Systemax Inc – ‘10-K405’ for 12/31/96

As of:  Friday, 3/28/97   ·   For:  12/31/96   ·   Accession #:  950103-97-192   ·   File #:  1-13792

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Annual Report — [x] Reg. S-K Item 405   —   Form 10-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-K405     Annual Report -- [x] Reg. S-K Item 405                46±   204K 
 2: EX-23.1     Consent of Experts or Counsel                          1      5K 
 3: EX-23.2     Consent of Experts or Counsel                          1      5K 
 4: EX-27       Financial Data Schedule (Pre-XBRL)                     1      7K 

10-K405   —   Annual Report — [x] Reg. S-K Item 405
Document Table of Contents

==============================================================================  

SECURITIES AND EXCHANGE COMMISSION  
WASHINGTON, D.C. 20549  

FORM 10-K 
(Mark One)                                                                      
[X]         ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE            
  SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1996 
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: 
1-13792 

________________________  

Global DirectMail Corp  
(Exact name of registrant as specified in its charter)  

    Delaware                                    11-3262067
(State or other jurisdiction of                    (I.R.S. Employer     
incorporation or organization)                    Identification No.)   

22 Harbor Park Drive                                        
Port Washington, New York                             11050       
(Address of principal executive offices)                   (Zip Code)           

    Registrant's telephone number, including area code: (516) 625-1555

________________________  

       Securities registered pursuant to Section 12(b) of the Act:

                                          Name of each exchange on
    Title of each class                   which registered
        -------------------               ------------------------

Common Stock, par value                               
          $0.01 per share                  New York Stock Exchange

     Securities registered pursuant to Section 12(g) of the Act:  NONE
________________________  

   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 [  ]                 

 Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,  
to the best knowledge of the registrant, in definitive proxy or information     
statements incorporated by reference in Part III of this Form 10-K or any       
amendment of this Form 10-K. Yes [X]  No [  ]                                   

    The aggregate market value of the voting stock held by non-affiliates of
the registrant as of March 25, 1997 was approximately $259,507,676. For         
purposes of this computation, all executive officers and directors of the       
Registrant and all parties to the Stockholders Agreement dated as of June 15,   
1995 have been deemed to be affiliates. Such determination should not be        
deemed to be an admission that such persons are, in fact, affiliates of the     
Registrant.                                                                     

  The number of shares outstanding of the registrant's common stock, as of
March 27, 1997, was 37,856,990 shares.                                          

  Documents incorporated by reference: The definitive Proxy Statement of
Global DirectMail Corp relating to the 1997 Annual Meeting of Stockholders      
is incorporated by reference in Part III hereof.                                

==============================================================================  

TABLE OF CONTENTS 
Part I                                                                          
Item 1. Business...................................................       1 
       General.... ...............................................       1
       Products...................................................       2
       Catalogs and Marketing......................................      3
Sales and Customer Service                                  
           and Support............................................       4
       Distribution Centers.......................................       6
       Suppliers..................................................       6
       Management Information Systems.............................       7
       Research and Development...................................       7
       Competition................................................       7
       Employees..................................................       9
       Environmental Matters......................................       9
Item 2. Properties.................................................      10 
Item 3. Legal Proceedings..........................................      10 
Item 4. Submission of Matters to a Vote                                     
        of Security Holders.......................................      10
Part II                                                                         
Item 5. Market for the Company's                                            
Common Equity and Related                                 
        Stockholder Matters.......................................      11
Item 6. Selected Financial Data....................................      12 
Item 7. Management's Discussion and                                         
Analysis of Financial Condition                           
        and Results of Operations.................................      14
Item 8. Financial Statements and                                            
        Supplementary Data........................................      20
Item 9. Changes in and Disagreements                                        
with Accountants on Accounting                            
        and Financial Disclosure..................................      20

Part III                                                                        
Items 10, 11,12                                                             
& 13. Directors and Executive Officers of the                           
Registrant, Executive Compensation                      
Security Ownership of Certain Beneficial                
Owners and Management and Certain                       
         Relationships and Related Transactions...................      20

Part IV                                                                         
Item 14.  Exhibits, Financial Statement Schedules                           
          and Reports on Form 8-K.................................      21

   Signatures.....................................................      23

PART I  

 Unless otherwise indicated, all references herein to "Global DirectMail
Corp" ("Global" or the "Company") include its subsidiaries and                  
predecessors.  Global is the successor to a number of corporations (the         
"Predecessor Companies") that operated with related ownership.  See             
"Management's Discussion and Analysis of Financial Condition and Results of     
Operations--General--Termination of S Corporation Status."                      

Item 1. Business.                                                               

General                                                                         

  Global is a direct marketer of over 40,000 products including brand name
and private label computer related products, office products and industrial     
products in North America and Europe. The Company emphasizes a broad selection  
of in-stock products, frequent mailings of a variety of distinctively branded   
full color catalogs, extensive customer service and prompt, complete order      
fulfillment. The Company's portfolio of catalogs includes such established      
brand names as Global, Misco, HCS Global, HCS Misco, Dartek, Power Up! and      
Tiger for computer related products and office products and Global and          
ArrowStar for industrial products. Global has grown rapidly as a result of      
internal growth and strategic acquisitions while maintaining a high level of    
profitability. The Company's net sales have increased at a compound annual      
growth rate of 40% from $238.8 million in 1992 to $911.9 million in 1996.       
During this same period, income from operations increased at a compound annual  
growth rate of 35% from $21.2 million to $69.5 million.                         

The Company has positioned itself as a "corporate supplier" offering a
broad spectrum of business products principally to mid-sized facilities (20     
to 1,000 employees).  The Company believes that direct mail is one of the most  
effective and convenient distribution methods to reach mid-sized facilities     
which place many small orders and require a wide selection of products. The     
Company's products consist of computer, office and industrial products, which   
accounted for 75%, 13% and 12%, respectively, of the Company's net sales in     
1996.                                                                           

   The Company primarily targets individuals at mid-sized facilities through
demographically directed mailings of its "full-line" and specialty catalogs.    
Most of the Company's various catalog titles are mailed monthly, although       
certain specialty catalogs are mailed less frequently. Catalog mailings         
increased from approximately 71 million catalogs comprising 11 different        
titles in 1992 to approximately 160 million catalogs comprising 40 different    
titles in 1996.  At December 31, 1996, the Company had 1.7 million "active"     
customers (defined as individuals that have purchased from the Company within   
the preceding 12 months) and combined customer and prospect files of more       
than 40 million names.                                                          

The Company operates in the United States, Canada and Europe through a
network of regional distribution centers. The Company's North American          
operations contributed 74% of net sales in 1996 and consist of eight branch     
locations in seven states and in Canada. Certain corporate functions, such as   
merchandising, marketing, purchasing and information systems, are centralized   
at the Company's corporate headquarters for efficiency, while other functions,  
such as sales, order entry and fulfillment, are decentralized at each of the    
Company's branches in order to provide superior customer service. Each branch   
consists of a regional distribution center as well as telemarketing and         
administrative functions which address local customer needs. European           
operations which began in June 1990 represented 26% of net sales in 1996 and    
consist of six sales and distribution centers located across Europe: two in     
the United Kingdom and one in each of France, Germany, Italy and Spain. Each    
country branch performs the same functions as each North American branch in     
addition to local marketing. For a more detailed geographic breakdown of the    
Company's operations, see Note 10 to the Consolidated Financial Statements.     

  Most of the Company's products are carried in stock, and orders for such
products are fulfilled directly from the Company's distribution centers,        
typically on the day on which the order was received. The strategic location    
of the Company's distribution centers allows next day or second day delivery    
via low cost ground carriers throughout the United States, Canada and Western   
Europe. In Europe, the location of branches also enables the Company to expand  
into new markets with limited incremental investment through cross border       
shipping.                                                                       

Products                                                                        

In positioning itself as a "corporate supplier", the Company has      
consistently expanded the breadth of its product offerings in order to fulfill  
an increasingly wide range of business product needs of mid-sized facilities.   
In total, Global offers over 40,000 brand name and private label products.      

  The Company's computer related products include: supplies, media such as
floppy disks and magnetic tape cartridges, peripherals such as hard disk        
drives and memory upgrades, data communication and networking equipment,        
ergonomic accessories, such as adjustable monitor support arms and antiglare    
screens, packaged software and hardware. Sales of office products include       
furniture, chairs, small office machines and related supplies. The Company's    
industrial product lines focus primarily on storage equipment such as metal     
shelving, bins and lockers, and light material handling equipment such as hand  
carts and hand trucks. In addition, Global has expanded into consumable         
industrial products such as first aid items, safety items, protective clothing  
and OSHA compliance items. The table below summarizes the Company's mix of      
sales by product category:                                                      

                                          Year Ended
                                            December 31,
                                         -----------------------------
Product Type                                   1994         1995      1996      
                                         ------       ------    ------
                                            (% of total sales)

Computer Related Products................       65%          66%       75%      
Office Products  ........................       18           16        13       
Industrial Products  ....................       17           18        12       
                                        ___          ___       ___
Total  .............................      100%         100%      100% 
                                        ===          ===       ===

 Historically, the Company focused primarily on non-branded or private
label products. Although the Company continues to experience strong growth in   
its private label products, in recent years, the Company made the strategic     
decision  to leverage its distribution and marketing strengths into the market  
for high volume brand name products which the Company believes offer            
significant  opportunities to increase sales. In 1993 the Company expanded its  
offerings of  brand name computer related products, including peripherals,      
data communications  and networking equipment, software and supplies. In        
addition, in 1995 the  Company further expanded its offering of brand name      
products to include  notebooks, desktops and servers. This strategy has         
impacted gross profit  margins, as such products typically have lower gross     
profit margins than many of the Company's other products. The majority of such  
decrease in gross profit margin, however, has been offset by decreased catalog  
production costs as a result of vendor supported advertising and increased      
efficiencies from (i) increased average order values, particularly with         
respect to order fulfillment and (ii) increased response rates for the          
Company's catalogs. Management believes that the market for brand name          
products represents a significant growth opportunity and will become an         
increasingly important part of its business.                                    

Merchandising is managed by product category and each product manager is
responsible for product selection and purchasing and is evaluated based on      
product line growth and profitability. Product managers also determine which    
products to list in each catalog.                                               

Catalogs and Marketing                                                          

The Company produces a total of 40 "full-line" and targeted specialty 
catalogs under distinct titles. Most of the Company's various catalog titles    
are mailed monthly although certain of its specialty catalogs are mailed less   
frequently. "Full-line" computer related products catalogs offer products such  
as computer supplies and magnetic media, peripherals, data communication,       
networking and power protection equipment, ergonomic accessories, furniture,    
software and hardware. "Full-line" industrial products catalogs offer products  
such as material handling products and industrial supplies. Specialty catalogs  
contain more focused product offerings and are targeted to individuals most     
likely to purchase from such catalogs. It is Global's policy to mail multiple   
catalogs to many individuals at each location, providing the Company with       
multiple points-of-entry into a business location. Once a prospect purchases    
a particular product, however, the Company's customers have exhibited strong    
brand loyalty resulting in limited customer overlap among the Company's         
various catalog brands. This multiple brand strategy, and the accompanying      
customer exposure to the Company's products, is a crucial factor in the         
Company's strategy to increase sales volume through broader market coverage     
and improve the productivity of its customer file through more focused          
marketing.                                                                      

   Specialty catalogs permit the Company to offer a more extensive selection
of focused products at a reduced catalog cost. The Company's database permits   
it to target each catalog to customers whose purchasing history suggest that    
they are most likely to purchase from it. For example, a data communications    
specialty catalog can be mailed exclusively to individuals who had purchased    
complementary products in the past. Introductions of specialty catalogs have    
included a safety products catalog, a hardware and software catalog, a data     
communications and networking catalog, an ergonomics catalog and a shelving     
catalog.                                                                        

Global has invested consistently and aggressively in developing a   
proprietary customer and prospect database. This database, which includes more  
than 40 million names, represents a major asset of the Company. The Company     
considers its customers to be the various individuals that work within an       
organization rather than the business location itself. The customer and         
prospect database includes detailed information, including company size,        
number of employees, industry of operation, various demographic and geographic  
characteristics and personal purchase history (catalog preference, product      
preference, order value). Management believes that this variety and depth of    
information on its customers offers Global a significant competitive advantage. 

Using its database, the Company primarily targets individuals at      
mid-sized facilities (20 to 1,000 employees) through demographically directed   
mailings of its "full-line" and targeted specialty catalogs. During 1996, the   
Company distributed approximately 160 million catalogs of which approximately   
120 million catalogs were mailed in North America and approximately 40 million  
catalogs were distributed in Europe. At December 31, 1996, the Company had 1.7  
million "active" customers (defined as individuals that have purchased from     
the Company within the preceding 12 months).                                    

