SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------
FORM 10-Q
(Mark One)
[ X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended October 30, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the period from __________________ to _________________
Commission file number 1-6083
NOODLE KIDOODLE, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 11-1771705
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification
Number)
6801 JERICHO TURNPIKE, SYOSSET, NEW YORK 11791
(Address of Principal Executive Office) (Zip Code)
Registrant's Telephone Number, Including Area Code (516) 677-0500
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 periods that the Registrant was required to
file such reports), and (2) has been subject to such filing
requirement for the past 90 days. YES X No
As of November 26, 1999, there were 7,603,890 outstanding shares
of the issuer's common stock, par value $.001 per share
(excluding 903,011 treasury shares).
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TABLE OF CONTENTS
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PART I - FINANCIAL INFORMATION
Page
Item 1. - Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets
October 30, 1999, October 31, 1998 and January 30, 1999 3
Condensed Consolidated Statements of Operations
Thirteen and Thirty-Nine Weeks Ended October 30, 1999
and October 31, 1998 4
Condensed Consolidated Statements of Cash Flows
Thirty-Nine Weeks Ended October 30, 1999 and
October 31, 1998 5
Notes to Condensed Consolidated Financial Statements 6
Item 2. - Management's Discussion and Analysis of
Financial Condition and Results of Operations 8
Item 3. - Quantative and Qualitative Disclosure About 13
Market Risk
PART II - OTHER INFORMATION
Item 6. - Exhibits and Reports on Form 8K 14
SIGNATURES 15
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PART I - FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENT
<TABLE>
NOODLE KIDOODLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
UNAUDITED
<CAPTION>
October 30, October 31, January 30,
1999 1998 1999
(In thousands, except share data)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 22 $ 54 $10,188
Merchandise inventories 52,675 34,054 21,074
Prepaid expenses and other current assets 5,504 3,118 3,780
Total Current Assets 58,201 37,226 35,042
Property, plant and equipment - net 29,193 21,726 22,900
Other assets 53 38 20
Total Assets $87,447 $58,990 57,962
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt $ 21 $ 20 $ 21
Revolving credit facility 21,578 5,419 -
Trade accounts payable 19,541 13,019 8,576
Accrued expenses and taxes 13,158 8,842 9,738
Net liabilities of discontinued operations - 1,259 1,303
Total Current Liabilities 54,298 28,559 19,638
Long-term debt 697 719 712
Commitments and contingencies - - -
Stockholders' equity:
Preferred stock-authorized 1,000,000
shares, par value $.001,(none issued) - - -
Common stock-authorized 15,000,000,
par value $.001, issued 8,506,901
shares, respectively 9 9 9
Capital in excess of par value 43,097 43,083 43,087
Accumulated deficit (6,950) (9,627) (1,747)
36,156 33,465 41,349
Less treasury stock, at cost, 903,011,
914,761, and 910,861 shares, respectively 3,704 3,753 3,737
Total Stockholders' Equity 32,452 29,712 37,612
Total Liabilities and Stockholders' Equity $87,447 $58,990 $57,962
See accompanying notes to Condensed Consolidated Financial Statements.
