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FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2001
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ______________ TO
____________________
COMMISSION FILE NUMBER 001-13195
INDUSTRIAL DISTRIBUTION GROUP, INC.
-----------------------------------
(Exact name of registrant as specified in its charter)
Delaware 58-2299339
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(State or other jurisdiction of (I.R.S.Employer
incorporation or organization) Identification No.)
950 East Paces Ferry Road, Suite 1575 Atlanta, Georgia 30326
------------------------------------------------------------
(Address of principal executive offices and zip code)
(404) 949-2100
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(Registrant's telephone number, including area code)
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:
Class Outstanding at July 31, 2001
---------------------------- ----------------------------
Common Stock, $.01 par value 8,685,669
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INDUSTRIAL DISTRIBUTION GROUP, INC.
INDEX
PART I. Financial Information
ITEM 1. Financial Statements
Consolidated Balance Sheets at June 30, 2001 (Unaudited) and
December 31, 2000
Consolidated Statements of Operations for the three months
ended June 30, 2001 and 2000 (Unaudited)
Consolidated Statements of Operations for the six months ended
June 30, 2001 and 2000 (Unaudited)
Consolidated Statements of Cash Flows for the six months ended
June 30, 2001 and 2000 (Unaudited)
Notes to Consolidated Financial Statements - June 30, 2001
(Unaudited)
ITEM 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk
PART II. Other Information
ITEM 1. Legal Proceedings
ITEM 4. Submission of Matters to Vote of Security Holders
ITEM 6. Exhibits and Reports on Form 8-K
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
INDUSTRIAL DISTRIBUTION GROUP, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
JUNE 30, DECEMBER 31,
2001 2000
--------- ---------
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and Cash Equivalents ................................... $ 656 $ 3,690
Accounts Receivable, net .................................... 67,753 64,705
Inventory, net .............................................. 67,459 68,518
Deferred Tax Assets ......................................... 6,544 7,586
Prepaid and Other Current Assets ............................ 11,368 9,923
--------- ---------
TOTAL CURRENT ASSETS ..................................... 153,780 154,422
Property and Equipment, net ................................. 14,453 15,446
Intangible Assets, net ...................................... 51,489 52,204
Other Assets ................................................ 2,430 1,886
--------- ---------
TOTAL ASSETS ............................................... $ 222,152 $ 223,958
========= =========
LIABILITIES & STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current Maturities of Long-Term Debt ........................ $ 743 $ 789
Book Overdraft .............................................. 5,459 8,230
Accounts Payable ............................................ 44,087 38,536
Accrued Compensation ........................................ 2,275 2,419
Current Portion of Management Liability Insurance ........... 3,718 3,718
Other Accrued Liabilities ................................... 6,278 6,465
--------- ---------
TOTAL CURRENT LIABILITIES .................................. 62,560 60,157
Long-Term Debt .............................................. 51,763 52,516
Other Long-Term Liabilities ................................. 6,764 9,170
--------- ---------
TOTAL LIABILITIES ......................................... 121,087 121,843
STOCKHOLDERS' EQUITY:
Common Stock, par value $.01 per share, 50,000,000
shares authorized; 8,649,440 shares issued and 8,642,667
shares outstanding in 2001; 8,493,360 shares issued and
8,486,587 shares outstanding in 2000 ....................... 87 85
Additional Paid-In Capital .................................. 97,562 97,293
Retained Earnings ........................................... 3,506 4,827
Treasury Stock .............................................. (90) (90)
--------- ---------
TOTAL STOCKHOLDERS' EQUITY .................................. 101,065 102,115
--------- ---------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY .................. $ 222,152 $ 223,958
========= =========
The accompanying notes are an integral part of these consolidated financial
statements.
