FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 1997
Commission file number 1-13059
JLK DIRECT DISTRIBUTION INC.
(Exact name of registrant as specified in its charter)
PENNSYLVANIA 23-2896928
(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification No.)
STATE ROUTE 981 SOUTH
P.O. BOX 231
LATROBE, PENNSYLVANIA 15650
(Address of registrant's principal executive offices)
Registrant's telephone number, including area code: (724) 539-5000
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 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:
TITLE OF EACH CLASS OUTSTANDING AT JANUARY 30, 1998
------------------- -------------------------------
Class A Common Stock, par value $.01 4,917,000
Class B Common Stock, par value $.01 20,237,000
TABLE OF CONTENTS
Item No.
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PART I. FINANCIAL INFORMATION
1. Financial Statements:
Condensed Consolidated Balance Sheets (Unaudited)
December 31, 1997 and June 30, 1997
Condensed Consolidated Statements of Income Unaudited)
Three and six months ended December 31, 1997 and 1996
Condensed Consolidated Statements of Cash Flows (Unaudited)
Six months ended December 31, 1997 and 1996
Notes to Condensed Consolidated Financial Statements (Unaudited)
2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
PART II. OTHER INFORMATION
2. Changes in Securities and Use of Proceeds
6. Exhibits and Reports on Form 8-K
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
JLK DIRECT DISTRIBUTION INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
- ----------------------------------------------------------------------------
(in thousands) December 31, June 30,
1997 1997
-------- --------
ASSETS
Current Assets:
Cash and equivalents $ 8,253 $ 13,088
Notes receivable from Kennametal 49,994 -
Accounts receivable, less allowance for
doubtful accounts of $311 and $186 50,579 42,589
Inventories 76,862 70,332
Deferred income taxes 3,314 3,260
-------- --------
Total current assets 189,002 129,269
-------- --------
Property, Plant and Equipment:
Land and buildings 2,416 1,761
Machinery and equipment 12,278 9,475
Less accumulated depreciation (4,967) (4,204)
-------- --------
Net property, plant and equipment 9,727 7,032
-------- --------
Other Assets:
Intangible assets, less accumulated
amortization of $6,006 and $4,948 36,416 27,927
Other 1,250 1,260
-------- --------
Total other assets 37,666 29,187
-------- --------
Total assets $236,395 $165,488
======== ========
LIABILITIES
Current Liabilities:
Notes payable to banks $ 114 $ 20,295
Notes payable to Kennametal - 15,805
Accounts payable 21,013 15,460
Due to Kennametal and affiliates 3,966 7,641
Accrued payroll 2,029 1,308
Income taxes payable 1,839 4,055
Other 5,025 3,233
-------- --------
Total current liabilities 33,986 67,797
-------- --------
Other Liabilities 5,483 4,960
-------- --------
Total liabilities 39,469 72,757
-------- --------
SHAREHOLDERS' EQUITY
Shareholders' Equity:
Investments by and advances from Kennametal - 92,643
Preferred stock, $.01 par value; 25,000 shares
authorized; none issued - -
Class A Common Stock, $.01 par value; 75,000 shares
authorized; 4,917 shares issued and outstanding 49 -
Class B Common Stock, $.01 par value; 50,000 shares
authorized; 20,237 shares issued and outstanding 202 -
Additional paid-in capital 182,837 -
Retained earnings 13,746 -
Cumulative translation adjustments 92 88
-------- --------
Total shareholders' equity 196,926 92,731
-------- --------
Total liabilities and shareholders' equity $236,395 $165,488
======== ========
See accompanying notes to condensed consolidated financial statements.
