UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the quarterly period ended March 31, 1999
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the transition period from __________ to __________
Commission File No. 33-92810
--------
Programmer's Paradise, Inc.
---------------------------
(Name of issuer in its charter)
Delaware 13-3136104
- -------------------------------- ---------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1157 Shrewsbury Avenue, Shrewsbury, New Jersey 07702
- ---------------------------------------------- -------------------
(Address of principal executive offices) (Zip Code)
Issuer's Telephone Number (732) 389-8950
--------------
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities and Exchange Act of 1934 during the past
12 months (or for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements for the past
90 days. Yes X No
--- ---
Indicate the number of shares outstanding of each of the issuer's
classes of common stock as of the latest practicable date.
There were 5,148,186 outstanding shares of Common Stock, par value $.01
per share, as of April 30, 1999.
Page 1
Exhibit index is on page 14.
<PAGE>
PROGRAMMER'S PARADISE, INC.
Index to Form 10-Q
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
PART I -- FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets as of March 31, 1999
and December 31, 1998 3
Condensed Consolidated Statements of Income and Comprehensive
Income for the Three Months Ended March 31, 1999 and 1998 4
Condensed Consolidated Statements of Cash Flows for the Three Months
Ended March 31, 1999 and 1998 5
Notes to Condensed Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations. 7
Item 3. Quantitative and Qualitative Disclosures About Market Risk 12
PART II -- OTHER INFORMATION
Item 1. Legal Proceedings 13
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit 27 - Financial Data Schedule 14
</TABLE>
Page 2
<PAGE>
PART I - FINANCIAL INFORMATION
PROGRAMMER'S PARADISE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
ASSETS
<TABLE>
<CAPTION>
March 31, December 31,
1999 1998
---- ----
(Unaudited) (Audited)
<S> <C> <C>
Current Assets
Cash and cash equivalents $ 12,651 $ 21,167
Accounts receivable 41,952 53,002
Inventory 4,813 5,335
Prepaid expenses and other current assets 4,163 2,925
Deferred income taxes 2,757 1,988
--------- ---------
Total current assets 66,336 84,417
Equipment and leasehold improvements 2,376 2,317
Goodwill 15,310 15,595
Other assets 1,247 1,286
Deferred income taxes 1,060 1,262
--------- ---------
$ 86,329 $ 104,877
========= =========
</TABLE>
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
<S> <C> <C>
Current Liabilities
Notes payable to banks $ 602 $ 674
Accounts payable and accrued expenses 40,537 58,064
Other current liabilities 5,394 7,993
--------- ---------
Total current liabilities 46,533 66,731
Other liabilities 0 144
Notes payable - Long-term 1,468 1,761
Stockholders' equity
Common stock 52 50
Additional paid-in capital 35,675 33,952
Retained earnings 4,173 3,186
Treasury stock (140) (219)
Cumulative foreign currency translation adjustment (1,432) (728)
--------- ---------
Total stockholders' equity 38,328 36,241
--------- ---------
$ 86,329 $ 104,877
========= =========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
Page 3
<PAGE>
PROGRAMMER'S PARADISE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(Unaudited)
(In thousands, except per share data)
<TABLE>
<CAPTION>
Three months ended
March 31,
---------
1999 1998
---- ----
<S> <C> <C>
Net sales $ 57,368 $ 53,193
Cost of sales 50,606 46,679
-------- --------
Gross profit 6,762 6,514
Selling, general and administrative expenses 5,158 4,930
Amortization expense 285 245
-------- --------
Income from operations 1,319 1,339
Interest income, net 64 78
Unrealized foreign exchange loss 208 (54)
-------- --------
Income before income taxes 1,591 1,363
Provision for taxes 604 603
-------- --------
Net income $ 987 $ 760
-------- --------
Net income per common share-Basic $.20 $.16
---- ----
Net income per common share-Diluted $.18 $.14
---- ----
Weighted average common shares outstanding-Basic 4,991 4,790
----- -----
Weighted average common shares outstanding-Diluted 5,487 5,293
----- -----
Reconciliation of Net Income to Comprehensive Income:
Net Income $ 987 $ 760
-------- --------
Other comprehensive income, net of tax:
Foreign currency translation adjustments (437) (86)
-------- --------
Comprehensive Income $ 550 $ 674
======== ========
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
Page 4
<PAGE>
PROGRAMMER'S PARADISE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
---------
1999 1998
---- ----
<S> <C> <C>
Cash provided by (used for)
Operations:
Net income $ 987 $ 760
Adjustments for non cash charges 598 416
Changes in assets and liabilities (11,229) (5,492)
-------- --------
Net cash used for operations (9,644) (4,316)
-------- --------
Investing:
Capital expenditures (307) (392)
-------- --------
Net cash used for investing (307) (392)
-------- --------
Financing:
Net proceeds from issuance of common stock/ increase in
additional paid in capital 1,723 82
Purchase of treasury stock 79 0
Repayments under lines of credit (366) (386)
-------- --------
Net cash provided by (used for) financing activities 1,436 (304)
-------- --------
Increase (decrease) in cash $ (8,515) $ (5,012)
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
Page 5
<PAGE>
PROGRAMMER'S PARADISE, INC.
