UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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 May 31, 1997
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: 000-19320
Ag Services of America, Inc.
(Exact name of registrant as specified in its charter)
Iowa 42-1264455
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2302 West First Street, Cedar Falls, Iowa 50613
(Address of principal executive offices) (Zip Code)
(319) 277-0261
(Registrant's telephone number, including area code)
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.
[X] Yes [ ] No
5,154,319 common shares were outstanding as of July 11, 1997.
<PAGE>
AG SERVICES OF AMERICA, INC.
INDEX
Page
PART I. FINANCIAL INFORMATION
Item 1. Financial statements:
Consolidated condensed balance sheets, May 31, 1997
(unaudited) and February 28, 1997 1
Unaudited consolidated condensed statements of income,
three months ended May 31, 1997 and 1996 2
Unaudited consolidated condensed statements of cash
flows, three months ended May 31, 1997 and 1996 3
Consolidated statement of stockholders' equity,
three months ended May 31, 1997 4
Notes to consolidated condensed financial statements
(unaudited) 5-6
Item 2. Management's discussion and analysis of
financial condition and results of operations 7-10
PART II. OTHER INFORMATION
Item 6. Exhibits and reports on form 8-K: 11
(a) Exhibits
(11) Statement re computation of earnings
per common share 12
<PAGE>
<TABLE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
AG SERVICES OF AMERICA, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
<CAPTION>
May 31, February 28,
ASSETS 1997 1997 *
(Unaudited)
------------- -------------
<S> <C> <C>
CURRENT ASSETS
Cash $682,224 $880,184
Customer notes receivable, less allowance for
doubtful notes and reserve for discounts May 31, 112,162,280 43,245,691
1997 $3,854,000; February 28, 1997 $1,609,000
Accounts receivable 343,886 208,578
Inventories 1,826,235 2,841,417
Foreclosed assets held for sale 428,731 431,346
Deferred income taxes, net 642,000 642,000
Other current assets 871,594 1,682,478
------------- -------------
Total current assets $116,956,950 $49,931,694
------------- -------------
LONG-TERM RECEIVABLES AND OTHER ASSETS
Customer notes receivable, less allowance for
doubtful notes May 31, 1997 $1,486,000; February
1997 $1,156,000 $10,798,261 $9,560,881
Foreclosed assets held for sale 165,817 166,829
Debt origination fees, less accumulated amort-
ization May 31, 1997 $28,275; February 28, 1997 $0 543,096 --
Deferred income taxes, net 433,000 433,000
$11,940,174 $10,160,710
EQUIPMENT, less accumulated depreciation
May 31, 1997 $831,720; February 28, 1997 $776,207 $668,100 $680,306
------------- -------------
$129,565,224 $60,772,710
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Note payable $70,869,014 $21,000,000
Excess of outstanding checks over bank balance 4,667,053 --
Accounts payable 12,288,025 955,871
Accrued expenses 788,264 600,845
Income taxes payable 717,297 --
------------- -------------
Total current liabilities $89,329,653 $22,556,716
============= =============
STOCKHOLDERS' EQUITY
Capital stock $22,045,707 $21,948,375
Retained earnings 18,189,864 16,267,619
------------- -------------
$40,235,571 $38,215,994
------------- -------------
$129,565,224 $60,772,710
============= =============
<CAPTION>
*Condensed from Audited Financial Statements.
<FN>
See Notes to Consolidated Condensed Financial Statements.
</TABLE>
-1-
<PAGE>
<TABLE>
AG SERVICES OF AMERICA, INC.
