SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_______________________
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Fiscal Quarter Ended 1-8668
March 27, 1998 Commission File Number
___________________________
FINGERHUT COMPANIES, INC.
(Exact name of registrant as specified in its charter)
Minnesota 41-1396490
(State of Incorporation) (I.R.S. Employer Identification No.)
4400 Baker Road, Minnetonka, Minnesota 55343
(Address of principal executive offices)
(612) 932-3100
(Registrant's telephone number, including area code)
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 _____
As of April 24, 1998, 46,558,964 shares of the Registrant's Common Stock,
$.01 par value, were outstanding.
FINGERHUT COMPANIES, INC.
FORM 10-Q
March 27, 1998
TABLE OF CONTENTS
Part I - Financial Information Page
Item 1. Financial Statements
Consolidated Statements of Earnings (Unaudited) -
thirteen weeks ended March 27, 1998
and March 28, 1997..................................... 3
Consolidated Statements of Financial Position
(Unaudited) - March 27, 1998 and December 26, 1997. ... 4
Consolidated Statements of Cash Flows (Unaudited) -
thirteen weeks ended March 27, 1998 and
March 28, 1997......................................... 5
Condensed Notes to Consolidated Financial
Statements (Unaudited)................................. 6
Item 2. Management's Discussion and Analysis of Results of
Operations and Financial Condition ..................... 8
Part II - Other Information
Item 6. Exhibits and Reports on Form 8-K .......................18
Signatures.......................................................19
<TABLE>
FINGERHUT COMPANIES, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(In thousands of dollars, except share and per share data)
(Unaudited)
Thirteen Weeks Ended
March 27, March 28,
1998 1997
Revenues:
<S> <C> <C>
Net sales $ 272,964 $ 289,537
Finance income and other securitization
income, net 94,371 60,477
367,335 350,014
Costs and expenses:
Product cost 128,651 146,294
Administrative and selling expense 178,553 157,037
Provision for uncollectible account 37,530 32,046
Interest expense, net 10,279 8,281
355,013 343,658
Earnings before income taxes
and minority interest 12,322 6,356
Provision for income taxes 4,803 2,368
Net earnings before minority in 7,519 3,988
Minority interest (2,014) (1,427)
Net earnings $ 5,505 $ 2,561
Earnings per share - Basic $ .12 $ .06
Diluted $ .11 $ .05
Dividends $ .04 $ .04
Weighted average shares
Basic 46,383,255 46,169,024
Diluted 50,474,458 48,624,211
</TABLE>
See accompanying Condensed Notes to Consolidated Financial Statements.
<TABLE>
FINGERHUT COMPANIES, INC.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(In thousands of dollars)
(Unaudited)
March 27, December 26,
1998 1997
ASSETS
Current assets:
<S> <C> <C>
Cash and cash equivalents $ 167,494 $ 145,418
Accounts receivable 246,370 607,874
Retained interest in securitized
receivables 656,450 406,650
Less: reserve for uncollectible
accounts and unearned finance income (175,973) (190,777)
Accounts receivable, net 726,847 823,747
Inventories, net 121,918 124,424
Promotional material 77,174 64,440
Deferred income taxes 214,560 197,355
Other 12,929 13,708
Total current assets 1,320,922 1,369,092
Property and equipment, net 266,903 272,190
Excess of cost over fair value of
net assets acquired, net 74,895 77,161
Customer lists, net 8,401 8,401
Other assets 27,981 24,912
$1,699,102 $1,751,756
LIABILITIES
Current liabilities:
Accounts payable $ 139,999 $ 177,021
Accrued payroll and employee benefits 51,009 57,860
Other accrued liabilities 96,570 93,037
Revolving credit facility 130,000 144,000
Other payables due to credit card
securitizations, net 176,423 134,562
Current portion of long-term debt 76 84
Current income taxes payable 14,331 71,659
Total current liabilities 608,408 678,223
Long-term debt, less current portion 345,187 345,187
Deferred income taxes 27,550 20,441
Other non-current liabilities 8,143 8,130
989,288 1,051,981
Minority interest 31,771 29,790
STOCKHOLDERS' EQUITY
Preferred stock - -
Common stock 465 463
Additional paid-in capital 296,630 292,407
Unearned compensation (555) (738)
Earnings reinvested 381,503 377,853
Total stockholders' equity 678,043 669,985
$1,699,102 $1,751,756
</TABLE>
See accompanying Condensed Notes to Consolidated Financial Statements.