NOTES TO CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
March 31, 1999
1. The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles
for interim financial information and with the instructions to Form 10-Q
and Article 10 of Regulation S-X. Accordingly, they do not include all of
the information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of management,
all adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. Operating results for
the three months ended March 31, 1999, are not necessarily indicative of
the results that may be expected for the year ended December 31, 1999. For
further information, refer to the consolidated financial statements and
notes thereto included in the Company's annual report on Form 10-K for the
year-ended December 31, 1998.
2. Assets and liabilities of the foreign subsidiaries, all of which are
located in Europe, have been translated at current exchange rates, and
related revenues and expenses have been translated at average rates of
exchange in effect during the year. Resulting cumulative translation
adjustments have been recorded as a separate component of stockholders'
equity.
3. In June 1998, the FASB issued SFAS 133, "Accounting for Derivative
Instruments and Hedging Activities." This Statement requires companies to
record derivatives on the balance sheet as assets or liabilities, measured
at fair value. Gains or losses resulting from changes in the values of
those derivatives would be accounted for depending on the use of the
derivative and whether it qualifies for hedge accounting. SFAS 133 will be
effective for the Company's fiscal year ending December 31, 2000.
Management believes that this Statement will not have a significant impact
on the Company.
Page 6
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
OVERVIEW
Programmer's Paradise, Inc. is a recognized international marketer of
software targeting the software development and Information Technology
professionals within enterprise organizations. The Company operates principally,
through five distribution channels in North America and Europe - Internet,
catalog, direct sales, telemarketing, and wholesale distribution. Internet sales
encompass the Company's international web sites. Catalog operations include
worldwide catalog sales, advertising and publishing. Direct sales operations
include Programmer's Paradise Corporate Sales in the United States, ISP*D
International Software Partners GmbH ("ISP*D"), a wholly owned subsidiary in
Munich, Germany, ISP*F International Software Partners France SA ("ISP*F"), a
majority owned subsidiary in Paris, France, and Logicsoft Holding BV
("Logicsoft"), a wholly owned subsidiary located in Amsterdam, The Netherlands.
Telemarketing operations are presently conducted in the United States, Germany
and the United Kingdom. Wholesale operations include distribution to dealers and
large resellers through Lifeboat Distribution Inc. in the United States and
Lifeboat Associates Italia Srl ("Lifeboat Italy") in Milan, Italy, also
subsidiaries of the Company. Website addresses are www.pparadise.com and
www.supershops.com. Information contained on our web sites is not, and should
not be deemed to be, a part of this report.
The Company's strategic focus is to expand its catalog and Internet
activities while solidifying its position as the predominant direct sales
company for corporate desktop application software. A key element of that
strategy is to build upon its distinctive catalogs - the established
Programmer's Paradise catalog, directed at independent professional programmers,
and its Programmer's Supershop catalog, directed at Information Technology
professionals working in large corporations, and to utilize the catalogs as
banner advertising for developing its internet traffic as well as being the
initial conduit to developing its telemarketing channel. The Company's focus for
direct sales is to expand revenues and income by assisting companies manage
their IT expenditures, a value-added selling approach.
