<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM 10-Q
(Mark One)
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended SEPTEMBER 30, 1996
----------------------------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
-------------- --------------
Commission file number 1-9511
----------------
THE COAST DISTRIBUTION SYSTEM
------------------------------------------------------
(Exact name of Registrant as specified in its charter)
CALIFORNIA 94-2490990
- -------------------------------------------------------------------------------
(State or other jurisdiction (I.R.S. Employer Identification
of incorporation or organization) Number)
1982 ZANKER ROAD, SAN JOSE, CALIFORNIA 95112
- -------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(408) 436-8611
----------------------------------------------------
(Registrant's telephone number, including area code)
Not Applicable
----------------------------------------------
(Former name, former address and former fiscal
year, if changed, since last year)
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 XX . NO .
------ ------
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
5,210,723 shares of Common Stock
as of November 1, 1996
<PAGE> 2
THE COAST DISTRIBUTION SYSTEM AND SUBSIDIARIES
INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
September 30, 1996 and December 31, 1995
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
------------- ------------
ASSETS (Unaudited) (Audited)
------ ----------- ---------
<S> <C> <C>
CURRENT ASSETS
Cash $ 1,123 $ 501
Accounts receivable - net 14,785 12,083
Inventories 45,038 48,225
Other current assets 2,045 2,664
------- -------
Total current assets 62,991 63,473
PROPERTY, PLANT, AND EQUIPMENT - NET 5,537 6,133
OTHER ASSETS 23,898 22,530
------- -------
$92,426 $92,136
======= =======
LIABILITIES
-----------
CURRENT LIABILITIES
Current maturities of long-term
obligations $ 2,621 $ 2,588
Accounts payable - trade 7,897 7,376
Other current liabilities 2,436 2,005
Short-term notes payable 1,500 1,500
------- -------
Total current liabilities 14,454 13,469
LONG-TERM OBLIGATIONS
Secured note payable to bank 29,246 29,024
Subordinated term note 4,667 7,000
Other long-term liabilities 2,524 2,667
------- -------
36,437 38,691
REDEEMABLE PREFERRED STOCK
OF SUBSIDIARY 473 584
SHAREHOLDERS' EQUITY
Common stock, no par value;
authorized: 10,000,000;
issued and outstanding:
5,210,723 at September 30, 1996
and 5,155,429 at
December 31, 1995 19,441 19,155
Cumulative translation adjustment 20 75
Retained earnings 21,601 20,162
------- -------
41,062 39,392
------- -------
$92,426 $92,136
======= =======
</TABLE>
The accompanying notes are an integral part of these statements.
2
<PAGE> 3
THE COAST DISTRIBUTION SYSTEM AND SUBSIDIARIES
INTERIM CONDENSED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
---------------------- --------------------
1996 1995 1996 1995
------- ------- -------- --------
<S> <C> <C> <C> <C>
Net sales $37,552 $46,805 $117,091 $144,674
Cost of sales, including
distribution costs 32,783 39,082 98,675 118,263
------- ------- -------- --------
Gross profit 4,769 7,723 18,416 26,411
Selling, general and
administrative expenses 5,610 5,483 16,814 17,582
------- ------- -------- --------
Operating income (loss) (841) 2,240 1,602 8,829
Other income (expense)
Equity in net earnings
of affiliates 541 628 1,414 1,309
Interest (872) (1,079) (2,837) (3,331)
Other (8) (1) 2,122 (15)
------- ------- -------- --------
(339) (452) 699 (2,037)
------- ------- -------- --------
Earnings (loss) before
income taxes (1,180) 1,788 2,301 6,792
Income tax provision (benefit) (716) 546 847 2,554
------- ------- -------- --------
NET EARNINGS (LOSS) $ (464) $ 1,242 $ 1,454 $ 4,238
======= ======= ======== ========
Earnings (loss) per common
share (Note 3) $ (.09) $ .24 $ .28 $ .81
======= ======= ======== ========
</TABLE>
The accompanying notes are an integral part of these statements.
