<PAGE> 1
UNITED STATES 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 25, 1999
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 - 22074
NATIONAL RECORD MART, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 11-2782687
(State or jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
507 FOREST AVENUE
CARNEGIE, PENNSYLVANIA 15106-2873
(Address of principal executive offices, including zip code)
(412-276-6200)
(Registrant's telephone number, including area code)
Indicate by a check mark whether the Registrant (1) has filed all reports
required to be filed by Sections 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 the issuer's classes of
common stock as of the latest practicable date.
COMMON STOCK, $.01 PAR VALUE,
5,048,167 SHARES OUTSTANDING AS OF NOVEMBER 9, 1999
EXHIBIT INDEX ON PAGE 11.
THIS DOCUMENT CONSISTS OF 12 PAGES.
<PAGE> 2
NATIONAL RECORD MART, INC.
INDEX
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
Balance Sheets: September 25, 1999 (unaudited) and March 27, 1999 3
Statements of Operations: Thirteen and Twenty-six Weeks Ended
September 25, 1999 (unaudited) and September 26, 1998 (unaudited) 4
Statements of Cash Flows: Twenty-six Weeks Ended September 25, 1999
(unaudited) and September 26, 1998 (unaudited) 5
Notes to Consolidated Financial Statements (unaudited) 6-7
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations 8-10
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 11
Signature 11
</TABLE>
2
<PAGE> 3
NATIONAL RECORD MART, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
September 25, March 27,
1999 1999
------------- ------------
Assets (unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 1,674,962 $ 853,222
Merchandise inventory 51,615,927 44,137,192
Due from stockholder 423,521 494,249
Deferred income taxes 417,000 417,000
Refundable income taxes 2,106,725 229,860
Other current assets 4,049,873 3,358,625
------------ ------------
Total current assets 60,288,008 49,490,148
Property and equipment, at cost 41,087,869 36,014,844
Accumulated depreciation and amortization (19,627,192) (17,771,446)
------------ ------------
Property and equipment, net 21,460,677 18,243,398
Other assets:
Deferred income taxes 1,726,319 1,726,319
Intangibles, net 2,565,071 2,534,646
Other 617,947 499,180
------------ ------------
Total other assets 4,909,337 4,760,145
------------ ------------
Total assets $ 86,658,022 $ 72,493,691
============ ============
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $ 22,947,323 $ 15,537,814
Deferred income 1,377,941 1,505,954
Other liabilities and accrued expenses 4,378,848 4,281,331
Current maturities of long-term debt 320,007 106,695
------------ ------------
Total current liabilities 29,024,119 21,431,794
Long-term debt:
Notes payable - subordinated 14,068,196 13,845,464
Revolving credit facility 31,076,511 21,373,000
------------ ------------
Total long-term debt 45,144,707 35,218,464
Stockholders' equity:
Preferred stock, $.01 par value, 2,000,000 shares
authorized, none issued -- --
Common stock, $.01 par value, 9,000,000 shares authorized,
5,494,984 and 5,494,384 shares issued at September 25, 1999
and March 27, 1999, and 5,048,167 and 5,049,567 outstanding
at September 25, 1999, and March 27, 1999, respectively 54,950 54,944
Additional paid-in capital 15,860,416 15,858,922
Retained (deficit) earnings (1,756,945) 1,590,432
------------ ------------
14,158,421 17,504,298
Less treasury stock, 446,817 shares at September 25, 1999
and 444,817 shares at March 27,1999, respectively (1,669,225) (1,660,865)
Total stockholders' equity 12,489,196 15,843,433
------------ ------------
Total liabilities and stockholders' equity $ 86,658,022 $ 72,493,691
============ ============
</TABLE>
See accompanying notes to consolidated financial statements
3
<PAGE> 4
NATIONAL RECORD MART, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
<TABLE>
<CAPTION>
Thirteen Thirteen Twenty-six Twenty-six
Weeks Ended Weeks Ended Weeks Ended Weeks Ended
September 25, September 26, September 25, September 26,
1999 1998 1999 1998
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Net sales $30,681,853 $26,367,759 $60,982,310 $50,802,994
Cost of sales 18,221,247 16,353,216 37,229,578 31,373,678
