U. S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 28, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934.
For the transition period from to ______ to ______
Commission File Number 333-7731
ASD GROUP, INC.
---------------
(Exact name of registrant as specified in its charter)
DELAWARE 14-1483460
- ------------------------------- ---------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
1 INDUSTRY STREET, POUGHKEEPSIE, NEW YORK 12603
-----------------------------------------------
(Address of principal executive offices, including zip code)
(914) 452-3000
--------------
(Registrant's telephone number, including area code)
Check whether the registrant (1) 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 [ ] No [X]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: The number of shares of the
issuer's Common Stock, $.01 par value per share, outstanding as of June 20, 1997
was 1,577,917.
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ASD GROUP, INC.
FORM 10-QSB
QUARTERLY REPORT
MARCH 28, 1997
INDEX
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PAGE
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PART I FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
Consolidated Balance Sheets:
March 28, 1997 (unaudited) and June 30, 1996 3
Consolidated Statements of Operations (unaudited):
Three and nine months ended March 28, 1997 and March 29, 1996 4
Consolidated Statements of Cash Flows (unaudited):
Nine months ended March 28, 1997 and March 29, 1996 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 7
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports 11
SIGNATURES 13
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<TABLE>
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PART I
FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
ASD GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
June 30, March 28,
1996 1997
------------ ------------
(Unaudited)
<S> <C> <C>
Assets
Current assets:
Cash. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 458,911 $ 217,397
Accounts receivable, less allowance for doubtful accounts of $383,000
and $63,000 respectively. . . . . . . . . . . . . . . . . . . . . . 2,737,163 2,112,161
Inventory. . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . 5,954,571 5,204,638
Prepaid expenses and other current assets. . . . . . . . . . . .. . . . 56,372 207,056
Deferred tax asset. . . . . . . . . . . . . . . . . . . . . . . . . . . 313,449 115,864
------------ ------------
Total current assets. . . . . . . . . . . . . . . . . . . . . . . . . 9,520,466 7,857,116
Property, plant and equipment, net. . . . . . . . . . . . . . . . . . . . 4,736,779 4,583,197
Deferred tax asset. . . . . . . . . . . . . . . . . . . . . . . . . . . . 959,499 1,415,067
Other assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 637,735 1,001,817
------------ ------------
Total assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 15,854,479 $ 14,857,197
============ ============
Liabilities and stockholders' equity
Current liabilities:
Current portion of long-term debt. . . . . . . . . . . . . . . . . . . $ 1,072,710 $ 1,927,213
Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,693,452 1,792,002
Accrued expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,202,228 897,330
Deferred revenues. . . . . . . . . . . . . . . . . . . . . . . .. . . . 69,666 -
------------ ------------
Total current liabilities. . . . . . . . . . . . . . . . . . .. . . . 5,038,056 4,616,545
Long-term debt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,602,158 9,053,884
Deferred compensation. . . . . . . . . . . . . . . . . . . . . . .. . . . 301,085 303,801
------------ ------------
Total liabilities. . . . . . . . . . . . . . . . . . . . . . . .. . . . 14,941,299 13,974,230
------------ ------------
Stockholders' equity:
Preferred stock, $.01 par value, 1,000,000 shares authorized,
none issued. . . . . . . . . . . . . . . . . . . . . . . . . . . . . - -
Common stock, $.01 par value, 10,000,000 shares authorized,
632,917 shares issued and outstanding. . . . . . . . . . . . .. . . . 6,329 6,329
Paid-in capital. . . . . . . . . . . . . . . . . . . . . . . . .. . . . - 327,000
Retained earnings. . . . . . . . . . . . . . . . . . . . . . . .. . . . 906,851 549,638
------------ ------------
Total stockholders' equity. . . . . . . . . . . . . . . . . . . . . . 913,180 882,967
------------ ------------
Total liabilities and stockholders' equity. . . . . . . . . . . . . . . . $ 15,854,479 $ 14,857,197
============= ============
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ASD GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
--------------------------------- ---------------------------------
March 29, March 28, March 29, March 28,
1996 1997 1996 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net sales. . . . . . . . . . . . $ 6,523,890 $ 3,873,949 $ 19,850,217 $ 12,083,794
Cost of good sold. . . . . . . . 5,052,409 2,960,819 15,714,508 8,994,085
------------- -------------- -------------- --------------
Gross profit. . . . . . . . . 1,471,481 913,130 4,135,709 3,089,709
------------- -------------- -------------- --------------
Operating expenses:
Sales and marketing. . . . . . 63,550 39,473 178,299 135,689
General and administrative. . 1,023,523 785,755 3,149,461 2,431,722
------------- -------------- -------------- --------------
Total operating expenses. . . 1,087,073 825,228 3,327,760 2,567,411
