UNITED GROCERS, INC., AND SUBSIDIARIES
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 Quarterly period ended April 2, 1999
Commission File Number 2-60487
United Grocers, Inc.
(Exact name of registrant as specified in its charter)
Oregon 93-0301970
(State or other jurisdiction of (IRS Employer identification No.)
incorporation or organization)
6433 S.E. Lake Road
Post Office Box 22187, Milwaukie, Oregon 97269
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (503) 833-1000
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 [ ] No [X]
Indicate the number of shares outstanding for each of the issuer's classes
of common stock, as of the latest practicable date.
Class Outstanding at May 1, 1999
Common shares, $5 par value 546,209 shares
1
<PAGE>
UNITED GROCERS, INC., AND SUBSIDIARIES
INDEX
PART I: Financial Information Pages
-----
Item 1. Financial Statements
Condensed Consolidated Statements of Operations
or the quarters and year-to-date periods
ended April 2, 1999 and April 3, 1998..................4
Condensed Consolidated Balance Sheets as of
April 2, 1999 and October 2, 1998....................5-6
Condensed Consolidated Statements of Cash Flows
for the year-to-date periods ended April 2, 1999
and April 3, 1998................................... ..7
Notes to the Condensed Consolidated Financial
Statements...........................................8-9
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of
Operations........................................10-14
Item 3. Quantitative and Qualitative Disclosures
about Market Risk....................................14
PART II: Other Information
Item 2. Changes in Securities and Use of Proceeds............15
Item 6. Exhibits and Reports on Form 8-K.....................15
SIGNATURE...............................................................15
2
<PAGE>
UNITED GROCERS, INC., AND SUBSIDIARIES
PART I: FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Quarter ended Quarter ended
April 2, 1999 April 3, 1998
------------- -------------
<S> <C> <C>
Net sales and operations $ 249,756,151 $ 296,732,425
------------ ------------
Costs and expenses:
Cost of sales 214,871,913 256,194,168
Members' allowances 4,434,376 2,326,477
Operating expenses 21,559,597 30,035,113
Selling and administrative
expenses 5,878,567 5,180,470
Depreciation and amortization 2,497,191 2,625,950
------------ ------------
Total costs and expenses 249,241,644 296,362,178
------------- ------------
Other (income)/expense:
Interest expense 2,391,082 3,683,725
Interest income ( 748,163) ( 444,467)
------------- -------------
Total other (income)/expense 1,642,919 3,239,258
------------- -------------
Loss from continuing operations
before income tax benefit (1,128,412) ( 2,869,011)
Benefit for income taxes 451,367 1,147,604
------------ -------------
Loss from continuing
operations (677,045) ( 1,721,407)
Discontinued operations (Note 3), less
applicable income taxes of $332,020
in 1998 - 498,001
------------ -------------
Net loss $ (677,045) $(1,223,406)
============ =============
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
UNITED GROCERS, INC., AND SUBSIDIARIES
PART I: FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Year-to-date Year-to-date
period ended period ended
April 2, 1999 April 3, 1998
------------ ------------
<S> <C> <C>
Net sales and operations $ 515,668,944 $ 600,873,833
------------- ------------
Costs and expenses:
Cost of sales 443,497,294 521,516,063
Members' allowances 9,283,241 4,599,641
Operating expenses 43,638,115 57,075,640
Selling and administrative
expenses 11,252,955 11,918,513
Depreciation and amortization 4,846,723 5,129,970
------------- ------------
Total costs and expenses 512,518,328 600,239,827
------------- ------------
Other (income)/expense:
Interest expense 4,940,911 7,631,869
Interest income ( 1,357,250) ( 697,672)
------------- ------------
Total other (income)/expense 3,583,661 6,934,197
------------- ------------
Loss from continuing operations
before income tax benefit (433,045) ( 6,300,191)
Benefit for income taxes 173,220 2,520,076
------------- ------------
Loss from continuing
operations (259,825) ( 3,780,115)
Discontinued operations (Note 3), less
applicable income taxes of $624,336
in 1998 - 936,475
------------- ------------
Net loss $ (259,825) $(2,843,640)
============= ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
UNITED GROCERS, INC., AND SUBSIDIARIES
PART I: FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
(Unaudited) (Audited)
ASSETS April 2, 1999 October 2, 1998
--------------- ----------------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 3,332,171 $ 1,294,137
Accounts and notes receivable, net 63,873,531 67,269,129
