<PAGE> 1
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 quarterly period ended March 31, 1996
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 No. 0-20802
CELEBRITY, INC.
(Exact name of registrant as specified in its charter)
Texas 75-1289223
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Physical Delivery Address:
4520 Old Troup Road
Tyler, Texas 75707
Mailing Address:
P.O. Box 6666
Tyler, Texas 75711
(903) 561-3981
(Address, including zip code, of principal executive
offices and registrant's telephone number, including
area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or 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 registrant had 6,309,602 shares of Common Stock, par value $.01 per share,
outstanding as of May 9, 1996.
<PAGE> 2
PART I - FINANCIAL INFORMATION
<TABLE>
<CAPTION>
ITEM 1. FINANCIAL STATEMENTS Page
----
<S> <C> <C>
Condensed Consolidated Balance Sheets at
March 31, 1996 and June 30, 1995
(Unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Condensed Consolidated Statements of Income
for the three months ended
March 31, 1996 and 1995 (Unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Condensed Consolidated Statements of Income
for the nine months ended March 31, 1996
and 1995 (Unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Condensed Consolidated Statements of Cash
Flows for the nine months ended
March 31, 1996 and 1995 (Unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Notes to Condensed Consolidated Financial
Statements (Unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF
OPERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
</TABLE>
<PAGE> 3
CELEBRITY, INC.
Condensed Consolidated Balance Sheets
(Dollars in thousands)
(Unaudited)
<TABLE>
<CAPTION>
ASSETS March 31, June 30,
1996 1995
---------- ----------
<S> <C> <C>
Current assets:
Cash $ 934 $ 1,921
Accounts receivable, net 14,717 16,247
Inventory 33,295 37,026
Other current assets 4,153 2,607
---------- ----------
Total current assets 53,099 57,801
Property, plant and equipment, net 11,585 10,943
Other assets 5,774 5,897
---------- ----------
Total assets $ 70,458 $ 74,641
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 3,130 $ 7,388
Accrued expenses 4,190 4,052
Current portion of long term debt 1,354 2,682
---------- ----------
Total current liabilities 8,674 14,122
Long term debt 30,381 27,941
---------- ----------
Total liabilities 39,055 42,063
---------- ----------
Redeemable common stock 350 525
Shareholders' equity:
Common stock 63 63
Additional paid-in capital 22,177 22,003
Subscriptions receivable (463) (554)
Retained earnings 9,616 10,714
Treasury stock (350) (175)
Cumulative translation adjustment 10 2
---------- ----------
Total shareholders' equity 31,053 32,053
---------- ----------
Total liabilities, redeemable common stock and
shareholders' equity $ 70,458 $ 74,641
========== ==========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
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<PAGE> 4
CELEBRITY, INC.
Condensed Consolidated Statements of Income
(Dollars in thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Three Months
Ended March 31,
------------------------
1996 1995
---------- ----------
<S> <C> <C>
Net sales $ 21,601 $ 25,761
---------- ----------
Costs and operating expenses:
Cost of sales 16,563 18,629
Selling expenses 1,755 1,091
General and administrative expenses 5,341 4,216
Depreciation and amortization 503 422
---------- ----------
Total expenses 24,162 24,358
---------- ----------
Operating income (loss) (2,561) 1,403
Interest expense, net (807) (539)
Other, net 4 8
---------- ----------
Income (loss) before income taxes (3,364) 872
Provision (benefit) for income taxes (1,139) 77
---------- ----------
Net income (loss) $ (2,225) $ 795
========== ==========
Earnings (loss) per share $ (.35) $ .13
========== ==========
Weighted average common and common
equivalent shares outstanding 6,311 6,332
========== ==========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
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<PAGE> 5
CELEBRITY, INC.
Condensed Consolidated Statements of Income
(Dollars in thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Nine Months
Ended March 31,
------------------------
1996 1995
---------- ----------
<S> <C> <C>
Net sales $ 84,841 $ 86,043
---------- ----------
Costs and operating expenses:
Cost of sales 63,829 65,428
Selling expenses 4,499 3,351
General and administrative expenses 14,539 11,581
Depreciation and amortization 1,460 1,120
---------- ----------
Total expenses 84,327 81,480
---------- ----------
Operating income 514 4,563
Interest expense, net (2,741) (1,187)
Other, net 59 80
---------- ----------
Income (loss) before income taxes (2,168) 3,456
Provision (benefit) for income taxes (1,074) 712
---------- ----------
Net income (loss) $ (1,094) $ 2,744
========== ==========
Earnings (loss) per share $ (.17) $ .43
========== ==========
Weighted average common and common
equivalent shares outstanding 6,311 6,332
========== ==========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
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<PAGE> 6
CELEBRITY, INC.
Condensed Consolidated Statements of Cash Flows
(Dollars in thousands)
(Unaudited)
<TABLE>
<CAPTION>
Nine Months
Ended March 31,
------------------------
1996 1995
---------- ----------
<S> <C> <C>
Operating activities:
Net income (loss) $ (1,094) $ 2,744
Adjustments to reconcile net income to net cash
used in operating activities:
Depreciation and amortization 1,460 1,120
Deferred income taxes 9 (518)
Changes in operating assets and liabilities:
Accounts receivable 1,530 714
Inventory 3,731 (11,051)
Other assets (1,702) (385)
Accounts payable and accrued expenses (4,120) 303
---------- ----------
Net cash used in operating activities (186) (7,073)
---------- ----------
Investing activities:
Additions to property and equipment (1,829) (2,475)
Acquisition of India Exotics (2,500)
---------- ----------
Net cash used in investing activities (1,829) (4,975)
---------- ----------
Financing activities:
Net proceeds (payments) on notes payable (2,026) 1,286
Net proceeds under revolving lines of credit 3,138 10,516
Payment of capital lease obligations (10)
Proceeds from subscriptions receivable 91 93
Redemption of common stock (175) (175)
---------- ----------
Net cash provided by financing activities 1,028 11,710
---------- ----------
Decrease in cash (987) (338)
Cash at beginning of period 1,921 2,435
---------- ----------
Cash at end of period $ 934 $ 2,097
========== ==========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
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<PAGE> 7
CELEBRITY, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. THE BUSINESS AND BASIS OF PRESENTATION
Description of Business
Celebrity, Inc. ("Celebrity" or the "Company") is a supplier of
high-quality artificial flowers, foliage, flowering bushes, brass products and
other decorative accessories to craft store chains and other specialty
retailers and to wholesale florists throughout North America and Europe.
