<PAGE> 1
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 September 30, 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: 0-21632
ELLETT BROTHERS, INC.
(Exact name of Registrant as specified in its charter)
SOUTH CAROLINA 57-0957069
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
267 COLUMBIA AVENUE, CHAPIN, SOUTH CAROLINA 29036
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (803) 345-3751
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 periods 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 September 30, 1997, 5,130,918 shares of no par value common stock of the
registrant were outstanding.
Page 1 of 12 pages
<PAGE> 2
Form 10-Q
Page 2
ELLETT BROTHERS, INC. AND SUBSIDIARIES
SEPTEMBER 30, 1997
INDEX
Part I. Financial Information Page
Item 1. Financial Statements
Condensed consolidated balance sheets as of
September 30,1997 and December 31, 1996 3
Condensed consolidated statements of income
for the three months ended September 30, 1997
and 1996, and the nine months ended
September 30, 1997 and 1996 4
Condensed consolidated statements of cash flows
for the nine months ended September 30, 1997 and 1996 5
Notes to condensed consolidated financial statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
Part II. Other Information Page
Item 6. Exhibits and Reports on Form 8-K 11
<PAGE> 3
Form 10-Q
Page 3
PART I. FINANCIAL INFORMATION
ELLETT BROTHERS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
<TABLE>
<CAPTION>
September 30, Dec. 31,
1997 1996
------------- -----------
(unaudited) (see note)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 202 $ 139
Accounts receivable, less allowance for doubtful accounts of $1,293 and $750
at September 30, 1997 and December 31, 1996, respectively 28,565 19,716
Other accounts receivable 15 878
Inventories 34,772 39,756
Prepaid expenses 1,518 3,727
Deferred income tax asset 1,868 591
--------- ---------
Total current assets 66,940 64,807
--------- ---------
Property, plant and equipment, at cost, less accumulated depreciation 6,700 6,190
Other assets:
Intangible assets, at cost, less accumulated amortization 1,999 2,262
Other assets 27 101
--------- ---------
Total other assets 2,026 2,363
--------- ---------
$ 75,666 $ 73,360
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable, trade $ 8,500 $ 7,909
Accrued expenses 1,170 1,356
Current portion of long-term debt 519 513
--------- ----------
Total current liabilities 10,189 9,778
--------- ----------
Revolving credit facility 35,788 31,515
Long-term debt 6,582 6,969
Deferred income tax liability 611 461
Shareholders' equity:
Preferred stock, no par value
(5,000 shares authorized, no shares issued or outstanding)
Common stock, no par value
(20,000 shares authorized, 5,131 and 5,065 shares issued and outstanding
as of September 30, 1997 and December 31, 1996, respectively) 12,439 12,550
Unearned compensation (202) (250)
Retained earnings 10,259 12,337
--------- ---------
Total shareholders' equity 22,496 24,637
--------- ---------
$ 75,666 $ 73,360
========= =========
</TABLE>
The accompanying notes are an integral part of these condensed
consolidated financial statements.
Note: The balance sheet at December 31, 1996 has been derived from the audited
financial statements at that date, but does not include all of the
information and footnotes required by generally accepted accounting
principles for complete financial statements.
<PAGE> 4
Form 10-Q
Page 4
ELLETT BROTHERS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(in thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
--------------------------- ----------------------------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Sales $ 41,326 $ 38,857 $112,798 $107,951
Cost of goods sold 34,484 31,833 96,936 87,806
-------- -------- -------- --------
Gross profit 6,842 7,024 15,862 20,145
Selling, general and administrative expenses 5,421 5,537 16,372 16,306
-------- -------- -------- --------
Income (loss) from operations 1,421 1,487 (510) 3,839
Other income (expenses):
Interest income 115 118 365 359
Interest expense (945) (967) (2,535) (2,424)
Other expense (13) (1) (6) (32)
-------- -------- -------- --------
Income (loss) before income taxes 578 637 (2,686) 1,742
Income tax expense (benefit) 113 231 (917) 623
-------- -------- -------- --------
Net income (loss) $ 465 $ 406 $ (1,769) $ 1,119
======== ======== ======== ========
Earnings (loss) per share $ 0.09 $ 0.08 $ (0.34) $ 0.22
======== ======== ======== ========
Weighted average shares outstanding 5,131 5,085 5,154 5,160
======== ======== ======== ========
</TABLE>
The accompanying notes are an integral part of these condensed
consolidated financial statements.
