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 NOVEMBER 29, 1997
or
THE SECURITIES EXCHANGE ACT OF 1934
/ / 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 1-9681
-------
JENNIFER CONVERTIBLES, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 11-2824646
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
419 CROSSWAYS PARK DRIVE, WOODBURY, NEW YORK 11797
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (516) 496-1900
--------------
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
--- ---
(APPLICABLE ONLY TO CORPORATE ISSUERS)
Indicate the number of shares outstanding of the issuer's common stock as
of November 29, 1997: 5,700,725
<PAGE>
JENNIFER CONVERTIBLES, INC. AND SUBSIDIARIES
Index to Consolidated Financial Statements
Part I - Financial Information
Item I - Financial Statements
Consolidated Balance Sheets - November 29, 1997
(Unaudited) and August 30, 1997.............................. 2
Comparative Consolidated Statements of Operations
for the thirteen weeks ended November 29, 1997 and
November 30, 1996 (Unaudited).................................. 3
Comparative Consolidated Statements of Cash Flows
for the thirteen weeks ended November 29, 1997
and November 30, 1996 (Unaudited).............................. 4
Notes to Unaudited Consolidated Financial Statements........... 5
Item 2 - Management's Discussion and Analysis of Financial
Condition and Results of Operations....................9
Part II - Other Information....................................13
<PAGE>
<TABLE>
<CAPTION>
JENNIFER CONVERTIBLES, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(In thousands, except share data)
ASSETS
November 29, 1997 August 30, 1997
----------------- ---------------
(unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 3,205 $ 3,405
Merchandise inventories 9,582 7,943
Accounts receivable 2,001 1,149
Due from Private Company and Unconsolidated Licensees, net
of reserves of $6,898 and $6,898 at November 29, 1997
and August 30, 1997 651 --
Prepaid expenses and other current assets 241 477
-------- --------
Total current assets 15,680 12,974
Store fixtures, equipment and leasehold improvements
at cost, net 7,320 7,669
Deferred lease costs and other intangibles, net 934 1,001
Goodwill, at cost, net 549 553
Other assets (primarily security deposits) 791 801
-------- --------
$ 25,274 $ 22,998
======== ========
LIABILITIES AND (CAPITAL DEFICIENCY)
Current liabilities:
Accounts payable, trade $ 19,093 $ 16,614
Customer deposits 9,670 8,841
Accrued expenses and other current liabilities 4,026 4,777
-------- --------
Total current liabilities 32,789 30,232
Deferred rent and allowances 5,698 5,712
Long-term obligations under capital leases 384 421
-------- --------
Total liabilities 38,871 36,365
-------- --------
Commitments and contingencies
(Capital Deficiency):
Preferred stock, par value $.01 per
share. Authorized 1,000,000 shares;
no shares issued -- --
Common stock, par value $.01 per share
Authorized 10,000,000 shares; issued and
outstanding 5,700,725 shares at November 29, 1997
and August 30, 1997 57 57
Additional paid in capital 22,911 22,911
Notes receivable from warrant holders (300) (300)
Accumulated (deficit) (36,265) (36,035)
-------- --------
(13,597) (13,367)
-------- --------
$ 25,274 $ 22,998
======== ========
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
2
<PAGE>
<TABLE>
<CAPTION>
JENNIFER CONVERTIBLES, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(In thousands, except share data)
(unaudited)
Thirteen weeks Thirteen weeks
ended ended
November 29, 1997 November 30, 1996
----------------- -----------------
<S> <C> <C>
Net sales $ 27,907 $ 27,767
----------- -----------
Cost of sales, including store occupancy,
warehousing, delivery and fabric protection 18,773 18,704
Selling, general and administrative expenses 9,015 9,232
Depreciation and amortization 440 460
----------- -----------
28,228 28,396
----------- -----------
Operating (loss) (321) (629)
----------- -----------
Other income (expense):
Royalty income 101 94
Interest income 23 22
Interest expense (8) (9)
Other income, net 63 120
----------- -----------
179 227
----------- -----------
(Loss) before income taxes (142) (402)
Income taxes 88 49
----------- -----------
Net (loss) $ (230) $ (451)
=========== ===========
Net (loss) per common share $ (0.04) $ (0.08)
=========== ===========
Weighted average number of common shares 5,700,725 5,700,725
=========== ===========
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
3