Celebrity imports and/or produces over 7,000 home accent, decorative accessory
and giftware items, including artificial floral arrangements, floor planters
and trees, a wide range of decorative brass and textile products, and a broad
line of seasonal items such as Christmas trees, wreaths, garlands and other
ornamental products.
Basis of Presentation
The condensed consolidated financial statements include the accounts of
Celebrity and its wholly-owned subsidiaries, Celebrity Exports International
Limited ("Celebrity Hong Kong"), The Cluett Corporation ("Cluett"), India
Exotics, Inc. ("India Exotics"), Magicsilk, Inc. ("Magicsilk") and Star
Wholesale Florist, Inc. All intercompany accounts and transactions have been
eliminated.
The accompanying condensed consolidated financial statements are
unaudited and in the opinion of management, reflect all adjustments that are
necessary for a fair presentation of the financial position and results of
operations for the periods presented. All such adjustments are of a normal and
recurring nature. The results of operations for the periods presented are not
necessarily indicative of the results to be expected for the entire year. The
condensed consolidated financial statements should be read in conjunction with
the financial statement disclosures contained in the Company's Annual Report on
Form 10-K for the fiscal year ended June 30, 1995.
2. INVENTORY
The composition of inventories at March 31, 1996, and June 30, 1995 is
as follows:
<TABLE>
<CAPTION>
March 31, June 30,
1996 1995
-------- --------
<S> <C> <C>
Raw materials $ 8,408 $ 8,145
Finished goods 24,887 28,881
-------- --------
$ 33,295 $ 37,026
======== ========
</TABLE>
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<PAGE> 8
3. REDEEMABLE COMMON STOCK
In September 1995 the Company repurchased 13,461 shares of its common
stock for an aggregate consideration of $175,000. The repurchase was pursuant
to certain put options issued in connection with the Magicsilk acquisition.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
FACTORS THAT MAY AFFECT FUTURE RESULTS
With the exception of historical information, the matters discussed in
this report are forward looking statements about the business, financial
condition and prospects of Celebrity. The actual results of the Company could
differ materially from those indicated by the forward looking statements
because of various risks and uncertainties, including without limitation
international economic conditions, interest and foreign exchange fluctuations,
changes in product demand, competitive products and pricing, the availability
of products, various inventory risks due to changes in market conditions,
dependence on manufacturers' regulatory and trade environment and other risks
indicated in the Company's filings with the Securities and Exchange Commission.
These risks and uncertainties are beyond the Company's control, and in many
cases the Company cannot predict the risks and uncertainties that could cause
its actual results to differ materially from those indicated by the forward
looking statements.
GENERAL
On February 7, 1995, the Company acquired the business and assets of
India Exotics, expanding the Company into the decorative brass and textile
markets. Management expects the acquisition to benefit the Company because it
further diversifies its product offerings. Additionally, management believes
the complementary product lines will provide the Company a greater presence in
the decorative accessories marketplace, thereby affording it the opportunity to
increase its share of a more broadly defined market.
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<PAGE> 9
RESULTS OF OPERATIONS
The following table sets forth certain items in the consolidated
statements of income of Celebrity expressed as a percentage of net sales for
the periods indicated:
<TABLE>
<CAPTION>
THREE MONTHS NINE MONTHS
ENDED ENDED
MARCH 31, MARCH 31,
--------------- ---------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net sales 100% 100% 100% 100%
---- ---- ---- ----
Costs and operating expenses:
Cost of sales 77% 72% 75% 76%
Selling expenses 8% 4% 5% 4%
General and administrative expenses 25% 16% 17% 14%
Depreciation and amortization 2% 2% 2% 1%
---- ---- ---- ----
Total expenses 112% 94% 99% 95%
---- ---- ---- ----
Operating income (loss) (12)% 6% 1% 5%
Interest expense, net (4)% (2)% (3)% (1)%
---- ---- ---- ----
Income (loss) before income taxes (16)% 4% (2)% 4%
Income tax provision (benefit) (6)% 1% (1)% 1%
---- ---- ---- ----
Net income (loss) (10)% 3% (1)% 3%
==== ==== ==== ====
</TABLE>
THREE MONTHS ENDED MARCH 31, 1996, COMPARED WITH THREE MONTHS ENDED MARCH 31,
1995
Net sales decreased 16% from $25.8 million in fiscal 1995 to $21.7
million in fiscal 1996. The decrease was primarily attributable to a decrease
in sales to existing customers.
Cost of sales decreased 11% from $18.6 million in fiscal 1995 to $16.7
million in fiscal 1996. Cost of sales increased as a percentage of net sales
from 72% in fiscal 1995 to 77% in fiscal 1996. The decrease in gross margin
was primarily attributable to the sales mix being more heavily weighted toward
lower margin trees for Cluett and commodity brass items for India Exotics.
Selling expenses increased from $1.1 million in fiscal 1995 to $1.8
million in fiscal 1996. The increase was primarily attributable to selling
expenses incurred by India Exotics, and higher salaries, showroom, catalog and
trade show costs. Selling expenses increased as a percentage of net sales from
4% in fiscal 1995 to 8% in fiscal 1996, primarily as a result of the lower
sales volume and the fact that direct shipment sales represented a lower
percentage of net sales in fiscal 1996 than in fiscal 1995. Direct shipment
sales are those for which products are shipped directly from Celebrity Hong
Kong to the customers and generally consist of large orders with lower gross
profit margins but also lower selling, general and administrative costs.
