United States
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10 - Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF
THE SECURITIES EXCHANGE ACTS OF 1934
----------
For the Quarter Ended Commission file number
September 30, 1999 0-12361
RICHTON INTERNATIONAL CORPORATION
Exact name of registrant as specified in its charter
DELAWARE 05-0122205
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) identification No.)
767 5th Avenue, New York, New York 10153
(Address of principal executive offices) (Zip Code)
Registrant's telephone number (212) 751-1445
Securities registered under Name of Exchange on which Registered:
Section 12 (b) of the Exchange Act:
Common Stock, par value $.10 American Stock Exchange
Securities registered under Section 12(g) of the Exchange Act:
Series A Preferred Stock, par value $100. Purchase Right
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 Registrant's classes of
common stock, as of the latest practicable date.
Common Stock, par value $.10, 3,021,000 shares at November 2, 1999
<PAGE>
Richton International Corporation
FORM 10-Q
INDEX
- --------------------------------------------------------------------------------
PAGE
PART I FINANCIAL INFORMATION
Item 1. - Financial Statements:
Consolidated Statements of Income
for the three and nine months ended September
30, 1999 and September 30, 1998 (unaudited) 3
Consolidated Balance Sheets at September
30,1999 (unaudited) and December 31, 1998 4
Consolidated Statements of Cash Flows for
the nine months ended September 30, 1999 and
September 30, 1998 (unaudited) 5
Notes to Consolidated Financial
Statements (unaudited) 6
Item 2. - Management's Discussion and
Analysis of Financial Condition
and Results of Operations 8
PART II OTHER INFORMATION - None
2
<PAGE>
<TABLE>
<CAPTION>
RICHTON INTERNATIONAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
Three Months Ended Nine Months Ended
------------------ -----------------
September 30,
-------------
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net Sales $ 65,748,000 $ 48,241,000 $170,315,000 $115,470,000
Cost of Sales 46,391,000 34,722,000 121,084,000 83,537,000
------------ ------------ ------------ ------------
Gross Profit 19,357,000 13,519,000 49,231,000 31,933,000
Selling, General & Administrative
Expenses 13,132,000 9,996,000 36,846,000 24,746,000
------------ ------------ ------------ ------------
Income from Operations 6,225,000 3,523,000 12,385,000 7,187,000
Interest Income 291,000 139,000 733,000 454,000
Interest Expense 938,000 753,000 2,435,000 1,709,000
------------ ------------ ------------ ------------
Income before provision for
Income Taxes 5,578,000 2,909,000 10,683,000 5,932,000
Provision for Income Tax 2,160,000 1,162,000 4,133,000 2,368,000
------------ ------------ ------------ ------------
Net Income $ 3,418,000 $ 1,747,000 $ 6,550,000 $ 3,564,000
============ ============ ============ ============
Net Income Per Common Share
Basic $ 1.13 $ 0.61 $ 2.17 $ 1.22
============ ============ =========== ============
Diluted $ 1.00 $ 0.53 $ 1.95 $ 1.06
============ ============ =========== ============
Weighted Average Common and
Common Equivalent Shares
Outstanding
Basic 3,021,000 2,854,000 3,021,000 2,922,000
============ ============ ============= ============
Diluted 3,434,000 3,326,000 3,357,000 3,356,000
============ ============ ============= ============
</TABLE>
The accompanying notes are an integral part of these consolidated statements.
