<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 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 33-82650
GENMAR HOLDINGS, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 41-1778106
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
100 SOUTH FIFTH STREET 55402
SUITE 2400 (Zip Code)
MINNEAPOLIS, MINNESOTA
(Address of principal executive offices)
(612) 339-7900
(Registrant's telephone number, including area code)
NOT APPLICABLE
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months, and (2) has been subject to such filing requirements
for the past 90 days.
Yes X No
--- ---
On November 13, 1996, there were 1,779,415 shares of Common Stock, $.01 par
value, of Genmar Holdings, Inc. outstanding.
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
GENMAR HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
UNAUDITED
(In Thousands)
<TABLE>
<CAPTION>
Three Months Ended September 30, Nine Months Ended September 30,
-------------------------------- ------------------------------
1996 1995 1996 1995
-------------- -------------- --------------- -------------
<S> <C> <C> <C> <C>
Net revenues $ 140,633 $ 125,619 $ 444,443 $ 403,100
Cost of products and services 122,768 112,556 385,845 350,485
-------------- -------------- --------------- -------------
Gross profit 17,865 13,063 58,598 52,615
Selling and administrative expenses 15,675 16,010 45,529 48,539
-------------- -------------- --------------- -------------
Operating profit (loss) 2,190 (2,947) 13,069 4,076
Interest expense (5,454) (5,748) (16,733) (18,238)
Investment and other income, net 100 4,802 340 15,668
-------------- -------------- --------------- -------------
Income (loss) before income taxes (3,164) (3,893) (3,324) 1,506
Provision for income taxes (154) (308) (625) (1,501)
-------------- -------------- --------------- -------------
Net income (loss) $ (3,318) $ (4,201) $ (3,949) $ 5
-------------- -------------- --------------- -------------
-------------- -------------- --------------- -------------
</TABLE>
See accompanying notes to condensed consolidated financial statements.
1
<PAGE>
GENMAR HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands)
September 30,
1996 December 31,
(Unaudited) 1995
------------ ------------
ASSETS
Current Assets:
Cash and cash equivalents $ 58 $ 18,091
Accounts receivable, net 41,609 42,356
Inventories 129,380 129,058
Prepaid expenses 5,513 4,958
---------- ----------
Total current assets 176,560 194,463
Property and Equipment, net 57,356 63,333
Other Assets, principally deferred financing costs 6,029 7,415
Goodwill 47,184 48,669
---------- ----------
Total assets $ 287,129 $ 313,880
---------- ----------
---------- ----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 43,450 $ 45,882
Accrued liabilities 49,758 59,000
Customer deposits 21,600 12,633
Accrued income taxes 445 788
Current maturities of long-term debt 588 893
---------- ----------
Total current liabilities 115,841 119,196
Long-Term Debt 135,477 151,445
Other Noncurrent Liabilities 33,141 36,621
---------- ----------
Commitments and Contingencies (Notes 3 and 4)
Stockholders' Equity:
Common stock, $.01 par, 2,000 shares
authorized; 1,779 shares issued and outstanding 18 18
Paid-in capital 126,229 126,229
Accumulated deficit (113,335) (109,386)
Cumulative translation adjustment (246) (247)
Treasury stock, 42 shares (9,996) (9,996)
---------- ----------
Total stockholders' equity 2,670 6,618
---------- ----------
Total liabilities and stockholders' equity $ 287,129 $ 313,880
---------- ----------
---------- ----------
See accompanying notes to condensed consolidated financial statements.
