<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[x] QUARTERLY REPORT UNDER SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2000
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE
ACT
For the transition period ________________ to _____________
Commission File number 1-10799
ADDvantage Technologies Group, Inc.
(Exact name of small business issuer as specified in its charter)
OKLAHOMA 73-1351610
(State or other jurisdiction (I.R.S. Employer)
of incorporation or organization) Identification No.)
1605 E. Iola
Broken Arrow, Oklahoma 74012
(Address of principal executive office) (Zip Code)
(918) 251-9121
(Registrant's telephone number, including area code)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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
Shares outstanding of the issuer's $.01 par value common stock as of May 1,
2000 is 9,999,206.
Transitional Small Business Issuer Disclosure Format (Check one): Yes No x
<PAGE>
Part I - Financial Information Page
Financial Information:
Item 1. Financial Statements
Consolidated Balance Sheet
March 31, 2000 3
Consolidated Statements of Income
Three and Six Months Ended March 31, 2000 and 1999 5
Consolidated Statements of Cash Flows
Three and Six Months Ended March 31, 2000 and 1999 6
Notes to Consolidated Financial Statements 8
Item 2.
Management's Discussion and Analysis of the Financial
Condition and Results of Operation 10
Part II - Other Information
Item 2. Changes in Securities and Use of Proceeds 14
Item 4. Submission of Matter to a Vote of Security Holders 14
Item 6. Exhibits and Reports on Form 8-K 15
Signatures 17
2
<PAGE>
<TABLE>
<CAPTION>
ADDVANTAGE TECHNOLOGIES GROUP, INC.
CONSOLIDATED BALANCE SHEET
March 31, 2000
<S> <C>
Assets
Current assets:
Cash $ 24,615
Accounts receivable 3,016,798
Inventories 14,274,630
Prepaid expenses 7,254
-------------
Total current assets 17,323,297
Property and equipment, at cost
Machinery and equipment 1,078,021
Leasehold improvements 152,379
Other property and equipment 26,412
-------------
1,256,812
Less accumulated depreciation (645,538)
-------------
Net property and equipment 611,274
Other assets:
Deferred income taxes 1,165,188
Investment 660,000
Goodwill 1,431,664
Other assets 5,626
-------------
3,262,478
Total assets $ 21,197,049
=============
</TABLE>
See notes to consolidated financial statements
3
<PAGE>
<TABLE>
<CAPTION>
ADDVANTAGE TECHNOLOGIES GROUP, INC.
CONSOLIDATED BALANCE SHEET
March 31, 2000
<S> <C>
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 1,073,271
Accrued income taxes 781,067
Bank Revolving Line of Credit 2,914,344
Note Payable - Current portion 135,500
Dividends payable 310,000
Stockholder loans 1,550,000
-------------
Total current liabilities 6,764,182
Note Payable 101,718
Stockholders' equity:
Preferred stock, 1,000,000 shares authorized,
$1.00 par value, at stated value
Series A, 5% cumulative convertible, 200,000 shares issued and
outstanding with a stated value of $40 per share 8,000,000
Series B, 7% cumulative; 300,000 shares issued and outstanding
with a stated value of $40 per share 12,000,000
Common stock, $.01 par value, 10,000,000
shares authorized; 9,992,956 shares issued
and outstanding 99,930
Common stockholders' deficit (5,768,781)
-------------
Total stockholders' equity 14,331,149
Total liabilities and stockholders' equity $ 21,197,049
=============
</TABLE>
See notes to consolidated financial statements
4
<PAGE>
<TABLE>
<CAPTION>
ADDVANTAGE TECHNOLOGIES GROUP, INC.
