<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------------------
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED MARCH 31, 1997 COMMISSION FILE NUMBER 0-28488
MULTIPLE ZONES INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
WASHINGTON 91-1431894
(State of incorporation) (I.R.S. Employer
Identification Number)
707 SOUTH GRADY WAY
RENTON, WASHINGTON 98055-3233
(Address of principal executive offices) (Zip Code)
(206) 430-3000
(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
--- ---
The number of shares of the registrant's Common Stock outstanding as of April
30, 1997, was 12,922,822.
<PAGE> 2
MULTIPLE ZONES INTERNATIONAL, INC.
INDEX
PART I. FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS:
<TABLE>
<S> <C>
Consolidated Balance Sheets
March 31, 1997 and December 31, 1996.......................... 3
Consolidated Statements of Operations
Three months ended March 31, 1997 and 1996.................. 4
Statements of Shareholders' Equity
Three months ended March 31, 1997........................... 5
Consolidated Statements of Cash Flows
Three months ended March 31, 1997 and 1996.................. 6
Notes to Consolidated Financial Statements..................... 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS.................. 8
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K............................... 12
SIGNATURES..................................................... 12
</TABLE>
2
<PAGE> 3
PART I - FINANCIAL INFORMATION
MULTIPLE ZONES INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
MARCH 31, December 31,
1997 1996
------------- -------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 846,359 $ 976,464
Receivables, net 39,102,574 49,974,983
Inventories, net 47,979,744 77,501,216
Prepaids 5,399,552 7,148,161
Deferred income taxes 1,216,228 1,216,228
------------- -------------
Total current assets 94,544,457 136,817,052
Property and equipment, net 10,636,938 9,758,647
Other assets 2,742,546 3,225,314
------------- -------------
Total assets $ 107,923,941 $ 149,801,013
============= =============
LIABILITIES & SHAREHOLDERS' EQUITY
Current liabilities:
Bank lines of credit $ 5,360,037 $ 3,026,298
Accounts payable 37,702,171 83,847,781
Accrued liabilities and other 7,359,030 8,404,882
Current portion of capital lease obligations 893,745 934,172
Income taxes payable 1,894,974 794,776
------------- -------------
Total current liabilities 53,209,957 97,007,909
Capital lease obligations, net of current portion 1,520,715 1,748,227
Deferred income taxes 251,722 249,506
Other 860,382 857,838
------------- -------------
Total liabilities 55,842,776 99,863,480
------------- -------------
Minority interest 476,644 468,741
------------- -------------
Commitments and contingencies
Shareholders' equity:
Common stock 37,195,642 36,987,825
Retained earnings 14,629,462 12,563,859
Foreign currency translation adjustment (220,583) (82,892)
------------- -------------
Total shareholders' equity 51,604,521 49,468,792
------------- -------------
Total liabilities & shareholders' equity $ 107,923,941 $ 149,801,013
============= =============
</TABLE>
3
<PAGE> 4
MULTIPLE ZONES INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
For the three months
ended March 31,
1997 1996
<S> <C> <C>
Net sales $122,755,313 $ 100,927,034
Cost of sales 106,207,897 86,963,556
------------ -------------
Gross profit 16,547,416 13,963,478
Selling, general and administrative expenses 12,928,666 10,077,954
------------ -------------
Income from operations 3,618,750 3,885,524
------------ -------------
Other (income) expense:
Interest expense, net 379,429 504,027
Other (income) expense 1,389 (85,318)
Minority interest 7,903 49,511
------------ -------------
388,721 468,220
------------ -------------
Income before income taxes 3,230,029 3,417,304
Provision for income taxes 1,164,426 1,244,243
------------ -------------
Net income $ 2,065,603 $ 2,173,061
============ =============
Primary earnings per share $ 0.16 $ 0.20
------------ -------------
Shares used in computation of
primary earnings per share 13,226,803 9,801,280
------------ -------------
Fully diluted earnings per share $ 0.16 $ 0.21
------------ -------------
Shares used in computation of
fully diluted earnings per share 13,226,803 10,136,610
------------ -------------
</TABLE>
4
<PAGE> 5
MULTIPLE ZONES INTERNATIONAL, INC. AND SUBSIDIARIES
STATEMENTS OF SHAREHOLDERS' EQUITY
(UNAUDITED)
<TABLE>
