<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: September 26, 1998
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from: to
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Commission file number: 333-37135
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Omega Cabinets, Ltd.
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(Exact name of registrant as specified in its charter)
Delaware 42-1423186
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(State or other jurisdiction (I.R.S. Employer
incorporation or organization) Identification Number)
1205 Peters Drive, Waterloo, Iowa 50703
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(Address of principal executive offices)
(Zip Code)
(319) 235-5700
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(Registrant's telephone number, including area code)
Not Applicable.
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(Former name, former address and former fiscal year, if changed since
last report)
Indicate by check mark whether 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 [ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. Yes [ ] No [ ] Not Applicable.
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date. Not Applicable.
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PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
The following financial statements are presented herein:
Condensed Consolidated Balance Sheets as of September 26, 1998
and December 27, 1997
Condensed Consolidated Statements of Income for the three
months and nine months ended September 26, 1998 and September 27, 1997
Condensed Consolidated Statements of Cash Flows for the nine
months ended September 26, 1998 and September 27, 1997
Notes to Condensed Consolidated Financial Statements
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Omega Cabinets, Ltd.
Condensed Consolidated Balance Sheets
<TABLE>
<CAPTION>
SEPTEMBER 26 DECEMBER 27
1998 1997
(UNAUDITED) (NOTE)
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<S> <C> <C>
Assets
Current assets:
Cash $ 277,726 $ 157,520
Accounts receivable 17,661,014 15,097,575
Inventories (Note 2) 12,026,658 11,496,588
Other current assets 1,488,127 3,302,918
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Total current assets 31,453,525 30,054,601
Property, plant and equipment 34,505,498 32,550,763
Less accumulated depreciation 7,063,844 5,298,501
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27,441,654 27,252,262
Deferred financing costs, net 5,536,797 5,853,666
Goodwill, net 51,778,502 52,858,262
Deferred income taxes - 475,000
Other assets 677,348 852,507
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Total assets $116,887,826 $117,346,298
============ ============
LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIT)
Current liabilities:
Accounts payable and accrued expenses $ 17,432,581 $ 14,303,600
Current portion of long-term debt 7,375,000 13,800,000
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Total current liabilities 24,807,581 28,103,600
Long-term debt, less current portion 132,125,000 132,320,000
Other noncurrent liabilities 825,000 75,103
Stockholder's equity (deficit):
Common stock, $.01 par value; 10,000 shares
authorized; 1,000 shares issued and outstanding 10 10
Additional paid-in capital 62,348,816 62,835,425
Predecessor basis adjustment (11,031,662) (11,031,662)
Retained earnings (deficit) (Note 3) (92,186,919) (94,956,178)
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Total stockholder's equity (deficit) (40,869,755) (43,152,405)
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Total liabilities and stockholder's equity (deficit) $116,887,826 $117,346,298
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</TABLE>
Note: The balance sheet at December 27, 1997 has been derived from the audited
financial statements at that date but does not include all the
information and footnotes required by generally accepted accounting
principles for complete financial statements.
See accompanying notes.
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Omega Cabinets, Ltd.
Condensed Consolidated Statements of Income (Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 26 SEPTEMBER 27 SEPTEMBER 26 SEPTEMBER 27
1998 1997 1998 1997
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<S> <C> <C> <C> <C>
Net sales $ 43,027,044 $ 38,773,512 $124,786,461 $115,313,374
Cost of goods sold 30,436,316 28,187,545 89,446,442 83,657,397
------------ ------------ ------------ ------------
Gross profit 12,590,728 10,585,967 35,340,019 31,655,977
Selling, general and administrative
expenses (Note 4) 5,151,219 4,280,368 15,029,185 17,852,349
Amortization of goodwill 359,920 357,888 1,079,760 1,040,527
------------ ------------ ------------ ------------
Operating income 7,079,589 5,947,711 19,231,074 12,763,101
Interest expense 3,689,899 6,011,176 11,436,596 12,615,987
------------ ------------ ------------ ------------
Income (loss) before income taxes
and extraordinary item 3,389,690 (63,465) 7,794,478 147,114
Income tax expense 1,288,000 76,000 2,974,000 390,000
------------ ------------ ------------ ------------
Income (loss) before extraordinary
item 2,101,690 (139,465) 4,820,478 (242,886)
Extraordinary loss on debt
refinancing (Note 5) - - - - - - (947,443)
------------ ------------ ------------ ------------
Net income (loss) $ 2,101,690 $ (139,465) $ 4,820,478 $ (1,190,329)
============ ============ ============ ============
</TABLE>
See accompanying notes.