STATEMENTS OF INCOME
Three months ended Six months ended
March 31 March 31
2000 1999 2000 1999
---------------------------- ----------------------------
<S> <C> <C> <C> <C>
Net sales and service income $ 6,747,529 $ 5,360,983 $ 11,283,700 $ 10,143,308
Cost of sales 3,274,865 2,661,926 5,375,870 5,386,987
---------------------------- ----------------------------
Gross profit 3,472,664 2,699,057 5,907,830 4,756,321
Operating expenses 1,357,547 910,892 2,485,005 1,798,462
---------------------------- ----------------------------
Income from operations 2,115,117 1,788,166 3,422,825 2,957,859
Interest expense (104,529) (86,994) (178,713) (158,315)
---------------------------- ----------------------------
Income before income taxes 2,010,588 1,701,172 3,244,112 2,799,544
Provision for income taxes 764,113 - 1,192,312 -
---------------------------- ----------------------------
Net income 1,246,475 1,701,172 2,051,801 2,799,544
Preferred Dividends 310,000 - 620,000 -
Net income attributable to common ---------------------------- ----------------------------
stockholders $936,475 $ 1,701,172 $ 1,431,801 $ 2,799,544
============================ ============================
Pro-forma net income (unaudited):
Income before income taxes $ 1,701,172 $ 2,799,544
Provision for income taxes 646,445 1,063,827
-------------- -------------
Pro-forma net income 1,054,727 1,735,717
Provision for preferred dividends 310,000 620,000
-------------- -------------
Pro-forma net income attributable to
common stockholders $ 744,727 $1,115,717
============== ===========
Earnings per Share:
Basic $0.10 $0.08 $0.15 $0.12
Diluted 0.09 $0.08 $0.14 $0.12
</TABLE>
See notes to consolidated financial statements
5
<PAGE>
<TABLE>
<CAPTION>
ADDVANTAGE TECHNOLOGIES GROUP, INC.
STATEMENTS OF CASH FLOWS
Six months ended
March 31,
2000 1999
-------------------------
<S> <C> <C>
Cash Flows from Operating Activities
Net income $ 2,051,801 $ 2,799,544
Adjustments to reconcile net income to net cash
provided by operating activities
Depreciation and amortization 90,590 73,649
Provision for deferred income taxes 89,812 -
Change in:
Receivables 72,786 4,259
Prepaid expense 211,841 (40,109)
Inventories (1,933,950) (1,510,707)
Accounts payable and accrued liabilities 258,158 936,883
--------------------------
Net cash provided by operating activities 841,039 2,263,520
Cash Flows from Investing Activities
Additions to property and equipment (190,818) (44,199)
Cash acquired in LEE CATV merger 90,047 -
Other 38,920 -
--------------------------
Net cash provided by (used in) investing activities (100,771) (44,199)
Cash Flows from Financing Activities
Distributions to owners - (820,000)
Net borrowings (repayments) under line of cred (504,926) (1,399,320)
Advances from stockholders 74,993 -
Payments of Preferred Dividends (310,000) -
Proceeds for exercise of common stock options 7,437 -
--------------------------
Net cash used in financing activities (732,496) (2,219,320)
Net increase in cash 7,772 -
Cash, beginning of period 16,843 -
--------------------------
Cash, end of period $ 24,615 $ -
==========================
</TABLE>
See notes to consolidated financial statements
6
<TABLE>
<CAPTION>
ADDVANTAGE TECHNOLOGIES GROUP, INC.
STATEMENTS OF CASH FLOWS
Six months ended
March 31,
2000 1999
-------------------------
<S> <C> <C>
Supplemental Cash Flow Information
Interest paid for the period $ 174,024 $ 158,315
Supplemental Disclosure of Non-cash
Investing and Financing Activities
Acquisition of Lee CATV Corporation:
Conversion of preferred stock 1,000,000 -
Working capital other than cash 241,017 -
Land and equipment 116,694 -
Intangibles and other assets 1,276,229 -
Assumption of note payable (723,987) -
Issuance of note payable 271,094 -
See notes to consolidated financial statements
7
</TABLE>
<PAGE>
NOTES TO CONDENSED FINANCIAL STATEMENTS (Unaudited)
Note 1 - Basis of Presentation
The accompanying unaudited condensed financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
statements and do not include all information and footnotes required by
generally accepted accounting principles for complete financial statements.
However, the information furnished reflects all adjustments, consisting only of
normal recurring adjustments which are, in the opinion of management, necessary
in order to make the financial statements not misleading.
