Exhibit 13


<TABLE>
<CAPTION>
                                      AMERICAN CONSUMERS, INC.

                                 FIVE-YEAR  SUMMARY  OF  OPERATIONS

                              (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

---------------------------------------------------------------------------------------------------

                                                          FISCAL YEAR ENDED
                                    ---------------------------------------------------------------
                                      JUNE 3       MAY 28       MAY 29       MAY 31       JUNE 1
                                       2006         2005         2004         2003         2002
                                    (53 Weeks)   (52 Weeks)   (52 Weeks)   (52 Weeks)   (52 Weeks)
                                    -----------  -----------  -----------  -----------  -----------
<S>                                 <C>          <C>          <C>          <C>          <C>

NET SALES                           $   33,280   $   32,101   $   30,011   $   29,625   $   28,900
                                    -----------  -----------  -----------  -----------  -----------

COST AND EXPENSES:
  Cost of goods sold                    25,234       24,431       22,819       22,524       22,313
  Operating, general and
    administrative expenses              8,262        8,031        7,473        7,098        6,881
  Interest expense                          60           59           45           56           73
  Other income, net                       (109)         (89)         (90)         (93)         (96)
                                    -----------  -----------  -----------  -----------  -----------

      Total                             33,447       32,432       30,247       29,585       29,171
                                    -----------  -----------  -----------  -----------  -----------

Income (loss) before income taxes         (167)        (331)        (236)          40         (271)
                                    -----------  -----------  -----------  -----------  -----------

INCOME TAXES:
  Federal                                    -            -            -            -          (42)
  State                                      -            -            -            -           (2)
                                    -----------  -----------  -----------  -----------  -----------

      Total                                  -            -            -            -          (44)
                                    -----------  -----------  -----------  -----------  -----------

NET INCOME (LOSS)                   $     (167)  $     (331)  $     (236)  $       40   $     (227)
                                    ===========  ===========  ===========  ===========  ===========

PER SHARE AMOUNTS:
  Net income (loss)                 $     (.21)  $     (.41)  $     (.29)  $      .05   $     (.27)
                                    ===========  ===========  ===========  ===========  ===========

  Cash dividends                    $        -   $        -   $        -   $        -   $        -
                                    ===========  ===========  ===========  ===========  ===========

WEIGHTED AVERAGE NUMBER
  OF SHARES OUTSTANDING                    800          807          814          818          825
                                    ===========  ===========  ===========  ===========  ===========

TOTAL ASSETS                        $    3,512   $    3,607   $    4,090   $    4,046   $    4,469
                                    ===========  ===========  ===========  ===========  ===========

LONG-TERM DEBT                      $  222,617   $  426,244   $  662,078   $  514,236   $  681,154
                                    ===========  ===========  ===========  ===========  ===========

---------------------------------------------------------------------------------------------------
</TABLE>

Please refer to "Management's Discussion and Analysis of Financial Condition and
Results  of  Operations"  herein  for  a  discussion  of the timing of new store
openings  and  other  factors  which  affect  the  comparability  of the summary
information  presented  above  for each of the Company's past five fiscal years.


                                      -3-
<PAGE>
                         MARKET AND DIVIDEND INFORMATION


     The  Company's  common stock is traded in the over-the-counter market.  The
approximate  number  of  record holders of the Company's common stock at June 3,
2006,  was  807.  The  following  table  gives  the  range  of  high and low bid
quotations  and  dividends  for  each  quarterly  period for the two most recent
fiscal  years.

<TABLE>
<CAPTION>
                   Bid Prices   Asked Prices  Dividends
--------------------------------------------------------
                  High    Low   High    Low   Per Share
                  -----  -----  -----  -----  ---------
<S>               <C>    <C>    <C>    <C>    <C>
2006
--------------------------------------------------------
  First Quarter   $1.20  $1.01  $3.00  $3.00     None
--------------------------------------------------------
  Second Quarter  $1.20  $1.20  $3.00  $3.00     None
--------------------------------------------------------
  Third Quarter   $1.26  $1.20  $3.00  $3.00     None
--------------------------------------------------------
  Fourth Quarter  $1.26  $1.26  $3.00  $3.00     None
--------------------------------------------------------

2005
--------------------------------------------------------
  First Quarter   $0.87  $0.87  $1.50  $1.50     None
--------------------------------------------------------
  Second Quarter  $0.90  $0.90  $4.00  $4.00     None
--------------------------------------------------------
  Third Quarter   $0.90  $0.90  $4.00  $4.00     None
--------------------------------------------------------
  Fourth Quarter  $1.01  $1.01   None   None     None
--------------------------------------------------------
</TABLE>

     The  information  set  forth  in  the  above table is supplied through Pink
Sheets  LLC  where  available.

     There  is no established public trading market for the Company's stock, and
the  information  set  forth  above  is  based  on  a  small  number of isolated
quotations  and  reflects inter-dealer prices, without retail mark-up, mark-down
or  commission  and  may  not  necessarily  represent  actual  trades.  The
market-makers  as  of  June  3,  2006,  are:

     Carr Securities Corporation       (516) 944-8300

     David A. Noyes & Co.              (312) 606-4694

     Domestic Securities, Inc.         (201) 782-0009

     Hill Thompson Magid & Co.         (800) 631-3083

     Hudson Securities, Inc.           (201) 216-9100

     Knight Equity Markets, LP         (212) 336-8790

     Monroe Securities, Inc.           (800) 766-5560

     UBS Capital Markets L.P.          (212) 514-5140


                                      -4-
<PAGE>
<TABLE>
<CAPTION>
                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                           CONDITION AND RESULTS OF OPERATIONS

                                  RESULTS OF OPERATIONS
                                  ---------------------

                                                             FISCAL YEAR ENDED
                                                 ----------------------------------------
                                                   June 3,       May 28,       May 29,
                                                     2006          2005          2004
                                                 ------------  ------------  ------------
<S>                                              <C>           <C>           <C>

Sales                                            $33,279,928   $32,101,191   $30,011,255
% Sales Increase                                        3.67%         6.96%         1.31%
Gross Margin %                                         24.18%        23.89%        23.97%
Operating, General and Administrative Expense:
  Amount                                         $ 8,262,133   $ 8,031,341   $ 7,473,239
  % of Sales                                           24.83%        25.02%        24.90%
Net Loss                                         $  (167,379)  $  (331,360)  $  (236,050)
</TABLE>

Overview:
--------

American  Consumers,  Inc.  (the  "Company"),  operates  eight  (8) self-service
supermarkets  within  a  compact  geographical  area  that  comprises  Northwest
Georgia,  Northeast  Alabama,  and Southeast Tennessee.  All of our supermarkets
are  operated  under the name "Shop-Rite," and are engaged in the retail sale of
groceries  including  meats, fresh produce, dairy products, frozen foods, bakery
products,  tobacco  products,  and  miscellaneous  other  non-food  items.

The  Company  continues  to  struggle with operating losses as we are faced with
increased  operating  expenses  and  competition  from  larger grocery retailers
operating  in the markets served by our stores.  The Company realized a net loss
for  the  year ended June 3, 2006 of $167,379, as compared to a net loss for the
fiscal  year  ended  May 28, 2005 of $331,360 and a net loss of $236,050 for the
fiscal  year  ended  May  29,  2004.

The  Company's  24.18% gross margin for fiscal 2006 represents an improvement of
0.29%  over  fiscal 2005 and an improvement of 0.21% as compared to fiscal 2004.
This  reversed the 0.08% reduction in gross margin that we experienced last year
as  compared to fiscal 2004 and contributed greatly to the $163,981 reduction in
net  loss  for  fiscal  2006  versus  2005.  The  gross margin improved because,
whereas  gross  margin  was negatively impacted during the second half of fiscal
2005  by  the  fact  that our primary inventory supplier increased its wholesale
markup  from  3.0% to 3.5% during the third quarter and competition prevented us
from  immediately  passing  the increase through to the retail level, management
succeeded  during  fiscal  2006  in strategically adjusting the Company's retail
pricing  mix  to  recapture the remainder of this increase.  Similarly, while we
were  not able to immediately adjust our prices to recover a fuel surcharge that
the  supplier  implemented  during  the  second  quarter of fiscal 2006, ongoing
adjustments  to  our  pricing  mix  also  offset  this increase in our wholesale
inventory  costs  by fiscal year end.  Unfortunately, increases in several items
of  operating,  general  and  administrative  expenses,  including a significant
non-recurring  theft  loss experienced during the fourth quarter of fiscal 2006,
more  than  offset  the improved gross margin, resulting in the net loss for the
year.  The  gross  margin  reduction  that occurred in the second half of fiscal
2005,  coupled  with  significant  increases  in  operating,  general  and
administrative  expenses for the year, were the principal drivers of the $95,310
increase in net loss for fiscal 2005 versus 2004.  Major factors contributing to
the  net  loss  experienced in fiscal 2004 included expenditures associated with
the  establishment of our eighth grocery store location in Tunnel Hill, Georgia,
payroll  increases  at  all  store  locations  and a significant increase in our
worker's  compensation  insurance  premium.


