UNITED STATES
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 quarter ended SEPTEMBER 30, 1995
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 1-9635
BISCAYNE APPAREL, INC.
(Exact name of registrant as specified in its charter)
Florida 65-0200397
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
1373 Broad Street, Clifton, New Jersey 07013
(Address of principal executive offices) (Zip Code)
(201) 473-3240
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed
all the 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 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 October 31, 1995, there were 10,741,241 outstanding shares
of the registrant's Common Stock, $0.01 par value.
BISCAYNE APPAREL, INC.
INDEX
Part I. Financial Information Page No.
Consolidated Balance Sheets
September 30, 1995 and December 31, 1994.....
Consolidated Statements of Operations Three and
Nine Months Ended September 30, 1995 and 1994..
Consolidated Statements of Cash Flows
Three and Nine Months Ended September 30, 1995
and 1994.........................................
Notes to Consolidated Financial Statements.......
Management's Discussion and Analysis of
Financial Condition and Results of Operations....
Part II. Other Information
Item 1 - Legal Proceedings.......................
Item 6 - Exhibits and Reports on Form 8-K........
Signatures.......................................
BISCAYNE APPAREL, INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
[CAPTION]
<TABLE>
<S> <C> <C>
SEPTEMBER 30, DECEMBER 31,
1995 1994
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents. . $ 1,830 $ 4,178
Trade accounts receivable,
less allowances of $2,256
in 1995 and $1,754 in 1994 27,923 21,009
Inventories. . . . . . . . . 37,963 22,584
Prepaid expenses and other . 1,518 833
Total current assets. . 69,234 48,604
Property, plant and equipment,
less accumulated depreciation
of $1,822 in 1995 and $1,388 in
1994 . . . . . . . . . . . 3,483 2,984
Investment in Hartwell Sports,
Inc. . . . . . . . . . . . 1,647 1,505
Goodwill, net. . . . . . . . 5,114 5,202
Other assets, net. . . . . . 3,101 2,142
$ 82,579 $ 60,437
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities:
Accounts payable. . . . . . . $ 7,212 $ 6,060
Accrued liabilities . . . . . 6,184 6,973
Notes payable to banks. . . . 31,250 8,500
Current portion of long-term
debt. . . . . . . . . . . . 1,250 -
Senior subordinated bridge
notes . . . . . . . . . . . - 4,776
Total current liabilities 45,896 26,309
Subordinated notes . . . . . . . 6,444 7,944
Long-term debt . . . . . . . . . 6,250 -
Other liabilities. . . . . . . . 64 303
. . . . . . . . . . . . . . .
Commitments and contingencies. . - -
Stockholders' Equity:
Common stock, $0.01 par value;
25,000,000 shares authorized;
10,741,241 issued and
outstanding in 1995 and
10,223,899 in 1994. . . . . 107 102
Additional paid-in capital. . 26,308 25,225
Unearned stock award
compensation. . . . . . . . (152) (203)
Retained earnings (deficit) . (2,338) 757
Total stockholders' equity . 23,925 25,881
$ 82,579 $ 60,437
See accompanying notes.
</TABLE>
BISCAYNE APPAREL, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands of dollars, except per share data)
(Unaudited)
[CAPTION]
<TABLE>
<S> <C> <C>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
1995 1994 1995 1994
Net sales. . . . . . . . $ 40,898 $ 34,446 $ 70,804 $ 50,360
Operating costs and expenses:
Cost of goods sold . . 30,291 24,463 53,009 36,690
Selling, general and
administrative . . . 7,069 4,251 18,501 10,289
Operating income (loss). 3,538 5,732 (706) 3,381
Other income and (expenses):
Interest and other
expenses . . . . . . (1,033) (603) (2,425) (1,119)
Interest and other
income . . . . . . . - 4 58 61
Equity in net income of
investees. . . . . . 59 (33) 142 -
Earnings before provision
(benefit) for income
taxes . . . . . . . . . 2,564 5,100 (2,931) 2,323
Provision (benefit) for
income taxes. . . . . . 1,209 2,023 (911) 965
Net earnings (loss). . . $ 1,355 $ 3,077 $ (2,020) $ 1,358
Net earnings (loss) per
common share . . . . . $ 0.12 $ 0.33 $ (0.19) $ 0.14
Shares used in computing
net earnings (loss)
per common share . . .10,864,004 9,398,565 10,730,943 9,438,827
See accompanying notes.
</TABLE>
BISCAYNE APPAREL, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(Unaudited)
[CAPTION]
<TABLE>
<S> <C>
NINE MONTHS ENDED
SEPTEMBER 30,
1995 1994
Operating activities:
Net earnings (loss) . . . . . . .$ (2,020) $ 1,358
Adjustments to reconcile net
earnings (loss) to net cash
used in operating activities:
Gain (loss) on sale of assets. (3) 12
Equity in net income of investee (142) -
Amortization of unearned stock
award compensation. . . . . . 51 51
Depreciation expense . . . . . 436 298
Amortization expense . . . . . 63 159
Provision for losses and sales
allowances on receivables . . 3,086 2,262
(Increase) decrease in operating assets:
Trade accounts receivable . . . . (10,000) (13,021)
Inventories . . . . . . . . . . . (15,379) (7,447)
Prepaid expenses and other. . . . (685) (671)
Other assets. . . . . . . . . . . (942) (56)
Increase (decrease) in operating
liabilities:
Accounts payable. . . . . . . . . 1,152 2,377
Accrued liabilities . . . . . . . (773) 340
Other liabilities . . . . . . . . (231) (6)
Net cash used in operating
activities . . . . . . . . . . (25,387) (14,344)
Investing activities:
Proceeds from sale of assets. . . 9 1
Capital expenditures. . . . . . . (941) (933)
Equity investment . . . . . . . . - (1,500)
Proceeds from sale of equity
investee . . . . . . . . . . . . - 50
Net cash used in investing
activities. . . . . . . . . . . (932) (2,382)
Financing activities:
Payments under notes payable to
banks . . . . . . . . . . . . . (24,025) (31,060)
Borrowings under notes payable
to banks. . . . . . . . . . . . 46,775 47,810
Proceeds from term loan . . . . . 7,500 -
Repayment of subordinated notes . (6,276) -
Principal payments of capital
leases. . . . . . . . . . . . . (16) (28)
Proceeds from exercise of employee
stock options . . . . . . . . . 13 -
Net cash provided by financing
activities. . . . . . . . . . . 23,971 16,722
Net decrease in cash and cash
equivalents. . . . . . . . . . . (2,348) (4)
Cash and cash equivalents at
beginning of year. . . . . . . . 4,178 1,568
Cash and cash equivalents at end
of year. . . . . . . . . . . . .$ 1,830 $ 1,564
Supplemental disclosure information:
Interest expense paid . . . . . .$ 2,045 $ 902
Income taxes paid . . . . . . . .$ 1,608 $ 784
BISCAYNE APPAREL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. The accompanying unaudited consolidated financial statements,
which are for an interim period, do not include all
disclosures provided in the annual consolidated financial
statements. These unaudited consolidated financial
statements should be read in conjunction with the
consolidated financial statements and the footnotes with
respect thereto contained in the Biscayne Apparel, Inc.,
("the Company") 1994 Annual Report on Form 10-K.