On September 30, 1999, the former shareholders of TULSAT Corporation (formerly
named DRK Enterprises, Inc.) assumed control of ADDvantage Technologies Group,
Inc. ("ADDvantage Technologies", formerly named ADDvantage Media Group, Inc)
pursuant to the Securities Exchange Agreement ("Agreement") entered into on
September 16, 1999. Pursuant to the Agreement, the TULSAT shareholders
transferred all the issued and outstanding common stock of TULSAT, along with
$10,000,000 of TULSAT promissory notes, to ADDvantage Technologies in exchange
for 8,000,000 shares of ADDvantage Technologies $.01 par value common stock,
200,000 shares of newly issued Series A 5% Cumulative Convertible Preferred
Stock, par value $1.00 per share, with a stated value of $40.00 per share
(convertible into ADDvantage Technologies common stock at a price of $4.00 per
share), and 300,000 shares of newly issued Series B 7% Cumulative Preferred
Stock, par value $1.00 per share, with a stated value of $40.00 per share.
As a result of this transaction, TULSAT became a wholly owned subsidiary of
ADDvantage Technologies and the former TULSAT owners acquired approximately
82% of the issued and outstanding common stock, and 100% of the issued and
outstanding preferred stock of ADDvantage Technologies. TULSAT's management
assumed management and control of ADDvantage Technologies.
The transaction has been accounted for as a purchase of ADDvantage Technologies
by TULSAT. The accompanying financial statements include the consolidated
balance sheet of ADDvantage Technologies and TULSAT as of March 31, 2000.
The statements of income and cash flows are those of the combined company for
March 31, 2000 and those of TULSAT for the period ended March 31, 1999.
Note 2 - Description of Business
TULSAT sells new, surplus, and refurbished cable television equipment throughout
North America in addition to being a repair center for various cable companies.
TULSAT operates in one business segment.
ADDvantage Technologies continues to market and sell the Shoppers Calculators-r-
to various companies and entrepreneurs who use them to sell advertising within
local stores. The advertising is positioned on patented solar-powered
calculators attached to the handles of shopping carts.
8
<PAGE>
<TABLE>
<CAPTION>
Note 3 - Earnings per Share
Pro-forma Pro-forma
Three months Three months Six months Six months
ended ended ended ended
March 31 March 31, March 31, March 31,
2000 1999 2000 1999
--------------------------- -------------------------
<S> <C> <C>
Net income $ 936,475 $ 744,727 $ 1,431,801 $ 1,115,717
Basic EPS Computation:
Weighted average outstanding common shares 9,772,448 9,476,999 9,746,647 9,476,999
Earnings per Share $0.10 $0.08 $0.15 $0.12
Diluted EPS Computation:
Weighted average outstanding common shares 9,999,206 9,476,999 9,999,206 9,476,999
Earnings per Share $0.09 $0.08 $0.14 $0.12
Stock options and warrants were not included in the computation of diluted EPS
as their effect is anti-dilutive.
Note 4 - Revolving Line of Credit
In January, ADDvantage received a Line of Credit increase to $l0,000,000. This
will provide up to $6,000,000 in a revolving Line of Credit for working capital
purposes and up to $4,000,000 for future acquisitions meeting Bank of Oklahoma
credit guidelines. This should provide ADDvantage with the financial resources
to help fund future business acquisitions or to establish new locations in
strategic markets.
9
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Overview
On September 30, l999, the former shareholders of TULSAT Corporation assumed
control of ADDvantage Technologies Group, Inc. ("ATG", formerly named
ADDvantage Media Group, Inc.) pursuant to the Securities Exchange Agreement
("Agreement") entered into on September l6, l999. Pursuant to the Agreement,
the TULSAT shareholders transferred all the issued and outstanding common stock
of TULSAT, along with $l0,000,000 of TULSAT promissory notes, to ATG in exchange
for 8,000,000 shares of ATG $.0l par value common stock, 200,000 shares of newly
issued Series A 5% Cumulative Convertible Preferred Stock, par value $l.00 per
share, with a stated value of $40.00 per share (convertible into ATG common
stock at a price of $4.00 per share), and 300,000 shares of newly issued Series
B 7% Cumulative Preferred Stock, par value $l.00 per share, with a stated value
of $40.00 per share.
As a result of this transaction TULSAT became a wholly owned subsidiary of ATG
and the former TULSAT owners acquired approximately 82% of the issued and
outstanding common stock, and l00% of the issued and outstanding preferred stock
of ATG. TULSAT'S management assumed control of ATG.
On November 22, l999, Lee CATV Corporation, formerly named Diamond W.