<CAPTION>
Foreign
Common Stock Currency
------------------------------ Retained Translation
Shares Amount Earnings Adjustment Total
---------- ------------ ----------- ------------ -----------
<S> <C> <C> <C> <C> <C>
Balance, January 1, 1997 12,876,616 $ 36,987,825 $12,563,859 $ (82,892) $49,468,792
Issuance of common stock 38,751 207,817 207,817
Net income 2,065,603 2,065,603
Translation adjustment (137,691) (137,691)
---------- ------------ ----------- --------- -----------
Balance, March 31, 1997 12,915,367 $ 37,195,642 $14,629,462 $(220,583) $51,604,521
========== ============ =========== ========= ===========
</TABLE>
5
<PAGE> 6
MULTIPLE ZONES INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW
(UNAUDITED)
<TABLE>
<CAPTION>
For the three months
ended March 31,
--------------------------------
1997 1996
------------ ------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 2,065,603 $ 2,173,061
Adjustments to reconcile net income to
net cash used in operating activities:
Allowance for inventory and receivables 120,184 736,163
Depreciation and amortization 840,656 343,201
Minority interest 7,903 49,511
Changes in assets and liabilities:
Accounts receivable 10,272,284 (7,433,607)
Inventory 29,238,231 (5,781,017)
Prepaids and other assets 2,308,442 1,224,908
Accounts payable (43,053,119) 5,527,071
Accrued liabilities (740,307) 716,605
Income taxes payable 1,130,110 316,689
------------ ------------
Net cash provided by (used in) operating activities 2,189,987 (2,127,415)
------------ ------------
Cash flows from investing activities:
Purchases of property and equipment (1,533,263) (433,017)
------------ ------------
Net cash used in investing activities (1,533,263) (433,017)
------------ ------------
Cash flows from financing activities:
Borrowings under line of credit agreement 41,296,769 29,205,385
Payments under line of credit agreement (38,950,000) (28,980,000)
Net change in book overdrafts (2,727,999) 2,165,055
Payments on capital leases (273,665) (180,614)
Proceeds from sale of common stock 207,817
Other (219,655) 104,055
------------ ------------
Net cash provided by (used in) financing activities (666,733) 2,313,881
------------ ------------
Effect of exchange rate on cash and cash equivalents (120,096) 26,093
------------ ------------
Net decrease in cash and cash equivalents (130,105) (220,458)
Cash and cash equivalents at beginning of period 976,464 1,214,581
------------ ------------
Cash and cash equivalents at end of period $ 846,359 $ 994,123
============ ============
</TABLE>
6
<PAGE> 7
MULTIPLE ZONES INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The consolidated financial statements and related notes thereto for the three
months ended March 31, 1997 and 1996 are unaudited and reflect all normal
recurring adjustments which are, in the opinion of management, necessary for a
fair presentation of the financial position and operating results for the
interim period. The results of operations for such interim periods are not
necessarily indicative of the results for the entire fiscal year ending December
31, 1997. These financial statements should be read in conjunction with the
audited financial statements and notes thereto contained in the Company's Annual
Report on Form 10-K for the year ended December 31, 1996.
Certain reclassifications have been made to the 1996 financial statements to
conform to the 1997 presentation. Such reclassifications had no effect on net
income.
2. EARNINGS PER SHARE
Earnings per share is computed using the weighted average number of common and
dilutive common equivalents outstanding during the period. Dilutive common
equivalents consist of stock options and warrants. The accretion relating to the
Series B Redeemable Convertible Preferred Stock ("Series B Preferred Stock")
prior to the conversion to Common Stock is deducted from income only in the
calculation of primary earnings per share. For the three months ended March 31,
1996, fully diluted earnings per share assumes the conversion of Series B
Preferred Stock to Common Stock. Common and common equivalent shares issued at
prices below the public offering price during the 12 months preceding the
initial public offering date have been included in the calculation as if they
were outstanding for all periods presented. The calculation uses the treasury
stock method in determining the resulting incremental weighted average
equivalent shares outstanding.
