SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 31, 1997
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period ________ to ________
Commission file number 1-11988
GREG MANNING AUCTIONS, INC.
(Exact name of Small Business Issuer as specified in its Charter)
NEW YORK 22-2365834
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
775 Passaic Avenue
West Caldwell, New Jersey 07006
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code: (201) 882-0004
Check whether the Issuer (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 filing requirements for the past 90
days.
Yes X No _____
As of April 22, 1997, Issuer had 4,419,997 shares of its Common Stock
outstanding.
Transitional Small Business Disclosure Format (check one): Yes ______ No X
GREG MANNING AUCTIONS, INC.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Table of Contents Page Number
Consolidated Balance Sheet - March 31, 1997 (Unaudited) 3
Consolidated Statements of Operations and Retained Earnings - 4
Three months ended March 31, 1996 and 1997 (Unaudited)
Nine months ended March 31, 1996 and 1997 (Unaudited)
Consolidated Statements of Cash Flows - 5
Nine months ended March 31, 1996 and 1997 (Unaudited)
Notes to Consolidated Financial Statements 6
as of March 31, 1997
Item 2. Management's Discussion and Analysis 10
<PAGE>
GREG MANNING AUCTIONS, INC.
Consolidated Balance Sheet
March 31, 1997
<TABLE>
<CAPTION>
Assets
Current assets:
<S> <C>
Cash and cash equivalents $ 332,865
Accounts receivable
Auctions receivable 7,548,667
Advances to consignors 4,219,968
Notes receivable - current portion 740,817
Inventory 3,665,403
Due from affiliate - CRM 45,793
Deferred tax asset 106,000
Prepaid expenses and deposits 205,213
-------------------------
Total current assets 16,864,726
Property and equipment, net 714,912
Goodwill 1,766,507
Marketable securities 215,200
Notes receivable - long-term portion 393,235
Other assets 722,275
=========================
Total assets $ 20,676,855
=========================
Liabilities and Stockholders' Equity
Current liabilities:
Demand notes payable $ 7,480,000
Notes payable - current portion 99,758
Payable to third party consignors 3,300,703
Accounts payable 932,386
Accrued expenses 265,394
Income taxes payable 403,397
-------------------------
Current liabilities 12,481,638
Notes payable - long-term portion 575,130
Deferred income taxes 3,121
-------------------------
Total liabilities 13,059,889
-------------------------
Commitments and Contingencies
-
Preferred stock, $.01 par value. Authorized
10,000,000 shares; none issued
Common stock, $.01 par value. Authorized
20,000,000 shares; 4,419,997 issued and outstanding 44,200
Additional paid in capital 6,793,401
Unrealized loss on marketable securities (13,400)
Retained earnings 792,765
-------------------------
Total stockholders' equity 7,616,966
-------------------------
Total liabilities and stockholders' equity $ 20,676,855
=========================
</TABLE>
See accompanying notes to financial statements
<PAGE>
GREG MANNING AUCTIONS, INC.
Consolidated Statements of Operations
<TABLE>
Three months ended Nine months ended
March 31, March 31,
------------------------------ ------------------------------
1996 1997 1996 1997
-------------- -------------- -------------- --------------
<CAPTION>
Operating revenues
<S> <C> <C> <C> <C>
Sales of merchandise $ 2,735,117 $ 3,548,074 $ 7,477,911 $ 7,621,560
Commissions earned 612,171 763,931 1,876,320 1,977,765
-------------- -------------- -------------- --------------
3,347,288 4,312,005 9,354,231 9,599,325
-------------- -------------- -------------- --------------
Operating expenses
Cost of merchandise sold 2,289,016 2,350,769 6,152,515 4,907,016
General and administrative 1,160,823 1,163,029 3,306,659 3,150,226
Marketing 173,127 166,216 434,144 478,557
-------------- -------------- -------------- --------------
3,622,966 3,680,014 9,893,318 8,535,799
-------------- -------------- -------------- --------------
Operating profit (loss) (275,678) 631,991 (539,087) 1,063,526
Other income (expense)
Interest and other income 1,039,823 224,280 1,289,358 557,029
Interest expense (150,128) (217,002) (414,086) (618,062)
-------------- -------------- -------------- --------------
Income (loss) before income taxes 614,017 639,269 336,185 1,002,493
Provision (benefit) for income taxes 244,859 257,108 140,447 433,997
-------------- -------------- -------------- --------------
Net income (loss) 369,158 382,161 195,738 568,496
Retained earnings, beginning of period (485,535) 228,437 (312,115) 224,268
-------------- -------------- -------------- --------------
Retained earnings, end of period (116,377) 610,598 (116,377) 792,764
============== ============== ============== ==============
Net income per share - primary $ 0.08 $ 0.09 $ 0.05 $ 0.13
Weighted average number common and
dilutive equivalent shares outstanding 4,370,408 4,419,997 4,213,442 4,537,184
============== ============== ============== ==============
Net income per share - fully diluted $ 0.08 $ 0.09 $ 0.05 $ 0.12
Weighted average number common and
dilutive equivalent shares outstanding 4,388,569 4,419,997 4,222,818 4,549,653
============== ============== ============== ==============
</TABLE>
See accompanying notes to financial statements
<PAGE>
GREG MANNING AUCTIONS, INC.
Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
Nine months ended
March 31,
-------------------------------
1996 1997
--------------- --------------
Cash flows from operating activities:
<S> <C> <C>
Net income (loss) $ 195,738 $ 568,497
Adjustments to reconcile net income (loss) to net cash provided by (used
in) operating activities:
Depreciation and amortization 227,255 258,213
Provision for bad debts 20,711 68,354
Gain on sale of stock (1,067,303)
Changes in assets (increase) decrease:
Auctions receivable 2,695,974 976,393
Advances to consignors (714,226) (2,125,483)
Notes and other receivables (8,816) 299,970
Inventories (1,444,896) (169,177)
Due from affiliate - CRM (33,291) (7,171)
Income taxes receivable 151,407 34,345
Prepaid expenses 35,024 104,620
Other assets 135,233 10,000
Changes in liabilities (decrease) increase
Payable to third-party consignors (2,376,832) (1,002,087)
Accounts payable 799,469 167,759
Accrued expenses and other liabilities (103,719) (5,953)
Income taxes payable 69,489
--------------- --------------
(1,488,272) (752,231)
--------------- --------------
Cash flows from investing activities:
Capital expenditures for property and equipment (75,271) (103,988)
Additional goodwill (64,708) (43,705)
Proceeds from sale of Americana division 90,000
Purchase of investment stock (460,000)
Proceeds from sale of investment stock 1,008,000
--------------- --------------
498,021 (147,693)
--------------- --------------
Cash flows from financing activities:
Proceeds from (repayment of) notes payable (220,948) 1,440,000
Repayment of loans payable (447,203) (738,137)
Net proceeds from issuance of stock 1,165,920 (27,580)
--------------- --------------
497,769 674,283
--------------- --------------
Net decrease in cash and cash equivalents (492,482) (225,641)
Cash and cash equivalents at beginning of period 956,801 558,506
=============== ==============
Cash and cash equivalents at end of period $ 464,319 $ 332,865
=============== ==============
</TABLE>
See accompanying notes to financial statements
<PAGE>
GREG MANNING AUCTIONS, INC
Notes to Consolidated Financial Statements
March 31, 1997
(Unaudited)
(1) Organization, Business and Basis of Presentation
Greg Manning Auctions, Inc., together with its wholly owned
subsidiaries Ivy & Mader Philatelic Auctions, Inc. and Greg Manning Galleries,
Inc. (collectively, the Company), is a public auctioneer of collectibles
including rare stamps, stamp collections and stocks, and regularly conducts rare
stamp auctions bringing together purchasers and sellers located throughout the
world. The Company accepts property for sale at auctions from sellers on a
consignment basis, and earns a commission on the sale. In addition to stamps,
the other collectibles auctioned by the Company include trading cards and sports
memorabilia and other collectibles such as antiquities. The Company also sells
collectibles by private treaty for a commission, and sells its own inventory at
auction, wholesale and retail.
