<PAGE>
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 ENDED MARCH 31, 1998 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 NO.: 0-26640
SCP POOL CORPORATION
------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 36-3943363
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
109 Northpark Boulevard, Covington, Louisiana 70433-5001
(Address of principal executive offices) (Zip Code)
504-892-5521
(Registrant's telephone number, including area code)
(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 past 90 days. YES [X] NO [ ]
At April 27, 1998, there were 7,746,770 outstanding shares of the Registrant's
Common Stock, $.001 par value per share.
<PAGE>
SCP POOL CORPORATION
TABLE OF CONTENTS
Part I. Financial Information Page
----
Item 1. Financial Statements
Consolidated Balance Sheets -- March 31, 1998
(Unaudited) and December 31, 1997................... 1
Consolidated Statements of Operations (Unaudited) --
Three Months Ended March 31, 1998 and 1997......... 2
Consolidated Statements of Cash Flows (Unaudited)--
Three Months Ended March 31, 1998 and 1997.......... 3
Notes to Consolidated Financial Statements
(Unaudited) -- March 31, 1998....................... 4
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations................. 6
Part II. Other Information
Items 1. - 6....................................... 13
<PAGE>
SCP POOL CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1998 1997
---------- ------------
(Unaudited) (Note)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 6,586 $ 22,296
Receivables 53,898 24,775
Inventory, primarily goods purchased for resale 93,731 48,261
Prepaid expenses 1,857 562
Deferred income taxes 939 580
-------- --------
Total current assets 157,011 96,474
Property and equipment, net 5,956 4,792
Goodwill, net 37,248 32,614
Other assets, net 2,850 2,572
-------- --------
Total assets $203,065 $136,452
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 82,899 $ 20,266
Accrued and other current liabilities 6,678 6,078
Current portion of long-term debt 6,993 6,743
-------- --------
Total current liabilities 96,570 33,087
Deferred income taxes 3,687 3,584
Long-term debt, less current portion 37,296 33,146
Stockholders' equity:
Preferred stock, $.01 par value;
100,000 shares authorized - -
Common stock, $.001 par value; 10,000,000
shares authorized; 7,746,770 and
7,740,060 shares issued and outstanding in
1998 and 1997, respectively 8 8
Additional paid-in capital 52,408 52,352
Retained earnings 13,096 14,275
-------- --------
Total stockholders' equity 65,512 66,635
-------- --------
Total liabilities and stockholders' equity $203,065 $136,452
======== ========
</TABLE>
Note: The balance sheet at December 31, 1997 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.
See accompanying notes.
1
<PAGE>
SCP POOL CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
1998 1997
-------- --------
<S> <C> <C>
(Unaudited)
Net sales $73,988 $63,565
Cost of sales 58,041 49,605
------- -------
Gross profit 15,947 13,960
Warehouse expense 4,298 3,229
Selling and administrative expenses 12,550 10,416
Goodwill amortization 255 211
------- -------
Operating income (loss) (1,156) 104
Other income (expense):
Interest expense (776) (1,057)
Amortization expense (210) (179)
Miscellaneous income 269 159
------- -------
(717) (1,077)
------- -------
Loss before income tax benefits (1,873) (973)
Income tax benefit (693) (370)
------- -------
Net loss $(1,180) $ (603)
======= =======
Net loss per share of common stock:
Basic $ (.15) $ (.10)
======= =======
Diluted $ (.15) $ (.10)
======= =======
Average shares outstanding:
Basic 7,742 6,335
======= =======
Diluted 7,742 6,335
======= =======
</TABLE>
See accompanying notes.
2
<PAGE>
SCP POOL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
1998 1997
-------- --------
<S> <C> <C>
(Unaudited)
OPERATING ACTIVITIES
Net loss $ (1,180) $ (603)
Adjustments to reconcile net loss to net cash provided by
operating activities 2,404 8,021
--------- -------
Net cash provided by operating activities 1,224 7,418
INVESTING ACTIVITIES
Acquisition of businesses (21,687) --
Purchase of property and equipment (511) (284)
Proceeds from sale of property and equipment 833 29
--------- -------
Net cash used in investing activities (21,365) (255)
FINANCING ACTIVITIES
Net borrowings on revolving loan 5,400 3,000
Payments on long-term debt (1,000) (5,504)
Issuance of common stock 31 5
--------- -------
Net cash provided by (used in) financing activities 4,431 (2,499)
--------- -------
Change in cash and cash equivalents (15,710) 4,664
Cash and cash equivalents at beginning of period 22,296 4,621
--------- -------
Cash and cash equivalents at end of period $ 6,586 $ 9,285
========= =======
SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid during the period for:
Interest $ 503 $ 1,044
========= =======
Income taxes $ 1,108 $ 2,242
========= =======
</TABLE>
See accompanying notes.
