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UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 8-K CURRENT REPORT Date of report (Date of earliest event reported): January 27, 2005 Programmer's Paradise, Inc. Delaware 000-26408 13-3136104 (State of Other Jurisdiction (Commission (IRS Employer of Incorporation) File Number) Identification No.) 1157 Shrewsbury Avenue, Shrewsbury, New Jersey 07702 (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code: (732) 389-8950 Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 and Item 7.01. Results of Operations and Financial Condition and Regulation FD Disclosure On January 27, 2005, Programmer's Paradise, Inc. (the "Company") issued a press release announcing its financial results for the fourth quarter and year ended December 31, 2004. The information contained in the press release, which is attached as Exhibit 99.1 to this report, is incorporated by reference herein and is furnished pursuant to Item 2.02, "Results of Operations and Financial Condition" and Item 7.01, "Regulation FD Disclosure." Item 5.02. Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers. On January 27, 2005, the Company issued a press release announcing the resignation of Mr. James W. Sight from the Board of Directors
of the Company effective January 26, 2005. Mr. Sight's resignation was not the result of any disagreement between Mr. Sight and the Company or its Board of Directors.
SIGNATURE 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 hereunto duly authorized. PROGRAMMER'S PARADISE, INC. Dated: January 28, 2005 By: Simon F. Nynens Chief Financial Officer
Index to Exhibits Exhibit No. Description 99.1 Press Release dated January 27, 2005 announcing financial results for the fourth quarter and year ended December 31, 2004 and the resignation of Mr. James W. Sight from the Board of Directors on January 26, 2005. Exhibit 99.1 Company Contact: PROGRAMMER'S PARADISE(R), INC. REPORTS 2004 FOURTH QUARTER FOURTH QUARTER SALES INCREASE 55% SHREWSBURY, NJ, January 27, 2005 - Programmer's Paradise (R), Inc. (NASDAQ: PROG) today reported financial results for the fourth quarter and year ended December 31, 2004. The results will be discussed in a conference call to be held on Friday, January 28, 2005 at 10:00 AM Eastern time. The dial-in telephone number is (866) 802-4324 and the pass code is "PROG". Revenue for the quarter ended December 31, 2004 was $31.0 million compared with $20.0 million for the quarter ended December 31, 2003. This 55% increase in sales reflects the expansion of our account executive team, improved productivity and a continued favorable IT spending environment. In addition, sales increased 16% over the immediately preceding quarter. For the year 2004 sales were $103.6 million, compared with $69.6 million for the year 2003, a 49% increase. For the year of 2005, we will continue to invest to grow market share. We expect to increase the number of account executives in our Shrewsbury, N.J. home office and in our satellite offices in Mount Laurel, N.J. and in Mississauga, Ontario, Canada. In addition, early in the second quarter we expect to open a new satellite sales office in Long Island, New York. As a result of our strong performance in 2004 and our confidence in our future performance we reversed $4.1 million of our $5.0 million deferred income tax valuation allowance on December 31, 2004. As discussed in the Company's previously filed Form 10-Q for the period ended September 30, 2004, the Company had net deferred tax assets totaling approximately $5.7 million, all of which were offset by a valuation allowance. The Company also noted that its assessment of the requirement for the valuation allowance could change in the future based upon its level of pre-tax income. Statement of Financial Accounting Standards No. 109, Accounting for Income Taxes (SFAS No. 109), requires the Company to record a valuation allowance when it is "more likely than not that some portion or all of the deferred tax assets will not be realized." Since December 31, 2000, the Company has maintained a 100% valuation allowance equal to the net deferred tax assets.