<PAGE> 5
Form 10-Q
Page 5
ELLETT BROTHERS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in thousands)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
--------------------------
1997 1996
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ (1,769) $ 1,119
Adjustments to reconcile net income to net cash used in operating activities:
Non-cash charges to income (loss) 1,028 1,589
Changes in assets and liabilities:
Accounts receivable (9,279) (7,451)
Inventories 4,985 (4,928)
Prepaid expenses 2,209 2
Accounts payable, trade 591 418
Accrued expenses (186) (1,551)
--------- --------
Net cash used in operating activities (2,421) (10,802)
--------- --------
Cash flows used in investing activities:
Proceeds from sale of assets 33
Purchase of property, plant and equipment (905) (1,256)
Purchase of intangible assets (36)
Change in industrial revenue refunding bond reserve -- 44
--------- --------
Net cash used in investing activities (905) (1,215)
--------- --------
Cash flows from financing activities:
Gross borrowings on revolving credit facility 110,329 116,288
Gross repayments on revolving credit facility (106,055) (102,529)
Principal payments on capital lease obligations (39) (31)
Principal payments on long-term debt (342) (304)
Exercise of stock options by certain executive officers 24 --
Common stock repurchase (219) (1,277)
Dividends to shareholders (309) (311)
--------- --------
Net cash provided by financing activities 3,389 11,836
--------- --------
Net decrease in cash and cash equivalents (63) (181)
Cash and cash equivalents:
Beginning of period 139 325
--------- --------
End of period $ 202 $ 144
========= ========
</TABLE>
The accompanying notes are an integral part of these condensed
consolidated financial statements.
<PAGE> 6
Form 10-Q
Page 6
ELLETT BROTHERS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
SEPTEMBER 30, 1997
(in thousands, except per share data)
1. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements, which
include the accounts of Ellett Brothers, Inc. and subsidiaries (the "Company"),
have been prepared in accordance with generally accepted accounting principles
for interim financial information and the instructions to Form 10-Q and Article
10 of Regulation S-X. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three and nine months ended September
30, 1997 are not necessarily indicative of the results that may be expected for
the full year ending December 31, 1997. For further information, refer to the
financial statements and footnotes thereto included in Ellett Brothers, Inc.'s
annual report on Form 10-K for the year ended December 31, 1996.
2. INVENTORIES
Inventories consisted of the following:
<TABLE>
<CAPTION>
September 30, December 31,
1997 1996
--------------- --------------
<S> <C> <C>
Finished goods $ 32,109 $ 38,283
Raw materials 1,834 1,096
Work in process 829 377
-------- --------
$ 34,772 $ 39,756
======== ========
</TABLE>
3. EARNINGS PER SHARE
The Company will adopt Statement of Financial Accounting Standards (SFAS) No.
128, "Earnings Per Share", on December 31, 1997. SFAS No. 128 requires the
Company to change its method of computing, presenting and disclosing earnings
per share information. Upon adoption, all prior periods' data presented will be
restated to conform to the provisions of SFAS No. 128.
The Company has calculated the basic and diluted earnings per share for the
three months ended September 30, 1997 and 1996, and the nine months ended
September 30, 1997 and 1996, under the provisions of SFAS No. 128, and
determined them to be the same as the reported earnings per share, $0.09 and
$0.08 and ($0.34), and $0.22, respectively.
