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 28, 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: 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
October 31, 1996 was 5,472,099.
ADVANCED MARKETING SERVICES, INC.
Quarterly Report on Form 10-Q
September 28, 1996
INDEX
Page
Number
PART I. FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
Consolidated Balance Sheets
September 28, 1996 (Unaudited), March 31, 1996 and
September 30, 1995 (Unaudited) 3 - 4
Consolidated Statements of Income (Unaudited)
Three months and six months ended September 28, 1996 and
September 30, 1995 5
Consolidated Statements of Cash Flows (Unaudited)
Six months ended September 28, 1996 and
September 30, 1995 6
Notes to Consolidated Financial Statements 7 - 9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS 10 - 11
PART II. OTHER INFORMATION 12
SIGNATURES 12
Page 2 of 12
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 ----------------
SEPTEMBER 28, MARCH 31 SEPTEMBER 30,
1996 1996 1995
(UNAUDITED) (UNAUDITED)
CURRENT ASSETS: (IN THOUSANDS EXCEPT SHARE DATA)
<S> <C> <C> <C>
CASH AND CASH EQUIVALENTS $ 6,694 $ 8,706 $ 3,099
INVESTMENTS, AVAILABLE-FOR-SALE 4,963 12,532 11,960
ACCOUNTS RECEIVABLE - TRADE, NET OF
ALLOWANCES FOR UNCOLLECTIBLE ACCOUNTS
AND SALES RETURNS OF $4,878,000 AT
SEPTEMBER 28, 1996, $4,173,000 AT
MARCH 31, 1996 AND $3,142,000 AT
SEPTEMBER 30, 1995 77,146 57,700 63,572
VENDOR AND OTHER RECEIVABLES 2,620 2,213 1,110
INVENTORIES, NET 110,041 72,297 111,419
DEFERRED INCOME TAXES 5,779 5,279 3,562
PREPAID EXPENSES 637 575 586
TOTAL CURRENT ASSETS 207,880 159,302 195,308
PROPERTY AND EQUIPMENT, AT COST 8,909 7,837 6,613
LESS - ACCUMULATED DEPRECIATION AND
AMORTIZATION 5,162 4,769 4,472
NET PROPERTY AND EQUIPMENT 3,747 3,068 2,141
INVESTMENTS, AVAILABLE-FOR-SALE 912 -- --
OTHER ASSETS 719 281 191
TOTAL ASSETS $213,258 $162,651 $197,640
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED BALANCE
SHEETS
Page 3 of 12
ADVANCED MARKETING SERVICES, INC.
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
AS OF
SEPTEMBER 28, MARCH 31, SEPTEMBER 30,
1996 1996 1995
(UNAUDITED (UNAUDITED)
CURRENT LIABILITIES: (IN THOUSANDS EXCEPT SHARE DATA)
<S> <C> <C> <C>
ACCOUNTS PAYABLE $152,348 $104,626 $ 146,303
ACCRUED LIABILITIES 5,857 5,309 3,434
INCOME TAXES PAYABLE 1,151 1,745 963
TOTAL CURRENT LIABILITIES 159,356 111,680 150,700
STOCKHOLDERS' EQUITY:
COMMON STOCK, $.001 PAR VALUE,
AUTHORIZED 20,000,000 SHARES, ISSUED
6,179,000 SHARES AT SEPTEMBER 28, 1996,
6,174,000 SHARES AT MARCH 31, 1996 AND
6,117,000 SHARES AT SEPTEMBER 30, 1995 6 6 6
ADDITIONAL PAID IN CAPITAL 25,977 25,968 25,585
RETAINED EARNINGS 30,039 27,113 23,531
UNREALIZED GAIN (LOSS) ON INVESTMENTS (2) 8 (28)
FOREIGN CURRENCY TRANSLATION ADJUSTMENT (88) (94) (124)
LESS: TREASURY STOCK, 708,000 SHARES,
AT COST (2,030) (2,030) (2,030)
TOTAL STOCKHOLDERS EQUITY 53,902 50,971 46,940
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $213,258 $162,651 $197,640
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED BALANCE
SHEETS.
