<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED APRIL 30, 1998
COMMISSION FILE NUMBER 1-13099
THE MAXIM GROUP, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 58-2060334
- ------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
210 TownPark Drive, Kennesaw, Georgia 30144
- ---------------------------------------- ---------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (770) 590-9369
---------------------
N/A
- --------------------------------------------------------------------------------
(Former name, former address, and former fiscal year, if changed since last
report)
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 last 90 days.
Yes X No
--------- ---------
Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date:
<TABLE>
<CAPTION>
Common Stock, $.001 par value 16,212,613
- ----------------------------------- ---------------------------------
<S> <C>
Class Outstanding at June 8, 1998
</TABLE>
<PAGE> 2
PART I--FINANCIAL INFORMATION
ITEM 1--FINANCIAL STATEMENTS
THE MAXIM GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Per Share Information)
(Unaudited)
<TABLE>
<CAPTION>
April 30, January 31,
Assets 1998 1998
- -------------------------------------------------------------------- --------- -----------
<S> <C> <C>
Current assets:
Cash and cash equivalents, including restricted cash of
$17,960 at April 30, 1998 and $22,786 at January 31, 1998 $ 21,248 $ 28,880
Current portion of franchise license fees receivable, net of
allowance for doubtful accounts of $430 at April 30, 1998
and $528 at January 31, 1998 2,365 3,107
Trade accounts receivable, net of allowance for doubtful
accounts of $2,341 at April 30, 1998 and $1,917 at
January 31, 1998 64,326 56,432
Accounts receivable from officers and employees 1,651 1,593
Current portion of notes receivable from franchisees and
related parties, net of allowance for doubtful accounts of
$252 at April 30, 1998 and $261 at January 31, 1998 1,276 1,165
Inventories 58,958 54,693
Refundable income taxes 1,986 2,558
Deferred income taxes 4,731 5,714
Prepaid expenses 5,903 3,406
-------- --------
Total current assets 162,444 157,548
Property and equipment, net of accumulated depreciation and
amortization of $51,291 at April 30, 1998 and $48,039 at
January 31, 1998 148,913 137,207
Franchise license fees receivable, less current portion, net of
allowance for doubtful accounts of $210 at April 30, 1998
and January 31, 1998 3,808 2,718
Notes receivable from franchisees, less current portion 3,753 3,506
Intangible assets, net of accumulated amortization of $1,764 at
April 30, 1998 and $1,626 at January 31, 1998 13,520 13,640
Other assets 8,888 6,875
-------- --------
$341,326 $321,494
======== ========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
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<PAGE> 3
THE MAXIM GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS, CONTINUED
(In Thousands, Except Per Share Information)
(Unaudited)
<TABLE>
<CAPTION>
April 30, January 31,
Liabilities And Stockholders' Equity 1998 1998
- -------------------------------------------------------------------- --------- -----------
<S> <C> <C>
Current liabilities:
Current portion of long-term debt $ 154 $ 384
Current portion of capital lease obligations 512 501
Rebates payable to franchisees 2,921 3,975
Accounts payable 22,056 23,376
Accrued expenses 13,609 14,333
Deferred revenue 3,072 1,750
Deposits 3,686 2,897
--------- ---------
Total current liabilities 46,010 47,216
Long-term debt, less current portion 146,693 129,349
Capital lease obligations, less current portion 1,289 1,429
Deferred taxes 10,427 9,725
--------- ---------
Total liabilities 204,419 187,719
--------- ---------
Commitments and contingencies
Stockholders' equity:
Preferred stock, $.001 par value; 1,000 shares authorized, no
shares issued or outstanding -- --
Common stock, $.001 par value; 25,000 shares authorized,
17,526 shares issued at April 30, 1998 and 17,352 shares
issued at January 31, 1998 18 17
Additional paid-in capital 120,611 119,264
Retained earnings 32,932 29,388
Treasury stock, 1,319 shares at April 30, 1998 and 1,221
