SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15(d) of the
Securities Exchange Act of 1934
For quarterly period ended November 30, 1996
Commission File No. 0-19369
LITTLE SWITZERLAND, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 66-0476514
(State of Incorporation) (I.R.S Employer
Identification No.)
161-B CROWN BAY CRUISE SHIP PORT
ST. THOMAS U.S.V.I. 00802
(Address of Principal Executive Offices) (Zip Code)
(809) 776-2010
(Registrant's Telephone Number, Including Area Code)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or 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 [ ]
At January 13, 1997, 8,461,488 shares of $.01 par value common stock of the
registrant were outstanding.
<PAGE>
LITTLE SWITZERLAND, INC.
INDEX TO FORM 10-Q
FOR THE QUARTER ENDED November 30, 1996
PAGE
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Consolidated Balance Sheets as of
November 30, 1996 (unaudited) and
June 1, 1996 3
Consolidated Statements of Income
for the three and six months
ended November 30, 1996 and December 2,
1995 (unaudited) 4
Consolidated Statements of Cash Flows
for the six months ended November 30,
1996 and December 2, 1995 (unaudited) 5
Notes to Consolidated Financial
Statements (unaudited) 6-10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS 11-13
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 14
Signature Page 15
<PAGE>
PART I. FINANCIAL INFORMATION FORM 10-Q
Item 1. Financial Statements Page 3
LITTLE SWITZERLAND, INC. AND SUBSIDIARIES
Consolidated Balance Sheets (in thousands)
November 30, June 1,
ASSETS 1996 1996
--------- ---------
Current assets: (unaudited)
Cash and cash equivalents........................$ 5,568 $ 5,393
Accounts receivable.............................. 1,864 1,892
Inventory........................................ 49,826 43,678
Prepaid expenses and other current assets........ 3,194 1,607
--------- ---------
Total current assets....................... 60,452 52,570
--------- ---------
Property, plant and equipment, at cost.............. 36,898 34,247
Less -- Accumulated depreciation................. (14,093) (12,522)
--------- ---------
22,805 21,725
--------- ---------
Other assets........................................ 3,463 3,582
--------- ---------
Total assets...............................$ 86,720 $ 77,877
========= =========
LIABILITIES AND STOCKHOLDERS EQUITY
Current liabilities:
Current portion of long term debt................$ 1,388 $ 832
Unsecured notes payable.......................... 13,600 7,100
Accounts payable................................. 11,991 6,839
Accrued and currently deferred income taxes...... 529 2,002
Other accrued expenses and deferred income....... 2,587 3,225
--------- --------
Total current liabilities.................. 30,095 19,998
Long term debt...................................... 7,513 8,068
Deferred income taxes............................... 90 90
--------- --------
Total liabilities.......................... 37,698 28,156
--------- --------
Commitments and contingencies....................... --- ---
Minority interest................................... 1,619 1,619
--------- --------
Stockholders' equity:
Preferred stock, $.01 par value--
Authorized--5,000 shares
Issued and outstanding--none.................... --- ---
Common stock, $.01 par value--
Authorized--20,000 shares
Issued and outstanding--8,459 shares
at November 30, 1996 and 8,457
at June 1, 1996............................... 85 85
Capital in excess of par.......................... 14,801 14,792
Retained earnings................................. 32,517 33,225
--------- --------
Total stockholders' equity.................... 47,403 48,102
--------- --------
Total liabilities, minority interest
and stockholders' equity...................$ 86,720 $ 77,877
========= ========
See accompanying notes to consolidated financial statements
<PAGE>
PART I. FINANCIAL INFORMATION FORM 10-Q
Item 1. Financial statements Page 4
LITTLE SWITZERLAND, INC. AND SUBSIDIARIES
Consolidated Statements of Income
(in thousands except per share data)
(unaudited)
For the three For the six
months ended months ended
