Back to GetFilings.com
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended 06/30/95
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from N/A to N/A
Commission file number 0-16345
SOUTHERN ELECTRONICS CORPORATION
(Exact name of Registrant as specified in its charter)
DELAWARE 22-2715444
(State or other jurisdiction (I.R.S. Employer
of incorporation or Identification No.)
organization)
4916 North Royal Atlanta Drive, Tucker, Georgia 30085
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 770/491-8962
Securities registered pursuant to Section 12(b) of the Act:
NONE
Securities registered pursuant to Section 12(g) of the Act:
COMMON STOCK, $.01 PAR VALUE
(Title of Class)
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 by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]
The aggregate market value of the voting stock held by nonaffiliates of the
Registrant was $24,619,194 as of September 13, 1995 based upon the closing price
of such stock as reported by Nasdaq on that day.
There were 6,995,902 shares of common stock, $.01 par value, outstanding at
September 13, 1995.
DOCUMENTS INCORPORATED BY REFERENCE:
Portions of the Annual Report to Stockholders for the fiscal year ended June 30,
1995 are incorporated by reference into Part II.
Part III incorporates information by reference from the Registrant's definitive
proxy statement for the 1995 annual meeting of stockholders presently scheduled
to be held on November 9, 1995, which proxy statement will be filed no later
than 120 days after the close of the Registrant's fiscal year ended June 30,
1995.
Exhibit Index appears on pages ___ through ___. This document contains ___
sequentially numbered pages, including exhibits.
PART I
Item 1. BUSINESS
(a) General Development of Business
Southern Electronics Corporation, a Delaware corporation (the
"Registrant"), through its wholly-owned operating subsidiary, Southern
Electronics Distributors, Inc., a Delaware corporation ("SED"), is a distributor
of microcomputers, computer peripheral products and cellular telephone products.
These products are sold through a centralized telemarketing sales force to an
active, nonexclusive, nationwide customer base of over 9,000 value-added
resellers ("VARs") and dealers of microcomputer products located primarily in
the Southeastern United States and resellers of cellular telephones.
The Registrant distributes from its distribution facilities in Tucker,
Georgia and Miami, Florida computer related products of nationally recognized
manufacturers such as AOC International (USA) Ltd., Colorado Memory Systems,
Inc., Cyrix Corporation, Epson America, Inc., Hewlett-Packard Company, Maxtor
Corporation, Panasonic Communications & Systems Company and Seagate Technology,
Inc., and cellular telephone products of nationally recognized manufacturers
such as Mitsubishi Electronics America Incorporated, NEC America, Inc. and
Toshiba America Consumer Products, Inc.
The Registrant and SED were organized in June 1986 and acquired
substantially all of the assets of Southern Electronics Distributors, Inc., a
Georgia corporation (the "Predecessor"), on July 2, 1986. The Registrant,
through SED, is conducting the business formerly operated by the Predecessor.
The Predecessor originally was engaged in the business of wholesale distribution
of consumer electronics products primarily to independent retailers in
small-to-medium-sized markets in the Southeastern United States. In response to
a perceived consolidation in the retail consumer electronics market resulting
from increased competition, the Registrant began shifting its product mix by the
end of fiscal 1987 toward microcomputers and computer peripheral products. The
Registrant added sales of cellular telephone products during fiscal 1988. The
Registrant substantially completed its strategic refocusing by the end of fiscal
1988.
On August 9, 1993, the Registrant entered into a lease for an
approximately 15,400 square foot sales and distribution facility located in
Miami, Florida. See "Item 2. Properties." The Registrant opened this facility
in November 1993 and is utilizing it primarily to foster the Registrant's
relationships with exporters that ship to the Caribbean and to Central and South
America. The Registrant presently has no intention to direct-export its
products.
(b) Financial Information about Industry Segments
The Registrant operates in only one business segment.
(c) Narrative Description of Business
1. Principal Products Distributed and Services Rendered
The Registrant offers a broad range of computer related hardware products
and cellular telephone products. Computer related hardware products accounted
for approximately 91% of net sales for fiscal 1995, and included sales of
microcomputers, floppy and hard disk drives, dot matrix and non-impact printers,
monitors, add-on boards and accessories. Approximately 9% of the Registrant's
net sales for fiscal 1995 consisted of cellular telephone products, such as
sales of mobile, transportable and portable cellular telephones and related
products. The Registrant continually evaluates its product mix and inventory
levels and maintains flexibility in its product offerings by adding popular
profitable items.
As a distributor, the Registrant plays a valued role in linking
manufacturers with customers that otherwise could not purchase products directly
from the manufacturers because of the inability or unwillingness of
manufacturers to deliver rapidly and handle efficiently small orders and to
verify smaller customers' creditworthiness. The Registrant's position in the
marketplace enables it to take advantage of volume discounts, product promotions
and other buying opportunities from its vendors, which allow the Registrant to
market a wide variety of product offerings to its customers at attractive
prices.
