SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended APRIL 30, 1998, 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 0-15194
SOUND ADVICE, INC.
(Exact name of registrant as specified in its charter)
FLORIDA 59-1520531
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
1901 TIGERTAIL BOULEVARD, DANIA, FLORIDA 33004
(Address of principal executive offices) (Zip Code)
(954) 922-4434
(Registrant's telephone number, including area code)
NOT APPLICABLE
(Former name, former address and former fiscal year,
if changed since last report)
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 __
INDICATE THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE ISSUER'S
CLASSES OF COMMON STOCK, AS OF THE LATEST PRACTICAL DATE.
COMMON STOCK, PAR VALUE $.01 PER SHARE - 3,728,894 SHARES OUTSTANDING AS OF MAY
29, 1998.
<PAGE>
SOUND ADVICE, INC. AND SUBSIDIARY
INDEX
PAGE
----
PART I - FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements.
Condensed Consolidated Balance Sheets (Unaudited)
April 30, 1998 and January 31, 1998 3-4
Condensed Consolidated Statements of Operations (Unaudited)
for the Three Months Ended April 30, 1998 and 1997 5
Condensed Consolidated Statements of Cash Flows (Unaudited)
for the Three Months Ended April 30, 1998 and 1997 6
Notes to Condensed Consolidated Financial Statements 7-8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations. 9-11
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 12
SIGNATURES 13
Page 2
<PAGE>
PART 1 - FINANCIAL INFORMATION
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
SOUND ADVICE, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
APRIL 30, 1998 AND JANUARY 31, 1998
<TABLE>
<CAPTION>
APRIL 30, 1998 JANUARY 31, 1998
------------------------ ----------------------
ASSETS (Unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash $ 83,841 $ 1,421,392
Receivables:
Vendors 2,875,961 3,964,078
Trade 923,988 883,832
Employees 216,240 215,411
------------------------ ----------------------
4,016,189 5,063,321
Less allowance for doubtful accounts (410,000) (384,100)
------------------------ ----------------------
3,606,189 4,679,221
Inventories 29,644,060 31,027,992
Prepaid and other current assets 443,461 362,078
Deferred tax assets -- --
Income taxes receivable 55,000 55,000
--------------------- --------------------
Total current assets 33,832,551 37,545,683
Property and equipment, net 13,839,564 13,977,184
Deferred tax assets, net -- --
Other assets 107,403 134,012
Goodwill, net 126,066 132,179
------------------------ ----------------------
$ 47,905,584 $ 51,789,058
======================== ======================
</TABLE>
SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
Page 3
<PAGE>
SOUND ADVICE, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
APRIL 30, 1998 AND JANUARY 31, 1998
<TABLE>
<CAPTION>
APRIL 30, 1998 JANUARY 31, 1998
------------------------ ----------------------
LIABILITIES AND SHAREHOLDERS' EQUITY (Unaudited)
<S> <C> <C>
CURRENT LIABILITIES:
Borrowings under revolving credit facility $ 16,463,641 $ 10,700,152
Accounts payable 5,249,107 13,163,813
Cash overdraft 290,225 --
Accrued liabilities 5,593,369 7,502,918
Current maturities of long-term debt 590,180 593,020
------------------------ ----------------------
Total current liabilities 28,186,522 31,959,903
Long-term debt, excluding current maturities 12,756 53,483
Capital lease obligation 803,436 805,113
Other liabilities and deferred credits 3,443,868 3,628,481
------------------------ ----------------------
32,446,582 36,446,980
------------------------ ----------------------
SHAREHOLDERS' EQUITY:
Common stock, $.01 par value; authorized
10,000,000 shares; issued and outstanding
3,728,894 shares at April 30, 1998
and January 31, 1998 37,289 37,289
Additional paid-in capital 11,058,655 11,058,655
Retained earnings 4,363,058 4,246,134
------------------------ ----------------------
Total shareholders' equity 15,459,002 15,342,078
Commitments and contingencies
------------------------ ----------------------
$ 47,905,584 $ 51,789,058
======================== ======================
</TABLE>
SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
Page 4
<PAGE>
SOUND ADVICE, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE THREE MONTHS ENDED APRIL 30, 1998 AND 1997
<TABLE>
<CAPTION>
1998 1997
----------------- -----------------
<S> <C> <C>
Net sales $ 33,648,350 $ 33,206,458
Cost of goods sold 21,803,311 21,925,089
----------------- -----------------
Gross profit 11,845,039 11,281,369
Selling, general and administrative
expenses 11,238,430 11,024,306
----------------- -----------------
Income from operations 606,609 257,063
Other income (expense):
Interest expense (378,130) (386,612)
Other, net 17,445 19,299
----------------- -----------------
Income (loss) before income taxes 245,924 (110,250)
Income taxes 129,000 --
----------------- -----------------
Net income (loss) $ 116,924 $ (110,250)
================= =================
BASIC EARNINGS (LOSS) PER SHARE $ 0.03 $ (0.03)
================= =================
DILUTED EARNINGS (LOSS) PER SHARE $ 0.03 $ (0.03)
================= =================
WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING - BASIC 3,728,894 3,728,894
================= =================
WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING - DILUTED 3,783,567 3,728,894
================= =================
</TABLE>
See accompanying notes to condensed consolidated financial statements.