    In its mailings, the Company seeks to maximize the response rates of its
catalogs. The following table shows the approximate number of catalogs          
distributed by the Company and the catalog response rates:                      

Catalogs Distributed                                                            

                                      Year Ended
                                        December 31,
                                     -----------------------------
Product Type                                 1994         1995      1996        
------------                                ------       ------    ------       
                                      (in millions, except response rates)

North America.........................        87           90        120        
Europe................................        27           32         40        
                                     ___          ___        ___
Total............................       114          122        160   
                                     ===          ===        ===
Response rates........................      1.94%        2.08%      2.12%       

 Catalogs distributed in 1996 include a full year catalog mailings for
Tiger Direct versus one month for 1995.  The Company's in-house staff designs   
all of the Company's catalogs.  Catalog paper is purchased from various         
sources and has historically been subject to price fluctuations.  The printing  
of the catalogs is done from several sources under fixed pricing arrangements.  
Each catalog is printed with full-color photographs, contains detailed product  
descriptions and generally bears a toll-free telephone number to be used by     
customers to place a product order. In-house catalog production helps reduce    
overall catalog expense and shortens catalog production time, allowing the      
Company the flexibility to alter its product offerings and pricing and refine   
its catalog formats more quickly.                                               

In addition to its catalogs and telemarketing sales force, the Company
uses targeted fax campaigns and special single-product "solo" mailings to       
generate incremental sales from key customer segments.                          

Sales and Customer Service and Support                                          

In responding to orders generated by its catalogs, soliciting new     
customers through outbound telemarketing and responding to service and          
technical support requirements of its customers, the Company relies heavily on  
its proprietary systems. See "--Management Information Systems." The principal  
components of its sales and support functions are as follows.                   

Order Entry and Fulfillment                                           

   Global makes purchasing its products as convenient as possible. Because a
majority of customer orders are placed by telephone, the efficient handling of  
calls is an extremely important aspect of Global's business. Order entry and    
fulfillment occurs at each of the Company's 13 branches. Global generally       
provides a toll-free telephone number which automatically directs calls to the  
branch closest to the customer. Department managers are trained to monitor and  
coordinate automatic call distribution activity which allows them to shift      
staff from other departments to cover periods of the day with heavy calling     
activity. Calls are received by well trained inbound telemarketing              
representatives who utilize on-line terminals to enter customer orders into     
computerized order processing systems. The integration of the Company's call    
centers also provide each domestic branch with telephone backup in the event    
of a disruption in phone service. In addition to telephone orders, Global also  
receives orders by mail, by fax, via EDI, and via the Internet.                 

When an order is entered into the system, a credit check is performed,
and, if the credit is approved, the order is electronically transmitted to the  
warehouse and a packing slip is printed for order fulfillment. Approximately    
75% of the Company's 1996 sales were on open account and the Company's bad debt 
experience has traditionally been approximately 1/2 of 1% of sales.  Orders     
generally are shipped by United Parcel Service in the United States and by      
similar national small package delivery services in Europe, as well as by       
various freight lines and local carriers. Air freight is also available. As a   
result of the regional locations of the Company's branches, Global estimates    
that most customers receive their orders (other than custom items, large        
furniture and large industrial items shipped directly by the vendor) within     
one or two business days of the order date. Customers are invoiced for          
merchandise, shipping and handling promptly after shipment.                     

Inbound Telemarketing                                                 

   The Company's catalogs generate calls to the in-bound telemarketing group
which is supported by proprietary software applications. Inbound telemarketing  
representatives use the capabilities of the Company's systems to effectively    
fulfill orders and explore additional customer product needs. Using             
proprietary applications, each member of the telemarketing group has immediate  
access to customer files, including usage and billing information, and          
real-time inventory levels by distribution center. Using this data, inbound     
telemarketing personnel are also prompted by their computer screen to           
cross-sell selected products and obtain specific information relating to        
customer-specific purchasing habits and product needs. For example, one         
program prompts the sales representative to suggest the purchase of an          
additional product which may be used with the products just ordered by the      
customer. In addition, the Company frequently runs sales incentive programs to  
improve productivity and enhance employee motivation. The Company also          
conducts regular on-site training seminars for its sales representatives and    
regularly reviews performance to monitor productivity.                          

Outbound Telemarketing                                                

  In 1988, the Company began to utilize outbound telemarketing to increase
the overall level of sales. Each of the Company's 13 branches has its own       
telephone sales center. The telemarketing sales force's goal is to increase     
the purchasing productivity of current customers and to actively solicit newly  
targeted prospects to become customers. As part of its outbound telemarketing   
effort, the Company established a national accounts program focused on          
expanding penetration of larger facilities. In the United States, Global has    
the ability to provide such customers with EDI ordering and customized billing  
services, customer savings reports, bulk discounts and stocking of specialty    
items specifically requested by customers. Global can also provide monthly      
reports illustrating customer savings from utilizing Global.                    

Customer Service and Support                                          

The Company conducts regular on-site training seminars for its sales  
representatives and operates a separate customer service department which       
responds to customer concerns and generally offers a 30 day return policy.      
Sales representatives receive technical training regarding various products     
from vendors and in-house training specialists. The Company also maintains a    
separate technical support group dedicated to answering customer inquiries and  
assisting customers with the operation of their products. Technical support     
questions are logged into the computer, thus forming a database of commonly     
asked questions for each product. This database helps sales representatives     
respond quickly to similar questions from future customers and also allows      
product managers to monitor the effectiveness of the information provided in    
the catalogs. The Company also employs a fax-back system that allows customers  
to call directly into a computer system that automatically faxes the requested  
information to the customer.                                                    

Distribution Centers                                                            

North American                                                        

The Company operates a network of seven branch locations in North     
America. Each sales and distribution center has a general manager in charge of  
sales and supervising on-site operations and handles its own telemarketing,     
credit review, product fulfillment and collection functions.                    

 Each location is linked by a sophisticated wide area network management
information system and in the event of adverse delivery conditions (such as     
weather problems or other delivery issues), the Company can easily shift        
inbound calls and/or order fulfillment and shipping to an alternative branch.   
Management believes this provides Global with important operating flexibility   
and protection from possible sales interruptions. See "Management Information   
Systems."                                                                       

A large number of the Company's products are carried in stock, and    
consequently orders for such products are fulfilled from the distribution       
center. Certain products (such as selected computer hardware and large          
furniture and industrial items) are shipped directly by the supplier. The       
layout of the Company's distribution centers is managed via a computer-based    
tracking system which dictates the location of specific stock items.            
Individual product types are consistently stocked in the same physical picking  
location, allowing ease of picking and minimizing picking errors. Picking of    
products at the distribution centers is done continuously throughout the day.   
Customer orders are packed and shipped as they are received.                    

European                                                              

The Company has six branch locations in five European countries, the  
operations of which are all directed from a central office outside London,      
England. The central office in Uxbridge is responsible for marketing support,   
catalog production, financial reporting, logistics, auditing and MIS            
programming support. Each of the Company's six separate European operations is  
run by a country manager with profit and loss responsibility. Management        
believes that its practice of operating each country's operations as a more     
autonomous entity fosters a highly entrepreneurial culture and increases        
management accountability. Each country (except the United Kingdom which has    
two) has a full service sales and distribution center to process orders.        

Suppliers                                                                       

   In North America, the Company purchases substantially all of its products
directly from manufacturers, except for certain peripherals, software and       
hardware products which are purchased through wholesale distributors. In        
Europe, products are sourced from a combination of local manufacturers,         
wholesalers and import suppliers of private label products. Substantially all   
of the European catalog product content is sourced  in Europe. No single        
supplier accounted for more than 10% of Global's total purchases in 1996.       

   Private label products are manufactured by third parties to the Company's
specifications. Many of these private label products have been designed or      
developed by the Company's in-house research and development team. See          
"Research and Development." As certain private label products require assembly, 
the Company also maintains a small assembly operation.                          

Management Information Systems                                                  

   In North America, the Company has installed and operates a sophisticated,
proprietary system that allows centralized management of key management         
functions, including communication links between distribution centers,          
inventory and accounts receivable management, purchasing, pricing, sales and    
distribution, and the preparation of daily operating control reports which      
provide concise and timely information regarding key aspects of its business.   
This proprietary management information system enables the Company to enhance   
its flexibility by shipping customer orders on a same-day basis, responding     
quickly to order changes and providing a high level of customer service. The    
Company maintains a database of over 40 million customer and prospect names     
and keeps records of historical purchasing patterns in order to prompt sales    
personnel with product suggestions to expand customer order values. In          
addition, the Company has developed a state-of-the-art customer prospecting     
function based upon geographic, economic and demographic data which enables     
Global to utilize its information systems to maintain and expand its customer   
data file. These applications enable the Company to achieve cost savings,       
deliver extensive customer service and centrally manage its operations.         

In the United States, the Company's management information systems are
networked, real-time information systems that allow each distribution center    
to share information and monitor daily progress relating to sales activity,     
credit approval, inventory levels, stock balancing, vendor returns, order       
fulfillment and other measures of performance.                                  

  The Company believes that its management information systems and planned
enhancements are sufficient to sustain its present operations and to            
accommodate the Company's internal growth strategy.                             

Research and Development                                                        

   The Company's research and development team designs and develops products
for Global's private label program. Management believes this engineering and    
design capability, which Global has had for more than 10 years, is unique in    
the direct marketing industry. The individuals responsible for research and     
development have backgrounds in engineering and industrial design.              

  This in-house capability provides important support to the private label
program. Many of the Company's private label products were designed or          
developed by the in-house research and development team. Examples of products   
designed in-house include: furniture, ergonomic monitor support arms, printer   
and monitor stands, wrist rests and other durable computer related products,    
storage racks and shelving systems, various stock and storage carts, work       
benches, plastic bins and shop furniture. The Company owns the tooling for      
many of these products, including plastic bins, computer accessories,           
furniture, and metal alloy monitor arms. See "Research and Development Costs"   
in Footnote 1 to the financial statements.                                      

Competition                                                                     

Computer Related Products                                             

  The North American computer related products market is highly fragmented
and characterized by multiple channels of distribution, including               
direct-response (mail-order) distributors, local and national retail computer   
stores that carry computer supplies, computer resellers (OEMs), and computer    
"superstores". The tremendous growth in the computer related products market    
during the past 10 years has been accompanied by substantial changes in the     
nature of product distribution and sales. The decentralization of computers     
throughout factory, business, engineering and office environments has made it   
increasingly difficult and expensive for many suppliers to use traditional      
direct sales methods to locate users, initiate sales contacts and effectively   
provide service to customers. Average order values also tend to be smaller      
than in the past, reflecting individual requirements rather than the greater    
needs traditionally associated with centralized data processing departments.    
These changes in the structure of the computer related products market have     
placed traditional distributors with direct sales forces at a competitive       
disadvantage due to their cost structures and established selling methods. As   
a result, direct marketers have been able to increase sales to the larger       
businesses that have traditionally been served by contract stationers as well   
as capturing sales volume and market share from the numerous, small retail      
computer stores. The Company believes that the relative inability of the        
traditional distribution channels to respond to changing industry dynamics      
together with the key customer purchase criteria of selection, price and        
service has created an opportunity for the growth of direct marketing           
organizations such as Global. In addition, the growing number of non-technical  
users has increased the need for a knowledgeable source for quality products.   
Global addresses these needs through its direct-response marketing strategy,    
broad product offering, same day shipping and a commitment to customer service  
and support.                                                                    

In Europe, the Company's major competitors are regional or            
country-specific retail and direct-mail distribution companies. The Company's   
presence in five major European countries provides Global with the flexibility  
to purchase large volumes centrally from its European headquarters in the       
United Kingdom or locally at each branch. In addition, the commonality of       
certain core pages of the European catalogs provides for economies in catalog   
production. The Company believes that these factors allow it to take advantage  
of cost savings not available to many of its competitors in Europe.             

Office Products                                                       

The distribution of office products in the United States is highly    
fragmented, with no one participant having more than a 10% market share.        
Sourcing of products from vendors and distributors also has been through a      
highly-fragmented supplier base without volume discounts or central purchasing  
efficiencies. Office products are typically sold through one of three           
channels: retail outlets, contract stationers and direct mail. However, due to  
the rapid growth of the office products market, competition and consolidation   
in this market are increasing, particularly with respect to the SOHO and large  
corporate (companies with over 1,000 employees) segments. Large contract        
stationers, direct mail distributors and office products superstores have       
grown at the expense of small independent retail dealers. The companies         
leading this consolidation have not, however, captured a large market position  
with the mid-sized facilities which the Company targets. The Company believes   
that this lack of penetration results from the fact that office products        
superstores and direct mail marketers have focused on serving the SOHO segment  
while contract stationers have focused on serving the large corporate sector.   
The Company believes that direct mail will continue to be a growing channel of  
distribution for office products and that price, breadth of product line and    
customer service will be key factors in the success of direct mail              
distribution of office products.                                                

Industrial Products                                                   

The market for the sale of industrial products in the United States is
highly fragmented and is characterized by multiple distribution channels such   
as retail outlets, small dealerships, direct mail distribution and large        
warehouse stores. Global also faces competition from manufacturers' own sales   
representatives who sell industrial equipment directly to customers, and from   
regional or local distributors. Many high volume purchasers, however, utilize   
catalog distributors as their first source of product specifications. In the    
industrial products market, customer purchasing decisions are, primarily,       
based on price, product selection, product availability, level of service and   
convenience. As in the office products industry, the Company believes that      
direct mail is one of the most effective and convenient distribution methods    
to reach mid-sized facilities which place many small orders and require a wide  
selection of products. In addition, because the industrial product market is    
highly fragmented and generally less brand-oriented, it is well-suited to       
private label products. The majority of the Company's industrial products are   
high gross profit margin, private label products.                               

