<PAGE> 1
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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, 1998 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)
(425) 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
27, 1998 was 13,074,855.
- --------------------------------------------------------------------------------
1
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MULTIPLE ZONES INTERNATIONAL, INC.
INDEX
<TABLE>
<S> <C> <C>
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements:
Consolidated Balance Sheets
March 31, 1998 and December 31, 1997................................................................... 3
Consolidated Statements of Operations and
Comprehensive Income Three months ended March 31, 1998 and 1997
4
Statements of Shareholders' Equity
Three months ended March 31, 1998...................................................................... 5
Consolidated Statements of Cash Flows
Three months ended March 31, 1998 and 1997............................................................. 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 5. Other Information....................................................................................... 14
Item 6. Exhibits and Reports on Form 8-K........................................................................ 14
Signatures.............................................................................................. 14
</TABLE>
2
<PAGE> 3
PART I - FINANCIAL INFORMATION
MULTIPLE ZONES INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
--------- ---------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 6,802 $ 1,645
Receivables, net 37,094 42,944
Inventories, net 37,952 40,169
Prepaid expenses 3,220 4,012
Income tax receivable 2,250 1,127
Deferred income taxes 1,787 1,889
--------- ---------
Total current assets 89,105 91,786
Property and equipment, net 12,632 12,417
Other assets 253 607
--------- ---------
Total assets $ 101,990 $ 104,810
========= =========
LIABILITIES & SHAREHOLDERS' EQUITY
Current liabilities:
Bank lines of credit $ 2,012 $ 2,084
Accounts payable 44,953 44,067
Accrued liabilities and other 7,565 9,059
Current portion of capital lease obligations 952 961
Income taxes payable 540
--------- ---------
Total current liabilities 55,482 56,711
Capital lease obligations, net of current portion 863 892
Other 1,728 1,608
--------- ---------
Total liabilities 58,073 59,211
--------- ---------
Minority interest 473 628
--------- ---------
Commitments and contingencies
Shareholders' equity:
Common stock 37,841 37,751
Retained earnings 6,022 7,256
Foreign currency translation adjustment (419) (36)
--------- ---------
Total shareholders' equity 43,444 44,971
--------- ---------
Total liabilities & shareholders' equity $ 101,990 $ 104,810
========= =========
</TABLE>
See notes to consolidated financial statements
3
<PAGE> 4
MULTIPLE ZONES INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(In thousands, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
For the three months
Ended March 31,
1998 1997
--------- ---------
<S> <C> <C>
Net sales $ 117,809 $ 122,755
Cost of sales 103,891 106,208
--------- ---------
Gross profit 13,918 16,547
Selling, general and administrative expenses 15,908 12,928
--------- ---------
Income (loss) from operations (1,990) 3,619
--------- ---------
Other (income) expense:
Interest expense, net 182 379
Other (income) expense (295) 2
Minority interest 81 8
--------- ---------
(32) 389
--------- ---------
Income (loss) before income taxes (1,958) 3,230
Provision for (benefit from) income taxes (724) 1,164
--------- ---------
Net income (loss) $ (1,234) $ 2,066
========= =========
Other comprehensive income (expense), net of tax
Foreign currency translation adjustments (140) (138)
Less: Reclassification adjustment for gains included in net income
(243)
--------- ---------
Net foreign currency translation adjustments (383) (138)
--------- ---------
Comprehensive income (loss) $ (1,617) $ 1,928
========= =========
Basic earnings (loss) per share $ (0.09) $ 0.16
========= =========
Shares used in computation of basic earnings (loss) per share
13,057 12,899
========= =========
Diluted earnings (loss) per share $ (0.09) $ 0.16
========= =========
Shares used in computation of diluted earnings (loss) per share
13,057 13,114
========= =========
</TABLE>
See notes to consolidated financial statements
4
<PAGE> 5
MULTIPLE ZONES INTERNATIONAL, INC. AND SUBSIDIARIES
