FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(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, 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: 0-20730
MICRO WAREHOUSE, INC.
(Exact name of registrant as specified in its charter)
Delaware 06-1192793
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
535 Connecticut Avenue, Norwalk, Connecticut 06854
(Address of principal executive offices)
(203) 899-4000
(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 |_|
Indicate the number of shares outstanding of each of issuer's class of common
stock as the latest practicable date:
Class: COMMON STOCK Outstanding Shares At March 31, 1997: 34,366,882
<PAGE>
MICRO WAREHOUSE, INC.
INDEX
Page
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements (unaudited)
Consolidated Balance Sheets ........................................3
Consolidated Statements of Income ..................................4
Consolidated Statements of Cash Flows ..............................5
Notes to Unaudited Consolidated Financial Statements ...............6
Item 2 - Management's Discussion and Analysis of Financial
Condition and Results of Operations .........................8
PART II - OTHER INFORMATION............................................12
SIGNATURE .............................................................13
EXHIBIT 11.............................................................14
2
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
MICRO WAREHOUSE, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands)
----------------------------------------
<TABLE>
<CAPTION>
March 31, December 31,
1997 1996
---- ----
ASSETS (unaudited) (audited)
<S> <C> <C>
Current assets:
Cash and cash equivalents $89,650 $32,234
Marketable securities at market value 20,238 20,022
Accounts receivable, net of allowance for doubtful accounts ($11,023
and $10,876 at March 31, 1997 and December 31, 1996, respectively) 206,127 203,687
Inventories 166,481 201,119
Prepaid expenses and other current assets 18,262 17,886
Tax refunds 17,084 16,433
Deferred taxes 4,176 3,447
----------- -----------
Total current assets 522,018 494,828
----------- -----------
Property, plant and equipment, net 28,968 29,712
Goodwill, net 68,495 66,291
Non-current deferred taxes 12,340 14,443
Other assets 2,585 2,568
=========== ===========
Total assets $634,406 $607,842
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $155,419 $127,723
Accrued expenses 48,050 52,445
Loans payable, bank 38,860 40,505
Income taxes 2,669 -
Deferred revenue 1,710 2,327
Equipment obligations 328 298
----------- -----------
Total current liabilities 247,036 223,298
-
Equipment obligations 298 376
----------- -----------
Total liabilities 247,334 223,674
----------- -----------
Stockholders' equity:
Preferred stock, $.01 par value: - -
Authorized - 100 shares; none issued
Common stock, $.01 par value:
Authorized - 50,000 shares; issued and outstanding; 34,367 and
34,359 shares at March 31, 1997 and December 31, 1996, respectively 344 343
Additional paid-in capital 272,277 270,762
Deferred compensation (967) 421
Loan to officer (1,400) (1,400)
Retained earnings 124,884 117,071
Cumulative translation adjustment (8,048) (3,047)
Valuation adjustment for marketable securities (18) 18
----------- -----------
Total stockholders' equity 387,072 384,168
----------- -----------
Total liabilities and stockholders' equity $634,406 $607,842
=========== ===========
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
3
<PAGE>
MICRO WAREHOUSE, INC.
CONSOLIDATED STATEMENTS OF INCOME
For the three months ended March 31,
(in thousands, except per share data)
------------------------------------------------------------
(unaudited)
1997 1996
---- ----
Net Sales $ 529,503 $ 514,391
Cost of Goods Sold 442,038 415,849
--------- ---------
Gross Profit 87,465 98,542
Selling, general and administrative 75,243 75,736
Restructuring costs -- 21,226
Merger costs -- 6,113
--------- ---------
Income (loss) from operations before interest,
income taxes and extraordinary charge 12,222 (4,533)
Interest income, net 860 126
--------- ---------
Income (loss) before income taxes
and extraordinary charge 13,082 (4,407)
Provision for income taxes (5,269) (694)
--------- ---------
Income (loss) before extraordinary charge 7,813 (5,101)
Extraordinary charge, net of taxes -- (1,584)
--------- ---------
Net income (loss) $ 7,813 ($ 6,685)
========= =========
Net income (loss) per share $ 0.23 ($ 0.20)
========= =========
Net income (loss) per share before extraordinary charge $ 0.23 ($ 0.15)
========= =========
Weighted average number of shares outstanding 34,437 33,996
========= =========
See accompanying notes to unaudited consolidated financial statements.