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INDUSTRIAL DISTRIBUTION GROUP, INC
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share data)
(Unaudited)
THREE MONTHS ENDED
JUNE 30,
2000
(restated -
2001 see note 1)
----------- ----------
NET SALES ..................................................... $ 131,364 $ 139,615
COST OF SALES ................................................. 101,821 107,983
----------- ----------
Gross profit ................................................ 29,543 31,632
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES .................. 29,341 29,263
----------- ----------
Income from operations ...................................... 202 2,369
INTEREST EXPENSE .............................................. 1,166 1,168
OTHER (INCOME) EXPENSE, NET ................................... (56) 29
----------- ----------
(LOSS) INCOME BEFORE INCOME TAXES ............................. (908) 1,172
(BENEFIT) PROVISION FOR INCOME TAXES .......................... (183) 585
----------- ----------
NET (LOSS) INCOME ............................................. $ (725) $ 587
=========== ==========
BASIC AND DILUTED (LOSS) EARNINGS PER SHARE ................... $ (.08) $ .07
=========== ==========
WEIGHTED AVERAGE SHARES OUTSTANDING (Basic and Diluted) ....... 8,618,776 8,817,625
=========== ==========
The accompanying notes are an integral part of these consolidated financial
statements.
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INDUSTRIAL DISTRIBUTION GROUP, INC
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share data)
(Unaudited)
SIX MONTHS ENDED
JUNE 30,
2000
(restated -
2001 see note 1)
----------- ------------
NET SALES ................................................... $ 267,533 $ 280,464
COST OF SALES ............................................... 207,549 217,251
----------- ----------
Gross profit .............................................. 59,984 63,213
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES ................ 59,129 59,059
----------- ----------
Income from operations .................................... 855 4,154
INTEREST EXPENSE ............................................ 2,524 2,397
OTHER INCOME, NET ........................................... 51 19
----------- ----------
(LOSS) INCOME BEFORE INCOME TAXES ........................... (1,618) 1,776
(BENEFIT) PROVISION FOR INCOME TAXES ........................ (297) 940
----------- ----------
NET (LOSS) INCOME ........................................... $ (1,321) $ 836
=========== ==========
BASIC AND DILUTED (LOSS) EARNINGS PER SHARE ................. $ (.15) $ .10
=========== ==========
WEIGHTED AVERAGE SHARES OUTSTANDING (Basic and Diluted) ..... 8,589,069 8,782,617
=========== ==========
The accompanying notes are an integral part of these consolidated financial
statements.
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INDUSTRIAL DISTRIBUTION GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
SIX MONTHS ENDED
JUNE 30,
2000
(restated -
2001 see note 1)
------- --------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income ...................................................... $(1,321) $ 836
------- --------
Adjustments to reconcile net (loss) income to net cash provided
by operating activities:
Depreciation and amortization ....................................... 2,472 2,587
Deferred taxes ...................................................... 1,056 0
Gain on disposal of equipment ....................................... (13) (101)
Changes in operating assets and liabilities:
Accounts receivable, net .......................................... (3,048) (3,395)
Inventories, net .................................................. 1,059 (972)
Prepaid assets and other assets ................................... (1,642) (1,510)
Accounts payable .................................................. 5,551 1,570
Accrued compensation .............................................. (81) 293
Other accrued liabilities ......................................... (734) 1,224
------- --------
Total adjustments ............................................... 4,620 (304)
------- --------
Net cash provided by operating activities ....................... 3,299 532
------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property and equipment, net ............................ (622) (3,409)
Proceeds from the sale of property and equipment .................... 10 9,485
Deposits ............................................................ (435) (457)
Payment to dissenting shareholder ................................... 0 (10,750)
Cash surrender value of life insurance .............................. 0 437
Proceeds from sale of investments ................................... 0 88
------- --------
Net cash used in investing activities ...................... (1,047) (4,606)
------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock .............................. 208 252
Net (repayments) borrowings on credit facilities and other lines .... (429) (3,300)
Long-term debt repayments ........................................... (370) (216)
Change in book overdraft ............................................ (2,771) (2,577)
Proceeds from management liability insurance, net of fees ........... 0 10,750
Premium payments on management liability insurance .................. (1,859) (938)
Deferred loan costs and other ....................................... (65) (53)
------- --------
Net cash (used in) provided by financing activities ........... (5,286) 3,918
NET CHANGE IN CASH AND CASH EQUIVALENTS ................................ (3,034) (156)
CASH AND CASH EQUIVALENTS, beginning of period ......................... $ 3,690 $ 851
======= ========
CASH AND CASH EQUIVALENTS, end of period ............................... $ 656 $ 695
======= ========
Supplemental Cash Flow Information:
Cash Paid for Interest .............................................. $ 2,057 $ 1,987
======= ========
Cash Paid for Income Taxes .......................................... $ 593 $ 1,198
======= ========
The accompanying notes are an integral part of these consolidated financial
statements.