-8-
<PAGE> 10
General and administrative expenses increased from $4.2 million, or
16% of net sales, in fiscal 1995 to $5.3 million, or 25% of net sales, in
fiscal 1996. The increase was primarily attributable to general and
administrative expenses incurred by India Exotics and expansion of floral
arrangement production facilities in Tyler, Texas and Encinitas, California,
resulting in increases in compensation, facility costs and other expenses.
General and administrative expenses increased as a percentage of net sales due
to the lower sales volume and the fact that direct shipment sales represented a
lower percentage of net sales in fiscal 1996 than in fiscal 1995.
Depreciation and amortization expense increased from $422,000 in
fiscal 1995 to $503,000 in fiscal 1996, primarily as a result of (i)
depreciation and amortization incurred by India Exotics and (ii) additional
building and equipment depreciation associated with the expansion of floral
arrangement production facilities in Tyler, Texas and Encinitas, California.
NINE MONTHS ENDED MARCH 31, 1996, COMPARED WITH NINE MONTHS ENDED MARCH 31,
1995
Net sales decreased 1% from $86.0 million in fiscal 1995 to $84.8
million in fiscal 1996. The decrease was primarily attributable to a decrease
in sales to existing customers, which was partially offset by sales of India
Exotics.
Cost of sales decreased from $65.4 million, or 76% of net sales, in
fiscal 1995 to $63.8 million, or 75% of net sales, in fiscal 1996. The
increase in gross margin was primarily attributable to a change in product mix
and the fact that direct shipment sales represented a lower percentage of net
sales in fiscal 1996 than in fiscal 1995. Direct shipment sales are those for
which products are shipped directly from Celebrity Hong Kong to the customers
and generally consist of large orders with lower gross margins but also lower
selling, general and administrative costs.
Selling expenses increased 34% from $3.4 million in fiscal 1995 to
$4.5 million in fiscal 1996. The increase was primarily attributable to
selling expenses incurred by India Exotics. Selling expenses increased as a
percentage of net sales from 4% in fiscal 1995 to 5% in fiscal 1996 primarily
as a result of the lower sales volume and the fact that direct shipment sales
represented a lower percentage of net sales in fiscal 1996 than in fiscal 1995.
General and administrative expenses increased from $11.6 million, or
13% of net sales, in fiscal 1995 to $14.5 million, or 17% of net sales, in
fiscal 1996. The increase was attributable to (i) general and administrative
expenses incurred by India Exotics, (ii) expansion of floral arrangement
production facilities in Tyler, Texas and Encinitas, California, resulting in
increases in compensation, facility costs and other expenses and (iii) the fact
that direct shipment sales represented a lower percentage of net sales in
fiscal 1996 than in fiscal 1995.
Depreciation and amortization increased 30% from $1.1 million in
fiscal 1995 to $1.5 million in fiscal 1996. The increase was primarily a
result of (i) depreciation and amortization incurred by India Exotics and (ii)
building and equipment depreciation associated with the expansion of floral
arrangement production facilities in Tyler, Texas and Encinitas, California.
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<PAGE> 11
INFLATION
The effect of inflation on operating costs has been minimal in recent
years. Most of the Company's operating expenses are inflation sensitive, with
increases in inflation generally resulting in increased costs of operation.
The effect of inflation-driven cost increases on the Company's overall
operating costs is not expected to be greater for the Company than its
competitors.
SEASONALITY
Celebrity markets and distributes products for all seasons. The
shipping period for each season is relatively long. When combined with
shipments of basic merchandise that is sold year round, there has not been
material seasonal or quarterly fluctuation in net sales or operating income.
LIQUIDITY AND CAPITAL RESOURCES
Celebrity's sales and marketing strategy and the growth of its
business have required significantly increased investment in inventory.
Additionally, the Company follows the industry practice of offering extended
terms to qualified customers for sales of Christmas merchandise. These sales
generally take place between the months of June and October on terms not
requiring payment until December 1. The Company has traditionally relied on
borrowings under its credit facilities and cash flows from operations to fund
these and other working capital needs.
The Company has a revolving credit facility in a maximum amount of
$35.0 million. At March 31, 1996, the aggregate amount outstanding under this
facility was approximately $25.2 million. Borrowing limits under the facility
are based on specified percentages of eligible accounts receivable and
inventories. Based on such limits, the maximum amount the Company would have
been eligible to borrow at March 31, 1996, was $26.4 million. Interest is
charged monthly on the daily outstanding balance at the lender's prime rate of
interest plus 1/2%. Interest on a maximum of $7.0 million of the amount
borrowed may be fixed at LIBOR + 2% for periods ranging from 30 days to one
year. Amounts borrowed under the facility are secured by inventory and trade
accounts receivable of Celebrity and its wholly-owned subsidiaries, Magicsilk,
Cluett and India Exotics, and by guarantees by Magicsilk, Cluett and India
Exotics. The credit facility expires in March 1998.
For products ordered for Celebrity's account or for direct shipment to
customers, Celebrity Hong Kong generally pays in full in cash within ten days
after the manufacturers deliver products in Hong Kong for export. The Company
believes that its practice of making prompt payments has enhanced its
relationships with manufacturers. Celebrity Hong Kong finances these cash
payments through two separate credit facilities with a Hong Kong bank.
Generally, under the terms of these facilities the bank finances, with
recourse, export bills for specific shipments by Celebrity Hong Kong. The bank
is reimbursed when these shipments are delivered to Celebrity in the U.S. or to
Celebrity's customers, or within a short time thereafter.
