<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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 March 31, 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 number: 0-20758
HA-LO INDUSTRIES, INC.
-------------------------
(Exact name of registrant as specified in its charter)
Illinois 36-3573412
----------- ------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
5980 TOUHY AVENUE, NILES, ILLINOIS 60714
------------------------------------------
(Address of principal executive offices, Zip Code)
Registrant's telephone number, including area code: (847) 647-2300
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[ ].
As of May 7, 1998, the registrant had an aggregate of 21,426,732 shares of
its common stock outstanding.
<PAGE>
HA-LO INDUSTRIES, INC.
INDEX
<TABLE>
<CAPTION>
Part I. FINANCIAL INFORMATION Page Number
-----------
<C> <S> <C>
Item 1. Financial Statements.
Balance Sheets as of March 31, 1998 and December 31, 1997. 2
Statements of Income for the three months ended March 31,
1998 and 1997. 4
Statements of Cash Flows for the three months ended March
31, 1998 and 1997. 5
Notes to Financial Statements. 6
Item 2. Management's Discussion and
Analysis of Financial Condition
And Results of Operations. 9
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote 12
of Security Holders.
Item 6. Exhibits and Reports on Form 8-K. 12
Signatures 13
</TABLE>
1
<PAGE>
PART 1. FINANCIAL INFORMATION
HA-LO INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
MARCH 31, 1998 AND DECEMBER 31, 1997
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
---------------------- ----------------------
(Unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 2,621,664 $ 2,717,027
Receivables 115,989,604 129,186,856
Related party receivable 236,092 662,702
Inventories 28,637,502 24,346,962
Prepaid expenses & deposits 8,212,625 5,195,515
---------------------- ------------------------
Total current assets 155,697,487 162,109,062
---------------------- ------------------------
PROPERTY AND EQUIPMENT, net 24,502,409 21,174,491
---------------------- -------------------------
OTHER ASSETS:
Intangible assets relating to acquired
businesses, net 24,529,178 22,568,646
Other 4,716,548 4,774,882
--------------------- ------------------------
Total other assets 29,245,726 27,343,528
--------------------- ------------------------
$209,445,622 $ 210,627,081
--------------------- ------------------------
--------------------- ------------------------
</TABLE>
The accompanying notes are an integral part of these balance sheets.
2
<PAGE>
HA-LO INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
MARCH 31, 1998 AND DECEMBER 31, 1997
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
------------------- ---------------------
(Unaudited)
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt $ 5,745,561 $ 4,352,493
Book overdraft 6,344,686 9,919,559
Accounts payable 40,463,878 45,420,494
Accrued expenses 18,291,543 23,261,377
Due to related parties - 192,000
Deferred taxes - current 1,092,606 1,092,538
-------------------- ----------------------
Total current liabilities 71,938,274 84,238,461
-------------------- ----------------------
LONG-TERM DEBT 47,167,895 43,625,649
-------------------- ----------------------
DEFERRED LIABILITIES 1,095,956 1,376,608
-------------------- ---------------------
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Preferred stock, no par value; 10,000,000
shares authorized and none issued
- -
Common stock, no par value: 100,000,000
shares authorized and 21,387,538 issued
and outstanding in 1998 and 21,085,237 in 1997 68,089,648 62,154,879
Other (1,920,891) (1,985,188)
Retained earnings 23,273,294 21,363,067
Accumulated other comprehensive income (198,554) (146,395)
-------------------- ---------------------
Total shareholders' equity 89,243,497 81,386,363
-------------------- ---------------------
$ 209,445,622 $ 210,627,081
-------------------- ----------------------
-------------------- ----------------------
</TABLE>
The accompanying notes are an integral part of these balance sheets.
3
<PAGE>
HA-LO INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF INCOME
FOR THE PERIODS ENDED
MARCH 31, 1998 AND 1997
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
-------------------------------------------------------
March 31, March 31,
1998 1997
------------------------ --------------------------
(Restated)
<S> <C> <C>
NET SALES $109,376,190 $ 83,593,444
COST OF SALES 73,420,087 57,471,373
------------------------ --------------------------
Gross profit 35,956,103 26,122,071
SELLING EXPENSES 15,445,756 10,461,266
GENERAL AND ADMINISTRATIVE EXPENSES 15,139,244 12,192,297
NON-RECURRING CHARGES 1,500,000 2,056,000
------------------------ --------------------------
Income from operations 3,871,103 1,412,508
INTEREST EXPENSE, net 686,576 346,931
------------------------ --------------------------
Income before taxes 3,184,527 1,065,577
PROVISION FOR TAXES 1,274,300 427,045
------------------------ --------------------------
NET INCOME FOR THE PERIOD $ 1,910,227 $ 638,532
------------------------ --------------------------
------------------------ --------------------------
EARNINGS PER SHARE:
Basic $ 0.09 $ 0.03
Diluted $ 0.09 $ 0.03
------------------------ --------------------------
------------------------ --------------------------
WEIGHTED AVERAGE SHARES
OUTSTANDING:
Basic 21,185,929 20,492,345
Diluted 22,444,107 21,400,623
------------------------ --------------------------
------------------------ --------------------------
</TABLE>
The accompanying notes are an integral part of these statements.