Competition in the United Kingdom is similar to competition in the U.S. 
with the exception that most direct mail companies in the United Kingdom drop   
ship the majority of their products from the manufacturer resulting in long     
delivery lead times. As Global intends to stock the majority of its products,   
management believes it will have a significant advantage over most of its       
direct mail competitors in the United Kingdom.                                  

Employees                                                                       

   As of December 31, 1996, the Company employed a total of 2,166 employees,
geincluding 1,957 full-time and 209 part-time employees, of whom 1,613 were     
in North America and 553 were in Europe.                                        

  None of the Company's North American employees is represented by a labor
union, except for approximately 80 warehouse and assembly employees at the      
Port Washington distribution center who are covered by an "open-shop"           
agreement with the Company, which expires at the end of 1998. The Port          
Washington employees are not required to join the union. In Europe, union       
membership and affiliations vary by country. In general, the European unions    
tend to be national, rather than local, in scope and industry specific.         

   The Company considers its relationships with employees to be good and has
experienced no work stoppages since 1976.                                       

Environmental Matters                                                           

Under various Federal, state and local environmental laws and         
regulations, a current or previous owner or operator (including the lessee) of  
real property may become liable for the costs of removal or remediation of      
hazardous substances at such real property. Such laws and regulations often     
impose liability without regard to fault. The Company leases all of its U.S.    
facilities. In connection with such leases, the Company could be held liable    
for the costs of removal or remedial actions with respect to hazardous          
substances. Although the Company has not been notified of, and is not           
otherwise aware of, any material environmental liability, claim or              
non-compliance, there can be no assurance that the Company will not be          
required to incur remediation or other costs in connection with environmental   
matters in the future.                                                          

Financial Information About Foreign and Domestic Operations                     

See "Geographic Information" contained in Footnote 10 to the financial          
statements.                                                                     

Item 2. Properties.                                                             

   The Company's primary facilities, which are leased except where otherwise
indicated, are as follows:                                                      
                                                                     Expira-
                                                                    tion
                                                       Approx       of
     Facility                         Location           Sq. Ft.     Lease
     --------                         --------           -------    ------
Headquarters, Sales and                                                         
Distribution Center, Catalog                                                
Operations(1)......................Port Washington, NY    178,000      2007 
Sales and Distribution Center(1).....Suwanee, GA            110,000      1999   
Sales and Distribution Center(1).....Compton, CA             60,000      1998   
Sales and Distribution Center........Naperville, IL         241,000      2010   
Sales and Distribution Center........Holmdel, NJ             51,000      1999   
Sales and Distribution Center........Markham, Ontario        45,000      2005   
Sales and Distribution Center........Verrieres le Buisson                       
                                  France                  19,500      2000
Sales and Distribution Center........Dreieich, Germany       55,000      2000   
Sales and Distribution Center........Madrid, Spain           35,000  2 months   
                                                                    notice
Sales and Distribution Center........Milan, Italy            44,600      1999   
Sales and Distribution Center........Greenock, Scotland      78,000     owned   
Sales and Distribution Center........Wellingborough,                            
                                    England               38,000      2013
Sales Center and Catalog Operations..Miami, FL               32,000      2000   
Sales Center.........................Raleigh-Durham, NC      12,000      1998   
___________                                                                     
(1) Facility leased from related party. See "Certain Relationships and Related  
Transactions--Agreements--Leases and Related Guarantees."               

The Company believes that its facilities are adequate for its current 
needs and that suitable additional space would be available as needed.          

Item 3. Legal Proceedings.                                                      

There are no material legal proceedings pending against the Company.  

Item 4. Submission of Matters to a Vote of Security Holders.                    

During the quarter ended December 31, 1996, there were no matters     
submitted to a vote of the Company's security holders.                          

PART II                                                                         

Item 5. Market for the Company's Common Equity and Related Stockholder          
Matters.                                                        

   The Company's Common Stock has been traded on the New York Stock Exchange
under the symbol "GML" since its initial public offering on June 26, 1995 (the  
"IPO"). The following table sets forth the high and low sales price of the      
Company's Common Stock as reported on the New York Stock Exchange for the       
periods indicated.                                                              

1995                                                     High          Low      
----                                                     ----          ---      

Second quarter (from June 27, 1995)................     $20 1/4      $19        
Third quarter......................................      28 7/8       19 1/4    
Fourth quarter.....................................      30 3/8       23 1/4    

1996                                                                            
----                                                                            

First quarter......................................      35           24 1/4    
Second quarter.....................................      47           32 1/8    
Third quarter......................................      47 1/4       36 1/4    
Fourth quarter.....................................      52 1/4       39 1/4    

 On March 25, 1997, the last reported sale price of the Company's Common
Stock on the New York Stock Exchange was $19 (7/8)  per share. As of March 25,  
1997, the Company had 258 stockholders of record.                               

   The Company has not paid any dividends since the IPO and anticipates that
all of its income in the foreseeable future will be retained for the            
development and expansion of its business, and therefore does not anticipate    
paying dividends on its Common Stock in the foreseeable future. See "Certain    
Relationships and Related Transactions" for a description of the Company's      
historical distributions.                                                       

Item 6. Selected Financial Data.                                                

The following selected financial information is qualified by reference
to, and should be read in conjunction with, the Company's Consolidated          
Financial Statements and the notes thereto, and "Management's Discussion and    
Analysis of Financial Condition and Results of Operations" contained elsewhere  
in this report. The selected income statement data for the years ended          
December 31, 1994, 1995 and 1996 and the selected balance sheet data as of      
December 31, 1995 and 1996 is derived from the audited consolidated financial   
statements which are included elsewhere herein. The selected balance sheet      
data as of December 31, 1992, 1993, and 1994 and the selected income statement  
data for the years ended December 31, 1992 and 1993 are derived from the        
audited financial statements of the Predecessor Companies which are not         
included herein.                                                                

                                     Year Ended December 31,
                                 ___________________________________________
                                  1992   1993(1)    1994     1995     1996
                                 -------  -------   ------   ------   ------

                                 (in millions, except per share data, number
                                  of catalog titles and number of countries)
Income Statement Data:                                                          
Net sales......................  $ 238.8  $ 393.6  $ 484.2  $ 634.5  $ 911.9
Cost of sales...................   147.0    244.5    318.5    437.2    662.3
                                 -------  -------  -------  -------  -------
Gross profit....................    91.8    149.1    165.7    197.3    249.6
Selling, general and                                                        
   administrative expenses......    70.6    119.0    129.2    143.0    180.1
                                 -------  -------  -------  -------  -------
Income from operations.........     21.2     30.1     36.5     54.3     69.5
Interest income................      0.2      1.1      1.1      1.2      2.5
Interest expense...............      1.5      2.1      1.8      2.4       .5
Income taxes(2)................      0.0      0.7      0.9     12.7     27.7
Officer compensation(3)........     14.9     16.8     18.1      4.7      0.0
Net income.....................      5.1     11.2     17.1     35.7     43.7
Net income per share ..........                                       $ 1.15
Common and common equivalent                                                
  shares outstanding...........                                         38.1
Selected Operating Data:                                                        
Active customers(4)............      0.5      0.9      1.1      1.7      1.7
Orders entered.................      1.0      1.9      2.2      2.5      3.4
Number of catalogs distributed.      71       98       114      122      160
Number of catalog titles.......      11       18        24       32       40
Number of countries                                                         
  receiving catalogs...........       7        7         7       10       12

                                               (Footnotes on following page)

                                     Year Ended December 31,
                                 ___________________________________________
                                  1992   1993(1)    1994     1995     1996
                                 -------  -------   ------   ------   ------
                                   (in millions)
Balance Sheet Data                                                              
(at period end):                                                            
 Working capital(5)......        $ 62.8   $ 65.8    $ 84.6   $ 99.1   $128.7
 Total assets............         114.5    127.1     164.2    247.5    331.4
 Short-term debt.........           5.0      4.8      19.2      5.4      0.5
Long-term debt, excluding                                                 
   current portion.......          23.8     13.9      11.5      2.9      2.0
 Stockholders' equity....          42.4     58.1      69.1    154.0    228.6
___________                                                                     

(1)  In December 1992, the Company acquired a computer related                  
products catalog business located in North America and Europe         
operating under the Misco brand name.  This business contributed      
$107.6 million in net sales in 1993.                                  

(2)  From 1992 through the closing of the IPO, the Predecessor Companies        
operated as a series of corporations with related ownership, most of  
which elected to be treated as S Corporations and therefore were      
subject to minimal federal and state income taxes.                    

(3)  Following the IPO, the aggregate amount of salary paid to each of the      
Company's three senior executive officers was reduced to $300,000     
per year and included in selling, general and administrative expenses.
Prior to the IPO, distributions to officers/shareholders were made    
primarily to satisfy their tax liabilities resulting from the S       
Corporation status of certain of the Predecessor Companies.  Officer  
compensation for 1995 was based on distributions made to such officers
of $4.7 million through the closing of the IPO and $0.5 million for   
the period after the closing of the IPO (which represents an annual   
rate of $0.9 million for such period).                                

(4)  An "active customer" is defined as a customer who has purchased from     
the Company within the preceding 12 months.                         

(5)   Working capital excludes cash and cash equivalents and short term debt.   

Item 7.  Management's Discussion and Analysis of Financial Condition and        
Results of Operations.                                        

General                                                                         

Global is a direct marketer of brand name and private label computer
related products, office products and industrial products in North America and  
Europe. The Company emphasizes a broad selection of in-stock products,          
frequent mailings of a variety of distinctively branded, full color catalogs,   
extensive customer service and prompt, complete order fulfillment. Global has   
grown rapidly as a result of internal growth and strategic acquisitions with    
net sales increasing from $238.8 million in 1992 to $911.9 million in 1996.     

Global was started over 45 years ago and existed as a direct sales    
organization prior to entering the direct mail business in 1972 with an         
industrial products catalog published under the Global name. Since then, the    
Company has added 39 catalog titles to its portfolio, the majority of which     
are specifically targeted at mid-sized facilities (20 to 1,000 employees). As   
a "corporate supplier" offering a broad spectrum of business products           
principally to mid-sized facilities, the Company has consistently emphasized    
serving the needs of its customers rather than selling particular products.     
This strategy has resulted in a product offering which has expanded over time   
to include computer related products and a selection of office products.        

   In June 1990, the Company made a strategic entry into the European market
with the purchase of Heathrow Computer Supplies, a direct marketing company in  
the United Kingdom. In October 1991, the Company expanded its sales of          
computer related products to France and in December 1992, the Company acquired  
Misco, a computer related products catalog business located in North America    
and Europe operating under the Misco brand name. The Misco acquisition          
provided the Company with new bases of operations in the United Kingdom and     
United States and further expanded its international operations into Germany,   
Italy, Spain and Canada. The Company's European operations represented 26% of   
net sales in 1996, substantially all of which were attributable to the sale of  
computer related products. The Company does not hedge any of its sales          
denominated in foreign currencies.                                              

   Prior to its acquisition by the Company in December 1992, Misco was owned
and operated by a substantially larger multinational corporation and had an     
established and respected brand name but had experienced substantial losses     
from operations. Following the acquisition, the Company promptly implemented a  
number of strategic initiatives designed to convert Misco to the Global         
business model including (i) redesigning Misco catalogs to increase the         
overall breadth and depth of the product offerings, (ii) repositioning Misco's  
products at lower price points in order to increase sales, (iii) reducing       
overhead expenses and (iv) applying the Company's distribution and marketing    
expertise.                                                                      

In November 1995, the Company acquired Tiger Direct, a company engaged  
primarily in the direct marketing of personal computer software and peripheral  
hardware products, in exchange for 148,240 shares of Global Common Stock and    
$1.1 million in cash. At the time of acquisition, Tiger had a mailing list of   
almost 3.5 million names, including approximately 400,000 active customers.     
Since the acquisition, the Company has implemented several measures designed    
to improve Tiger's operations, including the elimination of unprofitable        
catalogs and reducing overhead expenses. See Note 3 to the Consolidated         
Financial Statements.                                                           

Impact of Expansion into Brand Name Products                          

 Historically the Company focused primarily on non-brand name or private
label products. Although the Company has continued to experience strong growth  
in its private label products, in recent years the Company made the strategic   
decision to leverage its distribution and marketing strengths into the market   
for higher volume brand name products which the Company believes offer          
significant opportunities to increase sales. In particular, in 1993 the         
Company expanded its offerings of brand name computer related products.         
Although brand name computer related products typically have lower gross        
profit margins than many of the Company's other products, the majority of such  
decrease has been offset by vendor supported advertising and increased          
efficiencies from (i) larger average order values and (ii) increased response   
rates for the Company's catalogs.                                               

Geographic Segments                                                   

The Company operates in two geographic segments, North America and    
Europe.  (See Footnote 10 to the financial statements)  Sales and income from   
operations in North America grew from 1992 through 1996 at compound             
annual growth rates of 32% and 34% respectively.                                

