==============================================================================
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 33-69832
ALL-AMERICAN BOTTLING CORPORATION
BROWNE BOTTLING COMPANY
(Exact name of registrant as specified in its charter)
Delaware 73-1317652
(State or other jurisdiction 73-1311569
of incorporation or organization) (IRS Employer Identification No.)
Colcord Building
15 North Robinson, Suite 1201
Oklahoma City, Oklahoma 73102
(Address of Principal Executive Office)
(405) 232-1158
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (1) has filed 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 each 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 .
As of November 1, 1996 Browne Bottling Company had 192,244 shares of
common stock outstanding for which there is no public market; and All-American
Bottling Corporation had 100,000 shares of common stock outstanding, all of
which are held by Browne Bottling Company.
==============================================================================
<PAGE>
All-American Bottling Corporation
Browne Bottling Company
INDEX
Part I Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets
as of September 30, 1996 and December 31, 1995
(unaudited)
Consolidated Statements of Operations
for the three months and nine months ended
September 30, 1996 and 1995 (unaudited)
Consolidated Statements of Changes in Stockholders'
Equity for the nine months ended September 30, 1996
and for the year ended December 31, 1995 (unaudited)
Consolidated Statements of Cash Flows for the three
months and nine months ended September 30, 1996 and 1995
(unaudited)
Notes to Consolidated Financial Statements
(unaudited)
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations
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
<PAGE>
PART I
ITEM 1. Financial Statements
<TABLE>
BROWNE BOTTLING COMPANY
<CAPTION>
Consolidated Balance Sheets (in thousands)
- -------------------------------------------------------------------------------
December 31, September 30,
1995 1996
----------- -----------
<S> <C> <C>
ASSETS (unaudited)
Current assets:
Trade accounts receivable $ 11,944 $ 11,430
Franchise companies receivable 2,605 2,303
Other receivables 1,324 867
Allowance for doubtful accounts (515) (454)
Inventories - ingredients and packaging 3,021 2,884
Inventories - finished goods 5,786 5,931
Inventories - other 291 258
Inventories - pallets at deposit value 344 356
Prepaid expenses 862 541
Deferred tax asset 781 781
----------- -----------
Total current assets 26,443 24,897
----------- -----------
Plant and equipment, at cost:
Land 1,335 828
Buildings and improvements 6,961 6,526
Machinery and equipment 10,614 10,583
Vehicles 7,947 7,851
Vending equipment 9,525 6,473
Furniture and fixtures 512 357
Computer equipment 1,491 1,455
Returnable containers 2,355 2,338
Construction in progress 519 -
----------- -----------
41,259 36,411
Less - Accumulated depreciation (27,891) (24,186)
----------- -----------
Net plant and equipment 13,368 12,225
----------- -----------
Intangible assets:
Franchises 45,471 38,737
Goodwill 18,104 15,556
Other intangibles 2,877 2,898
----------- -----------
66,452 57,191
Less - Accumulated amortization (13,804) (13,398)
----------- -----------
Net intangible assets 52,648 43,793
----------- -----------
Other assets 828 918
----------- -----------
Total assets $ 93,287 $ 81,833
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
BROWNE BOTTLING COMPANY
<CAPTION>
Consolidated Balance Sheets (in thousands)
- -------------------------------------------------------------------------------
December 31, September 30,
1995 1996
----------- -----------
(unaudited)
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Bank overdraft $ 2,106 $ 484
Current portion of long-term debt 810 1,416
Current portion of obligations under
capital lease 262 168
Current portion of deferred compensation
and non-compete agreements 71 71
Trade accounts payable 12,798 9,612
Accrued compensation and payroll taxes 2,017 1,730
Accrued interest payable 2,326 844
Accrued insurance reserves 881 487
Accrued pension liability 599 177
Other liabilities 1,830 2,298
----------- -----------
Total current liabilities 23,700 17,287
----------- -----------
Long-term debt, net of current maturities 57,418 57,530
----------- -----------
Obligations under capital leases, net 939 931
----------- -----------
Deferred compensation and non-compete
agreements, net 613 1,009
----------- -----------
Other non-current liabilities 44 40
----------- -----------
Deferred tax liability 12,121 10,818
----------- -----------
Stock warrants 856 856
----------- -----------
Stockholders' equity:
Preferred stock - Series B, $.01 par
value, 1,000 shares authorized issued
and outstanding; (liquidation preference
of $1,000 per share) - -
Common stock, $.01 par value, 220,295 shares
authorized, and 192,244 shares issued and
outstanding 2 2
Common stock, non-voting, $.01 par value,
5,263 shares authorized, none outstanding - -
Additional paid-in capital 26,542 26,542
Deficit (28,948) (33,182)
----------- -----------
Total stockholders' equity (deficit) (2,404) (6,638)
----------- -----------
Total liabilities and stockholders' equity $ 93,287 $ 81,833
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
BROWNE BOTTLING COMPANY
<CAPTION>
Unaudited Consolidated Statements of Operations (in thousands)
- --------------------------------------------------------------------------------
Three Months Ended September 30,
1995 1996
----------- -----------
<S> <C> <C>
Revenues, net of discounts and allowances
($19,417 and $17,750 for the 3 months ended
September, 1995 and 1996, respectively) $ 45,546 $ 38,235
Cost of sales 30,601 25,258
----------- -----------
Gross Profit 14,945 12,977
----------- -----------
Operating expenses:
Plant and occupancy 1,428 1,212
Loading and shipping 1,384 939
Transport 275 180
Fleet service 202 178
Selling and delivery 7,325 5,923
Vending 643 508
Advertising 554 486
General and administrative 962 1,392
Amortization of intangibles 567 567
----------- -----------
Total operating expenses 13,340 11,385
----------- -----------
Income from operations 1,605 1,592
Gain on disposals 118 50
Interest expense - cash (1,902) (1,863)
Interest expense - non-cash (54) (31)
Other income 66 157
----------- -----------
Loss before income taxes and extraordinary
item (167) (95)
Income tax provision (40) (221)
----------- -----------
Net loss before extraordinary item (207) (316)
Extraordinary gain on debt extinguishment 4,252 -
----------- -----------
Net income (loss) $ 4,045 $ (316)
=========== ===========
Income (loss) per common share and common
share equivalent:
Primary and fully diluted:
Loss before extraordinary item $ (.97) $ (1.64)
Extraordinary item 19.91
___________ ___________
Net income (loss) $ 18.94 $ (1.64)
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
BROWNE BOTTLING COMPANY
<CAPTION>
Unaudited Consolidated Statements of Operations (in thousands)
- --------------------------------------------------------------------------------
Nine Months Ended September 30,
1995 1996
----------- -----------
<S> <C> <C>