Page 4 of 12
ADVANCED MARKETING SERVICES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
SEPT 28, SEPT 30, SEPT 28, SEPT 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
NET SALES $ 87,939 $ 90,318 $ 185,736 $166,358
COST OF GOOD SOLD 78,758 81,604 167,370 150,243
GROSS PROFIT 9,181 8,714 18,366 16,115
DISTRIBUTION AND
ADMINISTRATIVE EXPENSES 6,651 6,179 14,132 12,637
INCOME FROM OPERATIONS 2,530 2,535 4,234 3,478
INTEREST AND DIVIDEND INCOME 198 304 432 589
INCOME BEFORE PROVISION
FOR INCOME TAXES 2,728 2,839 4,666 4,067
PROVISION FOR INCOME TAXES 1,029 1,074 1,740 1,548
NET INCOME $ 1,699 $ 1,765 $ 2,926 $ 2,519
NET INCOME PER COMMON
AND COMMON SHARE
EQUIVALENT:
PRIMARY $ .30 $ .32 $ .51 $ .45
FULLY DILUTED $ .30 $ .32 $ .51 $ .45
WEIGHTED AVERAGE
NUMBER OF SHARES:
PRIMARY 5,715 5,568 5,736 5,545
FULLY DILUTED 5,697 5,591 5,696 5,590
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED STATEMENTS.
Page 5 of 12
ADVANCED MARKETING SERVICES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION> SIX MONTHS ENDED
SEPTEMBER 28, SEPTEMBER 30,
1996 1995
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
NET INCOME $ 2,926 $ 2,519
ADJUSTMENTS TO RECONCILE NET INCOME TO NET
CASH USED IN OPERATING ACTIVITIES:
DEPRECIATION AND AMORTIZATION 602 460
PROVISION FOR UNCOLLECTIBLE ACCOUNTS AND
SALES RETURNS 853 682
PROVISION FOR MARKDOWN OF INVENTORY 647 1,052
DEFERRED INCOME TAXES (500) (451)
CHANGES IN ASSETS AND LIABILITIES:
INCREASE IN ACCOUNTS RECEIVABLE - TRADE (20,313) (27,257)
(INCREASE) DECREASE IN VENDOR AND OTHER
RECEIVABLES (406) 547
INCREASE IN INVENTORIES (38,383) (43,115)
INCREASE ACCOUNTS PAYABLE 47,734 61,067
INCREASE IN ACCRUED LIABILITIES 548 478
INCREASE (DECREASE) IN INCOME TAXES PAYABLE (594) 361
INCREASE IN PREPAID EXPENSES AND OTHER ASSETS (500) (282)
NET CASH USED IN OPERATING ACTIVITIES (7,386) (3,939)
CASH FLOWS FROM INVESTING ACTIVITIES:
PURCHASE/DISPOSAL OF PROPERTY AND
EQUIPMENT, NET (1,281) (286)
PURCHASE OF INVESTMENTS, AVAILABLE-FOR-SALE (41,970) (17,035)
SALE AND REDEMPTION OF INVESTMENTS,
AVAILABLE-FOR-SALE 48,617 15,258
NET CASH PROVIDED BY (USED IN) INVESTING
ACTIVITIES 5,366 (2,063)
CASH FLOWS FROM FINANCING ACTIVITIES:
PROCEEDS FROM EXERCISE OF OPTIONS AND RELATED
TAX BENEFITS 9 66
NET CASH PROVIDED BY FINANCING ACTIVITIES 9 66
EFFECT OF EXCHANGE RATE CHANGES ON CASH (1) --
DECREASE IN CASH AND CASH EQUIVALENTS (2,012) (5,936)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 8,706 9,035
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 6,694 $ 3,099
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED STATEMENTS.
