UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
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|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended May 2, 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 0-15385
ONE PRICE CLOTHING STORES, INC.
(Exact name of registrant as specified in its charter)
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DELAWARE 57-0779028
(State or other jurisdiction of (I.R.S. Employer
Incorporation or organization) Identification No.)
Highway 290, Commerce Park
1875 East Main Street
Duncan, South Carolina 29334
(Address of principal executive offices) (Zip Code)
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Registrant's telephone number, including area code: (864) 433-8888
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 shares of the Registrant's Common Stock outstanding, as of June 4,
1998 was 10,435,531.
INDEX
ONE PRICE CLOTHING STORES, INC. AND SUBSIDIARIES
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Condensed consolidated balance sheets -- May 2, 1998, January 31,
1998 and May 3, 1997
Condensed consolidated statements of operations -- Three-month
periods ended May 2, 1998 and May 3, 1997
Condensed consolidated statements of cash flows -- Three-month
periods ended May 2, 1998 and May 3, 1997
Notes to unaudited condensed consolidated financial statements -- May 2, 1998
Independent accountants' report on review of interim financial information
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
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SIGNATURES
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PART I. FINANCIAL INFORMATION
CONDENSED CONSOLIDATED BALANCE SHEETS
One Price Clothing Stores, Inc. and Subsidiaries
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May 2, January 31, May 3,
1998 1998 (1) 1997
------------------ ------------------ ------------------
(Unaudited) (Unaudited)
Assets
CURRENT ASSETS
Cash and cash equivalents $ 2,695,000 $ 1,827,000 $ 2,996,000
Merchandise inventories 45,540,000 35,508,000 53,839,000
Federal and state income taxes receivable 2,855,000 4,637,000 2,929,000
Deferred income taxes -- -- 2,290,000
Other current assets 7,821,000 6,359,000 5,369,000
------------------ ------------------ ------------------
TOTAL CURRENT ASSETS 58,911,000 48,331,000 67,423,000
------------------ ------------------ ------------------
PROPERTY AND EQUIPMENT, at cost 60,858,000 60,752,000 58,305,000
Less accumulated depreciation 25,886,000 24,748,000 22,533,000
------------------ ------------------ ------------------
34,972,000 36,004,000 35,772,000
------------------ ------------------ ------------------
OTHER ASSETS 3,844,000 3,777,000 2,949,000
------------------ ------------------ ------------------
$ 97,727,000 $ 88,112,000 $ 106,144,000
================== ================== ==================
Liabilities and Shareholders' Equity
CURRENT LIABILITIES
Accounts payable $ 25,909,000 $ 25,391,000 $ 27,729,000
Current portion of long-term debt and note payable 17,331,000 11,664,000 15,514,000
Sundry liabilities 8,601,000 7,025,000 7,977,000
------------------ ------------------ ------------------
TOTAL CURRENT LIABILITIES 51,841,000 44,080,000 51,220,000
------------------ ------------------ ------------------
LONG-TERM DEBT 7,863,000 7,915,000 5,921,000
------------------ ------------------ ------------------
DEFERRED INCOME TAXES AND OTHER
NONCURRENT LIABILITIES 2,956,000 3,095,000 3,217,000
------------------ ------------------ ------------------
SHAREHOLDERS' EQUITY
Preferred Stock, par value $0.01, --
Authorized and unissued 500,000 shares
Common Stock, par value $0.01 --
Authorized 35,000,000 shares, issued and
outstanding 10,435,531 shares (all periods) 104,000 104,000 104,000
Additional paid-in capital 11,453,000 11,453,000 11,453,000
Retained earnings 23,510,000 21,465,000 34,229,000
------------------ ------------------ ------------------
35,067,000 33,022,000 45,786,000
------------------ ------------------ ------------------
$ 97,727,000 $ 88,112,000 $ 106,144,000
================== ================== ==================
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(1) Derived from audited financial statements.
See notes to unaudited condensed consolidated financial statements
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
One Price Clothing Stores, Inc. and Subsidiaries
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Three-Month Period Ended
----------------------------------------
May 2, May 3,
1998 1997
------------------ ------------------
NET SALES $ 82,513,000 $ 78,899,000
Cost of goods sold, distribution and buying costs 51,892,000 49,370,000
------------------ ------------------
GROSS MARGIN 30,621,000 29,529,000
------------------ ------------------
Selling, general and administrative expenses 17,995,000 19,032,000
Store rent and related expenses 6,883,000 6,297,000
Depreciation and amortization expense 1,322,000 1,223,000
Interest expense 649,000 586,000
------------------ ------------------
26,849,000 27,138,000
Interest income 30,000 14,000
------------------ ------------------
NET EXPENSES 26,819,000 27,124,000
------------------ ------------------
INCOME BEFORE INCOME TAXES 3,802,000 2,405,000
Provision for income taxes 1,757,000 961,000
------------------ ------------------
NET INCOME $ 2,045,000 $ 1,444,000
================== ==================
Net income per common share - Basic - Note B $ 0.20 $ 0.14
================== ==================
Net income per common share - Diluted - Note B $ 0.20 $ 0.14
================== ==================
Weighted average common shares outstanding -
Basic - Note B 10,435,531 10,435,531
================== ==================
Weighted average common shares outstanding -
Diluted - Note B 10,439,380 10,464,462
================== ==================
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See notes to unaudited condensed consolidated financial statements
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
One Price Clothing Stores, Inc. and Subsidiaries
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Three-Month Period Ended
----------------------------------------
May 2, May 3,
1998 1997
------------------ ------------------
OPERATING ACTIVITIES:
Net income $ 2,045,000 $ 1,444,000
Adjustments to reconcile net income to net cash
(used in) provided by operating activities
Depreciation and amortization 1,322,000 1,223,000
Decrease in other noncurrent assets 102,000 36,000
(Decrease) increase in other noncurrent (70,000) 235,000
liabilities
Deferred income tax benefit -- (400,000)
Loss on disposal of property and equipment 114,000 228,000
Changes in operating assets and liabilities (7,601,000) (1,324,000)
------------------ ------------------
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES
(4,088,000) 1,442,000
------------------ ------------------
INVESTING ACTIVITIES:
Purchases of property and equipment (318,000) (893,000)
Increase in other noncurrent assets, net (246,000) (101,000)
Decrease in amount due from related party 13,000 --
------------------ ------------------
NET CASH USED IN INVESTING ACTIVITIES (551,000) (994,000)
------------------ ------------------
FINANCING ACTIVITIES:
Net borrowings from revolving credit facility 5,667,000 396,000
Repayment of long-term debt (52,000) (394,000)
Debt financing costs incurred (40,000) --
Payment of capital lease obligation (55,000) (21,000)
(Decrease) increase in amount due to related (13,000) 10,000
parties
------------------ ------------------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
5,507,000 (9,000)
------------------ ------------------
INCREASE IN CASH AND CASH EQUIVALENTS 868,000 439,000
Cash and cash equivalents at beginning of period 1,827,000 2,557,000
------------------ ------------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD
$ 2,695,000 $ 2,996,000
================== ==================
SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid $ 660,000 $ 460,000
Income taxes paid 14,000 45,000
Noncash financing activity - capital leases -- 10,000
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See notes to unaudited condensed consolidated financial statements
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
One Price Clothing Stores, Inc. and Subsidiaries
May 2, 1998
NOTE A -- BASIS OF PRESENTATION
The accompanying condensed consolidated financial statements are unaudited and
include the accounts of One Price Clothing Stores, Inc. and its subsidiaries,
all of which are wholly-owned (the "Company"). All significant intercompany
accounts and transactions have been eliminated in consolidation.
These financial statements have been prepared in accordance with generally
accepted accounting principles for interim financial information and the
instructions 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.
For interim reporting, the Company's gross profit is calculated on a current
quarterly basis by its inventory management system. Inventories are stated at
the lower of cost (using the first-in, first-out (FIFO) retail method) or
market.
In the opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included. Due
to the seasonality of the Company's sales, operating results for the three-month
period ended May 2, 1998 are not necessarily indicative of the results that may
be expected for the year ending January 30, 1999. For further information, refer
to the financial statements and footnotes thereto included in the Company's
Annual Report on Form 10-K for the year ended January 31, 1998.
NOTE B -- EARNINGS PER SHARE
Basic earnings per share are computed based upon the weighted average number of
common shares outstanding. Diluted earnings per share are computed based upon
the weighted average number of common and common equivalent shares outstanding.
Common equivalent shares consist of shares under option.
NOTE C -- CREDIT FACILITIES
In May and June 1997 and February 1998, the Company amended its financing
arrangements with its primary lender. Considered together, the amendments
provide a three-year extension through March 2001 and continue to provide a
revolving credit facility of up to $37,500,000 (including a letter of credit
sub-facility of up to $25,000,000). Under the June 1997 amendment, the Company
was permitted to enter into a mortgage loan agreement with a commercial bank
(discussed further below) and the term loan portion of the agreement with the
primary lender was repaid. Under the May 1997 amendment, the term loan was
increased by approximately $1,450,000 to $7,500,000.