3
<PAGE>
SCP POOL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
MARCH 31, 1998
1. UNAUDITED INTERIM FINANCIAL STATEMENTS
The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. In the opinion of
management, the accompanying unaudited interim financial statements reflect all
adjustments, of a normal recurring nature, necessary for a fair presentation of
the results of the interim periods.
The Company's business is highly seasonal. In general, sales and net income are
highest during the second and third quarters, which represent the peak months of
swimming pool use and installation. Operating results for the three-month period
ended March 31, 1998 are not necessarily indicative of the results that may be
expected for the year ending December 31, 1998. For further information, refer
to the consolidated financial statements for the year ended December 31, 1997
and footnotes thereto included in the annual report on Form 10-K filed by the
Company with the Securities and Exchange Commission.
2. DESCRIPTION OF BUSINESS
As of March 31, 1998, SCP Pool Corporation and its wholly owned subsidiaries
(collectively referred to as the Company) maintain 89 service centers in 32
states located throughout the United States from which they sell swimming pool
equipment and supplies to pool builders, retail stores, and service firms.
In January 1998, the Company acquired substantially all of the assets and
assumed certain liabilities of Bicknell Huston Distributors, Inc. (BHD), a
distributor of swimming pool supplies and related products through eleven
service centers in six northeastern states, for a purchase price of
approximately $22 million, which was paid in cash. This acquisition was
accounted for using the purchase method of accounting.
3. RECENTLY ISSUED AUTHORITATIVE PRONOUNCEMENT
In April 1998 the AICPA's Accounting Standards Executive Committee issued SOP
98-5, Reporting on the Costs of Start-Up Activities. SOP 98-5 requires entities
to charge to expense start-up costs, including organizational costs, as
incurred. In addition, the SOP requires entities upon adoption to write-off as
the cumulative effect of a change in
4
<PAGE>
SCP POOL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)--(CONTINUED)
3. RECENTLY ISSUED AUTHORITATIVE PRONOUNCEMENT (CONTINUED)
accounting principle any previously capitalized start-up or organization costs.
The SOP is effective for most entities for fiscal years beginning after December
15, 1998. At March 31, 1998, the Company had unamortized organizational costs of
$1,016,000.
5
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
GENERAL
The Company was formed in December 1993 to acquire substantially all of the
assets and assume certain liabilities of its predecessor. From its inception in
1980 through the end of 1993, the predecessor increased its sales through
strategic acquisitions, by opening new service center locations and by
increasing sales to new and existing customers. Since the Company's acquisition
of the predecessor in December 1993 (the "SCP Acquisition"), the Company has
grown through acquisitions, by opening new service centers and by increasing
sales to new and existing customers. From January 1990 to March 1998, the
Company expanded from 8 service centers in 6 states to 89 service centers in 32
states, primarily through acquisitions, including the January 1998 acquisition
of Bicknell Huston Distributors, Inc. (BHD Acquisition). The Company acquired
substantially all of the assets and assumed certain liabilities of BHD, a
distributor of swimming pool supplies and related products through eleven
service centers in six northeastern states, for a purchase price of
approximately $22 million.
The Company derives its revenues primarily from the sale of swimming pool
supplies and related products, including chemicals, cleaners, packaged pools and
liners, filters, heaters, pumps, lights, repair parts and other equipment
required to build, maintain, install and overhaul residential and small
commercial swimming pools. The Company sells its products primarily to swimming
pool remodelers and builders, independent swimming pool retailers and swimming
pool repair and service companies. These customers tend to be small, family
owned businesses with relatively limited capital resources. The Company
maintains a strict credit policy. Losses from customer receivables have
historically been within management's expectations.
The swimming pool supply industry is affected by various factors, including
general economic conditions, consumer saving and discretionary spending levels,
the level of new housing construction, weather and consumer attitudes towards
pool products for environmental or safety reasons. Although management
believes that the Company's geographic diversity could mitigate the effect of a
regional economic downturn and that the continuing maintenance and repair needs
for existing swimming pools could mitigate the effect of a general economic
downturn, there can be no assurance that the Company's results of operations and
expansion plans would not be materially adversely affected by any of such
downturns.