The accompanying consolidated balance sheet as of March 31, 1997 and
related consolidated statements of operations and retained earnings for the
three and nine months ended March 31, 1996 and 1997 and consolidated statements
of Cash Flows for the nine month periods then ended, have been prepared from the
books and records maintained by the Company, in accordance with generally
accepted accounting principles for interim financial information and with the
instructions to Form 10-QSB and Item 310(b) of Regulation SB. Accordingly, they
do not include all information and disclosures required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, all adjustments, which are of a normal recurring nature, considered
necessary for a fair presentation have been included. For further information,
refer to the consolidated financial statements and disclosures thereto in the
Company's Form 10-KSB for the year ended June 30, 1996 filed with the Securities
and Exchange Commission.
(2) Summary of Certain Significant Accounting Policies
Revenue Recognition
Revenue is recognized by the Company when the rare stamps and
collectibles are sold and is represented by a commission received from the buyer
and seller. Auction commissions represent a percentage of the hammer price at
auction sales as paid by the buyer and the seller.
In addition to auction sales. the Company also sells via private
treaty. This occurs when an owner of property arranges with the Company to sell
such property to a third party at a privately negotiated price. In such a
transaction, the owner may set selling price parameters for the Company, or the
Company may solicit selling prices for the owner, and the owner may reserve the
right to reject any selling price. In certain transactions, the Company may be
requested to guarantee a fixed price to the owner, which would be payable
regardless of the actual sales price ultimately received. The Company recognizes
as private treaty revenue an amount equal to a percentage of the sales price, or
in the case of a guaranteed fixed price, the difference between the actual sales
price and the guaranteed fixed price when the properties are sold.
The Company also sells its own inventory at auction, wholesale and
retail. Revenue with respect to inventory at auction is recognized when sold and
for wholesale or retail sales, revenue is recognized when delivered or released
to the customer or to a common carrier for delivery.
The Company does not provide any guarantee with respect to the
authenticity of property offered for sale at auction. Each lot is sold as
genuine and as described by the Company in the catalog. However, when, in the
opinion of a competent authority mutually acceptable to the Company and the
purchaser, a lot is declared otherwise, the purchase price will be refunded in
full if the lot is returned to the Company within a specified period. In such
event, the Company will return such lot to the consignor before a settlement
payment has been made to such consignor for such lot. To date, returns have not
been material. Large collections are generally sold on an "as is" basis.
Principles of Consolidation
The consolidated financial statements of the Company include the
accounts of its wholly owned subsidiaries. All intercompany accounts and
transactions have been eliminated in consolidation.
Business Segment
The company operates in one segment, the auctioning or private treaty
sale of rare stamps and other collectibles. Set forth below is a table of
aggregate sales of the Company, subdivided by source and market:
<TABLE>
<CAPTION>
For the nine months ended
March 31, Percentages
------------------------------------- -----------------------------
1996 1997 1996 1997
------------------------------------- -----------------------------
<S> <C> <C> <C> <C>
Aggregate Sales $ 19,622,303 $ 19,009,079 100% 100%
===================================== =============================
By source:
A. Auction $ 12,144,394 $ 11,387,520 62% 60%
B. Sales of inventory 7,477,909 7,621,559 38% 40%
------------------------------------- -----------------------------
By market:
A. Philat lics 16,572,926 15,990,538 84% 84%
B. Sports collectibles 520,631 854,376 3% 5%
C. Other collectibles 2,528,746 2,164,165 13% 11%
------------------------------------- -----------------------------
</TABLE>
Goodwill
Goodwill primarily includes the excess purchase price paid over the
fair value of the net assets acquired. Goodwill is being amortized on a
straight-line basis over twenty to twenty five years. Total accumulated
amortization at March 31, 1997 was $231,956. The recoverability of goodwill is
evaluated at each year end balance sheet date as events or circumstances
indicate a possible inability to recover their carrying amount. This evaluation
is based on historical and projected results of operations and gross cash flows
for the underlying businesses.
Investments
The Company accounts for marketable securities pursuant to the
Statement of Financial Accounting Standards No. 115, Accounting for Certain
Investments in Debt and Equity Securities. Under this statement, the Company's
marketable securities with a readily determinable fair value have been
classified as available for sale and are carried at fair value with an
offsetting adjustment to Stockholders' Equity. Net unrealized gains and losses
on marketable securities are credited or charged to a separate component of
Stockholders' Equity.