Borrowings under the credit agreement with the primary lender are collateralized
by all assets owned by the Company during the term of the agreement (other than
the land, building, fixtures and improvements collateralizing the mortgage loan
discussed below) and bear interest, at the Company's option (subject to certain
limitations in the agreement), at the Prime Rate plus 0.5% or the Adjusted
Eurodollar Rate, as defined, plus 2.5%. Maximum borrowings under the revolving
credit facility and utilization of the letter of credit facility are based on a
borrowing base formula determined with respect to eligible inventory as defined
in the agreement. The amended agreement provides for a temporary adjustment to
the lending formula to increase the borrowing availability during the period
January 30, 1998 through June 30, 1998. Availability under the revolving credit
facility fluctuates in accordance with the Company's seasonal variations in
inventory levels. At May 2, 1998, the Company had approximately $8.7 million in
excess availability under the revised borrowing base formula. At June 5, 1998,
the Company had approximately $14.2 million in excess availability. The lending
formula may be revised from time to time in response to changes in the
composition of the Company's inventory or other business conditions. After June
30, 1998, when the temporary adjustment to the lending formula expires, excess
availabilities at May 2, 1998 and June 5, 1998 would have been $6.4 million and
$11.8 million, respectively.
The Company's amended revolving credit agreement contains certain covenants
which, among other things, restrict the ability of the Company to incur other
indebtedness, or encumber or dispose of assets, and prohibit the Company from
repurchasing its Common Stock or paying dividends. The Company is required to
maintain a $5,000,000 minimum level of working capital and to maintain a minimum
adjusted net worth (both as defined in the agreement). Effective January 30,
1998, such minimum net worth requirement was reduced from $34,000,000 to
$25,000,000. The Company was in compliance with these covenants at May 2, 1998.
In May 1997, the Company entered into an agreement with a commercial bank to
provide a letter of credit facility of up to $3,000,000. Letters of credit
issued under the agreement are collateralized by inventories purchased using
such letters of credit. In March 1998, the agreement was amended to adjust the
Company's minimum net worth requirement to the same level as that required by
the Company's primary lender under the revolving credit agreement. In April
1998, the agreement was amended to extend the expiration date of the facility to
the earlier of June 1999 or termination of the Company's revolving credit
facility with its primary lender. The agreement, as amended, contains certain
restrictive covenants which are substantially the same as those in the Company's
amended revolving credit facility discussed above.
In June 1997, the Company repaid the term loan portion of its primary credit
facility and entered into a twenty-year mortgage agreement with a commercial
bank. The agreement provides for a mortgage of $8,125,000 secured by the
Company's real property located at its corporate offices including land,
buildings, fixtures and improvements. Commencing August 1, 1997, the mortgage
loan is payable in 240 consecutive equal monthly installments (including
interest at the rate of 9.125% per annum). Certain fees may be payable by the
Company if the mortgage loan is repaid prior to June 2014. The mortgage
agreement contains certain nonfinancial covenants with which the Company was in
compliance at May 2, 1998.
NOTE D - EFFECT OF NEW ACCOUNTING PRONOUNCEMENTS
The FASB issued SFAS 130, "Reporting Comprehensive Income," which requires
disclosure of comprehensive income within the basic financial statements for
those entities with items which qualify as components of comprehensive income
such as foreign currency transactions and unrealized gains on securities. The
Company's adoption of SFAS 130, required for fiscal periods beginning after
December 15, 1997, resulted in comprehensive income equal to net income reported
for the three-month period ended May 2, 1998.
The FASB issued SFAS 131, "Disclosures about Segments of the Enterprise and
Related Information," effective for periods beginning after December 15, 1997.
The new standard requires disclosure of revenues, results of operations and
assets of each segment of a public enterprise which qualifies based on
quantifiable and decision-making criteria. The Company is in the process of
reviewing the effect, if any, that SFAS 131 will have on the Company's
consolidated financial statements.
INDEPENDENT ACCOUNTANTS' REVIEW REPORT
To the Board of Directors and Shareholders of
One Price Clothing Stores, Inc.
Duncan, South Carolina
We have reviewed the accompanying condensed consolidated balance sheets of One
Price Clothing Stores, Inc. and subsidiaries (the "Company") as of May 2, 1998
and May 3, 1997, and the related condensed consolidated statements of operations
and cash flows for the three-month periods then ended. These financial
statements are the responsibility of the Company's management.
We conducted our reviews in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and of 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 reviews, we are not aware of any material modifications that should
be made to such 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 January 31, 1998,
and the related consolidated statements of operations, shareholders' equity, and
cash flows for the year then ended (not presented herein); and in our report
dated March 20, 1998 (April 21, 1998 as to Note B), 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 January 31, 1998 is fairly stated, in all material respects, in relation
to the consolidated balance sheet from which it has been derived.
DELOITTE & TOUCHE LLP
Charlotte, North Carolina
May 21, 1998
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Results of Operations
Net sales for the quarter ended May 2, 1998 were $82,513,000 compared to
$78,899,000 for the quarter ended May 3, 1997. Comparable store sales for the
quarter were flat compared to the same quarter last year. The Company considers
stores that have been open 18 months or more to be comparable, and there were
576 such stores at May 2, 1998.
Three stores were opened during the first quarter of fiscal 1998, two stores
were relocated and sixteen underperforming stores were closed. At May 2, 1998,
the Company operated 647 stores, one fewer than at quarter-end last year, in 27
states, the District of Columbia, Puerto Rico and the U.S. Virgin Islands.
Sales performance for the first several weeks of the first quarter of fiscal
1998 were affected by slow receipts of key Spring merchandise. Sales
strengthened during the last six weeks of the first quarter of fiscal 1998 and
were in excess of planned levels. Management believes the strong sales trends
are primarily due to favorable customer reaction to the current merchandise mix,
a renewed emphasis on core pricing which began late last year, favorable weather
experienced in most of the Company's markets and to favorable sales trends in
the retail apparel industry.
Gross margin was 37.1% of net sales in the first quarter of fiscal 1998 compared
to 37.4% of net sales in the first quarter of fiscal 1997. The slight decrease
in gross margin as a percentage of net sales was principally due to taking
Spring merchandise markdowns earlier than in fiscal 1997 and to increasing the
provision for shrinkage versus the comparable quarter last year.
Selling, general and administrative ("SG&A") expenses were 21.8% of net expenses
in the first quarter of fiscal 1998 compared to 24.1% of net sales in the first
quarter of fiscal 1997. This decrease was primarily due to the initial results
of cost reductions in the Company's stores and Home Office as part of
Management's restructuring plan announced in January 1998.
Store rent and related expenses were 8.3% of net sales in the first quarter of
fiscal 1998 compared to 8.0% of net sales in the first quarter of fiscal 1997.
Store rent and related expenses per average store increased 8% for the first
quarter of fiscal 1998 compared to the same period last year. The increase in
average store rents was due to the continuation of the Company's store expansion
strategy of increasing the proportion of larger, higher volume stores, and, thus
entering more costly sites with higher rents, and the closing of older,
underperforming stores which had lower average rent costs. Management
anticipates that this trend of increasing average store rents per square foot
will continue.
Interest expense increased to 0.8% of net sales in the first quarter of fiscal
1998 compared to 0.7% in the first quarter of fiscal 1997. This increase was due
to slightly higher interest rates and increased average levels of borrowing.
The effective income tax benefit rate for fiscal 1997 was 16.1%. Management
estimates the Company's effective income tax rate will be approximately 45% in
fiscal 1998; however, if sufficient levels of profitability are not achieved,
the effective income tax rate may vary significantly.
Outlook
Sales thus far in the second quarter of fiscal 1998 continue ahead of planned
levels and comparable store sales comparisons to the same time period in fiscal
1997 are also positive. Management believes the improved sales trends are
primarily due to favorable customer reaction to the current merchandise mix and
a renewed emphasis on core pricing begun late last year, favorable weather
experienced in most of the Company's markets and to favorable sales trends in
the retail apparel industry.
The Company's sales and operating results are seasonal. The Company's sales and
operating results have been the highest in the first quarter (February - April)
and second quarter (May - July) and lowest in the third quarter (August -
October) and fourth quarter (November - January). Consumer reaction to the
Company's merchandise presentation, the effectiveness of the Company's
transition to Fall merchandise and the continuation or not of the favorable
trends in the women's retail apparel industry will largely determine the
profitability of the second, third and fourth quarters of fiscal 1998. During
fiscal 1998, the Company intends to focus its efforts on improving sales in
existing stores and achieving its margin and cost-containment targets.
As part of its strategy to focus on improving sales in existing stores, the
Company will limit the number of new store openings in fiscal 1998. The Company
will close in fiscal 1998 the remainder of the 75 underperforming stores
originally identified in the restructuring plan announced in January 1998.
Forty-seven such underperforming stores have been closed through the end of the
first quarter of fiscal 1998 including those closed during January 1998.
