<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 For the quarterly period ended August 31, 1996
---------------
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: 0-15817
-------
THE TOPPS COMPANY, INC.
(Exact name of registrant as specified in its charter)
Delaware 11-2849283
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Whitehall Street, New York, NY 10004
(Address of principal executive offices, including zip code)
(212) 376-0300
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No .
The number of outstanding shares of Common Stock as of October 3, 1996 was
46,947,510.
<PAGE>
THE TOPPS COMPANY, INC.
- --------------------------------------------------------------------------------
PART I - FINANCIAL INFORMATION
- --------------------------------------------------------------------------------
ITEM 1. FINANCIAL STATEMENTS
Index Page
----- ----
Condensed Consolidated Balance Sheets as of
August 31, 1996 and March 2, 1996 3
Condensed Consolidated Statements of Operations
for the thirteen and twenty-six weeks ended
August 31, 1996 and August 26, 1995 4
Condensed Consolidated Statements of Cash Flows
for the twenty-six weeks ended August 31, 1996 and
August 26, 1995 5
Notes to Condensed Consolidated Financial Statements 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 8
- --------------------------------------------------------------------------------
PART II - OTHER INFORMATION
- --------------------------------------------------------------------------------
ITEM 1. LEGAL PROCEEDINGS 10
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 10
The condensed consolidated financial statements for the twenty-six weeks ended
August 31, 1996 included herein have been reviewed by Deloitte & Touche LLP
independent public accountants, in accordance with established professional
standards for such a review. The report of Deloitte & Touche LLP is included on
page 7.
2
<PAGE>
THE TOPPS COMPANY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
(Unaudited)
August March
31, 1996 2, 1996
-------- -------
(amounts in thousands)
<S> <C> <C>
ASSETS
---------
CURRENT ASSETS:
Cash $ 35,120 $ 24,154
Accounts receivable - net 37,351 43,357
Inventories 23,374 27,887
Income tax receivable 1,961 3,008
Deferred tax assets 3,206 2,598
Prepaid expenses and other current assets 7,803 11,267
--------- ---------
TOTAL CURRENT ASSETS 108,815 112,271
--------- ---------
PROPERTY, PLANT, & EQUIPMENT 53,718 53,232
Less: accumulated depreciation 23,533 21,622
--------- ---------
NET PROPERTY, PLANT & EQUIPMENT 30,185 31,610
--------- ---------
INTANGIBLE ASSETS, net of accumulated
amortization of $32,948 and $30,532 69,093 70,447
OTHER ASSETS 3,862 2,799
--------- ---------
TOTAL ASSETS $ 211,955 $ 217,127
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
Accounts payable $ 23,602 $ 28,848
Accrued expenses and other liabilities 43,542 39,879
Current portion of long-term debt 5,000 6,800
Income taxes payable 2,470 5,466
--------- ---------
TOTAL CURRENT LIABILITIES 74,614 80,993
LONG-TERM DEBT, less current portion 32,450 37,500
DEFERRED INCOME TAXES 12,449 11,192
OTHER LIABILITIES 5,923 5,592
--------- ---------
TOTAL LIABILITIES 125,436 135,277
--------- ---------
STOCKHOLDERS' EQUITY:
Preferred stock, par value $.01 per share authorized
10,000,000 shares, none issued
Common stock, par value $.01 per share, authorized
100,000,000 shares; issued 47,502,510 shares,
less 555,000 shares in Treasury 475 475
Stock
Additional paid-in capital 16,812 16,812
Treasury stock, at cost (6,622) (6,120)
Retained earnings 74,686 69,719
Minimum pension liability adjustment (110) (110)
Cumulative foreign currency adjustment 1,278 1,074
--------- ---------
TOTAL STOCKHOLDERS' EQUITY 86,519 81,850
--------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 211,955 $ 217,127
========= =========
</TABLE>
See Notes to Condensed Consolidated Financial Statements and Accountants'
Review Report.