3
<PAGE>
<TABLE>
<CAPTION>
RICHTON INTERNATIONAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
September 30 December 31
1999 1998
---- ----
Assets (Unaudited)
------
<S> <C> <C>
Current Assets:
Cash and Cash Equivalents $ 84,000 $ 995,000
Notes and Accounts Receivable, net of
allowance for doubtful accounts of $1,550,000
in 1999 and $1,150,000 in 1998 48,203,000 24,486,000
Inventories, Net 29,396,000 20,419,000
Prepaid Expenses and Other Current Assets 1,599,000 736,000
Deferred Taxes 844,000 844,000
------------ ------------
Total Current Assets $ 80,126,000 $ 47,480,000
------------ ------------
Property, Plant and Equipment 5,180,000 3,566,000
Less: Allowance for Depreciation and Amortization (2,411,000) (1,411,000)
------------ ------------
2,769,000 2,155,000
------------ ------------
Other Assets:
Deferred Taxes 1,209,000 1,001,000
Goodwill 6,526,000 4,515,000
Other Intangibles 2,474,000 2,342,000
Other 186,000 --
------------ ------------
TOTAL ASSETS $ 93,290,000 $ 57,493,000
============ ============
Liabilities & Stockholders' Equity
Current Liabilities:
Current Portion of Long Term Debt $ 3,928,000 $ 1,832,000
Notes Payable 40,316,000 25,960,000
Accounts Payable, Trade 13,962,000 5,999,000
Accrued Liabilities 7,639,000 4,769,000
Deferred Income 3,366,000 2,385,000
------------ ------------
Total Current Liabilities 69,211,000 40,945,000
------------ ------------
Long Term Debt, Net of Current Maturities 5,330,000 4,639.000
------------ ------------
Stockholders' Equity
Preferred Stock, $1.00 par value;
authorized 500,000 shares; none issued -- --
Common Stock, $.10 par value; authorized
6,000,000 shares; issued 3,266,692 shares at
Sept. 30, 1999 and 3,216,692 shares at
December 31, 1998 327,000 322,000
Additional Paid-in Capital 18,118,000 18,013,000
Retained Earnings 1,854,000 (4,696,000)
Treasury Stock (1,430,000)
(1,430,000)
Translation Adjustment -- (130,000)
Deferred Stock Compensation (120,000) (170,000)
------------ ------------
Total Stockholders' Equity 18,749,000 11,909,000
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 93,290,000 $ 57,493,000
============ ============
</TABLE>
The accompanying notes are an integral part of these consolidated balance
sheets.
4
<PAGE>
<TABLE>
<CAPTION>
RICHTON INTERNATIONAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Nine Months Ended September 30,
1999 1998
------ ----
<S> <C> <C>
OPERATING ACTIVITIES
Net Income $ 6,550,000 $ 3,564,000
Reconciliation of net income to net cash used in
Operating activities:
Depreciation and Amortization 390,000 221,000
Amortization of Intangibles 890,000 800,000
Deferred Taxes (208,000) 319,000
Loss on Disposal of Fixed Assets -- 425,000
Changes in Operating Assets and Liabilities:
Deferred Income 70,000 2,000
Other Working Capital Items, Assets (29,285,000) (21,140,000)
Other Working Capital Items, Liabilities 9,551,000 6,841,000
Other Assets 169,000 (161,000)
Net Cash used in
Operating Activities (11,875,000) (9,129,000)
INVESTING ACTIVITIES
Capital Expenditures (756,000) (342,000)
Cash Paid for Acquisitions, Net of Cash Acquired (3,766,000) (3,973,000)
------------ ------------
Net Cash used in Investing Activities (4,522,000) (4,315,000)
FINANCING ACTIVITIES
Proceeds from Long-Term Debt 3,200,000 --
Repayment of Subordinated Debt (1,046,000) (616,000)
Exercise of Stock Options 110,000 47,000
Repurchase of Shares -- (1,015,000)
Proceeds from Line of Credit 13,635,000 15,277,000
Repayment of Long-Term Debt (550,000) (175,000)
------------ ------------
Net Cash Provided by Financing Activities 15,349,000 13,518,000
Effect of Exchange Rate on Cash Balances 137,000 (3,000)
------------ ------------
Increase (Decrease) in Cash and Cash Equivalents (911,000) 71,000
Cash and Cash Equivalents, Beginning of Period 995,000 474,000
------------ ------------
Cash and Cash Equivalents, End of Period $ 84,000 $ 545,000
============ ============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Cash Paid for Interest $ 2,599,000 $ 1.255.000
============ ============
Cash Paid for Income Taxes $ 3,067,000 $ 1,769,000
============ ============
</TABLE>
The accompanying notes are an integral part of these consolidated statements.