The consolidated financial statements of the Company include
the accounts of the parent company, and its wholly-owned
subsidiaries, Biscayne Apparel International, Inc. ("BAII"),
Scientific Products, Inc. ("SPI"), and M&L International,
Inc. ("M&L"), which was acquired in 1994, and its wholly-
owned subsidiaries, Unidex Garments (Philippines), Inc.,
Watersports Garment Manufacturing, Inc., Teri Outerwear
Manufacturing, Inc., GES Sportswear Manufacturing Corp. and
M&L International (H.K.) Limited. BAII operates through two
divisions, Andy Johns Fashions International ("Andy Johns")
and Varon, and its wholly-owned subsidiaries, Mackintosh of
New England Co., Mackintosh (U.K.) Limited and Amy Industries
De Honduras, S.A. de C.V., which was organized during 1995.
The Company holds a 20% interest in Hartwell Sports, Inc. and
accounts for investments in less than 50%-owned affiliates,
over which it exercises significant influence, under the
equity method in accordance with Accounting Principle Board
Opinion No. 18. All material intercompany balances and
transactions have been eliminated. Certain amounts included
in prior period financial statements have been reclassified
to conform with the 1995 presentation.
2. In the opinion of the Company, the accompanying unaudited
consolidated financial statements contain all adjustments
(consisting of only normal recurring accruals) necessary for
a fair presentation of the financial statements.
3. The results of operations for the three and nine month
periods ended September 30, 1995 and 1994 are not necessarily
indicative of the results to be expected for the full year.
4. Earnings per common share are based on the weighted average
number of common and common equivalent shares outstanding
during the period. Common stock equivalents include
incremental shares from the exercise of stock options and
warrants under the treasury stock method. Earnings per share
and weighted average shares have been restated for the
Company's May 1995 stock dividend. See Note 6 for further
information.
5. Included in accounts payable at September 30, 1995 and
September 30, 1994 are the Company's obligations under
outstanding letters of credit of $4,092,000 and $1,068,000,
respectively.
6. On March 10, 1995, the Company's Board of Directors declared
a five percent stock dividend with respect to the Company's
Common Stock par value, $0.01 ("Common Stock"). Each holder
of record on May 24, 1995 was entitled to receive one share
of Common Stock for every 20 shares held. Cash was paid in
lieu of issuing fractional shares at a price of $2.125 per
share, the closing price of the Common Stock on March 10,
1995. The distribution date was May 31, 1995.
7. On November 30, 1994, the Company acquired M&L, a Chicago-
based designer, manufacturer and marketer of infants',
toddlers' and children's outerwear, sportswear, and swimwear.
The following unaudited pro forma combined financial data
reflects the results of the Company and M&L as if the
Acquisition had occurred on January 1, 1994 (in thousands,
except per share data):
<CAPTION>
</TABLE>
<TABLE>
<S> <C> <C>
Pro Forma Data Pro Forma Data
for the Three for the Nine
Months Ended Months Ended
9/30/94 9/30/94
Net Sales........... $57,276 $89,605
Net Earnings before Pro-
vision for Income
Taxes.............. $ 8,344 $ 4,664
Net Earnings........ $ 5,086 $ 2,839
Earnings Per Share.. $ 0.46 $ 0.25
Shares Used in Computing
Pro Forma Earnings Per
Share............... 11,148,912 11,189,174
</TABLE>
8. At December 31, 1994, the Company had a $32,000,000
uncommitted credit agreement (the "BAI Agreement") with
several commercial banks. The BAI Agreement was
collateralized by substantially all of the Company's trade
accounts receivable and imported finished goods inventory, a
first mortgage on Varon's real property, and was guaranteed
by the Company. Under the BAI Agreement, the Company was
restricted from making any cash dividend payments. The BAI
Agreement was to expire on April 30, 1995, but was paid on
March 16, 1995 with proceeds from the Revolver Agreement (see
below).
In connection with the acquisition of M&L, M&L entered into
a three year $23,000,000 committed revolver credit agreement
with a bank ("The M&L Agreement"), which the Company
guaranteed. The M&L Agreement was to expire December 31,
1997. The M&L Agreement was retired on March 16, 1995 with
proceeds from the Revolver Agreement (see below).
On March 16, 1995, the Company entered into an agreement with
several banks for a $56,000,000 two year committed revolving
credit facility (the "Revolver Agreement") and a $7,500,000
four year term loan (the "Term Loan"), which replaced the
existing BAI Agreement and the M&L Agreement, and was used to
repay debt and other related costs associated with the M&L
Acquisition.
The Revolver Agreement and the Term Loan are collateralized
by substantially all of the Company's assets, excluding
domestic inventory, and including all trademarks.
Additionally, the Revolver Agreement and the Term Loan
require various financial covenants and reporting
requirements and limit capital expenditures, cash dividends,
other indebtedness, affiliate transactions, mergers and
acquisitions and other items.