shares at January 31, 1998 (16,654) (14,894)
--------- ---------
Total stockholders' equity 136,907 133,775
--------- ---------
$ 341,326 $ 321,494
========= =========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
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<PAGE> 4
THE MAXIM GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, Except Per Share Information)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
------------------------
April 30, April 30,
1998 1997
--------- ---------
<S> <C> <C>
Revenues:
Sales of floorcovering products $ 81,136 $ 71,490
Fiber and PET sales 6,965 5,772
Fees from franchise services 9,287 7,281
Other 2,149 1,682
-------- --------
Total revenues 99,537 86,225
Cost of sales 69,775 59,155
-------- --------
Gross profit 29,762 27,070
Selling, general, and administrative expenses 22,202 20,438
Interest income (386) (94)
Interest expense 2,364 1,401
Other (187) (35)
-------- --------
Earnings before income taxes 5,769 5,360
Income tax expense 2,225 2,109
-------- --------
Net earnings $ 3,544 $ 3,251
======== ========
Earnings per common share:
Basic $ 0.22 $ 0.20
======== ========
Diluted $ 0.21 $ 0.20
======== ========
Weighted average number of common shares outstanding:
Basic 16,424 16,110
======== ========
Diluted 17,247 16,630
======== ========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
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<PAGE> 5
THE MAXIM GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands, Except Per Share Information)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
-------------------------
April 30, April 30,
1998 1997
--------- ---------
<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 3,544 $ 3,251
--------- ---------
Adjustments to reconcile net earnings to net cash used in operating
activities:
Depreciation and amortization 3,372 2,729
Deferred income taxes 1,685 1,401
Changes in assets and liabilities:
Increase in receivables (8,659) (7,125)
Increase in inventories (4,264) (1,853)
Decrease in refundable income taxes 572 49
Increase in prepaid expenses and other assets (4,510) (1,292)
Decrease in rebates and accounts payable, accrued expenses,
deferred revenue, and deposits (987) (470)
--------- ---------
Total adjustments (12,791) (6,561)
--------- ---------
Net cash used in operating activities (9,247) (3,310)
--------- ---------
Cash flows from investing activities:
Capital expenditures (14,958) (3,878)
--------- ---------
Cash flows from financing activities:
Proceeds from issuance of common stock, net -- 47,248
Proceeds from exercise of options, net 1,348 463
Purchase of treasury stock (1,760) (8,944)
Borrowings under revolving credit agreement 17,114 --
Repayment of revolving credit agreement -- (33,428)
Principal payments on capital lease obligations (129) (190)
--------- ---------
Net cash provided by financing activities 16,573 5,149
--------- ---------
Net decrease in cash (7,632) (2,039)
Cash, beginning of period 28,880 6,439
--------- ---------
Cash, end of period $ 21,248 $ 4,400
========= =========
Supplemental disclosures of cash flow information:
Cash paid during period for:
Interest $ 4,711 $ 1,332
========= =========
Income taxes $ 54 $ 1,122
========= =========
Supplemental disclosure of noncash investing and financing activities:
Common stock issued in connection with acquisitions 0 0
========= =========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
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<PAGE> 6
THE MAXIM GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In Thousands, Except Per Share Information)
(Unaudited)
1. Consolidated Financial Statements
The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with the instructions to Form 10-Q and
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. These statements should be read in
conjunction with the consolidated financial statements and notes
thereto included in the Company's 1998 Annual Report on Form 10-K as
filed with the Securities and Exchange Commission.
The results of operations for the periods presented are not necessarily
indicative of the operating results for the full year.
