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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K/A-1
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report: November 30, 1995
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(Date of earliest event reported)
PIONEER-STANDARD ELECTRONICS, INC.
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(Exact name of Registrant as specified in its charter)
Ohio 0-5734 34-0907152
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(State or other jurisdiction (Commission (I.R.S. employer
of incorporation) file number) identification no.)
4800 East 131st Street, Cleveland, Ohio 44105
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (216) 587-3600
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The undersigned Registrant hereby amends the following items,
financial statements, exhibits or other portions of its Current Report on Form
8-K dated November 30, 1995 as set forth in the pages attached hereto:
"Item 2. Acquisition or Disposition of Assets" is hereby amended and
restated to correct a minor typographical error.
"Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits" is hereby amended and restated to include pro forma financial
information required in connection with the acquisition of Pioneer/Technologies
Group, Inc. by the Registrant and to include an Exhibit.
Item 2. Acquisition or Disposition of Assets.
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On November 30, 1995, Pioneer-Standard Electronics, Inc. (the
"Company") acquired 50% of the Common Stock (the "Stock") of
Pioneer/Technologies Group Inc., a Maryland corporation ("Technologies").
Prior to this acquisition, the Company owned of record 50% of the Common Stock
of Technologies. The acquisition was accomplished pursuant to a Plan and
Agreement of Merger, dated November 30, 1995, by and among the Company,
Technologies, Pioneer-Standard of Maryland, Inc., a wholly-owned subsidiary of
the Company, the shareholders of Technologies (the "Shareholders") and Bruce S.
Tucker as Shareholders Representative (the "Merger Agreement"), pursuant to
which Pioneer-Standard of Maryland, Inc., was merged with and into
Technologies. A copy of the Merger Agreement is filed as an Exhibit hereto.
In connection with the purchase of the Stock, Technologies
entered into Noncompetition Agreements with each of Bruce S. Tucker and Jay S.
Ross, former employees of Technologies. These Agreements provide that each
individual will not, for a period of two years, directly or indirectly compete
with Technologies. Copies of the Noncompetition Agreements are filed as
Exhibits hereto.
As consideration for the Stock, the Company assumed certain
liabilities, including approximately $30 million of bank debt, of Technologies
and, subject to claims which may be made under the Escrow Agreement described
below, will pay the Shareholders $50 million in cash. The obligation of the
Company to pay the Shareholders the cash purchase price is secured by a Letter
of Credit. On January 4, 1996 the Shareholders are entitled to receive $48
million in cash, after surrendering the Letter of Credit. At that time, two
million dollars will be deposited with NationsBank, N.A. as Escrow Agent to
secure certain indemnification provisions of the Merger Agreement. A copy of
the Escrow Agreement is filed as an Exhibit hereto. The purchase price for the
Stock was determined through arm's length negotiations among the parties.
The consideration to be paid by the Company was financed under
a Credit Agreement, dated November 29, 1995, by and among the Company,
Pioneer-Standard of Maryland, Inc., certain Banks and
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National City Bank, as Agent (the "Credit Agreement"). The principal amount
advanced and to be paid on January 4, 1996 under the Credit Agreement is
subject to an interest rate of various floating rate options. It is
anticipated that some portion of the loans under the Credit Agreement will be
refinanced with a combination of equity and fixed rate debt, given favorable
market conditions.
Technologies distributes electronic components and computer
products and provides technical support through 11 locations in the southeast
and northwest regions of the United States.
Other than the Noncompetition Agreements set forth above, and
the fact that, prior to this transaction, the Company owned 50% of the Common
Stock of Technologies, there are no material relationships between Technologies
and the Company or any of their affiliates, directors or officers, except that
James L. Bayman and Preston B. Heller, directors of the Company, also serve as
directors of Technologies.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
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(a) Financial Statements of Businesses Acquired.
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1. Audited Financial Statements of Pioneer/Technologies Group, Inc. (1)
Report of Independent Auditors
Balance sheets at March 31, 1995 and 1994
Statements of Income and Retained Earnings for the years
ended March 31, 1995, 1994 and 1993
Statements of Cash Flows for the years ended March 31,
1995, 1994 and 1993
Notes to Financial Statements
2. Unaudited Condensed Financial Statements of Pioneer/
Technologies Group, Inc. (2)
Balance Sheets at September 30, 1995 and March 31, 1995
Statements of Income and Retained Earnings for the three
and six month periods ending September 30, 1995
and 1994 Statements of Cash Flows for the three and six
month periods ended September 30, 1995 and 1994
Notes to Financial Statements
(b) Pro Forma Financial Information.