For the quarter ended September 30, 1995, the Company was not
in compliance with certain financial covenants required by
the Revolver Agreement and the Term Loan. The banks waived
the Company's non-compliance with the provisions of these
covenants.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Quarter Ended September 30, 1995 versus Quarter Ended September 30,
1994:
Net sales increased from third quarter 1994 net sales of
$34,446,000 to $40,898,000 in the third quarter of 1995. Pro forma
net sales for the 1994 quarter, including M&L, which was acquired
on November 30, 1994, were $57,276,000. The decrease in actual
1995 net sales, compared to the pro forma 1994 net sales was
attributable to lower sales at Andy Johns, Mackintosh and M&L,
offset by increased sales at Varon. Several unusual and temporary
factors combined in 1995 to create an unfavorable operating
performance for the period ended September 30, 1995. These factors
included the effects of one of the warmest winters in recent
history, which caused both outerwear retailers and manufacturers to
carryover higher levels of inventory from the 1994 to the 1995
season. This, coupled with the continuation in 1995 of
unseasonably warm weather, resulted in reduced ordering of Fall
1995 merchandise. The continued effects of weather and the related
softness of outerwear sales at retail was a significant influence
on the recent decision of one of the major warehouse club
retailers, our largest customer in 1994, to refrain from ordering
previously programmed Fall outerwear from us in 1995. Unless the
weather becomes colder and retail orders increase significantly in
the 1995 fourth quarter, the Company anticipates that the 1995
fourth quarter results will be significantly below results of the
1994 fourth quarter. The Company's consolidated sales backlog as
of September 30, 1995 was $28,836,000 versus $31,618,000 as of
September 30, 1994.
Cost of goods sold as a percentage of net sales was 74% versus 71%
for the quarters ended September 30, 1995 and 1994, respectively.
The increase was mainly attributable to increased raw material
costs, increased domestic and foreign labor costs and lower sales
prices.
Selling, general and administrative expenses ("S,G&A") as a
percentage of net sales increased from 12% for the third quarter of
1994 to 17% in the third quarter of 1995, primarily due to the
inclusion of M&L, coupled with decreased sales at Andy Johns. Pro
forma S,G&A as a percentage of net sales for the 1994 quarter was
14%. The increase from 1994 pro forma results was due to lower
sales levels.
OTHER
Interest and other expenses for the quarter ended September 30,
1995 increased to $1,033,000 versus $603,000 for the three months
ended September 30, 1994. The increase was primarily due to
increased borrowings incurred in connection with the acquisition of
M&L and increased inventory levels.
Interest and other income and equity in net income of investees
increased $88,000 for the three months ended September 30, 1995,
compared to the third quarter of 1994, primarily due to increases
in the net income of Hartwell Sports, Inc., which the Company owns
a 20% equity investment in.
NINE MONTHS ENDED SEPTEMBER 30, 1995 VERSUS NINE MONTHS ENDED
SEPTEMBER 30, 1994
Net sales increased from the nine months ended September 30, 1994
net sales of $50,360,000 to $70,804,000 for the comparable 1995
period. Pro forma net sales for the first nine months of 1994,
including M&L, which was acquired on November 30, 1994, were
$89,605,000. The decrease from pro forma was primarily
attributable to decreased sales at Andy Johns and Mackintosh,
offset by increased sales at M&L and Varon. The sales decreases
are due to adverse retail sales of outerwear primarily related to
the effects of unseasonably warm Fall weather in 1994 and 1995.
The continued effects of weather and the related softness of
outerwear sales at retail was a significant influence on the recent
decision of one of the major warehouse club retailers, our largest
customer in 1994, to refrain from ordering previously programmed
Fall outerwear from us in 1995. Unless the weather becomes colder
and retail orders increase significantly in the 1995 fourth
quarter, the Company anticipates that the 1995 fourth quarter
results will be significantly below the results of the 1994 fourth
quarter.
Cost of goods sold as a percentage of net sales increased from 73%
for the nine months ended September 30, 1994, to 75% for the first
nine months of 1995, primarily due to increased raw material costs,
increased domestic and foreign labor costs and lower selling
prices.
Selling, general and administrative expenses ("S,G&A") as a
percentage of net sales increased from 20% for the nine months
ended September 30, 1994 to 26% for the comparable 1995 period,
primarily due to the inclusion of M&L and decreased sales at the
Andy Johns division.
OTHER
Interest and other expense for the nine months ended September 30,
1995 increased $1,306,000 from the comparable 1994 period. The
increase was primarily due to increased borrowings incurred in
connection with the acquisition of M&L and increased inventory
levels.
Interest and other income and equity in net income of investees
increased $139,000 for the nine months ended September 30, 1995,
compared to the 1994 period primarily due to increases in the net
income of Hartwell Sports, Inc., a 20% equity investee of the
Company.
INCOME TAXES
For the quarters and nine months ended September 30, 1995 and 1994,
the income tax provision (benefit) differed from the provision
which would be derived upon application of the federal statutory
rate, primarily because of state income tax provisions, non-taxable
interest income, and non-deductible amortization of goodwill.
LIQUIDITY AND CAPITAL RESOURCES
Cash and cash equivalents were $1,830,000 and $4,178,000 at
September 30, 1995 and December 31, 1994, respectively. At
September 30, 1995, the Company's working capital was $23,338,000,
representing a current ratio of 1.51 to 1. This compares to
working capital of $22,295,000 and a current ratio of 1.85:1 at
December 31, 1994. The decrease in the working capital ratio is due
to higher year-to-date losses and increased short-term outstanding
bank borrowings to fund increased inventory levels.
As presented in the Consolidated Statements of Cash Flows for the
nine months ended September 30, 1995, the increase in accounts
receivable of $10,000,000, inventories of $15,379,000 and accounts
payable of $1,152,000 were due to the seasonality of the Company's
operations and increased levels of carryover 1994 inventory. The
net increase in cash from financing activities of $23,971,000 was
due to the Company's seasonality and the refinancing of debt from
the M&L acquisition.
At December 31, 1994, the Company had a $32,000,000 uncommitted
credit agreement (the "BAI Agreement") with several commercial
banks. The BAI Agreement was to expire on April 30, 1995, but was
retired on March 16, 1995 with proceeds from the Revolver
Agreement, as discussed below.
In connection with the acquisition of M&L, M&L entered into a three
year $23,000,000 committed revolver credit agreement with a bank
("The M&L Agreement"), which the Company guaranteed. The M&L
Agreement was to expire December 31, 1997, but was retired on March
16, 1995 with proceeds from the Revolver Agreement, as discussed
below.
On March 16, 1995, the Company entered into an agreement with
several banks for a $56,000,000 two year committed revolving credit
facility (the "Revolver Agreement"), and a $7,500,000 four year
term loan (the "Term Loan"), which replaced the existing BAI
Agreement and the M&L Agreement, and was used to repay debt and
other related costs associated with the M&L acquisition.