 The Company's growth in sales and income from operations in Europe grew
rapidly since its entry into Europe in 1990 through 1995. Sales and income      
from operations from 1992 through 1995 grew at compound annual growth rates of  
32% and 115% respectively. In 1996 sales in Europe increased by 24% and income  
from operations decreased by 48%.  At the end of 1996 the Company had           
operations in  five European countries (United Kingdom, France, Germany, Italy  
and Spain) and sold cross border into an additional five countries (Austria,    
Switzerland, Belgium, Portugal and Ireland).  Sales growth was affected by the  
weak economies in those countries, particularly Germany and Italy. Income from  
operations was impacted by the expenses associated with the first quarter       
launching of four new catalogs into those "cross border" countries in which     
the Company did not have an existing customer base.                             

Termination of S Corporation Status                                   

Immediately prior to the consummation of the IPO, Global became a     
successor to the Predecessor Companies. The Predecessor Companies operated as   
a series of corporations with related ownership, most of which elected to be    
treated as S Corporations under Subchapter S of the Internal Revenue Code and   
therefore were subject to minimal Federal and state income taxes. In            
connection with the consummation of the IPO, the stockholders of the            
Predecessor Companies exchanged all of the outstanding capital stock of the     
Predecessor Companies for 28,400,000 shares of Global Common Stock (the         
"Formation"). Upon the Formation, the Company terminated the S Corporation      
elections of the Predecessor Companies and accordingly became subject to        
Federal income taxes on its total earnings. See Note 2 to the Consolidated      
Financial Statements.                                                           

Results of Operations                                                           

The following table represents the Company's statement of income data 
expressed as a percentage of net sales for the three most recent fiscal years:  

                                      Year Ended
                                        December 31,
                                     -----------------------------
                                     1994         1995      1996
                                     ------       ------    ------
                                       (dollars in millions)

Net sales................................   $484.2       $634.5    $ 911.9      
Net sales................................    100.0%       100.0%     100.0%     
Gross profit.............................     34.2         31.1       27.4      
Selling, general and administrative                                             
expenses......                              26.7         22.5       19.8    
Income from operations...................      7.5          8.6        7.6      
Interest income..........................      0.2          0.2        0.3      
Interest expense.........................      0.4          0.4        0.1      
Income taxes.............................      0.2          2.0        3.0      
Officer compensation.....................      3.7          0.7        0.0      
Net income...............................      3.5          5.6        4.8      

Year Ended December 31, 1996 Compared to Year Ended December 31, 1995           

  Net sales increased by $277.4 million or 43.7% to $911.9 million in 1996
from $634.5 million in 1995. The increase was attributable to (i)  internal     
growth fueled by an increase in the number of catalogs mailed (including 8      
new catalog titles), an increase in revenue from the Company's outbound         
telemarketing program and an increased average order value resulting from       
increased offerings and sales of brand name products and (ii) the inclusion of  
a full year of sales from Tiger Direct verses one month in 1995.  Sales         
attributable to the Company's North American operations increased 52.1% to      
$677.8 million in 1996 from $445.7 in 1995 as compared with a 24.0% increase    
in European sales to $234.1 million in 1996 from $188.8 million in 1995.        

Gross profit, which consists of net sales less product and certain    
shipping and distribution center costs, increased by $52.3 million or 26.5% to  
$249.6 million in 1996 from $197.3 million in 1995. Gross profit margin         
decreased to 27.4% in 1996 from 31.1% in 1995. The decrease in gross profit     
margin was due in part to the inclusion of a full year of sales from Tiger      
Direct whose product mix has a lower gross profit margin, and the Company's     
strategic decision to increase the proportion of net sales attributable to      
brand name products, particularly computer related products and hardware which  
typically have lower gross profit margins than many of the Company's other      
products.                                                                       

A significant portion of this decline in gross profit margin has been 
offset by the continued decline in selling, general and administrative          
expenses as a percentage of net sales. While selling, general and               
administrative expenses increased by $37.1 million or 25.9% to $180.1 million   
in 1996 from $143.0 million in 1995, as a percentage of net sales they          
decreased to 19.8% in 1996 from 22.5% in 1995.  The decrease as a percentage    
of net sales was primarily attributable to reduced catalog costs in North       
America as a result of the increased efficiencies described above under         
"--Impact of Expansion into Brand Name Products", vendor supported              
advertising, continued expense control and the leveraging of selling, general   
and administrative expenses over a larger sales base. As a result of expenses   
associated with the Company's launching of four new cross border catalogs in    
the first quarter in Europe, selling, general and administrative expenses as a  
percentage of net sales for Europe did not decrease significantly. These        
European cross border catalogs were mailed into countries where the Company     
did not have an existing customer base and accordingly yielded lower catalog    
response rates than the Company's other catalogs.                               

Income from operations increased by $15.2 million or 28.0% to $69.5   
million in 1996 from $54.3 million in 1995.  Income from operations as a        
percentage of net sales decreased to 7.6% from 8.6% in 1995 as a result of a    
$4.6 million decrease in operating profits for Europe and the inclusion of a    
full year of Tiger which had a lower operating profit margin than the rest of   
North America.                                                                  

  Interest income increased $1.3 million to $2.5 million in 1996 from $1.2
million in 1995 primarily due to investment in short-term securities.           

Interest expense decreased $1.9 million to $0.5 million in 1996 from  
$2.4 million in 1995 primarily as a result of the repayments of                 
officers/shareholders' notes issued during 1995.                                

  Net income increased $8.0 million or 22.4% to $43.7 million in 1996 as a
result of the increase in income from operations described above and a $4.7     
million decrease in Officer Compensation and an increase of $15.0 million in    
income taxes as described in "--Termination of S Corporation Status".  Net      
income increased $10.6 million or 32.0% compared to 1995 pro forma net income   
of $33.1 million, as described below.                                           

Year Ended December 31, 1995 Compared to Year Ended December 31, 1994           

  Net sales increased by $150.3 million or 31.0% to $634.5 million in 1995
from $484.2 million in 1994. The increase was attributable to a 7.3% increase   
in the number of catalogs mailed (including 8 new catalog titles), an increase  
in revenue from the Company's outbound telemarketing program, a 7.2% increase   
in catalog response rates and a 13.6% increase in average order value. The      
Company attributes the increase in catalog response rates (calculated as the    
number of orders entered during a period divided by the number of catalogs      
distributed during such period) and the increase in the average order value     
primarily to increased offerings and sales of brand name products. Sales        
attributable to the Company's North American operations increased 25.6% to      
$445.7 million in 1995 from $354.8 in 1994 as compared with a 45.9% increase    
in European sales to $188.8 million in 1995 from $129.4 million in 1994.        

Gross profit, which consists of net sales less product and certain  
shipping and distribution center costs, increased by $31.6 million or 19.0% to  
$197.3 million in 1995 from $165.7 million in 1994. Gross profit margin         
decreased to 31.1% in 1995 from 34.2% in 1994. The decrease in gross profit     
margin was primarily due to an increase in the proportion of net sales          
attributable to brand name products, particularly computer related products,    
which typically have lower gross profit margins than many of the Company's      
other products. The majority of this decline, however, was offset by the        
increased efficiencies discussed above under "--Impact of Expansion into Brand  
Name Products" and vendor supported advertising.                                

 Selling, general and administrative expenses increased by $13.8 million
or 10.7% to $143.0 million in 1995 from $129.2 million in 1994. Selling,        
general and administrative expenses decreased as a percentage of net sales,     
however, to 22.5% in 1995 from 26.7% in 1994. The decrease as a percentage of   
net sales was primarily attributable to reduced catalog costs as a result of    
the increased efficiencies described above under "--Impact of Expansion into    
Brand Name Products," vendor supported advertising, continued expense control   
and the leveraging of selling, general and administrative expenses over a       
larger sales base.                                                              

Prior to the closing of the IPO on June 29, 1995, selling, general and
administrative expenses excluded officer compensation paid to the Company's     
three principal stockholders who also serve as the Company's three principal    
executive officers. Effective upon the closing of the IPO, each of such         
officers was paid a base salary of $300,000 per year and is not eligible for    
any increase in salary, any discretionary bonus or any stock options for the    
two year period following the closing of the IPO. All compensation paid to      
such officers after the closing of the IPO was included in selling, general     
and administrative expenses.  The increase in selling, general and              
administrative expenses attributable to such salaries was partially offset,     
however, by (i) the termination in connection with the IPO of a $500,000        
per year consulting agreement entered into in 1992 with a stockholder and       
(ii) the assignment to the Company in connection with the IPO of certain        
patents subject to a royalty agreement with the Company's three senior          
executive officers and principal stockholders pursuant to which the Company     
recorded $85,000 in royalty expenses during 1995.  After giving effect to       
such adjustments, pro forma selling, general and administrative expenses        
would have been $143.2 million or 22.6% of net sales in 1995.                   

Income from operations increased by $17.7 million or 48.6% to $54.3   
million in 1995 from $36.5 million in 1994. Income from operations as a         
percentage of net sales increased from 7.5% to 8.6% for the reasons discussed   
above. Income from operations on a pro forma basis as described above would     
have been $54.1 million or 8.5% of net sales in 1995.                           

Interest income increased to $1.2 million in 1995 from $1.1 million in
1994 primarily due to investment in short-term securities.                      

 Interest expense increased to $2.4 million in 1995 from $1.8 million in
1994 primarily as a result of the interest paid on officers/shareholders'       
notes issued during 1995.                                                       

Net income increased $18.6 million or 108.5% to $35.7 million in 1995 
principally as a result of the increase in income from operations described     
above. Net income on a pro forma basis as described above would have been       
$33.1 million. The decrease in pro forma net income compared to historical net  
income primarily reflects the imposition of a higher provision for income       
taxes resulting from the termination of the S Corporation status of certain     
Predecessor Companies in connection with the IPO.  See "--Termination of S      
Corporation Status."                                                            

Seasonality                                                                     

 The operations of the Company are somewhat seasonal. In particular, net
sales have historically been modestly weaker during the second and third        
quarter as a result of lower business activity during the summer months. The    
following table sets forth net sales, gross profit and income from operations   
for each of the quarters since January 1, 1994.                                 

                    Three Months Ended
                     -----------------------------------------------------
                     March 31,     June 30,    September 30,  December 31,
                   1994          1994          1994           1994
                     --------      --------    -------------  ------------
                     (dollars in millions)

Net sales................ $114.2       $114.3       $120.7          $135.0      
Gross profit.............   40.4         39.8         41.2            44.3      
Income from operations...   10.3          7.9          9.4             8.9      

                    Three Months Ended
                     -----------------------------------------------------
                     March 31,     June 30,    September 30,  December 31,
                   1995          1995          1995           1995
                     --------      --------    -------------  ------------

Net sales................ $160.7       $149.4       $153.0          $171.4      
Gross profit.............   50.9         45.6         47.5            53.3      
Income from operations...   14.7         12.1         12.8            14.7      

                    Three Months Ended
                     -----------------------------------------------------
                     March 31,     June 30,    September 30,  December 31,
                   1996          1996          1996           1996
                     --------      --------    -------------  ------------

Net sales................ $218.7       $213.7       $225.9          $253.6      
Gross profit.............   65.0         60.1         60.3            64.2      
Income from operations...   18.3         15.5         16.8            18.9      

Liquidity and Capital Resources                                                 

The Company's primary capital needs have been to fund (i) the working 
capital requirements necessitated by its sales growth, (ii) acquisitions and    
(iii) prior to the IPO, distributions to its existing stockholders primarily    
to satisfy their tax liabilities resulting from the S Corporation status of     
certain of the Predecessor Companies. The Company's primary sources of          
financing have been cash from operations and to a lesser extent, bank           
borrowings and loans from affiliates. The Company believes that its cash flows  
from operations and available lines of credit will be adequate to support its   
current operations.                                                             

   Net cash provided by operating activities was $5.7 million, $11.0 million
and $19.6 million in 1994, 1995 and 1996, respectively.  The increase from      
1994 to 1995 was primarily due to increased working capital as a result of      
increased sales. The increase from 1995 to 1996 was due to increased working    
capital as a result of increased sales, improved management of inventory and    
accounts receivable  and reduced levels of unprinted catalog paper in response  
to stabilizing paper prices.                                                    

Net cash used in investing activities in 1994 of $5.5 million was a   
result of additional capital expenditures of $5.4 million for the acquisition   
of a distribution center in Scotland, computer equipment and additional         
furniture and fixtures to accommodate increased staff levels.                   

Net cash used in investing activities in 1995 of $11.7 million was      
primarily as a result of the acquisition of Tiger, property and equipment       
purchases and the repayment of amounts due to affiliates. Net cash used in      
investing activities in 1996 of $39.8 million was the result of the             
investment of surplus cash and the acquisition of computer equipment and        
additional furniture and fixtures at the new Naperville, Illinois facility to   
accommodate increased staff levels.                                             

Net cash provided by (used in) financing activities was ($1.4) million, 
$20.2 million and $27.0 in 1994, 1995 and 1996, respectively.  The use of       
funds in 1994 was primarily due to additional bank borrowings to fund           
stockholder loans to pay taxes.                                                 

   The source of funds in 1995 was due mainly to the net proceeds of the IPO
net of the repayment of officers' notes payable and repayment of bank debt.     
For 1996 net cash provided by financing activities resulted from the net        
proceeds from the sale and issuance of 1,000,000 shares of common stock by the  
Company on March 26, 1996, the repayment of long term bank debt in Europe, the  
settlement of long term capital leases assumed and the write down of the        
goodwill resulting from the acquisition of Tiger Direct.                        

