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INTELLIGENT ELECTRONICS ANNOUNCES THIRD QUARTER RESULTS

 EXTON, Pa., Dec. 15 /PRNewswire/ -- Intelligent Electronics, Inc. (NASDAQ-NMS: INEL) today reported consolidated revenues of $648.1 million for its third quarter, increasing revenues 8 percent from $600.3 million during the comparable quarter a year ago.
 Due to operating losses sustained by its BizMart subsidiary, which is being sold, the company posted a net loss of $2.4 million for the quarter, or 6 cents a share.
 On Dec. 4, Intelligent announced a definitive agreement had been signed for OfficeMax, Inc., a 92 percent-owned unit of K mart Corporation (NYSE: KM), to acquire BizMart for an estimated $270 million in cash. The company expects the transaction will result in a pre-tax gain of approximately $12 million before audit review, transaction- related costs and the impact of BizMart's operations until the closing.
 Highlighting the quarter was the performance of the Reseller Network Division, which reported stabilized margins and increasing profitability.
 Reseller Network Division
 Intelligent's Reseller Network Division reported revenue increases, excluding interdivisional sales to BizMart and the Company Center Division, of 15 percent to $484.1 million from 1991's quarterly revenues of $422.6 million. Revenues including interdivisional sales increased to $496.6 million.
 The division's gross margin percent stabilized during the quarter and increased to 4.5 percent of total revenues, compared to 4.2 percent of revenues during the quarter ended Aug. 1, 1992. Margin percentages decreased from 5.7 percent during the comparable quarter a year ago, primarily as a result of industry-wide competitive pressures, which impacted vendor pricing and programs and the selling prices the company realized from its customers.
 The division reported income from operations of $13.3 million, compared to $11.6 million during the previous quarter and $19.4 million during the same quarter last year.
 Throughout the quarter, the Reseller Network Division continued its strategy of leveraging its lean infrastructure to generate demand in new and existing markets. The division reported continued success from its recently launched Intelligent Systems Group and Inter-Serve networks, which provide nationwide sales, service and support to multi-regional corporations; its configuration center, which configures, burns in, and fulfills customized product orders; its Advanced Technologies group, which provides resellers with sophisticated, multi-vendor product, maintenance, and training services; and its Minority Network, which forms one of the nation's largest groups of minority owned and operated computer resellers.
 Consumer Retail Division/BizMart
 BizMart, which is expected to be acquired by OfficeMax this February, reported revenues of $164.0 million, compared to revenues of $126.5 million during last year's comparable quarter. BizMart reported a loss from operations of $11.0 million, compared to income from operations of $1.2 million during the prior year's comparable quarter. Results reflect the termination of BizMart franchise contracts at a cost of $3.4 million; $2.0 million in BizMart store pre-opening costs; and store immaturity, with 33 percent of BizMart's stores less than one year old and 20 percent less than six months old.
 After the sale of BizMart is completed, the company indicates that possible uses being considered for sale proceeds, in addition to general corporate purposes, include stock repurchases, debt repayment and a dividend. Additionally, Intelligent Electronics' board of directors has currently authorized, subject to creditor approval, the repurchase of up to 2,000,000 shares of its common stock. The company said the repurchases would be made from time to time in open market transactions. Approximately 36,907,000 shares of Intelligent's common stock are currently outstanding.
 After BizMart's sale, the company will operate two divisions: Reseller Network and Distribution Services/InteLogistics. In addition to providing logistics services to the company's Reseller Network Division, the Distribution Services/InteLogistics Division will begin providing comprehensive customer-fulfillment and logistics services to IBM's EduQuest company, which serves IBM's customers in the kindergarten through 12 grade educational marketplace.
