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 September 28, 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)
212-575-3200
----------------------------------------------------
(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 November 12,1996
<PAGE>
CACHE, INC. AND SUBSIDIARIES
INDEX
PAGE
CONSOLIDATED FINANCIAL STATEMENTS
BALANCE SHEETS, SEPTEMBER 28, 1996
AND DECEMBER 30, 1995 3
STATEMENTS OF OPERATIONS
THIRTY-NINE WEEKS ENDED SEPTEMBER 28, 1996
AND SEPTEMBER 30, 1995 4
THIRTEEN WEEKS ENDED SEPTEMBER 28, 1996
AND SEPTEMBER 30, 1995 5
STATEMENTS OF CASH FLOWS
THIRTY-NINE WEEKS ENDED SEPTEMBER 28, 1996
AND SEPTEMBER 30, 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>
September 28, December 30,
1996 1995
<S> ---------------- ----------------
ASSETS <C> <C>
Current assets:
Cash and equivalents $ 605,000 $ 1,025,000
Receivables 1,758,000 1,331,000
Notes receivable from related parties 250,000 250,000
Inventories 17,121,000 15,803,000
Deferred income taxes 1,746,000 1,383,000
Prepaid expenses 372,000 589,000
---------------- ----------------
Total current assets 21,852,000 20,381,000
Property and equipment, net 16,555,000 16,577,000
Other assets 199,000 188,000
Deferred income taxes 822,000 901,000
---------------- ----------------
$ 39,428,000 $ 38,047,000
================ ================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 9,329,000 $ 9,376,000
Accrued compensation 1,111,000 749,000
Accrued liabilities 2,735,000 2,889,000
---------------- ----------------
Total current liabilities 13,175,000 13,014,000
Long-term bank debt 2,550,000 1,300,000
Subordinated indebtedness to related party 2,000,000 2,000,000
Other liabilities 2,020,000 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 September 28, 1996 and December 30, 1995 91,000 91,000
Additional paid-in capital 19,564,000 19,564,000
Retained earnings (deficit) 28,000 (25,000)
---------------- ----------------
Total stockholders' equity 19,683,000 19,630,000
---------------- ----------------
$ 39,428,000 $ 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 THIRTY-NINE WEEKS ENDED
(Unaudited)
<CAPTION>
September 28, September 30,
1996 1995
---------------- ----------------
<S> <C> <C>
Net sales $ 90,015,000 $ 84,000,000
---------------- ----------------
Costs and expenses
Cost of sales, including occupancy and buying costs 60,572,000 56,096,000
Selling, general and administrative expenses 29,062,000 26,460,000
---------------- ----------------
89,634,000 82,556,000
---------------- ----------------
Operating income 381,000 1,444,000
Interest expense
Related party 105,000 105,000
Other 191,000 330,000
---------------- ----------------
296,000 435,000
---------------- ----------------
Income before income taxes 85,000 1,009,000
Income tax provision 32,000 362,000
---------------- ----------------
Net income $ 53,000 $ 647,000
================ ================
Net income per share $.01 $.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>
4
<PAGE>
<TABLE>
CACHE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THIRTEEN WEEKS ENDED
(Unaudited)
<CAPTION>
September 28, September 30,
1996 1995
---------------- ----------------
<S> <C> <C>
Net sales $ 28,986,000 $ 27,168,000
---------------- ----------------
Costs and expenses
Cost of sales, including occupancy and buying costs 20,530,000 18,693,000
Selling, general and administrative expenses 9,706,000 9,081,000
---------------- ----------------
30,236,000 27,774,000
---------------- ----------------
Operating loss (1,250,000) (606,000)
Interest expense
Related party 35,000 35,000
Other 74,000 121,000
---------------- ----------------
109,000 156,000
---------------- ----------------
Loss before income taxes (1,359,000) (762,000)
Income tax benefit (510,000) (285,000)
---------------- ----------------
Net loss $ (849,000) $ (477,000)
================ ================
Net loss per share ($.09) ($.05)
================ ================
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 THIRTY-NINE WEEKS ENDED
(Unaudited)
September 28, September 30,
1996 1995
---------------- ----------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
-------------------------------------
Net income $ 53,000 $ 647,000
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 2,572,000 2,137,000
Accrual of future rent escalations 169,000 164,000
Change in assets and liabilities:
Increase in receivables (427,000) (237,000)
Decrease in notes receivable from related parties --- 663,000
Increase in inventories (1,318,000) (1,674,000)
Increase in deferred income taxes (284,000) (42,000)
Decrease in prepaid expenses 217,000 234,000
Decrease in accounts payable (47,000) (61,000)
Increase in accrued liabilities and accrued compensation 208,000 249,000
---------------- ----------------
Total changes in assets and liabilities (1,651,000) (868,000)
---------------- ----------------
