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 MAY 29, 1999
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 May
29, 1999: 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 - May 29, 1999
(Unaudited) and August 29, 1998............................................ 2
Comparative Consolidated Statements of Operations
(Unaudited) for the thirty-nine weeks and thirteen
weeks ended May 29, 1999 and May 30, 1998 ................................. 3
Comparative Consolidated Statements of Cash Flows (Unaudited) for the
thirty-nine weeks and thirteen weeks ended May 29, 1999 and
May 30, 1998 ............................................................... 4
Notes to Unaudited Consolidated Financial Statements......................... 5
Item 2 - Management's Discussion and Analysis of Financial
Condition and Results of Operations................................. 7
Part II - Other Information.................................................. 11
<PAGE>
JENNIFER CONVERTIBLES, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(in thousands, except for share data)
<TABLE>
<CAPTION>
ASSETS
May 29, 1999 August 29, 1998
------------ ---------------
(unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 5,254 $ 4,384
Merchandise inventories 9,221 10,018
Accounts receivable 67 500
Due from Private Company and Unconsolidated Licensees,
net of reserves of $6,815 and $6,696 at May 29, 1999
and August 29, 1998 1,436 601
Prepaid expenses and other current assets 396 388
------------ ------------
Total current assets 16,374 15,891
Store fixtures, equipment and leasehold improvements
at cost, net 5,294 6,147
Deferred lease costs and other intangibles, net 679 783
Goodwill, at cost, net 522 535
Other assets (primarily security deposits) 673 743
------------ ------------
$ 23,542 $ 24,099
============ ============
LIABILITIES AND (CAPITAL DEFICIENCY)
Current liabilities:
Accounts payable, trade $ 13,601 $ 14,917
Customer deposits 10,708 6,892
Accrued expenses and other current liabilities 4,373 5,192
------------ ------------
Total current liabilities 28,682 27,001
Deferred rent and allowances 5,197 5,497
Long-term obligations under capital leases 105 49
------------ ------------
Total liabilities 33,984 32,547
------------ ------------
Commitments and contingencies
(Capital Deficiency):
Preferred stock, par value $.01 per share
Authorized 1,000,000 shares
Series A Convertible Preferred-10,000 issued and outstanding
at May 29, 1999 and August 29, 1998
Series B Convertible Preferred-26,664 issued
and outstanding at May 29, 1999
Common stock, par value $.01 per share
Authorized 10,000,000 shares; issued and
outstanding 5,700,725 shares at May 29,1999
and August 29, 1998 57 57
Additional paid in capital 27,821 27,710
Notes receivable from warrant holders (270) (270)
Accumulated (deficit) (38,050) (35,945)
------------ ------------
(10,442) (8,448)
------------ ------------
$ 23,542 $ 24,099
============ ============
See accompanying notes to unaudited consolidated financial statements.
2
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
JENNIFER CONVERTIBLES, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(In thousands, except share data)
(unaudited)
Thirteen weeks Thirteen weeks Thirty-nine weeks Thirty-nine weeks
ended ended ended ended
May 29, 1999 May 30, 1998 May 29, 1999 May 30, 1998
-------------- -------------- ----------------- -----------------
<S> <C> <C> <C> <C>
Net sales $ 26,412 $ 29,254 $ 78,016 $ 82,442
----------- ----------- ----------- -----------
Cost of sales, including store occupancy,
warehousing, delivery and fabric protection 17,163 19,479 51,514 55,510
Selling, general and administrative expenses 8,937 8,363 27,352 25,519
Provision for amounts due from
Private Company and Unconsolidated Licensees -- 352 119 596
Loss from store closings 9 153 9 178
Depreciation and amortization 420 428 1,252 1,310
----------- ----------- ----------- -----------
26,529 28,775 80,246 83,113
----------- ----------- ----------- -----------
Operating (loss) income (117) 479 (2,230) (671)
----------- ----------- ----------- -----------
Other income (expense):
Royalty income 85 95 290 289
Interest income 44 24 110 62
Interest expense (11) (116) (98) (129)
Other income, net 34 44 102 160
----------- ----------- ----------- -----------
152 47 404 382
----------- ----------- ----------- -----------
Income (loss) before income taxes 35 526 (1,826) (289)
Income taxes 47 62 279 205
----------- ----------- ----------- -----------
Net (loss) income ($ 12) $ 464 ($ 2,105) ($ 494)
=========== =========== =========== ===========
Basic (loss) income per common share ($ 0.00) $ 0.08 ($ 0.37) ($ 0.09)
=========== =========== =========== ===========
Weighted average number of common shares 5,700,725 5,700,725 5,700,725 5,700,725
=========== =========== =========== ===========
See accompanying notes to unaudited consolidated financial statements.