International expansion has been an integral part of the Company's
strategy. The Company began European-based operations in the first quarter of
1993 when it acquired a controlling interest in Lifeboat Associates Italia Srl,
a long-standing software wholesale distributor in Italy with an orientation
towards technical software. In June 1994, the Company acquired a controlling
interest in ISP*D International Software Partners GmbH, a large software-only
dealer and a leading independent supplier of Microsoft Select licenses and other
software to many large German and Austrian companies. In January 1995, the
remaining 10% interest in ISP*D was purchased by the Company. In late 1994, the
Company organized a subsidiary in the United Kingdom to engage in catalog
operations and in December 1995, the Company acquired Systematika Ltd., a
leading reseller of technical software in the United Kingdom and the publisher
of the popular System Science catalog. In January 1996, the Company formed ISP*F
International Software Partners France SA, as a full service corporate reseller
of PC software, based in Paris and majority owned by Programmer's Paradise
France SARL. In August 1997, the Company formed Programmer's Paradise, Canada
Inc. located in Mississauga, Ontario, to serve the growing developer market in
Canada. In September 1997, the Company acquired Logicsoft Holding BV, the parent
company of Logicsoft Europe BV, the largest software-only corporate reseller of
PC software in The Netherlands. The Company estimates that it now holds the lead
position in over 40% of the European software market.
Page 7
<PAGE>
RESULTS OF OPERATIONS
The following table sets forth for the periods indicated certain
financial information derived from the Company's consolidated statement of
operations expressed as a percentage of net sales.
<TABLE>
<CAPTION>
Three months ended
March 31,
---------
1999 1998
---- ----
<S> <C> <C>
Net Sales 100.0% 100.0%
Cost of Sales 88.2 87.8
----- -----
Gross Profit 11.8 12.2
Selling, general and administrative expenses 9.0 9.3
Amortization expense 0.5 0.4
----- -----
Income from operations 2.3 2.5
Interest income (expense), net 0.1 0.1
Unrealized foreign exchange gain (loss) 0.4 (0.1)
----- -----
Income before income taxes 2.8 2.5
Income taxes (1.1) (1.1)
----- -----
Net income 1.7% 1.4%
----- -----
</TABLE>
NET SALES
Net sales of the Company represents the gross consolidated revenue of the
Company less returns. Although net sales consist primarily of sales of software,
revenue from marketing services and advertising is also included within net
sales. Net sales for the quarter ended March 31, 1999 increased by $4.2 million
or 8%, to $57.4 million, over the same period in 1998. This increase primarily
reflects the growth of the Company's Direct Sales channel and a considerable
increase in the Internet channel, partially offset by reduced catalog revenues.
Consolidated Internet sales revenues increased by 280% or $1.5 million for
the three months ended March 31, 1999 compared to the same period in 1998. This
increase was primarily due to the newly enhanced and expanded websites, the
creation of on-line specialty stores and a dramatic expansion in both product
offerings and product content. Specifically, the number of SKUs offered on the
web sites was increased from approximately 3,000 to more than 40,000. Direct
sales revenues increased by 9% or $3.1 million for the three months ended March
31, 1999 compared to the same period in 1998. Sales were particularly strong in
France, The Netherlands and the United States. Revenue growth in the US and
France represents increases in market share while the increase in The
Netherlands is attributable to execution of the relationship selling approach
with existing customers. Revenues from the German operations were less than
anticipated as several large licensing contracts were deferred to the second
quarter.Consolidated Catalog and Telemarketing revenues decreased 6% or $0.9
million for the three months ended March 31, 1999 primarily due to the shift in
business from the traditional catalogs to the Internet channel. Revenues for the
Distribution channel increased 12% or $0.5 million for the three months ended
March 31, 1999 primarily due to new distribution agreements in the United
States.
Page 8
<PAGE>
Geographically, approximately 67% and 69% of the revenues were derived from
the European operations for the three months ended March 31, 1999 and 1998,
respectively.
GROSS PROFIT
Gross profit represents the difference between net sales and costs of
sales. Cost of sales is composed primarily of amounts paid by the Company to
publishers and vendors plus catalog printing and mailing costs. Publisher and
vendor rebates are credited against cost of sales. For the three-month period
ended March 31, 1999, gross profit as a percentage of sales decreased from 12.2
to 11.8% over the same period in 1998, reflecting a shift in the mix of sales
through the Company's distribution channels as a result of the substantial
increase in lower margin direct sales, primarily Microsoft Select licensing
sales. Gross profit in absolute dollars for the three-month period ended March
31, 1999 increased by $248,000 over the previous year, which reflects the
strength of the direct sales channel in the quarter.