3
<PAGE> 4
THE COAST DISTRIBUTION SYSTEM AND SUBSIDIARIES
INTERIM CONDENSED CONSOLIDATED STATEMENTS
OF CASH FLOWS
(Dollars in thousands)
Nine months ended September 30,
(Unaudited)
<TABLE>
<CAPTION>
1996 1995
-------- -------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 1,454 $ 4,238
Adjustments to reconcile net earnings to net
cash provided by operating activities:
Depreciation and amortization 1,795 1,970
Equity in net earnings of affiliated companies (1,414) (1,309)
Changes in assets and liabilities:
(Increase) in accounts receivable (2,702) (2,950)
(Increase) decrease in inventories 3,187 (5,850)
Decrease in prepaids and other current assets 619 584
Increase in accounts payable 521 3,769
Increase (decrease) in note, accrueds, and other
current liabilities 464 (4,014)
------- -------
Total adjustments 2,470 (7,800)
------- -------
Net cash from (used in) operating activities 3,924 (3,562)
Cash flows from investing activities:
Acquisition of businesses, net of cash
acquired (683) (1,112)
Capital expenditures (285) (1,591)
(Increase) decrease in other assets (185) 206
------- -------
Net cash used in investing activities (1,153) (2,497)
Cash flows from financing activities:
Net borrowings under
line-of-credit agreement 222 10,171
Net borrowings (repayments) of other long-term debt (2,476) (3,222)
Issuance of Common Stock pursuant to Employee
Stock Option and Stock Purchase Plans 286 216
Redemption of redeemable preferred stock of subsidiary (111) (84)
Dividends on preferred stock of subsidiary (15) (27)
------- -------
Net cash provided by (used in) financing activities (2,094) 7,054
------- -------
Effect of exchange rate changes on cash (55) 196
------- -------
NET INCREASE IN CASH 622 1,191
Cash beginning of period 501 413
------- -------
Cash end of period $ 1,123 $ 1,604
======= =======
</TABLE>
The accompanying notes are an integral part of these statements.
4
<PAGE> 5
THE COAST DISTRIBUTION SYSTEM AND SUBSIDIARIES
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. In the opinion of management, the accompanying unaudited condensed
consolidated financial statements contain all adjustments necessary to
present the Company's financial position as of September 30, 1996 and
the results of its operations and cash flows for the nine months ended
September 30, 1996 and 1995. The accounting policies followed by the
Company are set forth in Note A to the Company's financial statements
in its Annual Report on Form 10-K for its fiscal year ended December
31, 1995.
2. The results of operations for the nine-month periods ended September
30, 1996 and 1995 are not necessarily indicative of the results for a
full year.
3. Earnings per share are based upon the average number of common and
common equivalent (dilutive stock options and warrants) shares
outstanding during each period.
4. The Company leases its corporate offices, warehouse facilities and
data processing equipment. Those leases are classified as operating
leases as they do not meet the capitalization criteria of FASB
Statement No. 13. The office and warehouse leases expire over the
next seven years and the equipment leases expire over the next three
years.
The minimum future rental commitments under non-cancelable operating
leases having an initial or remaining term in excess of one year as of
December 31, 1995 are as follows:
<TABLE>
<CAPTION>
(Dollars in thousands)
---------------------------------------------------
Facilities Equipment Total
---------- --------- --------
Year ending December 31,
<S> <C> <C> <C>
1996 $ 2,965 $ 19 $2,984
1997 2,661 6 2,667
1998 2,221 5 2,226
1999 1,103 5 1,108
2000 165 3 168
Later years 477 -- 477
------- ---- -------
$ 9,592 $ 38 $ 9,630
======= ==== =======
</TABLE>
5
<PAGE> 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
------------------------------------
General
- -------
Factors Generally Affecting Sales of RV and Boating Products
------------------------------------------------------------
The Company is the largest wholesale distributor of replacement parts,
accessories and supplies for recreational vehicles, and one of the largest
distributors of replacement parts, accessories and supplies for boats, in North
America. Sales are made by the Company to retail parts and supplies stores,
service and repair establishments, and new and used recreational vehicle and
boat dealers ("aftermarket customers"). The Company's sales are affected
primarily by (i) usage of recreational vehicles and boats which affects the
consumers' needs for and purchases of replacement parts, repair services and
supplies, and (ii) sales of new recreational vehicles and boats, because
consumers often "accessorize" their recreational vehicles and boats at the time
of purchase.