2. Inventories
Inventories consisted of the following:
<TABLE>
<CAPTION>
April 30, January 31,
1998 1998
--------- -----------
<S> <C> <C>
Raw materials $16,338 $14,809
Work in process 4,139 3,363
Finished goods 38,481 36,521
------- -------
$58,958 $54,693
======= =======
</TABLE>
3. Senior Subordinated Notes
On October 16, 1997, the Company completed the sale of $100,000 of
9-1/4% Senior Subordinated Notes ("Notes") due 2007, to institutional
buyers in a private offering under Rule 144A promulgated under the
Securities Act of 1933. The net proceeds to the Company from the
offering of the Notes were approximately $96,000, net of an issue
discount and fees and related costs. The Company used the net proceeds
from the offering of the Notes to repay all borrowings outstanding
under its revolving credit agreements of approximately $82,700 and for
general corporate purposes, including capital expenditures.
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<PAGE> 7
Each of the Company's subsidiaries has fully and unconditionally
guaranteed the Notes on a joint and several basis. The guarantor
subsidiaries comprise all of the direct and indirect subsidiaries of
the Company. The Company has not presented separate financial
statements and other disclosures concerning the guarantor subsidiaries
because management has determined that such information is not material
to investors. There are no significant restrictions on the ability of
the guarantor subsidiaries to make distributions to the Company.
-7-
<PAGE> 8
ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
Total Revenues. Total revenues increased 15.4% to $99.5 million for the
three months ended April 30, 1998 from $86.2 million for the three months
ended April 30, 1997. The components of total revenues are discussed
below:
Sales of Floorcovering Products. Sales of floorcovering products
increased 13.5% to $81.1 million for the three months ended April 30,
1998 from $71.5 million for the three months ended April 30, 1997.
Sales of floorcovering products in company-owned stores increased 18.4%
to $36.1 million for the three months ended April 30, 1998 from $30.5
million for the three months ended April 30, 1997. The growth in retail
sales of floorcovering products was primarily due to internal growth.
Sales of manufactured carpet increased 6.1% to $40.2 million for the
three months ended April 30, 1998 from $37.9 million for the three
months ended April 30, 1997. Unit sales of manufactured carpet were
constant at 6.9 million square yards for the three months ended April
30, 1998 and April 30, 1997. Sales from the Company's two distribution
centers amounted to $4.8 million for the three months ended April 30,
1998 and $3.1 million for the three months ended April 30, 1997,
largely representing sales to the Company's franchisees.
Fees From Franchise Services. Fees from franchise services, which
include franchise license fees and royalties, brokering of
floorcovering products, and advertising, increased 27.4% to $9.3
million for the three months ended April 30, 1998 from $7.3 million for
the three months ended April 30, 1997. This increase was attributable
to increases in brokering activity generated from new CarpetMAX and GCO
franchisees, growth in demand for franchise services from existing
CarpetMAX and GCO franchisees, greater utilization of advertising and
other services offered to franchisees, and an expansion of advertising
services offered by the Company.
Fiber and PET Sales. Sales of fiber and polyethylene terephthalate
("PET") increased 20.7% to $7 million for the three months ended April
30, 1998 from $5.8 million for the three months ended April 30, 1997.
Unit sales increased 5.8% to 16.3 million pounds for the three months
ended April 30, 1998 from 15.4 million pounds for the three months
ended April 30, 1997. The increase in dollar and unit sales was the
result of continued demand for PET fiber and flake products. The
Company has continued to expand the customer base for such products.
Gross Profit. Gross profit increased 10.0% to $29.8 million for the three
months ended April 30, 1998 from $27.1 million for the three months ended
April 30, 1997. As a percentage of revenues, gross profit was 29.9% for
the three months ended April 30, 1998 compared to 31.4% for the three
months ended April 30, 1997. The decrease in gross profit
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<PAGE> 9
as a percentage of revenues is primarily a result of the recognition of
higher raw material costs associated with manufacturing operations.
Selling, General, and Administrative Expenses. Selling, general, and
administrative expenses increased 8.8% to $22.2 million for the three
months ended April 30, 1998 from $20.4 million for the three months ended
April 30, 1997. Increases in operating expenses on an absolute basis
reflect an overall growth in the size of the Company's operations required
to serve the growing retail base as well as increased selling costs at
Image related to newly created territories. As a percentage of revenues,
selling, general, and administrative expenses decreased to 22.3% for the
three months ended April 30, 1998 from 23.7% for the three months ended
April 30, 1997.