3
<PAGE>
THE TOPPS COMPANY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
(Unaudited)
Thirteen weeks ended Twenty-six weeks ended
August August August August
31, 1996 26, 1995 31, 1996 26, 1995
-------- -------- -------- --------
(amounts in thousands, except share data)
<S> <C> <C> <C> <C>
Net sales $ 55,025 $ 60,661 $ 134,286 $ 128,093
Cost of sales 34,697 42,209 87,784 86,540
--------- --------- --------- ---------
Gross profit on sales 20,328 18,452 46,502 41,553
Royalties and other income 656 374 1,239 941
--------- --------- --------- ---------
20,984 18,826 47,741 42,494
Selling, general and administrative expenses 18,216 16,052 37,610 31,717
--------- --------- --------- ---------
Income from operations 2,768 2,774 10,131 10,777
Interest income (expense), net (537) (364) (1,100) (226)
--------- --------- --------- ---------
Income before provision for income taxes 2,231 2,410 9,031 10,551
Provision for income taxes 1,004 1,405 4,064 4,906
--------- --------- --------- ---------
Net income $ 1,227 $ 1,005 $ 4,967 $ 5,645
========= ========= ========= =========
Net income per share $.03 $.02 $.11 $.12
Dividends paid per share - - - $.21
Weighted average shares outstanding 47,011,191 47,047,510 47,029,351 47,046,982
</TABLE>
See Notes to Condensed Consolidated Financial Statements and Accountants'
Review Report.
4
<PAGE>
TOPPS COMPANY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
(Unaudited)
Twenty-six weeks ended
August August
31, 1996 26, 1995
-------- --------
(amounts in thousands)
<S> <C> <C>
Cash provided by (used for) operations:
Net income $ 4,967 $ 5,645
Add(subtract) non-cash items included in net income:
Depreciation and amortization 3,236 2,403
Deferred income taxes 648 1,199
Change in assets and liabilities net of effects from purchase of
subsidiary:
Receivables 6,006 (3,875)
Inventories 4,513 421
Income tax receivable 1,048 ( 799)
Prepaid expenses and other current assets 3,464 (2,929)
Payables and other current liabilities (4,579) 438
Other ( 658) ( 160)
-------- --------
Cash provided by operations 18,645 2,343
-------- --------
Cash used for investing activities:
Additions to property, plant and equipment (327) (1,284)
Purchase of subsidiary, net of cash acquired -- (39,998)
-------- --------
Cash used for investing activities (327) (41,282)
-------- --------
Cash provided by (used for) financing activities:
Proceeds from long-term debt 50,000
Payments of long-term debt (6,850) ( 1,900)
Exercise of employee stock options 20
Purchase of treasury stock ( 502) -
-------- --------
Cash provided by (used for) financing activities (7,352) 48,120
-------- --------
Net increase (decrease) in cash 10,966 9,181
Cash at beginning of year 24,154 17,785
-------- --------
Cash at end of quarter $ 35,120 $ 26,966
======== ========
Supplemental information:
Interest paid $ 1,125 $ 91
Income taxes paid $ 4,981 $ 7,041
</TABLE>
See Notes to Condensed Consolidated Financial Statements and Accountants'
Review Report.
5
<PAGE>
THE TOPPS COMPANY, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
TWENTY-SIX WEEKS ENDED AUGUST 31, 1996
1. Basis of Presentation
The accompanying unaudited condensed interim consolidated financial
statements have been prepared by The Topps Company, Inc. and
subsidiaries (the "Company") pursuant to the rules and regulations of
the Securities and Exchange Commission and reflect all adjustments,
which are, in the opinion of management, considered necessary for a
fair presentation. These statements do not include all information
required by generally accepted accounting principles to be included in
a full set of financial statements. Operating results for the
twenty-six weeks ended August 31, 1996 and August 26, 1995 are not
necessarily indicative of the results that may be expected for the year
ending March 1, 1997. For further information refer to the consolidated
financial statements and notes thereto in the Company's annual report
for the year ended March 2, 1996.
Certain items in the prior year's financial statements have been
reclassified to conform with the current year's presentation.
2. Acquisition
On July 6, 1995, the Company acquired 100% of the shares of Merlin
Publishing International Limited ("Merlin"), a privately-held U.K.
publisher and marketer of sticker and album collections (the
"Acquisition"). The purchase price for the Acquisition was $46,244,700.
