- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1998
OR
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ------------ TO -----------------
Commission file no. 1-10340
ALLOU HEALTH & BEAUTY CARE, INC.
- --------------------------------------------------------------------------------
(Exact name of Registrant as Specified in Its Charter)
Delaware 11-2953972
- --------------------------------------------------------------------------------
(State or Other Jurisdiction of
Incorporation or Organization) (IRS Employer Identification No.)
50 Emjay Boulevard, Brentwood, New York 11717
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices with Zip Code)
Registrant's Telephone Number Including Area Code: (516) 273-4000
- --------------------------------------------------------------------------------
Former Name, Former Address and Former Fiscal Year, if Changed Since Last
Report.
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
Indicate the number of shares of each of the issuer's classes of common
stock outstanding as of the latest practicable date:
Class November 10, 1998
- ------------------------------------------------- -----------------------
Class A Common Stock, par value $.001 per share......... 4,644,380
Class B Common Stock, par value $.001 per share......... 1,200,000
- --------------------------------------------------------------------------------
<PAGE>
ALLOU HEALTH & BEAUTY CARE, INC.
FORM 10-Q
FOR THE QUARTER ENDED SEPTEMBER 30, 1998
<TABLE>
<CAPTION>
<S> <C> <C>
PART I. FINANCIAL INFORMATION Page
----
Item 1. Financial Statements
Consolidated Balance Sheet as of September 30, 1998 (unaudited)
and March 31, 1998..............................................................................3
Consolidated Statement of Income & Retained Earnings (unaudited) for the Six Month
Periods Ended September 30, 1998 and 1997.......................................................4
Consolidated Statement of Income & Retained Earnings (unaudited) for the Three Month
Periods Ended September 30, 1998 and 1997.......................................................5
Consolidated Statement of Cash Flows for the Six Month Periods
Ended September 30, 1998 and 1997...............................................................6
Notes to Consolidated Financial Statements (unaudited) ...............................7
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.......................................................................8
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders............................................12
Item 6. Exhibits and Reports on Form 8-K...............................................................12
SIGNATURES.......................................................................................................13
</TABLE>
-2-
<PAGE>
ALLOU HEALTH & BEAUTY CARE, INC.
CONSOLIDATED BALANCE SHEET
(unaudited)
<TABLE>
<CAPTION>
September 30, March 31,
1998 1998
---------------------- ----------------------
ASSETS
Current Assets
- --------------
<S> <C> <C>
Cash.......................................................... $229,670 $46,675
Accounts Receivable (less allowance for doubtful
accounts of $1,041,474 at September 30, 1998 and
$371,475 at March 31, 1998)............................... 64,844,116 44,117,911
Inventories................................................... 132,495,941 112,530,659
Other Current Assets.......................................... 12,996,848 11,680,718
---------------------- ----------------------
Total Current Assets...................................... $210,735,039 $168,375,963
Property & Equipment, Less Accumulated Depreciation........... 3,863,350 3,613,223
Other Assets.................................................. 5,305,114 6,395,110
---------------------- ----------------------
TOTAL ASSETS........................................... $219,735,039 $178,384,296
====================== ======================
LIABILITIES & STOCKHOLDERS' EQUITY
Current Liabilities
- -------------------
Amounts Due Bank.............................................. $142,655,100 $110,596,761
Current Portion of Long Term Debt............................. 650,433 645,233
Accounts Payable and Accrued Expenses......................... 18,308,453 13,174,949
---------------------- ----------------------
Total Current Liabilities................................. $161,613,986 $124,416,943
---------------------- ----------------------
Long Term Liabilities
- ---------------------
Long Term Debt, Less Current Portion.......................... $4,049,237 $1,354,462
---------------------- ----------------------
Total Long Term Liabilities............................... 4,049,237 1,354,462
---------------------- ----------------------
TOTAL LIABILITIES...................................... $165,663,223 $125,771,405
---------------------- ----------------------
Commitments & Contingencies
Stockholders' Equity
- --------------------
Preferred Stock, $.001 par value, 1,000,000 shares authorized, none issued
and outstanding.
