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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549


Form 10-Q

[X] Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934.

For the quarterly period ended September 30, 2004.

Commission File Number 0-15708



HANDY HARDWARE WHOLESALE, INC.
(Exact name of Registrant as specified in its charter)

TEXAS 74-1381875
(State of incorporation) (I.R.S. Employer
Identification No.)

8300 Tewantin Drive, Houston, Texas 77061
(Address of principal executive offices) (ZIP Code)

Registrant's telephone number: (713) 644-1495

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

Yes [X] No [ ]

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Exchange Act Rule 12b-2).

Yes [ ] No [X]

The number of shares outstanding of each of the Registrant's classes of common
stock as of October 31, 2004, was 10,220 shares of Class A Common Stock, $100
par value, and 85,699 shares of Class B Common Stock, $100 par value.





HANDY HARDWARE WHOLESALE, INC.




INDEX




PART I Financial Information Page No.
--------


Item 1. Financial Statements

Condensed Balance Sheet September 30, 2004
and December 31, 2003 ................................................... 3 - 4

Condensed Statement of Earnings - Three and Nine Months
Ended September 30, 2004 and 2003........................................ 5

Condensed Statement of Cash Flows - Nine Months
Ended September 30, 2004 and 2003........................................ 6

Notes to Condensed Financial Statements........................................ 7 - 12


Item 2. Management's Discussion & Analysis of Financial
Condition and Results of Operations...................................... 13 - 18

Item 3. Quantitative & Qualitative Disclosures About
Market Risk.............................................................. 18

Item 4. Controls and Procedures.................................................. 18 - 19


PART II Other Information

Item 1. Legal Proceedings 20

Item 2. Unregistered Sales of Equity Securities and
Use of Proceeds 20

Item 3. Defaults upon Senior Securities 20

Item 4. Submission of Matters to a Vote of Security Holders 20

Item 5. Other Information 20

Item 6. Exhibits 20

Signatures 21


2






HANDY HARDWARE WHOLESALE, INC.
CONDENSED BALANCE SHEET

SEPTEMBER 30, DECEMBER 31,
2004 2003
------------ -----------

ASSETS
------

CURRENT ASSETS
--------------
Cash $ 1,760,938 $ 1,066,679
Accounts Receivable, net of 17,217,262 11,573,826
subscriptions receivable in the
amount of $89,396 for 2004 and
$65,876 for 2003
Notes Receivable (Note 3) 7,233 9,099
Inventory 23,182,943 20,552,365
Other Current Assets 91,389 100,754
Prepaid Income Tax 467,258 183,205
Deferred Compensation Funded 73,743 73,743
----------- -----------
$42,800,766 $33,559,671
----------- -----------
PROPERTY, PLANT AND EQUIPMENT (Note 2)
-------------------------------------
At Cost Less Accumulated Depreciation
of $8,211,770(2004) and $7,508,201 (2003) $15,037,581 $15,106,190
----------- -----------
OTHER ASSETS
------------
Notes Receivable (Note 3) $ 215,720 $ 244,002
Intangible Assets Less Accumulated Amortization
of $1,422 (2004) and $724 (2003) 15,722 8,981
Deferred Compensation Funded 90,323 147,485
Other Noncurrent Assets -0- 31,814
----------- -----------
$ 321,765 $ 432,282
----------- -----------
TOTAL ASSETS $58,160,112 $49,098,143
------------ =========== ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------

CURRENT LIABILITIES
-------------------
Notes Payable - Line of Credit $ 1,350,000 $ 2,430,000
Notes Payable-Stock (Note 4) 61,560 358,200
Notes Payable-Capital Lease 9,780 12,244
Accounts Payable - Trade 26,290,954 19,319,296
Other Current Liabilities 1,508,494 452,995
Deferred Compensation Payable 73,743 73,743
----------- -----------
$29,294,531 $22,646,478
----------- -----------

NONCURRENT LIABILITIES
----------------------
Notes Payable - Line of Credit $ 1,350,000 $ -0-
Notes Payable-Stock (Note 4) 276,460 235,820
Notes Payable-Capital Lease 6,526 22,393
Notes Payable-Vendor 215,291 242,759
Deferred Compensation Payable 90,323 147,485
Deferred Income Taxes Payable (Note 5) 364,859 349,934
----------- -----------
$ 2,303,459 $ 998,391
----------- -----------
TOTAL LIABILITIES $31,597,990 $23,644,869
----------------- ----------- -----------

The accompanying notes are an integral part of the Condensed Financial
Statements.


3





HANDY HARDWARE WHOLESALE, INC.
CONDENSED BALANCE SHEET (CONTINUED)

SEPTEMBER 30, DECEMBER 31,
2004 2003
------------ -----------

STOCKHOLDERS' EQUITY
--------------------
Common Stock, Class A,
authorized 30,000 shares, $100
par value per share, issued
10,800 & 10,200 shares $ 1,080,000 $ 1,020,000
Common Stock, Class B,
authorized 200,000 shares, $100
par value per share, issued
89,975 & 82,762 shares 8,997,500 8,276,200
Common Stock, Class B
Subscribed 5,105.99 & 5,174.65
shares 510,599 517,465
Less Subscription Receivable (44,698) (32,938)
Preferred Stock 7% Cumulative,
authorized 200,000 shares, $100
par value per share, issued
92,937.25 & 85,550 shares 9,293,725 8,555,000
Preferred Stock, Subscribed
5,105.99 & 5,174.65 shares 510,599 517,465
Less Subscription Receivable (44,698) (32,938)
Paid in Surplus 590,194 508,609
----------- -----------
$20,893,221 $19,328,863
Less: Cost of Treasury Stock
10,444.50 and -0- shares (1,044,450) -0-
----------- -----------
$19,848,771 $19,328,863

Retained Earnings exclusive of other
comprehensive loss (Note 6) 6,722,821 6,132,015
Retained Earnings applicable to other
comprehensive loss (Note 6) (9,470) (7,604)
----------- -----------
6,713,351 6,124,411
----------- -----------

Total Stockholders' Equity $26,562,122 $25,453,274
----------- -----------
TOTAL LIABILITIES &
STOCKHOLDERS' EQUITY $58,160,112 $49,098,143
-------------------- =========== ===========

The accompanying notes are an integral part of the Condensed Financial
Statements.

