<PAGE>
U.S. Securities and Exchange Commission
Washington, D.C 20549
Form 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2000
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
EXCHANGE ACT
For the transition period from ________________ to __________________
Commission file number 1-13856
Sel-Leb Marketing, Inc.
(Exact name of small business issuer as
specified in its charter)
New York 11-3180295
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
495 River Street, Paterson, NJ 07524
(Address of principal executive offices)
973-225-9880
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such report(s)), and (2) has
been subject to such filing requirements for the past 90 days.
Yes [X] No [ ]
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 2,261,018 shares of common stock as
of May 18, 2000.
Transitional Small Business Disclosure Format (check one):
Yes [ ] No [X]
<PAGE>
SEL-LEB MARKETING, INC. AND SUBSIDIARY
<TABLE>
<CAPTION>
PAGE
----
Part I - Financial Information
<S> <C>
Item 1. Financial Statements
Report of Independent Public Accountants 2
Condensed Consolidated Balance Sheets at March 31, 2000
(Unaudited) and December 31, 1999 3
Condensed Consolidated Statements of Operations
Three Months Ended March 31, 2000 and 1999 (Unaudited) 4
Condensed Consolidated Statement of Changes in Stockholders' Equity
Three Months Ended March 31, 2000 (Unaudited) 5
Condensed Consolidated Statements of Cash Flows
Three Months Ended March 31, 2000 and 1999 (Unaudited) 6
Notes to Condensed Consolidated Financial Statements 7-9
Item 2. Management's Discussion and Analysis or Plan of Operation 10-12
Part II - Other Information
Item 6. Exhibits and Reports on Form 8-K 13
Signatures 13
1
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
----------------------------------------
To the Board of Directors and Stockholders
Sel-Leb Marketing, Inc. and Subsidiary
We have reviewed the accompanying condensed consolidated balance sheet of
SEL-LEB MARKETING, INC. AND SUBSIDIARY as of March 31, 2000, and the related
condensed consolidated statements of operations, changes in stockholders' equity
and cash flows for the three months ended March 31, 2000. These financial
statements are the responsibility of the Company's management.
We conducted our review in accordance with standards established by the American
Insititute of Certified Public Accountants. A review of Interim financial
information consists principally of applying analytical procedures to financial
data and making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with generally accepted auditing standards, the objective of which is the
expression of an opinion regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.
Based on our review of the condensed consolidated financial statements referred
to above, we are not aware of any material modifications that should be made to
the accompanying condensed consolidated financial statements for them to be in
conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of the Company as of December 31,
1999, and the related consolidated statements of operations and cash flows for
the year then ended which are not presented herein, and in our report dated
March 24, 2000, we expressed an unqualified opinion on those consolidated
financial statements. In our opinion, the information set forth in the
accompanying condensed consolidated balance sheet as of December 31, 1999, is
fairly stated, in all material respects, in relation to the consolidated balance
sheet from which it has been derived.
The accompanying condensed consolidated statements of operations and cash flows
for the three months ended March 31, 1999 were not audited or reviewed by us
and, accordingly, we do not express an opinion or any other form of assurance on
them.