<PAGE>
<TABLE>
<CAPTION>
JENNIFER CONVERTIBLES INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(in thousands) (unaudited)
Thirteen weeks Thirteen weeks
ended ended
November 29, 1997 November 30, 1996
----------------- -----------------
<S> <C> <C>
Cash flows from operating activities:
Net (loss) $ (230) $ (451)
Adjustments to reconcile net (loss)
to net cash provided by operating activities:
Depreciation and amortization 440 460
Deferred rent (14) (22)
Changes in operating assets and liabilities:
(Increase) in merchandise inventories (1,639) (110)
Decrease in prepaid expenses and other current assets 236 212
(Increase) decrease in accounts receivables (852) 581
(Increase) in due from Private Company
and Unconsolidated Licensees (651) --
Decrease in other assets, net 10 154
Increase in accounts payable trade 2,479 810
Increase (decrease) in customer deposits 829 (284)
(Decrease) in accrued expenses
and other payables (731) (1,719)
------- -------
Net cash (used in) operating activities (123) (369)
------- -------
Cash flows from investing activities:
Capital expenditures (25) (234)
(Increase) in deferred lease costs
and other intangibles (15) (44)
------- -------
Net cash (used in) investing activities (40) (278)
------- -------
Cash flows from financing activities:
Payments of obligations under capital leases (37) 135
------- -------
Net cash (used in) provided by financing activities (37) 135
------- -------
Net (decrease) in cash and cash equivalents (200) (512)
Cash and cash equivalents at beginning of period 3,405 3,600
------- -------
Cash and cash equivalents at end of period $ 3,205 $ 3,088
======= =======
Supplemental disclosure of cash flow information:
Income taxes paid during the period $ 88 $ 49
======= =======
Interest paid $ 8 $ 9
======= =======
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
4
<PAGE>
JENNIFER CONVERTIBLES, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements
For the Thirteen Weeks Ended November 29, 1997
(In thousands except for share amounts)
(1) BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements of
Jennifer Convertibles, Inc. and subsidiaries (the "Company") and certain
licensees 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. Due to many factors inherent in the retail
industry, the operating results for the interim period ended November 29, 1997
are not necessarily indicative of the results that may be expected for the year
ending August 29, 1998. For further information, refer to the consolidated
financial statements and footnotes thereto included in the Company's Annual
Report on Form 10-K for the year ended August 30, 1997.
(2) MERCHANDISE INVENTORIES
Merchandise inventories are stated at the lower of cost (determined
on the first-in, first-out method) or market and are physically located, as
follows:
11/29/97 8/30/97
-------- -------
Showrooms $4,037 $4,271
Warehouses 5,545 3,672
------ ------
$9,582 $7,943
Vendor discounts and allowances in respect to merchandise purchased
by the Company are included as a reduction of inventory and cost of sales.
(3) COMMITMENTS, CONTINGENCIES AND OTHER MATTERS
CLASS ACTION AND DERIVATIVE ACTION LAWSUITS
Between December 6, 1994 and January 5, 1995, the Company was
served with eleven class action complaints and six derivative action lawsuits
which deal with losses suffered as a result of the decline in market value of
the Company's stock as well as the Company having "issued false and misleading
statements regarding future growth prospects, sales, revenues and net income".
The ultimate outcome of these matters is not presently determinable (see below).
5
<PAGE>
JENNIFER CONVERTIBLES, INC.
Notes to Unaudited Consolidated Financial Statements
For the Thirteen Weeks Ended November 29, 1997
(In thousands except for share amounts)
PROPOSED SETTLEMENT OF DERIVATIVE LITIGATION
In March 1996, the Company signed a Memorandum of Understanding
("Derivative Memorandum") for the purpose of settling all of the claims
involving those parties in the derivative litigation. The Derivative Memorandum
is subject to a settlement of all claims against the Company, its present and/or
former officers, directors, certain accountants, consultants and
representatives, the Private Company, its present and/or former officers,
directors, employees, accountants, consultants and/or representatives and the
discontinuance of the class action litigation presently pending. It also is
conditioned pupon mutual releases between the Company and the Private Company.