4



HANDY HARDWARE WHOLESALE, INC.
CONDENSED STATEMENT OF EARNINGS
(UNAUDITED)

QUARTER NINE MONTHS
ENDED SEPTEMBER 30, ENDED SEPTEMBER 30,
------------------------------------ ---------------------------------
2004 2003 2004 2003
---- ---- ---- ----

REVENUES
- --------
Net Sales $ 53,600,240 $ 49,947,734 $154,565,428 $145,284,144
Sundry Income 1,783,777 1,705,174 4,484,623 4,331,568
------------ ------------ ------------ ------------
TOTAL REVENUES $ 55,384,017 $ 51,652,908 $159,050,051 $149,615,712
- -------------- ------------ ------------ ------------ ------------

EXPENSE
- -------
Net Mat'l. Costs $ 47,941,956 $ 44,879,936 $137,110,667 $129,863,770
Payroll Costs 2,647,343 2,418,962 7,617,559 7,165,596
Other Operating Costs 4,370,216 3,996,158 12,417,402 11,247,486
Interest Expense 31,830 31,689 85,703 95,268
------------ ------------ ------------ ------------
TOTAL EXPENSE $ 54,991,345 $ 51,326,745 $157,231,331 $148,372,120
- ------------- ------------ ------------ ------------ ------------

EARNINGS BEFORE
PROVISIONS FOR
ESTIMATED FEDERAL
INCOME TAX $ 392,672 $ 326,163 $ 1,818,720 $ 1,243,592
- ----------------- ------------ ------------ ----------- ------------

PROVISIONS FOR
ESTIMATED FEDERAL
INCOME TAX (Note 5) (144,970) (117,884) (655,190) (446,943)
- ------------------ ------------ ------------ ----------- ------------

NET EARNINGS $ 247,702 $ 208,279 $ 1,163,530 $ 796,649
- ------------

LESS ESTIMATED
DIVIDENDS ON
PREFERRED STOCK (143,181) (131,048) (429,543) (393,144)
- --------------- ------------ ------------ ----------- -------------

NET EARNINGS
APPLICABLE
TO COMMON
STOCKHOLDERS $ 104,521 $ 77,231 $ 733,987 $ 403,505
- ------------ ============= ============ =========== =============

NET EARNINGS
PER SHARE OF
COMMON STOCK,
CLASS A &
CLASS B (Note 1) $ 1.05 $ 0.81 $ 7.41 $ 4.36
- --------------- ============= ============ =========== =============

OTHER COMPREHENSIVE EARNINGS (LOSS)
- ----------------------------------
Unrealized Earnings (Loss)
on Securities (Note 6) $ (7,187) $ 3,676 $ (2,827) $ 20,143
Provision for Federal
Income Tax (Note 5) 2,443 (1,250) 961 (6,849)
------------- ------------ ----------- -------------
Other Comprehensive
Earnings (Loss) Net
of Tax $ (4,744) $ 2,426 $ (1,866) $ 13,294
------------- ------------ ----------- -------------
TOTAL COMPREHENSIVE
EARNINGS (NOTE 6) $ 99,777 $ 79,657 $ 732,121 $ 416,799
- ------------------- ------------- ------------ ----------- -------------

The accompanying notes are an integral part of the Condensed Financial
Statements.

5




HANDY HARDWARE WHOLESALE, INC.
STATEMENT OF CASH FLOWS
(UNAUDITED)
NINE MONTHS ENDED SEPTEMBER 30,
2004 2003
------------------------------------------

CASH FLOWS FROM OPERATING ACTIVITY
- ----------------------------------
Net Earnings Plus Other Comprehensive
Earnings (Note 6) $ 1,161,664 $ 809,943
Adjustments to Reconcile Net Earnings to ------------ ------------
Net Cash Provided by Operating Activities:
Amortization $ 698 $ 563
Depreciation 718,453 780,246
Gain on Sale of Property, Plant &
Equipment (14,884) (13,351)
Increase(Decrease)in Deferred Income Tax 14,925 (15,092)
Unrealized (gain) loss
In fair market value of securities 2,827 (20,143)
Deferred Compensation Funded 55,307 45,101

Changes in Assets and Liabilities
Increase in Accounts Receivable $ (5,643,436) $ (6,723,934)
(Increase) Decrease in Notes Receivable 30,148 (5,273)
Increase in Inventory (2,630,578) (2,199,764)
(Increase) Decrease in Other Assets 41,179 (486,505)
(Increase) Decrease in Prepaid Income Tax (284,053) 115,456
Decrease in Note Payable-Vendor (27,468) (4,704)
Increase in Accounts Payable 6,971,658 4,518,729
Increase (Decrease) in Other Liabilities 1,055,499 (183,418)
Increase in Federal Income Taxes Payable -0- 7,508
Decrease in Deferred Compensation Payable (57,162) (21,852)
------------ ----------
TOTAL ADJUSTMENTS $ 233,113 $(4,206,433)
NET CASH PROVIDED BY (USED FOR) ------------ -----------
OPERATING ACTIVITIES $ 1,394,777 $(3,396,490)
------------ -----------
CASH FLOWS FROM INVESTING ACTIVITIES
- ------------------------------------
Capital Expenditures $ (726,432) $ (307,109)
Sale of Property, Plant & Equipment 91,472 102,634
Expenditure for Intangible Assets (7,439) (9,705)
Reinvested dividends, interest & capital gains (972) (3,106)
------------ -----------
NET CASH USED FOR INVESTING ACTIVITIES $ (643,371) $ (217,286)
------------ -----------
CASH FLOWS FROM FINANCING ACTIVITIES
- ------------------------------------
Increase in Note Payable - Line of Credit $ 270,000 $ 4,800,000
Increase (Decrease) in Notes Payable - Stock (256,000) (309,380)
Increase (Decrease) in Notes Payable -
Capital Lease (18,331) 3,668
Increase in Subscription Receivable (23,520) (63,098)
Proceeds From Issuance of Stock 1,587,878 1,467,721
Purchase of Treasury Stock (1,044,450) (273,900)
Dividends Paid (572,724) (524,193)
NET CASH PROVIDED BY (USED FOR) ------------ -----------
FINANCING ACTIVITIES $ (57,147) $ 5,100,818
------------ -----------
NET INCREASE
IN CASH & CASH EQUIVALENTS $ 694,259 $ 1,487,042

CASH & CASH EQUIVALENTS AT BEGINNING
OF PERIOD 1,066,679 1,394,324
------------ -----------
CASH & CASH EQUIVALENTS AT END OF PERIOD $ 1,760,938 $ 2,881,366
============ ===========
ADDITIONAL RELATED DISCLOSURES TO THE STATEMENT OF CASH FLOWS
- -------------------------------------------------------------
Interest Expense Paid $ 85,703 $ 95,268
Income Taxes Paid 650,464 461,376
The accompanying notes are an integral part of the Condensed Financial
Statements.