Inventories 67,220,464 68,898,336
Other current assets 6,118,016 5,115,026
Deferred income taxes 1,525,237 1,525,237
------------ ------------
Total current assets 142,069,419 144,101,865
------------ ------------
Non-current assets:
Notes receivable 25,586,197 29,201,865
Investment in affiliated companies 3,484,579 3,359,579
Other receivables 2,940,337 3,032,683
Property, plant and equipment, net 31,952,166 37,913,621
Other assets, net 14,416,0587 16,032,195
------------ ------------
Total non-current assets 78,379,337 89,539,943
------------ ------------
TOTAL $220,448,756 $233,641,808
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
UNITED GROCERS, INC., AND SUBSIDIARIES
PART I: FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED BALANCE SHEETS
(CONTINUED)
<TABLE>
<CAPTION>
(Unaudited) (Audited)
LIABILITIES AND MEMBERS' EQUITY April 2, 1999 October 2, 1998
-------------- -----------------
<S>
<C> <C>
Current liabilities:
Notes payable, current portion $50,214,759 $ 41,159,191
Accounts payable 53,484,452 59,675,586
Compensation and taxes payable 4,914,608 6,335,369
Other current liabilities 4,309,630 5,778,587
------------ ------------
Total current liabilities 112,923,449 112,948,733
Notes payable, net of current portion 64,652,758 74,433,616
Other liabilities 9,127,828 11,011,261
------------ ------------
Total liabilities 186,704,035 198,393,610
------------ ------------
Redeemable members' equity (includes 75,642 4,199,644 3,905,070
and 93,085 shares outstanding, respectively)
Members' equity:
Common stock -- authorized, 10,000,000
shares at $5.00 par value;
net issued and outstanding,
510,282 and 523,955 shares, respectively 2,551,410 2,619,775
Additional paid-in capital 18,924,409 20,394,270
Retained earnings 8,069,258 8,329,083
------------ ------------
Total members' equity 29,545,077 31,343,128
------------ ------------
TOTAL $220,448,756 $233,641,808
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
<PAGE>
UNITED GROCERS, INC., AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION> Year-to-date Year-to-date
period ended period ended
April 2, 1999 April 3, 1998
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net loss $ (259,825) $ (2,843,640)
Adjustments to reconcile net loss
to net cash provided by (used in)
operating activities (4,742,192) 8,153,216
------------- -------------
Net cash provided by (used in)
operating activities (5,002,017) 5,309,576
------------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Loans to members ( 71,153) (1,647,219)
Collections on loans to members 3,386,821 2,036,482
Proceeds from sale of member loans - 595,058
Redemption of investments - 6,413,850
Purchase of investments - (3,166,617)
Sale of property, plant and equipment 6,697,537 5,807,134
Purchase of property, plant and equipment (1,004,212) (1,192,183)
------------- -------------
Net cash provided by investing activities 9,008,993 8,846,505
------------- -------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Sale of common stock 750,582 -
Repurchase of common stock (1,994,234) -
Proceeds from (repayment of)
long-term liabilities:
Revolving bank lines of credit, net 8,099,868 ( 8,782,760)
Mortgages and notes (1,590,618) ( 2,028,150)
Redeemable notes and certificates (7,234,540) ( 1,242,589)
------------- -------------
Net cash used in financing activities (1,968,942) (12,053,499)
------------- -------------
Net increase in cash and
cash equivalents 2,038,034 2,102,582
Cash and cash equivalents,
beginning of period 1,294,137 10,223,434
------------- -------------
Cash and cash equivalents, end of period $ 3,332,171 $ 12,326,016
============ =============
</TABLE>
The accompanying notes are an integral part of these financial statements.
7
<PAGE>
UNITED GROCERS, INC., AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 1. MANAGEMENT'S STATEMENT
In the opinion of management, the accompanying unaudited financial statements
contain all adjustments necessary to present fairly the consolidated financial
position of United Grocers, Inc. and subsidiaries (the Company) at April 2, 1999
and the consolidated results of operations for the quarterly and the
year-to-date periods ended April 2, 1999 and April 3, 1998 and consolidated cash
flows for the year-to-date periods ended April 2, 1999 and April 3, 1998. The
Notes to the Condensed Consolidated Financial Statements which are contained in
the 1998 Annual Report Company's 1998 Annual Report on Form 10-K to Shareholders
should be read in conjunction with these Condensed Consolidated Financial
Statements.
Operating results for the period ended April 2, 1999 are not necessarily
indicative of the results that may be expected for the entire fiscal year ending
October 1, 1999, or any other period.