Attorney's fees will be funded by an insurance carrier for one of the defendants
other than the Company for $500. The Private Company will pay $165 in cash and
the Company will pay the remaining portion of fees and expenses in "Preferred
Stock". The Preferred Stock will have an aggregate value of $130, paying an
annual dividend of 7% and convertible into Common Stock (at such time as the
Company's Common Stock trades at $7.00 per share or higher) at $7.00 per share.
This settlement is subject to final court approval. In accordance with FASB
Statement No. 5, the $130 value of the Preferred Stock had been accrued in the
fiscal year ended August 26, 1995 as part of estimated settlement costs.
A group of shareholders claiming to own approximately 8.5% of the
outstanding shares of the Company have filed (as a group) objections to the
fairness of the settlement in the Derivative Memorandum. The group has requested
deposition and document discovery in advance of any hearing on the fairness of
the settlement, and the Company has provided some document and deposition
discovery voluntarily. However, the group of objectors has made a motion for
additional discovery which the Company has opposed. The motion is still pending.
PROPOSED SETTLEMENT OF CLASS ACTION LITIGATION
In March 1996, the Company and the parties in the class action
litigation signed a Memorandum of Understanding ("Class Memorandum") which is
subject to a Stipulation of Settlement to be submitted to the court for final
approval. The Class Memorandum provides that settlement of the class action
litigation is contingent upon final court approval of the proposed settlement of
the derivative litigation referred to above.
6
<PAGE>
JENNIFER CONVERTIBLES, INC.
Notes to Unaudited Consolidated Financial Statements
For the Thirteen Weeks Ended November 29, 1997
(In thousands except for share amounts)
The Class Memorandum provides for the payment to certain members of
the class and their attorneys of an aggregate maximum amount of $7,000 in cash
and Preferred Stock having a value of $370. (Terms and conditions of such
Preferred Stock are described above.) The cash portion of the settlement will be
funded entirely by insurance company proceeds. In accordance with FASB Statement
No. 5, the $370 value of the Preferred Stock had been accrued in the fiscal year
ended August 26, 1995.
The proposed settlement of the class action litigation is a claims
made settlement. All claimants who purchased the Company's Common Stock during
the period from December 9, 1992 through December 2, 1994 and who held their
stock through December 2, 1994, will be entitled to participate in the
settlement.
PROPOSED SETTLEMENT WITH THE PRIVATE COMPANY
The Company signed an agreement ("Settlement Agreement") with the
Private Company subject to court approval and settlement of the derivative and
class action litigation. The Settlement Agreement restructures the relationship
between the Private Company and the Company in order to reduce and eliminate any
alleged actual or potential conflicts of interest.
The Settlement Agreement provides, among other things, for (i)
certain changes in the billing rates and arrangements with respect to
warehousing, fabric protection and freight, (ii) the turnover of the warehouse
to the Company in January 1999, (iii) the assignment by the Private Company to
the Company, for no consideration, of limited partnership interests and stock of
licensees owning 55 licensed Jennifer Convertibles stores, and (iv) for the
payment, or offset, of certain amounts owing (a) by the Company to the Private
Company and (b) by the Private Company and certain licensees for which the
Private Company has assumed responsibility to the Company. The Company believes
the effective date of such changes will be the date court approval is obtained.
The Private Company has stated that the effective date is March 1996. The
Company believes this claim is without merit and has not provided for any losses
that may accrue as a result of this assertion which approximates $1,400 at
November 29, 1997. For a more complete description of the contemplated
Settlement Agreement, see the Company's Annual Report on Form 10-k for the
fiscal year ended August 30, 1997 under the caption "Legal Proceedings."
7
<PAGE>
JENNIFER CONVERTIBLES, INC.
