FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For quarterly period ended June 29, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from............... to ...............
Commission File Number: 0-10345
CACHE, INC.
- -------------------------------------------------------------------
(Exact name of registrant as specified in its Charter)
Florida 59-1588181
- ----------------------------------- ------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
1460 Broadway, New York, New York 10036
- -------------------------------------------------------------------
(Address of principal executive offices) (zip code)
212-840-4242
- -------------------------------------------------------------------
(Registrant's telephone number, including area code)
------
- -------------------------------------------------------------------
(Former name, address and former fiscal year, if changed since
last report)
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
----- -----
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each issuer's
classes of common stock, as of the latest practicable date.
Common Stock, $.01 9,091,338
- -------------------------- ----------------------------
Class of Stock Outstanding Outstanding at July 31, 1996
<PAGE>
CACHE, INC. AND SUBSIDIARIES
INDEX
PAGE
CONSOLIDATED FINANCIAL STATEMENTS
BALANCE SHEETS, JUNE 29, 1996
AND DECEMBER 30, 1995 3
STATEMENTS OF OPERATIONS
TWENTY-SIX WEEKS ENDED JUNE 29, 1996
AND JULY 1, 1995 4
THIRTEEN WEEKS ENDED JUNE 29, 1996
AND JULY 1, 1995 5
STATEMENTS OF CASH FLOWS
TWENTY-SIX WEEKS ENDED JUNE 29, 1996
AND JULY 1, 1995 6
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 7-9
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 9-12
OTHER INFORMATION:
EXHIBIT INDEX AND REPORTS ON FORM 8-K 13
SIGNATURES 14
2
<PAGE>
<TABLE>
CACHE, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
<CAPTION>
<S> June 29, December 30,
ASSETS 1996 1995
--------------- --------------
<C> <C>
Current assets:
Cash and equivalents $ 701,000 $ 1,025,000
Receivables 1,402,000 1,331,000
Notes receivable from related parties 250,000 250,000
Inventories 17,535,000 15,803,000
Deferred income taxes 1,200,000 1,383,000
Prepaid expenses 422,000 589,000
--------------- --------------
Total current assets 21,510,000 20,381,000
Property and equipment, net 16,240,000 16,577,000
Other assets 207,000 188,000
Deferred income taxes 853,000 901,000
--------------- --------------
$ 38,810,000 $ 38,047,000
=============== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 6,574,000 $ 9,376,000
Accrued compensation 551,000 749,000
Accrued liabilities 2,491,000 2,889,000
--------------- --------------
Total current liabilities 9,616,000 13,014,000
Long-term bank debt 4,550,000 1,300,000
Subordinated indebtedness to related party 2,000,000 2,000,000
Other liabilities 2,112,000 2,103,000
Commitments and contingencies
STOCKHOLDERS' EQUITY
Common stock, par value $.01; authorized, 20,000,000
shares; issued and outstanding 9,091,338 shares
at June 29, 1996 and December 30, 1995 91,000 91,000
Additional paid-in capital 19,564,000 19,564,000
Retained earnings (deficit) 877,000 (25,000)
--------------- --------------
Total stockholders' equity 20,532,000 19,630,000
--------------- --------------
$ 38,810,000 $ 38,047,000
=============== ==============
<FN>
The accompanying Notes to Consolidated Financial Statements are an integral part of these balance sheets.