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Omega Cabinets, Ltd.
Condensed Consolidated Statements of Cash Flows (Unaudited)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 26 SEPTEMBER 27
1998 1997
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OPERATING ACTIVITIES
Net income (loss) $ 4,820,478 $ (1,190,329)
Adjustments to reconcile net income (loss) to net cash
provided (used) by operating activities:
Extraordinary loss - 947,443
Depreciation and amortization 3,430,797 3,000,535
Noncash stock option and warrant expense - 5,481,000
Deferred income taxes 1,300,000 385,000
Changes in operating assets and liabilities:
Accounts receivable (2,563,439) (4,149,902)
Inventories (530,070) (2,053,564)
Other assets 1,989,950 (405,697)
Accounts payable, accrued expenses and other
liabilities 3,002,659 ( 2,218,726)
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Net cash provided (used) by operating activities 11,450,375 (204,240)
INVESTING ACTIVITIES
Purchases of property, plant and equipment (1,984,104) (2,116,219)
Additions to goodwill - (3,281,046)
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Net cash used in investing activities (1,984,104) (5,397,265)
FINANCING ACTIVITIES
Payments for deferred financing costs (239,456) (5,908,392)
Payments of long-term debt (8,000,000) (82,861,145)
Proceeds from long-term debt 1,380,000 146,670,000
Capital contribution by parent 118,627 62,248,435
Payments to parent to redeem common stock and
options at parent level (2,605,236) (114,547,393)
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Net cash provided (used) by financing activities (9,346,065) 5,601,505
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Net increase in cash 120,206 -
Cash at beginning of period 157,520 3,797
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Cash at end of period $ 277,726 $ 3,797
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</TABLE>
See accompanying notes.
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Omega Cabinets, Ltd.
Notes to Condensed Consolidated
Financial Statements (Unaudited)
September 26, 1998
1. ACCOUNTING POLICIES
BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included.
Operating results for the nine month period ended September 26, 1998 are not
necessarily indicative of the results that may be expected for the fiscal year
ending January 2, 1999. For further information, refer to the Company's
consolidated financial statements and footnotes thereto for the year ended
December 27, 1997.
2. INVENTORIES
Inventories consist of the following:
SEPTEMBER 26 DECEMBER 27
1998 1997
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Raw materials $ 4,822,222 $ 4,933,935
Work-in-process 4,568,363 3,910,231
Finished goods 2,636,073 2,652,422
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$12,026,658 $11,496,588
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3. Capital Transactions
In March 1998, the Company's parent paid a final defined post-closing
adjustment of $2,000,000 for the redemption of stock and options in connection
with its 1997 merger and recapitalization. As with the original redemption
cost (all of which was pushed down and reflected by the Company), the Company
has charged the amount to retained earnings during the 1998 first quarter.
In May 1998, the Company's parent redeemed approximately $605,000 of the
parent's common stock and options, which the Company in turn paid to the parent
and charged to additional paid-in capital during the 1998 second quarter.
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4. STOCK OPTION EXPENSE
Selling, general and administrative expenses include compensation expense
related to stock options, recognized in accordance with APB No. 25, of $0 and
$4,894,000 in the three months and nine months ended September 27, 1997,
respectively (none in the three months or nine months ended September 26,
1998).
5. EXTRAORDINARY LOSS
As a result of its 1997 merger and recapitalization, the Company wrote off
existing unamortized deferred financing costs of $1,554,443 in June 1997,
resulting in an extraordinary loss of $947,443 (net of related income tax
benefit of $607,000).
6. SUBSIDIARY DEBT GUARANTEE
The Company's senior subordinated notes in aggregate principal amount of
$100,000,000 are fully and unconditionally guaranteed by Panther Transport,
Inc. ("Panther"), the Company's wholly-owned subsidiary. Separate financial
statements or summarized financial information for Panther have not been
presented since its operations are inconsequential and its accounts and
transactions represent less than 1% of each of the consolidated total assets,
liabilities, equity, net sales, operating income, and net income of the
Company. Management believes that the separate financial statements and
summarized financial information of Panther are not material to investors.