Investments, Inc. ("Diamond"), was merged into a wholly-owned subsidiary of
ATG. As a result, the former shareholders of Diamond received 27,2ll shares of
ATG Series C Convertible Preferred Stock, par value of $l.00 per share, with a
stated value of $36.75 per share (which are convertible into shares of
ADDvantage Media common stock at a price of $3.675 per share), and a promissory
note in the amount of $27l,094, for a total merger consideration of $l,27l,094.
On November l0, l999, the ATG Board of Directors approved an amendment to the
certificate of incorporation to change the Company's name to "ADDvantage
Technologies Group, Inc." The amendment to the certificate of incorporation was
approved by a majority of the issued and outstanding shares of ADDvantage
Media's common stock. The name change became effective on December 30,
l999.
Results of Operations
TULSAT had previously elected to be taxed as an S Corporation for federal income
tax purposes since its organization in l985. As a consequence, the taxable net
earnings of TULSAT were taxed as income to TULSAT's stockholders in
proportion to their individual stockholdings, and the payment of federal income
taxes on such proportionate share of TULSAT's taxable earnings was the personal
obligation of each stockholder. Immediately prior to the closing of the
acquistion by the Company, TULSAT's status as a S Corporation automatically
terminated and since then TULSAT has been treated as a C Corporation for income
tax purposes as a wholly owned subsidiary of the Company. The Company
anticipates being taxed at a combined effective rate of 38% based upon current
federal and state income tax regulations.
10
<PAGE>
In order to present the results of operations for the three and six months ended
March 31, 1999 on a basis comparable to that for the three and six months ended
March 31, 2000, a pro-forma provision for income taxes and preferred stock
dividends has been presented for the 1999 period.
Comparison of Results of Operations for the Three Months Ended March 31,
2000 and March 3l, l999
Net income attributable to common stockholders for the second quarter of fiscal
2000 was $936,475 or $.10 per share versus $744,727 for the second quarter last
year on a pro-forma basis or $.08 per share. The Company incurred income tax
expense of $764,113 and declared preferred stock dividends of $310,000 for the quarter
ended March 31, 2000.
Gross profits rose $773,607 or 28.7% in the second quarter of the fiscal year
2000, as compared to l999 and increased as a percentage of sales to 51.5% in
2000 from 50.3% in 1999. The increase in profits resulted from a higher demand
for refurbished inventory and increased repair revenues from Tulsat, as well as
the $368,911 in gross profits realized by Lee CATV, which was acquired by the
Company in November 1999. The increase as a percentage of sales was primarily
due to a greater proportion of sales during the period being comprised of higher
margin products in the refurbished group.
Net Sales. Net Sales surged $1,385,546 or 25.9%, to a record $6,747,529 in the
second quarter of 2000 from $5,360,983 in l999. The increase was attributable
to purchases being postponed to the beginning of this quarter as a majority of
the large Multiple System Operators (MSO) began to upgrade newly acquired
systems resulting from the consolidation of the cable television industry
during 1999. The sales increase resulted from increases in sales of refurbished
equipment of $1,023,158 or 23.4% to $5,404,787 and an increase in repair service
revenues of $416,860 or 136.6% to $722,117. Lee CATV had sales of $679,720 for
the quarter.
Cost of Goods Sold. Cost of goods sold increased to $3,274,865 during the
second quarter of 2000 from $2,699,057 for l999 primarily due to increased
volume, and decreased as a percentage of sales to 48.5% for the quarter from
49.7% for the prior year. The percentage of sales decrease was primarily due
to a greater proportion of sales during the period being comprised of higher
margin products.
Operating Expenses. Operating expenses increased to $1,357,547 in the second
quarter of 2000 from $910,892 for l999 and increased as a percentage of sales
to 20.1% for the quarter from 17.0% for the prior year. The $446,655 increase
in operating expenses was primarily due to the higher costs resulting from the
acquisition of Lee CATV, an increase in employee headcount, and an increase in
expenditures for professional services. The increase in employee headcount and
expenditures for professional services was the result of being a public company.
Income from Operations. Income from operations increased 18.3% to $2,115,117
for the second quarter of 2000 from $1,788,166 for 1999. Income from operations
as a percentage of sales decreased to 31.3% for the quarter from 33.4% for the
prior year.
