<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
/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
/ / TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
EXCHANGE ACT
COMMISSION FILE NO. 1-12888
SPORT-HALEY, INC.
(Exact name of small business issuer as specified in its charter)
COLORADO 84-1111669
(State of other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4600 E. 48TH AVENUE, DENVER, COLORADO 80216
(Address of principal executive offices)
(303) 320-8800
(Issuer'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 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
--- ---
State the number of shares outstanding in each of the issuer's classes of
common stock, as of the latest practicable date.
CLASS OUTSTANDING AT MAY 13, 1998
COMMON STOCK, NO PAR VALUE 4,492,962
Transitional Small Business Disclosure Format (check one): Yes No X
--- ---
<PAGE>
INDEX
<TABLE>
<CAPTION>
PAGE
------
<S> <C>
PART 1 - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
BALANCE SHEETS 3
STATEMENTS OF INCOME 4
STATEMENTS OF CASH FLOWS 5-6
NOTES TO FINANCIAL STATEMENTS 7-11
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITIONS AND RESULTS OPERATIONS 12-13
PART II - OTHER INFORMATION 14-15
SIGNATURES 16
</TABLE>
<PAGE>
SPORT-HALEY, INC.
BALANCE SHEETS
(IN THOUSANDS)
<TABLE>
<CAPTION>
MARCH 31, JUNE 30,
1998 1997
------------- ----------
(UNAUDITED) (NOTE)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 3,463 $ 10,273
Short-term investments and marketable securities 2,075 1,319
Accounts receivable, net of allowances of
$119,000 and $126,000, respectively 6,806 5,756
Inventories (Note 2) 16,039 9,982
Other current assets 1,794 1,116
------------- -------------
30,177 28,446
------------- -------------
Property and equipment 3,717 3,243
Property held under capital leases 7 7
Less, accumulated depreciation (1,204) (841)
------------- -------------
2,520 2,409
------------- -------------
Other assets:
Other assets 548 67
------------- -------------
$ 33,245 $ 30,922
------------- -------------
------------- -------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,481 $ 1,319
Capital lease obligations maturing within one year 1 2
Accrued income taxes (Note 3) 319 -
Accrued commissions and other expenses 1,665 874
------------- -------------
3,466 2,195
------------- -------------
Long-term liabilities:
Capital lease obligations, net of current maturities - 1
Other 21 20
------------- -------------
21 21
------------- -------------
3,487 2,216
------------- -------------
Stockholders' equity: (Note 4)
Preferred stock, no par value; 1,500,000 shares
authorized; none issued and outstanding
Common stock, no par value;
15,000,000 shares authorized; 4,492,962 and
4,651,073 shares issued and outstanding, respectively 18,254 20,440
Additional paid in capital 516 285
Unrealized losses on available for sale securities (100) (206)
Retained earnings 11,088 8,187
------------- -------------
29,758 28,706
------------- -------------
Total Liabilities and Stockholders' Equity $ 33,245 $ 30,922
------------- -------------
------------- -------------
</TABLE>
Note: Taken from the audited balance sheet at that date.
3
<PAGE>
SPORT-HALEY, INC.
STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
MARCH 31, MARCH 31,
1998 1997 1998 1997
----------- ----------- ----------- -----------
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Net sales $ 8,610 $ 8,823 $ 21,911 $ 20,822
Cost of goods sold 4,996 5,089 13,313 12,001
----------- ----------- ----------- ----------
Gross profit 3,614 3,734 8,598 8,821
Selling, general and administrative expense 1,986 1,826 5,355 4,958
----------- ----------- ----------- ----------
Income from operations 1,628 1,908 3,243 3,863
Other income (expense):
Other income 167 87 519 540
Cash Settlements-stock options (Note 5) - (360) - (360)
Interest and other expense (92) (1) (144) (1)
----------- ----------- ----------- ----------
75 (274) 375 179
----------- ----------- ----------- ----------
Income before income taxes 1,703 1,634 3,618 4,042
Provision for income taxes (Note 3) 344 435 716 1,214
----------- ----------- ----------- ----------
Net income $ 1,359 $ 1,199 $ 2,902 $ 2,828
----------- ----------- ----------- ----------
----------- ----------- ----------- ----------
Basic earnings per common share $ 0.30 $ 0.27 $ 0.63 $ 0.64
----------- ----------- ----------- ----------
----------- ----------- ----------- ----------
Diluted earnings per common share $ 0.30 $ 0.25 $ 0.63 $ 0.60
----------- ----------- ----------- ----------
----------- ----------- ----------- ----------
</TABLE>
4
<PAGE>
SPORT-HALEY, INC.
STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
MARCH 31,
1998 1997
------------- -------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 2,902 $ 2,828
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 405 322
Depreciation recorded as prepaid expense (10) (12)
Deferred taxes, net (15) (37)
(Decrease) increase in allowance for doubtful accounts 48 36
Deferred stock option compensation 230 147
Deferred rents - 3
(Increase) decrease in assets:
Short-term investments to maturity (755) 1,037
Accounts receivable (1,097) (1,691)
Inventory (6,058) (2,759)
Other current assets (1,151) (425)
(Increase) decrease in liabilities:
Accounts payable 595 (1,032)
Accrued commissions and other expenses 338 397
Accrued income taxes 319 (263)
Accrued and withheld taxes 21 18
Deferred rent (1) (1)
------------- -------------
Net cash provided by operating activities (4,229) (1,432)
------------- -------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on capital lease obligation (1) (1)
Net proceeds from issuance of common stock 525 1,337
Stock purchased and retired (2,711) (1,625)
------------- -------------
Net cash provided by financing activities $ (2,187) $ (289)
------------- -------------
</TABLE>
5
<PAGE>
SPORT-HALEY, INC.
STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
MARCH 31,
1998 1997
------------- -------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C>
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of fixed assets $ (586) $ (964)
Disposal of assets 192 -
Investment in "available to sell" securities, net - 1,240
------------- -------------
Net cash used by investing activities (394) 276
------------- -------------
Net increase (decrease) in cash (6,810) (1,445)
CASH AND CASH EQUIVALENTS, BEGINNING 10,273 8,648
------------- -------------
CASH AND CASH EQUIVALENTS, ENDING $ 3,463 $ 7,203
------------- -------------
------------- -------------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Income taxes $ 466 $ 1,050
------------- -------------
------------- -------------
Interest $ 16 $ 1
------------- -------------
------------- -------------
SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES:
</TABLE>
At March 31, 1998, the Company has unrealized holding losses on marketable
securities of approximately $196,000 of which $98,700 has been charged off in
the Company's statement of income at March 31, 1998.
6
<PAGE>
SPORT-HALEY, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 1 CONDENSED FINANCIAL STATEMENTS
The financial statements included herein have been prepared by
Sport-Haley, Inc. (the "Company") without audit, pursuant to the
rules and regulations of the Securities and Exchange Commission.
Certain information and footnote disclosures normally included
in the financial statements prepared in accordance with
generally accepted accounting principles have been condensed or
omitted as allowed by such rules and regulations. The Company
believes that the disclosures are adequate to make the
information presented not misleading. It is suggested that these
financial statements be read in conjunction with the Company's
annual financial statements dated June 30, 1997. While
management believes the procedures followed in preparing these
financial statements are reasonable, the accuracy of the amounts
are, in some respects, dependent upon the facts that will exist,
and procedures that will be accomplished by the Company later in
the year.
The management of the Company believes that the accompanying
unaudited condensed financial statements prepared in conformity
with generally accepted accounting principles, which require the
use of management estimates, contain all adjustments (including
normal recurring adjustments) necessary to present fairly the
operations and cash flows for the period presented.