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<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
General
The following discussion should be read in conjunction with the accompanying
Condensed Consolidated Financial Statements for the period ended September 26,
1998 and the Company's audited consolidated financial statements and Annual
Report on Form 10-K for the year ending December 27, 1997.
1997 Merger and Refinancing
As more fully described in the Company's 1997 Form 10-K, in June 1997 the
Company's parent entered into a merger and recapitalization transaction and
concurrently refinanced all outstanding long-term debt as of that date. All
merger and recapitalization transactions have been pushed down and are
reflected in the accounts of the Company. The merger was accounted for as a
recapitalization and, accordingly, did not impact the historical basis of the
Company's assets or liabilities.
Results of Operations
Net Sales for the three months ended September 26, 1998 ("third quarter 1998")
were $43.0 million compared to $38.8 million for the comparable period in 1997
("third quarter 1997"), an increase of 11.0%. For the first nine months of 1998
net sales were $124.8 million compared to $115.3 million for the comparable
period in 1997 ("first nine months of 1997"), an increase of 8.2%. Net sales of
the Omega lines (custom and semi-custom cabinetry and bath vanities) were $19.4
million in the third quarter 1998 compared to $17.6 million for the third
quarter 1997, a 10.3% increase, while first nine months of 1998 net sales were
$60.6 compared to $54.2 million for the first nine months of 1997, an increase
of 11.9%. The third quarter 1998 sales increase resulted primarily through
increased penetration into specialty home centers and further West Coast market
expansion. For the first nine months of 1998, the combination of a general
price increase effective February 1 and sales of new private label products, in
conjunction with the third quarter initiatives, contributed to the 1998 sales
increase for Omega lines. Net sales of stock cabinetry were $23.6 million in
the third quarter 1998 compared to $21.2 million for the third quarter 1997, an
11.5% increase, while the first nine months of 1998 net sales were $64.2
compared to $61.1 million for the first nine months of 1997, a 4.9% increase.
The third quarter 1998 stock cabinetry sales increase resulted from an increase
in sales to the manufactured housing segment, increased dealer locations, and
additional product enhancements. The first nine months of 1998 sales
performance for stock cabinetry improved due to an increase in dealer locations
and product enhancements, which was partially offset by an unplanned sales
decline at the largest customer (due to the customer's system implementation
issues).
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Gross Profit for the third quarter 1998 was $12.6 million compared to $10.6
million for the comparable period in 1997, an increase of 18.9%. For the first
nine months of 1998 gross profit was $35.3 million compared to $31.7 million
for the first nine months of 1997, an increase of 11.6%. As a percentage of net
sales, gross profit increased to 29.2% in the third quarter 1998 from 27.3% in
1997, while for the first nine months of 1998 gross profit increased to 28.3%
of net sales from 27.5%. For the first nine months of 1998, gross profit
margins have been favorably impacted by lower insurance and outbound freight
costs. In addition, costs of plywood used for semi-custom cabinets have been
significantly below 1997 costs.
Selling, General and Administrative Expenses for the third quarter 1998 were
$5.2 million compared to $4.3 million for the third quarter 1997, an increase
of 20.4%. For the first nine months of 1998, selling, general and
administrative expenses were $15.0 million compared to $17.9 million, a
decrease of 15.8%. The decrease of $2.8 million for the first nine months of
1998 over the comparable period of 1997 is primarily attributable to $5.5
million of non-cash expense for employee stock options and warrants granted in
the first nine months of 1997. Selling, general and administrative expenses
without giving effect to this charge would have been $15.0 million in 1998
compared to $12.4 million for the first half of 1997, an increase of 21.7%. The
increase in selling, general and administrative expenses can be attributed
primarily to higher salary expenses partially associated with the upgrade of
Sales and Marketing areas to manage sales growth and to improve customer
support and training; higher advertising costs for cooperative advertising
participation; higher literature expense associated with new product
introductions, complete overhaul of sales catalogs and point-of-purchase
merchandising enhancements; and higher legal and accounting expenses incurred
from increased external reporting requirements.
Operating Income for the third quarter 1998 was $7.1 million, or 16.4% of net
sales, compared to $5.9 million, or 15.3% of net sales, for the third quarter
1997. For the first nine months of 1998, operating income was $19.2 million, or
15.4% of net sales, compared to $12.8 million, or 11.1% of net sales, for the
same period in 1997. For the first nine months of 1997, operating income
without giving effect to the non-cash compensation expense referred to above
would have been $18.3 million, or 15.8% of net sales. The primary reason for
the lower 1998 operating income percentage was higher selling, general and
administrative expenses as discussed above.