5
<PAGE>
RICHTON INTERNATIONAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial statements and related notes included herein have
been prepared by Richton International Corporation (the "Company") without
audit, pursuant to the requirements of Form 10-Q. All adjustments, including
those of a normal recurring nature which are, in the opinion of management,
necessary to fairly state the results for the interim periods presented have
been made. Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such requirements.
Although the Company believes that the disclosures are adequate to make the
information presented not misleading, it is suggested that these consolidated
financial statements and related notes be read in conjunction with the financial
statements and notes thereto included in the Company's Annual Report on Form
10-K for the year ended December 31, 1998. The results for any interim period
should not be construed as representative for the year taken as a whole due to,
among other things, the seasonality of the Company's business.
This report may contain forward-looking statements. The matters expressed in
such statements are subject to numerous uncertainties and risks including but
not limited to general economic and climatic conditions in the markets in which
the Company and its subsidiaries operate, fluctuation in demand for the products
and services offered by these subsidiaries, and current expectations of the
Company or its management. Should one or more of those uncertainties or risks
materialize, or should the underlying assumptions prove incorrect, actual
results may vary materially from those described as forward-looking statements.
The Company does not intend to update those forward-looking statements.
1. Description of Business:
Richton International Corporation ("Richton") is a holding company with three
principal subsidiaries, Century Supply Corp. ("Century"), CBE Technologies Inc
("CBE"), and Creative Business Concepts, Inc ("CBC") collectively the "Company".
Century is a leading full-service wholesale distributor of sprinkler irrigation
systems, outdoor lighting and decorative fountain equipment. Branches serve
customers in 33 states mostly in the eastern United States and in Ontario,
Canada. Irrigation products have historically been sold by manufacturers
primarily through wholesale distributors. Century is a major distributor in the
United States for all of the leading original equipment manufacturers (OEM) in
the irrigation systems field. CBE is headquartered in Boston, Massachusetts with
offices located in New York, and Portland, Maine. CBC is located in Irvine,
California. CBE and CBC are value added resellers of network and computer
equipment and systems integrators providing network consulting, design, and
installation; network management and related support; technical services
outsourcing; comprehensive hardware maintenance; and equipment sales. CBE and
CBC's technical certifications include; Novell Platinum reseller, Microsoft
Channel partner, Banyan Enterprise/Network dealer, Novell authorized Training
Center, and a Novell Authorized Service Center.
6
<PAGE>
2.Acquisitions:
During 1998, Century acquired five distributor operations in four different
markets: Michigan, New York (Long Island), Oregon, and Kentucky for an aggregate
purchase price of $3.6 million. The acquisitions were made in cash and notes and
were financed by its working capital line. As a result of these acquisitions,
the Company recorded $1.5 million in Goodwill and Intangible assets.
On February 25, 1999, the Company acquired 100% of the common stock of CBC, a
leading computer networking integrator, for cash of $2.2 million, plus a future
payment based upon profit improvement recorded during 1999 and 2000 over a base
period. The Costa Mesa office of Richton's CBE subsidiary has been consolidated
with CBC. The acquisition will be accounted for as a purchase. The company
recorded goodwill of approximately $1.7 million on this acquisition.
On October 27, 1999, the company acquired the operating assets and certain of
the liabilities and business of Corporate Access, Inc. ("CAI") of Andover,
Massachusetts, a value-added reseller ("VAR"), of computer and networking
equipment for $1.4 million cash. The Company expects to record goodwill of
approximately $1.0 million on this acquisition which will be accounted for as a
purchase.