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF INCOME
Three Months Ended May 31, 1997 and 1996
<CAPTION>
1997 1996
------------- -------------
<S> <C> <C>
Net revenues:
Farm inputs $78,339,015 $64,260,085
Financing income 2,435,513 1,946,888
------------- -------------
$80,774,528 $66,206,973
------------- -------------
Cost of revenues:
Farm inputs $73,953,091 $60,141,681
Financing expense 738,933 918,051
Provision for doubtful notes 1,256,712 1,060,865
------------- -------------
$75,948,736 $62,120,597
------------- -------------
Income before operating expenses
and income taxes $4,825,792 $4,086,376
Operating expenses 1,881,547 1,630,660
------------- -------------
Income before income taxes $2,944,245 $2,455,716
Federal and state income taxes 1,022,000 883,000
------------- -------------
Net income $1,922,245 $1,572,716
============= =============
Earnings per common and common
equivalent share
Primary $0.36 $0.41
============= =============
Fully diluted $0.36 $0.33
============= =============
Weighted average common and common
equivalent shares outstanding
Primary 5,413,089 3,852,867
============= =============
Fully diluted 5,413,089 5,354,621
============= =============
<FN>
See Notes to Consolidated Condensed Financial Statements.
</TABLE>
-2-
<PAGE>
<TABLE>
AG SERVICES OF AMERICA, INC.
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
Three Months Ended May 31, 1997 and 1996
<CAPTION>
1997 1996
------------- -------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $1,922,245 $1,572,716
Adjustments to reconcile net income to net
cash (used in) operating activities:
Depreciation 55,513 53,562
Amortization 28,275 21,600
(Gain) loss on sale of equipment -- (2,547)
Change in assets and liabilities (56,226,641) (44,451,390)
------------- -------------
Net cash (used in) operating activities ($54,220,608) ($42,806,059)
------------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from the sale of equipment $0 $7,000
Purchase of equipment (43,307) (118,610)
(Increase) in debt origination fees (571,070) --
(Increase) decrease in foreclosed assets held
for sale 3,627 260,769
------------- -------------
Net cash provided by (used in) investing
activities ($610,750) $149,159
------------- -------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from short-term borrowings $50,374,488 $38,300,000
Principal payments on short-term borrowings (505,475) (1,250,000)
Increase in excess of outstanding checks over
bank balance 4,667,053 3,884,435
Proceeds from issuance of capital stock upon
exercise of options 92,982 87,625
Proceeds from issuance of capital stock under
stock purchase plan 4,350 1,112
------------- -------------
Net cash provided by financing activities $54,633,398 $41,023,172
------------- -------------
(Decrease) in cash ($197,960) ($1,633,728)
CASH
Beginning 880,184 1,808,778
------------- -------------
Ending $682,224 $175,050
============= =============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash payments for:
Interest $491,300 $967,200
Income taxes $108,700 $41,900
<FN>
See Notes to Consolidated Condensed Financial Statements.
</TABLE>
-3-
<PAGE>
<TABLE>
AG SERVICES OF AMERICA, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Quarter Ended May 31, 1997
(Unaudited)
<CAPTION>
Capital Stock
----------------------------
Shares Retained
Issued Amount Earnings Total
-------------- ------------- ------------- ------------
<S> <C> <C> <C> <C>
Balance, February 28, 1997 5,135,719 $21,948,375 $16,267,619 $38,215,994
Net income - - - - 1,922,245 1,922,245
Issuance of 10,900 shares of capital
stock upon the exercise of options 10,900 92,982 - - 92,982
Issuance of 300 shares of capital
stock under employee stock purchase
plan 300 4,350 - - 4,350
-------------- ------------- ------------- ------------
Balance, May 31, 1997 5,146,919 $22,045,707 $18,189,864 $40,235,571
============== ============= ============= ============
<FN>
See Notes to Consolidated Condensed Financial Statements.
</TABLE>
-4-
<PAGE>
AG SERVICES OF AMERICA, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
Note 1. Basis of Presentation
The accompanying unaudited consolidated condensed
financial statements have been prepared in accordance
with the instructions to Form 10-Q and Rule 10-01 of
Regulation S-X. Certain information and footnote
disclosures normally included in financial statements
prepared in accordance with generally accepted accounting
principles have been condensed or omitted. It is
suggested these interim consolidated condensed financial
statements be read in conjunction with the financial
statements and notes thereto included in the Company's
Annual Report for the year ended February 28, 1997. In
the opinion of management, all adjustments (which include
only normal recurring adjustments) necessary for a fair
presentation of the financial position, results of
operations and cash flows for the interim periods
presented have been made. Operating results for the
three month period ended May 31, 1997 are not necessarily
indicative of the results that may be expected for the
year ending February 28, 1998.