6

HANDY HARDWARE WHOLESALE, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS

NOTE 1 - ACCOUNTING POLICIES
- ----------------------------

(1) Description of Business:
-----------------------
Handy Hardware Wholesale, Inc., ("Handy"), was incorporated as a Texas
corporation on January 6, 1961. Our principal executive offices and
warehouse are located at 8300 Tewantin Drive, Houston, Texas 77061. We are
owned entirely by our member-dealers and former member-dealers.

We sell to our member-dealers products primarily for retail hardware,
lumber and home center stores. In addition, we offer advertising and other
services to member-dealers. We wholesale hardware to our member-dealers in
Texas, Oklahoma, Louisiana, Alabama, Mississippi, Arkansas, Florida,
Colorado, New Mexico, Tennessee, Mexico and Belize.

(2) General Information:
-------------------
The condensed consolidated financial statements included herein have been
prepared by us. The financial statements reflect all adjustments, which
were all of a recurring nature, and which are, in the opinion of
management, necessary for a fair presentation. Certain information and
footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been omitted
pursuant to the rules and regulations of the Securities and Exchange
Commission (SEC). We believe that the disclosures made are adequate to make
the information presented not misleading. The condensed consolidated
financial statements should be read in conjunction with the audited
financial statements and the notes thereto included in the latest Form 10-K
Annual Report.

(3) Cash:
----
For purposes of the statement of cash flows, we consider all highly liquid
debt instruments purchased with a maturity of three months or less to be
cash equivalents.

(4) Inventories:
-----------
Inventories are valued at the lower of cost or market method, determined by
the first in, first out method, with proper adjustment having been made for
any old or obsolete merchandise.

(5) Earnings Per Share:
------------------
Net earnings per common share (Class A and Class B combined) are based on
the weighted average number of shares outstanding in each period after
giving effect to the stock issued, stock subscribed, accrued dividends on
Preferred Stock, and treasury stock as set forth by Accounting Principles
Board Opinion No. 15 as follows:




QUARTER ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
2004 2003 2004 2003
----------------------------- --------------------------

Calculation of Net Earnings Per Share
of Common Stock
- -------------------------------------
Net Earnings Before Preferred
Dividends $ 247,702 $ 208,279 $1,163,530 $ 796,649
Less: Estimated Dividends
on Preferred Stock (143,181) (131,048) (429,543) (393,144)
--------- --------- ---------- ---------
Net Earnings (Loss) Applicable
to Common Shareholders $ 104,521 $ 77,231 $ 733,987 $ 403,505

Weighted Average
Shares of Common Stock
(Class A & Class B)
outstanding 99,203 95,108 99,041 92,607

Net Earnings Per Share
of Common Stock $ 1.05 $ 0.81 $ 7.41 $ 4.36
========= ========= ========== =========


7


HANDY HARDWARE WHOLESALE, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS (CONTINUED)

(6) Revenue Recognition:
-------------------
The accompanying financial statements have been prepared in conformity with
generally accepted accounting principles. Accordingly, revenues and
expenses are accounted for using the accrual basis of accounting. Under
this method of accounting, revenues and receivables are recognized when
merchandise is shipped or services are rendered, and expenses are
recognized when the liability is incurred.

(7) Accounting for Dividends on Preferred Stock:
-------------------------------------------
We pay dividends on Preferred Stock during the first quarter of each fiscal
year. Only holders of Preferred Stock on the record date for the payment of
the dividend are entitled to receive dividends. Dividends are prorated for
the portion of the twelve-month period ending January 31 during which the
Preferred Stock was held.

Because we are unable to anticipate the amount of the Preferred Stock
dividends to be paid in the first quarter of 2005, we do not accrue a
liability for the payment of those dividends on our balance sheet. To more
properly reflect net earnings, however, on the Condensed Statement of
Earnings included herein, we show an estimated portion of the annual
dividends to be paid in the first quarter of 2005 based on three-fourths
($429,543) of the annual dividends paid in the first quarter of 2004.

When dividends on Preferred Stock are actually paid, there is a reduction
of retained earnings. Retained earnings on the Condensed Balance Sheet for
the nine months ended September 30, 2004 contained herein, therefore, are
net of dividends actually paid during the first quarter of 2004 in the
amount of $572,724.


NOTE 2 - PROPERTY, PLANT & EQUIPMENT
- ------------------------------------

Property, Plant & Equipment consists of:


SEPTEMBER 30, DECEMBER 31,
2004 2003
----------- -----------


Land $ 3,207,866 $ 3,207,866
Building & Improvements 15,505,854 15,490,838
Furniture, Computer, Warehouse 3,957,420 3,388,830
Transportation Equipment 578,211 526,857
----------- -----------
$23,249,351 $22,614,391

Less: Accumulated Depreciation (8,211,770) (7,508,201)
----------- -----------
$15,037,581 $15,106,190
=========== ===========


8

HANDY HARDWARE WHOLESALE, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS (CONTINUED)


NOTE 3 - NOTES RECEIVABLE
- -------------------------

Notes receivable reflect amounts due to us from our member-dealers under
deferred payment agreements and installment sale agreements as well as amounts
due from former member- dealers on amounts still owing on their accounts.

Under the deferred agreement, we supply member-dealers with an initial order of
General Electric Lamps. The payment for this order is deferred so long as the
member-dealer continues to purchase General Electric lamps through us. If a
member-dealer ceases to purchase lamp inventory or sells or closes his business,
then General Electric invoices us for the member-dealer's initial order and the
member-dealer's note becomes immediately due and payable in full to us.

