UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period June 30, 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 0-22982
NAVARRE CORPORATION
(Exact name of registrant as specified in its charter)
MINNESOTA 41-1704319
(State or other jurisdiction of (IRS 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 - 23,508,394 shares as of July 31, 1999
<PAGE>
NAVARRE CORPORATION
INDEX
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Consolidated Balance Sheets -
June 30, 1999 and March 31, 1999
Consolidated Statements of Operations -
Three months ended June 30, 1999 and 1998
Consolidated Statements of Cash Flows Three
months ended June 30, 1999 and 1998
Notes to Consolidated Financial Statements - June 30, 1999
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
ITEM 2. CHANGES IN SECURITIES
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
SIGNATURES
2
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
NAVARRE CORPORATION
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
<TABLE>
<CAPTION>
JUNE 30, 1999 MARCH 31, 1999
---------------------------------
(UNAUDITED) (NOTE)
<S> <C> <C>
ASSETS
Current assets:
Cash $ 31 $ 92
Accounts receivable, less allowance for doubtful accounts
and sales returns of $3,852 and $3,810, respectively 46,028 43,465
Inventories 30,263 29,223
Note receivable, related parties 192 221
Refundable income taxes 613 613
Prepaid expenses and other current assets 1,207 908
---------------------------------
Total current assets 78,334 74,522
Property and equipment, net of accumulated depreciation of
$4,746 and $5,251, respectively 3,529 3,361
Other assets:
Goodwill 772 853
Other assets 2,114 744
---------------------------------
Total assets $ 84,749 $ 79,480
=================================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Note payable to bank $ 5,083 $ 329
Current portion of long-term debt 118 93
Accounts payable 53,288 51,831
Accrued expenses 3,064 1,949
---------------------------------
Total current liabilities 61,553 54,202
Long-term debt, less current maturities 131 114
Shareholders' equity:
Preferred stock, no par value:
Authorized shares - 10,000,000,
Issued and outstanding shares - none, respectively -- --
Common stock, no par value:
Authorized shares - 50,000,000,
Issued and outstanding shares-23,508,394 and 23,344,046, respectively 91,893 91,415
Retained deficit (68,720) (66,119)
Unearned compensation (108) (132)
---------------------------------
Total shareholders' equity 23,065 25,164
---------------------------------
Total liabilities and shareholders' equity $ 84,749 $ 79,480
=================================
</TABLE>
NOTE: THE BALANCE SHEET AT MARCH 31, 1999 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.
3
<PAGE>
NAVARRE CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30,
1999 1998
------------------------------
<S> <C> <C>
Net sales: $ 57,751 $ 53,069
Cost of sales 50,908 46,148
------------------------------
Gross profit 6,843 6,921
Operating expenses:
Selling and promotion 2,331 1,609
Distribution and warehousing 1,224 854
General and administration 5,399 3,636
Depreciation and amortization 437 303
------------------------------
9,391 6,402
------------------------------
Income (loss) from operations (2,548) 519
Other expense:
Interest expense (199) (712)
Other income 143 178
------------------------------
Loss before income taxes (2,604) (15)
Income tax benefit -- (5)
Minority interest -- 37
------------------------------
Net earnings (loss) $ (2,604) $ 27
Preferred nondetachable conversion feature
and warrant valuation -- (34,229)
Preferred dividend requirements -- (334)
------------------------------
Net loss applicable to common shares $ (2,604) $ (34,536)
==============================
Loss per common share:
Basic and diluted $ (.11) $ (4.93)
==============================
Weighted average common and
common equivalent shares outstanding
Basic and diluted 23,371 7,010
==============================
</TABLE>
4
<PAGE>
NAVARRE CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30,
1999 1998
------------------------------
<S> <C> <C>
OPERATING ACTIVITIES
Net earnings (loss) $ (2,604) $ 27
Adjustments to reconcile net earnings (loss) to net cash
used in operating activities:
Depreciation 356 216
Amortization of intangible assets 81 88
Amortization on unearned compensation 24 24
Minority interests in subsidiaries -- 36
Changes in operating assets and liabilities:
Accounts receivable (2,563) (10,942)
Inventories (1,040) (3,968)
Prepaid expenses and other assets (1,669) 136
Accounts payable and accrued expenses 2,572 (1,139)
------------------------------
Net cash used in operating activities (4,843) (15,522)
INVESTING ACTIVITIES
Note receivable, related parties 29 69
Purchase of equipment and leasehold improvements (439) (280)
------------------------------
Net cash used in investing activities (410) (211)
FINANCING ACTIVITIES
Payment on long-term debt (40) (76)
Proceeds from notes payable, bank 54,040 44,630
Payment on notes payable, bank (49,286) (47,827)
Proceeds from sale of preferred stock and warrants -- 19,002
Exercise of common stock options 478 8
------------------------------
Net cash provided by financing activities 5,192 15,737
------------------------------
Net increase in cash (61) 4
Cash at beginning of period 92 23
------------------------------
Cash at end of period $ 31 $ 27
==============================
</TABLE>
5
<PAGE>
NAVARRE CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
JUNE 30, 1999
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited financial statements of Navarre Corporation and its
majority owned subsidiary, NetRadio, Corporation, have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-Q and Regulation S-X.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
All intercompany accounts and transactions have been eliminated. In the opinion
of management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included. Because of the
seasonal nature of the Company's business, the operating results for the three
month period ended June 30, 1999 are not necessarily indicative of the results
that may be expected for the year ending March 31, 2000. For further
information, refer to the financial statements and footnotes thereto included in
Navarre Corporation's Annual Report on Form 10-K for the year ended March 31,
1999. Certain balances at June 30, 1998 have been reclassified to conform to the
June 30, 1999 presentation.