Page 6 of 12
ADVANCED MARKETING SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF PRESENTATION
The financial statements presented herein as of and for the three and six
months ended September 28, 1996 and September 30, 1995 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.
The accompanying consolidated financial statements include the accounts of the
Company and its wholly-owned subsidiaries. All significant 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, 1996.
The results of operations for the three and six month periods ended September
28, 1996 are not necessarily indicative of the results to be expected for the
fiscal year ending March 31, 1997. 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.
3. INVESTMENTS, AVAILABLE-FOR-SALE
"Investments, available-for-sale" consist principally of highly rated corporate
and municipal bonds and funds held in managed investment funds.
The cost and estimated fair value of investments at September 28, 1996 and
September 30, 1995 are as follows (in thousands):
<TABLE>
<CAPTION> ----------- September 28, 1996 --------------
Gross Gross
Amortized Unrealized Unrealized Estimated
Cost Gains Losses Fair Value
<S> <C> <C> <C> <C>
Debt Securities issued by
States of the U.S. and
political subdivisions of
the States $ 5,877 $ 2 $ 4 $ 5,875
</TABLE>
Page 7 of 12
<TABLE>
<CAPTION> ------------- September 30, 1995 -------------
Gross Gross
Amortized Unrealized Unrealized Estimated
Cost Gains Losses Fair Value
<S> <C> <C> <C> <C>
Mortgage-Backed Securities $ 2,582 $ - $ 33 $ 2,549
Debt Securities issued by
States of the U.S. and
political subdivisions
of the States 9,406 5 - 9,411
------- ------- ------- -------
$11,988 $ 5 $ 33 $11,960
</TABLE>
As of September 28, 1996, investments in debt securities issued by States of the
U.S. and political subdivisions of the States in the amount of $4,963,000 are
scheduled to mature within one year and $912,000 are scheduled to mature within
2 years.
Proceeds from the sale of investments aggregated $3,400,000 for the quarter
ended September 28, 1996 and $2,050,000 for the quarter ended September 30,
1995. There was no significant gain or loss realized on these sales. The
Company uses the specific identification method in determining cost on these
investments. The net increase in unrealized loss on investments was
approximately $2,000 for the quarter ended September 28, 1996. The increase in
unrealized loss on investments for the quarter ended September 30, 1995 was
approximately $1,000.
Proceeds from the sale of investments totaled $3,400,000 for the six months
ended September 28, 1996. Proceeds from sales of investments during the same
period of the previous year totaled $8,050,000. There was loss no significant
gain or loss realized on these sales. The increase in unrealized loss on
investments was approximately $10,000 for the six months ended September 28,
1996. In the six months ended September 30, 1995, the reduction in unrealized
loss on investments was approximately $18,000.
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 $2,620,000 as of September 28, 1996, $2,173,000 as of
March 31, 1996 and $1,867,000 as of September 30, 1995 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
The Company had available at September 28, 1996 an unsecured bank line of credit
with a maximum borrowing limit of $10 million. The interest rate is at prime
(8.25 percent at September 28, 1996). The line of credit expires July 31, 1998.
As of September 28, 1996 and September 30, 1995, there were no outstanding
borrowings on the 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.
Income taxes paid in the six months ended September 28, 1996 totaled $2,847,700.
Income taxes paid during the same period of the previous year totaled
$1,466,000.
Page 8 of 12
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 537,290 shares of common stock
were outstanding as of September 28, 1996. The outstanding options were at
prices ranging from $2.02 to $11.16 per share.
Page 9 of 12
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
A. RESULTS OF OPERATIONS
Six Month Periods Ended September 28, 1996 and September 30, 1995:
During the six months ended September 28, 1996, the Company reported net income
of $2,926,000, or $.51 per share, compared with net income of $2,519,000, or
$.45 per share, for the first six months of the prior year.