NOTE 2 INVENTORIES
Inventories at March 31, 1998 consist of the following:
<TABLE>
<CAPTION>
<S> <C>
Raw materials $ 6,576,000
Finished goods 9,463,400
-------------
$ 16,039,400
-------------
-------------
</TABLE>
NOTE 3 INCOME TAXES
The components of the deferred tax asset and net deferred tax
liability recognized in the accompanying balance sheet as of
December 31, 1997, are as follows:
<TABLE>
<CAPTION>
Current Long-Term
------------- -------------
<S> <C> <C>
Deferred tax (liability) $ - $ (20,700)
Deferred tax asset 71,100 -
------------- -------------
$ 71,100 $ (20,700)
------------- -------------
------------- -------------
</TABLE>
7
<PAGE>
SPORT-HALEY, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 3 INCOME TAXES (Continued)
The types of temporary differences between the tax bases of
assets and liabilities and the financial reporting amounts that
give rise to a significant portion of the deferred tax liability
and their appropriate tax effects at March 31, 1998, as follows:
<TABLE>
<CAPTION>
Tax Effect
Difference Current Long-Term
---------- ---------- -----------
<S> <C> <C> <C>
Loss on stock $ 96,600 $ 24,700 $ -
Allowance for doubtful accounts 118,900 46,400 -
Stock option compensation 338,200 - 131,900
Accumulated depreciation 391,200 - (152,600)
---------- -----------
$ 71,100 $ (20,700)
---------- -----------
---------- -----------
</TABLE>
The components of income tax expenses are as follows:
<TABLE>
<S> <C>
Current:
Federal $ 630,200
State 100,800
-----------
731,000
-----------
Deferred:
Federal (12,668)
State (2,032)
-----------
(14,700)
-----------
$ 716,300
-----------
-----------
</TABLE>
NOTE 4 REPURCHASE OF COMMON STOCK
During December 1994, the Company's Board of Directors
authorized the repurchase of up to 150,000 shares of the
Company's issued and outstanding common stock. Additionally, the
Board of Directors authorized increases of 150,000 common shares
during October, 1996 and 1997, respectively, that may be
repurchased, thus bringing the total common shares authorized
for repurchase under the plan to 450,000 shares.
The repurchase of the Company's common stock is based upon the
Board of Director's belief the Company's common stock is
underpriced given its earnings and prospects for future
operations. The shares may be purchased from time to time in
open market transactions at prevailing market prices. The
Company has no commitment or obligation to purchase all or any
portion of the shares. All shares purchased by the Company will
be cancelled and returned to the status of authorized but
unissued common stock.
8
<PAGE>
SPORT-HALEY, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 4 REPURCHASE OF COMMON STOCK (continued)
As of March 31, 1998, the Company has repurchased 400,000 shares
of its common stock at a cost of approximately $4.702 million.
NOTE 5 COMMON STOCK OPTIONS
At March 31, 1998, the Company had 414,999 options outstanding
to purchase common stock at prices ranging from $2.50 to $14.25,
with expiration dates between March 15, 2003 and November 13,
2007. During the nine months ended March 31, 1998 the Company
issued options to purchase 155,001 shares. Additionally, option
holders exercised and purchased 73,326 shares of the Company's
common stock and the Company realized gross proceeds of
approximately $469,700 from the sale and exercise of these
options. During the nine months ending March 31, 1998, the
Company cancelled 34,229 options for individuals no longer
covered under the Company's option plan.
Included in the Company's nine month net income is a charge of
approximately $230,000, which is a result of FASB 123-Accounting
for Stock Based Compensation.
NOTE 6 EARNINGS PER SHARE
The following tables reflect the Company's adoption of Financial
Accounting Standards Statement No. 128, Earnings Per Share.
Accordingly, the prior-period earnings per share have been
restated.