<PAGE> 7
Form 10-Q
Page 7
4. CLOSING OF SUBSIDIARY OPERATION
In June 1997, Executive Management and the Board of Directors concluded that
ongoing operation of the Safesport Manufacturing Company subsidiary was not in
the best interest of the Company, and began liquidation of this subsidiary. The
liquidation is expected to be concluded by the end of 1997. An after tax reserve
of $2,725, or $0.53 per share, was established as of June 30 for the purpose of
this liquidation. The reserve was reviewed as of September 30, 1997 and adjusted
to reflect the liquidation efforts through that point. The reserves were
adjusted to the values noted below, resulting in $208 of net income in the three
months ended September 30, 1997. The reserve was composed of the following
components as of June 30, 1997 and as of September 30, 1997.
<TABLE>
<CAPTION>
June 30, 1997 September 30, 1997
------------- ------------------
<S> <C> <C>
Inventory Reserve $ 3,548 $ 1,246
Accounts Receivable Reserve 207 580
Accrued Expenses 255 10
Current Tax Benefit (1,285) (688)
------- -------
Total Reserve $ 2,725 $ 1,148
</TABLE>
The results (unaudited) for the three and nine months ended September 30, 1997,
without the impact of the Safesport subsidiary, would have been:
<TABLE>
<CAPTION>
Three Months Nine Months
------------ -----------
<S> <C> <C>
Sales $ 36,946 $ 104,909
Gross Margin 6,341 18,062
Operating Income 1,275 3,886
Net Income 457 1,502
Earnings Per Share $ 0.09 $ 0.29
</TABLE>
<PAGE> 8
Form 10-Q
Page 8
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
The following discussion and analysis provide information that management
believes is relevant to an assessment and understanding of the operations and
financial condition of Ellett Brothers, Inc. and its subsidiaries (the
"Company"). This discussion and analysis should be read in conjunction with the
financial statements and related notes presented in the Company's annual report
on Form 10-K for the year ended December 31, 1996, and the condensed
consolidated financial statements and related notes included in this Form 10-Q.
The net profits after tax for the three months ended September 30, 1997 were
benefited by a $208,000, or $0.04 per share, change in estimate of the
previously created reserve for liquidation of the Company's Safesport
Manufacturing Company subsidiary ("Safesport"). The nine months ended September
30, 1997 had a net after tax loss impact of $2,517,000, or $0.49 per share, for
the creation of a reserve for the closure of Safesport (see Note 4 to the
financial results).
Sales for the three months ended September 30, 1997 were $41.3 million, as
compared to $38.9 million for the same period in 1996, an increase of $2.4
million, or 6.3%. Sales for the nine months ended September 30, 1997 were $112.8
million, as compared to $108.0 million for the same period in 1996, an increase
of $4.8 million, or 4.4%. Sales from the subsidiaries, excluding Safesport, were
$3.1 million and $4.3 million for the three and nine months ended September 30,
1997, respectively, and $2.6 million and $3.9 million for the three and nine
months ended September 30, 1996, respectively.
If the impact of the operations of Safesport were excluded, sales for the three
months ended September 30, 1997 would have been $36.9 million as compared to
$37.1 million in the same period of 1996, a 0.5% decrease. On the same basis,
sales for the nine months ended September 30, 1997 would have been $104.9
million as compared to $102.9 million for the same period in 1996, a 1.9%
increase.
While there were indications of continued improvement in the distribution
business, the third quarter was negatively impacted by the United Parcel
Service/Teamsters strike. In recent history, over 85% of the products in our
distribution business have been delivered by UPS and, while alternative methods
of shipping were utilized, the operational constraints and extra cost of these
options significantly impacted sales and expenses. During the three weeks of the
strike, sales in the distribution business were 23% below the same period in the
prior year, while sales averaged 6% above last year for the remaining weeks of
the quarter. Management believes that the lost sales were approximately $2.8
million. Additional labor to prepare orders for shipment via the US Post Office
or motor freight lines, along with additional freight expenses, increased SG&A
expense during the period of the strike by approximately $85,000. Management
believes that the total impact of the strike on net income after tax was
approximately $200,000, or $0.04 per share.