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<PAGE> 12
Under the terms of the facilities, the maximum aggregate amount of Celebrity
Hong Kong export bills the bank is obligated to finance at any time is $2.6
million.
The Company is in the process of completing approximately $1.0 million
in capital expenditures in fiscal 1996, $500,000 for distribution center
racking and other equipment and $500,000 for upgrading its management
information system.
In September 1995 the Company repurchased 13,461 shares of its common
stock ("Common Stock") for an aggregate consideration of $175,000. The
repurchase was pursuant to certain put options issued in connection with the
Magicsilk acquisition. The holders of such put options have the right to put
additional shares of Common Stock to the Company in September 1996 and 1997, at
$13 per share, with the Company's purchase obligation limited to $175,000 in
each year. The Company does not currently plan to repurchase additional shares
of Common Stock other than those it is required to purchase under such put
options.
The Company's business is subject to U.S. law relating to imports,
including those imposing import duties. If the U.S. government were to
terminate most favored nation treatment for the People's Republic of China (the
"PRC") or impose punitive tariff rates on products imported by the Company in
response to market access barriers in the PRC, the duty on products imported by
the Company from the PRC would increase significantly. If the Company were to
face an increase in tariff rates on the products it imports into the U.S., it
would (i) attempt to increase the prices charged to its customers, (ii) request
that its suppliers reduce the prices charged to the Company and (iii) seek to
identify more favorable sources; however, unless and until these efforts were
successful, the Company's results of operations could be affected adversely.
The Company believes its credit facilities and cash flows from
operations will be adequate to fund its operations and expansion plans for the
foreseeable future. There can be no assurances, however, that these sources
will be sufficient to fund its operations and expansion plans or that any
necessary additional financing will be available, if at all, in amounts
required or on terms satisfactory to the Company.
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<PAGE> 13
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits:
2.1 Asset Purchase Agreement dated as of June 16, 1992, among
Registrant, Holdingflower, Inc., a Delaware corporation,
Magicsilk, Inc., a Delaware corporation, and Magicsilk, Inc.,
a Texas corporation. (1)
2.2 Asset Purchase Agreement dated February 7, 1995, among India
Exotics, Inc., a Texas corporation, Registrant, India Exotics,
Inc., a Missouri corporation, Surendra Khokha, Rajneesh
Khokha, Asheesh Khokha and the Surendra K. Khokha Revocable
Trust, dated July 18, 1985. (7)
3.1 Restated Articles of Incorporation of the Registrant. (1)
3.2 Bylaws of the Registrant. (1)
4.1 Specimen Common Stock Certificate. (1)
4.2 Warrant Agreement dated as of June 16, 1992, between the
Registrant and Magicsilk, Inc. (1)
10.1 Loan Agreement dated March 21, 1994, among Registrant and
NationsBank of Texas, N.A. (3)
10.2 Amendment to Loan Agreement dated December 21, 1994, between
Registrant and NationsBank of Texas, N.A. (7)
10.3 Second Amendment to Loan Agreement dated March 20, 1995,
between Registrant and NationsBank of Texas, N.A. (8)
10.4 Third Amendment to Loan Agreement dated February 9, 1996,
between Registrant and NationsBank of Texas, N.A. (12)
10.5 Modification of Note and Deed of Trust dated December 21,
1994, between Registrant and NationsBank of Texas, N.A. (7)
10.6 Modification of Promissory Note and Deed of Trust dated March
20, 1995, between Registrant and NationsBank of Texas, N.A.
(8)
10.7 Guaranty dated March 21, 1994, executed by The Cluett
Corporation in favor of NationsBank of Texas, N.A. (3)
10.8 Guaranty dated March 21, 1994, executed by Magicsilk, Inc. in
favor of NationsBank of Texas, N.A. (3)
10.9 Guaranty dated March 21, 1994, executed by Star Wholesale
Florist, Inc. in favor of NationsBank of Texas, N.A. (3)
10.10 Guaranty dated February 7, 1995, executed by India Exotics,
Inc. in favor of NationsBank of Texas, N.A. (8)
10.11 Modification and Amendment of Note and Restatement of Deed of
Trust (Tract A) dated March 21, 1994, executed by Registrant
and NationsBank of Texas, N.A. (3)
10.12 Transfer of Lien dated March 21, 1994, executed by Tyler Bank
and Trust, N.A. in favor of NationsBank of Texas, N.A. (3)
10.13 $2,290,409.98 Promissory Note dated March 21, 1994, signed by
Registrant and payable to the order of NationsBank of Texas,
N.A. (3)
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<PAGE> 14
10.14 Commercial Loans Deed of Trust, Assignment, Security Agreement
and Financing Statement (Future Advances) dated March 21,
1994, executed by Registrant in favor of Michael F. Hord,
Trustee for the benefit of NationsBank of Texas, N.A. (3)
10.15 $1,800,000 Promissory Note (Winston-Salem, N.C.) dated March
21, 1994, signed by Registrant and payable to NationsBank of
Texas, N.A. (3)
10.16 Commercial Loans Deed of Trust, Assignment, Security Agreement
and Financing Statement (Future Advances) dated March 20,
1994, executed by Registrant in favor of NationsBank of Texas,
N.A. (3)
10.17 Loan Agreement dated May 10, 1993, among Registrant,
Magicsilk, Inc. and National Canada Finance Corp. (4)
10.18 First Amendment to Loan Agreement dated July 27, 1993, among
Registrant, Magicsilk, Inc. and National Canada Finance Corp.