2. Sales, Marketing and Credit Management
The Registrant is sales driven. Knowledgeable, motivated salespeople are
a key to the Registrant's success. The Registrant's sales are generated by a
centralized telemarketing sales force, which consisted of approximately 120
persons on June 30, 1995. Members of the sales staff are trained through
intensive in-house sales training programs, along with manufacturer-sponsored
product seminars. This training allows sales personnel to provide customers
with product information and to use their marketing expertise to answer
customers' questions about important new product considerations, such as
compatibility and capability, while offering advice on which products meet
specific performance and price criteria. The Registrant's salespeople are able
to analyze quickly the Registrant's extensive inventory through a sophisticated
management information system and recommend the most appropriate cost-effective
systems and hardware for each customer -- whether a full-line retailer or an
industry-specific VAR.
Because the Registrant's salespersons' compensation is based primarily on
commissions, the salespeople are challenged to increase their product knowledge
and to establish long-term relationships with existing and new customers.
Customers can telephone their salespersons on a toll-free number provided by the
Registrant. Salespeople initiate calls to introduce the Registrant's existing
customers to the Registrant's new products and to solicit orders. In addition,
salespeople conduct "cold-call" prospecting using mailing lists and telephone
directories of various cities to develop new customer relationships.
The telemarketing salespersons are supported by other marketing programs.
Representatives of the Registrant generally attend at least one trade show
annually where they publicize the Registrant's capabilities. In addition, the
Registrant's in-house marketing staff prepares catalogs listing available
microcomputer and related products and catalogs listing available cellular
telephone products for distribution to the Registrant's customers. It also
publishes other direct mail pieces promoting specials and new products.
The Registrant's sales efforts for computer related products are directed
principally to its nationwide customer base of VARs and dealers located
primarily in the Southeastern United States. The Registrant maintains a
separate telemarketing salesforce for the sale of cellular telephone products to
retailers and cellular telephone carriers and their authorized agents located
throughout the United States.
The Registrant sells its merchandise on a trade credit, COD, prepaid or
floor-plan basis. Under floor-plan arrangements, a lender finances a customer's
purchase of inventory from the Registrant. The Registrant typically grants
trade credit terms to its customers who qualify. The Registrant has a number of
systems in place to monitor and manage trade credit extended to its customers,
including its participation in a national credit association in which credit
rating information on mutual customers is exchanged.
Generally, product orders are processed and shipped from the Registrant's
metropolitan Atlanta distribution facility on the same day an order is received
or, in the case of orders received after 7:00 p.m., on the next business day.
The Registrant generally uses United Parcel Service and Federal Express to
deliver its merchandise to its customers. Alternative shippers are, however,
readily available. Generally, the Registrant's inventory level of products has
been adequate to permit the Registrant to be responsive to its customers'
purchase requirements. From time to time, the Registrant experiences temporary
shortages with respect to certain products as certain of its vendors experience
increased demand or manufacturing with respect to their products, resulting in
smaller allocations of such products for the Company.
3. Customers and Customer Support
The Registrant serves an active, nonexclusive, nationwide customer base of
over 9,000 VARs and dealers of microcomputer products and resellers of cellular
telephones. The Registrant believes the multi-billion dollar microcomputer and
cellular telephone wholesale distribution industries are comprised primarily of
customers served on a nonexclusive basis, which provides the Registrant with
significant growth opportunities. During fiscal 1995, no customer accounted for
more than 10% of the net sales of the Registrant. The Registrant believes that
most of its customers rely on distributors as their principal source of computer
and cellular telephone products.
The Registrant's salespeople are trained to help customers configure
microcomputer products and to recommend the most appropriate, cost-effective
systems and hardware for each customer. In addition, the Registrant's technical
support department provides technical advice by toll-free telephone and
configures many of the microcomputer products sold by the Registrant. If
authorized by the Registrant, a customer may return to the Registrant a product
found defective during the manufacturer's warranty period. Upon receipt of the
defective product from the customer, the Registrant generally ships a
replacement product to the customer and returns the defective product to the
manufacturer for credit or repair.
4. Vendors
Because of the growing number of relatively small VARs that purchase low
volumes of product from manufacturers, it is becoming increasingly cost
efficient for most manufacturers to rely on distributors, such as the
Registrant, rather than to incur the cost of maintaining their own sales staff,
warehouses and credit functions to market, distribute, verify creditworthiness
and collect receivables from these customers. The Registrant's market position
and financial condition have enabled it to purchase large quantities of products
from many manufacturers at competitive prices. The Registrant believes that the
inability of certain smaller distributors to control costs and finance their
operations is causing a consolidation in the microcomputer and cellular
distribution channel, making the Registrant an increasingly important resource
to its vendors.
The Registrant, like most wholesale microcomputer and cellular telephone
distributors, sells products from manufacturers generally on a nonexclusive
basis without geographical restrictions. Although most manufacturers seek
geographical balance in their distributor network, distributors generally are
permitted to sell their products throughout the United States and Canada.
Management believes all of the Registrant's vendor agreements are in forms
customarily used by its vendors. Except to take advantage of certain volume
pricing opportunities, the Registrant's vendor agreements do not contain any
minimum purchase requirements. The Registrant purchases goods from more than
120 vendors; however, it has negotiated favorable terms from certain
manufacturers by purchasing a substantial portion of its products from them.
During fiscal 1995, the Registrant purchased approximately 15% of its inventory
from one vendor. No other vendor accounted for more than 10% of the
Registrant's purchases in fiscal 1995.