Class A Common Stock, $.001 par value; 10,000,000
shares authorized; 4,644,380 and 4,569,850 shares
issued and outstanding at September 30, 1998 and
March 31, 1998............................................ $4,644 $4,570
Class B Common Stock, $.001 par value; 2,200,000
shares authorized; 1,200,000 shares issued and
outstanding at September 30,1998 and March 31,
1998...................................................... 1,200 1,200
Additional Paid-In Capital.................................... 24,107,195 23,582,240
Retained Earnings............................................. 29,958,777 29,024,881
---------------------- ----------------------
TOTAL STOCKHOLDERS' EQUITY............................. 54,071,816 52,612,891
---------------------- ----------------------
TOTAL LIABILITIES & STOCKHOLDERS' $219,735,039 $178,384,296
EQUITY.............................................
====================== ======================
</TABLE>
The accompanying notes are an integral part of this financial statement
-3-
<PAGE>
ALLOU HEALTH & BEAUTY CARE, INC.
CONSOLIDATED STATEMENT OF INCOME AND RETAINED EARNINGS
<TABLE>
<CAPTION>
For the Six Months Ended
September 30,
1998 1997
---------------------- ----------------------
<S> <C> <C>
Revenues.......................................................... $158,301,989 $148,196,799
Costs of Revenues................................................. 136,591,341 129,200,439
---------------------- ----------------------
Gross Profit.............................................. 21,710,648 18,996,360
---------------------- ----------------------
Operating Expenses
- ------------------
Warehouse & Delivery.......................................... 4,919,453 4,466,186
Selling, General & Administrative............................. 10,242,562 6,981,725
---------------------- ----------------------
Total Expenses............................................ 15,162,015 11,447,911
---------------------- ----------------------
Income From Operations.................................... 6,548,633 7,548,449
---------------------- ----------------------
Other Charges (Credits)
- -----------------------
Interest...................................................... 5,012,737 3,978,595
Other......................................................... 0 (9,866)
---------------------- ----------------------
Total..................................................... 5,012,737 3,968,729
---------------------- ----------------------
Income Before Income Taxes................................ 1,535,896 3,579,720
Provision for Income Taxes.................................... 602,000 1,363,000
---------------------- ----------------------
NET INCOME............................................. 933,896 2,216,720
RETAINED EARNINGS - BEGINNING.......................... 29,024,881 24,744,671
---------------------- ----------------------
RETAINED EARNINGS - ENDING............................. $29,958,777 $26,961,391
====================== ======================
Net Income Per Common Share:
Basic............................................................. $.16 $.37
====================== ======================
Diluted........................................................... $.15 $.37
====================== ======================
</TABLE>
The accompanying notes are an integral part of this financial statement
-4-
<PAGE>
ALLOU HEALTH & BEAUTY CARE, INC.
CONSOLIDATED STATEMENT OF INCOME AND RETAINED EARNINGS
<TABLE>
<CAPTION>
For the Three Months Ended
September 30,
1998 1997
---------------------- ----------------------
<S> <C> <C>
Revenues.......................................................... $89,667,276 $83,341,115
Costs of Revenues................................................. 78,300,425 74,051,030
---------------------- ----------------------
Gross Profit.............................................. 11,366,851 9,290,085
---------------------- ----------------------
Operating Expenses
- ------------------
Warehouse & Delivery.......................................... 2,672,356 3,266,954
Selling, General & Administrative............................. 5,687,073 2,088,009
---------------------- ----------------------
Total Expenses............................................ 8,359,429 5,354,963
---------------------- ----------------------
Income From Operations.................................... 3,007,422 3,935,122
---------------------- ----------------------
Other Charges (Credits)
- ----------------------
Interest...................................................... 2,607,667 1,999,857
Other......................................................... 5,311 (6,485)
---------------------- ----------------------
Total..................................................... 2,612,978 1,993,372
---------------------- ----------------------
Income Before Income Taxes................................ 394,444 1,941,750
Provision for Income Taxes.................................... 157,700 713,000
---------------------- ----------------------