November 30, December 2, November 30, December 2,
1996 1995 1996 1995
----------- ---------- ----------- ----------
Net sales...................$17,458 $ 9,751 $33,326 $23,820
Cost of sales............... 9,820 5,581 18,792 13,558
-------- -------- -------- -------
Gross profit................ 7,638 4,170 14,534 10,262
Selling, general and
administrative expenses..... 7,538 6,369 15,190 12,702
Business interruption
insurance proceeds.......... 132 --- 560 ---
-------- -------- -------- -------
Operating income (loss)... 232 (2,199) (96) (2,440)
Interest expense, net....... 436 106 768 181
-------- -------- -------- -------
(Loss) before benefit
for income taxes...... (204) (2,305) (864) (2,621)
(Benefit) for income taxes.. (38) (414) (156) (480)
-------- -------- -------- -------
Net (loss)..................$ (166) $(1,891) (708) $(2,141)
======== ======== ======== ========
Net (loss) per share........$ (0.02) $ (0.22) $(0.08) (0.25)
======== ======== ======== ========
Weighted average shares
outstanding............... 8,459 8,454 8,459 8,454
======== ======== ======== =======
`
See accompany notes to consolidated financial statements
<PAGE>
PART I. FINANCIAL INFORMATION FORM 10-Q
Item 1. Financial statements Page 5
LITTLE SWITZERLAND, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
For the six months ended
November 30, December 2,
Cash flows from operating activities: 1996 1995
--------- --------
Net (loss)...........................................$ (708) $ (2,141)
Adjustments to reconcile net loss to
net cash provided by operating activities--
Depreciation and amortization................. 1,571 1,158
Changes in assets and liabilities:
Decrease in accounts receivable............. 28 40
(Increase) in inventory...................... (6,148) (3,598)
(Increase) in prepaid expenses
and other current assets.................. (1,587) (908)
Decrease in other assets.................... 119 15
Increase in accounts payable.................. 5,152 3,003
(Decrease) increase in other accrued
expenses and deferred income............. (757) 1,885
(Decrease) in accrued and currently
deferred income taxes..................... (1,353) (712)
------- -------
Net cash (used in) operating activities........... (3,683) (1,258)
------- -------
Cash flows from investing activities:
Capital expenditures............................ (2,651) (2,791)
------- -------
Net cash (used in) investing activities........... (2,651) (2,791)
------- -------
Cash flows from financing activities:
Increase in unsecured notes payable............. 6,500 5,500
Issuance of common stock........................ 9 9
------- -------
Net cash provided by financing activities............ 6,509 5,509
------- -------
Net increase in cash and cash equivalents.......... 175 1,460
Cash and cash equivalents, beginning of period....... 5,393 2,899
------- -------
Cash and cash equivalents, end of period.............$ 5,568 $ 4,359
======= =======
During the six months ended November 30, 1996 and December 2, 1995, the Company
paid income taxes of $1,197 and $232, respectively, and paid interest of $709
and $172, respectively.
See accompanying notes to consolidated financial statements
<PAGE>
FINANCIAL INFORMATION FORM 10-Q
Item 1. Financial statements Page 6
LITTLE SWITZERLAND, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(unaudited)
1. CONSOLIDATED FINANCIAL STATEMENTS
The accompanying consolidated financial statements include the
operations of Little Switzerland, Inc. (the "Company") and its wholly owned
subsidiaries, L.S. Holding, Inc. and L.S. Wholesale, Inc. All significant
intercompany balances have been eliminated in consolidation. The interim
financial statements are unaudited and, in the opinion of management, contain
all adjustments necessary to present fairly the Company's financial position as
of November 30, 1996 and December 2, 1995 and the results of its operations and
cash flows for the interim periods presented. It is suggested that these interim
financial statements be read in conjunction with the financial statements and
the notes thereto included in the Company's latest report on Form 10-K.