The usage and the purchase, by consumers, of recreational vehicles and
boats depend, in large measure, upon the extent of discretionary income
available to consumers and their confidence about economic conditions. Weather
conditions also affect the usage of recreational vehicles and boats. As a
result, the Company's sales and operating results can be, and in the past have
been, adversely affected by recessionary economic conditions, increases in
interest rates, which affect the availability and affordability of financing
for purchases of recreational vehicles and boats, increases in gasoline prices
which adversely affect the costs of using recreational vehicles and boats, and
weather conditions.
Factors Affecting Recent Operating Results
------------------------------------------
Until 1993, the Company's business consisted primarily of distributing
and marketing products that the Company purchased from third- party
manufacturers and that were sold under the brand names of those manufacturers
("third-party brand name products"). In order to improve its competitive
position and increase its profitability, during the past three years, the
Company has introduced into the marketplace a growing number of products,
including trailer hitches, plastic wastewater tanks, portable toilets and
toilet chemicals, vent lids and stabilizing jacks (the "Proprietary Products"),
that have been designed by the Company in conjunction with independent design
professionals, and are manufactured by a number of independent manufacturers,
specifically for the Company. The Proprietary Products are marketed by the
Company under its own brand names in competition with functionally equivalent
third-party brand name products. The Company generally is able to obtain the
Proprietary Products at prices that are below those it would have to pay for
functionally equivalent or similar third-party brand name products and, as a
result, the Company is able to realize higher margins on sales of its
Proprietary Products.
In the first half of 1995, three manufacturers of third-party name
brand products, sales of which had accounted, in the aggregate, for
approximately 8% of the Company's net sales in the fiscal year ended December
31, 1994, terminated their supply arrangements with the Company as a result of
its introduction and promotion of functionally equivalent Proprietary Products.
6
<PAGE> 7
In an unrelated development, in October 1995 Dometic Corporation, a
division of White Consolidated Industries ("Dometic"), which had supplied the
Company with substantially all of its requirements for air conditioners, awnings
and refrigerators, products that had accounted for 22% and 24%, respectively, of
the Company's net sales in 1994 and 1995, announced that it had decided to
integrate its operations vertically by marketing its products directly to
aftermarket customers in competition with the Company and other RV aftermarket
product distributors and that, as a result, it was terminating its supply
agreement with the Company. As a consequence of Dometic's actions, the Company
entered into a multi-year product supply agreement with Recreation Vehicle
Products, Inc. ("RVP"), which manufactures RV air conditioners under the
Coleman(R) brand name and awnings under the Faulkner brand name. Under that
product supply arrangement, RVP has agreed to supply all of the Company's
requirements for RV air conditioners and awnings for a minimum of five years.
Results of Operations
- ---------------------
The changes in the supply relationships within the RV products industry
and, in particular, the change in the Company's supplier of air conditioners and
awnings from Dometic to RVP, increased price competition, unusually severe
weather conditions in the first half of 1996, and a slowing in consumer
purchases and usage of recreation vehicles, have adversely affected the
Company's operating results in the three and nine month periods ended September
30, 1996, as compared to the same three and nine month periods of 1995.
Net sales revenues decreased by approximately $27,583,000 or 19% in the
nine months ended September 30, 1996, and by $9,253,000 or 20% in the three
months ended September 30, 1996, as compared to the corresponding nine and three
month periods ended September 30, 1995. These decreases were due to a number of
factors, including (i) the changes in supply relationships that occurred in 1995
and 1996 which, among other things, have caused supply shortages for the Company
as some of its new suppliers have not, as yet, been able to increase production
to levels needed to meet the Company's product requirements, which has prevented
the Company from fully replacing the sales of third-party brand name products
that are no longer sold by the Company with sales of new products; (ii) the
replacement of third-party name brand products with Proprietary Products,
because in many cases Proprietary Products are sold at prices below those at
which the Company had sold functionally equivalent third-party name brand
products during the three and nine month periods ended September 30, 1995; (iii)
increased price competition due to Dometic's entry into the marketplace as a
vertically integrated supplier to aftermarket customers and price reductions by
other distributors on various third-party name brand products, which the Company
believes is a strategy adopted by such distributors in an effort to increase
their market share and to respond to the competitive threat posed by the
Company's Proprietary Products; (iv) slowness in sales of new recreational
vehicles, which has adversely affected sales of accessories distributed by the
Company; and (v) unusually severe weather conditions throughout most of North
America that extended throughout the first quarter and into the second quarter
of 1996, adversely affecting the usage of recreational vehicles and boats and,
therefore, also purchases of aftermarket products, during those periods.