Being most impacted by the strike, sales of hunting and shooting sports products
decreased 5% while camping archery and outdoor accessories decreased 2% in the
third quarter of 1997, as compared to the third quarter of 1996. The decreases
in hunting and shooting sports products appear to be directly related to the
period of the strike, with the overall sales trend being positive. Management
continues to believe that this trend results from an increase in the market
share of the Company, in combination with a slight increase in sales for the
industry as a whole. A strong summer season for marine accessories enabled this
division to overcome the negative impacts of the strike and produce a sales
increase of 8% over the third quarter of 1996. This is consistent with growth in
prior periods, and represents continued increase in market share in this
industry. Sales of the subsidiary operations, other than Safesport, were not
impacted by the strike and increased from $2.6 million in the third quarter of
1996 to $3.1 million in the third quarter 1997, or 22%.
Gross profit was $6.8 million (16.6% of sales) for the three months ended
September 30, 1997, as compared to $7.0 million (18.1% of sales) for the same
period in 1996, a decrease of $182,000. Gross profit for the nine months ended
September 30, 1997 was $15.9 million (14.1% of sales), as compared to $20.1
million (18.7% of sales) for the same period in 1996, a decrease of $4.3
million. The third quarter decline in gross profit as a percentage of sales is
primarily due to the impact of the Safesport liquidation, with $4.4 million of
Safesport sales producing gross margin of $500,000 (11.4% of sales) after the
adjustment of the inventory reserve to reflect management's changes in estimate.
If the impact of the operations of Safesport were excluded, gross profit for the
three months ending September 30, 1997 would have been $6.3 million (17.2% of
sales) versus $6.5 million (17.6% of sales) in the same period of 1996. On the
same basis, gross profit for the nine months ended September 30, 1997 would have
been $18.1 million (17.2% of sales) as compared to $18.3 million (17.8% of
sales) for the same period in 1996. During the period of the UPS strike, the
distribution business was impacted as customers purchased heavier products to
reach
<PAGE> 9
Form 10-Q
Page 9
minimum motor freight requirements. In many cases, these heavier products,
being commodity items, also had lower gross profit margins. Management believes
this impacted our gross profit by 10 to 15 basis points for the quarter.
Selling, general and administrative expenses for the three months ended
September 30, 1997 were $5.4 million (13.1% of sales), as compared to $5.5
million (14.2% of sales) for the same period in 1996, a decrease of $116,000 or
2.1%. Selling, general and administrative expenses for the nine months ended
September 30, 1997 were $16.4 million (14.5% of sales), as compared to $16.3
million (15.1% of sales) for the same period in 1996, an increase of $66,000, or
0.4%. Third quarter expenses were reduced by $193,000 due to the reevaluation of
the Safesport reserve. The net reserve impact for the nine months ending
September 30,1997 was a $269,000 expense. Net shipping charges increased as a
result of the UPS strike, bad debt expense increased as a result of the higher
accounts receivable balance and general insurance expense increased due to
higher premium rates. Catalog and mini-catalog production expense increased due
to lower vendor contributions to these efforts, while depreciation and equipment
maintenance increased as a result of the investment in a new computer system.
Telephone expenses declined as a result of new contract rates with our carrier,
while management bonus declined due to the lower profits in the distribution
business.
Excluding Safesport, selling, general and administrative expenses for the three
months ended September 30, 1997 would have been $5.1 million (13.7% of sales)
versus $4.7 million (12.8% of sales) in the same period of 1996. On the same
basis, selling, general and administrative expenses for the nine months ended
September 30, 1997 would have been $14.2 million (13.5% of sales) as compared to
$14.1 million (13.7% of sales) for the same period in 1996.
Interest expense was $945,000 (2.3% of sales) for the three months ended
September 30, 1997, as compared to $967,000 (2.5% of sales) for the same period
in 1996, a decrease of $22,000, or 2.3%. Interest expense for the nine months
ended September 30, 1997 was $2.5 million (2.3% of sales), as compared to $2.4
million (2.3% of sales) for the same period in 1996, an increase of $111,000, or
4.6%. Higher interest rates in the nine months of 1997, as compared to the same
period in 1996, offset lower borrowings, resulting in increased interest
expense. In September 1997 the industrial revenue bond agreement was amended to
decrease the interest rate from 10.658% to 7.5%, resulting in approximately
$210,000 annual decrease in future interest expense.