Under the installment sale agreements, we sell member-dealers computer hardware,
the purchase price of which is due and payable by member-dealers to us in
thirty-six monthly installments of principal and interest.

Notes Receivable are classified as follows:



CURRENT PORTION NONCURRENT PORTION
SEPT. 30, DEC. 31, SEPT. 30, DEC. 31,
2004 2003 2004 2003
-------- ------- -------- -------


Note from Former Member-Dealer $ 6,141 $ 8,015 $ -0- $ -0-
Deferred Agreements -0- -0- 215,291 242,759
Installment Sale Agreements 1,092 1,084 429 1,243
------- ------- -------- --------
$ 7,233 $ 9,099 $215,720 $244,002
======= ======= ======== ========


NOTE 4 - NOTES PAYABLE STOCK
- ----------------------------

The five year, interest bearing notes payable - stock reflect amounts due from
us to former member-dealers for our repurchase of shares of Handy stock owned by
these former member-dealers. According to the terms of the notes, only interest
is paid on the outstanding balance of the notes during the first four years. In
the fifth year, both interest and principal are paid. Interest rates range from
3.0% to 6.0%.

Notes payable - stock are classified as follows:



CURRENT PORTION NON-CURRENT PORTION
SEPT. 30, DEC. 31, SEPT. 30, DEC. 31,
2004 2003 2004 2003
---- ---- ---- ----


$61,560 $358,200 $276,460 $235,820


Principal payments due over the next five years are as follows:




2004 20,280
2005 41,280
2006 26,600
2007 150,440
2008 17,500
Thereafter 81,920
--------
$338,020


9



HANDY HARDWARE WHOLESALE, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS (CONTINUED)

NOTE 5 - INCOME TAXES
- ---------------------

The Company accounts for income taxes in accordance with FASB Statement No. 109,
"Accounting for Income Taxes," which requires the recognition of deferred income
taxes for differences between the basis of assets and liabilities for financial
statement and income tax purposes.



QUARTER ENDED YEAR ENDED
SEPTEMBER 30, DECEMBER 31,
2004 2003
----------- ------------


Excess of tax over book depreciation $ 1,749,779 $ 1,733,731

Allowance for Bad Debt (41,570) (41,570)
Inventory - Ending inventory adjustment
for tax recognition of Sec. 263A
Uniform Capitalization Costs (462,300) (435,814)

Deferred Compensation (172,793) (227,128)

Total $ 1,073,116 $ 1,029,219
Statutory Tax Rate 34% 34%
----------- ------------
Cumulative Deferred Income Tax Payable $ 364,859 $ 349,934
=========== ============
Classified as:
Current Liability $ -0- $ -0-
Noncurrent Liability 364,859 349,934
----------- ------------
$ 364,859 $ 349,934
=========== ============


Reconciliation of income taxes on the difference between tax and financial
accounting is as follows:


QUARTER ENDED QUARTER ENDED
SEPTEMBER 30, SEPTEMBER 30,
2004 2003
------------ ------------

Principal Components of Income Tax Expense
Federal:
Current
Income tax paid $ 467,258 $ 345,920
Carry-over of prepayment from
prior year 183,206 115,456
Refund received for overpayment
from prior year -0- -0-
----------- -------------
$ 650,464 $ 461,376
Federal Income Tax Payable (Receivable) (11,161) 7,508
Carry-over to subsequent year -0- -0-
----------- -------------
Income tax for tax reporting
at statutory rate of 34% $ 639,303 $ 468,884
Deferred
Adjustments for financial reporting:
Depreciation 5,457 (10,086)
263A Uniform Capitalization Costs (9,005) (5,006)
Other 18,474 -0-
----------- -------------
Provision for federal income tax $ 654,229 $ 453,792
=========== =============


We are not exempt from income tax except for municipal bond interest earned
in the amount of $972.

We are not classified as a nonexempt cooperative under the provisions of
the Internal Revenue Code and are not entitled to deduct preferred dividends in
determining our taxable income.

10


HANDY HARDWARE WHOLESALE, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS (CONTINUED)


NOTE 6 - COMPONENTS OF COMPREHENSIVE EARNINGS (LOSS)
- ---------------------------------------------------

1. Deferred compensation fully funded in the amount of $164,066 on the Balance
Sheet as a current asset in the amount of $73,743 and as a non-current
asset in the amount of $90,323 at September 30, 2004, includes equity
securities classified as investments available for sale in the amount of
$164,066 at fair market value. The $164,066 includes $8,727 unrealized loss
on securities resulting from the decrease in fair market value. The cost of
the equity securities is $172,793.

2. Changes in Equity securities


Quarter Ended Since
Sept. 30 2004 Inception
------------- ----------

Beginning Balance-January 1, 2004 $ 221,228 $ -0-
Purchases -0- 117,400
Dividends, interest and capital gains 972 170,834
Deferred Compensation Funded (55,307) (115,441)
Unrealized losses on securities
resulting from increase (decrease)
in fair market value (2,827) (8,727)
----------- ----------
Balance-September 30, 2004 $ 164,066 $ 164,066
=========== ==========


3. Components of Net Earnings plus Other Comprehensive Earnings and Components
of Total Comprehensive Earnings for the nine months ended September 30,
2004:



Other Comprehensive Net Earnings Plus Other
Net Earnings Loss Comprehensive Loss
------------ ---- -----------------------

Earnings Before Provision Unrealized Loss
For Federal Income Tax $1,818,720 on Securities $(2,827) Net Earnings $1,163,530

Provision for Provision for Other Comprehensive
Federal Income Tax (655,190) Federal Income Tax 961 Loss (1,866)
---------- ------- ----------
Other Comprehensive Net Earnings Plus Other
Net Earnings $1,163,530 Loss $(1,866) Comprehensive $1,161,664
Earnings

Net Earnings Applicable to Other Comprehensive Total Comprehensive
Common Stockholders Loss Earnings
-------------------------- ------------------- -------------------
Unrealized Loss Net Earnings Applicable to
Net Earnings $1,163,530 on Securities $(2,827) Common Stockholders $ 733,987

Less Estimated Dividends Provision for Other Comprehensive
On Preferred Stock (429,543) Federal Income Tax 961 Loss (1,866)
---------- ------- ----------
Net Earnings Applicable Other Comprehensive Total Comprehensive
to Common Stockholders $ 733,987 Loss $(1,866) Earnings $ 732,121
========== ======= ==========


4. Components of Retained Earnings



Retained Earnings Retained Earnings
Exclusive of Other Applicable to Other
Comprehensive Loss Comprehensive Loss Total
------------------ ------------------- -----

Balance-January 1, 2004 $6,132,015 $ (7,604) $6,124,411
Add: Net earnings
9 months ended
September 30, 2004 1,163,530 (1,866) 1,161,664
Deduct: Cash Dividends on
Preferred Stock (572,724) (-0-) (572,724)
---------- ---------- ----------
Balance-September 30, 2004 $6,722,821 $ (9,470) $6,713,351
========== ========== ==========

11



NOTE 7 - ACCOUNTS RECEIVABLE
- ----------------------------
Accounts receivable are net of subscriptions receivable and allowance for
doubtful accounts.