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<TABLE>
NOODLE KIDOODLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
UNAUDITED
<CAPTION>
Thirteen Weeks Ended Thirty-Nine Weeks Ended
October 30, October 31, October 30, October 31,
1999 1998 1999 1998
(In thousands, except per share data)
<S> <C> <C> <C> <C>
Net sales $27,205 $22,670 $70,890 $59,146
Costs and expenses:
Cost of product sold including
buying and warehousing costs 16,683 13,816 43,149 35,935
Selling and administrative expenses 13,199 10,336 34,831 27,395
29,882 24,152 77,980 63,330
Operating loss (2,677) (1,482) (7,090) (4,184)
Interest income 6 12 104 184
Interest expense (325) (84) (403) (128)
Loss from continuing operations (2,996) (1,554) (7,389) (4,128)
before income taxes
Income taxes (benefit) - - - -
Net loss from continuing operations (2,996) (1,554) (7,389) (4,128)
Gain from disposal of discontinued
operations 2,500 - 2,500 -
Loss before cumulative effect of a
change in accounting principle (496) (1,554) (4,889) (4,128)
Cumulative effect of a change in
accounting principle - - 314 -
Net loss $ (496) $(1,554) $ (5,203) $(4,128)
Net income (loss) per share:
Continuing operations $ (0.39) $ (0.20) $ (0.97) $ (0.54)
Discontinued operations 0.33 - 0.33 -
Cumulative effect of a change in
accounting principle - - (0.04) -
Net loss per share basic and diluted: $ (0.06) $ (0.20) $ (0.68) $ (0.54)
Weighted average shares outstanding 7,604 7,592 7,602 7,586
See accompanying notes to Condensed Consolidated Financial Statements
</TABLE>
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NOODLE KIDODOLE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDTED STATEMENTS OF CASH FLOWS
UNAUDITED
<CAPTION>
Thirty-Nine Weeks Ended
October 30, October 31,
1999 1998
(In thousands)
<S> <C> <C>
Cash flows from operating activities:
Net loss from continuing operations $ (7,389) $ (4,128)
Adjustments to reconcile to net cash provided
(used):
Depreciation 2,658 2,086
Decrease (increase) in non-cash working capital
accounts:
Merchandise inventories (31,601) (17,233)
Prepaid expenses, taxes and other current assets (2,038) (94)
Trade accounts payable, accrued expenses and taxes 14,385 8,087
Net cash (used in) continuing operations (23,985) (11,282)
Gain from disposal of discontinued operating
activities 2,500 -
Decrease (increase) in non-cash working capital
accounts (1,303) 86
Net cash provided by discontinued operations 1,197 86
Net cash (used in)operating activities (22,788) (11,196)
Cash flows from investing activities:
Property additions (8,951) (5,298)
Other (33) (15)
Net cash (used in)investing activities (8,984) (5,313)
Cash flows from financing activities:
Net increase in revolving credit facility 21,578 5,419
Proceeds from exercise of employee stock options 43 59
Reduction of long-term debt (15) (14)
Net cash provided by financing activities 21,606 5,464
Net decrease in cash and cash equivalents (10,166) (11,045)
Cash and cash equivalents - beginning of period 10,188 11,099
Cash and cash equivalents - end of period $ 22 $ 54
Supplemental cash flow information
Interest expense $ 403 $ 128
Income taxes, net - -
See accompanying notes to Condensed Consolidated Financial Statements
</TABLE>
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<TABLE>
NOODLE KIDOODLE, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
UNAUDITED
<CAPTION>
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NOTE 1. Basis of presentation.
The accompanying interim unaudited consolidated
financial statements include the accounts of Noodle
Kidoodle, Inc. and subsidiaries (the "Company").
All intercompany accounts and transactions are
eliminated in consolidation.
These financial statements have been prepared in
accordance with generally accepted accounting
principles for interim financial information and
with the instructions to Form 10-Q and 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, such interim statements reflect all
adjustments (consisting of normal recurring
accruals) necessary to present fairly the financial
position and the results of operations and cash
flows for the interim periods presented. Due to the
seasonal nature of the Company's business, results
of operations for the interim periods are not
necessarily indicative of the results to be expected
for the full fiscal year. These financial
statements should be read in conjunction with the
audited consolidated financial statements and
footnotes included in the Company's annual Report on
Form 10-K for the year ended January 30, 1999.
NOTE 2. Cash and cash equivalents.
All highly liquid investments with a maturity date
of three months or less are considered to be cash
equivalents. These investments are stated at cost
which approximates market.
NOTE 3. Income taxes.
Income tax provisions are based on estimated annual
effective tax rates. The Company did not record a
tax benefit for the losses for the periods ended
October 30, 1999 and October 31, 1998, respectively,
since the Company has no available tax loss
carrybacks and there are no available tax planning
strategies that would enable the Company to utilize
the tax benefit of the carryforwards, without
relying on future income.
The Company has recorded a 100% valuation allowance
against its deferred tax assets, and management
believes that it is premature to reverse the
allowance at this time.
The Company has available net operating loss
carryforwards of approximately $16.5 million for
income tax purposes.
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NOTE 4. Earnings per share.
