10Q-94-08--09--As Filed with the S.E.C.
FORM 10-Q
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[ x ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended August 28, 1994
-----------------
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: 0-14394
-------
TOWN & COUNTRY CORPORATION
--------------------------
(Exact name of Registrant as specified in its charter)
Massachusetts 04-2384321
---------------------------------------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or Identification
organization) Number)
25 Union Street, Chelsea, Massachusetts 02150
----------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (617) 884-8500
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
---- ----
On October 4, 1994, the Registrant had outstanding 20,761,951 shares of Class A
Common Stock, $.01 par value and 2,670,498 shares of Class B Common Stock, $.01
par value.
<PAGE>
TOWN & COUNTRY CORPORATION Form 10-Q
Page 2
PART 1 - FINANCIAL INFORMATION
Item 1. Financial Statements
CONSOLIDATED BALANCE SHEETS
August 28, February 27,
1994 1994
ASSETS (Unaudited)
CURRENT ASSETS:
Cash and cash equivalents $ 1,845,842 $ 3,273,876
Restricted cash 236,346 37,971
Accounts receivable--
Less allowances for doubtful
accounts of $6,393,000 at
08/28/94 and $5,510,000 at
2/27/94 58,735,209 55,623,418
Inventories (Note 4) 83,504,309 75,029,397
Prepaid expenses & other current
assets 4,510,082 3,991,883
Total current assets $148,831,788 $137,956,545
PROPERTY, PLANT & EQUIPMENT, at cost $ 81,250,152 $ 79,340,723
Less - Accumulated depreciation 36,510,665 33,636,099
$ 44,739,487 $ 45,704,624
INVESTMENT IN AFFILIATES (Note 6) $ 27,421,089 $ 27,038,089
OTHER ASSETS (Note 2) $ 8,551,322 $ 13,221,467
$229,543,686 $223,920,725
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE>
TOWN & COUNTRY CORPORATION Form 10-Q
Page 3
CONSOLIDATED BALANCE SHEETS (Continued)
August 28, February 27,
1994 1994
LIABILITIES AND STOCKHOLDERS' EQUITY (Unaudited)
CURRENT LIABILITIES:
Notes payable (Note 3) $ 15,425,817 $ --
Current portion of long-term debt 1,718,427 1,479,590
Accounts payable 21,276,580 12,727,357
Accrued expenses 12,040,486 19,956,332
Accrued and currently deferred
income taxes 1,075,496 874,253
Total current liabilities $ 51,536,806 $ 35,037,532
LONG-TERM DEBT, less current portion
(Note 3) $ 90,480,590 $ 91,827,239
OTHER LONG-TERM LIABILITIES $ 1,872,830 $ 2,093,755
Total liabilities $ 143,890,226 $ 128,958,526
COMMITMENTS AND CONTINGENCIES (Note 2)
MINORITY INTEREST $ 4,167,131 $ 3,843,117
EXCHANGEABLE PREFERRED STOCK, $1.00
par value-
Authorized--2,700,000 shares
Issued and outstanding--2,533,255
shares (Note 3) $ 36,732,147 $ 35,785,399
STOCKHOLDERS' EQUITY (Note 3):
Preferred stock, $1.00 par value-
Authorized and unissued--2,300,000
shares $ -- $ --
Class A Common Stock, $ .01 par value-
Authorized--40,000,000 shares
Issued and outstanding--20,761,951
and 20,755,901 shares, respectively 207,619 207,559
Class B Common Stock, $.01 par value-
Authorized--8,000,000 shares
Issued and outstanding--2,670,498
and 2,670,693 shares, respectively 26,705 26,707
Additional paid-in capital 69,924,064 69,909,485
Retained deficit (25,404,206) (14,810,068)
Total stockholders' equity $ 44,754,182 $ 55,333,683
$ 229,543,686 $ 223,920,725
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE>
TOWN & COUNTRY CORPORATION Form 10-Q
Page 4
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
For the Three Months Ended For the Six Months Ended
August 28, August 29, August 28, August 29,
1994 1993 1994 1993
<S> <C> <C> <C> <C>
NET SALES $54,799,928 $51,063,035 $125,368,388 $115,188,767
COST OF SALES 40,063,415 34,692,194 86,012,585 74,167,161
Gross profit $14,736,513 $16,370,841 $ 39,355,803 $ 41,021,606
SELLING, GENERAL &
ADMINISTRATIVE
EXPENSES 18,527,260 16,571,007 42,875,511 37,050,187
Income (loss) from
operations $(3,790,747) $ (200,166) $ (3,519,708) $ 3,971,419
INTEREST EXPENSE, (2,782,404) (2,475,977) (5,342,491) (7,218,075)
net
INCOME (LOSS) FROM
AFFILIATES 30,000 (208,283) 383,000 246,298
