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 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
January 31, 1997 was 5,491,699 .
ADVANCED MARKETING SERVICES, INC.
Quarterly Report on Form 10-Q
December 28, 1996
INDEX
Page
Number
PART I. FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
Consolidated Balance Sheets
December 28, 1996 (Unaudited), March 31, 1996 and
December 30, 1995 (Unaudited) 3 - 4
Consolidated Statements of Income (Unaudited)
Three months and nine months ended December 28, 1996 and
December 30, 1995 5
Consolidated Statements of Cash Flows (Unaudited)
Nine months ended December 28, 1996 and
December 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
DECEMBER 28, MARCH 31, DECEMBER 30,
1996 1996 1995
(UNAUDITED) (UNAUDITED)
CURRENT ASSETS: (IN THOUSANDS EXCEPT SHARE DATA)
<S> <C> <C> <C>
CASH AND CASH EQUIVALENTS $ 9,310 $ 8,706 $ 10,172
INVESTMENTS, AVAILABLE-FOR-SALE 9,318 12,532 5,684
ACCOUNTS RECEIVABLE - TRADE, NET OF
ALLOWANCES FOR UNCOLLECTIBLE ACCOUNTS
AND SALES RETURNS OF $5,129,000 AT
DECEMBER 28, 1996, $4,173,000 AT MARCH
31, 1996 AND $4,800,000 AT DECEMBER 30,
1995 66,230 57,700 65,924
VENDOR AND OTHER RECEIVABLES 3,159 2,213 1,064
INVENTORIES, NET 85,924 72,297 89,013
DEFERRED INCOME TAXES 5,840 5,279 3,776
PREPAID EXPENSES 1,200 575 814
TOTAL CURRENT ASSETS 180,981 159,302 176,447
PROPERTY AND EQUIPMENT, AT COST 9,440 7,837 6,644
LESS - ACCUMULATED DEPRECIATION AND
AMORTIZATION 5,457 4,769 4,541
NET PROPERTY AND EQUIPMENT 3,983 3,068 2,103
INVESTMENTS, AVAILABLE-FOR-SALE 1,974 -- --
OTHER ASSETS 588 281 254
TOTAL ASSETS $187,526 $162,651 $178,804
</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
DECEMBER 28, MARCH 31, DECEMBER 30,
1996 1996 1995
(UNAUDITED) (UNAUDITED)
CURRENT LIABILITIES: (IN THOUSANDS EXCEPT SHARE DATA)
<S> <C> <C> <C>
ACCOUNTS PAYABLE $123,109 $104,626 $ 122,372
ACCRUED LIABILITIES 5,869 5,309 4,794
INCOME TAXES PAYABLE 1,579 1,745 1,339
TOTAL CURRENT LIABILITIES 130,557 111,680 128,505
STOCKHOLDERS' EQUITY:
COMMON STOCK, $.001 PAR VALUE,
AUTHORIZED 20,000,000 SHARES,
ISSUED 6,199,000 SHARES AT
DECEMBER 28, 1996, 6,174,000
SHARES AT MARCH 31, 1996 AND
6,156,000 SHARES AT DECEMBER
30, 1995 6 6 6
ADDITIONAL PAID IN CAPITAL 26,146 25,968 25,845
RETAINED EARNINGS 32,905 27,113 26,435
UNREALIZED GAIN (LOSS) ON INVESTMENTS 5 8 (24)
FOREIGN CURRENCY TRANSLATION ADJUSTMENT (63) (94) 67
LESS: TREASURY STOCK, 708,000 SHARES,
AT COST (2,030) (2,030) (2,030)
TOTAL STOCKHOLDERS' EQUITY 56,969 50,971 50,299
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $187,526 $162,651 $178,804
</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 NINE MONTHS ENDED
DEC 28, DEC 30, DEC 28, DEC 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
NET SALES $112,965 $121,396 $ 298,701 $287,754
COST OF GOOD SOLD 101,508 109,014 268,878 259,257
GROSS PROFIT 11,457 12,382 29,823 28,497
DISTRIBUTION AND ADMINISTRATIVE
EXPENSES 7,122 7,867 21,254 20,504
INCOME FROM OPERATIONS 4,335 4,515 8,569 7,993
INTEREST EXPENSE (4) -- (13) --
INTEREST AND DIVIDEND INCOME 213 397 654 986
INCOME BEFORE PROVISION FOR
INCOME TAXES 4,544 4,912 9,210 8,979
PROVISION FOR INCOME TAXES 1,678 2,008 3,418 3,556
NET INCOME $ 2,866 $ 2,904 $ 5,792 $ 5,423
NET INCOME PER COMMON AND
COMMON SHARE EQUIVALENT:
PRIMARY $ .50 $ .52 $ 1.01 $ .97
FULLY DILUTED $ .50 $ .51 $ 1.01 $ .96
WEIGHTED AVERAGE NUMBER OF
SHARES:
PRIMARY 5,692 5,637 5,724 5,582
FULLY DILUTED 5,697 5,671 5,724 5,664
</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>>
NINE MONTHS ENDED
DECEMBER 28, DECEMBER 30,
1996 1995
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