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INDUSTRIAL DISTRIBUTION GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2001
Industrial Distribution Group, Inc. ("IDG" or the "Company"), a Delaware
corporation, was formed on February 12, 1997 to create a nationwide supplier of
cost-effective, flexible procurement solutions for manufacturers and other users
of maintenance, repair, operating, and production (MROP) products. The Company
conducts business in 35 states and two foreign countries, providing product
expertise in the procurement and application of MROP products to a wide range of
industries.
1. BASIS OF PRESENTATION
The accompanying unaudited interim consolidated financial statements are
prepared pursuant to the Securities and Exchange Commission's rules and
regulations for reporting on Form 10-Q. Accordingly, certain information and
footnotes required by generally accepted accounting principles for complete
financial statements are not included herein. The Company believes all
adjustments necessary for a fair presentation of these interim statements have
been included and are of a normal and recurring nature.
Certain reclassifications have been made to prior year amounts to conform to the
current year presentation.
The quarterly and year-to-date results for the period ended June 30, 2000 were
restated as discussed in note 13 of the Company's financial statements and notes
thereto, included in its Annual Report on Form 10-K, for the fiscal year ended
December 31, 2000, Commission File Number 001-13195.
The interim statements should be read in conjunction with the Company's
financial statements and notes thereto, included in its Annual Report on Form
10-K, for the fiscal year ended December 31, 2000.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative
Instruments and Hedging Activities," as amended by SFAS Nos. 137 and 138, which
addresses the accounting for derivative instruments. SFAS No. 133 is effective
for financial statements for the Company's fiscal quarters beginning on January
1, 2001. The Company's adoption of SFAS No. 133 has not had a significant effect
on the Company's financial position or results of operations.
In June 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standard No. 142, Goodwill and Other Intangible Assets,
effective for fiscal years beginning after December 15, 2001. Under the new
rules, goodwill and intangible assets deemed to have indefinite lives will no
longer be amortized but will be subject to annual impairment tests in accordance
with the Statement. Other intangible assets will continue to be amortized over
their useful lives.
The Company will apply the new rules on accounting for goodwill and other
intangible assets beginning in the first quarter of 2002. During 2002, the
Company will apply the non-amortization provisions and perform the first of the
required impairment tests of goodwill and indefinite lived intangible assets as
of January 1, 2002. The Company has not yet determined what the effect the
statement will have on the earnings and financial position of the Company.
3. CREDIT FACILITY
In December 2000, the Company entered into a $100,000,000 revolving credit
facility with a five financial institution syndicate. The facility expires on
March 31, 2004 and has a first security interest in the assets of the business
units. The agreement provides that the facility may be used for operations and
acquisitions, and provides $5,000,000 for swinglines and $10,000,000 for letters
of credit. Amounts outstanding under the credit facility bear interest at either
the lead bank's corporate rate or LIBOR, as selected by the Company from time to
time, plus applicable margins. This rate was 6.3% at June 30, 2001.
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The amounts outstanding under the current facility at June 30, 2001 and December
31, 2000 were $49,000,000 and $49,429,000, respectively, which have been
classified as long-term liabilities. Additionally, the Company had outstanding
letters of credit for $2,604,000 at June 30, 2001. The revolving credit facility
contains various covenants pertaining to the maintenance of certain financial
ratios. These covenants include requirements for interest coverage, net worth,
and capital expenditures, among other restrictions. The covenants also prohibit
the payment of cash dividends. The Company was in compliance with these
covenants as of June 30, 2001 and December 31, 2000.
