SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended MARCH 31, 1998
OR
[ ] TRANSACTION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _______________ to ___________________.
Commission File No. 0-19670.
OCEAN OPTIQUE DISTRIBUTORS, INC.
(Exact Name of Small Business Issuer as Specified in Its Charter)
FLORIDA 65-0052592
(State of Other Jurisdiction of Incorporation (I.R.S. Employer I.D. No.)
or Organization)
2 N.E. 40TH STREET, MIAMI, FLORIDA 33137
(Address of Principal Executive Offices)
Issuer's telephone number, including area code: 305-573-0222
Check whether the Issuer (1) filed all reports required to be filed by Section
13 or 15 (d) of the Securities Exchange Act of 1934 during the past 12 months
and (2) has been subject to such filing requirements for the past 90 days.
YES X NO
State the number of shares outstanding of each of the Issuer's classes of common
equity as of the latest practicable date: At May 15, 1998 there were outstanding
961,734 shares of Common Stock, no par value.
Transitional Small Business Disclosure Format: YES NO X
<PAGE>
OCEAN OPTIQUE DISTRIBUTORS, INC. AND SUBSIDIARIES
INDEX TO FORM 10-QSB
PART 1 FINANCIAL INFORMATION PAGE
Item 1 Financial Statements
Condensed Consolidated Balance Sheets as of March 31, 1998
and June 30, 1997 (unaudited) 3
Condensed Consolidated Statement of Income Nine Months Ended
March 31, 1998 and 1997 (unaudited) 4
Condensed Consolidated Statement of Income Three Months Ended
March 31, 1998 and 1997 (unaudited) 5
Condensed Consolidated Statement of Cash Flows Nine Months Ended
March 31, 1998 and 1997 (unaudited) 6
Notes to the Condensed Consolidated Financial Statements (unaudited) 7
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 9
PART 11 OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 11
Signatures 12
2
<PAGE>
OCEAN OPTIQUE DISTRIBUTORS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
MARCH 31, 1998 AND JUNE 30, 1997
(UNAUDITED)
ASSETS
<TABLE>
<CAPTION>
31-MAR 30-JUN
1998 1997
------------- -------------
<S> <C> <C>
Current Assets
Cash and cash equivalents $ 36,669 $ 54,868
Certificate of deposit - restricted - 65,000
Accounts receivable (net of allowance for doubtful
accounts of $133,024 and $289,865 respectively) 1,541,580 2,535,435
Inventory 4,388,842 4,994,655
Prepaid expenses and other current assets 1,310,372 89,929
Deferred income taxes 136,400 130,229
------------- -------------
Total current assets 7,413,863 7,870,116
Property, plant and equipment, net 425,952 370,795
Security deposits and other assets 24,983 23,983
Debt issue costs, net - 76,522
Deferred income taxes - 4,303
Intangible assets - 1,928,980
------------- -------------
Total assets $ 7,864,798 $ 10,274,699
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Line of credit 3,124,248 3,233,534
Accounts payable and accrued expenses 1,126,354 2,977,841
Income tax payable - 94,029
Current portion of long-term debt 120,647 614,693
Note payable - officers 140,000 140,000
------------- -------------
Total current liabilities 4,511,249 7,060,097
8% Convertible subordinated debentures 250,000 341,250
Long-term debt 110,151 56,869
Deferred income taxes 98,300 96,432
------------- -------------
Total liabilities 4,969,700 7,554,648
Stockholders' equity
Preferred stock, no par value, 5,000,000 shares
authorized; shares issued:
Series A cumulative convertible 3% preferred stock,
214,500 shares outstanding (liquidation
value-$536,250) 95,151 95,151
Series B-1, 2% convertible preferred stock, 162,478
shares outstanding (liquidation value-$812,390) 64,016 64,016
Series C non-cumulative convertible preferred
stock, 1,000,000 shares outstanding 1,697,037 1,697,037
Series C-2, 5% convertible preferred stock, 250,000
shares outstanding 250,000 -
Series D convertible preferred stock, 2,864,154
shares outstanding 667,923
Series E convertible preferred stock, 5,926 shares
outstanding 1,069,651
Common stock, no par value; 10,000,000 shares authorized,
7,618,792 issued and outstanding -
Paid-in-capital 837,015 744,265
Retained earnings (1,785,695) 119,582
------------- -------------
Total stockholders' equity 2,895,098 2,720,051
------------- -------------
Total liabilities and stockholders' equity $ 7,864,798 $ 10,274,699
============= =============
</TABLE>
The accompanying notes are an integral part of this statement.