The principal components of the Company's expenses include the cost of products
purchased from manufacturers and sold during the year and operating expenses,
which are primarily related to labor, occupancy, commissions and marketing. Some
geographic markets serviced by the Company, particularly California, Arizona,
Texas and Florida,
6
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS--(CONTINUED)
GENERAL (CONTINUED)
tend to be more competitive than others. In response to competitive pressures
from any of its current or future competitors, the Company may be required to
lower selling prices in order to maintain or increase market share, and such
measures could adversely affect the Company's gross margins and operating
results.
RESULTS OF OPERATIONS
The following table shows, for the periods indicated, information derived from
the consolidated statements of operations of the Company expressed as a
percentage of net sales for such period.
<TABLE>
<CAPTION>
THREE MONTHS
ENDED MARCH 31,
1998 1997
------------------
<S> <C> <C>
Net sales 100.0% 100.0%
Cost of sales 78.4 78.0
------------------
Gross profit 21.6 22.0
Warehouse expense 5.8 5.1
Selling and administrative expenses 17.0 16.4
Goodwill amortization .3 .3
------------------
Operating income (1.5) .2
Other income (expense):
Interest expense (1.1) (1.7)
Amortization expense (.3) (.3)
Miscellaneous .4 .3
------------------
Income (loss) before income taxes (2.5) (1.5)%
==================
</TABLE>
The following discussions compare the results of operations of the Company for
the three-month periods ended March 31, 1998 and 1997.
Three Months Ended March 31, 1998 Compared to Three Months Ended March 31, 1997
Net sales increased by $10.4 million, or 16.4%, to $74.0 million in the three
months ended March 31, 1998 from $63.6 million in the comparable 1997 period.
Service centers acquired from BHD in January 1998 contributed
7
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS--(CONTINUED)
RESULTS OF OPERATIONS (CONTINUED)
$5.7 million to the increase, while an increase of approximately 3% in sales at
service centers open at least 15 months contributed $1.9 million to the
increase. The balance of the increase was attributable to sales at new service
centers open less than 15 months.
Gross profit increased by $1.9 million, or 14.2%, to $15.9 million in the three
months ended March 31, 1998 from $14.0 million in the comparable 1997 period.
Gross profit as a percentage of net sales decreased slightly, at 21.6% in the
1998 period compared to 22.0% in the 1997 period. The slight compression in
margin is attributable to the lower margins realized at centers acquired from
BHD, which approximated 17.5% for the first three months of 1998.
Operating expenses increased by $3.2 million, or 23.4%, to $17.1 million in the
three months ended March 31, 1998 from $13.9 million in the comparable 1997
period. This increase is reflective of an additional $2.6 million of operating
expenses incurred at service centers acquired from BHD during the first quarter
of 1998. Operating expenses for SCP, excluding service centers acquired from
BHD, remained relatively stable compared to the same period last year. Operating
expenses as a percentage of sales increased to 23.1% in the 1998 period compared
to 21.8% in the 1997 period. This increase was primarily attributable to the
increased operating expenses incurred by the service centers and administrative
offices acquired as a result of the BHD acquisition in January 1998. Excluding
BHD, operating expenses as a percentage of net sales for the first quarter
remained relatively stable at 21.3% in 1998 compared to 21.8% in the comparable
period.
Interest and other expenses decreased to $0.7 million in the three months ended
March 31, 1998 from $1.1 million in the comparable 1997 period. The decline in
interest expense for the first quarter of 1998 is reflective of both the lower
level of debt carried during the quarter compared to the same quarter in 1997,
and the more favorable interest rate on the Company's senior bank credit
facility (the "Senior Loan Facility").
SEASONALITY AND QUARTERLY FLUCTUATIONS
The Company's business is highly seasonal. In general, sales and net income are
highest during the second and third quarters, which represent the peak months of
swimming pool use and installation. Sales are substantially lower during the
first and fourth quarters, when the Company may incur net losses.
The Company experiences a build-up of inventory and accounts payable during the
first and second quarters of the year in anticipation of the peak swimming pool
supply selling
8
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS--(CONTINUED)
SEASONALITY AND QUARTERLY FLUCTUATIONS (CONTINUED)
season. The Company's peak borrowing occurs during the second quarter, primarily
because dated accounts payable offered by the Company's suppliers typically are
payable in April, May and June, while the Company's peak accounts receivable
collections typically occur in June, July and August.
