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 December 31, 1994
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: 0-16002
ADVANCED MARKETING SERVICES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 95-3768341
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5880 Oberlin Drive, Suite 400
San Diego, California 92121
(Address of principal executive offices)
(Zip Code)
Registrant's telephone number: (619) 457-2500
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
----- -----
The number of shares of the Registrant's Common Stock outstanding
as of January 20, 1995 was 5,437,679.
ADVANCED MARKETING SERVICES, INC.
QUARTERLY REPORT ON FORM 10-Q
December 31, 1994
INDEX
Page
Number
PART I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
Consolidated Balance Sheets
December 31, 1994 (Unaudited), March 31, 1994 and
December 25, 1993 (Unaudited) 3 - 4
Consolidated Statements of Income (Unaudited)
Three and nine months ended December 31, 1994 and
December 25, 1993 5
Consolidated Statements of Cash Flows (Unaudited)
Nine months ended December 31, 1994 and
December 25, 1993 6
Notes to Consolidated Financial Statements 7 - 9
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS 10 - 12
PART II. OTHER INFORMATION 13
SIGNATURES 13
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (See Note 1 for basis of presentation)
ADVANCED MARKETING SERVICES, INC.
CONSOLIDATED BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
AS OF
--------------------------------------
DECEMBER 31, MARCH 31, DECEMBER 25,
1994 1994 1993
(UNAUDITED) (UNAUDITED)
------------ ----------- -----------
(IN THOUSANDS EXCEPT SHARE DATA)
<S> <C> <C> <C>
CURRENT ASSETS:
CASH AND CASH EQUIVALENTS $ 7,205 $ 2,928 $ 12,783
INVESTMENTS, AVAILABLE-FOR-SALE 22,503 14,469 16,270
ACCOUNTS RECEIVABLE - TRADE, NET OF
ALLOWANCES FOR UNCOLLECTIBLE ACCOUNTS
AND SALES RETURNS OF $2,940,000 AT
DECEMBER 31, 1994, $1,986,000 AT
MARCH 31, 1994 AND $2,248,000 AT
DECEMBER 25, 1993 41,715 23,321 30,262
VENDOR AND OTHER RECEIVABLES 2,690 2,099 2,460
INVENTORIES, NET 64,625 62,451 75,519
DEFERRED INCOME TAXES 3,133 2,621 2,323
PREPAID EXPENSES 733 528 412
---------- ---------- ----------
TOTAL CURRENT ASSETS 142,604 108,417 140,029
---------- ---------- ----------
PROPERTY AND EQUIPMENT, AT COST 6,264 6,152 5,830
LESS - ACCUMULATED DEPRECIATION
AND AMORTIZATION 3,784 3,977 3,731
---------- ---------- ----------
NET PROPERTY AND EQUIPMENT 2,480 2,175 2,099
INVESTMENTS, AVAILABLE-FOR-SALE 1,000 1,550 3,250
OTHER ASSETS 270 260 248
---------- ---------- ----------
TOTAL ASSETS $ 146,354 $ 112,402 $ 145,626
========== ========== ==========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED
STATEMENTS.
ADVANCED MARKETING SERVICES, INC.
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
AS OF
---------------------------------------
DECEMBER 31, MARCH 31, DECEMBER 25,
1994 1994 1993
(UNAUDITED) (UNAUDITED)
----------- ----------- -----------
(IN THOUSANDS EXCEPT SHARE DATA)
<S> <C> <C> <C>
CURRENT LIABILITIES:
ACCOUNTS PAYABLE $ 96,751 $ 67,316 $ 98,573
ACCRUED LIABILITIES 4,105 3,167 2,978
INCOME TAXES PAYABLE 1,012 292 1,356
---------- ---------- ----------
TOTAL CURRENT LIABILITIES 101,868 70,775 102,907
---------- ---------- ----------
STOCKHOLDERS' EQUITY:
COMMON STOCK, $.001 PAR VALUE,
AUTHORIZED 20,000,000 SHARES,
ISSUED 5,944,000 SHARES AT
DECEMBER 31, 1994, 5,930,000
SHARES AT MARCH 31, 1994 AND
5,923,000 SHARES AT DECEMBER
25, 1993 6 6 6
ADDITIONAL PAID-IN CAPITAL 24,919 24,851 24,806
UNREALIZED LOSS ON INVESTMENTS (67) -- --
RETAINED EARNINGS 20,563 17,650 18,787
LESS: TREASURY STOCK,
506,511 SHARES AT COST (935) (880) (880)
---------- ---------- ----------
TOTAL STOCKHOLDERS' EQUITY 44,486 41,627 42,719
---------- ---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 146,354 $ 112,402 $ 145,626
========== ========== ==========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED
STATEMENTS.
