<PAGE>
==============================================================================
UNITED STATES
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 May 30, 1998
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934.
Commission File Number
333-33751
----------------------
ARCHIBALD CANDY CORPORATION
Incorporated in the IRS Employer Identification No.
State of Illinois 36-0743280
1137 West Jackson Boulevard
Chicago, Illinois 60607
(312) 243-2700
Indicate by check 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
--- ---
As of May 30, 1998, the number of shares outstanding of the
registrant's Common Stock was 19,200 shares, all of which is held by
Fannie May Holdings, Inc.
==============================================================================
<PAGE>
ARCHIBALD CANDY CORPORATION
FORM 10-Q
FOR THE QUARTER ENDED MAY 30, 1998
INDEX
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<TABLE>
<CAPTION>
PAGE NO.
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<S> <C>
PART I - FINANCIAL INFORMATION:
- ------------------------------
ITEM 1 - FINANCIAL STATEMENTS
BALANCE SHEETS - MAY 30, 1998 (UNAUDITED) AND
AUGUST 30, 1997 1
STATEMENTS OF OPERATIONS - THREE MONTH PERIODS
ENDED MAY 30, 1998 (UNAUDITED) AND
MAY 31, 1997 (UNAUDITED) 3
STATEMENTS OF OPERATIONS - NINE MONTH PERIODS
ENDED MAY 30, 1998 (UNAUDITED) AND
MAY 31, 1997 (UNAUDITED) 4
STATEMENTS OF CASH FLOWS - NINE MONTH PERIODS
ENDED MAY 30, 1998 (UNAUDITED) AND
MAY 31, 1997 (UNAUDITED) 5
NOTES TO FINANCIAL STATEMENTS 6
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS 7
PART II - OTHER INFORMATION:
- ----------------------------
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K 11
SIGNATURES 12
</TABLE>
<PAGE>
THIS REPORT UPDATES ARCHIBALD CANDY CORPORATION'S ANNUAL REPORT ON
FORM 10-K FOR THE FISCAL YEAR ENDED AUGUST 30, 1997, IN ACCORDANCE WITH THE
INSTRUCTIONS TO FORM 10-Q. IT IS PRESUMED THAT THE READER HAS READ THE
ANNUAL REPORT ON FORM 10-K.
SOME INFORMATION INCLUDED IN THIS REPORT MAY CONSTITUTE
FORWARD-LOOKING STATEMENTS THAT INVOLVE A NUMBER OF RISKS AND UNCERTAINTIES.
FROM TIME TO TIME, INFORMATION PROVIDED BY ARCHIBALD CANDY CORPORATION OR
STATEMENTS MADE BY ITS EMPLOYEES MAY CONTAIN OTHER FORWARD-LOOKING
STATEMENTS. FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM
THE FORWARD-LOOKING STATEMENTS INCLUDE, BUT ARE NOT LIMITED TO: GENERAL
ECONOMIC CONDITIONS INCLUDING INFLATION, INTEREST RATE FLUCTUATIONS, TRADE
RESTRICTIONS, AND GENERAL DEBT LEVELS; COMPETITIVE FACTORS INCLUDING PRICE
PRESSURES, TECHNOLOGICAL DEVELOPMENTS, AND PRODUCTS OFFERED BY COMPETITORS;
INVENTORY RISKS DUE TO CHANGES IN MARKET DEMAND OR BUSINESS STRATEGIES; AND
CHANGES IN EFFECTIVE TAX RATES. READERS ARE CAUTIONED NOT TO PLACE UNDUE
RELIANCE ON THESE FORWARD-LOOKING STATEMENTS, WHICH SPEAK ONLY AS OF THE DATE
MADE. ARCHIBALD CANDY CORPORATION UNDERTAKES NO OBLIGATION TO PUBLICLY
UPDATE OR REVISE ANY FORWARD-LOOKING STATEMENTS, WHETHER AS A RESULT OF NEW
INFORMATION, FUTURE EVENTS, OR OTHERWISE.