4. CAPITAL STOCK
During the second quarter of 2001, the Company issued 58,687 shares of its
common stock through its employee stock purchase plan.
During the second quarter of 2001, the Company issued 25,000 shares of its
common stock to an executive pursuant to a restricted stock agreement.
Options are to be included in the computation of diluted earnings per share
("EPS") where the options' exercise price is less than the average market price
of the common shares during the period. There was no dilutive effect of the
options outstanding during the three months ended June 30, 2001 and 2000 to the
weighted average common shares outstanding for purposes of calculating diluted
EPS. During the three months ended June 30, 2001 and 2000, options where the
exercise price exceeded the average market price of the common shares totaled
1,035,085 and 1,306,627, respectively.
5. COMMITMENTS AND CONTINGENCIES
The Company is subject to various claims and legal actions which arise in the
ordinary course of business. The Company believes that the ultimate resolution
of such matters will not have a material adverse effect on the Company's
financial position or results of operations.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion is based upon the historical financial results of the
Company. Results of operations from acquisitions made using the purchase method
of accounting have also been included from their date of acquisition.
In this discussion, most percentages and dollar amounts have been rounded to aid
presentation; as a result, all such figures are approximations. References to
such approximations have generally been omitted.
This discussion may contain certain forward-looking statements concerning the
Company's operations, performance, and financial condition, including, in
particular, the likelihood of the Company's success in developing and expanding
its business. These statements are based upon a number of assumptions and
estimates that are inherently subject to significant uncertainties and
contingencies, many of which are beyond the control of the Company. Actual
results may differ materially from those expressed or implied by such
forward-looking statements. Factors that could cause actual results to differ
include, but are not limited to, the availability of attractive acquisition
opportunities, the successful integration and profitable management of acquired
businesses, improvement of operating efficiencies, the availability of working
capital and financing for future acquisitions, the Company's ability to grow
internally through expansion of services and customer bases, its ability to
reduce overhead, seasonality, the continuation of key supplier relationships,
the ability of the Company to compete successfully in the highly competitive and
diverse MROP market, the Company's ability to maintain key personnel, the
availability of key personnel for employment by the Company, and other factors
discussed in more detail under "Item 1-Business" of the Company's Annual Report
on Form 10-K for fiscal 2000.
RESULTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 2001 AND 2000
The following table sets forth certain historical financial data for IDG and
shows such data as a percentage of net sales for the periods indicated (dollars
in thousands):
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THREE MONTHS ENDED JUNE 30
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2001 2000
------------------------- ------------------------
Net Sales $ 131,364 100.0% $ 139,615 100.0%
Cost of Sales 101,821 77.5 107,983 77.3
--------- ----- --------- -----
Gross Profit 29,543 22.5 31,632 22.7
Selling, General and Administrative 29,341 22.3 29,263 21.0
--------- ----- --------- -----
Operating Income $ 202 0.2% $ 2,369 1.7%
========= ===== ========= =====
Net sales decreased $8.3 million or 5.9% from $139.6 million for the three
months ended June 30, 2000 to $131.4 million for the three months ended June 30,
2001. The sales decrease is due to production curtailments, layoffs, and plant
closures at customer sites across the Company's broad customer base that are
occurring as customers adapt to the continuing softness in the economy.
Cost of sales decreased $6.2 million or 5.7% from $108.0 million for the three
months ended June 30, 2000 to $101.8 million for the three months ended June 30,
2001. As a percentage of net sales, cost of sales increased from 77.3% in 2000
to 77.5% in 2001. The increase in cost of sales as a percentage of sales is
attributable to a change in total company sales mix, competitive pricing
pressures, and lower vendor rebates due to lower purchasing volume.