Management continually seeks to expand its list of vendors. While the
loss of a major vendor could have a material adverse effect on the Registrant's
business, the Registrant believes alternative vendors for similar products are
available. There can be no assurance, however, that the addition of these
alternative vendors would place the Registrant in the same or as competitive a
financial position as it experienced immediately prior to the loss of the major
vendor. Generally, management believes that its relationship with its vendors
is good.
The Registrant receives vendor price protection for substantially all of
its inventory. In the event a vendor reduces its prices for goods covered by
this price protection arrangement which have otherwise not been sold, the
Registrant generally either receives a credit on account from the vendor for the
price differential or returns the goods to the vendor for credit of the purchase
price.
5. Employees
As of June 30, 1995, the Registrant had 330 full-time employees, 120 of
whom were engaged in telemarketing, and an additional 28 part-time employees.
The salespeople are compensated primarily on a commission basis. Management
believes the Registrant's relations with its employees are good, and the
Registrant has never experienced a strike or work stoppage. There is no
collective bargaining agreement covering any of the Registrant's employees.
6. Competition
The microcomputer and cellular telephone products markets are extremely
competitive. Competition within the industry is principally based on price,
product breadth and availability, delivery terms, trade credit terms and various
types of technical support and service. Major competitors include Ingram Micro,
Inc., Merisel, Inc., Tech Data Corporation and a variety of other smaller
regional competitors. The Registrant also competes with manufacturers that sell
directly to retailers and VARs. Although many of the distributors with which
the Registrant competes have greater financial resources, the Registrant
nevertheless believes that its ability to provide competitive pricing, a broad
range of products and available inventory, rapid delivery and technical support
are important factors that enable it to compete effectively.
7. Seasonality
The Registrant's sales are not subject to material seasonal fluctuations.
Item 2. PROPERTIES
The Registrant maintains its executive, administrative and sales office
and principal distribution facility in the Atlanta metropolitan area. The
Registrant leases its executive, administrative and sales office from Royal Park
Company, a Georgia general partnership comprised of certain minority
stockholders of the Registrant. The lease expires in October 1999 after an
8-year term and supersedes the original 15-year lease entered into in 1984
between the Predecessor and Royal Park Company. The facility consists of
approximately 30,000 square feet, with an annual rental of approximately
$163,000 through October 1, 1999, subject to increase based upon periodic
changes in the Consumer Price Index. The Registrant has a right of first
refusal to purchase the facility should it be offered for sale. The Registrant
believes that the lease is on terms no less favorable than those available from
unaffiliated parties.
The Registrant's distribution facility in Atlanta consists of
approximately 100,000 square feet subject to a lease expiring January 31, 1999.
The Registrant also leases additional warehouse and sales office space near its
executive, administrative and sales office in Atlanta for future growth. The
Registrant believes there is available sufficient additional warehouse and sales
office space for lease at reasonable prices near its principal facility in the
event the Registrant's growth plans so require.
On August 9, 1993, the Registrant entered into a lease for an
approximately 15,400 square foot sales and distribution facility located in
Miami, Florida. This lease expires in November 1996 and includes an annual
rental of approximately $107,000, subject to periodic adjustment as set forth in
the lease.
Item 3. LEGAL PROCEEDINGS
In the ordinary course of business, the Registrant, from time to time, is
involved in litigation with certain of its customers and vendors regarding
accounts receivable and accounts payable, respectively. With respect to
disputes with its vendors, the Registrant typically withholds payment for the
goods in controversy until a resolution of the matter has been obtained.
Although the Registrant is not currently engaged in or threatened by any
material litigation, it is the policy of management to vigorously defend suits
brought against the Registrant.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
Item 4(A). EXECUTIVE OFFICERS OF THE REGISTRANT
The executive officers of the Registrant and SED, their ages and their
present positions with the Registrant and SED are as follows:
Name Age Position
Gerald Diamond 57 Chairman of the Board, Chief Executive Officer
and Director of the Registrant and SED
Ray D. Risner 50 President, Chief Operating Officer and Director of
the Registrant and SED
Larry G. Ayers 49 Vice President-Finance, Chief Financial Officer,
Secretary and Treasurer of the Registrant and SED
Mark Diamond 30 Executive Vice President of the Registrant and SED
Barry Diamond 53 Vice President-Cellular of SED
Jean Diamond 54 Vice President-Credit of SED
Gerald Diamond was elected President and Chairman of the Board of the
Registrant and SED in June 1986 and has served in two or more capacities as
Chairman of the Board, Chief Executive Officer and President of the Registrant
and SED since that date. Mr. Diamond, a founder of the Predecessor, served as
its President and Treasurer from July 1980 through July 1986. Mr. Diamond has
been in electronics-related businesses for over 30 years. Mr. Diamond is the
brother of Barry Diamond and father of Mark Diamond.
Ray D. Risner was elected as a director of the Registrant in November 1994
and was elected President and Chief Operating Officer of the Registrant and SED
in May 1995. Mr. Risner served as Vice Chairman of RJM Group, Inc., a private
investment advisory firm, from 1989 to 1994. From 1987 to 1989, he served as
Vice President, Financial Administration of RJR Nabisco, Inc. Mr. Risner is
also a trustee of The National Faculty and a member of the Board of American Red
Cross Blood Services, Atlanta, Georgia.
Larry G. Ayers was elected Vice President-Finance and Treasurer of SED in
June 1986, Secretary in August 1986 and Chief Financial Officer in November
1989. He was also elected Vice President-Finance, Secretary and Treasurer of
the Registrant in August 1986 and Chief Financial Officer in November 1989.