Note 2. ACCOUNTING PRONOUNCEMENTS
In February 1998, the Financial Accounting Standards Board (FASB) issued SFAS
No. 132, "Employers' Disclosures about Pensions and Other Postretirement
Benefits" ("SFAS 132"). This statement revises employers' disclosures about
pension and other postretirement benefit plans. It does not change the
measurement or recognition of those plans. The statement suggests combined
formats for presentation of pension and other postretirement benefit
disclosures. The statement is effective for fiscal years beginning after
December 15, 1997, but is not required to be presented in interim financial
information in the year of adoption. The adoption of SFAS will require revised
disclosures when the statement becomes effective.
In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities" ("SFAS 133"). SFAS 133 establishes
accounting and reporting standards requiring that every derivative instrument be
recorded in the balance sheet as either an asset or liability measured at its
fair value. SFAS 133 also requires that changes in the derivative instrument's
fair value be recognized currently in results of operations unless specific
hedge accounting criteria are met. SFAS 133 is effective for fiscal years
beginning after June 15, 1999. The Company's management has studied the
implications of SFAS 133 and based on the initial evaluation, expects the
adoption to have no impact on the Company's financial condition or results of
operations.
8
<PAGE>
Note 3. DISCONTINUED OPERATIONS
In September 1997, the Company's management and Board of Directors approved a
plan whereby the insurance operations would be sold to an unrelated party.
Accordingly, the results of operations of the insurance segment for the 1998
period have been presented as "discontinued operations" in the accompanying
condensed consolidated statements of operations.
Note 4. PROPOSED MERGER
In March 1999, the Company executed a letter of intent with respect to a
proposed merger with Certified Grocers of California, Ltd., a grocery
cooperative headquartered in Commerce, California. The consummation of the
merger is conditional upon the execution of a mutually approved definitive
merger agreement following completion of due diligence, approval of the
agreement by the shareholders of both entities, required filings with regulatory
entities, and other customary conditions.
9
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the Company's 1998
Annual Report on Form 10-K and the consolidated financial statements and notes
thereto of the Company.
Year-to-date period ended April 2, 1999 ("1999") compared to year-to-date period
ended April 3, 1998 ("1998").
RESULTS OF OPERATIONS
OVERVIEW
In March 1999, the Company executed a letter of intent with respect to a
proposed merger with Certified Grocers of California, Ltd., a grocery
cooperative headquartered in Commerce, California. The consummation of the
merger is conditional upon the execution of a mutually approved definitive
merger agreement following completion of due diligence, approval of the
agreement by the shareholders of both entities, required filings with regulatory
entities, and other customary conditions.
During 1999, the Company incurred significant expenses related to the proposed
merger and Year 2000 (Y2K) compliance. During 1998 the first two quarters of the
prior year, the Company's financial condition and results of operations were
affected by implementation of the closure of the Medford, Oregon grocery
distribution facility and the consolidation of certain California operations
with Oregon operations.
NET SALES AND OPERATIONS
Net sales and operations declined 14.2% from 1998 to $515.7 million for 1999.
The decrease in sales is primarily due to the sale of the Cash & Carry division
in May 1998, and lower volume due to the elimination of certain unprofitable
accounts.
COSTS AND EXPENSES
Total costs and expenses decreased $87.7 million (14.6%) from 1998 to $512.5
million for 1999 (99.4% of sales). This compares to $600.2 million (99.9% of
sales) in 1998. The components of costs and expenses are outlined below:
Costs and Expenses as a Percent of Net Sales and Operations:
<TABLE>
<CAPTION>
Year-to-date Year-to-date
period ended period ended
April 2, 1999 April 3, 1998
-------------- ------------
<S> <C> <C>
Cost of sales 86.0% 86.8%
Members' allowances 1.8 0.8
Operating expenses 8.5 9.5
Selling and administrative
expenses 2.2 2.0
Depreciation and amortization 0.9 0.8
---- ----
Total 99.4% 99.9%
==== ====
</TABLE>
10
<PAGE>
Cost of sales as a percent of net sales and operations decreased from 86.8% to
86.0% from 1998 to 1999. The decrease in cost of sales is primarily due to
changes in the Company's marketing plan, which caused an offsetting increase in
members' allowances as a percentage of sales. Operating expenses as a percent of
net sales and operations decreased from 9.5% to 8.5% from 1998 to 1999. The
decrease in operating expenses is primarily due to internal cost efficiencies,
including the consolidation of the procurement and accounting staffs of the
Company's California division with those of the Oregon operations. In addition,
1998 included some costs incurred in connection with the closure of the
Company's Medford grocery distribution facility.
