<PAGE>
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 December 29, 1995
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 No. 0-12744
SUNRISE MEDICAL INC.
(Exact name of registrant as specified in its charter)
Delaware 95-3836867
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2382 FARADAY AVENUE, SUITE 200
CARLSBAD, CA 92008
(Address of principal executive offices)
Registrant's telephone number, including area code: (619) 930-1500
Indicate by check mark whether registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months and (2) has been subject to such filing requirements for
the past 90 days. Yes X No
----- -----
Number of shares of common stock outstanding at January 31, 1996: 18,825,449
<PAGE>
SUNRISE MEDICAL INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
<TABLE>
<CAPTION>
December 29, June 30,
1995 1995
------------ --------
(unaudited) (restated)
<S> <C> <C>
Assets
- ------
Current assets:
Cash and cash equivalents $ 5,544 $ 1,740
Receivables, net 147,200 141,556
Inventories 84,524 81,941
Other current assets 31,249 11,865
-------- --------
Total current assets 268,517 237,102
Property, plant and equipment, net 94,721 89,133
Goodwill and other intangible assets, net 300,160 270,478
Other assets, net 1,683 1,196
-------- --------
Total assets $665,081 $597,909
======== ========
Liabilities and Stockholders' Equity
- ------------------------------------
Current liabilities:
Current installments of long-term debt $ 4,389 $ 2,328
Trade accounts payable 44,150 36,096
Accrued compensation and other expenses 93,444 72,485
Income taxes 7,099 1,102
-------- --------
Total current liabilities 149,082 112,011
Long-term debt, less current installments 227,447 182,029
Deferred income taxes 4,781 4,376
Stockholders' equity:
Preferred stock, $1 par. Authorized
5,000 shares; none issued -- --
Common stock, $1 par. Authorized 40,000
shares; 18,825 and 18,597 shares,
respectively, issued and outstanding 18,825 18,597
Additional paid-in capital 195,762 189,955
Retained earnings 65,978 86,276
Cumulative foreign currency translation
adjustment 3,206 4,665
-------- --------
Total stockholders' equity 283,771 299,493
-------- --------
Total liabilities and stockholders' equity $665,081 $597,909
======== ========
</TABLE>
(See accompanying notes to condensed consolidated financial statements)
2
<PAGE>
SUNRISE MEDICAL INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
Thirteen Twenty-six
Weeks Ended Weeks Ended
December 29, December 29,
1995 1995
------------ ------------
(unaudited) (unaudited)
<S> <C> <C>
Net sales $173,710 $330,882
Cost of sales 119,553 222,025
-------- --------
Gross profit 54,157 108,857
-------- --------
Marketing, selling and administrative expenses 43,271 80,281
Research and development expenses 3,969 7,693
Corporate expenses 2,254 4,617
Amortization of goodwill and other intangibles 2,223 4,264
Unusual items 34,771 34,771
-------- --------
86,488 131,626
-------- --------
Corporate operating income (loss) (32,331) (22,769)
-------- --------
Other (expenses) income:
Interest expense (4,136) (7,666)
Other income and expense, net 414 1,072
-------- --------
(3,722) (6,594)
-------- --------
Loss before income taxes (36,053) (29,363)
Income tax benefit (11,961) (9,065)
-------- --------
Net loss $(24,092) $(20,298)
======== ========
Net loss per share $ (1.28) $ (1.08)
======== ========
Weighted average number of shares outstanding 18,825 18,786
======== ========
</TABLE>
(See accompanying notes to condensed consolidated financial statements)
3
<PAGE>
SUNRISE MEDICAL INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
<TABLE>
<CAPTION>
Thirteen Twenty-six
Weeks Ended Weeks Ended
December 29, December 29,
1995 1995
------------ ------------
(unaudited) (unaudited)
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (24,092) $(20,298)
Non-cash items 9,593 17,954
Changes in assets and liabilities,
net of effect of acquisitions:
Receivables, net 718 990
Inventories 6,012 3,089
Other current assets (11,502) (16,714)
Accounts payable and other liabilities 20,113 18,959
--------- --------
Net cash provided by operating activities 842 3,980
--------- --------
Cash flows from investing activities:
Purchase of property, plant and equipment, net (5,324) (11,995)
Net cash invested in acquisition of businesses (20,609) (23,072)
--------- --------
Net cash used for investing activities (25,933) (35,067)
--------- --------