JLK DIRECT DISTRIBUTION INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
- -------------------------------------------------------------------------
(in thousands, except per share data)
Three Months Ended Six Months Ended
December 31, December 31,
------------------ ------------------
1997 1996 1997 1996
-------- -------- -------- --------
OPERATIONS:
Net sales $93,693 $70,744 $189,114 $140,762
Cost of goods sold 59,156 47,634 122,328 95,707
-------- -------- -------- --------
Gross profit 34,537 23,110 66,786 45,055
Operating expenses 24,231 16,609 46,311 32,019
-------- -------- -------- --------
Operating income 10,306 6,501 20,475 13,036
Interest income 1,171 - 2,171 -
-------- -------- -------- --------
Income before income taxes 11,477 6,501 22,646 13,036
Provision for income taxes 4,500 2,554 8,900 5,119
-------- -------- -------- --------
Net income $ 6,977 $ 3,947 $ 13,746 $ 7,917
======== ======== ======== ========
PER SHARE DATA:
Basic earnings per share $ 0.28 - $ 0.55 -
======== ======== ======== ========
Diluted earnings per share $ 0.28 - $ 0.54 -
======== ======== ======== ========
Weighted average shares
outstanding 25,154 - 25,154 -
======== ======== ======== ========
Diluted average shares
outstanding 25,317 - 25,295 -
======== ======== ======== ========
Pro forma net income per share - $ 0.19 - $ 0.38
======== ======== ======== ========
Pro forma weighted average
shares outstanding - 20,932 - 20,932
======== ======== ======== ========
See accompanying notes to condensed consolidated financial statements.
JLK DIRECT DISTRIBUTION INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
- -------------------------------------------------------------------------
(in thousands)
Six Months Ended
December 31,
----------------------
1997 1996
------- -------
OPERATING ACTIVITIES:
Net income $13,746 $ 7,917
Adjustments for noncash items:
Depreciation and amortization 1,822 794
Loss on sale of assets 144 -
Noncash transactions with Kennametal - 3,083
Changes in certain assets and liabilities,
net of effects of acquisitions:
Accounts receivable (5,127) 3,996
Inventories (3,046) (168)
Accounts payable and accrued liabilities 2,221 (1,264)
Other (2,773) 931
------- -------
Net cash flow from operating activities 6,987 15,289
------- -------
INVESTING ACTIVITIES:
Purchases of property, plant and equipment (2,259) (1,300)
Notes receivable from Kennametal (49,994) -
Acquisitions, net of cash (14,032) -
------- -------
Net cash flow used for investing activities (66,285) (1,300)
------- -------
FINANCING ACTIVITIES:
Net proceeds from initial public offering
of Class A Common Stock 90,445 -
Decrease in short-term debt (20,181) -
Notes Payable to Kennametal (15,805) -
Net cash advances by (payments to) Kennametal - (7,815)
------- -------
Net cash flow from (used for) financing activities 54,459 (7,815)
------- -------
Effect of exchange rate changes on cash 4 292
------- -------
CASH AND EQUIVALENTS:
Net increase (decrease) in cash and equivalents (4,835) 6,466
Cash and equivalents, beginning 13,088 690
------- -------
Cash and equivalents, ending $ 8,253 $ 7,156
======= =======
See accompanying notes to condensed consolidated financial statements.
JLK DIRECT DISTRIBUTION INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
- -------------------------------------------------------------------------
1. The accompanying condensed consolidated financial statements of JLK
Direct Distribution Inc. (the "Company") include the operations of J&L
America, Inc. ("J&L"), a previously wholly-owned subsidiary of Kennametal Inc.
("Kennametal"), and Full Service Supply ("Full Service Supply"), which
previously had been operated as a program of Kennametal. Prior to April 1,
1997, the Company had no separate legal status or existence. Kennametal
incorporated the Company as a Pennsylvania corporation under the name "JLK
Direct Distribution Inc." in April 1997. In anticipation of the initial
public offering ("IPO"), Kennametal contributed to the Company the stock of
J&L, including the J&L United Kingdom operations, and the assets and
liabilities of Full Service Supply. Immediately prior to the effective date of
the IPO (see Note 2), Kennametal exchanged its currently outstanding
investment for 20,897,000 shares of Class B Common Stock.