The Company financed the Acquisition using a $50 million term loan with
a five-year amortization schedule provided by a syndicate of banks.
The Acquisition has been accounted for using the purchase method of
accounting. The cost of the Acquisition has been allocated to tangible
and intangible assets acquired and liabilities assumed based upon
management's estimate of their respective fair values at the
acquisition date as adjusted to reflect additional reserves for product
returns. Management is presently finalizing its estimate of these
respective fair values and may make further refinement if required. The
excess of purchase price over the fair value of the net assets acquired
(goodwill) is being amortized on a straight-line basis over a
forty-year period.
3. Quarterly Comparison
Management believes that quarter-to-quarter comparisons of sales and
operating results are affected by a number of factors, including the
timing of product introductions and variations in shipping and factory
scheduling requirements. Thus, annual sales and earnings amounts are
unlikely to consist of equal quarterly portions.
4. Inventories
<TABLE>
<CAPTION>
(Unaudited)
August March
31, 1996 2, 1996
-------- -------
(amounts in thousands)
<S> <C> <C>
Raw materials $ 5,347 $ 8,581
Work in process 2,502 3,221
Finished products 15,525 16,085
------- -------
Total $23,374 $27,887
======= =======
</TABLE>
6
<PAGE>
INDEPENDENT ACCOUNTANTS' REPORT
- -------------------------------
Board of Directors and Stockholders
The Topps Company, Inc.
We have made a review of the accompanying condensed consolidated balance sheet
of The Topps Company, Inc. and subsidiaries, (the "Company"), as of August 31,
1996, and the related condensed consolidated statements of operations and cash
flows for the twenty-six week periods ended August 31, 1996 and August 26, 1995,
in accordance with the standards established by the American Institute of
Certified Public Accountants.
A review of interim financial information consists principally of obtaining an
understanding of the system for the preparation of interim financial
information, applying analytical procedures to financial data and making
inquiries of persons responsible for financial and accounting matters. It is
substantially less in scope than an audit conducted in accordance with generally
accepted auditing standards, the objective of which is the expression of an
opinion regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the accompanying condensed consolidated financial statements for them
to be in conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of the Company as of March 2, 1996,
and the related consolidated statements of operations, stockholders' equity, and
cash flows for the year then ended (not presented herein); and in our report
dated March 27, 1996, we expressed an unqualified opinion on those consolidated
financial statements. In our opinion, the information set forth in the
accompanying condensed consolidated balance sheet as of March 2, 1996 is fairly
stated, in all material respects, in relation to the consolidated balance sheet
from which it has been derived.
DELOITTE & TOUCHE LLP
September 20, 1996
7
<PAGE>
ITEM 2. Management's Discussion and Analysis of Financial Condition and
------------------------------------------------------------------
Results of Operations
---------------------
Three Months Ended August 31, 1996 Compared with the Three Months Ended
- ---------------------------------------------------------------------------
August 26, 1995
- ---------------
Net sales for the second quarter of fiscal 1997 decreased 9.3%, to
$55,025,000 from $60,661,000 for the same period last year. The decrease
resulted from lower sales of sports cards, which was in large part due to the
timing of certain baseball product releases and lower sales of football
products, as well as the decline of lollipop sales overseas. Sales from the
acquisition of Merlin Publishing International Ltd., which occurred in July
1995, helped to offset some of the decrease.
Gross profit as a percentage of net sales for the second quarter increased to
36.9% from 30.4% for the same period last year. Improved margins were the result
of reduced product costs in Ireland and lower royalty expenses, as well as the
Company's ongoing cost reduction efforts, particularly in the areas of card
design and inventory obsolescence.
Selling, general and administrative expenses ("S,G&A") for the second
quarter of fiscal 1997 increased to $18,216,000 or 33.1% of net sales, from
$16,052,000 or 26.5% for the same period last year. These increases occurred
primarily as a result of the addition of Merlin and its relatively low level of
summer sales. Investment in the domestic salesforce and the startup costs
associated with certain foreign markets also contributed to the higher S,G&A.
The increase in net interest expense from $364,000 to $537,000 in the
second quarter of fiscal 1997 was attributable to debt incurred in connection
with the Merlin acquisition.