Cash flows from financing activities:
Borrowings of long-term debt 59,958 111,519
Repayments of long-term debt (32,572) (76,747)
Proceeds from issuance of common stock 38 108
--------- --------
Net cash provided by financing activities 27,424 34,880
--------- --------
Effect of exchange rate changes on cash (12) 11
--------- --------
Net increase in cash and cash equivalents 2,321 3,804
Cash and cash equivalents at beginning of period 3,223 1,740
--------- --------
Cash and cash equivalents at end of period $ 5,544 $ 5,544
========= ========
</TABLE>
(See accompanying notes to condensed consolidated financial statements)
4
<PAGE>
SUNRISE MEDICAL INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Basis of Presentation
The information contained in the consolidated financial statements and footnotes
is condensed from that which would appear in the annual consolidated financial
statements. Accordingly, the condensed consolidated financial statements
included herein should be reviewed in conjunction with the consolidated
financial statements and related notes thereto contained in the Annual Report on
Form 10-K/A Amendment No. 1 for the fiscal year ended June 30, 1995 filed by
Sunrise Medical Inc. (the "company") with the Securities and Exchange
Commission. The unaudited condensed consolidated financial statements as of
December 29, 1995 and for the thirteen-week and twenty-six week periods then
ended include all adjustments (consisting of normal recurring adjustments and
the unusual items described in Note 3) considered necessary for a fair
presentation. The results of operations for interim periods are not necessarily
indicative of the results which may be expected for the entire year.
On January 4, 1996 the company reported the results of an internal investigation
of its financial controls and financial statements for previously reported
periods. The company reported that it had determined that net sales, operating
income and assets at its Bio Clinic subsidiary had been overstated and
liabilities had been understated as a result of actions by a small group of
employees in the subsidiary's finance and management information systems
departments who falsified accounting entries and computer reports, thereby
circumventing the company's internal accounting controls and avoiding detection.
Accordingly, the company has restated its financial statements for the years
ended June 30, 1995 and July 1, 1994. Because it is not practicable to
reconstruct reliable accounting records at its Bio Clinic subsidiary for interim
periods during those years, the company has been unable to allocate accurately
to individual quarters the full year restatement adjustments for any financial
statement item other than net sales. Accordingly, no interim financial
statements for the thirteen-week and twenty-six week periods ended December 30,
1994 are presented herein and previously reported interim results for fiscal
1995 should be disregarded.
2. Inventories
Certain inventories are stated at the lower of last-in, first-out (LIFO) cost or
market value. All other inventories are stated at the lower of the first-in,
first-out (FIFO) cost or market value. Inventories consist of the following (in
thousands):
<TABLE>
<CAPTION>
December 29, June 30,
1995 1995
------------ --------
<S> <C> <C>
Raw material $36,385 $35,126
Work-in-progress 9,734 8,490
Finished goods 38,405 38,325
------- -------
$84,524 $81,941
======= =======
</TABLE>
Interim period inventory classifications involve a degree of estimation due to
the timing of physical inventories throughout the fiscal year.
5
<PAGE>
3. Unusual Items
During the quarter ended December 29, 1995 the company recorded pre-tax charges
of $34.8 million. These charges include: $13.1 million for costs of the internal
investigation, restatement, and reissuance of historical financial statements
and the estimated attorneys' fees associated with defending related litigation;
$10.7 million for the write-down of assets at Bio Clinic and Comfort Clinic to
reflect revised estimates of net asset realizations, including goodwill
associated with the company's air therapy rental business (and including
immaterial items related to periods prior to fiscal 1994); and $11.0 million
related to the company's reorganization and cost reduction program, including
severance costs, facility closing costs, and write-downs associated with
discontinued low-volume products.
