===============================================================================
UNITED STATES
SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarterly period ended July 31, 1999
Commission file number 000-23250
------------------------
MARKET AMERICA, INC.
(Exact name of registrant as specified in its charter)
North Carolina 56-1784094
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
7605 Business Park Drive
Greensboro, North Carolina
(Address of principal executive offices)
27409
(Zip Code)
(336) 605-0040
(Registrant's Telephone Number, Including Area Code)
------------------------
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 / /
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of September 14, 1999.
19,950,000
================================================================================
1
<PAGE>
PART I
ITEM 1 Statement of Financial Position as of July 31, 1999 (Unaudited)
and April 30, 1999
Statement of Operations for the Three-Month Periods Ended
July 31, 1999 and 1998 (Unaudited)
Statement of Changes in Stockholders' Equity for the Three-
Month Periods Ended July 31, 1999 and 1998 (Unaudited)
Statement of Cash Flows for the Three-Month Periods Ended
July 31, 1999 and 1998 (Unaudited)
Notes to Financial Statements as of July 31, 1999 (Unaudited)
2
<PAGE>
Statement of Financial Position as of
MARKET AMERICA, INC. July 31, 1999 and April 30, 1999
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(Unaudited)
July 31, April 30,
ASSETS 1999 1999
-------------- ----------------
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 32,612,838 $ 45,426,920
Securities available for sale 12,100,930 -
Advances to related parties 262,251 187,646
Notes receivable, employees 669,002 92,794
Inventories 1,770,579 1,852,487
Deferred tax assets 160,000 160,000
Other current assets 264,711 156,484
-------------- ---------------
Total current assets 47,840,311 47,876,331
-------------- ---------------
PROPERTY AND EQUIPMENT
Yacht 3,610,000 -
Furniture and equipment 1,244,531 1,234,438
Software 278,795 271,365
Building construction in progress 134,661 33,070
Leasehold improvements 6,370 6,370
-------------- ---------------
5,274,357 1,545,243
Less accumulated depreciation 736,289 653,933
-------------- ---------------
Total property and equipment 4,538,068 891,310
-------------- ---------------
OTHER ASSETS 680,856 230,856
-------------- --------------
TOTAL ASSETS $ 53,059,235 $ 48,998,497
============== ===============
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
Statement of Financial Position as of
MARKET AMERICA, INC. July 31, 1999 and April 30, 1999
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(Unaudited)
July 31, April 30,
LIABILITIES AND STOCKHOLDERS' EQUITY 1999 1999
-------------- -----------------
<S> <C> <C>
CURRENT LIABILITIES
Current portion of long-term debt $ 100,000 $ 120,000
Accounts payable - trade 1,401,314 1,107,633
Commissions payable 2,138,525 2,280,902
Sales tax payable 791,758 792,438
Income taxes payable 1,987,211 2,062,211
Other accrued liabilities 585,252 693,256
Unearned revenue 2,396,237 2,259,522
Deferred tax liability 173,000 -
-------------- ---------------
Total current liabilities 9,573,297 9,315,962
-------------- ---------------
LONG-TERM DEBT - 10,000
-------------- ---------------
STOCKHOLDERS' EQUITY
Common stock, $.00001 par value;
800,000,000 shares authorized;
19,950,000 shares issued and
outstanding 199 199
Additional paid-in capital 39,801 39,801
Retained earnings 43,187,642 39,632,535
Other comprehensive income
Unrealized gain on marketable
securities, net 258,296 -
-------------- ---------------
Total stockholders' equity 43,485,938 39,672,535
-------------- ---------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 53,059,235 $ 48,998,497
============== ===============
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
Statement of Operations for the Three-Month
MARKET AMERICA, INC. Periods Ended July 31, 1999 and 1998 (Unaudited)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
July 31, July 31,
1999 1998
------------ ------------
<S> <C> <C>
SALES $ 30,828,703 $ 27,097,790
COST OF SALES 8,009,354 6,937,544
------------ ------------
GROSS PROFIT 22,819,349 20,160,246
------------ ------------
SELLING EXPENSES
Commissions 14,246,399 11,912,958
Sales tax 3,715 (4,472)
------------ ------------
14,250,114 11,908,486
------------ ------------
GENERAL and ADMINISTRATIVE EXPENSES