Interest Expense. Interest expense increased 71.4% to $2.4 million for the
three months ended April 30, 1998 from $1.4 million for the three months
ended April 30, 1997 due principally to the Company having a larger debt
balance and a higher interest rate during the three months ended April 30,
1998 as compared to the prior year period. In October 1997, the Company
sold $100 million of 9-1/4% senior subordinated notes.
Income Tax Expense. The Company recorded income tax expense of $2.2
million for the three months ended April 30, 1998 compared to $2.1 million
for the three months ended April 30, 1997. The effective tax rate for the
three months ended April 30, 1998 was 38.6%.
Net Earnings. As a result of the foregoing factors, the Company recorded
net earnings of $3.5 million for the three months ended April 30, 1998
compared to net earnings of $3.3 million for the three months ended April
30, 1997.
Liquidity and Capital Resources
General. The Company's primary capital requirements are for new store
openings, investments in the manufacturing operations, working capital,
and acquisitions. The Company historically has met its capital
requirements through a combination of cash flows from operations, net
proceeds from the sale of equity and debt securities, bank lines of
credit, and standard payment terms from suppliers.
In March 1997, the Board of Directors of the Company authorized
management to repurchase up to 1 million shares of common stock of the
Company. In October 1997, the Board of Directors of the Company authorized
management to repurchase up to an additional 1 million shares of the
common stock of the Company. As of June 8, 1998, the Company had
repurchased 1,359,000 shares of its common stock in the open market for a
total of $17.3 million. These purchases were, and any future purchases
will be, financed from borrowings under the Company's revolving credit
958906379 facility.
Credit Facility. On August 26, 1997 and as amended on September 24, 1997,
the Company established a credit facility providing for aggregate
commitments of $110 million (the "Credit Facility"). The Credit Facility
consists of (i) a $50 million revolving credit facility, of which $22
million was available for borrowings on June 8, 1998 and which matures in
August 2000, (ii) a $29 million term loan which has been repaid, and (iii)
a special-purpose letter of credit in the amount of up to $31 million for
use as credit support for the
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<PAGE> 10
Summerville Loan to be used to finance the expansion of Image's fiber
extrusion capabilities at its plant in Summerville, Georgia, that matures
in September 2017. As of June 8, 1998, the Company had $28 million
outstanding under the revolving credit facility and no borrowings
outstanding under the term loan. No amounts have been drawn on the letter
of credit. Amounts outstanding under the Credit Facility bear interest at
a variable rate based on LIBOR or the prime rate, at the Company's option.
The Credit Facility contains customary covenants. As of the date hereof,
the Company was in compliance with, or obtained waivers of all violations
of, all covenants under the Credit Facility.
Summerville Loan. Effective September 1, 1997, the Development Authority
of the City of Summerville, Georgia (the "Authority"), issued Exempt
Facility Revenue Bonds in an aggregate principal amount of $30 million
(the "Facility Revenue Bonds"). On September 17, 1997, the Authority
loaned (the "Summerville Loan") the proceeds from the sale of the Facility
Revenue Bonds to Image to finance, in whole or in part, the expansion of
Image's fiber extrusion capabilities at its plant in Summerville, Georgia.
The Facility Revenue Bonds and the interest thereon are special, limited
obligations of the Authority, payable solely from the revenues and income
derived from a loan agreement between Image and the Authority, which
revenues and income have been pledged and assigned by Image to secure
payment thereof and funds which may be drawn under the special-purpose
letter of credit described above. The Facility Revenue Bonds and the
Summerville Loan will mature on September 1, 2017, and the interest rate
of the Facility Revenue Bonds is to be determined from time to time based
on the minimum rate of interest that would be necessary to sell the
Facility Revenue Bonds in a secondary market at the principal amount
thereof. The interest rate on the Summerville Loan equals the interest
rate on the Facility Revenue Bonds.
