<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
-----------
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
For the quarterly period ended SEPTEMBER 30, 1998
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 1-9169
BERNARD CHAUS, INC.
(Exact Name of Registrant as Specified in its Charter)
New York 13-2807386
- -------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. employer identification
incorporation or organization) number)
1410 Broadway, New York, New York 10018
- -------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (212) 354-1280
--------------
---------------------------------------------------
Former name, former address and former fiscal year,
if changed since last report
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days Yes X No .
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Date Class Shares Outstanding
---- ----- ------------------
November 2, 1998 Common Stock, $0.01 par value 27,115,907
- -------------------- --------------------------------- --------------
<PAGE>
BERNARD CHAUS, INC. AND SUBSIDIARIES
INDEX
PART I FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited) PAGE
Condensed Consolidated Balance Sheets as of
September 30, 1998, June 30, 1998 and
September 30, 1997 3
Condensed Consolidated Statements of Operations
for the Three Months ended September 30, 1998 and 1997 4
Condensed Consolidated Statements of Cash Flows
for the Three Months ended September 30, 1998 and 1997 5
Notes to Condensed Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9-12
PART II OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 13
SIGNATURES 14
2
<PAGE>
PART I -- FINANCIAL INFORMATION
Item 1. Financial Statements
BERNARD CHAUS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except number of shares)
<TABLE>
<CAPTION>
September 30, June 30, September 30,
1998 1998 1997
------------- -------- -------------
(Unaudited) (*) (Unaudited)
<S> <C> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents $ 135 $ 2,039 $ 236
Accounts receivable, net 34,823 17,289 29,159
Inventories 18,956 17,486 22,549
Prepaid expenses 370 362 565
--------- --------- ---------
Total current assets 54,284 37,176 52,509
Fixed assets-- net 977 960 1,157
Other assets 697 876 782
--------- --------- ---------
$ 55,958 $ 39,012 $ 54,448
========= ========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Notes payable-- banks $ 14,233 $ -- $ 56,178
Accounts payable 11,937 13,005 19,003
Accrued expenses 5,120 4,492 5,822
Accrued restructuring expenses -- -- 1,383
Term loan-- current 1,000 1,000 --
--------- --------- ---------
Total current liabilites 32,290 18,497 82,386
Subordinated promissory notes -- -- 27,121
Term loan 13,250 13,500
--------- ---------
45,540 31,997 109,507
STOCKHOLDERS' EQUITY/(DEFICIENCY)
Preferred stock, $.01 par value,
authorized shares -- 1,000,000,
outstanding shares -- none
Common stock, $.01 par value, authorized shares
-- 50,000,000; issued shares -- 27,178,177
at September 30, 1998 and June 30, 1998,
2,689,997 at September 30, 1997 272 272 27
Additional paid-in capital 125,224 125,224 65,705
Deficit (113,598) (117,001) (119,311)
Less: Treasury stock at cost --
62,270 shares at September 30, 1998
and June 30, 1998, 622,700 shares
at September 30, 1997 (1,480) (1,480) (1,480)
--------- --------- ---------
Total stockholders' equity/(deficiency) 10,418 7,015 (55,059)
--------- --------- ---------
$ 55,958 $ 39,012 $ 54,448
========= ========= =========
</TABLE>
* Derived from audited financial statements as of June 30, 1998.
See accompanying notes to condensed consolidated financial statements.
3
<PAGE>
BERNARD CHAUS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except number of shares and per share amounts)
For the Quarter Ended
September 30,
1998 1997
------------ ------------
(Unaudited)
Net Sales $ 49,672 $ 58,856
Cost of goods sold 35,880 44,432
------------ ------------
Gross profit 13,792 14,424
Selling, general and administrative expenses 9,701 10,051
------------ ------------
Income from operations 4,091 4,373
Interest expense (622) (2,319)
Other income (expense), net 4 (3)
------------ ------------
Income before provision for income taxes 3,473 2,051
Provision for income taxes 70 50
------------ ------------
Net income $ 3,403 $ 2,001
============ ============
Basic and diluted earnings per share $ 0.13 $ 0.30
============ ============
Weighted average number of
common shares outstanding-- basic 27,116,000 6,687,000
============ ============
Weighted average number of
common and common
equivalent shares outstanding-- diluted 27,196,000 6,687,000
============ ============
See accompanying notes to condensed consolidated financial statements.
