UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: April 1, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number: 0-19848
FOSSIL, INC.
(Exact name of registrant as specified in its charter)
Delaware 75-2018505
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2280 N. Greenville, Richardson, Texas 75082
(Address of principal executive offices)
(Zip Code)
(972) 234-2525
(Registrant's telephone number, including area code)
Indicate by check mark whether registrant (1) has filed all reports to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for 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
----- -----
The number of shares of Registrant's common stock, outstanding as of
May 12, 2000: 32,108,789.
<PAGE>
PART 1 - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
FOSSIL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
April 1, January 1,
2000 2000
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 92,256 $ 90,908
Short-term marketable investments 4,800 10,870
Accounts receivable - net 58,193 51,399
Inventories 72,977 63,029
Deferred income tax benefits 6,874 6,769
Prepaid expenses and other current assets 8,698 7,832
-------- --------
Total current assets 243,798 230,807
Investment in joint venture 3,591 3,849
Property, plant and equipment - net 29,777 28,603
Intangible and other assets - net 6,270 6,105
-------- --------
$283,436 $269,364
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable $ 5,001 $ 5,043
Accounts payable 21,476 11,870
Accrued expenses:
Co-op advertising 13,396 15,191
Compensation 4,319 4,617
Other 13,399 21,493
Income taxes payable 21,132 17,395
-------- --------
Total current liabilities 78,723 75,609
Minority interest in subsidiaries 2,486 2,558
Stockholders' equity:
Common stock, shares issued and
outstanding, 32,107,270 321 321
Additional paid-in capital 42,012 41,774
Retained earnings 165,279 153,569
Accumulated other comprehensive income (5,211) (3,259)
Treasury stock at cost, 8,369 and 59,572 shares,
respectively (174) (1,208)
-------- --------
Total stockholders' equity 202,227 191,197
-------- --------
$283,436 $269,364
======== ========
</TABLE>
See notes to condensed consolidated financial statements.
-1-
<PAGE>
<TABLE>
<CAPTION>
FOSSIL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
AND COMPREHENSIVE INCOME
UNAUDITED
(In thousands, except per share amounts)
For the 13 For the 13
Weeks Ended Weeks Ended
April 1, April 3,
2000 1999
----------- -----------
<S> <C> <C>
Net sales $ 103,569 $ 83,277
Cost of sales 49,910 40,605
--------- --------
Gross profit 53,659 42,672
Operating expenses:
Selling and distribution 24,183 17,899
General and administrative 8,317 6,896
--------- --------
Total operating expenses 32,500 24,795
--------- --------
Operating income 21,159 17,877
Interest expense 27 25
Other income (expense) - net 273 (141)
--------- --------
Income before income taxes 21,405 17,711
Provision for income taxes 8,777 7,280
--------- --------
Net income $ 12,628 $ 10,431
Other comprehensive income:
Currency translation adjustment (2,029) (207)
Unrealized gain (loss) on short-term 77 (18)
investments --------- --------
Total comprehensive income $ 10,676 $ 10,206
========= ========
Earnings per share:
Basic $ 0.39 $ 0.33
======= ========
Diluted $ 0.38 $ 0.32
======= ========
Weighted average common and common equivalent
shares outstanding:
Basic 32,045 31,411
======= ========
Diluted 33,208 33,083
======= ========
</TABLE>
See notes to condensed consolidated financial statements.
-2-
<PAGE>
<TABLE>
<CAPTION>
FOSSIL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
UNAUDITED
(In thousands)
For the 13 Weeks For the 13 Weeks
Ended Ended
April 1, April 3,
2000 1999
---- ----
<S> <C> <C>
Operating activities:
Net income $ 12,628 $ 10,431
Noncash items affecting net income:
Minority interest in subsidiaries 421 257
Equity in losses of affiliate 258 -
Depreciation and amortization 1,756 1,417
Increase in allowance for doubtful accounts 232 311
Increase in allowance for returns -
net of related inventory in transit 81 304
Deferred income tax benefits (106) (339)
Changes in assets and liabilities:
Accounts receivable (7,760) 1,311
Inventories (9,295) (269)
Prepaid expenses and other current assets (865) (1,453)
Accounts payable 8,493 (2,924)
Accrued expenses (10,187) (2,792)
Income taxes payable 3,975 6,985
----- -----
Net cash (used in) from operating activities (369) 13,239
Investing activities:
Additions to property, plant and equipment (2,841) (1,806)
Sale of marketable investments 6,070 -
Increase in intangible and other assets (254) (310)
----- -----
Net cash from (used in) investing activities 2,975 (2,116)
Financing activities:
Issuance of common or treasury stock for stock option exercises 383 1,355
Purchase of treasury stock (267) -
Distribution of minority interest earnings (493) (473)
Repayments of notes payable-banks (42) (261)
---- -----
Net cash (used in) from financing activities (419) 621
Effect of exchange rate changes on cash and cash equivalents (839) (218)
----- -----
Net increase in cash and cash equivalents 1,348 11,526
Cash and cash equivalents:
Beginning of period 90,908 57,263
------ ------
End of period $ 92,256 $ 68,789
======== ========
</TABLE>
See notes to condensed consolidated financial statements.