In February 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 128 "Earnings Per Share" (the "Statement").
The Statement simplifies the standards for computing earnings per share. The
Company will adopt the Statement for the year ending December 31, 1997.
Management believes that it will not have a material impact on the computation
of earnings per share.
7
<PAGE> 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FORWARD-LOOKING INFORMATION
The matters described below contain forward-looking statements which involve
known and unknown risks, uncertainties and other factors that may cause actual
results, performance or achievements of the Company or industry trends to differ
materially from those expressed or implied by such forward-looking statements.
The following discussion and analysis should be read in conjunction with the
Risk Factors and other information contained in the Company's Annual Report on
Form 10-K for the year ended December 31, 1996.
General
Multiple Zones International, Inc. together with its majority owned subsidiaries
(collectively the "Company") is a leading international direct marketer of brand
name microprocessor-based hardware, software, accessories and peripheral
products for users of both the PC/Wintel ("PC") and Macintosh ("Mac") operating
systems. The Company markets over 18,000 products through its two flagship
catalogs, The Mac Zone(R) and The PC Zone(R). The Company began operations in
1988 by advertising in national trade publications. Catalog circulation
commenced with The Mac Zone in 1990, followed by The PC Zone in 1992.
International subsidiary operations and licensing activities commenced in 1992,
and outbound telemarketing operations, principally to business accounts, were
added in 1993. The Company distributed 13.2 million catalogs domestically in the
three months ended March 31, 1997, with additional circulation by its
subsidiaries and licensees through operations in 26 other countries worldwide.
Results of Operations
The following tables present the Company's unaudited consolidated results of
operations, in dollars and as a percentage of net sales, and selected domestic
operating data for the periods indicated. This information has been prepared by
the Company on a basis consistent with the Company's unaudited Consolidated
Financial Statements and, in the opinion of management, includes all
adjustments, consisting only of normal recurring accruals, necessary for a fair
presentation of the results of such periods.
<TABLE>
<CAPTION>
Three months ended
March 31,
------------------------------------
1997 1996
--------- -----------
(In thousands, except operating data)
<S> <C> <C>
Net sales $122,755 $100,927
Cost of sales 106,208 86,964
-------- --------
Gross profit 16,547 13,963
SG&A expenses 12,928 10,078
-------- --------
Income from operations 3,619 3,885
Other expense 389 468
-------- --------
Income before taxes 3,230 3,417
Provision for taxes 1,164 1,244
-------- --------
Net income $ 2,066 $ 2,173
======== ========
</TABLE>
8
<PAGE> 9
<TABLE>
<CAPTION>
Three months ended
March 31,
--------------------------------
1997 1996
------ ------
<S> <C> <C>
Net sales 100.0% 100.0%
Cost of sales 86.5 86.2
----------- ----------
Gross profit 13.5 13.8
SG&A expenses 10.5 10.0
----------- ----------
Income from operations 3.0 3.8
Other expense 0.3 0.4
----------- ----------
Income before taxes 2.7 3.4
Provision for taxes 0.9 1.2
----------- ----------
Net income 1.8% 2.2%
Selected Domestic Operating Data:
Circulation 13,150,000 9,500,000
Number of Shipments 359,000 283,000
Average Order Size $ 328 $ 336
=========== ==========
</TABLE>
Comparison of the Three-Month Periods Ended March 31, 1997 and 1996
Net Sales. Net sales increased 21.7% to $122.8 million in the three months
ended March 31, 1997 from $100.9 million in the comparable period. The increase
resulted primarily from an increase in domestic PC product sales and growth in
domestic sales to business, education and government accounts, partially offset
by an overall decrease in domestic Mac product sales. Net domestic PC product
sales increased to $45.0 million in the three months ended March 31, 1997 from
$23.1 million in the comparable period, an increase of 94.8%. Net domestic
sales of Mac products decreased 2.5% to $62.4 million in the three months ended
March 31, 1997 from $64.0 in comparable period. Net domestic sales to business,
education and government accounts increased 88.5% to $32.8 million in the three
months ended March 31, 1997 from $17.4 million in the comparable period. Also
contributing to the increase in net sales was an increase in orders due
primarily to higher catalog circulation which grew to 13.2 million in the three
months ended March 31, 1997, an increase of 38.9% over the comparable period.