Effective with the second quarter of fiscal year 1996, the Company
adopted a "4-5-4" fiscal calendar wherein each fiscal quarter contains two four
week periods and one five week period, with each period beginning on a Sunday
and ending on a Saturday. Previously, the Company used calendar months for its
fiscal periods. The purpose of this change is to provide more consistent
comparability between fiscal periods. The change in fiscal calendar resulted in
three less days in the six month period of the current year, as compared to the
prior year. Management estimates that these three days represent approximately a
$.01 per share net income in the prior six month period. There was no fiscal
calendar difference in the three month period, this year compared to last year.
The results of operations for the interim periods presented are not
necessarily indicative of the results to be expected for a full fiscal year, due
to the seasonal nature of the Company's operations.
2. USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
<PAGE>
FORM 10-Q
Page 7
LITTLE SWITZERLAND, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(unaudited)
3. TRANSACTIONS WITH AFFILIATES
The Company enters into a number of transactions with Town & Country
Corporation, of which two of the Company's Directors are Executive Officers. The
Company purchases a portion of its merchandise from Town & Country and its
affiliated companies at prices which approximate arm's-length transactions.
4. CREDIT ARRANGEMENTS
The Company has available a total of $17.5 million in unsecured credit
facilities, of which $3.9 million is available for borrowing with maturities
ranging from one to three years from November 30, 1996. Any unfunded portion of
the facilities can be withdrawn at the bank's discretion. Outstanding borrowings
against these credit facilities totaled $13.6 million as of November 30, 1996.
Additionally, in February 1996, the Company secured term debt of approximately
$8.9 million from its two lead banks to finance the acquisition of the fixtures,
leasehold rights and inventories of two stores in Barbados. Interest on this
debt accrues at an annual interest rate of approximately 7.25%, and is payable
monthly. The principal is payable in equal quarterly payments over a four year
period, commencing March 1997. As of November 30, 1996, the Company was in
compliance with all restrictive covenants related to its unsecured and term debt
agreements. Additionally, the Company has available separate facilities for
foreign exchange contracts.
5. EARNINGS PER SHARE
Earnings per share is based on the weighted average number of shares
outstanding during each period. Primary and fully diluted earnings per share
have not been presented as they are within three percent of simple earnings per
share.
6. ACCOUNTING FOR INCOME TAXES
The Company uses the liability method in accounting for income taxes in
accordance with SFAS No. 109. This standard determines deferred income taxes
based on the estimated future tax effects of any differences between the
financial statement and the tax basis of assets and liabilities, given the
provisions of the enacted tax laws.
<PAGE>
FORM 10-Q
Page 8
LITTLE SWITZERLAND, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(unaudited)
7. INTANGIBLE ASSETS
The Company accounts for long-lived and intangible assets in accordance
with SFAS No. 121, Accounting for the Impairment of Long-lived Assets and for
Long-lived Assets to be Disposed of. The Company continually reviews its
intangible assets for events or changes in circumstances which might indicate
that the carrying amount of the assets may not be recoverable. The Company
assesses the recoverability of the assets by determining whether the
amortization of such intangibles over their remaining lives can be recovered
through projected undiscounted future results. The amount of impairment, if any,
is measured based on projected discounted future results using a discount rate
reflecting the Company's average cost of funds.
8. STATEMENT OF FINANCIAL ACCOUNTING STANDARDS NO. 123 - ACCOUNTING FOR
STOCK-BASED COMPENSATION
In December 1995, the Financial Accounting Standards Board issued SFAS
No. 123, Accounting for Stock-Based Compensation, which is to become effective
for fiscal years beginning after December 15, 1995. SFAS No. 123 requires
employee stock-based compensation to be either recorded or disclosed at its fair
value. Management intends to continue to account for employee stock-based
compensation under Accounting Principles Board Opinion No. 25 and will not adopt
the new accounting provision for employee stock- based compensation under SFAS
No. 123, but will include the additional required disclosures in the fiscal 1997
year end financial statements.
9. ADVERTISING
The Company expenses the costs of advertising as advertisements are
printed and distributed. The Company's advertising consists primarily of
advertisements with local and national travel magazines which are produced on a
periodic basis and distributed to visiting tourists, and fees paid for
promotional "port lecturer" programs directed primarily at cruise ship
passengers.