Page 5
<PAGE>
SOUND ADVICE, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE THREE MONTHS ENDED APRIL 30, 1998 AND 1997
<TABLE>
<CAPTION>
1998 1997
------------------------ ----------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 116,924 $ (110,250)
Adjustments to reconcile net income (loss) to net cash
(used in) provided by operating activities:
Depreciation and amortization 814,085 768,006
Changes in operating assets and liabilities:
Decrease (increase) in:
Receivables 1,073,032 740,592
Inventories 1,383,932 (2,571,846)
Prepaid and other current assets (81,383) 85,157
Income taxes receivable -- 1,273,571
Other assets 22,634 19,279
Increase (decrease) in:
Accounts payable (7,914,706) (2,320,366)
Accrued liabilities (1,909,549) (901,393)
Other liabilities and deferred credits (184,613) (52,752)
------------------------ ----------------------
NET CASH USED IN OPERATING ACTIVITIES (6,679,644) (3,070,002)
------------------------ ----------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (666,377) (279,624)
------------------------ ----------------------
NET CASH USED IN INVESTING ACTIVITIES (666,377) (279,624)
------------------------ ----------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings on revolving credit facility 43,219,476 38,940,578
Repayments on revolving credit facility (37,455,987) (37,117,990)
Net repayments of long-term debt (43,567) (40,988)
Increase in cash overdraft 290,225 1,015,536
Reductions in capital lease obligation (1,677) (1,386)
------------------------ ----------------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 6,008,470 2,795,750
------------------------ ----------------------
Decrease in cash (1,337,551) (553,876)
Cash, beginning of period 1,421,392 609,747
------------------------ ----------------------
CASH, END OF PERIOD $ 83,841 $ 55,871
======================== ======================
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Interest paid $ 303,364 $ 326,536
======================== ======================
Income taxes paid, net of refunds $ 475,000 $ (1,273,410)
======================== ======================
</TABLE>
SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
Page 6
<PAGE>
SOUND ADVICE, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1.) BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements
have been prepared in conformity with instructions to Form 10-Q and, therefore,
do not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. Certain items
included in these statements are based on management estimates. In the opinion
of management, the accompanying financial statements contain all adjustments,
consisting of normal, recurring accruals, necessary to present fairly the
financial position of the Company at April 30, 1998 and January 31, 1998 and the
statements of operations for the three month periods ended April 30, 1998 and
1997 and statements of cash flows for the three month periods ended April 30,
1998 and 1997. These financial statements reflect the first quarter results of
the new fiscal year. The comparable periods in 1997 have been restated to
conform to the Registrant's new fiscal year beginning February 1, 1998. The
results of operations for the three months ended April 30, 1998 are not
necessarily indicative of the operating results expected for the fiscal year
ending January 31, 1999. These financial statements should be read in
conjunction with the consolidated financial statements and notes thereto
contained in the Company's annual report on Form 10-K for the transition period
ended January 31, 1998.
2.) EARNINGS PER SHARE
In December 1997, the Company adopted the provisions of Statement of
Financial Accounting Standards No.128, "Earnings per Share" ("Statement 128")
which establishes new standards for computing and presenting earnings per share
("EPS"). Earnings per share for all prior periods have been restated to reflect
the provisions of this statement.
Basic earnings per share is computed by dividing net income (loss) by
the weighted average number of shares outstanding during the period. Diluted
earnings per share is computed assuming the exercise of stock options, as well
as their related income tax effects, unless their effect was antidilutive. For
loss periods, weighted average common share equivalents are excluded from the
calculation as their effect would be antidilutive.