Liquidity and Capital Resources
During the first three months of fiscal 1998, net cash provided by borrowings on
the Company's revolving credit facility was used to finance the increase in the
Company's inventory levels. The Company's inventory levels at May 2, 1998
include spring merchandise in stores and in-transit to the stores and were
higher than at January 30, 1998 when inventory levels are typically lower.
During the first three months of fiscal 1997, net cash provided by operating
activities was used primarily to purchase property and equipment.
Total merchandise inventories at the end of the first quarter of fiscal 1998
decreased 15% compared to the end of the first quarter of fiscal 1997. This
decrease in merchandise inventories was primarily due to reducing the proportion
of imported merchandise from foreign sources, thereby reducing the levels of
merchandise inventories in-transit to the Company's Distribution Center. As a
result, the level of outstanding documentary letters of credit decreased to $5.9
million at May 2, 1998 compared to $9.3 million at May 3, 1997. Management
expects to continue to pursue opportunistic domestic purchases of merchandise,
but will purchase merchandise from foreign sources when it is deemed in the best
interests of the Company.
Total accounts payable and amounts outstanding under the credit facilities,
including the long-term portions thereof, increased 4% at the end of the first
quarter of fiscal 1998 compared to the first quarter of fiscal 1997. The level
of accounts payable and amounts outstanding under the credit facilities is
subject to fluctuations because of the Company's seasonal operations,
opportunistic buying strategy, rate of capital expenditures and prevailing
business conditions.
During the first three months of fiscal 1998, $318,000 was used to purchase
property and equipment compared to $893,000 in the first three months of fiscal
1997. The decrease in amounts used to purchase property and equipment was due to
the Company's strategy to limit the number of new store openings in fiscal 1998.
In May and June 1997 and February 1998, the Company amended its financing
arrangements with its primary lender. Considered together, the amendments
provide a three-year extension through March 2001 and continue to provide a
revolving credit facility of up to $37,500,000 (including a letter of credit
sub-facility of up to $25,000,000). Under the June 1997 amendment, the Company
was permitted to enter into a mortgage loan agreement with a commercial bank
(discussed further below) and the term loan portion of the agreement with the
primary lender was repaid. Under the May 1997 amendment, the loan was increased
by approximately $1,450,000 to $7,500,000.
Borrowings under the credit agreement are collateralized by all assets owned by
the Company during the term of the agreement (other than the land, building,
fixtures and improvements collateralizing the mortgage loan discussed below) and
bear interest, at the Company's option (subject to certain limitations in the
agreement), at the Prime Rate plus 0.5% or the Adjusted Eurodollar Rate, as
defined, plus 2.5%. Maximum borrowings under the revolving credit facility and
utilization of the letter of credit facility are based on a borrowing base
formula determined with respect to eligible inventory as defined in the
agreement. The amended agreement provides for a temporary adjustment to the
lending formula to increase the borrowing availability during the period January
30, 1998 through June 30, 1998. Availability under the revolving credit facility
fluctuates in accordance with the Company's seasonal variations in inventory
levels. At May 2, 1998, the Company had approximately $8.7 million in excess
availability under the revised borrowing base formula. At June 5, 1998, the
Company had approximately $14.2 million in excess availability. The lending
formula may be revised from time to time in response to changes in the
composition of the Company's inventory or other business conditions. After June
30, 1998, when the temporary adjustment to the lending formula expires, excess
availabilities at May 2, 1998 and June 5, 1998 would have been $6.4 million and
$11.8 million, respectively.
The Company's amended revolving credit agreement contains certain covenants
which, among other things, restrict the ability of the Company to incur
indebtedness, or encumber or dispose of assets, and prohibit the Company from
repurchasing its Common Stock or paying dividends. The Company is required to
maintain a minimum adjusted net worth (as defined in the agreement) of
$34,000,000. Effective January 30, 1998, the Company's minimum net worth
requirement was reduced to $25,000,000. The Company was in compliance with these
covenants at May 2, 1998.
In May 1997, the Company entered into an agreement with a commercial bank to
provide a letter of credit facility of up to $3,000,000. Letters of credit
issued under the agreement are collateralized by inventories purchased using
such letters of credit. In March 1998, the agreement was amended to adjust the
Company's minimum net worth requirement to the same level as that required by
the Company's primary lender under the revolving credit agreement. In April
1998, the agreement was amended to extend the expiration date of the facility to
the earlier of June 1999 or termination of the Company's revolving credit
facility with its primary lender. The agreement, as amended, contains certain
restrictive covenants which are substantially the same as those in the Company's
amended revolving credit facility discussed above.
In June 1997, the Company repaid the term loan portion of its primary credit
facility and entered into a twenty-year mortgage agreement with a commercial
bank. The agreement provides for a mortgage loan of $8,125,000 secured by the
Company's real property located at its corporate offices including land,
buildings, fixtures and improvements. Commencing August 1, 1997, the mortgage
loan is payable in 240 consecutive equal monthly installments (including
interest at the rate of 9.125% per annum). Certain fees may be payable by the
Company if the mortgage loan is repaid prior to June 2014. The mortgage
agreement contains certain nonfinancial covenants with which the Company was in
compliance at May 2, 1998.
In fiscal 1998, the Company plans to spend approximately $2.0 million on capital
expenditures, most of which will be used to remodel, refixture and relocate
existing stores. The Company's liquidity requirements in the foreseeable future
will be met principally through cash provided by operations and the use of its
credit facilities. If deemed by management to be in the best interests of the
Company, additional long term debt, capital leases or other permanent financing
may be considered.
Year 2000 Systems Readiness
The Company has conducted a comprehensive review of its computer systems to
identify the systems that could be affected by the "Year 2000" issue. Based on
the review, the Company's major systems which would be adversely affected by the
year 2000 will be replaced or upgraded through the normal course of business.
Internal resources will be used in a timely manner to evaluate, modify and test
the Company's other systems which are not scheduled to be upgraded or replaced
through the normal course of business. Management believes the combination of
these efforts will prepare the Company's computer systems for the year 2000 on a
timely basis. However, if such modifications and conversions are not completed
timely, the Year 2000 problem may have a material impact on the operations of
the Company. The incremental costs associated with major system upgrades and/or
replacements, as well as internal efforts to evaluate, modify and test the
Company's other systems are not expected to be material to the Company's
consolidated financial statements.
Effect of New Accounting Pronouncements
The FASB issued SFAS 130, "Reporting Comprehensive Income," which requires
disclosure of comprehensive income within the basic financial statements for
those entities with items which qualify as components of comprehensive income
such as foreign currency transactions and unrealized gains on securities. The
Company's adoption of SFAS 130, required for fiscal periods beginning after
December 15, 1997, resulted in comprehensive income equal to net income reported
for the three-month period ended May 2, 1998.
The FASB issued SFAS 131, "Disclosures about Segments of an Enterprise and
Related Information," effective for periods beginning after December 15, 1997.
The new standard requires disclosure of revenues, results of operations and
assets of each segment of a public enterprise which qualifies based on
quantifiable and decision-making criteria. The Company is in the process of
reviewing the effect, if any, that SFAS 131 will have on the Company's
consolidated financial statements.
Private Securities Litigation Reform Act of 1995
All statements contained in this document as to future expectations and
financial results, including, but not limited to, statements containing the
words "believe," "anticipates," "expects," and similar expressions, should be
considered forward-looking statements subject to the safe harbor created by the
Private Securities Litigation Reform Act of 1995. The Company cautions readers
of this Quarterly Report on Form 10-Q that a number of important factors could
cause the Company's actual results in fiscal 1998 and beyond to differ
materially from those expressed in such forward-looking statements. These
factors include, but are not limited to, the general economic conditions and
consumer demand; consumer preferences; weather patterns; competitive factors,
including pressure from pricing and promotional activities of competitors; the
impact of excess retail capacity and the availability of desirable store
locations on suitable terms; whether or not the Company's merchandising strategy
to offer alternative categories of merchandise at alternative price points will
increase sales and operating results or increase and attract new customers; the
availability, selection and purchasing of attractive merchandise on favorable
terms; credit availability, including adequate levels of credit support provided
to certain of the Company's vendors by factors and insurance companies; import
risks, including potential disruptions and duties, tariffs and quotas on
imported merchandise; and other factors described in the Company's filings with
the Securities and Exchange Commission from time to time. The Company does not
undertake to publicly update or revise its forward-looking statements even if
experience or future changes make it clear that any projected results expressed
or implied therein will not be realized.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
<TABLE>
<S> <C> <C>
(a) The following exhibits are included herein:
10(a) Amendment Number Three to the Loan and Security
Agreement by and between Congress Financial Corporation
(Southern) as Lender and the Registrant, One Price Clothing
of Puerto Rico, Inc. and One Price Clothing - U.S. Virgin
Islands, Inc. as Borrowers dated February 19, 1998:
Incorporated by reference to Exhibit 4(k) to the Registrant's
Annual Report on Form 10-K for the year ended January 31,
1998 (File No. 0-15385) (the "1997 Form 10-K").