The effective tax rate for the second quarter of fiscal 1997 was 45.0%
compared to an effective rate of 58.3% for the same period a year ago. The
higher tax rate last year was the result of a one-time adjustment necessitated
by the Merlin acquisition.
Net income for the second quarter of fiscal 1997 was $1,227,000, or $.03
per share, as compared with $1,005,000, or $.02 per share for the same period
last year.
Six Months Ended August 31, 1996 Compared with the Six Months Ended August
- ---------------------------------------------------------------------------
26, 1995
- --------
Net sales for the first half of fiscal 1997 increased 4.8%, to $134,286,000 from
$128,093,000 for the same period last year. The increase resulted from the
addition of Merlin and from stronger sales of baseball products, partially
offset by lower sales of other sports cards, and to a lesser extent, lollipops.
Gross profit as a percentage of net sales for the first half of fiscal 1997
increased to 34.6% as compared with 32.4% for the same period last year. The
margin improvement was the result of lower material and labor costs in both the
U.S. and Ireland as well as lower costs for card design.
Selling, general and administrative expenses ("S,G&A") for the first half
of fiscal 1997 increased to $37,610,00 or 28.0% of net sales, from $31,717,000
or 24.8% for the same period a year ago. This increase occurred primarily as a
result of the acquisition of Merlin. The increase in S,G&A as a percentage of
net sales was due to higher depreciation and amortization charges as a result of
the Merlin acquisition, selective headcount additions of sales and other
personnel and the costs associated with the startup of operations in foreign
markets.
The increase in net interest expense from $226,000 to $1,100,000 in the
first half of fiscal 1997 was the result of debt incurred as a result of the
Merlin acquisition.
8
<PAGE>
The effective tax rate for the first half of fiscal 1997 was 45.0% compared
to an effective rate of 46.5% for the same period a year ago. The lower rate
this year is attributable to a more favorable effective tax rate at Merlin.
Net income for the first half of fiscal 1997 was $4,967,000, or $.11 per
share, as compared with $5,645,000, or $.12 per share for the same period last
year.
Liquidity and Capital Resources
- -------------------------------
On June 30, 1995, the Company entered into a $65 million credit agreement (the
"Credit Agreement") with a syndicate of banks which consisted of a $50 million
term loan to finance the Merlin acquisition, a $2 million letter of credit
facility and a $13 million revolving credit facility to be used for working
capital and general corporate purposes. Interest rates are variable on half of
the outstanding principal and, as a result of swap transactions, fixed on the
remaining balance for two years, commencing April 1996. The Credit Agreement
contains restrictions and prohibitions of a nature generally found in loan
agreements of this type and requires the Company, among other things, to comply
with certain financial covenants, limits the Company's ability to sell or
acquire assets or borrow additional money (other than through the revolving
facility,) and prohibits the payment of dividends. The Credit Agreement is
secured by a pledge of 65% of the stock of Merlin.
On June 27, 1996 the Company announced that its Board of Directors had
authorized the repurchase of up to 2,000,000 shares of its common stock. The
total number of shares to be repurchased and the price the Company will pay will
depend on a variety of factors, including prevailing market conditions. As of
October 1, 1996, the Company had repurchased 100,000 shares under this
authorization at an average price of $5.02.
As of August 31, 1996, the Company had $35,120,000 in cash, and $37,450,000 in
debt as a result of the Merlin acquisition. Management believes, in light of the
Company's borrowing capacity and cash on hand as of August 31, 1996, that the
Company has adequate means to meet its working capital, capital expenditure,
interest and principal repayment requirements for the foreseeable future.
Cautionary Statements
- ---------------------
In connection with the "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995, the Company is hereby filing cautionary
statements identifying important factors that could cause the Company's actual
results to differ materially from those projected in any forward-looking
statements made by, or on behalf of, the Company, whether oral or written. These
important factors include quarterly fluctuations in results, the Company's
dependence on licensing arrangements with third parties, the further prolonged
and material contraction in the trading card industry, excessive returns of the
Company's products and the effect of restrictions and financial covenants
imposed by the Credit Agreement, as well as other risks detailed from time to
time in the Company's reports and registration statements filed with the
Securities and Exchange Commission.