4
<PAGE>
BERNARD CHAUS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
For the Quarter Ended
----------------------------
September 30, September 30,
1998 1997
------------- -------------
(Unaudited)
OPERATING ACTIVITIES
Net income $ 3,403 $ 2,001
Adjustments to reconcile net income
to net cash used in operating activities:
Depreciation and amortization 363 196
Provision for losses on accounts receivable 20 20
Deferred interest on subordinated promissory
notes -- 747
Non-cash interest expense 9 --
Changes in operating assets and liabilities:
Accounts receivable (17,554) (21,728)
Inventories (1,470) 1,197
Prepaid expenses and other assets (19) 8
Accounts payable (1,068) (822)
Accrued expenses 628 429
Accrued restructuring expenses -- (467)
-------- --------
Net Cash Used In Operating Activities (15,688) (18,419)
-------- --------
INVESTING ACTIVITIES
Purchases of fixed assets (136) (73)
Purchases of other assets (63) (24)
-------- --------
Net Cash Used In Investing Activities (199) (97)
-------- --------
FINANCING ACTIVITIES
Net proceeds from short-term bank borrowings 14,233 18,422
Principal payment on term loan (250) 0
-------- --------
Net Cash Provided By Financing Activities 13,983 18,422
-------- --------
Decrease in cash and cash equivalents (1,904) (94)
Cash and Cash Equivalents, Beginning of Period 2,039 330
-------- --------
Cash and Cash Equivalents, End of Period $ 135 $ 236
======== ========
Cash Paid for:
Taxes $ 162 $ 7
Interest $ 574 $ 1,483
See accompanying notes to condensed consolidated financial statements.
5
<PAGE>
BERNARD CHAUS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Three Months Ended September 30, 1998 and September 30, 1997
1. Summary Of Significant Accounting Policies
Basis of Presentation: The accompanying unaudited condensed
consolidated 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 Rule 10-01 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, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included. All
significant intercompany balances and transactions were eliminated. Operating
results for the quarter ended September 30, 1998 are not necessarily indicative
of the results that may be expected for the year ending June 30, 1999 or any
other period. The balance sheet at June 30, 1998 has been derived from the
audited financial statements at that date. For further information, refer to
the financial statements and footnotes thereto included in the Company's Annual
Report on Form 10-K/A for the year ended June 30, 1998.
Earnings Per Share: All share and per share data reflects the 1 for 10
reverse stock split which was effected December 9, 1997. Basic earnings per
share has been computed by dividing the applicable net income by the weighted
average number of common shares outstanding. Diluted earnings per share has
been computed by dividing the applicable net income by the weighted average
number of common shares outstanding and common stock equivalents. At September
30, 1997, the calculation of basic and diluted earnings per share reflects the
retroactive adjustment for the bonus element of the Rights Offering, which was
consummated on January 26, 1998. At September 30, 1998 and September 30, 1997,
52,500 and 717,000 common stock equivalents, respectively, were not included in
the computation of earnings per share as they were antidilutive.
2. Inventories
Inventories (principally finished goods) are stated at the lower of
cost, using the first-in first-out (FIFO) method, or market. Included in
inventories is merchandise in transit of approximately $4.8 million at
September 30, 1998, $7.2 million at June 30, 1998 and $7.0 million at September
30, 1997.
3. Financing Agreement
The Company and BNY Financial Corporation, a wholly owned subsidiary
of The Bank of New York ("BNYF"), entered into a financing agreement in July
1991, which was amended and restated on several occasions (as amended, the "Old
Bank Debt Agreement").