4
<PAGE>
MICRO WAREHOUSE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the three months ended March 31,
(in thousands)
------------------------------------------------------------
(unaudited)
<TABLE>
<CAPTION>
Cash flows from operating activities: 1997 1996
---- ----
<S> <C> <C>
Net income (loss) $ 7,813 $ (6,685)
-------- --------
Adjustments to reconcile net income (loss) to net cash provided by operating
activities:
Depreciation and amortization 3,797 3,178
Restructuring cost - non-cash portion -- 3,457
Extraordinary charge -- 1,900
Write-off of deferred financing costs -- 762
Deferred taxes 1,358 (1,022)
Changes in assets and liabilities:
Accounts receivable, net (8,666) (21,317)
Inventories 32,081 24,708
Prepaid expenses and other current assets (1,162) (7,568)
Other assets (151) 1,331
Accounts payable 27,480 (4,285)
Accrued expenses 1,124 19,037
Accrued restructuring costs -- 15,362
Deferred revenue (607) 2,842
-------- --------
Total adjustments 55,254 38,385
-------- --------
Net cash provided by operating activities 63,067 31,700
-------- --------
Cash flows from investing activities:
Sales (purchases) of marketable securities, net (252) 2,880
Purchases or adjustments to acquisitions of businesses, represented by:
Goodwill (3,225) (5,149)
Other net assets (13) (1,405)
Acquisition of property, plant and equipment (2,571) (4,327)
-------- --------
Net cash (used) by investing activities (6,061) (8,001)
-------- --------
Cash flows from financing activities:
Net proceeds from issuance of common stock 129 1,270
Borrowings (repayments) under lines of credit, net 1,457 (11)
Repayment of notes payable -- (21,900)
Principal payments of obligations under capital leases (47) (98)
-------- --------
Net cash provided (used) by financing activities 1,539 (20,739)
-------- --------
Effect of exchange rate changes on cash (1,129) (144)
-------- --------
Net change in cash 57,416 2,816
Cash and cash equivalents:
Beginning of period 32,234 81,614
======== ========
End of period $ 89,650 $ 84,430
======== ========
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
5
<PAGE>
MICRO WAREHOUSE, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except per share data)
-------------------------------------------------------------------
1. FINANCIAL STATEMENTS
The consolidated financial statements include the accounts of Micro
Warehouse, Inc. and its subsidiaries (the "Company") and have been
prepared, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission (the "SEC"). 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. Although the
Company believes that the disclosures are adequate to make the information
presented not misleading, these financial statements should be read in
conjunction with the audited financial statements and the notes thereto
included in the Company's Annual Report to Shareholders which was filed as
an exhibit to its Annual Report on Form 10-K for the fiscal year ended
December 31, 1996.
In the opinion of management, the accompanying unaudited consolidated
financial statements contain all adjustments necessary to present fairly
the financial position of the Company at March 31, 1997 and the results of
operations and cash flows for the three months ended March 31, 1997 and
1996.
2. BUSINESS COMBINATIONS
During the first quarter of 1997, the Company acquired two businesses with
operations in Canada and Australia. The total cost of the acquisitions was
$3,238 which exceeded the fair value of the net assets acquired by
$3,225.
In October 1996, the Company acquired the business of USA Flex in a
business combination accounted for as a purchase. USA Flex directly
markets IBM PC-compatible computers and peripherals. The total cost of the
acquisition was $26,762, which exceeded the fair value of the net assets
acquired by $22,053.
The excess cost over the fair value of the net assets acquired for these
acquisitions has been allocated on a preliminary basis to goodwill, which
is subject to change as such valuations are finalized. As a result of the
analysis performed to date, however, management has determined that the
appropriate amortization periods for such goodwill range from 5 to 15
years. With respect to the goodwill recorded on the USA Flex acquisition,
which is now being amortized over 15 years, the Company had commenced
amortization of this goodwill over a 40 year period in 1996. The impact of
this change in the amortization period on the prior period is not
material.