Salaries 1,195,554 982,190
Consulting 85,739 45,557
Rents 260,117 206,070
Depreciation and amortization 82,356 50,319
Other operating expenses 1,287,045 999,802
------------ ------------
2,910,811 2,283,938
------------ ------------
INCOME FROM OPERATIONS 5,658,424 5,967,822
------------ ------------
OTHER INCOME (EXPENSE)
Interest income 388,996 389,407
Interest expense - (23,466)
Dividend income 24,705 -
Realized gain (loss) on available
for sale securities (341,768) -
Loss on disposal of assets - (6,404)
Miscellaneous 136,750 162,138
------------ ------------
Total other income (expense) 208,683 521,675
------------ ------------
INCOME BEFORE TAXES 5,867,107 6,489,497
PROVISION FOR INCOME TAXES 2,312,000 2,614,433
------------ ------------
NET INCOME $ 3,555,107 $ 3,875,064
============ ============
BASIC EARNINGS PER COMMON SHARE $ .18 $ .19
============ ============
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING 19,950,000 19,950,000
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
Statement of Changes in Stockholders' Equity for the
Three-Month Periods Ended July 31, 1999 and 1998
MARKET AMERICA, INC. (Unaudited)
------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Common Stock Additional Other
----------------- Paid-in Retained Comprehensive
Shares Amount Capital Earnings Income Total
---------- ------ ------- --------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
Balances at
April 30, 1998 19,950,000 $199 $39,801 $25,441,510 $ - $25,481,510
Net income 3,875,064 3,875,064
---------- ----- ------- ---------- ----------- -----------
Balances at
July 31, 1998 19,950,000 $199 $39,801 $29,316,574 $ - $29,356,574
=========== ===== ======= =========== =========== ===========
Balances at
April 30, 1999 19,950,000 $199 $39,801 $39,632,535 $ - $39,672,535
Comprehensive
Income:
Unrealized
holding gains
on available
for sale
securities, net
of deferred taxes
of $173,000 258,296 258,296
Net income 3,555,107 3,555,107
-----------
Total
Comprehensive
Income 3,813,403
-----------
---------- ----- ------- ----------- ---------- -----------
Balances at
July 31, 1999 19,950,000 $199 $39,801 $43,187,642 $258,296 $43,485,938
========== ===== ======= =========== ========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
<PAGE>
Statement of Cash Flows for the
Three-Month Periods Ended July 31, 1999 and 1998
MARKET AMERICA, INC. (Unaudited)
------------------------------------------------------------------------------
<TABLE>
<CAPTION>
July 31, July 31,
1999 1998
-------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 3,555,107 $ 3,875,064
Adjustments to reconcile net income to net
cash provided by operating activities:
Loss on sale of assets - 6,404
Depreciation and amortization 82,356 50,319
Loss on sales of available for sale securities 341,768 -
(Increase) decrease in inventories 81,908 (508,743)
(Increase) decrease in other current assets (108,227) 32,722
Increase (decrease) in accounts payable 293,681 138,942
Increase (decrease) in commissions payable (142,377) (961,551)
Increase (decrease) in sales tax payable (680) (76,136)
Increase (decrease) in income taxes payable (75,000) 573,554
Increase (decrease) in other accrued liabilities (108,004) (70,762)
Increase (decrease) in unearned revenue 136,715 (275)
--------- ---------
NET CASH PROVIDED BY OPERATING ACTIVITIES 4,057,247 3,059,538
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of available for sale securities (27,651,497) -
Proceeds from sale of available
for sale securities 15,640,095 -
(Increase) decrease in short-term investments - (82,058)
Increase in notes receivable, employees (576,208) (27,397)
Advances to related parties (74,605) (54,467)
(Increase) decrease in other assets (450,000) (6,809)
Increase in restricted cash - (1,425)
Proceeds from sale of assets - 23,286
Capital expenditures (3,729,114) (224,865)
----------- -----------
NET CASH USED IN INVESTING ACTIVITIES (16,841,329) (373,735)
----------- -----------
CASH FLOWS USED IN FINANCING ACTIVITIES
Principal payments on long-term debt (30,000) (36,390)
----------- -----------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (12,814,082) 2,649,413
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 45,426,920 18,379,127
----------- -----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $32,612,838 $21,028,540
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
7
<PAGE>
Notes to Financial Statements
MARKET AMERICA, INC. July 31, 1999(Unaudited)