------------- -------------- -------------- --------------
Income from operations. . . . 384,408 87,902 807,949 522,298
Other income (expense). . . . . (10,935) 9,145 205,175 59,698
Interest expense. . . . . . . . 306,764 431,055 680,673 1,197,192
------------- -------------- -------------- --------------
Income (loss) before
income taxes. . . . . . . . 66,709 (334,008) 332,451 (615,196)
Provision (benefit) for
income taxes. . . . . . . . . 28,000 (139,983) (33,000) (257,983)
------------- -------------- -------------- --------------
NET INCOME (LOSS). . . . . . $ 38,709 $ (194,025) $ 365,451 $ (357,213)
============= ============== ============== ==============
Net income (loss) per
common share. . . . . . . . . $ .06 $ (.31) $ .58 $ (.56)
============= ============== ============== ==============
Weighted average common shares
outstanding. . . . . . . . . . 632,917 632,917 632,917 632,917
============= ============== ============== ==============
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Page 4
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ASD GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
------------------------------
March 29, March 28,
1996 1997
---- ----
<S> <C> <C>
Operating Activities:
Net income (loss). . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . $ 365,451 $ (357,213)
Adjustments to reconcile net income
(loss) to net cash used in
operating activities:
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . 277,412 549,267
Benefit for doubtful accounts . . . . . . . . . . . . . . . . . . . . . . . . . (45,000) (90,000)
Deferred compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22,342 24,129
Interest accrued on advances from
stockholder . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . 32,338 34,925
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (56,736) (257,983)
Gain on sale of plant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (166,734) -
Changes in assets and liabilities:
Accounts receivable . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . 303,956 715,002
Inventory . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . (1,018,785) 749,933
Prepaid expences and other
current assets . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . (200,781) (150,684)
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (76,127) 22,218
Accounts payable. . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . (197,224) (901,450)
Accrued expenses. . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . (486,408) (339,823)
Deferred revenues. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (725,899) (69,666)
---------- -------
Net cash used in
operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,972,195) (71,345)
---------- -------
Investing activities
Net proceeds from sale of plant . . . . . . . . . . . . . . . . . . . . . . . . . 591,781 -
Capital expenditures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (130,911) (47,671)
---------- -------
Net cash provided by (used in)
investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 460,870 (47,671)
---------- -------
Financing activities:
Borrowings . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . 3,131,230 1,100,000
Payments of long-term debt . . . . . . .. . . . . . . . . . . . . . . . . . . . . (1,207,419) (793,771)
Financing costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (292,500) (407,314)
Payments of deferred compensation . . . . . . . . . . . . . . . . . . . . . . . . (18,262) (21,413)
---------- -------
Net cash provided by (used in)
financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,613,049 (122,498)
---------- -------
Net increase (decrease) in cash . . . . . . . . . . . . . . . . . . . . . . . . . 101,724 (241,514)
Cash, beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . 356,922 458,911
---------- -------
Cash, end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 458,646 $ 217,397
========== =======
Supplemental disclosure:
Cash paid during the period for:
Income taxes. . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . $ 31,238 $ 6,484
========== =======
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 786,782 $ 699,455
========== =======
Notes exchanged for amounts owed
to vendors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 90,920 $ -
========== =======
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ASD GROUP INC. & SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - INTERIM FINANCIAL STATEMENTS
In the opinion of management, the accompanying unaudited interim
financial statements have been prepared in accordance with generally accepted
accounting principles for interim financial information and pursuant to the
rules and regulations of the Securities and Exchange Commission for reporting on
Form 10-QSB. Accordingly, certain information and footnote disclosures required
for complete financial statements are not included herein. It is recommended
that these financial statements be read in conjunction with the financial
statements and related notes of ASD Group, Inc. (the "Company") as reported on
the Company's financial statements on Form SB-2 for the six months ended
December 27,1996. In the opinion of management, all adjustments (consisting of
normal recurring adjustments) considered necessary for a fair presentation of
financial position, results of operations and cash flows at the dates and for
the periods presented have been included.