Interest Expense for the third quarter 1998 was $3.7 million compared to $6.0
million for the third quarter 1997, a decrease of 38.6%, while the first nine
months of 1998 interest expense was $11.4 million compared to $12.6 million for
the first nine months of 1997, a decrease of 9.3%. Third quarter 1997 interest
expense was heavily impacted by bridge loan fees associated with the 1997
recapitalization transaction. The first nine months of 1998 decrease is
primarily due to decreased borrowings under the Company's revolving credit
facility.
Income Tax Expense for the third quarter 1998 was $1.3 million compared to
$0.1 for the third quarter of 1997. For the first nine months of 1998,
income tax expense was $3.0 million compared to $0.4 million for the first nine
months of 1997. Income tax expense in the 1998 periods reflected the Company's
normalized effective tax rate.
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<PAGE>
Net Income(Loss) for the third quarter 1998 was a net income of $2.1 million
compared to a net loss of $0.1 million in the third quarter 1997. For the first
nine months of 1998, net income was $4.8 million compared to a net loss of $1.2
million for the first nine months of 1997. The increase in net income for the
third quarter was primarily attributable to lower interest expense and
increased operating income. The increase in net income for the first nine
months of 1998 was primarily attributable to increased operating income and the
1997 extraordinary loss on debt refinancing and non-cash expense from stock
options and warrants discussed above.
Liquidity and Capital Resources
The Company's primary cash needs are working capital, capital expenditures and
debt service. The Company has financed these cash requirements primarily
through internally generated cash flow and funds borrowed under the Company's
credit facilities.
Net cash provided by operating activities for the nine month period ended
September 26, 1998 was $11.5 million as compared to net cash used by operating
activities of $0.2 million in the comparable period of 1997, an increase of
$11.7 million. The increase was due to the combination of changes in operating
assets and liabilities, and improvement in net income before non-cash charges.
Net income as adjusted for non-cash charges was $9.6 million for the first nine
months of 1998 compared to $8.6 million for the first nine months of 1997, due
to the factors described above. The net increase in operating assets and
liabilities of $1.9 million for the first nine months of 1998 compared to a net
decrease of $8.8 million for the first nine months of 1997 was primarily due to
accounts receivable and inventories increasing at a lesser rate in 1998 than in
1997, and a significant decrease in accrued expenses in 1997 due to the
recapitalization transaction.
The Company used cash in investing activities of $2.0 million in the first nine
months of 1998 compared to $5.4 million in the first nine months of 1997.
During the first nine months of 1997, additional contingent purchase price of
$3.3 million was paid for the 1994 acquisition of Omega.
Cash used by financing activities was $9.3 million for the first nine months of
1998 compared to cash provided from financing activities of $5.6 million for
the first nine months of 1997. Significant 1998 cash uses included payments on
the Company's revolving credit facility, in addition to the retirement of a
$3.0 million note and a $2.0 million redemption payment, both related to the
1997 recapitalization.
The Company's ability to make scheduled payments of principal, or to pay the
interest or premium, if any, on, or to refinance, its indebtedness, or to fund
planned capital expenditures will depend on its future performance, which, to a
certain extent, is subject to general economic, financial, competitive,
legislative, regulatory and other factors that are beyond its control. Based
upon the current level of operations, management believes that cash flow from
operations and available cash, together with available borrowings under its
current credit facility, will be adequate to meet the Company's anticipated
future requirements for working capital, budgeted capital expenditures and
scheduled payments of principal and interest on its indebtedness, for the next
several years. There can be no assurance that the Company's business will
generate sufficient cash flow from operations
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or that future borrowings will be available under its current bank credit
facility in an amount sufficient to enable the Company to service its
indebtedness or make anticipated capital expenditures.
As of September 26, 1998, the Company had additional borrowing availability
under its revolving facility of approximately $16.4 million. The Company's term
facility requires quarterly principal payments of approximately $1.0 million
per quarter currently, increasing at each anniversary. Subsequent payments will
be approximately $1.4 million, $1.5 million, $1.9 million, and $2.3 million per
quarter during the four quarter periods beginning in September 1999, 2000,
2001, 2002, respectively, with the balance due in the following two quarters.