- --------------------------------------------------------------------------------
Interim Financial Information
The unaudited interim financial statements of Market America, Inc. (the
"Company")as of July 31, 1999 and 1998 have been prepared in accordance with the
rules and regulations of the Securities and Exchange Commission. 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 rules and regulations. In the opinion of
management, the accompanying interim financial statements contain all
adjustments, consisting of normal recurring adjustments, necessary to present
fairly the Company's financial statements as of July 31, 1999 and for the three
month periods ended July 31, 1999 and 1998. Management suggests that these
financial statements should be read in conjunction with the audited financial
statements and notes thereto included in the Company's latest Annual Report on
Form 10-K. The results of operations for the quarter ended July 31, 1999 may not
be indicative of the results that may be expected for the fiscal year ending
April 30, 2000.
Earnings Per Share
The Company computes earnings per share ("EPS") based upon the requirements of
Statement of Financial Accounting Standards No. 128. This statement specifies
the calculation, presentation, and disclosure requirements for both basic and
diluted EPS. The Company does not have any securities or agreements outstanding
with dilutive potential for its common shares.
Reclassifications
Certain reclassifications have been made to prior period amounts to conform with
the current period financial statements presentation. Reclassifications made had
no effect on previously reported net income.
Related Party Transactions
The Company has agreements with three companies owned by Mr. & Mrs. James H.
Ridinger, officers and major stockholders of the Company. One agreement allows
the Company to lease real estate in Miami, Florida for use by Company management
when conducting business in Florida. The second agreement is for the lease of a
yacht on a per event basis. The yacht was used as an integral part of the direct
sales training and education activities of the Company prior to the purchase of
a yacht by the Company in June 1999 (see Liquidity and Capital Resources below).
Both the lease agreements have 5-year terms with options to renew.
The third agreement is a 33-year net ground lease for the site on which the
Company is currently constructing its new headquarters and warehouse facility in
Greensboro, North Carolina. In June 1999, the Company paid $500,000 for a Right
of First Refusal on this site which provides the Company with the opportunity to
purchase the land, should it be offered for sale, before the land is offered for
sale to other parties. The amount paid will be applied to the purchase price of
the land in the event the Company buys it. On June 28, 1999, the Company became
guarantor of a bank loan to the related party for the purchase of the land. This
loan and the Company's construction loan (see Liquidity and Capital Resources
8
<PAGE>
below) are cross-collateralized by the land being leased from the related
company and by the building improvement to be constructed thereon by the
Company. The guaranteed loan is repayable over a five-year period following
completion of the building construction.
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The board of directors has determined that the above agreements are equivalent
to market rates.
The amount of rent expense incurred for the three-month period ended July 31,
1999 was $29,800 for the real estate in Miami, Florida, $60,000 for the yacht
and $31,998 for the land in Greensboro, North Carolina. At July 31, 1999 these
companies owed the Company $262,251.
Liquidity & Capital Resources
Cash and cash equivalents, investments with maturity dates of three months or
less when purchased, were $32.6 million at July 31, 1999 compared to $45.4
million at April 30, 1999. The decreases in cash and cash equivalents and the
increase in cash used by investing activities are directly related to two
separate events. In May 1999, $12 million of available cash was invested into
readily marketable equity securities in order to increase the Company's yield on
assets pending use in the Company's business. In June 1999, the Company
purchased a yacht for $3.6 million in cash to be used as an integral part of the
direct sales training and education activities of the Company.