The Company maintains unsecured lines of credit with various financial
institutions under which the maximum aggregate amount available is $52.0        
million. As of December 31, 1996, the Company had no outstanding borrowings     
under the lines of credit. The lines of credit bear interest at either the      
prime rate, LIBOR, plus 0.63% or at the bank's base rate and expire on various  
dates through December 1997.  In addition, the Company may have outstanding     
letters of credit equal to an amount of the total line less outstanding         
borrowings.   At December 31, 1996 there were no outstanding letters of         
credit.                                                                         

The Company also maintains a secured line of credit with a bank with a  
maximum amount available of Pound Sterling1,000,000.  Borrowings, of which      
there were none as of December 31, 1996, bear interest at the bank's base rate  
(6 % at December 31, 1996) plus 2% and are secured by substantially all of the  
assets of the Global's United Kingdom subsidiaries.  This line expires in       
December 1997 and is renewable at Global's option.                              

The Company anticipates capital expenditures in 1997 of approximately 
$15 million, which the Company expects to fund out of cash from operations and  
existing cash and cash equivalents . These capital expenditures are primarily   
for (i) the relocation and expansion of the Company's sales and distribution    
centers and (ii) the purchase of computers and other fixed assets.              

Recent Pronouncements of the Financial Accounting Standards Board               

Recent pronouncements of the Financial Accounting Standards Board     
("FASB") include Statement of Financial Accounting Standards ("SFAS") No. 123,  
"Accounting for Stock-Based Compensation" ("SFAS 123") and SFAS No. 121,        
"Accounting for Impairment of Long-Lived Assets and for Long-Lived Assets to    
be Disposed Of" ("SFAS 121"),  which are effective for the fiscal year ended    
December 31, 1996. The adoption of SFAS 123 and SFAS 121 did not have a         
material impact on the Company's consolidated financial position or results of  
operations.                                                                     

Forward Looking Statements                                                      

  The Company has made in this report, and from time to time may otherwise
make, forward looking statements concerning the Company's operations, economic  
performance and financial condition.  Such forward looking statements are       
subject to various risks and uncertainties.  Actual results could differ        
materially from those currently anticipated due to a number of factors,         
including but not limited to (i) the Company's ability to manage rapid growth   
as a result of internal expansion and strategic acquisitions, (ii) the effect   
on the Company of volatility in the price of paper and periodic increases in    
postage rates, (iii) the operation of the Company's management information      
systems, (iv) the general risks attendant to the conduct of business in         
foreign countries, including currency fluctuations associated with sales not    
denominated in United States dollars (v) significant changes in the computer    
products retail industry, especially relating to the distribution and sale of   
such products, (vi) competition in the computer related products, office        
products and industrial products markets from superstores, direct marketers,    
the Internet and other retailers, (vii) the potential for expanded              
imposition of state sales taxes or use taxes, or other taxes on mail order      
companies, (viii) the continuation of key vendor relationships including        
the ability to continue to receive vendor supported advertising, (ix)           
timely availability of existing and new products, and (x) risks due to          
shifts in market demand and/or price erosion of owned inventory.                

Item 8. Financial Statements and Supplementary Data.                            

 The information required by Item 8 of Part II is incorporated herein by
reference to the Consolidated Financial Statements filed with this report; see  
Item 14 of Part IV.                                                             

Item 9. Changes In and Disagreements with Accountants on Accounting and         
Financial Disclosure.                                                           

None.                                                                 

PART III  

Item 10. Directors and Executive Officers of the Registrant.                    

   The information required by Item 10 of Part III is hereby incorporated by
reference from the Company's Proxy Statement for the 1997 Annual Meeting of     
Stockholders (the "Proxy Statement").                                           

Item 11. Executive Compensation.                                                

   The information required by Item 11 of Part III is hereby incorporated by
reference from the Company's Proxy Statement.                                   

Item 12. Security Ownership of Certain Beneficial Owners and Management.        

   The information required by Item 12 of Part III is hereby incorporated by
reference from the Company's Proxy Statement.                                   

Item 13. Certain Relationships and Related Transactions.                        

   The information required by Item 13 of Part III is hereby incorporated by
reference from the Company's Proxy Statement.                                   

PART IV 

Item 14. Exhibits, Financial Statements, Schedules and Reports on Form 8-K.     

(a) 1. The Consolidated Financial Statements of Global DirectMail Corp      
(see index to financial statements at F-1).                                     

2.  Financial Statement Schedules:                                  

        Schedules not included with this additional financial data have been
omitted because they are not applicable or the required     
    information is shown in the Consolidated Financial Statements or
Notes thereto.                                              

3.  Exhibits.                                                       

EXHIBIT INDEX 
Exhibit                                                                         
No.                             Description                                 
_______   ____________________________________________________________________  

3.1      Certificate of Incorporation of Registrant*                          

3.2      By-laws of Registrant*                                               

4.1      Stockholders Agreement**                                             

4.2      Specimen Stock Certificate of Registrant*                            

10.1      Form of 1995 Stock Option Plan***                                     

10.2      Exchange Agreement dated as of May 8, 1995 between certain            
stockholders of the Predecessor Companies and the Company*  

10.3      Lease Agreement dated October 14, 1992 between the Company            
and 2 RB Associates Co. (Port Washington facility)*         

10.4      Lease Agreement dated September 20, 1988 between the                  
    Company and Addwin Realty Associates (Port Washington facility)*

10.5      Lease Agreement dated May 25, 1989 between the Company and            
Addwin Realty Associates (Suwanee facility)*                

10.6      Lease Agreements dated February 1, 1988 between the Company           
and Addwin Realty Associates (Addison facility)*            

10.7      Lease Agreements dated November 1, 1993 between the Company           
and Delcomp Realty Company (Compton facility)*              

10.8      Build-to-Suit Lease Agreement dated April, 1995 among the Company,    
  American National Bank and Trust Company of Chicago and Walsh,
Higgins & Company (Naperville facility)*                    

10.9      Rent Guaranty dated as of October 14, 1992 by the Company             
to the Bank of New York*                                    

10.10     Royalty Agreement dated June 30, 1986 between the Company and Richard 
Leeds, Bruce Leeds and Robert Leeds, and Addendum thereto*  

10.11     Consulting Agreement dated as of December 22, 1992 between            
the Company and Paul Leeds*                                 

10.12     Form of 1995 Stock Plan for Non-Employee Directors***                 

10.13     Consulting Agreement dated as of January 1, 1996 between              
the Company and Gilbert Rothenberg***                       

21.1      Subsidiaries of the Registrant***                                     

23.1      Consent of Independent Public Accountants                             

23.2      Consent of Independent Public Accountants                             

27        Financial Data Schedule                                               
__________                                                                      

* Incorporated herein by reference to the Company's                         
registration statement on Form S-1 (Registration No. 33-92052).         

** Incorporated herein by reference to the Company's quarterly report on Form 
10-Q for the quarterly period ended September 30, 1995.                 

*** Incorporated herein by reference to the Company's                           
registration statement on Form S-1 (Registration No. 333-1852).         

(b) Reports on Form 8-K.                                                        

No reports on Form 8-K have been filed during the quarterly period ended
December 31, 1996.                                                              

SIGNATURES  

Pursuant to the requirements of Section 13 or 15(d) 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 in the City of New  
York, State of New York, on the 28th day of March, 1997.                        

                GLOBAL DIRECTMAIL CORP

                 By:  /s/ RICHARD  LEEDS
                                       .....................................
                         Richard Leeds
                                      Chairman and Chief Executive Officer

   Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed below by the following persons on behalf of the          
Registrant and in the capacities and on the dates indicated.                    

Signature            Title                                        Date    
---------            -----                                        ----    

/s/ RICHARD LEEDS         Chairman and Chief Executive Officer  March 28, 1997  
---------------------     Principal Executive Officer)                          
Richard Leeds                                                           

/s/ BRUCE LEEDS           Vice Chairman and President of        March 28, 1997  
---------------------     International Operations                              
Bruce Leeds                                                             

/s/ ROBERT LEEDS          Vice Chairman and President of        March 28, 1997  
----------------------    Domestic Operations                                   
Robert Leeds                                                            

/s/ ROBERT DOOLEY         Director and Senior Vice President--  March 28, 1997  
----------------------    Worldwide Computer Sales and                          
Robert Dooley         Marketing                                         

/s/ KENNETH J. HALL       Chief Financial Officer               March 28, 1997  
----------------------    (Principal Financial Officer)                         
Kenneth J. Hall                                                         

/s/ HOWARD KOHOS          Corporate Controller                  March 28, 1997  
----------------------    (Principal Accounting Officer)                        
Howard Kohos                                                            

/s/ ROBERT D. ROSENTHAL   Director                              March 28, 1997  
-----------------------                                                         
Robert D. Rosenthal                                                     

/s/ STACY DICK            Director                              March 28, 1997  
-----------------------                                                         
Stacy Dick                                                              

GLOBAL DIRECTMAIL CORP  
INDEX TO FINANCIAL STATEMENTS 

                                                                    Page
Global DirectMail Corp                                                  ----    

Independent Auditors' Report..............................................F-2   

Consolidated Balance Sheets--                                                   
December 31, 1995 and 1996.............................................F-3

Statements of Consolidated Income--                                             
Years ended December 31, 1994, 1995 and 1996...........................F-4

Statements of Consolidated Shareholders' Equity--                               
Years ended December 31, 1994, 1995 and 1996...........................F-5

Statements of Consolidated Cash Flows--                                         
Years ended December 31, 1994, 1995 and 1996...........................F-6

Notes to Consolidated Financial Statements.................. F-7 through F-17   

INDEPENDENT AUDITORS' REPORT  

The Shareholders and Board of Directors of                                      
THE GLOBAL DIRECTMAIL CORP:                                                 

We have audited the accompanying consolidated balance sheets of Global          
DirectMail Corp, the successor corporation to the Global Group of Companies     
(collectively, the "Company"), as of December 31, 1995 and 1996 and the         
related consolidated statements of income, shareholders' equity and cash flows  
for each of the three years in the period ended December 31, 1996. These        
financial statements are the responsibility of the Company's management. Our    
responsibility is to express an opinion on these financial statements based on  
our audits.                                                                     

We conducted our audits in accordance with generally accepted auditing          
standards. Those standards require that we plan and perform the audit to        
obtain reasonable assurance about whether the financial statements are free of  
material misstatement. An audit includes examining, on a test basis, evidence   
supporting the amounts and disclosures in the financial statements. An audit    
also includes assessing the accounting principles used and significant          
estimates made by management, as well as evaluating the overall financial       
statement presentation. We believe that our audits provide a reasonable basis   
for our opinion.                                                                

In our opinion, such consolidated financial statements present fairly, in all   
material respects, the consolidated financial position of the Company at        
December 31, 1995 and 1996, and the consolidated results of their operations    
and their cash flows for each of the three years ended December 31, 1996 in     
conformity with generally accepted accounting principles.                       

DELOITTE & TOUCHE LLP                                                           
New York, New York                                                              
February 5, 1997                                                                

GLOBAL DIRECTMAIL CORP  

CONSOLIDATED BALANCE SHEETS 
DECEMBER 31, 1995 AND 1996  
(IN THOUSANDS)  

                                 Notes          1995          1996
ASSETS                                  -----        --------      --------     
------                                                                          
CURRENT ASSETS:                                                                 
Cash and cash equivalents                          $ 28,477      $ 35,211   
Short term investments                                    -        31,031   
Accounts receivable, net                1            84,390       111,709   
Inventories                                          71,645        93,033   
Prepaid catalog expense                              20,467        12,305   
Other prepaid expenses and                                                  
current assets                                      6,331         7,427 
Deferred income tax benefit             8             1,470         3,266   
                                                --------      --------
 Total current assets                            212,780       293,982

PROPERTY AND EQUIPMENT, net               4            17,255        21,878     

GOODWILL, net                             3            16,125        13,545     

DEFERRED INCOME TAX BENEFIT               8               300             -     

OTHER ASSETS                                            1,055         2,034     
                                                --------      --------
 TOTAL                                          $247,515      $331,439
                                                ========      ========

LIABILITIES AND SHAREHOLDERS' EQUITY                                            
CURRENT LIABILITIES:                                                            
Accounts payable and accrued expenses              $ 85,189      $ 99,053   
Current portion of long-term debt       6             5,395           495   
                                                --------      --------

 Total current liabilities                        90,584        99,548
                                                --------      --------

LONG-TERM DEBT                            6             2,924         2,030     
                                                --------      --------
DEFERRED INCOME TAXES                     8                 -         1,224     
                                                --------      --------
COMMITMENTS AND CONTINGENCIES             9                                     
SHAREHOLDERS' EQUITY:                     7                                     
Preferred shares                                          -             -   
Common shares                                           369           379   
Additional paid-in capital                          138,470       168,356   
Retained earnings                                    14,688        58,392   
Cumulative translation adjustment                       480         1,510   
                                                --------      --------
 Total shareholders' equity                      154,007       228,637
                                                --------      --------
 TOTAL                                          $247,515      $331,439
                                                ========      ========

See notes to consolidated financial statements.                                 