International subsidiary net sales in the three months ended March 31, 1997
were $15.4 million, an increase of 11.6% over the comparable period. The
increase ininternational subsidiary net sales resulted primarily from the
addition of subsidiaries in Sweden and Venezuela and sales growth in the
Company's operations in France, Australia and Mexico, partially offset by an
overall decline in the international Mac product sales.
Gross Profit. Gross profit increased to $16.5 million in the three months ended
March 31, 1997 from $14.0 million in the comparable period, but decreased
between periods to 13.5% from 13.8% of net sales. Gross profit dollars increased
due primarily to higher sales volume generated by increased orders. The decrease
in the gross margin percentage resulted primarily from continued industry price
competition and from increased sales of hardware products (primarily CPUs) and
sales to business accounts, which generally carry a lower average gross margin
percentage, partially offset by improved recovery of domestic freight costs
during the three months ended March 31, 1997.
Selling, General and Administrative Expenses. SG&A expenses increased to $12.9
million in the three months ended March 31, 1997 from $10.1 million in the
comparable period, and increased between periods as a percentage of net sales to
10.5% from 10.0%. The percentage increase in SG&A expenses resulted primarily
from increased depreciation and facilities expenses due to the relocation of the
corporate headquarters to a new facility during the third quarter of 1996. The
9
<PAGE> 10
dollar increase in SG&A expenses was primarily attributable to increased
expenditures associated with growing PC product sales and sales to business,
education and government accounts, partially offset by improved co-op
advertising recovery.
Other Expense. Other expense decreased to $389,000 in the three months ended
March 31, 1997 from $468,000 in the comparable period, primarily as a result of
lower interest expense related to lower levels of borrowing on the Company's
primary line of credit.
Income Taxes. Income tax expense was $1.2 million for the three months ended
March 31, 1997 and 1996.
Net Income. As a result of the above factors, net income decreased to $2.1
million or 1.8% of net sales in the three months ended March 31, 1997 from $2.2
million or 2.2% of net sales in the comparable prior period.
SEASONALITY AND TRENDS
The Company has historically experienced fluctuations in its sales, gross margin
percentage and average order size. In addition to seasonal factors, these
fluctuations are due primarily to variability in sales of hardware products as a
percentage of gross sales, price fluctuations resulting from new product
introductions, variability in the percentage of gross sales to businesses,
changes in the proportion of products purchased directly from distributors and
other general conditions in the technology markets.
Seasonal factors cause sales of microcomputer software and hardware products
through the direct marketing channel to be somewhat stronger in the fourth
calendar quarter. Sales during the fourth quarter tend to be stronger as
manufacturers make year-end introductions of new products and increase related
marketing activities, and as corporate purchasing activities increase at the end
of budgetary cycles.
Sales of hardware products (primarily CPUs), PC product sales and sales to
business accounts tend to carry a lower average gross margin percentage.
Continued growth in sales of hardware products, PC products and sales to
business accounts could have an adverse affect on the Company's gross margin
percentage.
Domestic net sales of Mac products decreased 2.5% during the three months ended
March 31, 1997 to $62.4 million from $64.0 million in the comparable period, and
decreased 19.0% compared to the sequential quarter ended December 31, 1996,
reflecting general uncertainties in the Mac marketplace and the decline in
the overall market demand for Mac products. Circulation of The Mac Zone
increased to 8.0 million in the three months ended March 31, 1997 compared to
6.0 million in the comparable period, but decreased from 9.0 million in the
sequential quarter ended December 31, 1996. The Mac Zone circulation in the
second quarter of 1997 is planned to be 7.0 million but may decline further in
the third quarter of 1997. The Company's international subsidiaries are heavily
dependent upon Mac product sales. The Company believes that the sales of Mac
products may continue to decline as a result of the continuing uncertainties in
the Mac marketplace. A further decline in the demand for, or availability of
Apple or other Mac products could have a material adverse effect on the
Company's future results of operations.