On June 28, 1999, the Company obtained a construction loan commitment of $2.1
million to be used for the construction of its new corporate headquarters and
warehouse facility in Greensboro, North Carolina. The building will be
constructed on land leased from a related party and is expected to cost
approximately $4.6 million. Upon completion, the Company plans to depreciate the
building over the 33-year term of the ground lease. The loan will be repayable
over a five-year period following completion of construction and bears interest
of 7.625%.
Management believes that its cash reserves and cash flows provided by operations
will provide sufficient working capital for the remainder of the fiscal year.
Results of Operations
The Company's sales continued to grow during the quarter ended July 31, 1999.
Net sales increased 13.8% to $30.8 million from $27.1 million for the quarter
ended July 31, 1998 compared to the same period in the prior fiscal year.
Management believes that its emphasis on one-to-one marketing and mass
customization has lead to this growth.
Commission expense was $14.2 million for the three-month period ended July 31,
1999. This compares to $11.9 million for the same period last year. Commissions,
as a percentage of sales, were 46.2% and 44.0% for the three-month periods ended
July 31, 1999 and 1998, respectively. Management anticipates that commission
expense will range from 43% to 46% of sales during fiscal 2000.
9
<PAGE>
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS - CONTINUED
General and administrative expenses were $2.9 million and $2.3 million for the
three-month periods ended July 31, 1999 and 1998, respectively. As a percentage
of sales, general and administrative expenses were 9.4% and 8.4% for the
three-month periods ended July 31, 1999 and 1998, respectively. For the
three-month periods ended July 31, 1999 and 1998, the general and administrative
expenses included the following items:
1999 1998
---------- --------
Legal and professional fees $ 368,522 $315,499
Insurance 281,269 163,123
Other taxes and licenses 125,029 158,673
Utilities 85,717 67,171
Other 426,508 295,336
---------- --------
$1,287,045 $999,802
========== ========
The increase in general and administrative costs is due to the Company's efforts
to expand human resources to better serve the Company's distributors. In the
period ended July 31, 1999, the Company had an 18% larger workforce compared to
the same period in 1998. This resulted in increased payroll expenses and
employee benefits.
Compared to the 1998 period, the Company incurred larger consulting expenses.
The increased costs were a result of the continued development of customized
apparel. Management expects consulting expenses to remain constant throughout
the remainder of fiscal 2000.
Management expects legal expenses to decline substantially during the remainder
of fiscal 2000 as a result of the conclusion of the Securities and Exchange
Commission administrative proceeding on May 4, 1999 (see Part II, Item I Legal
Proceedings below).
Earnings per share for the quarter were 4.18, compared to $.19 for the same
period in 1998, primarily due to the delay in recognition of revenue caused by
movement of the Company's annual convention from July to August.
Year 2000 Issue
The Year 2000 (Y2K) issue stems from the use of two digits rather than four to
define calendar dates. By using two digit dates, systems may fail or make
miscalculations due to their inability to distinguish dates in the 1900s from
dates in the 2000s. The Company continues to aggressively address the business
issues associated with the Year 2000 issue. The Company has formed a Year 2000
task force and has implemented a compliance plan.
The Company has upgraded approximately 75% of its core operating systems to be
Year 2000 compliant. The Company purchased a test system in order to run test
transactions with dates beyond the January 1, 2000. This allowed the Company's
task force personnel to determine what changes were needed in the current
systems. The costs incurred by the Company for the completed upgrades were
approximately $16,000, excluding internal costs that the Company does not track.
In order to complete the conversion of the remaining 25% of the core operating
systems to Y2K compliance, the Company is currently contracting
10
<PAGE>
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS - CONCLUDED
with outside vendors to update the voice response system and phone system. The
expected costs of these updates are approximately $20,000. The Company fully
expects the remaining testing of the current system to be completed by October
31, 1999. The Company expects all necessary upgrades for Y2K compliance to be
completed by November 30, 1999.