Revenues, net of discounts and allowances
($55,175 and $49,190 for the 9 months ended
September 30, 1995 and 1996, respectively) $ 129,426 $ 109,768
Cost of sales 85,682 72,717
----------- -----------
Gross Profit 43,744 37,051
----------- -----------
Operating expenses:
Plant and occupancy 4,246 3,836
Loading and shipping 3,673 2,876
Transport 788 557
Fleet service 608 539
Selling and delivery 21,169 17,773
Vending 1,929 1,602
Advertising 2,192 1,560
General and administrative 4,564 4,798
Amortization of intangibles 1,716 1,590
----------- -----------
Total operating expenses 40,885 35,131
----------- -----------
Income from operations 2,859 1,920
Gain (loss) on disposals 31 (1,849)
Interest expense - cash (5,528) (5,572)
Interest expense - non-cash (729) (92)
Other income 295 413
----------- -----------
Loss before income taxes and extraordinary
item (3,072) (5,180)
Income tax benefit 860 946
----------- -----------
Net loss before extraordinary item (2,212) (4,234)
Extraordinary gain on debt extinguishment 4,252 -
___________ ___________
Net income (loss) $ 2,040 $ (4,234)
=========== ===========
Income (loss) per common share and common
share equivalent:
Primary and fully diluted:
Loss before extraordinary item $ (10.36) $ (22.02)
Extraordinary item 19.91 -
___________ ___________
Net income (loss) $ 9.55 $ (22.02)
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
BROWNE BOTTLING COMPANY
<CAPTION>
Consolidated Statements of Changes in Stockholders' Equity
(dollars in thousands)
- --------------------------------------------------------------------------------
Preferred Additional Retained
Shares, Common Stock Paid-in Earnings
Series B Shares Amount Capital (Deficit) Total
------- ------- ------ --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1994 1,000 192,244 $ 2 $26,542 $(29,035) $ (2,491)
Net income 87 87
------- ------- ------ --------- --------- ---------
Balance, December 31, 1995 1,000 192,244 2 26,542 (28,948) (2,404)
Net loss (unaudited) (4,234) (4,234)
------- ------- ------ --------- --------- ---------
Balance, September 30, 1996 1,000 192,244 $ 2 $26,542 $(33,182) $ (6,638)
(unaudited) ======= ======= ====== ========= ========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
BROWNE BOTTLING COMPANY
<CAPTION>
Unaudited Consolidated Statements of Cash Flows (in thousands)
- --------------------------------------------------------------------------------
Three Months Ended September 30,
1995 1996
----------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ 4,045 $ (316)
Adjustments to reconcile net income
(loss) to net cash provided (used)
by operating activities:
Extraordinary gain on debt extinguishment (4,252) -
Depreciation and amortization 1,246 1,260
Gain on disposal of assets and franchises (118) (50)
Deferred compensation 102 64
Deferred taxes 7 (7)
Changes in assets and liabilities, net of
effect of acquisitions and dispositions:
(Increase) decrease in accounts receivable 1,965 1,905
(Increase) decrease in inventories (769) (281)
Increase (decrease) in accounts payable (334) 666
Increase (decrease) in accrued interest (1,249) (1,416)
Increase (decrease) in overdraft 171 (1,385)
Other (428) (738)
----------- -----------
Net cash provided (used) by operating
activities 386 (298)
----------- -----------
Cash flows from investing activities:
Capital expenditures (1,235) (507)
Proceeds from sale of fixed assets and
franchises 321 1,005
Payment for organization costs (31) -
----------- -----------
Net cash provided (used) by investing
activities (945) 498
----------- -----------
Cash flows from financing activities:
Proceeds from issuance of debt 3,747 18
Principal payments on debt (5,856) (1,811)
Borrowings on revolver note 57,886 45,070
Payments on revolver note (54,773) (43,477)
Financing costs paid (445) -
----------- -----------
Net cash provided (used) by financing
activities 559 (200)
----------- -----------
Net decrease in cash - -
Cash at beginning of period - -
----------- -----------
Cash at end of period $ - $ -
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
BROWNE BOTTLING COMPANY
<CAPTION>
Unaudited Consolidated Statements of Cash Flows (in thousands)
- --------------------------------------------------------------------------------
Nine Months Ended September 30,
1995 1996
----------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ 2,040 $ (4,234)
Adjustments to reconcile net income (loss) to net
cash used by operating activities:
Extraordinary gain on debt extinguishment (4,252) -
Depreciation and amortization 3,892 3,705
(Gain) loss on disposal of assets and franchises (31) 1,849
Deferred compensation 151 340
Deferred taxes (938) (1,304)
Changes in assets and liabilities, net of
effect of acquisitions and dispositions:
(Increase) decrease in accounts receivable 708 990
(Increase) decrease in inventories 68 (316)
Increase (decrease) in accounts payable (1,205) (3,578)
Increase (decrease) in accrued interest (648) (1,482)
Increase (decrease) in overdraft (1,170) (1,624)
Other (617) (416)
----------- -----------
Net cash used by operating
activities (2,002) (6,070)
----------- -----------
Cash flows from investing activities:
Capital expenditures (2,793) (1,911)
Proceeds from sale of fixed assets and
franchises 4,609 8,294
Payment for organization costs (31) -
Payment for purchase of territories and
related fixed assets, net of cash
acquired - (705)
----------- -----------
Net cash provided by investing
activities 1,785 5,678
----------- -----------
Cash flows from financing activities:
Proceeds from issuance of debt 6,555 5,819
Principal payments on debt (7,913) (6,848)
Borrowings on revolver note 151,139 131,941
Payments on revolver note (149,119) (130,420)
Financing costs paid (445) (100)
----------- -----------
Net cash provided by financing
activities 217 392
----------- -----------
Net decrease in cash - -
Cash at beginning of period - -
----------- -----------
Cash at end of period $ - $ -
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements
<PAGE>
<TABLE>
BROWNE BOTTLING COMPANY
<CAPTION>
Unaudited Consolidated Statements of Cash Flows (in thousands)
- --------------------------------------------------------------------------------
Supplemental Disclosures of Cash Flow Information
Three Months Ended September 30,
1995 1996
----------- -----------
<S> <C> <C>
Cash paid during the period for interest $ 3,182 $ 3,280
=========== ===========
Cash paid during the period for income
taxes $ 37 $ 280
=========== ===========
</TABLE>
<TABLE>
<CAPTION>
Nine Months Ended September 30,
1995 1996
----------- -----------
<S> <C> <C>
Cash paid during the period for interest $ 6,848 $ 7,085
=========== ===========
Cash paid during the period for income
taxes $ 104 $ 403
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
BROWNE BOTTLING COMPANY
Notes to Unaudited Consolidated Financial Statements
- ------------------------------------------------------------------------------
1. NATURE OF BUSINESS
All-American Bottling Corporation (the "Company") is a wholly-owned
subsidiary of Browne Bottling Company ("BBC"). BBC has no independent
operations and its only material asset is its investment in the Company.