Domestic net sales of PC products increased 94.8% during the three months ended
March 31, 1997 to $45.0 million compared to $23.1 million in the comparable
period, and increased 11.4% compared to the sequential quarter ended December
31, 1996. The increase in PC product sales is due to increased overall demand
for PC products, as well as the increasing acceptance of the direct marketing
channel by PC product manufacturers and users, and the Company's expanded focus
on PC products sales.
Domestic net sales to business, education and government accounts increased
88.5% to $32.8 million compared to $17.4 million in the comparable period, and
increased 1.9% compared to the sequential quarter ended December 31, 1996. The
increase in sales over the comparable period was due primarily to a 126.5%
increase in the number of outbound telemarketing staff. Sequentially, sales
growth in the business, education and government accounts slowed as the number
of outbound telemarketing staff declined to 77 at March 31, 1997 from 89 at
December 31, 1996. The Company believes that this decline in outbound
telemarketing staff is temporary. The Company continues to recruit qualified
personnel in this area to support its goal of increasing outbound sales to
business accounts. The Company's ability to increase outbound sales depends on
its ability to attract, train and retain skilled sales personnel. There can be
no assurance that the Company will be able to hire and retain a sufficient
number of qualified personnel.
10
<PAGE> 11
The market for microcomputer products is characterized by rapid changes and
frequent introductions of new products and product enhancements. These changes
result in rapid price fluctuations. Typically, prices of microcomputer products
initially increase with improvements in features, such as processing speed and
storage capacity. Prices subsequently decrease as manufacturers pass on savings
from lower-cost components and reduce their inventories of older models.
The Company does not believe that inflation has had a material impact on its
results of operations. However, there can be no assurance that inflation will
not have such an effect in future periods.
LIQUIDITY AND CAPITAL RESOURCES
As of March 31, 1997, the Company had total assets of $107.9 million, of which
$94.5 million were current assets. At March 31, 1997 and December 31, 1996 the
Company had cash and cash equivalents of $846,000 and $976,000, respectively,
and working capital of $41.3 million and $39.8 million, respectively. Net cash
provided by (used in) operating activities was $2.2 million and ($2.1) million
for the three months ended March 31, 1997 and 1996, respectively. Cash inflows
in the three months ended March 31, 1997 were primarily due to a reduction in
accounts receivable and inventories. In the three months ended March 31, 1997
accounts receivable decreased $10.3 million and inventories decreased $29.2
million. Cash outflows in the three months ended March 31, 1996 were primarily
due to higher accounts receivable resulting from growing sales to business
accounts, and to increased inventories necessary to support rapidly growing
sales. In the three months ended March 31, 1996 accounts receivable increased
$7.4 million and inventories increased $5.8 million.
Cash outlays for capital expenditures were $1.5 million and $433,000 in the
three months ended March 31, 1997 and 1996, respectively. These expenditures
were primarily for information and telecommunication system enhancements,
furniture and equipment and leasehold improvements.
During the three months ended March 31, 1997 the effect of the foreign exchange
rate on cash was an outflow of $120,000 compared to a cash inflow of $26,000 in
the comparable period.
The Company has a domestic revolving line of credit of $30.0 million from a
commercial bank collateralized by accounts receivable. At March 31, 1997, there
were borrowings outstanding under the facility of $3.7 million. Additionally, at
March 31, 1997, the Company had $2.0 million of unused letters of credit.
In May, 1997 the Company obtained an additional $20.0 million line of credit
from a commercial lender collateralized by inventory.
The net amount of vendor credit outstanding at March 31, 1997 was $37.7 million
of which $16.9 million was drawn from a $30 million inventory financing facility
between the Company and a commercial lender, which provides financing for, and
is collateralized by, inventory purchased from certain participating vendors.