<PAGE>
PART 1 - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
Archibald Candy Corporation
(A Wholly Owned Subsidiary of Fannie May Holdings, Inc.)
Balance Sheets
As of May 30, 1998 and August 30, 1997
<TABLE>
<CAPTION>
MAY 30, AUGUST 30,
1998 1997
------------- ------------
(DOLLARS IN THOUSANDS)
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 29,924 $ 15,801
Accounts receivable, net 1,122 576
Inventories 18,206 18,965
Prepaid expenses and other
current assets 1,389 791
------------- ------------
Total current assets 50,641 36,133
Due from affiliate 825 825
Property, plant, and equipment 20,478 20,330
Goodwill 31,260 31,960
Noncompete agreements and other
intangibles 113 127
Deferred financing fees 3,771 4,166
Other assets 1,965 2,119
------------- ------------
Total assets $ 109,053 $ 95,660
------------- ------------
------------- ------------
</TABLE>
-1-
<PAGE>
<TABLE>
<CAPTION>
MAY 30, AUGUST 30,
1998 1997
------------- ------------
(DOLLARS IN THOUSANDS)
(Unaudited)
<S> <C> <C>
LIABILITIES AND SHAREHOLDER'S EQUITY (DEFICIT)
Current liabilities:
Accounts payable $ 3,820 $ 4,769
Accrued liabilities 8,693 4,964
Payroll and related liabilities 2,157 2,025
Current portion of capital lease
obligations 129 376
------------- ------------
Total current liabilities 14,799 12,134
Long-term debt 100,000 100,000
Capital lease obligations, less
current portion 61 145
Shareholder's equity (deficit):
Common stock, $0.01 par value:
Authorized -- 25,000 shares
Issued and outstanding --
19,200 shares -- --
Additional paid-in-capital 18,700 18,700
Accumulated deficit (24,507) (35,319)
------------- ------------
Total shareholder's equity
(deficit) ( 5,807) (16,619)
------------- ------------
Total liabilities and shareholder's
equity (deficit) $ 109,053 $ 95,660
------------- ------------
------------- ------------
See accompanying notes.
</TABLE>
-2-
<PAGE>
Archibald Candy Corporation
(A Wholly Owned Subsidiary of Fannie May Holdings, Inc.)
Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
----------------------------
MAY 30, MAY 31,
1998 1997
------------- -------------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Net sales $ 26,216 $ 25,905
Cost of sales, excluding depreciation 9,092 9,173
Selling, general, and administrative
expenses, excluding depreciation and
amortization 14,944 14,601
Depreciation and amortization expense 1,191 1,155
Amortization of goodwill and other
intangibles 420 402
Management fees and other fees 133 117
------------- -------------
Operating income 436 457
Other (income) and expense:
Interest expense 2,521 2,092
Interest and other (income) and
expense (458) (29)
------------- -------------
Loss before income taxes (1,627) (1,606)
Provision for income taxes 43 25
------------- -------------
Net Loss $ (1,670) $ (1,631)
------------- -------------
------------- -------------
</TABLE>
See accompanying notes.
-3-
<PAGE>
Archibald Candy Corporation
(A Wholly Owned Subsidiary of Fannie May Holdings, Inc.)
Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
----------------------------
MAY 30, MAY 31,
1998 1997
------------- -------------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Net sales $ 111,786 $ 106,977
Cost of sales, excluding depreciation 39,062 36,741
Selling, general, and administrative
expenses, excluding depreciation and
amortization 49,767 49,058
Depreciation and amortization expense 3,573 3,465
Amortization of goodwill and other
intangibles 1,260 1,207
Management fees and other fees 391 351
------------- -------------
Operating income 17,733 16,155
Other (income) and expense:
Interest expense 7,780 6,697
Interest and other (income) and
expense (1,068) (206)
------------- -------------
Income before income taxes 11,021 9,664
Provision for income taxes 209 308
------------- -------------
Net Income $ 10,812 $ 9,356
------------- -------------
------------- -------------
</TABLE>
See accompanying notes.