Mr. Ayers served as Vice President-Finance of the Predecessor from May 1986
through July 1986.
Mark Diamond has been employed by SED on a full-time basis in the Sales
Department since January 1987. In February 1991, Mr. Diamond was elected Vice
President-Sales of SED and in May 1993, was elected Executive Vice
President-Marketing of SED. In February 1994, Mr. Diamond was elected Executive
Vice President-Sales of SED, and in July 1995, he was elected Executive Vice
President of the Registrant and in August 1995, he was elected Executive Vice
President of SED. Mark Diamond is the son of Gerald Diamond.
Barry Diamond joined SED in September 1987 as Vice President and has
worked since that time in the purchasing, sales and distribution departments.
In September 1989, Mr. Diamond was elected Vice President-Operations and in
September 1990, was elected Vice President-Cellular Sales. In May 1993,
Mr. Diamond was elected Vice President-Distribution of SED. In February 1994,
Mr. Diamond was elected Vice President of SED, and in November 1994, his title
became Vice President-Cellular of SED.
Jean Diamond was elected Vice President - Credit of SED in August 1994.
From 1986 to August 1994, she served as Manager of Credit of SED. Jean Diamond
is the wife of Gerald Diamond and the mother of Mark Diamond.
PART II
Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
Information regarding the range of high and low sales prices for the
common stock of the Registrant for each full quarterly period for fiscal 1995
and 1994 as reported by the Nasdaq National Market ("Nasdaq") and the number of
holders of common stock of the Registrant (including individual participants in
securities position listings) is incorporated by reference to "Price Range of
Common Stock" on the inside back cover of the Registrant's 1995 Annual Report to
Stockholders.
The Registrant has not paid any cash dividends on its common stock since
its inception. The Registrant currently intends to retain earnings to finance
the growth and development of its business and does not anticipate paying cash
dividends in the foreseeable future. Future policy with respect to payment of
dividends on the common stock will be determined by the Board of Directors based
on conditions then existing, including the Registrant's earnings and financial
condition, capital requirements and other relevant factors. SED, the earnings
of which would be the source of any dividend payments, and the Registrant are
parties to a revolving credit agreement that contains certain financial
covenants that may impact the Registrant's ability to pay dividends, should it
choose to do so.
Item 6. SELECTED FINANCIAL DATA
Selected financial information about the Registrant is incorporated herein
by reference to "Selected Income Statement Data" and "Selected Balance Sheet
Data" on page 1 of the Registrant's 1995 Annual Report to Stockholders.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Information and a discussion regarding the Registrant's financial
condition and results of operations are incorporated herein by reference to
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" on pages 6 and 7 of the Registrant's 1995 Annual Report to
Stockholders.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The consolidated financial statements of the Registrant, notes thereto,
and independent auditors' report thereon are incorporated herein by reference to
pages 8 through 16 of the Registrant's 1995 Annual Report to Stockholders.
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
None.
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information regarding the Registrant's directors is incorporated herein by
reference to the section of the Registrant's Proxy Statement for the Annual
Meeting of Stockholders scheduled for November 9, 1995 (the "Proxy Statement")
entitled "Proposal 1 - Election of Directors."
Information regarding the Registrant's executive officers is incorporated
herein by reference to Item 4(A) of Part I of this Report.
Item 11. EXECUTIVE COMPENSATION
Information regarding the Registrant's compensation of its executive
officers and directors is incorporated herein by reference to the sections of
the Proxy Statement entitled "Proposal 1 - Election of Directors" and
"Executive Compensation".
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Information regarding the security ownership of certain beneficial owners
and management of the Registrant is incorporated by reference to the section of
the Proxy Statement entitled "Ownership of Shares".
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information regarding certain relationships and related transactions is
incorporated herein by reference to the section of the Proxy Statement entitled
"Compensation Committee Interlocks and Insider Participation."
PART IV
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) The following documents are filed as part of this Report:
1. Financial Statements. The Registrant's 1995 Annual Report to
Stockholders, a copy of which is filed with this Form 10-K,
contains the following financial statements and the report of
the Registrant's independent auditors thereon, which are
incorporated herein by reference:
- Independent Auditors' Report
- Consolidated Balance Sheets at June 30, 1995 and 1994
- Consolidated Statements of Earnings for the years ended
June 30, 1995, 1994 and 1993
- Consolidated Statements of Stockholders' Equity for the
years ended June 30, 1995, 1994 and 1993
- Consolidated Statements of Cash Flows for the years
ended June 30, 1995, 1994 and 1993
- Notes to Consolidated Financial Statements
2. Financial Statement Schedules.
- Independent Auditors' Report
- Schedules:
Schedule Description
II Valuation and Qualifying Accounts
Schedule II and the report thereon appear immediately
preceding the signature pages to this Report.
Schedules other than the Schedule are omitted because the
information required is not applicable or the required
information is shown in the consolidated financial statements
or notes thereto.
3. Exhibits Incorporated by Reference or Filed with this Report.
Exhibit
Number Description
3.1 Certificate of Incorporation, as amended, of the Registrant.
3.2 Amended and Restated By-Laws of the Registrant.(1)
4.1 See Exhibits 3.1 and 3.2 for provisions of the Certificate of
Incorporation, as amended, and Amended and Restated By-Laws of the
Registrant defining rights of holders of Common Stock of the
Registrant.