Options to purchase 213,500 shares of common stock at a range from
$1.69 to $1.77 per share were included in the diluted EPS calculation for the
three month period ended April 30, 1998 because the average market price for the
three months ended April 30, 1998 of the common shares exceeded the exercise
price of the options. Options to purchase 437,500 shares of common stock at
$1.89 per share and warrants to purchase 15,000 shares of common stock at $1.89
per share were outstanding for the three months ended April 30, 1998, but were
not included in the computation of diluted earnings per share because they are
contingently issuable shares and all the necessary conditions have not been
satisfied. Shareholder warrants to purchase 306,335 shares of common stock at
$8.70 per share were outstanding at April 30, 1998 and were excluded from the
diluted EPS calculation for the period because the exercise price of the
warrants was greater than the average market price of the common shares during
the three months ended April 30, 1998. The options and the 15,000 warrants
expire between February 21, 2001 and April 28, 2002 and the 306,335 shareholder
warrants expire June 14, 1999.
Options and warrants to purchase shares of common stock that were
outstanding for the three months ended April 30, 1997 were not included in the
computation of diluted earnings per share due to the net loss reported by the
Company for this period.
Page 7
<PAGE>
3.) SEASONALITY
Historically, the Company's net sales are greater during the holiday
season than during other periods of the year. Net sales by fiscal quarters and
their related percentages for the trailing four quarters ended April 30, 1998
and 1997 are as follows:
TRAILING FOUR QUARTERS ENDED APRIL 30,
(Dollars in Thousands)
QUARTERLY SALES
<TABLE>
<CAPTION>
1998 1997
---- ----
AMOUNT % AMOUNT %
------ - ------ -
<S> <C> <C> <C> <C>
First Quarter $33,648 22.1% $33,206 21.2%
(February - April)
Fourth Quarter 48,808 32.1 48,324 30.9
(November - January)
Third Quarter 36,282 23.9 38,418 24.5
(August - October)
Second Quarter 33,347 21.9 36,666 23.4
(May - July)
-------- ---- -------- ----
SALES FOR TRAILING TWELVE $152,085 100% $156,614 100%
MONTHS ENDED APRIL 30, ======== ==== ======== ====
1998 AND 1997, RESPECTIVELY
</TABLE>
4.) PROPERTY AND EQUIPMENT, NET
Property and equipment, net, consists of the following:
<TABLE>
<CAPTION>
APRIL 30, 1998 JANUARY 31, 1998
--------------- ----------------
<S> <C> <C>
Land $ 521,465 $ 521,465
Building 1,119,605 1,119,605
Furniture and equipment 9,010,195 8,708,705
Leasehold improvements 16,460,016 16,345,129
Display fixtures 6,185,670 5,999,650
Vehicles 1,023,747 959,768
----------- ------------
Total 34,320,698 33,654,322
Less accumulated depreciation (20,481,134) (19,677,138)
---------- ----------
Property and equipment, net $ 13,839,564 $ 13,977,184
========== ==========
</TABLE>
5.) PROVISION (BENEFIT) FOR INCOME TAXES
The provision for income taxes includes an amount for taxes payable
based on pretax operating income and an increase in the valuation reserve on
deferred tax assets. The adjustment of the valuation reserve results from the
refund of taxes paid in prior periods which are no longer available to support
the recognition of deferred tax assets. As a result, the provision for income
taxes totals $129,000 or 52% of the pretax income for the three months ended
April 30, 1998.
Page 8
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
RESULTS OF OPERATIONS
The Company's net sales for the quarter ended April 30, 1998 increased
$442,000 or 1.3% to $33,648,000 compared to $33,206,000 in the corresponding
period in the prior fiscal year. The overall net increase in sales is primarily
attributable to increased sales in the categories of projection televisions, DVD
players (digital video disc) and DSS systems, and an overall increase in audio
products and custom installation revenues. These increases were partially offset
by reduced sales of VCRs and personal and mobile electronics. Comparable store
net sales decreased 1.3% in the quarter ended April 30, 1998 over the
corresponding quarter in the prior year. The comparable store sales were
adjusted to exclude the new stores opened in November 1997 and February 1998.
The Company's operations, in common with other retailers in general, are subject
to seasonal influences. Historically, the Company has realized greater sales and
profits during the holiday selling season.
Gross profit increased by $564,000 or 5.0% in the quarter ended April
30, 1998 compared to the corresponding quarter in the prior fiscal year. The
gross profit percentage was 35.2% in the quarter ended April 30, 1998 as
compared to 34.0% in the quarter ended April 30, 1997. The increase in gross
profit and gross profit percentage is directly related to the Company's
increased sales and sales mix of higher margin categories.
Selling, general and administrative expenses ("SG&A") increased by
$214,000 or 1.9% in the quarter ended April 30, 1998 over the corresponding
period in the prior year. This increase is primarily a result of additional
sales commissions on increased gross margin. SG&A as a percentage of net sales
increased slightly to 33.4% in the quarter ended April 30, 1998 from 33.2% in
the comparable period of the previous fiscal year.