NET INCOME............................................. 236,744 1,228,750
RETAINED EARNINGS - BEGINNING.......................... 29,722,033 25,732,641
---------------------- ----------------------
RETAINED EARNINGS - ENDING............................. $29,958,777 $26,961,391
====================== ======================
Net Income Per Common Share:
Basic............................................................. $.04 $.21
====================== ======================
Diluted........................................................... $.04 $.21
====================== ======================
The accompanying notes are an integral part of this financial statement
</TABLE>
-5-
<PAGE>
ALLOU HEALTH & BEAUTY CARE, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
For the Six Months Ended
September 30,
1998 1997
---------------------- ----------------------
<S> <C> <C>
Cash Flows From Operating Activities
- ------------------------------------
Net Income.................................................... $933,896 $2,216,720
Adjustments to Reconcile Net income to Net Cash Used in
Operating Activities:
Depreciation and Amortization................................. 385,716 351,672
Decrease (Increase) in Assets:
Accounts Receivable........................................... (20,726,205) (7,021,363)
Inventories................................................... (19,965,282) (4,203,433)
Prepaid Purchases and Other Assets............................ (305,400) (2,457,202)
Increase (Decrease) in Liabilities:
Accounts Payable and Accrued Expenses......................... 5,133,504 9,563,845
---------------------- ----------------------
Net Cash Used in Operating Activities..................... (34,543,771) (1,549,761)
---------------------- ----------------------
Cash Flows Used in Investing Activities
- ---------------------------------------
Acquisition of Fixed Assets................................... (556,577) (301,727)
---------------------- ----------------------
Cash Flows From Financing Activities
- ------------------------------------
Net Increase in Amounts Due Bank.............................. 32,058,339 1,931,368
Borrowings.................................................... 3,108,704 215,771
Repayment of Debt............................................. (408,729) (355,738)
Proceeds from Exercise of Options............................. 525,029 45,750
---------------------- ----------------------
Net Cash Provided by Financing Activities................. 35,283,343 1,837,151
---------------------- ----------------------
INCREASE (DECREASE) IN CASH............................ 182,995 (14,337)
CASH AT BEGINNING OF PERIOD............................ 46,675 76,531
---------------------- ----------------------
CASH AT END OF PERIOD.................................. $229,670 $62,194
====================== ======================
Supplemental Disclosures of Cash Flow Information:
Cash Paid For:
Interest.................................................. $4,840,400 $3,959,378
Income Taxes.............................................. $1,474,304 $1,580,108
During the six months ended September 30, 1998 and 1997, the Company issued
notes for $3,108,704 and $215,771, respectively.
</TABLE>
The accompanying notes are an integral part of this financial statement
-6-
<PAGE>
ALLOU HEALTH & BEAUTY CARE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. The accompanying interim consolidated financial statements of Allou
Health & Beauty Care, Inc. (the "Company") have been prepared in
conformity with generally accepted accounting principles consistent in
all material respects with those applied in the Annual Report on Form
10-K for the year ended March 31, 1998. The interim financial
information is unaudited, but reflects all normal adjustments which
are, in the opinion of management, necessary to provide a fair
statement of results for the interim periods presented. The interim
financial statements should be read in connection with the financial
statements in the Company's Annual Report on Form 10-K for the year
ended March 31, 1998.
2. On June 23, 1998 the Company purchased certain assets of Direct
Fragrances, Inc. ("Direct Fragnances"), a telemarketer of fragrances
located in Florida for $2,761,671. The assets include inventories,
fixed assets and intangibles.
3. During the current period, certain officers of the Company loaned The
Fragrance Counter, Inc., a wholly owned subsidiary of the Company ("The
Fragrance Counter"), $3,000,000 at an interest rate of 8.75% per annum.
The loan is subordinated to the Company's senior debt, and may be
repaid only upon an infusion of new equity into The Fragrance Counter.
4. Earnings per share (EPS) for the current and prior period has been
presented in conformity with the provisions of SFAS 128. The following
table is a reconciliation of the weighted-average shares (denominator)
used in the computation of basic and diluted EPS for the statement of
operation periods presented herein.