ADVANCED MARKETING SERVICES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
DEC 31, DEC 25, DEC 31, DEC 25,
1994 1993 1994 1993
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
NET SALES $ 91,226 $ 91,532 $244,695 $204,003
COST OF GOODS SOLD 82,390 84,137 222,405 186,670
--------- --------- --------- ---------
GROSS PROFIT 8,836 7,395 22,290 17,333
DISTRIBUTION AND
ADMINISTRATIVE EXPENSES 6,192 5,569 18,138 15,812
--------- --------- --------- ---------
INCOME FROM OPERATIONS 2,644 1,826 4,152 1,521
INTEREST EXPENSE (6) (13) (35) (39)
INTEREST AND DIVIDEND
INCOME 16 244 582 646
--------- --------- --------- ---------
INCOME BEFORE PROVISION
FOR INCOME TAXES 2,654 2,057 4,699 2,128
PROVISION FOR INCOME
TAXES 971 794 1,786 835
--------- --------- --------- ---------
NET INCOME $ 1,683 $ 1,263 $ 2,913 $ 1,293
========= ========= ========= =========
NET INCOME PER COMMON AND
COMMON SHARE EQUIVALENT:
PRIMARY $ .30 $ .22 $ .52 $ .23
========= ========= ========= =========
FULLY DILUTED $ .30 $ .22 $ .52 $ .23
========= ========= ========= =========
WEIGHTED AVERAGE NUMBER OF
SHARES:
PRIMARY 5,644 5,629 5,608 5,648
========= ========= ========= =========
FULLY DILUTED 5,636 5,625 5,625 5,622
========= ========= ========= =========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED
STATEMENTS.
ADVANCED MARKETING SERVICES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
DEC 31, DEC 25,
1994 1993
--------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
NET INCOME $ 2,913 $ 1,293
ADJUSTMENTS TO RECONCILE NET INCOME TO
NET CASH PROVIDED BY OPERATING ACTIVITIES:
DEPRECIATION AND AMORTIZATION 669 702
PROVISION FOR UNCOLLECTIBLE ACCOUNTS
AND SALES RETURNS 1,174 839
PROVISION FOR MARKDOWN OF INVENTORY 2,465 1,897
CHANGES IN ASSETS AND LIABILITIES:
INCREASE IN ACCOUNTS RECEIVABLE - TRADE (19,568) (9,709)
INCREASE IN VENDOR AND OTHER RECEIVABLES (591) (817)
INCREASE IN INVENTORIES (4,639) (11,942)
INCREASE IN ACCOUNTS PAYABLE 29,435 30,861
INCREASE IN ACCRUED LIABILITIES 938 103
INCREASE IN INCOME TAXES PAYABLE 720 814
INCREASE IN DEFERRED INCOME TAXES (512) (324)
INCREASE IN PREPAID EXPENSES (205) (321)
INCREASE IN OTHER ASSETS (10) (44)
--------- ---------
NET CASH PROVIDED BY OPERATING ACTIVITIES 12,789 13,352
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
PURCHASE/DISPOSAL OF PROPERTY AND EQUIPMENT (974) (1,004)
PURCHASE OF INVESTMENTS, AVAILABLE FOR SALE (59,480) (66,028)
SALE AND REDEMPTION OF INVESTMENTS,
AVAILABLE FOR SALE 51,929 57,064
PURCHASE OF TREASURY STOCK (55) -
--------- ---------
NET CASH PROVIDED BY INVESTING ACTIVITIES (8,580) (9,968)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
PROCEEDS FROM EXERCISE OF OPTIONS AND
RELATED TAX BENEFITS 68 324
--------- ---------
INCREASE IN CASH AND CASH EQUIVALENTS 4,277 3,708
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 2,928 9,075
--------- ---------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 7,205 $ 12,783
========= =========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED
STATEMENTS.