Based upon the Company's profitable operations since December 31, 2002, and its expected profitability in future years, the Company has concluded that the results of future operations will generate sufficient taxable income to realize certain deferred tax assets. The Company has reduced its valuation allowance which was provided for in prior years. The Company believes that uncertainty still exists regarding the realizability of certain deferred tax assets, and accordingly, has established a $0.9 million valuation allowance, based on management's estimates, against these specific deferred tax assets. As a result, in accordance with SFAS No. 109, the Company recorded a net deferred tax benefit (including the net change in valuation allowance) in the amount of $4.1 million. As a result of the reversal of the valuation allowance, beginning with the first quarter of 2005, the Company expects to begin providing an income tax provision at a rate on income before taxes equal to the combined federal and state effective tax rates, currently estimated to be 40 percent. On January 26, 2005, Mr. James W. Sight resigned for personal reasons from the Board of Directors of Programmer's Paradise, Inc. Bill Willett, Chairman and CEO, said, "on behalf of Programmer's Paradise, Inc. we thank Jim for his years of service as a member of our Board". There were no disagreements between Mr. Sight and the Company or its Board of Directors. The 2004 cash dividend distribution paid to shareholders should be treated as 56.4% as a return of capital and 43.6% as a taxable dividend. However, shareholders should discuss this with their tax advisors. Programmer's Paradise, Inc. (NASDAQ: PROG) was founded in 1982 and is an award-winning marketer of technical software and hardware. Programmer's Paradise is one of the most recognizable and memorable brands in developer marketing. Our experienced account executives are key in our strategy. We offer our customers customized extranets, consultancy services, and flexible financing, as well as same day shipping. Additional information can be found by visiting . Contact Programmer's Paradise, Inc. via Bill Willett, CEO of Programmer's Paradise, Inc. at (732) 389-8950 or
bill.willett@programmers.com. The statements in this release concerning the Company's future prospects are forward-looking statements that involve certain risks and uncertainties. Such risks and uncertainties include the continued acceptance of the Company's distribution channel by vendors and customers, the timely availability and acceptance of new products, and contribution of key vendor relationships and support programs. - Tables Follow -
PROGRAMMER'S PARADISE, INC. AND SUBSIDIARIES December 31, December 31, ASSETS Current assets Cash and cash equivalents $ 4,888 $ 5,878 Marketable Securities 6,595 5,033 Accounts receivable, net 14,173 7,634 Inventory - finished goods 1,423 1,119 673 333 Deferred income taxes, current 1,423 - Total current assets 29,175 19,997 Equipment and leasehold improvements, net 303 292 Other assets 581 200 2,855 - Total assets $ 32,914 $ 20,489 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable and accrued expenses $ 15,994 $ 8,919 Dividend payable 425 375 Total current liabilities 16,419 9,294 Commitments and contingencies Stockholders' equity Common stock, $.01 par value; authorized, 10,000,000 shares; issued 5,284,500 shares 53 53 Additional paid-in capital 32,642 34,099 Treasury stock, at cost, 1,418,090 shares and 1,533,970 shares, respectively (4,130) (4,490) Retained earnings (12,223) (18,545) Accumulated other comprehensive income (loss) 153 78 Total stockholders' equity 16,495 11,195 Total liabilities and stockholders' equity $ 32,914 $ 20,489
____________________
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
(Exact name of Registrant as specified in its charter)
/s/ Simon F. Nynens
Bill Willett
Programmer's Paradise(R), Inc.
Chairman and Chief Executive Officer
(732)-389-8950
bill.willett@programmers.com
AND YEAR END FINANCIAL RESULTS
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
2004
(Unaudited)
2003
(Audited)
Prepaid expenses and other current assets
Deferred income taxes, net of current
PROGRAMMER'S PARADISE, INC. AND SUBSIDIARIES |
||||
Three months ended |
||||
December 31, |
December 31, |
|||
2004 |
2003 |
2004 |
2003 |
|
Net sales |
$ 103,582 |
$ 69,569 |
$ 31,022 |
$ 19,965 |
Cost of sales |
91,243 |
60,609 |
27,566 |
17,410 |
Gross profit |
12,339 |
8,960 |
3,456 |
2,555 |
Selling, general and administrative expenses |
10,173 |
8,143 |
2,814 |
2,203 |
Income from operations |
2,166 |
817 |
642 |
352 |
Interest income, net |
156 |
133 |
69 |
40 |
Realized foreign exchange gain/(loss) |
(44) |
97 |
(48) |
27 |
Income before income tax provision |
2,278 |
1,047 |
663 |
419 |
Provision (benefit) for income taxes |
(4,044) |
81 |
(4,148) |
29 |
Net income |
$ 6,322 |
$ 966 |
$ 4,811 |
$ 390 |
Net income per common share - Basic |
$ 1.65 |
$ 0.26 |
$ 1.25 |
$ 0.10 |
Net income per common share - Diluted |
$ 1.51 |
$ 0.25 |
$ 1.10 |
$ 0.10 |
Weighted average common shares outstanding-Basic |
3,828 |
3,724 |
3,854 |
3,732 |
Weighted average common shares outstanding-Diluted |
4,180 |
3,900 |
4,357 |
3,907 |
Reconciliation to comprehensive income: |
||||
Net Income |
$ 6,322 |
$ 966 |
$ 4,811 |
$ 390 |
Other comprehensive income (loss), net of tax: |
||||
Unrealized gain (loss) on marketable securities |
(22) |
- |
- |
(16) |
Foreign currency translation adjustments |
97 |
223 |
71 |
23 |
Total comprehensive income |
$ 6,397 |
$ 1,189 |
$ 4,882 |
$ 397 |