UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q/A
AMENDMENT NO. 1 TO FORM 10-Q
[X]QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarter 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 0-22982
NAVARRE CORPORATION
(Exact name of registrant as specified in its charter)
MINNESOTA 41-1704319
(State of other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
7400 49TH AVENUE NORTH, NEW HOPE, MN 55428
(Address of principal executive offices)
Registrant's telephone number, including area code (612) 535-8333
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. [X] Yes [ ] No
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practical date.
COMMON STOCK, NO PAR VALUE - 6,906,420 SHARES AS OF OCTOBER 31, 1997
<PAGE>
NAVARRE CORPORATION
INDEX
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
Consolidated statements of operations -
Three and six months ended September 30, 1997 and
1996
The number $4,610 appearing immediately below the number $8,769 under
the total Operating expenses has been deleted from the column for the six month
ended September 1996 column. It had inadvertently been included in the first
place.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The first sentence in the sixth paragraph under the table in the
"Results of Operations" has been revised.
SIGNATURES
The signature page is attached.
<PAGE>
PART I. FINANCIAL INFORMATION
NAVARRE CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
1997 1996 1997 1996
-----------------------------------------------------------
<S> <C> <C> <C> <C>
Net sales:
Computer software $ 31,822 $ 33,412 $ 58,329 $ 61,422
Music 16,757 14,783 30,048 26,366
-----------------------------------------------------------
48,579 48,195 88,377 87,788
Cost of sales 42,341 42,082 77,864 76.607
-----------------------------------------------------------
Gross profit 6,238 6,113 10,513 11,181
Operating expenses:
Selling and promotion 1,284 1,304 2,555 2,472
Distribution and warehousing 632 627 1,295 1,142
General and administration 2,379 2,660 5,539 5,134
Amortization of intangible assets 405 19 814 21
-----------------------------------------------------------
4,700 4,610 10,203 8,769
-----------------------------------------------------------
Income from operations 1,538 1,503 310 2,412
Other expense:
Interest expense (656) (501) (1,215) (964)
Other expense (81) (143) (183) (248)
Equity in loss of affiliate -- (414) -- (414)
-----------------------------------------------------------
Income (loss) before income taxes 801 445 (1,088) 786
Income tax expense (benefit) 329 352 (446) 492
Minority interest in subsidiaries 47 -- 101 --
-----------------------------------------------------------
Net income (loss) $ 519 $ 93 $ (541) $ 294
===========================================================
Earnings (loss) per common share $ .07 $ .01 $ (.08) $ .04
===========================================================
Weighted average number of
common and common equivalent
shares outstanding 7,188 7,564 6,902 7,494
===========================================================
</TABLE>
SEE ACCOMPANYING NOTES
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The first sentence in the sixth paragraph under the table in the "Results of
Operations" has been revised to read as follows.
General and administration expenses decreased from $2.7 million during the three
month period in 1996 to $2.4 million during the same period in 1997 but
increased from $5.1 million during the six month period in 1996 to $5.5 million
during the same period in 1997. As a percentage of net sales, it decreased from
5.6% during the three month period in 1996 to 4.9% during the same period in
1997 but increased from 5.9% during the six month period in 1996 to 6.3% for the
same period in 1996. The decrease for the three month period was primarily due
to the Company's commitment in controlling these expenses and the increase for
the six month period was primarily due to expenses in the newly acquired Net
Radio where none existed last year and costs associated with increased staffing
to support anticipated growth. Amortization of intangible assets represents the
Company's amortization of its investment in Velvel Musical Products LLC. In
November 1996, the Company acquired an interest in Velvel Music Products in
exchange for distribution rights with respect to Velvel products. The Company is
amortizing its investment in the Velvel distribution rights over the five year
life of the distribution agreement. The decrease in the provision for doubtful
accounts was due to the application of the receivable balance of three customers
who filed bankruptcy this past quarter, to the provision.
<PAGE>
NAVARRE CORPORATION
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.
NAVARRE CORPORATION
(Registrant)
Date: November 21, 1997 By /s/ Eric H. Paulson
---------------------------
Eric H. Paulson
Chairman of the Board,
President and
Chief Executive Officer
Date: November 21, 1997 By /s/ Charles E. Cheney
---------------------------
Charles E. Cheney
Treasurer and Secretary,
Executive Vice President,
and Chief Financial Officer