<TABLE>
FINGERHUT COMPANIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands of dollars)
(Unaudited)
Thirteen Weeks Ended
March 27, March 28,
1998 1997
Cash flows from operating activities:
<S> <C> <C> <C> <C>
Net earnings $ 5,505 $ 2,561
Adjustments to reconcile net earnings to
net cash provided (used) by operating activities:
Depreciation and amortization 20,033 13,120
Amortization of unearned compensation 183 511
Minority interest in earnings 1,981 1,427
Change in assets and liabilities:
Accounts receivable, net 96,900 (17,558)
Inventories, net 2,506 (4,181)
Promotional material and other current assets (11,955) (8,042)
Accounts payable (37,022) (32,174)
Accrued payroll and employee benefits (6,851) (6,286)
Accrued liabilities 3,533 (14,777)
Other payables due to credit card
securitizations, net 41,861 13,145
Current income taxes payable (56,469) (70,605)
Deferred income taxes (10,096) 14,882
Other (8,208) 6,069
Net cash (used) provided by operating activities 41,901 (101,908)
Cash flows from investing activities:
Additions to property and equipment (7,328) (4,891)
Net cash used by investing activities (7,328) (4,891)
Cash flows from financing activities:
Repayments of long-term debt (8) (8)
Revolving credit facility (14,000) 135,000
Issuance of common stock 3,366 247
Repurchase of common stock - (924)
Cash dividends paid (1,855) (1,847)
Net cash (used) provided by financing activities (12,497) 132,468
Net increase in cash and cash
equivalents 22,076 25,669
Cash and cash equivalents at beginning of period 145,418 61,003
Cash and cash equivalents at end of period $ 167,494 $ 86,672
Supplemental noncash investing and financing activities:
Tax benefit from exercise of non-qualified
stock options, disqualified dispositions of
Employee Stock Purchase Plan Shares, and
vesting of restricted stock $ 859 $ 71
Issuance of restricted stock, net of forfeitures $ (37) $ -
Supplemental disclosure of cash flow information:
Cash paid during the period for interest $ 8,672 $ 10,007
Cash paid during the period for income taxes $ 71,259 $ 58,085
</TABLE>
Included in cash and cash equivalents were liquid investments with
original maturities of fifteen days or less.
See accompanying Condensed Notes to Consolidated Financial Statements.
FINGERHUT COMPANIES, INC.
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Unaudited
1. Consolidated financial statements
The consolidated financial statements of Fingerhut Companies, Inc.
(the "Company") reflect the financial position and results of
operations of the Company and its wholly owned and majority owned
subsidiaries, after elimination of all material intercompany
transactions and balances.
The consolidated financial statements as of March 27, 1998 and March
28, 1997, and for the thirteen weeks ended March 27, 1998 and March
28, 1997, included herein are unaudited and have been prepared by
the Company pursuant to the rules and regulations of the Securities
and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations,
although the Company believes that the disclosures are adequate to
make the information presented not misleading. The interim
financial statements reflect all adjustments (consisting of normal
recurring accruals) that are, in the opinion of management,
necessary for a fair statement of the results for the interim
periods. These consolidated financial statements should be read in
conjunction with the consolidated financial statements and the notes
thereto included in the Company's 1997 Annual Report to Shareholders
and incorporated by reference in the Company's annual report on Form
10-K filed with the Securities and Exchange Commission. The results
of operations for the interim period should not be considered
indicative of the results to be expected for the entire year.
During the first quarter of 1998, the Company implemented Statement
of Financial Accounting Standards No. 130 (FAS 130), "Reporting
Comprehensive Income." FAS 130 has no effect on the consolidated
financial statements.
2. Earnings per share
Basic earnings per share was computed by dividing net earnings by
the weighted average shares of common stock outstanding during the
periods. Diluted earnings per share was computed by dividing net
earnings by the weighted average shares of common stock and common
stock equivalents outstanding during the periods. The dilutive
effect of the potential exercise of outstanding options to purchase
shares of common stock was calculated using the treasury stock
method.