-3-
<PAGE>
FOSSIL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
UNAUDITED
1. FINANCIAL STATEMENT POLICIES
Basis of Presentation. The condensed consolidated financial statements include
the accounts of Fossil, Inc., a Delaware corporation, and its majority-owned
subsidiaries (the "Company"). The condensed consolidated financial statements
reflect all adjustments that are, in the opinion of management, necessary to
present a fair statement of the Company's financial position as of April 1,
2000, and the results of operations for the thirteen-week periods ended April 1,
2000 and April 3, 1999. All adjustments are of a normal, recurring nature.
These interim financial statements should be read in conjunction with the
audited financial statements and the notes thereto included in Form 10-K filed
by the Company pursuant to the Securities Exchange Act of 1934 for the year
ended January 1, 2000. Operating results for the thirteen-week period ended
April 1, 2000, are not necessarily indicative of the results to be achieved for
the full year.
On July 21, 1999, the Board of Directors of the Company declared a 3-for-2 stock
split ("Stock Split") of the Company's $0.01 par value common stock ("Common
Stock") which was effected in the form of a stock dividend which was paid on
August 17, 1999 to stockholders of record on August 3, 1999. Retroactive effect
has been given to the Stock Split in stockholders' equity accounts and in all
share and per share data in the accompanying condensed consolidated financial
statements and notes thereto.
Business. The Company designs, develops, markets and distributes fashion watches
and other accessories, principally under the "FOSSIL" and "RELIC" brands names.
The Company's products are sold primarily through department stores and other
major retailers, both domestically and in over 85 countries worldwide.
2. INVENTORIES
<TABLE>
<CAPTION>
Inventories consist of the following:
April 1, January 1,
(In thousands) 2000 2000
---- ----
<S> <C> <C> <C>
Components and parts $ 5,234 $ 5,568
Work-in-process 2,743 2,755
Finished merchandise on hand 47,006 38,595
Merchandise at Company stores 7,878 7,481
Merchandise in-transit from estimated
customer returns 10,116 8,630
------ -----
$ 72,977 $ 63,029
======== ========
</TABLE>
The Company periodically enters into forward contracts principally to hedge the
payment of intercompany inventory transactions with its non-U.S. subsidiaries.
Currency exchange gains or losses resulting from the translation of the related
accounts, along with the offsetting gains or losses from the hedge, are deferred
until the inventory is sold or the forward contract is completed. At April 1,
2000, the Company had hedge contracts to sell 194.4 million Japanese Yen for
approximately $1.9 million, expiring through December 2000 and 7.13 billion
Italian Lira for approximately $3.6 million, expiring through June 2000.
-4-
<PAGE>
<TABLE>
<CAPTION>
3. GEOGRAPHIC INFORMATION
(In thousands)
For the 13 Weeks For the 13 Weeks
Ended April 1, 2000 Ended April 3, 1999
------------------- -------------------
Operating Operating
Net Sales Income Net Sales Income
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
U.S.- exclusive of Stores:
External customers $ 65,197 $ 10,409 $ 51,188 $ 8,790
Intergeographic 17,100 - 7,700 -
Far East:
External customers 8,218 8,032 6,071 5,834
Intergeographic 42,700 - 27,400 -
Stores 7,044 (810) 4,789 (597)
Europe 21,672 4,042 19,215 4,280
Japan 1,445 (514) 1,942 (430)
Intergeographic items (59,807) (35,028) -
--------- -------- -------- --------
Consolidated $ 103,569 $ 21,159 $ 83,277 $ 17,877
========= ======== ======== ========
</TABLE>
4. EARNINGS PER SHARE
The following table reconciles the numerators and denominators used in the
computations of both basic and diluted EPS:
<TABLE>
<CAPTION>
For the 13 For the 13
(In thousands, except per share data) Weeks Ended Weeks Ended
April 1, April 3,
2000 1999
----------- -----------
<S> <C> <C>
Basic EPS computation:
Numerator:
Net income $ 12,628 $10,431
-------- -------
Denominator:
Weighted average common
shares outstanding 32,048 31,471
Treasury stock (3) (60)
-------- -------
32,045 31,411
-------- -------
Basic EPS $ 0.39 $ 0.33
======== =======
Diluted EPS computation:
Numerator:
Net income $ 12,628 $10,431
-------- -------
Denominator:
Weighted average common
shares outstanding 32,048 31,471
Stock option conversion 1,163 1,672
Treasury stock (3) (60)
-------- -------
33,208 33,083
-------- -------
Diluted EPS $ 0.38 $ 0.32
======== =======
</TABLE>
5. STOCKHOLDER'S EQUITY
During the First Quarter of 2000, the Company repurchased 12,800 shares of
treasury stock for $267,604.
