Exhibit 99.1
[Pioneer Standard Logo]
FOR IMMEDIATE RELEASE
PIONEER-STANDARD ELECTRONICS REPORTS
FISCAL 2004 FIRST-QUARTER RESULTS
- - Sales Increase 2.3 Percent Over Last Year's First Quarter
- - Net Loss of $0.05 Per Share in Line with Previously Announced Guidance
- - Company Updates Full-Year Earnings Guidance Due to Purchase of Senior Notes
CLEVELAND, Ohio - July 24, 2003 - Pioneer-Standard Electronics, Inc. (Nasdaq:
PIOS) today announced fiscal 2004 first-quarter sales of $280 million, an
increase of 2.3 percent compared with first-quarter sales of $273 million last
year. For the first quarter ended June 30, 2003, the Company reported a net loss
of $1.5 million, or $0.05 per share, compared with a net loss of $34 million, or
$1.25 per share in first quarter fiscal 2003. The Company's guidance for fiscal
2004 first quarter, issued on May 13, 2003, anticipated break-even to a loss of
$0.05 per share for the quarter.
Last year's first-quarter net loss included a charge of $34.8 million, net of
tax, or $1.28 per share, related to the adoption of Statement of Financial
Accounting Standards No. 142, "Goodwill and Other Intangible Assets." The charge
was recorded as a cumulative effect of change in accounting principle.
First-quarter operating income was $2.8 million, a 22 percent increase over $2.3
million for the first quarter last year. Included in fiscal 2004 first-quarter
operating income are restructuring charges of approximately $463,000 related to
facilities and other costs associated with the continuation of the Company's
fiscal 2003 reorganization.
"I am very pleased with the progress we have made in our initial quarter as a
stand-alone enterprise computer solutions company, particularly in light of the
difficult economic environment," said Arthur Rhein, chairman, president and
chief executive officer. "Following the divestiture of our electronic components
business, we were able to grow sales, reduce costs and significantly improve
operating income."
The Company reported a loss from continuing operations of $708,000, net of tax,
or $0.02 per share, in first quarter fiscal 2004, compared with $1.5 million, or
$.05 per share in the first quarter last year. The Company also reported a loss
from discontinued operations of $749,000, net of tax, or $0.03 per share,
related to activities associated with the divestiture of the Company's
electronic components distribution business.
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BUSINESS OUTLOOK
"Although our second quarter is generally our weakest, typically down from the
first quarter, we expect fiscal 2004 second-quarter sales to be about the same
level as the first quarter," said Rhein. "We continue to expect the second half
of fiscal 2004 to be substantially stronger than the first half, which is
consistent with historical trends."
Consistent with the guidance provided on May 13, 2003, revenue is expected to
grow between 3 percent and 6 percent for the fiscal year ending March 31, 2004.
For fiscal 2004, gross margin is expected to approximate 13 percent and selling,
general and administrative expenses are anticipated to be 10.5 percent to 11.0
percent of sales.
Subsequent to June 30, 2003, the Company purchased an additional $28.0 million
of its 9.5 percent senior notes, at approximately 111.66 percent of face value.
The premium was approximately $3.3 million and will be reported in
second-quarter 2004 results. In addition, interest expense is now expected to be
approximately $8.7 million for fiscal 2004. Previously, the Company anticipated
interest expense of approximately $10.0 million for the year.
The net after tax impact of the senior note repurchase will decrease net income
by approximately $1.2 million, or $0.04 per share for the year. The Company,
therefore, now anticipates net income of $0.11 to $0.16 per share for fiscal
2004, excluding the impact of any further debt reductions.
"As we execute our plan to grow Pioneer-Standard, our focus is to be the best at
driving the adoption of enterprise computer solutions to satisfy the business
needs of our customers," Rhein said. "We also intend to deliver industry-leading
financial results, including improving our return on capital and reducing our
debt, to benefit the Company and our shareholders over the long term."
CONFERENCE CALL INFORMATION
A conference call to discuss quarterly results is scheduled for 10 a.m. ET on
Thursday July 24, 2003. The conference call will be broadcast live over the
Internet and a replay will be accessible on the investor relations page of the
Company's Web site: www.pioneerstandard.com.
-----------------------
A taped replay of the conference call will be available at noon ET on Thursday
July 24, 2003 through midnight ET on Wednesday August 1, 2003 accessible by
dialing 877-344-7529 or 412-858-1440 (account #914 for conference call #322590).