3. Accounts receivable, net
Accounts receivable, net of amounts sold, consisted of the
following:
<TABLE>
(In thousands of dollars) March 28, December 26,
1998 1997
<S> <C> <C>
Customer receivables (Retail) $ 197,439 $ 339,553
Retained interest in securitized
receivables 168,966 178,652
Reserve for uncollectible accounts,
net of anticipated recoveries (87,857) (100,901)
Reserve for returns and exchanges (11,674) (12,322)
Other reserves (14,747) (22,765)
Net collectible amount 252,127 382,217
Unearned finance income (20,229) (22,750)
Accounts receivable 231,898 359,467
Credit card and other receivables (Metris) 48,931 268,321
Retained interest in securitized
receivables 487,484 227,998
Reserve for uncollectible accounts,
net of anticipated recoveries (41,466) (32,039)
Credit card and other receivables, net 494,949 464,280
Accounts receivable, net $ 726,847 $ 823,747
</TABLE>
During the quarter, the Retail segment accelerated its efforts to
move customers from an installment-based lending program to
revolving charge accounts. By the end of the quarter, approximately
350,000 customer accounts had been converted or were awaiting
conversion. It is the intention of the Company to continue this
practice over the coming years until substantially all of its
customer accounts have been converted to revolving charge.
4. Stockholders' equity
During the thirteen week period ended March 27, 1998, 234,608 shares
of common stock were issued related to the exercise of employee
stock options and 9,860 shares of common stock were issued under the
Fingerhut Companies, Inc. Employee Stock Purchase Plan. The total
shares of common stock outstanding as of March 27, 1998 was
46,518,607.
5. Subsequent events
On April 23, 1998, the Company declared a cash dividend in the
amount of $.04 per share, aggregating approximately $1.9 million,
payable on May 21, 1998, to the shareholders of record as of the
close of business on May 7, 1998.
In April 1998, the Company issued 8,618 shares of common stock under
the Fingerhut Companies, Inc. Employee Stock Purchase Plan.
<TABLE>
MANAGEMENT DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL CONDITION
THIRTEEN WEEKS ENDED
MARCH 27, 1998 AND MARCH 28, 1997
RETAIL SEGMENT
STATEMENTS OF EARNINGS
(In thousands of dollars, except per share data)
(Unaudited)
Thirteen Weeks Ended
March 27, March 28,
1998 1997
Revenues:
<S> <C> <C>
Net sales $ 269,420 $ 290,156
Finance income and other
securitization income, net 437 3,134
269,857 293,290
Costs and expenses:
Product cost 128,590 146,433
Administrative and selling expenses 124,287 124,872
Provision for uncollectible accounts 17,488 20,992
Interest expense, net 5,420 7,219
275,785 299,516
Loss before income taxes (5,928) (6,226)
Provision for income
tax benefit (2,223) (2,476)
Net loss $ (3,705) $ (3,750)
Loss per share - Diluted* $ (.07) $ (.08)
</TABLE>
* Loss per share computed on a "diluted" share basis which is consistent
with the Consolidated Statement of Earnings and the use of "primary"
shares for results of operations prior to the implementation of FAS
128 for the year ended December 26, 1997.
<TABLE>
RETAIL SEGMENT
(Unaudited)
Thirteen Weeks Ended
March 27, March 28,
1998 1997
Fingerhut Key Statistics:
Sales per mailing -
<S> <C> <C> <C> <C>
existing customer list $ 2.62 $ 2.95
Cost per new customer $ 22.45 $ 16.29
Mailings (in 000's)
New customers 33,849 32,962
Existing customers 70,970 68,013
Active customer list
(in 000's) 4,219 4,598
Contribution margin per
existing customer $ 15 $ 15
Reserves for bad debt
as a percent of total
managed receivables 17.4% 17.1%
Reserves for bad debt
as a percent of
accounts 29 days plus
delinquent 81% 76%
Segment Key Statistics: (in 000's)
Capital expenditures $ 5,367 $ 3,086
Depreciation $ 10,446 $ 12,818
</TABLE>
<TABLE>
RETAIL SEGMENT
STATEMENTS OF EARNINGS (Managed Basis*)
(In thousands of dollars, except per share data)
(Unaudited)
Thirteen Weeks Ended
March 27, March 28,
1998 1997
Revenues:
<S> <C> <C>
Net sales $ 269,420 $ 290,156
Finance income and other revenue 43,981 45,988
313,401 336,144
Costs and expenses:
Product cost 128,590 146,433
Administrative and selling expenses 126,762 126,482
Provision for uncollectible accounts 44,170 47,438
Discount on sale of accounts receivable 14,387 14,798
Interest expense, net 5,420 7,219
319,329 342,370
Loss before income taxes (5,928) (6,226)
Provision for income tax benefit (2,223) (2,476)
Net loss $ (3,705) $ (3,750)
Loss per share - Diluted** $ (.07) $ (.08)
</TABLE>
* Presented in format consistent with prior periods.