OTHER INCOME/EXPENSE
Interest expense decreased $2.7 million from 1998 to 1999, primarily due to debt
reductions resulting from the sale of the Company's Cash & Carry division and
certain non-core assets. Interest income increased $.7 million from 1998 to
1999, primarily as a result of an increase in the Company's notes receivable.
LIQUIDITY AND CAPITAL RESOURCES
The Company believes that anticipated needs for working capital, capital
expenditures and repayment of long-term debt through fiscal 1999 will be met
from funds generated by operations and borrowings under the credit facility.
CASH FLOWS FROM OPERATING ACTIVITIES
In 1999, the Company used $5.0 million in cash in its operating activities,
compared to $5.3 million provided from its operations in 1998. The decrease of
$10.3 million is due primarily to reductions in accounts payable.
CASH FLOWS FROM INVESTING ACTIVITIES
In 1999, the Company provided $9.0 million in cash from investing activities,
compared to the $8.8 million in cash provided by investing activities in 1998.
CASH FLOWS FROM FINANCING ACTIVITIES
In 1999, the Company's financing activities used $2.0 million in cash compared
to $12.1 million used in 1998. The decrease in cash provided by financing is
primarily a result of increases in borrowings under the line of credit,
partially offset by payments of long-term debt and the repurchase of common
stock. At April 2, 1999, $31,214,681 was available for borrowing under the bank
lines of credit.
11
<PAGE>
Note 2. ACCOUNTING PRONOUNCEMENTS
In February 1998, the Financial Accounting Standards Board (FASB) issued SFAS
No. 132, "Employers' Disclosures about Pensions and Other Postretirement
Benefits" ("SFAS 132"). This statement revises employers' disclosures about
pension and other postretirement benefit plans. It does not change the
measurement or recognition of those plans. The statement suggests combined
formats for presentation of pension and other postretirement benefit
disclosures. The statement is effective for fiscal years beginning after
December 15, 1997, but is not required to be presented in interim financial
information in the year of adoption. The adoption of SFAS 132 will require
revised disclosures when the statement becomes effective.
In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities"("SFAS 133"). SFAS 133 establishes accounting
and reporting standards requiring that every derivative instrument be recorded
in the balance sheet as either an asset or liability measured at its fair value.
SFAS 133 also requires that changes in the derivative instrument's fair value be
recognized currently in results of operations unless specific hedge accounting
criteria are met. SFAS 133 is effective for fiscal years beginning after June
15, 1999. The Company's management has studied the implications of SFAS 133 and
based on the initial evaluation, expects the adoption to have no impact on the
Company's financial condition or results of operations.
YEAR 2000 PREPARATIONS
This section captioned "Year 2000 Preparations" and other statements about
Year 2000 issues are "Year 2000 Readiness Disclosures" pursuant to the Year 2000
Information and Readiness Disclosure Act.
The Company is addressing possible Year 2000 (Y2K) problems with a systematic
approach. To make a smooth transition into the next century, the Company has
entered into a "Year 2000 Project," comprised of four major areas of concern -
(1) Infrastructure (Hardware & Operating System Software), (2) Applications
Software, (3) Third Party Suppliers (Trading Partners, Banks, Utilities), and
(4) Process Control and Instrumentation (Embedded Systems).
Area -1- The Infrastructure area consists of hardware and operating system
software. Updating in this area was completed on April 15, 1999.
Area -2- The Applications Software area consists of conversion of software
that is not Y2K compliant, and where available, the replacement of such software
from the vendor. The Company has engaged Applied Decisions USA, Inc. to assist
in project management, and in conversion and testing of certain non-compliant
application software code.
12
<PAGE>
The conversion phase was completed March 31, 1999. The testing phase is
progressing in an organized fashion as the software is repaired or replaced. The
testing is ongoing.
The Company uses software from The Armature Company for warehousing functions
and E3 software for purchasing functions. The Company has Y2K compliant software
installed in these critical areas.
Area -3- The Third Party Suppliers area includes the identification and
prioritizing of critical suppliers, financial institutions, and utilities, and
communicating with them about their plans and progress in addressing the Y2K
issue. The Company has identified and contacted 4,324 suppliers requesting
information on their plans and progress on the Y2K issue. As of March 31, 1999,
the Company had received a response from 80 percent of the identified suppliers.
Responses from the identified suppliers indicate progress in addressing the Y2K
issue, with a majority of the responses expecting full compliance by September
30, 1999. The Company has a follow-up plan in place scheduled through the
remainder of 1999. Contingency planning in this area began in February 1999,
with the completed plan estimated to be in place by June 30, 1999.