On October 10, 1997, the Company and BNYF entered into a new revolving
credit facility (the "New Revolving Facility") and a new term loan facility
(the "New Term Loan" and, together with the New Revolving Facility, the "New
Financing Agreement"). The New Financing Agreement consisted of two facilities:
(i) the New Revolving Facility, which was a $66.0 million five-year revolving
credit line with a $20 million sublimit for letters of credit, and (ii) the New
Term Loan,
6
<PAGE>
BERNARD CHAUS, INC. AND SUBSIDIARIES
which was a $15.0 million term loan facility. On June 3, 1998, the Company and
BNYF amended the New Financing Agreement to provide for a $45.5 million
five-year revolving credit line with a $34.0 million sublimit for letters of
credit and a $14.5 million term loan facility. Each facility matures on
December 31, 2002.
Interest on the New Revolving Facility accrues at 1/2 of 1% above the
Prime Rate (8.25% at September 30, 1998) and is payable on a monthly basis, in
arrears. Interest on the New Term Loan accrues at an interest rate ranging from
1/2 of 1% above the Prime Rate to 1 1/2% above the Prime Rate, which interest
rate will be determined, from time to time, based upon the Company's
availability under the New Revolving Facility. With the exception of warrants
issued to BNYF (as discussed below), the Company's execution of the New
Financing Agreement did not require the payment of any commitment, closing,
administration or facility fees. The New Financing Agreement provides for
service charges and letter of credit fees on substantially the same terms as
those existing under the Company's Old Bank Debt Agreement with BNYF. As part
of the New Financing Agreement, BNYF's then existing warrants were
extinguished, and BNYF received new warrants (the "BNYF Warrants") to purchase
an aggregate of 162,500 shares of the Company's Common Stock. The issuance of
the BNYF Warrants was recorded in the third quarter of fiscal 1998 at a value
of $0.1 million and was included as an increase in additional paid-in capital
and will be charged to interest expense over the term of the New Financing
Agreement.
Amortization payments in the amount of $250,000 are payable quarterly
in arrears in connection with the New Term Loan. Three amortization payments
have been made as of September 30, 1998. A balloon payment in the amount of
$10.25 million is due on December 31, 2002. In the event of the earlier
termination by the Company of the New Financing Agreement, the Company will be
liable for termination fees initially equal to $2.8 million, and declining to
$2.2 million after October 8, 2000. The Company's obligations under the New
Financing Agreement are secured by a first priority lien on substantially all
of the Company's assets, including the Company's accounts receivable, inventory
and trademarks.
The New Financing Agreement contains financial covenants requiring,
among other things, the maintenance of minimum levels of tangible net worth,
working capital and maximum permitted loss (minimum permitted profit).
4. Restructuring
In June 1997, the Company announced a proposed restructuring program
to be implemented by the Company. In September 1997, the disinterested members
of the Board of Directors of the Company unanimously approved the restructuring
plan which provided for the following: (i) the Company would raise, through an
offer of rights to subscribe ("Rights"), up to $20.0 million, but not less than
$12.5 million, of equity through a rights offering to all shares of Common
Stock of the Company (the "Rights Offering") of up to 13,977,270 shares of
Common Stock of the Company (on a post stock split basis); (ii) the conversion
of approximately $40.6 million of the Company's indebtedness to Ms. Chaus,
consisting of $28.1 million of then existing subordinated indebtedness
(including accrued interest through January 28, 1998) and $12.5 million of
additional indebtedness owed to Ms. Chaus, into 10,510,910 shares of Common
Stock of the Company; (iii) the New Financing Agreement; (iv) the
implementation of a reverse stock split of the Company's Common Stock such that
every ten (10) shares of Common Stock would be converted into one (1) share of
7
<PAGE>
BERNARD CHAUS, INC. AND SUBSIDIARIES
Common Stock; and (v) the liquidation of the Company's retail outlet stores. On
October 10, 1997, the Company entered into the New Financing Agreement referred
to in (iii) above. On December 9, 1997, the reverse stock split described in
(iv) above became effective. By mid-January, the Company closed all of its
retail outlet stores as referenced in (v) above. On January 26, 1998, the
Rights Offering described in (i) above was consummated. On January 29, 1998,
the conversion of indebtedness into equity described in (ii) above was
completed.