4
<PAGE>
HA-LO INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED
MARCH 31, 1998 AND 1997
(UNAUDITED)
<TABLE>
<CAPTION>
March 31, March 31,
1998 1997
------------------------ --------------------------
(Restated)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income for the period $ 1,910,227 $ 638,532
Adjustments to reconcile net income to net
cash provided by for operating activities-
Depreciation and amortization 2,079,534 1,465,338
Increase in cash surrender value 60,250 26,431
Increase (decrease) in deferred liabilities - other (280,652) 30,320
Changes in assets and liabilities, net of effects
of acquired companies -
Receivables 14,051,218 5,639,468
Inventories (3,622,471) (1,946,171)
Prepaid expenses and deposits (2,958,966) 610,775
Accounts payable, accrued expenses and
due to related parties (8,633,096) (6,198,893)
------------------------ --------------------------
Net cash provided by operating activities 2,606,044 265,800
------------------------ --------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (4,420,395) (1,634,807)
Decrease in short-term investments - 2,908,370
Increase in other assets (98,200) (139,679)
Cash paid for acquisition, including deferred payments (2,086,540) (73,275)
------------------------ --------------------------
Net cash provided by (used for) investing activities (6,605,135) 1,060,609
------------------------ --------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings on long-term debt 5,658,174 350,621
Net payments under line of credit (1,817,375) (3,042,049)
Increase(decrease) in book overdraft (3,574,873) 1,584,624
Net proceeds from issuance of common stock 3,713,160 661,340
Repayments from related party 426,610 -
Repurchase of common stock (449,809) (901,056)
------------------------ --------------------------
Net cash provided by (used for) financing activities 3,955,887 (1,346,520)
------------------------ --------------------------
EFFECT OF EXCHANGE RATE CHANGES ON
CASH AND CASH EQUIVALENTS (52,159) (28,499)
------------------------ --------------------------
NET DECREASE IN CASH AND
EQUIVALENTS (95,363) (48,610)
CASH AND EQUIVALENTS, beginning of period 2,717,027 5,261,647
------------------------ --------------------------
CASH AND EQUIVALENTS, end of period $ 2,621,664 $ 5,213,037
------------------------ --------------------------
------------------------ --------------------------
</TABLE>
The accompanying notes are an integral part of these statements.
5
<PAGE>
HA-LO INDUSTRIES, INC.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1998
NOTE 1. BASIS OF PRESENTATION:
The accompanying financial statements have been prepared by the Company,
without audit, in accordance with generally accepted accounting principles
for interim financial information and in conjunction with the rules and
regulations of the Securities and Exchange Commission. Accordingly, they do
not include all of the information and footnotes required by generally
accepted accounting principles for financial statements. In the opinion of
management, all adjustments (consisting only of normal recurring matters)
considered necessary for a fair presentation have been included.
The results of operations for the three months ended March 31, 1998 are not
necessarily indicative of the results that may be expected for the full year.
These financial statements should be read in conjunction with the Company's
financial statements and related notes in the Company's 1997 Annual Report on
Form 10-K.
NOTE 2. CAPITAL STOCK AND EARNINGS PER SHARE:
In the first quarter of 1998, the Company increased the shares available
under its 1997 Stock Plan (as amended and restated) from 1,500,000 to
3,000,000.
In the first quarter of 1998, options to acquire an aggregate of 999,593
shares of the Company's common stock were issued under the Company's Stock
Plans at exercise prices ranging from $24.69 to $34.94 per share.
Additionally, 299,276 options were exercised in the first quarter at prices
ranging from $2.67 to $25.13 per share.
On May 13, 1998, the Company completed a public offering covering 5,500,000
shares of Common Stock. Of the amount of shares offered, 3,750,000 shares
were sold by the Company, and 1,750,000 shares were sold by certain
shareholders of the Company.
Basic earnings per share is calculated using the average number of common
shares outstanding. Diluted earnings per share is computed on the basis of
the average number of common shares outstanding plus the effect of
outstanding stock options and warrants using the "treasury stock" method.