10(b)Amendment Number One to the Continuing Commercial Credit
Agreement by and between Carolina First Bank as Lender and
the Registrant, One Price Clothing of Puerto Rico, Inc. and
One Price Clothing - U. S. Virgin Islands, Inc. as Borrowers
dated March 20, 1998: Incorporated by reference
to Exhibit 4(l) to the 1997 Form 10-K.
10(c) Amendment Number Two to the Continuing Commercial
Credit Agreement by and between Carolina First Bank
as Lender and the Registrant, One Price Clothing of Puerto
Rico, Inc. and One Price Clothing - U.S. Virgin Islands, Inc.
as Borrowers dated April 21, 1998: Incorporated by reference
to Exhibit 4(m) to the 1997 Form 10-K.
10(d) Employment Agreement dated November 10, 1997 and
Amendment to Employment Agreement dated April 16, 1998
between the Registrant and A. J. Nepa: Incorporated by
reference to Exhibit 10(q) to the 1997 Form 10-K.
10(e) Employment Agreement dated October 21, 1991 and
Amendment to Employment Agreement dated April 16, 1998
between the Registrant and George V. Zalitis: Incorporated by
reference to Exhibit 10(r) to the 1997 Form 10-K.
10(f) Letter of Understanding regarding Non-Executive
Chairman of the Board position and Consulting Agreement
dated April 16, 1998 between the Registrant and Leonard
Snyder: Incorporated by reference to Exhibit 10(s) to the
1997 Form 10-K.
10(g) Stock Option Agreement dated April 16, 1998 between
the Registrant and Leonard Snyder.
10(h) Restated By-Laws of the Registrant, as of July 22, 1992
and amended as of July 20, 1994, March 14, 1996 and April 29,
1998.
11 Computation of Per Share Earnings
15 Acknowledgment of Deloitte & Touche LLP, Independent
Accountants
27 Financial Data Schedule (electronic filing only)
(b) On April 29, 1998, the Company filed a report on Form 8-K
dated April 29, 1998 to announce changes in the composition
of the Company's Board of Directors.
</TABLE>
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.
ONE PRICE CLOTHING STORES, INC. (Registrant)
<TABLE>
<S> <C> <C>
Date: June 9, 1998 /s/ Larry I. Kelley
-------------------
Larry I. Kelley
President and Chief Executive Officer
(principal executive officer)
Date: June 9, 1998 /s/ Stephen A. Feldman
----------------------
Stephen A. Feldman
Executive Vice President and
Chief Financial Officer
(principal financial and accounting officer)
</TABLE>
ONE PRICE CLOTHING STORES, INC.
STOCK OPTION AGREEMENT
Name of Optionee: Leonard M. Snyder
Date of Grant: April 16, 1998
Number of Shares Subject to Options: 80,000
Exercise Price per Share: $1.766
Option expires and is no longer valid on or after: April 16, 2008 unless an
earlier date of expiration occurs pursuant to the terms set forth below.
The Options shall be exercisable according to the following schedule (subject to
adjustment as provided below):
26,667 Shares Beginning April 16, 1998 26,667 Shares Beginning
April 16, 1999 26,666 Shares Beginning April 16, 2000
An Option that becomes exercisable in whole or in part according to the
foregoing schedule may be exercised subsequently at any time prior to its
scheduled expiration, subject to earlier termination as described below.
Additional Option Terms:
The Options shall not be transferable except to members of the
Optionee's immediate family or a trust for the benefit of members of his family.
Any unexercised Option shall terminate on the date the Optionee ceases
to be Non-Executive Chairman of the Board of Directors of One Price Clothing
Stores, Inc. (the "Company"), unless the Optionee shall (a) die while still
serving in such capacity, in which case his legatees under his last will or his
personal representative or representatives may exercise the previously
unexercised portion of the Options at any time within one (1) year after his
death to the extent the Optionee could have exercised such Options as of the
April 16th next following his death; (b) becomes permanently or totally disabled
within the meaning of Section 22(e)(3) of the Internal Revenue Code of 1986, as
amended (the "Code") (or any successor provision), in which case he or his
personal representative may exercise the previously unexercised portion of the
Options at any time within one (1) year after termination of his services as
Non-Executive Chairman to the extent the Optionee could have exercised such
Options as of the April 16th next following his termination of employment; or
(c) resign or retire with the consent of the Company or be terminated without
Cause (as defined in that certain Employment Agreement by and between the
Company and Mr. Snyder dated April 16, 1998 (the"Agreement"), in which case he
may exercise the previously unexercised but then exercisable portion of the
Options at any time within three (3) months after such resignation or retirement
or retirement with the consent of the Company or termination without Cause. In
no event may the Options be exercised after the expiration of their fixed term.
An Option shall be deemed exercised when the holder (a) shall indicate
the decision to do so in writing delivered to the Company, (b) shall at the same
time tender to the Company payment in full in cash (or in shares of the
Company's Common Stock at the value of such shares at the time of exercise ) of
the exercise price for the shares for which the Option is exercised, (c) shall
tender to the Company payment in full in cash of the amount of all federal and
state withholding or other employment taxes applicable to the taxable income, if
any, of the holder resulting from such exercise, and (d) shall comply with such
other reasonable requirements as may be required for legal reasons. The Optionee
shall not have any of the rights of a shareholder with reference to shares
subject to an Option until a certificate for the shares has been executed and
delivered.
An Option may be exercised for any lesser number of shares than the
full amount for which it could be exercised. Such a partial exercise of an
Option shall not affect the right to exercise the Options from time to time in
accordance with this agreement for the remaining shares subject to the Options.
The number and kind of shares subject to Options hereunder and/or the
exercise price will be appropriately adjusted by the Compensation Committee of
the Board ("Committee") in the event of any change in the outstanding stock of
the Company by reason of stock dividend, stock split, recapitalization,
reorganization, merger, split up or the like. Such adjustment shall be designed
to preserve, but not increase, the benefits to the Optionee. The Committee is
responsible for making all determinations necessary or advisable for the
implementation of the Agreement, including what adjustments, if any, shall be
made, and all such determinations shall be final, binding and conclusive,
provided, however, that the Committee may, as required, or as it deems
necessary, in its discretion, seek legal advice prior to making any
determinations regarding the Agreement.
No certificate(s) for shares shall be executed or delivered upon
exercise of an Option until the Company shall have taken such action, if any, as
is then required to comply with the provisions of the Securities Act of 1933, as
amended, the Securities Exchange Act of 1934, as amended, the South Carolina
Uniform Securities Act, as amended, any other applicable state blue sky law(s)
and the requirements of any exchange on which the Company's Common Stock may, at
the time, be listed. Promptly following the date hereof, the Company will
register with the United State Securities and Exchange Commission on a Form S-8
the shares underlying the Options, notify the NASDAQ of such filing, and take
other steps as it deems necessary or appropriate in order that the shares
covered hereby may be lawfully issued. In the case of the exercise of an Option
by a person or estate acquiring the right to exercise the Option by bequest or
inheritance, the Board or Committee may require reasonable evidence as to the
ownership of the Option and may require such consents and releases of taxing
authorities as it may deem advisable.
Nothing in this Agreement shall in any way alter any of the rights or
duties of the Company or the Optionee under the Agreement.
By the Optionee's and the Company's signatures below, the Optionee and
the Company agree that this Option is granted under and governed by the terms
and conditions of this agreement. Signed as of June 2,1998.
<TABLE>
<S> <C>
ONE PRICE CLOTHING STORES, INC.
By: /s/ Larry I. Kelley
Title: President and Chief Executive Officer
WITNESS:
OPTIONEE:
/s/ Grant H. Gibson /s/ Leonard M. Snyder
- -------------------- ---------------------
Leonard M. Snyder
</TABLE>
RESTATED
BY-LAWS
OF
ONE PRICE CLOTHING STORES, INC.