September 30, 2004 December 31, 2003
------------------ -----------------

Accounts Receivable $17,348,228 $11,681,272
Subscription Receivable (89,396) (65,876)
Allowance for Doubtful Accounts (41,570) (41,570)
----------- -----------
Accounts Receivable, Net of
Subscription Receivable and
Allowance for Doubtful Accounts $17,217,262 $11,573,826
=========== ===========














12

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OVERVIEW
- --------

For the first nine months of 2004, we continued to widen our offering of
products in order to give member-dealers more variety in what they can offer to
their customers. In addition, we also explored expanding our presence
geographically to increase the number of member-dealers as a means of continuing
the growth of net sales. The first quarter of 2004 generated 49.7% of pre-tax
income for the first nine months of 2004 due to unusually high rebates in the
first quarter and due to trade show income. Overall, for the first nine months
of 2004, we strove to maintain our steady growth while continuing to meet our
goals of providing quality goods to our member-dealers.

MATERIAL CHANGES IN RESULTS OF OPERATIONS
- -----------------------------------------

NET SALES Net sales in the third quarter of 2004 increased 7.3%
($3,652,506) from net sales during the same period in 2003, while net sales
during the first nine months of 2004 increased 6.4% ($9,281,284) compared to
sales for the same period in 2003.

Net sales growth during the third quarter and first nine months of 2004 was
mainly attributable to strong increases in both regular sales and sales
generated from our spring and fall trade show, as well as sales from other
marketing initiatives which helped member-dealers maintain their competitiveness
in their selling territories.

NET MATERIAL COSTS AND REBATES Net material costs for the third quarter and
first nine months of 2004 were $47,941,956 and $137,110,667, respectively,
compared to $44,879,936 and $129,863,770, respectively, for the same periods in
2003. Net material costs for the third quarter and first nine months of 2004
increased 6.8 percent and 5.6 percent, respectively, from the same periods in
2003. These increases were somewhat less than the increases in net sales for the
same periods. As a result, net material costs were 89.4 percent of net sales in
the third quarter of 2004, as compared to 89.9 percent of sales for the same
period in 2003, while for the first nine months of 2004 and 2003 net materials
costs were 88.7 percent and 89.4 percent of sales, respectively. The relative
stability in net material costs as a percentage of net sales, was primarily the
result of continued improvements in warehouse efficiencies. Factory rebates
increased slightly from $4,114,101 in the first nine months of 2003 to
$4,228,459 for the same period in 2004.

PAYROLL COSTS Payroll costs for the third quarter of 2004 increased by
$228,381 from the third quarter of 2003 level, and increased by $451,963 for the
first nine months of 2004 compared to the level for the same period in 2003.
These increases resulted from salary increases needed to attract or retain
high-quality employees.

Despite pressures on wages, payroll costs as a percentage of both total
expenses and net sales remained fairly constant. Payroll costs for the third
quarter of 2004 and 2003 constituted 4.9 and 4.8 percent, respectively, of net
sales and 4.8 percent and 4.7 percent, respectively, of total expenses for the
same periods. Payroll costs were 4.9 percent of net sales and 4.8 percent of
total expenses for the first nine months of both 2004 and 2003. The relative
stability in payroll costs has been a result of a continuing effort to maintain
employee productivity.

OTHER OPERATING COSTS During the third quarter and the first nine months of
2004, other operating costs increased by $374,058 (9.4%) and $1,169,916 (10.4%),
respectively, compared to the same periods of 2003. Other operating costs
increased slightly as a percentage of total expenses, accounting for 7.9% of
total expenses in the third quarter of 2004 as compared to 7.8% of total
expenses for the third quarter of 2003. For the nine month period ending
September 30, 2004, other operating costs were 7.9% of total expenses as
compared to 7.6% of total expenses during the same period in 2003.

The increase in other operating costs in the first nine months of 2004,
from the first nine months of 2003, can be attributed to an increase in
warehouse and delivery expense, most notably an increase of $847,137 in fuel
costs, contract driver costs, truck repairs and rental equipment costs, an
increase of $238,520 in the accrual for year end employee bonuses, and an
increase of $101,310 in health insurance expenses.

13



NET EARNINGS AND EARNINGS PER SHARE
- -----------------------------------

NET EARNINGS - THIRD QUARTER Net sales for the third quarter of 2004
increased by $3,652,506 (7.3%), net material costs for the same period increased
by $3,062,020 (6.8%) compared in both cases to levels in the third quarter of
2003, resulting in an increase in gross margin of $590,486 (11.7%). The increase
in gross margin, as well as an increase in sundry income of $78,603, was offset
by increases in payroll costs of $228,381 (9.4%) and other operating costs of
$374,058 (9.4%). Thus after tax net earnings increased $39,423 (18.9%), from
$208,279 in the third quarter of 2003 to $247,702 for the same 2004 period.
After tax net earnings, combined with estimated dividends on preferred stock and
other comprehensive gains resulted in total comprehensive earnings for 2004's
third quarter of $99,777, compared to total comprehensive earnings of $79,657
for the same 2003 period, for an overall increase of $20,120 (25.3%).