The Company is an independent bottler and distributor of soft drinks and
other beverage products, including flavored and premium waters, brewed
teas, natural sodas and sparkling juices. The Company's largest markets
in terms of franchise case sales volume are the metropolitan areas of
Milwaukee, Louisville, Nashville and Oklahoma City. The Company has
franchise agreements covering various territories for brands such as RC
Cola, Diet Rite Cola, Seven-Up, Dr Pepper, Sunkist, Canada Dry, Dad's
Root Beer, Crush, A&W Root Beer, Big Red, Sundrop, Snapple, Mistic,
Clearly Canadian, Evian and Yoo-Hoo.
2. BASIS OF PRESENTATION
The interim financial statements included herein have been prepared by
BBC without audit, pursuant to the rules and regulations promulgated by
the Securities and Exchange Commission (the "Commission"). Certain
information and footnote disclosures, normally included in financial
statements prepared in accordance with generally accepted accounting
principles, have been omitted pursuant to Commission rules and
regulations; nevertheless, BBC believes that the disclosures are
adequate to make the information presented not misleading. These
condensed financial statements should be read in conjunction with BBC's
audited financial statements and the notes thereto included in BBC's
Annual Report on Form 10-K for the year ended December 31, 1995 filed
with the Commission. In the opinion of management, the accompanying
interim financial statements contain all material adjustments,
consisting only of normal recurring adjustments, necessary to present
fairly the financial position, results of operations, cash flows and
stockholders' equity of BBC for the interim periods. The results of
operations for the interim periods are not necessarily indicative of the
results to be expected for the full fiscal year.
The accompanying financial statements include the accounts of BBC and
its wholly-owned subsidiary, the Company. All significant intercompany
balances and transactions have been eliminated.
In August 1993, the Company issued $45 million principal amount of 13%
Senior Secured Notes (the "Senior Notes"), which indebtedness has been
fully and unconditionally guaranteed by BBC. The separate financial
statements of the Company have not been included because the assets,
liabilities, earnings and equity of the Company are substantially
equivalent to the assets, liabilities, earnings and equity of BBC on a
consolidated basis and therefore are not considered material.
3. EARNINGS PER SHARE
Primary and fully diluted earnings per common share (EPS) are based upon
the weighted average number of shares of common stock outstanding plus
the common stock equivalents which would arise from the exercise of
warrants, unless such items would be anti-dilutive. Fully diluted
earnings per common share assume the conversion of common stock
equivalents which would arise from the exercise of warrants, unless such
items would be anti-dilutive. Primary and fully diluted earnings per
share are the same for all periods presented.
Weighted average number of shares used in computing loss per common
share and common share equivalent for both primary and fully diluted
were 192,244 for all periods in 1996 and were 213,604 for all periods in
1995.
4. ASSET SALES AND PURCHASES
On March 23, 1996, the Company sold assets in St. Paul, Duluth and
Rochester, Minnesota and North and South Dakota to an unrelated party
for proceeds of approximately $5.6 million, resulting in a loss on sale
of approximately $2.9 million. The assets sold included warehouse
inventory in St. Paul, selected warehouse equipment, vendors and
visicoolers, and franchise and distributor agreements. Sale proceeds
included $5.4 million in cash paid at closing which was used to reduce
the balance on the Company's Senior Credit Facility, and a receivable of
$200,000 which was paid in September, 1996.
During the nine months ended September 30, 1996, the Company also sold
franchise and distribution rights in Madison, Wisconsin, Pulaski,
Tennessee and Roanoke, Virginia and real estate in Charleston, West
Virginia for combined net sale proceeds of approximately $3.4 million,
and recognized gains totaling approximately $1.2 million. Sale proceeds
included $2.8 million in cash paid at closing which was used to reduce
the balance on the Company's Senior Credit Facility and Senior Secured
Notes and a $608,000 note with interest and principal due monthly.
In January 1996, the Company acquired the franchise and distribution
rights, accounts receivable, inventory, and fixed assets of an unrelated
bottler in LaCrosse, Wisconsin. The purchase price was approximately
$1.0 million and was financed primarily through borrowings under the
Company's Senior Credit Facility.
5. ADJUSTED HISTORICAL RESULTS
During the nine months ended September 30, 1996, AABC sold certain
assets constituting its St. Paul, Minnesota, Duluth, Minnesota and
Roanoke, Virginia operations. The following table sets forth a summary
of unaudited selected financial information for the three and nine
months ended September 30, 1995 and 1996. For each of these periods,
the selected financial information presented includes actual operating
results for the Company, while "adjusted" information has also been
provided for the three and nine months ended September 30, 1995 which
eliminates all case sales data and all revenues and expenses relating to
the St. Paul, Duluth and Roanoke operations. The other territory sales
discussed in Note 4 have not been eliminated due to their immaterial
impact on the comparability of the financial information provided.