4. Acquisitions
On July 19, 1995 the company acquired Coopers Healthcare Plc, a United Kingdom-
based manufacturer of patient aids, for 222,266 shares of its common stock
(valued at $5.8 million) and cash of $2.5 million. On October 6, 1995 the
company acquired Parker Bath Group, a U.K. manufacturer and distributor of
bathing systems and patient lifters, for cash and notes amounting to $30.2
million. These transactions have been accounted for as purchases. Pro forma
results of operations, assuming the acquisitions had been made at the beginning
of fiscal 1996, would not be materially different from the results reported.
5. Contingencies
Following the announcement by the company on October 26, 1995 of its internal
investigation into accounting practices at its Bio Clinic Corporation subsidiary
(Note 1), the company and certain of its current and former officers, directors
and employees were named as defendants in a number of stockholder class action
lawsuits, each alleging violations of the federal securities laws and seeking
unspecified damages. These lawsuits have been consolidated in a single action
filed in the U.S. District Court for the Southern District of California. In
addition, a number of derivative actions seeking unspecified damages have been
filed against the company and certain of its current and former officers,
directors and employees in California and Delaware state courts. The company is
vigorously defending this litigation.
The Securities and Exchange Commission (the "SEC") has entered a formal order of
private investigation into the circumstances underlying the restatement of the
company's 1995 and 1994 financial results. The company is cooperating fully
with the SEC in its investigation.
6
<PAGE>
SUNRISE MEDICAL INC. AND SUBSIDIARIES
ITEM 1. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS
Net sales for the first two quarters of fiscal 1995 were not affected by the
restatement described in Note 1 of Notes to Condensed Consolidated Financial
Statements. However, it is not practicable to determine the effect on other
items in the company's consolidated financial statements for those periods. The
quarterly trend in net sales may not be indicative of any similar trend with
respect to other aspects of the company's consolidated financial statements.
Accordingly, the following discussion involves only limited quarterly
comparisons, and includes comparisons of divisional sales and profit
contribution for all divisions of the company other than the two (Bio Clinic and
Comfort Clinic) affected by the restatement.
Thirteen Weeks ended December 29, 1995
- --------------------------------------
Net sales for the second quarter of fiscal 1996 were $173.7 million, an increase
of 18% over net sales of $146.9 million in the second quarter of fiscal 1995.
The company's base business accounted for 3% of the sales growth, and was
depressed by a significant decline in support surfaces revenues. Acquisitions
contributed 13% to the sales increase and foreign currency translation accounted
for 2%.
Net sales of support surfaces (Bio Clinic and Comfort Clinic) were $23.2 during
the second quarter, a decline of 17% from last year's level of $27.9 million.
Their combined loss (based on divisional profit contribution and excluding the
unusual items described below) increased to $6.1 million from $2.6 million in
the first quarter of fiscal 1996, reflecting intensified pricing pressure during
the quarter combined with higher raw material costs. Divisional profit
contribution is an internal measurement used by the company to measure
divisional, product line and group performance; it does not include any
allocations of corporate office expense, goodwill amortization, interest, or
income taxes.
The company's other operating divisions, exclusive of the support surfaces
business, had sales growth of 27% to $150.5 million in the second quarter of
fiscal 1996, from $119.0 million in the comparable quarter last year. Internal
growth represented 7%, acquisitions 17%, and foreign exchange translation added
3%. Excluding support surfaces, the company's gross margin declined to 34.2%
from 36.5%, reversing the trend reported in the first quarter of fiscal 1996 as
increased pressure on gross margins was experienced across most product lines.
Divisional operating expenses (research and development, and marketing, selling
and administrative expenses) for the company's other operating divisions
increased to 25.6% of sales in the second quarter of fiscal 1996 compared to
24.0% in the same period of last year. As a result, the divisional profit
contribution, exclusive of support surfaces, declined 12% compared to fiscal
1995's second quarter, from $14.8 million to $13.0 million. Improved divisional
profit contribution in wheelchairs, beds and bathing products was more than
offset by lower results for patient aids and respiratory products.
7
<PAGE>
During the second quarter of fiscal 1996, net sales of Rehabilitation Products
were $89.4 million, an increase of 19% compared to net sales of $74.9 million in
the prior year's second quarter. Wheelchair sales showed continued strong growth
in both the U.S. and Europe. Patient aids sales were soft, but international
sales of patient aids were positively affected by the inclusion of Coopers, a
U.K. ambulatory aids manufacturer acquired in July 1995. The group's profit
contribution rose slightly in the second quarter compared to the same period of
fiscal 1995.