The Company calculates earnings per share in
accordance with Statement of Financial Accounting
Standards (SFAS) No. 128, "Earnings per Share." We
use the weighted-average number of common shares
outstanding during each period to compute basic
earnings per common share. Diluted earnings per
share are computed using the weighted-average number
of common shares and dilutive potential common
shares outstanding. Dilutive potential common
shares are employee stock options assumed to be
exercised.
Average common and common equivalent shares
used in computing diluted earnings per share as
a result of applying the treasury stock method to
outstanding employee stock options were as follows:
Thirteen Weeks Ended Thirty-Nine Weeks Ended
October 30, October 31, October 30, October 31,
1999 1998 1999 1998
7,681,000 7,661,000 7,768,000 7,677,000
In accordance with FAS 128, as a result of losses
from operations for the quarter and nine month
period ended October 30, 1999 and October 31, 1998,
the inclusion of employee stock options were
antidilutive and, therefore, were not utilized in
the computation of diluted earnings per share.
NOTE 5. Accounting change.
Effective January 31, 1999, the Company adopted
Statement of Position ("SOP") 98-5, "Reporting on
the Costs of Start-Up Activities". The change
involves expensing store pre-opening costs as
incurred. Previously, the Company capitalized such
costs and amortized them over the first twelve
months of a store's operations.
The cumulative effect of the change in accounting
principle resulted in the write-off of $314,000 of
unamortized costs in the first quarter which is
so reflected in the Statement of Operations.
NOTE 6. Revenue Recognition.
Revenue is recognized at the time that retail sales
are made to customers. Returns and allowances are
recorded at the time returns are received from or
allowances made to customers.
NOTE 7. Discontinued operations.
In the third quarter ended October 30, 1999, the
Company adjusted the estimated gain on disposal of
its discontinued wholesale operations recognized in
fiscal 1996. The adjustment resulted in an
additional gain of $2.5 million. The additional
gain arose from the sale of the Company's leasehold
interest in its former distribution center in
Birmingham, Alabama and the settlement of
liabilities related to its discontinued operations.
The leasehold interest in the Birmingham, Alabama
distribution center was sold on November 15, 1999.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Thirteen Weeks Ended October 30, 1999 Compared With
Thirteen Weeks Ended October 31, 1998
Results of Operations
Continuing operations
Net sales increased 19.8% to $27.2 million in the thirteen
weeks ended October 30, 1999 from $22.7 million in the
comparable period in the prior year. The increase was due to
the addition of seventeen stores since last year's third
quarter, eight of which were opened in this quarter, offset
by decreases in comparable store sales of 4% in the quarter.
The Company had 35 comparable stores at October 30, 1999.
The Company operated 56 Noodle Kidoodle stores at October 30,
1999 compared to 39 Noodle Kidoodle stores at October 31,
1998.
Gross profit (derived from net sales less the cost of product
sold, which includes buying and warehousing costs) increased
18.0% to $10.5 million in the thirteen weeks ended October
30, 1999 from $8.9 million in the comparable period in the
prior year. Gross profit, as a percentage of net sales
("gross profit percentage") decreased to 38.7% for the third
quarter ended October 30, 1999 from 39.1% in the comparable
period in the prior year, primarily due to increased
warehousing costs this year, partially offset by reduced
markdowns. This year the Company incurred additional costs to
lease additional warehouse space to support its peak seasonal
inventory requirements.
Selling and administrative expenses increased $2.9 million to
$13.2 million in the third quarter ended October 30, 1999
from $10.3 million in the comparable period in the prior
year. Direct store expenses, which consist of payroll,
occupancy, advertising and other store operating costs,
increased $2.5 million, primarily as a result of the
increased store base. Home office expenses increased $0.2
million, including $0.1 million of costs this quarter
associated with the development of the noodlekidoodle.com
internet site. Store pre-opening costs increased $0.2
million. Selling and administrative expenses, as a percent
of net sales, increased to 48.5% in the current quarter ended
October 30, 1999 from 45.6% in the comparable period in the
prior year, primarily as a result of the additional direct
store expenses, increased home office costs, additional store
pre-opening costs, and the negative impact of lower
comparable store sales.
Net interest expense in the third quarter ended October 30,
1999 was $.3 million as compared to $.1 million in the
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comparable period in the prior year. The increase of $.2
million in the current quarter resulted primarily from
increased borrowings under the Company's revolving credit
facility, which funded the buildup of inventory levels needed
for the upcoming holiday season.
