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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
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CURRENT REPORT
PURSUANT TO SECTION 13 or 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): July 28, 1998
TECH DATA CORPORATION
(Exact name of registrant as specified in its charter)
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Florida 0-14625 59-1578329
(State or other (Commission File Number) (I.R.S. Employer
jurisdiction of Identification No.)
Incorporation)
5350 Tech Data Drive, Clearwater, Florida 33760
(Address of principal executive offices)
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Registrant's telephone number, including area code: (727) 539-7429
Not applicable
(Former name or former address, if changed since last
report.)
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Item 2. Acquisition or Disposition of Assets.
On July 28, 1998, pursuant to a Share Purchase Agreement dated June 10, 1998
(the "Agreement"), Tech Data Corporation ("Tech Data" or the "Company")
completed the sale of its majority interest in Munich-based subsidiary Macrotron
AG ("Macrotron") to Ingram Micro, Inc ("Ingram"). Pursuant to the terms of the
Agreement, the effective date of the sale was June 30, 1998. Tech Data acquired
its majority interest in Macrotron in July 1997 and owned 99% and 91% of
Macrotron's outstanding common and preferred stock, respectively, at the time of
the sale. The sale of Macrotron was completed through an exchange of
approximately $100 million in cash and the assumption, by Ingram, of
approximately $123 million in debt.
Item 7. Financial Statements and Exhibits.
(a) Financial statements of business acquired. - Not applicable
(b) Pro forma financial information
The following pro forma financial statements are filed with this report: Page
1. Unaudited Pro Forma Condensed Consolidated Balance
Sheet as of April 30, 1998............................................... 6
2. Unaudited Pro Forma Condensed Consolidated Statement of Income for the
three months ended April 30, 1998........................................ 7
3. Unaudited Pro Forma Condensed Consolidated Statement of Income
for the twelve months ended January 31, 1998............................. 8
The unaudited pro forma financial information reflects adjustments to the
historical financial statements of the Company to give effect to the disposition
on July 28, 1998 of the Company's majority interest in Macrotron.
The Unaudited Pro Forma Condensed Consolidated Balance Sheet of the Company at
April 30, 1998 reflects the financial position of the Company after giving
effect to the disposition of Macrotron as discussed in Item 2 as if it had
occurred at April 30, 1998. The Unaudited Pro Forma Condensed Consolidated
Statement of Income for the three months ended April 30, 1998 and the year ended
January 31, 1998 give retroactive effect to the disposition as if it had
occurred at the beginning of the periods presented, and are based upon the
operations of the Company for the respective periods.
The following unaudited pro forma financial information has been prepared from
and should be read in conjunction with the historical financial statements and
related notes thereto of the Company. The following information is not
necessarily indicative of the financial position or operating results that would
have occurred had the sale been consummated on the date or at the beginning of
the period for which the sale is being given effect nor is it necessarily
indicative of future operating results or financial position.
(c) Exhibits
2-B* Share Purchase Agreement dated as of June 10, 1998 by and
between INGRAM MICRO, INC., as Acquirer and TECH DATA
CORPORATION, as Seller
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* Document contains certain confidential information which has been
omitted from the attached Exhibit 2-B pursuant to a request for
confidential treatment and has been filed separately with the
Securities and Exchange Commission.
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.
TECH DATA CORPORATION
Dated: August 12, 1998 By: /s/ Jeffery P. Howells
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Jeffery P. Howells
Executive Vice President
and Chief Financial Officer
(principal financial officer)
By: /s/ Joseph B. Trepani
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Joseph B. Trepani
Senior Vice President
and Corporate Controller
(principal accounting officer)
EXHIBIT INDEX
Exhibit Number Description
2-B* Share Purchase Agreement dated as of June 10, 1998 by and
between INGRAM MICRO, INC., as Acquirer and TECH DATA
CORPORATION, as Seller
* Document contains certain confidential information which has been
omitted from the attached Exhibit 2-B pursuant to a request for
confidential treatment and has been filed separately with the
Securities and Exchange Commission..