Area -4- The Process Control and Instrumentation area consists of
identification and prioritization of hardware and software associated with
embedded chips used in operation of all facilities of the Company. The Company
estimates it has identified and corrected approximately 85 percent of the
identified items. The remaining 15 percent is expected to be completed by
September 30, 1999. Contingency planning in this area began in January 1999 and
will be completed by September 30, 1999.
The major phases associated with the Y2K Project are: (A) Inventory of
potential Y2K items; (B) Assigning priorities to the items identified as
material to the Company; (C) Assessing the Y2K compliance of the inventoried
items; (D) Repairing or replacing material items that are determined not to be
Y2K compliant; (E) Testing material items; and (F) Developing contingency and
business continuation plans for each functional area and Company location.
On November 21, 1998, the Inventory, Prioritization, and Assessment phases
(phases A, B and C) of the Project were declared completed.
Phase D - Material items are those identified by the Company that affect the
ability of the Company to perform its core business functions, that support the
Company's customer base, or that affect revenues. All material items had been
repaired or replaced as of December 31, 1998.
Phase E - Full systems testing commenced in January 1999, and completion is
expected by June 30, 1999. Vendor software upgrades continue on schedule.
Phase F - Contingency planning for all areas is ongoing and is to be completed
by September 30, 1999.
13
<PAGE>
Cost - The estimated cost of the Y2K Project is approximately $5.6 million.
The total amount expended on the project through March 31, 1999 was $3.5 million
related to the cost of conversion or replacement of application software,
$150,000 related to the replacement of hardware, and $50,000 related to the cost
of identifying and communicating with Third Party Suppliers. The estimated
future cost of completing the Y2K Project is estimated to be $1.8 million for
replacement of software and related hardware, and $100,000 to identify and
communicate with third party suppliers and to repair or replace embedded
systems.
Risks - The failure to correct material Y2K issues could result in
interruption in, or failure of, key core business processes. The most likely
worst case scenario is business being partially or totally disrupted for a
period of a few hours to one week. There can be no assurance that actual results
will not differ materially from those projected.
Safety Net Preparation - The Y2K team has, as part of their project, been
identifying manual or modified processes that would need to be employed in the
unlikely event that some of the upgrades fail.
FORWARD-LOOKING STATEMENTS
Statements above and elsewhere in this Form 10-Q regarding future events or
performance are "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. As with all forward-looking
statements, the forward-looking statements made by the Company herein are
subject to uncertainties that could cause actual results to differ materially
from those projected, including without limitation, uncertainties inherent in
business plans and the changing of business methods, uncertainties related to
the response of customers and suppliers to changing business strategies,
uncertainties related to Y2K issues, and uncertainties concerning the outcome of
sales of subsidiaries or divisions.
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
No material changes to previously reported information.
14
<PAGE>
Part II
Item 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
In March 1999, the Company issued 21,184 shares of its common stock to new
members in exchange for member deposits in the amount of $750,582. The shares
were issued without registration, as the issuance did not involve the sale of a
security or in reliance on the exemption from registration under Section 4(2) of
the Securities Act of 1933.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibit 27 Financial Data Schedule
(b) Reports on Form 8-K
None.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: May 14, 1999 UNITED GROCERS, INC.
(Registrant)
By /s/ Mark Tweedie
------------------------------------------
Vice President and Chief Financial Officer
(Principal Accounting Officer)
15
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
condensed consolidated financial statements of United Grocers, Inc., for the
applicable periods ended April 2, 1999 and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<CIK> 0000225966
<NAME> United Grocers, Inc.
<MULTIPLIER> 1
<CURRENCY> USD
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-01-1999
<PERIOD-START> OCT-03-1998
<PERIOD-END> APR-02-1999
<EXCHANGE-RATE> 1
<CASH> 3,332,171
<SECURITIES> 0
<RECEIVABLES> 63,873,531
<ALLOWANCES> 1,797,019
<INVENTORY> 67,220,464
<CURRENT-ASSETS> 142,069,419
<PP&E> 31,952,166
<DEPRECIATION> 42,854,505
<TOTAL-ASSETS> 220,448,756
<CURRENT-LIABILITIES> 112,923,449
<BONDS> 64,652,758
0
0
<COMMON> 2,551,410
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 220,448,756
<SALES> 515,668,944
<TOTAL-REVENUES> 515,668,944
<CGS> 443,497,294
<TOTAL-COSTS> 496,418,650
<OTHER-EXPENSES> 11,252,955
<LOSS-PROVISION> 501,391
<INTEREST-EXPENSE> 4,940,911
<INCOME-PRETAX> (433,045)
<INCOME-TAX> 173,220
<INCOME-CONTINUING> (259,825)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (259,825)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