8
<PAGE>
BERNARD CHAUS, INC. AND SUBSIDIARIES
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Results of Operations
In the quarter ended September 30, 1998, net sales decreased by $9.2
million or 15.6% as compared to the quarter ended September 30, 1997. The sales
decrease is primarily due to a decrease in retail store sales ($5.7 million)
related to the closing of all but one of the Company's retail outlet stores
during the second quarter of fiscal 1998, a decrease in sales associated with
the Company's Nautica licensed product line ($2.4 million), and the late timing
of fall shipments a year ago. Due to the Company's financial restructuring last
year, fall goods were not shipped until July 1997, whereas this year fall goods
were shipped beginning in June. On a comparable basis, net sales for fall
products shipped in June 1998 through September 1998 increased approximately
16% over net sales of fall products shipped in July 1997 through September
1997.
In the quarter ended September 30, 1998, exclusive of sales associated
with the retail outlet stores, units shipped decreased by 11.5% with a 5.5%
increase in the average selling price per unit from the comparable period last
year. The increase in average selling price per unit for the quarter resulted
from the Company's ability to decrease its off-price sales and increase its
price points in conjunction with its improved product mix.
Gross profit as a percentage of net sales increased to 27.8% for the
quarter ended September 30, 1998 as compared to 24.5% for the quarter ended
September 30, 1997. The increase in gross profit as a percentage of net sales
was primarily due to improved gross margins on the Chaus product lines as a
result of an improved initial mark-up and the elimination of the retail
division which carried a lower gross profit percentage. This improvement was
partially offset by the reduction in gross profit percentage of the Nautica
licensed product line.
Selling, general and administrative ("SG&A") expenses decreased by
$0.4 million for the quarter ended September 30, 1998 as compared with the
quarter ended September 30, 1997. This decrease was primarily attributable to
the closing of all but one of the Company's retail outlet stores during the
second quarter of fiscal 1998 ($1.3 million), offset by increased expenses
related to the Company's Nautica licensed product line ($0.3 million) and
increases in salary expense related to the Company's Chaus product line ($0.3
million) and other SG&A expenses ($0.3 million). SG&A expenses as a percentage
of net sales increased from 17.1% for the quarter ended September 30, 1997 to
19.5% for the quarter ended September 30, 1998. The increase is primarily due
to a decrease in sales of the Nautica license product line and the timing of
fall shipments, as discussed above, as compared to a relatively fixed SG&A
expense structure.
Interest expense for the quarter ended September 30, 1998 decreased by
$1.7 million from the comparable period last year as a result of decreases in
bank borrowings and the conversion of subordinated debt to equity in connection
with the Company's Restructuring (as defined below) which was completed on
January 29, 1998.
9
<PAGE>
BERNARD CHAUS, INC. AND SUBSIDIARIES
Financial Position, Liquidity and Capital Resources
General
Net cash used in operating activities was $15.7 million for the
quarter ended September 30, 1998 as compared to $18.4 million for the quarter
ended September 30, 1997. Cash used in operating activities resulted from an
increase in accounts receivable of $17.6 million, an increase in inventory of
$1.5 million and a decrease in accounts payable of $1.1 million, offset by net
income of $3.4 million.
Financing Agreement
The Company and BNY Financial Corporation, a wholly owned subsidiary
of The Bank of New York ("BNYF"), entered into a financing agreement in July
1991, which was amended and restated on several occasions (as amended, the "Old
Bank Debt Agreement").