The principal external factor affecting the Company's business is weather. Hot
weather can increase purchases of chemicals and supplies and pool installations.
Unseasonably cool weather or extraordinary amounts of rainfall during the peak
sales season can decrease purchases of chemicals and supplies and pool
installations. In addition, unseasonably early or late warming trends can
increase or decrease the length of the pool season and, therefore, the Company's
sales.
To encourage preseason orders, the Company, like many other swimming pool supply
distributors, utilizes preseason sales programs which provide for extended
dating terms and other incentives to its customers. Some of the Company's
suppliers also offer extended dating terms on certain products to the Company
for preseason or early season purchases. In offering extended dating terms to
its customers and accepting extended dating terms from its suppliers, the
Company effectively finances a portion of its receivables with extended
payables.
The Company expects that its quarterly results of operations will continue to
fluctuate depending on the timing and amount of revenue contributed by new
service centers and acquisitions, if any. The Company attempts to open its new
stores at the end of the fourth quarter or the beginning of the first quarter to
take advantage of preseason sales programs and the peak season.
The following table sets forth certain unaudited quarterly data for 1997 and the
first quarter for 1998 which, in the opinion of management, reflects all
adjustments (consisting of normal recurring adjustments) considered necessary
for a fair presentation of such data. Results of any one or more quarters are
not necessarily indicative of results for an entire fiscal year or of continuing
trends.
9
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS--(CONTINUED)
SEASONALITY AND QUARTERLY FLUCTUATIONS (CONTINUED)
<TABLE>
<CAPTION>
1997 1998
----------------------------------------- -------
1ST 2ND 3RD 4TH 1ST
QUARTER QUARTER QUARTER QUARTER QUARTER
------- ------- ------- ------- -------
(Dollars in thousands)
<S> <C> <C> <C> <C> <C>
Net sales $63,565 $124,790 $98,492 $48,175 $73,988
Gross profit 13,960 28,159 21,460 9,798 15,947
Operating income (loss) 104 11,496 6,847 (2,726) (1,156)
Net sales as a percentage of annual net sales 19% 37% 29% 15 % N/A
Gross profit as a percentage of annual gross
profit 19% 38% 29% 13 % N/A
Operating income as a percentage of annual
operating income 1% 73% 44% (18)% N/A
</TABLE>
LIQUIDITY AND CAPITAL RESOURCES
Currently, the Company's primary sources of working capital are cash flow from
operations and borrowings under the Senior Loan Facility, which consists of a
term loan and a revolving line of credit. The Company's borrowings under its
credit facilities, together with cash flow from operations and seller financing
have historically have been sufficient to support the Company's growth and to
finance acquisitions. Considering the Company's borrowing base as of March 31,
1998, the Company had approximately $42.8 million available for borrowing under
the Senior Loan Facility, the only additional credit source currently available
to the Company.
During the three months ended March 31, 1998, the Company had cash flow of $1.3
million from operating activities. The increase in the amount of the Company's
accounts receivable, inventory and accounts payable from December 31, 1997 to
March 31, 1998 is a result of the BHD Acquisition and the normal seasonal
increase as discussed above. See "Seasonality and Quarterly Fluctuations."
During the three months ended March 31, 1998, the Company borrowed $5.4 million
to meet seasonal working capital requirements and made scheduled principal
payments of $1.0 million required under its Senior Loan Facility.
Borrowings under the Senior Loan Facility may, at the Company's option, bear
interest at either (i) the agent bank's corporate base rate or the federal funds
rate plus 0.5%, whichever is higher, plus a margin ranging from 0.0% to .5% or
(ii) LIBOR plus a margin ranging from .75% to 2.0%, in each case depending on
the Company's leverage ratio. Substantially all of the assets of the Company
(other than inventory which secures the
10
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS--(CONTINUED)
LIQUIDITY AND CAPITAL RESOURCES (CONTINUED)
Company's obligations to the seller of The B-L Network Inc.), including the
capital stock of South Central Pool Supply, Inc., the Company's wholly owned
subsidiary, secure the Company's obligations under the Senior Loan Facility. The
Senior Loan Facility has numerous restrictive covenants which require the
Company to maintain minimum levels of interest coverage and fixed charge
coverage and which also restrict the Company's ability to pay dividends and make
capital expenditures. As of March 31, 1998, the Company was in compliance with
all such covenants and financial ratio requirements. The Senior Loan Facility
expires on December 31, 2002.