Six Months Ended
September 30,
1998 1997
------------------- -------------------
Basic................................. 5,834,482 5,755,138
Assumed exercise of stock options..... 476,692 121,992
Diluted............................... 6,311,174 5,877,130
=================== ===================
Three Months Ended
September 30,
1998 1997
------------------- -------------------
Basic................................. 5,918,910 5,756,840
Assumed exercise of stock options..... 145,043 221,447
Diluted............................... 6,093,953 5,978,287
=================== ===================
Net income as presented in the consolidated statement of operations is
used as the numerator in the EPS calculation for both the basic and diluted
computations.
-7-
<PAGE>
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS.
A. RESULTS OF OPERATIONS
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
Revenues for the six months ended September 30, 1998 were
$158,301,989, representing a 6.8% increase over revenues of
$148,196,799 for the six months ended September 30, 1997.
This increase in revenues was attributable to an increase in
sales volume for the segments of the Company's business
described below, an expanded customer base and an increase in
same store sales, which have together caused an increase in
the volume of products sold.
Contributions to this increase in revenues by product segment
was as follows:
Sales of health and beauty aids increased 6.4% when compared
to sales in the same period of the previous year. This
increase in revenue was due to an increase in same store sales
and an expanded customer base.
Sales of prestige designer fragrances grew 22.0% when compared
to sales in the same period of the prior year due to increases
in same store sales and an expanded customer base.
Sales of nationally advertised non-perishable branded food
products decreased 46% when compared to sales in the same
period of the prior year due to management's decision to
eliminate a variety of products from the Company's
distribution mix due to increased costs and lower gross profit
margins associated with those products. It is management's
expectation that the Company will continue to focus its
resources on those non-perishable branded food products which
carry higher gross profit margins.
Sales of pharmaceutical decreased 11.0% when compared to sales
in the same period of the prior year, as a direct result of
management's decision to de-emphasize sales of branded
pharmaceuticals, which are characterized by limited operating
margins. The Company has required that all sales of its
branded pharmaceutical products to its customers be combined
with orders for generic pharmaceuticals and over-the-counter
health and beauty aids products, which historically are marked
by higher gross profit margins.
Gross profit as a percentage of revenues increased to 13.7%
for the six months ended September 30, 1998 when compared to
12.8% for the same period of the previous year. This increase
was due to improved profit margins associated with the sales
of the Company's fragrance products.
Warehouse, delivery, selling, general and administrative
expenses increased as a percentage of sales to 9.6% for the
six months ended June 30, 1998, from 7.7% when compared to the
same period of the prior year. This increase in operating
expenses is due to expenses associated with its wholly owned
subsidiary, Allou Personal Care Corporation, a manufacturer of
hair and skin care products, and advertising expenses
associated with the Company's wholly-owned E-commerce
subsidiary, The Fragrance Counter.
-8-
<PAGE>
Inventories increased by approximately $20.0 million or 18% at
September 30, 1998 when compared to the fiscal year ended
March 31, 1998. This increase in inventory was attributable to
merchandise purchased in anticipation of increased sales.
Interest expense for the six months ended September 30, 1998
increased to 3.2% from 2.7% when compared to the six months
ended September 30, 1997. This increase was a result of
increased borrowing the Company made under its line of credit
after its acquisition of Direct Fragrances.
Net income for the six months ended September 30, 1998 was
$933,896, representing a 58.0% decrease over net income of
$2,326,720 for the comparable period in 1997. The decrease in
net income was due primarily to the reasons discussed above.
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1998
Revenues for the three months ended September 30, 1998 were
$89,667,276, representing a 7.6% increase over revenues of
$83,341,115 for the three months ended September 30, 1997.
This increase in revenues was attributable to an increase in
sales volume for the segments of the Company's business
described below, an expanded customer base and an increase in
same store sales, which has together caused an increase in the
volume of products sold.
Contributions to this increase in revenues by product segment
was as follows:
Sales of health and beauty aides increased 6.3% when compared
to sales in the same period of the previous year. This
increase in revenue was due to an increase in same store sales
volume and an expanded customer base.
Sales of prestige designer fragrances increased 40.0% when
compared to sales in the same period of the prior year due to
an expanded customer base and an increase in same store sales.