Income tax expense for the three months ended September 30, 1997 was $113,000,
as compared to $231,000 for the same period in 1996. An income tax benefit of
$917,000 exists for the nine months ended September 30, 1997 as compared to a
$623,000 expense for the same period in 1996. Of the year to date tax credit,
$1,270,000 is derived from the creation of the Safesport reserve. The effective
tax rate for the three months ended September 30, 1997 was 19.6%, as compared to
36.3% for the same period in 1996. The effective tax rate for the nine months
ended September 30, 1997 was a tax benefit of 34.1%, as compared to a tax
expense of 35.8% for the same period in 1996. The difference in tax rate is
driven by the impacts of the Safesport reserve and changes in deferred tax
credits.
The net income for the three months ended September 30, 1997 was $465,000 (1.1%
of sales), of which $208,000 resulted from the reevaluation of the Safesport
reserve, as compared to net income of $406,000 (1.0% of sales) for the same
period in 1996, an increase of $59,000. Net loss for the nine months ended
September 30, 1997 was $1.8 million, including $2.5 million ($0.49 per share) of
one-time losses for the liquidation of Safesport, as compared to net income of
$1.1 million (1.0% of sales) for the same period in 1996, a decrease of $2.9
million. As previously noted, it is management's belief that the UPS strike had
an approximately $200,000 negative impact on net income after tax in the third
quarter.
If the total impact of the operations of Safesport were excluded, net income for
the three months ended September 30, 1997 would have been $457,000 (1.2% of
sales) versus $672,000 (1.8% of sales) in the same period of 1996, a decrease of
31.9%. On the same basis, net income for the nine months ended September 30,
1997 would have been $1,502,000 (1.4% of sales) as compared to $1,568,000 (1.5%
of sales) for the same period in 1996, an increase of 5.2%. However, certain
fixed expenses previously allocated to Safesport, primarily depreciation and
interest expenses, will continue in future years.
SEASONALITY AND QUARTERLY INFORMATION
Historically, the Company's business has been seasonal. The sales of hunting and
shooting sports products, as well as camping, archery and outdoor accessories,
usually increase in the third quarter of each year, and peak early in the fourth
quarter. Sales of marine accessories usually increase in the first quarter of
each year, then peak midway through the second quarter and continue at similar
levels through the first half of the third quarter. Operations of the
subsidiaries are very seasonal, producing significantly higher sales and gross
profit during the third and fourth
<PAGE> 10
Form 10-Q
Page 10
quarters, with losses generated in the first and second quarters. The Company's
quarterly operating results may also be affected by a wide variety of factors,
such as legislative and regulatory changes, competitive pressures, and general
economic conditions.
LIQUIDITY AND CAPITAL RESOURCES
The Company's primary sources of liquidity are results of operations and
borrowings under its revolving credit facility. Pursuant to its operating
strategy, the Company maintains very minimal cash balances and is substantially
dependent on, among other things, the availability of adequate working capital
financing to support inventories and accounts receivable.
During the nine months ended September 30, 1997, net cash used in operating
activities was $2.4 million as compared to $10.8 million for the same period in
1996. The net cash used in operating activities in 1997 was due to funding of
the year to date loss, while the reduction of prepaid expenses and inventories,
including the liquidation of the Safesport inventory, was offset by higher
accounts receivable. The net cash used in investing activities in 1997 of
$905,000 was primarily due to the purchase of computer software. During the nine
months ended September 30, 1997, the Company obtained the additional cash needed
to fund operations by increasing borrowings under its revolving credit facility
by $4.3 million. The Company also paid dividends of $342,000 in the nine months
ended September 30, 1997.