10.1 Form of Lease Agreement dated as of January 1, 1991 between Royal
Park Company and Southern Electronics Distributors, Inc.(2)
10.2 Consulting and Financial Advisory Agreement dated July 2, 1986
between SED Acquisition Corp. and the ZS Fund L.P.(3), as amended as
of July 2, 1991.(2)*
10.3 Letter Agreement dated July 2, 1986 among Southern Electronics
Distributors, Inc., the shareholders of Southern Electronics
Distributors, Inc., SED Acquisition Corp. and the Registrant
regarding tax liability indemnification and ERISA matters.(4)*
10.4 Lease Agreement dated May 16, 1990 between The Equitable Life
Assurance Society of the United States and Southern Electronics
Distributors, Inc.(5), as amended March 20, 1992.(6)
10.5 Lease Agreement dated September 16, 1989 between Industrial
Distribution Group, Inc. and Southern Electronics Distributors,
Inc.(7), as amended August 19, 1991.(3)
10.6 Lease Agreement dated January 15, 1992 between Southern Electronics
Distributors, Inc. and RW Building One Associates.(8)
10.7 Revolving Credit Agreement dated as of June 29, 1995 among National
City Bank, Columbus, Wachovia Bank of Georgia, N.A., the Registrant
and SED.
10.8 Southern Electronics Corporation 1986 Stock Option Plan dated
September 3, 1986, together with related forms of Incentive Stock
Option Agreement and Non-Qualified Stock Option Agreement.(9)*
10.9 Form of First Amendment dated September 14, 1989 to Southern
Electronics Corporation 1986 Stock Option Plan.(10)*
10.10 Second Amendment dated November 7, 1989 to Southern Electronics
Corporation 1986 Stock Option Plan.(11)*
10.11 Third Amendment dated July 17, 1992 to Southern Electronics
Corporation 1986 Stock Option Plan.(12)*
10.12 Southern Electronics Corporation 1988 Restricted Stock Plan,
together with related form of Restricted Stock Agreement.(13)*
10.13 First Amendment dated November 7, 1989 to Southern Electronics
Corporation 1988 Restricted Stock Plan.(14)*
10.14 Second Amendment dated July 17, 1992 to Southern Electronics
Corporation 1988 Restricted Stock Plan.(15)*
10.15 Form of Southern Electronics Corporation 1991 Stock Option Plan,
together with related forms of Incentive Stock Option Agreement and
Non-Qualified Stock Option Agreement.(16)*
10.16 First Amendment dated July 17, 1992 to Southern Electronics
Corporation 1991 Stock Option Plan.(17)*
10.17 Form of Non-Qualified Stock Option Agreement dated as of August 28,
1992 between the Registrant and Cary Rosenthal.(18)*
10.18 Form of Non-Qualified Stock Option Agreement dated as of August 28,
1992 between the Registrant and G. William Speer.(19)*
10.19 Employment Agreements dated November 7, 1989, between the
Registrant, SED and each of Gerald Diamond, Jean Diamond, Barry
Diamond and Larry G. Ayers(20)*, each as amended by form of
Amendment No. 1 dated September 24, 1991.(21)*
10.20 Form of Employment Agreement dated September 24, 1991, among the
Registrant, SED and Mark Diamond.(22)*
10.21 Southern Electronics Distributors, Inc. Savings Plan effective as of
January 1, 1991, together with Savings Plan Trust and Savings Plan
Adoption Agreement.(23)*
10.22 Form of Indemnification Agreement entered into with each of the
directors and officers of the Registrant and Southern Electronics
Distributors, Inc.(24)*
10.23 Form of Indemnification Agreement entered into with each of the
directors and officers of the Registrant and Southern Electronics
Corporation.
10.24 Lease Agreement dated November 1992 between H.G. Pattillo and
Elizabeth M. Pattillo and Southern Electronics Distributors,
Inc.(25)
10.25 Lease Agreement dated August 9, 1993 between New World Partners
Joint Venture and Southern Electronics Distributors, Inc.(26)
10.26 Amendment to Lease for 4775 N. Royal Atlanta Drive.
10.27 Form of Non-Qualified Stock Option Agreement dated as of May 21,
1993 between the Registrant and Cary Rosenthal (see form referenced
herein as Exhibit 10.17).*
10.28 Form of Non-Qualified Stock Option Agreement dated as of May 21,
1993 between the Registrant and G. William Speer (see form
referenced herein as Exhibit 10.18).*
10.29 Form of Non-Qualified Stock Option Agreement for Directors.
10.30 Subscription and Stockholders Agreement dated as of July 2, 1986 by
and among the Registrant, ZS SED L.P., ZS Southern L.P. and SED
Associates.
11.1 Statement regarding computation of per share earnings.
13 Form of Southern Electronics Corporation 1995 Annual Report to
Stockholders (only the portions incorporated by reference into this
report are deemed "filed" with the Securities and Exchange
Commission).
21 Subsidiaries of the Registrant.(27)
23 Independent Auditors' Consent.
24 Power of Attorney. See signature page to this Registration
Statement.
27 Financial Data Schedule.
Notes
*Management contract or compensatory plan or arrangement with one or more
directors or executive officers.
