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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
MAY 11, 2001
KENT ELECTRONICS CORPORATION
Exact Name of Registrant as Specified in its Charter
TEXAS 74-1763541
State of Incorporation or 0-14643 I.R.S. Employer
Organization Commission File Number Identification No.
1111 GILLINGHAM LANE
SUGAR LAND, TEXAS 77478
Address of Principal Executive Offices (Zip Code)
(281) 243-4000
Registrant's telephone number,
including area code
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INFORMATION TO BE INCLUDED IN THE REPORT
ITEM 5. OTHER EVENTS.
On May 11, 2001, Kent Electronics Corporation ("Kent") reported the
following financial results for the fourth quarter and fiscal year ended March
31, 2001.
FOURTH QUARTER RESULTS
Net sales for the fourth quarter grew to $248.6 million, a 4%
sequential increase over the prior quarter, and 13% above the $220.8 million
reported in the comparable quarter in fiscal 2000.
Gross profit for the quarter was $47.6 million, a 5% sequential
decrease from the prior quarter and a slight increase over the $46.9 million
reported in the fourth quarter last year. Gross margin declined to 19.1% from
20.9% in the prior quarter and 21.3% in the comparable year-ago period.
Operating expenses were $34.7 million compared to $36.0 million in the
third quarter this year and $35.4 million in the fourth quarter last year. As a
percentage of sales, operating expenses improved to 13.9% compared to 15.0% in
the prior quarter and 16.0% in the same quarter of fiscal 2000.
Operating profit grew to $12.9 million, an 8% decrease from the $14.0
million reported in the third quarter this year, and 12% above the $11.5 million
reported in the fourth quarter last year.
Earnings from continuing operations for the fourth quarter decreased 7%
to $9.1 million compared to the $9.7 million reported in the third quarter.
Earnings per diluted share, from continuing operations, were $0.31, decreasing
6% from the $0.33 reported in the third quarter of this year. Earnings from
continuing operations in the fourth quarter of fiscal 2000 were $6.0 million, or
$0.20 per diluted share.
FULL YEAR RESULTS
Net sales for the fiscal year ended March 31, 2001 grew 27% to $942.4
million from $742.8 million in fiscal 2000. Gross profit was $191.8 million
compared to $156.3 million last year. Gross margin declined to 20.3% compared to
21.0% in fiscal 2000. Operating expenses increased to $141.1 million compared to
$122.3 million last year. As a percentage of sales, however, operating expenses
declined to 15.0% compared to 16.5% in fiscal 2000.
Operating profit for the year reached $50.7 million compared to $34.0
million in fiscal 2000. Earnings from continuing operations were $31.5 million,
or $1.07 per diluted share. Earnings from continuing operations for fiscal 2000
were $17.4 million, or $0.60 per diluted share.
Kent Electronics is among the largest publicly traded specialty
electronics distributors and network integrators. On March 21, 2001, Kent
entered into a stock-for-stock merger agreement with Avnet, Inc. pursuant to
which Kent would be merged into Avnet. The merger has been approved by the
boards of directors of both companies and is subject to the approval of the
shareholders of both companies. The transaction is expected to be accounted for
as a pooling-of-interests and to be completed within the next 30 days.
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KENT ELECTRONICS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS*
(IN THOUSANDS, EXCEPT PER SHARE DATA)
Fourth Quarter Fiscal Year
-------------------------------- --------------------------------
March 31, 2001 April 1, 2000 March 31, 2001 April 1, 2000
(Unaudited) (Unaudited)
-------------- ------------- -------------- -------------
Net sales $ 248,596 $ 220,836 $ 942,364 $ 742,837
Cost of sales 201,028 173,895 750,613 586,538
--------- --------- --------- ---------
Gross profit 47,568 46,941 191,751 156,299
Selling, general and
administrative expenses 34,673 35,400 141,100 122,293
--------- --------- --------- ---------
Operating profit 12,895 11,541 50,651 34,006
Other income (expense)
Interest expense (2,633) (2,743) (10,693) (10,470)
Other - net 4,488 1,193 12,120 5,579
--------- --------- --------- ---------
Earnings from continuing operations
before income taxes 14,750 9,991 52,078 29,115
Income taxes 5,694 4,012 20,624 11,692
--------- --------- --------- ---------
Earnings from continuing operations 9,056 5,979 31,454 17,423
Discontinued operations
Earnings from discontinued
operations, net of income taxes** -- 1,451 5,317 828
Gain on disposal of discontinued opera-
tions, net of income taxes of $12,000 -- -- 18,000 --
--------- --------- --------- ---------
Net earnings $ 9,056 $ 7,430 $ 54,771 $ 18,251
========= ========= ========= =========
Basic earnings per common share:
Earnings from continuing operations $ 0.31 $ 0.21 $ 1.10 $ 0.62
========= ========= ========= =========
Net earnings $ 0.31 $ 0.26 $ 1.92 $ 0.65
========= ========= ========= =========
Diluted earnings per common share:
Earnings from continuing operations $ 0.31 $ 0.20 $ 1.07 $ 0.60
========= ========= ========= =========
Net earnings $ 0.31 $ 0.25 $ 1.86 $ 0.63
========= ========= ========= =========
Weighted average shares:
Basic 28,632 28,225 28,527 28,062
========= ========= ========= =========
Diluted 29,171 29,513 29,389 28,888
========= ========= ========= =========
* On October 10, 2000, the Company sold K*TEC Electronics Corporation, its
contract manufacturing operation. The operations of K*TEC are reflected as
discontinued operations. Amounts prior to the second quarter of fiscal 2001
include the operating results of the Company's wire and cable redistribution
assets, which were sold on May 23, 2000. The sale of the redistribution assets,
in accordance with U.S. generally accepted accounting principles, was not
accounted for as a discontinued operation.