3
<PAGE>
OCEAN OPTIQUE DISTRIBUTORS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FOR THE NINE MONTHS ENDED MARCH 31, 1998 AND 1997
(UNAUDITED)
<TABLE>
<CAPTION>
3/31/98 3/31/97
--------------- ---------------
<S> <C> <C>
Net Sales $ 2,787,444 $ 1,726,746
Cost of goods sold 2,159,487 1,201,970
--------------- ---------------
Gross profit 627,957 524,776
Selling, general and administrative expenses 3,462,062 529,550
--------------- ---------------
Net Profit before interest and income taxes (2,834,105) (4,774)
Interest expense 204,581 18,429
--------------- ---------------
Income before income taxes (3,038,686) (23,203)
Income tax expense - (5,000)
--------------- ---------------
Net Income (loss) (3,038,686) (18,203)
Dividends on convertible preferred stock 3,501 -
--------------- ---------------
Net income (loss) applicable to common stockholders $ (3,042,187) $ (18,203)
=============== ===============
Net income (loss) per share of common stock (0.12) -
=============== ===============
Weighted average number of common
shares outstanding 24,747,339 24,747,339
=============== ===============
</TABLE>
The accompanying notes are integral part of these statements.
4
<PAGE>
OCEAN OPTIQUE DISTRIBUTORS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
(UNAUDITED)
3/31/98 3/31/97
----------- -----------
Net Sales 561,349 431,378
Cost of goods sold 1,414,849 296,765
----------- -----------
Gross profit (853,500) 134,613
Selling, general and administrative expenses 2,328,970 170,902
----------- -----------
Net profit before interest and income taxes (3,482,470) (36,289)
Interest expense 60,250 9,666
----------- -----------
Income before income taxes (3,542,720) (45,955)
Income tax expense - (10,600)
----------- -----------
Net income (3,542,720) (35,355)
Dividends on convertible preferred stock 501 -
----------- -----------
Net income applicable to common
stockholders (3,543,221) (35,355)
=========== ===========
Net income per share of common stock (0.08) -
=========== ===========
Weighted average number of common shares
outstanding 44,544,154 44,544,154
=========== ===========
The accompanying notes are an integral part of these statements.
5
<PAGE>
OCEAN OPTIQUE DISTRIBUTORS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
FOR THE NINE MONTHS ENDED MARCH 31, 1998 AND 1997
<TABLE>
<CAPTION>
3/31/98 3/31/97
---------------- ---------------
Cash flows from operating activities:
<S> <C> <C>
Net income (loss) $ (1,008,410) (18,203)
Adjustments to reconcile net loss to net cash provided by
(used in) operating activities:
Depreciation and amortization 255,391 14,027
Bad debt expense (156,841) -
Changes in operating assets and liabilities:
Decrease(increase) in:
Accounts receivable 1,450,696 92,353
Inventory 605,813 7,211
Prepaid expenses and other current assets (1,220,443) 5,230
Security deposits and other assets (1,000) 280
Increase(decrease) in:
Accounts payable and accrued expenses 325,126 (108,918)
Income tax payable (94,029) (5,000)
---------------- ---------------
Net cash provided by (used in) operating activities 156,303 (13,020)
---------------- ---------------
Cash flows from investing activities:
Capital expenditures 310,548 -
Net cash provided by (used in) investing activities 310,548 -
---------------- ---------------
Cash flows from financing activities:
Net borrowings (payments) on bank line of credit and notes payable (550,050) 60,892
Contributions
---------------- ---------------
Net cash provided by (used in) financing activities (550,050) 60,892
---------------- ---------------
Net decrease in cash and cash equivalents (83,199) 47,872
Cash and cash equivalents, beginning of period 119,868 7,360
---------------- ---------------
Cash and cash equivalents, end of period $ 36,669 $ 55,232
================ ===============
Supplemental disclosure of cash flow information:
Cash paid (received) during the period for income taxes, net - -
================ ===============
Cash paid during the period for interest $ 350,082 $ 18,429
================ ===============
Non cash financing and investing activities:
Conversion of debt to equity $ 91,250 $ -
================ ===============
Sale of business:
Fair value of assets sold $ 1,443
----------------
Liabilities sold $ 2,656,000
----------------
</TABLE>
The accompanying notes are an integral part of these statements
6
<PAGE>
OCEAN OPTIQUE DISTRIBUTORS, INC.
AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(1) BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with the instructions to Form 10-QSB
and do not include all of the information and footnotes required by
generally accepted accounting principles for complete financial
statements. However, such information reflects all adjustments
(consisting solely of normal recurring adjustments), which are, in the
opinion of Management necessary for a fair statement of results for the
interim periods.
The results of operations for the nine months ended March 31, 1998 are
not necessarily indicative of the results to be expected for the full
year.
These statements should be read in conjunction with the financial
statements and notes thereto included in the Company's Form 10-KSB, for
the fiscal year ended June 30, 1997
(2) TRANSACTIONS WITH XR CO.
In January 1998, Ocean Optique Distributors, Inc. ("Ocean") entered
into a Consulting Agreement (the "Consulting Agreement") with XR Co., a
privately held Miami-based investment company. The Consulting Agreement
contemplated, among other matters, that XR Co. would assist Ocean in
increasing its net tangible assets by approximately $1.0 million in
exchange for which, among other matters, XR Co. received shares of
Ocean's Series D Preferred Stock (the "Series D Preferred Stock"),
which gave it voting control of Ocean. Subsequent to the date of the
Consulting Agreement, XR Co. and Ocean determined that the amount by
which Ocean's net tangible assets needed to be increased was
significantly in excess of the $1.0 million originally contemplated. On
February 20, 1998, Ocean and XR Co. entered into a Purchase Agreement
(the "Purchase Agreement") pursuant to which XR Co. purchased from
Ocean all of the outstanding capital stock of two of Ocean's
subsidiaries, Classic Optical, Inc. ("Classic") and European
Manufacturers Agency, Inc. ("EMA"), in exchange for XR Co.'s purchase
of the liabilities of Classic and EMA through the acquisition of their
outstanding capital stock. Classic and EMA had combined assets of
approximately $1,423,00 and combined liabilities of approximately
$2,656,000.
In connection with the purchase transaction, Ocean and XR Co. also
supplemented the Consulting Agreement pursuant to which Ocean issued to
XR Co. 5,926 shares of Ocean's newly-designated Series E Preferred
Stock (the"Series E Preferred Stock"). The Series E Preferred Stock
when and if declared by Oceans Board of Directors pays cumulative
dividends at the annual rate of 2.5% of liquidation preference
beginning on July 1, 1998. the Series E has preference of $2.70 per
share after July 1, 1998, and is subordinate to Ocean's previously
issued series of preferred stock, other than the Series D Preferred
Stock with which it ranks pari passu. The shares of Series E Preferred
Stock may be converted by XR Co. into shares of Ocean's common stock at
the rate of 5,000 shares of common stock for each $270 of liquidation
value plus accumulated but unpaid dividends for each share converted.
The Series E Preferred Stock has 5,000 votes per share and votes
together with Ocean's common stock and other voting preferred stock as
a single class on all matters (except as required by law). As a result
of the transaction, XR Co. holds approximately 74% voting control of
Ocean. On May 11, 1998 to Company effected a reverse Stock Split
7
<PAGE>
The terms of the foregoing agreements were arrived at by arms' length
negotiation between the parties and were unanimously approved by
Ocean's Board of Directors. The presentation of the Company's condensed
Consolidated Financial Statements included in this report reflects the
consummation of the Purchase Agreement.