(1) Incorporated herein by reference to exhibit of same number to
Registrant's Registration Statement ("Registration Statement") on Form
S-1, filed September 5, 1986 (Reg. No. 33-8494).
(2) Incorporated herein by reference to exhibit of same number to
Registrant's Annual Report on Form 10-K for the fiscal year ended
June 30, 1991 (SEC File No. 0-16345) ("1991 Form 10-K").
(3) Incorporated herein by reference to exhibit 10.6 to Registrant's
Registration Statement.
(4) Incorporated herein by reference to exhibit 10.7 to Registrant's
Registration Statement.
(5) Incorporated herein by reference to exhibit 10.8 to Registrant's
Annual Report on Form 10-K for the fiscal year ended June 30, 1990
(SEC File No. 0-16345) ("1990 Form 10-K").
(6) Incorporated herein by reference to exhibit 10.5 to Registrant's
Annual Report on Form 10-K for the fiscal year ended June 30, 1992
(SEC File No. 0-16345) ("1992 Form 10-K").
(7) Incorporated herein by reference to exhibit 10.9 to Registrant's 1990
Form 10-K.
(8) Incorporated herein by reference to exhibit 10.7 to Registrant's 1992
Form 10-K.
(9) Incorporated herein by reference to exhibit 10.12 to Registrant's
Registration Statement.
(10) Incorporated herein by reference to exhibit 10.22 to Registrant's Annual
Report on Form 10-K for the fiscal year ended June 30, 1988 (SEC File No.
0-16345).
(11) Incorporated herein by reference to exhibit 10.25 to Registrant's 1990
Form 10-K.
(12) Incorporated herein by reference to exhibit 10.12 to Registrant's 1992
Form 10-K.
(13) Incorporated herein by reference to exhibit 10.21 to Registrant's Annual
Report on Form 10-K for the fiscal year ended June 30, 1988 (SEC File No.
0-16345).
(14) Incorporated herein by reference to exhibit 10.26 to Registrant's 1990
Form 10-K.
(15) Incorporated herein by reference to exhibit 10.15 to Registrant's 1992
Form 10-K.
(16) Incorporated herein by reference to Annex A to Registrant's definitive
Supplemental Proxy Statement dated October 18, 1991 (SEC File No.
0-16345).
(17) Incorporated herein by reference to exhibit 10.17 to Registrant's 1992
Form 10-K.
(18) Incorporated herein by reference to exhibit 10.18 to Registrant's 1992
Form 10-K.
(19) Incorporated herein by reference to exhibit 10.19 to Registrant's 1992
Form 10-K.
(20) Incorporated herein by reference to Exhibit 6(a) to Registrant's
Quarterly Report on Form 10-Q for the quarterly period ended December 31,
1989 (SEC File No. 0-16345).
(21) Incorporated herein by reference to exhibit 10.13 to Registrant's 1991
Form 10-K.
(22) Incorporated herein by reference to exhibit 10.14 to Registrant's 1991
Form 10-K.
(23) Incorporated herein by reference to exhibit 10.15 to Registrant's 1991
Form 10-K.
(24) Incorporated herein by reference to exhibit 10.16 to Registrant's 1991
Form 10-K.
(25) Incorporated herein by reference to exhibit 10.24 to Registrant's Annual
Report on Form 10-K for the fiscal year ended June 30, 1993 (SEC File No.
0-16345) ("1993 Form 10-K").
(26) Incorporated herein by reference to exhibit 10.25 to Registrant's 1993
Form 10-K.
(27) Incorporated herein by reference to exhibit 21 to Registrant's 1993 Form
10-K.
(b) Reports on Form 8-K.
No reports on Form 8-K were filed during the last quarter of fiscal
1995.
INDEPENDENT AUDITORS' REPORT
We have audited the consolidated financial statements of Southern Electronics
Corporation and subsidiary as of June 30, 1995 and 1994, and for each of the
three years in the period ended June 30, 1995, and have issued our report
thereon dated August 18, 1995; such consolidated financial statements and
report are included in your 1995 Annual Report to Stockholders and are
incorporated herein by reference. Our audits also included the financial
statement schedule of Southern Electronics Corporation listed in Item 14.
This financial statement schedule is the responsibility of the Company's
management. Our responsibility is to express an opinion based on our audits.
In our opinion, such financial statement schedule, when considered in relation
to the basic financial statements taken as a whole, presents fairly, in all
material respects, the information set forth therein.
DELOITTE & TOUCHE LLP
Atlanta, Georgia
August 18, 1995
SOUTHERN ELECTRONICS CORPORATION
AND SUBSIDIARY
SCHEDULE II
VALUATION AND QUALIFYING ACCOUNTS
Column A Column B Column C Column D Column E
Balance at Charged to Balance
Beginning Costs and at End
Description of Period Expenses Deductions(1) of Period
Year ended June 30, $664,000 $1,143,000 $ 962,000 $ 845,000
1995; Allowance for
doubtful accounts
Year ended June 30, 931,000 1,225,000 1,492,000 664,000
1994; Allowance for
doubtful accounts
Year ended June 30, 728,000 425,000 220,000 931,000
1993; Allowance for
doubtful accounts
1 Deductions represent actual write-offs of specific accounts receivable
charged against the allowance account, net of amounts recovered.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
SOUTHERN ELECTRONICS CORPORATION
Date: September 28, 1995 By: /s/ Larry G. Ayers
Larry G. Ayers,
Vice President - Finance
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that each person whose signature appears
below constitutes and appoints Gerald Diamond and Larry G. Ayers and each of
them as his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments to the Annual Report on
Form 10-K of Southern Electronics Corporation, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission and other appropriate agencies, granting unto
said attorneys-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing requisite and necessary to be done
in and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or either of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities indicated this 28 day of September, 1995.