</FN>
</TABLE>
3
<PAGE>
<TABLE>
CACHE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE TWENTY-SIX WEEKS ENDED
(Unaudited)
<CAPTION>
June 29, July 1,
1996 1995
-------------- --------------
<S> <C> <C>
Net sales $ 61,029,000 $ 56,832,000
-------------- --------------
Costs and expenses
Cost of sales, including occupancy and buying costs 40,042,000 37,403,000
Selling, general and administrative expenses 19,356,000 17,379,000
-------------- --------------
59,398,000 54,782,000
-------------- --------------
Operating income 1,631,000 2,050,000
Interest expense
Related party 70,000 70,000
Other 117,000 209,000
-------------- --------------
187,000 279,000
-------------- --------------
Income before income taxes 1,444,000 1,771,000
Income tax provision 542,000 647,000
-------------- --------------
Net income $ 902,000 $ 1,124,000
============== ==============
Net income per share $ .10 $ .12
============== ==============
Weighted average number of shares and
share equivalents outstanding 9,091,000 9,091,000
============== ==============
<FN>
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
</FN>
</TABLE>
4
<PAGE>
<TABLE>
CACHE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THIRTEEN WEEKS ENDED
(Unaudited)
<CAPTION>
June 29, July 1,
1996 1995
-------------- --------------
<S> <C> <C>
Net sales $ 32,722,000 $ 30,822,000
-------------- --------------
Costs and expenses
Cost of sales, including occupancy and buying costs 21,503,000 20,525,000
Selling, general and administrative expenses 9,818,000 9,133,000
-------------- --------------
31,321,000 29,658,000
-------------- --------------
Operating income 1,401,000 1,164,000
Interest expense
Related party 35,000 35,000
Other 55,000 120,000
-------------- --------------
90,000 155,000
-------------- --------------
Income before income taxes 1,311,000 1,009,000
Income tax provision 492,000 366,000
-------------- --------------
Net income $ 819,000 $ 643,000
============== ==============
Net income per share $ .09 $ .07
============== ==============
Weighted average number of shares and
share equivalents outstanding 9,091,000 9,091,000
============== ==============
<FN>
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
</FN>
</TABLE>
5
<PAGE>
<TABLE>
CACHE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE TWENTY-SIX WEEKS ENDED
(Unaudited)
<CAPTION>
June 29, July 1,
1996 1995
-------------- --------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
- --------------------------------------------------
Net income $ 902,000 $ 1,124,000
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 1,693,000 1,372,000
Deferred income taxes 231,000 350,000
Accrual of future rent escalations 91,000 175,000
Change in assets and liabilities:
(Increase) decrease in receivables (71,000) 539,000
(Increase) decrease in inventories (1,732,000) (773,000)
(Increase) decrease in prepaid expenses 167,000 196,000
Increase (decrease) in accounts payable (2,802,000) (3,046,000)
Increase (decrease) in accrued liabilities
and accrued compensation (596,000) (742,000)
-------------- ---------------
Total changes in assets and liabilities (5,034,000) (3,826,000)
-------------- ---------------
Net cash used in operating activities (2,117,000) (805,000)
-------------- ---------------
CASH FLOWS FROM INVESTING ACTIVITIES:
-------------------------------------
Loss on property and equipment disposals --- (40,000)
Payments for property and equipment (1,436,000) (2,995,000)
-------------- ---------------
Net cash used in investing activities (1,436,000) (3,035,000)
-------------- ---------------
CASH FLOWS FROM FINANCING ACTIVITIES:
-------------------------------------
Long-term bank debt borrowings 27,200,000 26,700,000
Long-term bank debt payments (23,950,000) (22,800,000)
Other, net (21,000) 2,000
-------------- ---------------
Net cash provided by financing activities 3,229,000 3,902,000
-------------- ---------------
Net increase (decrease) in cash (324,000) 62,000
Cash at beginning of period 1,025,000 814,000
-------------- ---------------
Cash at end of period $ 701,000 $ 876,000
============== ===============
<FN>
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
</FN>
</TABLE>
6
<PAGE>
CACHE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
---------------------
In the opinion of the Company, the accompanying consolidated
financial statements include all adjustments necessary, which are
considered normal and recurring to present fairly the financial
position of the Company at June 29, 1996 and December 30, 1995, and the
results of operations for the twenty-six and thirteen week periods
ended June 29, 1996 and July 1, 1995 and consolidated statements of
cash flows for the twenty-six weeks then ended.
Certain financial information which is normally included in
financial statements prepared in accordance with generally accepted
accounting principles, but which is not required for interim reporting
purposes, has been condensed or omitted. The accompanying consolidated
financial statements should be read in conjunction with the Financial
Statements and notes thereto included in the Company's latest annual
report on Form 10-K for the fiscal year ended December 30, 1995.
Certain amounts reflected in Fiscal 1995 financial statements have been
reclassified to conform with the presentation of similar items in
Fiscal 1996.