3. STOCK-BASED COMPENSATION
During 1997, the Company granted to substantially all employees options to
purchase a total of 2,017 shares of common stock, subject to shareholder
approval, under its 1994 Stock Option Plan (the "Plan"). The exercise
price for these options is $12.625 per share. The Company recorded
deferred compensation of $1,388 and recognized compensation expense of $51
for these options. An adjustment to the deferred
6
<PAGE>
compensation may be required if the market value of the Company's stock at
the date of stockholder approval is different from the value at March 31,
1997.
The Company granted under the Plan additional options to purchase 10
shares of common stock with exercise prices ranging from $11.6875 to
$13.0625 per share. Also during 1997, the Company granted options to
purchase 300 shares of common stock to senior executives outside of its
stock option plans. The exercise prices of these options range from $10.75
to $11.875 per share.
4. LEGAL PROCEEDINGS
The Company and certain of its directors and officers are named as
defendants in various lawsuits that followed and are predicated upon the
facts underlying the Company's announcements in September and October 1996
that it intended to restate certain prior financial statements. On
February 10, 1997 the Company filed Forms 10-K/A with the SEC reflecting
restated financial statements for the years 1992 through 1995.
All of these lawsuits are at an early stage. The plaintiffs in these
lawsuits seek unspecified compensatory damages, other relief, legal fees
and litigation costs. The Company is unable to predict the outcome or the
potential financial impact of this litigation, and, accordingly, has made
no provision therefor in the consolidated financial statements.
In addition, the staff of the SEC is conducting a formal investigation
into the events that underlie the Company's restatement of its prior
period financial statements noted above. The Company is cooperating with
the staff in its investigation.
5. NEW ACCOUNTING STANDARD
In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128, "Earnings Per Share"
which specifies the computation, presentation and disclosure requirements
for earnings per share. This statement is effective for both interim and
annual periods ending after December 15, 1997. Early implementation is not
permitted. The Company does not expect that the application of this
standard will have a material effect on its present method of calculating
and reporting earnings per share.
7
<PAGE>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS.
Overview
Micro Warehouse, Inc. (the "Company") is a specialty catalog retailer and direct
marketer of brand name personal computers, computer software, accessories,
peripheral and networking products to commercial and consumer customers. The
Company markets its products through frequent mailings of its distinctive,
colorful catalogs, Internet catalog sites on the worldwide web and dedicated
telemarketing account managers who focus on corporate, education and government
accounts. The Company offers brand name hardware and software from leading
vendors such as Adobe, Apple, Compaq, Hewlett Packard, IBM, Iomega, Microsoft,
Motorola, 3Com, and Toshiba.
Through its three core catalogs, MicroWarehouse, MacWarehouse and Data Comm
Warehouse, various specialty catalogs and its Internet sites, the Company offers
a broad assortment of more than 25,000 computer products at competitive prices.
With colorful illustrations, concise product descriptions and relevant technical
information, each catalog title focuses on a specific segment of the computer
market. The catalogs are recognized as a leading source for computer hardware,
software and other products.
International operations, particularly in Europe and Canada, have become a
significant part of the Company's business. In 1991, the Company established
full-service, direct marketing operations in the United Kingdom. In late 1992,
the Company began operations in France and Germany and, in 1993 and 1994,
acquired companies or initiated operations in Sweden, Denmark, Norway, the
Netherlands, Belgium, Finland, and France. In this same time frame the Company
also expanded into the non-European markets of Japan, Canada and Mexico. In
1995, the Company acquired businesses in the United Kingdom, Germany, Australia
and Switzerland. In 1996 the Company discontinued its "Macintosh only"
operations in Belgium and Switzerland. The Company currently publishes catalogs
in 12 countries outside the US.