Respiratory Products net sales were $33.4 million in the second quarter of 1996,
an increase of 2% over sales of $32.7 million in the second quarter of fiscal
1995. Product demand in the United States continued to be negatively influenced
by Congressional actions intended to cut the Medicare reimbursement rate for
oxygen equipment. European respiratory sales showed continued sales growth. The
group's profit contribution declined significantly compared to the prior year
period, reflecting increasing pressure on domestic prices and gross margins.
Recovery Products net sales for the thirteen weeks ended December 29, 1995 were
$51.2 million compared to $38.9 million in the comparable fiscal 1995 period, an
increase of 32%. Excluding support surfaces, this group's second quarter net
sales increased 156% to $28.0 million from $10.9 million, and its profit
contribution increased by a greater percentage. Both net sales and profit
contribution were positively impacted by recent acquisitions; healthcare beds
and bathing now include Corona, a French bed manufacturer, and Parker Bath, a
U.K. institutional bathing and lifting products company, acquired in April and
October 1995, respectively.
In December 1995 the company completed an intensive review of its operations and
businesses and initiated Operation Rebound, a corporate-wide profit improvement
plan. This plan involves four major elements: the consolidation of the company's
U.S. salesforces from twelve to six; the integration of a number of the
company's smaller divisions operating within the same country or market; the
launching of a company-wide profit improvement program; and the sale of Bio
Clinic's air therapy rental business. Approximately 250 positions have been
eliminated (including 83 positions in the air therapy rental business
transferred as of January 31, 1996 to the buyer of that business), or 6% of the
company total.
As a result of these actions, the company recorded pretax charges from unusual
items of $34.8 million in the second quarter of fiscal 1996. These charges
include: $13.1 million for costs of the internal investigation, restatement, and
reissuance of historical financial statements and the estimated attorneys' fees
associated with defending related litigation; $10.7 million for the write-down
of assets at Bio Clinic and Comfort Clinic to reflect revised estimates of net
asset realizations, including goodwill associated with the company's air therapy
rental business (and including immaterial items related to periods prior to
fiscal 1994); and $11.0 million related to the company's reorganization and cost
reduction program, including severance costs, facility closing costs, and
product line discontinuance expenses. Of the total charges of $34.8 million,
approximately $21.3 million will require cash payments (already paid or to be
paid primarily over the next three to six months), and $13.5 million represent
non-cash charges.
8
<PAGE>
Interest expense for the quarter was $4.1 million. The average amount borrowed
increased compared to the prior year period as a result of additional debt used
to finance recent acquisitions.
Primarily as a result of the unusual items, the company incurred a loss before
income taxes of $36.1 million. The effective tax rate used in computing the tax
benefit for the quarter was 33%, less than the statutory tax rate, in part
because the company continued to be profitable in certain tax jurisdictions, and
partly because of the non-deductibility for tax purposes of goodwill
amortization.
The net loss for the quarter was $24.1 million or $1.28 per share.
Twenty-Six Weeks ended December 29, 1995
- ----------------------------------------
Net sales for the twenty-six week period ended December 29, 1995 were $330.9
million, an increase of 15% over net sales of $287.3 million in the
corresponding period of fiscal 1995. Acquired businesses accounted for 12% of
the total increase in net sales, while base business growth contributed 1% and
foreign currency translation added 2%.
Net sales of support surfaces were $46.2 million in the first half of fiscal
1996 compared to $64.4 million in the comparable period of 1995. This business
incurred a divisional operating loss of $8.7 million before unusual items. The
company's other operating divisions, exclusive of support surfaces, had sales
growth of 28%, increasing to $284.7 million in the 1996 period from $222.8
million in the first half of fiscal 1995. This sales growth consisted of
internal growth--9%, acquisitions--16%, and foreign currency translation--3%.
The divisional profit contribution of these other divisions was $29.6 million
compared to $26.7 million in the prior year period.
Sales of Rehabilitation Products were $177.4 million, an increase of 25%
compared to net sales of $142.4 million in the first half of fiscal 1995.