----------- ----------- ----------- ------------
Gross profit 12,460,606 10,014,543 23,752,732 19,429,316
Selling, general and administrative expenses 12,694,635 9,997,491 24,775,611 19,773,164
Depreciation and amortization 1,058,741 836,941 2,133,308 1,650,486
Interest expense 1,045,650 808,509 2,037,043 1,510,260
Interest income (10,430) (9,572) (17,809) (20,883)
Other expenses 37,207 68,029 49,925 106,324
----------- ----------- ----------- -----------
Total expenses 14,825,803 11,701,398 28,978,078 23,019,351
----------- ----------- ----------- -----------
Net loss before income taxes (2,365,197) (1,686,855) (5,225,346) (3,590,035)
Income tax benefit 847,871 607,268 1,877,969 1,292,393
----------- ----------- ----------- -----------
Net loss $(1,517,326) $(1,079,587) (3,347,377) (2,297,642)
=========== =========== =========== ===========
Basic net loss per share $ (0.30) $ (0. 22) $ (0.66) $ (0. 47)
=========== =========== =========== ===========
Diluted net loss per share $ (0.30) $ (0. 22) $ (0.66) $ (0. 47)
=========== =========== =========== ===========
Weighted average number of common shares
and common equivalent shares
outstanding 5,048,167 4,838,918 5,048,475 4,841,771
=========== =========== =========== ===========
</TABLE>
See accompanying notes to consolidated financial statements
4
<PAGE> 5
NATIONAL RECORD MART, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
<TABLE>
<CAPTION>
Twenty-six Twenty-six
Weeks Ended Weeks Ended
September 25, September 26,
1999 1998
------------- -------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (3,347,377) $ (2,297,642)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 2,133,308 1,650,486
Accretion of notes payable for value assigned to warrants 222,732 222,732
Other (97,390) 41,911
Changes in operating assets and liabilities:
Merchandise inventory (7,478,735) (7,304,094)
Other assets (2,586,580) (4,472,231)
Accounts payable 7,409,509 6,606,894
Other liabilities and accrued expenses (30,496) 57,009
------------ ------------
Net cash used in operating activities (3,775,029) (5,494,935)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, equipment and goodwill (5,383,923) (4,269,951)
Amounts repaid by (loaned to) stockholders 70,728 (48,626)
------------ ------------
Net cash used in investing activities (5,313,195) (4,318,577)
CASH FLOWS FROM FINANCING ACTIVITIES
Payments on debt (69,633,637) (74,535,734)
Borrowings on revolving line of credit 79,300,461 69,735,712
Borrowings on subordinated notes payable -- 15,000,000
Borrowings on note 250,000 --
Exercise of options 1,500 --
Purchases of treasury stock (8,360) (538,233)
------------ ------------
Net cash provided by financing activities 9,909,964 9,661,745
------------ ------------
Net decrease in cash and cash equivalents 821,740 (151,767)
Cash and cash equivalents, beginning of period 853,222 384,304
------------ ------------
Cash and cash equivalents, end of period $ 1,674,962 $ 232,537
============ ============
</TABLE>
See accompanying notes to consolidated financial statements
5
<PAGE> 6
NATIONAL RECORD MART, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1 - BASIS OF PRESENTATION
The accompanying interim consolidated financial statements of National Record
Mart, Inc. (the "Company") and subsidiary are unaudited. However, in the opinion
of management, they include all adjustments necessary for a fair presentation of
financial position, results of operations and cash flows for the interim
periods. All adjustments made for the second quarter ended September 25, 1999
were of a normal recurring nature. The results of operations for the second
quarter ended September 25, 1999 are not necessarily indicative of the results
of operations to be expected for the entire fiscal year ending March 25, 2000.
Additional information is contained in the Company's audited consolidated
financial statements for the year ended March 27, 1999, included in the
Company's Form 10K and should be read in conjunction with this quarterly report.
The Consolidated Financial Statements include the accounts of the Company and
its wholly owned subsidiary, National Record Mart Investments, Inc., a Delaware
holding company. All intercompany accounts and transactions have been eliminated
in consolidation.