                                      -5-
<PAGE>
Management  actively  monitors  both  the  gross margin and the company's retail
pricing  structure  in  an  attempt to maximize profitability.  Management began
working  on the Company's gross margin during the quarter ended August 31, 2002,
at which time the gross margin stood at 22.79% for the fiscal year ended June 1,
2002.  While  occasional  improvements  in gross profit have been seen in recent
periods, such as the increase we achieved during fiscal 2006, it is difficult to
maintain  a  trend  of  consistent  improvement  in  the  gross  margin  due  to
competitive  conditions  which often delay the Company's ability to pass through
price  increases  experienced  at  the  wholesale  level.  Accordingly,  while
management  attempts  to  offset  increases  in  its cost, such as our principal
supplier's  pricing increases discussed above, further improvements in the gross
margin  may  not  be  achievable  at this time, and further deterioration in the
Company's  gross  margin  is  possible.  Management  believes  that  competitive
pressures  on  the  Company,  which have led to the losses experienced in recent
periods,  will  continue  to  increase  over  time  as a result of the increased
presence  of  larger  competitors  operating in the Company's trade area.  These
competitors  have greater financial resources than those of the Company, and may
be  able  to  obtain  preferential  treatment  from  suppliers  in  the  form of
advertising  allowances, lower prices and other concessions not available to the
Company.  These  factors  allow  our competitors to engage in aggressive pricing
and  promotional  activities  that  the  Company  cannot  match, putting us at a
competitive  disadvantage.

Our  gross  margins  may  not  be  directly  comparable  to  those of our larger
competitors,  since  some  of  those  companies  may  include the costs of their
internal  distribution networks in cost of goods sold - thus impacting the gross
margin  -  while  others  reflect  such  costs  elsewhere (such as in operating,
general  and  administrative expenses).  Unlike many of the larger grocery store
chains with which we compete, the Company does not have an internal distribution
network.  Inventory  is  delivered directly to our individual store locations by
our wholesale supplier, which recovers its distribution costs through the markup
that  it  charges  to  the  Company.  Accordingly,  our  cost  of  goods sold as
reflected  in the Company's financial statements is comprised principally of our
direct  wholesale  cost for the acquisition of such inventory, net of applicable
rebates  and  allowances  as  discussed  under  "Inventories"  in  Note  1  the
accompanying  financial  statements.

Due  to  continued  increases  in  net  sales,  the  trend  of  operating  and
administrative  expenses  increasing  as  a  percent  of  sales  appears to have
moderated,  as operating and administrative expenses decreased by 0.19% of sales
in  fiscal  2006  as compared to fiscal year 2005, versus increasing by 0.12% of
total  sales  in  fiscal  2005  compared  to  2004.  Still,  these expenses have
continued  to  increase  in  absolute  terms  with the addition of the Company's
seventh  and  eighth grocery stores since April 28, 2001, as well as the unusual
theft  loss  and  the  additional increases in corporate level expenses detailed
below.

Operating, general and administrative expenses increased overall by $230,792 (or
2.9%) in fiscal 2006 as compared to 2005, and increased by $558,102 (or 7.5%) in
fiscal  2005  as compared to 2004.  A detailed breakdown and discussion of these
expenses is presented below.  Management continues to monitor these expenses and
continues  to evaluate the performance of each of our grocery store locations to
determine  their  long  term  value  to  the  Company.

Interest  expense  remained  essentially  flat during fiscal 2006 (increasing by
only $393), in spite of a $203,627 reduction in our long-term debt.  The effects
of  this reduction were offset by a $93,012 increase in the Company's short-term
working  capital  financing  and by an increase in the weighted average interest
rate on our debt (from 6.11% to 7.37%) due to increases in the prime rate during
the  year.  The increase in interest expense was more than offset, however, by a
$6,845  increase  in


                                      -6-
<PAGE>
interest  income  for  fiscal  2006 versus 2005, which resulted from a favorable
repricing  of  our  bank certificate of deposit during the year.  This contrasts
with fiscal 2005, during which interest expense increased by $14,501 as compared
to  the  prior year, due to increases in both our credit line borrowings and the
effective  interest  rate  on  a portion of our variable rate debt, and interest
income simultaneously decreased by $9,695 due to an unfavorable repricing of our
bank  certificate  of  deposit  during  the  year.

Sales:
-----

Sales  for  the  fiscal  year  ended  June  3,  2006 increased by 3.67% over the
previous  year.  Approximately  55%  of  this sales increase was due to the fact
that  our  2006  fiscal year contained 53 weeks, while fiscal 2005 was a 52-week
year.  Besides  the extra week of operations, fiscal 2006 sales also were helped
by  a  successful  Super Bowl promotion and two significant snowfalls during the
third  quarter  (which  tend  to  generate short-term spikes in grocery sales as
customers  "stock  up" on staple items), and by the success of a major promotion
that we ran in celebration of the Company's 50th anniversary in May 2006.  Seven
of our eight locations experienced same-store sales increases (ranging from 1.0%
to  11.4%)  for  fiscal  2006  as compared to fiscal 2005.  Our remaining store,
which experienced a 2.3% sales decrease for fiscal 2006, was negatively impacted
by  the  fact  that  another tenant moved out of the shopping center where it is
located  during  the  year,  as well as by generally unfavorable traffic pattern
conditions at that location.  This store also was the location of the theft loss
that  was  detected  during  the  year-end  audit.

Sales  for  the year ended May 28, 2005 included an entire year of sales for our
Tunnel  Hill  store,  opened  on January 5, 2004.  Sales without Tunnel Hill for
fiscal  2005  increased  1.32%,  while  the  addition  of  the Tunnel Hill store
accounted  for  the  remainder  of the 6.96% sales increase over the 2004 fiscal
year.  The  remaining  1.32%  increase was attributable to the closing of one of
the  Company's  main  competitors in Dayton, Tennessee in April 2004.  Sales for
the  Dayton  location increased 9.88% in fiscal 2005 as compared to fiscal 2004,
while our other store locations saw either negligible growth in sales or minimal
declines.  Excluding the impact of the Tunnel Hill store addition, sales for the
year  ended  May 29, 2004 actually decreased 2.50% as compared to the year ended
May  31,  2003.

Management  believes  that  the  difficulties  experienced  by  the  Company  in
increasing  its  volume,  apart  from  the  addition of new store locations, are
indicative  of  the effects of ongoing price competition from larger competitors
with  greater  financial  resources  than  the  Company.

The following table sets forth information for the last three fiscal years as to
the  amount  of  total  sales  contributed  by  each  class  of  products  which
contributed  a  significant percentage of the total retail sales and revenues of
the  Company  during  such  periods:

<TABLE>
<CAPTION>
                                  Fiscal 2006    Fiscal 2005    Fiscal 2004
     Product Class                (53 Weeks)     (52 Weeks)     (52 Weeks)
     --------------------------  -------------  -------------  -------------
<S>                              <C>            <C>            <C>
     Meat and Deli               $   9,533,808  $   9,230,478  $   8,327,742
     Produce                         2,563,086      2,344,420      2,206,198
     Grocery and Non-Food Items     21,183,034     20,526,293     19,477,315
</TABLE>


                                      -7-
<PAGE>
Gross  Margin:
-------------

As discussed above, the Company's gross margin of 24.18% for the year ended June
3,  2006 increased by .29% over fiscal year 2005, reversing a 0.08% reduction in
gross  margin that occurred last year and representing an increase of 0.21% over
the  gross  margin  of  23.97%  realized  in  fiscal  years 2004 and 2003.  This
improvement  in  the  gross margin is principally attributable to our success in
strategically  adjusting  retail prices over the past fiscal year to offset both
our  primary  supplier's increase in its wholesale markup from 3% to 3.5% during
the  third  quarter  of  fiscal  2005  and  a  fuel surcharge implemented by the
supplier  in during the second quarter of fiscal 2006.  While we will attempt to
sustain  these  improvements  in  gross margin by adjusting the Company's retail
prices  to  recover  future cost increases, competitive conditions may limit the
extent  to  which  we  are  able  to  do  so.

Operating,  General  and  Administrative  Expenses:
--------------------------------------------------

The  Company's  ongoing  operating,  general  and  administrative  expenses  are
comprised  mainly  of  personnel salary and related payroll costs, utilities and
telephone  expenses, rent, insurance expense, advertising and promotion expense,
general  and  office  supplies  expense,  repairs  and maintenance, depreciation
expense,  bank  service  charges  and  credit  card  fees,  bad  checks expense,
professional  fees,  and other minor miscellaneous expenses.  In accordance with
EITF  02-16,  advertising  rebates  received  from  suppliers  are deducted from
advertising  expense  within  this  category.

The  following  table  details  the  components  of  operating,  general  and
administrative expenses, both in absolute terms and as a percentage of the total
of  all  such  expenses,  for  fiscal  years  2006,  2005  and  2004:

<TABLE>
<CAPTION>
                                                        % of 2006                % of 2005                % of 2004
Expense Item                               2006 Amount    Total    2005 Amount     Total    2004 Amount     Total
------------                               -----------  ---------  ------------  ---------  ------------  ---------
<S>                                        <C>          <C>        <C>           <C>        <C>           <C>
Payroll                                    $ 3,936,440       47.6  $  3,932,634       49.0  $  3,747,605       50.2
Utilities and telephone expense                718,550        8.7       653,600        8.1       591,574        7.9
Rent                                           628,765        7.6       621,808        7.7       593,841        7.9
Insurance                                      627,826        7.6       674,109        8.4       583,301        7.8
Advertising and promotion                      611,447        7.4       628,455        7.8       571,991        7.7
General and office supplies                    367,303        4.5       327,785        4.1       301,936        4.0
Repairs and maintenance                        359,460        4.4       349,754        4.4       333,651        4.5
Depreciation                                   279,250        3.4       303,820        3.8       300,212        4.0
Bank service charges and credit card fees      160,347        1.9       115,629        1.4        75,280        1.0
Bad checks                                     120,583        1.5        87,502        1.1        66,506        0.9
Professional fees                              118,195        1.4       108,553        1.4        97,181        1.3
Theft loss                                      98,750        1.2             -          -             -          -
All other misc.                                235,217        2.8       227,692        2.8       210,161        2.8
                                           -----------  ---------  ------------  ---------  ------------  ---------
TOTAL                                      $ 8,262,133      100.0  $  8,031,341      100.0  $  7,473,239      100.0
                                           ===========  =========  ============  =========  ============  =========
</TABLE>