Earnings (loss) per common and common equivalent share
Earnings (loss) per common and common equivalent share of the Company's
Common Stock ("Common Stock") is computed using the weighted average number of
common and common equivalent shares outstanding for each period.
(3) Inventories
Inventories as of March 31, 1997 consisted of the following:
<TABLE>
<CAPTION>
<S> <C>
Stamps $ 1,900,706
Sports cards and sports memorabilia 557,863
Other collectibles 1,206,834
------------
$ 3,665,403
</TABLE>
(4) Marketable Securities
As of March 31, 1997, the Company owned 9.5% or 4,112,289 common shares
of PICK Communications, which is primarily engaged in the business of issuing
prepaid telephone cards. These securities are classified as available for sale
having a cost of $237,599 and a fair value of approximately $215,200 resulting
in a cumulative unrealized loss of $22,400 which was offset by deferred tax
asset of $9,000. The fair value of the securities has been reduced from
$2,580,000 at June 30, 1996 as a result of a corresponding reduction in the
closing price per share from $3.00 at June 30, 1996 to $0.47 , as of March 31,
1997 ($0.24 at April 22, 1997) as reported on the electronic bulletin board. The
decrease in net valuation for the nine months ended March 31, 1997 of $1,418,400
was charged to a separate component of Stockholders' Equity.
(5) Related-party Transactions
The Company accepts rare stamps and other collectibles for sale at auction
on a consignment basis from Collectibles Realty Management, Inc., ("CRM") which
owned approximately 29%, as of March 31, 1997, of the Company's common stock.
Such stamps and collectibles have been auctioned by the Company or sold at
private treaty under substantially the same terms as for third party customers
and the Company charges CRM a seller's commission for items valued at under
$100,000 per lot. In the case of auction, the hammer price of the sale, less any
seller's commission, is paid to CRM upon successful auction, and in the case of
private treaty, the net price after selling commissions is paid to CRM. For the
nine months ended March 31, 1997, such auction and private treaty sales were not
material.
(6) Debt
The Company is party to secured revolving credit and term loan facility
with Brown Brothers Harriman & Co. ("BBH&Co."). At March 31, 1997, borrowing
under the revolving credit facility and term loan totaled $5,195,000 and
$256,250 respectively. In November 1996, the Company borrowed an additional
$1,400,000 from BBH&Co in the form of a term note due in July 1997 bearing
interest at 12% per annum. Absent a material adverse change or event of default
as determined by BBH&Co., BBH&Co. has agreed to provide of the revolving credit
loan, the Company with a 120-day notification period prior to issuing a demand
for repayment, so long as the Company is in compliance with certain financial
and operating guidelines. The Company believes that at March 31, 1997, it was in
compliance with such guidelines.
(7) Supplementary Cash Flow Information
Following is a summary of supplementary cash flow information:
<TABLE>
<CAPTION>
For the nine months ended March 31,
1996 1997
----------------- ------------------
<S> <C> <C>
Interest paid $ 414,086 $ 591,733
Income taxes paid 274,603
Noncash investing and financing activities:
Acquisition of inventory under note payable 700,000
Note receivable in conjunction with sale of division 120,000
Acquisition of fixed assets under capital leases 135,312
Sale of stock 81,704
Leases canceled 19,341
</TABLE>
(8) Other information
In November 1996 it was determined that the Company's proposed
acquisition of the Latham Companies, Inc., the parent company of Larry Latham
Auctioneers, Inc., would not be consummated.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Results of Operations
General
The Company's revenues are represented by the sum of (a) the proceeds
from the sale of the Company's inventory, and (b) the portion of sale proceeds
from auction or private treaty that the Company is entitled to retain after
remitting the sellers' share, consisting primarily of commissions paid by
sellers and buyers. Generally, the Company earns a commission from the seller of
10% to 15% (although the commission may be slightly lower on high value
properties). During the nine month period ended March 31, 1997, the Company
earned a commission of 15% from the buyers in all markets except for sports
cards which is a 10% premium.
The Company's operating expenses consist of the cost of sales of the
Company's inventory and general and administrative expenses and marketing
expenses for the nine months ended March 31, 1996 and 1997. General and
administrative expenses are incurred to pay employees and to provide support and
services to those employees, including the physical facilities and data
processing. Marketing expenses are incurred to promote the services of the
Company to sellers and buyers of collectibles through advertising and public
relations, producing and distributing its auction catalogs and conducting
auctions.