NOTE 2 - SEASONALITY
The Company's business is seasonal in nature, with the highest sales and
earnings occurring in the third quarter of its fiscal year, which includes the
Christmas selling season.
NOTE 3 - INCOME TAXES
The Company provides for income taxes in interim periods on an estimated basis.
For the second quarter ended September 25, 1999 and September 26, 1998, the
effective income tax rate is 36%.
NOTE 4 - REVOLVING CREDIT FACILITY
The Company has a revolving credit facility (the "Revolver") which expires on
June 10, 2003. The maximum borrowings under the Revolver are $35,000,000 and are
based upon eligible inventory levels as defined therein. The interest rate is
the bank's borrowing rate (8.25% at September 25, 1999) or Libor (5.3825% at
September 25, 1999) plus 2.0%. The Company is required to pay a monthly
commitment fee of .25% per annum on the unused portion of the Revolver and a
monthly collateral monitoring fee of $3,500. The Revolver also contains various
financial and other covenants that place restrictions or limitations on the
Company and its subsidiary, the more restrictive of which include: (i)
maintenance of a number of financial ratios, as defined, (ii) a restriction on
dividends, and (iii) limitation on capital expenditures.
Borrowings are collateralized by substantially all assets of the Company,
including inventory, property and equipment.
6
<PAGE> 7
NATIONAL RECORD MART, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) CONTINUED
NOTE 5 - SUBORDINATED DEBT
On April 16, 1998, the Company secured a private placement of $15,000,000 in
senior subordinated notes. The notes carry an interest rate of 11.75% payable
semi-annually and expire April 16, 2001. In consideration of the placement the
Company issued 400,000 common stock warrants with an exercise price of $0.01.
The Company allocated $1,600,000 of value for accounting purposes to the
warrants, which was recorded as a reduction of the $15,000,000. This reduction
will be accreted as additional interest expense over the term of the note. The
Company issued 39,990 warrants for an additional expense of $205,000 in the
third quarter of fiscal 1999. The additional warrants are a settlement for the
delay in the effective date of registering the 400,000 warrants noted above with
the SEC. During fiscal 1999, both the 400,000 and 39,990 warrants were
exercised.
NOTE 6 - ASSET PURCHASES
On May 4, 1998, the Company purchased certain of the assets of Record Den Inc.
and DJK Records & Video Inc., totaling four stores. The acquisition was
accounted for using the purchase method of accounting for a purchase price of
approximately $933,000 resulting in $195,000 of goodwill which is being
amortized using the straight line method over 40 years, $708,000 for purchased
assets and a $30,000 consulting and noncompete agreement for a period of three
years. The purchase price was paid in cash upon completion of the agreement.
On November 13, 1998, the Company purchased certain of the assets of Happy Town
Inc. and Tempo One Stop Records, Inc., totaling twelve stores. The acquisition
was accounted for using the purchase method of accounting for a purchase price
of approximately $3,574,000 resulting in $869,000 of goodwill which is being
amortized using the straight line method over 40 years, $2,648,000 for purchased
assets and a $57,000 consulting and noncompete agreement for a period of three
years. The purchase price was paid in cash upon completion of the agreement.
On May 5, 1999, the Company amended its asset purchase agreement with Tempo One
Stop Records Inc. and Happy Town Inc. to provide for the additional purchase of
two stores. The acquisition was accounted for using the purchase method of
accounting for a purchase price of $250,000 resulting in $187,000 of goodwill
which is being amortized using the straight line method over 40 years, and
$63,000 of purchased assets. The purchase price is paid over monthly
installments equal to 7% of sales of the store with the highest sales for the
applicable month.
NOTE 7 - ACCOUNTING FOR STOCK-BASED COMPENSATION
The Company has elected to follow Accounting Principles Board Opinion No. 25
(APB 25), "Accounting for Stock Issued to Employees" and the related
interpretations in accounting for its employee stock options because, as
discussed below, the alternative fair value accounting provided for under FASB
Statement No. 123 (FASB 123), "Accounting for Stock-Based Compensation,"
requires the use of option valuation models that were not developed for use in
valuing employee stock options. Under APB 25, because the exercise price of the
Company's employee stock options is greater than the market price of the
underlying stock on the date of the grant, no compensation expense is
recognized.