( a Delaware corporation)
<TABLE>
<S> <C> <C> <C> <C>
INDEX
Page
ARTICLE I. Offices ................................................................ 1
ARTICLE II. Stockholders' Meetings .................................................. 1
Section 2.1 Places of Meetings ........................................... 1
Section 2.2 Annual Meetings ............................................ 1
Section 2.3 Special Meetings ............................................. 2
Section 2.4 Voting ...................................................... 2
Section 2.5 Quorum ........................................................ 2
Section 2.6 List of Stockholders .......................................... 3
Section 2.7 Action Without Meeting ........................................ 4
ARTICLE III. Board of Directors ................................................... 4
Section 3.1 Powers ........................................................ 4
Section 3.2 Numbers and Qualification....................................... 4
Section 3.3 Compensation .................................................. 5
Section 3.4 Meetings and Quorum ........................................... 5
Section 3.5 Committees .................................................... 6
Section 3.6 Conference Telephone Meetings .................................. 7
Section 3.7 Action Without Meeting ...................................... 7
ARTICLE IV. Officers ......................................................... 7
Section 4.1 Titles and Election ........................................... 7
Section 4.2 Duties ........................................................ 8
(a) Chairman of the Board of Directors ............................. 9
(b) President ...................................................... 9
(c) Vice President.................................................. 9
(d) Secretary ....................................................... 10
(e) Treasurer ....................................................... 10
Section 4.3 Delegation of Authority ........................................ 11
Section 4.4 Compensation ................................................... 11
ARTICLE V. Resignation, Vacancies and Removals .......................................... 11
Section 5.1 Resignations .................................................... 11
Section 5.2 Vacancies......................................................... 11
(a) Directors ....................................................... 11
(b) Officers.......................................................... 12
Section 5.3 Removals ......................................................... 12
(a) Directors ........................................................ 12
(b) Officers ........................................................ 12
ARTICLE VI. Capital Stock .............................................................. 12
Section 6.1 Certificates of Stock ........................................... 12
Section 6.2 Transfer of Stock ............................................... 13
Section 6.3 Record Dates .................................................... 13
Section 6.4 Lost Certificates ................................................ 14
ARTICLE VII. Fiscal Year, Bank Deposits, Checks, Etc..................................... 14
Section 7.1 Fiscal Year ...................................................... 14
Section 7.2 Bank Deposits, Checks, Etc. ..................................... 14
ARTICLE VIII. Books and Records ......................................................... 15
Section 8.1 Place of Keeping Books .......................................... 15
Section 8.2 Examination of Books ............................................ 15
ARTICLE IX. Notices .................................................................. 15
Section 9.1 Requirements of Notice .......................................... 15
Section 9.2 Waivers .......................................................... 16
ARTICLE X. Seal .................................................................. 16
ARTICLE XI. Powers of Attorney .......................................................... 16
ARTICLE XII. Indemnification of Directors, Officers and Employees ........................ 17
Section 12.1 Action Other Than By or in the Right
of the Corporation .............................................. 17
Section 12.2 Action By or in the Right of the
Corporation....................................................... 18
Section 12.3 Determination of Right of Indemnification ......................... 19
Section 12.4 Indemnification Against Expenses of Successful Party ............. 19
Section 12.5 Advances of Expenses ............................................. 20
Section 12.6 Right of Agent to Indemnification
Upon Application; Procedure Upon
Application ..................................................... 20
Section 12.7 Other Rights and Remedies ........................................ 21
Section 12.8 Insurance ........................................................ 22
Section 12.9 Indemnity Fund ................................................... 22
Section 12.10 Indemnification of Other Persons.................................. 22
Section 12.11 Survival of Indemnification....................................... 23
Section 12.12 Saving Clause .................................................... 23
Section 12.13 Certain Definitions .............................................. 23
ARTICLE XIII. Amendments ................................................................ 25
</TABLE>
ONE PRICE CLOTHING STORES, INC.
BY- LAWS
ARTICLE I
OFFICER
The Corporation shall at all times maintain a registered office in
the State of Delaware and a registered agent at that address but may have other
offices located in or outside of the State of Delaware as the Board of Directors
may from time to time determine.
ARTICLE II
Stockholders' Meetings
2.1 Places of Meetings. All meetings of stockholders shall be held at
such place or places in or outside of the State of Delaware as the Board of
Directors may from time to time determine or as may be designated in the notice
of meeting or waiver of notice thereof, subject to any provisions of the laws of
the State of Delaware.
2.2 Annual Meetings. The annual meeting of stockholders for the
election of directors and the transaction of such other business as may properly
come before the meeting shall be held on such date and at such time as may be
designated from time to time by the Board of Directors within four months after
the end of each fiscal year of the Corporation. If the annual meeting is not
held on the date designated, it may be held as soon thereafter as convenient and
shall be called the annual meeting. Written notice of the time and place of the
annual meeting shall be given by mail to each stockholder entitled to vote
thereat at his address as it appears on the records of the Corporation not less
than ten (10) nor more than sixty (60) days prior to the scheduled date thereof,
unless such notice is waived as provided by Article IX of these By-laws.
2.3 Special Meetings. Special meetings of stockholders may be called at
any time by the Board of Directors or the Chairman of the Board of Directors
stating the specific purpose or purposes thereof. Written notice of the time,
place and specific purposes of such meeting shall be given by mail to each
stockholder entitled to vote thereat at his address as it appears on the records
of the corporation not less than ten (10) nor more than sixty (60) days prior to
the scheduled date thereof, unless such notice is waived as provided by Article
IX of these By-laws.
2.4 Voting. At all meetings of stockholders, each stockholder entitled
to vote on the record date as determined under Article VI, Section 6.3 of these
By-laws or , if not so determined, as prescribed under the laws of the State of
Delaware, shall be entitled to one vote for each share of stock standing of
record in his name, subject to any restrictions or qualifications set forth in
the Certificate of Incorporation or any amendment thereto.
2.5 Quorum. At any meeting of stockholders, a majority of the number of
shares of stock outstanding and entitled to vote thereat, present in person or
by proxy, shall constitute a quorum, but a smaller interest may adjourn any
meeting from time to time, and the meeting may be held as adjourned without
further notice, subject to such limitation as may be imposed under the laws of
the State of Delaware. When a quorum is present at any meeting, a majority of
the number of shares of stock entitled to vote present thereat shall decide any
question brought before such meeting unless the question is one upon which a
different vote is required by express provision of the laws of the State of
Delaware, the Certificate of Incorporation or these By-laws, in which case such
express provision shall govern.
2.6 List of Stockholders. At least ten (10) days before every meeting,
a complete list of the stockholders entitled to vote at the meeting, arranged in
alphabetical order and showing the address of and the number of shares
registered in the name of each stockholder, shall be prepared by the Secretary
or the transfer agent in charge of the stock ledger of the Corporation. Such
list shall be open for examination by any stockholder, for any purpose germane
to the meeting, during ordinary business hours, for a period of at least ten
(10) days prior to the meeting, either at a place within the city where the
meeting is to be held, which place shall be specified in the notice of the
meeting, or, if not specified, at the place where the meeting is to be held. The
list shall also be produced and kept at the time and place of the meeting during
the whole time thereof, and may be inspected by any stockholder who is present.
The stock ledger shall be the only evidence as to who are the stockholders
entitled to examine such list or the books of the corporation or to vote in
person or by proxy at such meeting.
2.7 Action Without Meeting. Any action required by the laws of the
State of Delaware to be taken at any annual or special meeting of stockholders,
or any action which may be taken at any annual or special meeting of
stockholders, may be taken without a meeting, without prior notice and without a
vote, if a consent in writing , setting forth the action so taken, shall be
signed by all the holders of outstanding stock entitled to vote at such meeting.
ARTICLE III
Board of directors
3.1 Powers. The business and affairs of the corporation shall be
carried on by or under the direction of the Board of Directors, which shall have
all the powers authorized by the laws of the State of Delaware, subject to such
limitations as may be provided by the Certificate of Incorporation or these
By-laws.
3.2 Number and Qualification. The number of directors shall be not less
than three (3) and not more than nine (9), the exact number within such minimum
and maximum limits to be fixed and determined from time to time by resolution of
a majority of the Board of Directors. Each director shall serve until the
election and qualification of his successor or until his earlier resignation or
removal as provided in the Certificate of Incorporation or these By-laws. In
case of an increase in the number of directors between elections by the
stockholders, the additional directorships shall be considered vacancies and
shall be filled in the manner prescribed in Article V of these By-laws.
Directors need not be stockholders.
3.3 Compensation. The Board of Directors, or a committee thereof, may
from time to time by resolution, including, but not limited to, fees for
attendance at all meetings of the Board of Directors or any committee thereof,
and determine the amount of such fees and compensation.
3.4 Meeting and Quorum. Meetings of the Board of Directors may be held
either in or outside of the State of Delaware. A quorum shall be one-third (1/3)
of the then authorized number of directors, but not less than two (2) directors.
The Board of Directors shall, at the close of each annual meeting of
stockholders and without further notice other than these By-laws, if a quorum of
directors is then present or as soon thereafter as may be convenient, hold
regular meeting for the election of officers and the transaction of any other
business.
The Board of Directors may from time to time provide for the holding of
regular meetings with or without notice and may fix the times and places at
which such meetings are to be held. Meetings other than regular meetings may be
called at any time by the Chairman of the Board of Directors of the President
and must be called by the Secretary or an Assistant Secretary upon the request
of a majority of the Board of Directors.
Notice of each meeting other than a regular meeting (unless required by
the Board of Directors), shall be given to each director by mailing the same to
each director at his residence or business address at least two (2) days before
the meeting or by delivering the same to him personally or by telephone or
telegraph at least one (1) day before the meeting unless, in case of exigency,
the Chairman of the Board of Directors, the President or the Secretary shall
prescribe a shorter notice to be given personally or by telephone, telegraph,
cable or wireless to all or any one or more of the directors at their respective
residences or places of business.