Sales of nationally advertised non-perishable branded food
products decreased 59.0% when compared to sales in the same
period of the prior year due to management's decision to
eliminate a variety of products from the Company's
distribution mix due to increased costs and lower gross profit
margins associated with those products. It is management's
expectation that the Company will continue to focus its
resources on those non-perishable branded food products which
carry higher gross profit margins.
Sales of prescription pharmaceuticals decreased 5.3% when
compared to the same period of the prior year, as a direct
result of management's decision to de-emphasize sales of
branded pharmaceuticals, which are characterized by limited
operating margins. The Company has required that all sales of
its branded pharmaceutical products to its customers be
combined with orders for generic pharmaceuticals and
over-the-counter health and beauty aids products, which
historically are marked by higher gross profit margins.
-9-
<PAGE>
Gross profit as a percentage of sales increased to 12.7% for
the three months ended September 30, 1998 from 11.1% when
compared to the three months ended September 30, 1997. This
increase was principally attributable to higher profit margins
associated with the Company's fragrance products.
Warehouse, delivery, selling, general and administrative
expenses increased as a percentage of sales to 9.3% for the
three months ended September 30, 1998 from 6.4% when compared
to the same period of the prior year. This increase in
operating expenses was due primarily to advertising expenses
associated with its wholly owned E-commerce subsidiary, The
Fragrance Counter.
Interest expenses for the three months ended September 30,
1998 increased to 2.9% from 2.4% when compared to the same
period of the prior year. This increase was a result of
increased borrowing the Company made under its line of credit
after its acquisition of Direct Fragrances.
Net income for the three months ended September 30, 1998 was
$236,744, representing a 81% decrease over net income of
$1,228,750 for the comparable period in 1997. The decrease in
net income was due primarily to the reasons discussed above.
B. LIQUIDITY AND CAPITAL RESOURCES.
The Company meets its working capital requirements from
internally generated funds and from a financing agreement with
a consortium of banks led by the First National Bank of Boston
for financing the Company's accounts receivable and inventory.
As of September 30, 1998, the Company had $142,655,100
outstanding under its $145,000,000 bank line of credit. The
loan is collateralized by the Company's inventory and accounts
receivable. Interest on the loan balance is payable monthly at
3/8% above the prime rate of 2.0% above the Eurodollar rate at
the option of the Company. The effective interest rate charged
to the Company at September 30, 1998 was 7.84%, which was
based on a combination of 2.0% above the Eurodollar rate and
3/8% above the prime rate. The Company utilizes cash generated
from operations to reduce short-term borrowings, which in turn
acts to increase loan availability consistent with the
Company's financing agreement.
The Company's accounts receivable increased to $64,844,116 at
September 30, 1998 from $55,446,245 at September 30, 1997,
representing an increase of 17%. This increase in accounts
receivable was due to customers which had previously paid the
Company in an average of 61 days at September 30, 1997 have
been paying the Company in an average of 64 days at September
30, 1998, and due to increased sales.
The Company has minimal capital investment requirements and
any significant capital expenditures are financed through long
term lease agreements that would not adversely impact cash
flow. The Company believes that, except for The Fragrance
Counter, its internally generated funds and its current and
future bank line of credit will be sufficient to meet its
anticipated cash and capital needs through the fiscal year
ending March 31, 1999. The Company is seeking means of
providing financing for The Fragrance Counter that are
independent of its revolving line of credit. During the
quarter ended June 30, 1998, Messrs. Victor Jacobs, Herman
Jacobs and Jack Jacobs collectively loaned an aggregate of
-10-
<PAGE>
$3 million on an unsecured basis to The Fragrance Counter (the
"Bridge Financing"). Amounts loaned under the Bridge Financing
accrue interest at the rate of 8-3/4% per annum and become due
and payable in October 1998. During June 1998 the Company
acquired selected assets of Direct Fragrances, a telemarketing
sales company of fragrance products to an account base
consisting of over 5,000 independent retailers nationally.
INFLATION AND SEASONALITY
Inflation has not had any significant adverse effects on the
Company's business and the Company does not believe it will
have any significant effect on its future business. The
Company's fragrance business is seasonal, with greater sales
during the Christmas season than in other seasons. The
Company's other product lines are not seasonal.
