Mass merchants provide boost.

The Handleman Co. reports net income of $8.2 million, or 36 cents per diluted share, on sales of $295.3 million for the fiscal second quarter, which ended Oct. 30.

The sales figure is up 9.4% from the $269.9 million the rackjobber generated in last year's fiscal second quarter, thanks to the growing music market share for the U.S. mass merchants Handleman services, and also because of growth in its Canadian operation.

While net income was up from last year's $9.9 million, or 40 cents per diluted share, the figure is actually down if one takes into account discontinued operations.

Gross margin was down slightly to 20.2% from 20.5% of revenue last year, while expenses maintained the same 16.1% or revenue ratio.

In the six-month period ended oct. 30, Handleman reported net income of $9.1 million, or 39 cents per diluted share, on sales of $527.4 million. This compares to income of $11.2 million, or 45 cents per diluted share, in the same period last year, when sales were $475.2 million. The sales figure represents a gain of 11%, while income was affected by discontinued operations. In examining only continuing operations, Handleman showed earnings of 41 cents per diluted shares, vs. 35 cents last year.

Handleman's stock finished today (Nov. 23) at $22.28, up 22 cents or 1% from yesterday's close.