(3) CALCULATION OF EARNINGS PER SHARE
Net (loss) income per share of Common Stock is computed based upon the
weighted average number of Common Shares and Common Stock equivalents
outstanding during the year. Included in the weighted average number of
shares calculation is the retroactive effect of the 3,137,977 Common
shares and the 1,000,000 Series C non-cumulative Convertible Preferred
shares issued in the Solovision Acquisition. Also, included in the
weighted average number of shares calculation is the retroactive effect
of the XR Co. purchase.
8
<PAGE>
MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The following is an analysis of the Company's results of operations and
its liquidity and capital resources. To the extent that such analysis
contains statements that are not of a historical nature, such
statements are forward-looking statements, which involve risks and
uncertainties. These risks include: risks of increases in the costs of
the Company's products; the Company's relationships with its suppliers
and licensors; the financial condition and operations of the Company's
customers; changes in fashions and preferences of purchasers of
eyewear; competitive and general economic factors in the markets where
the Company's products are manufactured or sold; the impact of, and
changes in, government regulations such as trade restrictions or
prohibitions, or import and other charges and taxes; and other factors
discussed in the Company's filings with the Securities and Exchange
Commission.
The following discussion and analysis should be read in conjunction
with the condensed consolidated financial statements and the related
notes thereto of Ocean Optique Distributors, Inc. and subsidiaries
(collectively, the "Company"), included elsewhere herein.
RESULTS OF OPERATIONS - For the nine months ended March 31, 1998 and
1997.
Net sales for the nine months ended March 31, 1998 were $2,787,444, an
increase of $1,060,698 or 61.4% from the same period in 1997. The
increase was due primarily to the impact of the Solovision Acquisition.
Net sales at Solovision for the nine months ended March 31, 1998
totaled $2,229,733.
The Company's gross profit for the nine months ended March 31,1998
increased by $103,181 or 19.7%, when compared to the same period in
1997, mainly due to increased sales relating to the merger. The
Company's gross profit margin decreased from 30.4% for the nine months
ended March 31, 1997 to 22.5% for the nine months ended March 31, 1998.
SG & A expenses for the nine months ended March 31, 1998 increased by
$2,932,512 (553.8%) over the same period last year. This increase is
mainly due to the write off of intangible assets of $2,005,502, the
impact of the Solovision Acquisition, and to a lesser extent is due to
additional professional fees of $219,016. And an increase in bad debt
write off of $253,657. SG & A as a percentage of net sales increased to
124.2% from 30.7% for the nine months ended March 31, 1998 and 1997,
respectively. This increase was mainly due to the merger with
Solovision Acquisition, and the additional expenses as mentioned above.
For the nine months ended March 31, 1998, the Company had a net loss
$3,038,686 compared to a net loss of $18,203 for the same period last
year. This decrease in profits is primarily due to the increase in
interest expense of $186,152, the increase of amortization and
depreciation of $2,005,502 which relates to the write off of the
intangible assets, an increase in professional fees of $219,016 and an
increase in bad debt write off of $253,657.
RESULTS OF OPERATIONS - For the three months ended March 31, 1998 and
1997.
Net sales for the three months ended March 31, 1998 were $561,349, an
increase of $129,971, or 30.1% from the same period in 1997. The
increase was due primarily to the impact of the Solovision Acquisition.
9
<PAGE>
The Company's gross profit for the three months ended March 31, 1998
decreased by $988,113, when compared to the same period in 1997, mainly
due to the sale of old slow moving inventory at less than cost.
SG & A expenses for the three months ended March 31, 1998 increased by
$2,458,068 (1438.3%) over the same period last year. This increase is
mainly due to the write off of intangible assets of $1,978,788, and to
a lesser extent is due to additional bad debt expense of $105,065.
For the three months ended March 31, 1998, the Company had a net loss
of $3,542,720 compared to a net loss of $35,355 for the same period
last year. This decrease in profits is primarily due to the write off
in intangible assets of $1,978,788 the increase in interest expense of
$50,594, an increase in bad debts of $105,065 and to the increase in
normal operating expenses related to the Solovision Acquisition.
LIQUIDITY AND CAPITAL RESOURCES
At March 31, 1998, the Company's working capital was $2,902,614, and
its current ratio was 1.6:1% as compared to the working capital of
$810,069 and current ration of 1.11:1 as of June 30, 1997.