J.H.Cohn LLP
Roseland, New Jersey
May 17, 2000
2
<PAGE>
SEL-LEB MARKETING, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
MARCH 31, 2000 AND DECEMBER 31, 1999
March December
ASSETS 31, 2000 31, 1999
------ -------------- --------------
(Unaudited) (Note 1)
Current assets:
<S> <C> <C>
Cash and cash equivalents $ 178,797 $ 158,032
Accounts receivable, less allowance for doubtful
accounts of $271,818 and $230,918 5,487,689 5,702,343
Inventories 8,637,422 8,331,838
Deferred tax assets 297,258 288,195
Prepaid expenses and other current assets 639,741 534,309
-------------- --------------
Total current assets 15,240,907 15,014,717
Property and equipment, at cost, net of accumulated
depreciation and amortization of $921,282 and $858,882 489,740 547,376
Goodwill, net of accumulated amortization of $138,291
and $129,676 207,477 216,092
Other assets 112,363 113,498
-------------- -------------
Totals $16,050,487 $15,891,683
============== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Note payable to bank $ 3,281,266 $ 2,948,356
Current portion of long-term debt 266,789 262,888
Accounts payable 2,127,550 2,279,635
Accrued expenses and other liabilities 1,236,374 1,053,667
------------- -------------
Total current liabilities 6,911,979 6,544,546
Long-term debt, net of current portion 1,117,554 1,188,101
------------- -------------
Total liabilities 8,029,533 7,732,647
------------- -------------
Commitments and contingencies
Stockholders' equity:
Preferred stock, $.01 par value; 10,000,000 shares
authorized; none issued - -
Common stock, $.01 par value; 40,000,000 shares
authorized; 2,261,018 shares issued and outstanding 22,611 22,611
Additional paid-in capital 6,496,359 6,496,359
Retained earnings 1,543,984 1,685,066
Less receivable in connection with equity transactions (42,000) (45,000)
--------------- ---------------
Total stockholders' equity 8,020,954 8,159,036
------------- -------------
Totals $16,050,487 $15,891,683
=========== ===========
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
3
<PAGE>
SEL-LEB MARKETING, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 2000 AND 1999
(Unaudited)
<TABLE>
<CAPTION>
2000 1999
---------- -----------
<S> <C> <C>
Net sales $5,006,394 $4,424,315
---------- ----------
Operating expenses:
Cost of sales 4,121,055 3,079,667
Selling, general and administrative expenses 1,028,474 1,087,635
----------- -----------
Totals 5,149,529 4,167,302
----------- -----------
Operating income (loss) (143,135) 257,013
Interest expense, net of interest income of $3,500
and $4,519 92,937 61,667
------------- -----------
Income (loss) before income taxes (236,072) 195,346
Provision (credit) for income taxes (94,990) 74,900
------------ -----------
Net income (loss) $ (141,082) $ 120,446
=========== ===========
Net earnings (loss) per share:
Basic ($.06) $.06
===== ====
Diluted ($.06) $.05
===== ====
Weighted average shares outstanding:
Basic 2,261,018 2,178,360
========= =========
Diluted 2,261,018 2,301,031
========= =========
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
4
<PAGE>
SEL-LEB MARKETING, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
THREE MONTHS ENDED MARCH 31, 2000
(Unaudited)
<TABLE>
<CAPTION>
Receivable in
Additional Connection Total
Common Stock Paid-in Retained with Equity Stockholders'
Shares Amount Capital Earnings Transactions Equity
------------ ---------- ------------ ------------ -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Balance, January 1, 2000 2,261,018 $22,611 $6,496,359 $1,685,066 $(45,000) $8,159,036
Partial payment of balance
receivable 3,000 3,000
Net loss (141,082) (141,082)
------------ ---------- ------------ ------------ -------------- -------------
Balance, March 31, 2000 2,261,018 $22,611 $6,496,359 $1,543,984 $(42,000) $8,020,954
========= ======= ========== ========== ======== ==========
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
5
<PAGE>
SEL-LEB MARKETING, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 2000 AND 1999
(Unaudited)
<TABLE>
<CAPTION>
2000 1999
----------- ----------
<S> <C> <C>
Operating activities:
Net income (loss) $ (141,082) $ 120,446
Adjustments to reconcile net income (loss) to net cash
used in operating activities:
Depreciation and amortization 71,015 67,410
Provision for doubtful accounts 40,900 32,814
Deferred income taxes (9,063)
Changes in operating assets and liabilities:
Accounts receivable 173,754 (599,188)
Inventories (305,584) (584,244)
Prepaid expenses and other current assets (105,432) (33,539)
Other assets 1,135 4,050
Accounts payable, accrued expenses and other
liabilities 30,622 526,588
----------- ----------
Net cash used in operating activities (243,735) (465,663)
----------- ----------
Investing activities - purchases of property and equipment (4,764) (33,522)