Income tax provisions are based on estimated annual effective
tax rates. The Company did not record a tax benefit for the
losses for the periods ended October 30, 1999 and October 31,
1998, respectively, since the Company has no available tax
losses carrybacks and there are no available tax planning
strategies that would enable the Company to utilize the tax
benefit of the carryforwards, without relying on future
income. The Company has recorded a 100% valuation allowance
against its deferred tax assets, and management believes that
it is premature to reverse the allowance at this time.
Net loss from continuing operations increased $1.4 million to
$3.0 million ($0.39 per share) for the third quarter ended
October 30, 1999 from $1.6 million ($0.20 per share) in the
comparable period in the prior year.
Gain from disposal of discontinued operations was $2.5
million ($0.33 per share) for the thirteen week period ended
October 30, 1999, as a result of the sale of the Company's
leasehold interest in its former wholesale distribution
center in Birmingham, Alabama and the settlement of
liabilities relating to its discontinued operations. The
Birmingham, Alabama distribution center was the final
remaining tangible asset resulting from the decision to exit
the wholesale business in August 1995 and was sold on
November 15, 1999.
The net loss decreased $1.1 million to $0.5 million ($0.06
per share) for the third quarter ended October 30, 1999 from
$1.6 million ($0.20 per share) in the comparable period in
the prior year.
Thirty-Nine Weeks Ended October 30, 1999 Compared
with Thirty-Nine Weeks Ended October 31, 1998
Continuing operations
Net sales increased 20.0% to $70.9 million in the thirty-nine
week period ended October 30, 1999 from $59.1 million in the
comparable period in the prior year, primarily due to the
addition of fourteen new stores in the current nine month
period and three new stores in the fourth quarter of last
year, offset by comparable store sales decreases of 3%. The
Company had 35 comparable stores at October 30, 1999. The
Company operated 56 Noodle Kidoodle stores at October 30,
1999 compared to 39 Noodle Kidoodle stores at October 31,
1998.
Gross profit (derived from net sales less the cost of product
sold, which includes buying and warehousing costs) increased
19.8% to $27.8 million in the nine months period ended
October 30, 1999 from $23.2 million in the comparable period
in the prior year. Gross profit percentage decreased to
39.1% for the thirty-nine week period ended October 30, 1999
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from 39.2% in the comparable period in the prior year,
primarily due to increased warehousing costs this year,
partially offset by reduced markdowns. This year the Company
incurred additional costs to lease additional warehouse space
to support its peak seasonal inventory requirements.
Selling and administrative expenses increased $7.4 million to
$34.8 million in the thirty-nine week period ended October
30, 1999 from $27.4 million in the comparable period in the
prior year. Direct store expenses which consist of payroll,
occupancy, advertising and other store operating costs
increased $6.4 million. Home office expenses increased $0.5
million including $0.3 million of costs associated with the
development of the noodlekidoodle.com internet site. Store
pre-opening costs increased $0.5 million. Selling and
administrative expenses as a percent of net sales increased
to 49.1% in the current nine-month period ended October 30,
1999 from 46.3% in the comparable period in the prior year,
primarily as a result of the additional direct store
expenses, increased home office costs, additional store pre-
opening costs, and the negative impact of lower comparable
store sales.
Net interest expense in the nine month period ended October
30, 1999 was $.3 million as compared to net interest income
of $.1 million in the comparable period in the prior year.
The increase of $.4 million resulted primarily from increased
borrowing under the Company's revolving credit facility,
which funded the buildup of inventory levels needed for the
upcoming holiday season and the acquisition of fixed assets
for new stores opened this year.
Income tax provisions are based on estimated annual effective
tax rates. The Company did not record a tax benefit for the
losses for the periods ended October 30, 1999 and October 31,
1998, respectively, since the Company has no available tax
losses carrybacks and there are no available tax planning
strategies that would enable the Company to utilize the tax
benefit of the carryforwards, without relying on future
income. The Company has recorded a 100% valuation allowance
against its deferred tax assets, and management believes that
it is premature to reverse the allowance at this time.