11
<PAGE>
Comparison of Results of Operations for the Six Months Ended March 31, 2000
and March 3l, l999
Net income attributable to common stockholders for the six month period ending
March 31, 2000 was $1,431,801 or $.15 per share versus $1,115,717 for the six
month period last year on a pro-forma basis or $.12 per share. The Company
incurred income tax expense of $1,192,312 and preferred stock dividends of
$620,000 for the six months ended March 31, 2000.
Gross profits climbed $1,151,509 or 24.2% for the first six months of fiscal
year 2000, as compared to l999 and increased as a percentage of sales to 52.3%
in 2000 from 46.9% in 1999. The increase in profits resulted from an increase
for refurbished inventory and increased repair revenues from Tulsat, as well as
the $526,567 in gross profits realized by Lee CATV, which was acquired in
November 1999. The increase as a percentage of sales was primarily due to a
greater proportion of sales during the period being comprised of higher margin
products in the refurbished group.
Net Sales. Net Sales increased $1,140,392 or 11.2%, to $11,283,700 in the first
six months of 2000 from $10,143,308 in l999. The increase was attributable to
purchases being postponed to the beginning of January as a majority of the large
Multiple System Operators (MSO) began to upgrade newly acquired systems
resulting from the consolidation of the cable television industry during 1999
and sales contributed by Lee CATV since the merger. The sales increase resulted
from increases in sales of refurbished equipment of $876,911 or 10.7% and an
increase in repair service revenues of $492,394 or 83.2%. Lee CATV had sales
of $946,532 since the merger.
Cost of Goods Sold. Cost of goods sold decreased to $5,375,870 during the first
six months of 2000 from $5,386,987 for l999 primarily due to increase in high
margin products, and decreased as a percentage of sales to 47.6% for the quarter
from 53.1% for the prior year.
Operating Expenses. Operating expenses increased to $2,485,005 in the first six
months of 2000 from $1,798,462 for l999 and increased as a percentage of sales
to 22.0% for the period from 17.7% for the prior year. The $686,543 increase in
operating expenses was primarily due to the higher costs resulting from the
acquisition of ATG and Lee CATV, an increase in employee headcount, and an
increase in expenditures for professional services. The increase in employee
headcount and expenditures for professional services was the result of being a
public company.
Income from Operations. Income from operations rose 15.7% to $3,422,825 for
the first six months of 2000 from $2,957,859 for 1999. Income from operations
as a percentage of sales increased to 30.3% for the period from 29.2% for the
prior year.
Liquidity and Capital Resources
The Company finances its operations primarily through internally generated funds
and bank lines of credit totaling $6,000,000. At March 3l, 2000, the Revolving
Line of Credit consists of a $2,914,344 balance outstanding due June 30, 2000,
interest payable monthly at Chase Manhattan Prime less .5% (8.5% at March 31,
2000) and $237,218 balance remaining on a note resulting from the Diamond
12
<PAGE>
purchase,payable quarterly at 8% to the former owners. Net Cash provided by
operating activities for the six-month period ended March 3l, 2000 was $841,039
compared to $2,263,520 for the quarter ended March 31, 1999. The cash provided
by operating activities was affected by record 2nd quarter sales to be
collected within the next 30 days and inventory received from 120 day backorders
of new broadband equipment, such as Scientific Atlanta, GI-Motorola and
Phillips, to support the upgrades occurring in the industry.
Borrowings under the line of credit are limited to the lesser of $4,500,000 or
the sum of 80% of qualified accounts receivable and 25% of qualified inventory.
The line of credit is collateralized by inventory, accounts receivable,
equipment and fixtures, and general intangibles, and is guaranteed by certain
shareholders up to an aggregate $l,000,000.
In January, ADDvantage received a Line of Credit increase to $l0,000,000. This
will provide up to $6,000,000 in a revolving Line of Credit for working capital
purposes and up to $4,000,000 for future acquisitions meeting Bank of Oklahoma
credit guidelines. This should provide ADDvantage with the financial resources
to help fund future business acquisitions or to establish new locations in
strategic markets.
Stockholder loans include a $1,550,000 note bearing interest the same rate as
the Company's bank line of credit, and is subordinate to the bank notes payable.