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31, 1998
--------------------------------------------
Net
Income Shares Per Share
------------ --------- ---------
<S> <C> <C> <C>
BASIC EARNINGS PER SHARE
Income available
to common shareholders $ 1,359,000 4,499,406 $ 0.30
-------
-------
Effect of Dilutive Securities
Warrants 28,120
Options, net of future tax benefit 5,628
------------ ---------
DILUTED EARNINGS PER SHARE $ 1,359,000 4,533,154 $ 0.30
------------ --------- -------
------------ --------- -------
</TABLE>
9
<PAGE>
SPORT-HALEY, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 6 EARNINGS PER SHARE (continued)
<TABLE>
<CAPTION>
NINE MONTHS ENDED MARCH 31, 1998
-------------------------------------------------
Net
Income Shares Per Share
------------- --------- ---------
<S> <C> <C> <C>
BASIC EARNINGS PER SHARE
Income available
to common shareholders $ 2,902,000 4,587,482 $ 0.63
-------
-------
Effect of Dilutive Securities
Warrants 28,120
Options, net of future tax benefit 5,628
------------- ---------
DILUTED EARNINGS PER SHARE $ 2,902,000 4,621,230 $ 0.63
------------- --------- -------
------------- --------- -------
</TABLE>
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31, 1997
--------------------------------------------------------
Net
Income Shares Per Share Amount
------------- --------- ----------------
<S> <C> <C> <C>
BASIC EARNINGS PER SHARE
Income available
to common shareholders $ 1,199,000 4,432,210 $0.27
-------
-------
Effect of Diluted Securities
Warrants 27,535
Options 300,779
------------- --------- -------
DILUTED EARNINGS PER SHARE $ 1,199,000 4,760,524 $0.25
------------- --------- -------
------------- --------- -------
</TABLE>
<TABLE>
<CAPTION>
NINE MONTHS ENDED MARCH 31, 1997
--------------------------------------------------------
Net
Income Shares Per Share Amount
------------- --------- ----------------
<S> <C> <C> <C>
BASIC EARNINGS PER SHARE
Income available
to common shareholders $ 2,828,000 4,403,100 $0.64
-------
-------
Effect of Diluted Securities
Warrants 27,535
Options 300,779
------------- ---------
DILUTED EARNINGS PER SHARE $ 2,828,000 4,731,414 $0.60
------------- --------- -------
------------- --------- -------
</TABLE>
10
<PAGE>
SPORT-HALEY, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 7 ACQUISITION
On March 27, 1998, the Company closed on its purchase of 52% of
the outstanding shares of capital stock of B&L Sportswear, Inc.
("B&L"). The acquisition was completed pursuant to the terms of
a stock purchase agreement. The Company paid $171,980 in cash to
acquire its 52% ownership interest in B&L. The cash payments
were made out of working capital of the Company. The Company and
remaining shareholders entered into a buy-sell agreement
restricting transfer of their shares of B&L and granting the
other party a right of first refusal upon the occurrence of
certain events which could lead to a change in ownership of the
shares.
In addition to the share purchases, the Company loaned B&L
$386,317 to pay in full certain outstanding obligations and to
acquire certain equipment. Principal on the loan and accrued
interest at 8% per annum are both payable in full on March 31,
2003. The loan is secured by all fixed assets and inventory of
B&L.
B&L, a company headquartered in Four Oaks, North Carolina, has
been a principal cutting and sewing contractor utilized by the
Company for several years and is expected to manufacture the
Company's products on an exclusive basis in the future. The
Company's management believes that the acquisition of a
controlling interest in B&L will enhance the Company's ability
to control costs, product delivery and inventory. It also
believes that by utilizing a captive cutting and sewing
contractor, the Company will be able to expand its corporate and
retail sales efforts, remain competitive and maintain historical
margins.
11
<PAGE>
SPORT-HALEY, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FINANCIAL CONDITION
The Company's financial position for the nine month period ended March 31, 1998
continues to improve as a result of growth in net sales, and increase in net
income. The Company intends to rely on cash generated from operations and
investments to finance its working capital requirements for at least the next 12
months. To the extent such amounts are insufficient to finance the Company's
working capital requirements, the Company may also make periodic borrowings
under its revolving line of credit.