-5-
<PAGE>
FOSSIL, INC. AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following is a discussion of the financial condition and results of
operations of the Company for the thirteen-week period ended April 1, 2000 (the
"First Quarter"), as compared to the thirteen-week period ended April 3, 1999
(the "Prior Year Quarter"). This discussion should be read in conjunction with
the Condensed Consolidated Financial Statements and the related Notes attached
hereto.
General
The Company is a leader in the design, development, marketing and distribution
of contemporary, high quality fashion watches and accessories. The FOSSIL brand
name was developed by the Company to convey a distinctive fashion, quality and
value message and a brand image reminiscent of "America in the 1950s" that
suggests a time of fun, fashion and humor. Since its inception in 1984, the
Company has grown from its original flagship FOSSIL watch product into a Company
offering a diversified range of accessories. The Company's current product
offerings include an extensive line of fashion watches sold under the FOSSIL and
RELIC brands as well as complementary lines of small leather goods, belts,
handbags and sunglasses. In addition to developing its own brands, the Company
leverages its development and production expertise by designing and
manufacturing private label and licensed products for some of the most
prestigious companies in the world, including national retailers, entertainment
companies and fashion designers.
The Company's products are sold to department stores and specialty retail stores
in over 85 countries worldwide through Company-owned foreign sales subsidiaries
and through a network of approximately 52 independent distributors. The
Company's foreign operations include a presence in Asia, Australia, Canada, the
Caribbean, Europe, Central and South America and the Middle East. In addition,
the Company's products are offered at Company-owned retail locations throughout
the United States and in independently-owned, authorized FOSSIL retail stores
and kiosks located in several major airports, on cruise ships and in certain
international markets. The Company's successful expansion of its product lines
worldwide and leveraging of its infrastructure have contributed to its
increasing net sales and operating profits.
First Quarter & Company Highlights
o FOSSIL brand watch sales continue to show double-digit growth at retail
with an increased emphasis on the ladies F2 line of watches.
o FOSSIL brand handbags recorded sales volume growth with net sales increases
over 70% during the First Quarter. This increase was largely due to the
strong retail demand for the Company's traditional leather handbag products
as well as the current non-leather seasonal line.
o RELIC, the Company-owned brand sold in leading national and regional chain
department stores, recorded sales volume growth exceeding 70% during the
First Quarter. This increase was driven by strong volume increases in RELIC
watches combined with continued roll-out of RELIC leather goods.
o The Company continued to strengthen its licensed watch product line. During
the First Quarter, the Company launched its DKNY brand licensed watch line,
which generated sales of approximately $4.3 million. Additionally, sales of
EMPORIO ARMANI brand watches increased 28% over the prior year to $8.6
million during the First Quarter.
o International sales continued to show strong growth despite the
strengthening of the U.S. dollar over the Euro currency. Overall sales
volume growth increased approximately 15% during the First Quarter. In a
stable Euro currency environment relative to the first quarter of 1999,
sales volume growth would have been approximately 28%.
-6-
<PAGE>
o The Company operated 35 outlet and 17 retail stores at the end of the First
Quarter compared to 29 outlet and 11 retail stores at the end of the Prior
Year Quarter. This retail store expansion, as well as increases in same
store sales, also positively impacted sales.
Results of Operations
The following table sets forth, for the periods indicated, (i) the percentages
of the Company's net sales represented by certain line items from the Company's
condensed consolidated statements of income and (ii) the percentage changes in
these line items between the current period and the comparable period of the
prior year.