<TABLE>
<CAPTION>
Three Months Ended March 31,
----------------------------------
1998 1997
---- ----
<S> <C> <C>
Net income available to common shareholders' (A) $ 1,910,227 $ 638,532
-------------------- --------------------
-------------------- --------------------
Average outstanding:
Common stock (B) 21,185,929 20,492,345
Effective of stock options and warrants 1,258,178 908,278
-------------------- --------------------
-------------------- --------------------
Common stock and common stock equivalents (C) 22,444,107 21,400,623
-------------------- --------------------
-------------------- --------------------
Earnings per share:
Basic (A/B) $ .09 $ .03
-------------------- --------------------
-------------------- --------------------
Diluted (A/C) $ .09 $ .03
-------------------- --------------------
-------------------- --------------------
</TABLE>
6
<PAGE>
NOTE 3. STATEMENTS OF CASH FLOWS:
The supplemental schedule of non-cash activities for the three months ended
March 31, 1998 and 1997 includes the following:
<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
Issuance of common shares in connection with acquisitions, net $ 550,760 $ -
Recognition of tax benefits from options and restricted stock $2,120,658 $ 648,190
Conversion of non-operating assets to note receivable $ - $1,530,159
</TABLE>
NOTE 4. RELATED-PARTY TRANSACTIONS:
A member of the Board of Directors renders acquisition-consulting services to
the Company pursuant to an agreement. The director's compensation is directly
contingent upon the successful completion of an acquisition. During the first
quarter of 1998, the director earned approximately $131,800 and was granted
3,295 options at fair value at the date of grant related to acquisitions.
A wholly owned subsidiary of the Company leases its corporate headquarters
from the Vice-Chairman of the Board of the Company. Rental payments under
this lease are $25,000 per month. The Company believes that the lease terms
are no more or less favorable than otherwise could be obtained from
unaffiliated third parties.
In connection with an acquisition the Vice-Chairman of the Board of the
Company converted certain non-operating assets of the acquired company to a
$1,530,159 note receivable. The note bears interest at 7.0% per annum.
Subsequent to March 31, 1998, amounts owed under this obligation were paid in
full.
NOTE 5. BUSINESS COMBINATIONS:
In each of the second and fourth quarters of 1997, the Company completed an
acquisition accounted for using the pooling-of-interests method of
accounting. Accordingly, the consolidated financial statements for the first
quarter of 1997 have been restated to include the results of these two
acquisitions.
On February 28, 1998, the Company completed the acquisition of a distributor
of promotional products for an aggregate of approximately 19,400 shares of
its common stock and $750,000 in cash. The acquisition has been accounted for
using the purchase method of accounting and the results of operations are
included in the consolidated financial statements from the date of
acquisition.
The Company is engaged in ongoing evaluations of third parties regarding
possible acquisitions and has reached a non-binding, preliminary
understanding to acquire a European-based promotional products distributor
for approximately $60.0 million, approximately half of which is expected to
be paid in shares of Common Stock; however, the Company has not executed
definitive agreements with respect to such acquisition and there can be no
assurance that such acquisition will occur.
7
<PAGE>
NOTE 6: NON-RECURRING CHARGES:
First quarter 1998 results include pre-tax non-recurring charges of $1.5
million related to a fire in a branch office and distribution facility, and
the closing of a warehouse and embroidery operation in California. First
quarter 1997 results include two pretax non-recurring charges equaling
approximately $2.1 million related to the completion of two acquisitions that
were accounted for using the pooling-of-interest method of accounting.
NOTE 7: ACCOUNTING PRONOUNCEMENTS:
In June 1997, the Financial Accounting Standards Board (FASB) issued
Statement No. 130, "Reporting Comprehensive Income". As of January 1, 1998,
the Company has adopted this standard which requires the display of
comprehensive income and its components in the financial statements. The
Company's comprehensive income includes net income and unrealized gains and
losses from currency translation. The calculation of total comprehensive
income for the three-month periods ending March 31, 1998 and 1997 is as
follows:
<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
Net income $1,910,227 $ 638,532
Other comprehensive loss, net of taxes (31,300) (17,100)
------------- -----------
------------- -----------
Comprehensive income $1,878,927 $621,432
------------- -----------
------------- -----------
NOTE 8: UNAUDITED SUPPLEMENTAL EARNINGS PER SHARE:
A portion of the net proceeds from the public offering described above will
be used to repay substantially all debt outstanding on the Company's credit
facilities. Had the debt retirement taken place on January 1, 1997, the
unaudited pro forma earnings per common and common equavalent share would not
have been materially different from that reflected on the results of
operations for the three-month periods ended March 31, 1998 or 1997, or for
the year ended December 31, 1997.