Senior Notes. On October 16, 1997, the Company completed the sale of $100
million of 9-1/4% senior subordinated notes ("Senior Notes") due 2007.
Each of the Company's subsidiaries has fully and unconditionally
guaranteed the Senior Notes on a joint and several basis. The guarantor
subsidiaries comprise all of the direct and indirect subsidiaries of the
Company. The Company has not presented separate financial statements and
other disclosures concerning the guarantor subsidiaries because management
has determined that such information is not material to investors. There
are no significant restrictions on the ability of the guarantor
subsidiaries to make distributions to the Company.
Synthetic Lease Financing. On April 9, 1998, the Company and its
subsidiaries established a $13 million short-term end-loaded lease
facility (the "Bridge Facility"), also referred to as a synthetic lease
facility, with First Union National Bank ("First Union"). Under the Bridge
Facility, which is scheduled to mature no later than July 31, 1998, the
Company has the ability to direct First Union to make loans to First
Security Bank National Association (the "Trustee"), in its capacity as the
owner-trustee, principally for acquisition or expansion of CarpetMAX store
locations, which financed locations are then leased by the owner trustee
to the Company or a designated subsidiary.
The Company is presently negotiating with First Union to establish a
long-term synthetic lease facility (the "Permanent Facility") in an amount
of not less than $70 million.
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<PAGE> 11
The Permanent Facility will be used to repay the Bridge Facility, to
further finance the acquisition or expansion of CarpetMAX store locations,
and to expand the Company's Gallery franchise program, all under a master
lease arrangement with one or more trustees yet to be determined. It is
anticipated that the Permanent Facility will be established during the
second quarter of fiscal 1999.
Cash Flows. During the three months ended April 30, 1998, operating
activities used $9.2 million compared to $3.3 million for the three months
ended April 30, 1997. The increase in cash used in operating activities
resulted primarily from an increase in receivables and inventories. The
increase in receivables and inventories was due to higher sales of
floorcovering products to franchisees and other carpet retailers.
During the three months ended April 30, 1998, investing activities
used $15 million compared to $3.9 million for the three months ended April
30, 1997. The increase is primarily due to an increase in capital
expenditures related to manufacturing operations and the purchase of real
estate for the expansion of retail stores.
During the three months ended April 30, 1998, financing activities
provided cash of $16.6 million compared to $5.1 million in the prior year
period. This increase is primarily due to the proceeds received from
borrowings under the Company's revolving credit
958907488agreement958907488.
Capital Expenditures. The Company anticipates that it will require
approximately $15 million for the remainder of fiscal 1999 to (i) open
approximately 32 new Gallery stores (assuming approximately 50% of such
stores will be located on company-owned property and the remainder on
leased property), (ii) reconfigure three existing CarpetMAX stores, and
(iii) upgrade its management information systems. The actual costs that
the Company will incur in opening new Gallery stores cannot be predicted
with precision because the opening costs will vary based upon geographic
location, the size of the store, the amount of supplier contributions, and
the extent of the buildout required at the selected site. The Company
anticipates that it will require approximately $24 million during the
remainder of fiscal 1999 for capital expenditures at Image, including the
expansion of Image's polyester fiber production capacity.
The Company believes that the net proceeds from the Notes Offering,
borrowings under the Credit Facility, the Summerville Loan, and cash flows
from the operating activities will be adequate to meet the Company's
working capital needs, planned capital expenditures, and debt service
obligations through fiscal 1999. As the Company's debt matures, the
Company may need to refinance such debt. There can be no assurance that
such debt can be refinanced or, if so, whether it can be refinanced on
terms acceptable to the Company. If the Company is unable to service its
indebtedness, it will be required to adopt alternative strategies, which
may include actions such as reducing or delaying capital expenditures,
selling assets, restructuring, or refinancing its indebtedness or seeking
additional equity capital. There can be no assurance that any of these
strategies could be effected on satisfactory terms, if at all.