Wheelchair sales were especially strong in both North America and Europe.
Patient aids sales were soft, but were positively affected by the inclusion of
Coopers, a U.K. business acquired in July 1995. Profit contribution from
Rehabilitation Products increased in the first half of fiscal 1996 compared to
the same period of fiscal 1995, but at a lesser rate than the increase in
sales.
Respiratory Products sales were $59.2 million in the first twenty-six weeks of
1996, an increase of only 1% over sales of $58.3 million in the corresponding
period of fiscal 1995. Product demand in the United States was weak,
attributable primarily to uncertainty as to Medicare reimbursement rates for
oxygen equipment. However, this weakness was offset by continued sales growth in
Europe. This group's profit contribution declined compared to the prior year
period as a result of increasing pressure on domestic prices and gross margins.
Recovery Products sales increased by 10% to $94.7 million in the first half of
fiscal 1996 from $86.2 million in the same period of fiscal 1995. Significantly
lower sales at Bio Clinic and Comfort Clinic offset most of the benefit of sales
contributed by Corona, acquired in April 1995, and Parker Bath, acquired in
October 1995. The group's profit contribution, excluding support surfaces,
increased substantially as a result of the two acquisitions.
9
<PAGE>
The unusual items incurred in the first half of fiscal 1996 are discussed above
under the heading "Thirteen Weeks ended December 29, 1995." Interest expense
for the period was $7.7 million. The average amount borrowed increased compared
to the first half of fiscal 1995 as a result of additional debt used to finance
recent acquisitions.
As a result of the unusual items, the company incurred a loss before
income taxes of $29.4 million in the first half of fiscal 1996. The net loss
for the period was $20.3 million or $1.08 per share.
LIQUIDITY AND CAPITAL RESOURCES
During the first half of fiscal 1996 the company's working capital decreased by
$5.7 million to $119.4 million, primarily as a result of the costs of the
company's internal investigation and attorneys' fees associated with related
pending litigation. Cash outlays for capital expenditures were $12.0 million in
the first half of fiscal 1996, primarily for new product tooling, building
improvements, machinery and other equipment to improve efficiency or to expand
capacity. Net cash used in the purchase of two businesses was $23.1 million.
These amounts were financed by additional borrowings under the company's bank
credit facility.
The company amended its five and one-half year multi-currency bank credit
facility as of September 29, 1995. Under the amended credit facility, the
company's revolving credit commitment was increased to $275 million, with annual
reductions of $20 million beginning in January 1998. Funds available under the
amended credit facility at December 29, 1995 were approximately $70 million.
As a result of the restatement of its 1995 and 1994 financial statements and the
unusual items recorded in the second quarter of 1996, the company was not in
compliance with certain covenants contained in its credit facility. On February
16, 1996 the bank group agreed to waive compliance with these covenants for one
year, until February 28, 1997. Management believes that appropriate
amendments will be made to the credit facility prior to the end of the company's
1996 fiscal year that will enable the company to be in compliance with the
covenants in the credit facility, although no assurance can be given that such
amendments will be completed. In connection with the waiver of compliance by
the bank group, the company has agreed to an increase in the interest rate and
must comply with certain revised covenants, such as maintenance of debt to
capital ratio, net worth and interest coverage. In addition, the company must
obtain approval of the bank group for any acquisitions. As a result of the
aforementioned waiver, borrowings under the credit facility remain classified as
long-term debt.
IMPACT OF INFLATION
Inflation did not have any significant effect on the company's operating results
in the second quarter of fiscal 1996.
10
<PAGE>
FORWARD-LOOKING STATEMENTS
Any statements contained in this Form 10-Q which are not historical facts are
forward-looking statements that involve risks and uncertainties. The company
wishes to caution the reader that actual events or results may differ materially
from these forward-looking statements. These risks and uncertainties include,
but are not limited to: the impact of competitive products and pricing
pressures; the costs of raw materials; future product demand and market
acceptance risks; the effect of economic conditions in the U.S. and abroad;
product development, commercialization and technological difficulties; shifts in
industry distribution channels; acceleration of the current trend of
consolidation of the company's customer base; regulatory related risks; and
other risks referenced in this and other Securities and Exchange Commission
filings of the company.