-4-
<PAGE>
Archibald Candy Corporation
(A Wholly Owned Subsidiary of Fannie May Holdings, Inc.)
Statements of Cash Flows
(Unaudited)
<TABLE>
NINE MONTHS ENDED
----------------------------
MAY 30, MAY 31,
1998 1997
------------- -------------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 10,812 $ 9,356
Adjustments to reconcile net income to
net cash provided by operating
activities:
Depreciation and amortization 4,833 4,672
Changes in operating assets and
liabilities:
Accounts receivable, net (546) (410)
Inventories 759 2,983
Prepaid expenses and other
current assets (599) (341)
Other assets 154 145
Accounts payable and accrued
liabilities 2,912 (89)
------------- -------------
Net cash provided by operating activities 18,325 16,316
INVESTING ACTIVITIES
Purchase of property, plant, and
equipment (3,370) (1,646)
------------- -------------
Net cash used in investing activities (3,370) (1,646)
FINANCING ACTIVITIES
Net increase (decrease)in revolving line of
credit -- (9,100)
Repayments of long-term debt -- (3,218)
Principal payments of capital lease
obligations (331) (270)
Costs related to refinancing (501) (12)
------------- -------------
Net cash used in
financing activities (832) (12,600)
------------- -------------
Net increase in cash and cash
equivalents 14,123 2,070
Cash and cash equivalents beginning of
period 15,801 380
------------- -------------
Cash and cash equivalents end of
period $ 29,924 $ 2,450
------------- -------------
------------- -------------
SUPPLEMENTAL SCHEDULE OF CASH
TRANSACTIONS
Interest paid $ 4,295 $ 5,457
------------- -------------
------------- -------------
</TABLE>
See accompanying notes.
-5-
<PAGE>
Archibald Candy Corporation
(A Wholly Owned Subsidiary of Fannie May Holdings, Inc.)
Notes to Financial Statements
May 30, 1998
(DOLLARS IN THOUSANDS)
1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION
Archibald Candy Corporation (the "Company") is a manufacturer and
retailer of boxed chocolates and other confectionery items. The Company sells
its Fannie May and Fanny Farmer brand candies in over 300 Company-operated
stores and approximately 6,000 third-party grocery stores, drug stores and
independent retail accounts as well as through a variety of non-retail
programs, including quantity order, mail order and fundraising programs. The
Company is a wholly owned subsidiary of Fannie May Holdings, Inc.
The interim financial statements included herein have been prepared
pursuant to the rules and regulations of the Securities and Exchange
Commission. Certain information and footnote disclosures normally included in
annual financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such rules
and regulations, although the Company believes these disclosures are adequate
to make the information presented not misleading. In the opinion of
management, all adjustments necessary for fair presentation for the periods
presented have been reflected and are of a normal recurring nature. These
financial statements should be read in conjunction with the financial
statements and notes thereto for the year ended August 30, 1997.
Results of operations for the period from August 30, 1997 to May 30,
1998 are not necessarily indicative of the results that may be achieved for
the entire year.
2. INVENTORIES
Inventories at May 30, 1998 and August 30, 1997 are comprised of
the following:
<TABLE>
<CAPTION>
MAY 30, AUGUST 30,
1998 1997
------------ ----------
<S> <C> <C>
Raw materials .................. $ 8,878 $ 7,688
Work in process ................ 306 218
Finished goods ................. 9,022 11,059
------------ ----------
$18,206 $18,965
------------ ----------
------------ ----------
</TABLE>
3. DEBT
Debt at May 30, 1998 and August 30, 1997 is comprised of $100
million of 10.25% senior secured notes due July 1, 2004.