Principles of Consolidation:
The consolidated financial statements include the
accounts of Ag Services of America, Inc. (the Company)
and its wholly owned subsidiary, Ag Acceptance
Corporation. All material intercompany balances and
transactions have been eliminated in consolidation.
According to the terms related to the asset backed
securitized financing program as described in Note 3 of
the consolidated condensed financial statements, the
Company formed Ag Acceptance Corporation, a wholly owned,
special purpose corporation.
Note 2. Commitments and Contingencies
Commitments:
In the normal course of business, the Company makes
various commitments which are not reflected in the
accompanying consolidated condensed financial statements.
These include various commitments to extend credit to
customers. At May 31, 1997 and February 28, 1997 the
Company had approximately $56,285,000 and $50,180,000,
respectively, in commitments to supply farm inputs. No
material losses or liquidity demands are anticipated as
a result of these commitments.
-5-
<PAGE>
AG SERVICES OF AMERICA, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
Contingencies:
The Company is named in lawsuits in the ordinary course
of business. Counsel for the Company have advised the
Company, while the outcome of various legal proceedings
is not certain, it is unlikely that these proceedings
will result in any recovery which will materially affect
the financial position or operating results of the
Company.
The availability of lines of credit to finance operations
and the existence of a multi-peril crop insurance program
are essential to the Company's operations. If the
federal multi-peril crop insurance program currently in
existence were terminated or negatively modified and no
comparable private or government program were
established, this could have a material adverse effect on
the Company's future operations. The government has from
time to time evaluated the federal multi-peril insurance
program and is likely to review the program in the
future, and there can be no assurance of the outcome of
such evaluations.
Note 3. Pledged Assets and Related Debt
On March 11, 1997, the Company implemented an asset
backed securitized financing program with a maximum
available borrowing amount of $135 million. this
facility replaces the $100 million line of credit used in
fiscal 1997. Under the terms of the five-year facility,
the Company sells and may continue to sell or contribute
certain notes receivable to Ag Acceptance Corporation
("Ag Acceptance"), a newly formed, wholly owned, special
purpose subsidiary of the Company. Ag Acceptance pledges
its interest in these notes receivable to a commercial-
paper market conduit entity and incurs interest at
variable rates in the commercial paper market. The
agreement contains various restrictive covenants
including, among others, restrictions on mergers,
issuance of stock, declaration or payment of dividends,
transactions with affiliates and requires the Company to
maintain certain levels of equity and pretax earnings.
Advances under the facility are made subject to portfolio
performance, financial covenant restrictions and
borrowing base calculations. At May 31, 1997, the
Company had a maximum amount available under the asset
backed securitized financing program of approximately
$9.2 million, based on borrowing base computations as
provided by the agreement.
Note 4. Earnings per Common and Common Equivalent Share
Earnings per common and common equivalent share was
computed by dividing net income by the weighted average
number of common and common equivalent shares outstanding
during each respective period.
-6-
<PAGE>
AG SERVICES OF AMERICA, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
The following table sets forth percentages of net revenues
represented by the selected items in the unaudited condensed
statements of income of the Company for the three months ended May
31, 1997 and 1996. In the opinion of management, all normal and
recurring adjustments necessary for a fair statement of the results
for such periods have been included. The operating results for any
period are not necessarily indicative of results for any future
period.
Percentage
of Net Revenues
------------------
Three Months Ended
May 31,
------------------
1997 1996
-------- --------
Net Revenues:
Farm inputs 97.0% 97.1%
Financing Income 3.0% 2.9%
-------- --------
100.0% 100.0%
-------- --------
Cost of Revenues:
Farm inputs 91.5% 90.8%
Financing expense 0.9% 1.4%
Provision for doubtful notes 1.6% 1.6%
-------- --------
94.0% 93.8%
-------- --------
Income before operating
expenses and income taxes 6.0% 6.2%
Operating expenses 2.3% 2.5%
-------- --------
Income before income taxes 3.7% 3.7%
Federal and state income taxes 1.3% 1.3%
-------- --------
Net income 2.4% 2.4%
======== ========
Net Revenues:
Net revenues increased $14.6 million or 22.0% during the three
months ended May 31, 1997, compared with the three months ended May
31, 1996. The Company reached this record level through increased
market penetration in the Company's twenty-eight state market area.
