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The following is an excerpt from a 10-Q SEC Filing, filed by POMEROY COMPUTER RESOURCES INC on 5/6/1998.
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Basis of Presentation
1.The consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Except as disclosed herein, there has been no material change in the information disclosed in the notes to consolidated financial statements included in the Company's Annual Report on Form 10- K for the year ended January 5, 1998. In the opinion of management, all adjustments (consisting of normal recurring accruals) necessary for a fair presentation of the interim period have been made. The results of operations for the three-month period ended April 5, 1998 are not necessarily indicative of the results that may be expected for future interim periods or for the year ending January 5, 1999.

2. Borrowing Arrangements At January 5 and April 5, 1998, bank notes payable include $6.5 million and $12.1 million, respectively, of overdrafts in accounts with the Company's primary lender. These amounts were subsequently funded through the normal course of business.

3. Earnings per Common Share The following is a reconciliation of the number of shares used in the basic EPS and diluted EPS computations:

         (in thousands, except per share data)
                                  Quarter ended April
                                  1997           1998
                      ____________________  ____________________
                                 Per Share            Per Share
                       Shares     Amount      Shares   Amount
                      ________   _________   ________ _________
Basic EPS               10,336    $ 0.29       11,392  $ 0.38
Effect of dilutive
  stock options            313     (0.01)         319   (0.01)
Contingent shares-          -                      -
                      ________   _________   ________ _________
Diluted EPS             10,649    $ 0.28       11,711  $ 0.37
                      ========   =========   ======== ========

4.Supplemental Cash Flow Disclosures

Supplemental disclosures with respect to cash flow information and non-cash investing and financing activities are as follows:

                              Quarter Ended
                        April 5, 1997  April 5, 1998
                        _____________  _____________
Interest paid                 $470         $425
                              ====         ====

Income taxes paid             $251       $4,112
                              ====       ======

Business combinations
accounted for as purchases:

Assets acquired                         $31,804
Liabilities assumed                      18,505
Notes payable                             2,000
Net cash paid                           $11,299


There are various legal actions arising in the normal course of business that have been brought against the Company. Management believes these matters will not have a material adverse effect on the Company's financial position or results of operations.

6.Subsequent Event

In April 1998, the Company amended its revolving credit agreement under the same terms as its prior agreement. The amended agreement provides for borrowings up to $45.0 million at the bank's prime rate minus 1.25%.

Special Cautionary Notice Regarding Forward-Looking Statements

Certain of the matters discussed under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations" contain certain forward looking statements regarding future financial results of the Company. The words "expect," "estimate," "anticipate," "predict," and similar expressions are intended to identify forward-looking statements. Such statements are forward-looking statements for the purposes of the Securities Act of 1933 and the Securities Exchange Act of 1934, as amended, and as such may involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from future results, performance or achievements expressed or implied by such forward- looking statements. Important factors that could cause the actual results, performance or achievements of the Company to differ materially from the Company's expectations are disclosed in this document including, without limitation, those statements made in conjunction with the forward-looking statements under "Management's Discussion and Analysis of Financial Condition and Results of Operations". All written or oral forward-looking statements attributable to the Company are expressly qualified in their entirety by such factors.