NOTE 2 - PUBLIC OFFERING OF COMMON STOCK
In May 1997, the Company completed an initial public offering of
945,000 shares of common stock at $5.75 per share (the "Offering"). Prior to the
Offering, there was no public market for the Company's common stock. The net
proceeds of the Offering, after deducting applicable offering costs and
expenses, were $4,141,000. The net proceeds of the Offering are being used
primarily to repay certain indebtedness, to increase staffing and to purchase
inventory and capital assets.
In connection with the Offering, the Company increased its outstanding
common stock from 632,917 shares to 1,577,917 shares.
NOTE 3 - INCOME TAXES
During the three months ended March 29, 1996 the Company recorded a tax
provision of $28,000, reflecting an effective tax rate of 42%. During the nine
months ended March 29, 1996 the Company recorded a tax benefit of $33,000
reflecting an effective tax rate of 42% and a reduction in the valuation
allowance of $171,976 . During the three months and nine months ended March 28,
1997, the Company recorded a tax benefit of $139,983 and $257,983 respectively,
reflecting an effective tax rate of 42%.
6
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
ASD Group, Inc. (the "Company") cautions readers that certain important
factors may affect the Company's actual results and could cause such results to
differ materially from any forward-looking statements which may be deemed to
have been made in this Report or which are otherwise made by or on behalf of the
Company. For this purpose, any statements contained in this Report that are not
statements of historical fact may be deemed to be forward-looking statements.
Without limiting the generality of the foregoing, words such as "may", "will",
"expect", "believe", "anticipate", "intend", "could", "would", "estimate", or
"continue" or the other negative variations thereof or comparable terminology
are intended to identify forward-looking statements. Such factors include, but
are not limited to, the risks and uncertainties associated with a contract
manufacturing company which is dependent upon a small number of large companies,
a limited history of profitability, dependence upon key personnel, need for
future capital and dependence upon certain industries. Additionally, the Company
is subject to the risks and uncertainties associated with all contract
manufacturing companies including variability of customer requirements and
customer financing, limited availability of components and a market
characterized by rapidly changing technology and continuing process development.
The Company is also subject to other risks detailed herein or detailed from time
to time in the Company's filings with the U.S. Securities and Exchange
Commission.
OVERVIEW
The Company provides comprehensive contract manufacturing and
engineering services to original equipment manufacturers ("OEMs"). The Company
was formed in 1965 to provide design and engineering services to IBM's main
frame computer development and manufacturing operations in New York's Hudson
Valley ("IBM-Hudson Valley"). Over a 25-year period, the Company's relationship
with IBM-Hudson Valley evolved to the point where by the mid-1980's the Company
assembled, wired and tested a significant portion of IBM-Hudson Valley's main
frame computers. IBM-Hudson Valley became the Company's principal customer,
providing over 90% of its revenues. Commencing in 1990, IBM-Hudson Valley's main
frame sales began to decline due to the recession and the shift in technology to
personal computer-based systems. In December 1992, IBM-Hudson Valley eliminated
the use of substantially all main frame assembly vendors, including the Company.