------------- -----------
Financing activities:
Proceeds from note payable to bank, net 332,910 217,691
Repayments of long-term debt (66,646) (18,513)
Net proceeds from exercise of warrants and stock options 1,872
Decrease in receivable in connection with equity transactions 3,000
------------- ----------
Net cash provided by financing activities 269,264 201,050
----------- ----------
Net increase (decrease) in cash and cash equivalents 20,765 (298,135)
Cash and cash equivalents, beginning of period 158,032 504,060
----------- ----------
Cash and cash equivalents, end of period $ 178,797 $ 205,925
========== =========
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
6
<PAGE>
SEL-LEB MARKETING, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1 - Organization and basis of presentation:
In the opinion of management, the accompanying unaudited
condensed consolidated financial statements reflect all
adjustments, consisting of normal recurring accruals, necessary
to present fairly the financial position of Sel-Leb Marketing,
Inc. ("Sel-Leb") and its 80%-owned subsidiary, Ales Signature,
Ltd. ("Ales"), as of March 31, 2000, their results of operations
and cash flows for the three months ended March 31, 2000 and
1999 and their changes in stockholders' equity for the three
months ended March 31, 2000. Sel-Leb and Ales are referred to
together herein as the "Company." Information included in the
condensed consolidated balance sheet as of December 31, 1999 has
been derived from the audited consolidated balance sheet
included in the Company's Form 10-KSB for the year ended
December 31, 1999 (the "10-KSB") previously filed with the
Securities and Exchange Commission (the "SEC"). Pursuant to
rules and regulations of the SEC, certain information and
disclosures normally included in financial statements prepared
in accordance with generally accepted accounting principles have
been condensed or omitted from these consolidated financial
statements unless significant changes have taken place since the
end of the most recent fiscal year. Accordingly, these unaudited
condensed consolidated financial statements should be read in
conjunction with the consolidated financial statements, notes to
consolidated financial statements and the other information in
the 10-KSB.
The consolidated results of operations for the three months
ended March 31, 2000 are not necessarily indicative of the
results to be expected for the full year.
Note 2 - Stock split:
The numbers of common shares and the per share amounts set forth
herein have been retroactively adjusted, where appropriate, for
a 2-for-1 split effected on December 7, 1999.
Note 3 - Earnings (loss) per share:
As further explained in Note 1 in the 10-KSB, the Company has
adopted the provisions of Statement of Financial Accounting
Standards No. 128, "Earnings per Share" ("FAS 128"), which
require the presentation of "basic" and, if appropriate,
"diluted" earnings (loss) per common share. Basic earnings
(loss) per share is calculated by dividing net income (loss) by
the weighted average number of common shares outstanding during
each period. The calculation of diluted earnings per share is
similar to that of basic earnings per share, except that the
denominator is increased to include the number of additional
common shares that would have been outstanding if all
potentially dilutive common shares, such as those issuable upon
the exercise of stock options and warrants, were issued during
the period.
7
<PAGE>
SEL-LEB MARKETING, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 3 - Earnings (loss) per share (concluded):
Since the Company had a net loss for the three months ended
March 31, 2000, the assumed effects of the exercise of all of
the Company's outstanding stock options and warrants and the
application of the treasury stock method would have been
anti-dilutive. Accordingly, the basic and diluted loss per share
and weighted average share amounts are the same for that period.
In computing diluted earnings per share for the three months
ended March 31, 1999, the assumed exercise of all of the
Company's outstanding stock options and warrants, adjusted for
the application of the treasury stock method, would have
increased the weighted average number of common shares
outstanding as shown in the table below:
<TABLE>
<CAPTION>
<S> <C>
Basic weighted average shares outstanding 2,178,360
Shares arising from assumed exercise of stock options 122,671
----------
Diluted weighted average shares outstanding 2,301,031
==========
</TABLE>
Note 4 - Note payable to bank:
As further explained in Note 4 in the 10-KSB, during December
1998 the Company entered into a loan agreement pursuant to
which Merrill Lynch Business Financial Services, Inc.
