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ALTERNATIVE DISTRIBUTORS REPORTS OPERATING RESULTS

 ALTERNATIVE DISTRIBUTORS REPORTS OPERATING RESULTS
 MADFORD, Mass., June 15 /PRNewswire/ -- Alternative Distributors


Corporation announced today that its new accountants, Gordon, Harrington and Osborn, P.C., have concluded that certain of its financial records have not been maintained in a manner enabling such accountants to satisfy themselves as to the amounts of accounts receivable, allowance for doubtful accounts, net sales and bad debt expense. Accordingly, those accountants are unable to express an opinion on the financial statements for the company's fiscal year ended Feb. 29, 1992, which are scheduled to be filed with the Securities and Exchange Commission later today as part of its annual report on Form 10-K. The financial statements show a loss of $1,033,648 or ($0.40) per share, compared with a profit of $66,706 or $0.03 per share for its prior fiscal year. The principal reasons for the loss are a reduction in reported sales of approximately $430,000, to take into account inadequately documented receivables, and the establishment of a reserve in the amount of $350,000 for doubtful accounts. The company also experienced significant one-time expenses associated with becoming a public company.
 The company had not been aware of the extent of the problems that its accountants have identified in its procedures relating to the maintenance of records regarding its accounts receivable. Since those problems have surfaced, the company has terminated its retention of the accountant who audited its financial statements for its last three fiscal years (except for one matter, nearing completion) and more recently had his role reduced to supervision of bookkeeping procedures when the company retained its new auditing firm. The company has also retained a financial consultant to (1) institute new procedures to insure that accounts receivable are closely monitored in the future, (2) assist in staffing the company's bookkeeping group with experienced personnel, subject to overall guidance from the new accounting firm, (3) supervise the integration of company's new hand-held computer system with its internal bookkeeping, and (4) inaugurate a program for recovering receivables that the accountants have determined to be inadequately documented. The company believes these steps not only will solve its accounting problems in the future, but also will result in the collection over the next few months of a significant portion of the receivables its accountants deem insufficiently documented. As a result, its operating results for the current fiscal year, and especially for the period beginning June 1, 1992, should be substantially improved compared with prior years. The company's sales are currently running more than 65 percent above the average (adjusted) net sales reported by the accountants for the fiscal year ended Feb. 29, 1992, and more than 52 percent above sales recorded by the company, prior to such adjustment. As soon as practicable, the company intends to obtain an audit which (except for the opening balance of certain accounts receivable) is unqualified, and anticipates that such an audit will be obtainable with respect to the six-month period ending Aug. 31, 1992.
 -0- 6/15/92
 /CONTACT: Bernard Reitman, president of Alternative Distributors, 617-395-0353/ CO: Alternative Distributors Corporation ST: Massachusetts IN: SU: ERN


TQ-OS -- NY064 -- 0286 06/15/92 15:24 EDT
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Publication:PR Newswire
Date:Jun 15, 1992
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