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
JENNIFER CONVERTIBLES INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(in thousands) (unaudited)
Thirteen weeks Thirteen weeks Thirty-nine weeks Thirty-nine weeks
ended ended ended ended
May 29, 1999 May 30, 1998 May 29, 1999 May 30, 1998
-------------- -------------- ----------------- -----------------
<S> <C> <C> <C> <C>
Cash flows from operating activities:
Net (loss) income ($ 12) $ 464 ($2,105) ($ 494)
Adjustments to reconcile net (loss) income
to net cash provided by operating activities:
Depreciation and amortization 420 428 1,252 1,310
Provision for warranty costs -- -- 50 --
Loss from store closings 9 153 9 178
Deferred rent (72) (78) (300) (130)
Provision for losses on amounts due from
Private Company and Unconsolidated Licensees -- 352 119 596
Changes in operating assets and liabilities:
(Increase) decrease in merchandise inventories (466) (1,030) 797 (2,297)
Decrease (increase) in prepaid expenses
and other current assets 152 178 (8) (14)
Decrease in accounts receivable 373 211 433 788
(Increase) in due from Private Company
and Unconsolidated Licensees (253) (789) (954) (1,266)
(Increase) decrease in deferred lease costs
and other intangibles (30) -- (29) 16
Decrease in other assets, net 9 7 71 28
Increase (decrease) in accounts payable trade 2,415 2,314 (1,316) (2,721)
Increase (decrease) in customer deposits 1,444 (668) 3,816 (877)
(Decrease) in accrued expenses
and other payables (183) (433) (491) (560)
------- ------- ------- -------
Net cash provided by (used in) operating activities 3,806 1,109 1,344 (5,443)
------- ------- ------- -------
Cash flows from investing activities:
Capital expenditures (119) (27) (273) (95)
------- ------- ------- -------
Net cash (used in) investing activities (119) (27) (273) (95)
------- ------- ------- -------
Cash flows from financing activities:
Payments of obligations under capital leases (72) 38 (201) (59)
Sale of Series A Preferred Stock -- -- -- 5,000
------- ------- ------- -------
Net cash (used in) provided by financing activities (72) 38 (201) 4,941
------- ------- ------- -------
Net increase (decrease) in cash and cash equivalents 3,615 1,120 870 (597)
Cash and cash equivalents at beginning of period 1,639 1,688 4,384 3,405
------- ------- ------- -------
Cash and cash equivalents at end of period $ 5,254 $ 2,808 $ 5,254 $ 2,808
======= ======= ======= =======
Supplemental disclosure of cash flow information:
Income taxes paid during the period $ 48 $ 62 $ 279 $ 205
======= ======= ======= =======
Interest paid $ 11 $ 116 $ 98 $ 129
======= ======= ======= =======
Supplemental disclosure of non-cash financing activities:
Issuance of Series B Preferred Stock-in settlement
of liability -- -- $ 111 --
======= ======= ======= =======
See accompanying notes to unaudited consolidated financial statements.
</TABLE>
4
<PAGE>
JENNIFER CONVERTIBLES, INC.