                                      -8-
<PAGE>
Overall,  operating,  general  and administrative expenses increased by $230,792
(or  2.9%)  in  fiscal  2006  as  compared  to  2005.  Approximately 43% of this
increase  is  attributable  to  a  loss  of  $98,750  (net of expected insurance
recoveries  of  $24,000)  due to an alleged employee theft of cash at one of our
grocery  stores  that was detected during the fiscal 2006 audit of the Company's
financial  statements.  The  Company's  practice  of  cashing payroll checks for
customers  at  its grocery store locations contributed to the circumstances that
led  to  this loss, and also contributed to the $44,718 increase in bank service
charges and credit card fees and the $33,081 increase in bad checks expense that
the  Company  experienced  during  fiscal  2006.  The  increase  in bank service
charges is also partially attributable to increases in merchant fees paid by the
Company  as  more  customers  elect  to pay for grocery purchases with debit and
credit  cards.  Management  believes  that  the  practice  of cashing customers'
checks,  while  posing  certain  risks  for  the  Company,  is also vital to our
competitive  strategy  for maintaining customer traffic and growing sales in the
face  of  the  increased  competition from larger grocery retailers that we have
experienced  in  recent years.  We have installed a check verification system to
reduce  bad  checks  expense  and are investigating a possible upgrade to a more
sophisticated  system  to  further  combat  this problem.  We are also exploring
other  measures  to  improve  our  process  for  managing customer check cashing
activities  and  reducing  associated  expenses  while  continuing to offer this
service  to  our  customers.  Other  significant  increases  in this category of
expenses  for  fiscal  2006  included  an  increase  of $64,950 in utilities and
telephone  expense during 2006, largely due to increasing energy costs in recent
periods  which  are  beyond  the  Company's  control,  an increase of $39,518 in
expenditures  for  supplies,  primarily  related  to price increases experienced
during  the  year  for  many  of  the  routine  supplies  (particularly  certain
petroleum-based  packaging  materials) purchased by the Company, and an increase
of  $9,706  in  repairs  and  maintenance  related  to  the overall aging of the
Company's  equipment.  These increases were partially offset by decreases during
fiscal  2006  of  $46,283  in  insurance  expense  (due  mainly to a decrease of
approximately  $40,000  in  our  worker's compensation insurance premium for the
year), $17,008 in advertising and promotion expense (reflecting the fact that we
did  not  run  certain  programs that were primarily responsible for the $56,464
increase  last  year,  but  also  offset  by  increases  in  the  cost  of other
promotions),  and $24,570 in depreciation (reflecting a significant reduction in
our purchases of new equipment during fiscal 2006, as well as the fact that some
of  our  older  equipment  is  now  fully depreciated).  Further, the relatively
insignificant increase of $3,806 in payroll for fiscal 2006, as compared to much
more significant increases in each of the prior two years, reflects management's
efforts  to  reduce  payroll  expense  through  better scheduling and the use of
part-time  employees.

Operating,  general  and administrative expenses increased by $558,102 (or 7.5%)
in  fiscal  2005  as  compared  to  2004.  Significant components of the overall
increase  in  these  expenses  during  fiscal 2005 included increases in payroll
($185,029),  insurance  premiums ($90,808), advertising and promotion ($56,464),
utilities  and  telephone  expense ($62,026), rent ($27,967), general and office
supplies  expense ($25,849), bank service charges and credit card fees ($40,349)
and  bad  checks  expense ($20,996), all of which were significantly impacted by
the  addition  of  our  eighth  grocery store during fiscal 2004.  Additionally,
repairs and services expense and depreciation expense increased by significantly
greater  amounts  in  fiscal  2004  than  in fiscal 2005, reflecting the initial
refurbishment  and capital equipment expenditures associated with the opening of
the  Tunnel  Hill  store.


                                      -9-
<PAGE>
Finally,  a significant contributor to the increases in professional fees during
both  fiscal  2006  and  fiscal  2005  ($9,642  and  $11,372,  respectively) was
increased  regulatory costs related to compliance with the Sarbanes-Oxley Act of
2002.

Other  Income:
-------------

The  components of net other income for the fiscal years ended June 3, 2006, May
28,  2005  and  May  29,  2004  were  as  follows:

<TABLE>
<CAPTION>
     Description                                2006 Amount   2005 Amount   2004 Amount
     -----------                                ------------  ------------  ------------
<S>                                             <C>           <C>           <C>

     Check cashing fees                         $     66,755  $     52,133  $     31,139
     Funds received for handling money orders          8,118         5,940        15,870
     Vendor's compensation from the States of
       Alabama and Georgia for collecting and
       remitting sales taxes on a timely basis        14,516        14,153        13,664
     Returned check fees                                 570         6,003        10,264
     Revenue related to Fed-Ex shipments/other         7,886         6,756         5,421
     Interest income                                  10,878         4,033        13,728
                                                ------------  ------------  ------------
     TOTAL                                      $    108,723  $     89,018  $     90,086
                                                ============  ============  ============
</TABLE>

As  noted  above,  both  the  $6,845 increase in interest income for fiscal 2006
versus  2005  and  the $9,695 decrease in interest income for fiscal 2005 versus
2004  were due principally to the repricing of the Company's bank certificate of
deposit  during  such  periods.  Changes  in  the  remaining components of other
income  as  presented  above relate primarily to variations in the volume of the
associated activity or service provided by the Company during each of the fiscal
years  presented.

Income  Taxes:
--------------

The  Company accounts for income taxes in accordance with the provisions of SFAS
No.  109,  "Accounting  for  Income  Taxes," which requires that deferred income
taxes  be  determined  based  on the estimated future tax effects of differences
between  the  financial  statement and tax basis of assets and liabilities given
the  provisions of the enacted tax laws. Valuation allowances are used to reduce
deferred  tax  assets  to  the  amount  considered  likely  to  be  realized.

No  amounts  have  been  provided for current and deferred federal and state tax
expense  in  the  statements  of income for any of the three years ended June 3,
2006, as a result of continued net operating losses and the related valuation of
the  Company's  net  deferred  tax  assets.

At  June  3,  2006, the Company has net operating loss carryforwards for federal
and  state  income  tax  purposes  of  $747,024 and $666,022, respectively.  The
Company  has  established  a  valuation allowance, which effectively reduces the
carrying  value  of  its  net deferred taxes to zero at June 3, 2006 and May 28,
2005.  Unless  the  Company realizes sufficient taxable income in future periods
to demonstrate that the likelihood of realization of the net deferred tax assets
is  reasonably  assured  under  the  accounting guidelines of SFAS No. 109, this
valuation  allowance  will be continued in future periods.  If not utilized, the
carryforwards  will  expire  at  various  dates  through  2025.


                                      -10-
<PAGE>
Inflation:
----------

The Company continues to seek ways to cope with the threat of inflation.  To the
extent  permitted  by  competition, increased costs of goods and services to the
Company  are  reflected in increased selling prices for the Company's goods.  As
discussed above, however, competitive conditions often delay our ability to pass
through price increases experienced at the wholesale level.  When the Company is
forced  to  raise  overall prices of its goods, the Company attempts to preserve
its  market  share  by  competitive  pricing  strategies  that  emphasize
weekly-advertised  specials.


                               FINANCIAL CONDITION
                               -------------------

Liquidity  and  Capital  Resources:
-----------------------------------

Changes  in  the  Company's  liquidity  and capital resources during the periods
presented  resulted  primarily  from  the  following:

During  the  fiscal  year  ended June 3, 2006, the Company generated $275,309 in
cash  flow  from  operating  activities,  increased  its draws under its line of
credit  with  Northwest  Georgia Bank by $100,000 (bringing the outstanding line
balance to the full $500,000 available to the borrowed), and incurred additional
long-term debt in the amount of $22,212 in connection with the purchase of a new
vehicle.  The  Company's  cash  and  cash equivalents increased by approximately
$35,895 and its certificate of deposit increased by $11,925 for fiscal 2006.  In
addition  to funding our ordinary working capital requirements, these funds were
utilized to reduce the Company's long-term debt by a net amount of approximately
$203,627  and  its borrowings from affiliated parties by $6,988 during the year,
to  redeem  $7,082 in common stock, and to fund purchases of property, plant and
equipment  of  $115,880.  These purchases of property and equipment included the
replacement  of  two  vehicles  financed  through payment of $17,678 in cash and
manufacturer financing in the amount of $22,212 on one of the vehicles, plus the
trade-in  value received for the two older vehicles replaced, as well as $68,680
to  replace  certain  refrigeration  equipment  at  one  store  and some smaller
equipment  purchases  and  miscellaneous  shelving  upgrades  and  leasehold
improvements.  We  presently  estimate  that  capital  expenditures for required
replacements  of  equipment  in  the  ordinary course during fiscal 2007 will be
$30,000  or  less,  which  we  expect  to  fund  from  operating  cash  flows.
Additionally, we expect to have to replace anywhere from one to three additional
vehicles  during  fiscal  2007 at an estimated cost of approximately $25,000 per
vehicle,  which we expect to fund through either bank or manufacturer financing,
whichever  option  will  provide  the  Company  with  the  most favorable terms.
Finally,  while  management  is  attempting  to  postpone future upgrades of our
existing  cash  registers  and  scanning  equipment  beyond fiscal 2007, pending
changes that will add an additional digit to the bar codes on the inventory that
we  carry  will  likely require such upgrades within the next two to five fiscal
years.  We cannot reliably estimate the cost of any such upgrades at the present
time, but we will attempt to manage the number of units purchased and the timing
of  such  purchases  in a manner which both contains the Company's overall costs
and allows us to finance these purchases on the most favorable terms that we are
able  to  obtain.