<PAGE>
FORM 10-Q
Page 9
LITTLE SWITZERLAND, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(unaudited)
10. COMMITMENTS AND CONTINGENCIES
In September 1995, Hurricanes Luis and Marilyn inflicted damage to
several of the Company's stores and caused significant damage to various
islands' infrastructures, including hotels and other tourist facilities. As of
November 30, 1996, all stores have reopened.
The Company has settled all outstanding claims related to the
hurricanes with its insurance carrier. In connection with this final settlement,
the Company received approximately $13.4 million in property and business
interruption proceeds. The Company recorded a net gain of approximately $4.7
million in fiscal 1996, after write-offs related to damaged assets of
approximately $8.1 million, including furniture and fixtures, inventory and
other assets related to stores affected by the hurricanes. In addition,
approximately $560,000, representing fiscal 1997 lost profits for a store in
Marigot not reopened until November 1996, was recorded as deferred income on the
Company's consolidated balance sheet as of June 1, 1996. In the current quarter
and six month period, the Company recorded $132,000 and $560,000, respectively,
of that amount as business interruption insurance proceeds, which represents
lost profits for the closed Marigot store.
The Company is insured for property losses and related business
interruption losses in excess of 5% of the insured value of the property subject
to a claim. For fiscal years 1995 and 1996, the Company was only insured for
wind related losses in excess of $5 million, subject to certain deductibles.
11. ACQUISITION
On February 16, 1996, World Gift Imports (Barbados), Inc., a subsidiary
of LS Holding, Inc. which is a subsidiary of Little Switzerland, Inc. (the
"Company"), purchased the leasehold rights, fixtures and inventories of two
retail stores located in Barbados, West Indies, from Dacosta Mannings Inc., a
subsidiary of Barbados Shipping & Trading Company Limited. The two stores were
previously operated under the name of Louis Bayley and sold merchandise similar
to that carried in the Company's retail stores, such as name brand watches,
jewelry, china, crystal and gift items at duty free prices. The Company began
operating the two stores as "Little Switzerland" stores on February 19, 1996.
<PAGE>
FORM 10-Q
Page 10
LITTLE SWITZERLAND, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(unaudited)
The purchase price of approximately $10.6 million was financed by bank
borrowing provided by the Company's two primary banks, Chase Bank and Bank of
Nova Scotia, of approximately $8.9 million and the issuance of preferred stock
of approximately $1.6 million by World Gift Imports (Barbados), Inc. to the
seller. The purchase price is subject to adjustment three and four years after
the closing date, based on the sales performance of the two purchased stores and
any additional stores that may be opened by the Company in Barbados during that
period. As a part of the purchase agreement, the Company pays to the seller a
management fee of 2.5% of its Barbados stores' annual sales up to $15 million
and 1.25% of annual sales in excess of $15 million, so long as the preferred
stock is unredeemed. The preferred stock may be redeemed by the Company at face
value at any time after three years from the date of close through nine years
from the date of close. Following that period, the Company retains the right of
first refusal to match any bona fide offer from a third party to purchase the
preferred stock.
The Acquisition has been accounted for as a purchase transaction
effective as of February 16, 1996, in accordance with Accounting Principles
Board Opinion No. 16, "Business Combinations", and accordingly, the consolidated
financial statements for the period subsequent to February 16, 1996 reflect the
purchase price allocated to tangible and intangible assets acquired, based on
their estimated fair values as of February 16, 1996, which may be revised at a
later date. However, the Company does not expect material changes to the
allocation of the purchase price.