NET INCOME $ 5,792 $ 5,423
ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH
PROVIDED BY (USED IN) OPERATING ACTIVITIES:
DEPRECIATION AND AMORTIZATION 959 662
PROVISION FOR UNCOLLECTIBLE ACCOUNTS AND SALES RETURNS 1,352 2,538
PROVISION FOR MARKDOWN OF INVENTORY 2,163 3,246
DEFERRED INCOME TAXES (561) (665)
CHANGES IN ASSETS AND LIABILITIES:
INCREASE IN ACCOUNTS RECEIVABLE - TRADE (10,019) (31,442)
(INCREASE) DECREASE IN VENDOR AND OTHER RECEIVABLES (945) 593
INCREASE IN INVENTORIES (16,016) (22,863)
INCREASE ACCOUNTS PAYABLE 18,775 37,260
INCREASE IN ACCRUED LIABILITIES 560 1,842
INCREASE (DECREASE) IN INCOME TAXES PAYABLE (172) 737
INCREASE IN PREPAID EXPENSES AND OTHER ASSETS (932) (573)
NET CASH PROVIDED BY (USED IN) OPERATING
ACTIVITIES 956 (3,242)
CASH FLOWS FROM INVESTING ACTIVITIES:
PURCHASE/DISPOSAL OF PROPERTY AND EQUIPMENT, NET (1,875) (450)
PURCHASE OF INVESTMENTS, AVAILABLE-FOR-SALE (55,110) (19,535)
SALE AND REDEMPTION OF INVESTMENTS, AVAILABLE-FOR-SALE 56,347 24,038
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES (638) 4,053
CASH FLOWS FROM FINANCING ACTIVITIES:
PROCEEDS FROM EXERCISE OF OPTIONS AND RELATED TAX
BENEFITS 178 326
NET CASH PROVIDED BY FINANCING ACTIVITIES 178 326
EFFECT OF EXCHANGE RATE CHANGES ON CASH 108 --
INCREASE IN CASH AND CASH EQUIVALENTS 604 1,137
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 8,706 9,035
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 9,310 $ 10,172
</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 nine
months ended December 28, 1996 and December 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 nine month periods ended December
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.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
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 market value of investments at December 28, 1996 and
December 30, 1995 are as follows (in thousands):
<TABLE>
<CAPTION>
December 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 $11,287 $ 10 $ 5 $11,292
</TABLE>
Page 7 of 12
<TABLE>
<CAPTION>
December 30, 1995
Amortized Unrealized Unrealized Estimated
Cost Gains Losses Fair Value
<S> <C> <C> <C> <C>
Mortgage-Backed Securities $ 2,205 $ - $ 28 $ 2,177
Debt Securities issued by States
of the U.S. and political
subdivisions of the States 3,503 4 - 3,507
$ 5,708 $ 4 $ 28 $ 5,684
</TABLE>
As of December 28, 1996, investments in debt securities issued by States of the
U.S. and political subdivisions of the States in the amount of $9,318,000 are
scheduled to mature within one year and $1,974,000 are scheduled to mature
within two years.
Proceeds from the sale of investments aggregated $1,038,000 for the quarter
ended December 28, 1996. There was a gain of $3,000 realized on these sales.
Proceeds from the sale of investments in the quarter ended December 30, 1995
totaled $5,400,000. There was no 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 gain on investments was
approximately $7,000 for the quarter ended December 28, 1996. The decrease in
unrealized loss on investments for the quarter ended December 30, 1995 was
approximately $4,000.
Proceeds from the sale of investments totaled $4,438,000 for the nine months
ended December 28, 1996. Proceeds from sales of investments during the same
period of the previous year totaled $13,450,000. There was a net loss of $400
and a net gain of $3,000 realized on these sales, respectively. The decrease in
unrealized gain on investments was approximately $3,000 for the nine months
ended December 28, 1996. In the nine months ended December 30, 1995, the
decrease in unrealized loss on investments was approximately $22,000.