NET EARNINGS - FIRST NINE MONTHS Net sales for the first nine months of
2004 increased by $9,281,284 (6.4%), net material costs for the same period
increased by $7,246,897 (5.6%) compared in both cases to levels in the first
nine months of 2003, resulting in an increase in gross margin of $2,034,384
(13.2%). The increase in gross margin, as well as the increase in sundry income
of $153,055 from the first nine months of 2003, were only partially offset by an
increase of $451,963 in payroll costs (6.3%) and a substantial increase in other
operating costs of $1,169,916 (10.4%). Thus after tax net earnings increased by
$366,881 (46.1%), from $796,649 in the first three quarters of 2003 to
$1,163,530 for the same 2004 period. After tax net earnings, combined with
estimated dividends on preferred stock and other comprehensive gains resulted in
total comprehensive earnings for the first nine months of 2004 of $732,121,
compared to total comprehensive earnings of $416,799 for the same 2003 period,
for an overall increase of $315,322 (75.7%).

EARNINGS PER SHARE Our earnings per share increased by 29.6% in the
comparative third quarters of 2004 and 2003 and increased by 70.0% for the first
nine months of 2004 as compared to the same period of 2003, from net earnings
per share of $0.81 for the 2003 third quarter, to net earnings per share of
$1.05 for the same 2004 period and an increase in nine months earnings per share
from $4.36 per share in the 2003 period to $7.41 per share for the 2004 period.
The increase in the 2004 periods were due to the factors previously discussed,
as well as estimated dividends accrued in the third quarter and first nine
months of 2004 representing a smaller percentage of 2004 net earnings than
estimated dividends accrued in the same 2003 periods (third quarter 2004-57.8%
versus third quarter 2003-62.9%; and first nine months of 2004-36.9% versus
first nine months of 2003-49.3%).

SEASONALITY Quarter-to-quarter variations in our earnings per share (in
addition to the factors discussed above) reflect our commitment to lower pricing
of our merchandise in order to deliver the lowest cost buying program to our
member-dealers, even though this often results in lower net earnings. Because
virtually all of our stockholders are also member-dealers, these trends benefit
our individual stockholders who purchase our merchandise. Therefore, our
shareholders do not demand that we focus greater attention upon earnings per
share.

Our quarterly net earnings generally vary based on the timing of events
which affect our sales. Except for the first quarter of 2004, (where the
cumulative effect of the various timing differences, as well as improved
economic conditions, caused an increase in net earnings for that period)
traditionally our first and third quarter earnings are negatively affected by
the increased level of direct sales (with no markup) during our semiannual trade
show which is always held in those quarters. Generally, there is an overall
increase in sales during the trade shows which typically offsets the effect of
increased direct sales with no markup. Additionally, net earnings per quarter
may vary substantially from year to year due to the timing difference in the
receipt of discounts, rebates and miscellaneous income, as well as changes in
the weather conditions and the economic conditions in our selling territories.

14



SELECTED QUARTERLY FINANCIAL DATA (Unaudited)
- --------------------------------------------

The following is a summary of selected quarterly financial data for each
quarterly period beginning October 1, 2002 and ending September 30, 2004;



Qtr. Ended Qtr. Ended Qtr. Ended Qtr. Ended Qtr. Ended Qtr. Ended Qtr. Ended Qtr. Ended
12-31-02 03-31-03 06-30-03 09-30-03 12-31-03 03-31-04 06-30-04 09-30-04


Sales $44,920,202 $48,974,287 $46,362,123 $49,947,734 $43,784,516 $52,274,312 $48,690,876 $53,600,240

Net
Mat'l
Costs 39,404,595 44,255,647 40,728,187 44,879,936 38,302,519 46,565,586 42,603,125 47,941,956

Gross
Margin 5,515,607 4,718,640 5,633,936 5,067,798 5,481,997 5,708,726 6,087,751 5,658,284

Other
Operating
Expenses(1) 7,840,146 6,022,971 6,038,570 6,446,809 6,090,815 6,747,816 6,323,459 7,049,389

Sundry
Income(1) 2,510,195 1,634,618 991,776 1,705,174 693,239 1,943,709 757,137 1,783,777

Pre-Tax Net
Earnings(2) 185,656 330,287 587,142 326,163 84,421 904,619 521,429 392,672


(1) Historically, sundry income has included income generated from our trade
shows offset by expenses incurred from our trade shows. Starting with the
quarter ended 12/31/02, we began to include expenses incurred from our trade
shows in other operating expenses rather than offsetting sundry income.
Therefore, in order to provide the data for other operating expenses and sundry
income using a consistent calculation method, for each quarter in the table
above, we have included expenses incurred from our trade shows in other
operating expenses rather than offsetting sundry income. This change has no
effect on pre-tax net earnings. (2) Excludes other comprehensive income/(loss).


Trends

As reflected in our numbers for the first nine months of 2004, due to the
current unstable environment in the Middle East and additional Department of
Transportation regulations, we expect fuel costs and rental equipment expenses
to continue to increase in the foreseeable future. In addition, as a result of
the current shortage of experienced drivers, as well as Department of
Transportation driver regulations, contract driver costs will continue to
escalate. We believe insurance premiums will stabilize in 2005 with only
moderate increases expected. Furthermore, property taxes are continuing to
increase and may increase in the future due to general increases in tax
assessments.

15



MATERIAL CHANGES IN FINANCIAL CONDITION
- ---------------------------------------

FINANCIAL CONDITION AND LIQUIDITY During the period ending September 30,
2004, we maintained our financial condition and ability to generate adequate
amounts of cash while continuing to make significant investments in inventory,
warehouse and computer equipment, software, and office furniture and equipment.
However, net cash provided by our operating activities often varies
substantially from year to year. These variations result from (i) the timing of
promotional activities such as our spring trade show, (ii) payment terms
available to us from our suppliers, (iii) payment terms we offer to our
member-dealers, and (iv) the state of the regional economy in our selling
territories.

We generated $792,783 less cash in the first nine months of 2004 than in
the first nine months of 2003. Our cash and cash equivalents at September 30,
2004 were $1,120,428 lower than at September 30, 2003. During the first nine
months of 2004, we provided cash flow from operating activities of $1,394,777,
as compared to $3,396,490 used in the first nine months of 2003. This increase
in cash provided by operating activities in the 2004 period was principally
attributable to a larger increase in net earnings, a smaller increase in
accounts receivable, as well as an increase in other liabilities and an increase
in accounts payable (which payables increased 36.1% in the 2004 period compared
to an increase in payables of 22.4% for the same 2003 period). These factors
were offset by a larger increase in inventory.