FORWARD-LOOKING LANGUAGE
Portions of this release, particularly the statements made by management and
those included in the Business Outlook section, are forward-looking statements
within the meaning of the safe harbor
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provisions of the Private Securities Litigation Reform Act of 1995. Such
statements are subject to important factors that could cause Pioneer-Standard's
actual results to differ materially from those anticipated by the
forward-looking statements. These factors include those referenced in the Annual
Report on Form 10-K or as may be described from time to time in
Pioneer-Standard's subsequent SEC filings.
ABOUT PIONEER-STANDARD ELECTRONICS, INC.
Pioneer-Standard Electronics, Inc. is one of the foremost distributors and
premier resellers of enterprise computer technology solutions from HP, IBM and
Oracle, as well as other leading manufacturers. The Company has a proven track
record of delivering complex servers, software, storage and services to
resellers and corporate customers across a diverse set of industries.
Headquartered in Cleveland, Ohio, Pioneer-Standard has sales offices throughout
the U.S. and Canada. For more information, visit the Company's website at
www.pioneerstandard.com.
- -----------------------
For more information contact: Martin Ellis
Executive Vice President, Corporate Development
Pioneer-Standard Electronics, Inc.
440-720-8682
# # #
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PIONEER-STANDARD ELECTRONICS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended
June 30
----------------------------
(In Thousands, Except Per Share Data) 2003 2002 (A)
------------ -------------
Net Sales $279,593 $ 273,191
Cost of goods sold 244,666 238,406
------------ -------------
Gross margin $ 34,927 $ 34,785
Gross margin % 12.5% 12.7%
Selling, general and administrative expenses $ 31,671 $ 32,493
Restructuring charges 463 -
------------ -------------
Operating Income 2,793 2,292
Other (Income) Expense
Other (income) expense 53 (26)
Interest expense, net 2,438 2,186
Gain on retirement of mandatorily redeemable
convertible preferred securities (734) -
------------ -------------
Income Before Income Taxes 1,036 132
Provision for income taxes 414 35
Distributions on mandatorily redeemable
convertible trust preferred securities, net of tax 1,330 1,564
------------ -------------
Loss from Continuing Operations $ (708) $ (1,467)
------------ -------------
Income (Loss) from Discontinued
Operations, net of tax (749) 2,297
------------ -------------
Income (Loss) before Cumulative Effect of
Change in Accounting Principle $ (1,457) $ 830
------------ -------------
Cumulative Effect of Change in Accounting
Principle, net of tax - (34,795)
------------ -------------
Net Loss $(1,457) $ (33,965)
============ =============
PER SHARE DATA:
BASIC AND DILUTED:
Loss from Continuing Operations $(0.02) $(0.05)
Income (Loss) from Discontinued Operations (0.03) 0.08
------------ -------------
Income (Loss) before Cumulative Effect of Change
in Accounting Principle $ (0.05) $ 0.03
Cumulative Effect of Change in Accounting
Principle - (1.28)
------------ -------------
Net Loss $ (0.05) $ (1.25)
============ =============
DIVIDENDS PER SHARE $ .03 $ .03
Weighted Average Shares Outstanding:
Basic and Diluted 27,748,037 27,228,901
(A) The Company's results for fiscal 2003 have been restated to characterize
its electronic components distribution business as discontinued operations.
Pioneer-Standard completed the sale of that business on February 28, 2003.
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PIONEER-STANDARD ELECTRONICS, INC.
CONDENSED BALANCE SHEETS
(Dollars in thousands)
June 30 March 31
(Dollars In Thousands) 2003 2003
--------------- ---------------
ASSETS (Unaudited) (Audited)
Current Assets
Cash and cash equivalents $ 254,845 $ 318,543
Accounts receivable, net 216,246 170,708
Inventories, net 57,426 48,285
Other 8,859 6,981
Assets of discontinued operations 28,818 43,367
--------------- ---------------
Total current assets $ 566,194 $ 587,884
Intangible Assets, net and Other 154,402 147,762
Property & Equipment, net 36,067 38,237
--------------- ---------------
Total Assets $ 756,663 $ 773,883
=============== ===============
LIABILITIES & SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 149,042 $ 139,185
Other 19,725 18,901
Liabilities of discontinued operations 11,065 26,127
--------------- ---------------
Total current liabilities $ 179,832 $ 184,213
Long-Term Debt 130,995 130,995
Other Long-Term Liabilities 18,527 16,450
Mandatorily Redeemable Convertible Trust
Preferred Securities 125,425 143,675
Shareholders' Equity 301,884 298,550
--------------- ---------------
Total Liabilities and Shareholders' Equity $ 756,663 $ 773,883
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