<TABLE>
<CAPTION>
Percentage of Percentage
Net Sales Change
--------- --------
For the 13 For the 13
Weeks Ended Weeks Ended
----------- -----------
April 1, April 3, April 1,
2000 1999 2000
-------- -------- -----------
<S> <C> <C> <C>
Net sales 100.0% 100.0% 24.4%
Cost of sales 48.2 48.8 22.9
------ -----
Gross profit margin 51.8 51.2 25.7
Selling and distribution
expenses 23.4 21.5 35.1
General and administrative
expenses 8.0 8.3 20.6
------ -----
Operating income 20.4 21.4 18.4
Interest expense 0.0 0.0 8.0
Other income
(expense)- net 0.3 (0.2) 293.6
------ -----
Income before income taxes 20.7 21.2 20.9
Income taxes 8.5 8.7 20.6
------ -----
Net income 12.2% 12.5% 21.1%
====== =====
</TABLE>
Net Sales. The following table sets forth certain components of the Company's
consolidated net sales and the percentage relationship of the components to
consolidated net sales for the periods indicated (in millions, except percentage
data):
<TABLE>
<CAPTION>
Amounts % of Total
For the 13 Weeks Ended For the 13 Weeks Ended
------------------------ -----------------------
April 1, April 3, April 1, April 3,
2000 1999 2000 1999
-------- -------- -------- --------
<S> <C> <C> <C> <C>
International:
Europe $ 21.7 $ 19.3 21% 23%
Other 9.7 8.0 9 10
------ ------ --- ---
Total International 31.4 27.3 30 33
------ ------ --- ---
Domestic:
Watch products 41.4 36.3 40 43
Other products 23.8 14.9 23 18
------ ------ --- ---
Total 65.2 51.2 63 61
Stores 7.0 4.8 7 6
------ ------ --- ---
Total Domestic 72.2 56.0 70 67
------ ------ --- ---
Total Net Sales $103.6 $ 83.3 100% 100%
====== ====== === ===
</TABLE>
-7-
<PAGE>
Fueling top line sales growth during the First Quarter was (a) a 59% increase in
the Company's domestic other accessory product lines, primarily handbags and
other FOSSIL branded leather products, (b) sales of $4.3 million from the launch
of the DKNY licensed watch line and (c) a 46% increase in sales from
Company-owned stores. Sales volume increases during the First Quarter were
partially offset by decreases in the Company's private label watch line.
Management anticipates sales volume growth of 20% or more over the remainder of
2000 from increased sales of existing product lines and businesses as well as
new product lines scheduled to be launched.
Gross Profit. Gross profit margins increased from 51.2% in the Prior Year
Quarter to 51.8% in the First Quarter. The increase is primarily due to the
positive gross margin influence from a higher sales mix of licensed designer
watches and sales from Company-owned stores. In addition, gross profit margins
were favorably impacted from higher production levels in the Company's
foreign-based assembly facilities. These positive influences were partially
offset by the impact of the increase in sales of leather goods which
historically generate gross profit margins below the Company's consolidated
average margins. Management believes the Company's gross profit margins for the
remainder of 2000 will be equal to, or marginally above, the levels achieved
during 1999.
Operating Expenses. The aggregate increase in operating expenses was due
primarily to costs necessary to support increased sales volumes. Total selling,
general and administrative expenses as a percentage of net sales, increased in
the First Quarter compared to the Prior Year Quarter. This increase was
primarily due to increased display cost incurred in connection with the DKNY
licensed watch line launch, the continued roll-out of leather handbag fixtures
and costs associated with the addition of 12 new Company-owned stores opened
following the Prior Year Quarter. Additionally, increased brand advertising,
primarily through certain internet portal relationships, and continued
enhancement of the Company's web site added to the operating expense increases.
Management believes the operating expense ratio for the remainder of 2000 will
approximate 1999 levels with operating expense leveraging improving throughout
the remainder of the year.
Other Income (Expense). Other income (expense) increased favorably during the
First Quarter as compared to the Prior Year Quarter. The increase was primarily
due to (a) increased interest income generated from increased cash levels, (b)
increased royalty revenues generated on certain FOSSIL brand license agreements
and (c) a decrease in exchange losses realized. These increases in other income
were partially offset by increases in minority interest expense generated as a
result of increased profitability from the Company's majority-owned
subsidiaries.
Liquidity and Capital Resources
The Company's general business operations historically have not required
substantial cash needs during the first several months of its fiscal year.