2
<PAGE>
GENMAR HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30,
UNAUDITED
(In Thousands)
<TABLE>
<CAPTION>
1996 1995
------------ ------------
<S> <C> <C>
OPERATING ACTIVITIES:
Net (loss) income $ (3,949) $ 5
Adjustments to reconcile net (loss) income to net cash
used in operating activities:
Depreciation and amortization 8,793 8,541
Gain on the sale of marketable securities - (9,452)
Changes in operating assets and liabilities, net (3,637) (11,808)
Other, net (88) (460)
Payments of noncurrent liabilities (3,480) (2,223)
------------ ------------
Net cash used in operating activities (2,361) (15,397)
------------ ------------
INVESTING ACTIVITIES:
Property and equipment additions (2,275) (10,453)
Proceeds from sales of property 4,196 -
Proceeds from sales of marketable securities - 58,770
------------ ------------
Net cash provided by investing activities 1,921 48,317
------------ ------------
FINANCING ACTIVITIES:
Proceeds from revolving credit facility 35,000 23,000
Repayment of revolving credit facility (52,000) (55,285)
Repayment of other long-term debt (593) (1,532)
------------ ------------
Net cash used in financing activities (17,593) (33,817)
------------ ------------
Net decrease in cash and cash equivalents (18,033) (897)
CASH AND CASH EQUIVALENTS:
Balance, beginning of period 18,091 4,699
------------ ------------
Balance, end of period $ 58 $ 3,802
------------ ------------
------------ ------------
SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid during the period $ 17,323 $ 19,125
Income taxes paid during the period 996 1,493
------------ ------------
------------ ------------
SCHEDULE OF NONCASH FINANCING ACTIVITIES:
Property and equipment additions from capital leases $ 362 $ -
------------ ------------
------------ ------------
</TABLE>
See accompanying notes to condensed consolidated financial statements.
3
<PAGE>
GENMAR HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
UNAUDITED
1. INTRODUCTION -
The condensed consolidated financial statements have been prepared by
Genmar Holdings, Inc. (the "Company"), without audit, pursuant to the Rules
and Regulations of the Securities and Exchange Commission. The information
furnished in the condensed consolidated financial statements includes
normal recurring adjustments and reflects all adjustments which are, in the
opinion of management, necessary for a fair presentation of such financial
statements. Certain information and footnote disclosures normally included
in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such rules
and regulations. Although the Company believes the disclosures are
adequate to make the information presented not misleading, it is suggested
that these condensed consolidated financial statements be read in
conjunction with the audited financial statements and notes thereto
included in the Company's Annual Report on Form 10-K for the year ended
December 31, 1995.
Revenues and operating results for the nine months ended September 30,
1996 are not necessarily indicative of the results to be expected for the
full year.
2. INVENTORIES -
Inventories, which are valued at the lower of first-in first-out
(FIFO) costs or market, consisted of the following (in thousands):
September 30, December 31,
1996 1995
------------- ------------
Raw materials $ 39,778 $ 40,006
Work in process 55,411 49,215
Finished goods 34,191 39,837
------------- ------------
$ 129,380 $ 129,058
------------- ------------
------------- ------------
4
<PAGE>
GENMAR HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
UNAUDITED
3. SUBSIDIARY GUARANTEES -
The Company's payment obligations with respect to its 13-1/2% Series A
Senior Subordinated Notes Due 2001 (the "Notes") and its borrowings under
its bank credit facility (the "Credit Facility") are secured by
substantially all of the assets of the Company and its subsidiaries and are
guaranteed by substantially all of the Company's subsidiaries ("Subsidiary
Guarantors").
At September 30, 1996, the aggregate combined net assets, net
revenues, earnings and equity of the Subsidiary Guarantors were
substantially equivalent to the net assets, net revenues, earnings and
equity of the Company, except for certain obligations and operating,
interest and other expenses pertaining to non-guarantor entities. Each of
the Subsidiary Guarantors is a wholly-owned subsidiary of the Company.
Management believes that separate financial statements of the Subsidiary
Guarantors are inconsequential to investors and such financial statements
are not included herein.
4. CONTINGENCIES -
Dealer Inventory Floor Plan Financing:
The Company and its subsidiaries are parties to dealer inventory floor
plan financing arrangements with certain financial institutions pursuant to
which each may be required, in the event of default by a financed dealer,
to repurchase products previously sold to such dealer. The Company
repurchased $1.6 million and $1.9 million of such dealer inventory in the
nine month periods ended September 30, 1996 and 1995, respectively. As of
September 30, 1996, the Company was contingently liable under such
arrangements to repurchase inventory in the aggregate maximum amount of
$23.5 million.