2. NET INCOME OR LOSS PER SHARE
----------------------------
Net income or loss per share has been computed based on the
weighted average number of shares of common stock outstanding for the
twenty-six and thirteen week periods ended June 29, 1996 and July 1,
1995.
The approximate number of shares used in the computations of
income per common share were 9,091,000, for the twenty-six and thirteen
week periods ended June 29, 1996 and July 1, 1995, respectively.
3. PROPERTY AND EQUIPMENT
----------------------
June 29, December 30,
1996 1995
------------ ------------
Leasehold improvements $15,739,000 $15,661,000
Furniture, fixtures and
equipment 14,381,000 13,170,000
------------ -----------
30,120,000 28,831,000
Less: accumulated depreciation
and amortization 13,880,000 12,254,000
------------ -----------
$16,240,000 $16,577,000
============ ===========
7
<PAGE>
4. ACCRUED LIABILITIES
-------------------
June 29, December 30,
1996 1995
----------- ------------
Operating expenses $ 880,000 $ 889,000
Taxes, other than income taxes 627,000 1,022,000
Leasehold additions 90,000 52,000
Other 894,000 926,000
----------- -----------
$2,491,000 $2,889,000
=========== ===========
5. BANK DEBT
---------
During 1996, the Company reached an agreement with its bank to
extend the maturity of the existing Revolving Credit Facility until
July 4, 1997. Pursuant to the Revolving Credit Facility, $8,500,000 is
available until expiration of the agreement. The amounts outstanding
thereunder bear interest at a maximum per annum rate up to 1.00% above
the bank's prime rate. The agreement contains selected financial and
other covenants including covenants to maintain a minimum current
ratio, a maximum debt to equity and total equity ratio, a maximum
capital expenditure covenant, a minimum earnings to bank interest
coverage ratio and certain restrictions on the repayment of principal
amounts due to related parties. The agreement prohibits the payment of
any dividends on the Company's common stock. Effective upon the
occurrence of an Event of Default under the Revolving Credit Facility,
the Company grants to the bank a security interest in the Company's
inventory and certain receivables.
The outstanding balances on the line of credit at June 29, 1996
and December 30, 1995 were $4,550,000 and $1,300,000, respectively.
The related party debt is subordinated to the bank debt and therefore
will not be paid prior to expiration of the bank line of credit.
6. INDEBTEDNESS TO RELATED PARTY
-----------------------------
As of June 29, 1996 and December 30, 1995 the Company had
outstanding, (i) a $250,000 long-term loan from a major stockholder
bearing interest payable quarterly with principal due upon demand at
any time after January 31, 1997; and (ii) a $1,750,000 loan made by the
same stockholder bearing interest payable quarterly with principal due
upon demand at any time after January 31, 1997. Interest on both notes
accrue at 7% per year through January 31, 1997.
In December 1994, the Company loaned a total of $913,000 to
several officers of the Company. The loans are evidenced by secured
promissory notes, which bear interest at the rate of 9% per annum. In
September 1995, two officers repaid a total of $663,000 to the Company,
while $250,000 remains outstanding at December 30, 1995 and June 29,
1996.