3. Statement of Cash Flows:
The components of other working capital items included in the Consolidated
Statements of Cash Flows are as follows:
Nine Months Ended September 30,
1999 1998
---- ----
Receivables $(20,701,000) $(16,945,000)
Inventories (7,895,000) (3,903,000)
Prepaid Expenses (689,000) (292,000)
------------ ------------
Increase in Working Capital Items, Assets $(29,285,000) $(21,140,000)
============ ============
Accounts Payable $ 7,214,000 $ 4,364,000
Accrued Liabilities 2,337,000 2,477,000
------------ ------------
Increase Working Capital Items, Liabilities $ 9,551,000 $ 6,841,000
============ ============
7
<PAGE>
4. Financing Arrangements:
In May, 1999 the Company negotiated a new five-year revolving line of credit and
term loan agreement (the "Agreement") with a syndicate of four banks lead by PNC
Business Credit amounting to $67.5 million. The Agreement provides for a $60
million revolving line of credit (increased from $40 million) and for $7.5
million senior term debt - an increase of $3.2 million from the former term loan
balance. The additional proceeds from the term loan were used to finance the
acquisition of CBC.(see note 2), and to restructure the CBE working capital
line. The revolving line of credit carries a interest rate based upon LIBOR plus
250 basis points if the Company's leverage ratio is in excess of 2.5 times
trailing twelve month EBITDA or LIBOR plus 225 basis points if the leverage
ratio is below that level. (the Company has the option to borrow at prime.) At
September 30, 1999, essentially all the borrowings under the line of credit were
at 8.39% (LIBOR plus 250). The outstanding balance on the line of credit at
September 30, 1999 and December 31, 1998 was $39.5 million and $26.0 million,
respectively. This financing agreement contains various covenants which among
other things require the Company to maintain certain financial ratios.
Concurrent with the October, 1999 acquisition of CAI (see note 2), CBE entered
into a financing agreement with Deutsche Financial Services ("DFS"). DFS will
provide floor planning/financing facilities to CBE and more favorable purchasing
arrangements in exchange for an Irrevocable Standby Letter of Credit from PNC in
the amount of $1.5 million. At September 30, 1999, CBC owed DFS $1.1 million
under a similar arrangement. CBC's line of credit with DFS is supported by an
unconditional guarantee from the Company.
5. Long-Term Debt:
<TABLE>
<CAPTION>
The Company has the following long-term debt as of: Sept. 30 Dec. 31,
1999 1998
---- ----
<S> <C> <C>
Term note payable to a bank, secured by accounts receivable, inventory,
furniture and equipment, interest at LIBOR plus 300 basis points or prime plus
50 basis points (8.75% as of September 30, 1999), payable in monthly
Installments of $125,000, final payment due June 30, 2004 (A) $ 7,125,000 $ 4,475,000
Other, including $951,000 in 1999, due former owners whose assets
and businesses were acquired in 1999. 2,133,000 1,996,000
----------- ----------
9,278,000 6,471,000
Less: Current Portion (3,928,000) (1,832,000)
----------- -----------
$5,330,000 $4,639,000
========== ==========
</TABLE>
(A):Based upon excess Cash Flow, as determined, an additional $1.0 million
maximum could be repaid each year.
8
<PAGE>
6. Net Income Per Common Share:
Net income per common share was calculated as follows:
<TABLE>
<CAPTION>
Net Income
Income Shares Per Share
------ ------ ---------
For the Nine Months Ended Sept. 30, 1998
-----------------------------------------
<S> <C> <C> <C>
Basic $3,564,000 2,922,000 $1.22
Effect of dilutive options and warrants -- 434,000 --
Diluted $3,564,000 3,356,000 $1.06
<CAPTION>
Net Income
Income Shares Per Share
------ ------ ---------
For the Three Months Ended Sept. 30, 1998
-----------------------------------------
<S> <C> <C> <C>
Basic $1,747,000 2,854,000 $ .61
Effect of dilutive options and warrants -- 472,000 --
Diluted $1,747,000 3,326,000 $ .53
<CAPTION>
Net Income
Income Shares Per Share
------ ------ ---------
For the Nine Months Ended Sept. 30, 1999
-----------------------------------------
<S> <C> <C> <C>
Basic $6,550,000 3,021,000 $2.17
Effect of dilutive options and warrants -- 336,000 --
Diluted $6,550,000 3,357,000 $1.95
<CAPTION>
Net Income
Income Shares Per Share
------ ------ ---------
For the Three Months Ended Sept. 30, 1999
-----------------------------------------
<S> <C> <C> <C>
Basic $3,418,000 3,021,000 $1.13
Effect of dilutive options and warrants -- 413,000 --
Diluted $3,418,000 3,434,000 $1.00
</TABLE>
Basic net income per common share was computed by dividing net income by the
weighted average number of shares of common stock outstanding during the
periods. Diluted net income per common share included the effect of options and
warrants computed under the treasury stock method.