During 1995, the Company entered into agreements with financial
institutions to transfer limited floor plan financing for certain dealers
and to provide floor plan financing for certain other dealers. Pursuant to
the agreements, the Company is contingently liable for repurchase of
inventory and has recourse liability in the event of dealer default. As of
September 30, 1996, the Company was contingently liable under these
agreements for repurchase and recourse in the aggregate maximum amounts of
$19.2 million and $17.2 million, respectively. The Company repurchased
$0.3 million of dealer inventory but did not incur any recourse losses
under these agreements during the nine months ended September 30, 1996.
The Company generally has not provided reserves, other than immaterial
reserves at certain subsidiaries, for losses and costs which may result
should the Company be required to repurchase product from a defaulting
dealer. Although the ultimate loss which might be incurred as a result of
such contractual obligation is uncertain, the Company believes any such
losses that may be incurred would not have a material effect on its
consolidated operating results or financial position.
5
<PAGE>
GENMAR HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
UNAUDITED
4. CONTINGENCIES - (CONTINUED)
Legal and Environmental:
The Company and its subsidiaries are defendants in legal proceedings
arising in the ordinary course of business. Although the outcome of these
matters cannot be determined, in the opinion of management and outside
counsel, disposition of these proceedings will not have a material effect
on the Company's consolidated financial position or results of operations.
Where appropriate, the Company has established reserves in response to
these matters.
Divested Businesses:
In connection with certain previously divested businesses, the Company
retained certain obligations and remains contingently liable under limited
indemnities related to such matters as taxes, insurance, litigation and
post retirement medical benefits. Cash expenditures for such obligations
are expected to be payable over an extended period of time. Where
appropriate, the Company has established reserves in response to these
matters.
The Company also incurs costs from time to time for environmental
claims relating to certain previously divested businesses. The Company
anticipates total environmental-related costs associated with these
divested businesses to range from approximately $6 million to $10 million,
which include Comprehensive Environmental Response Compensation and
Liability Act, as amended ("CERCLA"), type liabilities, and which costs are
likely to be incurred over the next 8 to 12 years. With respect to these
potential liabilities, the Company has been identified as a potential
responsible party at approximately 10 sites. Based on currently available
information, the Company believes adequate reserves have been provided to
cover such potential costs as of September 30, 1996.
Letters of Credit:
The Company and its subsidiaries have insurance for workers'
compensation, health, general and auto liability losses in excess of
predetermined loss limits. Provision has been made in the consolidated
financial statements for estimated losses resulting from claims incurred
prior to the balance sheet date, which were below the amounts of the
predetermined loss limits. At September 30, 1996, the Company had
outstanding letters of credit aggregating approximately $25.1 million.
Approximately $17.7 million of such letters of credit secure insurance
programs; the remainder principally relate to dealer floor plan financing
arrangements with certain financial institutions and to liabilities
retained by the Company in connection with certain divested businesses.