<PAGE>
Three months ended March 31, 1997
Compared with the three months ended March 31, 1996
The Company recorded a increase in revenues of $964,717 (29%), from
$3,347,288 for the three months ended March 31, 1996 to $4,312,005 for the three
months ended March 31, 1997. This increase was attributable to the increases in
revenues from the sale of the Company's inventories of $812,957 (30%) and
commissions earned of $151,760 (25%) for the three month period ended March 31,
1997 compared to the prior year.
Gross margins on the sales of the Company's inventory increased by
$751,204 (168%) in the three months ended March 31, 1997 compared to the three
months ended March 31, 1997. All areas of collectibles recorded an increase in
margins, although other collectibles recorded the largest increase of $579,300.
The Company's operating expenses of $1,329,245 for the three months
ended March 31, 1997 were substantially the same as the same period in the prior
year. These costs resulted in operating costs of 31% of operating revenues for
the three months ended March 31, 1997 compared to 40% for the comparable period
in the prior year.
Interest and other income decreased by $815,543 in the quarter ended
March 31, 1997 compared to the prior year's comparable quarter primarily due to
no gains on the sale of marketable securities during the quarter ended March 31,
1997 compared to a gain of $987,200 during the quarter ended March 31, 1996.
This was partially offset by an increase in interest income of $171,000 during
the quarter ended March 31, 1997 compared to the prior year's comparable
quarter. The Company has increased advances to consignors over $2,250,000 from
March 31, 1996 to March 31, 1997 resulting in the additional interest income.
Interest expense increased by $66,874 in the three months ended March
31, 1997 compared to the three months ended March 31, 1997 primarily as a result
of the higher average daily borrowings for the comparable period ($26,000) and
higher interest rate on the Company's revolving credit facility and term loans
($34,000). The borrowings under the Company's secured revolving credit facility
are utilized to support the operations of the Company, including the advances to
consignors, auctions receivables and merchandise inventories.
Net Income: The Company recorded an increase in income before income
taxes of $25,252 for the three months ended March 31, 1997 compared to the three
months ended March 31, 1996. This change was primarily due to an increase in
operating profits of approximately $908,000 during this period, offset by not
having sales of securities as outlined above.
<PAGE>
Nine months ended March 31, 1997
Compared with the nine months ended March 31, 1997
The Company had an increase in revenue of $245,094 (3%) to $9,599,325
for the nine months ended March 31, 1997 as compared to the comparable period
ended March 31,1996. This increase was due to both increases due to the sale of
the Company's inventories by $143,649 (2%) and commissions earned from
consignments of $101,445 (5%) for the nine months ended March 31, 1997 compared
to the prior year's comparable period.
Gross margin percentages on the sales of the Company's inventories
increased from 18% to 36% for the nine months ended March 31, 1997 as compared
the nine months ended March 31, 1996. This increase in gross margin percentages
and the above increase in revenue from inventory sales resulted in an increase
in overall gross margins on the sale of inventories of $1,389,088 (105%) to
$2,714,544 for the nine months ended March 31, 1997 compared to the prior year's
comparable period.
The Company recorded a decrease in operating expenses of $112,020 (3%)
for the nine months ended March 31, 1997 compared to the nine months ended March
31, 1996. This net decrease was primarily attributable to cost reductions in the
Galleries division and partially offset by the expansion of the sports
department and expanded marketing campaigns in the philatelic areas.
Interest expense increased by approximately $204,000 in the nine months
ended March 31, 1997 compared to the nine months ended March 31, 1997. This
increase was primarily attributable to higher average borrowings ($62,000) and
increased interest rates on the Company's revolving credit facility and term
note ($85,000). This was offset by the increase in interest income of
approximately $338,000 for the nine months ended March 31, 1997 as compared to
the comparable period of the prior year primarily earned on trade receivables
and advances to consignors.
Net Income: The Company recorded income before income taxes of
$1,002,493 for the nine months ended March 31, 1997 compared to $336,185 for the
nine months ended March 31, 1996. This change was primarily due to an increase
in operating profits of approximately $1,603,000 and the decrease in gains on
the sales of marketable securities during the nine months ended March 31, 1997
as compared to the prior year's comparable period. During the nine months ended
March 31, 1997, the Company did not sell any marketable securities.