The Company's gross margin decreased to 15.7% of net sales in the nine
months ended September 30, 1996 from 18.3% for the same period of 1995. For
the quarter ended September 30, 1996, the gross margin decreased to 12.7% of
net sales as compared to 16.5% of net sales in 1995. These decreases were due
primarily to (i) changes in product mix to a greater
7
<PAGE> 8
proportion of lower margin products that were attributable primarily to the
changes in supply relationships that occurred in 1995 and 1996 and related
supply problems that have been occasioned by those changes, which has prevented
the Company from fully replacing sales of third-party brand name products that
are no longer sold by the Company; (ii) increased price competition which, as
discussed above, also adversely affected the Company's sales revenue; and (iii)
the impact of fixed costs on a lower sales base, the combined effects of which
more than offset the more favorable margins which the Company realizes on sales
of its Proprietary Products.
As a percentage of net sales, selling, general and administrative
expenses increased to 14.4% for the nine months ended September 30, 1996 from
12.2% for the same period of 1995. In the third quarter of 1996, these
expenses increased to 14.9% of net sales from 11.7% in the comparable quarter
in 1995. These increases were due primarily to the impact of fixed costs on a
lower sales base and marketing costs associated with the introduction of new
Proprietary Products and products from new suppliers.
Due primarily to the combined effects of the declines in sales and
gross margin and the increases in selling, general and administrative expenses,
operating income declined to $1,602,000 in the nine months ended September 30,
1996, and the Company sustained a loss from operations of $841,000 in the
quarter then ended, as compared to operating income of $8,829,000 and
$2,240,000, respectively, in the nine months and quarter ended September 30,
1995.
The Company maintains ownership positions in several companies in
related industries. The Company's ownership interests in these companies are
accounted for under the equity method of accounting. Under this method, the
Company includes in its operating results its pro- rata share of the net income
of these companies which is reported as "equity in net earnings of affiliates."
During the first nine months of 1996, the Company's earnings from its affiliate
investments increased $105,000 or 8% from the same period in 1995. The
Company's equity in the net earnings of these companies is not cash, and the
Company is dependent on the declaration of cash dividends by those companies to
realize any current cash from these investments. No dividends were declared by
those companies in the first nine months of 1996.
In the nine months ended September 30, 1996, interest expense declined
by $494,000, or 15%, as compared to the same period in 1995. Interest expense
in the quarter ended September 30, 1996 decreased by $207,000 or 19% as compared
to the same quarter of 1995. These decreases were the result of: (i) a
decrease in the rate of interest charged under the Company's revolving bank
credit facility, and (ii) reductions in average long-term borrowings outstanding
during the third quarter of 1996 as compared to the same quarter of 1995.
Other income for the nine months ended September 30, 1996 includes the
net proceeds from the favorable settlement of a lawsuit recorded in the second
quarter of 1996. The net proceeds from the settlement of that lawsuit
accounted for the substantial portion of the Company's earnings for the nine
months ended September 30, 1996.
The income tax benefit in the amount of $716,000 in the third quarter
of 1996 was attributable to the loss before income taxes incurred in the that
quarter.
The Company anticipates that the factors that led to the decline in
sales and the loss that was incurred in the third quarter of 1996, together
with the onset of winter weather
8
<PAGE> 9
conditions, will adversely affect operating results, and as a consequence the
Company will sustain a loss, in the fourth quarter of 1996. It is not possible
at this time to predict the extent of that anticipated loss; however the Company
currently expects that it will be somewhat greater than the loss that the
Company incurred in the fourth quarter of 1995.
Liquidity and Capital Resources
- -------------------------------
The Company finances its working capital requirements for its
operations primarily with borrowings under a long-term revolving bank credit
facility and internally generated funds. Under that credit facility, the
Company may borrow up to the lesser of (i) $50,000,000 or (ii) an amount equal
to 80% of its eligible accounts receivable and 50% of its eligible inventory
(the "borrowing base"). At November 8, 1996 outstanding borrowings under the
revolving credit facility were approximately $28,300,000.