6. Subsequent Event:
In October, 1999 the Company acquired 30,000 shares of its Common Stock for
$495,000.
9
<PAGE>
Item 2
Management's Discussion and Analysis of Financial Condition
and Results of Operations.
Results of Operations - for the Three and Nine Months ended September 30, 1999.
- ---------------------
Sales and net income for the three months ended September 30, 1999 were $65.7
million and $3.4 million or $1.00 per share - diluted, respectively. For the
three months ended September 30, 1998 sales and net income were $48.2 million
and $1.7 million, or $.53 per share,-diluted respectively. Sales and net income
for the nine months ended September 30, 1999 were $170.3 million and $6.6
million, or $1.95 per share - diluted, respectively. For the nine months ended
September 30, 1998 sales and net income were $115.5 million and $3.6 million or
$1.06 per share - diluted, respectively.
Gross profit for the three and nine months ended September 30, 1999 were $19.4
million and $49.2 million, respectively. For the three and nine months ended
September 30, 1998 gross profit was $ 13.5 million and $31.9 million,
respectively. The higher gross profit as a percentage of sales in both the three
and nine months period when compared to the corresponding periods in 1998 is due
principally to a more favorable geographic and product and service mix.
Century's business has been positively affected by a vibrant economy, and
favorable weather conditions in the areas it serves. There are now more than one
hundred and twenty Century branches and newly opened locations have become
profitable. CBE has experienced improved sales and operations, as well as a
better mix of service activities during 1999 as compared to the same periods in
1998. A large share of Richton's sales are seasonal, and one quarter's results
cannot be used as a measure for the other quarters.
Selling, general and administrative expenses for the three and nine months ended
September 30, 1999 were $13.1 million and $36.8 million, respectively. For the
three and nine months ended September 30, 1998 selling general and
administrative expenses were $10.0 million and $24.7 million respectively. The
higher level of expenses in the current year is due to the higher number of
operating branches and the inclusion of CBC which was acquired effective January
1, 1999.
Interest, expense, net, for the three and nine months ended September 30, 1999
were $.6 million and $1.7 million, respectively. For the three and nine months
ended September 30, 1998 interest expense, net, was $.6 million and $1.3
million, respectively. The higher interest cost is principally due to the higher
levels of working capital loans required relating to the higher level of sales
in the current periods.
The provision for Federal, State and foreign income taxes as a percentage of
pre-tax income is approximately the same as last year.
As a result of the foregoing, the net income for the three and nine months
period ended September 30, 1999 was $3.4 million or $1.00 per share-diluted and
$6.6 million or $1.95 per share-diluted, respectively. This compares favorably
with the three and nine months net income for the same periods last year of $1.7
million or $.53 per share-diluted and $3.6 million or $1.06 per share-diluted,
respectively.
10
<PAGE>
Financial Condition:
- --------------------
The Company's principal source of funding is through its working capital line of
credit. As was noted above, (see note # 4), the Company, in May of this year,
completed a new five year borrowing agreement with a syndication of four banks
lead by PNC Business Credit that increased the maximum capacity of it's line of
credit to $60 million (from $40 million) and increased the term loan by $3.2
million to $7.5 million. The increase in the term loan was used to Acquire CBC
(see note 2) and to reduce CBE's reliance on line of credit financing. This
financing agreement will provide the Company with greater flexibility as the
Company continues to grow.
For the nine months ended September 30, 1999, the net cash used in operations
was $11.9 million. This is an increase of $2.7 million over the same nine month
period in 1998. This increase is due to higher working capital associated with
nearly a 50% greater sales in 1999 over 1998. Historically, during the last
quarter of the year, receivable balances are reduced and inventory levels are
decreased, thereby providing cash that may be used to reduce short-term
borrowings.
For the nine months ended September 30, 1999 the Company invested $4.5 million
to acquire new businesses, including the previously noted acquisition of CBC,
and to make capital improvements. During the same period last year the Company
invested $4.3 million to acquire five irrigation wholesalers and make capital
improvements.