MINORITY INTEREST (200,634) (156,396) (324,014) (487,418)
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE>
TOWN & COUNTRY CORPORATION Form 10-Q
Page 5
CONSOLIDATED STATEMENTS OF OPERATIONS (continued)
(Unaudited)
For the Three Months Ended For the Six Months Ended
August 28, August 29, August 28, August 29,
1994 1993 1994 1993
LOSS BEFORE
INCOME TAXES $(6,743,785) $(3,040,822) $ (8,803,213) $(3,487,776)
PROVISION FOR
INCOME TAXES 425,642 50,000 844,177 102,000
NET LOSS $ (7,169,427) $(3,090,822) $ (9,647,390) $(3,589,776)
ACCRETION OF
DISCOUNT ON
EXCHANGEABLE
PREFERRED STOCK 479,552 455,150 946,748 531,154
LOSS ATTRIBUTABLE
TO COMMON
STOCKHOLDERS $ (7,648,979) $(3,545,972) $(10,594,138) $(4,120,930)
LOSS PER COMMON
SHARE (Note 5): $ (0.33) $ (0.15) $ (0.45) $ (0.22)
WEIGHTED AVERAGE
COMMON SHARES
OUTSTANDING
(Note 5): 23,430,390 23,417,586 23,428,492 18,988,704
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE>
TOWN & COUNTRY CORPORATION Form 10-Q
Page 6
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
For the Six Months Ended
August 28, August 29,
1994 1993
CASH FLOWS FROM OPERATNG ACTIVITIES:
Net loss $ (9,647,390) $ (3,589,776)
Adjustments to reconcile net loss to
net cash used in operating activities-
Depreciation and amortization 2,378,893 3,206,855
Loss (gain) on disposal of certain
assets 3,815 (99,963)
Ordinary dividends received from affiliates -- 2,045,533
Undistributed earnings of affiliates,
net of minority interest (58,986) 364,046
Interest paid with issuance of debt 1,543,116 --
Change in assets and liabilities--
Decrease (increase) in accounts
receivable (3,111,791) (1,575,469)
Decrease (increase) in inventory (8,474,912) (16,194,696)
Decrease (increase) in prepaid
expenses and other current assets (518,199) 2,570,928
Decrease (increase) in other assets 4,494,814 296,815
Increase (decrease) in accounts
payable 8,549,223 7,671,176
Increase (decrease) in accrued
expenses (5,755,492) (4,840,804)
Increase (decrease) in accrued and
current deferred taxes 201,243 (295,495)
Increase (decrease) in other
liabilities (220,925) (80,792)
Net cash used in operating
activities (10,616,591) (10,521,642)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (1,921,818) (2,494,488)
Proceeds from sale of certain assets 1,473 179,689
Proceeds from sale of investments -- 3,485,999
Net cash provided by (used in)
investing activities (1,920,345) 1,171,200
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE>
TOWN & COUNTRY CORPORATION Form 10-Q
Page 7
CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
(Unaudited)
For the Six Months Ended
August 28, August 29,
1994 1993
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on revolving credit facilities $(116,477,032) $ (63,398,512)
Proceeds from borrowings under
revolving credit facilities 131,902,849 81,950,000
Payments on long-term debt (4,133,177) (7,298,009)
Decrease (increase) in restricted cash (198,375) --
Proceeds from the issuance of common
stock 14,637 19,815
Payments to retire credit facility -- (37,250,000)
Proceeds from senior secured notes -- 30,000,000
Payments for recapitalization expenses -- (5,650,917)
Net cash provided by (used in)
financing activities $ 11,108,902 $ (1,627,623)
NET DECREASE IN CASH AND CASH
EQUIVALENTS $ (1,428,034) $ (10,978,065)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 3,273,876 15,353,259
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 1,845,842 $ 4,375,194
SUPPLEMENTAL CASH FLOW DATA:
Cash paid during the period for:
Interest $ 1,957,961 $ 3,060,406
Income taxes 603,739 307,528
Supplemental Disclosure of Non-Cash Investing & Financing Activities:
On May 14, 1993, the Company completed its recapitalization as described in
Note 3. As a result of this transaction, long-term debt with a carrying value of
$122,673,945, including accrued interest and deferred financing costs, was
retired. New debt with a carrying value of $61,486,762, exchangeable preferred
stock valued at $34,331,895, and common stock valued at $26,855,288 were issued
in exchange for these redemptions.