Net cash provided by operating activities 1,143,000 2,080,000
---------------- ----------------
CASH FLOWS FROM INVESTING ACTIVITIES:
-------------------------------------
Proceeds from property and equipment disposals 20,000 22,000
Payments for property and equipment (2,668,000) (4,647,000)
---------------- ----------------
Net cash used in investing activities (2,648,000) (4,625,000)
---------------- ----------------
CASH FLOWS FROM FINANCING ACTIVITIES:
-------------------------------------
Long-term bank debt additional borrowings 36,150,000 61,500,000
Long-term bank debt principal repayments (34,900,000) (59,050,000)
Other, net (165,000) (29,000)
---------------- ----------------
Net cash provided by financing activities 1,085,000 2,421,000
---------------- ----------------
Net decrease in cash (420,000) (124,000)
Cash at beginning of period 1,025,000 814,000
---------------- ----------------
Cash at end of period $ 605,000 $ 690,000
================ ================
<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 September 28, 1996 and December 30, 1995,
and the results of operations for the thirty-nine and thirteen week
periods ended September 28, 1996 and September 30, 1995 and
consolidated statements of cash flows for the thiry-nine 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
thirty-nine and thirteen week periods ended September 28, 1996 and
September 30, 1995.
The approximate number of shares used in the computations of
income per common share were 9,091,000, for the thirty-nine and
thirteen week periods ended September 28, 1996 and September 30, 1995,
respectively.
3. PROPERTY AND EQUIPMENT
----------------------
September 30, December 30,
1996 1995
------------ ------------
Leasehold improvements $15,948,000 $15,661,000
Furniture, fixtures and
equipment 15,282,000 13,170,000
------------ ------------
31,230,000 28,831,000
Less: accumulated depreciation
and amortization 14,675,000 12,254,000
------------ ------------
$16,555,000 $16,577,000
============ ============
7
<PAGE>
4. ACCRUED LIABILITIES
-------------------
September 28, December 30,
1996 1995
------------ -----------
Operating expenses $ 954,000 $ 889,000
Taxes, other than income taxes 738,000 1,022,000
Leasehold additions 146,000 52,000
Other 897,000 926,000
------------ -----------
$2,735,000 $2,889,000
============ ===========
5. BANK DEBT
---------
During August 1996, the Company reached an agreement with its bank
to extend the maturity of the existing Revolving Credit Facility until
January 31, 2000. Pursuant to the Amended Revolving Credit Facility,
$12,000,000 is available until expiration of the agreement. The
amounts outstanding thereunder bear interest at a maximum per annum
rate up to .50% 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 September 28,
1996 and December 30, 1995 were $2,550,000 and $1,300,000,
respectively. The related party debt is subordinated to the bank debt
and repayment is subject to terms contained in the amended revolving credit
agreement.
6. INDEBTEDNESS TO RELATED PARTY
-----------------------------
As of September 28, 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, 2000. Interest on both notes
accrue at 7% per year through January 31, 2000. The Company may make
loan repayments of $1,000,000 each on December 31, 1997 and December
31, 1998, subject to the Tangible Net Worth covenant contained in the
Amended Revolving Credit Facility.
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 September
28, 1996.
8
<PAGE>
7. INCOME TAXES
------------
At September 28, 1996, the Company has available net operating loss
carryforwards of approximately $1,600,000, for federal income tax reporting
purposes. The net operating loss carryforward is expected to be fully
utilized at December 28, 1996. 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 September 28, 1996, the
Company's deferred tax assets were $2,135,000 and $2,059,000, respectively,
also, there was no deferred tax liability.
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 thirty-nine weeks ended September 28, 1996, the Company increased bank
borrowings ($1,250,000), reduced cash on hand ($420,000), and used cash
provided by operations ($1,143,000), to offset the cost of the Company's new
store expansion and remodeling program ($2,668,000). Cash provided by
operations decreased to $1,143,000 in 1996 from $2,080,000 in 1995, primarily
due to reduced profitability and notes receivable repayments of $663,000 in
Fiscal 1995. Inventories increased $1,318,000, principally due to increased
average store inventory levels at September 28, 1996, as compared to fiscal
year-end post-holiday inventory levels, as well as due to the net addition of
six new stores in 1996. Receivables increased $427,000 during the periods,
primarily due to accrual of construction reimbursements, due from landlords,
for stores built in Fiscal 1996.