During the nine months ended March 31, 1998, current assets and current
liabilities increased by approximately $1.7 million and $1.3 million,
respectively, as compared to current assets and current liabilities at June 30,
1997.
Inventories at March 31, 1998 were approximately $16.0 million, which represents
an increase of approximately $6.1 million from June 30, 1997. The increase in
inventory was to meet the fiscal fourth quarter sales orders and provide for the
fall selling season.
For the nine months ended March 31, 1998, the Company spent approximately
$474,000 for office furniture and equipment.
The Company received proceeds of approximately $525,000 from the exercise of
stock options and warrants during the nine months ended March 31, 1998.
Stockholders' equity increased by approximately $1.1 million for the nine month
period. Net income increased stockholders' equity by approximately $1.9 million
while the Company expended approximately $2.7 million to repurchase 240,000
shares of its common stock.
RESULTS OF OPERATIONS
The Company's business is seasonal in nature, and therefore the results for any
one or more quarters are not necessarily indicative of the annual results or
continuing trends.
Net sales for the third quarter ended March 31, 1998, were approximately $8.6
million, a decrease of approximately $200,000, or 2%, from net sales of $8.8
million for the same quarter in the prior fiscal year. The 2% reduction in net
sales is attributable to the depressed sales to the Company's professional golf
course accounts, reflecting the impact of El Nino weather patterns on golf
courses in California, North and South Carolina, Florida and Arizona. Net sales
for the nine months ended March 31, 1998 were $21.9 million. This is an increase
of $1.1 million or 5%, over the same nine month period of fiscal 1997. The net
sales for the nine months of fiscal 1998, while positive, reflect the various
problems the Company has encountered with the UPS strike, resulting in canceled
sales orders, and the weather related problems in the second and third quarters.
The Company's gross profit declined approximately $120,000 and $223,000 for the
three months and the nine months ended March 31, 1998. Gross profit as a
percentage of sales was 42% for each of the three month periods and declined to
39% from 42% for the nine month periods.
12
<PAGE>
SPORT-HALEY, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS (CONTINUED)
Selling, general and administrative expenses increased by approximately $160,000
or 9% for the third quarter ended March 31, 1998, from $1.8 million for the same
quarter in the prior fiscal year. For the nine months ended March 31, 1998,
these costs increased by approximately $397,000, or 8% from $5.0 million in the
same nine month period in the prior fiscal year. The increase for both periods
can be attributed to personnel additions necessary to handle increased sales
volume, commissions paid to independent sales representatives on higher sales
volume, increased advertising and general administration expenditures.
Other income (expense) increased by approximately $349,000 and $169,000 for the
three months and the nine months ended March 31, 1998 as compared to the same
periods in the prior fiscal year. During the prior fiscal year the Company
incurred costs of approximately $360,000 to repurchase 30,909 shares of its
stock options. The Company has not incurred similar costs during the current
fiscal year period.
Income before provision for income taxes decreased by approximately $91,000, or
21%, for the third fiscal quarter ended March 31, 1998, from $435,000 for the
same quarter in the prior fiscal year. Income before provisions for income taxes
decreased by approximately $498,000 or 41% for the nine months ended March 31,
1998, from $1.2 million in the same period in the prior fiscal year.
The Company's effective tax rates for the quarters ended March 31, 1998 and
March 31, 1997 were approximately 20% and 27%, respectively. The effective tax
rates for the nine month periods ended March 31, 1998 and 1997, were 20% and
30%, respectively. The decrease in the effective rate for the fiscal 1998
periods are due to certain stock option tax deductions net of FASB
123-Accounting for Stock Based Compensation book deductions.
For the three month and the nine month periods ended March 31, 1998, net income
increased by approximately $160,000 or 13% and $74,000 or 3%, respectively, when
compared to the same three and nine month periods in the prior fiscal year.