As payment for the commitment to purchase up to 100% of the Company's senior
secured notes, an investor received 750,000 shares of the Company's Class A
common stock with a value of $2,015,625 at the time of issuance.
As of August 28, 1994 and August 29, 1993, accretion of discount on
exchangeable preferred shares has amounted to $946,748 and $531,154,
respectively.
On May 15, 1994, the Company issued approximately $3.7 million in new 13%
Senior Subordinated Notes due May 31, 1998, as payment of the semiannual
interest installment. Approximately $2.2 million of this amount was classified
as accrued expenses in the February 27, 1994, Consolidated Balance Sheet.
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE>
TOWN & COUNTRY CORPORATION Form 10-Q
Page 8
PART I - FINANCIAL INFORMATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AUGUST 28, 1994
(1) Significant Accounting Policies
The unaudited consolidated financial statements presented herein have been
prepared by the Company and contain all adjustments (consisting of only normal
recurring adjustments) necessary to present fairly and on a basis consistent
with the consolidated financial statements for the year ended February 27, 1994,
the Company's financial position as of August 28, 1994, and the results of its
operations for the three- and six-month periods ended August 28, 1994, and
August 29, 1993, and cash flows for the six-month periods ended August 28, 1994,
and August 29, 1993.
The significant accounting policies followed by the Company are set forth in
Note (1) of the Company's consolidated financial statements for the year ended
February 27, 1994, which have been included in the Annual Report on Form 10-K,
Commission File Number 0-14394, for the fiscal year ended February 27, 1994. The
Company has made no change in these policies during the six months ended August
28, 1994.
The consolidated financial statements include the accounts of subsidiary
companies more than fifty percent owned.
The results of operations for the six-month period ended August 28, 1994, are
not necessarily indicative of the results to be expected for the year due to the
seasonal nature of the Company's operations.
(2) Commitments and Contingencies
Zale Bankruptcy
The Company's largest customer for a number of years has been the Zale
Corporation and its affiliated companies, including Gordon Jewelry Corporation.
On July 30, 1993, this group of companies completed a reorganization under
Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy
Court and emerged from bankruptcy as Zale Delaware, Inc. (Zale).
The Company has reached agreement on most issues with the new Zale concerning
the Company's claim of approximately $40 million, filed with the Bankruptcy
Court, representing the net outstanding balance of trade accounts receivable and
the wholesale value of the consignment inventory as of the date of Zale's
bankruptcy petition.
The Company's Consolidated Financial Statements at February 28, 1992, originally
reflected a net valuation of approximately $13 million, which was classified as
Other Assets in the Consolidated Balance Sheets, due to the uncertainty of the
timing of a final settlement. The Company has subsequently received proceeds
from Zale and from liquidation of claim assets of approximately $11.4 million.
The Consolidated Financial
<PAGE>
TOWN & COUNTRY CORPORATION Form 10-Q
Page 9
Statements at August 28, 1994, reflect a net valuation of approximately $1.6
million, representing management's estimate of the value of the remaining claim
related assets.
The Company continues to conduct business with Zale.
(3) Loan Arrangements
In order to significantly reduce the amount of the Company's cash interest and
principal requirements and to satisfy the Company's near-term and long-term
liquidity needs, the Company completed a major recapitalization on May 14, 1993.
This recapitalization revised the Company's consolidated capitalization,
including debt structure, to be consistent with the Company's current and
expected operating performance levels. The amount of debt outstanding was
reduced and a significant portion of the old subordinated debt was exchanged for
new debt, shares of Class A Common Stock and Exchangeable Preferred Stock.