The Company plans to open a total of approximately fourteen new stores
during 1996. The Company has already opened twelve stores as of September
28, 1996 and two additional stores will open in the fourth quarter. After
deducting construction allowances paid to the Company by its landlords, the
Company has spent $2,668,000 through September 28, 1996 and expects to spend
an additional $500,000 in 1996 for both new store and existing store
construction and remodeling. The Company anticipates that it will finance
9
<PAGE>
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, one store in July 1996, and one store in September
1996. The store closures had no material effect on net income. 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 thirty-nine
week period ended September 28, 1996, which was primarily caused by a one
percent decrease in comparative store sales. Higher markdowns, both in
dollars and as a percent of sales, contributed to reduced gross margins for
the current thirty-nine week period as compared to Fiscal 1995. During the
thirteen week period ended September 28, 1996, the additional sales generated
by new stores opened in 1995 and 1996 did not offset the increase in
operating expenses related to these new stores, resulting in a decrease in
net income as compared to Fiscal 1995. Higher markdowns, incurred during the
current thirteen week period, also contributed to reduced gross margins as
compared to the Fiscal 1995 period.
Certain financial data concerning the Company's results of operations
for the thirty-nine and thirteen week periods ended September 28, 1996 and
September 30, 1995, expressed as a percentage of net sales, are as follows:
Thirty-nine Weeks Ended Thirteen Weeks Ended
----------------------- --------------------
Sept. 28, Sept. 30, Sept. 28, Sept. 30,
1996 1995 1996 1995
----------------------- --------------------
Sales 100.0% 100.0% 100.0% 100.0%
Cost of sales, including
occupancy and buying expenses 67.3% 66.8% 70.8% 68.8%
Selling, general and
administrative expenses 32.3% 31.5% 33.5% 33.4%
Operating income (loss) .4% 1.7% (4.3%) (2.2%)
Interest expense .3% .5% .4% .6%
Pre-tax income (loss) .1% 1.2% (4.7%) (2.8%)
Income taxes (benefit) -- .4% (1.8%) (1.0%)
Net income (loss) .1% .8% (2.9%) (1.8%)
Sales
- -----
Net sales increased $6,015,000 or 7.2% and $1,818,000 or 6.7%,
respectively, during the thirty-nine and thirteen week periods ended
September 28, 1996, versus the comparable periods in 1995. The increases
were primarily due to the greater number of stores open during the 1996
periods. Same store sales (sales for stores open at least one year or more)
decreased 1% as compared to the comparable thirty-nine week period in 1995,
and was flat as compared to the comparable thirteen week period in 1995.
10
<PAGE>
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 thirty-nine and thirteen week periods ended
September 28, 1996 and September 30, 1995 were as follows:
Thirty-nine Weeks Ended Thirteen Weeks Ended
----------------------- ----------------------
Sept. 28, Sept. 30, Sept. 28, Sept. 30,
1996 1995 1996 1995
----------------------- ----------------------
Sales $90,015,000 $84,000,000 $28,986,000 $27,168,000
Weighted Average Stores
Open During Period 153.2 136.9 156.3 142.3
Net Sales Per Weighted
Average Number of Stores $ 587,000 $ 613,000 $ 185,000 $ 191,000
Net Weighted Average Sales
per square foot $ 283.00 $ 296.00 $ 89.00 $ 92.00
Stores Open at End
of Period 158 147 158 147
Costs and expenses
- ------------------
Cost of sales, including occupancy and buying costs, increased $4,476,000
or 8.0% for the thirty-nine weeks ended September 28, 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, higher markdowns, and a $1,278,000
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, increased 0.5%, (67.3% versus 66.8%) for the
thirty-nine week period ended September 28, 1996, versus the comparable period
in 1995. Markdowns, both in dollars and as a percentage of sales, increased in
1996 as compared to the 1995 period. The Company takes markdowns for several
reasons such as; changes in customer preference adaptation, changes in style or
if it is determined merchandise in stock will not sell at its currently marked
price. The increase was also due to higher occupancy costs, both in dollars and
as a percent of sales, versus the comparable period in 1995.