ADVANCED MARKETING SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF PRESENTATION
The financial statements presented herein for the nine months ended
December 31, 1994 and December 25, 1993 have been prepared in
accordance with generally accepted accounting principles and with
instructions to Form 10-Q. These financial statements have not
been examined by independent public accountants, but include all
adjustments (consisting of normal recurring adjustments) which are,
in the opinion of Management, necessary for a fair presentation of
the financial condition, results of operations and cash flows for
such periods. Certain reclassifications have been made to the
financial statements of the prior period to conform to the
classifications used at December 31, 1994.
The accompanying consolidated financial statements include the
accounts of the Company and its wholly-owned subsidiaries. All
intercompany accounts and transactions have been eliminated.
Certain information and footnote disclosures normally included in
financial statements in accordance with generally accepted
accounting principles have been omitted pursuant to requirements of
the Securities and Exchange Commission. Management believes that
the disclosures included in the accompanying interim financial
statements and footnotes are adequate to make the information not
misleading. For further information, refer to the financial
statements and notes thereto included in the Company's Annual
Report on Form 10-K for the fiscal year ended March 31, 1994.
The results of operations for the nine month period ended December
31, 1994 are not necessarily indicative of the results to be
expected for the fiscal year ending March 31, 1995. Net sales in
the Company's third fiscal quarter have historically been, and are
expected to be, significantly greater than in any other quarter of
the fiscal year due to increased demand during the holiday season.
2. INTERIM ACCOUNTING PERIODS
In accordance with wholesale distribution industry practice, net
sales and cost of goods sold for interim periods are cut off on the
Saturday nearest to the end of an accounting period. The cut-off
for the fourth fiscal quarter is March 31. This practice may
result in differences in the number of business days for which
sales and cost of goods sold are recorded both as to quarter-to-
quarter comparisons, and as to comparisons of quarters between
years.
The first quarter of the current fiscal year included one
additional week of sales compared to the first quarter of the prior
fiscal year. (See Management's Discussion and Analysis of
Financial Condition and Results of Operations in Item 2 of this
Form 10-Q.)
3. INVESTMENTS, AVAILABLE-FOR-SALE
"Investments, available-for-sale" consist principally of highly
rated corporate and municipal bonds, funds held in managed
investment funds and preferred stock instruments. In May 1993, the
Financial Accounting Standards Board issued Statement of Financial
Accounting Standards (SFAS) No. 115, "Accounting for Certain
Investments in Debt and Equity Securities." The Company adopted
SFAS No. 115 on April 1, 1994 and in connection therewith
reclassified all investments as available for sale. The adoption
of SFAS No. 115 had no material impact on the Company's financial
position or results of operations. SFAS No. 115 requires the use
of fair value accounting for debt and equity securities, except in
those cases where there is a positive intent and ability to hold
debt securities to maturity.
Investments, available for sale at December 31, 1994 are as follows
(in thousands):
<TABLE>
<CAPTION>
December 31, 1994
----------------------------------------------
Gross Gross
Amortized Unrealized Unrealized Approximate
Cost Gains Losses Market Value
--------- ---------- ---------- ------------
<S> <C> <C> <C> <C>
Mortgage-Backed
Securities $ 3,476 $ - $ 82 $ 3,394
Debt Securities
issued by States of
the U.S. and polit-
ical subdivisions
of the States 17,966 27 12 17,981
Equity Securities 2,128 - - 2,128
------- ----- ----- -------
$23,570 $ 27 $ 94 $23,503
======= ===== ===== =======
</TABLE>
Investments in debt securities issued by States of the U.S. and
political subdivisions of the States in the amount of $16,981,350
are scheduled to mature within one year. The remaining balance of
$999,650 is scheduled to mature within two years. The Company's
investments in mortgage-backed securities have contracted
maturities up to 30 years. The actual time to repayment, however,
may be shorter due to prepayments made on the underlying
collateral. The contractual principal repayments of mortgage-
backed securities range from 6 to 29 years. Equity securities
represent investments in preferred stocks, which have no
maturities.