Cost of Revenues:
The total cost of revenues increased to 94% of net revenues for the
three months ended May 31, 1997 from 93.8% of net revenues for the
three months ended May 31, 1996. The increase in total cost of
revenues as a percentage of net revenues was attributable to the
decrease in gross margin on the sale of farm inputs but was
partially offset by an increase in gross margin on financing
-7-
<PAGE>
income. The gross margin on the sale of farm inputs, alone,
decreased to 5.6% for the three months ended May 31, 1997 from 6.4%
for the three months ended May 31, 1996. The decrease in gross
margin on the sale of farm inputs was the result of new programs
and changes in product mix from higher to lower margin farm inputs.
In fiscal 1997, we initiated marketing programs designed to attract
larger financially stable, high quality customers. With these new
programs, our overall customer loan portfolio quality has
increased. However, we now compete more directly with traditional
sources of agricultural lending, such as banks and the Farm Credit
System for the elite customer market share. As a result, we have
been pricing our products more competitively, and gross margin on
the sale of farm inputs declined. In addition, our continued
marketing reductions in the South due to poor collection history
have also caused a change in the product mix. Higher margin cotton
seed and chemical sales in the South were replaced by lower margin
sales, such as irrigation and fuel advances, concentrated in the
western corn belt and lower midwest plain states. The gross margin
on financing income, alone, increased to 69.7% for the three months
ended May 31, 1997 from 52.8% for the three months ended May 31,
1996. The increase in gross margin on financing income was the
result of two events. Firstly, the Company converted its 7%
Convertible Subordinated Debentures in the second quarter of fiscal
1997. This conversion allowed for a first quarter pre-tax interest
savings of $240,000 over the same period in the prior year.
Secondly, contributing to current interest savings is our new asset
backed securitization program, initiated in March 1997, which
allows the Company to borrow funds by means of the commercial paper
market at lower interest rates. A portion of these savings will be
passed along to our customers to maintain competitive pricing in
the market. The provision for doubtful notes was 1.6% of net
revenues for the three months ended May 31, 1997 and 1996.
Operating Expenses:
Operating expenses decreased to 2.3% of net revenues for the three
months ended May 31, 1997 from 2.5% of net revenues for the three
months ended May 31, 1996. The decrease is the result of operating
expenses increasing at a lower rate (15.4%) than net revenues
(22.0%) for the three months ended May 31, 1997 due to economies
experienced as a result of the Company's improved efficiencies.
The increase in operating expense is attributed primarily to the
Company's growth. Payroll and payroll related expenses increased
to $1,200,690 for the three months ended May 31, 1997 from
$1,086,712 for the three months ended May 31, 1996.
Net Income:
Net income increased 22.2% to $1,922,245 for the three months ended
May 31, 1997 from $1,572,716 for the three months ended May 31,
1996. The increase is attributable to the increase in net revenues
and the decrease in financing expense and operating expenses as a
percentage of net revenues.
Inflation:
The Company does not believe the Company's net revenues and income
from continuing operations were significantly impacted by inflation
or changing prices in fiscal 1997 or the first quarter of fiscal
1998.
Seasonality:
The Company's revenues and income are directly related to the
growing cycle for crops. Accordingly, quarterly revenues and
income vary during each fiscal year. The following table shows the
Company's quarterly net revenues and net income for fiscal 1997 and
the first quarter of fiscal 1998. This information is derived from
-8-
<PAGE>
unaudited consolidated financial statements which include, in the
opinion of management, all normal and recurring adjustments which
management consider necessary for a fair statement of results of
those periods. The operating results for any quarter are not
necessarily indicative of the results for any future period.