The Revolver Agreement and the Term Loan are collateralized by
substantially all of the Company's assets, excluding domestic
inventory, and including all trademarks. Additionally, the
Revolver Agreement and the Term Loan require various financial
covenants and reporting requirements and limit capital
expenditures, cash dividends, other indebtedness, affiliate
transactions, mergers and acquisitions and other items.
For the quarter ended September 30, 1995, the Company was not in
compliance with certain financial covenants required by the
Revolver Agreement and the Term Loan. The banks waived the
Company's non-compliance with the provisions of these covenants.
Management is in the process of negotiation with the banks
regarding certain financial covenants for the year ending December
31, 1995 and thereafter, and, at this time does not anticipate any
default or acceleration of the loans.
Capital expenditures for the nine months ended September 30, 1995
increased slightly to $941,000 from $933,000 in 1994, primarily due
to the addition of M&L.
The Company expects that cash on hand, investments in short-term
securities, investment income, cash from operations and borrowings
under its credit agreement will be sufficient to fund current
operations and to enable the Company to meet its obligations as
they become due.
EFFECT OF INFLATION AND SEASONALITY
The Company believes that inflation will not significantly effect
its profit margins or have a material effect on the prices of other
goods and services used in its business operations.
Sales of women's and children's outerwear and children's thermal
underwear are seasonal. Historically, Andy Johns, Mackintosh,
Varon and M&L have significantly higher revenues in the third and
fourth quarters than in the first and second quarters. Therefore,
the results of any interim period are not necessarily indicative of
the results which might be expected during a full year.
Part II. Other Information
ITEM 1. LEGAL PROCEEDINGS
The Company is, from time to time, involved in routine
litigation. None of such litigation in which the Company is
presently involved is material to its financial position or results
of operations.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
a) Exhibits:
10.1 Lease Contract, dated June 10, 1995, by
and between Zip Buena Vista, S.A. and Amy
Industries De Honduras, S.A. de C.V.
10.2 First Amendment, dated June 1, 1995, to
the Credit Agreement, dated March 16,
1995, among the Registrant, Biscayne
Apparel International, Inc., Mackintosh
of New England Co. and M&L International,
Inc. and The Chase Manhattan Bank
(National Association) as Agent.
10.3 Second Amendment, dated November 1, 1995
to the Credit Agreement, dated March 16,
1995, among the Registrant, Biscayne
Apparel International, Inc., Mackintosh
of New England Co. and M&L International,
Inc. and The Chase Manhattan Bank
(National Association) as Agent.
11 Computation of Per Share Earnings
b) Reports on Form 8-K:
During the quarter for which this Quarterly Report
on Form 10-Q is filed, the Registrant did not file
any Current Reports on Form 8-K.
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:
BISCAYNE APPAREL, INC.
Date: November 8, 1995 By: /s/ John E. Pollack
John E. Pollack
President and Chief
Executive Officer
Date: November 8, 1995 By: /s/ Peter Vandenberg, Jr.
Peter Vandenberg, Jr.
Vice President, Treasurer and
Chief Financial Officer
LEASE CONTRACT
We, JUAN M. CANAHUATI, Businessman, married, Honduran, resident of
San Pedro Sula, acting as President of the Board of Directors and
Legal Representative of the merchantile society named as BUENA
VISTA EXPORT PROCESSING ZONE (ZIP BUENA VISTA, S.A.), constituted
under number Twenty-three (23), on the Third of August of Nineteen
Ninety-One, authorized before the Public Notary Sergio Zavala Leiva
and registered under number Ninety-Four (94) Tome One Hundred
Twenty-Five (125) of the local Registry, who will from now on be
referred as THE LESSOR on one hand, and on the other hand Mr.
FREDERICK VINCENT KNOX, businessman, married from Maryland, U.S.A.,
in transit through this city, acting as President of Amy Industries
de Honduras, S.A. de C.V. that is properly registered under number
60 of Tome 189 of the Merchantile Registry, who will from now on be
referred to as THE LESSEE. Both parties being in full use of their
rights freely and spontaneously declare. FIRST: THE LESSOR
declares to be the owner of the property located in the
Municipality of Villanueva, Department of Cortes, in the place
known as Buena Vista Export Processing Zone (ZIP BUENA VISTA),
properly registered under number Ninety-four (94) of tome One
Hundred Twenty-Five (125) of the Property Registry, Mortgages and
Preventive Annotation of this Judicial Section where appears a
building described as J-2 who is duly authorized to operate through
the Export Processing Zone decree number 3787 dated April 27, 1987
as granted in the Executive Agreement, number 40-92 of The Ministry
of Economy dated October 30, 1992. SECOND: The Lessor continues
stating that the building to lease has 2,403.461 square meters or
25,881.24 square feet which is being leased to AMY INDUSTRIES DE
HONDURAS, S.A. DE C.V. from June 10, 1995. Said building contains
the following specifications: BUILDING SPECIFICATIONS: The
building foundations consist of footings and perimetral beams of
reinforced concrete. The walls are of cement blocks of 15 cms. x
40 cms. of vibrated concrete, the walls and reinforced structure
are detailed on drawing #3 (Elevations). The production area,
mezzanine areas, and concrete slabs have metal columns of the type
indicated on drawing # 5 (Structural). The root is also
constructed of metal structure and covered by fiber cement sheets,
the roof is design to support a total weight of 90 kilograms per
square meter (dead and live load). The floor is of tile of 25 cms.
x 25 cms. gray color in the production, cafeteria, restrooms and
miscellaneous areas, and in the office area the tile is of 30 x 30
cms. (blue-beige color). The foundation of the building consist of
reinforced concrete structure (footings for metal columns,
reinforced concrete columns for the office and cafeteria areas.)