(5)
10.19 Second Amendment to Loan Agreement dated effective as of
November 17, 1993, among Registrant, Magicsilk, Inc., The
Cluett Corporation and National Canada Finance Corp. (6)
10.20 Third Amendment to Loan Agreement dated effective as of March
18, 1994, among Registrant, Magicsilk, Inc., The Cluett
Corporation and National Canada Finance Corp. (3)
10.21 Fourth Amendment to Loan Agreement dated effective as of
November 4, 1994, among Registrant, Magicsilk, Inc., The
Cluett Corporation and National Canada Finance Corp. (7)
10.22 Fifth Amendment to Loan Agreement dated effective as of
February 3, 1995, among Registrant, Magicsilk, Inc., The
Cluett Corporation, India Exotics, Inc. and National Canada
Finance Corp. (7)
10.23 Sixth Amendment to Loan Agreement dated effective as of March
14, 1995, among Registrant, Magicsilk, Inc., The Cluett
Corporation, India Exotics, Inc. and National Canada Finance
Corp. (8)
10.24 Seventh Amendment to Loan Agreement dated effective as of
August 4, 1995, among Registrant, Magicsilk, Inc., The Cluett
Corporation, India Exotics, Inc. and National Canada Finance
Corp. (10)
10.25 Promissory Note dated August 4, 1995, executed by Registrant,
Magicsilk, Inc., The Cluett Corporation and India Exotics,
Inc. in the principal amount of $35,000,000 payable to the
order of National Canada Finance Corp. (10)
10.26 Security Agreement dated May 10, 1993, among Registrant,
Magicsilk, Inc. and National Canada Finance Corp. (5)
10.27 Security Agreement dated November 17, 1993, between The Cluett
Corporation and National Canada Finance Corp. (6)
10.28 Security Agreement dated February 3, 1995, between India
Exotics, Inc. and National Canada Finance Corp. (7)
10.29 Subordination Agreement dated July 14, 1992, among National
Canada Finance Corp., TBK Partners, L.P., ML-Lee Acquisition
Fund, L.P., The Bank of New York Commercial Corporation,
Registrant and Magicsilk, Inc. (1)
10.30 Letter agreement dated August 16, 1995, setting forth the
terms of a banking facility between Celebrity Exports
International Limited and The Hongkong and Shanghai Banking
Corporation Limited. (11)
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<PAGE> 15
10.31 General Security Agreement Relating to Goods between Celebrity
Exports International Limited and The Hongkong and Shanghai
Banking Corporation Limited dated April 30, 1984. (1)
10.32 Form of Guarantee by Limited Company executed by Registrant in
favor of the Hongkong and Shanghai Banking Corporation
Limited. (11)
10.33 Commitment of Celebrity Exports International Limited to
maintain a net worth of HK$30,000,000. (11)
10.34 Employment Agreement dated November 17, 1993, between The
Cluett Corporation and Robert C. Welles, Jr. (2)
10.35 Employment Agreement dated November 17, 1993, between The
Cluett Corporation and Raymond J. Trottier. (2)
10.36 Employment Agreement dated November 17, 1993, between The
Cluett Corporation and James N. Gammill, III. (2)
10.37 Employment Agreement dated February 7, 1995, between India
Exotics, Inc. and Surendra Khokha. (7)
10.38 Employment Agreement dated February 7, 1995, between India
Exotics, Inc. and Meena Khokha. (7)
10.39 Noncompetition Agreement dated November 17, 1993, between
Registrant and Robert C. Welles, Jr. (2)
10.40 Noncompetition Agreement dated November 17, 1993, between
Registrant and Raymond J. Trottier. (2)
10.41 Noncompetition Agreement dated November 17, 1993, between
Registrant and James N. Gammill, III. (2)
10.42 Noncompetition Agreement dated February 7, 1995, among India
Exotics, Inc., Surendra Khokha, Rajneesh Khokha, Asheesh
Khokha and Meena Khokha. (7)
10.43 Promissory Note of India Exotics, Inc., a Texas corporation,
guaranteed by Registrant, dated February 7, 1995, in the
original principal amount of $2,000,000 payable to the order
of India Exotics, Inc., a Missouri corporation. (7)
10.44 Promissory Note of India Exotics, Inc., a Missouri
corporation, guaranteed by Registrant, dated February 7, 1995,
in the principal amount of $1,800,000 payable to the order of
Surendra Khokha and his successors, trustees of the Surendra
K. Khokha Revocable Trust, dated July 18, 1985. (7)
10.45 Form of Indemnity Agreement. (1)
10.46 Amended and Restated 1992 Stock Option Plan. (3)
10.47 Amended and Restated 1993 Employee Stock Purchase Plan. (7)
10.48 1996 Employee Bonus Plan. (10)
21.1 Subsidiaries of Registrant. (10)
27.1 Financial Data Schedule. (12)
(b) Reports on Form 8-K:
-14-
<PAGE> 16
None.
- ---------------
(1) Previously filed as an exhibit to Registration Statement No. 33-51820
on Form S-1 and incorporated herein by reference.
(2) Previously filed as an exhibit to the Registrant's Current Report on
Form 8-K dated November 17, 1993, as amended, and incorporated herein
by reference.
(3) Previously filed as an exhibit to the Registrant's Quarterly Report on
Form 10-Q for the quarter ended March 31, 1994, and incorporated
herein by reference.
(4) Previously filed as an exhibit to the Registrant's Quarterly Report on
Form 10-Q for the quarterly period ended March 31, 1993, as amended,
and incorporated herein by reference.
(5) Previously filed as an exhibit to the Registrant's Annual Report on
Form 10-K for the fiscal year ended June 30, 1993, as amended, and
incorporated herein by reference.
(6) Previously filed as an exhibit to the Registrant's Quarterly Report on
Form 10-Q for the quarter ended December 31, 1993, and incorporated
herein by reference.
(7) Previously filed as an exhibit to the Registrant's Quarterly Report on
Form 10-Q for the quarter ended December 31, 1994, and incorporated
herein by reference.
(8) Previously filed as an exhibit to the Registrant's Quarterly Report on
Form 10-Q for the quarter ended March 31, 1995, and incorporated
herein by reference.