Gross margins have been affected by the mix of products sold and the mix of
distribution channels. Historically, the gross margins attained in the catalog
channel have been higher than either the direct sales or distribution channels.
Margins within the direct sales channel are also subject to mix variations as
Microsoft Select License sales typically produce lower gross margin results. The
emergence of the Internet as a viable commerce channel has caused the Company to
experience competitive margin pressures. The Company anticipates that this
margin pressure will continue for the next few quarters.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling, general and administrative ("SG&A") expenses include all corporate
personnel costs (including salaries and health benefits), depreciation and
amortization, non-personnel-related marketing and administrative costs and the
provision for doubtful accounts. Depreciation and amortization consists
primarily of equipment depreciation and leasehold improvements.
SG&A expenses as a percentage of revenues decreased by 0.3% for the three
months ended March 31, 1999 compared to the same period in 1998. SG&A expenses
in absolute dollars for the three-month period ended March 31, 1999 increased by
$228,000 when compared to the same period in 1998. This increase mainly reflects
the additional infrastructure in the form of personnel related costs as the
Company moves into the e-commerce arena and expands its European operations.
Geographically, the North America operation of the Company accounted for
approximately 37% and 41% of total SG&A expenditure for the three months ended
March 31, 1999 and 1998, respectively, while the European operation accounted
for approximately 63% and 59% for the three months ended March 31, 1999 and
1998, respectively.
Page 9
<PAGE>
AMORTIZATION EXPENSE
Amortization expense includes the systematic write-off of goodwill.
Amortization expense for the three months ended March 31, 1999 increased by
$40,000 as compared to the same period in 1998. This increase reflects the
amortization of the excess of the purchase price over the fair value of the net
assets acquired in connection with the acquisition of Logicsoft. The purchase
contract with Logicsoft Holding BV included an "earn-out" feature based on
results of operations for the fiscal year ended December 31, 1998. As a result,
the Company has recorded an additional $2.2 million as goodwill at December 31,
1998,which is being amortized over a fifteen-year period.
UNREALIZED FOREIGN EXCHANGE GAIN (LOSS)
Unrealized foreign exchange gain for the three months ended March 31, 1999
was $208,000 compared to a unrealized foreign exchange loss of $54,000 in the
same period in 1998. The unrealized profit in the first three months of 1999 is
primarily due to the continuing rise of the US$ against the EURO as from January
1, 1999 to March 31, 1999. The Company does not hedge its net asset exposure to
fluctuations in the U.S. Dollar against any such local currency exchange rates.
Although the Company does maintain bank accounts in local currencies to reduce
currency exchange fluctuations, the Company is, nevertheless, subject to risks
associated with such fluctuations.
INCOME TAXES
Provision for income tax was $604,000 for the three months ended March 31,
1999, compared to $603,000 for the same period in 1998. As a percentage of
income before taxes the provision for income tax decreased from 44% in 1998 to
38% in 1999. The fluctuations in the Company's effective tax rate primarily
reflect the impact of its international operations.
NET INCOME
Net income was $987,000 or $.18 per share on a diluted basis with
approximately 5,487,000 weighted average common shares outstanding for the
quarter ended March 31, 1999 compared to $760,000 or $.14 per share on a diluted
basis with approximately 5,293,000 weighted average common shares outstanding
for the same period of the previous year.
LIQUIDITY AND CAPITAL RESOURCES
The Company's primary capital needs have been to fund the working capital
requirements created by its sales growth and to make acquisitions. The Company
had cash and cash equivalents of $12.7 million and net working capital of $19.8
million at March 31, 1999.
Net cash used for operations was $9.6 million for the three months ended
March 31, 1999 compared with $4.3 million of cash used for operating activities
in the same period of the previous year. Cash was primarily used for a reduction
in accounts payable and other liabilities (approximately $20.1 million), offset
by a reduction in accounts receivable ( approximately $11.0 million ) as well as
net earnings for the period.