Net sales for the first six months of fiscal 1997 increased 12 percent to
$185,736,000 from $166,358,000 in the same period of the prior year. This
increase was primarily due to obtaining additional business from two of its
major customers in the summer of 1995.
During the first six months of fiscal 1997, gross profits increased 14 percent
to $18,366,000 from $16,115,000 in the first six months of the previous fiscal
year. Gross profit as a percentage of net sales increased to 9.9 percent from
9.7 percent in the same period last year. This improvement resulted primarily
from an increase in earnings from publisher incentive plans which was offset in
part by lower margins in several book categories.
Distribution and administrative expenses for the six months ended September 28,
1996 increased 12 percent to $14,132,000 and represented 7.6 percent of net
sales compared to $12,637,000, or 7.6 percent of net sales, in the same period
of the previous year. Distribution center expenses were higher due to increased
customer shipments and returns. These increases were partially offset by
greater contributions from the Company's promotional programs.
Interest and dividend income decreased to $432,000 in the period from $589,000
in the corresponding period of the previous year. This decrease was primarily
the result of lower investment balances and lower pre-tax yields due to a
greater proportion of tax exempt investments in the current fiscal period.
Three Month Periods Ended September 28, 1996 and September 30, 1995:
During the three months ended September 28, 1996, the Company reported net
income of $1,699,000, or $.30 per share, compared with a net income of
$1,765,000, or $.32 per share, for the corresponding quarter of the previous
year.
Net sales for the quarter declined three percent to $87,939,000 compared to
$90,318,000 in the previous year's second quarter. The decline in quarterly net
sales was primarily attributable to an increase in the rate of customer returns
to 28 percent for the fiscal 1997 second quarter from 20 percent for the fiscal
1996 second quarter. Last summer the Company obtained additional business from
two of its major customers. These customers returned to their former suppliers
any unsold inventory and, accordingly, the Company exerienced very low returns
associated with this new business. Results for the fiscal 1997 second quarter
include returns attributable to this additional business which account for
approximately four percentage points of the difference in return rates between
years.
During the quarter ended September 28, 1996, gross profits increased 5 percent
to $9,181,000 from $8,714,000 in the second quarter of the previous fiscal year.
Gross profit as a percentage of net sales increased to 10.4 percent from 9.6
percent in the same period last year. The improvement primarily resulted from
an increase in earnings from publisher incentive plans.
Distribution and administrative expenses for the quarter ended September 28,
1996 increased to $6,651,000 and represented 7.6 percent of net sales compared
to $6,179,000, or 6.8 percent of net sales, in the same quarter of the previous
year. Increases in customer shipments and returns pushed distribution costs
higher for the quarter. Partially offsetting the increased distribution costs
were larger contributions from the Company's promotional activities.
Page 10 of 12
Interest and dividend income decreased to $198,000 in the second quarter from
$304,000 in the corresponding period of the previous year. This decrease was
primarily the result of lower investment balances and lower yields due to a
greater proportion of tax exempt investments in the current fiscal quarter.
B. LIQUIDITY AND SOURCES OF CAPITAL
For the six months ended September 28, 1996, $7,386,000 of net cash was used in
operating activities. Net cash used in operating activities in the same period
of the prior year was $3,939,000. The Company's cash and investments decreased
by $2,490,000 compared to September 30, 1995 primarily due to an increase in
accounts receivable. Trade accounts receivable increased $13,574,000 compared
to one year ago primarily due to increased sales during the month of September,
delays in the receipt of certain customer payments and an increase in disputed
items. Trade accounts receivable increased $19,446,000 compared to March 31,
1996 due to the reasons noted above. Inventories were approximately equal to
last September's level and increased $37,744,000 compared to March 31, 1996 due
to the expected seasonal increases in third quarter sales. The increase in
inventories was more than offset by increases in accounts payable of $6,045,000
and $47,722,000 compared to September 28, 1996 and March 31, 1996, respectively.