Testing on application software will continue into the second quarter of fiscal
2000. Currently, the Company is converting the commissions, sales, order entry
and credit file applications with the use of internal personnel. During fiscal
1999, the Company upgraded the following software to the current Y2K compliant
version: accounting, sales tax and shipping applications. The Company expects
the internal conversions and testing of the upgraded application software to be
completed and, therefore, Year 2000 compliant by October 31, 1999.
If the Company's systems for commission calculation and payment are not Y2K
compliant by December 31, 1999 it could have a material adverse effect on the
Company's financial statements. However, the Company expects to be fully Y2K
compliant by October 31, 1999.
In addition, the Company has requested information regarding Year 2000
compliance plans and current status from 68 of it's most significant vendors and
financial institutions. Management has determined that the remaining vendors
would not have a significant impact on the Company's operations due to Year 2000
noncompliance. Currently, 54.4% of the parties contacted have responded, with
only 19.1% of respondents certifying in writing that they are Y2K compliant. At
present, the Company is not aware of any significant risk exposure associated
with the parties that have not either certified their Y2K compliance or
responded. As a result, the Company is unable to predict the impact on its
business if such parties are unable to comply. In order to reduce any such
impact, the Company has contacted backup vendors for its significant products
and may increase inventory levels during the fourth calendar quarter for
products which are obtained from vendors who have not certified their Y2K
compliance.
Forward-Looking Information
Statements in this report concerning the Company's business outlook for future
economic performance, anticipated profitability, revenues, expenses or other
financial items, together with other statements that are not historical facts,
are "forward-looking statements" as that term is defined under federal
securities laws. "Forward-looking statements" are subject to risks,
uncertainties and other factors, which could cause actual results to differ
materially from those stated in such statements. Such risks, uncertainties and
factors include, but are not limited to, decreases in sales volume or number of
distributors, unfavorable regulatory action, loss of key personnel and general
economic conditions.
11
<PAGE>
PART II
ITEM 1 LEGAL PROCEEDINGS
On May 4, 1999, the Company agreed to settle an SEC administrative
proceeding, in the Matter of Market America, Inc. et al., SEC
Administrative Proceeding File No. 3-9889 (May 4, 1999), that
resulted from a previously reported SEC staff investigation. In the
settlement, the Company neither admitted nor denied the SEC's
allegations, but agreed to be subject to a cease-and-desist order
against future violations of the provisions of the securities laws
requiring public companies to file periodic reports with the SEC.
The SEC had alleged that the Company's periodic reports from 1994 to
1998 had not accurately disclosed all ownership of the Company's
stock of its Chairman and Chief Executive Officer.
The Company is periodically involved in routine litigation
incidental to its business, including litigation involving
distributor terminations. Management believes that any such pending
litigation will not have a material effect on the Company's
financial position or results of operations.
ITEM 2 CHANGES IN SECURITIES
NONE
ITEM 3 DEFAULTS UPON SENIOR SECURITIES
NONE
ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
NONE
ITEM 5 OTHER INFORMATION
NONE
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS
The exhibits to this report are listed in the Exhibit Index, which
is incorporated herein by reference.
(b) REPORTS ON FORM 8-K
None
12
<PAGE>
- -------------------------------------------------------------------------------
SIGNATURE
- -------------------------------------------------------------------------------
Pursuant to the requirements of Section 13 or 15 (d) 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.
MARKET AMERICA, INC.