On October 10, 1997, the Company and BNYF entered into a new revolving
credit facility (the "New Revolving Facility") and a new term loan facility
(the "New Term Loan" and, together with the New Revolving Facility, the "New
Financing Agreement"). The New Financing Agreement consisted of two facilities:
(i) the New Revolving Facility which was a $66.0 million five-year revolving
credit line with a $20.0 million sublimit for letters of credit, and (ii) the
New Term Loan which was a $15.0 million term loan facility. On June 3, 1998,
the Company and BNYF amended the New Revolving Facility to provide for a $45.5
million five-year revolving credit line with $34.0 million sublimit for letters
of credit and amended the New Term Loan to provide for a $14.5 million term
loan facility. Each facility matures on December 31, 2002. See Note 3 to
Condensed Consolidated Financial Statements. At September 30, 1998, the Company
had availability of approximately $5.5 million (inclusive of overadvance
availability) under the New Financing Agreement.
The New Financing Agreement contains financial covenants requiring,
among other things, the maintenance of minimum levels of tangible net worth,
working capital and maximum permitted loss (minimum permitted profit).
Restructuring Program
In June 1997, the Company announced a proposed restructuring program
to be implemented by the Company. In September 1997, the disinterested members
of the Board of Directors of the Company unanimously approved the restructuring
plan (the "Restructuring") which provided for the following: (i) the Company
raised, through an offer of rights to subscribe ("Rights"), up to $20.0
million, but not less than $12.5 million, of equity through a rights offering
to all shares of Common Stock of the Company (the "Rights Offering") of up to
13,977,270 shares of Common Stock of the Company (on a post stock split basis);
(ii) the conversion of approximately $40.6 million of the Company's
indebtedness to Ms. Chaus, consisting of $28.1 million of then existing
subordinated indebtedness (including accrued interest through January 28, 1998)
and $12.5 million of additional indebtedness owed to Ms. Chaus, into 10,510,910
shares of Common Stock of the Company; (iii) the New Financing Agreement; (iv)
the implementation of a reverse stock split of the Company's Common Stock such
that every ten (10) shares of Common Stock would be converted into one (1)
10
<PAGE>
BERNARD CHAUS, INC. AND SUBSIDIARIES
share of Common Stock; and (v) the liquidation of the Company's retail outlet
stores. On October 10, 1997, the Company entered into the New Financing
Agreement referred to in (iii) above. On December 9, 1997, the reverse stock
split described in (iv) above became effective. By mid-January 1998, the
Company closed all of its retail outlet stores as referenced in (v) above. On
January 26, 1998, the Rights Offering described in (i) above was consummated.
On January 29, 1998, the conversion of indebtedness into equity described in
(ii) above was completed.
Nautica License Agreement
On October 23, 1998, the Company discontinued its license agreement
with Nautica Enterprises, Inc. under which it had an exclusive license to
manufacture, market, distribute and sell licensed product for women under the
Nautica brand name. The fiscal quarter includes a net loss of $1.0 million, or
a loss of $0.4 per diluted share, associated with the licensed Nautica
business. The Company will discontinue shipping Nautica products after Holiday
deliveries are made in the second quarter of fiscal 1999. The conclusion of the
Nautica license is expected to have a positive impact on the Company's earnings
in the future.
Year 2000 Compliance
The Company has prepared a plan to become Year 2000 compliant.
Pursuant to the Company's Year 2000 Plan, major segments of the Company's
information technology ("IT") and non-IT systems have been upgraded and tested
to become Year 2000 compliant. The Company anticipates that the remaining IT
and non-IT systems should be upgraded and tested to be Year 2000 compliant by
the first quarter of calendar 1999. The total costs of these system upgrades is
projected to approximate $0.4 million. As of September 30, 1998, the Company
incurred $0.2 million of these costs. The remaining $0.2 million will be funded
out of existing cash flows from operations. Given that the Company expects to
be Year 2000 compliant by the first quarter of calendar 1999, the Company has
not prepared a contingency plan and does not currently believe that a
contingency plan is necessary.