11
<PAGE>
SUNRISE MEDICAL INC. AND SUBSIDIARIES
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
On October 26, 1995 the company announced an internal investigation into its
financial controls and financial statements for previously reported periods to
determine the nature and extent of accounting practices at its Bio Clinic
Corporation subsidiary that may have been inconsistent with generally accepted
accounting principles. During November and December 1995, the company and
certain of its current and former officers, directors and employees were named
as defendants in a number of stockholder class action lawsuits, each alleging
violations of the federal securities laws and seeking unspecified damages.
These lawsuits have been consolidated in the U.S. District Court for the
Southern District of California. In addition, a number of derivative actions
seeking unspecified damages have been filed against the company and certain of
its current and former officers, directors and employees in California and
Delaware state courts. The company is vigorously defending this litigation.
The Securities and Exchange Commission (the "SEC") has entered a formal order of
private investigation into the circumstances underlying the company's
restatement of its 1995 and 1994 financial results. The company is cooperating
fully with the SEC in its investigation.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Number Description
-------- -----------
10.1 Amended and Restated Stock Option Plan for Key Associates.
(Incorporated herein by reference to the 1990 Definitive Proxy
Statement of the company)
10.2 1993 Stock Option Plan. (Incorporated herein by reference to
the 1993 Definitive Proxy Statement of the company)
10.3 Management Incentive Bonus Plan. (Incorporated herein by
reference to the company's Registration Statement No. 2-86314
filed with the Securities and Exchange Commission)
10.4 Special Bonus Plan. (Incorporated herein by reference to the
company's fiscal 1992 Form 10-K)
10.5 First Amended and Restated Credit Agreement dated as of
September 29,1995 among Sunrise Medical Inc. and certain
subsidiary borrowers and guarantors, Bank of America as agent
and other lenders. (Incorporated herein by reference to the
company's Form 10-K/A for the year ended June 30, 1995)
27 Financial Data Schedule.
12
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (CONTINUED)
(b) Reports on Form 8-K
On October 26, 1995 the company filed a Current Report on Form 8-K
related to the issuance of a press release announcing an internal investigation
of its financial controls and financial statements for previously reported
periods.
On November 2, 1995 the company filed a Form 8-K related to a press
release reporting that a number of lawsuits had been filed following the October
26, 1995 announcement of an internal investigation.
13
<PAGE>
SUNRISE MEDICAL INC. AND SUBSIDIARIES
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.
SUNRISE MEDICAL INC.
Date: February 21, 1996 /s/ Ted N. Tarbet
-----------------------------
Ted N. Tarbet
Senior Vice President,
Chief Financial Officer
(Principal Financial Officer)
Date: February 21, 1996 /s/ John M. Radak
-----------------------------
John M. Radak
Vice President and Controller
(Principal Accounting Officer)
14
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED CONSOLIDATED BALANCE SHEET AS OF DECEMBER 29, 1995 AND THE CONDENSED
CONSOLIDATED STATEMENT OF OPERATIONS FOR THE QUARTER ENDED DECEMBER 29, 1995 AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-28-1996
<PERIOD-END> DEC-29-1995
<CASH> 5,544
<SECURITIES> 0
<RECEIVABLES> 161,174
<ALLOWANCES> 13,974
<INVENTORY> 84,524
<CURRENT-ASSETS> 268,517
<PP&E> 172,135
<DEPRECIATION> 77,414
<TOTAL-ASSETS> 665,081
<CURRENT-LIABILITIES> 149,082
<BONDS> 227,447
0
0
<COMMON> 18,825
<OTHER-SE> 264,946
<TOTAL-LIABILITY-AND-EQUITY> 665,081
<SALES> 330,882
<TOTAL-REVENUES> 330,882
<CGS> 222,025
<TOTAL-COSTS> 222,025
<OTHER-EXPENSES> 131,626
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 7,666
<INCOME-PRETAX> (29,363)
<INCOME-TAX> (9,065)
<INCOME-CONTINUING> (20,298)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (20,298)
<EPS-PRIMARY> (1.08)
<EPS-DILUTED> (1.08)
</TABLE>