6
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND LIQUIDITY AND CAPITAL RESOURCES
RESULTS OF OPERATIONS
The following table reflects the relationship between certain income and
expense items and net revenues by presenting such items as a percentage of net
revenues for the three month and nine month periods ended September 30, 1996 and
1995 and shows the percentage changes in these income and expense items for the
current fiscal periods from the comparable periods of the prior fiscal year:
<TABLE>
<CAPTION>
Percentage of Net Sales Percentage Change
--------------------------------------------------- Between Periods
Three Months Ended Nine Months Ended ----------------------------
September 30, September 30, Three Months Nine Months
------------------------ ----------------------- Ended Ended
1996 1995 1996 1995 September 30 September 30
-------- -------- -------- -------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Net Revenues 100.0% 100.0% 100.0% 100.0% 12.0% 10.3%
Cost of Products and Services 87.3 89.6 86.8 87.0 9.1 10.1
-------- -------- -------- --------
Gross Profit 12.7 10.4 13.2 13.0 36.8 11.4
Selling and Administrative
Expenses 11.1 12.7 10.2 12.0 (2.1) (6.2)
-------- -------- -------- --------
Operating Profit (Loss) 1.6 (2.3) 3.0 1.0 n/a 220.6
Interest Expense (3.9) (4.6) (3.8) (4.5) (5.1) (8.3)
Investment and Other Income,
net -- 3.8 0.1 3.9 (97.9) (97.8)
-------- -------- -------- --------
Income (Loss) Before Income
Taxes (2.3) (3.1) (0.7) 0.4 18.7 n/a
Provision For Income Taxes (0.1) (0.2) (0.2) (0.4) (50.0) (58.4)
-------- -------- -------- --------
Net Income (Loss) (2.4)% (3.3)% (0.9%) 0.0% 21.0% n/a
-------- -------- -------- --------
-------- -------- -------- --------
</TABLE>
Consolidated net revenues for the nine months ended September 30, 1996 were
$444.4 million, an increase of 10.3% as compared to net revenues of $403.1
million for the nine months ended September 30, 1995. This increase in net
revenues was primarily a reflection of strengthened wholesale demand for the
Company's fiberglass recreational powerboat products. For the nine months ended
September 30, 1996, unit retail deliveries of the Company's products, as
compared to the same period during 1995, were significantly improved for
recreational power boat product and down for both motor yacht and fishboat
product, but overall, approximately equal in total. The Company's backlog of
orders at September 30, 1996 was down slightly from backlog as of September 30,
1995.
Consolidated net revenues for the three months ended September 30, 1996
were $140.6 million, an increase of 12.0% as compared to net revenues of
$125.6 million for the three months ended September 30, 1995. This increase in
net revenues reflects improved wholesale demand across all of the Company's
product segments, but particularly in the fishboat and fiberglass recreational
powerboat segments.
7
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND LIQUIDITY AND CAPITAL RESOURCES
(CONTINUED)
Gross profit for the nine months ended September 30, 1996 was $58.6 million
(13.2% of net revenues) as compared to $52.6 million (13.0% of net revenues) for
the same period during 1995. This increase in gross profit as a percentage of
net revenues was primarily attributable to an improvement in gross margins
realized on motor yacht and recreational powerboat product sales, offset by a
change in the mix of sales away from fishboat products which generally produce
higher gross margins.
Gross profit for the three months ended September 30, 1996 was $17.9
million (12.7% of net revenues) as compared to $13.1 million (10.4% of net
revenues) for the same period during 1995. This increase in gross profit as a
percentage of net revenues was attributable to an improvement in gross margins
realized across all product segments, but particularly on recreational powerboat
product sales.
Selling and administrative expenses for the nine months ended September 30,
1996 totaled $45.5 million (10.2% of net revenues) as compared to $48.5 million
(12.0% of net revenues) for the same period during 1995. The decrease in
spending as a percentage of net revenues was a reflection of various cost
reduction initiatives implemented throughout the Company.
Selling and administrative expenses for the three months ended September
30, 1996, totaled $15.7 million (11.1% of net revenues) as compared to $16.0
million (12.7% of net revenues) for the same period during 1995. This spending
decrease reflects the same factors discussed above.
The Company's operating profit for the nine months ended September 30, 1996
was $13.1 million (3.0% of net revenues) as compared to operating profit of $4.1
million (1.0% of net revenues) for the same period during 1995. Operating
profit for the three months ended September 30, 1996 was $2.2 million (1.6% of
net revenues) as compared to an operating loss of $2.9 million for the same
period during 1995. The improvement in operating profit for both periods was
attributable to the factors discussed above.
Interest expense for the nine months ended September 30, 1996 totaled $16.7
million as compared to $18.2 million for the same period during 1995. Interest
expense for the three months ended September 30, 1996 totaled $5.5 million as
compared to $5.7 million for the same period during 1995. In both comparisons,
the reduction in interest expense resulted primarily from a decrease in
borrowings outstanding between the two periods.