The change in net cash provided by operating activities was primarily
due to the net loss from operations of $1,008,410, depreciation of
$255,391, a decrease in accounts receivable of $1,450,696 an increase
in prepaid expenses and other current assets of $1,220,443 mainly due
to prepaid purchases and usage of barter agreements, and a decrease in
inventory of $605,813. The decrease in accounts receivable relates to
stronger collections and the decrease in inventory relates to the sales
at less than cost. The change in net cash provided by financing
activities was primarily due to the payments of notes payable of
$550,050.
In May 1997, the Company refinanced its credit facility through a Loan
and Security Agreement with Coast Business Credit, a division of
Southern Pacific Thrift & Loan Association ("Coast"). Loans outstanding
under this agreement at any time may not exceed the lesser of either:
(a) $4,000,000 or (b) the sum of: (I) 70% of the Company's receivable
deemed by Coast to be eligible for borrowing (which may be increased to
75% if dilution is less than 15%, subject to certain restrictions); and
(II) the lesser of up to 55% of the value of the Company's inventory
deemed by Coast to be eligible for borrowing, or $2,000,000. The
interest rate of all loans made under the credit facility is 2% above
the prime rate, with a minimum monthly interest amount equal to said
rate charged on an outstanding daily balance of $2,000,000. The
maturity date is June 30, 2000, subject to automatic renewal for
additional one-year terms upon payment of a renewal fee. The Company
also issued to Coast warrants to acquire $187,500 shares of Common
Stock at an exercise price of $1.625 per share. The credit facility is
secured by all of the Company's assets. Inability to repay the loans
under the credit facility in a timely manner would have a materially
adverse effect on the Company's ability to continue its operations and
could cause the Company to lose most of its assets. There can be no
assurance that income generated from operations will be sufficient to
cover all operating expenses and meet present and future debt service
payments.
In October 1997, the Company's Chairman of the Board invested $250,000
in shares of a new series of the Company's convertible preferred stock,
the terms of which are being finalized.
Management currently believes that cash from operations and from
available credit sources is sufficient for the Company to maintain its
operations at current levels, including the operations acquired in the
Solovision Acquisition. The Company is at the present time seeking
other sources of financing to provide additional working capital. There
can be no assurances that such other financing will be available and,
if available, will be at terms favorable to the company.
10
<PAGE>
PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is a party to a legal proceeding involving two
former employees who are also the daughters of the former
President of the Company. They filed a Motion to Enforce
Settlement Agreement and Damages Arising from the Breach
thereof filed in Dade County Circuit Court Case No. 96-23733
CA 25. The outcome is still pending and the Company believes
that there will be no material adverse effect on the Company's
long-term future business.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
On January 12, 1998, the Registrant amended its Articles of
Incorporation to authorize the issuance of an aggregate of
2,864,154 shares of Series D Cumulative Convertible 2.5%
Preferred Stock (the "Series D Preferred Stock"). On January
8, 1998, the Registrant sold 2,864,154 shares of Series D
Preferred Stock to X-R Co. pursuant to a Consulting Agreement
therewith. See Notes to Condensed Consolidated Financial
Statements included in this Quarterly Report on Form 10-QSB.
The Registrant claimed exemption from registration under the
Securities Act of 1933 inasmuch as no public offering was
involved.
Holders of the Series D Preferred Stock are entitled to
receive cumulative dividends at the rate of 2.5% of the
liquidation value thereof when and if declared by the
Registrant's Board of Directors. The Series D Preferred Stock
is subordinate with respect to dividends and other
distributions by the Registrant to certain other series of the
Registrant's Preferred Stock, but is, however, senior in all
such respects, to the to the Registrant's Common Stock.
Holders of the Series D Preferred Stock are entitled to vote
together with the holders of the Registrant's Common Stock as
a single class on all matters presented to a vote of
shareholders, except as otherwise provided by law, and each
share of Series D Preferred Stock is entitled to 6.5 votes.