7
<PAGE> 8
ITEM 2- MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the unaudited
consolidated financial statements and notes thereto included elsewhere in this
report and with the Company's audited consolidated financial statements and
notes thereto for the fiscal year ended March 27, 1999 ("fiscal 1999") included
in the Company's Form 10K.
RESULTS OF OPERATIONS
NET SALES: The Company's net sales increased during the second quarter
(ended September 25, 1999) of the Company's fiscal year ending March 25, 2000
("fiscal 2000") by $4.3 million, or 16.4%, over the second quarter of fiscal
1999. Net comparable store sales for the second quarter were down 1.4% or $0.4
million. The increase in total sales was attributable to the operation of
twenty-four additional stores in the second quarter of fiscal 2000 compared to
the same quarter in fiscal 1999. Sales for the twenty-six weeks ended September
25, 1999 increased $10.2 million or 20.0%. Net comparable store sales for the
twenty-six weeks ended September 25, 1999 were up .5% or $0.2 million compared
to the twenty-six weeks ended September 26, 1998. The quarterly comparative
store sales decreases were primarily attributable to the record sales in the
same period of the prior year of the "Titanic" video and a decrease in "hit"
related product by major artists for the Company's second quarter.
GROSS PROFIT: Gross profit increased $2.4 million or 24.4% from the
same quarter in the previous year. As a percentage of net sales, gross profit
increased to 40.6% for the second quarter of fiscal 2000 from 38.0% in the
second quarter of fiscal 1999. Gross profit for the twenty-six weeks ended
September 25, 1999 was 39.0% compared to 38.2% for the twenty-six weeks ended
September 26, 1998. The increase in margin as a percentage of net sales is
related to the increase in shelf pricing on CD's which was partially offset by
the continued shift from sales of higher margin cassettes to lower margin
compact discs and the Company's increase in purchase discounts.
EXPENSES: Selling, general and administrative (SG&A) expenses,
expressed as a percentage of net sales, increased to 41.4% or $12.7 million
during the second quarter of fiscal 2000 compared to 37.9% or $10.0 million in
the second quarter of fiscal 1999. SG&A expenses, expressed as a percentage of
sales, increased to 40.6% for the twenty six weeks ended September 25, 1999 from
39.0% for the twenty six weeks ended September 26, 1998. The increase expressed
as a percentage of sales is attributable to the opening of 31 additional stores
which have not reached the normal level of sales activity of a mature store.
Included in the prior year comparison was a $500,000 credit to operating expense
for the renewal of an existing data retrieval contract.
Net interest expense increased to $1.0 million in the second quarter of fiscal
2000 from $0.8 million in the second quarter of fiscal 1999. The increase is due
to a combination of increased borrowings on the revolving line of credit and to
a private placement of $15,000,000 in senior subordinated notes on April 16,
1998 which carries an interest rate of 11.75%. The remaining portion of
long-term debt was financed through the Company's revolving credit facility at
an interest rate of 8.25%. The Company is expensing $1.6 million, the valuation
of common stock warrants issued in connection with the private placement as
interest expense over a three-year period.
NET LOSS: The Company had a net loss of $1.5 million, or basic net loss
per share of $0.30, in the second quarter of fiscal 2000 compared to a net loss
of $1.1 million, or $0.22 per share, in the same quarter of fiscal 1999. The net
loss for the twenty-six weeks ended September 25, 1999 was $3.3 million, or
basic net loss per share of $0.66, compared to $2.3 million, or $0.47 per share,
for the twenty-six weeks ended September 26, 1998. The increase in the net loss
is primarily attributable to; the costs associated with the opening and
financing of 31 additional stores of which sales have not yet matured
proportionately to their expenses and the $500,000 credit to operating expense
for the renewal of an existing data retrieval contract which benefited the prior
year numbers by approximately $0.07 per share.
8
<PAGE> 9
ITEM 2- MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
Typically new stores will not become profitable prior to their first twelve
months of sales, which includes the Christmas selling season.