In some cases, the Company's computer systems are linked to its major
customers and the Company is in the process of assessing its customers'
compliance with Year 2000. The Company has had correspondence from its major
customers regarding Year 2000. The Company's major customers have advised the
Company that they generally comply with VICS (Voluntary Interindustry Commerce
Standards) standards. VICS establishes standards that simplify the flow of
product and information in the general merchandise retail industry for
retailers and suppliers alike. The Company expects to be compliant with VICS
Year 2000 Electronic Data Interchange standards by the end of calendar 1998.
The Company has virtually no computer interfaces with its vendors: however, it
does not know the extent to which its vendors, or its customers, would be
impaired by their own Year 2000 issues and its impact on the Company. The costs
of assessing compliance are expected to be minimal. Although the Company
believes it is adequately addressing its Year 2000 issues, the failure to
correct a material Year 2000 problem could result in an interruption in, or a
failure of, certain normal business activities or operations. Such failure
could materially adversely affect the Company's results of operations,
liquidity and financial condition.
11
<PAGE>
BERNARD CHAUS, INC. AND SUBSIDIARIES
Future Financing Requirements
At September 30, 1998, the Company had working capital of $22.0
million. The Company's business plan requires the availability of sufficient
cash flow and borrowing capacity to finance its product lines. The Company
expects to satisfy such requirements through cash flow from operations and
borrowings under the New Financing Agreement.
Although there can be no assurance, the Company believes that it has
adequate resources to meet its needs for the foreseeable future, assuming it
meets its business plan.
The foregoing discussion contains forward-looking statements which are
based upon current expectations and involve a number of uncertainties, the
Company's ability to maintain its borrowing capabilities under the New
Financing Agreement, retail market conditions and consumer acceptance of the
Company's products.
12
<PAGE>
BERNARD CHAUS, INC. AND SUBSIDIARIES
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Attached hereto as Exhibits are the following:
27 Financial Data Schedules
(b) The Company filed no reports on Form 8-K during the quarter
ended September 30, 1998.
13
<PAGE>
BERNARD CHAUS, 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.
BERNARD CHAUS, INC.
(Registrant)
Date: November 5, 1998 By: /s/ Josephine Chaus
------------------------
JOSEPHINE CHAUS
Chairwoman of the Board and
Office of the Chairman
Date: November 5, 1998 By: /s/ Andrew Grossman
----------------------------
ANDREW GROSSMAN
Chief Executive Officer and
Office of the Chairman
Date: November 5, 1998 By: /s/ Stuart S. Levy
----------------------------
STUART S. LEVY
Chief Financial Officer and
Secretary
14
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1000
<CURRENCY> U.S. DOLLARS
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 3-MOS
<FISCAL-YEAR-END> JUN-30-1999 JUN-30-1998
<PERIOD-START> JUL-1-1998 JUL-1-1997
<PERIOD-END> SEP-30-1998 SEP-30-1997
<EXCHANGE-RATE> 1 1
<CASH> 135 236
<SECURITIES> 0 0
<RECEIVABLES> 36,770 30,334
<ALLOWANCES> 1,947 1,175
<INVENTORY> 18,956 22,549
<CURRENT-ASSETS> 54,284 52,509
<PP&E> 4,871 6,126
<DEPRECIATION> 3,894 4,969
<TOTAL-ASSETS> 55,958 54,448
<CURRENT-LIABILITIES> 32,290 82,386
<BONDS> 0 0
0 0
0 0
<COMMON> 272 27
<OTHER-SE> 10,146 (55,659)
<TOTAL-LIABILITY-AND-EQUITY> 55,958 54,448
<SALES> 49,672 58,856
<TOTAL-REVENUES> 49,672 58,856
<CGS> 35,880 44,432
<TOTAL-COSTS> 45,581 54,483
<OTHER-EXPENSES> (4) (3)
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 622 2,319
<INCOME-PRETAX> 3,473 2,051
<INCOME-TAX> 70 50
<INCOME-CONTINUING> 3,403 2,001
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 3,403 2,001
<EPS-PRIMARY> .13 .30
<EPS-DILUTED> .13 .30
</TABLE>