(9) Previously filed as an exhibit to the Registrant's Annual Report on
Form 10-K for the fiscal year ended June 30, 1994, and incorporated
herein by reference.
(10) Previously filed as an exhibit to the Registrant's Annual Report on
Form 10-K for the fiscal year ended June 30, 1995.
(11) Previously filed as an exhibit to the Registrant's Annual Report on
Form 10-Q for the quarter ended September 30, 1995, and incorporated
herein by reference.
(12) Filed herewith.
-15-
<PAGE> 17
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.
CELEBRITY, INC.
Dated: May 14, 1996 By /s/ Robert H. Patterson, Jr.
-----------------------------------
Robert H. Patterson, Jr.
Chief Executive Officer
Dated: May 14, 1996 By /s/ James R. Thompson
-----------------------------------
James R. Thompson
Vice President - Finance
-16-
<PAGE> 18
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibit Page
- ------ ---------------------- ----
<S> <C>
2.1 Asset Purchase Agreement dated as of June 16, 1992, among Registrant, Holdingflower,
Inc., a Delaware corporation, Magicsilk, Inc., a Delaware corporation, and
Magicsilk, Inc., a Texas corporation. (1)
2.2 Asset Purchase Agreement dated February 7, 1995, among India Exotics, Inc., a Texas
corporation, Registrant, India Exotics, Inc., a Missouri corporation, Surendra
Khokha, Rajneesh Khokha, Asheesh Khokha and the Surendra K. Khokha Revocable Trust,
dated July 18, 1985. (7)
3.1 Restated Articles of Incorporation of the Registrant. (1)
3.2 Bylaws of the Registrant. (1)
4.1 Specimen Common Stock Certificate. (1)
4.2 Warrant Agreement dated as of June 16, 1992, between the Registrant and Magicsilk,
Inc. (1)
10.1 Loan Agreement dated March 21, 1994, among Registrant and NationsBank of Texas, N.A.
(3)
10.2 Amendment to Loan Agreement dated December 21, 1994, between Registrant and
NationsBank of Texas, N.A. (7)
10.3 Second Amendment to Loan Agreement dated March 20, 1995, between Registrant and
NationsBank of Texas, N.A. (8)
10.4 Third Amendment to Loan Agreement dated February 9, 1996, between Registrant and
NationsBank of Texas, N.A. (12)
10.5 Modification of Note and Deed of Trust dated December 21, 1994, between Registrant
and NationsBank of Texas, N.A. (7)
10.6 Modification of Promissory Note and Deed of Trust dated March 20, 1995, between
Registrant and NationsBank of Texas, N.A. (8)
10.7 Guaranty dated March 21, 1994, executed by The Cluett Corporation in favor of
NationsBank of Texas, N.A. (3)
10.8 Guaranty dated March 21, 1994, executed by Magicsilk, Inc. in favor of NationsBank
of Texas, N.A. (3)
10.9 Guaranty dated March 21, 1994, executed by Star Wholesale Florist, Inc. in favor of
NationsBank of Texas, N.A. (3)
10.10 Guaranty dated February 7, 1995, executed by India Exotics, Inc. in favor of
NationsBank of Texas, N.A. (8)
10.11 Modification and Amendment of Note and Restatement of Deed of Trust (Tract A) dated
March 21, 1994, executed by Registrant and NationsBank of Texas, N.A. (3)
</TABLE>
<PAGE> 19
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibit Page
- ------ ---------------------- ----
<S> <C>
10.12 Transfer of Lien dated March 21, 1994, executed by Tyler Bank and Trust, N.A. in
favor of NationsBank of Texas, N.A. (3)
10.13 $2,290,409.98 Promissory Note dated March 21, 1994, signed by Registrant and payable
to the order of NationsBank of Texas, N.A. (3)
10.14 Commercial Loans Deed of Trust, Assignment, Security Agreement and Financing
Statement (Future Advances) dated March 21, 1994, executed by Registrant in favor of
Michael F. Hord, Trustee for the benefit of NationsBank of Texas, N.A. (3)
10.15 $1,800,000 Promissory Note (Winston-Salem, N.C.) dated March 21, 1994, signed by
Registrant and payable to NationsBank of Texas, N.A. (3)
10.16 Commercial Loans Deed of Trust, Assignment, Security Agreement and Financing
Statement (Future Advances) dated March 20, 1994, executed by Registrant in favor of
NationsBank of Texas, N.A. (3)
10.17 Loan Agreement dated May 10, 1993, among Registrant, Magicsilk, Inc. and National
Canada Finance Corp. (4)
10.18 First Amendment to Loan Agreement dated July 27, 1993, among Registrant, Magicsilk,
Inc. and National Canada Finance Corp. (5)
10.19 Second Amendment to Loan Agreement dated effective as of November 17, 1993, among
Registrant, Magicsilk, Inc., The Cluett Corporation and National Canada Finance
Corp. (6)
10.20 Third Amendment to Loan Agreement dated effective as of March 18, 1994, among
Registrant, Magicsilk, Inc., The Cluett Corporation and National Canada Finance
Corp. (3)
10.21 Fourth Amendment to Loan Agreement dated effective as of November 4, 1994, among
Registrant, Magicsilk, Inc., The Cluett Corporation and National Canada Finance
Corp. (7)
10.22 Fifth Amendment to Loan Agreement dated effective as of February 3, 1995, among
Registrant, Magicsilk, Inc., The Cluett Corporation, India Exotics, Inc. and
National Canada Finance Corp. (7)
10.23 Sixth Amendment to Loan Agreement dated effective as of March 14, 1995, among
Registrant, Magicsilk, Inc., The Cluett Corporation, India Exotics, Inc. and
National Canada Finance Corp. (8)
10.24 Seventh Amendment to Loan Agreement dated effective as of August 4, 1995, among