Notes to Unaudited Consolidated Financial Statements
For the Thirty-Nine Weeks Ended May 29, 1999
(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 May 29, 1999 are
not necessarily indicative of the results that may be expected for the year
ending August 28, 1999. 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 29, 1998.
(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:
5/29/99 8/29/98
------- -------
Showrooms $ 4,061 $ 4,113
Warehouses 5,160 5,905
------- -------
$ 9,221 $10,018
======= =======
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".
5
<PAGE>
JENNIFER CONVERTIBLES, INC.
Notes to Unaudited Consolidated Financial Statements
For the Thirty-Nine Weeks Ended May 29, 1999
(In thousands except for share amounts)
SETTLEMENT OF CLASS ACTION LITIGATION
On November 30, 1998, the court approved the settlement of the
class action litigation. The settlement 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. 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 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 cash
settlement. The Company has issued 26,664 shares of Series B Convertible
Preferred Stock to plaintiff attorneys as part of the settlement.
PROPOSED SETTLEMENT OF DERIVATIVE LITIGATION
As described in prior filings with the Securities and Exchange
Commission, the Company had entered into settlement agreements as to the
derivative litigation, subject, in the case of certain of such agreements, to
court approval of such settlement by a certain date. Such court approval was not
obtained by such date. The Company and the Private Company are negotiating with
respect to a new settlement. There can be no assurance that a settlement will be
reached or as to the terms of such settlement. The ultimate outcome of these
matters is not presently determinable.
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 previously proposed settlement agreements which have been
terminated.
6
<PAGE>
JENNIFER CONVERTIBLES, INC.
Notes to Unaudited Consolidated Financial Statements
For the Thirty-Nine Weeks Ended May 29, 1999
(In thousands except for share amounts)
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 OUR 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 THE RISK FACTORS SET FORTH UNDER THE CAPTION "RISK FACTORS" IN OUR
ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED AUGUST 29, 1998. 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:
Our sales decreased by 5.4% to $78,016 for the thirty-nine
weeks ended May 29, 1999 as compared to $82,442 for the same period in the prior
year. Sales for the thirteen weeks ended May 29, 1999 decreased by 9.7% to
$26,412 from $29,254 for the same period in the prior year. There were 142
stores in operation as of May 29, 1999 compared to 145 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) decreased by 4.0% and 8.3%,
respectively. These sales decreases are mainly attributable to the Jennifer
Leather division that had lower sales on a comparable basis by 13.9% and 26.8%,
respectively, primarily because of a manufacturer's delivery problem which we
believe will be corrected by the end of our fourth quarter. Sales were also
adversely impacted by our inability to offer a private label credit card program
from mid February 1999 to mid May 1999.
COST OF SALES:
THIRTY-NINE WEEKS ENDED MAY 29, 1999:
Cost of sales decreased by 7.2% to $51,514 (66.0% as a
percentage of sales) as compared to $55,510 (67.3% as a percentage of sales) for
the same period in the prior year. The dollar decrease of $3,996 is primarily
attributable to the lower sales volume. As a percentage of sales, the 1.3%
decline is primarily attributable to lower freight costs and fabric protection
charges from the Private Company of .4% and .2%, respectively. Total occupancy
costs declined but such costs increased as a percentage of sales by .6%
7
<PAGE>
JENNIFER CONVERTIBLES, INC.
Notes to Unaudited Consolidated Financial Statements
For the Thirty-Nine Weeks Ended May 29, 1999
(In thousands except for share amounts)
due to the lower sales volume. Net home delivery income increased by $270 and
increased as a percentage of sales by .4%. Warehouse expenses of $3,151 are net
of $750 due to a reduction negotiated with the Private Company ($150 per month
effective January 1, 1999) as compared to $4,122 in the prior year.