The Company's source of funding for it's operating needs, during the first nine
months of 1999 and 1998, was from an increase in it's line of credit of $13.6
million and $15.3 million, respectively. These funds also partially funded the
Company's investment needs. The balance of the investment requirements in 1999
were funded by an increase in the term loan. During the first nine months of
1998 all of the operating and investment needs were funded by an increase in the
line of credit.
In October, 1999 the Company acquired 30,000 shares of its Common Stock for
$495,000.
Though the Company has continued to generate sufficient cash to pay its term and
subordinated debt as it becomes due, and make acquisitions for its growth, there
is no assurance, given the high degree of leverage, the seasonality of its
principal business and the related higher fixed charges incumbent with more
branches, that it can continue to do so in the future.
Year 2000
- ---------
The year 2000 issue exists because many computer systems and applications,
including those imbedded in equipment and facilities, use two digit rather than
four digit date fields to designate an applicable year. As a result, the systems
and applications may not properly recognize the year 2000 or process data which
includes it, potentially causing data miscalculations or inaccuracies or
operational malfunctions of failures.
Each of the Company's operating subsidiaries uses systems software acquired from
an established software vendor. In each case the vendor has indicated that the
software being supplied is year 2000 compliant. In the case of Century, its
operating computer environment uses a proxy for a date rather than the actual
date - thus there is no double zero situation to deal with that would be subject
to misinterpretations or miscalculation.
11
<PAGE>
CBE has received a "Y2K Compliance Certificate" from American Micro Innovations,
Inc. the vendor of its general ledger systems and its supporting modules.
Despite the assurance, the Company tested these systems during the 2nd quarter
of 1999 and has determined that the systems are 2000 compliant. CBE has also
embarked on a program of replacing those personal computers that are not Year
2000 complaint. As of September 30, 1999 this process is more than 75% complete.
Both Century and CBE communicate with their suppliers through Electronic Data
Interchange ("EDI"). Century, however, does not receive its third party data
directly into its operating systems but rather it converts such data before it
is internally processed, avoiding the opportunity for contamination of its
system. It has, however, implemented a testing process with it's major vendors
that has to date been satisfactory. Century expects to complete this process by
the end of the third quarter update. CBE recently tested their EDI transmission
with several of their largest vendors and found the systems compliant. Century,
CBE and CBC are continuing to work with their suppliers, however should any
supplier or vendor be unable to achieve year 2000 compliance by September 30,
1999 update, the Company intends to switch to other suppliers that are able to
provide year 2000 compliance. The Company does not expect to incur any material
additional cost to achieve year 2000 compliance.
The Company's ability, however, to be completely compliant is of course
dependent upon the ability of its vendors, suppliers, bankers and other
fiduciaries to also be compliant. In addition, the Company can not guarantee
that third parties and telephone and other interchange carriers, will convert
their critical systems and processes in a timely manner. Failure or delay by any
of these parties could affect the Company's businesses. The Company has
established a supplier compliance program to minimize such risks.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
RICHTON INTERNATIONAL CORPORATION
(Registrant)
/s/ Cornelius F. Griffin
------------------------------------
Cornelius F. Griffin
Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)
DATE: November 10, 1999
New York, New York
12
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-Mos
<FISCAL-YEAR-END> Sep-30-1999
<PERIOD-START> Jan-1-1999
<PERIOD-END> Sep-30-1999
<CASH> 84
<SECURITIES> 0
<RECEIVABLES> 49,753
<ALLOWANCES> 1,550
<INVENTORY> 29,396
<CURRENT-ASSETS> 80,126
<PP&E> 5,180
<DEPRECIATION> 2,411
<TOTAL-ASSETS> 93,290
<CURRENT-LIABILITIES> 69,211
<BONDS> 5,330
0
0
<COMMON> 327
<OTHER-SE> 18,422
<TOTAL-LIABILITY-AND-EQUITY> 93,290
<SALES> 170,315
<TOTAL-REVENUES> 170,315
<CGS> 121,084
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 36,846
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,702
<INCOME-PRETAX> 10,683
<INCOME-TAX> 4,133
<INCOME-CONTINUING> 6,550
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6,550
<EPS-BASIC> 2.17
<EPS-DILUTED> 1.95
</TABLE>