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 $2,819,000 as of December 28, 1996, $2,173,000 as of
March 31, 1996 and $3,119,000 as of December 30, 1995 for the gross profit
effect of estimated future sales returns.
5. INVENTORIES
Inventories consist primarily of books and prerecorded audio 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 December 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 December 31, 1996). The line of credit expires July 31, 1998.
As of December 28, 1996, March 31, 1996 and December 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 nine months ended December 28, 1996 totaled $4,089,000.
Income taxes paid during the same period of the previous year totaled
$3,248,000.
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 516,390 shares of common stock
were outstanding as of December 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
Nine Month Periods Ended December 28, 1996 and December 30, 1995:
During the nine months ended December 28, 1996, the Company reported net income
of $5,792,000, or $1.01 per share, compared with net income of $5,423,000, or
$.96 per share, for the first nine months of the prior year.
Net sales for the first nine months of fiscal 1997 increased four percent to
$298,701,000 from $287,754,000 in the same period of the prior year. This
increase was due in part to improved comparable retail sales recorded by the
Company's warehouse club customers and additional business obtained from two of
the Company's major customers in the summer of 1995. The increase was offset,
in part, by continuing high rates of returns from customers as well as lower
than expected shipments to one of the Company's major customers in the fall of
1996. Net sales to this customer were adversely impacted as a result of the
customer's overall retail inventory levels exceeding budgeted levels during the
latter part of the Christmas season.
During the first nine months of fiscal 1997, gross profit increased five percent
to $29,823,000 from $28,497,000 in the first nine months of the previous fiscal
year. Gross profit as a percentage of net sales increased to 10 percent from
9.9 percent in the same period last year. This improvement resulted primarily
from higher income from publisher incentive programs and lower markdown
provisions offset, in part, by higher allowance and sales adjustments associated
with certain customer shipments.
Distribution and administrative expenses for the nine months ended December 28,
1996 increased four percent to $21,254,000 and represented 7.1 percent of net
sales compared to $20,504,000, or 7.1 percent of net sales, in the same period
of the previous year. During the nine months ended December 28, 1996,
distribution center labor increased as a percent of sales due primarily to
increased returns volume. In addition, administrative expenses increased as a
result of the addition of new personnel to support the Company's continued
activities to expand its customer base. These increases were offset, in part,
by greater contributions from the Company's promotional programs and cash
discounts on certain publisher payments. The Company believes that
opportunities for earning such cash discounts may be significantly reduced in
future periods due to changes in certain publishers' policies.
In the nine months ended December 28, 1996, the Company incurred interest
expense of $13,000 credited to participants of its deferred compensation plan.
The Company incurred no interest expense in the nine months ended December 30,
1995. Interest and dividend income decreased to $654,000 in the period from
$986,000 in the corresponding period of the previous year. This decrease was
the result of lower investment balances, as well as lower pre-tax yields due to
a greater proportion of tax exempt investments in the current fiscal period.
Lower investment balances were primarily due to accelerated payments to vendors
in order to take advantage of early payment discounts.
The Company's combined federal and state statutory tax rate is approximately 39
percent. The tax provision for the nine months ended December 28, 1996 was 37
percent compared to 40 percent in the same period of the previous fiscal year.
The decrease in the tax provision rate was applicable primarily to utilization
of a foreign tax loss carryforward in the current fiscal year and a larger
nondeductible provision for foreign exchange losses in the third quarter of the
previous fiscal year.
Three Month Periods Ended December 28, 1996 and December 30, 1995:
During the three months ended December 28, 1996, the Company reported net income
of $2,866,000, or $.50 per share, compared with net income of $2,904,000, or $
.51 per share for the same period of the previous year. Net sales for the
quarter declined seven percent to $112,965,000 compared to $121,396,000 in the
previous year's third quarter. The decline in net sales was primarily
attributable to continuing high rates of returns from customers as well as lower
than expected shipments to one of the Company's major customers. Net sales to
this customer were adversely impacted as a result of the customer's overall
retail inventory levels exceeding budgeted levels during the latter part of the
Christmas season.
Page 10 of 12
Distribution and administrative expenses for the quarter ended December 28, 1996
decreased 9 percent to $7,122,000 and represented 6.3 percent of net sales
compared to $7,867,000, or 6.5 percent of net sales, in the same quarter of the
previous year. Administrative expenses during the quarter were favorably
affected by higher cash discount income, lower provision for bad debt expense
and a modest foreign exchange translation gain.