(Registrant)
Date: September 14, 1999 /s/ James H. Ridinger
- ------------------------ -----------------------------------
James H. Ridinger, President and CEO
(Principal Executive Officer and
Principal Financial Officer)
13
<PAGE>
EXHIBITS TO FORM 10-Q
EXHIBIT INDEX
Exhibit
Number Identification
------ ---------------
2.1 Agreement and Plan of Merger dated as of October 31, 1993 between
Atlantis Ventures, Inc. and Market America, Inc. and Addendum (to
same)dated October 1, 1993 (incorporated by reference to Exhibits
2.1 and 2.2, respectively, to the Company's Current Report on Form
8-K filed October 6, 1993, Commission File No. 000-23250)
3.1 Articles of Incorporation of the Company (incorporated by
reference to Exhibit 3.1 to the Company's Current Report on Form
8-K filed with the Commission on November 3, 1993, Commission File
No. 000-23250)
3.2 Articles of Amendment of the Company (incorporated by reference to
Exhibit 3.1 to the Company's Annual Report on Form 10-K for the
fiscal year ended April 30, 1996 filed with the Commission on July
30, 1996, Commission File No. 000-23250)
3.3 By-laws of the Company (incorporated by reference to Exhibit 3.4
to the Company's Annual Report on Form 10-K for the fiscal year
ended April 30, 1996 filed with the Commission on July 30, 1996,
Commission File No. 000-23250)
10.1 Lease between Miracle Marine, Inc. and Market America, Inc. dated
May 1, 1998 (incorporated by reference to Exhibit 10.1 to the
Company's Annual Report on Form 10-K for the fiscal year ended
April 30, 1999 filed with the Commission on July 29, 1999,
Commission File No. 000-23250)
10.2 Vendor agreement between Market America, Inc. and Isontonix (x)
Corporation dated October 25, 1993 (incorporated by reference to
Exhibit 10.2 to the Company's Annual Report on Form 10-K for the
fiscal year ended April 13, 1998 filed with the Commission on
August 13, 1998, Commission File No. 000-23250)
10.3 Lease between Miracle Properties LLC and Market America, Inc.
dated May 1, 1998 (incorporated by reference to Exhibit 10.3 to
the Company's Annual Report on Form 10-K for the fiscal year ended
April 30, 1999 filed with the Commission on July 29, 1999,
Commission File No. 000-23250)
10.4 Lease between Miracle Holdings LLC and Market America, Inc. dated
November 1, 1998 (incorporated by reference to Exhibit 10.4 to the
Company's Annual Report on Form 10-K for the fiscal year ended
April 30, 1999 filed with the Commission on July 29, 1999,
Commission File No. 000-23250)
10.5 Right of First Refusal agreement between Market America, Inc. and
Miracle Holdings LLC dated May 20, 1999 (incorporated by reference
to Exhibit 10.5 to the Company's Annual Report on Form 10-K for
the fiscal year ended April 30, 1999 filed with the Commission on
July 29, 1999, Commission File No. 000-23250)
27* Financial Data Schedule
- ----------------
o Filed herewith.
14
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Statement of Financial Position at July 31, 1999 and the Statement of Operations
for the year ended July 31, 1999 and is in its entirety by reference to such
financial statements.
</LEGEND>
<CIK> 0000880121
<NAME> Market America, Inc.
<MULTIPLIER> 1
<CURRENCY> U.S. Dollars
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> Apr-30-2000
<PERIOD-START> May-1-1999
<PERIOD-END> Jul-31-1999
<EXCHANGE-RATE> 1
<CASH> 32,612,838
<SECURITIES> 12,100,930
<RECEIVABLES> 931,253
<ALLOWANCES> 0
<INVENTORY> 1,770,579
<CURRENT-ASSETS> 47,840,311
<PP&E> 5,274,357
<DEPRECIATION> 736,289
<TOTAL-ASSETS> 53,059,235
<CURRENT-LIABILITIES> 9,573,297
<BONDS> 0
0
0
<COMMON> 199
<OTHER-SE> 43,485,739
<TOTAL-LIABILITY-AND-EQUITY> 53,059,235
<SALES> 30,828,703
<TOTAL-REVENUES> 30,828,703
<CGS> 8,009,354
<TOTAL-COSTS> 8,009,354
<OTHER-EXPENSES> 17,160,925
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 5,867,107
<INCOME-TAX> 2,312,000
<INCOME-CONTINUING> 5,658,424
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,555,107
<EPS-BASIC> .18
<EPS-DILUTED> .18
</TABLE>