<TABLE>
Three Months Ended September 30,
<CAPTION>
Historical Adjusted
1995 1995 1996
------------- -------------- --------------
Cases Percent Cases Percent Cases Percent
----- ------- ----- ------- ----- -------
(In thousands, except percent data)
<S> <C> <C> <C> <C> <C> <C>
DSD sales............. 5,752 5,009 4,818
Distributor sales..... 498 404 331
----- ---- ----- ---- ----- ----
Total franchise 6,250 89% 5,413 88% 5,149 85%
Contract sales........ 737 11% 737 12% 877 15%
------ ---- ----- ---- ----- ----
Total case sales. 6,987 100% 6,150 100% 6,026 100%
Produced.............. 6,403 92% 5,907 96% 5,485 91%
Purchased............. 786 11% 526 9% 745 12%
Inventory - (inc.)/dec (202) -3% (283) -5% (204) -3%
----- ---- ----- ---- ----- ----
Total case sales. 6,987 100% 6,150 100% 6,026 100%
</TABLE>
<TABLE>
<CAPTION>
Per Per Per
Aggregate Case Aggregate Case Aggregate Case
--------- ---- --------- ---- --------- ----
(In thousands, except per case and per share date)
<S> <C> <C> <C> <C> <C> <C>
Franchise sales......... $41,925 $6.71 $36,423 $6.73 $34,102 $6.62
Contract sales.......... 3,621 4.91 3,621 4.91 4,133 4.71
------- ------- -------
Net sales....... 45,546 6.52 40,044 6.51 38,235 6.34
Cost of goods sold...... 30,601 4.38 26,597 4.32 25,258 4.19
------- ----- ------- ----- ------- -----
Gross profit.... 14,945 $2.14 13,447 $2.19 12,977 $2.15
Operating expenses...... 13,340 11,269 11,385
------- ------- -------
Operating income........ 1,605 2,178 1,592
Interest expense........ (1,956) (1,808) (1,894)
Other non-operating
income ................ 184 230 207
------- ------- -------
Net income (loss) before
income taxes and extra item (167) 600 (95)
Income tax benefit
(provision) (40) (298) (221)
------- ------- -------
Net income (loss) before
extraordinary item..... (207) 302 (316)
Extraordinary gain...... 4,252 4,252 -
------- ------- -------
Net income (loss)....... $ 4,045 $ 4,554 $ (316)
======= ======= =======
EPS before extraordinary
item................... $ (.97) $ 1.41 $ (1.64)
EPS..................... $ 18.94 $ 21.32 $ (1.64)
EBITDA (a).............. $ 2,925 $ 3,356 $ 2,994
</TABLE>
Note 5 (continued)
<TABLE>
Nine Months Ended September 30,
<CAPTION>
Historical Adjusted
1995 1995 1996
----------------- ----------------- -----------------
Cases Percent Cases Percent Cases Percent
----- ------- ----- ------- ----- -------
(In thousands, except percent data)
<S> <C> <C> <C> <C> <C> <C>
DSD sales............... 16,370 14,831 13,696
Distributor sales....... 1,446 1,214 1,161
------ ------ ------
Total franchise.... 17,816 89% 16,045 88% 14,857 86%
Contract sales.......... 2,216 11% 2,216 12% 2,323 14%
------ ---- ------ ---- ------ ----
Total case sales... 20,032 100% 18,261 100% 17,180 100%
Produced................ 18,135 91% 16,897 93% 15,291 89%
Purchased............... 2,127 10% 1,589 8% 2,026 12%
Inventory - (inc.)/dec.. (230) -1% (225) -1% (137) -1%
------ ---- ------ ---- ------ ----
Total case sales... 20,032 100% 18,261 100% 17,180 100%
</TABLE>
<TABLE>
<CAPTION>
Per Per Per
Aggregate Case Aggregate Case Aggregate Case
--------- ---- --------- ---- --------- ----
(In thousands, except per case and per share date)
<S> <C> <C> <C> <C> <C> <C>
Franchise sales......... $118,703 $6.66 $107,157 $6.68 $ 98,755 $6.65
Contract sales.......... 10,723 4.84 10,723 4.84 11,013 4.74
------- -------- --------
Net sales....... 129,426 6.46 117,880 6.46 109,768 6.39
Cost of goods sold...... 85,682 4.28 77,525 4.25 72,717 4.23
-------- ----- ------- ----- -------- -----
Gross profit....... 43,744 $2.18 40,355 $2.21 37,051 $2.16
Operating expenses...... 40,885 36,661 35,131
-------- -------- --------
Operating income........ 2,859 3,694 1,920
Interest expense........ (6,257) (5,959) (5,664)
Other non-operating
income (expense)....... 326 495 (1,436)
-------- -------- --------
Net loss before income
taxes and extra item... (3,072) (1,770) (5,180)
Income tax benefit...... 860 378 946
-------- -------- --------
Net loss before extra-
ordinary item.......... (2,212) (1,392) (4,234)
Extraordinary gain...... 4,252 4,252 -
-------- -------- --------
Net income (loss)....... $ 2,040 $ 2,860 $ (4,234)
======== ======== =========
EPS before extraordinary item $ (10.36) $ (6.53) $ (22.02)
EPS..................... $ 9.55 $ 13.38 $ (22.02)
EBITDA<F1>.............. $ 6,983 $ 7,593 $ 5,994
<FN>
<F1> EBITDA consists of net income (loss) before (a) income taxes, (b) interest expense, (c)
depreciation, (d) amortization, (e) gain (loss) on asset sales, (f) other non-cash charges, and
(g) extraordinary gains. EBITDA should not be considered as an alternative to, or more
meaningful than, operating income or cash flow as an indicator of the Company's operating
performance.