Working capital requirements for the Company's traditional distribution business
have historically been somewhat seasonal in nature. Accounts receivable have
generally increased in the first quarter primarily because of the customary
industry practice during the first quarter of each year whereby the Company has
offered to its customers extended payment terms for purchases of certain
products, thereby extending the payment due dates for a portion of its sales
into the third and fourth quarters of the year. Accounts receivable have
generally increased further early in the third quarter as additional 60 to 90
day extended terms have been offered to stimulate sales in advance of the
Company's highest volume quarters. Accounts receivable usually decrease in the
fourth quarter as payments are received on prior quarters' sales and a larger
percentage of current sales are made with shorter payment terms. Inventory
generally builds during the first two quarters and peaks in the third quarter to
support the higher sales volumes of the third and fourth quarters. In the fourth
quarter, the higher sales volumes have traditionally served to reduce inventory
to its lowest point at year-end.
Working capital requirements are also seasonal for the subsidiaries. Inventories
increase during the first half of the year to accommodate the sales expected in
the third and fourth quarters. Accounts receivable decline to their lowest point
in the second quarter just before the sales increase in the second half of the
year.
In the past twelve months, the Company entered into several commitments to
upgrade the computer equipment and information systems in the aggregate amount
of approximately $2.6 million, of which approximately $550,000 is leased over a
three year period. Further efforts in this area will continue through the second
quarter of 1998. The total cost of the computer upgrades is expected to be
approximately $3.0 million.
Principal maturities on the Company's industrial revenue refunding bonds began
in 1995. Remaining payments for 1997 will be $125,000, and maturities for 1998
and 1999 will be $517,000 and $567,000, respectively. As previously noted the
agreement was amended in September to reduce the fixed rate to 7.50%, from
10.625% with future interest charges of approximately $157,000 for the remainder
of 1997, and $612,000 and $568,000 for 1998 and 1999, respectively.
Management believes that cash generated from operations, including the final
liquidation of Safesport, and available under the Company's revolving credit
facility, will be sufficient to finance its operations, expected working capital
needs, capital expenditures, debt service requirements, and business
acquisitions for the remainder of 1997 and through the end of 1999.
<PAGE> 11
Form 10-Q
Page 11
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
27 Financial Data Schedule (for SEC use only)
(b) Reports on Form 8-K
On July 18, 1997, the Company filed a report on Form 8-K relating to the
liquidation of the Safesport Manufacturing Company subsidiary.
<PAGE> 12
Form 10-Q
Page 12
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this Form 10-Q to be signed on its behalf by the
undersigned thereunto duly authorized.
Ellett Brothers, Inc.
Date: November 14, 1997
By: /s/ Joseph F. Murray, Jr.
----------------------------------------
Joseph F. Murray, Jr.
President, Chief Executive Officer
and Director
By: /s/ Richard M. Eddinger
----------------------------------------
Richard M. Eddinger
Vice President and Chief Financial
Officer (principal financial
and accounting officer)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF ELLETT BROTHERS, INC. FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 1997, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 202
<SECURITIES> 0
<RECEIVABLES> 29,858
<ALLOWANCES> 1,293
<INVENTORY> 34,772
<CURRENT-ASSETS> 66,940
<PP&E> 13,215
<DEPRECIATION> 6,515
<TOTAL-ASSETS> 75,666
<CURRENT-LIABILITIES> 10,189
<BONDS> 6,582
0
0
<COMMON> 12,439
<OTHER-SE> 10,057
<TOTAL-LIABILITY-AND-EQUITY> 75,666
<SALES> 112,798
<TOTAL-REVENUES> 112,798
<CGS> 96,936
<TOTAL-COSTS> 96,936
<OTHER-EXPENSES> 16,372
<LOSS-PROVISION> 1,321
<INTEREST-EXPENSE> (2,535)
<INCOME-PRETAX> (2,686)
<INCOME-TAX> (917)
<INCOME-CONTINUING> (1,769)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,769)
<EPS-PRIMARY> (0.34)
<EPS-DILUTED> (0.34)
</TABLE>