GLOBAL DIRECTMAIL CORP  

STATEMENTS OF CONSOLIDATED INCOME 
FOR THE YEARS ENDED DECEMBER 31, 1994, 1995 AND 1996  
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)  

                                   1994           1995          1996
                                    --------      --------      --------

NET SALES                               $484,165      $634,484      $911,893    

COST OF SALES                            318,429       437,179       662,277    
                                    --------      --------      --------

GROSS PROFIT                             165,736       197,305       249,616    

SELLING, GENERAL AND ADMINISTRATIVE                                             
EXPENSES                               129,204       143,034       180,142  
                                    --------      --------      --------

INCOME FROM OPERATIONS                    36,532        54,271        69,474    

OTHER INCOME (EXPENSE), net                  313           (41)          (39)   

INTEREST INCOME                            1,075         1,246         2,470    

INTEREST EXPENSE                          (1,759)       (2,394)         (521)   

PROVISION FOR INCOME TAXES                  (909)      (12,655)      (27,680)   

OFFICERS'/SHAREHOLDERS' COMPENSATION     (18,124)       (4,707)            -    
                                    --------      --------      --------

NET INCOME                              $ 17,128      $ 35,720      $ 43,704    
                                    ========      ========      ========

NET INCOME PER COMMON SHARE$                                            1.15    
                                                                ========
Weighted average common and common                                              
   equivalent shares outstanding                                  38,129
                                                                ========
Pro Forma Income Data (unaudited)                                               
Historical income before income taxes   $ 18,037      $ 48,375                  
Pro forma other adjustments               17,833         5,684                  
                      --------      --------
Pro forma income before income taxes      35,870        54,059                  
Pro forma income taxes                    13,989        21,008                  
                      --------      --------
Pro forma net income                    $ 21,881      $ 33,051                  
                      ========      ========
Pro forma net income per common share   $   0.65      $   0.93(1)               
                      ========      ========
Pro forma weighted average common and                                           
common equivalent shares                                              
outstanding                          33,807        35,499(1)          
                      ========      ========

(1)  If the common shares outstanding after the initial public offering in      
June 1995 were outstanding for the entire 1995 year, then pro forma   
net income per share for 1995 would have been $0.90 (see Note 2).     

See notes to consolidated financial statements.                                 

GLOBAL DIRECTMAIL CORP  

STATEMENTS OF CONSOLIDATED SHAREHOLDERS' EQUITY 
YEARS ENDED DECEMBER 31, 1994, 1995 AND 1996  
(IN THOUSANDS)  

[CAPTION]                                                                       

                                                        [Enlarge/Download Table]

                                                                                                        Notes      
                                                                                                     Receivable    
                                                                Additional              Cumulative      from       
                                                 Common Shares    Paid-in    Retained   Translation    Related     
                                          Notes  (See  Note 2)    Capital     Earnings   Adjustment     Parties    
                                          -----  -------------  ----------   ---------  -----------  ------------  
                                                                                                                   
Balances, January 1, 1994                          $18,922        $ 14,539   $25,087    $ (482)        $        (5)

Difference arising from translation of                                                                             
  foreign statements                                     -               -         -       797                 -   
Dividends paid                                           -               -    (2,486)        -                 -   
Increase in notes receivable from                                                                                  
  related parties, net                      5            -               -         -         -           (10,268)  
Compensation to officers' paid                                                                                     
  in common shares                          7        6,000               -         -         -                 -   
Other                                                   12               -      (138)        -                 -   
Net Income                                               -               -    17,128         -                 -   
                                                   -------        --------   -------    ------         ---------   
Balances, December 31, 1994                         24,934          14,539    39,591       315           (10,273)  

Differences arising from translation of                                                                            
  foreign statements                                     -               -         -       165                 -   
Dividends paid                                           -               -    (2,000)        -                 -   
Other                                                  (30)              -        30         -                 -   
Effect of exchange of common                                                                                       
  shares, issuance of notes and                                                                                    
  collection of notes receivable            1      (24,620)        (14,528)  (58,653)        -            10,273   
Initial public offering of common shares    1           83         134,329         -         -                 -   
Issuance of common shares for the                                                                                  
  acquisition of Tiger Direct, Inc.         3            2           4,130         -         -                 -   
Net income                                               -               -    35,720         -                 -   
                                                   -------        --------   -------    ------         ---------   
Balances, December 31, 1995                            369         138,470    14,688       480                 -   

Differences arising from translation of                                                                            
  foreign statements                                     -               -         -     1,030                 -   
Net proceeds from sale of common                                                                                   
  shares                                    1           10          29,886         -         -                 -   
Net income                                               -               -    43,704         -                 -   
                                                   -------        --------   -------    ------         ---------   
Balances, December 31, 1996                        $   379        $168,356   $58,392    $1,510         $       -   
                                                   =======        ========   =======    ======         =========   

See notes to consolidated financial statements.                                 

GLOBAL DIRECTMAIL CORP  

STATEMENTS OF CONSOLIDATED CASH FLOWS 
FOR THE YEARS ENDED DECEMBER 31, 1994, 1995 AND 1996  
(IN THOUSANDS)  
[CAPTION]                                                                       

                                                        [Enlarge/Download Table]

                                                              1994       1995       1996   
                                                            --------   --------   -------- 
                                                                                           

CASH FLOWS PROVIDED BY OPERATING ACTIVITIES:                                               
Net income                                                  $ 17,128   $ 35,720   $ 43,704 
Adjustments to reconcile net income to net                                                 
  cash provided by operating activities:                                                   
    Depreciation and amortization, net                         1,808      2,098      3,813 
    Provision (benefit) for deferred income taxes                211     (1,959)      (330)
    Provision for returns and doubtful accounts                3,330      4,178      2,745 
    Officers' non-cash compensation (see Note 7)               6,000          -          - 
    Changes in assets and liabilities:                                                     
      Accounts receivable                                    (21,380)   (15,261)   (29,242)
      Inventories                                             (9,355)   (12,155)   (20,748)
      Prepaid catalog expense and other prepaid expenses and                               
        current assets                                        (4,217)    (8,500)     7,028 
      Accounts payable and accrued expenses                   12,179      6,921     12,647 
                                                            --------   --------   -------- 
      Net cash provided by operating activities                5,704     11,042     19,617 
                                                            --------   --------   -------- 

CASH FLOWS USED IN INVESTING ACTIVITIES:                                                   
Investments in short term instruments                              -          -    (31,031)
Additions to property and equipment                           (5,406)    (4,859)    (8,805)
Due from affiliated entities                                     (51)    (5,631)         - 
Acquisition of business (see Note 3)                               -     (1,185)         - 
                                                            --------   --------   -------- 
      Net cash used in investing activities                   (5,457)   (11,675)   (39,836)
                                                            --------   --------   -------- 

CASH FLOWS PROVIDED BY (USED IN) FINANCING                                                 
  ACTIVITIES:                                                                              
Net cash provided by short term borrowings from banks              -          -        478 
Borrowings of long term debt                                  20,080      8,392          - 
Repayment of long term debt                                   (8,700)   (27,550)    (6,442)
Increase in notes payable to related parties                     317          -          - 
Repayment from (advances to) related parties                 (10,453)     4,702          - 
Proceeds from sale and issuance of common shares                  12    134,412     29,896 
Dividends paid                                                (2,486)    (2,000)         - 
Payment of notes payable to shareholders                           -    (97,800)         - 
Adjustment of goodwill (see Note 3)                                -          -      3,113 
Payment to minority shareholders for dissolution of                                        
  a company                                                                                
                                                                (138)         -          - 
                                                            --------   --------   -------- 
      Net cash provided by (used in) financing activities     (1,368)    20,156     27,045 
                                                            --------   --------   -------- 

EFFECTS OF EXCHANGE RATES ON CASH                                307        128        (92)
                                                            --------   --------   -------- 
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS            (814)    19,651      6,734 
                                                            --------   --------   -------- 
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD                9,640      8,826     28,477 
                                                            --------   --------   -------- 
CASH AND CASH EQUIVALENTS - END OF PERIOD$                  $  8,826   $ 28,477   $ 35,211 
                                                            ========   ========   ======== 
SUPPLEMENTAL DISCLOSURES:                                                                  
Interest paid                                               $  1,937   $  2,548   $  1,194 
                                                            ========   ========   ======== 
Income taxes paid                                           $  1,179   $ 14,957   $ 26,606 
                                                            ========   ========   ======== 

See notes to consolidated financial statements.                                 

GLOBAL DIRECTMAIL CORP  

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  
FOR THE YEARS ENDED DECEMBER 31, 1994, 1995 AND 1996  

1.  BASIS OF PRESENTATION, DESCRIPTION OF BUSINESS AND SUMMARY OF               
SIGNIFICANT ACCOUNTING POLICIES                                         

Basis of Presentation - The accompanying consolidated financial     
statements include the accounts of Global DirectMail Corp and its wholly-owned  
subsidiaries (collectively, the "Company" or "Global").                         

Global DirectMail Corp is the successor to several corporations,    
previously referred to as the Global Group, which were owned by related         
shareholders.  In connection with the consummation of an initial public         
offering in June 1995 (the "IPO"), the stockholders of these predecessor        
companies exchanged all of the outstanding capital stock for 28,400,000 common  
shares of Global DirectMail Corp and the predecessor companies terminated       
their elections to be treated as S Corporations.  This transaction was          
accounted for as if it were a pooling of interests.                             

In addition to this exchange, notes aggregating $97.8 million, which
were issued by certain of the predecessor companies to the shareholders,        
representing S Corporation earnings and tax basis through the date of the       
closing of the IPO discussed below, were paid.  Such payment was made net of    
$10.6 million of notes receivable from officers/shareholders and loans made to  
officers/shareholders of $1.2 million.  In addition, all affiliated             
indebtedness which existed at that time was satisfied.  On June 29, 1995,       
Global completed the IPO of 8,308,750 shares at $17.50 per share.  On March     
26, 1996 the Company sold 1,000,000 shares of common stock at $32.25 per        
share.                                                                          

    Description of Businesses - The Company is involved in the marketing and
sale of computer related products, office products and industrial products,     
through the distribution of mail order catalogs and a network of outbound       
telemarketers.                                                                  

   Principles of Consolidation - All significant intercompany accounts and
transactions have been eliminated in consolidation.  The foreign subsidiaries'  
financial statements have been adjusted, when necessary, to conform to          
accounting principles generally accepted in the United States of America.       

   Cash and Cash Equivalents - The Company considers amounts held in money
market accounts and other short-term investments with an original maturity      
date of approximately three months or less to be cash equivalents.              

Accounts Receivable - The amounts shown in the consolidated balance 
sheets are shown net of allowances for doubtful collections and subsequent      
customer returns of approximately $7,731,000 and $7,724,000 at December 31,     
1995 and 1996, respectively.  The changes in these reserve accounts are         
summarized as follows (in thousands):                                           

                                            Years ended December 31,
                                           ---------------------------------
                                           1994        1995         1996
                                           --------    --------     --------

   Balance, beginning of year.........     $ 5,367     $ 4,598     $ 7,731
   Charged to expense.................       3,330       4,178       2,745
    Reductions, principally write-offs.      (4,099)     (1,045)     (2,752)
   Balance, end of year...............     $ 4,598     $ 7,731     $ 7,724

 Inventories - Inventories consist of finished goods and are stated at
the lower of cost or market value.  Cost is determined by using the first-in,   
first-out method.                                                               

   Prepaid Catalog Expense - Prepaid catalog expense includes unused paper
and reflects the costs of producing and distributing catalogs which are         
deferred and charged to expense over the period that each catalog remains the   
most current selling vehicle (generally three months).  Vendors place           
advertisements in the catalogs for which the Company receives advertising       
allowances and incentives.  These revenues are recognized on the same basis as  
catalog costs.                                                                  

Property and Equipment - Property and equipment is stated at cost.  
Depreciation of furniture, fixtures and equipment is on the straight line or    
accelerated method over their estimated useful lives ranging from three to      
eight years.  Depreciation of the building is on the straight line method over  
its estimated useful life of 50 years.  Leasehold improvements are amortized    
over the lessor of their useful lives or the term of the lease.                 

Income Taxes - Under the provisions of the Internal Revenue Code,   
several of the predecessor companies had elected to be treated as S             
Corporations.  Accordingly, Federal and, where applicable, certain state        
income taxes were included in the respective shareholders' individual tax       
returns until such time as the predecessor companies completed the IPO.         
Income taxes for the predecessor companies were recorded where appropriate.     
Since that time, the predecessor companies have all become taxable entities     
(see Note 8).                                                                   

  Foreign Currency Translation - The financial statements of the foreign
entities are translated into U.S. dollars, the reporting currency, using        
year-end exchange rates for consolidated balance sheet items and average        
exchange rates for the consolidated statements of income items.  The            
translation differences are recorded directly in the consolidated statement of  
shareholders' equity.                                                           

  Foreign Currency Transactions - Transactions in foreign currencies are
recorded at the exchange rate in effect at the transaction date.  Realized and  
unrealized exchange gains and losses during the year are included in the        
respective year's consolidated statements of income.                            