On January 25, 1996, the Company acquired Santa Clara, California-based Inmac
Corp. ("Inmac"), a leading international direct-response marketer of a wide
range of personal computer and networking products. Inmac had operations in the
United States, Canada, France, Germany, the Netherlands, Sweden and the UK. For
accounting purposes, the Inmac merger has been treated as a pooling of
interests. Accordingly, all historical financial information has been adjusted
to include Inmac.
In September 1996, the Company acquired the Helsinki, Finland-based Business
Forum and a related company. In November 1996, the Company completed the
acquisition of the business of USA Flex, a Bloomingdale Illinois direct marketer
of IBM PC-compatible personal computer products.
In February 1997, the Company acquired the Notebook Store in Toronto, Canada and
Commsware of Brisbane, Australia.
8
<PAGE>
RESULTS OF OPERATIONS
The table below sets forth certain items expressed as a percent of net sales for
each of the three month periods ended March 31, 1997 and 1996:
<TABLE>
<CAPTION>
Three Months Ended March 31, 1997 1996
---- ----
<S> <C> <C>
Net sales 100.0% 100.0%
Cost of sales 83.5 80.8
----- -----
Gross profit 16.5 19.2
Selling, general and administrative expenses 14.2 14.7
Restructuring and merger costs -- 5.3
----- -----
Income (loss) from operations before interest, income taxes and extraordinary charge 2.3 (.8)
Interest income, net .2 --
----- -----
Income (loss) before income taxes and extraordinary charge 2.5% (.8)%
</TABLE>
Three Months Ended March 31, 1997 Compared to Three Months Ended March 31, 1996
Net sales increased by $15.1 million or 2.9% to $529.5 million for the three
months ended March 31, 1997, from $514.4 million for the three months ended
March 31, 1996. This increase in net sales was primarily attributable to
continued growth in the domestic IBM PC-Compatible ("Wintel") business which
increased by 37.6% to $180.3 million, including USA Flex net sales of $22.6
million. Offsetting this growth was a 15.6% decline in the worldwide Macintosh
("Mac") business to $226.8 million. The Mac business represented 42.8% of total
worldwide sales, down from 52.2% in the same period last year.
Domestic sales increased 6.9% as a 37.6% increase in the Wintel business offset
a 13.0% decline in the Mac business. The Wintel sales growth in the U.S. without
the USA Flex and Inmac acquisitions was approximately 31.7%. The sales increase
was due to increases in the average order size coupled with increased Wintel
catalog circulation of 44.5%. Domestic Inmac sales declined by approximately
33.5% from last year on a circulation decrease of 71.5%, while USA Flex sales
were $22.6 million in the quarter. The average order size increased to $488 in
1997 from $442 in 1996 due to an increase in the proportion of hardware sales
which typically have a higher per unit price than software sales. Circulation of
the MacWarehouse catalog declined by 13.8% to approximately 11.6 million.
International sales for the quarter ended March 31, 1997 decreased by 4.3% from
the prior year to $173.0 million, principally due to a 23.5% decline in
international Mac sales. International Wintel sales were up 6.8% over 1996 to
$122.4 million. As a result, international sales decreased to 32.7% of total net
sales in the three months ended March 31, 1997 from 35.1% in the same period in
1996. The number of catalogs distributed grew by 2.1% to approximately 7.7
million. Micro Warehouse sales throughout Europe were generally soft, with
France, Germany and Sweden experiencing the most significant declines. The
continued decline in the Mac business as well as increased competition in the
consumable and business supply sectors were the principal reasons. In addition,
translation of international sales at 1997 exchange rates reduced sales in
dollars by approximately 3.4% as compared to last year.
Gross margin, which consists of net sales less product and transportation costs,
decreased as a percentage of net sales to 16.5% in 1997 from 19.2% during the
same period last year. The decline in gross margin was due to a
9
<PAGE>
reduction in Mac margins as a result of increased competition and the continuing
shift in mix towards lower margin Wintel products. These factors had the
greatest impact in Europe.