Registrant, Magicsilk, Inc., The Cluett Corporation, India Exotics, Inc. and
National Canada Finance Corp. (10)
10.25 Promissory Note dated August 4, 1995, executed by Registrant, Magicsilk, Inc., The
Cluett Corporation and India Exotics, Inc. in the principal amount of $35,000,000
payable to the order of National Canada Finance Corp. (10)
10.26 Security Agreement dated May 10, 1993, among Registrant, Magicsilk, Inc. and
National Canada Finance Corp. (5)
</TABLE>
<PAGE> 20
<TABLE>
<S> <C>
10.27 Security Agreement dated November 17, 1993, between The Cluett Corporation and
National Canada Finance Corp. (6)
10.28 Security Agreement dated February 3, 1995, between India Exotics, Inc. and National
Canada Finance Corp. (7)
10.29 Subordination Agreement dated July 14, 1992, among National Canada Finance Corp.,
TBK Partners, L.P., ML-Lee Acquisition Fund, L.P., The Bank of New York Commercial
Corporation, Registrant and Magicsilk, Inc. (1)
10.30 Letter agreement dated August 16, 1995, setting forth the terms as a banking
facility between Celebrity Exports International Limited and The Hongkong and
Shanghai Banking Corporation Limited. (11)
10.31 General Security Agreement Relating to Goods between Celebrity Exports International
Limited and The Hongkong and Shanghai Banking Corporation Limited dated April 30,
1984. (1)
10.32 Form of Guarantee by Limited Company executed by Registrant in favor of the Hongkong
and Shanghai Banking Corporation Limited. (11)
10.33 Commitment of Celebrity Exports International Limited to maintain a net worth of
HK$30,000,000. (11)
10.34 Employment Agreement dated November 17, 1993, between The Cluett Corporation and
Robert C. Welles, Jr. (2)
10.35 Employment Agreement dated November 17, 1993, between The Cluett Corporation and
Raymond J. Trottier. (2)
10.36 Employment Agreement dated November 17, 1993, between The Cluett Corporation and
James N. Gammill, III. (2)
10.37 Employment Agreement dated February 7, 1995, between India Exotics, Inc. and
Surendra Khokha. (7)
10.38 Employment Agreement dated February 7, 1995, between India Exotics, Inc. and Meena
Khokha. (7)
10.39 Noncompetition Agreement dated November 17, 1993, between Registrant and Robert C.
Welles, Jr. (2)
10.40 Noncompetition Agreement dated November 17, 1993, between Registrant and Raymond J.
Trottier. (2)
10.41 Noncompetition Agreement dated November 17, 1993, between Registrant and James N.
Gammill, III. (2)
10.42 Noncompetition Agreement dated February 7, 1995, among India Exotics, Inc., Surendra
Khokha, Rajneesh Khokha, Asheesh Khokha and Meena Khokha. (7)
10.43 Promissory Note of India Exotics, Inc., a Texas corporation, guaranteed by
Registrant,
</TABLE>
<PAGE> 21
<TABLE>
<S> <C>
dated February 7, 1995, in the original principal amount of $2,000,000
payable to the order of India Exotics, Inc., a Missouri corporation. (7)
10.44 Promissory Note of India Exotics, Inc., a Missouri corporation, guaranteed by
Registrant, dated February 7, 1995, in the principal amount of $1,800,000
payable to the order of Surendra Khokha and his successors, trustees of
the Surendra K. Khokha Revocable Trust, dated July 18, 1985. (7)
10.45 Form of Indemnity Agreement. (1)
10.46 Amended and Restated 1992 Stock Option Plan. (3)
10.47 Amended and Restated 1993 Employee Stock Purchase Plan. (7)
10.48 1996 Employee Bonus Plan. (10)
21.1 Subsidiaries of Registrant. (10)
27.1 Financial Data Schedule. (12)
</TABLE>
(b) Reports on Form 8-K:
None.
- ---------------
(1) Previously filed as an exhibit to Registration Statement No. 33-51820
on Form S-1 and incorporated herein by reference.
(2) Previously filed as an exhibit to the Registrant's Current Report on
Form 8-K dated November 17, 1993, as amended, and incorporated herein
by reference.
(3) Previously filed as an exhibit to the Registrant's Quarterly Report on
Form 10-Q for the quarter ended March 31, 1994, and incorporated
herein by reference.
(4) Previously filed as an exhibit to the Registrant's Quarterly Report on
Form 10-Q for the quarterly period ended March 31, 1993, as amended,
and incorporated herein by reference.
(5) Previously filed as an exhibit to the Registrant's Annual Report on
Form 10-K for the fiscal year ended June 30, 1993, as amended, and
incorporated herein by reference.
(6) Previously filed as an exhibit to the Registrant's Quarterly Report on
Form 10-Q for the quarter ended December 31, 1993, and incorporated
herein by reference.
(7) Previously filed as an exhibit to the Registrant's Quarterly Report on
Form 10-Q for the quarter ended December 31, 1994, and incorporated
herein by reference.
(8) Previously filed as an exhibit to the Registrant's Quarterly Report on
Form 10-Q for the quarter ended March 31, 1995, and incorporated
herein by reference.
(9) Previously filed as an exhibit to the Registrant's Annual Report on
Form 10-K for the fiscal year ended June 30, 1994, and incorporated
herein by reference.
(10) Previously filed as an exhibit to the Registrant's Annual Report on
Form 10-K for the fiscal year ended June 30, 1995.
(11) Previously filed as an exhibit to the Registrant's Annual Report on
Form 10-Q for the quarter ended September 30, 1995, and incorporated
herein by reference.
(12) Filed herewith.