</TABLE>
8
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1998 AND 1997
Net sales for the first quarter of 1998 increased 30.8% to $109.4 million
compared to $83.6 million in the corresponding quarter of 1997. Of the $25.8
million increase, $18.2 million is due to internal growth and the remainder
is from acquired companies.
Gross profit increased 37.6% to $36.0 million (32.9% of net sales) in the
first quarter of 1998 from $26.1 million (31.2% of net sales) in the first
quarter of 1997. As a percentage of net sales, the increase is due to
increased margins in the promotional products business, a change in sales mix
toward promotional products and a continued focus on profitable growth.
Selling expenses as a percentage of net sales increased to 14.1% in the first
quarter of 1998 ($15.4 million) compared to 12.5% ($10.5 million) in the
first quarter of 1997. The increase as a percentage of net sales is
attributable primarily to an increase in commissions resulting from the
increase in gross profit as a percentage of net sales. To a lesser extent,
the increase is due to increased investments in enhancing corporate
visibility and establishing exclusive product arrangements.
General and administrative expenses as a percentage of net sales decreased to
13.8% in the first quarter of 1998 ($15.1 million) compared to 14.6% in the
first quarter of 1997 ($12.2 million). The decrease in the percentage is the
result of more effective leverage of the Company's cost structure. The $2.9
million increase is due to investments in infrastructure required to support
the Company's growth.
Operating results for the first quarter of 1998 include non-recurring charges
of $1.5 million related to two events-a fire that damaged an office and
distribution facility and the closing of a warehouse and embroidery operation
that was acquired as part of a 1997 acquisition. Operating results for the
first quarter of 1997 include non-recurring charges of approximately $2.1
million incurred to complete two acquisitions accounted for using the
pooling-of-interests accounting method.
Net interest expense for the first quarter of 1998 increased to $687,000 from
$347,000 for the same period last year. The increase is due to working
capital needs necessary to fund growth and additional borrowings incurred to
fund certain 1997 acquisitions.
9
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
On May 13, 1998, the Company completed a public offering for 3,750,000 shares
of its common stock and will receive net proceeds of approximately $113.2
million. The proceeds will be used to pay off substantially all debt
outstanding on its credit facilities. The remainder will be used for future
acquisitions, internal growth, working capital and general corporate purposes.
The Company has an unsecured credit facility totaling $65 million, consisting
of a $45 million revolving line of credit (the "Revolver") and $20 million
term acquisition loan (the "Term"). The Revolver matures on January 31, 1999
and Term borrowings mature on the sooner of five years from the date of
borrowing or June 30, 2003. The facility bears interest at either prime less
.25% or LIBOR plus between .375% and 1% based on a defined ratio. The
agreement contains certain financial covenants that the Company must meet,
including minimum tangible net worth, maximum leverage, and minimum cash flow
coverages.
In addition to the facility discussed above, one of the Company's European
subsidiaries has revolving credit facilities with several banks. These
facilities provide for borrowings of up to $5 million at rates ranging from
8-13% and are generally unsecured.
As of March 31, 1998, the Company's working capital was $83.8 million
compared to $77.9 million at December 31, 1997. Capital expenditures for
property and equipment were approximately $4.4 million for the first three
months of 1998, and management expects capital expenditures to be
approximately $9.0 million for the full year of 1998, excluding acquisitions.
The Company anticipates that cash flows from future operations, net proceeds
from the public offering and funds available under its credit facilities will
be adequate to satisfy its cash needs for the foreseeable future.
INFLATION
Management does not believe that inflation had a significant impact on the
Company's results of operations for the periods presented.
YEAR 2000 COMPLIANCE
The Company's operating divisions and subsidiaries utilize various software
programs and operating systems. Based upon its preliminary review, the
Company does not believe that it will incur significant costs to make its
software programs and operating systems Year 2000 compliant. The Company will
continue to review its date sensitive software programs and operating systems
and make necessary upgrades and modifications.