Notes to Unaudited Consolidated Financial Statements
For the Thirteen Weeks Ended November 29, 1997
(In thousands except for share amounts)
SECURITIES AND EXCHANGE COMMISSION INVESTIGATION
On December 9, 1994, the Company was advised that the Securities
and Exchange Commission (SEC) was conducting an inquiry of the Company's affairs
"to determine whether there have been violations of the federal securities
laws". The SEC requested that the Company voluntarily provide certain documents
in connection with its December 2, 1994 press release "concerning the adjustment
in the valuation of certain subsidiaries on the Company's balance sheet". Since
that date, the SEC has also requested the Final Report of Counsel to the
Independent Committee of the Board of Directors and the November 22, 1994 letter
from a director of the Company to the President (as more fully described above).
Additionally, the SEC requested the "responses" to these documents and the
Company furnished them with the "Response of Harley Greenfield to the January
26, 1995 Final Report of Counsel to the Independent Committee" dated March 10,
1995 and the "Response of Jerome I. Silverman to the letter dated November 22,
1994 from Michael Colnes to Harley Greenfield" dated April 3, 1995.
On May 3, 1995 the SEC commenced a formal investigation into the
affairs of the Company. Subpoenas have been issued to the Company and certain of
its current and former management to furnish various contracts and accounting
records which have been complied with. The outcome of the SEC investigation is
not presently determinable.
8
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS:
EXCEPT FOR HISTORICAL INFORMATION CONTAINED HEREIN, THIS
"MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS" CONTAINS FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF THE U.S.
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995, AS AMENDED. THESE STATEMENTS
INVOLVE KNOWN AND UNKNOWN RISKS AND UNCERTAINTIES THAT MAY CAUSE THE COMPANY'S
ACTUAL RESULTS OR OUTCOME TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS,
PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD LOOKING
STATEMENTS. FACTORS THAT MIGHT CAUSE SUCH DIFFERENCES INCLUDE, BUT ARE NOT
LIMITED TO RISK FACTORS SUCH AS UNCERTAINTY AS TO THE OUTCOME OF THE LITIGATION
CONCERNING THE COMPANY, FACTORS AFFECTING THE FURNITURE INDUSTRY GENERALLY, SUCH
AS THE COMPETITIVE AND MARKET ENVIRONMENT, AND MATTERS WHICH MAY AFFECT THE
COMPANY'S SUPPLIERS OR THE PRIVATE COMPANY. IN ADDITION TO STATEMENTS WHICH
EXPLICITLY DESCRIBE SUCH RISKS AND UNCERTAINTIES, INVESTORS ARE URGED TO
CONSIDER STATEMENTS LABELED WITH THE TERMS "BELIEVES," "BELIEF," "EXPECTS,"
"INTENDS," "PLANS" OR "ANTICIPATES" TO BE UNCERTAIN AND FORWARD-LOOKING.
NET SALES:
The Company's sales increased by .5% to $27,907 for the thirteen
weeks ended November 29, 1997 as compared to $27,767 for the same period in the
prior year. There were 147 stores in operation as of November 29, 1997 compared
to 150 stores at the end of the prior year fiscal quarter. Comparable store
sales (those open for the entire period in the current and prior year periods)
increased by 1.4%.
COST OF SALES:
Cost of sales increased by .4% to $18,773, 67.3% as a percentage of
sales, as compared to $18,704, 67.4% as a percentage of sales, for the same
period in the prior year. The dollar increase of $69 is affected by various
components. Merchandise costs increased by 2.7% as a percentage of sales due to
lower selling prices on certain product lines. Freight costs declined by .2% and
higher delivery income of .5% partially offset the increase in merchandise
costs. Total occupancy costs did not change. Higher costs for customer repairs
were offset by vendor allowances for repairs from the Company's principal
supplier which resulted in a 1.2% decline as a percentage of sales. Warehouse
expenses of $1,395, fabric protection services of $663 and freight of $794
provided by the Private Company compared to $1,392, $746 and $855, respectively,
from the previous year.