STATEMENTS OF SHAREHOLDERS' EQUITY
(In thousands, except share data)
(Unaudited)
<TABLE>
<CAPTION>
Foreign
Currency
Common Stock Retained Translation
Shares Amount Earnings Adjustment Total
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Balance, January 1, 1998 13,041,464 $ 37,751 $ 7,256 $ (36) $ 44,971
Issuance of common stock 24,380 90 90
Net loss (1,234) (1,234)
Translation adjustment (383) (383)
----------- ----------- ----------- ----------- -----------
Balance, March 31, 1998 13,065,844 $ 37,841 $ 6,022 $ (419) $ 43,444
=========== =========== =========== =========== ===========
</TABLE>
See notes to consolidated financial statements
5
<PAGE> 6
MULTIPLE ZONES INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
For the three months
ended March 31,
--------------------
1998 1997
-------- --------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ (1,234) $ 2,066
Adjustments to reconcile net income to
net cash provided by operating activities:
Allowance for inventory and receivables (590) 120
Depreciation and amortization 840 841
Deferred income taxes 31
Loss on disposal of asset 12
Minority interest (155) 8
Changes in assets and liabilities:
Accounts receivable 5,113 10,272
Inventory 3,330 29,238
Prepaid expenses and other assets 944 2,308
Accounts payable 675 (43,053)
Accrued liabilities (1,022) (740)
Income taxes (1,663) 1,130
-------- --------
Net cash provided by operating activities 6,281 2,190
-------- --------
Cash flows from investing activities:
Purchases of property and equipment (1,052) (1,533)
-------- --------
Net cash used in investing activities (1,052) (1,533)
-------- --------
Cash flows from financing activities:
Borrowings under line of credit agreement 8,015 41,297
Payments under line of credit agreement (8,073) (38,950)
Net change in book overdrafts 405 (2,728)
Proceeds from sale of common stock 90 208
Payments on capital leases (72) (274)
Other (162) (220)
-------- --------
Net cash provided by financing activities 203 (667)
-------- --------
Effect of exchange rate on cash and cash equivalents (275) (120)
-------- --------
Net increase in cash and cash equivalents 5,157 (130)
Cash and cash equivalents at beginning of period 1,645 976
-------- --------
Cash and cash equivalents at end of period $ 6,802 $ 846
======== ========
</TABLE>
6
See notes to consolidated financial statements
<PAGE> 7
MULTIPLE ZONES INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
BASIS OF PRESENTATION
The consolidated financial statements and related notes thereto for the three
months ended March 31, 1998 and 1997 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, 1998. 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, 1997.
EARNINGS PER SHARE
Earnings per share is computed using the provision of Statement of Financial
Accounting Standards No. 128 "Earnings Per Share" (the "Statement"). The
statement specifies the computation, presentation, and disclosure requirements
for earnings per share ("EPS"). Basic EPS excludes all dilution. It is based
upon the weighted average number of shares outstanding during the period.
Diluted EPS reflects the potential dilution that would occur if securities or
other contracts to issue common stock were exercised or converted into common
stock.
RECENT ACCOUNTING PRONOUNCEMENTS
In June 1997, the FASB issued SFAS No. 131, "Disclosure about Segments of an
Enterprise and Related Information" ("FAS 131"). FAS 131 establishes standards
for disclosures about operating segments in annual financial statements and
selected information in interim financial reports. It also establishes standards
for related disclosures about products and services, geographic areas and major
customers. FAS 131 supersedes FAS No. 14, "Financial Reporting for Segments of a
Business Enterprise." FAS 131 is effective for the year ending December 31, 1998
and requires restatement of earlier periods presented. The impact of adopting
FAS 131 has not been determined.
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, 1997.
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 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.
In 1997 the Company expanded onto the Internet through the opening of its online
superstores, zones.com. The Company distributed 11.5 million catalogs
domestically in the three months ended March 31, 1998, with additional
circulation by its subsidiaries and licensees through operations in 24 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.