</FN>
</TABLE>
6. DEBT EXTINGUISHMENT
On July 7, 1995, the Company completed the repurchase of the Kidder
Subordinated Loan. The Kidder Subordinated Loan, which was purchased
for $4,750,000, had a principal amount (including accrued interest) of
approximately $12.3 million. The purchase price was financed in part by
selling $3.3 million principal amount of Senior Notes held by All-American
Bottling Financial Corporation, a wholly-owned subsidiary of
the Company, to an entity affiliated with Stephen B. Browne, at the then
market price of approximately $2.9 million plus accrued interest. The
remaining amount of the purchase price was borrowed under the Senior
Credit Facility. After expenses associated with the transaction, the
Company experienced an extraordinary gain of approximately $4.3 million
(a pre-tax extraordinary gain of $7.0 million less taxes of $2.7
million).
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
GENERAL
All-American Bottling Corporation (the "Company") is an independent
bottler and distributor of soft drinks and other beverage products operating
in six states. The Company is a wholly-owned subsidiary of Browne Bottling
Company ("BBC"). The Company's soft drink product portfolio includes such
well-known national brands as RC Cola, Diet Rite Cola, Seven-Up, Dr Pepper,
Sunkist, Canada Dry, Dad's Root Beer, Crush and A&W Root Beer, as well as
leading regional brands such as Big Red and Sundrop. Other beverages
distributed by the Company include Snapple, Mistic, Clearly Canadian, Evian
and other waters and are commonly referred to as "alternative beverages". The
Company's largest markets in terms of franchise case sales volume are the
metropolitan areas of Milwaukee, Louisville, Nashville and Oklahoma City.
In August 1993, BBC and the Company completed a recapitalization plan
designed to enhance the Company's financial flexibility. As part of the
recapitalization plan, the Company issued $45.0 million principal amount of
13% Senior Secured Notes due 2001 (the "Senior Notes"), guaranteed by BBC, and
entered into a new senior secured credit facility (the "Senior Credit
Facility") providing for borrowing availability of up to $20.0 million,
subject to borrowing base limitations (65% of eligible inventories and 85% of
eligible accounts receivable).
The Company's primary measurement of unit volume is franchise and
contract case sales. Franchise case sales represent sales of products in the
Company's franchise territories, while contract case sales consist of product
sold under contract manufacturing arrangements to private label or other
bottlers. Produced product consists of product manufactured by the Company in
its own facilities and purchased product is finished product purchased from
other bottlers and suppliers. EBITDA consists of net income (loss) before
income taxes, interest expense, depreciation, amortization, gain (loss) on
asset sales and other non-cash charges and extraordinary gains. EBITDA should
not be considered as an alternative to, or more meaningful than, operating
income or cash flow (as determined in accordance with generally accepted
accounting principles) as an indicator of the Company's operating performance
or liquidity.
The operating results for the three and nine month periods ended
September 30, 1996 are not directly comparable to the operating results for
the three and nine month periods ended September 30, 1995, as the results for
the 1996 periods are materially affected by the sale of assets in St. Paul and
Duluth, Minnesota and in Roanoke, Virginia. The sales of these operations
significantly reduced case sales, net sales, cost of goods sold, gross profit,
and administrative, marketing and general expenses. In order to provide
comparable information, the selected financial information included in Note 5
of the interim financial statements for the three and nine months ended
September 30, 1995 has been "adjusted" to eliminate these operations.
Accordingly, the following discussion of the results of operations compares
the actual results of operations for the three and nine months ended September
30, 1996 with the actual, as well as "adjusted", results of operations for the
corresponding periods ended September 30, 1995.
RESULTS OF OPERATIONS (UNAUDITED)
The following discussion addresses the results of operations for the
three months ended September 30, 1996 (the "Current Quarter") compared to the
corresponding period ended September 30, 1995 (the "Prior Quarter") and the
"adjusted" corresponding period ended September 30, 1995 (the "Adjusted Prior
Quarter") and for the nine months ended September 30, 1996 (the "Current
YTD") compared to the corresponding period ended September 30, 1995 (the
"Prior YTD") and the "adjusted" corresponding period ended September 30, 1995
(the "Adjusted Prior YTD").
THREE MONTHS ENDED SEPTEMBER 30, 1996 VS. THREE MONTHS ENDED SEPTEMBER 30,
1995
Net sales for the Current Quarter were $38.2 million compared to $45.5
million for the Prior Quarter, a $7.3 million or 16.1% decrease due to lower
franchise case sales resulting primarily from the sales of the Minnesota,
Pulaski, Tennessee and Roanoke, Virginia territories. Franchise case sales
were 5.1 million cases for the Current Quarter compared to 6.3 million cases
for the Prior Quarter, a decrease of 1.1 million or 17.6%. After adjustment
for sold operations, net sales decreased $1.8 million or 4.5% for the Current
Quarter compared to the Adjusted Prior Quarter due to a decrease in franchise
case sales for the Current Quarter of 264,000 cases or 4.9% from the Adjusted
Prior Quarter. This decrease in franchise cases is attributable to volume
declines in Kentucky, West Virginia and Tennessee. Franchise case sales in
Kentucky were 1.5 million cases for the Current Quarter compared to 1.6
million cases for the Prior Quarter, a decrease of 93,000 cases or 5.7%. This
decrease in Kentucky is primarily attributable to a volume reduction in August
1996 compared to August 1995 in which record high sales of canned products
were achieved. In West Virginia, franchise case sales fell 89,000 cases or
12.4% in the Current Quarter compared to the Adjusted Prior Quarter due to
reduced volume and margins on RC Brands in West Virginia. In Tennessee,
franchise case sales for the Current Quarter were 973,000 cases compared to
1.1 million cases for the Prior Quarter, a decrease of 106,000 cases or 9.8%.
This decrease is primarily related to declines in the sales of RC Cola
products in response to price increases implemented in Tennessee. For the
Prior Quarter, heavy promotional activity in Tennessee resulted in volume
increases at a lower average net selling price compared to the Current
Quarter. The higher average net selling price in Tennessee was offset by
price decreases in Wisconsin where the average net selling price for franchise
cases fell to $6.50 for the Current Quarter compared to $6.98 for the Adjusted
Prior Quarter. This decline in the average net selling price in Wisconsin is
due to increased promotional expenses incurred to increase volume primarily on
Cadbury Beverage Corporation brands. Overall, the average net selling price
for franchise sales for the Company decreased to $6.62 for the Current Quarter
from $6.71 for the Prior Quarter and $6.73 for the Adjusted Prior Quarter
primarily due to the increased promotional activity in Wisconsin.