The Company has authorized the repurchase of up to $l,000,000 of its outstanding
common stock from time to time in the open market at prevailing market prices or
in privately negotiated transactions. The repurchased shares will be held in
treasury and used for general corporate purposes including possible use in the
company's employees stock plans or for acquisitions.
Forward Looking Statements
Certain statements included in this report which are not historical facts are
forward-looking statements. These forward-looking statements are based on
current expectations, estimates, assumptions and beliefs of management; and
words such as expects," "anticipates," "intends," "plans," "believes,"
"projects", "estimates" and similar expressions are intended to identify such
forward looking statements. These forward-looking statements involve risks and
uncertainties, including, but not limited to, the future prospects for the
business of the Company, the Company's ability to generate or to raise
sufficient capital to allow it to make additional business acquisitions, changes
or developments in the cable television business that could adversely affect the
business or operations of the Company, general economic conditions, the
availability of new and used equipment and other inventory and the Company's
ability to fund the costs thereof, and other factors which may affect the
Company's ability to comply with future obligations. Accordingly, actual
results may differ materially from those expressed in the forward-looking
statements.
13
<PAGE>
PART II-OTHER INFORMATION
OTHER INFORMATION
Item 2. Changes in Securities and Use of Proceeds
During March of 2000, all of the Company's 27,211 outstanding shares of Series C
Convertible Preferred Stock were converted into 272,211 shares of its common
stock in accordance with its terms.
Item 4. Submission of Matter to a Vote of Security Holders
The annual meeting of shareholders of the Company was held in Broken
Arrow, Oklahoma at the Forrest Ridge Golf Club on March 2, 2000. At the
meeting, the following directors were elected for one year terms (with the votes
as indicated):
FOR WITHHELD
--- --------
Kenneth A. Chymiak 9,502,653 27,650
David E. Chymiak 9,502,653 27,650
Stephen J. Tyde 9,502,653 27,650
Freddie H. Gibson 9,502,553 27,750
Gary W. Young 9,502,653 27,650
Randy L. Weideman 9,502,653 27,650
The shareholders approved the amendment to increase the number of
authorized shares of common and preferred stock to 30,000,000 and 5,000,000,
respectively by a vote of 8,692,603 shares in favor and 27,185 against, with
26,100 shares abstaining.
The shareholders also approved the ratification of appointment of
Tullius, Taylor, Sartain & Sartain as the Company's auditors for the 2000 fiscal
year by a vote of 9,503,678 shares in favor and 900 against, with 25,725 shares
abstaining.
14
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits pursuant to Item 601 of Regulation S-B.
Exhibit 27.1 Financial Data Schedule
15
<PAGE>
(b) Reports on Form 8-K.
None.
16
<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.
ADDVANTAGE TECHNOLOGIES GROUP, INC.
Signature Title Date
- --------- ----- ----
- ----------------------- Director and President May 15, 2000
Kenneth A. Chymiak (Principal Executive Officer)
- ------------- Controller May 15, 2000
Adam R. Havig (Principal Accounting Officer)
17
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
----------- -----------
27.1 Financial Data Schedule
18
</PAGE>
</TABLE>
<TABLE> <S> <C>
<S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM 10-QSB
QUARTER ENDED MAR. 31, 2000 AND QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-2000
<PERIOD-END> MAR-31-2000
<CASH> 24,615
<SECURITIES> 0
<RECEIVABLES> 3,016,798
<ALLOWANCES> 0
<INVENTORY> 14,274,630
<CURRENT-ASSETS> 17,323,297
<PP&E> 1,078,021
<DEPRECIATION> 645,538
<TOTAL-ASSETS> 21,197,049
<CURRENT-LIABILITIES> 6,764,182
<BONDS> 0
0
20,000,000
<COMMON> 99,930
<OTHER-SE> (5,768,781)
<TOTAL-LIABILITY-AND-EQUITY> 21,197,049
<SALES> 6,747,529
<TOTAL-REVENUES> 6,747,529
<CGS> 3,472,865
<TOTAL-COSTS> 3,472,865
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 104,529
<INCOME-PRETAX> 2,010,588
<INCOME-TAX> 764,113
<INCOME-CONTINUING> 1,246,475
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,246,475
<EPS-BASIC> 0.10
<EPS-DILUTED> 0.09
</TABLE>