8
<PAGE>
7. INCOME TAXES
------------
During Fiscal 1996, the Company has utilized all available net operating
loss carryforwards, for federal income tax reporting purposes. The net
operating loss carryforwards were due to expire at various dates through
2008. In Fiscal 1995, the Company realized for financial reporting purposes
$718,000 of income tax benefits from stock option exercises. This benefit
was recorded as an increase in paid-in capital. The Company had available at
December 30, 1995 approximately $295,000 of alternative minimum tax
carryforwards for tax reporting purposes. At December 30, 1995 and June 29,
1996, the Company's deferred tax assets were $2,135,000 and $1,617,000,
respectively, also, there was no deferred tax liability. The major
components of the Company's net deferred taxes at June 29, 1996 and December
30, 1995 are as follows:
June 29, December 30,
1996 1995
----------- ------------
Net operating loss carryforwards ("NOL'S") and
alternative minimum tax carryforwards.......... $ 474,000 $ 508,000
NOL'S resulting from stock option exercises..... --- 378,000
Deferred rent................................... 721,000 695,000
Inventory cost capitalization................... 290,000 348,000
Other........................................... 132,000 206,000
----------- -----------
$1,617,000 $2,135,000
=========== ===========
8. CONTINGENCIES
-------------
The Company is exposed to a number of asserted and unasserted potential
claims. In the opinion of management, the resolution of these matters is not
presently expected to have a material adverse effect upon the Company's
financial position and results of operations.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
- ------------------------------------------------------------------------
RESULTS OF OPERATIONS
- ---------------------
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
The Company's primary need for capital is to finance new store
merchandise inventories, as well as the construction of new stores. During
the twenty-six weeks ended June 29, 1996, the Company increased bank
borrowings ($3,250,000), and reduced cash ($324,000) to partially offset the
cost of inventory purchases ($1,732,000), and the Company's new store
expansion and remodeling program ($1,436,000). Cash used by operations
increased to $2,117,000 in 1996 from $805,000 in 1995, primarily due to the
increase in inventory. Inventories increased $1,732,000, principally due to
9
<PAGE>
increased average store inventory levels at June 29, 1996, as compared to
fiscal year-end post-holiday inventory levels, as well as due to the addition
of six new stores in 1996. Accounts payable decreased $2,802,000 and accrued
expenses decreased $596,000 during the period, as the Company paid for
merchandise and expenses accrued at the end of Fiscal 1995.
The Company plans to open a total of approximately thirteen new stores
during 1996. The Company opened four stores in March, one store in April and
one store in May 1996. The remaining stores are expected to be opened during
late summer and fall of 1996. After deducting construction allowances paid
to the Company by its landlords, the Company has spent $1,436,000 through
June 29, 1996 and expects to spend an additional $2,000,000 in 1996 for both
new store and existing store construction and remodeling. The Company
anticipates that it will finance new store construction and remodeling in
1996 primarily by cash flow from operations and its existing credit
facilities. The Company closed three stores in January 1996, the store
closures had no material effect on net income for the thirteen week period.
The Company believes that given the sources of credit discussed above, its
financial resources will be sufficient to meet anticipated requirements.
RESULTS OF OPERATIONS
- ---------------------
The Company experienced a decrease in net income, for the
twenty-six week period ended June 29, 1996 which was primarily caused by a
1.8% decrease in comparative store sales. During the thirteen week period
ended June 29, 1996, the additional sales generated by new stores opened in
1995 and 1996, as well as strong Easter sales, caused an increase in sales
and net income, as compared to Fiscal 1995.
Certain financial data concerning the Company's results of operations
for the twenty-six and thirteen week periods ended June 29, 1996 and July 1,
1995, expressed as a percentage of net sales, are as follows:
Twenty-six Weeks Ended Thirteen Weeks Ended
---------------------- --------------------
June 29, July 1, June 29, July 1,
1996 1995 1996 1995
--------- -------- -------- ---------
Sales 100.0% 100.0% 100.0% 100.0%
Cost of sales, including
occupancy and buying expenses 65.6% 65.8% 65.7% 66.6%
Selling, general and
administrative expenses 31.7% 30.6% 30.0% 29.6%
Operating income 2.7% 3.6% 4.3% 3.8%
Interest expense .3% .5% .3% .5%
Income tax provision .9% 1.1% 1.5% 1.2%
Net income 1.5% 2.0% 2.5% 2.1%
10
<PAGE>
Sales
- -----
Net sales increased $4,197,000 or 7.4% and $1,900,000 or 6.2%,
respectively, during the twenty-six and thirteen week periods ended June 29,
1996, versus the comparable periods in 1995. The increases were primarily due
to the greater number of stores open during the 1996 periods. Comparable store
sales decreased 1.8% and 1.7% for the twenty-six and thirteen week periods in
1996, as compared to the comparable periods in 1995.