The new debt structure consisted of a new revolving credit agreement which was
obtained from Foothill Capital Corporation to provide secured financing in an
aggregate amount of up to $30 million, new gold consignment agreements which
were obtained from the Company's gold suppliers to provide an aggregate gold
consignment availability of up to approximately 100,000 troy ounces, $30 million
principal amount of 11 1/2% Senior Secured Notes due September 15, 1997, which
were purchased by various investors, and approximately $53 million principal
amount of 13% Senior Subordinated Notes due May 31, 1998, issued as a component
of the exchange.
The results of the exchange offer were:
(a) holders of approximately 93% of the Company's existing 13% Senior
Subordinated Notes due December 15, 1998, exchanged each $1,000
principal amount of those notes for $478.96 principal amount of the
Company's 13% Senior Subordinated Notes due May 31, 1998, $331.00 of
the Company's Exchangeable Preferred Stock, par value $1.00 per share,
and 89.49 shares of the Company's Class A Common Stock, par value
$0.01 per share, and
(b) holders of approximately 98% of the Company's existing 10 1/4%
Subordinated Notes due July 1, 1995, exchanged each $1,000 principal
amount of those notes for $408.11 principal amount of the Company's
13% Senior Subordinated Notes due May 31, 1998, $282.04 of the
Company's Exchangeable Preferred Stock, par value $1.00 per share, and
76.25 shares of the Company's Class A Common Stock, par value $0.01
per share.
The Company reached an agreement with Chemical Bank to change the terms of the
IRB financing for the Company's facility located in New York, New York. This
agreement includes, among other things, an accelerated payment schedule relative
to that which had previously been in place and the release of certain collateral
by Chemical Bank.
<PAGE>
TOWN & COUNTRY CORPORATION Form 10-Q
Page 10
To address seasonality needs, the Company recently entered into an amendment to
the revolving credit agreement to increase the maximum amount available under
the agreement from $30,000,000 to $35,000,000 during the months of September
through December. The Company also entered into an agreement with one of its
gold suppliers to reduce such supplier's consignment obligation by 10,000
ounces. As of August 28, 1994, total ounces available under the gold agreements
were approximately 92,000. Both of these amendments included modifications of
the consolidated tangible net worth covenant. The covenant previously provided
that the Company was required to maintain consolidated tangible net worth of
$38,000,000 through February 27, 1994, and $43,000,000 thereafter. As amended,
the covenant provides that the Company will maintain consolidated tangible net
worth of $40,000,000 from July 1, 1994, through November 26, 1994, and
$43,000,000 thereafter. As of August 28, 1994, approximately $15.4 million was
outstanding under the revolving credit agreement and approximately 69,000 ounces
were on consignment under the gold agreements.
(4) Inventories
Inventories consisted of the following at August 28, 1994, and February 27,
1994:
August 28, February 27,
1994 1994
Raw Materials $15,915,131 $16,753,865
Work-in-Process 9,961,444 7,154,300
Finished Goods 57,627,734 51,121,232
$83,504,309 $75,029,397
(5) Earnings (Loss) Per Common Share
Loss per common share is computed by adjusting the Company's net loss for the
accretion of discount on exchangeable preferred stock and dividing by the
weighted average number of common shares outstanding during each period.
<PAGE>
TOWN & COUNTRY CORPORATION Form 10-Q
Page 11
(6) Investment in Little Switzerland, Inc.
Presented below is summarized financial information (in thousands) for Little
Switzerland, Inc. as of and for the fiscal years ended May 31, 1994, and 1993:
1994 1993
Current Assets $36,581 $40,425
Noncurrent Assets 16,288 13,735
Current Liabilities 9,055 14,049
Noncurrent Liabilities 356 794
Total Equity 43,458 39,317
Sales $64,312 $63,396
Gross Profit 28,344 29,286
Net Income 4,098 5,191
<PAGE>
TOWN & COUNTRY CORPORATION Form 10-Q
Page 12
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations for the Six Months Ended August 28, 1994 Compared to
the Six Months Ended August 29, 1993
Net sales for the six months ended August 28, 1994, increased $10.2 million or
8.8% from $115.2 million in fiscal 1994 to $125.4 million in fiscal 1995.
Current year sales of fine jewelry have increased approximately $12.4 million or
18% over the corresponding period in fiscal 1994. The majority of the increases
in fine jewelry sales have come from the Company's existing discount department
store customers as a result of emphasis by these customers on the promotion of
jewelry sales.