NOTE B - BUSINESS SEGMENTS
Financial Information by reportable business segment is included in the
following summary:
QUARTERS ENDED
- ---------------------------------------------------------------------------
In thousands JUNE 30, 1999 JUNE 30, 1998
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
NET SALES
Home Entertainment Products 57,531 53,006
NetRadio 220 63
- ---------------------------------------------------------------------------
CONSOLIDATED 57,751 53,069
===========================================================================
OPERATING INCOME (LOSS)
Home Entertainment Products (393) 1,035
NetRadio (2,155) (516)
- ---------------------------------------------------------------------------
CONSOLIDATED (2,548) 519
- ---------------------------------------------------------------------------
Net Interest Expense (199) (712)
Other Income (Expense) 143 178
- ---------------------------------------------------------------------------
INCOME (LOSS) BEFORE INCOME TAXES (2,604) (15)
===========================================================================
6
<PAGE>
NOTE C - NET EARNINGS (LOSS) PER SHARE
Preferred stock, preferred stock warrants and employee stock options are not
included in the periods ending June 30, 1999 and 1998, respectively, calculation
because they are anti-dilutive.
The following table sets forth the computation of basic and diluted earnings per
share: (In thousands, except per share data)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
JUNE 30,
1999 1998
-------------------------------
<S> <C> <C>
Numerator:
Net earnings $ (2,604) $ 27
Less preferred nondetachable conversion feature
and warrant valuation -- (34,229)
Less preferred dividend requirements -- (334)
-------------------------------
Adjusted net loss applicable to common stock $ (2,604) $ (34,536)
Denominator:
Denominator for basic earnings per
share--weighted-average shares 23,371 7,010
Dilutive securities:
Preferred stock -- --
Employee stock options -- --
Denominator for diluted earnings
per share--adjusted
weighted-average shares 23,371 7,010
-------------------------------
Basic and dilutive loss per share $ (.11) $ (4.93)
===============================
</TABLE>
On May 1, 1998, the Company issued 1,523,810 shares of Class A Convertible
Preferred Stock in a private placement to a group of investors for aggregate
consideration of $20.0 million. The Class A Convertible Preferred Stock was
issued at a price of $13.125 per share and was convertible into five shares of
Navarre common stock any time after June 30, 1998. In addition, for each share
of Class A Convertible Preferred Stock acquired, each investor received a
five-year warrant to purchase five shares of Navarre common stock at $3.50 per
share. The Class A Convertible Preferred Stock had a cumulative annual dividend
of 10% per annum payable quarterly, beginning on June 30, 1998. In connection
with the private placement, the Company also granted a four year warrant to
purchase 380,953 shares of common stock at a price of $2.625 per share to Delphi
Financial Corporation, the Company's agent in the private placement, and paid
Delphi selling commissions of five percent of the gross proceeds from the sale
of the Class A Convertible Preferred Stock.
During the period from April 1, 1999 through June 30, 1999, holders of warrants
issued in May 1998 exercised their warrants for an aggregate of 3,500 shares and
paid the Company gross proceeds of $12,250. The Company believes that the
transactions were exempt pursuant to Section 4(2) of the Securities Act of 1933
and Rule 506 under Regulation D.