The Registrant's Articles of Incorporation, as amended (the
"Amended Articles"), provide that on or after July 1, 1993,
each share of Series D Preferred Stock is convertible into
.8125 shares of the Registrant's Common Stock. The Amended
Articles also provide that the conversion rate for the Series
D Preferred Stock shall be .8125 shares of the Registrant's
Common Stock for each $.35 of liquidation value thereof plus
accumulated but unpaid dividends on the Series D Preferred
Stock to be converted, subject to adjustment in certain cases.
In the event of any liquidation, dissolution or winding up of
the Registrant, the holders of the Series D Preferred Stock
are entitled to receive from the Registrant's assets available
therefor, before any distribution is made to holders of the
Registrant's Common Stock or any other junior stock,
liquidating distributions in the amount of $.35 per share plus
accumulated but unpaid dividends, commencing June 30, 1998.
The shares of Series D Preferred Stock are not redeemable by
the Registrant, except that the Registrant had the right to
shares of Series D Preferred Stock from the holder thereof at
a redemption price of $.001 per share as follows:
(i) If X-R Co. has increased the Registrant's Net
Tangible Assets of the Registrant (as defined in an
Agreement between X-R Co. and the Registrant) by at
least $750,000 but less than $1,000,000 before July
1, 1998, then the Registrant shall be entitled to
redeem 711,538 shares of Series D Preferred Stock;
(ii) If X-R Co. has increased the Net Tangible Assets of
the Registrant by at least $500,000 but less than
$750,000 before July 1, 1998, then the Registrant
shall be entitled to redeem 1,423,077 shares of
Series D Preferred Stock;
<PAGE>
(iii) If X-R Co. has increasesd the Net Tangible Assets of
the Registrant by at least $500,000 but less than
$750,000 before July 1, 1998, then the Registrant
shall be entitled to redeem 1,423,077 shares of
Series D Preferred Stock;
(iv) If the Consultant has failed to increase the Net
Tangible Assets of the Registrant by at least
$250,000 before July 1, 1998, then the Registrant
shall be entitled to redeem all of the shares of the
Series D Preferred Stock.
Because X-R Co. has increased the Net Tangible Assets of the
Registrant by more than $1,000,000, the Registrant's right to
redeem the Series D Preferred Stock has terminated.
Holders of the Series D Preferred Stock have a preemptive
right with respect to the any issuances of the Registrant's
Common Stock or any other voting securities issued by the
Registrant based upon the relative respective voting rights.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(A) Exhibits.
27.1 Financial Data Schedule
(B) Reports on Form 8-K
A Current Report on Form 8-K was filed on January 8, 1998,
which included Exhibit 1.
A current report on Form 8-K was filed on February 20, 1998,
which included proforma balance sheet as of Feb. 20, 1998.
11
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the Company has caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
OCEAN OPTIQUE DISTRIBUTORS, INC.
/S/ RONALD L. DARATA
--------------------------------
BY: RONALD L. DARATA
President, Chief Executive Officer
--------------------------------
Date
/S/ KENNETH GORDON
--------------------------------
BY: KENNETH GORDON
Principal Financial and
Accouting Officer
--------------------------------
Date
12
<PAGE>
EXHIBIT INDEX
EXHIBIT DESCRIPTION
- ------- -----------
27.1 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
financial statements of Ocean Optique Distributors, Inc. For the nine months
ended March 31, 1998 and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-END> MAR-31-1998
<CASH> 37
<SECURITIES> 0
<RECEIVABLES> 1,675
<ALLOWANCES> 133
<INVENTORY> 4,388
<CURRENT-ASSETS> 7,414
<PP&E> 681
<DEPRECIATION> 255
<TOTAL-ASSETS> 7,865
<CURRENT-LIABILITIES> 4,511
<BONDS> 0
0
3,844
<COMMON> 0
<OTHER-SE> (948)
<TOTAL-LIABILITY-AND-EQUITY> 7,865
<SALES> 2,787
<TOTAL-REVENUES> 2,787
<CGS> 2,159
<TOTAL-COSTS> 2,159
<OTHER-EXPENSES> 3,462
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 205
<INCOME-PRETAX> (3,039)
<INCOME-TAX> 0
<INCOME-CONTINUING> (3,039)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,042)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