9
<PAGE>
SELLING, GENERAL AND ADMINISTRATIVE AND OTHER EXPENSES:
Selling, general and administrative expenses were $9,015, 32.3% as
a percentage of sales, as compared to $9,232, 33.2% as a percentage of sales,
for the prior period, a decrease of $217 or 2.4%. Part of the percentage decline
in expenses was caused by maintaining salaries at prior year levels resulting in
a .3% percentage of sales decline. Advertising expenses declined by $309 (1.2%
as a percentage of sales) because of a change in the mix of programs. Included
in selling, general and administrative expenses are credit adjustments related
to cancelled customer orders of $130 (.5% as a percentage of sales) compared to
$219 (.8% as a percentage of sales) in the prior year period. Also included are
$129 (.5% as a percentage of sales) of new costs in connection with an enhanced
private label credit card program started in the current fiscal year.
The Company's receivables from the Private Company, the
Unconsolidated Licensees and S.F.H.C. were $7,549 as of November 29, 1997 which
had increased by $651 from August 30, 1997. At August 30, 1997, the Company had
provided a reserve for the full amount due from these entities of $6,898. These
entities have losses and\or capital deficiencies and there can be no assurance
that the gross receivables will be collected. It is the Company's intention to
continue to fund these operations in the future. The Company has accounted for
transactions with these entities on an offset basis. If the result of the offset
is a receivable due from them, then such net amount was previously reserved for
and generally recognized as income only at the time when cash was received from
these entities. As of January 9, 1998, the increased receivables of $651 for the
thirteen weeks ended November 29, 1997 have been paid and no reserve has been
provided.
LIQUIDITY AND CAPITAL RESOURCES:
At November 29, 1997, the Company had an aggregate working capital
deficiency of $(17,109) compared to a deficiency of $(17,258) at August 30, 1997
and had available cash and cash equivalents of $3,205 compared to $3,405 at
August 30, 1997. This decrease since August 30, 1997 is due principally to the
net (loss) of $(230).
10
<PAGE>
The Company is continuing to fund the operations of the LP's which,
as described above, continue to generate operating losses. All such losses have
been consolidated in the Company's consolidated financial statements. The
Company's receivables from the Private Company, the Unconsolidated Licensees
(other than S.F.H.C.), and S.F.H.C., which had been fully reserved for in prior
years, increased by $651 and have been fully paid by January 9, 1998. It is the
Company's intention to continue to fund these operations in the future. The
Company and the Private Company have entered into offset agreements that permit
the two companies to offset their current obligations to each other. As part of
such agreements, the Private Company agreed to assume certain liabilities owed
to the Company by the Unconsolidated Licensees, other than S.F.H.C..
In March 1996, the Company executed a Credit and Security Agreement
("Agreement") with its principal supplier, Klaussner which gives the Company the
right to extend payment terms for merchandise shipped from 60 days to 81 days.
As of November 29, 1997, the amount owed that exceeded terms was $833 for 7
days. Klaussner has waived the default provisions in the Agreement as to such
violations. As part of the Agreement, the Company granted a security interest in
all of its assets as well as assigning leasehold interests, trademarks and a
licensee agreement to operate the Company's business in the event of default.
On December 11, 1997, the Company sold to Klaussner 10,000 shares of
Series A Convertible Preferred Stock ("Preferred Stock"), convertible into
1,424,500 shares of the Company's Common Stock for $5,000. These shares are
non-voting, have a liquidation preference of $5,000 and do not pay dividends
(except if declared on the Common Stock). The Preferred Stock is not convertible
until September 1, 1999, or earlier under certain circumstances (e.g. if another
person or group acquires 12.5% or more of the Common Stock or there are certain
changes in management or the Board of Directors), and has other rights
associated with it. In addition, the Credit and Security Agreement with
Klaussner was modified to include a late fee of .67% per month for invoices the
Company pays beyond the normal 60 day terms.
11
<PAGE>
In September and November 1997, the Company opened letters of
credit in favor of an Italian supplier of leather furniture aggregating $1,350
by depositing these funds into an interest bearing money market account. The
supplier draws down on these letters of credit as shipments are made. These
letters of credit expire over various dates to June 30, 1998. As of November 29,
1997, $1,128 of these credits remain outstanding.
The Company does not currently have any traditional bank financing
and there can be no assurance such financing will be available in the future.