Gross profit for the six months ended August 28, 1994, decreased $1.7 million
from $41 million in fiscal 1994 to $39.3 million in fiscal 1995. Gross profit
margin decreased 4.2% from 35.6% in fiscal 1994 to 31.4% in fiscal 1995. The
Company's sales increase has been primarily in the lower margin fine jewelry
product categories and this change in product mix has negatively impacted gross
profit margin by approximately 0.6%. In its effort to manage inventory levels,
the Company has also sold, or made provisions to sell, inventory in excess of
current requirements, at less than normal margins. These sales and provisions
negatively impacted margin by approximately 1.9%. The Company's inability to
reduce fixed overhead costs, while production requirements for direct response
and other specialty products were lower this year than last year, has negatively
impacted margin by approximately 1.7%. The division which distributes these
products has recently moved to a new facility which the Company believes will
result in lower overhead.
Selling, general, and administrative expenses for the current period increased
approximately $5.8 million or 15.7% from $37.1 million in fiscal 1994 to $42.9
in fiscal 1995. As a percentage of net sales, selling, general, and
administrative expenses were approximately 2% more in the current year than for
the six months ended August 29, 1993. Increases primarily relate to higher costs
associated with the Company's direct response distribution business of licensed
sports and other specialty products in which the Company invested heavily,
particularly in advertising. Sales of these products have not materialized at
the rate anticipated.
Net interest expense for the six months ended August 28, 1994, decreased
approximately $2 million relative to the corresponding period in fiscal 1994.
This decrease is the result of the recapitalization that occurred on May 14,
1993. Approximately $115 million of the Company's long-term debt was exchanged
for approximately $53 million in new debt, approximately $37 million of
exchangeable preferred stock, and approximately 10 million shares of the
Company's Class A stock.
Although the Company had a taxable loss for the six months ended August 28,
1994, the Company recorded a tax provision of approximately $844,000. The tax
provision was primarily due to the Company's inability to fully recognize the
tax benefits of operating losses in certain jurisdictions as well as state and
foreign income taxes.
<PAGE>
TOWN & COUNTRY CORPORATION Form 10-Q
Page 13
Liquidity and Working Capital
Cash used in operating activities for the six months ended August 28, 1994, was
$11 million, approximately the same amount as in the corresponding period in
fiscal 1994, despite a larger current period loss. The current period net loss
includes expenses related to provisions made for inventory and receivable
reserves, in excess of prior year provisions, of approximately $2.4 million.
Lower requirements to purchase diamond inventory resulted in a smaller increase
in inventory in fiscal 1995 than in fiscal 1994. Fiscal 1995 operating cash flow
includes proceeds from the Zale bankruptcy claim of $4.7 million. Fiscal 1994
operating cash flows included $2 million of cash proceeds from dividends related
to the Company's investment in Solomon Brothers, Limited.
Cash used in investing activities was $1.9 million for the six months ended
August 28, 1994, compared with $1.2 million of cash provided by investing
activities in the corresponding period in fiscal 1994. The change is primarily
the result of the $3.5 million benefit realized in fiscal 1994 from a partial
redemption of the preferred share investment in Solomon Brothers, Limited.
Cash provided by financing activities was $11.1 million in the first six months
of fiscal 1995 versus a use of $1.6 million in the corresponding period in
fiscal 1994. The use of financing cash in fiscal 1994 was the result of costs
associated with the recapitalization which was completed on May 14, 1993. Net
cash provided by financing activities in the current period has been used to
fund current operations while fiscal 1994 operations were funded with beginning
period cash. Current period financing cash has been primarily provided by the
Company's revolving credit facility which had an outstanding balance of $15.4
million at August 28, 1994, versus $18.6 million at August 29, 1993. The Company
is required to escrow net proceeds from the Zale claim and Solomon investment
for repayment of Senior Secured Notes. Approximately $3.4 million and $5.5
million of Senior Secured Notes were redeemed with such proceeds during the
first six months of fiscal 1994 and fiscal 1995, respectively.
The Company's net cash position decreased from approximately $3 million at
February 27, 1994, to approximately $2 million at August 28, 1994, compared to a
decrease from $15 million at February 28, 1993, to $4 million at August 29,
1993.