Net cash provided by financing was $1.4 million for the three months ended
March 31, 1999 compared with $304,000 of cash used for financing activities in
the same period of the previous year. This increase primarily reflects the
result of favorable permanent tax differences due to stock options exercised in
the first quarter of 1999.
Page 10
<PAGE>
Domestically, the Company has a committed line of credit whereby the
Company can borrow up to $7.5 million with interest at either the prime rate or
Euro rate plus 200 basis points. The facility expires on June 30, 1999 and is
secured by all the domestic assets of the Company and 65% of the outstanding
stock of the foreign subsidiaries and contains certain covenants that require
the Company to maintain a minimum level of tangible net worth and working
capital. At March 31, 1999, there were no amounts outstanding under the line.
During 1997, the Company entered into a five-year term loan agreement in
the US$ equivalent of $3.0 million bearing interest at 6.17%. The loan is
denominated in Dutch Guilders and is secured by the assets of the Company and
65% of the stock of foreign subsidiaries. At March 31, 1999, there was
approximately $2 million outstanding under this facility.
The Company maintains a secured, demand revolving line of credit for its
German subsidiary, pursuant to which it may borrow in Deutschmarks up to DM
1,500,000 (the equivalent of approximately $820,000 at March 31, 1999), based
upon its eligible accounts receivable and eligible inventory, and the creditor
is entitled to the benefit of a limited guarantee by the Company of up to DM
300,000 (the equivalent of approximately $160,000 at March 31, 1999). The line
bears interest at 8.25%. At March 31, 1999, there were no amounts outstanding
under this line.
In Italy, Lifeboat Italy has banking arrangements with several Italian
banks, pursuant to which it may borrow in lire on an unsecured, demand basis to
finance working capital requirements, through credit and overdrafting
privileges, as well as receivables-based advances. The aggregate credit and
overdraft limits of such arrangements at March 31, 1999 were approximately Lit
2,800,000,000 (the equivalent of approximately $1.5 million at March 31, 1999).
The unsecured borrowings bear interest at market rates ranging from 6.25% to
9.00%. At March 31, 1999 there were no amounts outstanding under this line.
The Company's subsidiary in The Netherlands, Logicsoft Europe, BV,
maintains a demand revolving line of credit pursuant to which it may borrow in
guilders up to DFL 2.5 million (the equivalent of approximately $1.2 million at
March 31, 1999), and is secured by its accounts receivable and inventory. The
line bears interest at 5.875%. At March 31, 1999 approximately $600,000 of this
credit facility was used.
In France, ISP*F maintains a demand revolving line of credit pursuant to
which it may borrow up to FRF 3.0 million (the equivalent of approximately
$490,000 at March 31, 1999), and is secured by its accounts receivable and
inventory and a FRF 3.0 million letter of credit. At March 31, 1999, there were
no amounts outstanding under this line.
CERTAIN FACTORS AFFECTING OPERATING RESULTS
Certain statements contained in, or incorporated by reference in, this Form
10-Q are forward-looking in nature. Such statements can be identified by the use
of forward-looking terminology such as "believes", "expects", "may", "will",
"should" or "anticipates" or the negative thereof or comparable terminology, or
by discussions of strategy. The Company wishes to ensure that such statements
are accompanied by meaningful cautionary statements, so as to ensure to the
fullest extent possible the protections of the safe harbor established in the
Private Securities Litigation Reform Act of 1995. Accordingly, such statements
are qualified in their entirety by reference to and are accompanied by the
following discussion of certain important factors that could cause actual
results to differ materially from those projected in such forward-looking
statements. The Company cautions the reader that this list of factors may not be
exhaustive.
The Company operates in a rapidly changing business, and new risk factors
emerge from time to time. Management cannot predict every risk factor, nor can
it assess the impact, if any, of all such risk factors on the Company's business
or the extent to which any factor, or combination of factors, may cause actual
results to differ materially from those projected in any forward-looking
statements. Accordingly, forward-looking statements should not be relied upon as
a prediction of actual results.
Page 11
<PAGE>
YEAR 2000 COMPLIANCE
The Company believes that its present IT system is Year 2000 compliant. The
Company has also conducted an investigation and received certification from its
major suppliers that they are fully Y2K compliant.