Selling, general, and administrative expenses increased $0.1 million or 0.3%
from $29.3 million for the three months ended June 30, 2000 to $29.3 million for
the three months ended June 30, 2001. As a percentage of net sales, selling,
general and administrative expenses increased from 21.0% to 22.3%. The increase
in selling general and administrative expenses is a result of severance costs of
$0.4 million associated with work force reductions initiated to streamline
operations. As of June 30, 2001, the Company's total headcount was reduced by
5.8% as compared to June 30, 2000. Excluding these severance costs, selling,
general, and administrative expenses were $28.9 million or 22.0% of sales for
the second quarter of 2001. The decrease in selling, general, and administrative
expense excluding severance costs is due to the impact of the Company's
headcount and cost reduction initiatives undertaken during the second quarter
of 2001.
Operating income decreased $2.2 million or 91.5% from $2.4 million for the three
months ended June 30, 2000 to $0.2 million for the three months ended June 30,
2001. As a percentage of net sales, operating income decreased from 1.7% in 2000
to 0.2% in 2001.
SIX MONTHS ENDED JUNE 30, 2001 AND 2000
The following table sets forth certain historical financial data for IDG and
shows such data as a percentage of net sales for the periods indicated (dollars
in thousands):
SIX MONTHS ENDED JUNE 30
--------------------------------------------------------
2001 2000
------------------------- ---------------------------
Net Sales $ 267,533 100.0% $ 280,464 100.0%
Cost of Sales 207,549 77.6 217,251 77.5
--------- ------ --------- ------
Gross Profit 59,984 22.4 63,213 22.5
Selling, General and Administrative 59,129 22.1 59,059 21.0
--------- ------ --------- ------
Operating Income $ 855 0.3% $ 4,154 1.5%
========= ====== ========= ======
Net sales decreased $12.9 million or 4.6% from $280.5 million for the six months
ended June 30, 2000 to $267.5 million for the six months ended June 30, 2001.
The sales decrease is due to production curtailments, layoffs, and plant
closures at customer sites across the Company's broad customer base that are
occurring as customers adapt to the continuing softness in the economy.
Cost of sales decreased $9.7 million or 4.5% from $217.3 million for the six
months ended June 30, 2000 to $207.5 million for the six months ended June 30,
2001. As a percentage of net sales, cost of sales increased from 77.5% in 2000
to 77.6% in 2001. The increase in cost of sales as a percentage of sales is
attributable to a change in total company sales mix, competitive pricing
pressures, and lower vendor rebates due to lower purchasing volume.
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Selling, general, and administrative expenses remained stable at $59.1 million
for the six months ended June 30, 2000 and June 30, 2001. As a percentage of net
sales, selling, general and administrative expenses increased from 21.0% to
22.1%. The increase in selling general and administrative expenses is a result
of severance costs of $0.5 million associated with work force reductions
initiated to streamline operations. As of June 30, 2001, the Company's total
headcount was reduced by 5.8% as compared to June 30, 2000. Excluding these
severance costs, selling, general, and administrative expenses were $58.6
million or 21.9% of sales for the six months ended June 30, 2001. The increase
in selling, general, and administrative expense excluding severance costs as a
percentage of sales is due to the reduction in sales volume from prior year.
Operating income decreased $3.3 million or 79.4% from $4.2 million for the six
months ended June 30, 2000 to $0.9 million for the six months ended June 30,
2001. As a percentage of net sales, operating income decreased from 1.5% in 2000
to 0.3% in 2001.
LIQUIDITY AND CAPITAL RESOURCES
At June 30, 2001, the Company had $0.7 million in cash, an additional $90.6
million of working capital, and $48.4 million of borrowing capacity under the
master agreement of its $100 million revolving credit facility; however, the
current asset base gives the Company a borrowing capacity of $19.0 million. The
Company's liquidity position continues to be sufficient to enable the Company to
fund its current operations and to fund anticipated internal expansion.
Net cash provided by operating activities for the six months ended June 30, 2001
and 2000 was $3.3 million and $0.5 million, respectively. The change was
principally due to improved management of accounts payable and inventory offset
by a reduction in accrued liabilities.