Notice of any meeting shall state the time and place of such meeting,
but need not state the proposes thereof unless otherwise required by the laws of
the State of Delaware, the Certificate of Incorporation or the Board of
Directors.
3.5 Committees. The Board of Directors may, by resolution adopted by a
majority of the whole Board of Directors, provide for committees of two or more
directors and shall elect the members thereof to serve at the pleasure of the
Board of Directors and may at any time change the membership of each committee,
fill vacancies in it , authorize the committee to fill vacancies in such
committee, designated alternate members to replace any absent or disqualified
members at any meeting of such Committee, or dissolve it. Each such committee
shall have the powers and preform such duties, not inconsistent with law, as may
be assigned to it by the Board of Directors. Each committee may determine its
rules of procedure and the notice to be given of its meeting. A majority of the
members of each committee shall constitute a quorum.
3.6 Conference Telephone Meetings. Any one or more members of the Board
of Directors or any committee thereof may participate in a meeting by means of a
conference telephone or similar communication equipment by means of which all
persons participating in the meeting can hear each other, and such participation
in a meeting shall constitute presence in person at such meeting.
3.7 Action Without Meeting. Any action required or permitted to be
taken at any meeting of the Board of Directors or any committee thereof may be
taken without a meeting of all members of the Board of Directors or committee,
as the case may be, consent thereto in writing, and the writing or writings are
filed with the minutes of proceedings of the Board of Directors or committee.
ARTICLE IV
OFFICERS
4.1 Titles and Election. The officers of the Corporation shall be the
President, one or more Vice Presidents, the Secretary and the Treasurer. The
officers of the Corporation shall initially be elected as soon as convenient by
the Board of Directors and thereafter, in the absence of earlier resignations or
removals, shall be elected at the first meeting of the Board of Directors
following each annual meeting of stockholders. Each officer shall hold office at
the pleasure of the Board of Directors except as may otherwise be approved by
the Board of Directors, or until his earlier resignation, removal under these
By-laws or other termination of his employment. Any person may hold more than
one office if the duties can be consistently performed by the same person.
The Board of Directors, in its discretion, may also at any time elect
or appoint a Chairman of the Board of Directors, Assistant Secretaries and
Assistant Treasures and such other officers as it may deem advisable, each of
whom shall hold office at the pleasure of the Board of Directors or until his
earlier resignation, removal or other termination of employment, and shall have
such authority and shall perform such duties as may be prescribed or determined
from time to time by the Board of Directors or , in case of officers other than
the Chairman of the Board of Directors as the President or the then senior
executive officer may prescribe or determine.
4.2 Duties. Subject to such extension, limitations, and other
provisions as the Board of Directors may from time to time prescribe or
determine, the following officers shall have the following powers and duties:
(a) Chairman of the Board of Directors. The Chairman of the board of
Directors, if one is elected, shall be a director and , when present, shall
preside at all meetings of the stockholders and of the Board of Directors and
shall be charged with general supervision of the management and policy of the
Corporation and shall have such other powers and perform such other duties as
the Board of Directors may prescribe from time to time. Pursuant to the
foregoing provision, the Board of Directors in its discretion may appoint the
Chairman of the Board of Directors as Chief Executive Officer of the
Corporation.
(b) President. The President, if one is elected, shall be the chief
operating officer of the Corporation, shall exercise the power and authority and
perform all of the duties commonly incident to his office, shall in the absence
of the Chairman of the Board of Directors preside at all meetings of the
stockholders and of the Board of Directors if he is a director, and shall
perform such other duties as the Board of Directors may specify from time to
time. Pursuant to the foregoing provision, the Board of Directors in its
discretion may appoint the President as Chief Executive Office of the
Corporation. The President or a Vice President, or any officer specifically
authorized by the Board of Directors, shall sign all certificates for shares,
bonds, debentures, promissory notes, deeds and contracts of the Corporation.
(c) Vice President. The Vice President or Vice Presidents shall perform
such duties as may be assigned to them from time to time by the Board of
Directors or by the President if the Board of Directors does not do so. In the
absence or disability of the President, the Vice Presidents in order of
seniority may, unless otherwise determined by the Board of Directors, exercise
the powers and perform the duties pertaining to the office of President.
(d) Secretary. The Secretary, or in his absence an Assistant Secretary,
shall keep the minutes of all meetings of stockholders and of the Board of
Directors and any committee thereof, give and serve all notices, attend to such
correspondence as may be assigned to him, keep in safe custody the seal of the
Corporation, and affix such seal to all such instruments properly executed as
may reacquire, and shall perform all of the duties commonly incident to his
office and shall have such other duties and powers as may be prescribed or
determined from time to time by the Board of Directors or by the President if
the Board of Directors does not do so.
(e) Treasurer. The Treasurer, subject to the order of the Board of
Directors, shall have the care and custody of the monies, funds, and securities
of the Corporation (other than his own bond, if any, which shall be in the
custody of the President), shall maintain the general accounting book/accounting
records and forms of the Corporation and shall have, under the supervision of
the Board of Directors, all the powers and duties commonly incident to his
office. In addition to the foregoing, the Treasurer shall have such duties as
may be prescribed or determined from time to time by the Board of Directors of
by the President if the Board of Directors does not do so.
4.3 Delegation of Authority. The Board of Directors may at any time
delegate the powers and duties of any officer for the time being to any other
officer, director or employee.
4.4 Compensation. The compensation of the officers of the corporation
shall be fixed by the Board of Directors or a committee thereof, and the fact
that any officer is a director shall not preclude him form receiving
compensation or from voting upon the resolution providing the same.
ARTICLE V
Resignations, Vacancies and Removals
5.1 Resignations. Any director or officer may resign at any time by
giving written notice thereof to the Board of Directors, the President or the
Secretary. any such resignation shall take effect at the time specified therein
or , if the time be not specified, upon receipt thereof; and unless otherwise
specified therein, the acceptance of any resignation shall not be necessary to
make it effective.
5.2 Vacancies.
(a) Directors. Any vacancy in the Board of Directors caused by
reason of death, incapacity, resignation, removal, increase in the authorized
number of directors or otherwise, shall be filled by a majority vote of the
remaining directors though less than a quorum, or by the sole remaining
director. Any director so filling such a vacancy shall serve until the next
annual meeting of stockholders and until election and qualification of his
successor or until his earlier resignation or removal.
(b) Officers. The Board of Directors may at any time or from
time to time fill any vacancy among the officers of the Corporation.
5.3 Removals.
(a) Directors. The entire Board of Directors, or any
individual member thereof, maybe removed, with or without cause, by the holders
of a majority of the shares of capital stock then entitled to vote at an
election of directors.
(b) Officers. Subject to the provisions of any validly
existing agreement, the Board of Directors may at any meeting remove from office
any officer, with or without cause, and may appoint a successor.
ARTICLE VI
Capital Stock
6.1 Certificates of Stock. Every stockholder shall be entitled to a
certificate or certificates for shares of the capital stock of the Corporation
in such form as may be prescribed or authorized by the Board of Directors, duly
numbered and setting forth the number and kind of shares represented thereby.
Such certificates shall be signed by the Chairman of the Board of Directors, or
by the President or a Vice President and by the Treasurer or an Assistant
Treasurer or by the Secretary or an Assistant Secretary. Any or all of such
signatures may be in facsimile. In case any officer, transfer agent or
registrant who has signed or whose facsimile signature has been placed on a
certificate has ceased to be such officer, transfer agent or registrar before
the certificate has been issued, such certificate may nevertheless be issued and
delivered by the Corporation with the same effect as if he were such officer,
transfer agent or registrar at the date of issue.
6.2 Transfer of Stock. Shares of the capital stock of the Corporation
shall be transferable only upon the books of the Corporation upon the surrender
of the certificate or certificates properly assigned and endorsed for transfer.
If the corporation has a transfer agent or registrar acting on its behalf, the
signature of any officer or representative thereof may be in facsimile. The
Board of Directors may appoint a transfer agent and one or more co-transfer
agents and a registrar and one or more co-registrars and may make or authorize
such agents to make all such rules and regulations deemed expedient concerning
the issuance, transfer and registration of shares of stock.
6.3 Record Dates. In order that the Corporation may determine the
stockholders entitled to notice of or to vote at any meeting of stockholders or
any adjournment thereof, or to express consent to corporate action in writing
without a meeting, or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion or exchange of stock or for the purpose of any
other lawful action, the Board of Directors may fix in advance a record date
which, in the case of a meeting, shall not be less than ten (10) nor more than
sixty (60) days prior to the scheduled date of such meeting and which, in the
case of any other action, shall be not more than sixty (60) days prior to any
such action permitted by the laws of the State of Delaware. A determination of
stockholders of record entitled to notice of or to vote at a meeting of
stockholders shall apply to any adjournment of the meeting; provided, however,
that the Board of Directors may fix a new record date for the adjourned meeting.