8
<PAGE> 9
<TABLE>
<CAPTION>
Three months ended
March 31,
------------------------------
1998 1997
--------- ---------
(In thousands, except operating data)
<S> <C> <C>
Net sales $ 117,809 $ 122,755
Cost of sales 103,891 106,208
--------- ---------
Gross profit 13,918 16,547
SG&A expenses 15,908 12,928
--------- ---------
Income (loss) from operations (1,990) 3,619
Other (income) expense (32) 389
--------- ---------
Income(loss) before taxes (1,958) 3,230
Provision for (benefit from) taxes (724) 1,164
--------- ---------
Net income (loss) $ (1,234) $ 2,066
========= =========
</TABLE>
<TABLE>
<CAPTION>
Three months ended
March 31,
--------------------------------------
1998 1997
------------- -------------
<S> <C> <C>
Net sales 100.0 % 100.0 %
Cost of sales 88.2 86.5
------------- -------------
Gross profit 11.8 13.5
SG&A expenses 13.5 10.5
------------- -------------
Income (loss) from operations (1.7) 3.0
Other (income) expense (0.1) 0.3
------------- -------------
Income(loss) before taxes (1.6) 2.7
Provision for (benefit from) taxes (0.6) 0.9
------------- -------------
Net income (loss) (1.0)% 1.8 %
============= =============
Selected domestic operating data:
Catalog circulation 11,450,000 13,150,000
Number of shipments 316,000 359,000
Average order size $ 340 $ 328
</TABLE>
11
<PAGE> 10
Comparison of the Three-month Periods ending March 31, 1998 and 1997.
Net Sales. Net sales decreased 4.0% to $117.8 million in the three months ended
March 31, 1998 from $122.7 million in the comparable period. The decrease
resulted primarily from a decrease in Mac product sales, partially offset by an
increase in PC product sales. Additionally, the Company's platform mix has
continued to shift toward PC products. PC platform sales increased to 48.0% of
net sales in the quarter ended March 31, 1998 from 41.9% in the comparable
period.
Net domestic PC product sales increased to $47.7 million in the three months
ended March 31, 1998 from $45.0 million in the comparable period. The increase
is due to an increase in PC catalog circulation and growth in sales to business,
education, and government accounts. PC catalog circulation increased to 5.3
million in the three months ended March 31, 1998 from 4.8 million in the
comparable period. Sales to business, education, and government accounts
increased 22.6% to $40.2 million in the three months ended March 31, 1998 from
$32.8 million in the comparable period. PC product sales represent 57.0% and
50.7% of the sales to business, education, and government accounts in each of
the respective periods.
Net domestic Mac product sales decreased to $51.7 million in the three months
ended March 31, 1998 from $62.4 million in the comparable period, a decrease of
17.2%. Mac catalog circulation decreased to 6.0 million in the three months
ended March 31, 1998 from 8.0 million in the comparable period. The decrease in
the domestic Mac product sales reflects the decrease in Mac catalog circulation
and the overall comparative weakness in demand for Mac products between the two
periods.
International subsidiary net sales in the three months ended March 31, 1998 were
$18.4 million, an increase of 19.8% over the comparable period. Excluding the
results of the operations that were closed in the prior year, net sales
increased 40.8%. The increase in international subsidiary net sales resulted
primarily from the addition of a subsidiary in India, as well as sales growth in
the Company's operations in France, Germany, and the United Kingdom.
Gross Profit. Gross profit decreased to $13.9 million in the three months ended
March 31, 1998 from $16.5 million in the comparable period, and decreased to
11.8% of net sales from 13.5%. Gross profit dollars declined due primarily to
lower sales volume. Gross profit as a percentage of net sales declined due to
continued industry price competition and lower average unit selling prices
during the period.
Selling, General, and Administrative Expenses. SG&A expenses increased to $15.9
million in the three months ended March 31, 1998 from $12.9 million in the
comparable period, and increased between periods as a percentage of net sales to
13.5% from 10.5%. SG&A increased due to increased expenses associated with
catalog production, salaries, depreciation, and increased professional fees.