 INTELLIGENT ELECTRONICS, INC. AND SUBSIDIARIES
 Consolidated Statement of Operations
 (Unaudited; in thousands, except per-share data)
 Periods ended Three months Nine months
 Oct. 31 1992 1991 1992 1991
 Revenues $648,061 $600,321 $1,891,694 $1,482,234
 Cost of goods sold 596,082 540,974 1,730,318 1,350,452
 Gross profit 51,979 59,347 161,376 131,782
 Operating expenses:
 Selling, general and
 administrative expenses 47,571 37,658 133,177 76,738
 Amortization of intangibles,
 primarily goodwill 2,887 2,999 8,844 6,283
 Retail store
 pre-opening costs 1,954 785 4,779 1,127
 Total operating expenses 52,412 41,442 146,800 84,148
 Income (loss) from operations (433) 17,905 14,576 47,634
 Other income (expense):
 Investment and other
 income, net 198 138 146 3,783
 Interest expense (1,957) (1,444) (7,200) (5,123)
 Gain on sale of CCD -- -- 43 --
 Equity interest in earnings
 of affiliate 411 -- 411 --
 Income (loss) before provision
 for income taxes (1,781) 16,599 7,976 46,294
 Provision for income taxes 625 7,045 7,881 18,337
 Net income (loss) (2,406) 9,554 95 27,957
 Earnings (loss) per common
 share and share equivalents:
 Primary and fully diluted ($.06) $.26 -- $.74
 Weighted average number of common
 shares and share equivalents
 outstanding (in thousands):
 Primary and fully diluted 37,612 37,286 38,047 37,589
 INTELLIGENT ELECTRONICS, INC. AND SUBSIDIARIES
 Consolidated Balance Sheet
 (in thousands, except share-related data)
 Assets
 Oct. 31 Feb. 1
 1992 1992
 (unaudited)
 Current assets:
 Cash and cash equivalents $51,255 $64,490
 Accounts receivable, net 20,806 44,119
 Inventory 340,802 285,485
 Prepaid expenses and other current assets 9,246 7,054
 Deferred income taxes 2,684 3,125
 Total current assets 424,793 404,273
 Property and equipment 56,865 43,930
 Intangible assets, primarily goodwill, net 204,728 221,028
 Investments in affiliates 17,557 --
 Other assets 1,845 1,184
 Total assets 705,788 670,415
 Liabilities and Shareholders' Equity
 Current liabilities:
 Current portion of long-term debt $421 $631
 Accounts payable 343,270 305,340
 Accrued liabilities 38,327 45,475
 Total current liabilities 382,018 351,446
 Long-term debt 1,117 228
 Subordinated debt 29,610 29,462
 Other liabilities 886 --
 Commitments and contingencies -- --
 Shareholders' equity:
 Common stock $.01 par value per share:
 Authorized 100,000,000 shares,
 issued and outstanding:
 36,887,354 and 36,592,294 shares 369 366
 Additional paid-in capital 196,087 193,307
 Retained earnings 95,701 95,606
 Total shareholders' equity 292,157 289,279
 Total liabilities and shareholders' equity 705,788 670,415
 INTELLIGENT ELECTRONICS, INC. AND SUBSIDIARIES
 Consolidating Statement of Operations
 For the three months ended Oct. 31, 1992
 (Unaudited; in thousands)
 Reseller Company Total
 Network Center Elimi- Systems
 Division Division(A) nations Group
 Revenues $484,077 -- -- $484,077
 Interdivisional sales 12,500 -- (12,500) --
 Total revenues 496,577 -- (12,500) 484,077
 Cost of goods sold 474,325 -- (12,500) 461,825
 Gross profit 22,252 -- -- 22,252
 Operating expenses:
 Selling, general and
 administrative expenses 7,752 -- -- 7,752
 Amortization of intangibles,
 primarily goodwill 1,180 -- -- 1,180
 Retail store pre-opening
 costs -- -- -- --
 Total operating expenses 8,932 -- -- 8,932
 Income from operations 13,320 -- -- 13,320
 (A) Division was sold on July 2, 1992.