6.4 Lost Certificates. In case of loss or mutilation or destruction of
a stock certificate, a duplicate certificate may be issued upon such terms as
may be determined or authorized by the Board of Directors or by the President if
the Board of Directors does not do so.
ARTICLE VII
Fiscal Year Bank Deposits, Checks, Etc.
7.1 Fiscal Year. The fiscal year of the Corporation shall be the
calendar year unless otherwise fixed by resolution of the Board of Directors.
7.2 Bank Deposit, Checks, Etc.. The funds of the Corporation shall be
deposited in the name of the Corporation or of any division thereof in such
banks or trust companies in the United States or elsewhere as may be designated
from time to time by the Board of Directors, or by such officer or officers as
the Board of Directors may authorize to make such designations.
All checks, drafts or other orders for the withdrawal of funds from any
bank account shall be signed by such person or persons as may be designated from
time to time by the Board of Directors. The signatures on checks, drafts or
other orders for the withdrawal of funds may be in facsimile if authorized in
the designation.
ARTICLE VII
Books and Records
8.1 Place of Keeping Books. The books and records of the corporation
may be kept outside of the State of Delaware.
8.2 Examination of Books. Except as may otherwise be provided by the
laws of the State of Delaware, the Certificate of Incorporation or these
By-laws, the Board of Directors shall have the power to determine from time to
time whether and to what extent and at what times and places and under what
conditions any of the accounts, records and books of the Corporation are to be
open to the inspection of any stockholder. No stockholder shall have any right
to inspect any account or book or document of the Corporation except as
prescribed by law or authorized by express resolution of the stockholders or of
the Board of Directors.
ARTICLE IX
Notices
9.1 Requirements of Notice. Whenever notice is required to be given by
statute, the Certificate of Incorporation or these By-laws, it shall not mean
personal notice unless so specified, but such notice may be given in writing by
deposition the same in a post office, letter box, or mail chute postage prepaid
and addressed to the person to whom such notice is directed at the address of
such person on the records of the Corporation, and such notice shall be deemed
given at the time when the same shall be thus mailed.
9.2 Waivers. Any stockholder, director or officer may, in writing or by
telegram or cable, at any time waive any notice or other formality required by
statute, the Certificate of Incorporation or these By-laws. Such waiver of
notice, whether given before or after any meeting or action shall be deemed
equivalent to notice. Presence of a stockholder either in person or by proxy at
any meeting of stockholders and presence of any director at any meeting of the
Board of Directors shall constitute a waiver of such notice as may be required
by any statute, the Certificate of Incorporation or these By-laws.
ARTICLE X
Seal
The corporate seal of the Corporation shall be in such form as the
Board of Directors shall determine from time to time and may consist of a
facsimile thereof or the words "Corporate Seal" or "Seal" enclosed in
parentheses.
ARTICLE XI
Powers of Attorney
The Board of Directors may authorize one or more of the officers of the
Corporation to execute powers of attorney delegating to named representatives or
agents power to represent or act on behalf of the Corporation, with or without
power of substitution.
In the absence of any action by the Board of Directors, any officer of
the Corporation may execute for and on behalf of the Corporation waivers of
notice of meeting of stockholders and proxies for such meetings of any company
in which the Corporation may hold voting securities.
ARTICLE XII
Indemnification of Directors, Officers and Employees
12.1 Action Other Than by or in the Right of the Corporation. Subject
to Section 12.3 hereof, the Corporation shall indemnify any person who was or is
a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding , whether civil, criminal, administrative,
and whether external or internal to the Corporation, (other than a judicial
action or suit brought by or in the right of the Corporation) by reason of the
fact that he is or was a director or officer of the Corporation, or is or was
serving at the request of the corporation as a director or officer of another
corporation, partnership, joint venture, trust or other enterprise (all such
persons being referred to hereafter as an "Agent"), against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonable incurred by him in connection with such action, suit or proceeding if
he acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interest of the Corporation, and with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful. The termination of any action, suit or proceeding by judgment,
order , settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that the person did not
act in good faith and in a manner which he reasonably believed to be in or not
opposed to the best interest of the Corporation, and with respect to any
criminal action or proceeding, that he had reasonable cause to believe that his
conduct was unlawful.
12.2 Action by or in the Right of the Corporation. The Corporation
shall indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed judicial action or suit brought by
or in the right of the Corporation to procure a judgment in its favor by reason
of the fact that he is or was an Agent against expenses (including attorneys'
fees) actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interest of the
Corporation, except that no indemnification shall be made in respect of any
claim, issued or matter as to which such person shall have been adjudged to be
liable to the Corporation unless and only to the extent that the Court of
Chancery or the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably entitled to
indemnity of such expenses which the Court of Chancery or other such court shall
deem proper.
12.3 Determination of Right of Indemnification. Any indemnification
under Section 12.1 or 12.2 hereof (unless ordered by a court) shall be made by
the Corporation unless a determination is reasonably and promptly made (i) by
the Board of Directors by a majority vote of a quorum consisting of directors
who are or were not parties to such action, suite or proceeding, or (ii) if such
a quorum is not obtainable, or, even if obtainable, if a quorum of disinterested
directors so directs, by independent legal counsel in a written opinion, or
(iii) by the stockholders, that such person acted in bad faith and in a manner
that such person did not believe to be in or not opposed to the best interests
of the Corporation, or , with respect to any criminal proceeding, that such
person believed or had reasonable cause to believe that his conduct was
unlawful.
12.4 Indemnification Against Expense of Successful Party.
Notwithstanding the other provisions of this Article XII, to the extent that an
Agent has been successful on the merits or otherwise, including the dismissal or
an action without prejudice or the settlement of an action without admission of
liability, in defense of any proceeding or in defense of any claim, issue or
matter therein, such Agent shall be indemnified against all expenses incurred in
connection therewith.
12.5 Advances of Expenses. Except as limited by Section 12.6 hereof,
expenses incurred in defending or investigating any action, suit proceeding or
investigation shall be paid by the Corporation in advance of the final
disposition of such matter, if the Agent shall undertake to repay such amount in
the event that is ultimately determined, as provided herein , that such person
is not entitled to indemnification. However, no advance shall be made by the
Corporation if a determination is reasonably and promptly made by the Board of
Directors by a majority vote of a quorum of disinterested directors, or (if such
a quorum is not obtainable or , even if obtainable, a quorum if disinterested
directors so directs) by independent legal counsel in a written opinion, that,
based upon the facts known to the Board of Directors or counsel at the time such
determination is made, such person acted in bad faith and in a manner that such
person did not believe to be in or not opposed to the best interests of the
Corporation, or , with respect to any criminal proceedings, that such person
believed or had reasonable cause to believe his conduct was unlawful. In no
event shall any advance be made in instances where the Board of Directors or
independent legal counsel reasonably determines that such person deliberately
breached his duty to the Corporation or its stockholders.
12.6 Right of Agent to Indemnification Upon Application; Procedure Upon
Application. Any indemnification under Section 12.2, 12.3, and 12.4 hereof, or
advance under Section 12.5 hereof, shall be made promptly and in any event
within 45 days, upon the written request of the Agent, unless with respect to
applications under Section 12.2, 12.3, or 12.5 hereof, a determination is
reasonably and promptly made by the Board of Directors by a majority vote of a
quorum of disinterested directors that such Agent acted in a manner set forth in
such Sections as to justify the Corporation's not indemnifying or making an
advance to the Agent. In the event no quorum if disinterested directors is
obtainable, the board of Directors shall promptly direct that independent legal
counsel shall decide whether the Agent acted in the manner set forth in such
Sections as to justify the Corporation's not indemnifying or making and advance
to the Agent. The right to indemnification or advances as granted by this
Article XII shall be enforceable by the Agent in any court of competent
jurisdiction of the Board of Directors or independent legal counsel denies the
claim, in whole or in part, or if no disposition of such claim is made within 45
days. The Agent's expenses incurred in connection with successfully establishing
his right to indemnification, in whole or in part, in any such proceeding shall
also be indemnified by the Corporation.
12.7 Other Rights and Remedies. The indemnification provided by his
Article XII shall not be deemed exclusive of any other rights to which an Agent
seeking indemnification may be entitled under any agreement, vote of
stockholders or disinterested directors, court order or otherwise, both as to
action in his official capacity and as to action in another capacity while
holding such office. It is the policy of the Corporation that indemnification of
Agents shall be made to the fullest extent permitted by law. All rights to
indemnification under this Article XII shall be deemed to be provided by a
contract between the Corporation and the Agent who serves in such capacity at
any time while these By-laws and other relevant provisions of the General
Corporation Law of the State of Delaware and other applicable law, if any, are
in effect Any repeal or modification thereof shall not affect any rights or
obligations then existing.
12.8 Insurance. The corporation may purchase and maintain insurance on
behalf of any person who is or was an Agent against any liability asserted
against him and incurred by him in any such capacity, or arising out of his
status as such, whether or not the Corporation would have the power to indemnify
him against such liability under the provisions of his Article XII.