INCOME TAXES: The Company's effective tax rate in the second quarter of
fiscal 2000 and 1999 was 36%.
As of September 25, 1999 the Company had net deferred tax assets of
$2,143,000. In assessing the realizability of deferred tax assets, management
considers whether it is more likely than not that some portion or all of the
deferred tax assets will not be realized. The ultimate realization of deferred
tax assets is dependent upon the generation of future taxable income. Management
considers the scheduled reversal of deferred tax liabilities, projected future
taxable income, and tax planning strategies in making this assessment. Based on
the amount of current and projected taxable income, management believes it is
more likely than not that the Company will realize the benefits of those
deductible differences. The amount of the deferred tax asset considered
realizable could be reduced if estimates of future taxable income during the
carryforward period are reduced.
LIQUIDITY AND CAPITAL RESOURCES
During the first six months of fiscal 2000 and 1999 the Company had net
cash used in operating activities of $3,775,029 and $5,494,935, respectively,
due to the cash loss from operations and the increase in other assets.
The Company made capital expenditures during the first six months of
fiscal 2000 of $5,383,923, relating to store equipment, fixtures and leaseholds
for ten new stores, and five remodels and expansions.
The Company has a five-year revolving credit facility (the "Revolver")
from an institutional lender, which expires June 10, 2003. Advances under the
Revolver bear interest at a floating rate equal to the lender's base rate (8.25%
at September 25, 1999) or Libor (5.3825% at September 25, 1999) plus 2.0%. The
Company's lender has recently increased the maximum borrowings under the credit
facility from $28,000,000 to $35,000,000, with lending limits based upon
eligible inventory levels as defined therein.
On April 16, 1998 the Company completed a private placement of
$15,000,000 of senior subordinated notes to a group of institutional lenders.
The notes carry an interest rate of 11.75% payable semi-annually and are due on
April 16, 2001.
Management believes that cash flows from operations and amounts
available under the credit facilities will be sufficient to meet the Company's
current liquidity and capital needs at least through fiscal 2000.
YEAR 2000 COMPLIANCE
State of Readiness. The Company has completed evaluation of its
information technology issues relative to computer programs being unable to
distinguish between the year 1900 and the year 2000. As a result of such review,
the Company concluded that its point of sale information systems needed to be
upgraded. The Company selected a replacement system, which is currently being
installed, and anticipates its successful operation before the Christmas selling
season. During such installation, testing is being conducted of such systems to
9
<PAGE> 10
ITEM 2- MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
YEAR 2000 COMPLIANCE (CONTINUED)
verify year 2000 compliance. In addition, the Company has determined that
reprogramming of certain of its other proprietary information systems programs
will be required. Such reprogramming has begun and is approximately 85%
completed. It is anticipated that such reprogramming will be completed by
November 30, 1999, The Company has been testing its reprogrammed systems and
will continue its testing until all of its reprogramming is completed.
The Company's evaluation of year 2000 issues relating to
non-information technology systems, such as embedded microchips and automatic
processors, is substantially completed. The Company has not yet identified any
material problems in this area.
The Company is dependent upon music suppliers from whom it purchases
products. Based upon informal inquiries, the Company believes that year 2000
issues will not pose material problems with respect to such suppliers continuing
to do business with the Company on customary terms and conditions. If such
problems arise, the Company has no practical alternatives to dealing with its
existing suppliers, as the five largest suppliers dominate the music
distribution industry. The Company is also dependent on normal
telecommunications and banking systems and has communicated with its major
providers of such services. It is expected that the Company will not encounter
material difficulties from these providers with regard to such systems.
Costs to Address Year 2000 Issues. The costs of the required upgrade of
the Company's inventory management and point of sale systems is expected to be
approximately $10,000 per store or $1.7 million (currently the Company operates
179 stores). The Company to date has incurred capitalized costs of $362,505,
will be amortized over the useful lives of the applicable assets. In addition,
leasing costs of $39,000 have also been incurred. The Company will incur the
remainder of the capitalized costs in its third fiscal quarter and has entered
into an operating lease for approximately $428,000 of the costs for a term of 48
months. The Company does not expect to incur material costs in internally
reprogramming its other information systems software.