The Company is continuing to conduct a review of key publishers to
determine whether their software products meet Year 2000 requirements. The
Company has continued to post updated information on Y2K compliance on its
websites. In the event that the Company's key publishers cannot provide the
Company with software products that meet Year 2000 requirements on a timely
basis, or if customers delay or forego software purchases based upon Year 2000
related issues, the Company's operating results could be materially adversely
affected. In general, as a reseller of software products, the Company only
passes through to its customers the applicable vendor's warranties. The
Company's operating results could be materially adversely affected, however, if
it were held liable for the failure of software products resold by the Company
to be Year 2000 compliant despite its disclaimer of software product warranties.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
FOREIGN OPERATIONS
In addition to its activities in the United States, 67% of the Company's
sales for the three month period ended March 31, 1999 were generated
internationally. Foreign operations are subject to general risks attendant to
the conduct of business in each foreign country, including economic
uncertainties and each foreign government's regulations. In addition, the
Company's international business may be affected by changes in demand or pricing
resulting from fluctuations in currency exchange rates or other factors.
FOREIGN EXCHANGE
The Company's shipments to foreign subsidiaries are invoiced in U.S.
dollars. As a result, the Company believes its foreign exchange exposure caused
by these shipments is insignificant. The Company is, however, exposed to
exchange conversion differences in translating foreign results of operations to
U.S. dollars. Depending upon the strengthening or weakening of the U.S. dollar,
these conversion differences could be significant.
Sales to the customers in European countries and borrowings by the
Company's European subsidiaries are denominated in local currencies. The Company
does not hedge its net asset exposure to fluctuations in the U.S. Dollar against
any such local currency exchange rates. Although the Company does maintain bank
accounts in local currencies to reduce currency exchange fluctuations, the
Company is, nevertheless, subject to risks associated with such fluctuations.
Page 12
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is subject to certain legal proceedings and claims which have arisen
in the ordinary course of business and which have not been fully adjudicated.
The results of legal proceedings cannot be predicted with certainty; however, in
the opinion of management, the Company does not have a potential liability
related to any legal proceedings and claims that would have a material adverse
effect on its financial condition or results of operations.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibit 27 - Financial Data Schedule
Page 13
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PROGRAMMER'S PARADISE, INC.
May 12, 1999 By: /s/ John P. Broderick
- ------------------------ ----------------------------------------
Date John P. Broderick, Chief Financial Officer,
Vice President of Finance and duly authorized
officer
Page 13
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibits Page No.
------ ----------------------- --------
<S> <C> <C>
27 Financial Data Schedule 15
</TABLE>
Page 14
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Company's Consolidated Balance Sheet at March 31, 1999 and 1998 and Consolidated
Statement of Income and Comprehensive Income for the three months ended March
31, 1998 and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<MULTIPLIER> 1
<CURRENCY> US DOLLARS
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 3-MOS
<FISCAL-YEAR-END> DEC-31-1999 DEC-31-1998
<PERIOD-START> JAN-01-1999 JAN-01-1998
<PERIOD-END> MAR-31-1999 MAR-31-1998
<EXCHANGE-RATE> 1 1
<CASH> 12,651 15,559
<SECURITIES> 0 0
<RECEIVABLES> 42,818 34,869
<ALLOWANCES> 866 751
<INVENTORY> 4,813 5,036
<CURRENT-ASSETS> 66,336 59,731
<PP&E> 5,246 5,365
<DEPRECIATION> 2,870 3,327
<TOTAL-ASSETS> 86,329 77,630
<CURRENT-LIABILITIES> 46,533 42,532
<BONDS> 0 0
0 0
0 0
<COMMON> 52 48
<OTHER-SE> 38,276 32,920
<TOTAL-LIABILITY-AND-EQUITY> 86,329 77,630
<SALES> 57,368 53,193
<TOTAL-REVENUES> 57,368 53,193
<CGS> 50,606 46,679
<TOTAL-COSTS> 56,049 51,854
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 48 (74)
<INTEREST-EXPENSE> 64 78
<INCOME-PRETAX> 1,591 1,363
<INCOME-TAX> 604 603
<INCOME-CONTINUING> 987 760
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 987 760
<EPS-PRIMARY> 0.20 0.16
<EPS-DILUTED> 0.18 0.14
</TABLE>