THIRTEEN WEEKS ENDED MAY 29, 1999:
Cost of sales decreased by 11.9% to $17,163 (65.0% as a
percentage of sales) as compared to $19,479 (66.6% as a percentage of sales) for
the same period in the prior year. The dollar decrease of $2,316 is primarily
attributable to the lower sales volume. Costs of merchandise increased by .7% as
a percentage of sales while freight and fabric protection charges from the
Private Company declined by .3% and .1%. Total occupancy costs did not change,
but increased as a percentage of sales by 1.2% due to the lower sales volume.
Net home delivery income increased by $168 and increased as a percentage of
sales by .9%. Warehouse expenses of $870 are net of $450 due to a reduction
negotiated with the Private Company ($150 per month effective January 1, 1999)
as compared to $1,411 in the prior year.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES:
THIRTY-NINE WEEKS ENDED MAY 29, 1999:
Selling, general and administrative expenses were $27,352
(35.1% as a percentage of sales) as compared to $25,519 (31.0% as a percentage
of sales) for the prior period, an increase of $1,833 or 7.2%. The major
components of the increase in expenses were: A) increased legal expenses of $365
in connection with the derivative litigation; B) advertising expenses which
increased by $862 principally as a result of a new national television campaign
that commenced January 1, 1999 and C) higher expenses for our private label
credit card program of $207.
THIRTEEN WEEKS ENDED MAY 29, 1999:
Selling, general and administrative expenses were $8,937
(33.8% as a percentage of sales) as compared to $8,363 (28.6% as a percentage of
sales) for the prior period, an increase of $574 or 6.9%. The increase in
expenses is primarily due to higher advertising expenses of $553 as a result of
a new national television campaign that commenced January 1, 1999.
8
<PAGE>
JENNIFER CONVERTIBLES, INC.
Notes to Unaudited Consolidated Financial Statements
For the Thirty-Nine Weeks Ended May 29, 1999
(In thousands except for share amounts)
Our receivables from the Private Company, the Unconsolidated
Licensees and S.F.H.C. were $8,251 as of May 29, 1999, which had increased by
$954 from August 29, 1998. A reserve of $6,815 has been provided at May 29, 1999
and $6,696 at August 29, 1998. These entities have losses and/or capital
deficiencies and there can be no assurance that the gross receivables will be
collected. It is our intention to continue to fund these operations in the
future. We have 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 will be generally recognized as income only at the time when cash is
received from these entities. As of July 13, 1999, $1,197 of the unreserved
receivables at May 29, 1999 have been paid.
LIQUIDITY AND CAPITAL RESOURCES:
At May 29, 1999, we had an aggregate working capital
deficiency of $(12,308) compared to a deficiency of $(11,110) at August 29, 1998
and had available cash and cash equivalents of $5,254 compared to $4,384 at
August 29, 1998. This increase in cash and cash equivalents since August 29,
1998 is due principally to a significant increase in customer deposit
liabilities of $3,816 because of a manufacturer's delivery problem in the
leather division and our inability to offer a private label credit card program
for almost all of the third quarter. This increase has been offset by the net
(loss) of $(2,105) and higher receivables from the Private Company and
Unconsolidated Licensees of $835.
We fund the operations of the LP's, which continue to generate
operating losses. All such losses have been consolidated in our consolidated
financial statements. We have also continued to fund the operations of the
Private Company, the Unconsolidated Licensees (other than S.F.H.C.), and
S.F.H.C. As of May 29, 1999, the current receivables from these entities were
$1,436, and, of this amount, $1,197 has been paid as of July 13, 1999. The
9
<PAGE>
JENNIFER CONVERTIBLES, INC.
Notes to Unaudited Consolidated Financial Statements
For the Thirty-Nine Weeks Ended May 29, 1999
(In thousands except for share amounts)
balance is expected to be paid shortly. We have entered into offset agreements
with the Private Company that permit the two companies to offset their current
monthly obligations to each other in excess of a $1,000 credit extended by us to
the Private Company. As part of such agreements, the Private Company agreed to
assume certain liabilities owed to us by the Unconsolidated Licensees, other
than S.F.H.C.