While the Company encountered a net loss of $167,379 for fiscal 2006, its impact
on the Company's liquidity was more than offset by depreciation and amortization
in  the amount of $279,250, which has no effect on the Company's cash flow.  Our
liquidity  and  cash  position  also


                                      -11-
<PAGE>
were  favorably  impacted  during  fiscal  2006  by  a  $82,658  reduction  in
inventories,  reflecting  management's  continued  efforts to reduce inventories
following  the  buildup which occurred during fiscal 2004, and by an increase in
accounts  payable  of  $190,145.  As  the  Company  has  experienced  continued
operating  losses  in recent years, we have been forced to rely more extensively
on  managing  these elements of the Company's overall working capital structure,
as  well  as  on additional borrowings under the line of credit, to fund ongoing
operations.  Conversely,  liquidity  was  negatively  impacted  by  an  alleged
employee  theft  of  cash  that occurred at one of our grocery stores during the
fiscal  year  and accounted for $98,750 (net of expected insurance recoveries of
$24,000)  of  the  Company's  $167,379  net  loss  for  fiscal  2006.

During  the  fiscal  year  ended May 28, 2005, the Company generated $150,760 in
cash  flow  from  operating  activities,  increased  its draws under its line of
credit  with  Northwest  Georgia  Bank by $100,000 and reduced its cash and cash
equivalents by $36,376 and reduced its certificate of deposit by $20,640.  These
funds  were  utilized  to  purchase $56,588 in property and equipment, to redeem
$9,423  in  common stock, and to reduce the Company's long-term debt by $235,834
and  its  borrowings  from  affiliated parties by $5,931 during the fiscal year.
The  impact  on  the  Company's  liquidity  of the $331,360 net loss incurred in
fiscal  2005  was  softened  by  the fact that much of the loss was comprised of
$303,820  in depreciation and amortization, which has no impact of the Company's
cash  flow.  Following the substantial increase in inventories which occurred in
fiscal  2004  in  connection  with  the  addition  of  our eighth grocery store,
management  concentrated  during  fiscal  2005 on reducing the Company's overall
inventories,  resulting in a net reduction of $156,884 which also had a positive
impact  on our liquidity.  We also significantly reduced capital spending during
fiscal  2005,  with purchases of property and equipment amounting to $56,588 for
the  2005  year  as  compared  to  $341,752  for  fiscal  2004,  which  included
significant  capital  expenditures  related  to  the establishment of our eighth
grocery  store  location.

During  fiscal  year  2004,  the company experienced a decrease in cash and cash
equivalents  of $410,524.  This decrease is primarily attributable to opening of
the  Company's eighth grocery store during the third quarter of the fiscal year.
In  conjunction  with  this  opening,  the  Company  was  required  to  purchase
approximately  $300,000  in  inventories and $300,000 in property and equipment.
Purchases  of  inventory and property and equipment at the other store locations
were  approximately  $66,000  and  $42,000,  respectively.  In  addition  to the
decrease in cash and cash equivalents, the Company increased its net outstanding
long-term debt at May 29, 2004 by $147,842 and borrowed an additional $85,303 in
short-term  borrowings, as compared to May 31, 2003, to help fund the opening of
the eighth store and other store operations.  Finally, the Company experienced a
net  loss of $236,050 for fiscal year 2004.  However, the impact of the net loss
on the Company's cash flow was slightly more than offset by non-cash charges for
depreciation  and  amortization  of  $300,212.

The  ratio  of current assets to current liabilities was 1.66 to 1 at the end of
the  latest  fiscal  year,  June 3, 2006 compared to 1.74 to 1 at the end of the
fiscal  year  ended on May 28, 2005.  Cash, cash equivalents and the certificate
of  deposit  constituted  21.17% of the total current assets at June 3, 2006, as
compared  to  20.13% at May 28, 2005.  These ratios reflect the trends discussed
above,  in  that the Company increased its reliance on bank and vendor financing
during the last three fiscal years, due to increased losses which coincided with
increased  inventory and capital spending requirements in fiscal 2004 related to
the  establishment  of  our  eighth grocery store location.  During fiscal years
2005  and  2006, management has limited additional capital spending and has been
working  to  control costs and to gradually reduce the Company's inventory level
in  order  to


                                      -12-
<PAGE>
moderate the effects of these developments on the Company's overall liquidity by
reducing  the  Company's  working  capital  requirements.

Historically,  we  have  financed  our  working capital requirements principally
through  cash  flow from operations.  Short-term borrowings to finance inventory
purchases  are  provided  by the Company's $500,000 line of credit from its bank
and  through borrowings from related parties, as discussed below.  The bank line
of  credit  is  secured  by our certificate of deposit, as well as by a security
interest  in  substantially  all of our accounts receivable, inventory, machines
and  equipment,  furniture and fixtures and by personal guarantees of Michael A.
Richardson  and Paul R. Cook, the Company's President and CEO and Executive Vice
President  and  CFO,  respectively.  While  we  believe  that these sources will
continue  to  provide us with adequate liquidity to supply the Company's working
capital  needs,  if  the Company's operating losses were to increase relative to
depreciation  and  other  non-cash  charges,  our  operating cash flows could be
adversely  affected.  If  this  happens, we could be required to seek additional
financing  through  bank  loans,  or other sources, in order to meet our working
capital  needs.  If  we were required to seek such additional financing and were
not able to obtain it, or were unable to do so on commercially reasonably terms,
we  could  be  required  to  reduce the Company's current level of operations in
order  to  lower  our  working  capital requirements to a level that our present
financing  arrangements  would  support.

Short-term  borrowings  as of the end of the past two fiscal years are presented
below:

<TABLE>
<CAPTION>
                                    June 3,   May 28,
                                     2006      2005
                                   --------  --------
<S>                                <C>       <C>

     Michael and Diana Richardson  $ 11,840  $ 12,776
     Matthew Richardson              15,291    21,343
     Line of Credit                 500,000   400,000
                                   --------  --------
     Total                         $527,131  $434,119
                                   ========  ========
</TABLE>

The  Company's  line  of  credit  with  Northwest Georgia Bank bears interest at
prime,  subject  to  a 6.0% floor.  Notes to Michael and Diana Richardson and to
Matthew  Richardson  are  unsecured, payable on demand and bear interest at .25%
below  the  base  rate  charged by Northwest Georgia Bank on the line of credit.
Michael  Richardson  is Chairman of the Board and Chief Executive Officer of the
Company.  Diana  Richardson  is  the  wife  of  Michael  Richardson, and Matthew
Richardson  is  their  son.

On  July 25, 2006, we renewed our $500,000 line of credit with Northwest Georgia
Bank  for an additional one year term, effective as of June 27, 2006.  Under the
terms  of  the  renewal,  outstanding borrowings bear interest at an annual rate
equal  to  the  Wall  Street  Journal  prime  rate,  subject to a minimum annual
interest rate of 6.0%.  We are required to make quarterly interest only payments
on  the  outstanding  balance,  and  to  repay outstanding principal and accrued
interest  on  June  27,  2007.  The  outstanding balance on the renewal date was
$500,000,  representing the full amount of the line, so there were no additional
funds  available  to  be  borrowed  as  of  such  date.

Long-Term  Debt:
----------------

At  June  3,  2006,  long-term debt included a note payable to Northwest Georgia
Bank  of  $5,941  to  finance cash registers and peripheral equipment and a note
payable  to  Northwest  Georgia  Bank  of  $196,020 incurred in December 2003 to
finance  the  addition  of  the  Company's  eighth grocery store. In addition, a
vehicle  was  purchased  and  financed through Ford Credit with a balance due at
June  3,  2006,  of  $20,656.

The  components  of  the  Company's  long term debt as of the end of each of the
fiscal years ended June 3, 2006 and May 28, 2005 are set forth in detail in Note
3  to  the  accompanying  financial  statements.


                                      -13-
<PAGE>
The  following  is  a  schedule  by  years  of  the  amount of maturities of all
long-term  debt  subsequent  to  June  3,  2006:

<TABLE>
<CAPTION>
               Year        Amount
               ----        -------
<S>                        <C>

               2007        $78,120
               2008         78,307
               2009         58,613
               2010          4,861
               2011          2,716
</TABLE>

Material  Commitments  and  Contingencies
-----------------------------------------

As  noted above, capital expenditures for equipment replacements in the ordinary
course  during  fiscal 2007 are estimated to be $30,000 or less, which we expect
to  be  funded  from  operating  cash flows.  Additionally, we expect to have to
replace  anywhere from one to three additional vehicles during fiscal 2007 at an
estimated  cost  of  approximately  $25,000 per vehicle, which we expect to fund
through either bank or manufacturer financing, whichever option will provide the
Company  with the most favorable terms.  Finally, while management is attempting
to  postpone  future  upgrades  of  our  existing  cash  registers  and scanning
equipment  beyond fiscal 2007, pending changes that will add an additional digit
to  the  bar  codes  on  the  inventory  that  we carry will likely require such
upgrades  within the next two to five fiscal years.  We cannot reliably estimate
the cost of any such upgrades at the present time, but we will attempt to manage
the number of units purchased and the timing of such purchases in a manner which
both  contains  the  Company's  overall  costs  and  allows  us to finance these
purchases  on  the  most  favorable  terms  that  we  are  able  to  obtain.