Net loss from continuing operations increased $3.3 million to
$7.4 million ($0.97 per share) for the nine-month period
ended October 30, 1999 from $4.1 million ($0.54 per share) in
the comparable period in the prior year.
Gain from disposal of discontinued operations was $2.5
million ($0.33 per share) for the thirty-nine week period
ended October 30, 1999, as a result of the sale of the
Company's leasehold interest in its former wholesale
distribution center in Birmingham, Alabama and the settlement
of liabilities relating to its discontinued operations. The
Birmingham, Alabama distribution center was the final
remaining tangible asset resulting from the decision to exit
the wholesale business in August 1995 and was sold on
November 15, 1999.
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The cumulative effect of a change in accounting principle of
$314,000 represents the write-off of unamortized pre-opening
costs as a result of adopting SOP 98-5, "Reporting on the
Costs of Start-Up Activities", in the first quarter of
fiscal 2000. This accounting change requires the Company to
expense on a current basis previously capitalized pre-opening
costs.
The net loss increased $1.1 million to $5.2 million ($0.68
per share) for the nine-month period ended October 30, 1999
from $4.1 million ($0.54 per share) in the comparable period
in the prior year.
Liquidity and Capital Resources.
During the thirty-nine week period ended October 30, 1999 the
Company's operating activities of its continuing operations
used $24.0 million of cash. This use of cash resulted from
the net loss of $7.4 million, and an increase in working
capital of $19.3 million, offset by non-cash charges of $2.7
million. The increase in working capital resulted primarily
from the seasonal build up of inventory in preparation for
the upcoming holiday season, the addition of fourteen new
stores and the need for inventories for the Company's planned
store openings for the remainder of the year, as well as
inventory to support expected increases in internet sales,
offset by increases in trade accounts payable, accrued
expenses and taxes. The operating activities of discontinued
operations provided $1.2 million in cash as a result of the
sale of the Company's former wholesale distribution center in
Birmingham, Alabama and the settlement of liabilities related
to the Company's discontinued wholesale operations. The
Company used cash to fund investing activities of $9.0
million for the purchase of fixed assets for new stores.
Cash provided from financing activities was $21.6 million,
from borrowings under the Company's revolving credit
facility. As a result of the foregoing, cash and cash
equivalents decreased during the period by $10.2 million.
On July 29, 1999 the Company announced its intent to form
noodlekidoodle.com, a joint venture, between the Company and
Daniel Nissan. Following the successful launch of the
website, the joint venture will be 80% owned by the Company
and 20% owned by Daniel Nissan. The Company estimates that
it will invest up to $1 million in the internet venture this
year, of which $0.3 million was charged to expense in the
current nine month period. The website was launched on
November 18,1999.
The Company maintains a revolving credit facility, effective
through June 2000, with The CIT Group/Business Credit, Inc.
The agreement was amended on October 29,1999, to increase the
maximum amount available to $27 million until November 30,
1999, reducing to $22 million through December 31, 1999, and
further reducing to $15 million until expiration date.
This facility may be used for direct borrowings and letters
of credit and may not exceed a certain percentage of, and is
collateralized by, the Company's inventory, receivables and
certain other assets. The agreement provides for an annual
collateral management fee and commitment fee on the unused
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portion of the commitment. Outstanding borrowings bear
interest, at the option of the Company, based on the prime
rate or LIBOR. The agreement contains certain covenants
which among other items, limits the payment of cash dividends
when borrowings under the agreement are outstanding. As of
October 30, 1999, the Company had $21.6 million of
outstanding borrowings under the revolving credit facility.
The Company opened fourteen stores during the thirty-nine
week period ended October 30, 1999. The Company has
subsequently opened two additional stores in the month of
November. The Company has signed leases for four new
locations scheduled to open in calendar 2000. In addition,
the Company plans to continue to make investments in its
distribution center and for store remodels to improve
operational efficiencies and customer service. The Company
leased a 65,000 square foot distribution facility on July 1,
1999 to support its peak seasonal inventory requirements as a
result of the increased store base. The Company expects to
further increase its distribution capacity in Fiscal 2001.
The Company has available net operating loss carryforwards of
approximately $16.5 million for income tax purposes.