Year 2000. The year 2000 issue is the result of computer programs being
written using two digits rather than four to define the applicable year.
Any of the Company's computer
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<PAGE> 12
programs that have time-sensitive software may recognize a date using "00"
as the year 1900 rather than the year 2000. This could result in a system
failure or miscalculations causing disruptions of operations, including,
among other things, a temporary inability to process transactions, send
invoices, or engage in similar normal business activities.
Based on the assessment of the Company's information technology
personnel, management presently believes that with the planned conversion
to new software and hardware and the planned modifications to existing
software and hardware, the effects of the year 2000 issue will be
mitigated. All costs associated with analyzing the year 2000 issue or
making conversions to existing software are being expensed as incurred.
The Company is planning formal communications with all of its
significant suppliers of goods and services to determine the extent to
which the Company's operations and systems are vulnerable to those third
parties' failure to remediate their own year 2000 issues. There can be no
guarantee that the systems of other companies on which the Company's
operations and systems rely will be timely converted and will not have an
adverse effect on the Company's results of operations. The Company will
utilize predominately internal resources to reprogram, or replace, and
test the Company's software for year 2000 compliance by June 1999, which
is prior to any anticipated impact on its operating systems. Management
has not estimated a total cost of the year 2000 issues; however, such
costs are not expected to have a material effect on the results of
operations during any quarterly or annual reporting period.
The costs to the Company of year 2000 compliance and the date on
which the Company believes it will complete the year 2000 modifications
are based on management's best estimates, which were derived utilizing
numerous assumptions of future events, including the continued
availability of certain resources, third-party modification plans, and
other factors. However, there can be no assurance that these estimates
will be achieved, and actual results could differ materially from those
anticipated. Specific factors that might cause such material differences
include, but are not limited to, the availability and cost of personnel
trained in this area, the ability to locate and correct all relevant
computer codes, and similar uncertainties.
Forward-Looking Statements. This Report contains statements that
constitute "forward-looking statements" within the meaning of Section 27A
of the Securities Act of 1933 and Section 21E of the Securities Exchange
Act of 1934. Those statements appear in a number of places in this Report
and include statements regarding the intent, belief or current
expectations of the Company, its directors or its officers with respect
to, among other things: (i) the timing, magnitude and costs of the
roll-out of the Gallery Stores; (ii) potential acquisitions by the
Company; (iii) the Company's financing plans; (iv) trends affecting the
Company's financial condition or results of operations; (v) the Company's
business and growth strategies; and (vi) the declaration and payment of
dividends. Any such forward-looking statements are not guarantees of
future performance and involve risks and uncertainties, and actual
results may differ materially from those projected in the forward-looking
statements as a result of various factors. The accompanying information
contained in this Report, including without limitation the information set
forth under the headings "Management's Discussion and Analysis of
Financial Condition and Results of Operations," identifies important
factors that could cause such differences.
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<PAGE> 13
ITEM 3--QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
N/A
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<PAGE> 14
PART II--OTHER INFORMATION
ITEM 6--EXHIBITS AND REPORTS ON FORM 8-K
(A) Exhibits
11 Statements Regarding Computation of Per Share Earnings
27.1 Financial Data Schedule (for SEC use only)
27.2 Restated Financial Data Schedule (for SEC use only)
(B) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter ended April 30, 1998.
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<PAGE> 15
SIGNATURES
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 thereunto duly authorized.
THE MAXIM GROUP, INC.