Contract case sales increased to 877,000 cases for the Current Quarter
from 737,000 cases for the Prior Quarter, and the average net selling price
for contract cases decreased to $4.71 for the Current Quarter compared to
$4.91 for the Prior Quarter. The changes in both volume and price are
attributable primarily to additional case sales from the Company's Louisville
production facility made pursuant to a production agreement with the
purchasers of the Pulaski, Tennessee and Roanoke, Virginia operations which
were sold as described in Note 4 of the interim financial statements.
On a company-wide basis the average net selling price for all cases fell
from $6.52 for the Prior Quarter and $6.51 for the Adjusted Prior Quarter to
$6.34 for the Current Quarter primarily due to the reduced average net selling
price realized on franchise cases and, to a lesser extent, due to the higher
percentage of sales resulting from contract cases which were at a lower net
selling price as compared to franchise case sales.
Cost of goods sold decreased $5.3 million or 17.5% for the Current
Quarter compared to the Prior Quarter. Cost of goods sold decreased $1.3
million or 5.0% for the Current Quarter compared to the Adjusted Prior Quarter
primarily due to the volume decreases described above and a reduction in
packaging costs. Gross profit for the Current Quarter was $13.0 million
compared to $14.9 million for the Prior Quarter, a decrease of $2.0 million or
13.2%. Gross profit decreased $470,000 or 3.5% for the Current Quarter
compared to the Adjusted Prior Quarter due to case volume and average net
selling price declines partially offset by the reduced packaging costs. Gross
margin (gross profit as a percentage of sales) improved slightly to 33.9% for
the Current Quarter compared to 33.6% for the Adjusted Prior Quarter.
Operating expenses declined $2.0 million or 14.7% for the Current
Quarter compared to the Prior Quarter due to overall decreases in expenses as
a result of the decreased volume of case sales. Operating expenses increased
$116,000 or 1.0% in the Current Quarter compared to the Adjusted Prior Quarter
due to increased depreciation and insurance expense partially offset by
decreased payroll expenses.
Interest expense was $1.9 million for the Current Quarter compared to
$2.0 million for the Prior Quarter and $1.8 million for the Adjusted Prior
Quarter. Cash interest expense was $1.9 million for both the Current Quarter
and the Prior Quarter compared to $1.8 million for the Adjusted Prior Quarter,
an increase in the Current Quarter of $109,000 or 6.2% due to increased
borrowings under the Senior Credit Facility to enable the Company to realize
available trade discounts.
Other income increased to $157,000 in the Current Quarter compared to
$66,000 for the Prior Quarter, an increase of $91,000 or 138% and compared to
$113,000 for the Adjusted Prior Quarter, an increase of $44,000 or 39% due to
increased trade discounts and rental income.
The lower net loss before income taxes and extraordinary item ("pretax
net loss") for the Current Quarter of $95,000 compared to a pretax net loss
for the Prior Quarter of $167,000 resulted from the sale of the Minnesota and
Roanoke, Virginia territories described in Notes 4 and 5 of the interim
financial statements. Reduced gross margins resulting from the volume
reductions described above primarily account for the decrease in the Current
Quarter compared to net income before income taxes and extraordinary item of
$600,000 for the Adjusted Prior Quarter.
The extraordinary gain on debt extinguishment for the Prior Quarter was
due to the after-tax extraordinary gain realized on the repurchase of the
Company's Senior Subordinated Notes in July, 1995 described in Note 6 to the
interim financial statements.
EBITDA was $3.0 million for the Current Quarter compared to $2.9 million
for the Prior Quarter and $3.4 million for the Adjusted Prior Quarter. The
decrease in EBITDA for the Current Quarter compared to the Adjusted Prior
Quarter is also attributable to reduced gross margins resulting from the
volume reductions described above.
NINE MONTHS ENDED SEPTEMBER 30, 1996 VS. NINE MONTHS ENDED SEPTEMBER 30, 1995
Net sales for the Current YTD were $110.0 million compared to $129.4
million for the Prior YTD, a $20.0 million or 15.2% decrease due to lower
franchise case sales resulting primarily from the sale of the Minnesota,
Pulaski, Tennessee and Roanoke, Virginia territories. Franchise case sales
were 14.9 million cases for the Current YTD compared to 17.8 million cases for
the Prior YTD, a decrease of 3.0 million or 16.6%. After the adjustment for
sold operations, net sales decreased $8.1 million or 6.9% for the Current YTD
compared to the Adjusted Prior YTD. Franchise case sales for the Current YTD
decreased 1.2 million cases or 7.4% from the Adjusted Prior YTD. This
decrease in franchise cases is attributable to volume losses in Wisconsin,
Minnesota, Tennessee and West Virginia. In Wisconsin, franchise case sales
for the Current YTD were 4.6 million cases compared to 5.0 million cases for
the Prior YTD and compared to 4.7 million cases for the Adjusted Prior YTD, a
decrease of 144,000 cases or 3.0%. This decrease is primarily related to
declines in the sales of RC Cola products due to the territory sales in
Madison, Wisconsin described in Note 4 of the interim financial statements.
In Minnesota, franchise case sales for the Current YTD were 350,000 cases
compared to 562,000 cases for the Adjusted Prior YTD, a decrease of 212,000
cases or 37.8%. This volume decline is attributable to a limited distribution
system in Minnesota in anticipation of the sale of this territory which was
completed in March 1996. In Tennessee, franchise case sales for the Current
YTD were 2.7 million cases compared to 3.2 million cases for the Prior YTD, a
decrease of 481,000 cases or 14.9%. This decrease is primarily related to
declines in can package case sales in response to price increases implemented
in Tennessee. For the Prior YTD, heavy promotional activity in Tennessee
resulted in volume increases at lower average net selling prices compared to
the Current YTD. In West Virginia, franchise case sales for the Current YTD
were 1.9 million cases compared to 2.0 million cases for the Adjusted Prior
YTD, a decrease of 148,000 cases or 7.2%. This decrease is due to reduced
volume and margin on RC brands in West Virginia. Overall, the average net
selling price for franchise sales for the Company decreased to $6.65 for the
Current YTD compared to $6.66 for the Prior YTD and $6.68 for the Adjusted
Prior YTD.