-6-
<PAGE>
4. INCOME TAXES
The provision for income taxes differs from the amount of income tax
expense computed by applying the United States federal income tax rate due to
the benefit of the net operating losses that were not recognized in prior
periods.
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
THREE MONTHS ENDED MAY 30, 1998 COMPARED TO THE THREE MONTHS ENDED
MAY 31, 1997
NET SALES. Net sales for the three months ended May 30, 1998 were
$26.2 million, an increase of $.3 million, or 1.2%, from $25.9 million for
the three months ended May 31, 1997. Pounds sold were 2.4 million for
the three months ended May 30, 1998, a decrease of .1 million, or 5.1%,
from 2.5 million pounds sold for the three months ended May 31, 1997. The
decrease in pounds sold resulted from a decrease in pounds sold in the Company-
Operated Retail channel(1). Company-Operated Retail sales were $21.6 million
for the three months ended May 30, 1998, an increase of $.1 million, or .5%,
from $21.5 million for the three months ended May 31, 1997. This increase was
primarily a result of same store sales growth of 3.0%, partially offset by 11
fewer Company-operated stores open at May 30,1998 compared to May 31, 1997.
For the three months ended May 30, 1998, Third-Party Retail (2) sales were $2.5
million, an increase of $.1 million, or 4.9%, from $2.4 million for the three
months ended May 31, 1997. For the three months ended May 30, 1998, Non-Retail
(3) sales were $2.1 million, an increase of $.1 million, or 4.1%, from $ 2.0
million for the three months ended May 31, 1997.
GROSS PROFIT. Gross profit for the three months ended May 30, 1998 was
$17.1 million, an increase of $.4 million, or 2.3%, from $16.7 million for
the three months ended May 31, 1997. Gross profit as a percentage of net
sales increased to 65.3% for the three months ended May 30, 1998 from 64.6%
for the three months ended May 31, 1997. This increase in gross margin was
due primarily to an overall increase in net sales resulting from a larger mix
of products sold in each of the Company-Operated Retail, Third-Party Retail,
and Non-Retail channels.
SELLING, GENERAL AND ADMINISTRATIVE. Selling, general and
administrative ("SG&A") expenses were $14.9 million for the three months
ended May 30, 1998, an increase of $.3 million, or .2%, from $14.6 million
for the three months ended May 31, 1997. As a percentage of net sales, SG&A
expenses increased to 57.0% for the three months ended May 30, 1998 from
56.4% for the three months ended May 31, 1997.
- ----------------------------
(1) Company-Operated Retail includes sale of Company branded products through
Company-Operated Fannie May and Fanny Farmer stores.
(2) Third-Party Retail includes grocery stores, drug stores and other
independent retailers that purchase the Company's branded products at
wholesale pricing for resale to the consumer.
(3) Non-Retail includes sale of Company branded products through the
Company's quantity order, mail order and fundraising programs.
-7-
<PAGE>
EBITDA. Earnings before interest, income taxes, depreciation, and
amortization, (EBITDA) was $2.1 million for the three months ended May 30,
1998, an increase of $.1 million, or 6.5%, from $2.0 million for the three
months ended May 31, 1997. As a percentage of net sales, EBITDA was 8.1% for
the three months ended May 30, 1998 as compared to 7.7% for the three months
ended May 31, 1997.
OPERATING INCOME. Operating income was $.4 million for the three months
ended May 30, 1998, a decrease of $.1 million, or 4.6%, from income of $.5
million for the three months ended May 31, 1997. This decrease was primarily a
result of an increase in operating expenses.
NET (LOSS). Net loss was $1.7 million for the three months ended
May 30, 1998, an increase of $.1 million, or 2.4%, from $1.6 million for the
three months ended May 31, 1997. Interest expense was $2.5 million for the
three months ended May 30, 1998, an increase of $.4 million, or 20.5%, from
$2.1 million for the three months ended May 31, 1997. This increase in
interest expense was primarily a result of an increase in long-term debt.