Selling, general and administrative expenses decreased by 0.7% to $75.2 million
for the three months ended March 31, 1997 from $75.7 million for the same period
in 1996 and decreased as a percentage of net sales to 14.2% from 14.7%. The
principal reason for the decline in 1997 was a reduction in net advertising
costs due to increased co-op advertising income and lower catalog costs.
Worldwide catalog circulation was down 2.2% to 33.6 million in the current
quarter. Also, SG&A expenses in the first quarter of 1997 were adversely
affected by higher legal and insurance costs related to the litigation arising
out of the facts underlying the restatement of certain prior year financial
statements.
Operating income for the first three months of 1997 was $12.2 million as
compared to a loss of $4.5 million for the same period in 1996. The operating
loss in 1996 includes $27.3 million of restructuring and merger costs relating
to the acquisition of Inmac. International operations during the first quarter
of 1997 operated at break even compared to a loss of $7.2 million in 1996 which
included $12.4 million of the total restructuring and merger costs.
Net interest income increased to $0.9 million for the first three months of 1997
from $0.1 million for the same period in 1996. The increase was due primarily to
the higher level of cash and cash equivalents in the first quarter of 1997
available for investment and the lower level of debt due to the early
extinguishment of Inmac's debt.
Liquidity and Capital Resources
As of March 31, 1997, the Company had cash and short-term investments totaling
$109.9 million compared to $52.3 million at December 31, 1996. This increase was
due to a planned reduction in inventories and improved payables management. The
current ratio was 2.1 to 1 at March 31, 1997 compared to 2.2 to 1 at December
31, 1996 and working capital was $275.0 million compared to $271.5 million for
the same periods respectively.
Inventories decreased to $166.5 million at March 31, 1997 from $201.1 million at
December 31, 1996. Accounts receivable increased to $206.1 million at March 31,
1997 from $203.7 million at December 31, 1996. In addition, accounts payable
increased by $27.7 million to $155.4 million at March 31, 1997 from $127.7
million at December 31, 1996. Overall, operations generated cash of $63.1
million in the current quarter.
Capital expenditures for the first three months of 1997 were $2.6 million,
primarily for computer systems and distribution equipment both in the United
States and internationally. Although the Company's primary capital need will be
to fund its working capital requirements for expected sales growth, the Company
expects that future growth will also require continued expansion of its computer
systems and distribution capacity. The Company has a multi-currency borrowing
facility of $75 million. The purpose of this facility is to provide working
capital financing for its foreign subsidiaries in local currencies, thus
limiting exposure to foreign exchange fluctuation. Total borrowings as of March
31, 1997, under this arrangement were $38.9 million. Additionally, at March 31,
1997, the Company had unused lines of credit in the United States and United
Kingdom, which provided for unsecured borrowings of up to $10.0 million and
(pounds)1.8 million, respectively, for working capital purposes.
10
<PAGE>
The Company believes that its existing cash reserves, cash flow from operations
and existing credit facilities will be sufficient to satisfy its cash needs for
at least the next 12 months without consideration of uncertainties surrounding
litigation pending against the Company.
Outlook
The Company expects that the installed base of personal computers will continue
to expand at slower rates than experienced in the past. Apple Computer continues
to experience difficulties and has announced plans to significantly downsize its
operations. Such actions are expected to affect the Company's Macintosh-related
sales both domestically and in Europe. In addition, Apple Computer has licensed
the Macintosh operating system to other manufacturers. These "clones" are
generally entering the market at lower prices than Apple's products which has
led to increased price competition and reduced margins. In Europe, the Company
anticipates increased competitive pressures and uneven market demand depending
on the business cycles of individual countries.
Statement under the Private Securities Litigation Reform Act
With the exception of the historical information contained in this report, the
matters described herein contain forward-looking statements that involve risk
and uncertainties including but not limited to economic, competitive,
governmental, technological and litigation factors outside of the control of the
Company. These factors more specifically include: uncertainties surrounding the
demand for and supply of products manufactured by and compatible with those of
Apple Computer; success of the Company's diversification away from its Apple
products; competition from other catalog, retail store, on-line and other
resellers of computer products; and the ultimate outcome of the legal
proceedings brought against the Company in connection with its reported
accounting errors. These and other factors are described generally in the MD&A
section of the Company's 1996 Annual Report to Stockholders and most
specifically in the paragraphs in that section captioned "Liquidity and Capital
Resources," "Impact of Inflation and Seasonality", and "Outlook."