Fiscal 1998 Quarter Ended
-----------------------------------------------
May 31 August 31 November 30 February 28
-------- ---------- ------------ -------------
(Dollars in thousands)
Net revenues $80,775
Net income $1,922
Fiscal 1997 Quarter Ended
-----------------------------------------------
May 31 August 31 November 30 February 28
-----------------------------------------------
(Dollars in thousands)
Net revenues $66,207 $49,631 $11,402 $20,407
Net income $1,573 $1,635 $832 $306
The 1997 crop planting season commenced ahead of normal, however,
an unusually cool spring throughout the corn belt initially delayed
plant germination and plant development. Recent rains and warmer
weather have improved overall crop development. The delayed
germination and an increase in the use of post emergent chemicals
have however, shifted a portion of chemical sales to the second
quarter.
Liquidity and Capital Resources:
At May 31, 1997, the Company had working capital of $27,627,000 a
decrease of $5,000 compared to a year ago and an increase of
$252,000 since February 28, 1997. The components of this net
increase, since February 28, 1997, were (i) $198,000 resulting from
operating activities, consisting of approximately $1,922,000 in net
income, $56,000 in depreciation, $28,000 in amortization, and the
remainder from the net change in other working capital items, (ii)
capital expenditures of approximately $43,000 related to the
acquisition of equipment and furniture, and (iii) net proceeds of
$97,000 from the issuance of common stock under the stock purchase
plan and upon stock options exercised.
On March 11, 1997, the Company implemented an asset backed
securitized financing program with a maximum available borrowing
amount of $135 million. This facility replaces the $100 million
line of credit used in fiscal 1997. Under the terms of the five
year facility, the Company sells and may continue to sell or
contribute certain notes receivable to Ag Acceptance Corporation
("Ag Acceptance"), a newly formed, wholly owned, special purpose
subsidiary of the Company. Ag Acceptance pledges its interest in
these notes receivable to a commercial-paper market conduit entity
and incurs interest at variable rates in the commercial paper
market. The agreement contains various restrictive covenants,
including, among others, restrictions on mergers, issuance of
stock, declaration or payment of dividends, transactions with
affiliates, and requires the Company to maintain certain levels of
equity and pretax earnings. Advances under the facility are made
subject to portfolio performance, financial covenant restrictions
-9-
<PAGE>
and borrowing base calculations. At May 31, 1997, the Company had
a maximum amount available under the asset backed securitized
financing program of approximately $9.2 million, based on borrowing
base computations as provided by the agreement.
In conjunction with the securitized financing program, Ag Services
will maintain an $8.5 million revolving bank line of credit in
fiscal 1998. The line of credit is accessible to cover any
potential deficiencies in available funds financed through the
securitization program. All borrowings are collateralized by
substantially all assets of the Company. The agreement requires
that the total outstanding borrowings be repaid in full for 10
consecutive days during the Company's fiscal second quarter. The
agreement contains various restrictive covenants, including, among
others, restrictions on mergers, issuance of stock, declaration or
payment of dividends, loans to stockholders, and requires the
Company to maintain certain levels of equity and pretax earnings.
At May 31, 1997, all $8.5 million was available based on the
borrowing base computation as provided by the agreement.
In April 1993, the Company completed the public offering of $13.8
million (including $1.8 million as a result of over-allotments)
principal amount of 7% Convertible Subordinated Debentures due
2003. Interest was paid semi-annually on May 31 and November 30 of
each year and was convertible into Common Stock of the Company at
$9.25 per share, subject to adjustment under certain conditions, at
any time prior to maturity, unless previously redeemed or
repurchased.
On June 7, 1996, the Company called for redemption or conversion
all of its outstanding 7% Convertible Subordinated Debentures due
2003 (the "Debentures"). From June 7, 1996 through July 10, 1996,
the redemption date, the Company issued 1,487,669 shares of common
stock upon conversion of $13,761,000 of Debentures and redeemed
$39,000 of Debentures as full settlement of all $13,800,000 of the
Debentures outstanding at that date.
Management believes that the financial resources available to it,
including its bank line of credit, trade credit, its equity, and
internally generated funds, will be sufficient to finance the
Company and its operations in the foreseeable future. The Company
currently has no significant capital commitments.