All the reinforced concrete is mixed on site and tested in
compression cylinders, after 28 days its resistance is equal to
3000 pounds per square inch. The reinforced steel used is of grade
40. The ground has been compacted to support 12 tons per square
meter, as indicated on drawing # 1 (Foundation). There are 7
drawings that describe the building which include: 1) Foundation,
2) Architectural Layout, 3) Elevations, 4) Plumbing, 5) Details
Layout, 6) Mezzanine, 7) Roof Structure. The building has the
following distribution: Office area, Production Area, Cafeteria,
Machine Room, Garbage Area, Rest Rooms. The building also includes
a mezzanine with an area of 526.063 square meters or (5660.437
square feet) built of metal structure with concrete floor with a
live load capacity of 90 pounds per square foot. The wood and
metal doors are described on drawing # 5 (Details Layout). The
doors are made of hard wood with and without louvers of 0.94 mts.
by 2.05 mts. with brass accessories of 3 1/2" brass and latchkey
with lock. The private restrooms are of hard wood of 8 sections by
70 cms. width x 2.05 mts. height the other restroom doors are made
of plywood pine of 3/16 thick, the other type of windows (aluminum
and glass) for interior and exterior are described on drawing # 5
(Details Layout). The plumbing consist of toilets (Incehsa
Standard or its equivalent) white and beige color, the white is
used in the production area, and the beige in the office areas.
White tile is used in the restrooms of the plant area as well as
the 15x15 cms. tile to cover the walls of these restrooms, and the
beige tile in the office area. The potable water piping is PVC
type SDR-26, with connection of 3/4" in diameters the toilet drain
systems is PVC SDR-41 with diameters 2", 4" and 6" as described on
drawing #4 (Plumbing). There are also 2 emergency doors on the
north side of the building, there are metal doors installed for the
kitchen exit, garbage, machine room, loading and unloading areas.
Also two roll-up doors 8 by 9 feet for the dock area. It includes
also a ramp with handrails made of galvanized piping 1 1/2" in
diameter and a concrete ramp with steps. In the porch at the main
entrance the ceiling made of hard wood and has a similar
architectural design as the other buildings in the park. The front
of the building includes parking spaces for compact cars, and in
the back of the building there two parking areas for loading and
unloading containers. The office walls are made of panelit 1.22
mts. x 3.04 mts. by 8 mm., its structure is made of pressure cured
pine wood. The paint used varies according to the area: Cements
blocks, finished areas, wood doors, metal doors, panelit, exterior,
etc. The building has metal gutters of 2 mm. thick by .30 by .25
mts. which drain to 4" SDR - 1 downspouts connected to the gutters
with PVC adapters which drain to 8" SDR-4t main PVC collector. The
concrete slabs to support the air conditioning units are designed
to support these weights the floor of the slab has a 2% inclination
towards the metal gutter and PVC downspouts of the rain system
described on drawing # 7 (Roof Structure). This concrete slab is
supported by H type steel columns, and have secondary structures
separated every 60 cms. which rest on its end on the H columns, the
concrete slabs are located above the miscellaneous, cafeteria,
kitchen and the office areas as indicated in the corresponding
drawing # 7 (Roof Structure). ELECTROMECHANICAL INSTALLATIONS:
The building is equipped with an air conditioning system which
consist of 4 units (Carrier) of 27.5 Tons. each for the production
area and 5 split units (Janitrol) of 5 Ton. each, all units are
installed complete with duct work, difusers, extractors and
accessories for the office, cafeteria and maintenance areas. The
drop ceiling system consists of sections of 2'x4' of fiber ceiling
material (Orion 220) the drop ceiling structure is constructed with
angles, cross-tees, main-tees, above the drop ceiling is covered
with insulation material (type R-19) all this hangs from a
structure constructed with U angles of 1"x2"x3/16"x2O', steel rod
of 3/8" x 30', nuts of 3/8'', angles of 2"x2"x1/4x20 . The
electric installations of the building include the following: 248
lamps 2x96 277V., 59 lamps 4x40 120 Volts, 7 lamps 2x40 120 Volts,
5 lamps 2x20 120 Volts., 2 panelboard 42 space 120/208 Volt, 1
panelboard 42 space 277/480 Volt., 1 panelboard 42 space 277/480
Volt., 1 panelboard 42 space 120/208 Volt, 1 panelboard 32 space
120/208 Volt, 1 Switchboard 3P4W 277/480 1200 Amps., 1 dry
transformer of 300 KVA.480/208 120 Volts., 1 dry transformer of
112.5 KVA. 480/208 120 Volts., 1 dry transformer of 45 KVA. 480/208
120 Volts., 1 ABB transformer of 750 KVA. 34.5 KV 480 Volts. All
the equipment is installed with accessories and electric cables.
The building also has a Flex-A-Power installation, which is located
below the drop ceiling hanging from the same structure, the system
consist of 19 lines of 8 rails of 10 feet long each making a total
of 150 rails, it also has 38 feed in boxes, end caps with screw,
coupling sets, rod and hangers. There are eight drawings that
describe the electromechanical installations: 1) Office Lighting,
2) Office Outlets, 3) Cafeteria Lighting, 4) Cafeteria Outlets, 5)
Air Conditioning, 6) Flex-A-Power Installations, 7) Production
Plant Lighting, 8) Electric Diagram. THIRD: Both parties have
agreed to formalize and in fact are formalizing the current lease
contract in accordance to the Export Processing Zone Law (Article
Number 10 Letter B) and adjusted to the following terms and
conditions a) THE LESSOR states that the leased building described
above will only be used for the specific activities regarding the
nature of the lessee's operation. The LESSEE is not entitled to
sublease, modify or make any type of construction without the
written consent of a representative of ZIP BUENA VISTA. Once a
written request is received by Zip Buena Vista this written consent
shall be answered within the following seven working days. THE
LESSOR also agrees that in the event that the company that has the
first lease option on the building of 25,861.24 sq.2 known as
building J-2 does not execute its option, AMY INDUSTRIES DE
HONDURAS, S.A. DE C.V. will have the first option on that building.
Also the Lessor states that it will make available a building of
approximately 44,000 sq.ft. no later than June 10 of 1996. THE
LESSOR also gives an option for a second building of approximately
44,000 sq.ft., nevertheless this option will have to be executed by
Lessee not later than April 10 of 1997 (10 months). b) The Lessee
will remit the amount of US$59,265.34 to the Bank Account Number
2189-770418414 at the First Union National Bank of Florida in favor
of Zip Buena Vista, this amount represents a five-month security
deposit, as a guarantee on the building, the deposit can be applied
to any delinquent rent under this lease. Of this deposit two months
will be credited to the 13th and 25th month rent respectively. In
the case that ZIP BUENA VISTA is to make total or partial use of
this security deposit the Lessee is committed to replace the used
amount. Likewise, the Lessor agrees once the contract expires to
return said deposit. c) The Lessor declares that the lease term is
fixed at FIVE YEARS counting from the day the Lessor moves into
building (J-2). C-1) The building has a mezzanine and its
construction cost is paid by the Lessee. THE LESSOR agrees to
return this amount to THE LESSEE at a depreciated value at the end
of the lease term, value to be based on a 15 year period. C-2) The
Lessor agrees to deliver the building (J-2) on the date stipulated;
any delay will exempt THE LESSEE from paying the rent, on the
building which is currently renting, known as building (P-1) up to
date that it is delivered. d) The Lessor continues to state that
the price of the rent is fixed at US$11,853.06 per month equal to
US$4.9316657 per square meter per month to be deposited on or
before the 5th of every month to the account of ZIP BUENA VISTA,
proof of payment will be the date that appears on the wire transfer
or deposit. A 2% interest per month will be charged if there is a
delay in payment, said interest will not to be charged if the
Lessee proves that the delay is justified and out of his control.