The Company believes that its existing available cash and cash equivalents,
operating cash flow and existing credit facilities will be sufficient to satisfy
its operating cash needs for at least the next 12 months. However, if working
capital or other capital requirements are greater than currently anticipated,
the Company could be required to seek additional funds through sales of equity,
debt or convertible securities or increased credit facilities. There can be no
assurance that additional financing will be available or that, if available, the
financing will be on terms favorable to the Company and its shareholders.
STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
With the exception of the historical information contained herein, the matters
described herein contain forward-looking statements that involve risk and
uncertainties including but not limited to variability of quarterly results,
reliance on vendor support and relationships, and dependence on sales of Mac
products. These and other risk factors are described generally in the Risk
Factors section of the Company's Annual Report on Form 10-K for the year ended
December 31, 1996.
11
<PAGE> 12
PART II. OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits
11.1 Computation of Earnings Per Share
27.1 Financial Data Schedule
(b) Reports on Form 8-K
No Reports on Form 8-K were filed during the Quarter ended March 31,
1997.
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:
MULTIPLE ZONES INTERNATIONAL, INC.
Dated: May 13, 1997 By:_______________________________
John E. DeFeo, Chief Executive
Officer and President
Dated: May 13, 1997 By:_______________________________
Peter J. Biere, Chief Financial Officer
12
<PAGE> 13
EXHIBIT INDEX
Exhibits
11.1 Computation of Earnings Per Share
27.1 Financial Data Schedule
<PAGE> 1
Exhibit 11.1
MULTIPLE ZONES INTERNATIONAL, INC.
COMPUTATION OF PRIMARY EARNINGS PER SHARE
<TABLE>
<CAPTION>
Three Months Ended
------------------------------
MARCH 31, March 31,
1997 1996
------------ ----------
<S> <C> <C>
Net income $ 2,065,603 $2,173,061
Adjustment to net income for accretion of
Series B Convertible Preferred Stock (229,631)
------------ ----------
Net income applicable to common stock equivalents $ 2,065,603 $1,943,430
============ ==========
Shares used in calculating primary earnings per share:
Weighted average common shares outstanding 12,899,378 9,374,999
Net effect of stock options and warrants calculated using
the treasury stock method 327,425 426,281
Total shares 13,226,803 9,801,280
============ ==========
Primary earnings per share $ 0.16 $ 0.20
============ ==========
</TABLE>
MULTIPLE ZONES INTERNATIONAL, INC.
COMPUTATION OF FULLY DILUTED EARNINGS PER SHARE
<TABLE>
<CAPTION>
Three Months Ended
-----------------------------
MARCH 31, March 31,
1997 1996
----------- -----------
<S> <C> <C>
Net income $ 2,065,603 $ 2,173,061
=========== ===========
Shares used in calculating fully diluted earnings per share:
Weighted average common shares outstanding 12,899,378 9,374,999
Net effect of stock options and warrants calculated using
the treasury stock method 327,425 426,281
Weighted average Series B Convertible Preferred Stock issued during the 12
months prior to the public offering calculated using the treasury stock
method and treated as
outstanding for the entire period 335,330
----------- -----------
Total shares 13,226,803 10,136,610
=========== ===========
Fully diluted earnings per share $ 0.16 $ 0.21
=========== ===========
</TABLE>
13
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 846,359
<SECURITIES> 0
<RECEIVABLES> 39,102,574
<ALLOWANCES> 0
<INVENTORY> 47,979,744
<CURRENT-ASSETS> 94,544,457
<PP&E> 10,636,938
<DEPRECIATION> 0
<TOTAL-ASSETS> 107,923,941
<CURRENT-LIABILITIES> 53,209,957
<BONDS> 0
0
0
<COMMON> 37,195,642
<OTHER-SE> 14,408,879
<TOTAL-LIABILITY-AND-EQUITY> 107,923,941
<SALES> 122,755,313
<TOTAL-REVENUES> 122,755,313
<CGS> 106,207,897
<TOTAL-COSTS> 12,928,666
<OTHER-EXPENSES> 388,721
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 3,230,029
<INCOME-TAX> 1,164,426
<INCOME-CONTINUING> 2,065,603
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,065,603
<EPS-PRIMARY> 0.16
<EPS-DILUTED> 0.16
</TABLE>