In connection with the IPO, Kennametal surrendered to the Company
640,000 shares of Class B Common Stock equal to the number of additional
shares of Class A Common Stock purchased by the underwriters upon exercise of
the underwriters over-allotment option. In addition, Kennametal sold
20,000 shares of Class B Common Stock at $20 per share to one of the members
of its and the Company's board of directors. The 20,000 shares of Class B
Common Stock were subsequently converted to Class A Common Stock. Subsequent
to the IPO, 4,917,000 shares of Class A Common Stock were outstanding, and
Kennametal held 20,237,000 shares of Class B Common Stock.
2. On July 2, 1997, the Company consummated an IPO of approximately
4.9 million shares of Class A Common Stock at a price of $20 per share. The
net proceeds from the IPO were approximately $90 million and represented
approximately 20% of the Company's outstanding common stock. The net proceeds
were used by the Company to repay $20 million of short-term debt related to a
dividend paid to Kennametal and $20 million to repay Kennametal for
acquisitions and income taxes paid for on behalf of the Company.
Additional net proceeds of $14 million have been used to make acquisitions
(see Note 6). The remaining net proceeds are loaned to Kennametal under an
intercompany debt/investment and cash management agreement at a fluctuating
rate of interest equal to Kennametal's short-term borrowing costs. Kennametal
maintains unused lines of credit to enable it to repay any portion of the
borrowed funds as the amounts are due on demand by the Company.
3. The condensed consolidated financial statements should be read in
conjunction with the Notes to Consolidated Financial Statements included in
the Company's 1997 Annual Report on Form 10-K. The condensed consolidated
balance sheet as of June 30, 1997 has been derived from the audited balance
sheet included in the Company's 1997 Annual Report on Form 10-K. These
interim statements are unaudited; however, management believes that all
adjustments necessary for a fair presentation have been made and all
adjustments are normal, recurring adjustments. The results for the three and
six months ended December 31, 1997 are not necessarily indicative of the
results to be expected for the full fiscal year.
4. Basic earnings per share for fiscal 1998 was computed using the weighted
average number of shares outstanding during the period, while diluted earnings
per share was calculated to reflect the potential dilution that occurs related
to issuance of common stock under stock option grants. The difference between
basic and diluted earnings per share relates solely to the effect of common
stock options. Pro forma earnings per share for fiscal 1997 was computed
using the weighted average number of shares outstanding during the period.
Pro forma weighted average common shares outstanding are presented on a basis
that gives pro forma effect to (i) the issuance of the Class B Common Stock
and (ii) the assumed issuance of 34,650 shares of Class A Common Stock to fund
the excess of dividends over net income.
5. The Financial Accounting Standards Board ("FASB") recently issued SFAS
No. 128, "Earnings Per Share" ("SFAS No. 128") and SFAS No. 129, "Disclosure
of Information about Capital Structures" ("SFAS No. 129"). SFAS No. 128 was
issued in February 1997 and is effective for periods ending after December 15,
1997. This statement requires all prior earnings per share ("EPS") data to be
restated to conform to the provisions of the statement. This statement's
objective is to simplify the computations of EPS and to make the U.S. standard
for EPS computations more compatible with that of the International Accounting
Standards Committee. The Company adopted SFAS No. 128 in the second quarter
of fiscal 1998.
SFAS No. 129 was issued in February 1997 and is effective for periods ending
after December 15, 1997. This statement requires all companies to provide
specific disclosure regarding their capital structure. SFAS No. 129 will
specify the disclosure for all companies, including descriptions of their
capital structure and the contractual rights of the holders of such
securities. The Company adopted SFAS No. 129 in the second quarter of fiscal
1998.
6. During the quarter ended December 31, 1997, JLK acquired Car-Max Tool &
Cutter Sales, Inc. and GRS Industrial Supply Company. Both companies are
engaged in the distribution of metalcutting tools and industrial supplies. The
two acquired companies had combined annual sales of approximately
$23.9 million. The net purchase price of the acquisitions was allocated as
follows (in thousands):
Current assets, net of cash $ 6,400
Property, plant & equipment 1,345
Other assets 215
Goodwill 7,790
Liabilities (1,718)
-------
Purchase price, net of cash $14,032
The acquisitions were accounted for using the purchase method of accounting.