Interest expense for the quarter ended April 30, 1998 was $378,000, a
slight decrease of $8,000 from the corresponding period in the prior fiscal
year. The decrease was primarily reflective of a lower effective interest rate
under the Company's revolving credit facility on an increased level of borrowing
as compared to the comparable period in the prior fiscal year.
In the quarter ended April 30, 1998, the Company recorded an income tax
provision of $129,000. As a result, the Company had an effective income tax rate
of approximately 52.5% for the quarter ended April 30, 1998. The Company did not
record an income tax provision or benefit in the comparable period in the prior
fiscal year.
Net income for the quarter ended April 30, 1998 was $117,000 or $.03
per share compared to net loss of $110,000 or $.03 per share for the same
quarter in the previous fiscal year. The net income in the quarter ended April
30, 1998 is a direct result of the increase in the Company's net sales and gross
profit.
FINANCIAL CONDITION
Net cash used in operating activities was approximately $6,680,000 for
the three months ended April 30, 1998 primarily due to the decrease in the
Company's accounts payable since January 31, 1998. The Company had working
capital of approximately $5,646,000 at April 30, 1998, as compared to the
$5,585,000 in working capital at January 31, 1998 for an overall increase of
$61,000. The decrease in current assets of $3,713,000
Page 9
<PAGE>
during the three month period was primarily related to the $1,384,000 decrease
in inventory and the decreases in cash and accounts receivable of $1,338,000 and
$1,073,000, respectively. The net decrease in current assets was offset by an
overall decrease of $3,773,000 in current liabilities. The net decrease in
current liabilities resulted primarily from a decrease in accounts payable of
$7,915,000, which was substantially offset by the increase in borrowings under
the revolving credit facility of $5,763,000.
The Company currently believes that funds from the Company's operations
combined with borrowings available under its revolving credit facility and
vendor credit programs will be sufficient to satisfy its currently projected
operating cash requirements during fiscal 1999. However, in order to fully
complete the store expansion program currently planned in fiscal 1999, the
Company may need to seek additional financing sources. In that regard, the
Company is exploring additional financing sources in connection with the
expansion program. The Company has signed a lease for one new store located in
Palm Beach County, Florida and is currently in lease negotiations for a store in
Tallahassee, Florida and an additional B&O Concept store in Boca Raton, Florida.
The Company may also need to seek additional sources of financing (debt and/or
equity or a combination thereof) in order to proceed with any expansion program
beyond fiscal 1999.
The principal balance of approximately $428,000 of the mortgage loan
encumbering the Company's former Fort Lauderdale store is due in July. This
obligation will be repaid through funds available under the revolving credit
facility, refinancing of the mortgage or sale of the property.
The Company recognizes the potential problems for many computer systems
relating to the Year 2000. The majority of the Company's systems are purchased
from outside vendors. Those installed systems which are not currently able to
fully function in the Year 2000 either have new versions which are Year 2000
compliant and which the Company is preparing to install on the system, or the
vendor has committed to a Year 2000 compliant release in sufficient time to
allow installation and testing prior to critical cutover dates. Consequently,
the Company presently does not anticipate either a significant amount of
incremental expense or a disruption in service associated with the Year 2000 and
its impact on the Company's computer system. In addition, the Company is
assessing the impact of vendors' compliance to Year 2000 and what the impact
will be on the Company's ongoing results of operations.
Effective February 1, 1998, the Company adopted the provisions of
Statement of Financial Accounting Standards No. 130, "Reporting Comprehensive
Income" and Statement of Financial Accounting Standards No. 131, "Segment
Reporting." The adoption of these statements did not have a material impact on
the Company's operating results, financial position or cash flows.