**Loss per share computed on a "diluted" share basis which is consistent
with the Consolidated Statement of Earnings and the use of "primary"
shares for results of operations prior to the implementation of FAS
128 for the year ended December 26, 1997.
Results of Operations - Retail Segment
Net sales for the current 13-week period were $269.4 million compared to
net sales of $290.2 million for the related period in 1997, a decrease of
7 percent. Fingerhut Corporation ("Fingerhut"), the Company's core
business in this segment, had first quarter net sales of $257.7 million
compared to $276.6 million in the same period in 1997, a decrease of 7
percent. Net sales from Fingerhut's new customer acquisition programs
decreased 3 percent to $49.6 million. Net sales from Fingerhut's
existing customer list totaled $208.1 million, which was an 8 percent
decrease from the first quarter of 1997. Both decreases were due to
lower sales per mailing, which was partially driven by the tightening of
credit screens to reduce the number of high risk orders.
Finance income and other securitization income, net, for the quarter was
$0.4 million, compared to $3.1 million in the first quarter of 1997.
This decrease was primarily due to reduction of sales within the first
quarter.
Product cost for the current 13-week period was 47.7 percent of net
sales, or $128.6 million, compared to 50.5 percent of net sales, or
$146.4 million, during the comparable prior-year period. The decrease as
a percent of net sales was primarily the result of negotiated vendor cost
reductions, partially driven by foreign currency devaluation and
refurbishing cost reductions.
Administrative and selling expenses for the current 13-week period were
$124.3 million, or 46.1 percent of net sales, compared to $124.9 million,
or 43.0 percent of net sales, in the comparable prior-year period.
Continued cost controls resulted in consistent expense levels, while
lower sales per mailing contributed to the increase as a percent of net
sales.
The provision for uncollectible accounts relating to receivables sold is
included in "Finance income and other securitization income, net." The
provision for uncollectible accounts on a "managed" basis for the current
13-week period was 16.4 percent of net sales, compared to 16.3 percent of
net sales for the first quarter of 1997. At the end of the first
quarter, account balances 29 days or more delinquent as a percent of
managed receivables stood at 21.6 percent, down from 22.5 percent at the
end of the prior-year first quarter.
Net interest expense for the current 13-week period was $5.4 million,
compared with $7.2 million in the first quarter of 1997. The decrease in
expense was due to lower working capital requirements which resulted in
lower utilization of the revolving credit facility in the current year.
The effective consolidated tax rate, which includes both the Retail
Segment and Metris, for the first quarter of 1998 was 39.0 percent
compared to 37.3 percent in the comparable prior-year period. The rate
increase quarter over quarter was primarily driven by the increase in
Metris profits having an applied tax rate of 38.5%.
As a result of the items discussed above, the Retail Segment generated a
net loss of $3.7 million, or ($0.07) per share, compared to a first
quarter 1997 net loss of $3.8 million, or ($0.08) per share.
<TABLE>
METRIS COMPANIES INC.
STATEMENTS OF EARNINGS
(In thousands of dollars, except per share data)
(Unaudited)
Thirteen Weeks Ended
March 31, March 31,
1998 1997
Revenues:
<S> <C> <C> <C> <C>
Net sales $ 5,664 $ 1,068
Finance income and other securitization
income, net 93,934 57,343
99,598 58,411
Costs and expenses:
Product cost 61 32
Administrative and selling expenses 56,386 33,681
Provision for uncollectible accounts 20,042 11,054
Interest expense, net 4,859 1,062
81,348 45,829
Earnings before income tax and minority interest 18,250 12,582
Provision for income taxes 7,026 4,844
Net earnings before minority interest 11,224 7,738
Minority interest (2,014) (1,427)
Net earnings $ 9,210 $ 6,311
Earnings per share - Diluted $ .18 $ .13
Key Statistics:
Managed net charge-off ratio 8.8% 8.5%
Period-end managed loans (in 000's) $3,617,276 $1,816,653
Total accounts (in 000's) 2,214 1,475
Managed loan loss reserves (in 000's) $ 291,102 $ 116,809
Managed delinquency ratio 7.4% 6.0%
Reserves as a percent of 30-day plus receivables 109% 107%
</TABLE>
Results of Operations - Financial Services Segment (Metris Companies
Inc.)