As a result, the Company had significant reductions in revenues and incurred
substantial losses. Accordingly, during 1993 and 1994 the Company undertook a
restructuring of its operations wherein it implemented a significant downsizing,
re-engineered its operations and commenced intensive efforts to market its
contract manufacturing services to other OEMs. While the IBM-Hudson Valley
down-sizing greatly affected the Company, management believes that its
relationship with IBM-Hudson Valley permitted the Company to evolve into a
vertically integrated contract manufacturer with a well disciplined quality
control program.
In May 1997, the Company completed an initial public offering ("IPO")
of 945,000 shares of Common Stock at $5.75 per share. A portion of the net
proceeds of $4,141,000 are being used to repay $1.1 million in principal amount
of bridge notes (the "Bridge Notes") and $900,000 in principal amount of the
Company's 10% Senior Secured Notes due June 30, 1999 (the "Notes ").
7
<PAGE>
RESULTS OF OPERATIONS
THREE MONTHS ENDED MARCH 28, 1997 AS COMPARED TO THREE MONTHS ENDED MARCH 29,
1996
For the three months ended March 28, 1997, the Company's net sales
decreased by $2,650,000 or 40.6% to $3,874,000 from $6,524,000 for the three
months ended March 29, 1996. The decrease in sales was, in part, a result of a
reduction in volume of orders by two of the Company's largest customers, due to
their inventory backlog, and a delay in the Company's raising additional capital
which adversely effected the Company's ability to obtain and fund new orders.
Costs of goods sold for the three months ended March 28, 1997 decreased
by $2,092,000 or 41.4% to $2,961,000 from $5,052,000 for the three months ended
March 29, 1996. The decrease in cost of goods sold is primarily the result of
the reduction of sales. Gross profit as a percentage of net sales increased by
1.0% from 22.6% for the three months ended March 29, 1996 to 23.6% for the three
months ended March 28, 1997. The improvement in gross profit percentage reflects
the efficiencies achieved by management through cost reduction and selected
price increases.
Selling, general and administrative expenses decreased for the three
months ended March 28, 1997 by $262,000 or 24.1% to $825,000 from $1,087,000 for
the three months ended March 29, 1996. The decrease in selling, general and
administrative expenses is primarily the result of reductions to support staff.
Interest expense increased for the three months ended March 28, 1997 by
$124,000 or 40.6% to $431,000 from $307,000 for the three months ended March 29,
1996. The increase in interest expense reflects both an increase in interest
rates and in amounts borrowed, including $1,100,000 raised from the issuance of
the Bridge Notes and amortization related to the costs of acquiring Senior
Secured Notes and Bridge Notes.
Benefit for income tax for the three months ended March 28, 1997 is
$140,000 as compared to a provision for tax of $28,000 for the three months
ended March 29, 1996. The Company realized a tax benefit from the loss during
the period ended March 28, 1997.
NINE MONTHS ENDED MARCH 28, 1997 AS COMPARED TO NINE MONTHS ENDED MARCH 29, 1996
For the nine months ended March 28, 1997, the Company's net sales
decreased by $7,766,000 or 39.1% to $12,084,000 from $19,850,000 for the nine
months ended March 29, 1996. The decrease in sales was, in part, a result of a
temporary reduction in shipments by two of the Company's largest customers due
to their inventory backlog and a delay in the Company's raising additional
capital, which resulted in an adverse effect on the Company's ability to obtain
and fund new orders.
Costs of goods sold for the nine months ended March 28, 1997 decreased
by $6,720,000 or 42.8% to $8,994,000 from $15,715,000 for the nine months ended
March 29, 1996. The decrease in cost of goods sold is primarily the result of
the reduction of sales. Gross profit as a percentage of net sales increased by
4.8% from 20.8% for the nine months ended March 29, 1996 to 25.6% for the nine
months ended March 28, 1997. The improvement in gross profit percentage reflects
the efficiencies achieved by management through cost reduction and selected
price increases.