The Company believes that for at least the next twelve months available
credit under the revolving bank credit facility, together with internally
generated funds, will be sufficient to enable the Company to meet its working
capital requirements.
During the nine months ended September 30, 1996, reductions in
inventories enabled the Company to generate cash from operating activities of
$3,924,000 as compared to $3,562,000 of cash that was used to fund operating
activities in the same nine months of 1995.
Net cash used in investing activities was $1,153,000 in the nine months
ended September 30, 1996 and $2,497,000 for the same period of 1995. Capital
expenditures were $285,000 in 1996 and $1,591,000 in 1995. The Company used
cash of $683,000 in 1996 and $668,000 in 1995 to acquire, in each of those
years, 5% of the outstanding shares of, and thereby increase its equity
ownership in, H. Burden Ltd., which is an affiliate of the Company that
distributes, at wholesale in Western Europe, parts, supplies and accessories for
recreational vehicles and boats.
Net cash used in financing activities was $2,094,000 in the first nine
months of 1996 as compared to net cash provided by financing activities of
$7,054,000 in same nine month of 1995. The cash provided by financing
activities in the first nine months of 1995 was generated primarily from
increases in net borrowings of $10,171,000 under the Company's revolving bank
credit facility. In the first nine months of 1996, the net increase in bank
borrowings was only $222,000. During the first nine months of 1996 and 1995, the
Company retired $2,333,000 and $3,333,000, respectively, of subordinated term
notes with a combination of borrowings under its revolving bank credit facility
and cash from operations.
Seasonality and Inflation
- -------------------------
Sales of recreational vehicle and boating parts, supplies and
accessories are seasonal. The Company has significantly higher sales during
the six-month period from April through September than it does during the
remainder of the year. Because a substantial portion of the Company's expenses
are fixed, operating income declines and the Company sometimes incurs losses
and must rely more heavily on borrowings to fund operating requirements in the
months when sales are lower.
Generally, the Company has been able to pass inflationary price
increases on to its customers. However, inflation also may cause or may be
accompanied by increases in gasoline prices and interest rates. Such
increases, or even the prospect of increase in the price or
9
<PAGE> 10
shortages in the supply of gasoline, can adversely affect the purchase and
usage of recreational vehicles, which can result in a decline in the demand for
the Company's products.
This Report contains forward-looking information which reflects
Management's current views of future financial performance. The
forward-looking information is subject to certain risks and uncertainties,
including but not limited to, the effects on future performance of the changing
product supply relationships in the industry and the uncertainties created by
those changes; the potential for continuing price competition; and possible
changes in economic conditions, prevailing interest rates or gasoline prices,
or the occurrence of unusually severe weather conditions, that can affect both
the purchase and usage of recreational vehicles and boats and which, in turn,
affects purchases by consumers of the products that the Company sells. For
information concerning such factors and risks, see the foregoing discussion in
this section of this Report entitled "Management's Discussion and Analysis of
Financial Condition and Results of Operation." Due to such uncertainties and
risks, readers are cautioned not to place undue reliance on such
forward-looking statements, which speak only as of the date of this Report.
PART II
ITEM 4. SUBMISSION OF MATTERS FOR VOTE OF SECURITY HOLDERS
--------------------------------------------------
(a) The Annual Meeting of Shareholders was held on August 8, 1996.
(b) Set forth below is the name of each director elected at the
meeting and the number of votes cast for their election and the number of votes
withheld. The election was uncontested and there were no broker non-votes in
the election.
Directors Elected at the Annual Meeting:
<TABLE>
<CAPTION>
Name of Number of Number of
Nominee/Director Votes "For" Votes "Withheld"
---------------- ----------- ----------------
<S> <C> <C>
Thomas R. McGuire 4,216,801 2,383
Louis B. Sullivan 4,216,821 2,363
John E. Turco 4,216,821 2,363
Brian P. Friedman 4,216,821 2,363
Ben A. Frydman 4,216,821 2,363
Robert S. Throop 4,216,821 2,363
</TABLE>
(c) At the Annual Meeting, the shareholders considered and voted
on, and they approved, an amendment to the Company's 1993 Stock Option Plan
(the "Plan") increasing the aggregate number of shares of Common Stock of the
Company that may be issued under the Plan by 250,000 to a total of 500,000
shares. Set forth below are the number of votes cast "For" "Against" and
"Abstain" on the proposal to increase the number of shares of common stock
issuable under he Plan. There were 10,000 broker non-votes with respect to
this proposal.