In December 1997, the Company completed a public offering of 1,350,000 shares of
Common Stock at a public offering price of $18.00 per share, resulting in net
proceeds to the Company of approximately $22.6 million. These proceeds were used
to finance the BHD Acquisition in January 1998. Prior to the BHD Acquisition,
the Company's acquisitions have been financed primarily by borrowings under the
Senior Loan Facility and seller notes. To finance future acquisitions, the
Company may utilize its ability to borrow additional funds under the Senior Loan
Facility or, depending on market conditions, incur additional indebtedness or
issue common or preferred stock (which may be issued to third parties or to
sellers of acquired businesses).
YEAR 2000 ISSUE
The Company continues to assess and review its computer systems devices,
software applications and equipment (collectively, "Computer Systems") to
identify those areas that could be affected by Year 2000 noncompliance. Based on
such review, management believes that the Company's Computer Systems will
function properly when handling date-related data in the Year 2000 and
thereafter, although there can be no such assurances, and failure of the
Company's Computer Systems to function properly could have a material adverse
effect on the Company's business, operations or financial condition. The total
cost to the Company of complying with Year 2000 requirements is not known at
this time, although management does not currently expect such costs to have a
material adverse effect on the Company's business, operations or financial
condition. The Company is communicating with suppliers, service providers, and
large customers (collectively, "Third Party Businesses") regarding their
compliance with Year 2000 requirements. If the Third Party Businesses fail to
comply in a timely manner with Year 2000 requirements, such failures by Third
Party Businesses could have a material adverse effect on the Company's business,
operations or financial condition.
11
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS--(CONTINUED)
INFLATION
The Company does not believe that inflation has had a significant impact on its
results of operations for the periods presented.
CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995
With the exception of historical matters, the matters discussed in this Form
10-Q are forward-looking statements that involve risks and uncertainties,
including but not limited to factors related to (i) the Company's ability to
identify appropriate acquisition candidates, complete acquisitions on
satisfactory terms, or successfully integrate acquired businesses; (ii) the
sensitivity of the swimming pool supply business to cool or rainy weather; (iii)
the intense competition and low barriers to entry in the swimming pool supply
industry; (iv) the Company's ability to obtain financing on satisfactory terms
and the degree to which Company is leveraged; (v) the sensitivity of the
swimming pool supply business to general economic conditions; (vi) the Company's
ability to remain in compliance with the numerous environmental, health and
safety requirements to which it is subject; (vii) the risk of fire, safety and
casualty losses and related liabilities claims inherent in the storage of
chemicals sold by the Company; and (viii) the other factors discussed in the
Company's filings with the Securities and Exchange Commission. Such factors
could affect the Company's actual results and could cause such results to differ
materially from the Company's expectations described above.
12
<PAGE>
Part II. Other Information
Item 1. Legal Proceedings
The Company currently is not involved in any material legal
proceedings.
Item 2. Changes in Securities
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
27.1 Financial Data Schedule
Reports on Form 8-K
On January 12, 1998, the Company filed a report on Form 8-K in
connection with the acquisition of certain assets of Bicknell
Huston Distributors, Inc. by the Company's wholly owned
subsidiary, South Central Pool Supply, Inc.
13
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SCP POOL CORPORATION
DATE: 5/13/98 BY: /s/ CRAIG K. HUBBARD
--------------------- -------------------------------------------
Craig K. Hubbard, Chief Financial Officer,
Treasurer and Secretary and duly authorized
signatory on behalf of the Registrant
14
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from consolidated
financial statements 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> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> $6,586
<SECURITIES> 0
<RECEIVABLES> 52,229
<ALLOWANCES> (2,047)
<INVENTORY> 93,731
<CURRENT-ASSETS> 157,011
<PP&E> 10,124
<DEPRECIATION> (4,168)
<TOTAL-ASSETS> 203,065
<CURRENT-LIABILITIES> 96,570
<BONDS> 44,289
0
0
<COMMON> 8
<OTHER-SE> 65,504
<TOTAL-LIABILITY-AND-EQUITY> 203,065
<SALES> 73,988
<TOTAL-REVENUES> 73,988
<CGS> 58,041
<TOTAL-COSTS> 75,144
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 319
<INTEREST-EXPENSE> 986
<INCOME-PRETAX> (1,873)
<INCOME-TAX> (693)
<INCOME-CONTINUING> (1,180)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,180)
<EPS-PRIMARY> (.15)
<EPS-DILUTED> (.15)
</TABLE>