/s/ Gerald Diamond
Gerald Diamond,
Chairman of the Board,
Chief Executive Officer
and Director
(principal executive officer)
/s/ Larry G. Ayers
Larry G. Ayers,
Vice President - Finance and Treasurer
(principal financial and accounting
officer)
/s/ Stewart I. Aaron
Stewart I. Aaron,
Director
/s/ Ray D. Risner
Ray D. Risner,
Director
/s/ Cary Rosenthal
Cary Rosenthal,
Director
/s/ G. William Speer
G. William Speer,
Director
/s/ Michel Zaleski
Michel Zaleski,
Director
EXHIBIT INDEX
Sequentially
Exhibit Numbered
Number Description Page
3.1 Certificate of Incorporation, as amended, of the Registrant. ___
3.2 Amended and Restated By-Laws of the Registrant.(1) N/A
4.1 See Exhibits 3.1 and 3.2 for provisions of the Certificate of
Incorporation, as amended, and Amended and Restated By-Laws
of the Registrant defining rights of holders of Common Stock
of the Registrant. N/A
10.1 Form of Lease Agreement dated as of January 1, 1991 between
Royal Park Company and Southern Electronics Distributors,
Inc.(2) N/A
10.2 Consulting and Financial Advisory Agreement dated July 2, 1986
between SED Acquisition Corp. and the ZS Fund L.P.(3), as
amended as of July 2, 1991.(2)* N/A
10.3 Letter Agreement dated July 2, 1986 among Southern Electronics
Distributors, Inc., the shareholders of Southern
Electronics Distributors, Inc., SED Acquisition Corp. and
the Registrant regarding tax liability indemnification and ERISA
matters.(4)* N/A
10.4 Lease Agreement dated May 16, 1990 between The Equitable Life
Assurance Society of the United States and Southern Electronics
Distributors, Inc.(5), as amended March 20, 1992.(6) N/A
10.5 Lease Agreement dated September 16, 1989 between Industrial
Distribution Group, Inc. and Southern Electronics
Distributors, Inc.(7), as amended August 19, 1991.(3) N/A
10.6 Lease Agreement dated January 15, 1992 between Southern
Electronics Distributors, Inc. and RW Building One
Associates.(8) N/A
10.7 Revolving Credit Agreement dated as of June 29, 1995 among
National City Bank, Columbus, Wachovia Bank of Georgia,
N.A., the Registrant and SED. ___
10.8 Southern Electronics Corporation 1986 Stock Option Plan dated
September 3, 1986, together with related forms of Incentive
Stock Option Agreement and Non-Qualified Stock Option
Agreement.(9)* N/A
10.9 Form of First Amendment dated September 14, 1989 to Southern
Electronics Corporation 1986 Stock Option Plan.(10)* N/A
10.10 Second Amendment dated November 7, 1989 to Southern Electronics
Corporation 1986 Stock Option Plan.(11)* N/A
10.11 Third Amendment dated July 17, 1992 to Southern Electronics
Corporation 1986 Stock Option Plan.(12)* N/A
10.12 Southern Electronics Corporation 1988 Restricted Stock Plan,
together with related form of Restricted Stock Agreement.(13)* N/A
10.13 First Amendment dated November 7, 1989 to Southern Electronics
Corporation 1988 Restricted Stock Plan.(14)* N/A
10.14 Second Amendment dated July 17, 1992 to Southern Electronics
Corporation 1988 Restricted Stock Plan.(15)* N/A
10.15 Form of Southern Electronics Corporation 1991 Stock Option Plan,
together with related forms of Incentive Stock Option
Agreement and Non-Qualified Stock Option Agreement.(16)* N/A
10.16 First Amendment dated July 17, 1992 to Southern Electronics
Corporation 1991 Stock Option Plan.(17)* N/A
10.17 Form of Non-Qualified Stock Option Agreement dated as of
August 28, 1992 between the Registrant and Cary
Rosenthal.(18)* N/A
10.18 Form of Non-Qualified Stock Option Agreement dated as of
August 28, 1992 between the Registrant and G. William
Speer.(19)* N/A
10.19 Employment Agreements dated November 7, 1989, between the
Registrant, SED and each of Gerald Diamond, Jean Diamond,
Barry Diamond and Larry G. Ayers(20)*, each as amended by
form of Amendment No. 1 dated September 24, 1991.(21)* N/A
10.20 Form of Employment Agreement dated September 24, 1991, among
the Registrant, SED and Mark Diamond.(22)* N/A
10.21 Southern Electronics Distributors, Inc. Savings Plan effective
as of January 1, 1991, together with Savings Plan Trust and
Savings Plan Adoption Agreement.(23)* N/A
10.22 Form of Indemnification Agreement entered into with each of the
directors and officers of the Registrant and Southern
Electronics Distributors, Inc.(24)* N/A
10.23 Form of Indemnification Agreement entered into with each of the
directors and officers of the Registrant and Southern
Electronics Corporation. ___
10.24 Lease Agreement dated November 1992 between H.G. Pattillo and
Elizabeth M. Pattillo and Southern Electronics Distributors,