Proceeds from the sale of investments aggregated $1,319,080. The
realized loss on these sales totalled $118,450. The Company uses
the specific identification method in determining cost on these
investments. The decrease in unrealized loss on investments was
approximately $212,000 for the quarter ended December 31, 1994
primarily as a result of the Company making a provision of $170,000
to cover anticipated losses on its preferred stock investments.
4. SALES RETURNS
In accordance with industry practice, a significant portion of the
Company's products are sold to customers with the right of return.
The Company has provided allowances of $2,067,000 as of December
31, 1994, $1,104,000 as of March 31, 1994 and $1,758,000 as of
December 25, 1993 for the gross profit effect of estimated future
sales returns.
5. INVENTORIES
Inventories consist primarily of books and prerecorded audio and
video cassettes purchased for resale and are stated at the lower of
cost (first-in, first-out) or market.
6. LINE OF CREDIT
On January 23, 1995 the Company entered into an agreement which
provides the Company with an unsecured bank line of credit with a
maximum borrowing limit of $10 million. The interest rate is at
prime (8.5 percent at December 31, 1994). The line of credit
expires July 31, 1996. As of December 31, 1994 and December 25,
1993 there were no outstanding borrowings on any line of credit.
7. INCOME TAXES
The Company provides currently for taxes on income regardless of
when such taxes are payable. Deferred income taxes result from
temporary differences in the recognition of income and expense for
tax and financial reporting purposes.
8. PER SHARE INFORMATION
Per share information is based on the weighted average number of
common shares and, when applicable, dilutive common share
equivalents outstanding during the periods. The effects of all
anti-dilutive common share equivalents are excluded from the
calculation of earnings per share. The Company's only potential
dilutive common share equivalents are stock options.
9. EMPLOYEE STOCK OPTION PLAN
Nonqualified options to purchase an aggregate of 657,410 shares of
common stock were outstanding as of December 31, 1994 including
150,000 shares granted to Michael M. Nicita subject to approval by
the stockholders of an increase in the number of shares issuable
under the Plan. The outstanding options were at prices ranging
from $1.70 to $5.42 per share.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
A. RESULTS OF OPERATIONS
Nine Month Periods Ended December 31, 1994 and December 25, 1993:
- - - - -----------------------------------------------------------------
During the nine months ended December 31, 1994, the Company
reported net income of $2,913,000, or $.52 per share, compared with
net income of $1,293,000, or $.23 per share, for the corresponding
period of the previous year.
Net sales increased 20 percent to $244,695,000 compared to
$204,003,000 in the same period of the prior year. The first
quarter of this year included one additional week of sales which
accounted for approximately $6.0 million of net sales. If this
additional week was excluded, the net sales increase for the period
would have been 17 percent. Comparable store sales, those to
customer locations which were in operation throughout the first
nine months of the current and previous fiscal year, increased by
one percent. The sales increase in the period occurred as a result
of the previously-announced designation of the Company as a primary
book supplier to additional locations of a major customer as well
as strong sales of individual titles, particularly in the juvenile,
paperback and bestseller categories.
During the first nine months of fiscal 1995, gross profits
increased 29 percent to $22,290,000 from $17,333,000 in the first
nine months of the previous fiscal year. Gross profit as a
percentage of net sales increased to 9.1 percent compared to 8.5
percent last year. This increase resulted from lower cash discount
expense, increased income from certain publishers' incentive plans,
and favorable trends in other inventory related costs.
Distribution and administrative expenses for the nine months ended
December 31, 1994 increased 15 percent to $18,138,000 and
represented 7.4 percent of net sales compared to $15,812,000, or
7.8 percent of net sales, in the previous year. Warehouse labor
and freight expenses increased as a result of higher sales volume.
Administrative expenses increased as a result of higher
compensation costs and costs (including currency losses) connected
with the Company's expansion into Mexican and United Kingdom
markets. Administrative cost increases were partially offset by
increases in income from advertising and promotional activities.
Distribution and administrative expenses decreased as a percent of
sales primarily due to the increase in net sales.
Interest expense consisting of costs related to the Company's line
of credit totalled $35,000 in the nine months ended December 31,
1994 compared to $39,000 in the nine months ended December 25,
1993. Interest and dividend income decreased to $582,000 in the
period from $646,000 in the corresponding period of the previous
year as a result of the Company providing for anticipated losses on
its preferred stock investments.