FORWARD-LOOKING STATEMENTS
Statements contained in this Management's Discussion and Analysis of Financial
Condition and the Results of Operations regarding the amount and nature of
planned capital expenditures, continued increased margins
10
<PAGE>
in the promotional products business, the percentage of the Company's future
sales that will be attributable to the promotional products business, the
Company's belief that available cash will be sufficient to satisfy its future
needs and HA-LO'S anticipated profitability in 1998 are forward-looking
statements that involve substantial risks and uncertainties. Following are
important factors that could cause the Company's actual results to differ
materially from those implied by such forward-looking statements: The
Company's growth will be dependent, in large part, upon its ability to hire,
motivate and retain high quality sales representatives, most of whom are
independent contractors. The Company does not maintain its own manufacturing
facilities and is dependent upon domestic and foreign manufacturers for its
supply of promotional products. The promotional products and telemarketing
industries are very competitive. The Company has experienced and may continue
to experience rapid growth, which growth has placed and may place significant
demands on its management and resources. Increased profitability will depend
upon the Company's ability to manage its growth and to integrate acquired
companies into its existing operations. Readers are encouraged to review
HA-LO'S Prospectus dated May 13, 1998, its 1997 Annual Report on Form 10-K
and 1997 quarterly reports on Form 10-Q for other important factors that may
cause actual results to differ materially from those implied in these forward
looking-statements.
11
<PAGE>
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
27.1 Financial Data Schedule - March 31, 1998
27.2 Financial Data Schedule - March 31, 1997
(b) Reports of Form 8-K - None
12
<PAGE>
SIGNATURE
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.
HA-LO INDUSTRIES, INC.
Dated: May 15, 1998 /s/ GREGORY J. KILREA
-------------------------
Gregory J. Kilrea
Duly Authorized Officer
and Chief Financial Officer
13
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE MARCH
31, 1998, CONSOLIDATED BALANCE SHEET AND THE CONSOLIDATED STATEMENT OF INCOME
FOR THE THREE-MONTH PERIOD THEN ENDED AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 2,621,664
<SECURITIES> 0
<RECEIVABLES> 119,407,323
<ALLOWANCES> 3,417,719
<INVENTORY> 28,637,502
<CURRENT-ASSETS> 155,697,487
<PP&E> 37,490,956
<DEPRECIATION> 12,988,547
<TOTAL-ASSETS> 209,445,622
<CURRENT-LIABILITIES> 71,938,274
<BONDS> 47,167,895
0
0
<COMMON> 68,089,648
<OTHER-SE> 21,153,849
<TOTAL-LIABILITY-AND-EQUITY> 209,445,622
<SALES> 109,376,190
<TOTAL-REVENUES> 109,376,190
<CGS> 73,420,087
<TOTAL-COSTS> 73,420,087
<OTHER-EXPENSES> 32,085,000<F1>
<LOSS-PROVISION> 312,820
<INTEREST-EXPENSE> 742,288
<INCOME-PRETAX> 3,184,527
<INCOME-TAX> 1,274,300
<INCOME-CONTINUING> 1,910,227
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,910,227
<EPS-PRIMARY> .09
<EPS-DILUTED> .09
<FN>
<F1>INCLUDES PRE-TAX NON-RECURRING CHARGES OF $1.5 MILLION, RELATED TO A FIRE IN A
BRANCH OFFICE AND DISTRIBUTION FACILITY AND THE CLOSING OF A WAREHOUSE AND
EMBROIDERY OPERATION IN CALIFORNIA.
</FN>
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE RESTATED
CONSOLIDATED BALANCE SHEET AS OF MARCH 31, 1997, AND THE RESTATED CONSOLIDATED
INCOME STATEMENT FOR THE THREE-MONTH PERIOD THEN ENDED AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<RESTATED>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 5,213,037
<SECURITIES> 0
<RECEIVABLES> 71,734,585
<ALLOWANCES> 3,107,500
<INVENTORY> 14,225,742
<CURRENT-ASSETS> 93,161,031
<PP&E> 26,381,057
<DEPRECIATION> 10,657,245
<TOTAL-ASSETS> 122,695,978
<CURRENT-LIABILITIES> 35,744,177
<BONDS> 25,400,416
0
0
<COMMON> 50,212,771
<OTHER-SE> 9,612,731
<TOTAL-LIABILITY-AND-EQUITY> 122,695,978
<SALES> 83,593,444
<TOTAL-REVENUES> 83,593,444
<CGS> 57,471,373
<TOTAL-COSTS> 57,471,373
<OTHER-EXPENSES> 24,709,563<F1>
<LOSS-PROVISION> 242,500
<INTEREST-EXPENSE> 348,240
<INCOME-PRETAX> 1,065,577
<INCOME-TAX> 427,045
<INCOME-CONTINUING> 638,532
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 638,532
<EPS-PRIMARY> .03
<EPS-DILUTED> .03
<FN>
<F1>INCLUDES A NON-RECURRING CHARGE OF $2,056,000 RELATED TO ACQUISITIONS ACCOUNTED
FOR UNDER THE POOLING-OF-INTERESTS METHOD OF ACCOUNTING.
</FN>
</TABLE>