The  Company  has adopted a 401(k) plan that is administered by Capital Bank and
Trust  Company.  Participation  in  the  plan  is  available  to  all  full-time
employees.  The  Company's  annual  contributions to the plan are discretionary.
The  Company's contribution to the plan was $7,500 in each of fiscal years 2006,
2005  and  2004.

The  Sarbanes-Oxley Act of 2002 includes provisions addressing audits, financial
reporting  and  disclosure,  conflicts  of  interest and corporate governance at
public  companies.  As  discussed  above,  the  Company  already  has  incurred
increased  professional  fees  during  fiscal  years  2005  and  2006 related to
compliance  with  these provisions.  Additionally, Section 404 of this Act deals
with  management's report on internal controls, and will require much in the way
of  resources  to  plan,  implement and document internal controls.  Some of the
resources will be in the form of management effort devoted to complying with the
new  rules,  but  a  significant cost will likely be in increased accounting and
consulting  fees.

On  August 9, 2006, the SEC issued an additional formal extension of the Section
404  compliance  dates  for  non-accelerated  filers  such  as  the  Company.
Non-accelerated  filers now will be required to phase-in compliance with Section
404  of the Act as follows: such filers will have to begin providing a report by
management  assessing the effectiveness of their internal control over financial
reporting for fiscal years ending on or after December 15, 2007, but such filers
will  not  be  required  to  provide an auditor's attestation report on internal
control  over  financial  reporting  for the first time until their first fiscal
year  ending on or after December 15, 2008.  The SEC issued a concept release in
May  2006  seeking additional public comment on these issues, and has undertaken
to issue additional interpretive guidance intended to ease the burden of Section
404


                                      -14-
<PAGE>
compliance  for  smaller public companies sometime in the near future.  Further,
the  Public  Company  Accounting Oversight Board (PCAOB) has undertaken to issue
related  revisions  to  its Auditing Standard No. 2, which governs the auditor's
attestation  report  on  internal control over financial reporting, with similar
objectives.  The  SEC's  August  9,  2006  release  indicated  that  its revised
December  15,  2007  phase-in  date could be further extended if the SEC has not
issued  its  additional guidance "in time to be of assistance in connection with
annual  reports  filed  for  fiscal years ending on or after December 15, 2007."
Similarly,  if  revisions  to Auditing Standard No. 2 have not been finalized in
time  to  be  of  assistance  in connection with annual reports filed for fiscal
years ending on or after December 15, 2008, the SEC stated that the deadline for
phasing in the auditor's attestation requirement could also be further extended.

Accordingly,  the Company may begin to incur Section 404 compliance costs during
fiscal  year  2007,  and  presently  expects  to  incur  significant Section 404
compliance  costs  during  fiscal year 2008.  However, due to pending regulatory
developments  concerning  the application of these rules to smaller issuers such
as the Company, and to the related possibility that the SEC might act to further
extend the phase-in dates related to the Company's compliance efforts, the exact
amount  of  such  costs  cannot  be  reliably  estimated  at  this  time.

Critical  Accounting  Policies:
-------------------------------

Critical  accounting  policies  are  those policies that management believes are
important  to  the portrayal of the Company's financial condition and results of
operations  and  require  management's  most  difficult,  subjective  or complex
judgments,  often  as a result of the need to make estimates about the effect of
matters  that  are  inherently  uncertain.

Management  has determined valuation of its inventories as a critical accounting
policy.  Inventories  are  stated  at  the  lower  of  average  cost  or market.

Off-Balance  sheet  Arrangements:
---------------------------------

The  Company  has  no  significant  off-balance sheet arrangements as of June 3,
2006.

Related  Party  Transactions:
-----------------------------

Except  as  discussed  under  "Liquidity  and  Capital Resources" with regard to
short-term borrowings from related parties, there were no material related party
transactions  during  the  fiscal  year  ended  June  3,  2006.

Contractual  Obligations:
-------------------------

The following table represents the Company's outstanding contractual obligations
at  June  3,  2006:

<TABLE>
<CAPTION>
                                                         LESS THAN 1
CONTRACTUAL OBLIGATIONS                     TOTAL            YEAR          1-3 YEARS     4-5 YEARS    AFTER 5 YEARS
-----------------------                  ---------------------------------------------------------------------------
<S>                                      <C>           <C>                <C>           <C>           <C>
Debt Obligations Excluding Interest (1)  $        750  $             605  $        137  $          8  $            0
Operating Lease Obligations (2)                 1,347                598           591           158               0
Other Obligations                                   0                  0             0             0               0
                                         ------------  -----------------  ------------  ------------  --------------
TOTAL CONTRACTUAL CASH OBLIGATIONS       $      2,097  $           1,203  $        728  $        166  $            0
                                         ============  =================  ============  ============  ==============
<FN>
(1)     Amount includes short-term borrowings of $527 at June 3, 2006, which are included in the "Less than 1 year"
        column.
(2)     These obligations relate primarily to leases of the Company's various store locations.
</TABLE>


                                      -15-
<PAGE>
Forward-Looking  Statements
---------------------------

Information  provided  by the Company, including written oral statements made by
its  representative,  may  contain  "forward  looking information" as defined in
Section  21E of the Securities Exchange Act of 1934, as amended.  All statements
which  address  activities,  events  or developments that the Company expects or
anticipates  will or may occur in the future, including such things as expansion
and  growth of the Company's business, the effects of future competition, future
capital  expenditures  and  the Company's business strategy, are forward-looking
statements.  In reviewing such information it should be kept in mind that actual
results  may  differ  materially  from  those  projected  or  suggested  in such
forward-looking  statements.  This  forward  looking  information  is  based  on
various  factors  and was derived utilizing numerous assumptions.  Many of these
factors  previously have been identified in filings or statements made on behalf
of the Company, including filings with the Securities and Exchange Commission on
Forms  10-Q, 10-K and 8-K.  Important assumptions and other important facts that
could  cause  actual  results  to  differ materially from those set forth in the
forward-looking  statements  include:  changes  in the general economy or in the
Company's  primary  markets,  the  effects  of  ongoing  price  competition from
competitors  (some  of  which have greater financial resources than those of the
Company),  changes  in  consumer  spending,  the  nature and extent of continued
consolidation  in  the grocery store industry, changes in the rate of inflation,
changes  in  state  or federal legislation or regulation, adverse determinations
with  respect to any litigation or other claims, inability to develop new stores
or  complete  remodels as rapidly as planned, stability of product costs, supply
or  quality  control  problems  with the Company's vendors, and other issues and
uncertainties  detailed  from  time-to-time  in  the  Company's filings with the
Securities  and  Exchange  Commission.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK:
-----------------------------------------------------------

The  Company  does  not  engage  in derivative transactions, nor does it hold or
issue  financial  instruments  for  trading  or other speculative purposes.  The
Company is exposed to market risk related to changes in interest rates primarily
as  a  result  of  its borrowing activities.  The effective interest rate on the
Company's  borrowings  under  its  Line  of  Credit  Agreements  and  under  its
outstanding notes varies with the prime rate.  The Company does not maintain any
interest  rate  hedging  arrangements.  Based  on  the  Company's  outstanding
indebtedness at June 3, 2006 a one percent (1.0%) increase in the prime interest
rate  would  increase interest expense applicable to our variable rate debt (and
our  net  loss)  by  approximately  $7,497  annually.  Conversely, a one percent
(1.0%)  decrease  in  the  prime  interest  rate would decrease interest expense
applicable  to our variable rate debt (and our net loss) by approximately $7,497
annually.  All  of  the  Company's  business is transacted in U. S. dollars and,
accordingly,  foreign  exchange  rate  fluctuations have never had a significant
impact  on  the  Company and they are not expected to in the foreseeable future.


                                      -16-
<PAGE>
             Report of Independent Registered Public Accounting Firm
             -------------------------------------------------------


To the Board of Directors and Stockholders
American Consumers, Inc.
Fort Oglethorpe, Georgia

     We have audited the accompanying balance sheets of American Consumers, Inc.
as  of  June  3,  2006  and  May 28, 2005, and the related statements of income,
changes  in  stockholders' equity, and cash flows for each of the three years in
the period ended June 3, 2006. 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 the standards of the Public
Company  Accounting  Oversight  Board  (United States).  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, the financial statements referred to above present fairly,
in  all material respects, the financial position of American Consumers, Inc. as
of June 3, 2006 and May 28, 2005, and the results of its operations and its cash
flows  for  each  of  the  three  years  in  the  period  ended June 3, 2006, in
conformity  with  U.S.  generally  accepted  accounting  principles.


/S/ HAZLETT, LEWIS & BIETER, PLLC


Chattanooga, Tennessee
July 7, 2006


                                      -17-
<PAGE>
<TABLE>
<CAPTION>
                           AMERICAN  CONSUMERS,  INC.