We had approximately 45,000 stockkeeping units at September 30, 2004, which
were maintained as a result of management's strategy to increase the breadth and
depth of inventory to better meet the needs of our member-dealers. The increase
in inventory of $2,630,578 in the first nine months of 2004 from 2003 levels was
higher than the increase in inventory of $2,199,764 in the same period in 2003,
as we grew our inventory to meet our member- dealers' inventory requirements.

In the first nine months of 2004, accounts receivable increased by
$5,643,436 from year-end 2003 levels of $11,573,826. This variation in levels of
accounts receivable was mainly attributable to differences in extended payment
terms offered to member-dealers at the spring and fall trade shows.

Accounts payable increased during the first three quarters of 2004 by
$6,971,658 and increased $4,518,729 during the same three quarters in 2003. As
in accounts receivable, variations in levels of accounts payable for both
periods are attributable to differences in payment terms offered to the Company
for the spring and fall trade shows.

Other liabilities increased by $1,055,499 during the first nine months of
2004 from year-end 2003 levels. By comparison, other liabilities declined by
$183,418 during the same period in 2003. This variance of $1,238,917 can be
attributed to the increase in delivery costs, the increase in insurance costs
and an increase in the accrual for employee bonuses, as previously discussed.

For the period ended September 30, 2004, net earnings plus other
comprehensive earnings were $1,161,664, compared to $809,943 for the same 2003
period. This 43.4% increase was mainly attributable to the increase in gross
margin.

Net cash used for investing activities increased from $217,286 in the first
nine months of 2003 to $643,371 for the same period in 2004. The increase in the
first three quarters of 2004 was mainly due to the replacement of a large
section of the Company's conveyor system, additional warehouse racking and
upgrades to company vehicles.

Net cash used for financing activities was $57,147 in the nine month period
ending September 30, 2004 as compared to net cash provided by financing
activities of $5,100,818 during the same period in 2003. During the first nine
months of 2003 draws on the Company's line of credit increased $4,800,000 from
year-end 2002 levels. By comparison, during the same period in 2004, draws on
the Company's line of credit increased only $270,000 from year-end 2003 levels.
In addition, in the period ending September 30, 2004, repurchases of Company
stock from former member-dealers increased (2004 - $1,044,450 versus 2003 -
$273,900). This increase in repurchases of Company stock was mainly attributable
to the repurchase of stock of two significant departing member-dealers.

16


Our continuing ability to generate cash for funding our activities is
highlighted by the relative constancy of three key liquidity measures - working
capital, current ratio (current assets to current liabilities) and long-term
debt as a percentage of capitalization, as shown in the following table:



SEPTEMBER 30, DECEMBER 31, SEPTEMBER 30,
2004 2003 2003
------------ ----------- ------------


Working Capital $13,506,235 $10,913,193 $12,617,217
Current Ratio 1.5 to 1 1.5 to 1 1.4 to 1
Long-term Debt as Percentage
of Capitalization 8.7% 3.9% 13.3%


During the remainder of 2004 and in 2005, we expect to further expand our
existing customer base in our non-core selling territories. We will finance this
expansion with anticipated growth in revenues from sales to new member-dealers
in these territories, and with proceeds from the sale of stock to new and
current member-dealers. We expect that expansion in these selling territories
will have a beneficial effect on our ability to generate cash to meet our
funding needs.

Off-Balance Sheet Arrangements
- ------------------------------
As of September 30, 2004, we did not have any off-balance sheet
arrangements, as defined by Item 303(a)(4) of Regulation S-K promulgated by the
Securities and Exchange Commission.


Contractual Commitments and Obligations
- ---------------------------------------
Our contractual obligations for the next five years and thereafter are as
follows:



Year Ended December 31,
---------------------------------------------------------------------------------------------------
2004(2) 2005 2006 2007 2008 Thereafter Total
---- ---- ---- ---- ---- ---------- -----
Contractual
Obligation(1):


Non-cancelable
Operating Leases $1,035,888 $ 943,271 $744,595 $646,648 $487,086 $399,838 $4,257,326

Credit Facility
which expires in
April 2006 (1) (1) (1) (1) -- -- -- --

Notes Payable -
Stock 20,280 41,280 26,600 150,440 17,500 81,920 338,020

Notes Payable -
Vendor
Consignment -0- -0- -0- -0- -0- 215,291 215,291

Non-cancelable
Capital Leases 2,445 9,780 4,081 -0- -0- -0- 16,306

$1,058,613 $ 994,331 $775,276 $797,088 $504,586 $697,049 $4,826,943
========== ========= ======== ======== ======== ======== ==========


(1) There was $2,430,000 outstanding on the Company's credit facility at
December 31, 2003 and $2,700,000 outstanding on September 30, 2004. The amounts
outstanding under the credit facility fluctuate on a daily basis.

(2) These are our contractual commitments and obligations for the fourth quarter
of 2004.

Capital Resources
- -----------------
In the nine month periods ending September 30, 2004 and September 30, 2003,
our investment in capital assets was $726,432 and $307,109 respectively.
Approximately 73.0 percent ($530,291) of the amount expended in the first nine
months of 2004 was used to upgrade warehouse equipment, 19.6 percent ($142,165)
was used to purchase company vehicles and 4.6 percent ($33,310) was used to
purchase computer equipment. By comparison, of the total amount expended in the
first nine months of 2003, $122,330 (38.6%) was used to purchase company
vehicles, $116,151 (36.7%) was used to upgrade warehouse equipment and $44,086
(13.9%) was used to purchase computer equipment.

17




In April, 2004, JP Morgan Chase Bank amended the Company's existing
unsecured $10 million revolving line of credit to provide for an April 30, 2006
maturity date. We use our unsecured $10 million revolving line of credit from
time to time for our working capital and other financing needs. During the first
nine months of 2004, we borrowed $58,630,000 and repaid $55,930,000 from cash
flow, leaving an outstanding balance of $2,700,000 under our line of credit on
September 30, 2004. Our average outstanding balance on our line of credit for
the first nine months of 2004 was $3,052,664.