Net cash used in investing activities for the six months ended June 30, 2001 and
2000 was $1.0 million and $4.6 million, respectively. In 2001, the Company
reduced property and equipment expenditures by approximately $2.8 million as
compared to 2000. In June 2000 the Company sold one of its buildings in a
transaction accounted for as a sale-leaseback. Proceeds from the sale are
included in investing activities for the six months ended June 30, 2000. Also,
in 2000 the Company made a $10.75 million payment to a dissenting shareholder as
disclosed in the Company's Annual Report (Note 10 to the Consolidated Financial
Statements) on Form 10-K for the year ended December 31, 2000.
Net cash (used in) provided by financing activities for the six months ended
June 30, 2001 and 2000 was ($5.3 million) and $3.9 million, respectively. In
2000, the Company used proceeds from the sale of property and equipment to pay
down its revolving credit facility and other long-term debt by $3.5 million.
Payments made against the credit facility and other debt instruments totaled
$0.8 million in 2001. In 2000, the Company arranged through one of its insurance
carriers to purchase management liability insurance to cover the $10.75 million
payment made to the dissenting shareholder. Proceeds received from this policy,
net of fees, were $10.75 million in 2000. Total premiums payments made on the
management liability insurance policy were $1.9 million and $0.9 million in 2001
and 2000, respectively.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
There has been no significant change in the disclosure concerning this item made
in the Company's Annual Report on Form 10-K for the year ended December 31,
2000.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is subject to various claims and legal actions, which arise in the
ordinary course of business. The Company believes that the ultimate resolution
of such matters will not have a material adverse effect on the Company's
financial position or results of
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operations. There has been no significant change in the disclosure concerning
this item made in the Company's Annual Report on Form 10-K for the year ended
December 31, 2000.
ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS
The Company held its annual meeting of stockholders on May 16, 2001, at which
three items were brought to a vote. First, the election of eight nominees for
directors was voted on. All eight nominees were elected, with the following vote
totals:
NOMINEE VOTES FOR VOTES WITHHELD
------------------- ----------- ----------------
David K. Barth 6,447,902 1,286,256
William J. Burkland 6,512,330 1,221,828
William A. Fenoglio 6,696,080 1,038,078
Patrick S. O'Keefe 6,117,215 1,616,943
William T. Parr 6,696,080 1,038,078
George L. Sachs, Jr. 6,431,766 1,302,392
Richard M. Seigel 6,696,080 1,038,078
Andrew B. Shearer 6,507,766 1,226,392
Second, it was approved, through a vote of the stockholders, that the Company's
Amended and Restated Employee Stock Purchase Plan (the "Plan") be amended to
increase the shares of Common Stock authorized for issuance under the Plan from
500,000 to 1,000,000 shares. The number of shares cast for this amendment was
5,231,214, with 610,449 votes against, 12,797 votes abstained, and 1,879,698
unvoted shares.
Lastly, the stockholders voted upon an amendment to the Company's Certificate of
Incorporation and Bylaws dividing the Board of Directors into three classes,
which serve staggered three-year terms. The stockholders approved the amendment
to the Company's Bylaws which required a majority of the shares represented and
voted, while the amendment to the Company's Certificate of Incorporation, which
required a majority of all outstanding shares of the Company, was not approved.
The number of shares cast for these amendments were 3,154,043, with 2,657,905
votes against, 42,512 votes abstained and 1,879,698 unvoted shares. As a result
of the amendment to the Bylaws, the nominees were elected to three classes of
directors, with the following terms: Mr. Barth and Mr. Sachs were elected to
terms which expire in 2002; Mr. Burkland, Mr. Fenoglio, and Mr. Parr were
elected to terms which expire in 2003; and Mr. O'Keefe, Mr. Shearer, and Mr.
Seigel were elected to terms which expire in 2004.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
a) Exhibits filed as part of this Form 10-Q:
None
b) Reports on Form 8-K filed during the quarter to which this Form 10-Q
relates:
None
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.
INDUSTRIAL DISTRIBUTION GROUP, INC.
(Registrant)
Date: August 14, 2001 By: /s/ Jack P. Healey
-----------------------------------------------
Jack P. Healey
Senior Vice President and Chief Financial
Officer (Duly Authorized Officer and Principal
Accounting and Financial Officer)
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