                             STATEMENTS  OF  INCOME

     For the Fiscal Years Ended June 3, 2006, May 28, 2005 and May 29, 2004

--------------------------------------------------------------------------------


                                   2006          2005          2004
                                (53 Weeks)    (52 Weeks)    (52 Weeks)
                               ------------  ------------  ------------
<S>                            <C>           <C>           <C>

NET SALES                      $33,279,928   $32,101,191   $30,011,255

COST OF GOODS SOLD              25,233,903    24,430,627    22,819,052
                               ------------  ------------  ------------

    Gross profit                 8,046,025     7,670,564     7,192,203

OPERATING, GENERAL AND
  ADMINISTRATIVE EXPENSES        8,262,133     8,031,341     7,473,239
                               ------------  ------------  ------------

    Operating loss                (216,108)     (360,777)     (281,036)
                               ------------  ------------  ------------

OTHER INCOME (EXPENSE)
  Interest expense                 (59,994)      (59,601)      (45,100)
  Other income                     108,723        89,018        90,086
                               ------------  ------------  ------------

                                    48,729        29,417        44,986
                               ------------  ------------  ------------

    Loss before income taxes      (167,379)     (331,360)     (236,050)

FEDERAL AND STATE INCOME
  TAXES                                  -             -             -
                               ------------  ------------  ------------

NET LOSS                       $  (167,379)  $  (331,360)  $  (236,050)
                               ============  ============  ============

LOSS PER SHARE                 $      (.21)  $      (.41)  $      (.29)
                               ============  ============  ============

WEIGHTED AVERAGE NUMBER
  OF SHARES OUTSTANDING            800,304       806,586       814,382
                               ============  ============  ============
<FN>
The Notes to Financial Statements are an integral part of these statements.
</TABLE>


                                      -18-
<PAGE>
<TABLE>
<CAPTION>
                           AMERICAN  CONSUMERS,  INC.

                                 BALANCE  SHEETS

                          June 3, 2006 and May 28, 2005

--------------------------------------------------------------------------------


                                         2006          2005
                                     ------------  ------------
<S>                                  <C>           <C>
ASSETS

CURRENT ASSETS
  Cash and short-term investments    $   334,654   $   298,759
  Certificate of deposit                 314,773       302,848
  Accounts receivable                    170,316       112,698
  Inventories                          2,124,431     2,207,089
  Prepaid expenses                       123,545        67,655
                                     ------------  ------------

      Total current assets             3,067,719     2,989,049
                                     ------------  ------------



PROPERTY AND EQUIPMENT - at cost
  Leasehold improvements                 295,057       290,586
  Furniture, fixtures and equipment    3,300,542     3,258,304
                                     ------------  ------------

                                       3,595,599     3,548,890
  Less accumulated depreciation       (3,151,622)   (2,931,312)
                                     ------------  ------------

                                         443,977       617,578
                                     ------------  ------------

                                     $ 3,511,696   $ 3,606,627
                                     ============  ============
<FN>
The Notes to Financial Statements are an integral part of these statements.
</TABLE>


                                      -19-
<PAGE>
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------


                                                             2006        2005
                                                          ----------  ----------
<S>                                                       <C>         <C>
       LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
  Accounts payable                                        $  867,663  $  752,028
  Short-term borrowings                                      527,131     434,119
  Current maturities of long-term debt                        78,120     227,309
  Accrued sales tax                                          156,442     111,996
  Other                                                      217,981     187,917
                                                          ----------  ----------

      Total current liabilities                            1,847,337   1,713,369
                                                          ----------  ----------

LONG-TERM DEBT                                               144,497     198,935
                                                          ----------  ----------

STOCKHOLDERS' EQUITY
  Nonvoting preferred stock - authorized 5,000,000
    shares of no par value; no shares issued                       -           -
  Nonvoting common stock - $.10 par value; authorized
    5,000,000 shares; no shares issued                             -           -
  Common stock - $.10 par value; authorized 5,000,000
    shares; shares issued of 796,905 in 2006 and 803,987
    in 2005                                                   79,691      80,399
  Additional paid-in capital                                 664,556     670,462
  Retained earnings                                          775,615     943,462
                                                          ----------  ----------

                                                           1,519,862   1,694,323
                                                          ----------  ----------

                                                          $3,511,696  $3,606,627
                                                          ==========  ==========
</TABLE>


                                      -20-
<PAGE>
<TABLE>
<CAPTION>
                                 AMERICAN  CONSUMERS,  INC.

                     STATEMENTS  OF  CHANGES  IN  STOCKHOLDERS'  EQUITY

           For the Fiscal Years Ended June 3, 2006, May 28, 2005 and May 29, 2004

-------------------------------------------------------------------------------------------


                              Shares of                Additional
                                Common       Common      Paid-in    Retained
                                Stock        Stock       Capital    Earnings       Total
                              ----------  ------------  ---------  -----------  -----------
<S>                           <C>         <C>           <C>        <C>          <C>
Balance, May 31, 2003           815,996   $    81,600   $680,477   $1,511,665   $2,273,742

  Net loss for year                   -             -          -     (236,050)    (236,050)

  Redemption of common stock     (2,586)         (259)    (2,157)        (170)      (2,586)
                              ----------  ------------  ---------  -----------  -----------

Balance, May 29, 2004           813,410        81,341    678,320    1,275,445    2,035,106

  Net loss for year                   -             -          -     (331,360)    (331,360)

  Redemption of common stock     (9,423)         (942)    (7,858)        (623)      (9,423)
                              ----------  ------------  ---------  -----------  -----------

Balance, May 28, 2005           803,987        80,399    670,462      943,462    1,694,323

  Net loss for year                   -             -          -     (167,379)    (167,379)

  Redemption of common stock     (7,082)         (708)    (5,906)        (468)      (7,082)
                              ----------  ------------  ---------  -----------  -----------

Balance, June 3, 2006           796,905   $    79,691   $664,556   $  775,615   $1,519,862
                              ==========  ============  =========  ===========  ===========
<FN>
The Notes to Financial Statements are an integral part of these statements.
</TABLE>


                                      -21-
<PAGE>
<TABLE>
<CAPTION>
                                     AMERICAN  CONSUMERS,  INC.

                                     STATEMENTS  OF  CASH  FLOWS

               For the Fiscal Years Ended June 3, 2006, May 28, 2005 and May 29, 2004

----------------------------------------------------------------------------------------------------


                                                                  2006         2005         2004
                                                               (53 Weeks)   (52 Weeks)   (52 Weeks)
                                                               -----------  -----------  -----------
<S>                                                            <C>          <C>          <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Net loss                                                     $ (167,379)  $ (331,360)  $ (236,050)
  Adjustments to reconcile net loss to net cash
    provided by (used in) operating activities:
      Depreciation and amortization                               279,250      303,820      300,212
      Loss on sale of property and equipment                        4,143          130            -
      Change in operating assets and liabilities:
        Accounts receivable                                       (57,618)      24,765      (24,196)
        Inventories                                                82,658      156,884     (366,044)
        Prepaid expenses                                          (55,890)      (2,286)      (9,228)
        Accounts payable and accrued liabilities                  190,145       (1,193)      49,642
                                                               -----------  -----------  -----------

          Net cash provided by (used in) operating activities     275,309      150,760     (285,664)
                                                               -----------  -----------  -----------

CASH FLOWS FROM INVESTING ACTIVITIES
  Purchase of certificate of deposit                             (314,773)    (302,848)    (323,488)
  Proceeds from maturity of certificate of deposit                302,848      323,488      309,821
  Purchase of property and equipment                             (115,880)     (56,588)    (341,752)
  Proceeds from disposal of property and equipment                  6,088            -            -
                                                               -----------  -----------  -----------

          Net cash used in investing activities                  (121,717)     (35,948)    (355,419)
                                                               -----------  -----------  -----------

CASH FLOWS FROM FINANCING ACTIVITIES
  Net increase in short-term borrowings                            93,012       94,069       85,303
  Proceeds from long-term debt                                     22,212            -      350,020
  Principal payments on long-term debt                           (225,839)    (235,834)    (202,178)
  Redemption of common stock                                       (7,082)      (9,423)      (2,586)
                                                               -----------  -----------  -----------

          Net cash provided by (used in) financing activities    (117,697)    (151,188)     230,559
                                                               -----------  -----------  -----------

NET INCREASE (DECREASE) IN CASH
  AND CASH EQUIVALENTS                                             35,895      (36,376)    (410,524)

CASH AND CASH EQUIVALENTS, beginning of year                      298,759      335,135      745,659
                                                               -----------  -----------  -----------

CASH AND CASH EQUIVALENTS, end of year                         $  334,654   $  298,759   $  335,135
                                                               ===========  ===========  ===========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION
  Cash paid during the year for:
    Income taxes                                               $    4,810   $    6,354   $    6,356
    Interest                                                       59,463       53,037       44,673
                                                               ===========  ===========  ===========
<FN>
The Notes to Financial Statements are an integral part of these statements.
</TABLE>


                                      -22-
<PAGE>
                            AMERICAN CONSUMERS, INC.

                         NOTES TO FINANCIAL STATEMENTS


--------------------------------------------------------------------------------


Note  1.  Nature  of  Business  and  Summary  of Significant Accounting Policies

          Nature  of  business:

          The  Company is engaged in a single line of business, the operation of
          a  chain  of retail grocery stores. The stores are located in Georgia,
          Tennessee,  and  Alabama  and  operate  under  the  name  of Shop-Rite
          Supermarket.

          Use  of  estimates:

          The  preparation  of financial statements in conformity with generally
          accepted  accounting  principles requires management to make estimates
          and  assumptions that affect certain reported amounts and disclosures.
          Accordingly,  actual  results  could  differ  from  those  estimates.

          Cash  and  cash  equivalents:

          For  purposes  of  reporting  cash  flows,  the  Company considers all
          highly-liquid  debt  instruments  with  an  original maturity of three
          months  or  less  to  be  cash  equivalents.

          Accounts  receivable:

          The  Company  extends  unsecured  credit  for 30-day terms to selected
          customers  in  the  ordinary  course  of  business,  but mitigates the
          associated  credit risk by carefully screening applicants and actively
          pursuing past due accounts. An allowance for doubtful accounts has not
          been  established since management is of the opinion that all accounts
          receivable  at  year-end  are  fully  collectible.