The consolidated financial statements include the operating results from the
date of acquisition. Pro forma results of operations have not been presented
because the effects of these acquisitions were not significant.
Additionally, on January 5, 1998, JLK acquired Production Tools Sales, Inc.
("PTS"), a metalworking distributor headquartered in Dallas, Texas. PTS had
annual sales of $23 million in its latest fiscal year.
7. Information related to the Company's shareholders' equity during the six
months ended December 31, 1997 is as follows:
(in thousands) Class A Common Stock Class B Common Stock Additional Investments by
-------------------- -------------------- Paid-In Retained Translation and Advances
Shares Amount Shares Amount Capital Earnings Adjustments from Kennametal Total
------ ------ ------ ------ ------- -------- ----------- --------------- -----
Balance, June 30, 1997 - $ - - $ - $ - $ - $88 $92,643 $ 92,731
Exchange of investment by
and advances from
Kennametal for 20,897
shares of Class B Common
Stock - - 20,897 209 92,434 - - (92,643) -
Initial public offering
of Class A Common Stock
including surrender of
640 shares of Class B
Common Stock 4,897 48 (640) (6) 90,403 - - - 90,445
Sale and exchange of
Class B Common Stock for
Class A Common Stock by
Kennametal 20 1 (20) (1) - - - - -
Translation adjustments - - - - - - 4 - 4
Net Income - - - - - 13,746 - - 13,746
Balance, December 31, 1997 4,917 $49 20,237 $202 $182,837 $13,746 $92 $ - $196,926
===== === ====== ==== ======== ======= === ======= ========
In connection with the IPO, Kennametal surrendered to the Company
640,000 shares of Class B Common Stock equal to the number of additional
shares of Class A Common Stock purchased by the underwriters upon exercise of
the underwriters over-allotment option. In addition, Kennametal sold
20,000 shares of Class B Common Stock at $20 per share to one of the members
of its and the Company's board of directors. The 20,000 shares of Class B
Common Stock were subsequently converted to Class A Common Stock. Subsequent
to the IPO, 4,917,000 shares of Class A Common Stock were outstanding, and
Kennametal held 20,237,000 shares of Class B Common Stock.
8. The Company engages in business transactions with Kennametal and its
subsidiaries. Products purchased for resale from Kennametal and its
subsidiaries and sales to these entities for the three and six months ended
December 31, 1997 and 1996 were as follows ($ in thousands):
Three months ended Six months ended
December 31, December 31,
------------------ -----------------
1997 1996 1997 1996
------- ------ ------- -------
Purchases from Kennametal
and subsidiaries $8,863 $6,987 $19,100 $12,843
Sales to Kennametal
and subsidiaries $2,561 $3,530 $ 5,192 $ 7,129
The Company also receives from Kennametal certain warehouse, management
information systems, financial and administrative services. All amounts
incurred by Kennametal on behalf of the Company are reflected in operating
expenses in the accompanying statements of income. Costs charged to the
Company by Kennametal totaled $2.6 million and $1.9 million, and $5.1 million
and $3.8 million for the three and six months ended December 31, 1997 and
1996, respectively.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
- ---------------------------------------------------------------------------
RESULTS OF OPERATIONS
NET SALES
- ---------
Net sales for the December 1997 quarter were $93.7 million, an increase of 32%
from $70.7 million last year. Net sales primarily increased because of the
expanded product offering in the 1998 master catalog issued September 1, 1997,
from acquisitions and from further penetration of existing customers. These
increases in sales were realized despite a significant reduction in sales due
to the General Electric Full Service Supply contract (GE Contract)
disengagement. Excluding the acquisitions, net sales increased 17%.
During the six-month period ended December 31, 1997, consolidated sales were
$189.1 million, up 34% from $140.8 million last year.
GROSS PROFIT
- ------------
Gross profit for the December 1997 quarter was $34.5 million, an increase of
49% from $23.1 million in the prior year. Gross profit margin for the
December 1997 quarter was 36.9% compared to 32.7% in the prior year. The
gross profit margin improved due to a more favorable sales mix as well as
improved contract pricing on new Full Service Supply programs and the positive
impact of the GE Contract disengagement.