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Pioneer-Standard Electronics, Inc. and Subsidiaries and
Pioneer/Technologies Group, Inc. -- Pro Forma Condensed Combined
Financial Statements (Unaudited)
Pro Forma Condensed Consolidated Balance Sheet of Pioneer-Standard
Electronics, Inc. and Subsidiaries and
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Pioneer/Technologies Group, Inc. for the Six Months Ended September
30, 1995 (Unaudited)
Pro Forma Condensed Consolidated Statement of Income of
Pioneer-Standard Electronics, Inc. and Subsidiaries and
Pioneer/Technologies Group, Inc. for the Fiscal Year Ended
March 31, 1995 (Unaudited)
Pro Forma Consolidated Statement of Income of Pioneer-Standard
Electronics, Inc. and Subsidiaries and Pioneer/Technologies
Group, Inc. for the Six Months Ended September 30, 1995 (Unaudited)
Notes to Unaudited Pro Forma Combined Consolidated Financial Statements
Exhibit No. Description Page No.
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2.1 Plan and Agreement of Merger, dated *
November 30, 1995 by, and among Pioneer-Standard Electronics,
Inc., Pioneer-Standard of Maryland, Inc., Pioneer/Technologies
Group Inc., the Shareholders identified on the Signature Pages
and Bruce S. Tucker, as Shareholders Representative (without
Schedules).**
4.1 Credit Agreement, dated as of November 29, 1995, by and among *
Pioneer-Standard Electronics, Inc., Pioneer-Standard of
Maryland, Inc., the Banks identified on the Signature Pages
thereto and National City Bank, as Agent.
4.2 Amendment No. 2 to Note Purchase 13
Agreement, as of November 30, 1995,
by Pioneer-Standard Electronics, Inc.
and Teachers Insurance and Annuity
Association of America.
99.1 Escrow Agreement, dated as of November 30, 1995, by and among *
Pioneer-Standard Electronics, Inc., certain stockholders of
Pioneer/Technologies Group Inc., Bruce S. Tucker as
Shareholders Representative and NationsBank, N.A.
99.2 Noncompetition Agreement, dated as of November 30, 1995, by *
and between Pioneer-Standard of Maryland, Inc. f/k/a
Pioneer/Technologies Group Inc. and Bruce S. Tucker.
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99.3 Noncompetition Agreement, dated as of November 30, 1995, by *
and between Pioneer-Standard of Maryland, Inc. f/k/a
Pioneer/Technologies Group Inc. and Jay S. Ross.
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(1) These financial statements were previously filed in connection
with the Company's Annual Report on Form 10-K for the year
ended March 31, 1995, which financial statements are
incorporated herein by reference.
(2) These Financial Statements were previously filed in connection
with the Company's Quarterly Report on Form 10-Q for the
fiscal quarter ended September 30, 1995, which Financial
Statements are incorporated herein by reference.
* Previously filed.
** The Registrant agrees by this filing to supplementally furnish
a copy of the schedules of this Agreement to the Commission
upon request.
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SIGNATURES
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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.
PIONEER-STANDARD ELECTRONICS, INC.
By: /s/ John V. Goodger
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John V. Goodger, Vice President,
Treasurer and Assistant Secretary
Date: February 9, 1996
431/15154NGA.451
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PIONEER-STANDARD ELECTRONICS, INC.
UNAUDITED PRO FORMA CONDENSED COMBINED
FINANCIAL STATEMENTS
BASIS OF PRESENTATION
Pioneer-Standard Electronics, Inc. ("Pioneer") acquired the
remaining interest in the 50 percent owned affiliate, Pioneer/Technologies
Group, Inc. ("Technologies") in a $50 million cash transaction on November
30, 1995. The transaction was funded with revolving bank credit borrowings.
The unaudited pro forma combined statements of income for the year
ended March 31, 1995 and the six months ended September 30, 1995 present the pro
forma results of operations of Pioneer as if the acquisition of Technologies had
occurred on April 1, 1994 and April 1, 1995, respectively. The pro forma
condensed combined balance sheet is presented on a pro forma basis as if the
acquisition and related revolving bank credit borrowings had occurred on
September 30, 1995. The unaudited pro forma condensed combined statements of
income for the year ended March 31, 1995 and the six months ended September 30,
1995, are not necessarily indicative of the results of operations that my have
actually occurred had the acquisition taken place at April 1, 1994 and April 1,
1995, or of the future results of Pioneer.
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PIONEER-STANDARD ELECTRONICS, INC.