9
<PAGE>
THE TOPPS COMPANY, INC.
PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In August 1996, the Company was named a defendant in a class action in the
United States District Court for the Eastern District of New York entitled
Sullivan, et al. v. The Topps Company, Inc., No CV 96-3779 (EDNY) (the
"Action"). The Action alleges, among other things, that the Company has violated
the federal Racketeer Influenced and Corrupt Organizations Act by its practice
of selling sports and entertainment cards with randomly-inserted, limited
edition "insert" cards, allegedly in violation of state and federal
anti-gambling statutes. Each of the Company's principal competitors, as well as
several of its principal licensors, has been separately sued in its home state
for employing, or participating in, the same or similar practices. The Action
seeks treble damages and attorneys fees on behalf of all purchasers of packs of
cards potentially including "insert" cards over a four-year period. The Company
believes it has meritorious defenses and intends to defend the Action
vigorously. Given the early stage of the litigation, however, the Company is
unable to assess the likelihood of a materially adverse outcome or to estimate
the amount or range, if any, of any probable loss.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits as required by Item 601 of Regulation S-K
10.27 - Amendment Number 1 to Credit Agreement
10
<PAGE>
SIGNATURE
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.
THE TOPPS COMPANY, INC.
-----------------------
REGISTRANT
/s/ Catherine Jessup
------------------------------
Vice President-Chief Financial
Officer
October 15, 1996
11
<PAGE>
AMENDMENT NO. 1 TO CREDIT AGREEMENT
THIS AMENDMENT NO. 1 TO CREDIT AGREEMENT (this "Agreement") is made and
entered into as of this 5th day of June, 1996 among THE TOPPS COMPANY, INC., a
Delaware corporation ("Borrower"), NATIONSBANK, N.A., a national banking
association formerly known as NationsBank, National Association (Carolinas),
each other lender signatory hereto (each individually, a "Lender" and
collectively, the "Lenders"), and NATIONSBANK, N.A., a national banking
association formerly known as NationsBank, National Association (Carolinas), in
its capacity as agent for the Lenders (in such capacity, the "Agent");
W I T N E S S E T H:
-------------------
WHEREAS, the Borrower, the Lenders and the Agent have entered into a
Credit Agreement dated as of June 30, 1995 (as amended hereby and as from time
to time further amended, supplemented or replaced, the "Credit Agreement"),
pursuant to which the Lenders agreed to make certain revolving credit, term loan
and letter of credit facilities available to the Borrower; and
WHEREAS, the Borrower has requested that the Credit Agreement be
amended in the manner set forth herein and the Agent and the Lenders are willing
to agree to such amendment;
NOW, THEREFORE, in consideration of the mutual covenants and the
fulfillment of the conditions set forth herein, the parties hereto do hereby
agree as follows:
1. Definitions. Any capitalized terms used herein without definition shall
-----------
have the meaning set forth in the Credit Agreement.
2. Amendment. Subject to the terms and conditions set forth herein, the
---------
definition of "Consolidated Current Assets" is hereby deleted in its entirety
and replaced by the following definition:
"Consolidated Current Assets" means all assets of the Borrower
and its Subsidiaries which are expected to be realized in cash, sold in
the ordinary course of business, or consumed within one year or which
would be classified as a current asset, other than cash, all determined
in accordance with GAAP applied on a Consistent Basis; provided,
however, that there shall be excluded from the calculation of
Consolidated Current Assets that portion of all assets financed through
incurring liabilities which are not included in the calculation of
Consolidated Current Liabilities;
3. Effectiveness. This Agreement shall become effective as of the date
-------------
hereof upon receipt by the Agent of twelve (12) fully executed copies of this
Agreement (which may be signed in counterparts).