8
<PAGE>
Selling, general and administrative expenses decreased for the nine
months ended March 28, 1997 by $760,000 or 22.8% to $2,432,000 from $3,328,000
for the nine months ended March 29, 1996. The decrease in selling, general and
administrative expenses is primarily the result of reductions to support staff.
In addition, these expenses decreased in part as a result of a recovery of bad
debt of $90,000.
Interest expense increased for the nine months ended March 28, 1997 by
$517,000 or 75.9% to $1,197,000 from $681,000 for the nine months ended March
29, 1996. The increase in interest expense reflects both an increase in interest
rates and in amounts borrowed, including the $2,000,000 of the Notes, $1,100,000
raised from the issuance of the Bridge Notes and $1,000,000 increase in the
Company's revolving bank line of credit (the "Line of Credit") with Banker's
Trust Company (the "Bank").
Other income decreased for the nine months ended March 28, 1997 by
$145,000 or 70.7% to $60,000 from $205,000 for the nine months ended March 29,
1996. Other income in the nine months ended March 29, 1996 included a gain of
$167,000 on the August 1995 sale of a North Carolina facility owned by the
Company.
Benefit for income tax increased for the nine months ended March 28,
1997 by $225,000 to $258,000 from $33,000 for the nine months ended March 29,
1996. The tax benefit provided during the period ended March 29, 1996 included a
reduction of the previously established deferred tax asset valuation allowance
relating to the utilization of a capital loss carryforward of $172,000,
resulting from the sale of the Company's North Carolina facility in August 1995.
The Company realized a tax benefit from the loss during the period ended March
28, 1997.
LIQUIDITY AND CAPITAL RESOURCES
STATEMENTS OF CASH FLOWS
Net cash used in operations was $71,000 for the nine months ended March
28, 1997 as compared to $1,972,000 for the nine months ended March 29, 1996. The
decrease in cash used in operations was the result of a significant decrease in
accounts receivable and inventory offset by decreases in accounts payable and
accrued expenses. The inventory reduction was primarily a result of
implementation of a new feature in the production operation management ("POM")
manufacturing software and a change of policy in the Company's purchasing
department. Net cash used in financing activities during the nine months ended
March 28, 1997 was $122,000. During this period $1,100,000 was provided from the
issuance of the Bridge Notes, $794,000 of long-term debt was repaid, $407,000 of
financing costs were incurred and payments of deferred compensation of $21,000
were made. Working capital decreased to $3,241,000 at March 28, 1997 from
$4,482,000 at March 29, 1996.
LINE OF CREDIT
The Line of Credit currently permits borrowings of up to $3,730,000.
The amount available for borrowings under the Line of Credit is determined
pursuant to a formula based upon the Company's eligible accounts receivable and
inventory. As of March 28, 1997, $3,069,000 was outstanding under the Line of
Credit and the Company had $661,000 available for additional borrowings.
The Line of Credit currently bears interest at the rate of 9.5% (prime
plus 1 1/2%). The Line of Credit is secured by a first lien on substantially all
of the Company's assets other than a second lien on inventory. In addition, the
Bank holds mortgages on two of the Company's properties, which mortgages had an
aggregate principal balance of approximately $3,331,000 as of March 28, 1997.
The Bank has extended to the Company the Equipment Line with an outstanding
principal balance as of March 28, 1997 of $443,000. The Equipment Line is
9
<PAGE>
due June 30, 1997. The Company intends to refinance such indebtedness with a new
credit facility to be negotiated. There can be no assurance that the Company
will be able to refinance the Equipment Line.
The Line of Credit contains certain financial operating covenants,
including requirements that the Company maintain minimum net worth levels,
prohibitions on the ability of the Company to make capital expenditures, to
incur or suffer to exist certain liens and to take certain other actions,
including restricting the payment of dividends by certain subsidiaries to the
Company. The Company is currently in compliance with all covenants under the
Line of Credit.