("Merrill Lynch") is providing the Company with a credit
facility, including a revolving line of credit with maximum
borrowings of $3,800,000 against the Company's eligible
accounts receivable and inventories, through October 31, 2000.
Borrowings under the revolving line of credit, which totaled
$3,281,266 at March 31, 2000, bear interest, which is payable
monthly, at 2.65% above the 30-day commercial paper rate (an
effective rate of 8.73% as of March 31, 2000).
Note 5 - Stock options and warrants:
Descriptions of the Company's stock option plans and other
information related to stock options and warrants are included
in Note 6 in the 10-KSB. No options or warrants were granted,
exercised or cancelled during the three months ended March 31,
2000.
8
<PAGE>
SEL-LEB MARKETING, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 6- Segment information:
Pursuant to the provisions of Statement of Financial Accounting
Standards No. 131, "Disclosures about Segments of an Enterprise
and Related Information," the Company reports segment sales and
gross margins in the same format reviewed by the Company's,
management (the "management approach"). The Company has two
reportable segments: "Opportunity" and "Cosmetics". The
Opportunity segment is comprised of the operations connected
with the acquisition, sale and distribution of name-brand and
off-brand products which are purchased from close-out,
overstocked and/or change-of-packaging brand name items. The
Cosmetics segment is comprised of the acquisition, sale and
distribution of all other products, including "celebrity
endorsed" cosmetics and health and beauty aid products and
designer and all other fragrances.
Net sales, cost of sales and other related segment information
for the three months ended March 31, 2000 and 1999 follows:
<TABLE>
<CAPTION>
2000 1999
----------- -----------
<S> <C> <C>
Net sales:
Opportunity $1,918,468 $1,850,754
Cosmetics 3,087,926 2,573,561
----------- -----------
Total net sales 5,006,394 4,424,315
----------- -----------
Cost of sales:
Opportunity 1,631,696 1,590,786
Cosmetics 2,489,359 1,488,881
----------- -----------
Total cost of sales 4,121,055 3,079,667
Selling, general and administrative expenses 1,028,474 1,087,635
----------- -----------
Total operating expenses 5,149,529 4,167,302
----------- -----------
Operating income (loss) (143,135) 257,013
Interest expense, net 92,937 61,667
------------ ------------
Income (loss) before provision (credit)
for income taxes $ (236,072) $ 195,346
=========== ===========
</TABLE>
* * *
9
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The following discussion and analysis of the Company's results of
operations, liquidity and financial condition should be read in conjunction with
the Consolidated Financial Statements of the Company and related notes thereto.
This Quarterly Report on Form 10-QSB contains certain forward-looking
statements, including statements concerning the adequacy of the Company's
sources of cash to finance its current and future operations. Actual
results could differ materially from those projected in the forward-looking
statements due to a number of factors, including but not limited to general
trends in the retail industry, the operation of the Company's website, the
ability of the Company to successfully implement its expansion plans, consumer
acceptance of any products developed and sold by the Company, the ability of the
Company to develop its "celebrity" product business and other factors set forth
herein or in reports and other documents filed by the Company with the SEC.
Consolidated Results of Operations: Three Month Period Ended March 31, 2000
Compared to the Corresponding Period Ended March 31, 1999.
The Company has two principal business segments (see Note 6 to the
Company's condensed consolidated financial statements). Opportunity and
Cosmetics. Net sales for the three months ended March 31, 2000 were $5,006,394
compared to $4,424,315 for the three months ended March 31, 1999, representing
an increase of 13.2%. This increase in net sales resulted primarily in the
cosmetics segment, which increased approximately 12.0%, while the opportunity
segment increased by 3.7%.