12.9 Indemnity Fund. Upon resolution adopted by the Board of Directors,
the corporation may establish a trust or other designated account, grant a
security interest or use other means (including, without limitation, a letter of
credit), to ensure the payment of certain of its obligations arising under this
Article XII and/or agreements which may be entered into between the Corporation
and its officers and directors from time to time.
12.10 indemnification of Other Persons. The provisions of this Article
XII shall not be deemed to preclude the indemnification of any person who is not
an agent but whom the corporation has the power or obligation to indemnify under
the provisions of the General Corporation Law of the State of Delaware or other
vise. The Corporation may, in its sole discretion, indemnify an employee,
trustee or other agent as permitted by the General Corporation Law of the State
of Delaware. The Corporation shall indemnify an employee, trustee or other agent
where required by law.
12.11 Survival of indemnification. The indemnification and advancement
of expenses provided by, or granted pursuant to, this Article XII shall continue
as to a person who has ceased to be an Agent and shall inure to the benefit of
the heirs, executors and administrators of such Agent.
12.12 Savings Clause. If this Article XII or any portion thereof shall
be invalidated on any ground by any court of competent jurisdiction, then the
Corporation shall nevertheless indemnify each Agent against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement with respect
to any action, suit or proceeding, whether civil, criminal, administrative or
investigative, and whether internal or external, including a grand jury
proceeding and an action or suit brought by or in the right of the Corporation,
to the full extent permitted by any applicably portion of this Article XII that
shall not have been invalidated, or by any other applicable law.
12.13 Certain Definitions. For purposes of this Article XII, references
to "the Corporation" shall include, in addition to the resulting or surviving
corporation, any constituent corporation (including any constituent of a
constituent absorbed in a consolidation or merger which, if its separate
existence had continued, would have had power to indemnify its directors,
officers and employees or agents, so that any person who is or was a director,
officer, employee or agent of such constituent corporation, or is or was serving
at the request of such constituent corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise, shall stand in the same position under this Article XII with respect
to the resulting or surviving corporation as he would have with respect to such
constituent corporation if its separate existence had continued; references to
"other enterprises" shall include employee benefit plans; references to "fines"
shall include any excise taxes assessed a person with respect to any employee
benefit plan; and references to "serving at the request of the Corporation"
shall include any service as a director or officer of the Corporation which
imposes duties on, or involves services by, such director or officer with
respect to any employee benefit plan, its participants, or beneficiaries; and a
person who acted in good faith and in a manner he reasonable believed to be in
the interest of the participants and beneficiaries of an employee benefit plan
shall be deemed to have acted in a manner "not opposed to the best interests of
the Corporation" as referred to in this Article XII.
ARTICLE XIII
Amendments
These By-laws may be amended or repealed either:
(a) at any meeting of stockholders at which a quorum is present by vote
of a majority of the number of shares of stock entitled to vote present in
person or by proxy at such meeting as provided in Article II, Sections 2.5 and
2.6 of these By-laws, or
(b) at any meeting of the Board of Directors by a majority vote of the
directors then in office; provided that the notice of such meeting of
stockholders or directors or waiver of notice thereof contains a statement of
the substance of the proposed amendment or repeal.
AMENDMENT TO BY-LAWS
OF
ONE PRICE CLOTHING STORES INC.
ADOPTED JULY 20, 1994
Article II, Shareholders' Meetings is hereby amended by adding the
following new Section 2.8:
2.8 Notice of Shareholders Proposals. Any shareholder desiring to
submit a proposal to an annual or special meeting of shareholders shall submit
information regarding the proposal, together with the proposal to the
corporation at least 45 days prior to the shareholders meeting at which such
proposal is to be present.
AMENDMENT TO BY-LAWS
OF
ONE PRICE CLOTHING STORES INC.
ADOPTED MARCH 14, 1996
Article II, Shareholders' Meetings is hereby amended by replacing the
following Section 2.2:
2.2 Annual Meetings. The annual meeting of stockholders for the
election of directors and the transaction of such other business as may properly
come before the meeting shall be held on such date and at such time as may be
designated from time to time by the Board of Directors within six months after
the end of each fiscal year of the Corporation. If the annual meeting is not
held on the date designated, it may be held as soon therefore as convenient and
shall be called the annual meeting. Written notice of the time and place of the
annual meeting shall be given by mail to each stockholder entitled to vote
thereat at his address as it appears on the records of the Corporation not less
than ten (10) nor more than sixty (6) days prior to the scheduled date thereof,
unless such notice is waived as provided by Article IX of these By-laws.
AMENDMENT TO BY-LAWS
OF
ONE PRICE CLOTHING STORES, INC.
ADOPTED APRIL 29, 1998
Article II, Shareholders' Meeting is hereby amended by replacing the
following Section 2.5:
2.5 Quorum. A majority of the shares entitled to vote, present in
person or represented by proxy, shall constitute a quorum at any
meeting of stockholders, but a smaller interest may adjourn any meeting
from time to time, and the meeting may be held as adjourned without
further notice, subject to such limitation as may be imposed under the
laws of the State of Delaware. At any meeting in which a quorum is
present, (i) in all matters other than the election of directors, the
affirmative vote of the majority of shares present in person or
represented by proxy at the meeting and entitled to vote on the subject
matter shall be the act of the stockholders unless a different vote is
required by express provision of the laws of the State of Delaware, the
Certificate of Incorporation or these By-laws, in which case such
express provision shall govern, and (ii) if directors are to be elected
at the meeting, directors shall be elected by a plurality of the votes
of the shares present in person or represented by proxy at the meeting
and entitled to vote on the election of directors.
ONE PRICE CLOTHING STORES, INC. AND SUBSIDIARIES
EXHIBIT 11 -- Computation of Per Share Earnings
<TABLE>
<S> <C> <C>
Three-Month Period Ended
May 2, May 3,
1998 1997
--------------- ----------
BASIC INCOME PER COMMON SHARE
Weighted average number of common shares
outstanding 10,435,531 10,435,531
============ ==========
Net income $ 2,045,000 $ 1,444,000
=========== ===========
Basic net income per common share $ 0.20 $ 0.14
=========== ===========
DILUTED INCOME PER COMMON SHARE
Weighted average number of common shares
Outstanding 10,435,531 10,435,531
Net effect of dilutive stock options - based
on the treasury stock method using the
greater of ending or average market price 3,849 28,931
----------- -----------
TOTAL 10,439,380 10,464,462
=========== ===========
Net income $ 2,045,000 $ 1,444,000
=========== ===========
Diluted net income per common share $ 0.20 $ 0.14
=========== ===========
</TABLE>
ONE PRICE CLOTHING STORES, INC. AND SUBSIDIARIES
EXHIBIT 15 -- ACKNOWLEDGMENT OF DELOITTE & TOUCHE LLP
INDEPENDENT ACCOUNTANTS
One Price Clothing Stores, Inc. and Subsidiaries
Duncan, South Carolina
We have made a review, in accordance with standards established by the American
Institute of Certified Public Accountants, of the unaudited interim condensed
consolidated financial information of One Price Clothing Stores, Inc. and
subsidiaries for the three-month periods ended May 2, 1998 and May 3, 1997, as
indicated in our report dated May 21, 1998; because we did not perform an audit,
we expressed no opinion on that information.
We are aware that our report referred to above, which is included in your
Quarterly Report on Form 10-Q for the quarter ended May 2, 1998, is incorporated
by reference in Registration Statements No. 33-20529, 33-31623, 33-48091, and
33-61803 on Form S-8 pertaining to the 1987 Stock Option Plan, the 1988 Stock
Option Plan, the 1991 Stock Option Plan, and the Director Stock Option Plan,
respectively, of One Price Clothing Stores, Inc.
We also are aware that the aforementioned report, pursuant to Rule 436(c) under
the Securities Act of 1933, is not considered a part of the Registration
Statement prepared or certified by an accountant or a report prepared or
certified by an accountant within the meaning of Sections 7 and 11 of that Act.
DELOITTE & TOUCHE LLP
Charlotte, North Carolina
June 9, 1998
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-30-1999
<PERIOD-END> MAY-02-1998
<CASH> 2695
<SECURITIES> 0
<RECEIVABLES> 3413
<ALLOWANCES> 0
<INVENTORY> 45540
<CURRENT-ASSETS> 58911
<PP&E> 60858
<DEPRECIATION> 25886
<TOTAL-ASSETS> 97727
<CURRENT-LIABILITIES> 51841
<BONDS> 0
0
0
<COMMON> 104
<OTHER-SE> 34963
<TOTAL-LIABILITY-AND-EQUITY> 97727
<SALES> 82513
<TOTAL-REVENUES> 82513
<CGS> 51892
<TOTAL-COSTS> 51892
<OTHER-EXPENSES> 8205
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 649
<INCOME-PRETAX> 3802
<INCOME-TAX> 1757
<INCOME-CONTINUING> 2045
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2045
<EPS-PRIMARY> .20
<EPS-DILUTED> .20
</TABLE>