To address seasonality needs, the Company recently entered into an amendment to
the revolving credit agreement to increase the maximum amount available under
the agreement from $30,000,000 to $35,000,000 during the months of September
through December. The Company believes that it can meet its future working
capital needs through cash flow from operations and from its secured borrowing
facility.
<PAGE>
TOWN & COUNTRY CORPORATION Form 10-Q
Page 14
Item 4. Submission of Matters to a Vote of Security-Holders
On July 21, 1994, the Company held its Annual Meeting of Stockholders. At this
meeting, two matters were submitted for a vote of the stockholders: (a) election
of two directors and (b) approval of performance-based compensation arrangements
for the Company's two executive officers. The following votes were cast on the
foregoing matters:
For Withheld
Election of Mone Anathan III 16,839,935 171,893
Election of William Schawbel 16,835,335 176,493
For Against Abstentions
Approval of
Performance-Based
Compensation
Arrangements 19,169,180 424,064 88,048
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
11 Earnings Per Share Computations
27 Financial Data Schedule
(b) Reports on Form 8-K
There were no Form 8-K filings during the second quarter
ended August 28, 1994.
<PAGE>
TOWN & COUNTRY CORPORATION Form 10-Q
Page 15
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.
TOWN & COUNTRY CORPORATION
(Registrant)
Date: October 11, 1994 /s/ Francis X. Correra
-----------------------
Francis X. Correra
Senior Vice President and
Chief Financial Officer
<PAGE>
TOWN & COUNTRY CORPORATION & SUBSIDIARIES EXHIBIT 11
<TABLE>
<CAPTION>
Earnings Per Share Computations
(Unaudited)
For the Three Months Ended For the Six Months Ended
August 28, August 29, August 28, August 29,
1994 1993 1994 1993
<S> <C> <C> <C> <C>
PRIMARY EPS:
Net Loss $ (7,169,427) $ (3,090,822) $ (9,647,390) $ (3,589,776)
Accretion of discount on
Exchangeable Preferred
Stock 479,552 455,150 946,748 531,154
Net loss for EPS
calculation $ (7,648,979) $ (3,545,972) $(10,594,138) $ (4,120,930)
Weighted average common
shares outstanding 23,430,390 23,417,586 23,428,492 18,988,704
Weighted shares issued
from exercise and
assumed execise of:
warrants -- -- -- --
options -- -- -- --
Shares for EPS
calculation 23,430,390 23,417,586 23,428,492 18,988,704
REPORTED EPS:
Loss before accretion of
discount on Exchangeable
Preferred Stock $ (0.31) $ (0.13) $ (0.41) $ (0.19)
Accretion of discount on
Exchangeable Preferred
Stock (0.02) (0.02) (0.04) (0.03)
Net loss per share: $ (0.33) $ (0.15) $ (0.45) $ (0.22)
FULLY DILUTED EPS:
Net loss $ (7,169,427) $ (3,090,822) $ (9,647,390) $ (3,589,776)
Accretion of discount on
Exchangeable Preferred 479,552 455,150 946,748 531,154
Stock
Net loss for EPS
calculation $ (7,648,979) $ (3,545,972) $(10,594,138) $ (4,120,930)
Weighted average common
shares outstanding 23,430,390 23,417,586 23,428,492 18,988,704
Weighted shares issued
from exercise and
assumed exercise of:
warrants -- -- -- --
options -- -- -- --
Shares for EPS calculation 23,430,390 23,417,586 23,428,492 18,988,704
REPORTED EPS:
Loss before accretion of
discount on Exchangeable
Preferred Stock $ (0.31) $ (0.13) $ (0.41) $ (0.19)
Accretion of discount on
Exchangeable Preferred
Stock (0.02) (0.02) (0.04) (0.03)
Net loss per share: $ (0.33) $ (0.15) $ (0.45) $ (0.22)
</TABLE>
This exhibit should be reviewed in conjunction with
Note 5 of Notes to Consolidated Financial Statements.
<TABLE> <S> <C>
<ARTICLE> 5
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> FEB-26-1995
<PERIOD-END> AUG-28-1994
<CASH> 1,845,842
<SECURITIES> 0
<RECEIVABLES> 58,735,209
<ALLOWANCES> 6,393,000
<INVENTORY> 83,504,309
<CURRENT-ASSETS> 148,831,788
<PP&E> 81,250,152
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36,732,147
0
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<EPS-PRIMARY> (0.45)
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</TABLE>