Sales Recognition - Sales of products are recognized at the time of 
shipment.  A reserve is recorded for returns based upon historic trends.        

Research and Development Costs - Costs incurred in connection with  
research and development are expensed as incurred.  Such expenses for each of   
the three years ended December 31, 1994, 1995 and 1996 aggregated               
approximately $515,000, $443,000 and $573,000, respectively.                    

  Goodwill and Negative Goodwill - Goodwill of $19.4 million at December
31, 1996 arose from the 1995 acquisition of Tiger Direct, Inc. (see Note 3)     
and is shown net of negative goodwill which arose as a result of acquisitions   
made in prior years.  Goodwill and negative goodwill are being amortized over   
35-year and 10-year periods, respectively.                                      

   Use of Estimates In Financial Statements - The preparation of financial
statements in conformity with generally accepted accounting principles          
requires management to make estimates and assumptions that affect the reported  
amount of assets and liabilities and disclosure of contingent assets and        
liabilities at the date of the financial statements and the reported amounts of 
revenues and expenses during the reporting period.  Actual results could        
differ from those estimates.                                                    

    Net Income Per Share - Net income per share in 1996 was calculated based
upon the weighted average number of common shares outstanding and include the   
equivalent shares for dilutive options outstanding during 1996.                 

Reclassifications - Certain amounts in prior years have been        
reclassified to conform to the 1996 presentation.                               

2.    PRO FORMA INFORMATION (UNAUDITED)                                         

Pro Forma Income Adjustments                                        

    The pro forma income data for the years ended December 31, 1994 and 1995
present the effects on the historical consolidated financial statements of      
certain transactions related to the IPO as if they occurred as of the           
beginning of such periods, including (1) reduced levels of compensation and     
royalty payments to officers/shareholders, (2) the elimination of $500,000 per  
year of compensation paid to a shareholder pursuant to a consulting agreement   
entered into in 1992 which terminated in connection with the IPO, (3) the       
elimination of interest paid on officers/shareholders notes in 1995, and (4)    
the provision for income taxes to eliminate the benefit, for income tax         
purposes, of the predecessor companies with S Corporation status.               

Payments to Officers/Shareholders - An adjustment has been made to  
eliminate (1) compensation paid to the Company's three principal                
officers/shareholders in excess of $300,000 each per annum, (2) interest paid   
to officers/shareholders on notes in 1995, and (3) royalty expenses paid to     
the Company's three principal officers/shareholders aggregating approximately   
$109,000 and $85,000 for the years ended December 31, 1994 and 1995,            
respectively, under a royalty agreement.  Such patents were assigned to Global  
DirectMail Corp and the royalty agreement was terminated in connection with     
the IPO.                                                                        

   Income Taxes - Immediately prior to the closing of the IPO, each of the
predecessor companies with S Corporation status terminated such status.  The    
pro forma adjustment reflects increased provisions for income taxes to an       
effective rate of approximately 39 percent.  While this effective rate          
represents the  pro forma tax rate based on historic earnings trends in the     
respective tax jurisdictions and results through December 31, 1995, this rate   
will change in the future in accordance with such trends as tax credits         
currently available are fully utilized.                                         

Pro Forma Net Income Per Common Share                               

    Pro forma net income per common share prior to the completion of the IPO
was based on the number of shares of common stock to be outstanding after the   
exchange and additionally includes only the number of shares (calculated at     
the assumed initial public offering price) that were used in the IPO to repay   
the various notes and related party payments (see Note 5).                      

   Pro forma net income per share for the year ended December 31, 1995 was
calculated based on the weighted average number of shares outstanding plus the  
effect of 201,400 options assumed outstanding.  Pro forma net income per share  
for the year ended December 31, 1994 was calculated based on 33,807,000 shares  
outstanding during the entire year.                                             

3.    ACQUISITIONS                                                              

   On November 30, 1995, Global acquired Tiger Direct, Inc. ("Tiger") from
unrelated third party sellers.  Tiger was purchased for aggregate               
consideration of $5.8 million, representing cash of $1.1 million, the issuance  
of approximately 148,000 Global common shares, and purchase related expenses    
of $0.6 million.  The acquisition has been accounted for under the purchase     
method of accounting.  As required by the purchase method, assets were          
recorded at their fair market value, which approximated cost, and liabilities   
of $21.5 million were assumed at fair value.  At December 31, 1995, the         
Company recorded  the purchase price in excess of the fair value of the net     
assets acquired as goodwill.  The estimated fair values were further evaluated  
by the Company during 1996 and, as a result, goodwill from this transaction     
was reduced by approximately $3.1 million.  The Company will periodically       
evaluate the carrying value of goodwill using undiscounted cash flows.  While   
the Company intends to make all efforts to effectively assign a value to other  
intangibles no value has been  attributed to intangible assets other than       
goodwill.                                                                       

   The unaudited pro forma results of operations of the Company, including
the pro forma effect as if Tiger had been acquired as of January 1, 1994 are    
as follows (in thousands, except earnings per share):                           

                                            Years ended December 31,
                                           ---------------------------
                                           1994               1995
                                           --------           --------

 Net Sales..............................   $ 574,402         $ 721,816
 Net income from continuing operations..   $  15,590         $  20,491
 Earnings per share.....................   $    0.46         $    0.58

  The pro forma financial information presented above is not necessarily
indicative of either the results of operations that would have occurred had     
the acquisition taken place at the beginning of the periods presented or        
future operating results of the Company.                                        

    During 1994, the Company acquired the assets of two separate businesses,
Power UP! and SN Option PC S.A.R.L. for aggregate consideration of              
approximately $800,000.  The effect of such acquisitions on the Company's       
operating results, actual or pro forma for 1994 or 1995, were not material.     

4.    PROPERTY AND EQUIPMENT, net                                               

 Property and equipment, net consists of the following (in thousands):

                                            December 31,
                                           ---------------------------
                                           1995               1996
                                           --------           --------

 Land and building......................    $ 3,932            $ 5,226
Furniture and fixtures, office and                                  
   warehouse equipment..................     21,485             27,273
 Leasehold improvements.................      2,929              3,990
 Transportation equipment...............      1,271              1,555
                                            -------            -------
                                             29,617             38,044
Less accumulated depreciation and                                   
   amortization.........................     12,362             16,166
                                            -------            -------
           Net Property and Equipment...    $17,255            $21,878
                                            =======            =======

5.     RELATED PARTY TRANSACTIONS                                               

All amounts receivable from and/or payable to related parties and   
affiliates at December 31, 1994, net of activity through June 29, 1995, were    
satisfied from the proceeds of the IPO (see Note 1).                            

The Company leases several warehouse and office facilities from     
affiliates (see Note 9).  Rent expense under those leases aggregated            
$2,497,000, $2,366,000 and $2,130,000 for the years ended December 31, 1994,    
1995 and 1996, respectively.                                                    

6.    LONG-TERM DEBT                                                            

Long-term debt consist of the following (in thousands):             

                                            December 31,
                                           ---------------------------
                                           1995               1996
                                           --------           --------
 Unsecured lines of credit (a)..........    $     -            $     -
 Secured lines of credit (b)............          -                  -
Foreign denominated term loan                                       
   subsequently repaid                        4,647                  -
 Foreign denominated secured loan (c)...      1,860              2,030
 Capitalized lease obligations..........      1,812                 17
                                            -------            -------
 Total..................................      8,319              2,047
 Less: current maturities...............      5,395                 17
                                            -------            -------
 Long-Term Debt.........................    $ 2,924            $ 2,030
                                            =======            =======

  At December 31, 1996, the aggregate maturities of notes payable are as
follows (in thousands):                                                         

Year Ending December 31,                            Amount          
------------------------                            ------          

1997...........................................     $   17          
1998...........................................          -          
1999...........................................      2,030          
                                          ------
Total Notes Payable............................     $2,047          
                                          ======

(a)  The Company maintains lines of credit with various financial               
institutions.  The maximum aggregate amounts available under these    
lines of credit were $32 million and $52 million at December 31, 1995 
and 1996.  No amounts were outstanding under these lines at December  
31, 1996.  These lines accrue interest at variable rates of either the
prime rate or LIBOR plus 63 basis points.  The prime rate and LIBOR   
were 8.25 percent and 5.5 percent, respectively, at December 31, 1996.
These lines expire on various dates through December 1997.            

Associated with the lines of credit, the Company may have outstanding 
  letters of credit equal to the amount of the total line less outstanding
borrowings.  At December 31, 1996 there were no outstanding letters of
credit.                                                               

(b)  The Company maintains a secured line of credit with a bank                 
with a maximum amount available of Pound Sterling1,000,000.           
Borrowings, of which there were none as of December 31, 1995 and 1996,
bear interest at the bank's base rate (6 % at December 31, 1996) plus 
2% and are secured by substantially all of the assets of the Global's 
United Kingdom subsidiaries.  This line expires in December 1997 and  
is renewable at Global's option.                                      

(c)  In May 1994, a subsidiary of the Company entered into a mortgage           
agreement ("Mortgage") in the amount of Pound Sterling1,200,000 due in
its entirety in June 1999, with interest payable semi-annually at a   
rate of 9.6 percent per annum.  The Mortgage is secured by land and   
building with an aggregate net book value of Pound Sterling2,479,000  
at December 31, 1996.  The Mortgage contains certain covenants calling
for timely reporting of financial information, restrictions on changes
in ownership and employment levels by such subsidiary.                

7.   SHAREHOLDERS' EQUITY                                                       

  At December 31, 1996, there were 25,000,000 shares of preferred stock,
$0.01 par value, of which none were issued.  Common stock at such date          
consisted of 150,000,000 shares authorized, par value of $0.01 per share, of    
which 37,856,990 were issued and outstanding.                                   

  Prior to the IPO, the consolidated common stock and additional paid-in
capital on a company-by-company basis at December 31, 1994 were as follows (in  
thousands):                                                                     

                                                                    Additional
                                                                    Paid- In
                                                   Common Stock    Capital
                                                     ------------   ----------
Continental Dynamics Corp. ("Continental") -                                    
9,000 non-voting shares and 1,000 voting                                    
shares authorized, 6,116 and 998                                            
outstanding, respectively.....................        $ 19,703      $     - 

Systemax Incorporated - 200 shares authorized,                                  
174 outstanding...............................              87        9,634 

Dartek Corporation - 300 shares authorized                                      
and outstanding                                              -        4,891 

Misco America, Inc. - 99 shares authorized,                                     
3 outstanding                                                -            3 

HCS Global, Ltd. - 869,000 shares authorized,                                   
793,333 outstanding...........................           1,201           11 

Misco Germany, Inc. - 99 shares authorized,                                     
3 outstanding.................................              18            - 

Misco Italy Computer Supplies, S.p.A.                                           
-6 million shares authorized and outstanding..           3,715            - 

Other entities - 5,401 shares authorized,                                       
3,117 outstanding.............................             210            - 
                                                      --------      --------
                                                      $ 24,934      $ 14,539
                                                      ========      ========

As required by law, certain foreign subsidiaries must retain a      
percentage of shareholders' capital in the respective company.  Accordingly, a  
portion of retained earnings is restricted and not available for distribution   
to shareholders.  Such amount at December 31, 1996 was not material.            

Continental issued 1,523 shares of non-voting shares of common stock
during 1994.  Such issuance was made as compensation to the Company's  three    
principal officers/shareholders.  Continental determined the fair value of the  
shares issued to be $6,000,000.                                                 

Stock Option Plans - The Company has two fixed option plans which   
reserve shares of common stock for issuance to key employees, directors,        
consultants and advisors to the company.   The following is a description of    
these plans:                                                                    

    The 1995 Long-Term Stock Incentive Plan - This plan empowers the Company
to award or grant from time to time non qualified and deferred compensation     
stock options, stock appreciation rights ( SAR's), restricted stock and         
restricted unit grants, performance unit grants and other stock based awards    
authorized by the Compensation Committee of the Board of Directors.  Options    
issued under this plan expire ten years after the options are granted and       
generally become exercisable ratably on the third, fourth, and fifth            
anniversary of the grant date.  A maximum total number of 2,000,000 shares may  
be granted under this plan of which a maximum of  800,000 shares may be of      
restricted stock and restricted stock units.  No award shall be granted under   
this plan after December 31, 2005. A total of 1,192,500 options were            
outstanding under this plan as of December 31, 1996.                            