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED)
SEPTEMBER 30, 1995
(IN THOUSANDS)
Pro Forma Pro Forma
Pioneer Technologies Adjustments Combined
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ASSETS
Current Assets
Cash $ 18,845 $ 10 $ 18,855
Accounts receivable - net 128,127 42,829 $ (312) (A) 170,644
Merchandise inventory 137,352 58,685 196,037
Prepaid expenses 2,667 630 3,297
Deferred income taxes 5,708 1,075 6,783
Shareholder notes receivable -- 14 (14) (A) --
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Total current assets 292,699 103,243 (326) (A) 395,616
Investment in 50%-owned company 17,872 -- {(76,272) (B)} --
{58,400 (A)}
Other assets 1,142 378 (192) (A) 1,328
Goodwill 4,542 -- 40,526 (B) 45,068
Property and equipment, at cost 62,466 11,360 73,826
Accumulated depreciation 24,775 6,046 30,821
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Net 37,691 5,314 -- 43,005
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$ 353,946 $ 108,935 $ 22,136 $ 485,017
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LIABILITIES AND
SHAREHOLDERS' EQUITY
Current liabilities
Notes payable to banks $ 17,000 $ -- $ 17,000
Accounts payable 89,082 26,779 115,861
Accrued liabilities 22,260 2,693 24,953
Long-term debt due within one year 2,873 -- 2,873
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Total current liabilities 131,215 29,472 160,687
Long-term debt 80,313 43,717 $ 57,882 (A) 181,912
Deferred income taxes 2,268 -- 2,268
Shareholder's equity
Common stock 6,653 10 (10) (B) 6,653
Capital in excess of stated value 16,884 90 (90) (B) 16,884
Retained earnings 116,121 35,646 (35,646) (B) 116,121
Foreign currency translation adjustment 492 -- 492
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140,150 35,746 (35,746) 140,150
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$ 353,946 $ 108,935 $ 22,136 $ 485,017
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See accompanying notes.
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PIONEER-STANDARD ELECTRONICS, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
FOR THE YEAR ENDED MARCH 31, 1995
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
Pro Forma Pro Forma
Pioneer Technologies Adjustments Combined
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DR (CR)
Net sales $ 832,152 $ 368,100 $ 1,200,252
Cost and expenses:
Cost of goods sold 677,171 316,212 993,383
Warehouse, selling and $ {(4,400) (C)}
administrative expense 111,302 41,736 { 1,013 (D)} 149,651
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Operating profit 43,679 10,152 (3,387) 57,218
Interest expense 3,966 2,016 3,600 (E) 9,582
Equity in earnings of
50%-owned company 2,500 -- 2,500 (F) --
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Income before income taxes 42,213 8,136 (2,713) 47,636
Provision for income taxes 17,204 3,135 (444) (G) 19,895
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Net income $ 25,009 $ 5,001 $ (2,269) $ 27,741
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Average shares outstanding 22,886,877 22,886,877
Shares outstanding at end of period 22,374,219 22,374,219
Earning per share $1.09 $1.21
Dividends per share $.075 $.075
See accompanying notes.
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PIONEER-STANDARD ELECTRONICS, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1995
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
Pro Forma Pro Forma
Pioneer Technologies Adjustments Combined
DR (CR)
Net sales $ 459,637 $ 160,396 $ 620,033
Cost and expenses:
370,671 133,532 504,203
Cost of goods sold
Warehouse, selling and $ {(1,900) (C)}
administrative expense 63,838 22,280 { 507 (D)} 84,725
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Operating profit 25,128 4,584 (1,393) 31,105
Interest expense 2,965 1,313 1,800 (E) 6,078
Equity in earnings of
50%-owned company 909 -- 909 (F) --
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Income before income taxes 23,072 3,271 (1,316) 25,027
Provision for income taxes 9,551 1,454 (73) (G) 10,932
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Net income $ 13,521 $ 1,817 $ (1,243) $ 14,095
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Average shares outstanding 23,178,946 23,178,946
Shares outstanding at end of period 22,451,135 22,451,135
Earning per share $.58 $.61
Dividends per share $.047 $.047
See accompanying notes.
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PIONEER-STANDARD ELECTRONICS, INC.
NOTES TO UNAUDITED PRO FORMA COMBINED
CONSOLIDATED FINANCIAL INFORMATION
(IN THOUSANDS)
The following is a summary of the adjustments to the pro forma condensed
consolidated balance sheet at September 30, 1995 to record the Technologies
acquisition and related goodwill:
Debit Credit
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(A) Investment in 50%-owned company $58,400
Long-term debt $57,882
Account receivable 312
Shareholder notes receivable 14
Other assets 192
To record the acquisition, bank borrowings and
collection of amounts due
from Technologies' shareholders.
(B) Common stock $ 10
Capital in excess of stated value 90
Retained earnings 35,646
Goodwill 40,526
Investment in 50%-owned company $76,272
To eliminate the investment in and equity accounts of Technologies and
record related goodwill (to be amortized over 40 years).
The following is a summary of the adjustments included in the pro forma
condensed consolidated statements of income:
For the For the Six
Year Ended Months Ended
March 31, 1995 September 30, 1995
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(C) Adjustment to record reduction of net expenses
primarily attributable to compensation and benefit $ (4,400) $ (1,900)
related expenses of terminated employees
(D) Adjustment to record amortization of goodwill over a 40
year period. 1,013 507
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For the For the Six
Year Ended Months Ended
March 31, 1995 September 30, 1995
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(E) Adjustment to reflect the increase in interest expense
associated with additional debt incurred in connection
with the acquisition. $ 3,600 $ 1,800
(F) Adjustment to eliminate equity in earnings of 50%-owned
company. (2,500) (909)
(G) Adjustment to income taxes based on consolidated pro
forma income. (444) (75)