Risks of Year 2000 Issues. The Company believes that the most
reasonably likely worst case scenario with regard to year 2000 matters would
relate to the effect that year 2000 issues would have upon music suppliers to
the Company. If such suppliers were unable to continue to do business with the
Company on comparable terms as conducted in the past, the Company's business
could be materially adversely affected.
The Company's Contingency Plan. The Company has begun discussions with
its suppliers to provide assurance of business continuation in the event of year
2000 issues, with a view to developing a plan for continuing the Company's
access to music product in the event of the suppliers' year 2000 difficulties.
There can be no assurance that the Company's efforts will prevent all
consequences and there may be undetermined future costs due to business
disruption that may be caused by suppliers or unforeseen circumstances.
10
<PAGE> 11
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
<TABLE>
<CAPTION>
Exhibit No. Description Page No.
----------- ----------- --------
<S> <C> <C>
11 Calculation of Net Loss Per Common
Share - For the thirteen and twenty-six
weeks ended September 25, 1999 and
September 26, 1998 12
</TABLE>
(b) Reports on Form 8-K:
There were no reports on Form 8-K filed during the
thirteen weeks ended September 25, 1999.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereto duly authorized.
NATIONAL RECORD MART, INC.
By: /s/ Theresa Carlise
---------------------------------------------
Theresa Carlise
Senior Vice President and Chief
Financial Officer
(Principal Financial and Accounting Officer)
Date: November 9, 1999
11
<PAGE> 1
EXHIBIT 11
PAGE 1 OF 1
NATIONAL RECORD MART, INC.
CALCULATION OF NET LOSS PER COMMON SHARE
FOR THE THIRTEEN AND TWENTY-SIX WEEKS ENDED
SEPTEMBER 25, 1999 AND SEPTEMBER 26, 1998
NET LOSS PER COMMON SHARE
The computation of weighted average common shares and equivalents outstanding
for the periods presented is as follows:
<TABLE>
<CAPTION>
Thirteen Weeks Ended Twenty-six Weeks Ended
----------------------------- ------------------------------
September 25, September 26, September 25, September 26,
1999 1998 1999 1998
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Weighted average common
shares outstanding 5,048,167 4,838,918 5,048,475 4,841,771
Common Stock Equivalents
which are dilutive * * * *
Treasury stock assumed to
be repurchased using
proceeds from options and
warrants -- -- -- --
----------- ----------- ----------- -----------
Weighted average common
shares and equivalents
outstanding 5,048,167 4,838,918 5,048,475 4,841,771
=========== =========== =========== ===========
Net loss ($1,517,326) ($1,079,587) ($3,347,377) ($2,297,642)
=========== =========== =========== ===========
Net loss per share ($0.30) ($0. 22) ($0.66) ($0.47)
=========== =========== =========== ===========
</TABLE>
* Shares not included in calculation, as the effects of such shares would be
anti-dilutive.
12
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000904535
<NAME> NATIONAL RECORD MART
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAR-25-2000
<PERIOD-START> MAR-28-1999
<PERIOD-END> SEP-25-1999
<CASH> 1,674,962
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 51,615,927
<CURRENT-ASSETS> 60,288,008
<PP&E> 41,087,869
<DEPRECIATION> 19,627,192
<TOTAL-ASSETS> 86,658,022
<CURRENT-LIABILITIES> 29,024,119
<BONDS> 0
0
0
<COMMON> 54,950
<OTHER-SE> 15,860,416
<TOTAL-LIABILITY-AND-EQUITY> 86,658,022
<SALES> 60,982,310
<TOTAL-REVENUES> 60,982,310
<CGS> 37,229,578
<TOTAL-COSTS> 37,229,578
<OTHER-EXPENSES> 28,978,078
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,037,043
<INCOME-PRETAX> (5,225,346)
<INCOME-TAX> (1,877,969)
<INCOME-CONTINUING> (3,347,377)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,347,377)
<EPS-BASIC> (0.66)
<EPS-DILUTED> (0.66)
</TABLE>