4. Representations and Warranties. In order to induce the Agent and the
--------------------------------
Lenders to enter into this Agreement, the Borrower represents and warrants to
the Agent and the Lenders as follows:
1
<PAGE>
a) There has been no material adverse change in the condition,
financial or otherwise, of the Borrower and its Subsidiaries, taken as
a whole, since the date of the most recent financial reports of the
Borrower received by the Agent and the Lenders under Section 9.1(a) of
-------------
the Credit Agreement, other than changes in the ordinary course of
business;
b) The business and properties of the Borrower and its
Subsidiaries, taken as a whole, are not, and since the date of the most
recent financial report of the Borrower and its Subsidiaries received
by the Agent and the Lenders under Section 9.1(a) of the Credit
--------------
Agreement, have not been, adversely affected in any substantial way as
the result of any fire, explosion, earthquake, accident, strike,
lockout, combination of workers, flood, embargo, riot, activities of
armed forces, war or acts of God or the public enemy, or cancellation
or loss of any major contracts; and
c) No event has occurred and is continuing which constitutes,
and no condition exists which upon the consummation of the transaction
contemplated hereby would constitute, a Default or an Event of Default
under the Credit Agreement, either immediately or with the lapse of
time or the giving of notice, or both.
5. Entire Agreement. This Agreement sets forth the entire understanding and
----------------
agreement of the parties hereto in relation to the subject matter hereof and
supersedes any prior negotiations and agreements among the parties relative to
such subject matter.
6. Full Force and Effect of Agreement. Except as hereby specifically
--------------------------------------
amended, modified or supplemented, the Credit Agreement and all other Loan
Documents are hereby confirmed and ratified in all respects and shall remain in
full force and effect according to their respective terms.
7. Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be deemed an original as against any party
whose signature appears thereon, and all of which shall together constitute one
and the same instrument.
8. Governing Law. This Agreement shall in all respects be governed by the
--------------
laws and judicial decisions of the State of New York.
9. Enforceability. Should any one or more of the provisions of this
--------------
Agreement be determined to be illegal or unenforceable as to one or more of the
parties hereto, all other provisions nevertheless shall remain effective and
binding on the parties hereto.
10. Credit Agreement. All references in any of the Loan Documents to the
-----------------
Credit Agreement shall mean the Credit Agreement as amended hereby.
[Signature page follows.]
2
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their duly authorized officers, all as of the day and year
first above written.
BORROWER:
THE TOPPS COMPANY, INC.
By:_______________________________________
Name:_____________________________________
Title:____________________________________
AGENT:
NATIONSBANK, N.A. as Agent for the Lenders
By:_______________________________________
Name:_____________________________________
Title:____________________________________
LENDERS:
NATIONSBANK, N.A.
By:_______________________________________
Name:_____________________________________
Title:____________________________________
CHEMICAL BANK
By:_______________________________________
Name:_____________________________________
Title:____________________________________
[Signature Page 1 of 2]
3
<PAGE>
NATWEST BANK N.A.
By:_______________________________________
Name:_____________________________________
Title:____________________________________
THE BANK OF NEW YORK
By:_______________________________________
Name:_____________________________________
Title:____________________________________
THE SUMITOMO BANK LIMITED,
CHICAGO BRANCH
By:_______________________________________
Name:_____________________________________
Title:____________________________________
TORONTO DOMINION (NEW YORK), INC.
By:_______________________________________
Name:_____________________________________
Title:____________________________________
THE MITSUBISHI BANK, LIMITED-
NEW YORK BRANCH
By:_______________________________________
Name:_____________________________________
Title:____________________________________
[Signature Page 2 of 2]
4
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAR-01-1997
<PERIOD-END> AUG-31-1996
<CASH> 35,120
<SECURITIES> 0
<RECEIVABLES> 37,351
<ALLOWANCES> 1,056
<INVENTORY> 23,374
<CURRENT-ASSETS> 108,815
<PP&E> 53,718
<DEPRECIATION> 23,533
<TOTAL-ASSETS> 211,955
<CURRENT-LIABILITIES> 74,614
<BONDS> 37,450
0
0
<COMMON> 475
<OTHER-SE> 86,044
<TOTAL-LIABILITY-AND-EQUITY> 211,955
<SALES> 134,286
<TOTAL-REVENUES> 136,014
<CGS> 87,784
<TOTAL-COSTS> 125,394
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 166
<INTEREST-EXPENSE> 1,589
<INCOME-PRETAX> 9,031
<INCOME-TAX> 4,064
<INCOME-CONTINUING> 4,967
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,967
<EPS-PRIMARY> .11
<EPS-DILUTED> .11
</TABLE>