During the six-month period ended December 31, 1997, gross profit was
$66.8 million, up 48% from $45.1 million last year. Gross profit margin for
the six-month period ended December 31, 1997 was 35.3% compared to 32.0% in
the prior year.
OPERATING EXPENSES
- ------------------
Operating expenses for the December 1997 quarter were $24.2 million, an
increase of 46% from $16.6 million in the prior year. Operating expenses as a
percentage of net sales were 25.9% in the December 1997 quarter compared to
23.5% in the prior year. Operating expenses rose primarily as a result of
increased costs from acquisitions, higher costs associated with the addition
of new showroom locations and increased direct mail costs, and new customer
marketing campaigns.
Also included in operating expenses were charges from Kennametal Inc.
("Kennametal") for warehousing, administrative, financial and management
information systems services provided to the Company. Charges from Kennametal
were $2.6 million in the December 1997 quarter, an increase of 36.9% from
$1.9 million in the prior year. The increase in total charges from Kennametal
resulted partly from increased costs to support higher sales volumes.
During the six-month period ended December 31, 1997, operating expenses were
$46.3 million, up 45% from $32.0 million last year. Charges from Kennametal
were $5.1 million for the six-month period ended December 31, 1997 compared to
$3.8 million in the prior year.
INTEREST INCOME
- ---------------
The Company earned interest income of approximately $1.2 million during the
December 1997 quarter. This was primarily from investments made from excess
cash and from the residual proceeds the Company received from its initial
public offering ("IPO").
During the six-month period ended December 31, 1997, interest income was
approximately $2.2 million.
INCOME TAXES AND NET INCOME
- ---------------------------
The effective tax rate was 39.2% for the December 1997 quarter compared to
39.3% in the prior year. Net income increased 77% to $7.0 million for the
December 1997 quarter as a result of higher sales and an improved gross
margin, offset by higher operating expenses.
For the six-month period ended December 31, 1997, the effective tax rate was
39.3%, the same as in the prior year. Net income increased 74% to
$13.7 million from $7.9 million in the prior year.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
The Company's primary capital needs have been to fund the working capital
requirements necessitated by its sales growth, its showroom expansion program
in the United States, acquisitions, the addition of new products and Full
Service Supply Programs. The Company's primary sources of financing have been
cash from operations and the net proceeds from the IPO. The Company
anticipates that its cash flows from operations, coupled with the net proceeds
from the IPO, will be adequate to support its operations for the foreseeable
future.
Net cash provided by operating activities was $7.0 million for the six months
ended December 31, 1997. The decrease in net cash from operations resulted
from slightly higher working capital requirements, offset in part by higher
net income.
Net cash used in investing activities was $66.3 million for the six months
ended December 31, 1997. The increase in net cash used in investing
activities resulted from a portion of the net proceeds from the IPO being
loaned to Kennametal under an intercompany debt/investment and cash management
agreement, from recent acquisitions and from investments related primarily to
capital expenditures for improved information systems and office and computer
equipment to accommodate new product offerings and showroom openings.
During the December quarter, the Company acquired GRS Industrial Supply
Company and Car-Max Tool & Cutter Sales, Inc. Both companies are engaged in
the distribution of metalcutting tools and industrial supplies. Additionally,
on January 5, 1998, JLK acquired Production Tools Sales, Inc., a metalworking
distributor headquartered in Dallas, Texas. The three acquired companies had
combined annual sales of approximately $47 million. The acquisitions were
accounted for using the purchase method of accounting. The consolidated
financial statements include the operating results from the date of
acquisition. Pro forma results of operations have not been presented because
the effects of these acquisitions were not significant.
Net cash provided by financing activities was $54.5 million for the six months
ended December 31, 1997. The increase in net cash provided by financing
activities was a result of proceeds received from the issuance of common stock
in connection with the Company's IPO. This was partially offset by repayments
to Kennametal for amounts previously advanced to the Company for two
acquisitions in the June 1997 quarter and by the repayment of short-term
borrowings that were made under the Company's line of credit primarily to fund
the $20 million dividend paid to Kennametal.