In the three months ended December 28, 1996, the Company incurred $4,000 in
interest expense credited to participants of its deferred compensation plan.
The Company incurred no interest expense in the three months ended December 30,
1995. Interest and dividend income decreased to $213,000 in the period from
$397,000 in the corresponding period of the previous year. This increase was
the result of lower investment balances, as well as lower per-tax yields due to
a greater proportion of tax exempt investments in the current period. Lower
investment balances were primarily due to accelerated payments to vendors in
order to take advantage of early payment discounts.
The Company's combined federal and state statutory tax rate is approximately 39
percent. The tax provision for the quarter ended December 28, 1996 was 37
percent compared to 41 percent in the same quarter of the previous fiscal year.
The decrease in the tax provision rate was applicable primarily to utilization
of a foreign tax loss carryforward in the current fiscal quarter and a larger
nondeductible provision for foreign exchange losses in the third quarter of the
previous fiscal year.
B. LIQUIDITY AND SOURCES OF CAPITAL
For the nine months ended December 28, 1996, $956,000 of cash was provided by
operating activities. In the same period of the prior year, $3,242,000 of cash
was used in operating activities. The Company's cash and investments increased
by $4,746,000 compared to December 30, 1995 primarily due to a decrease in net
investment in inventory. While third quarter sales declined, trade accounts
receivable increased $306,000 compared to one year ago primarily as a result of
delays in the receipt of certain customer payments. Trade accounts receivable
increased $8,530,000 compared to March 31, 1996 due primarily to seasonally high
sales during the Christmas quarter. Inventories decreased $3,089,000 compared
to December 30, 1995 as a result of accelerated returns to publishers.
Inventories increased $13,627,000 compared to March 31, 1996 due to the expected
seasonal increase in sales. The increase in inventories was more than offset by
an increase in accounts payable $18,483,000 compared to March 31, 1996.
Working capital was $50,424,000 as of December 28, 1996 which increased from the
March 31, 1996 level of $47,622,000 and from the December 30, 1995 balance of
$47,942,000. These increases compared to March 31, 1996 and December 30, 1995
were primarily a result of increases in net operating current assets.
The Company had available at December 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 December 28, 1996). The line of credit expires July 31, 1998.
As of December 28, 1996, March 31, 1996 and December 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-NONE
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)
February 11, 1997 By: /s/ Michael M. Nicita
Date Michael M. Nicita
President and Chief Executive
Officer (Principal Executive
Officer)
February 11, 1997 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 NINE MONTHS ENDED
DEC 28 DEC 30, DEC 28, DEC 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
NET INCOME $2,866 $2,904 $5,792 $5,423
WEIGHTED AVERAGE COMMON AND COMMON
SHARE EQUIVALENTS:
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING 5,481 5,429 5,473 5,412
WEIGHTED AVERAGE COMMON SHARE
EQUIVALENTS-DILUTIVE STOCK
OPTIONS:
PRIMARY 211 208 251 170
FULLY DILUTED 216 242 251 252
TOTAL WEIGHTED AVERAGE COMMON AND
COMMON EQUIVALENT SHARES:
PRIMARY 5,692 5,637 5,724 5,582
FULLY DILUTED 5,697 5,671 5,724 5,664
NET INCOME PER COMMON AND
COMMON SHARE EQUIVALENT:
PRIMARY $ .50 $ .52 $ 1.01 $ .97
FULLY DILUTED $ .50 $ .51 $ 1.01 $ .96
</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 BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-END> DEC-28-1996
<CASH> 9310
<SECURITIES> 9318
<RECEIVABLES> 66230
<ALLOWANCES> 5129
<INVENTORY> 85924
<CURRENT-ASSETS> 18981
<PP&E> 9440
<DEPRECIATION> 5457
<TOTAL-ASSETS> 187526
<CURRENT-LIABILITIES> 130557
<BONDS> 0
0
0
<COMMON> 6
<OTHER-SE> 56969
<TOTAL-LIABILITY-AND-EQUITY> 187526
<SALES> 298701
<TOTAL-REVENUES> 298701
<CGS> 268878
<TOTAL-COSTS> 268878
<OTHER-EXPENSES> 21254
<LOSS-PROVISION> 843
<INTEREST-EXPENSE> 4
<INCOME-PRETAX> 4544
<INCOME-TAX> 1678
<INCOME-CONTINUING> 2866
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2866
<EPS-PRIMARY> .50
<EPS-DILUTED> .50
</TABLE>