The Company's revolving facility will mature in 2002 and has no scheduled
interim amortization.
Year 2000 Issue
The Year 2000 Issue is the result of computer programs being written using
two digits rather than four to define the applicable year. Any of computer
programs that have time-sensitive software may recognize a date using "00" as
the year 1900 rather than year 2000. This could result in a system failure or
miscalculations causing disruptions of operations, including, among other
things, a temporary inability to process transactions, send invoices, or engage
in similar normal business activities.
The Company classifies its response to the Year 2000 Issue into five phases:
inventory, assessment, renovation, validation and implementation. Inventory is
the process in which all electronic/computer components are defined for all
systems (IT and non-IT). Assessment is the process in which all components are
classified as either compliant or non-compliant. Renovation is the process in
which a system is upgraded, replaced or retired. Validation is the process in
which compliant systems are tested within the Company's infrastructure to
validate that either the initial compliant assessment is correct or the upgrade
or replacement from the renovation phase is compliant with the Company's
infrastructure. Implementation is the process in which a compliant system is
installed into the Company's production environment and is used to support
business operations.
The Company recently completed an inventory of its IT systems, and is now in
the renovation or validation phases of its IT systems and currently intends to
implement these systems by mid-1999. In the ordinary course of business, the
Company upgraded the operating system and applications software covering the
HomeCrest division, and it has received assurances from the software vendor
that such upgrade would make these systems Year 2000 compliant. The Company
also has plans to implement replacement software to improve the information
processing capabilities at its Omega Cabinets division. As of September 26,
1998, the Company has an expected cost of $1.4 million to renovate, validate
and implement the software to address the Year 2000 Issue. This cost is being
funded out of operating cash flow with approximately $1.0 million being
capitalized as new hardware and software. The remaining $0.4 million, which
will be expensed as incurred, is not expected to have material effect on the
results of operations.
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<PAGE>
The Company's inventory and assessment of its non-IT systems (including
phone, voicemail, heating/air-conditioning, electricity and security systems) is
expected to be completed by year end 1998, followed by any required renovation.
The Company is using internal resources to address the Year 2000 Issue of its
non-IT systems and has not incurred significant separately identifiable costs
related to the Year 2000 Issue through September 26, 1998 and does not expect
to incur significant additional costs in order to upgrade its non-IT systems.
All validation and implementation of these non-IT systems is expected to
completed by mid-1999.
The costs of the systems implementation and Year 2000 modifications are
based on management's best estimates, which were derived utilizing numerous
assumptions of future events, including the continued availability of certain
resources, and other factors. However, there can be no guarantee that these
estimates will be achieved and actual results could differ materially from
those anticipated. Specific factors that might cause such material differences
include, but are not limited to, the availability and cost of personnel trained
in this area, the ability to locate and correct all relevant computer codes,
and similar uncertainties. As of September 26, 1998, the cost of bringing the
Company's IT and non-IT systems into Year 2000 compliance is not expected to
have a material effect on the Company's financial condition or results of
operations.
In addition to reviewing its internal systems, the Company has polled or is
in the process of polling its outside software and other vendors, customers and
freight carriers to determine whether they are Year 2000 compliant and to
attempt to identify any potential issues. If the Company's customers and
vendors do not achieve Year 2000 compliance before the end of 1999, the Company
may experience a variety of problems which may have a material adverse effect
on the Company. To the extent such vendors are not Year 2000 compliant by the
end of 1999, such vendors may fail to deliver ordered materials and products to
the Company and may fail to bill the Company properly and promptly.
Consequently, the Company may experience delays in manufacturing product to
send to its customers. The Company plans to address potential problems with
its vendors by identifying and arranging for alternative sources of supply.
Due to the nature of its product, the Company does not believe it has any
exposure to contingencies related to the Year 2000 Issue for the products it
has sold.
Forward Looking Statements
When used in this quarterly report on Form 10-Q, the words "believes,"
"anticipates" and similar expressions are used to identify forward looking
statements. Such statements are subject to risks and uncertainties which could
cause actual results to differ materially from those projected. The Company
wishes to caution readers that the following important factors and others in
some cases have affected and in the future could affect the Company's actual
results and could cause the Company's results for 1998 to differ materially
from those expressed in any forward statements made by the Company: (i)
economic conditions in the remodeling and housing markets, (ii) availability of
credit, (iii) increases in interest rates, (iv) cost of lumber and other raw
materials, (v) inability to maintain state-of-the-art manufacturing facilities,
(vi) heightened competition, including intensification of price and service
competition, the entry of new competitors and the introduction of new products
by existing competitors, (vii) inability to capitalize on opportunities
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presented by industry consolidation, (viii) loss or retirement of key
executives and (ix) inability to grow by acquisition of additional cabinetry
manufacturers or to effectively consolidate operations of businesses acquired.