Contract case sales increased slightly to 2.3 million cases for the
Current YTD from 2.2 million cases for the Prior YTD. The average net selling
price for contract cases decreased to $4.74 for the Current YTD compared to
$4.84 for the Prior YTD due to new production at the Louisville production
facility pursuant to agreements entered into in connection with the sale of
the Pulaski, Tennessee and Roanoke, Virginia operations.
On a company-wide basis the average net selling price for all cases fell
from $6.46 for the Prior YTD and the Adjusted Prior YTD to $6.39 for the
Current YTD due to the reduced average net selling price for franchise cases
and due to the higher percentage of sales resulting from contract cases which
were at a lower net selling price compared to franchise case sales.
Cost of goods sold decreased $13.0 million or 15.1% for the Current YTD
compared to the Prior YTD. Cost of goods sold decreased $4.8 million or 6.2%
for the Current YTD compared to the Adjusted Prior YTD primarily due to the
volume decrease described above. Gross profit for the Current YTD was $37.0
million compared to $43.7 million for the Prior YTD, a decrease of $6.7
million or 15.3%. Gross profit decreased $3.3 million or 8.2% for the Current
YTD compared to the Adjusted Prior YTD due to case volume declines and reduced
average net selling price. Gross margin was 33.8% for the Current YTD
compared to 33.8% for the Prior YTD and 34.2% for the Adjusted Prior YTD. The
decline in the gross margin percentage is due to the decreased average net
selling price.
Operating expenses declined $5.8 million or 14.1% for the Current YTD
compared to the Prior YTD and by $1.5 million or 4.2% compared to the Adjusted
Prior YTD due to overall decreases in personnel expenses and utility costs as
a result of the decreased volume of case sales.
Interest expense was $5.7 million for the Current YTD compared to $6.3
million for the Prior YTD and $6.0 million for the Adjusted Prior YTD. Cash
interest expense was $5.6 million for the Current YTD compared to $5.5 million
for the Prior YTD and compared to $5.2 million for the Adjusted Prior YTD, an
increase in the Current YTD of $342,000 or 6.5% over the Adjusted Prior
Quarter due to higher levels of debt carrying cash interest. The higher levels
of debt carrying cash interest resulted from the July 1995 sale of the
Company's Senior Notes which were previously held by a subsidiary of the
Company as described in Note 6 to the interim financial statements. Proceeds
from the sale of the Company's Senior Notes were used to retire the Company's
Senior Subordinated Notes which provided for noncash interest payments. As a
result, noncash interest declined.
Other income increased to $413,000 in the Current YTD compared to
$295,000 for the Prior YTD, an increase of $118,000 or 40.0%. Compared to
$480,000 for the Adjusted Prior YTD, other income in the Current YTD decreased
$67,000 or 14.0% primarily due to a decline in trade discounts taken in the
Current YTD.
Pretax net loss for the Current YTD was $5.2 million compared to a
pretax net loss for the Prior YTD of $3.1 million and compared to a pretax net
loss of $1.8 million for the Adjusted Prior YTD. The increase in the Current
YTD pretax net loss results from the volume and margin declines discussed
above and from the loss of $1.8 million realized on the sale of the
territories as described in Notes 4 and 5 to the interim financial statements.
The extraordinary gain on debt extinguishment for the Prior YTD is due
to the after-tax extraordinary gain realized on the repurchase of the
Company's Senior Subordinated Notes in July, 1995 described in Note 6 to the
interim financial statements.
EBITDA was $6.0 million for the Current YTD compared to $7.0 million for
the Prior YTD and compared to $7.6 million for the Adjusted Prior YTD. The
decrease in EBITDA for the Current YTD compared to the Adjusted Prior YTD is
attributable to reduced gross profit partially offset by reduced cash
operating expenses.
LIQUIDITY AND CAPITAL RESOURCES
At September 30, 1996 the Company had working capital (excluding cash
overdraft and the current portion of long-term debt and other obligations) of
$9.7 million compared to $6.0 million at December 31, 1995. The increase in
working capital is due primarily to the decline in trade payables and accrued
interest partially offset by a decline in accounts receivable. The Company's
working capital needs have historically been funded from operations and, on a
seasonal basis, from borrowings under its Senior Credit Facility.
For the Current Quarter, the Company's operating activities used cash of
$298,000 compared to cash provided of $386,000 for the Prior Quarter. The net
cash used of $298,000 by operating activities in the Current Quarter resulted
primarily from significant decreases in accrued interest and cash overdraft
partially offset by decreases in accounts receivable and $951,000 cash
provided from operations. The net cash provided of $386,000 in the Prior
Quarter resulted primarily from cash provided from operations of $1.0 million
and decreases in accounts receivable partially offset by increases in
inventory and decreases in accrued interest.
For the Current YTD, the Company's operating activities used cash of
$6.1 million compared to cash used of $2.0 million for the Prior YTD. The net
cash used of $6.1 million by operating activities in the Current YTD resulted
primarily from a significant decrease in accounts payable, cash overdraft and
accrued interest partially offset by decreases in accounts receivable and cash
provided from operations of $356,000. The cash used of $2.0 million for the
Prior YTD resulted primarily from decreases in accounts payable, cash
overdraft and accrued interest partially offset by decreases in accounts
receivable and by cash provided from operations of $862,000.
During the Current Quarter investing activities provided cash of
$498,000 compared to cash used of $945,000 in the Prior Quarter. The increase
in cash provided in the Current Quarter over the Prior Quarter is due
primarily to decreased capital expenditures and increased proceeds from sales
of fixed assets in the Current Quarter compared to the Prior Quarter. For the
Current Quarter the proceeds from sales resulted from the sale of real estate
in Charleston, West Virginia. For the Prior Quarter the proceeds from sales
resulted from the sale of a beer franchise in Oklahoma City.