Such rent shall be increased on the fourth and fifth anniversaries
of the day THE LESSEE moves into the first building such increase
will be based on the Consumer Price Index (all urban consumers) for
the Miami, Florida U.S.A. metropolitan area, as published by the
United States Department of Labor (but in-any case not more than
five percent per year). The delay in payment of three consecutive
monthly payments or the failure to comply with any of the clauses
mentioned will grant the Lessor enough grounds to declare the lease
terminated, and AMY INDUSTRIES OF HONDURAS, S.A. DE C.V. will pay
50% of the rent due for the period from the termination date to the
expiration of the five year lease term. f) During the term of this
lease, Lessor agrees to keep and maintain the foundation,
structural supports, roof, gutters and downspouts of the building
in good condition and repair. Lessor also agrees to keep and
maintain all common areas including perimeter lighting, roads and
perimeter fencing in good condition and repair. The Lessor states
that he will provide the Lessee with the installations for water,
sewer system, electric energy and telephone, being the payment of
the last two responsibility of the Lessee. The Lessor will also
provide the following services: 1) 24 hour perimeter security 7
days per week, 2) garbage collection, 3) maintenance of park
grounds, 4) street lighting, 5) customs, 6) potable water and for
industrial use up to 13,200 gallons per day. 7) workforce
recruitment assistance, and other optional services as required. g)
The Lessor is not responsible for any inconvenience, loss or damage
caused to the Lessee or his property as consequence of a
malfunction or any other hazards due to the utility companies. h)
The Lessor continues to state that the insurance of the leased
building will be covered by the Lessor, but that such insurance
will only and exclusively cover the damages suffered to the Lessors
property, being the Lessees responsibility to cover the costs and
damages caused to his property or to third parties. i) The Lessor
also states that none of the parties will be responsible for
damages arising out of acts of war or acts of nature. j) The Lessor
continues to state that both parties can by mutual agreement
terminate this lease without any party being liable to complete the
terms of the lease. In the case of not reaching an agreement to
terminate, the party that does not comply with the lease will be
responsible for reasonable legal costs incurred to enforce the
lease. There of shall be resolved in San Pedro Sula in accordance
with the arbitration of the Chamber of Commerce and Industry of
Cortes with representation of the President of Zip Buena Vista or
his Representative, the President of Amy Industries de Honduras,
S.A. de C.V. or his Representative and the President of The Chamber
of Commerce and Industry of Cortes or his Representative as a first
step towards resolving any dispute. k) The Lessor states that once
the contract has expired the Lessee is compelled to surrender the
leased building on the day of expiration in good condition
acceptable by the LESSOR, functional, broom clean and with the
maintenance required up to date except those which are due to
structural upkeep, defects or common area problems. The Lessee will
be responsible for payment of repairs to correct damages to the
building, installations and other property of the park caused by
the Lessee from abuse or negligence in their use, except those
produced by the normal wear of the building. l) At the expiration
of this Lease, Lessee shall have an option to renew this Lease on
the same terms and conditions set forth herein for a period of five
years from the date of expiration. Lessee may exercise this option
by giving written notice to Lessor at least 180 days prior to the
expiration date of the initial term. The rent to be paid by Lessee
during each of the first three years of the renewal term of five
years shall be the same as the rent paid by Lessee during the fifth
year of the initial lease contract. Such rent shall be increased on
the fourth and fifth anniversary of the renewal date such increase
will be based on the Consumer Price Index (all urban consumers) for
the Miami, Florida U.S.A. metropolitan area, as published by the
United States Department of Labor (but in any case not more than
five percent per year). m) In the case of not reaching an agreement
between the parties to renew, extend or sign a new contract the
Lessee must surrender the leased facilities in compliance with the
conditions states in letter "K" of this document, in the event that
this does not occur, the Lessee will be subject to a fee of
US$1,000.00 for every day he delays the surrendering of the
building. n) Everything contained in this contract will be ruled by
all the applicable provisions contained in the Export Processing
Zone Law, the Civil Code, The Commerce Code, Zip Buena Vista
Internal regulations and other related laws. FOURTH: The Lessee
states that he accepts this in all and each of its parts, and
accordingly commits itself to faithfully comply with the same and
for pertinent legal purpose, we the undersigned, with the power
indicated above, sign this contract in two copies of one and the
same tenor, one for each party. SIGNATURES FOLLOW.
MR. FREDERICK VINCENT KNOX MR. JUAN M. CANAHUATI
PRESIDENT PRESIDENT
AMY INDUSTRIES DE HONDURAS, ZIP BUENA VISTA, S.A.
S.A. DE C.V.
FIRST AMENDMENT TO REVOLVING CREDIT AND TERM LOAN AGREEMENT
THIS AMENDMENT dated as of June 1, 1995 (the "First
Amendment") is to the Credit Agreement dated as of March 16, 1995
(as amended from time to time the "Agreement") among Biscayne
Apparel, Inc.; Biscayne Apparel International, Inc.; Mackintosh of
New England Co., M&L International, Inc.; each of the banks which
is a signatory thereto and The Chase Manhattan Bank (National
Association) as agent.
In connection with the formation of a new subsidiary by
Biscayne Apparel International, Inc., the Borrowers and the Banks
desire to amend certain terms of the Credit Agreement on the terms
and conditions set forth herein.
Except as otherwise provided herein, the capitalized terms
used in this First Amendment shall have the respective meanings
assigned to such terms in the Agreement.