Unaudited pro forma operating results of the Company for the six months
ended December 2, 1995 as adjusted for the debt financing and estimated effects
of the acquisition as if it had occurred on June 1, 1995, are as follows:
Net sales................................. $26,540,000
Net (loss)................................ (2,366,000)
Net (loss) per share...................... (.28)
Weighted average shares outstanding....... 8,454,000
<PAGE>
FORM 10-Q
Page 11
PART I. FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
NET SALES
Net sales for the second quarter ended November 30, 1996 were $17.5
million or 79.0% higher than net sales of $9.8 million for the corresponding
period last year. Net sales of $33.3 million for the six month period ended
November 30, 1996 were 39.9% higher than net sales of $23.8 million for the
corresponding period last year. The increase in net sales is primarily the
result of sales this year from stores that were closed for all or part of the
prior year periods due to Hurricanes Luis and Marilyn in September 1995, and
sales generated by four new stores, the Royal Plaza store in Aruba, the Juneau
store in Alaska and two stores in Barbados.
Net sales of $4.6 million for stores which were open for the full three
month period this year and last year decreased 36.5% from net sales of $7.2
million for the same period last year. Net sales of $9.2 million for stores
which were open for the full six month period this year decreased 23.5% from net
sales of $12.0 million for the same period last year. These decreases reflect
the temporary shift of tourism last year to islands such as Aruba and Curacao
that were undamaged by Hurricanes Luis and Marilyn, in September 1995.
GROSS PROFIT
Gross profit as a percentage of net sales during the three and six
month periods ended November 30, 1996 were 43.7% and 43.6%, respectively,
compared to the three and six month periods ended December 2, 1995 of 42.8% and
43.1%, respectively. This increase in gross margin percentage reflects the
strengthening of the U.S. dollar as compared to the European currencies in which
the Company purchases a substantial portion of its merchandise, and to a
favorable change in the mix of merchandise sold.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Second quarter selling, general and administrative expenses ("SG&A")
increased 18.4% to $7.5 million for the three month period ended November 30,
1996 from $6.4 million for the same period last year. As a percent to net sales,
SG&A expenses decreased to 43.2% for the quarter ended November 30, 1996 from
65.3% for the same quarter last year. Six month SG&A increased 19.6% to $15.2
million for the period ended November 30, 1996 from 12.7 million for the same
<PAGE>
FORM 10-Q
Page 12
PART I. FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
period last year. As a percent to net sales, SG&A decreased to 45.6% for the
six month period this year from 53.3% for the same period last year. The
increase in SG&A expense dollars this year is due mostly to new and reopened
stores this year. The decrease in SG&A expenses as a percentage of net sales is
due to the increase of sales this year resulting from reopened and new stores.
BUSINESS INTERRUPTION INSURANCE PROCEEDS
For the three and six month periods ended November 30, 1996, the
Company recorded $132,000 and $560,000, respectively, as Business interruption
insurance proceeds, which represents the insurance recovery for lost profits
from its closed Marigot store during the periods.
OTHER
Net interest expense for the six month periods ended November 30, 1996
and December 2, 1995 totaled $768,000 and $181,000, respectively. The increase
is due to higher average borrowings this year to support construction and
inventories for two new stores, and the interest on long term debt utilized in
the acquisition of the fixtures, leasehold rights and inventories of two stores
in Barbados in February 1996.
The Company's effective income tax rates for the six month periods
ended November 30, 1996 and December 2, 1995 consisted of a benefit of
approximately 18% for each period.
LIQUIDITY AND CAPITAL RESOURCES
Net cash used in operations during the six month period ended November
30, 1996 was $3.7 million, compared to $1.3 million used in operations for the
same six month period last year. The increase in net cash used in operations
primarily reflects increases in inventories of $6.1 million and prepaid expenses
and other current assets of $1.6 million, and a decrease in accrued and
currently deferred income taxes of $1.4 million, partially offset by a $5.2
million increase in accounts payable.
<PAGE>
FORM 10-Q
Page 13
PART I. FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The Company's working capital position as of November 30, 1996
decreased to $30.4 million from $32.6 million at June 1, 1996. Current ratios
were 2.0 and 2.6 as of the same periods, respectively. Capital expenditures were
approximately $2.7 million during the six month period ended November 30, 1996,
compared to approximately $2.8 million during the same period last year. Major
capital expenditures this year include new in-store merchandise systems and
related hardware, upgrade of the Company's central computer system, a new store
in Juneau, Alaska and the refurbishment of stores in St. Thomas, Marigot and
Antigua.