During the Current YTD investing activities provided cash of $5.7
million compared to cash provided during the Prior YTD of $1.8 million. The
increase is due primarily to $5.4 million in cash received on the sale of
Minnesota territories as well as the proceeds from sales of other locations
described in Note 4 to the interim financial statements. For the Prior YTD
the proceeds from sales resulted from sales of the Rockford, Illinois
territory, real estate in Wisconsin and West Virginia, and small franchise
territories in Ohio and Oklahoma City.
Financing activities used cash of $200,000 in the Current Quarter
primarily due to principal payments on debt of $1.8 million partially offset
by increased borrowings over payments on the Senior Credit Facility of $1.6
million. Principal payments on debt of $1.8 million include approximately
$500,000 for the repurchase of the Company's Senior Notes and $1.1 million
paid on unsecured demand notes from Stephen B. Browne, the chief executive
officer of the Company and BBC and BBC's principal stockholder, and entities
affiliated with him. Mr. Browne and affiliated entities from time to time
make unsecured loans to the Company at the same interest rates charged under
the Company's Senior Credit Facility. At September 30, 1996 such debt had a
remaining balance of $1.0 million. For the Current YTD, financing activities
provided cash of $392,000 primarily due to increased borrowings over payments
on the Senior Credit Facility and the issuance of unsecured demand notes to
Mr. Browne and affiliated entities as described above, partially offset by
$1.5 million used for the repurchase of Senior Notes. At September 30, 1996,
the Company's borrowing base under the Senior Credit Facility was $17.2
million, and the Company had borrowings of $15.2 million and an additional
$138,000 of letters of credit outstanding leaving $1.9 million of unused
credit available.
The Company's earnings before income taxes and fixed charges were
insufficient to cover its fixed charges by $95,000 for the Current Quarter and
by $5.1 million for the Current YTD. EBITDA (as defined) and cash interest
expense for the Current Quarter were $3.0 million and $1.9 million,
respectively. For the Current YTD, EBITDA (as defined) and cash interest
expense were $6.0 million and $5.6 million, respectively. EBITDA is presented
not as an alternative to operating income (as determined in accordance with
generally accepted accounting principles) as an indicator of the Company's
operating performance or to cash flow from operating activities (as determined
in accordance with generally accepted accounting principles) as a measure of
its liquidity, but rather to provide additional information related to the
debt service ability of the Company. If the Company were to experience a
deterioration in operating results, the Company's ability to generate
sufficient cash to cover its interest expense would be reduced, and the
Company would become unable to meet its interest obligations.
The Company's long-term debt (including current maturities thereof and
amounts payable under non-compete and deferred compensation agreements) was
approximately $61.1 million as of September 30, 1996, and scheduled principal
payments are estimated to be approximately $1.7 million for the twelve months
ending September 30, 1997. Of this $1.7 million approximately $1.0 million
represents unsecured demand notes from Mr. Browne and affiliated entities as
described above and approximately $414,000 represents financing of 18 months
or less from trade suppliers to finance 1995 capital expenditures. The
Company must make certain capital expenditures on an annual basis in order to
maintain its business and assets and compete effectively. The Company expects
to spend approximately $800,000 on capital expenditures during the three
months ending December 31, 1996. To the extent that requirements for debt
service and capital expenditures are in excess of cash flow from operations,
the Company will need to finance such requirements with additional
indebtedness or defer capital expenditures.
FORWARD LOOKING STATEMENTS
When used in this document, the words "anticipate", "estimate",
"believe" and similar expressions are intended to identify forward looking
statements. Such statements are subject to certain risks, uncertainties and
assumptions. Should one or more of these risks or uncertainties occur, or
should underlying assumptions prove incorrect, actual results may vary
materially from those anticipated, estimated or projected.
<PAGE>
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
(a) The following exhibit is filed with this Form 10-Q and is
identified by the number indicated:
27 Financial Data Schedule
(b) Reports on 8-K filed during the Current Quarter:
Form 8-K dated July 03, 1996
Form 8-K/A dated July 16, 1996
<PAGE>
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.
ALL-AMERICAN BOTTLING CORPORATION
Date: November 12, 1996 By: STEPHEN B. BROWNE
------------------------
Stephen B. Browne
President, Chief Executive
Officer and Chairman
of the Board
Date: November 12, 1996 By: STEPHEN R. KERR
-------------------------
Stephen R. Kerr
Vice President and Chief
Financial Officer
BROWNE BOTTLING COMPANY
Date: November 12, 1996 By: STEPHEN B. BROWNE
------------------------
Stephen B. Browne
President, Chief Executive
Officer and Chairman
of the Board
Date: November 12, 1996 By: STEPHEN R. KERR
-------------------------
Stephen R. Kerr
Vice President and Chief
Financial Officer
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit No. Description Method of Filing
- ----------- ----------- ----------------
<S> <C> <C>
27 Financial Data Schedule Filed herewith electronically
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000825811
<NAME> ALL-AMERICAN BOTTLING COMPANY
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> (484)
<SECURITIES> 0
<RECEIVABLES> 11,430
<ALLOWANCES> 454
<INVENTORY> 9,429
<CURRENT-ASSETS> 24,897
<PP&E> 36,411
<DEPRECIATION> 24,186
<TOTAL-ASSETS> 81,833
<CURRENT-LIABILITIES> 17,287
<BONDS> 59,470
0
0
<COMMON> 2
<OTHER-SE> (6,640)
<TOTAL-LIABILITY-AND-EQUITY> 81,833
<SALES> 109,768
<TOTAL-REVENUES> 109,768
<CGS> 72,717
<TOTAL-COSTS> 72,717
<OTHER-EXPENSES> 35,131
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5,664
<INCOME-PRETAX> (5,180)
<INCOME-TAX> 946
<INCOME-CONTINUING> (4,234)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (4,234)
<EPS-PRIMARY> (22.02)
<EPS-DILUTED> (22.02)
</TABLE>