Inc.(25) N/A
10.25 Lease Agreement dated August 9, 1993 between New World Partners
Joint Venture and Southern Electronics Distributors,
Inc.(26) N/A
10.26 Amendment to Lease for 4775 N. Royal Atlanta Drive. ___
10.27 Form of Non-Qualified Stock Option Agreement dated as of May 21,
1993 between the Registrant and Cary Rosenthal (see form
referenced herein as Exhibit 10.17).* N/A
10.28 Form of Non-Qualified Stock Option Agreement dated as of May 21,
1993 between the Registrant and G. William Speer (see
form referenced herein as Exhibit 10.18).* N/A
10.29 Form of Non-Qualified Stock Option Agreement for Directors. ___
10.30 Subscription and Stockholders Agreement dated as of July 2, 1986
by and among the Registrant, ZS SED L.P., ZS Southern
L.P. and SED Associates. ___
11.1 Statement regarding computation of per share earnings. ___
13 Form of Southern Electronics Corporation 1995 Annual Report
to Stockholders (only the portions incorporated by reference
into this report are deemed "filed" with the Securities and
Exchange Commission). ___
21 Subsidiaries of the Registrant.(27) N/A
23 Independent Auditors' Consent. ___
24 Power of Attorney. See signature page to this Registration
Statement. N/A
27 Financial Data Schedule. ___
__________________
Notes
*Management contract or compensatory plan or arrangement with one or more
directors or executive officers.
(1) Incorporated herein by reference to exhibit of same number to Registrant's
Registration Statement ("Registration Statement") on Form S-1, filed
September 5, 1986 (Reg. No. 33-8494).
(2) Incorporated herein by reference to exhibit of same number to Registrant's
Annual Report on Form 10-K for the fiscal year ended June 30, 1991 (SEC
File No. 0-16345) ("1991 Form 10-K").
(3) Incorporated herein by reference to exhibit 10.6 to Registrant's
Registration Statement.
(4) Incorporated herein by reference to exhibit 10.7 to Registrant's
Registration Statement.
(5) Incorporated herein by reference to exhibit 10.8 to Registrant's Annual
Report on Form 10-K for the fiscal year ended June 30, 1990 (SEC
File No. 0-16345) ("1990 Form 10-K").
(6) Incorporated herein by reference to exhibit 10.5 to Registrant's Annual
Report on Form 10-K for the fiscal year ended June 30, 1992 (SEC
File No. 0-16345) ("1992 Form 10-K").
(7) Incorporated herein by reference to exhibit 10.9 to Registrant's 1990 Form
10-K.
(8) Incorporated herein by reference to exhibit 10.7 to Registrant's 1992 Form
10-K.
(9) Incorporated herein by reference to exhibit 10.12 to Registrant's
Registration Statement.
(10) Incorporated herein by reference to exhibit 10.22 to Registrant's Annual
Report on Form 10-K for the fiscal year ended June 30, 1988
(SEC File No. 0-16345).
(11) Incorporated herein by reference to exhibit 10.25 to Registrant's 1990
Form 10-K.
(12) Incorporated herein by reference to exhibit 10.12 to Registrant's 1992
Form 10-K.
(13) Incorporated herein by reference to exhibit 10.21 to Registrant's Annual
Report on Form 10-K for the fiscal year ended June 30, 1988
(SEC File No. 0-16345).
(14) Incorporated herein by reference to exhibit 10.26 to Registrant's 1990
Form 10-K.
(15) Incorporated herein by reference to exhibit 10.15 to Registrant's 1992
Form 10-K.
(16) Incorporated herein by reference to Annex A to Registrant's definitive
Supplemental Proxy Statement dated October 18, 1991 (SEC File
No. 0-16345).
(17) Incorporated herein by reference to exhibit 10.17 to Registrant's 1992
Form 10-K.
(18) Incorporated herein by reference to exhibit 10.18 to Registrant's 1992
Form 10-K.
(19) Incorporated herein by reference to exhibit 10.19 to Registrant's 1992
Form 10-K.
(20) Incorporated herein by reference to Exhibit 6(a) to Registrant's Quarterly
Report on Form 10-Q for the quarterly period ended December
31, 1989 (SEC File No. 0-16345).
(21) Incorporated herein by reference to exhibit 10.13 to Registrant's 1991
Form 10-K.
(22) Incorporated herein by reference to exhibit 10.14 to Registrant's 1991
Form 10-K.
(23) Incorporated herein by reference to exhibit 10.15 to Registrant's 1991
Form 10-K.
(24) Incorporated herein by reference to exhibit 10.16 to Registrant's 1991
Form 10-K.
(25) Incorporated herein by reference to exhibit 10.24 to Registrant's Annual
Report on Form 10-K for the fiscal year ended June 30, 1993
(SEC File No. 0-16345) ("1993 Form 10-K").
(26) Incorporated herein by reference to exhibit 10.25 to Registrant's 1993
Form 10-K.
(27) Incorporated herein by reference to exhibit 21 to Registrant's 1993 Form
10-K.