** Earnings from discontinued operations is presented net of income taxes of
$3,544 for the fiscal year ending March 31, 2001, and $787 and $100 for the
quarter and fiscal year ending April 1, 2000, respectively.
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KENT ELECTRONICS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS*
(IN THOUSANDS)
March 31, April 1,
2001 2000
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ASSETS
CURRENT ASSETS
Cash and cash equivalents (including
temporary investments of $248,942 in
2001 and $105,164 in 2000) $ 252,022 $ 101,052
Accounts receivable, net 219,951 149,161
Notes receivable 12,810 --
Inventories
Materials and purchased products 117,195 124,939
Work in process 6,947 1,002
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124,142 125,941
Net assets of discontinued operations -- 143,795
Other 8,485 12,594
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Total current assets 617,410 532,543
PROPERTY AND EQUIPMENT
Land 4,990 4,990
Buildings 21,832 19,627
Equipment, furniture and fixtures 61,707 58,808
Leasehold improvements 1,168 1,541
--------- ---------
89,697 84,966
Less accumulated depreciation
and amortization (32,042) (29,209)
--------- ---------
57,655 55,757
OTHER ASSETS 13,170 10,429
COST IN EXCESS OF NET ASSETS ACQUIRED,
Less accumulated amortization of $7,661
in 2001 and $5,176 in 2000 99,791 103,164
--------- ---------
Total assets $ 788,026 $ 701,893
========= =========
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KENT ELECTRONICS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS* - CONTINUED
(IN THOUSANDS, EXCEPT SHARE DATA)
March 31, April 1,
2001 2000
--------- ---------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 91,746 $ 82,782
Accrued compensation 27,717 23,877
Other accrued liabilities 23,572 16,202
Income taxes 10,729 589
Current maturities of long-term debt 4,000 4,000
--------- ---------
Total current liabilities 157,764 127,450
LONG-TERM DEBT, less current maturities 208,000 212,000
DEFERRED INCOME TAXES 8,153 11,824
LONG-TERM LIABILITIES 7,501 5,887
STOCKHOLDERS' EQUITY
Preferred stock, $1 par value per share;
authorized 2,000,000 shares; none issued -- --
Common stock, no par value; authorized
60,000,000 shares; 28,682,204 shares issued
and 28,637,204 shares outstanding in 2001
and 28,375,032 shares issued and
28,325,032 shares outstanding in 2000 74,918 68,579
Additional paid-in capital 118,519 117,797
Retained earnings 214,104 159,333
--------- ---------
407,541 345,709
Less common stock in treasury - at cost, 45,000
shares in 2001 and 50,000 shares in 2000 (933) (977)
--------- ---------
406,608 344,732
--------- ---------
Total liabilities and stockholders' equity $ 788,026 $ 701,893
========= =========
* On October 10, 2000, the Company sold K*TEC Electronics Corporation, its
contract manufacturing operation. The net assets of K*TEC are reflected as
discontinued operations as of April 1, 2000.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Not applicable.
(b) Not applicable.
(c) Exhibits. Not applicable.
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SIGNATURE
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 hereunto duly authorized.
Dated: May 11, 2001
KENT ELECTRONICS CORPORATION
By: /s/ Stephen J. Chapko
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Stephen J. Chapko
Executive Vice President, Chief Financial
Officer, Secretary and Treasurer