The Company has total unsecured credit facilities of $17.5 million
provided by its two lead banks. As of November 30, 1996, short-term borrowings
of $13.6 million were outstanding against these facilities. Additionally, the
Company has secured facilities through its two lead banks for the acquisition of
the leasehold rights, fixed assets and inventory of two stores in Barbados. The
total borrowing provided for the acquisition was $8.9 million at an approximate
7 1/4% interest rate, with terms of interest only, for the first year and equal
principal payments due quarterly over the following three years. It remains
management's expectation that funds available from operations and bank financing
will be sufficient to fund operations and expansion for at least the next three
years.
<PAGE>
Form 10-Q
Page 14
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company held its Annual Meeting of Stockholders on Friday, October
11, 1996 in Boston, Massachusetts. At that meeting, stockholders of the Company
voted upon the election of two Class II Directors, each for a three-year term,
and the approval of an amendment to the Company's 1991 Stock Option Plan (the
"1991 Plan") authorizing issuance under the 1991 Plan of an additional 400,000
option shares for the Company's common stock. Each of the matters submitted to a
vote of the stockholders of the Company passed by the requisite vote, and the
specific results of such votes, with the election of directors proposal broken
down with respect to each nominee, are set forth below:
(In numbers of shares)
Against/ Broker
Proposal For Withheld Abstentions Non-votes
-------- --- -------- ----------- ---------
Election of Directors:
Timothy B. Donaldson 5,456,064 0 765,991 2,237,034
Kenneth W. Watson 5,624,379 0 597,676 2,237,034
Amendment of the
1991 Plan 3,541,339 2,507,7850 150,247 2,259,718
ITEM 6. EXHIBITS AND REPORTS OF FORM 8-K
(a) Exhibits
3.1 The Amended and Restated Certificate of Incorpo-
ration of the Company is incorporated herein by
reference to Exhibit 3.3 to Amendment No. 1 to
the Company's Registration Statement on Form S-1,
Registration No. 33-40907, filed with the
Securities and Exchange Commission on July 10,
1992 ("Amendment No. 1 to the Form S-1").
3.2 The Amended and Restated By-Laws of the Company
are incorporated herein by reference to Exhibit
3.4 to Amendment No. 1 to the Form S-1.
(b) Reports on Form 8-K
No Form 8-K was issued by the registrant during the six month period ended
November 30, 1996.
<PAGE>
FORM 10-Q
Page 15
LITTLE SWITZERLAND, INC. AND SUBSIDIARIES
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.
LITTLE SWITZERLAND, INC.
Date: January 13, 1997 /s/ Ronald J. Lataille
---------------- ----------------------
Ronald J. Lataille
Vice President and
Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-1-1997
<PERIOD-START> NOV-3-1996
<PERIOD-END> NOV-30-1996
<CASH> 5,568
<SECURITIES> 0
<RECEIVABLES> 1,864
<ALLOWANCES> 0
<INVENTORY> 49,826
<CURRENT-ASSETS> 60,452
<PP&E> 36,898
<DEPRECIATION> 14,093
<TOTAL-ASSETS> 86,720
<CURRENT-LIABILITIES> 30,095
<BONDS> 7,513
0
0
<COMMON> 85
<OTHER-SE> 47,318
<TOTAL-LIABILITY-AND-EQUITY> 86,720
<SALES> 17,458
<TOTAL-REVENUES> 17,458
<CGS> 9,820
<TOTAL-COSTS> 9,820
<OTHER-EXPENSES> 7,406
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 436
<INCOME-PRETAX> (204)
<INCOME-TAX> (38)
<INCOME-CONTINUING> (166)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (166)
<EPS-PRIMARY> (0.02)
<EPS-DILUTED> (0.02)
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