Historically, sales at new stores do not achieve the same levels as
existing, established stores. New stores generally begin to perform as well as
existing stores during their second and third year of operation. Sales on a
weighted average basis for the twenty-six and thirteen week periods ended June
29, 1996 and July 1, 1995 were as follows:
Twenty-six Weeks Ended Thirteen Weeks Ended
----------------------- -----------------------
June 29, July 1, June 29, July 1,
1996 1995 1996 1995
----------- ----------- ----------- -----------
Sales $61,029,000 $56,832,000 $32,722,000 $30,822,000
Weighted Average Stores
Open During Period 151.7 134.3 153.8 138.3
Net Sales Per Weighted
Average Number of Stores $ 402,000 $ 423,000 $ 213,000 $ 223,000
Net Weighted Average Sales
per square foot $ 202.88 $ 205.82 $ 107.66 $ 109.50
Stores Open at End
of Period 155 139 155 139
Costs and expenses
- ------------------
Cost of sales, including occupancy and buying costs, increased $2,639,000
or 7.1% for the twenty-six weeks ended June 29, 1996, versus the similar period
in 1995. The increase was primarily due to the increase in sales and the
related cost of merchandise for those sales, as well as a $828,000 increase in
occupancy expenses, primarily due to the additional stores in operation during
the 1996 versus 1995. As a percentage of sales, cost of sales, including the
occupancy expenses, decreased 0.2%, (65.6% versus 65.8%) for the twenty-six week
period ended June 29, 1996, versus the comparable period in 1995. The decrease
was primarily due to lower markdowns in 1996, as a percent of sales. The
Company takes markdowns for several reasons such as; changes in customer
preference, seasonal adaptation, changes in style or if it is determined
merchandise in stock will not sell at its currently marked price.
11
<PAGE>
Cost of sales, including occupancy and buying costs, increased $978,000 or
4.8% for the thirteen weeks ended June 29, 1996, versus the similar 1995 period.
The increase was primarily due to the increase in sales and the related cost of
the merchandise for those sales, and a $380,000 increase in occupancy, due to
the additional stores in operation during 1996 versus 1995. As a percentage of
sales, cost of sales, including occupancy and buying expenses, decreased .9%
(65.7% versus 66.6%) for the thirteen weeks ended June 29, 1996, versus the
comparable period in 1995. The decrease was primarily due to lower markdowns,
both in dollars and as a percent of sales, versus the comparable period in 1995.
Selling, general and administrative expenses
- --------------------------------------------
Selling, general and administrative expenses ("S,G&A") increased $1,977,000
or 11.4% during the twenty-six week period ended June 29, 1996 versus the
comparable period in 1995. The increase was primarily due to greater payroll
and payroll taxes ($1,010,000), credit card fees ($73,000), freight charges
($166,000), depreciation ($322,000) and licenses and taxes ($130,000). As a
percentage of sales, these expenses increased 1.1% (31.7% versus 30.6%) for the
twenty-six weeks ended June 29, 1996 versus the similar 1995 period. The
increase was due primarily to the effects of a 1.8% decrease in comparable store
sales, experienced in the current twenty-six week period, upon S,G&A expenses,
which are relatively fixed in nature.
Selling, general and administrative expenses increased $685,000 or 7.5%
during the thirteen weeks ended June 29, 1996, versus the comparable period in
1995. The increase was due to greater payroll and payroll taxes ($298,000),
insurance ($60,000), licenses and taxes ($53,000), freight charges ($118,000)
and depreciation ($121,000). As a percentage of sales, these expenses increased
0.4% (30.0% versus 29.6%) for the thirteen weeks ended June 29, 1996 versus the
similar 1995 period. The increase was due primarily to the effects of a 1.7%
decrease in comparable store sales, experienced in the current thirteen week
period, upon S,G&A expenses, which are relatively fixed in nature.
Interest expense
- ----------------
Interest expense decreased $92,000 (33.0%) and $65,000 (41.9%),
respectively, for the twenty-six and thirteen week periods ended June 29, 1996
versus the comparable period in 1995, primarily due to lower average borrowing
levels in 1996. Decreased interest expense was also due to lower average
borrowing rates in 1996, as compared to 1995.