TECH DATA CORPORATION AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
APRIL 30, 1998
(In thousands)
Pro Forma
Historical Adjustments Pro Forma
----------- ----------- ---------
ASSETS
Current assets:
Cash and cash equivalents $ 1,249 $ - $ 1,249
Accounts receivable, net 914,837 (135,742) (a) 779,095
Inventories 969,570 (121,430) (a) 848,140
Prepaid and other assets 57,399 (12,577) (a) 44,822
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Total current assets 1,943,055 (269,749) 1,673,306
Property and equipment, net 110,792 (10,843) (a) 99,949
Excess of cost over acquired net assets, net 57,088 (51,733) (a) 5,355
Other assets, net 22,994 (1,558) (a) 21,436
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$2,133,929 $(333,883) $1,800,046
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Revolving credit loans $ 335,053 $(222,563) (b) $ 112,490
Accounts payable 949,580 (77,692) (a) 871,888
Accrued expenses 101,877 (35,829) (a,b) 66,048
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Total current liabilities 1,386,510 (336,084) 1,050,426
Long-term debt 8,627 - 8,627
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Total liabilities 1,395,137 (336,084) 1,059,053
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Minority interest 3,431 (3,431) (a) -
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Total shareholders' equity 735,361 5,632 (a,b) 740,993
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$2,133,929 $(333,883) $1,800,046
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The accompanying Notes to Unaudited Pro Forma Condensed
Consolidated Financial Statements
are an integral part of these financial statements
TECH DATA CORPORATION AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
FOR THE THREE MONTHS ENDED APRIL 30, 1998
(In thousands, except per share amounts)
Pro Forma
Historical Adjustments Pro Forma
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Net sales $2,184,366 $(370,996) (a) $1,813,370
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Cost and expenses:
Cost of products sold 2,044,599 (344,157) (a) 1,700,442
Selling, general and administrative expenses 94,801 (21,850) (a) 72,951
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2,139,400 (366,007) 1,773,393
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Operating profit 44,966 (4,989) 39,977
Interest expense 7,954 (2,279) (a,b) 5,675
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Income before income taxes 37,012 (2,710) 34,302
Provision for income taxes 13,815 (804) (a,b) 13,011
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Income before minority interest 23,197 (1,906) 21,291
Minority interest 92 (92) (a) -
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Net income $ 23,105 $ (1,814) $ 21,291
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Net income per common share:
Basic $ .48 - $ .44
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Diluted $ .46 - $ .42
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Weighted average common shares outstanding:
Basic 48,285 - 48,285
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Diluted 50,323 - 50,323
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The accompanying Notes to Unaudited Pro Forma Condensed
Consolidated Financial Statements
are an integral part of these financial statements
TECH DATA CORPORATION AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
FOR THE TWELVE MONTHS ENDED JANUARY 31, 1998
(In thousands, except per share amounts)
Pro Forma
Historical Adjustments Pro Forma
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Net sales $7,056,619 $(661,478) (c) $6,395,141
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Cost and expenses:
Cost of products sold 6,590,873 (612,005) (c) 5,978,868
Selling, general and administrative expenses 293,108 (39,065) (c) 254,043
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6,883,981 (651,070) 6,232,911
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Operating profit 172,638 (10,408) 162,230
Interest expense 29,908 (4,332) (c,d) 25,576
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Income before income taxes 142,730 (6,076) 136,654
Provision for income taxes 52,816 (2,182) (c,d) 50,634
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Income before minority interest 89,914 (3,894) 86,020
Minority interest 429 (429) (c)
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Net income $ 89,485 $ (3,465) $ 86,020
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Net income per common share:
Basic $ 2.00 - $ 1.92
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Diluted $ 1.92 - $ 1.85
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Weighted average common shares outstanding:
Basic 44,715 - 44,715
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Diluted 46,610 - 46,610
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The accompanying Notes to Unaudited Pro Forma Condensed
Consolidated Financial Statements
are an integral part of these financial statements
TECH DATA CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - BASIS OF PRESENTATION
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The foregoing Unaudited Pro Forma Condensed Consolidated Financial
Statements illustrate the effect of the disposition of Macrotron AG
("Macrotron") by the Company. The Unaudited Pro Forma Condensed Consolidated
Balance Sheet of the Company at April 30, 1998 reflects the financial position
of the Company after giving effect to the disposition of Macrotron as if it had
occurred at April 30, 1998. The Unaudited Pro Forma Condensed Consolidated
Statement of Income for the three months ended April 30, 1998 and the year ended
January 31, 1998 give retroactive effect to the disposition as if it had
occurred at the beginning of the periods presented; however, note that Tech
Data's purchase of Macrotron on July 1, 1997 results in the removal of six
months of operating results based upon the acquisition date and the Company's
policy of consolidating Macrotron's results of operations on the basis of a
fiscal year that ends on December 31.
NOTE 2 - PRO FORMA BALANCE SHEET ADJUSTMENTS
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a) Reflects the disposition of net assets and liabilities of Macrotron.
b) Reflects the application of the proceeds of the sale, including
reduction for the debt assumed by Ingram, recognition of the gain on the
sale and the related tax liability. Note that the proceeds are used
to reduce the revolving credit loan balance in accordance with the
Company's policy of using excess cash to pay down debt.
NOTE 3 - PRO FORMA INCOME STATEMENT ADJUSTMENTS
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a) Reflects the elimination of Macrotron's results of operations for the
quarter ended April 30, 1998.
b) Reflects incremental interest expense savings of $232,000 and the related
tax effect of $87,000 due to the reduction of indebtedness by the amount
of the proceeds from the sale. Reduction in expense calculated based upon
the average interest rate on outstanding indebtedness during the period.
c) Reflects the elimination of Macrotron's results of operations for the year
ended January 31, 1998.
b) Reflects incremental interest expense savings of $928,000 and the related
tax effect of $348,000 due to the reduction of indebtedness by the amount
of the proceeds from the sale. Reduction in expense calculated based upon
the average interest rate on outstanding indebtedness during the period.