Metris contributed net income for the quarter ended March 31, 1998 of
$9.2 million, or $.18 per share, up from $6.3 million, or $.13 per share,
for the first quarter of 1997. The 46 percent increase in net income is
the result of an increase in net interest income and other operating
income partially offset by increases in the provision for loan losses and
other operating expenses. Metris' managed credit card loan portfolio
increased 2 percent, or $70 million, during the first quarter bringing
the portfolio to over $3.6 billion at March 31, 1998. Also during the
quarter, Metris added approximately 25,000 new accounts to end the
quarter with 2.2 million credit card accounts.
Liquidity and Capital Resources (Consolidated)
The Company funds its operations through internally generated funds, the
sale of accounts receivable pursuant to the Fingerhut Master Trust and
the Metris Master Trust, borrowings under the Company's Amended and
Restated Revolving Credit Facility and Metris' Revolving Credit Facility
(the "Revolving Credit Facilities") and the issuance of long-term debt
and common stock.
The proceeds from the sale of Fingerhut accounts receivable were $1.090
billion and $1.205 billion at March 27, 1998 and December 26, 1997,
respectively. Net proceeds received from the sale of credit card
receivables were $3.093 billion at March 31, 1998 and $3.057 billion at
December 31, 1997, of which $21.5 million and $29.3 million,
respectively, was deposited in an investor reserve account held by the
trustee of the Metris Master Trust for the benefit of the Metris Master
Trust's certificateholders.
During the first quarter, the Fingerhut Master Trust was amended to
include certain revolving receivables and certain previously unsold, new
customer installment receivables. As a result of this the Company
terminated an agreement to sell revolving receivables to a third party
conduit.
In April 1998, the Company issued Series 1998-1 and Series 1998-2
securities to third parties. This generated net proceeds of $897.0
million of which $790.0 million was used to pay down the entire principal
portion of the 1997-1 Series. Approximately $102.5 million of the
remaining proceeds was used to reduce the Class A Variable Funding
Certificate issued under Series 1994-2.
The Revolving Credit Facilities provide for aggregate commitments of up
to $500.0 million, of which $200.0 million represents the Company's
credit facility and $300.0 million represents Metris' credit facility,
which is currently guaranteed by the Company. The expiration date for
both facilities is September 2001. As of March 27, 1998, outstanding
revolving credit balances totaled $130.0 million, of which $130 million
related to Metris and outstanding letters of credit totaled $7.8 million,
of which $6.3 million and $1.5 million related to the Company and Metris,
respectively. As of March 28, 1997, outstanding revolving credit
balances totaled $208.0 million, of which $106.0 million and $102.0
million related to the Company and Metris, respectively and the Company's
outstanding letters of credit totaled $7.4 million. Additional
outstanding open letters of credit under a separate agreement aggregated
$29.2 million and $28.4 million at March 27, 1998 and March 28, 1997,
respectively.
The Company had an aggregate amount of fixed rate notes outstanding of
$345.0 million of which $245.0 and $100.0 related to the Company and
Metris, respectively, as of March 27, 1998 and $270.0 million as of March
28, 1997.
The Company generated $41.9 million in cash from operations during the 13-
week period ended March 27, 1998 compared with $101.9 million used for
operations during the related period in 1997. This $143.8 million net
increase in cash generated by operations resulted primarily from a
significant decrease in the Retail Segments accounts receivable, net, and
an increase in payables due to Metris credit card securitizations, net.
Net cash used by investing activities for the 13-week period ended March
27, 1998 was $7.3 million, compared to $4.9 million for the comparable
period in 1997.
Net cash used by financing activities for the 13-week period ended March
27, 1998 was $12.5 million, compared with $132.5 million generated for
the comparable period in 1997. The $145.0 million net decrease was due
to lower working capital requirements for the Retail Segment, which
required lower utilization of the revolving credit facility in the
current year.
During 1994, the Company's Board of Directors authorized the repurchase
of up to 2.5 million shares of the Company's common stock that may be
made from time to time at prevailing prices in the open market or by
block purchase and may be discontinued at any time. The purchases are
made within certain restrictions relating to volume, price and timing in
order to minimize the impact of the purchase on the market for the
Company's common stock. During the current 13-week period, no stock was
repurchased. Total purchases to date under this plan were 1,612,200
shares for an aggregate of $24.9 million.