          Inventories:  Inventories  are  stated  at  the  lower of average cost
          or  market.

          The  Company  receives funds for a variety of merchandising activities
          from vendors whose products the Company buys for resale in its stores.
          These  incentives  and  allowances  include  volume or purchased based
          incentives,  advertising  allowances,  and  promotional discounts. The
          purpose  of these incentives and allowances is generally to aid in the
          reduction  of  the  costs  incurred  by  the  Company  for  stocking,
          advertising,  promoting  and  selling  the  vendor's  products. Due to
          system  constraints  and  the  nature  of  certain  allowances,  these
          allowances  are  applied  as  a  reduction  of inventory costs using a
          rational  and systematic methodology, which results in the recognition
          of these incentives when the inventory related to the initial purchase
          is  sold.  Amounts  that  represent  a  reimbursement  of  specific
          identifiable incremental costs, such as advertising, are recorded as a
          reduction  to  the  related  expense  in  the  period that the related
          expense  is  incurred.


                                      -23-
<PAGE>
                            AMERICAN CONSUMERS, INC.

                         NOTES TO FINANCIAL STATEMENTS


--------------------------------------------------------------------------------


Note 1.   Nature of Business and Summary of Significant Accounting Policies
          (continued)

          Property  and  equipment:

          Expenditures  for property and equipment are charged to asset accounts
          at  cost.  Depreciation  is  provided  on  the  straight-line  and
          declining-balance  methods  at  rates  based upon the estimated useful
          lives  of  the  various  classes  of depreciable property. Repairs and
          maintenance are expensed as incurred. Depreciation expense included in
          the statements of income was $279,250, $303,820, and $300,212 in 2006,
          2005  and  2004,  respectively.  Revenue  recognition:

          The  financial  statements  of  the  Company  are  prepared  under the
          accrual  method  of  accounting.  The Company recognizes income on the
          sale  of  all  grocery  and non-food merchandise at the point-of-sale.

          Advertising  costs:

          Advertising  costs  are  charged  to  operations  when  incurred.
          Advertising  costs  charged to operations were $611,447, $628,455, and
          $571,991  in  2006,  2005,  and  2004,  respectively.

          Deferred  income  taxes:

          The  Company  accounts  for  income  taxes  in  accordance  with  the
          provisions  of  Statement of Financial Accounting Standards (SFAS) No.
          109,  "Accounting  for  Income  Taxes,"  which  requires that deferred
          income  taxes  be determined based on the estimated future tax effects
          of differences between the financial statement and tax basis of assets
          and  liabilities  given  the  provisions  of  the  enacted  tax  laws.
          Valuation  allowances  are  used  to reduce deferred tax assets to the
          amount  considered  likely  to  be  realized.

          Recent  accounting  pronouncements:

          In  March  2005,  the  FASB  issued  FASB Interpretation (FIN) No. 47,
          "Accounting  for  Conditional  Asset  Retirement  Obligations  -  an
          Interpretation  of  FASB Statement No. 143." FIN 47 clarifies that the
          term  "conditional  asset  retirement  obligation"  as  used  in  FASB
          Statement  No.  143,  "Accounting  for  Asset Retirement Obligations,"
          refers  to  a legal obligation to perform an asset retirement activity
          in which the timing and (or) method of settlement are conditional on a
          future  event that may or may not be within the control of the entity.
          Accordingly,  an  entity  is required to recognize a liability for the
          fair  value  of  a conditional asset retirement obligation if the fair
          value  of  the  liability  can  be reasonably estimated. FIN 47 became
          effective for the Company on June 3, 2006, and did not have a material
          effect  on  the  Company's  financial  statements.


                                      -24-
<PAGE>
                            AMERICAN CONSUMERS, INC.

                         NOTES TO FINANCIAL STATEMENTS


--------------------------------------------------------------------------------


Note  1.  Nature  of  Business and Summary of Significant Accounting Policies
          (continued)

          Recent  accounting  pronouncements:  (continued)

          In  November  2004,  the  FASB  issued SFAS No. 151, "Inventory Costs,
          an  Amendment of ARB No. 43, Chapter 4" which clarifies that inventory
          costs  that  are  "abnormal"  are required to be charged to expense as
          incurred  as  opposed to being capitalized into inventory as a product
          cost.  SFAS  No.  151 provides examples of "abnormal" costs to include
          costs  of  idle  facilities,  excess  freight  and  handling costs and
          spoilage.  SFAS No. 151 will become effective for the Company's fiscal
          year  beginning  June  4,  2006.  The  impact  of  SFAS No. 151 is not
          expected  to  have  a  material  effect  on  the  Company's  financial
          statements.

Note  2.  Short-Term  Borrowings

          The  Company  had  a  line-of-credit  agreement  with  a bank totaling
          $500,000  at  June  3,  2006  and  May  28, 2005. The interest rate on
          amounts  outstanding  under  the line-of-credit agreement was based on
          prime  at  June  3, 2006, subject to a 6.0% floor. This line-of-credit
          agreement was renewed on July 25, 2006 (to be effective as of June 27,
          2006),  with interest at prime subject to a 6.0% floor. This agreement
          matures  on  June  27,  2007.  The  line-of-credit  is  secured by the
          Company's certificate of deposit, as well as by a security interest in
          substantially  all of its accounts receivable, inventory, machines and
          equipment,  furniture  and  fixtures  and  by  personal  guarantees of
          Michael  A.  Richardson  and Paul R. Cook, the Company's President and
          CEO  and  Executive  Vice  President  and  CFO,  respectively.

          At  June  3,  2006  and  May  28,  2005,  the  Company  had short-term
          borrowings  consisting of unsecured notes payable to Michael and Diana
          Richardson,  principal  shareholders of the Company, and to their son,
          Matthew Richardson. These notes provide for interest at .25% below the
          bank's  base  rate  and  are  payable  on  demand.

          A  summary  of  short-term  borrowings  for  the  fiscal  years  ended
          June  3,  2006  and  May  28,  2005,  is  as  follows:

<TABLE>
<CAPTION>
                                                        2006       2005
                                                      ---------  ---------
<S>                                                   <C>        <C>
          Line-of-credit agreements                   $500,000   $400,000
          Loans payable to shareholders                 27,131     34,119
                                                      ---------  ---------
            Total outstanding                         $527,131   $434,119
                                                      =========  =========
          Weighted average interest rate at year end      7.99%      6.13%
                                                      ---------  ---------
          Weighted average interest rate during year      7.29%      5.99%
                                                      ---------  ---------
          Maximum amount outstanding during year      $534,921   $440,610
                                                      =========  =========
          Average amount outstanding during year      $490,429   $399,438
                                                      =========  =========
</TABLE>


                                      -25-
<PAGE>
                            AMERICAN CONSUMERS, INC.

                         NOTES TO FINANCIAL STATEMENTS


--------------------------------------------------------------------------------


Note  3.  Long-Term  Debt

     Long-term  debt  consists  of  the  following notes payable at June 3, 2006
     and  May  28,  2005:

<TABLE>
<CAPTION>
                                                                     2006      2005
                                                                   --------  --------
<S>                                                                <C>       <C>
          Note payable to Northwest Georgia Bank;
            principal and interest due in monthly installments
            of $11,381, through September 2006; interest
            at prime rate; collateralized by equipment,
            accounts receivable, inventory, and personal
            guarantees of the Company's President and
            Executive Vice President                               $  5,941  $137,287

          Note payable to Northwest Georgia Bank;
            principal and interest due in monthly installments
            of $3,576, through April 2006; interest at prime rate
            plus 1.5%; collateralized by equipment, inventory,
            and personal guarantees of the Company's President
            and Executive Vice President                                  -    27,648

          Note payable to Northwest Georgia Bank;
            principal and interest due in monthly installments
            of $6,781, through December 2008; interest at prime
            rate with 6.00% floor; collateralized by equipment,
            inventory, and personal guarantees of the Company's
            President and Executive Vice President                  196,020   261,309

          Vehicle installment loan; due in monthly installments
            of $433, through December 2010; collateralized
            by an automobile                                         20,656         -
                                                                   --------  --------
                                                                    222,617   426,244

          Less current maturities                                    78,120   227,309
                                                                   --------  --------

          Total long-term debt                                     $144,497  $198,935
                                                                   ========  ========
</TABLE>


                                      -26-
<PAGE>
                            AMERICAN CONSUMERS, INC.

                         NOTES TO FINANCIAL STATEMENTS


--------------------------------------------------------------------------------


Note  3.  Long-Term  Debt  (continued)

     The  aggregate  maturities  or  principal  payments  required  on long-term
     debt  for  years  subsequent  to  June  3,  2006,  are  as  follows:

<TABLE>
<CAPTION>
               Year          Amount
               ----          -------
<S>                          <C>
               2007          $78,120
               2008           78,307
               2009           58,613
               2010            4,861
               2011            2,716
</TABLE>

Note  4.  Lease  Commitments

          The  Company  leases  the  facilities  in  which  its  retail  grocery
          operations  are  located  under  noncancelable  operating  leases that
          expire  at  various dates through April 2011. Substantially all of the
          leases  include  renewal options. The following is a schedule by years
          of future minimum rental payments required under operating leases that
          have  initial  or remaining noncancelable lease terms in excess of one
          year  as  of  June  3,  2006:

<TABLE>
<CAPTION>
               Fiscal        Minimum
            Year Ending      Rentals
            -----------     ----------
<S>                         <C>
               2007         $  598,255
               2008            382,448
               2009            208,820
               2010             94,638
               2011             62,700
                            ----------

               Total        $1,346,861
                            ==========
</TABLE>

          Rental  expense  for  the  fiscal  years  ended  June 3, 2006, May 28,
          2005,  and  May  29,  2004,  is  as  follows:

<TABLE>
<CAPTION>
                                                    2006      2005      2004
                                                  --------  --------  --------
<S>                                               <C>       <C>       <C>
               Minimum rentals                    $611,417  $609,105  $577,213
               Contingent rentals based on sales    17,348    12,703    16,628
                                                  --------  --------  --------

               Total                              $628,765  $621,808  $593,841
                                                  ========  ========  ========
</TABLE>


                                      -27-
<PAGE>
                            AMERICAN CONSUMERS, INC.