"Safe Harbor" Statement under the Private Securities Litigation
Reform Act of 1995
Information contained in this report, other than historical
information, should be considered forward looking which reflect
Management's current views of future events and financial
performance that involve a number of risks and uncertainties. The
factors that could cause actual results to differ materially
include, but are not limited to, the following: general economic
conditions within the agriculture industry; competitive factors and
pricing pressures; changes in product mix; changes in the
seasonality of demand patterns; changes in weather conditions;
changes in agricultural regulations; and other risks detailed in
the Company's Securities and Exchange Commission filings.
-10-
<PAGE>
AG SERVICES OF AMERICA, INC.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
(11) Statement re computation of earnings per common
share is attached.
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the period
covered by this report.
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.
AG SERVICES OF AMERICA, INC.
(Registrant)
/s/ Brad D. Schlotfeldt
Brad D. Schlotfeldt
Vice President of Finnance & Treasurer
(Principal Financial & Accounting Officer)
Date: July 15, 1997
<PAGE>
<TABLE>
AG SERVICES OF AMERICA, INC.
EXHIBIT 11 - COMPUTATION OF EARNINGS PER COMMON SHARE
<CAPTION>
Three Months Ended
May 31, 1997
-----------------------
1997 1996
---------- ----------
<S> <C> <C>
Computation of weighted average
number of common shares outstanding
and common equivalent shares
Primary:
Common shares outstanding at beginning
of the period 5,135,719 3,611,350
Weighted average common shares issued
during the period 6,180 7,160
Weighted average common shares issued
under the stock purchase plan this period 116 100
Weighted average common shares issued
due to 7% subordinated debenture
conversion this period 0 47
Weighted average of the common equivalent
shares computed using the treasury stock
method using the average market price
during the period:
Options (1) 271,074 234,210
----------- -----------
Weighted average number of common
and common equivalent shares 5,413,089 3,852,867
=========== ===========
Net Income $1,922,245 $1,572,716
=========== ===========
Earnings per common and
common equivalent share $0.36 $0.41
======== ========
Fully diluted:
Common shares outstanding at beginning
of period 5,135,719 3,611,350
Weighted average common shares issued
during the period 6,180 7,160
Weighted average common shares issued
under the stock purchase plan this period 116 100
Weighted average of the common equivalent
shares computed using the treasury stock
method using the greater of the quarter
end market price or average market price
during the period:
Options (1) 271,074 244,119
Assumed conversion of $13.8 million 7%
convertible subordinated debentures (2) -- 1,491,892
----------- -----------
Weighted average common and common
equivalent shares 5,413,089 5,354,621
=========== ===========
Net Income $1,922,245 $1,572,716
Add: Interest on $13.8 million 7%
subordinated debentures (2) -- 154,077
Amortization of debt issue costs,
net of income tax effect -- 13,781
----------- -----------
Total $1,922,245 $1,740,574
=========== ===========
Earnings per common and common
equivalent shares $0.36 $0.33
======= =======
<CAPTION>
(1) Some of the stock options have not been included because they are
antidilutive.
(2) Assumes conversion at the date of issuance on April 23, 1993.
</TABLE>
-12-
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> FEB-28-1998
<PERIOD-END> MAY-31-1997
<CASH> 682,224
<SECURITIES> 0
<RECEIVABLES> 128,644,427
<ALLOWANCES> 4,740,000
<INVENTORY> 1,826,235
<CURRENT-ASSETS> 116,956,950
<PP&E> 1,499,820
<DEPRECIATION> 831,720
<TOTAL-ASSETS> 129,565,224
<CURRENT-LIABILITIES> 89,329,653
<BONDS> 0
0
0
<COMMON> 22,045,707
<OTHER-SE> 18,189,864
<TOTAL-LIABILITY-AND-EQUITY> 129,565,224
<SALES> 78,339,015
<TOTAL-REVENUES> 80,774,528
<CGS> 73,953,091
<TOTAL-COSTS> 74,692,024
<OTHER-EXPENSES> 1,881,547
<LOSS-PROVISION> 1,256,712
<INTEREST-EXPENSE> 738,933
<INCOME-PRETAX> 2,944,245
<INCOME-TAX> 1,022,000
<INCOME-CONTINUING> 1,922,245
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,922,245
<EPS-PRIMARY> 0.36
<EPS-DILUTED> 0.36
</TABLE>