Income taxes
- ------------
Income tax expense provisions were $542,000 and $492,000 for the twenty-six
and thirteen week periods ended June 1996, as compared to $647,000 and $366,000,
respectively, in 1995. In 1996 and 1995, the Company's effective tax rate is
37.5% and 36.5%, respectively. The Company's effective rate increased in 1996
primarily due to higher state franchise tax accruals as most state net operating
loss carryforwards have been fully utilized.
12
<PAGE>
PART II - OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) The annual meeting of shareholders of the Company was held on
June 25, 1996.
(b) All members of the current Board of Directors were re-elected as
such for the next ensuing year. The names of each elected
Director are: Andrew M. Saul, Joseph E. Saul, Morton J. Schrader,
Mark E. Goldberg, Mae Soo Hoo, Thomas E. Reinckens and Roy C.
Smith.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
NONE
(b) Reports on Form 8-K
NONE
13
<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.
CACHE, INC.
(Registrant)
July 31, 1996 BY: /s/ Thomas E. Reinckens
-----------------------------
Thomas E. Reinckens
On behalf of Cache, Inc.
and in his capacity as
Executive Vice President and
Chief Financial Officer
(Principal Financial and
Principal Accounting Officer)
14
<PAGE>
<TABLE>
EXHIBIT 11.1
CALCULATION OF PRIMARY AND FULLY DILUTED EARNINGS PER COMMON SHARE
(In thousands except per share data)
<CAPTION>
TWENTY-SIX THIRTEEN
WEEKS ENDED WEEKS ENDED
---------------------------- ----------------------------
June 29, July 1, June 29, July 1,
1996 1995 1996 1995
<S> ---------------------------- ----------------------------
EARNINGS <C> <C> <C> <C>
--------
Net Income Applicable
to Common Stockholders $ 902,000 $ 1,124,000 $ 819,000 $ 643,000
============================ ============================
PRIMARY SHARES
--------------
Weighted Average Number of
Common Shares Outstanding 9,091,000 9,091,000 9,091,000 9,091,000
Assuming Conversion of
Outstanding Stock Options
and Stock Warrants --- --- --- ---
Less Assumed Repurchase
of Common Stock Pursuant
to the Treasury Stock Method --- --- --- ---
--------------------------- ----------------------------
Weighted Average Number of
Common Shares Outstanding
As Adjusted 9,091,000 9,091,000 9,091,000 9,091,000
=========================== ============================
Primary Earnings Per Share $0.10 $0.12 $0.09 $0.07
=========================== ============================
FULLY DILUTED EARNINGS PER SHARE
--------------------------------
Weighted Average Number of
Common Shares Outstanding 9,091,000 9,091,000 9,091,000 9,091,000
Assuming Conversion of
Outstanding Stock Options
and Stock Warrants --- --- --- ---
Less Assumed Repurchase
of Common Stock Pursuant
to the Treasury Stock Method --- --- --- ---
--------------------------- ----------------------------
Weighted Average Number of
Common Shares Outstanding
As Adjusted 9,091,000 9,091,000 9,091,000 9,091,000
=========================== ============================
Fully Diluted Earnings Per Share $0.10 $0.12 $0.09 $0.07
=========================== ============================
</TABLE>
15
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-28-1996
<PERIOD-END> JUN-29-1996
<CASH> 701,000
<SECURITIES> 0
<RECEIVABLES> 1,652,000
<ALLOWANCES> 0
<INVENTORY> 17,535,000
<CURRENT-ASSETS> 21,510,000
<PP&E> 30,120,000
<DEPRECIATION> 13,880,000
<TOTAL-ASSETS> 38,810,000
<CURRENT-LIABILITIES> 9,616,000
<BONDS> 0
<COMMON> 91,000
0
0
<OTHER-SE> 20,441,000
<TOTAL-LIABILITY-AND-EQUITY> 38,810,000
<SALES> 61,029,000
<TOTAL-REVENUES> 61,029,000
<CGS> 40,042,000
<TOTAL-COSTS> 40,042,000
<OTHER-EXPENSES> 19,356,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 187,000
<INCOME-PRETAX> 1,444,000
<INCOME-TAX> 542,000
<INCOME-CONTINUING> 902,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 902,000
<EPS-PRIMARY> .10
<EPS-DILUTED> .10
</TABLE>