For the remaining three months of 2004, we anticipate significant cash
outlays for payment of accounts payable and increased inventory purchases.
Additional cash outlays anticipated for capital expenditures include
approximately $290,000 to purchase warehouse equipment, $30,000 to upgrade
computer equipment and $30,000 to purchase office furniture and equipment.

Our cash position of $1,760,938 at September 30, 2004 is anticipated to be
sufficient to fund all planned capital expenditures and working capital needs,
although some third party financing, including draws on our line of credit, may
be needed.

CRITICAL ACCOUNTING POLICIES
----------------------------

For a discussion of our critical accounting policies which relate to
inventory, revenue recognition and allowance for doubtful accounts, and which
remain unchanged, see our annual report on Form 10-K for the year ended December
31, 2003.

FORWARD-LOOKING STATEMENTS
--------------------------

The statements contained in this report that are not historical facts are
forward-looking statements as that term is defined in Section 21E of the
Securities and Exchange Act of 1934, as amended, and therefore involve a number
of risks and uncertainties. Such forward-looking statements may be or may
concern, among other things, sales levels, the general condition of retail
markets, levels of costs and margins, capital expenditures, liquidity, and
competition. Such forward-looking statements generally are accompanied by words
such as "plan," "budget," "estimate," "expect," "predict," "anticipate,"
"projected," "should," "believe," or other words that convey the uncertainty of
future events or outcomes. Such forward-looking information is based upon
management's current plans, expectations, estimates and assumptions and is
subject to a number of risks and uncertainties that could significantly affect
current plans, anticipated actions, the timing of such actions and the Company's
financial condition and results of operations. As a consequence, actual results
may differ materially from expectations, estimates or assumptions expressed in
or implied by any forward-looking statements made by or on behalf of the
Company, including those regarding the Company's financial results, levels of
revenues, capital expenditures, or capital resource activities. Among the
factors that could cause actual results to differ materially are: fluctuations
of the prices received for or demand for the Company's goods, amounts of goods
sold for reduced or no mark-up, a need for additional labor or transportation
costs for delivery of goods, requirements for capital; general economic
conditions or specific conditions in the retail hardware business; weather
conditions; competition and insurance costs, as well as the risks and
uncertainties discussed in this report, including, without limitation, the
portions referenced above and the uncertainties set forth from time to time in
the Company's other public reports, filings, and public statements. Interim
results are not necessarily indicative of those for a full year.


Item 3. QUANTITATIVE & QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not Applicable

Item 4. CONTROLS AND PROCEDURES

a. Evaluation of Disclosure Controls and Procedures

The Company's chief executive officer and chief financial officer have
evaluated the Company's disclosure controls and procedures, as defined in
Rules 13a-15(e) and 15d- 15(e) under the Securities Exchange Act of 1934
(the "Exchange Act") as of the end of the period covered by this Quarterly
Report on Form 10-Q. Based on that evaluation, they have concluded that
such disclosure controls and procedures are effective, in all material
respects, in communicating to them on a timely basis material information
relating to the Company required under the Exchange Act to be disclosed in
this Quarterly Report.

18




b. Changes in Internal Controls

There were no significant changes in the Company's internal controls over
financial reporting that occurred during the fiscal quarter covered by this
Quarterly Report that have materially affected, or are reasonably likely to
materially affect such internal controls over financial reporting.

















19

PART II. OTHER INFORMATION

Item 1. Legal Proceedings - None

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds



Issuer Purchases of Equity Securities
- ----------------------------------------------------------------------------------------------------------------------------

Period (a) Total (b) Average (c) Total Number (d) Maximum
Number of Price Paid of Shares (or Number (or
Shares (or Per Share Units) Purchased Approximate
Units) (or Unit) as Part of Dollar Value)
Purchased(1) Publicly or Shares (or
Announced Plans Units) that May
or Programs Yet Be
Purchased Under
the Plans or
Programs
- ----------------------------------------------------------------------------------------------------------------------------


January 1-31, 2004 50 shares $100.00 N/A N/A
- ----------------------------------------------------------------------------------------------------------------------------

February 1-29, 2004 1,122 shares $100.00 N/A N/A
- ----------------------------------------------------------------------------------------------------------------------------

March 1-31, 2004 376 shares $100.00 N/A N/A
- ----------------------------------------------------------------------------------------------------------------------------

April 1-30, 2004 520 shares $100.00 N/A N/A
- ----------------------------------------------------------------------------------------------------------------------------

May 1-31, 2004 6,102.75 shares $100.00 N/A N/A
- ----------------------------------------------------------------------------------------------------------------------------

June 1-30, 2004 1,142.25 shares $100.00 N/A N/A
- ----------------------------------------------------------------------------------------------------------------------------

July 1-31, 2004 687.50 shares $100.00 N/A N/A
- ----------------------------------------------------------------------------------------------------------------------------

August 1-31, 2004 386 shares $100.00 N/A N/A
- ----------------------------------------------------------------------------------------------------------------------------

September 1-30, 2004 58 shares $100.00 N/A N/A
- ----------------------------------------------------------------------------------------------------------------------------

Total 10,444.50 shares $100.00 N/A N/A
- ----------------------------------------------------------------------------------------------------------------------------
(1) We do not have any publicly announced repurchase programs. These shares were repurchased when certain member-dealers' stock
ownership exceeded desired levels or upon the retirement of member-dealers from our buying group.


Item 3. Defaults Upon Senior Securities - None

Item 4. Submission of Matters to a Vote of Security Holders - None

Item 5. Other Information - None

Item 6. Exhibits

(a) Exhibits

Exhibit Number

--------------
*31.1 Certification of Chief Executive Officer Pursuant to Section
302 of the Sarbanes-Oxley Act of 2002.

*31.2 Certification of Chief Financial Officer Pursuant to Section
302 of the Sarbanes-Oxley Act of 2002.

*32 Certification of Chief Executive Officer and Chief Financial
Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.

*Filed herewith

20






Signatures


Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.



HANDY HARDWARE WHOLESALE, INC.



/s/ Don Jameson
---------------------------------------------
DON JAMESON
President
(Chief Executive Officer)



/s/ Tina S. Kirbie
---------------------------------------------
TINA S. KIRBIE
Executive Vice President
Secretary and Treasurer
(Chief Financial and Accounting Officer)





Date: November 10, 2004



21