The proposed settlement of the derivative and class action
litigations (as described elsewhere) will come from insurance company payments
and the issuance of new Preferred Stock by the Company. If approved, there will
be no cash outlays by the Company other than legal costs. Additionally, a new
proposed agreement with the Private Company (as described in the Notes to the
Consolidated Financial Statements) contemplates significant changes to the
operating relationship between the companies.
In fiscal 1996 and 1995, the Company and the LP's closed an
aggregate of 40 stores. In fiscal 1997, three additional stores were closed.
Several were closed for non-performance, but a number of such closings were due
to the Company's decision to combine separate Jennifer Convertibles and Jennifer
Leather stores located in the same demographic areas into one store. The primary
benefit of combining both operations into one store was an elimination of the
real estate expenses and other expenses associated with the closed showroom.
Additional benefits realized included reductions of personnel and, in a number
of cases, elimination of duplicate office equipment and telephone lines.
Although combining two stores into one store generally reduces sales, management
believes that sales at the combined store will generate more profit due to the
elimination or reduction of expenses described above.
The Company anticipates losses for fiscal 1998. However, as a result
of the Credit and Security Agreement with Klaussner and the $5,000 sale of
Preferred Stock to Klaussner on December 11, 1997, the Company, in the opinion
of management, will have adequate cash flow to fund its operations for the
current fiscal year.
12
<PAGE>
JENNIFER CONVERTIBLES, INC.
PART II
OTHER INFORMATION
ITEMS 1. through 5. NOT APPLICABLE.
ITEM 6. (a) EXHIBIT 11.1 - STATEMENT RE: COMPUTATION OF
NET (LOSS) PER SHARE
(b) REPORTS ON FORM 8-K - NONE
During the quarter ended November 29, 1997 the Company filed no Current
Reports on Form 8-K.
13
<PAGE>
JENNIFER CONVERTIBLES, INC.
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.
JENNIFER CONVERTIBLES, INC.
January 13, 1998 By: /s/ HARLEY J. GREENFIELD
-------------------------------------
Harley J. Greenfield,
Chairman of the Board and Chief
Executive Officer
January 13, 1998 By: /s/ GEORGE J. NADEL
-------------------------------------
George J. Nadel, Executive Vice President
Chief Financial Officer and Treasurer
(Principal Financial and Accounting
Officer)
14
EXHIBIT 11.1
JENNIFER CONVERTIBLES INC. AND SUBSIDIARIES
STATEMENT RE: COMPUTATION OF NET (LOSS) PER SHARE
THIRTEEN WEEKS ENDED NOVEMBER 29, 1997 AND NOVEMBER 30, 1996
(in thousands, except per share data)
Primary
--------------------
Thirteen weeks ended
November 29, 1997 November 30, 1996
-------------------- -----------------
(unaudited) (unaudited)
Net (loss) $ (230) $ (451)
------- -------
Common shares outstanding 5,701 5,701
======= =======
Net (loss) per common share $ (0.04) $ (0.08)
======= =======
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000806817
<NAME> Jennifer Convertibles, Inc.
<MULTIPLIER> 1
<CURRENCY> USD
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> AUG-29-1998
<PERIOD-START> AUG-31-1997
<PERIOD-END> NOV-29-1997
<EXCHANGE-RATE> 1
<CASH> 3,205,000
<SECURITIES> 0
<RECEIVABLES> 2,652,000
<ALLOWANCES> 0
<INVENTORY> 9,582,000
<CURRENT-ASSETS> 15,680,000
<PP&E> 14,073,000
<DEPRECIATION> 6,753,000
<TOTAL-ASSETS> 25,274,000
<CURRENT-LIABILITIES> 32,789,000
<BONDS> 0
0
0
<COMMON> 57,000
<OTHER-SE> (13,654,000)
<TOTAL-LIABILITY-AND-EQUITY> 25,274,000
<SALES> 27,907,000
<TOTAL-REVENUES> 27,907,000
<CGS> 18,773,000
<TOTAL-COSTS> 28,228,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 8,000
<INCOME-PRETAX> (142,000)
<INCOME-TAX> 88,000
<INCOME-CONTINUING> (230,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (230,000)
<EPS-PRIMARY> (0.04)
<EPS-DILUTED> (0.04)
</TABLE>