Investment and other income for the nine months ended September 30, 1996
totaled $0.3 million as compared to $15.7 million for the same period during
1995. Investment and other income for the three months ended September 30, 1996
totaled $0.1 million as compared to $4.8 million for the same period during
1995. Investment and other income for the nine months ended September 30, 1996
consisted principally of interest earned on short-term investments, notes and
other receivables. Investment and other income for the same period during 1995
consisted principally of gains on sales of and dividend income related to the
Company's investment in shares of Amway Japan Limited, the sale of beneficial
interest in a litigation trust, a gain on the settlement of a foreign currency
hedge and interest earned on short-term investments, notes and other
receivables.
8
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND LIQUIDITY AND CAPITAL RESOURCES
(CONTINUED)
LIQUIDITY AND CAPITAL RESOURCES
At September 30, 1996, capacity under the Company's bank credit facility,
as amended and restated ("Credit Facility"), totaled $60.0 million, consisting
of a $29.2 million revolving credit facility and a $30.8 million letter of
credit facility. At September 30, 1996, the Company had $36.4 million
outstanding under the Credit Facility, with $18.0 million of availability under
the revolving credit facility.
The Credit Facility, as amended and restated, and the indenture (the
"Indenture") governing the Company's 13-1/2% Series A Senior Subordinated Notes
Due 2001 (the "Notes") contain restrictive covenants which, among other matters,
limit the ability of the Company to incur other indebtedness, engage in
transactions with affiliates, incur liens, make certain restricted payments, and
enter into certain business combination and asset sale transactions. The Credit
Facility also requires the Company to satisfy certain financial tests and ratios
and restricts capital expenditures. In addition, the Credit Facility contains
provisions which may require accelerated repayment of the Credit Facility and/or
limit the Company's access to the facility upon the incurrence of specific
obligations or significant changes in the financial condition, business,
properties, prospects or operations of the Company. As of September 30, 1996,
the Company was in compliance with all the financial covenants under the
Indenture and the Credit Facility.
At September 30, 1996, the Company had $60.7 million of working capital, a
decrease of $14.5 million from December 31, 1995. This reduction in working
capital for the nine months ended September 30, 1996 contributed to the
Company's ability to fund net repayments totaling $17.0 million under the
revolving credit facility. Net cash used in operating activities for the nine
months ended September 30, 1996 totaled $2.4 million, as compared to net cash
used of $15.4 million for the same period during 1995. The net cash use for the
nine months ended September 30, 1996 was comprised of a $7.2 million use
resulting from changes in working capital items, payments of noncurrent
liabilities and other items, offset by $4.8 million provided by operations, net
of non-cash charges.
Capital expenditures of the Company for the nine months ended September 30,
1996 totaled $2.3 million. Proceeds from sales of property and equipment for
the same period during 1996 totaled $4.2 million. Included in this total were
proceeds of approximately $3.8 million from the sale of certain land, buildings
and equipment formerly used to operate the Company's retail marine dealership
located near Minneapolis, Minnesota. No gain or loss was recognized in
connection with this sale.
The Company will require substantial cash flow to meet its interest and
principal obligations under the Indenture and the Credit Facility, and in
meeting the working capital and capital expenditure requirements of its
operations. The Company believes that current cash balances, borrowings under
the Credit Facility, cash flow generated from operations and proceeds from the
sales of certain assets will provide sufficient liquidity to fund its cash
operating expenses and capital expenditures and meet its interest and principal
obligations until the Credit Facility and Notes become due. However, the
Company's ability to meet its debt service and other obligations depends on its
future performance, which, in turn, is subject to general economic conditions
and to financial performance, business and other factors, including factors
beyond the Company's control. If the Company is unable to generate sufficient
cash flows from operations or otherwise to comply with the terms of the Credit
Facility or the Indenture, it may be required to refinance all or a portion of
its existing debt or obtain additional financing, although there can be no
assurance that the Company will be able to obtain such refinancing or additional
financing.