Cost of sales, including occupancy and buying costs, increased $1,837,000
or 9.8% for the thirteen weeks ended September 28, 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, higher markdowns, and a $450,000
increase in occupancy expenses due to the additional stores in operation during
1996 versus 1995. As a percentage of sales, cost of sales, including occupancy
and buying expenses, increased 2.0% (70.8% versus 68.8%) for the thirteen weeks
ended September 28, 1996, versus the comparable period in 1995. Markdowns, both
in dollars and as a percent of sales, were higher than the comparable 1995
period. The increase was also due to higher occupancy costs, both in dollars
and as a percent of sales, versus the comparable period in 1995.
11
<PAGE>
Selling, general and administrative expenses
- --------------------------------------------
Selling, general and administrative expenses increased $2,602,000 or 9.8%
during the thirty-nine week period ended September 28, 1996, versus the
comparable period in 1995. The increase was primarily due to greater payroll
and payroll taxes ($1,312,000), credit card fees ($89,000), freight ($236,000),
depreciation ($436,000) and licenses and taxes ($199,000). As a percentage of
sales these expenses increased 0.8% (32.3% versus 31.5%) for the thirty-nine
weeks ended September 28, 1996 versus the similar 1995 period. The increase,
as a percent of sales, was due primarily to lower comparable store sales
experienced in the current thirty-nine week period.
Selling, general and administrative expenses increased $625,000 or 6.9%
during the thirteen weeks ended September 28, 1996, versus the comparable period
in 1995. The increase was due to greater payroll and payroll taxes ($302,000),
licenses and taxes ($69,000), freight ($70,000) and depreciation ($114,000).
As a percentage of sales these expenses increased .1% (33.5% versus 33.4%) for
the thirteen weeks ended September 28, 1996 versus the similar 1995 period.
Fiscal 1995 results were impacted by a $100,000 one-time charge related to the
resignation of two officers.
Interest expense
- ----------------
Interest expense decreased $139,000 (32.0%) and $47,000 (30.1%),
respectively, for the thirty-nine and thirteen week periods ended September 28,
1996 versus the comparable period in 1995, primarily due to lower average
borrowing levels in 1996, as well as lower average borrowing rates in 1996, as
compared to 1995.
Income taxes
- ------------
An income tax expense provision of $32,000 and a tax benefit of $510,000
were accrued, for the thirty-nine and thirteen week periods ended September 28,
1996, as compared to an income tax provision of $362,000 and a tax benefit of
$285,000, 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, due to the fact
that 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
NONE
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
11.1 Calculations of primary and fully diluted earnings per common
share.
(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)
November 11, 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>
THIRTY-NINE THIRTEEN
WEEKS ENDED WEEKS ENDED
------------------------------- ----------------------------------
September 28, September 30, September 28, September 30,
1996 1995 1996 1995
------------------------------- ----------------------------------
<S> <C> <C> <C> <C>
EARNINGS
--------
Net Income (Loss) Applicable
to Common Stockholders $ 53,000 $ 647,000 $ (849,000) $ (477,000)
============== ============== ================ ==============
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 --- --- --- ---
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 (Loss) Per Share $0.01 $0.07 ($0.09) ($0.05)
=============================== ==================================
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 --- --- --- ---
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 (Loss) Per Share $0.01 $0.07 ($0.09) ($0.05)
=============================== =================================
</TABLE>
15
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-28-1996
<PERIOD-END> SEP-28-1996
<CASH> 605,000
<SECURITIES> 0
<RECEIVABLES> 2,008,000
<ALLOWANCES> 0
<INVENTORY> 17,121,000
<CURRENT-ASSETS> 21,852,000
<PP&E> 31,230,000
<DEPRECIATION> 14,675,000
<TOTAL-ASSETS> 39,428,000
<CURRENT-LIABILITIES> 13,175,000
<BONDS> 0
<COMMON> 91,000
0
0
<OTHER-SE> 19,592,000
<TOTAL-LIABILITY-AND-EQUITY> 39,428,000
<SALES> 90,015,000
<TOTAL-REVENUES> 90,015,000
<CGS> 60,572,000
<TOTAL-COSTS> 60,572,000
<OTHER-EXPENSES> 29,062,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 296,000
<INCOME-PRETAX> 85,000
<INCOME-TAX> 32,000
<INCOME-CONTINUING> 53,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 53,000
<EPS-PRIMARY> .01
<EPS-DILUTED> .01
</TABLE>