As a result of increased sales, cost of sales increased from $3,079,667
for the three month period in 1999 to $4,121,055 in 2000. The cost of goods as a
percentage of sales increased from 69.6% in 1999 to 82.3% in 2000, primarily as
a result of the Company's decision to sell certain inventories at lower than
usual margins to customers with whom the Company is hopeful of doing significant
business in the near future, and the Company's decision to reduce inventory of
slow moving items by selling them at reduced margins. The cosmetics lines
increased their cost of sales from $1,488,881 for the first quarter 1999 to
$2,489,359 for the first quarter 2000, with a resulting cost of sales percentage
of 80.6% in 2000 versus 57.9% in 1999. Opportunity products cost of sales
increased from $1,590,786 in 1999 to $1,631,696 for the first quarter in 2000,
with a resulting cost of sale percentage of 85.1% versus 86.0% in 1999.
Selling, general and administrative ("SG&A") expenses decreased from
$1,087,635 for the three month period ended March 31, 1999 to $1,028,474 for the
comparable period in 2000. The decrease is primarily the result of management's
continuing efforts at monitoring and controlling these costs. Generally, the
principal components of the Company's SG&A expenses are payroll, rent,
commission, insurance, legal, accounting and other fees paid to third parties
and travel and promotional expenses.
Interest expense increased from $61,667 for the three month period
ended March 31, 1999 to $92,937 for the comparable period in 2000. This increase
resulted from increases in interest rates as well as increased borrowings under
the Company's operating line of credit and additional long term loans obtained
by the Company.
As a result of the increase in the cost of sales, partially offset by
the decrease in SG&A, total operating expenses increased from $4,167,302 for the
three month period ended March 31, 1999 to $5,149,529 for the three month period
ended March 31, 2000. Primarily as a result of these increased operating
expenses, pretax income decreased by $431,418 from income of $195,346 for the
period ended March 31, 1999 to a loss of $(236,072) for the comparable period in
2000.
As a result of the Company's having recorded a net operating loss for
the three month period ended March 31, 2000 as compared to net operating income
for the comparable period in 1999, the Company's provision for income taxes
decreased from an expense of $74,900 in 1999 to a benefit of $(94,990) in 2000.
As a result of the above, the Company's net income decreased by
approximately $261,528 from $120,446 for the three month period ended March 31,
1999 to a loss of $(141,082) for the comparable period in 2000.
10
<PAGE>
Liquidity and Capital Resources
At March 31, 2000, the Company had working capital of $8,328,928 including cash
and cash equivalents in the amount of $178,797. The Company's principal cash
requirements are for the acquisition of inventory and the financing of
receivables. Receivables decreased from $5,702,343 at December 31, 1999 to
$5,487,689 at March 31, 2000, representing a decrease of $214,654 while
inventory increased from $8,331,638 at December 31, 1999 to $8,637,422 at March
31, 2000, representing an increase of $305,784.
During December 1998, the Company entered into a new credit facility
("Facility") with Merrill Lynch Business Financial Services Inc. ("Merrill
Lynch") which replaced the Company's previous arrangement with Summit Bank. The
Facility initially consisted of both a revolving line of credit and a $900,000
term loan, which is payable in monthly installments through January 2006, at
which time the unpaid balance is due. The revolving line of credit provided for
maximum borrowings of $3,300,000 (see note 4 to the Company's audited
consolidated financial statements) against the Company's eligible accounts
receivable and inventories, through October 31, 2000. On April 20, 1999, the
Company obtained a temporary line of credit increase with Merrill Lynch
increasing the Facility to a maximum borrowing of $3,800,000. The increase was
effective through October 31, 1999, at which time the maximum line was to revert
back to $3,300,000. Effective as of October 31, 1999, the Company and Merrill
Lynch further amended the facility to increase the revolving credit line to
$3,800,000, and provide for an additional term loan of $500,000, which is to be
repaid in 60 equal monthly installments, with interest at 2.65% above the 30 day
commercial paper rate, through October 31, 2004, at which time the unpaid
balance is due.