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<PAGE>
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Not applicable.
PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
None.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.
None.
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 AND REPORTS ON FORM 8-K.
(a) EXHIBIT INDEX.
3.1 Certificate of Incorporation, as amended, of the Company*
3.2 By-laws of the Company*
4.1 Indenture dated as of July 24, 1997*
10.1 New Bank Credit Facility dated as of June 13, 1997*
10.2 Panther Security Agreement dated as of June 13, 1997*
10.3 Omega Security Agreement dated as of June 13, 1997*
10.4 Pledge Agreement dated as of June 13, 1997*
10.5 Collateral Assignment of Trademarks dated as of June 13, 1997*
10.6 Management Agreement dated June 13, 1997*
10.7 Financing Agreement dated June 13, 1997*
10.8 Deferred Compensation Plan dated June 13, 1997*
10.9 Rabbi Trust Agreement dated June 13, 1997*
10.10 Key Employment Agreement dated September 16, 1997*
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10.11 Key Severance Agreement dated April 24, 1997*
10.12 Moran Employment Agreement dated September 11, 1995, as amended
June 13, 1997*
10.13 Moran Severance Agreement dated April 24, 1997*
10.14 Erlick Employment Agreement dated July 11, 1994*
10.15 Erlick Severance Agreement dated April 24, 1997*
10.16 Goebel Employment Agreement dated April 10, 1995, as amended
June 13, 1997*
10.17 Goebel Severance Agreement dated April 24, 1997*
10.18 Hagan Employment Agreement dated April 10, 1995*
10.19 Hagan Severance Agreement dated April 24, 1997*
10.20 Schmidt Employment Agreement dated April 10, 1995*
10.21 Schmidt Severance Agreement dated April 24, 1997*
10.22 Deferred Non-Qualified Compensation Agreement dated June 28, 1997*
10.23 Company Bonus Plan*
10.24 Stockholders Agreement dated June 13, 1997*
10.25 Omega Holdings, Inc. Stock Option Plan*
10.26 Key Put Agreement dated June 13, 1997*
10.27 Goebel Put Agreement dated June 13, 1997*
27.1 Financial Data Schedule.
______________
* Incorporated by reference to the similarly numbered exhibit in the Company's
Registration Statement on Form S-4, No. 333-37135, filed October 3, 1997.
(b) REPORTS ON FORM 8-K.
No reports on Form 8-K were filed during the third quarter ended
September 26, 1998.
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<PAGE>
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.
OMEGA CABINETS, LTD.
By: /s/ Henry P. Key
---------------------------------------
Name: Henry P. Key
Title: Chief Executive Officer
(Principal executive
officer and principal
financial officer)
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<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM UNAUDITED
FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED SEPTEMBER 26, 1998 PREPARED BY
ERNST & YOUNG, LLP.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JAN-02-1999
<PERIOD-START> JUN-29-1998
<PERIOD-END> SEP-26-1998
<CASH> 277,726
<SECURITIES> 0
<RECEIVABLES> 19,497,941
<ALLOWANCES> 1,836,927
<INVENTORY> 12,026,658
<CURRENT-ASSETS> 31,453,525
<PP&E> 34,505,498
<DEPRECIATION> 7,063,844
<TOTAL-ASSETS> 116,887,826
<CURRENT-LIABILITIES> 17,432,581
<BONDS> 0
0
0
<COMMON> 10
<OTHER-SE> (40,869,765)
<TOTAL-LIABILITY-AND-EQUITY> 116,887,826
<SALES> 124,786,461
<TOTAL-REVENUES> 124,786,461
<CGS> 89,446,442
<TOTAL-COSTS> 89,446,442
<OTHER-EXPENSES> 1,079,760
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 11,436,596
<INCOME-PRETAX> 7,794,478
<INCOME-TAX> 2,974,000
<INCOME-CONTINUING> 4,820,478
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,084,401
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