Based on the Company's stock price on May 1, 1998, the date of issuance of the
Class A Convertible Preferred Stock, these securities were deemed to have
contained beneficial conversion features that must be recognized as a dividend
paid to preferred stockholders. The Company's financial statements conform with
the Financial Accounting Standards Board's Emerging Issues Task Force - Topic
D60 ("Accounting for the Issuance of Convertible Preferred Stock and Debt
Securities with a Nondetachable Conversion Feature") issued March 13, 1997, and
the Task Force's Working Group discussions and tentative conclusions reported on
Issue 98-5, November 1998, which provide that any discounts resulting from an
allocation of proceeds to the beneficial conversion feature and warrants are
analogous to a dividend, and should be recognized as a return to the preferred
stockholders over the minimum conversion period (from date securities are issued
to date they are first convertible). As noted above the value of the
Nondetachable Conversion Feature and accompanying warrants for the securities
issued in May 1998 was $34,228,583.
7
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS
The following table sets forth for the periods indicated the percentage of net
sales represented by certain items included in the Company's "Consolidated
Statements of Operations."
THREE MONTHS ENDED JUNE 30,
1999 1998
------------------------------
Net sales:
Computer 64.4% 68.0%
Music 35.2 31.9
------------------------------
Home entertainment products 99.6 99.9
NetRadio 0.4 0.1
------------------------------
Total net sales 100.0 100.0
Cost of sales 88.2 87.0
------------------------------
Gross profit 11.8 13.0
Selling and promotion 4.0 3.0
Distribution and warehousing 2.1 1.6
General and administration 9.3 6.8
Amortization of intangible assets 0.8 0.6
------------------------------
Income (loss) from operations (4.4) 1.0
Interest expense (0.3) (1.3)
Other expense 0.2 0.3
------------------------------
Net income (loss) (4.5)% 0.0%
==============================
Certain information in this section contains forward-looking statements. The
Company's actual results could differ materially from the statements contained
in the forward-looking statements as a result of a number of factors, including
risks and uncertainties inherent in the Company's business, the consumer market
for music products and computer software products, retail customer buying
patterns, new or different competition in the Company's traditional and new
markets and the rate of new product development and commercialization. For a
detailed discussion of these factors see the section entitled "Forward Looking
Statements" in the Company's Form 10-K for the year ended March 31, 1999.
Net sales of home entertainment products for the three-month period ended June
30, 1999 increased 8.5% from $53.0 million in fiscal 1999 to $57.5 million for
fiscal 2000. The gain was due to increased sales in the both the Computer
Products Division and the Music Products Division. Computer products sales for
the three-month period ended June 30, 1999 increased by 3.0% from $36.1 million
in fiscal 1999 to $37.2 million for fiscal 2000. This increase was primarily due
to the rapid growth in PC software fulfillment with e-commerce retailers. Music
sales for the three-month period ended June 30, 1999 increased 19.4% from $17.0
million in fiscal 1999 to $20.3 million for fiscal 2000. This increase was
primarily due to strong music releases from our exclusive independent labels.
NetRadio sales for the three-month period ending June 30, 1999 increased from
$63,000 in fiscal 1999 to $220,000 for fiscal 2000. NetRadio's increase was
primarily due to the growth of the internet business.
Gross profit of home entertainment products for the three-month period ended
June 30, 1999 decreased 1.4% or $119,000 from $6.9 million in fiscal 1999 to
$6.8 million for fiscal 2000. As a percentage of net sales, gross profit for the
three-month period ended June 30, 1999 decreased from 13.0% in fiscal 1999 to
11.7% for fiscal 2000. Gross margins from the Computer Products Division's net
sales for the three-month period ended June 30, 1999 were $4.1 million or 11.0%
as a percentage of net sales in fiscal 2000 compared with $3.5 million or 9.7%
as a percentage of net sales in the same period in fiscal 1999. The increase was
primarily due to higher margin sales to e-commerce customers. Gross margins from
music sales for the three-month period ended June 30, 1999 were $2.6 million or
12.8% of music net sales in fiscal 2000 compared with $3.4 million or 20.0% of
music net sales for the same period in fiscal 1999. The decrease was primarily
due to customer returns of devaluated inventory titles.
8
<PAGE>
Selling and promotion expense of home entertainment products for the three-month
period ended June 30, 1999 increased from $1.6 million in fiscal 1999 to $1.9
million during the same period for fiscal 2000 and increased as a percentage of
net sales for the three-month period ended June 30, 1999 from 3.0% in fiscal
1999 to 3.3% during the same period for fiscal 2000. This increase for the
three-month period was primarily due to increased freight costs. NetRadio's
selling and marketing expense for the three-month period ended June 30, 1999
increased from $56,000 in fiscal 1999 to $453,000 for fiscal 2000. The increase
in sales and marketing expenses was primarily due to the growth in NetRadio's
sales force and marketing staff.