On April 23, 1998, the Company declared a cash dividend in the amount of
$.04 per share, aggregating approximately $1.9 million, payable on May
21, 1998, to the shareholders of record as of the close of business on
May 7, 1998.
In April 1998, the Company issued 8,618 shares of common stock under the
Fingerhut Companies, Inc. Employee Stock Purchase Plan.
The Company believes it will have sufficient funds available to meet
current and future commitments.
FINGERHUT COMPANIES, INC.
FORWARD LOOKING STATEMENTS
This quarterly report contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. These
statements include statements regarding intent, belief or current
expectations of the Company and its management. Shareholders and
prospective investors are cautioned that any such forward-looking
statements are not guarantees of future performance and involve a number
of risks and uncertainties that may cause the Company's actual results to
differ materially from the results discussed in the forward-looking
statements, including: general economic conditions affecting disposable
consumer income such as employment, business conditions, interest rates
and taxation; risks associated with unsecured credit transactions;
interest rate risks; seasonal variations in consumer purchasing
activities; increases in postal and paper costs; competition in the
retail and direct marketing industry; dependence on the securitization of
accounts receivable and credit card loans to fund operations; state and
federal laws and regulations related to advertising, offering and
extending credit, charging and collecting state sales/use taxes; product
safety; and risks of doing business with foreign suppliers. Each of
these factors is more fully discussed in Exhibit 99 to the Company's
Annual Report on Form 10-K for the fiscal year ended December 26, 1997.
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
11 Computation of Earnings per Share
27 Financial Data Schedule
(b) Reports on Form 8-K:
None
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.
FINGERHUT COMPANIES, INC.
Date: May 5, 1998 By:
/s/ Gerald T. Knight
Gerald T. Knight
Chief Financial Officer
(Principal Financial Officer)
Date: May 5, 1998 By:
/s/ John C. Manning
John C. Manning
Vice President, Finance
Date: May 5, 1998 By:
/s/ Thomas C. Vogt
Thomas C. Vogt
Corporate Controller
(Principal Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
consolidated financial statements of Fingerhut Companies, Inc. for the fiscal
quarter ended March 27, 1998 and is qualified in its entirety by reference to
such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-25-1998
<PERIOD-END> MAR-27-1998
<CASH> 167,494
<SECURITIES> 0
<RECEIVABLES> 907,948
<ALLOWANCES> 181,101
<INVENTORY> 121,918
<CURRENT-ASSETS> 1,320,922
<PP&E> 492,175
<DEPRECIATION> 225,272
<TOTAL-ASSETS> 1,699,102
<CURRENT-LIABILITIES> 608,408
<BONDS> 345,187
0
0
<COMMON> 465
<OTHER-SE> 677,578
<TOTAL-LIABILITY-AND-EQUITY> 1,699,102
<SALES> 272,964
<TOTAL-REVENUES> 378,887
<CGS> 128,651
<TOTAL-COSTS> 356,286
<OTHER-EXPENSES> 2,014
<LOSS-PROVISION> 37,530
<INTEREST-EXPENSE> 10,279
<INCOME-PRETAX> 10,308
<INCOME-TAX> 4,803
<INCOME-CONTINUING> 5,505
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,505
<EPS-PRIMARY> .12
<EPS-DILUTED> .11
</TABLE>
<TABLE>
Exhibit 11
FINGERHUT COMPANIES, INC. AND SUBSIDIARIES
Computation of Earnings Per Share
(In thousands of dollars, except per share data)
Unaudited
Thirteen Weeks Ended
March 27, March 28,
1998 1997
Basic
<S> <C> <C> <C> <C>
Net earnings (a) $ 5,505 $ 2,561
Weighted average shares of common stock
outstanding 46,383,255 46,169,024
Basic earnings per share of common
stock (a/b) $ .12 $ .06
Diluted
Net earnings (c) $ 5,505 $ 2,561
Weighted average shares of common
stock outstanding 46,383,255 46,169,024
Common stock equivalents 4,091,203 2,455,187
Weighted average shares of common stock
and common stock equivalents (d) 50,474,458 48,624,211
Diluted earnings per share of common
stock and common stock equivalents
(c/d) $ .11 $ .05
Common stock equivalents for diluted earnings per share are
computed by the treasury stock method using the average market
price.
</TABLE>