On July 2, 1997, the Company consummated its IPO of approximately 4.9 million
shares of common stock at a price of $20 per share. The net proceeds from the
IPO were approximately $90 million and represented approximately 20% of the
Company's outstanding common stock. The net proceeds were used by the Company
to repay $20 million of short-term debt related to the dividend paid to
Kennametal and to repay $20 million to Kennametal for the recent acquisitions
and income taxes paid for on behalf of the Company.
The remaining proceeds will be used to acquire or construct a new
$15-20 million Midwest distribution center, to provide working capital for new
showrooms and Full Service Supply Programs and to fund acquisitions.
Additional net proceeds of $14 million have been used to make acquisitions.
The remaining net proceeds are loaned to Kennametal under an intercompany
debt/investment and cash management agreement at a fluctuating rate of
interest equal to Kennametal's short-term borrowing costs. Kennametal
maintains unused lines of credit to enable it to repay any portion or all of
such loans on demand by the Company.
Additionally, the Company finalized its plan of disengagement from those sites
that are not being continued under the General Electric Full Service Supply
contract ("GE Contract"). In fiscal 1998, Full Service Supply sales will
experience a gradual reduction as a result of this event. In fiscal 1998, in
conjunction with such disengagement, the Company expects sales to General
Electric to amount to approximately 30% of the total amount received by the
Company in fiscal 1997 under the GE Contract which amounted to $54.7 million.
FINANCIAL CONDITION
- -------------------
The Company's financial condition remains strong. Total assets were
$236 million at December 31, 1997, up 43% from $165 million at June 30, 1997.
Net working capital was $155 million, up from $61 million at June 30, 1997.
Additionally, the Company had no outstanding long-term debt at December 31,
1997.
The most significant events that impacted the Company's financial condition
during the quarter were the acquisition of two industrial supply companies and
the remaining effects of the Company's IPO of approximately 4.9 million shares
of common stock at $20 per share. The net proceeds received from the offering
was approximately $90 million. A portion of the net proceeds was used to
repay short-term debt and advances from Kennametal, and the remaining net
proceeds were loaned to Kennametal.
OUTLOOK
- -------
In looking to the third quarter ending March 31, 1998, management expects
JLK's sales to continue to benefit from further expansion of locations,
increased mail order sales as a result of the expanded product offering in the
new master catalog and from acquisitions. Sales should also benefit from the
further development of international business, offset in part by the loss of
the General Electric Full Service Supply Contract.
This Form 10-Q contains forward-looking statements as defined in Section 21E
of the Securities Exchange Act of 1934. Actual results can materially differ
from those in the forward-looking statements to the extent that the
anticipated economic conditions in the United States and Europe are not
sustained. The Company undertakes no obligation to publicly release any
revisions to forward-looking statements to reflect events or circumstances
occurring after the date hereof.
PART II. OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
- ---------------------------------------------------------------------------
The information set forth in Note 2 to the condensed consolidated financial
statements, contained in Part I. of this Form 10-Q, and the information set
forth in Part I, Item 2 of this Form 10-Q, is incorporated by reference herein
and supplements the information previously reported in Part II, Item 5 of the
Company's Form 10-K for the year ended June 30, 1997, which is also
incorporated by reference herein.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
- ---------------------------------------------------------------------------
(a) Exhibits
(10) Material Contracts
10.1 JLK Direct Distribution Inc. 1997 Stock Option and
Incentive Plan Filed herewith.
(27) Financial Data Schedule for six months ended
December 31, 1997, submitted to the Securities and Exchange
Commission in electronic format Filed herewith.
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter ended
December 31, 1997.
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.
JLK DIRECT DISTRIBUTION INC.
Date: February 12, 1998 By: /s/ MICHAEL J. MUSSOG
---------------------
Michael J. Mussog
Vice President and
Chief Financial Officer