 INTELLIGENT ELECTRONICS, INC. AND SUBSIDIARIES
 Consolidating Statement of Operations
 For the three months ended Oct. 31, 1992
 (Unaudited; in thousands)
 Total
 Systems
 Group BizMart Corporate Consolidated
 Revenues $484,077 $163,984 -- $648,061
 Interdivisional sales -- -- -- --
 Total revenues 484,077 163,984 -- 648,061
 Cost of goods sold 461,825 134,257 -- 596,082
 Gross profit 22,252 29,727 -- 51,979
 Operating expenses:
 Selling, general and
 administrative expenses 7,752 37,037(B) 2,782 47,571
 Amortization of intangibles,
 primarily goodwill 1,180 1,707 -- 2,887
 Retail store pre-opening costs -- 1,954 -- 1,954
 Total operating expenses 8,932 40,698 2,782 52,412
 Income (loss) from operations 13,320 (10,971) (2,782) (433)
 Other income (expense):
 Investment and
 other income, net -- -- -- 198
 Interest expense -- -- -- (1,957)
 Equity interest in earnings
 of affiliate -- -- -- 411
 Income before provision
 for income taxes -- -- -- (1,781)
 Provision for income taxes -- -- -- 625
 Net income -- -- -- (2,406)
 (B) Includes store operating costs totaling $29,379,000.
 INTELLIGENT ELECTRONICS, INC. AND SUBSIDIARIES
 Consolidating Statement of Operations
 For the three months ended Oct. 31, 1991
 (Unaudited; in thousands)
 Reseller Company Total
 Network Center Elimi- Systems
 Division Division nations Group
 Revenues $422,554 $51,222 -- $473,776
 Interdivisional sales 58,339 -- (58,339) --
 Total revenues 480,893 51,222 (58,339) 473,776
 Cost of goods sold 453,341 43,831 (58,339) 438,833
 Gross profit 27,552 7,391 -- 34,943
 Operating expenses:
 Selling, general and
 administrative expenses 7,021 6,884 -- 13,905
 Amortization of intangibles,
 primarily goodwill 1,173 128 -- 1,301
 Retail store pre-opening costs -- -- -- --
 Total operating expenses 8,194 7,012 -- 15,206
 Income from operations 19,358 379 -- 19,737
 INTELLIGENT ELECTRONICS, INC. AND SUBSIDIARIES
 Consolidating Statement of Operations
 For the three months ended Oct. 31, 1991
 (Unaudited; in thousands)
 Total
 Systems
 Group BizMart Corporate Consolidated
 Revenues $473,776 $126,545 -- $600,321
 Interdivisional sales -- -- -- --
 Total revenues 473,776 126,545 -- 600,321
 Cost of goods sold 438,833 102,141 -- 540,974
 Gross profit 34,943 24,404 -- 59,347
 Operating expenses:
 Selling, general and
 administrative expenses 13,905 20,698(C) 3,055 37,658
 Amortization of intangibles,
 primarily goodwill 1,301 1,698 -- 2,999
 Retail store pre-opening costs -- 785 -- 785
 Total operating expenses 15,206 23,181 3,055 41,442
 Income (loss) from operations 19,737 1,223 (3,055) 17,905
 Other income (expense):
 Investment and
 other income, net -- -- -- 138
 Interest expense -- -- -- (1,444)
 Income before provision
 for income taxes -- -- -- 16,599
 Provision for income taxes -- -- -- 7,045
 Net income -- -- -- 9,554
 (C) Includes store operating expenses of $17,486,000.
 /delval/
 -0- 12/15/92
 /CONTACT: Patrice Johnson, vice president-Corporate Communications & Marketing, 215-458-6706, or Bob Yablunsky, director-Investor Relations, 215/458-6668, both of Intelligent Electronics/
 (INEL KM)


CO: Intelligent Electronics, Inc. ST: Pennsylvania IN: REA SU: ERN

CC-MK -- PH027 -- 7430 12/15/92 17:17 EST
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