We have a Credit and Security Agreement ("Agreement") with our
principal supplier, Klaussner, which gives us the right to extend payment terms
for merchandise shipped from 60 days to 81 days provided that a late fee of .67%
per month is paid for invoices we pay beyond the normal 60 day terms. As of May
29, 1999, there were no amounts due over 60 days. As part of the Agreement, we
granted a security interest in all of our assets as well as assigning leasehold
interests, trademarks and a license agreement to operate our business in the
event of default.
On December 11, 1997, we sold to Klaussner 10,000 shares of
Series A Convertible Preferred Stock ("Preferred Stock"), convertible into
1,424,500 shares of our 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.
On November 30, 1998, the court approved a settlement of all
the class actions pending against us. The cash portion of the settlement has
been funded entirely by insurance company proceeds.
In May 1999, we issued a $200 standby letter of credit to an
institution that provides our new private label credit card program. Such letter
of credit is secured by $200 on deposit with our bank. Our new private label
credit card program requires us to issue an additional $1,000 in standby letters
of credit on various dates to May 29, 2000. The Private Company is participating
in this program and has provided $50 of the $200 referred to above and has
agreed to provide 25% of all cash needed to fund future standby letters of
credit. Such letters of credit will be terminated when we achieve certain
specified levels of profitability.
In fiscal 1998 and 1997, we and the LP's closed an aggregate
of six stores. In the thirty nine weeks ended May 29, 1999, two additional
stores were closed. A number of such closings were due to our decision to
combine separate Jennifer Convertibles and Jennifer Leather stores located in
the same geographic 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.
10
<PAGE>
JENNIFER CONVERTIBLES, INC.
Notes to Unaudited Consolidated Financial Statements
For the Thirty-Nine Weeks Ended May 29, 1999
(In thousands except for share amounts)
We anticipate a net loss for fiscal 1999 with approximately a
break-even cash flow. With the Credit and Security Agreement with Klaussner, in
the opinion of management, we will have adequate cash flow to fund our
operations.
JENNIFER CONVERTIBLES, INC.
PART II
OTHER INFORMATION
ITEMS 1. through 5. NOT APPLICABLE.
ITEM 6. (a) None
(b) During the quarter ended May 29, 1999, the Company filed no
Current Reports on Form 8-K.
11
<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.
July 13, 1999 By: /s/ HARLEY J. GREENFIELD
----------------------------------------------
Harley J. Greenfield, Chairman of the
Board and Chief Executive Officer
July 13, 1999 By: /s/ GEORGE J. NADEL
----------------------------------------------
George J. Nadel, Executive Vice President,
Chief Financial Officer and Treasurer
(Principal Financial and Accounting
Officer)
12
<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-28-1999
<PERIOD-START> FEB-28-1999
<PERIOD-END> MAY-29-1999
<EXCHANGE-RATE> 1
<CASH> 5,254,000
<SECURITIES> 0
<RECEIVABLES> 67,000
<ALLOWANCES> 0
<INVENTORY> 9,221,000
<CURRENT-ASSETS> 16,374,000
<PP&E> 13,988,000
<DEPRECIATION> 8,694,000
<TOTAL-ASSETS> 23,542,000
<CURRENT-LIABILITIES> 28,682,000
<BONDS> 0
0
367
<COMMON> 57,000
<OTHER-SE> (10,499,367)
<TOTAL-LIABILITY-AND-EQUITY> 23,542,000
<SALES> 26,412,000
<TOTAL-REVENUES> 26,412,000
<CGS> 17,163,000
<TOTAL-COSTS> 26,529,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 11,000
<INCOME-PRETAX> 35,000
<INCOME-TAX> 47,000
<INCOME-CONTINUING> (12,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (12,000)
<EPS-BASIC> 0.00
<EPS-DILUTED> 0.00
</TABLE>