Quarter Ended December 31, 1994 and December 25, 1993:
- - - - ------------------------------------------------------
Net income for the quarter ended December 31, 1994 was $1,683,000,
or $.30 per share, compared with net income of $1,263,000, or $.22
per share, for the same quarter of the previous year.
Net sales during the third quarter decreased slightly to
$91,226,000 from $91,532,000 in the third quarter of fiscal 1994.
Comparable store sales, those to customer locations which were in
operation throughout the third quarter of the current and previous
fiscal year, decreased by 15 percent. This decline was due in part
to reduced sales of bestselling novels as well as reduced sales in
several other book categories and, in certain cases, customers
obtaining certain titles from competitive sources. The Company
anticipates and has provided for a higher level of returns from
customers in the post-Christmas period than in the previous year.
During the quarter, gross profits increased 19 percent to
$8,836,000 from $7,395,000 in the same period last year. Gross
profit as a percentage of net sales increased to 9.7 percent of net
sales compared to 8.1 percent of net sales in the previous year's
third quarter. The increase in gross profit dollars resulted from
lower cash discount expense, increased income from certain
publishers' incentive plans, and favorable trends in other
inventory related costs.
Distribution and administrative expenses for the quarter ended
December 31, 1994 increased 11 percent to $6,192,000 and
represented 6.8 percent of net sales compared to $5,569,000, or 6.1
percent of net sales, in the same quarter of the previous year.
This increase resulted in part from one-time charges connected with
the termination of a senior executive's employment as well as other
compensation related costs. These and other increases in
administrative expenses were offset in part by increased income
from the Company's advertising and promotional activities. In
addition, the financial statements reflect a provision of $213,000
for the impact on the Company's Mexican subsidiary resulting from
the recent devaluation of the Mexican peso. Accordingly, the
Company believes that the impact of recent changes in currency
conversion rates and their effect on unsettled balances will not
have a material impact on future financial statements.
Interest expense consisting of costs related to the Company's line
of credit decreased to $6,000 in the quarter ended December 31,
1994 from $13,000 in the third quarter last year. Interest and
dividend income declined to $16,000 during the quarter from
$244,000 in the corresponding quarter of the previous year as a
result of the Company providing for anticipated losses on its
preferred stock investments.
B. LIQUIDITY AND SOURCES OF CAPITAL
Working capital was $40,736,000 as of December 31, 1994 which
increased from the December 25, 1993 level of $37,122,000 and from
the March 31, 1994 balance of $37,642,000. The increase compared
to December 25, 1993 was due primarily to increases in retained
earnings and sales of certain long-term investments.
Cash and investments available for sale totalled $30,708,000 at
December 31, 1994, an increase of $11,761,000 from March 31, 1994
primarily as a result of a seasonal reduction of net investment in
inventory. Cash and investments available for sale decreased by
$1,595,000 compared to December 25, 1993.
Trade accounts receivable increased by $18,394,000 during the nine
months ended December 31, 1994 and $11,453,000 from one year ago
due primarily to the increase in net sales and a change in certain
terms of sale to customers.
Compared to one year ago, inventories decreased by $10,894,000 to
$64,625,000 as a result of a reduction in levels of both returnable
and non-returnable inventory. Compared to March 31, 1994,
inventories increased by $2,174,000 to support higher seasonal
sales levels.
Accounts payable increased by $29,435,000 from the March 31, 1994
due primarily to an increase in purchases to support seasonally
higher levels of sales. Accounts payable decreased by $1,822,000
from the balance a year ago.
On January 23, 1995 the Company entered into an agreement which
provides the Company with an unsecured bank line of credit with a
maximum borrowing limit of $10 million. The interest rate is at
prime (8.5 percent at December 31, 1994). The line of credit
expires July 31, 1996. As of December 31, 1994 and December 25,
1993 there were no outstanding borrowings on any line of credit.
Given its current level of operations, the Company does not
anticipate utilizing its line of credit in the foreseeable future.
The Company believes that its existing working capital, cash flows
from operations, trade credit traditionally available from its
vendors and its line of credit will be sufficient to finance its
current and anticipated level of operations.
