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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
SCHEDULE 13G
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULES 13d-1(b), (c) and (d) AND AMENDMENTS THERETO FILED
PURSUANT TO 13d-2(b)
(Amendment No. )*
Drypers Corporation
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(Name of Issuer)
Common Stock, $.001 par value
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(Title of Class of Securities)
262497308
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(CUSIP Number)
May 11, 1998
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(Date of Event Which Requires Filing of this Statement)
Check the appropriate box to designate the rule pursuant to which this Schedule
is filed:
[X] Rule 13d-1(b)
[_] Rule 13d-1(c)
[_] Rule13d-1(d)
_______________
*The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter the disclosures provided in a prior cover page.
The information required in the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
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CUSIP No. 262497308 13G Page 2 of 5 Pages
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1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
PENN CAPITAL MANAGEMENT COMPANY, INC.
22-2796848
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [_]
(b) [_]
3 SEC USE ONLY
4 CITIZENSHIP OR PLACE OF ORGANIZATION
NEW JERSEY
NUMBER OF 5 SOLE VOTING POWER
SHARES 1,063,835
BENEFICIALLY
OWNED BY 6 SHARED VOTING POWER
EACH 0
REPORTING
PERSON 7 SOLE DISPOSITIVE POWER
WITH 1,063,835
8 SHARES DISPOSITIVE POWER
0
9 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,063,835
10 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES
[_]
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11 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 9
6.33%/1/
12 TYPE OF REPORTING PERSON
IA
SCHEDULE 13G
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ITEM 1(a) NAME OF ISSUER: DRYPERS CORPORATION
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ITEM 1(b) ADDRESS OF ISSUER'S PRINCIPAL EXECUTIVE OFFICES:
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1415 WEST LOOP NORTH
HOUSTON, TX 77042-6019
ITEM 2(a) NAME OF PERSON FILING:
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PENN CAPITAL MANAGEMENT COMPANY, INC.
ITEM 2(b) ADDRESS OF PRINCIPAL BUSINESS OFFICE OR, IF NONE, RESIDENCE:
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52 HADDONFIELD-BERLIN ROAD
SUITE 1000
CHERRY HILL, NJ 08034
ITEM 2(c) CITIZENSHIP:
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NEW JERSEY
ITEM 2(d) TITLE OF CLASS OF SECURITIES:
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Common Stock, par value $.001
ITEM 2(e) CUSIP NUMBER:
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262497308
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/1/ Based on the 16,818,923 shares of common stock outstanding as of April 24,
1998 as reported in the Form 10-Q for the Drypers Corporation filed on May 13,
1998.
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ITEM 3 IF THIS STATEMENT IS FILED PURSUANT TO RULES 13D-1(b), OR 13D-
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2(b), CHECK WHETHER THE PERSON FILING IS A:
[ ](a) BROKER OR DEALER REGISTERED UNDER SECTION 15 OF THE ACT,
[ ](b) BANK AS DEFINED IN SECTION 3(a)(6) OF THE ACT,
[ ](c) INSURANCE COMPANY AS DEFINED IN SECTION 3(a)(19) OF THE
ACT,
[ ](d) INVESTMENT COMPANY REGISTERED UNDER SECTION 8 OF THE
INVESTMENT COMPANY ACT
[x](e) INVESTMENT ADVISOR REGISTERED UNDER SECTION 203 OF THE
INVESTMENT ADVISERS ACT OF 1940,
[ ](f) EMPLOYEE BENEFIT PLAN, PENSION FUND WHICH IS SUBJECT TO
THE PROVISIONS OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974 OR ENDOWMENT FUND; SEE RULE 13d-
1(b)(1)(ii)(F),
[ ](g) PARENT HOLDING COMPANY, IN ACCORDANCE WITH RULE 13d-
1(b)(ii)(G); SEE ITEM 7,
[ ](h) GROUP, IN ACCORDANCE WITH RULE 13d-1(b)(1)(ii)(H).
ITEM 4 OWNERSHIP.
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(a) AMOUNT BENEFICIALLY OWNED:
1,063,835
(b) PERCENT OF CLASS:
6.33%
(c) NUMBER OF SHARES AS TO WHICH SUCH PERSON HAS:
(i) SOLE POWER TO VOTE OR TO DIRECT THE VOTE
1,063,835
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(ii) SHARED POWER TO VOTE OR TO DIRECT THE VOTE
-0-
(iii) SOLE POWER TO DISPOSE OR TO DIRECT THE
DISPOSITION OF
1,063,835
(iv) SHARED POWER TO DISPOSE OR TO DIRECT THE
DISPOSITION OF
-0-
ITEM 5 OWNERSHIP OF FIVE PERCENT OR LESS OF A CLASS
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IF THIS STATEMENT IS BEING FILED TO REPORT THE FACT THAT AS OF
THE DATE HEREOF THE REPORTING PERSON HAS CEASED TO BE THE
BENEFICIAL OWNER OF MORE THAN FIVE PERCENT OF THE CLASS OF
SECURITIES, CHECK THE FOLLOWING [ ].
ITEM 6 OWNERSHIP OF MORE THAN FIVE PERCENT ON BEHALF OF ANOTHER PERSON.
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ALL SECURITIES REPORTED UPON IN THIS SCHEDULE ARE OWNED BY
ADVISORY CLIENTS OF PENN CAPITAL MANAGEMENT COMPANY, INC., EACH
OF WHOM HAS THE RIGHT TO RECEIVE OR THE POWER TO DIRECT THE
RECEIPT OF DIVIDENDS FROM, OR THE PROCEEDS OF THE SALE OF, SUCH
SECURITIES. NO ONE OF SUCH ADVISORY CLIENTS OWNS MORE THAN 5% OF
THE CLASS.
ITEM 7 IDENTIFICATION AND CLASSIFICATION OF THE SUBSIDIARY WHICH
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ACQUIRED THE SECURITY BEING REPORTED ON BY THE PARENT HOLDING
COMPANY.
N/A
ITEM 8 IDENTIFICATION AND CLASSIFICATION OF MEMBERS OF THE GROUP.
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N/A
ITEM 9 NOTICE OF DISSOLUTION OF GROUP.
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N/A
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ITEM 10 CERTIFICATION.
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BY SIGNING BELOW I CERTIFY THAT, TO THE BEST OF MY KNOWLEDGE
AND BELIEF, THE SECURITIES REFERRED TO ABOVE WERE ACQUIRED AND
ARE HELD IN THE ORDINARY COURSE OF BUSINESS AND WERE NOT ACQUIRED
AND ARE NOT HELD FOR THE PURPOSE OF OR WITH THE EFFECT OF
CHANGING OR INFLUENCING THE CONTROL OF THE ISSUER OF SUCH
SECURITIES AND WERE NOT ACQUIRED AND ARE NOT HELD IN CONNECTION
WITH OR AS A PARTICIPANT IN ANY TRANSACTION HAVING THAT PURPOSE
OR EFFECT.
SIGNATURE
AFTER REASONABLE INQUIRY AND TO THE BEST OF MY KNOWLEDGE AND BELIEF, I
CERTIFY THAT THE INFORMATION SET FORTH IN THIS STATEMENT IS TRUE, COMPLETE AND
CORRECT.
June 16, 1998
PENN CAPITAL MANAGEMENT COMPANY, INC.
/s/ Michael F. Swallow
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SIGNATURE
Michael F. Swallow, Secretary/Treasurer
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NAME/TITLE