Forward-looking statements are typically identified by the words "believe,"
"expect," "anticipate," "intend," "estimate," and similar expressions. Readers
are cautioned not to place undue reliance on these forward-looking statements,
which speak only as of their dates.
11
<PAGE>
Part II - OTHER INFORMATION
Item 1. Legal Proceedings
The information required by this item appears on page 1 of the Company's
1996 Annual Report to Stockholders under the caption "Restatement of Financial
Statements" and in Note 17 to Notes to Consolidated Financial Statement on page
36 of the Company's 1996 Annual Report to Stockholders, all of which information
is incorporated herein by reference.
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
Exhibit 11 STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
Exhibit 27 FINANCIAL DATA SCHEDULE
(b) Reports on Form 8-K
None
12
<PAGE>
MICRO WAREHOUSE, INC.
FORM 10-Q
MARCH 31, 1997
-------------------------------------
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MICRO WAREHOUSE, INC.
The Registrant
Date: May 15, 1997
/s/WAYNE P. GARTEN
-------------------------------------------------
WAYNE P. GARTEN
Senior Vice President and Chief
Financial Officer
(Duly Authorized Officer of the Registrant and
Principal Financial Officer)
13
EXHIBIT 11
MICRO WAREHOUSE, INC. AND SUBSIDIARIES
STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
Primary
Three Months Ended
March March 31,
31, 1997 1996
------- --------
<S> <C> <C>
Net Income (Loss)
Income (loss) before extraordinary charge $ 7,813 ($ 5,101)
Extraordinary loss on early extinguishment of debt, net of taxes -- 1,584
------- --------
Net income (loss) $ 7,813 ($ 6,685)
======= ========
Shares
Weighted average common shares outstanding 34,364 33,996
Common equivalent shares 73 --
------- --------
Weighted average common shares and common equivalent shares outstanding 34,437 33,996
======= ========
Per Share
Income (loss) before extraordinary charge $ 0.23 ($ 0.15)
Extraordinary loss on early extinguishment of debt, net of taxes -- (0.05)
------- --------
Net income (loss) $ 0.23 ($ 0.20)
======= ========
Fully Diluted
Three Months Ended
March March 31,
31, 1997 1996
------- --------
Net Income (Loss)
Income (loss) before extraordinary charge $ 7,813 ($ 5,101)
Extraordinary loss on early extinguishment of debt, net of taxes -- 1,584
------- --------
Net income (loss) $ 7,813 ($ 6,685)
======= ========
Shares
Weighted average common shares outstanding 34,364 33,996
Common equivalent shares 84 --
------- --------
Weighted average common shares and common equivalent shares outstanding 34,448 33,996
======= ========
Per Share
Income (loss) before extraordinary charge $ 0.23 ($ 0.15)
Extraordinary loss on early extinguishment of debt, net of taxes -- (0.05)
------- --------
Net income (loss) $ 0.23 ($ 0.20)
======= ========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 89,650
<SECURITIES> 20,238
<RECEIVABLES> 217,150
<ALLOWANCES> 11,023
<INVENTORY> 166,481
<CURRENT-ASSETS> 522,018
<PP&E> 69,770
<DEPRECIATION> 40,802
<TOTAL-ASSETS> 634,406
<CURRENT-LIABILITIES> 247,036
<BONDS> 298
0
0
<COMMON> 344
<OTHER-SE> 386,728
<TOTAL-LIABILITY-AND-EQUITY> 634,406
<SALES> 529,503
<TOTAL-REVENUES> 529,503
<CGS> 442,038
<TOTAL-COSTS> 517,281
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 13,082
<INCOME-TAX> 5,269
<INCOME-CONTINUING> 7,813
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 7,813
<EPS-PRIMARY> .23
<EPS-DILUTED> .23
</TABLE>