The funds used in operating activities were financed primarily by a reduction in
cash and investment balances of $8,669,000 in the six month period ended
September 28, 1996.
Working capital was $48,524,000 as of September 28, 1996 which increased from
the September 30, 1995 level of $44,608,000 and from the March 31, 1996 balance
of $47,622,000. The increase compared to March 31, 1996 and September 30, 1995
was primarily a result of increases in net operating current assets.
The Company had available at September 28, 1996 an unsecured bank line of credit
with a maximum borrowing limit of $10 million. The interest rate is at prime
(8.25 percent at September 30, 1996). The line of credit expires July 31, 1998.
As of September 28, 1996 and September 30, 1995, there were no outstanding
borrowings on the line of credit.
The Company believes that its existing working capital, cash flows from
operations, trade credit traditionally available from its vendors and its $10
million line of credit will be sufficient to finance its current and anticipated
level of operations.
Page 11 of 12
PART II. OTHER INFORMATION
ITEMS 1-4. NOT APPLICABLE
ITEM 5. OTHER INFORMATION
On July 25, 1996, the Company announced that effective January 1, 1997, Michael
M. Nicita will assume the position of Chief Executive Officer in addition to his
current responsibilities as President of the Company. Charles C. Tillinghast,
III, who has served as Chief Executive Officer, will continue as Chairman of the
Company after January 1, 1997.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
11.0 Statement re Computation of Per Share Earnings
27.0 Financial Data Schedule
(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)
November 12, 1996 By: /s/ Charles C. Tillinghast, III
Date Charles C. Tillinghast, III
Chief Executive Officer, Chairman
of the Board (Principal Executive Officer)
November 12, 1996 By: /s/ Jonathan S. Fish
Date Jonathan S. Fish
Chief Financial and Accounting Officer,
Executive Vice President - Finance
(Principal Financial and Accounting Officer)
Page 12 of 12
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 SIX MONTHS ENDED
SEPT 28, SEPT 30, SEPT 28, SEPT 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
NET INCOME $1,699 $1,765 $2,926 $2,519
WEIGHTED AVERAGE COMMON
AND COMMON SHARE
EQUIVALENTS:
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING 5,471 5,410 5,469 5,404
WEIGHTED AVERAGE COMMON
SHARE EQUIVALENTS-
DILUTIVE STOCK OPTIONS:
PRIMARY 244 158 267 141
FULLY DILUTED 226 181 227 186
TOTAL WEIGHTED AVERAGE
COMMON AND COMMON
EQUIVALENT SHARES:
PRIMARY 5,715 5,568 5,736 5,545
FULLY DILUTED 5,697 5,591 5,696 5,590
NET INCOME PER COMMON
COMMON SHARE EQUIVALENT:
PRIMARY $ .30 $ .32 $ .51 $ .45
FULLY DILUTED $ .30 $ .32 $ .51 $ .45
</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 FINANCIAL STATEMENTS OF INCOME AND CONSOLIDATED
BALANCE SHEETS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-END> SEP-28-1996
<CASH> 6694
<SECURITIES> 4963
<RECEIVABLES> 77146
<ALLOWANCES> 4878
<INVENTORY> 110041
<CURRENT-ASSETS> 207880
<PP&E> 8909
<DEPRECIATION> 5162
<TOTAL-ASSETS> 213258
<CURRENT-LIABILITIES> 159356
<BONDS> 0
0
0
<COMMON> 6
<OTHER-SE> 53896
<TOTAL-LIABILITY-AND-EQUITY> 213258
<SALES> 185736
<TOTAL-REVENUES> 185736
<CGS> 167370
<TOTAL-COSTS> 167370
<OTHER-EXPENSES> 14132
<LOSS-PROVISION> 534
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 4666
<INCOME-TAX> 1740
<INCOME-CONTINUING> 2926
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2926
<EPS-PRIMARY> .51
<EPS-DILUTED> .51
</TABLE>