Other (Income)/Expense. Other income/expense was $32,000 of income in the three
months ended March 31, 1998 compared to $389,000 of expenses in the comparable
prior year period. The change is primarily attributable to decreased interest
expense in the current year as compared to the prior year and recognition of a
gain on the closure international subsidiaries in the current year quarter.
Income Tax (Benefit)/Expense. The income tax benefit for the three months ended
March 31, 1998 was $724,000. Income tax expense for the three months ended March
31, 1997 was $1.2 million. The decrease in income tax expense is due to the loss
recognized by the company in the three months ended March 31, 1998 compared to
income in the prior year comparable period.
10
<PAGE> 11
Net (Loss) Income. As a result of the above factors, a net loss of $1.2 million,
1.0% of net sales was incurred for the three months ended March 31, 1998. Net
income for the three months ended March 31, 1997 was $2.1 million, 1.8% of net
sales.
Trends
PC product sales represented 48.0% of domestic net sales for the first quarter
of 1998 as compared to 41.9% in the three months ended March 31, 1997 and 49.7%
in the three months ended December 31, 1997. Additionally, domestic net PC
product sales increased 6.1% to $47.7 million for the first quarter of 1998 from
$45.0 million in the first quarter of 1997.
Domestic net sales to business, education, and government accounts were $40.3
million in the first quarter of 1998 compared to $32.8 million and $49.9 million
in the first quarter of 1997 and fourth quarter of 1997, respectively. During
the three month periods ended March 31, 1998, March 31, 1997 and December 31,
1997, PC sales represented 57.0%, 50.7%, and 65.2% of the sales to business,
education, and government accounts. The variation in sales levels can be
attributable to the changes in staffing levels. The outbound telemarketing staff
was comprised of 84 members as of March 31, 1998 compared to 77 at March 31,
1997 and 91 at December 31, 1997.
PC product sales and sales to business accounts tend to carry a lower average
gross margin percentage and have contributed to a decrease in the gross margin
percentage. The Company's gross margin percentage has decreased to 11.8% in the
first quarter of 1998, compared to 13.5% in the first quarter of 1997 and 12.2%
in the fourth quarter of 1997.
Circulation of The PC Zone was 5.3 million in the first quarter of 1998 compared
to 4.8 million in the first quarter of 1997 and 6.0 million distributed in the
fourth quarter of 1997. The Company is continuing to focus on growing it PC
sales and plans to increase circulation. The Company's circulation in the fourth
quarter is seasonally higher than other times during the year in order to
capture a greater amount of the holiday buying.
Net domestic Mac product sales decreased 17.2% to $51.7 million in the first
quarter of 1998 from $62.4 million in the first quarter of 1997. Circulation of
The Mac Zone decreased to 6.0 million in the first quarter of 1998 compared to
8.0 million in the first and fourth quarters of 1997. A further decline in the
demand for Mac products could have a material adverse effect on the Company's
future results of operations.
The Company opened its Internet site in the first quarter of 1997. Web-based
sales increased to $7.5 million in the three-month period ended March 31, 1998
compared to $416,000 in the quarter ended March 31, 1997 and $4.8 million in the
quarter ended December 31, 1997.
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 inventory of older models. The
Company expects pricing pressure to continue. In order to remain competitive,
the Company may be required to reduce its prices. Such a reduction in prices
could have a material adverse effect on the Company's future results of
operations.
11
<PAGE> 12
Seasonal Factors
Seasonal factors cause sales of microcomputer software and hardware products
through the direct marketing channel to be somewhat stronger in the fourth
calendar quarter than in the other periods. Sales during the fourth quarter tend
to be stronger as manufacturers make year-end introductions of new products and
increased marketing activities related to the holiday season, and as corporate
purchasing activities increase at the end of budgetary cycles.
Inflation
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, 1998, the Company had total assets of $102.0 million, of which
$89.1 million were current assets. At March 31, 1998 and December 31, 1997 the
Company had cash and cash equivalents of $6.8 million and $1.6 million,
respectively, and working capital of $33.6 million and $35.1 million,
respectively. Net cash provided by operating activities was $6.3 million and
$2.2 million for the three month ended March 31, 1998 and 1997, respectively.