YEAR 2000
The Company does not expect that the cost to modify or replace
software that it uses, so that such software will properly
recognize dates beyond December 31, 1999 ("Year 2000
Compliance"), will be material. If the Company is not
successful in implementing the necessary Year 2000 changes, it
expects to then develop contingency plans to address any
matters not corrected in a timely manner. The Company has
initiated formal communications with its significant vendors
and customers to determine the extent that Year 2000
Compliance issues of such parties may affect the Company.
There can be no guarantee that the systems of such other
companies will be timely converted, or that their conversion
will be compatible with information included in the Company's
systems, without a material adverse effect on the Company's
business, financial condition or results of operations. To the
extent that responses to such communications with the
Company's vendors are unsatisfactory, the Company expects to
take steps to ensure that its vendors' products have
demonstrated Year 2000 Compliance.
-11-
<PAGE>
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders.
On September 15, 1998, the Company's annual meeting of stockholders was
held (the "Meeting"). At the Meeting, the stockholders approved the following
two matters:
First, the election of Messrs. Victor Jacobs, Herman Jacobs, Jack
Jacobs, David Shamilzadeh, Ramon Montes, Sol Naimark and Jeffrey Berg as as
directors of the Company to serve until the next Annual Meeting of stockholders
and until their successors shall have been duly elected and qualified. The
number of votes cast for or withheld was as follows:
Votes
-----
For Witheld
--- -------
Victor Jacobs........................... 6,837,156 52,873
Herman Jacobs........................... 6,835,156 54,873
Jack Jacobs............................. 6,834,456 55,573
David Shamilzadeh....................... 6,837,156 52,873
Ramon Montes............................ 6,818,456 71,573
Sol Naimark............................. 6,833,656 56,373
Jeffrey Berg............................ 6,833,656 56,373
Second, the approval of an amendment to the Company's Certificate of
Incorporation to increase the number of authorized shares of the Company's Class
A Common Stock, par value $.001 per share, from 10,000,000 shares to 15,000,000
shares. There were 6,890,029 votes cast "for" the matter, 1,000 votes cast
"against" the matter and 2,760,126 abstentions and broker non-votes.
Item 6. Exhibits and reports on Form 8-K
(a) Exhibits
Exhibit Description
------- -----------
27.1 Financial Data Schedule.
(b) Reports on Form 8-K
The Company did not file any reports on Form 8-K during the quarter
ended September 30, 1998.
-12-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
/s/ Herman Jacobs
-----------------------------------------
Herman Jacobs
President and Chief Operating Officer
/s/ David Shamilzadeh
-----------------------------------------
David Shamilzadeh
Chief Financial Officer
Dated: November 16, 1998
-13-
<PAGE>
EXHIBIT INDEX
-------------
Exhibit Description
------- -----------
27.1 Financial Data Schedule
-14-
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000846538
<NAME> ALLOU HEALTH AND BEAUTY CARE
<S> <C>
<PERIOD-TYPE> 6-Mos
<FISCAL-YEAR-END> Mar-31-1999
<PERIOD-START> Apr-01-1998
<PERIOD-END> Sep-30-1998
<CASH> 229,670
<SECURITIES> 0
<RECEIVABLES> 65,885,590
<ALLOWANCES> 1,041,474
<INVENTORY> 132,495,941
<CURRENT-ASSETS> 210,566,575
<PP&E> 7,750,693
<DEPRECIATION> 3,887,343
<TOTAL-ASSETS> 219,735,038
<CURRENT-LIABILITIES> 161,613,986
<BONDS> 0
0
0
<COMMON> 5,844
<OTHER-SE> 54,065,972
<TOTAL-LIABILITY-AND-EQUITY> 219,735,039
<SALES> 158,301,989
<TOTAL-REVENUES> 158,301,989
<CGS> 136,591,341
<TOTAL-COSTS> 151,753,356
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5,012,737
<INCOME-PRETAX> 1,535,896
<INCOME-TAX> 602,000
<INCOME-CONTINUING> 933,896
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 933,896
<EPS-PRIMARY> .16
<EPS-DILUTED> .15
</TABLE>