AGREEMENT
In consideration of the foregoing, and the mutual covenants
and agreements hereinafter set forth, the parties hereto hereby
agree as follows:
1. Section 1 of the Agreement is amended by adding the
following definition: ""Amy" means Amy Industries de Honduras,
S.A. de C.V."
2. Schedule I to the Agreement is amended to add Amy as a
Subsidiary as shown on the Addendum to Schedule I attached hereto.
3. Section 10.05. Investments is amended by adding a new
sub-section (f) reading "(f) Biscayne Apparel International, Inc.
may make an investment of up to $500,000 in Amy."
4. The Banks hereby waive the noncompliance by the Borrower
with the provisions of Section 10.07 of the Agreement to the
extent that the transfer of equipment in connection with the start-
up of Amy and the transfer of raw materials and piece goods to Amy
may violate such Section.
5. The execution and delivery of this First Amendment and
the performance of the Agreement as amended by this First Amendment
shall constitute a representation and warranty that the following
statements are true:
(a) the representations and warranties contained in
Article 8 of the Agreement are correct on and as of the date hereof
as though made on and as of the date hereof; and
(b) no Event of Default has occurred and is continuing,
or would result from the taking effect of this First Amendment.
6. Except as provided in this First Amendment and waiver, all
terms and provisions of the Agreement shall continue in full force
and effect. This waiver shall be effective only for the specific
transaction, and for the specific provisions for which given and
the Borrowers must hereafter be in compliance with all provisions
of the Agreement.
7. This First Amendment shall be governed by, and construed
in accordance with, the laws of the State of New York.
8. This Amendment may be executed in two or more
counterparts, each of which shall constitute an original, but all
of which when taken together shall constitute but one agreement.
IN WITNESS WHEREOF, the Borrowers, the Banks and the Agent
have caused this Amendment to be duly executed by their duly
authorized officers, all as of the day and year first above
written.
BISCAYNE APPAREL, INC. BISCAYNE APPAREL INTERNATIONAL, INC
By By
Name: Name:
Title: Title:
MACKINTOSH OF NEW ENGLAND CO. M&L INTERNATIONAL, INC
By By
Name: Name:
Title: Title:
THE CHASE MANHATTAN BANK THE CHASE MANHATTAN BANK
NATIONAL ASSOCIATION NATIONAL ASSOCIATION
(AS AGENT)
By By
Name: Name:
Title: Title:
NATWEST BANK N.A. THE FIRST NATIONAL BANK OF BOSTON
By By
Name: Name:
Title: Title:
CORESTATES BANK, N.A.
By
Name:
Title:
By
Name:
Title:
ADDENDUM TO SCHEDULE I
to
CREDIT AGREEMENT DATED AS OF MARCH 16, 1995
Biscayne Apparel International, Inc. has the following foreign
subsidiary:
Amy Industries de Honduras, S.A. de C.V.
Incorporated: Honduras
[CAPTION]
<TABLE>
<S> <C>
Shareholder Ownership %
Biscayne Apparel International, Inc. 96%
Earl W. Powell 1%
Phillip T. George 1%
Troy D. Templeton 1%
Peter W. Klein 1%
</TABLE>
SECOND AMENDMENT TO REVOLVING CREDIT
AND TERM LOAN AGREEMENT
THIS AMENDMENT dated as of November 1, 1995 (the "Second
Amendment") is to the Credit Agreement dated as of March 16, 1995
(as amended from time to time the "Agreement") among Biscayne
Apparel, Inc.; Biscayne Apparel International, Inc.; Mackintosh of
New England Co., M&L International, Inc.; each of the banks which
is a signatory thereto and The Chase Manhattan Bank (National
Association) as agent.
The Borrowers have notified the Banks that they expect to be
out of compliance with certain covenants and restrictions contained
in the Agreement. The Borrowers have requested and the Banks desire
to grant a waiver of compliance with certain provisions of the
Agreement for the period ending September 30, 1995; to amend the
definition of Permitted Overadvances to create Permitted
Overadvances for October and November 1995; to increase the Direct
Debt sublimit for December 1995; and reduce the minimum borrowing
amount for Variable Rate Loans on the terms and conditions set
forth herein.
Except as otherwise provided herein, the capitalized terms
used in this Second Amendment shall have the respective meanings
assigned to such terms in the Agreement.
AGREEMENT
In consideration of the foregoing, and the mutual covenants
and agreements hereinafter set forth, the parties hereto hereby
agree as follows:
1. The definition of Permitted Overadvance is amended to read
as follows:
"Permitted Overadvance" means, (a) with respect to the
Aggregate Borrowing Base the following amounts during the
following months:
[CAPTION]
<TABLE>
<S> <C>
March $ 2,750,000
April $ 8,250,000
May $12,750,000
June $14,750,000
July $13,250,000
August $ 7,250,000;
</TABLE>
(b) with respect to the Direct Debt Borrowing Base, the following
amounts during the following months:
[CAPTION]
<TABLE>
<S> <C>
April $ 5,500,000
May $14,000,000
June $19,000,000
July $21,750,000
August $17,500,000
September $ 5,500,000
</TABLE>
and (c) with respect to the Direct Debt Borrowing Base, the
following amounts for the following periods only, October 1995
$3,700,000 and November 1995 $700,000."
2. The definition of Direct Debt Borrowing Base is amended to
read as follows:
"Direct Debt Borrowing Base" means, during the period from the
delivery of a Borrowing Base Certificate until the delivery of a
more current Borrowing Base Certificate, an amount equal to the
lesser of (1) the sum of (a) 80% of the difference of (i) Eligible
Accounts, less (ii) the amount of the Borrowers' accounts
receivable reserve maintained and revised monthly in accordance
with GAAP applied consistently with previous periods, plus (b) the
amount of any Permitted Overadvance; or (2) $15,000,000 for the
period from December 1 through and including April 30 of each year
and $45,000,000 for the period from May 1 through and including
November 30 of each year, provided that, for the period from
December 1, 1995 through December 19, 1995 such amount shall be
$30,000,000 and for the period from December 20, 1995 through
December 31, 1995 such amount shall be $25,000,000.