Distribution and warehousing expense for the three-month period ended June 30,
1999 increased from $854,000 in fiscal 1999 to $1.2 million for fiscal 2000. As
a percentage of net sales for the three-month period ended June 30, 1999 it
increased from 1.6% of net sales in fiscal 1999 to 2.1% of net sales for fiscal
2000. The increase for the three-month period was primarily due to increased
costs associated with the increase in returns processing.
General and administration expenses of home entertainment products for the
three-month period ended June 30, 1999 increased from $3.2 million in fiscal
1999 to $3.8 million during for fiscal 2000. As a percentage of net sales for
the three-month period ended June 30, 1999 it increased from 6.0% in fiscal 1999
to 6.6% for fiscal 2000. NetRadio's general and administration expenses for the
three-month period ended June 30, 1999 increased from $486,000 in fiscal to $1.6
million for fiscal 2000. The increase in NetRadio's general and administration
expenses was primarily due cost associated with adding key personnel and
building infrastructure.
Interest expense for the three-month period ended June 30, 1999 decreased from
$712,000 in fiscal 1999 to $199,000 for fiscal 2000. This decrease resulted from
substantially lower borrowings.
Due to the utilization of prior years' losses and the current quarter's loss,
the Company has not recorded any tax benefit.
The net loss of home entertainment products for the three-month period ended
June 30, 1999 was $362,000 for fiscal 2000 compared to net earnings of $244,000
in the same three-month period in fiscal 1999. NetRadio's net loss for the
three-month period ended June 30, 1999 was $2.2 million for for fiscal 2000
compared to a net loss of $243,000 in the same three-month period in fiscal
1999.
YEAR 2000
The Company has been evaluating the potential impact of what is commonly
referred to as the Year 2000 issue, concerning the inability of certain
information systems to properly recognize and process dates containing the year
2000 and beyond. The Company established a Year 2000 team working with every
operational area throughout the Company, and this team worked with management to
commence the following steps: (i) implementing a Year 2000 Assessment and
Testing Plan for all internal information systems and other systems that contain
micro-controllers that may be affected by the Year 2000 date change; (ii)
implementing a Year 2000 Assessment and Testing Plan for all Company products,
(iii) communicating with third parties that supply product to the Company to
ensure they are addressing the Year 2000 issue; (iv) assisting our trade
partners with the conversion of their purchasing and invoicing Electronic Data
Interchange (EDI) documents to be Y2K compliant; and (v) contingency and
disaster recovery planning to ensure Year 2000 problem resolution.
The Company has identified and tested the systems it believes are critical and
the test results indicate that these systems are Year 2000 compliant. The
Company engaged in an ongoing process to test, reprogram, update or replace all
computer system non-compliant hardware and software and non-computer system
related non-compliant office and warehouse systems and equipment. The Company
has completed testing of mission critical systems and of non-mission critical
systems. Implementation of software upgrades and replacement of non-compliant
hardware is substantially completed. The Company will be conducting a total
computer system and mission critical equipment check during the months of July
and August, by processing documents for both Fiscal 1999 and Fiscal 2000. The
Company also completed the upgrade of the warehouse systems and Electronic Data
Interchange (EDI) systems and is listed as being compliant by the National
Retail Federation. Regardless of the Year 2000 compliance of the Company's
systems and products, there can be no assurance that the Company will not be
adversely affected by the failure of others to become Year 2000 compliant.
To date, the Company has incurred expenditures totaling $216,000 in connection
with the Company's effort to become Year 2000 compliant. At this time, the
Company estimates that its additional costs for Year 2000 compliance will
consist of costs related to Year 2000 compliance and expenditures for software
in the approximate amount of $50,000.
9
<PAGE>
While the Company cannot at this time state with certainty that the Year 2000
issues will not have a material adverse impact on its financial condition,
results of operations and liquidity, the Company considers it unlikely. The
Company believes that the following situations make up the Company's "most
reasonably likely worst case Year 2000 scenarios": (i) disruption of a
significant customer's ability to accept products or pay invoices, (ii)
disruption of suppliers, (iii) disruption of the Company's internal management
information systems, and (iv) disruption of the Company's external management
information systems.
While the Company recognized the need for contingency planning, it has not yet
developed any specific contingency plans for potential Year 2000 disruptions.
The Company does anticipate developing contingency plans for its most critical
areas, but details of such plans will depend on the Company's final assessment
of the problems of customers and suppliers as well as the evaluation and success
of its remediation efforts.