The Company expects to fund its near-term cash requirements
principally from its existing cash balances and by borrowing
under its revolving credit facility. The Company expects to
finance its long-term expansion plan with internally and
externally generated funds, which may include borrowings
under future credit facilities, and through the sale of
equity, equity-related or debt securities. There can be no
assurance that financing will be available in amounts, or at
rates or on terms and conditions acceptable to the Company.
Seasonality
The Company's operations are highly seasonal and a
significant portion of its revenues occur in the fourth
quarter which coincides with the Christmas selling season.
New stores are expected to be opened throughout the year, but
generally before the Christmas selling season, which will
make the Company's fourth quarter revenues an even greater
percentage of total year's revenues. Operations during the
first three quarters are not expected to be profitable for
the foreseeable future.
Year 2000 Compliance
The Company has completed its review of year 2000 ("Y2K")
issues and does not believe that the business impact or cost
of these issues is material. The following areas have been
reviewed:
Corporate Information Systems - All corporate information
systems, both those developed by the Company and critical
systems developed by third parties, have been developed in an
environment and programming language which are not affected
by the year 2000 problem, and no software changes are needed.
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In-Store Systems - All in-store and point of sale (POS)
software was developed by an outside software firm which has
provided written assurance of the systems' year 2000
compliance. The Company has tested the systems' Y2K
compliance during the first quarter of calendar 1999 and
found the systems to be Y2K compliant.
Personal Computers - Some personal computers used to run the
Company's in-store POS systems were not year 2000 compliant.
BIOS upgrades for these computers have been obtained at no
cost.
Embedded Systems - None of the Company's critical operations
are dependent on hardware with embedded systems. The
Company's home office telephone system was upgraded in the
third quarter of calendar 1999 and is now Y2K compliant.
Risk - While the Company has completed its testing and any
necessary conversions and upgrades and believes its systems
are now Y2K compliant, there can be no assurance that the
Company's testing was adequate or that the conversions and
upgrades will be effective. Further, there can be no
assurance that the failure of such systems to be year 2000
compliant will not have a material adverse affect on the
Company's results of operations, financial condition or
liquidity. Management believes that the risks associated
with the year 2000 problem are minimal. The greatest risk to
the business is the possibility of an interruption in service
from a vendor who is not properly prepared. Any impact to
the business in this "worst case" scenario would be minimized
by the likelihood that it will occur during the traditionally
slower first quarter.
Item 3. Quantitative and Qualitative Disclosures About
Market Risk
Not applicable.
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PART II - OTHER INFORMATION
Item 6. - Exhibits and Reports on Form 8-K
(a) The following exhibit is filed as part of this
report:
Exhibit 27 - Financial Data Schedule (SEC/EDGAR
only)
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly
authorized.
NOODLE KIDOODLE, INC.
(Registrant)
Date: December 13, 1999 /s/ Stanley Greenman
Stanley Greenman, Chairman
of the Board, Chief
Executive Officer, and
Treasurer
(Principal Executive
Officer)
Date: December 13, 1999 /s/ Kenneth S. Betuker
Kenneth S. Betuker
Vice President, Chief
Financial Officer and
Secretary
(Principal Financial and
Accounting Officer)
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<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JAN-29-2000
<PERIOD-START> JAN-31-1999
<PERIOD-END> OCT-30-1999
<CASH> 22
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 52,675
<CURRENT-ASSETS> 58,201
<PP&E> 40,089
<DEPRECIATION> 11,896
<TOTAL-ASSETS> 87,447
<CURRENT-LIABILITIES> 54,298
<BONDS> 0
0
0
<COMMON> 9
<OTHER-SE> 32,443
<TOTAL-LIABILITY-AND-EQUITY> 87,447
<SALES> 70,890
<TOTAL-REVENUES> 70,890
<CGS> 43,149
<TOTAL-COSTS> 43,149
<OTHER-EXPENSES> 34,831
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 403
<INCOME-PRETAX> (7,389)
<INCOME-TAX> 0
<INCOME-CONTINUING> (7,389)
<DISCONTINUED> 2,500
<EXTRAORDINARY> 0
<CHANGES> 314
<NET-INCOME> (5,203)
<EPS-BASIC> (0.68)
<EPS-DILUTED> (0.68)
</TABLE>