3. Section 2.11 is amended to read as follows:
"Section 2.11. Minimum Amounts. Except for borrowings which
exhaust the full remaining amount of the Commitments, prepayments
of Variable Rate Loans which maybe in a minimum amount of $500,000,
prepayments or conversions which result in the prepayment or
conversion of all Loans of a particular type, or conversions made
pursuant to Section 6.04, each borrowing, prepayment, conversion
and renewal of principal of Loans shall be in an amount at least
equal to $2,000,000 in the aggregate for all Banks for Eurodollar
Loans and $500,000 in the aggregate for Variable Rate Loans and
$1,000,000 in the aggregate for Quoted Rate Loans (borrowings,
prepayments, conversions or renewals of or into Loans of different
types or, in the case of Eurodollar Loans, having different
Interest Periods at the same time hereunder to be deemed separate
borrowings, prepayments, conversions and renewals for the purposes
of the foregoing, one for each type of Interest Period)."
4. The Banks hereby waive the noncompliance by the Borrowers
with the provisions of (a) Section 2.07 of the Agreement to the
extent that they exceeded the Aggregate Borrowing Base and Direct
Debt Borrowing Base for 9/30/95; (b) Section 11.05 for the fiscal
quarter ended 9/30/95 provided that the ratio is not less than .30
to 1.0 for such fiscal quarter end; and (c) Section 11.06 for the
fiscal quarter ended 9/30/95 provided that the ratio is not less
than .43 to 1.0 for such fiscal quarter end.
5. The execution and delivery of this Second Amendment and
the Borrowers' performance of the Agreement as amended by this
Second Amendment shall constitute a representation and warranty of
the Borrowers that the following statements are true:
(a) the representations and warranties contained in
Article 8 of the Agreement are correct on and as of the date hereof
as though made on and as of the date hereof; and
(b) no Event of Default has occurred and is continuing,
or would result from the taking effect of this Second Amendment.
6. Except as provided in this Second Amendment and waiver,
all terms and provisions of the Agreement shall continue in full
force and effect. This waiver shall be effective only for the
specific transaction, and for the specific provisions for which
given and the Borrowers must hereafter be in compliance with all
provisions of the Agreement.
7. This Second Amendment shall be governed by, and construed
in accordance with, the laws of the State of New York.
8. This Amendment may be executed in two or more
counterparts, each of which shall constitute an original, but all
of which when taken together shall constitute but one agreement.
IN WITNESS WHEREOF, the Borrowers, the Banks and the Agent
have caused this Amendment to be duly executed by their duly
authorized officers, all as of the day and year first above
written.
[CAPTION]
<TABLE>
<S> <C>
BISCAYNE APPAREL, INC. BISCAYNE APPAREL INTERNATIONAL,
INC.
By By
Name: Name:
Title: Title:
MACKINTOSH OF NEW ENGLAND CO. M&L INTERNATIONAL, INC.
By By
Name: Name
Title: Title:
THE CHASE MANHATTAN BANK THE CHASE MANHATTAN BANK
NATIONAL ASSOCIATION NATIONAL ASSOCIATION
(AS AGENT)
By By
Name: Name:
Title: Title:
NATWEST BANK N.A. THE FIRST NATIONAL BANK OF
BOSTON
By By
Name: Name:
Title: Title:
CORESTATES BANK, N.A.
By
Name:
Title:
By
Name:
Title:
</TABLE>
EXHIBIT 11
Biscayne Apparel, Inc.
Computation of Per Share Earnings
(Dollars in Thousands, Except
Per Share Amounts)
(Unaudited)
[CAPTION]
<TABLE>
<S> <C>
THREE MONTHS ENDED
SEPTEMBER 30,
1995 1994
Net earnings (loss). . . . . . . $ 1,355 $ 3,077
PRIMARY:
Common and common equivalent
shares:
Weighted average common shares
outstanding . . . . . . . . . 10,732,373 8,953,247
Potential dilution upon
exercise of stock options
and warrants. . . . . . . . . 131,631 445,318
Shares used in computing net
earnings (loss) per common
share. . . . . . . . . . . . . 10,864,004 9,398,565
PER SHARE AMOUNTS:
Net earnings (loss) per share. . $ 0.12 $ 0.33
FULLY DILUTED:
Common and common equivalent
shares:
Weighted average common shares
outstanding. . . . . . . . . . 10,732,373 8,953,247
Potential dilution upon exercise
of stock options and warrants. 131,631 445,318
Shares used in computing net
earnings (loss) per common
share. . . . . . . . . . . . . 10,864,004 9,398,565
PER SHARE AMOUNTS:
Net earnings (loss) per
share . . . . . . . . . . . . . $ 0.12 $ 0.33
(continued)
<S> <C>
NINE MONTHS ENDED
SEPTEMBER 30,
1995 1994
Net earnings (loss). . . . . . . . $ (2,020) $ 1,358
PRIMARY:
Common and common equivalent
shares:
Weighted average common shares
outstanding . . . . . . . . . . 10,730,943 8,953,247
Potential dilution upon
exercise of stock options
and warrants. . . . . . . . . . - 485,580
Shares used in computing net
earnings (loss) per common
share. . . . . . . . . . . . . . 10,730,943 9,438,827
PER SHARE AMOUNTS:
Net earnings (loss) per share. . . $ (0.19) $ 0.14
FULLY DILUTED:
Common and common equivalent
shares:
Weighted average common shares
outstanding. . . . . . . . . . . 10,730,943 8,953,247
Potential dilution upon exercise
of stock options and warrants. . - 485,580
Shares used in computing net earnings
(loss) per common share. . . . . 10,730,943 9,438,827
PER SHARE AMOUNTS:
Net earnings (loss) per share. . . $ (0.19) $ 0.14
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
Financial Statements
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<CASH> 1,830
<SECURITIES> 0
<RECEIVABLES> 30,179
<ALLOWANCES> (2,256)
<INVENTORY> 37,963
<CURRENT-ASSETS> 69,234
<PP&E> 5,305
<DEPRECIATION> (1,822)
<TOTAL-ASSETS> 82,579
<CURRENT-LIABILITIES> 45,896
<BONDS> 0
<COMMON> 107
0
0
<OTHER-SE> 23,818
<TOTAL-LIABILITY-AND-EQUITY> 82,579
<SALES> 70,804
<TOTAL-REVENUES> 70,804
<CGS> 53,009
<TOTAL-COSTS> 53,009
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,425
<INCOME-PRETAX> (2,931)
<INCOME-TAX> (911)
<INCOME-CONTINUING> (2,020)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,020)
<EPS-PRIMARY> (0.19)
<EPS-DILUTED> (0.19)
</TABLE>