<PAGE>
Liquidity and Capital Resources
At March 31, 1997, the Company's working capital position was
$4,383,088, compared to $3,170,150 as of June 30, 1996. This increase of
$1,212,938 was primarily due to increases in inventories purchased for future
auctions ($869,177), advances to consignors ($2,125,483) and a decrease in
payables to consignors ($1,002,087). These increases to working capital were
offset by a decrease in auctions receivable ($1,044,747) and an increase in the
demand notes payable and current portion of loans payable ($1,313,252). These
items were the material cause of the negative cash flow from operating
activities of $752,231.
The Company experienced a decrease in cash flow from investing
activities for the nine months ended March 31, 1997 of $147,693. This was
attributable to the purchase of equipment of $103,988 and additional goodwill
related to the purchase of Ivy and Mader, in the amount of $43,705.
The Company experienced an increase in cash flow from financing
activities for the nine months ended March 31, 1997 of $674,283. This was
primarily attributable to the Company borrowing an additional $1,400,000 in
November 1996 in the form of a term note due in July 1997 to allow for
additional advances to consignors targeted towards the June 1997 auctions. This
was partially offset by the payments on term loans of approximately $700,000
during this period.
The Company's need for liquidity and working capital is expected to
increase as a result of any proposed business expansion activities. In addition
to the need for such capital, and to enhance the Company's ability to offer cash
advances to a larger number of potential consignors of property (which
management believes is an important aspect of the marketing of an auction
business). In addition, the Company will likely require additional working
capital in the future in order to further expand its sports trading card and
sports memorabilia auction business as well as to acquire collectibles for sale
in the Company's business.
Management believes that the Company's cash flow from ongoing
operations supplemented by the Company's working capital credit facilities will
be adequate to fund the Company's working capital requirements for the next 12
months. However, to complete any of the Company's proposed expansion activities
or to make any significant acquisitions, the Company may consider exploring
financing alternatives including increasing its working capital credit
facilities or raising additional debt or equity capital.
The decision to expand, the desired rate of expansion, and the areas of
expansion will be determined by management and the Board of Directors only after
careful consideration of all relevant factors. This will include the Company's
financial resources and working capital needs, and the necessity of continuing
its growth and position in its core business area of stamp auctions.
<PAGE>
GREG MANNING AUCTIONS, INC.
Part II - OTHER INFORMATION
Item 1. Legal Proceedings
None
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
27 Financial Data Schedule
(b) Reports on Form 8-k
None
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized
GREG MANNING AUCTIONS, INC.
Dated: April 23, 1997
Greg Manning
Chairman and Chief Executive Officer
Daniel Kaplan
Vice President and Chief Financial Officer
<PAGE>
EXHIBIT INDEX
Exhibit
No. Description
- -------- ------------------------------------------
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Condensed Consolidated Balance Sheet at March 31, 1997 (Unaudited) and the
Condensed Consolidated Statement of Operations for the Nine Months Ended March
31, 1997 (Unaudited) and is qualified in its entirety by reference to such
financial statements
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-Mos
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> MAR-31-1997
<CASH> 332865
<SECURITIES> 215200
<RECEIVABLES> 7738667
<ALLOWANCES> 190000
<INVENTORY> 3665403
<CURRENT-ASSETS> 16864726
<PP&E> 1267779
<DEPRECIATION> 552867
<TOTAL-ASSETS> 20676855
<CURRENT-LIABILITIES> 12481638
<BONDS> 0
0
0
<COMMON> 44200
<OTHER-SE> 6780001
<TOTAL-LIABILITY-AND-EQUITY> 20676855
<SALES> 7621560
<TOTAL-REVENUES> 9599325
<CGS> 4907016
<TOTAL-COSTS> 3628783
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 68354
<INTEREST-EXPENSE> 618062
<INCOME-PRETAX> 1002493
<INCOME-TAX> 433997
<INCOME-CONTINUING> 568496
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 568496
<EPS-PRIMARY> .13
<EPS-DILUTED> .12
</TABLE>