-8-
<PAGE>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
NINE MONTHS ENDED MAY 30, 1998 COMPARED TO THE NINE MONTHS ENDED
MAY 31, 1997
NET SALES. Net sales for the nine months ended May 30, 1998 were $111.8
million, an increase of $4.8 million, or 4.5%, from $107.0 million for the
nine months ended May 31, 1997. Pounds sold were 10.7 million for the nine
months ended May 30, 1998, an increase of .2 million, or 1.8%, from 10.5
million pounds sold for the nine months ended May 31, 1997. Pounds sold in
the Company-Operated Retail channel decreased slightly over the previous
period due to fewer stores open during the period. The Third-Party Retail and
Non-Retail channels showed an increase in pounds sold over the prior nine
month period. Company-Operated Retail sales were $79.1 million for the nine
months ended May 30, 1998, an increase of $2.3 million, or 2.9%, from $76.9
million for the nine months ended May 31, 1997. This increase was primarily
the result of same store sales growth of 4.8%, partially offset by there
being 11 fewer Company-operated stores open at May 30,1998 as compared to May
31, 1997. For the nine months ended May 30, 1998, Third-Party Retail sales
were $16.2 million, an increase of $1.1 million, or 7.6%, from $15.1 million
for the nine months ended May 31, 1997. This increase reflects the continued
results of management's strategy to expand Third-Party Retail sales into new
markets, including providing Fanny Farmer branded products to mass
merchandisers and developing Fannie May product line extensions. For the
nine months ended May 30, 1998, Non-Retail sales were $16.4 million, an
increase of $1.4 million, or 9.3%, from $ 15.0 million for the nine months
ended May 31, 1997. This increase was primarily a result of growth in the
fundraising boxed chocolate business.
GROSS PROFIT. Gross profit for the nine months ended May 30,1998 was
$72.7 million, an increase of $2.5 million, or 3.5%, from $70.2 million for the
nine months ended May 31, 1997. Gross profit as a percentage of net sales
decreased to 65.1% for the nine months ended May 30, 1998 from 65.7% for the
nine months ended May 31, 1997. This decrease in gross margin was due primarily
to an increase in product costs and a continuing shift from Company-Operated
Retail sales to lower margin Third-Party Retail and Non-Retail sales.
SELLING, GENERAL AND ADMINISTRATIVE. SG&A expenses were $49.8 million
for the nine months ended May 30, 1998, an increase of $.7 million, or
1.4%, from $49.1 million for the nine months ended May 31, 1997. This
increase in SG&A expenses was due primarily to an increase in Third-Party
Retail operating expenses resulting from growth of the Fanny Farmer mass
merchandising programs. The increase in SG&A expenses was partially offset by
lower store operating costs resulting from store closings. As a percentage of
net sales, SG&A expenses decreased to 44.5% for the nine months ended May 30,
1998 from 45.9% for the nine months ended May 31, 1997.
-9-
<PAGE>
EBITDA. EBITDA was $22.8 million for the nine months ended May 30,
1998, an increase of $1.8 million, or 8.7%, from $20.9 million for the nine
months ended May 31, 1997. As a percentage of net sales, EBITDA was 20.4%
for the nine months ended May 30, 1998 as compared to 19.6% for the nine
months ended May 31, 1997.
OPERATING INCOME. Operating income was $17.7 million for the nine months
ended May 30, 1998, an increase of $1.6 million, or 9.8%, from $16.2 million
for the nine months ended May 30, 1997. This increase was primarily a result
of an increase in net sales.
NET INCOME. Net income was $10.8 million for the nine months ended
May 30, 1998, an increase of $1.5 million, or 15.6%, from income of $9.4
million for the nine months ended May 31, 1997. Interest expense was $7.8
million for the nine months ended May 30, 1998, an increase of $1.1 million or
16.2% from $6.7 million for the nine months ended May 31, 1997. This increase
in interest expense reflects an increase in long-term debt.
LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operating activities was $18.3 million for the nine
months ended May 30, 1998 compared to $16.3 million for the nine months
ended May 31, 1997. Net income was $10.8 million for the nine months
ended May 30, 1998 and $9.4 million for the nine months ended May 31, 1997.
Net income included noncash depreciation and amortization charges of $4.8
million for the nine months ended May 30, 1998 and $4.7 million for the nine
months ended May 31, 1997.
Net cash used for capital expenditures increased to $3.4 million for the
nine months ended May 30, 1998 from $1.6 million for the nine months ended
May 31, 1997. This increase in capital expenditures was related primarily to
the purchase of computer systems during the nine months ended May 30, 1998.
Approximately $.3 million of additional capital expenditures are expected for
the remainder of fiscal 1998 primarily for machinery & equipment.
As of May 30, 1998, the Company had $20 million available for borrowings
under a $20 million revolving credit facility (the "Credit Facility"), which
matures on July 1, 2000. As of May 30, 1998, the Company had outstanding $100
million of 10.25% senior secured notes due July 1, 2004.
The Company believes that the Credit Facility and cash flows from
operations will provide sufficient funds to meet the Company's debt service
obligations, projected capital expenditures and working capital requirements
for the foreseeable future.
-10-
<PAGE>
In July 1996, the Emerging Issues Task Force of the Financial Accounting
Standards Board reached a consensus on Issue 96-14, Accounting for the Costs
Associated with Modifying Computer Software for the Year 2000, which provides
that costs associated with modifying computer software for the year 2000 be
expensed as incurred. The Company is assessing the extent of the necessary
modifications to its computer software.
The Company is in the process of conducting a comprehensive review of its
computer systems to identify the systems that could be affected by the "Year
2000" issue and is in the process of developing an implementation plan to
resolve the issue. The Year 2000 problem is the result of computer programs
being written using two digits (rather than four) to define the applicable
year. Any of the company's programs that have time-sensitive software may
recognize a date using "00" as the Year 1900 rather than the Year 2000. This
could result in a system failure or miscalculations. Management has assessed
the Year 2000 compliance expense and does not believe that the costs to become
Year 2000 compliant will be material.
PART II - OTHER INFORMATION
ITEM 6- EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBIT 27.1 -- FINANCIAL DATA SCHEDULE FOR QUARTER ENDED
MAY 30, 1998, FILED HEREWITH.
(b) NO REPORTS WERE FILED ON FORM 8-K FOR THE QUARTER ENDED
MAY 30, 1998.
-11-
<PAGE>
SIGNATURE
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.
ARCHIBALD CANDY CORPORATION
DATE: JULY 14, 1998. BY: /S/ DONNA M. SNOPEK
-------------------------
DONNA M. SNOPEK
VICE PRESIDENT OF FINANCE
& ACCOUNTING
-12-
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ARCHIBALD
CANDY CORPORATION'S INTERNAL MONTHLY FINANCIAL STATEMENTS AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> AUG-29-1998
<PERIOD-START> AUG-31-1997
<PERIOD-END> MAY-30-1998
<CASH> 29,924
<SECURITIES> 0
<RECEIVABLES> 1,359
<ALLOWANCES> (237)
<INVENTORY> 18,206
<CURRENT-ASSETS> 50,641
<PP&E> 52,400
<DEPRECIATION> (31,922)
<TOTAL-ASSETS> 109,053
<CURRENT-LIABILITIES> 14,799
<BONDS> 100,000
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 109,053
<SALES> 111,786
<TOTAL-REVENUES> 111,786
<CGS> 39,062
<TOTAL-COSTS> 54,991
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 7,780
<INCOME-PRETAX> 11,021
<INCOME-TAX> 209
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 10,812
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