The Company intends to refinance its indebtedness to the Bank and
secure a new credit facility with an increased borrowing limit. On May 31, 1996,
the Company entered into an agreement with the Bank which will permit the
Company to repay its existing indebtedness to the Bank at a discount of
approximately $460,000, provided such option is exercised on or before June 30,
1997. Management of the Company believes that the Bank agreed to accept
repayment of the Line of Credit at a discount in order to encourage the Company
to find another source for its financial needs as the Bank no longer provides
commercial lending on a short-term basis. There are no continuing obligations or
conditions imposed upon the Company in connection with the repayment of the Line
of Credit. The Company is negotiating with a number of financial institutions to
refinance its existing credit facility. There can be no assurance that the
Company will be able to successfully do so.
PART II - OTHER INFORMATION
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
11 Statement re: computation of per share earnings (loss)
27 Financial Data Schedule
(b) Reports on Form 8-K: none
<PAGE>
ASD GROUP, INC.
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.
By /s/ GARY HORNE
------------------------------
Gary Horne
Chief Executive Officer
By /s/ ROBERT A. LETTIERI
------------------------------
Robert A. Lettieri
Chief Financial Officer
Date: June 24, 1997
<PAGE>
EXHIBIT INDEX
EXHIBIT
11 Statement re: computation of per share earnings (loss)
27 Financial Data Schedule
EXHIBIT 11
ASD Group, Inc.
EXHIBIT TO ANNUAL REPORT ON FORM 10-QSB
Computation of Per Share Earnings (Loss)
<TABLE>
<CAPTION>
For the Three Months Ended For the Nine Months Ended
-------------------------- -------------------------
March 29, March 28, March 29, March 28,
1996 1997 1996 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net income (loss). . . . . . . . . . . $ 38,709 $ (194,025) $ 365,451 $ (357,213)
Weighted average number of common and
common equivalent shares outstanding:
Average number of common shares
outstanding during the period. . . . . 632,917 632,917 632,917 632,917
Add common share equivalents--options to
purchase common shares. . . . . . . . . - - - -
---------- ---------- ----------- -----------
Total common shares outstanding 632,917 632,917 632,917 632,917
========== ========== =========== ===========
Net income (loss) per common share. . . $ 0.06 $ (0.31) $ 0.58 $ (0.56)
========== ========== =========== ===========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 9-MOS
<FISCAL-YEAR-END> JUN-30-1997 JUN-30-1997
<PERIOD-START> DEC-28-1996 JUL-01-1996
<PERIOD-END> MAR-28-1997 MAR-28-1997
<CASH> 0 217,397
<SECURITIES> 0 0
<RECEIVABLES> 0 2,175,161
<ALLOWANCES> 0 63,000
<INVENTORY> 0 5,204,638
<CURRENT-ASSETS> 0 322,920
<PP&E> 0 4,583,197
<DEPRECIATION> 0 0
<TOTAL-ASSETS> 0 14,857,197
<CURRENT-LIABILITIES> 0 4,616,545
<BONDS> 0 0
0 0
0 0
<COMMON> 0 6,329
<OTHER-SE> 0 0
<TOTAL-LIABILITY-AND-EQUITY> 0 14,857,197
<SALES> 3,873,949 12,083,794
<TOTAL-REVENUES> 3,873,949 12,083,794
<CGS> 2,960,819 8,994,085
<TOTAL-COSTS> 825,228 2,567,411
<OTHER-EXPENSES> (9,145) (59,698)
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 431,055 1,197,192
<INCOME-PRETAX> (334,008) (615,196)
<INCOME-TAX> 139,983 257,983
<INCOME-CONTINUING> (194,025) (357,213)
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (194,025) (357,213)
<EPS-PRIMARY> (.31) (.56)
<EPS-DILUTED> 0 0
</TABLE>