LIQUIDITY AND CAPITAL RESOURCES
The Company has historically financed its working capital needs through bank
borrowings. The level of borrowings has historically fluctuated significantly
during the year. At June 30, 1999, the Company had net accounts receivable of
$46.0 million and inventory of $30.3 million. Accounts payable of $53.3 million
and bank borrowings of $5.1 million primarily financed these assets.
For the three-month period ended June 30, 1999, net sales were $57.8 million for
fiscal 2000, an increase of $4.7 million over net sales of $53.1 million in
fiscal 1999. The Company used cash of $4.8 million in operating activities.
Accounts receivable increased by $2.6 million, inventories increased by $1.0
million and accounts payable and accrued expense increased by $2.6 million.
Investing activities used $410,000 of cash, including $439,000 for the purchase
of furniture, equipment and leasehold improvements. The Company generated net
cash of $5.2 million in financing activities primarily through bank borrowings.
Cash at the end of the period decreased by $61,000.
The Company has a revolving line of credit with Congress Financial Corporation.
The credit facility has a maximum borrowing limit of $45.0 million and is
secured by substantially all the Company's assets. The available amount
fluctuates based on an asset-borrowing base.
The Company anticipates it will utilize its credit facility during the next
twelve months to meet seasonal working capital needs. The Company believes that
the funds available under its current credit facility together with cash flow
from operations will be adequate to fund its anticipated working capital
requirements.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
There have been no material changes in the Company's market risk during the
three months ended June 30, 1999. For additional information, refer to page 27
of the Company's 1999 Annual Report to Shareholders.
10
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In the normal course of its business, the Company is involved in a number of
routine litigation matters that are incidental to the operation of its business.
These matters include collection matters with regard to products distributed by
the Company and accounts receivable owed to the Company. The Company currently
believes that the resolution of any pending matters will not have a material
adverse effect on its financial position or results of operation.
ITEM 2. CHANGES IN SECURITIES
On May 1, 1998, the Company issued 1,523,810 shares of Class A Convertible
Preferred Stock in a private placement to a group of investors for aggregate
consideration of $20.0 million. The Class A Convertible Preferred Stock was
issued at a price of $13.125 per share and was convertible into five shares of
Navarre common stock any time after June 30, 1998. In addition, for each share
of Class A Convertible Preferred Stock acquired, each investor received a
five-year warrant to purchase five shares of Navarre common stock at $3.50 per
share. The Class A Convertible Preferred Stock had a cumulative annual dividend
of 10% per annum payable quarterly, beginning on June 30, 1998. In connection
with the private placement, the Company also granted a four year warrant to
purchase 380,953 shares of common stock at a price of $2.625 per share to Delphi
Financial Corporation, the Company's agent in the private placement, and paid
Delphi selling commissions of five percent of the gross proceeds from the sale
of the Class A Convertible Preferred Stock.
As of March 31, 1999 all of the Company's Class A Convertible Preferred Stock
had been converted to common stock
During the period from April 1, 1999 through June 30, 1999, holders of warrants
issued in May 1998 exercised their warrants for an aggregate of 3,500 shares and
paid the Company gross proceeds of $12,250. The Company believes that the
transactions were exempt pursuant to Section 4(2) of the Securities Act of 1933
and Rule 506 under Regulation D.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) The following exhibits are included herein:
Exhibit 27: Financial data schedule
(b) Reports on Form 8-K
The Company did not file any reports on Form 8-K during the three
months ended June 30, 1999
11
<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: August 6, 1999 By /s/ Eric H. Paulson
-----------------------
Eric H. Paulson
Chairman of the Board,
President and
Chief Executive Officer
Date: August 6, 1999 By /s/ Charles E. Cheney
------------------------
Charles E. Cheney
Treasurer and Secretary,
Executive Vice President,
and Chief Financial Officer
12
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1999
<PERIOD-START> APR-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 31
<SECURITIES> 0
<RECEIVABLES> 46,028
<ALLOWANCES> 2,303
<INVENTORY> 30,263
<CURRENT-ASSETS> 78,334
<PP&E> 3,529
<DEPRECIATION> 4,746
<TOTAL-ASSETS> 84,749
<CURRENT-LIABILITIES> 61,553
<BONDS> 0
0
0
<COMMON> 91,893
<OTHER-SE> (68,828)
<TOTAL-LIABILITY-AND-EQUITY> 84,749
<SALES> 57,751
<TOTAL-REVENUES> 57,751
<CGS> 50,908
<TOTAL-COSTS> 9,391
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 210
<INTEREST-EXPENSE> 199
<INCOME-PRETAX> (2,604)
<INCOME-TAX> 0
<INCOME-CONTINUING> (2,548)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,604)
<EPS-BASIC> (.11)
<EPS-DILUTED> (.11)
</TABLE>