9
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND LIQUIDITY AND CAPITAL RESOURCES
(CONTINUED)
The Company is in the process of evaluating and pursuing, as appropriate,
various strategic alternatives relative to strengthening the Company's financial
position, including the potential sales of non-operating assets and possible
joint venture considerations. The Company continuously evaluates its existing
operations and investigates possible acquisitions to expand its business in
order to maximize profits and increase its share of the motorized pleasure boat
market. Accordingly, while the Company does not have any material arrangement,
commitment or understanding with respect thereto, further acquisitions,
investments and changes in operations are possible.
10
<PAGE>
PART II. OTHER INFORMATION
GENMAR HOLDINGS, INC. AND SUBSIDIARIES
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits -- No exhibits have been filed with this Form 10-Q.
(1) Amendment, dated as of August 15, 1996, to the Amended and
Restated Credit Agreement, dated as of December 30, 1995 among
the Company, the Lenders named therein and The Bank of New York,
as Agent (the "Credit Agreement").
(b) No Form 8-K's were filed during the quarter ended September 30, 1996.
11
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
GENMAR HOLDINGS, INC.
Date: November 13, 1996 /s/ ROGER R. CLOUTIER, II
----------------------------
Roger R. Cloutier, II
Executive Vice President
and Chief Financial Officer
12
<PAGE>
AMENDMENT NO. 1 TO CREDIT AGREEMENT
AMENDMENT NO. 1, dated as of August 15, 1996, (this "Amendment"), to the
AMENDED AND RESTATED CREDIT AGREEMENT, dated as of December 30, 1995 (as amended
or otherwise modified from time to time, the "Credit Agreement," the terms
defined therein and not otherwise defined herein being used herein as therein
defined), among Genmar Holdings, Inc., a Delaware corporation (the "Borrower"),
the financial institutions party thereto (the "Lenders") and The Bank of New
York as agent for the Lenders (the "Agent").
WHEREAS, the Borrower has requested that the Lenders agree to modify the
minimum amount of Consolidated Cumulative Cash Flow for the period ending July
31, 1996;
WHEREAS, the Lenders are willing to modify such minimum amount of
Consolidated Cumulative Cash Flow for the period ending July 31, 1996, on the
terms and subject to the conditions set forth herein;
NOW, THEREFORE, in consideration of the premises, the parties hereto hereby
agree as follows:
SECTION 1. AMENDMENT TO THE CREDIT AGREEMENT. Section 7.1(c)(i) of the
Credit Agreement is amended by replacing the amount "12,225,000" appearing
opposite the month July, 1996 in the table therein with the amount "11,000,000"
therefor.
SECTION 2. CONDITIONS TO EFFECTIVENESS OF AMENDMENT. This Amendment
shall become effective upon the execution and delivery hereof by the Borrower
and the Required Lenders.
SECTION 3. MODIFICATION OF CREDIT AGREEMENT. Except as expressly
modified by this Amendment, all of the terms and provisions of the Credit
Agreement are reaffirmed and shall remain in full force and effect.
SECTION 4. GOVERNING LAW; TERMS THIS AMENDMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 5. COUNTERPARTS. This Amendment may be executed in any number
of counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by their duly authorized officers as of the date
first above written.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
THIRD QUARTER FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JUL-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 58
<SECURITIES> 0
<RECEIVABLES> 41,609
<ALLOWANCES> 0
<INVENTORY> 129,380<F2>
<CURRENT-ASSETS> 176,560
<PP&E> 57,356
<DEPRECIATION> 0
<TOTAL-ASSETS> 287,129
<CURRENT-LIABILITIES> 115,841
<BONDS> 135,477
0
0
<COMMON> 18
<OTHER-SE> 2,652
<TOTAL-LIABILITY-AND-EQUITY> 287,129
<SALES> 444,443
<TOTAL-REVENUES> 444,443
<CGS> 385,845
<TOTAL-COSTS> 385,845
<OTHER-EXPENSES> 45,529
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 16,733
<INCOME-PRETAX> (3,324)
<INCOME-TAX> 625
<INCOME-CONTINUING> (3,949)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,949)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<FN>
<F2> To Come Later
</FN>
</TABLE>