The 1995 Stock Option Plan for Non-Employee Directors - This plan   
provides for awards of non qualified options to directors of the company who    
are not employees of the Company or its affiliates. All options granted under   
this plan will have a ten-year term from grant date and are immediately         
exercisable.   A maximum of 100,000 shares may be granted for awards under this 
plan.  This plan will terminate the day following the tenth annual              
stockholders meeting.  A total of 14,000 options were outstanding under this    
plan as of December 31, 1996.                                                   

The Company accounts for these plans in accordance with Accounting  
Principles Board Opinion No. 25, under which no compensation costs have been    
recognized for stock options.  Had compensation costs of the plans been         
determined under a fair value alternative method as stated in Statement of      
Financial Accounting Standards No. 123, "accounting for stock-based             
compensations," the company would have prepared a fair value model for such     
options and recorded such amount in the accompanying Financial Statements as    
compensation expense.  On a pro forma basis, net income for 1996 and 1995       
would have been $42.3 million and $32.6 million respectively and earnings       
per share for 1996 and 1995 would have been $1.11 and $0.92 respectively.       
The Company arrived at the fair value of stock grant at the date of the         
grant by using the Black-Scholes pricing option model with the following        
assumptions used for grants: risk-free interest rate of 6.1%;w expected         
dividend rate of 0%; expected level of 4 years; and expected volatility of      
35%.  The weighted average stock options at December 31, 1996 have a            
weighted average contractual level of 8.82 years.                               

The following reflects activity for 1996 in these plans:            

                         Options
                                         For Shares    Option Prices
                                           ----------  -----------------

Outstanding, January 1, 1996............   865,500           -      
  Granted during 1996.....................   365,150    $27.19 to $49.13
  Terminated during 1996..................   (24,150)   $17.50 to $39.50
Exercised during 1996...................       -             -      
                                           ---------    ----------------
  Outstanding, December 31, 1996.......... 1,206,500    $17.50 to $49.13
                       =========

The following table summarizes information as of December 31, 1996  
concerning currently outstanding and exercisable options:                       

                   1995                           1996
                     ------------------------     --------------------------
                            Weighted-                     Weighted
                             Average                       Average
Fixed Options           Shares   Exercise Price      Shares    Exercise Price   
-------------          -------   --------------     --------   ---------------  

Outstanding at                                                                  
beginning of year          -             -          865,500      $ 20.49    
Granted............    876,900       $ 20.45          365,150      $ 36.80      
Exercised..........          -             -                -            -      
Forfeited..........    (11,400)      $ 17.50          (24,150)     $ 19.39      
    -------                      ---------
Outstanding at end                                                              
of year..........    865,500       $ 20.49        1,206,500      $ 25.45    
    =======                      =========

Options exercisable                                                             
at year end......     10,000                        139,000                 
Weighted average                                                                
fair value per                                                              
option granted                                                              
during the year..    $  7.05                       $  13.57                 

Weighted      
                    Number      Average    Weighted                 Weighted
 Range of       Outstanding   Remaining    Average      Number     Average
  Exercise            at      Contractual  Exercise    Exercisable  Exercise
   Price          12/31/96       Life      Price      at 12/31/96    Price
  --------       -----------  -----------  --------    -----------  --------
$17.50 to $22.50     555,150       8.48       $17.54         5,000      $21.56  
$22.51 to $30.00     347,750       8.74       $26.73       130,000      $26.87  
$30.01 to $40.00     294,600       9.52       $38.13         4,000      $39.06  
$40.01 to $49.13       9,000       9.83       $49.13             -           -  
     ---------                               -------
$17.50 to $49.13   1,206,500       8.82       $25.45       139,000      $27.03  
     =========                               =======

8.   INCOME TAXES                                                               

  The provision for income taxes consists of the following (in thousands):

                                          Years Ended December 31,
                                         -------------------------------
                                         1994         1995        1996
                                         ------       ------      ------
Current:                                                            
   Federal...........................     $    -       $10,400     $23,140
   State.............................        855         1,895       3,787
   Foreign...........................       (157)        2,319       1,038
    Deferred..........................       (837)         (369)       (865)
   Change in valuation allowance.....      1,048        (1,590)        580
                                          ------       -------     -------
   Total.............................     $  909       $12,655     $27,680
                                          ======       =======     =======

Prior to the IPO, a number of the predecessor companies were S      
Corporations and accordingly their income was not taxable for Federal and       
certain state tax purposes.  Subsequent to the IPO, all of the former S         
Corporations terminated such status and accordingly became taxable entities     
thereafter.  Income taxes are accrued and paid by each foreign entity in        
accordance with applicable local regulations.  The difference between the       
income tax expense and the computed income tax based on the Federal statutory   
corporate rate is as follows (in thousands):                                    

                                         Year Ended December 31,
                                         -------------------------------
                                         1994         1995        1996
                                         ------       ------      ------

Federal statutory rate...................... $ 6,313      $16,931     $24,984   
State and local income taxes, net of                                            
Federal tax benefit........................      855        1,001       2,456   
Foreign tax..................................  1,040        2,778        (175)  
Foreign source income........................ (3,065)      (2,685)       (573)  
Increase (reduction) in valuation allowance..  1,048         (923)        580   
Net operating loss utilized..................      -            -         335   
Other items, net.............................      -            -          73   
Federal, state and local tax benefit of S                                       
Corporation status......................... (5,282)      (4,447)          - 
                                          -------      -------     -------
                                          $   909      $12,655     $27,680
                                          =======      =======     =======

   The deferred tax assets (liabilities) at December 31, 1995 and 1996 are
comprised of the following:                                                     

                                          Years Ended December 31,
                                         -------------------------
                                         1995               1996
                                         ------             ------

Current:                                                                        
Deductible assets.........................   $ (3,580)           $(2,542)   
Non-deductible accruals and reserves......      3,870              4,244    
Non-deductible assets.....................        780                826    
Foreign net operating loss carryforwards..        140              1,027    
Other.....................................        260               (289)   
                                         --------            -------
Current.................................      1,470              3,266  
                                         --------            -------
Non-Current:                                                                    
Foreign net operating loss carryforwards..      1,320              1,712    
Accelerated depreciation..................       (920)            (1,441)   
Basis differences from acquisitions.......        440                356    
Other assets..............................         50               (332)   
Valuation allowances......................       (590)            (1,519)   
                                         --------            -------
Non-Current.............................        300             (1,224) 
                                         --------            -------
Total.................................   $  1,770            $ 2,042
                                         ========            =======

  The foreign net operating loss carryforwards generally expire at dates
through 2003.  The Company maintains valuation allowances against its foreign   
net operating loss carryforwards since, at the this time, the realizability of  
the related deferred tax benefits can not be reasonably assured.                

9.    COMMITMENTS AND CONTINGENCIES                                             

  Leases - The Company is obligated under operating lease agreements for
the rental of certain office and warehouse facilities and equipment which       
expire at various dates through October 2013.                                   

 At December 31, 1996 future minimum annual lease payments for related
and third-party leases were as follows (in thousands):                          

  Year Ending December 31,        Related Party    Third Party     Total
   ------------------------        -------------    -----------    -------

   1997..........................     $ 1,920         $ 3,309      $ 5,229
   1998..........................       1,872           3,131        5,003
   1999..........................       1,122           2,889        4,011
   2000..........................         612           1,706        2,318
   2001..........................         612           1,339        1,951
   2002-2006.....................       3,060           6,493        9,553
   2007-2011.....................         510           4,796        5,306
   Thereafter....................           -             352          352
                                      -------         -------      -------
                                      $ 9,708         $24,015      $33,723
                                      =======         =======      =======

Rent expense for the years ended December 31, 1994, 1995 and 1996   
aggregated approximately $4,869,000, $5,235,000 and $7,406,000, respectively.   

Guarantees - The Company has guaranteed a mortgage obtained by an   
affiliate ($2.5 million at December 31, 1996) relating to property which the    
Company leases from the affiliate.  Additionally the Company's U.K.             
subsidiaries have granted a security interest for substantially all of their    
assets to secure a line of credit with a U.K. financial institution.            

    Litigation - The Company has been named defendant in lawsuits incidental
to their businesses.  Management of the Company, based on discussions with      
legal counsel, believes the ultimate resolution of these lawsuits will not      
have a material effect on the Company's consolidated financial position or      
results of operations.                                                          

    Contingency - The Company is required to collect sales tax on certain of
its out-of-state sales.  In accordance with current law, 20% of the Company's   
1996 domestic sales were subject to sales tax.  A change in this law could      
require the Company to collect sales tax in additional states.                  

Sales by the Company to government agencies are subject to certain  
government regulations.  Inadvertent failure to comply with such regulations    
can result in significant penalties.  While the Company has never paid any      
such penalties to date, there can be no assurances that penalties will not be   
levied in the future.                                                           

10.   GEOGRAPHIC INFORMATION                                                    

 The Company conducts its business in North America (the United States
and Canada) and Europe.  The following sets forth the Company's operations in   
their two geographic markets (in thousands):                                    

                                Year ended December 31, 1994
                                ----------------------------------------
                                Europe       North America     TOTAL
                                ----------     -------------    --------

Net Sales.......................     $ 129,390        $354,775      $484,165    
Income from operations..........         4,341          32,191        36,532    
Identifiable assets.............        50,589         113,578       164,167    

                                Year ended December 31, 1995
                                ----------------------------------------
                                Europe       North America     TOTAL
                                ----------     -------------    --------

Net Sales.......................     $ 188,765        $445,719      $634,484    
Income from operations..........         8,846          45,425        54,271    
Identifiable assets.............        66,369         181,146       247,515    

                                Year ended December 31, 1996
                                ----------------------------------------
                                Europe       North America     TOTAL
                                ----------     -------------    --------

Net Sales.......................    $ 234,078         $677,815      $911,893    
Income from operations..........        4,224           65,250        69,474    
Identifiable assets.............       78,490          252,949       331,439    

11.   OTHER MATTERS                                                             

    Employee Benefit Plans - Certain of the U.S. subsidiaries participate in
defined contribution compensatory 401(k)/profit sharing benefit plans covering  
such eligible employees as defined by the plan document.  Contributions to the  
plan by the Company is determined as a percentage of the employees'             
contributions.  Aggregate expense to the Company for contributions to such      
plans was approximately $274,000, $211,000 and $267,000 in the years ended      
December 31, 1994, 1995 and 1996, respectively.                                 

Certain foreign entities require amounts to be accrued for each     
employee's retirement, determined in accordance with labor laws and labor       
agreements in effect in the respective country.  Liabilities relative to such   
termination indemnities were not material.                                      

    Foreign Exchange Risk Management -   The Company has limited involvement
with derivative financial instruments and does not use them for trading         
purposes.  The Company enters into foreign currency options or forward          
exchange contracts to hedge certain foreign currency transactions.  The intent  
of this practice is to minimize the impact of foreign exchange rate movements   
on the Company's operating results.  As of December 31,1996, the Company had    
outstanding options in the amount of Pound Sterling 1.0 million.                

Fair Value of Financial Instruments - Financial instruments consist 
primarily of investments in cash, trade account receivables, accounts payable   
and debt obligations.  The Company estimates the fair value of financial        
instruments based on interest rates available to the Company and by comparison  
to quoted market prices.  At December 31, 1995 and 1996, the fair value of the  
Company's financial instruments approximated their carrying values.             

Concentration of Credit Risk - Concentrations of credit risk with   
respect to trade account receivables are limited due to the large number of     
customers comprising the Company's customer base.  Ongoing credit evaluations   
of customer's financial condition are performed.                                

12.   QUARTERLY FINANCIAL DATA (UNAUDITED)                                      

   Quarterly financial data for the years ended December 31, 1995 and 1996
is as follows:                                                                  

                             First       Second       Third       Fourth
1995:                           Quarter      Quarter      Quarter     Quarter   
----                           ---------    ---------    ---------   ---------  

Net Sales..................     $160,685     $149,443     $152,949    $171,407  
Gross Profit...............     $ 50,934     $ 45,590     $ 47,498    $ 53,283  
Net Income:                                                                     
Pro forma................     $  8,703     $  7,191                         
Actual...................                               $  7,940    $  9,217
Net Income Per Share:                                                           
Pro forma................     $   0.26     $   0.20                         
Actual...................                               $   0.22    $   0.25

                             First       Second       Third       Fourth
1996:                           Quarter      Quarter      Quarter     Quarter   
----                           ---------    ---------    ---------   ---------  

Net Sales..................     $ 218,732    $213,707     $225,868    $253,586  
Gross Profit...............     $  65,021    $ 60,070     $ 60,313    $ 64,212  
Net Income.................     $  11,392    $  9,787     $ 10,683    $ 11,842  
Net Income Per Share.......     $    0.31    $   0.26     $   0.28    $   0.31  

    Prior to the third quarter of 1995, the Company had disclosed net income
and net income per share on a pro forma basis, the latter having been           
determined based on the weighted average number of shares and share             
equivalents outstanding.                                                        

*  *  *  *  *  *      

Dates Referenced Herein   and   Documents Incorporated by Reference

This ‘10-K405’ Filing		Date		Other Filings
		12/31/05		10-K,  NT 10-K
Filed on:		3/28/97
		3/27/97
		3/25/97
		2/5/97
For Period End:		12/31/96
		3/26/96
		1/1/96
		12/31/95
		11/30/95
		9/30/95
		6/29/95
		6/27/95
		6/26/95
		6/15/95
		5/8/95
		12/31/94
		1/1/94
		12/31/93
		11/1/93
		12/31/92
		12/22/92
		10/14/92
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