Both the basic and diluted earnings per share were $.30, respectively, for the
third quarter ended March 31, 1998. This compares to basic and diluted earnings
per share of $.27 and $.25, respectively, for the same quarter in fiscal 1997.
The nine month basic and diluted earnings per share at March 31, 1998 were both
$.63, respectively. This compares to basic and diluted earnings per share of
$.64 and $.60 per share, respectively, for the same nine month period in fiscal
1997.
13
<PAGE>
SPORT-HALEY, INC.
PART II
OTHER INFORMATION
ITEM 1 LEGAL PROCEEDINGS - NONE
ITEM 2 CHANGES IN SECURITIES AND USE OF PROCEEDS- NONE
ITEM 3 DEFAULTS UPON SENIOR SECURITIES - NONE
ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) The annual meeting of shareholders was held February 10, 1998.
(b) The following were elected directors with terms until their
successor shall have been duly elected and qualified.
<TABLE>
<CAPTION>
Votes for Votes withheld
<S> <C> <C>
Robert G. Tomlinson 3,971,696 127,573
Robert W. Haley 3,971,696 127,573
Mark J. Stevenson 3,971,696 127,573
Ronald J. Norick 3,971,196 128,073
James H. Everest 3,971,696 127,573
</TABLE>
(c) To consider and act upon a proposal to approve amendments
to, and a restatement of the Company's 1993 Stock Option
Plan ("Plan") to (I) permit the issuance of an additional
150,000 shares of common stock pursuant to the Plan, and
(II) to simplify administration of the Plan in accordance
with revisions to Section 16 of the Securities Exchange
Act of 1934.
<TABLE>
<S> <C>
For 3,871,047
Against 218,523
Abstain 9,699
Not voted 493,693
</TABLE>
To ratify the appointment of Levine, Hughes & Mithuen,
Inc. as auditors of the Company.
<TABLE>
<S> <C>
For 4,060,446
Against 30,430
Abstain 8,393
</TABLE>
(d) None
ITEM 5 OTHER INFORMATION - NONE
14
<PAGE>
SPORT-HALEY, INC.
PART II
OTHER INFORMATION
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K
(A) EXHIBITS
27 FINANCIAL DATA SCHEDULE
(B) REPORTS ON FORM 8-K -
A report on Form 8-K, dated March 27, 1998 was filed on
April 23, 1998 reporting the Registrant's purchase of 52%
of the outstanding shares of the capital stock of B&L
Sportswear, Inc. under Item 5 of such Form.
15
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934, the
Registrant caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
SPORT-HALEY, INC.
(Registrant)
Date: May 14, 1998 /s/ Robert G. Tomlinson
------------ -----------------------
Robert G. Tomlinson
Chief Executive Officer
Date: May 14, 1998 /s/ Steve S. Auger
------------ ------------------
Steve S. Auger
Chief Accounting Officer
16
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JUL-01-1997
<PERIOD-END> MAR-31-1998
<CASH> 3,463
<SECURITIES> 2,075
<RECEIVABLES> 6,806
<ALLOWANCES> 119
<INVENTORY> 16,039
<CURRENT-ASSETS> 30,177
<PP&E> 3,724
<DEPRECIATION> 1,204
<TOTAL-ASSETS> 33,245
<CURRENT-LIABILITIES> 3,466
<BONDS> 0
0
0
<COMMON> 18,354
<OTHER-SE> 11,504
<TOTAL-LIABILITY-AND-EQUITY> 33,245
<SALES> 21,911
<TOTAL-REVENUES> 21,911
<CGS> 13,313
<TOTAL-COSTS> 13,313
<OTHER-EXPENSES> 5,355
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 16
<INCOME-PRETAX> 3,618
<INCOME-TAX> 716
<INCOME-CONTINUING> 2,902
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,902
<EPS-PRIMARY> .63
<EPS-DILUTED> .63
</TABLE>