PART II. OTHER INFORMATION
ITEMS 1-4. NOT APPLICABLE
ITEM 5. OTHER INFORMATION
On November 1, 1994 Charles C. Tillinghast III, President, assumed
the responsibilities of Chairman of the Board, a newly-created
position. Mr Tillinghast will remain Chief Executive Officer of
the Company. Michael M. Nicita became President and Chief
Operating Officer of the Company effective November 7, 1994. Mr.
Nicita had previously been employed as General Manager of Golden
Lee Book Distributors, Inc. On December 31, 1994 the employment of
James T. Dixon, formerly Executive Vice President-Marketing, was
terminated. On January 22, 1995 Adam Zoldan joined the Company as
Vice President-Marketing.
On May 30, 1994, the Company announced a stock repurchase program
pursuant to which the Company may repurchase in open market
transactions, from time to time, based upon existing market
conditions, up to 500,000 shares of its Common Stock. On December
13, 1994 the Company repurchased 10,000 shares of its Common Stock
pursuant to such stock repurchase program.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
11.0 Statement re Computation of Per Share Earnings
(b) Reports on Form 8-K - None
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.
ADVANCED MARKETING SERVICES, INC.
(Registrant)
January 27, 1995 By: /s/ Charles C. Tillinghast III
- - - - -------------------- -------------------------------
Date Charles C. Tillinghast III
Chairman of the Board, Chief
Executive Officer (Principal
Executive Officer)
January 27, 1995 By: /s/ Jonathan S. Fish
- - - - -------------------- -------------------------------
Date Jonathan S. Fish
Executive Vice President of
Finance and Chief Financial
Officer (Principal Financial
and Accounting Officer)
Exhibit 11.0
ADVANCED MARKETING SERVICES, INC.
STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
DEC 31, DEC 25, DEC 31, DEC 25,
1994 1993 1994 1993
-------- -------- ------- --------
<S> <C> <C> <C> <C>
NET INCOME $1,683 $1,263 $2,913 $1,293
WEIGHTED AVERAGE COMMON AND
COMMON SHARE EQUIVALENTS:
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING 5,443 5,427 5,439 5,410
WEIGHTED AVERAGE COMMON SHARE
EQUIVALENTS-DILUTIVE STOCK
OPTIONS:
PRIMARY 201 202 169 238
FULLY DILUTED 193 198 186 212
------ ------ ------ ------
TOTAL WEIGHTED AVERAGE
COMMON AND COMMON
EQUIVALENT SHARES:
PRIMARY 5,644 5,629 5,608 5,648
FULLY DILUTED 5,636 5,625 5,625 5,622
------ ------ ------ ------
NET INCOME PER COMMON AND
COMMON SHARE EQUIVALENT
PRIMARY $ .30 $ .22 $ .52 $ .23
FULLY DILUTED $ .30 $ .22 $ .52 $ .23
------ ------ ------ ------
</TABLE>
- - - - --------------------------------
Common share equivalents (for AMS outstanding stock options) are
excluded
from earnings
per share calculations when antidilutive.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S CONSOLIDATED STATEMENTS OF INCOME AND CONSOLIDATED BALANCE
SHEETS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAR-31-1995
<PERIOD-END> DEC-31-1994
<CASH> 7,205
<SECURITIES> 22,503
<RECEIVABLES> 41,715
<ALLOWANCES> 873
<INVENTORY> 64,625
<CURRENT-ASSETS> 142,604
<PP&E> 6,264
<DEPRECIATION> 3,784
<TOTAL-ASSETS> 146,354
<CURRENT-LIABILITIES> 101,868
<BONDS> 0
<COMMON> 6
0
0
<OTHER-SE> 44,480
<TOTAL-LIABILITY-AND-EQUITY> 146,354
<SALES> 244,695
<TOTAL-REVENUES> 244,695
<CGS> 222,405
<TOTAL-COSTS> 222,405
<OTHER-EXPENSES> 18,138
<LOSS-PROVISION> 211
<INTEREST-EXPENSE> 35
<INCOME-PRETAX> 4,699
<INCOME-TAX> 1,786
<INCOME-CONTINUING> 2,913
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,913
<EPS-PRIMARY> .52
<EPS-DILUTED> .52
</TABLE>