Dated: June 8, 1998 By: /s/ A. J. Nassar
---------------------------------------------------
A. J. Nassar, President and Chief Executive Officer
Dated: June 8, 1998 By: /s/ Gene Harper
---------------------------------------------------
Gene Harper, Chief Financial Officer
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<PAGE> 1
EXHIBIT NO. 11
THE MAXIM GROUP, INC. AND SUBSIDIARIES
COMPUTATION OF BASIC AND DILUTED EARNINGS
PER COMMON AND COMMON EQUIVALENT SHARE
(In Thousands, Except Per Share Information)
<TABLE>
<CAPTION>
Three Months Ended
-------------------------
April 30, April 30,
1998 1997
========= =========
<S> <C> <C>
Basic:
Net earnings $ 3,544 $ 3,251
========= =========
Weighted average number of common shares outstanding 16,424 16,110
========= =========
Basic earnings per common share $ 0.22 $ 0.20
========= =========
Diluted:
Net earnings $ 3,544 $ 3,251
========= =========
Shares:
Weighted average number of common shares outstanding 16,424 16,110
Shares issuable from assumed exercise of outstanding stock
options 823 520
--------- ---------
Weighted average number of common and common
equivalent shares 17,247 16,630
========= =========
Diluted earnings per common share $ 0.21 $ 0.20
========= =========
</TABLE>
Common equivalent shares represent stock options
granted to key employees and directors.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET OF THE MAXIM GROUP, INC. AND SUBSIDIARIES AS OF APRIL
30, 1998 AND THE RELATED CONSOLIDATED STATEMENTS OF INCOME AND CASH FLOWS FOR
THE QUARTERS ENDED APRIL 30, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-START> FEB-01-1998
<PERIOD-END> APR-30-1998
<CASH> 21,248
<SECURITIES> 0
<RECEIVABLES> 80,412
<ALLOWANCES> 3,233
<INVENTORY> 58,958
<CURRENT-ASSETS> 162,444
<PP&E> 200,204
<DEPRECIATION> 51,291
<TOTAL-ASSETS> 341,326
<CURRENT-LIABILITIES> 46,010
<BONDS> 146,693
0
0
<COMMON> 18
<OTHER-SE> (16,654)
<TOTAL-LIABILITY-AND-EQUITY> 341,326
<SALES> 99,537
<TOTAL-REVENUES> 99,537
<CGS> 69,775
<TOTAL-COSTS> 69,775
<OTHER-EXPENSES> 22,202
<LOSS-PROVISION> 300
<INTEREST-EXPENSE> 2,364
<INCOME-PRETAX> 5,769
<INCOME-TAX> 2,225
<INCOME-CONTINUING> 3,544
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,544
<EPS-PRIMARY> .22
<EPS-DILUTED> .21
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET OF THE MAXIM GROUP, INC. AND SUBSIDIARIES AS OF APRIL
30, 1997 AND THE RELATED CONSOLIDATED STATEMENTS OF INCOME AND CASH FLOWS FOR
THE QUARTERS ENDED APRIL 30, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<RESTATED>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-31-1997
<PERIOD-START> FEB-01-1997
<PERIOD-END> APR-30-1997
<CASH> 4,400
<SECURITIES> 0
<RECEIVABLES> 57,422
<ALLOWANCES> 2,474
<INVENTORY> 44,000
<CURRENT-ASSETS> 110,724
<PP&E> 142,101
<DEPRECIATION> 39,500
<TOTAL-ASSETS> 228,438
<CURRENT-LIABILITIES> 45,387
<BONDS> 57,578
0
0
<COMMON> 16
<OTHER-SE> (8,944)
<TOTAL-LIABILITY-AND-EQUITY> 228,438
<SALES> 86,225
<TOTAL-REVENUES> 86,225
<CGS> 59,155
<TOTAL-COSTS> 59,155
<OTHER-EXPENSES> 20,438
<LOSS-PROVISION> 125
<INTEREST-EXPENSE> 1,401
<INCOME-PRETAX> 5,360
<INCOME-TAX> 2,109
<INCOME-CONTINUING> 3,251
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,251
<EPS-PRIMARY> .20
<EPS-DILUTED> .20
</TABLE>