Generally, starting in the second quarter the Company's cash needs begin to
increase, typically reaching its peak in the September-November time frame. The
additional cash needs have generally been to finance the accumulation of
inventory and the build-up in accounts receivable. During the First Quarter, the
Company increased its cash holdings and short-term marketable securities to $97
million in comparison to $69 million at the end of Prior Year Quarter. However,
the Company's cash and short-term marketable securities position decreased by
$4.7 million from the end of 1999 due to the accumulation of inventory and the
build-up in accounts receivable during the First Quarter. The increase in
inventory was a result of (a) DKNY inventory necessary to support the product
launch and reorders, (b) an increase in EMPORIO ARMANI inventory levels due to
lower levels of inventory at the end of 1999 and (c) increases in the number of
Company-owned stores. The build-up in accounts receivable was primarily related
to the timing of First Quarter sales inclusive of the DKNY watch line launch
which took place in late February through March. During the last half of the
First Quarter, the Company's domestic-based sales alone increased $17 million as
compared to the last half of the Prior Year Quarter. Management anticipates the
accounts receivable percentage increase in comparison to prior year comparable
periods to more closely approximate the applicable sales percentage increases by
the end of the Company's second quarter. At the end of the First Quarter, the
Company had working capital of $165 million compared to working capital of $120
million and $155 million at the end of the Prior Year Quarter and fiscal 1999
year-end, respectively. The Company had outstanding borrowings of only $5
million against
-8-
<PAGE>
its combined $43 million bank credit facilities at the end of the First Quarter.
Management believes that cash flow from operations combined with existing cash
on hand will be sufficient to satisfy its working capital expenditures for at
least the next eighteen months.
Forward-Looking Statements
Included within management's discussion of the Company's operating results,
"forward-looking statements" were made within the meaning of the Private
Securities Litigation Reform Act of 1995 regarding expectations for 2000. The
actual results may differ materially from those expressed by these
forward-looking statements. Significant factors that could cause the Company's
2000 operating results to differ materially from management's current
expectations include, among other items, significant changes in consumer
spending patterns or preferences, competition in the Company's product areas,
international in comparison to domestic sales mix, changes in foreign currency
valuations in relation to the United States dollar, principally the European
Union's Euro and Japanese Yen, an inability of management to control operating
expenses in relation to net sales without damaging the long-term direction of
the Company and the risks and uncertainties set forth in the Company's current
report on Form 8-K dated March 30, 1999.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As a multinational enterprise, the Company is exposed to changes in foreign
currency exchange rates. The Company employs a variety of practices to manage
this market risk, including its operating and financing activities and, where
deemed appropriate, the use of derivative financial instruments. Forward
contracts have been utilized by the Company to mitigate foreign currency risk.
The Company's most significant foreign currency risks relate to the Euro and the
Japanese Yen. The Company uses derivative financial instruments only for risk
management purposes and does not use them for speculation or for trading. There
were no significant changes in how the Company managed foreign currency
transactional exposures during the First Quarter and management does not
anticipate any significant changes in such exposures or in the strategies it
employs to manage such exposures in the near future.
-9-
<PAGE>
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
27 Financial Data Schedule
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the period covered by this
Report.
-10-
<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.
FOSSIL, INC.
Date: May 15, 2000 /s/ Randy S. Kercho
----------------------------
Randy S. Kercho
Executive Vice President and
Chief Financial Officer
(Principal financial and
accounting officer duly
authorized to sign on behalf
of Registrant)
-11-
<PAGE>
EXHIBIT INDEX
Exhibit
Number Document Description
- ------- --------------------
27 Financial Data Schedule.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This Schedule contains summary financial information extracted from Part I
Item I Financial Statements of Fossil, Inc. and Subsidiaries as of and for
the thirteen weeks ended April 1, 2000 filed on Form 10-Q and is qualified
in its entirety by reference to such Quarterly Report on Form 10-Q.
</LEGEND>
<CIK> 0000883569
<NAME> Fossil, Inc.
<MULTIPLIER> 1,000
<CURRENCY> U.S. Dollars
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-30-2000
<PERIOD-START> JAN-02-2000
<PERIOD-END> APR-01-2000
<EXCHANGE-RATE> 1
<CASH> 92,256
<SECURITIES> 4,800
<RECEIVABLES> 66,382
<ALLOWANCES> 8,189
<INVENTORY> 72,977
<CURRENT-ASSETS> 243,798
<PP&E> 49,197
<DEPRECIATION> 19,421
<TOTAL-ASSETS> 283,436
<CURRENT-LIABILITIES> 78,723
<BONDS> 0
0
0
<COMMON> 321
<OTHER-SE> 201,906
<TOTAL-LIABILITY-AND-EQUITY> 283,436
<SALES> 103,569
<TOTAL-REVENUES> 103,569
<CGS> 49,910
<TOTAL-COSTS> 82,410
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 232
<INTEREST-EXPENSE> 27
<INCOME-PRETAX> 21,405
<INCOME-TAX> 8,777
<INCOME-CONTINUING> 12,628
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 12,628
<EPS-BASIC> .39
<EPS-DILUTED> .38
</TABLE>