FORWARD-LOOKING STATEMENTS
This Form 10-Q contains forward-looking statements (within the meaning
of Section 21E. of the Securities Exchange Act of 1934, as amended) representing
the Company's current expectations, beliefs, estimates or intentions concerning
the Company's future performance and operating results, its products, services,
markets and industry, and/or future events relating to or effecting the Company
and its business and operations. When used in this Form 10-Q, the words
"believes," "estimates," "plans," "expects," "intends," "anticipates," "Year
2000" and similar expressions as they relate to the Company or its management
are intended to identify forward-looking statements. The actual results or
achievements of the Company could differ materially from those indicated by the
forward-looking statements
Page 10
<PAGE>
because of various risks and uncertainties related to and including, without
limitation, the effectiveness of the Company's business and marketing
strategies, the product mix sold by the Company, customer demand, availability
of existing and new merchandise from and the establishment and maintenance of
relationships with suppliers, price competition for products and services sold
by the Company, management of expenses, gross profit margins, the opening of
additional stores, availability and terms of financing to refinance or repay
existing financings or to fund capital and expansion needs, the continued and
anticipated growth of the retail home entertainment and consumer electronics
industry, a change in interest rates, exchange rate fluctuations, the
seasonality of the Company's business and the other risks and factors detailed
in this Form 10-Q and in the Company's other filings with the Securities and
Exchange Commission. These risks and uncertainties are beyond the ability of the
Company to control. In many cases, the Company cannot predict the risks and
uncertainties that could cause actual results to differ materially from those
indicated by the forward-looking statements.
Page 11
<PAGE>
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security-Holders.
(a) The Registrant held its 1997 annual meeting of shareholders on
Friday, February 13, 1998 (the "Annual Meeting").
(b) and (c) The only matter voted upon at the Annual Meeting was the
election of six directors which comprised the Registrant's
entire Board of Directors. The six nominees, who were the
nominees of the Registrant's Board of Directors and, except
William F. Hagerty, were serving as directors of the Registrant
as of the date of the Annual Meeting, were all elected at the
Annual Meeting as directors of the Registrant receiving the
number of votes for election and abstentions and percentage of
total votes cast as set forth next to their respective names
below:
<TABLE>
<CAPTION>
NOMINEE FOR DIRECTOR FOR THE ELECTION ABSTAIN
-------------------- ---------------- -----------------
<S> <C> <C>
Peter Beshouri 2,605,850 (81.20%) 603,547.5 (18.80%)
Michael Blumberg 2,604,450 (81.20%) 604,947.5 (18.80%)
G. Kay Griffith 2,604,755 (81.20%) 604,642.5 (18.80%)
William F. Hagerty, IV 2,605,850 (81.20%) 603,547.5 (18.80%)
Herbert A. Leeds 2,605,850 (81.20%) 603,547.5 (18.80%)
Gregory Sturgis 2,604,450 (81.20%) 604,947.5 (18.80%)
</TABLE>
(d) Not applicable.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits. The following exhibits are filed with this report:
EXHIBIT NO. DESCRIPTION
----------- --------------------------------------------
27. Financial Data Schedule (filed herewith).
(b) Reports on Form 8-K. A report on Form 8-K was filed by the
Company on February 20, 1998, in Item 8 (Change in Fiscal
Year) of which the Company disclosed the change in the
Company's fiscal year end from the twelve month period ending
on June 30 to January 31.
Page 12
<PAGE>
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.
SOUND ADVICE, INC.
(Registrant)
Date JUNE 10, 1998 /S/ PETER BESHOURI
------------- ------------------------------------
Peter Beshouri, Chairman of the
Board, President and Chief
Executive Officer
Date JUNE 10, 1998 /S/ KENNETH L. DANIELSON
-------------- ------------------------------------
Kenneth L. Danielson, Chief
Financial and Accounting Officer
Page 13
<PAGE>
EXHIBIT INDEX
EXHIBIT
NO. DESCRIPTION
- ------- -----------
27. Financial Data Schedule (filed herewith).
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION FROM THE REGISTRANT'S
FINANCIAL STATEMENTS AS OF AND FOR THE THREE MONTH PERIOD ENDED APRIL 30, 1998,
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-31-1999
<PERIOD-START> FEB-01-1998
<PERIOD-END> APR-30-1998
<CASH> 83,841
<SECURITIES> 0
<RECEIVABLES> 4,016,189
<ALLOWANCES> 410,000
<INVENTORY> 29,644,060
<CURRENT-ASSETS> 33,832,551
<PP&E> 34,320,698
<DEPRECIATION> 20,481,134
<TOTAL-ASSETS> 47,905,584
<CURRENT-LIABILITIES> 28,186,522
<BONDS> 816,192
0
0
<COMMON> 37,289
<OTHER-SE> 15,421,713
<TOTAL-LIABILITY-AND-EQUITY> 47,905,584
<SALES> 33,648,350
<TOTAL-REVENUES> 33,648,350
<CGS> 21,803,311
<TOTAL-COSTS> 21,803,311
<OTHER-EXPENSES> 11,238,430
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 378,130
<INCOME-PRETAX> 245,924
<INCOME-TAX> 129,000
<INCOME-CONTINUING> 116,924
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 116,924
<EPS-PRIMARY> .03
<EPS-DILUTED> .03
</TABLE>