For: 3,939,760; Against: 253,999; Abstain: 24,425;
--- ------- -------
10
<PAGE> 11
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K AND EXHIBITS
---------------------------------------------
(a) Exhibits.
--------
Exhibit 11.1 Computations of Earnings (Loss) Per Share
for the Quarter and Nine Months Ended
September 30, 1996
Exhibit 27 Financial Data Schedule
(b) Reports on Form 8-K.
--------------------
None.
11
<PAGE> 12
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.
Date: November 13, 1996 THE COAST DISTRIBUTION SYSTEM
By: /s/ SANDRA A. KNELL
-------------------------------
Sandra A. Knell
Executive Vice President
and Chief Financial Officer
12
<PAGE> 13
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Sequentially
Numbered
Exhibit Page
- ------- ------------
<S> <C> <C>
Exhibit 11.1 Computations of Earnings (Loss) Per Share for the
Quarter and Nine Months Ended September 30, 1996 14
Exhibit 27 Financial Data Schedule 16
</TABLE>
13
<PAGE> 1
EXHIBIT 11.1
------------
THE COAST DISTRIBUTION SYSTEM
Computation of Earnings (Loss) Per Share
Quarter Ended September 30, 1996
<TABLE>
<CAPTION>
Primary Fully Diluted
Earnings Earnings
Per Share Per Share
---------- -------------
<S> <C> <C> <C>
I. Weighted averages shares outstanding 5,209,324 5,209,324
II. Common stock equivalents -- --
---------- ----------
Average number of common and common
equivalent shares 5,209,324 5,209,324
========== ==========
Net (Loss) $ (464,000) $ (464,000)
Dividend paid on preferred stock
of subsidiary (5,000) (5,000)
---------- ----------
Net loss allocable to
common shareholders $ (469,000) $ (469,000)
Divided by shares 5,209,324 5,209,324
---------- ----------
Loss per share $(0.09) $(0.09)
========== ==========
</TABLE>
14
<PAGE> 2
EXHIBIT 11.1 (Cont'd.)
------------
THE COAST DISTRIBUTION SYSTEM
Computation of Earnings Per Share
Nine Months Ended September 30, 1996
<TABLE>
<CAPTION>
Primary Fully Diluted
Earnings Earnings
Per Share Per Share
---------- -------------
<S> <C> <C> <C>
I. Weighted averages shares outstanding 5,194,261 5,194,261
II. Common stock equivalents 21,993 22,140
---------- ----------
Average number of common and
common equivalent shares 5,216,254 5,216,401
========== ==========
Net earnings $1,454,000 $1,454,000
Dividend paid on preferred stock
of subsidiary (15,000) (15,000)
---------- ----------
Earnings available to
common shareholders $1,439,000 $1,439,000
Divided by shares 5,216,254 5,216,401
---------- ----------
Earnings per share $ 0.28 $ 0.28
========== ==========
</TABLE>
15
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEET AS OF, AND THE STATEMENT OF OPERATIONS FOR THE PERIOD ENDED
SEPTEMBER 30, 1996 INCLUDED IN REGISTRANT'S QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTER ENDED SEPTEMBER 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH BALANCE SHEET AND STATEMENT OF OPERATIONS AND THE NOTES
THERETO.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 1,123
<SECURITIES> 0
<RECEIVABLES> 14,785
<ALLOWANCES> 0
<INVENTORY> 45,038
<CURRENT-ASSETS> 62,991
<PP&E> 5,537
<DEPRECIATION> 0
<TOTAL-ASSETS> 92,426
<CURRENT-LIABILITIES> 14,454
<BONDS> 33,913
473
0
<COMMON> 19,441
<OTHER-SE> 21,621
<TOTAL-LIABILITY-AND-EQUITY> 92,426
<SALES> 117,091
<TOTAL-REVENUES> 117,091
<CGS> 98,675
<TOTAL-COSTS> 115,489
<OTHER-EXPENSES> (699)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,837
<INCOME-PRETAX> 2,301
<INCOME-TAX> 847
<INCOME-CONTINUING> 1,454
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,454
<EPS-PRIMARY> .28
<EPS-DILUTED> .28
</TABLE>