Cash inflows in the three months ended March 31, 1998 were primarily due to a
reduction in accounts receivable and inventories. In the period ended March 31,
1998 accounts receivable decreased $5.1 million and inventories decreased $3.3
million. Cash inflows in the three months ended March 31, 1997 were primarily
due to the net effect of lower accounts payable offset by lower accounts
receivable and inventory. In the three months ended March 31, 1997 accounts
payable decreased $43.0 million, accounts receivable decreased $10.3 million and
inventories decreased $29.2 million.
Cash outlays for capital expenditures were $1.0 million and $1.5 million in the
three months ended March 31, 1998 and 1997, respectively. These expenditures
were primarily for information system enhancements and furniture and equipment.
During the three months ended March 31, 1998 and 1997 the effect of the foreign
exchange rate on cash was an outflow of $275,000 and $120,000, respectively.
The Company has two domestic revolving lines of credit from commercial banks.
The Company has a $30.0 million and a $20.0 million line of credit
collateralized by accounts receivable and inventories, respectively. At March
31, 1998, the Company received a waiver related to noncompliance with one of the
restrictive covenants under its $30.0 million line of credit collateralized by
accounts receivable. At March 31, 1998, there were no borrowings outstanding
under the facilities. Additionally, at March 31, 1998, the Company had $2.5
million of unused letters of credit.
The net amount of vendor credit outstanding at March 31, 1998 was $45.0 million
of which $12.9 million was drawn from a $35.0 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
12
<PAGE> 13
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.
Other Matters
The Company is currently conducting its assessment of the potential impact of
the year 2000 on the processing of date-sensitive information by the Company's
computerized information systems. The year 2000 problem is the result of
computer programs being written using two digits (rather than four) to define
the applicable year. Any of the Company's program that have time-sensitive
software may recognize a date using "00" as the year 1900 rather that the year
2000, which could result in miscalculations or system failures.
The Company's assessment has not yet been completed. Accordingly, the extent of
potential impact, if any, of the year 2000 on the company's computerized
information systems, whether or not processing errors caused thereby may be
remedied, the cost of such remedies, and the time necessary to implement them
are uncertain. If the Company, its customers or vendors are unable to resolve
such processing issues in a timely manner, it could result in a material
financial risk. The Company believes it is devoting the resources necessary to
assess and resolve all significant year 2000 issues in a timely manner.
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
Macintosh products. These and other risk factors are described generally in the
Risk Factors section of the Company's 10-K dated March 31, 1998 filed with the
Securities and Exchange Commission.
13
<PAGE> 14
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
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, 1998.
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 14, 1998 By: /S/ FIROZ H. LALJI
--------------------------------------
Firoz H. Lalji, Chief Executive Officer
Dated: May 14, 1998 By: /S/ PETER J. BIERE
------------------------------------
Peter J. Biere, Chief Financial Officer
14
<PAGE> 15
EXHIBIT INDEX
Exhibits
27.1 Financial Data Schedule
15
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 6,802
<SECURITIES> 0
<RECEIVABLES> 40,529
<ALLOWANCES> 3,435
<INVENTORY> 37,952
<CURRENT-ASSETS> 89,150
<PP&E> 20,562
<DEPRECIATION> 7,930
<TOTAL-ASSETS> 101,990
<CURRENT-LIABILITIES> 55,482
<BONDS> 0
0
0
<COMMON> 37,841
<OTHER-SE> 5,603
<TOTAL-LIABILITY-AND-EQUITY> 101,990
<SALES> 117,809
<TOTAL-REVENUES> 117,809
<CGS> 103,891
<TOTAL-COSTS> 103,891
<OTHER-EXPENSES> 15,876
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (1,958)
<INCOME-TAX> (724)
<INCOME-CONTINUING> (1,234)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,234)
<EPS-PRIMARY> (0.09)
<EPS-DILUTED> (0.09)
</TABLE>