                         NOTES TO FINANCIAL STATEMENTS


--------------------------------------------------------------------------------


Note 5.  Federal and State Income Taxes

          No  amounts  have  been  provided  for  current  and  deferred federal
          and state tax expense in the statements of income for any of the three
          years  ended  June  3,  2006,  as  a result of continued net operating
          losses  and  the  related  valuation  allowance  on  the Company's net
          deferred  tax  assets.

          A  reconciliation  of  income  tax  expense  computed  by applying the
          U.S.  Federal statutory rates to income before income taxes and actual
          income  tax  expense  is  as  follows:

<TABLE>
<CAPTION>
                                                     2006       2005       2004
                                                   ---------  ---------  ---------
<S>                                                <C>        <C>        <C>
          Federal income tax benefit
            computed at the statutory rates        $(25,100)  $(49,700)  $(35,400)
          State income tax, net of federal
            income tax benefit                       (9,300)   (18,000)   (13,000)
          Change in deferred tax asset valuation
            allowance                                34,400     67,700     48,400
                                                   ---------  ---------  ---------

              Total income tax expense (benefit)   $      -   $      -   $      -
                                                   =========  =========  =========
</TABLE>

          The  tax  effects  of  significant  temporary  differences  that
          comprise  deferred  tax assets and liabilities at June 3, 2006 and May
          25,  2005,  are  as  follows:

<TABLE>
<CAPTION>
                                                            2006        2005
                                                         ----------  ----------
<S>                                                      <C>         <C>
          Deferred tax assets:
            Net operating loss carryforward              $(148,900)  $(140,000)
            Other                                          (19,300)    (16,300)
          Deferred tax liabilities:
            Depreciable basis of property and equipment     15,700      38,200
          Deferred tax asset valuation allowance           152,500     118,100
                                                         ----------  ----------

                                                         $       -   $       -
                                                         ==========  ==========
</TABLE>

          At  June  3,  2006,  the  Company has net operating loss carryforwards
          for  federal  and  state income tax purposes of $747,024 and $666,022,
          respectively. The Company has established a valuation allowance, which
          effectively  reduces  the  carrying value of its net deferred taxes to
          zero  at  June  3,  2006 and May 28, 2005. Unless the Company realizes
          sufficient  taxable  income  in future periods to demonstrate that the
          likelihood of realization of the net deferred tax assets is reasonably
          assured  under  the  accounting  guidelines  of  SFAS  No.  109,  this
          valuation  allowance  will  be  continued  in  future  periods. If not
          utilized, the carryforwards will expire at various dates through 2025.


                                      -28-
<PAGE>
                            AMERICAN CONSUMERS, INC.

                         NOTES TO FINANCIAL STATEMENTS


--------------------------------------------------------------------------------


Note  6.  Employee  Benefit  Plan

          The  Company  has  adopted  a  401(k)  employee  benefit plan covering
          substantially  all  employees  who  have  met  minimum service and age
          requirements.  The  service  and  age requirements were waived for the
          initial  plan  participants  to encourage participation. The Company's
          annual  contribution  is  discretionary. The Company's contribution to
          the  plan  was  $7,500  in  2006,  2005  and  2004.

Note  7.  Concentration  of  Credit  Risk  and  Major  Supplier

          The  Company  maintains  a  certificate  of  deposit and other deposit
          accounts  at financial institutions in amounts that exceed the Federal
          Deposit  Insurance  Corporation  (FDIC)  insurance limit. The total of
          deposits  that  exceeded the FDIC insurance limit was $452,159 at June
          3,  2006.  The  Company  believes  that  maintaining deposits in these
          financial  institutions  does  not represent a significant credit risk
          and  that the Company benefits from favorable banking relationships as
          a  result  of  maintaining  deposits  with  these  institutions.

          Approximately  83  percent  of  the  Company's  purchased  merchandise
          for  the year ended June 3, 2006, was procured from the Company's main
          supplier.

Note  8.  Related  Party  Transactions

          As  described  in  greater  detail  in  Note  2  above,  the  Company
          finances  a  portion  of  its  working  capital  requirements  through
          borrowings  consisting  of two unsecured notes, payable to Michael and
          Diana  Richardson, principal shareholders of the Company, and to their
          son, Matthew Richardson. These notes bear interest at a rate per annum
          .25%  below  the  base  rate  of  interest  charged  on  the Company's
          borrowings  from  its  lead  bank  and  are  payable  on  demand.

Note  9.  Segment  Reporting

          SFAS  No.  131,  "Disclosures  about  Segments  of  an  Enterprise and
          Related  Information"  provides  for  the identification of reportable
          segments  on  the basis of discrete business units and their financial
          information to the extent such units are reviewed by an entity's chief
          decision  maker  (which  can  be  an individual or group of management
          persons). The Statement permits aggregation or combination of segments
          that  have  similar characteristics. In the Company's operations, each
          store  is  viewed  by  management  as  being a separately identifiable
          business or segment from the perspective of monitoring performance and
          allocation  of  financial  resources.  Although  the  stores  operate
          independently  and  are  managed  and  monitored  separately,  each is
          substantially  similar  in terms of business focus, type of customers,
          products and services. Accordingly, the Company's financial statements
          reflect the presentation of segment information on an aggregated basis
          in  one  reportable  segment.


                                      -29-
<PAGE>
                            AMERICAN CONSUMERS, INC.

                         NOTES TO FINANCIAL STATEMENTS


--------------------------------------------------------------------------------


Note  10.  Fair  Value  of  Financial  Instruments

          The  carrying  values  of  cash  and  short-term  investments,  the
          certificate  of  deposit,  accounts receivable, short-term borrowings,
          accounts  payable  and accrued liabilities are reasonable estimates of
          their  fair  values  because  of the short maturity of these financial
          instruments. Based on the borrowing rates available to the Company for
          long-term debt with similar terms and average maturities, the carrying
          amounts  approximate  the  fair  value  of such financial instruments.


                                      -30-
<PAGE>
                                                AMERICAN  CONSUMERS,  INC.

                                             NOTES  TO  FINANCIAL  STATEMENTS


<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------------


Note  11.  Quarterly  Data  (unaudited)

                                                                Years Ended
---------------------------------------------------------------------------------------------------------------------------
                                      June 3, 2006                                        May 28, 2005
----------------------------------------------------------------------  ---------------------------------------------------
                    Fourteen     Thirteen      Thirteen     Thirteen     Thirteen     Thirteen      Thirteen     Thirteen
                      Weeks        Weeks        Weeks         Weeks        Weeks        Weeks        Weeks         Weeks
                      Ended        Ended        Ended         Ended        Ended        Ended        Ended         Ended
                    6/3/2006     2/25/2006    11/26/2005    8/27/2005    5/28/2005    2/26/2005    11/27/2004    8/28/2004
                   -----------  -----------  ------------  -----------  -----------  -----------  ------------  -----------
<S>                <C>          <C>          <C>           <C>          <C>          <C>          <C>           <C>
Net sales          $9,060,496   $8,176,572   $ 8,047,771   $7,995,089   $7,989,118   $7,903,607   $ 8,182,495   $8,025,971
Cost of
  goods sold        6,892,914    6,201,916     6,098,898    6,040,175    6,087,839    6,039,155     6,206,884    6,096,749
                   -----------  -----------  ------------  -----------  -----------  -----------  ------------  -----------

  Gross profit      2,167,582    1,974,656     1,948,873    1,954,914    1,901,279    1,864,452     1,975,611    1,929,222

Operating,
  general and
  administrative
  expenses          2,260,671    2,032,786     1,998,887    1,969,789    1,987,972    2,010,879     1,969,071    2,063,419
                   -----------  -----------  ------------  -----------  -----------  -----------  ------------  -----------

  Operating
  income (loss)       (93,089)     (58,130)      (50,014)     (14,875)     (86,693)    (146,427)        6,540     (134,197)

Other income           30,067       23,457        31,023       24,176       22,376       11,609        31,039       23,994
Interest expense      (17,127)     (15,414)      (14,251)     (13,202)     (14,751)     (15,288)      (14,881)     (14,681)
                   -----------  -----------  ------------  -----------  -----------  -----------  ------------  -----------

Income
  (loss) before
  income taxes        (80,149)     (50,087)      (33,242)      (3,901)     (79,068)    (150,106)       22,698     (124,884)
Income taxes                -            -             -            -            -            -             -            -
                   -----------  -----------  ------------  -----------  -----------  -----------  ------------  -----------

Net income
  (loss)           $  (80,149)  $  (50,087)  $   (33,242)  $   (3,901)  $  (79,068)  $ (150,106)  $    22,698   $ (124,884)
                   ===========  ===========  ============  ===========  ===========  ===========  ============  ===========

Earnings
  (loss) per
 Common share:     $    (0.10)  $    (0.06)  $     (0.04)  $    (0.01)  $    (0.10)  $    (0.19)  $      0.03   $    (0.15)
                   ===========  ===========  ============  ===========  ===========  ===========  ============  ===========
</TABLE>


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