Outstanding borrowings under the Facility are secured by substantially all of
the Company's assets. Funds available under the Facility were used to replace
the previous loans with Summit Bank as well as provide funds for the working
capital needs of the Company. As of March 31, 2000, the outstanding balance
under the Revolving Line of credit was $3,281,266 and under the term loans,
including the Paterson Restoration Corporation, described below, was $1,384,343.
As of May 18, 2000, the outstanding balance under the Revolving Line of credit
was $3,208,910 and under the term loans, including the Paterson Restoration
Corporation was $1,362,111. The Facility contains certain restrictive covenants,
which, among other things, require the maintenance of certain financial ratios
and limitations on future indebtedness.
On September 26, 1997, in connection with the previous relocation of its office
and warehouse facilities to Paterson, New Jersey, the Company borrowed $100,000
from the Paterson Restoration Corporation. The loan, which bears interest at 6%
per annum, provides for monthly payment of principal and interest in the amount
of $1,461 through October 1, 2004. On December 28, 1999, in connection with the
expansion of its business in Paterson, New Jersey, the Company borrowed an
additional $100,000 from the Paterson Restoration Corporation. The loan, which
bears interest at 6% per annum, provides for monthly payments of principal and
interest in the amount of $1,461 through December 1, 2006. Each of these loans
is secured by a second priority lien on all new machinery and equipment
purchased by the Company. The proceeds of each of the loans were used for the
purchase of fixed assets.
The Company anticipates that its working capital, together with anticipated cash
flow from the Company's operations, will be sufficient to satisfy the Company's
cash requirements for at least twelve months. In the event the Company's plans
change (due to unanticipated expenses or difficulties or otherwise), or if the
working capital and projected cash flow otherwise prove insufficient to fund
operations, the Company could be required to seek additional financing sooner
than currently anticipated. Except for the Facility, which expires on October
31, 2000, and the term loans under the Facility, the Company has no current
arrangements with respect to, or sources of, additional financing. Accordingly,
there can be no assurance that additional financing will be available to the
Company when needed, on commercially reasonable terms, or at all. The
11
<PAGE>
Company's inability to obtain such additional financing could have a material
adverse effect on the Company's long-term liquidity.
During the year ended December 31, 1999, we completed our Year 2000 assessment.
The costs of such assessment were not significant. In addition, we experienced
no problems in the operations of our business as a result of Year 2000 effects
on computer systems.
12
<PAGE>
Part II Other Information
Item 6. Exhibits and Reports on Form 8-K
A. Exhibits
None
27. Financial Data Schedule
B. Reports on Form 8-K
No reports on Form 8-K were filed by the registrant during the three Month
Period ended March 31, 2000.
Signatures
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
SEL-LEB MARKETING, INC.
/s/ Jan S. Mirsky
-----------------
Jan S. Mirsky
Executive Vice President - Finance
As both duly authorized officer of
the registrant and as principal
financial officer of registrant.
May 18, 2000
13
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 178,797
<SECURITIES> 0
<RECEIVABLES> 5,759,507
<ALLOWANCES> 271,818
<INVENTORY> 8,637,422
<CURRENT-ASSETS> 15,240,907
<PP&E> 1,411,022
<DEPRECIATION> 921,282
<TOTAL-ASSETS> 16,050,487
<CURRENT-LIABILITIES> 6,911,979
<BONDS> 0
0
0
<COMMON> 22,611
<OTHER-SE> 7,998,343
<TOTAL-LIABILITY-AND-EQUITY> 16,050,487
<SALES> 5,006,394
<TOTAL-REVENUES> 5,006,394
<CGS> 4,121,055
<TOTAL-COSTS> 5,149,529
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 92,937
<INCOME-PRETAX> (236,072)
<INCOME-TAX> (94,990)
<INCOME-CONTINUING> (141,082)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (141,082)
<EPS-BASIC> (0.06)
<EPS-DILUTED> (0.06)
</TABLE>