<PAGE> 1
EXHIBIT 10.4
THIRD AMENDMENT TO LOAN AGREEMENT
THIS THIRD AMENDMENT TO LOAN AGREEMENT (the "Amendment") is entered into
between CELEBRITY, INC., a Texas corporation ("Borrower") and NATIONSBANK OF
TEXAS, N.A., a national association ("Lender") as of February 9, 1996.
RECITALS
A. Borrower is indebted to Lender in the aggregate original principal
amount of $5,800,000.00, pursuant to a Loan Agreement between Borrower and
Lender dated March 21, 1994, as amended by Amendment to Loan Agreement dated
December 21, 1994, and as further amended by Second Amendment to Loan Agreement
dated March 20, 1995 (collectively, the "Loan Agreement"). By instrument dated
December 21, 1994, the principal Indebtedness was increased by an additional
advance of $300,000. The indebtedness is evidenced by two certain Promissory
Notes, each dated March 21, 1994, from Borrower to the order of Lender, and one
Promissory Note dated April 23, 1993, and endorsed to the order of Lender on
March 21, 1994, as amended (the "Indebtedness"), which Indebtedness is secured
by, among other collateral, a certain Modification and Amendment of Note and
Restatement of Deed of Trust, and two certain Commercial Loans Deeds of Trust,
Assignments, Security Agreements and Financing Statements (all three being
collectively called the "Deeds of Trust") encumbering the Land described
therein.
B. Borrower now desire to borrow, and Lender is willing to lend, an
additional sum with which to acquire the land described in Exhibit A attached
hereto ("Tract D"), such additional advance to be evidenced by a promissory note
in the original principal amount of Four Hundred Fifty-Five Thousand Five
Hundred Fifty and No/100 Dollars ($455,550.00) (the "Tract D Note") secured by,
among other collateral, a Commercial Loans Deed of Trust, Assignment, Security
Agreement and Financing Statement (the "Tract D Deed of Trust") and in
connection therewith to modify the Loan Agreement to evidence the additional
advance by Lender and to more fully reflect the terms of the Loan as modified by
the Tract D Note and Tract D Deed of Trust.
NOW, THEREFORE, in consideration of the premises herein contained, and
other good and valuable consideration, the receipt and sufficiency of which are
herby acknowledged, Borrower and Lender agree as follows:
AGREEMENT
SECTION 1. DEFINITIONS. All capitalized terms not otherwise defined
herein shall have the meanings given them in the Loan Agreement.
SECTION 2. TRACT D LOAN. Lender shall lend the funds provided in the Tract
D Note (the "Tract D Loan").
1
<PAGE> 2
SECTION 3. REPRESENTATIONS. The representations set forth in Section 8 of
the Loan Agreement are incorporated herein by this reference, as if set out
verbatim. Borrower expressly represents that each such representation was true
and correct on the date of the Loan Agreement, and is true and correct on the
date hereof.
SECTION 4. PURPOSE OF LOAN. Paragraph 2 of the Loan Agreement is hereby
amended by inserting, at the conclusion thereof, the following: "The purpose of
the Tract D Loan is to finance the purchase of Tract D. Borrower covenants and
agrees that the proceeds of the Tract D Loan will be used solely for such
purpose and for no other without Lender's prior written consent."
SECTION 5. OTHER REPRESENTATIONS AND WARRANTIES.
a. There are no Defaults under the Loan and no event which, with
notice or passage of time or both, may become a Default.
b. There are no claims or offsets against, or defenses or
counterclaims to, the terms or provisions of the Note and the other
instruments referenced in the Loan Agreement.
SECTION 6. SECURITY. Paragraph 7 of the Loan Agreement is hereby amended
by inserting at the conclusion thereof, the following: "It is further agreed
that Tracts B, C and D are each Collateral for those portions of the Loan
identified by the Tract B Loan, Tract C Loan and Tract D Loan, but are not
Collateral for the Tract A Loan. The Tract D Deed of Trust shall also be a
third and subordinate lien against Tract A, and a second and subordinate lien
against Tract B, and shall also be filed for record as such subordinate liens,
without title insurance and without merger of title."
SECTION 7. CONDITIONS. Borrower shall pay all of Lender's costs and
expenses in connection with the Tract D Loan. Borrower shall deliver an opinion
of counsel reasonably acceptable to Lender.
SECTION 8. NOTICES. The address for copies of notice to Lender is hereby
amended by deleting the work "Rohde," so that the firm name is "True & Sewell."
The address for copies of notice to Borrower is hereby amended by deleting
"Kimberlee Rozman" and inserting: "Joan Sostek."
SECTION 9. APPLICABLE LAW. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES HEREUNDER SHALL BE GOVERNED AND INTERPRETED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF TEXAS, EXCEPT AS MAY BE SPECIFICALLY PROVIDED TO THE
CONTRARY IN THE TRACT C DEED OF TRUST.
SECTION 10. THIS AMENDMENT AND THE DOCUMENTS EXECUTED CONTEMPORANEOUSLY
HEREWITH REPRESENT THE FINAL AGREEMENT
2
<PAGE> 3
BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
SECTION 11. Except as modified herein and in the Tract D Note and Tract D
Deed of Trust, the Loan Documents shall remain in full force and effect, and
are hereby ratified in all respects.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the date first written above.
BORROWER: LENDER:
CELEBRITY, INC., NATIONSBANK OF TEXAS, N.A.,
a Texas corporation a national association
By: /s/ JAMES R. THOMPSON By: /s/ PAM CUNNINGHAM
------------------------ ------------------------
James R. Thompson Pam Cunningham
Vice President-Finance Vice President
The undersigned hereby join in the foregoing Amendment to evidence their
consent and agreement to the terms and provisions of same, to the terms and
provisions of the Tract D Note and the Tract D Deed of Trust, to the increase
in the Guaranteed Indebtedness, and to the securing of the Tract D Loan by the
liens and encumbrances described in the Loan Agreement as amended. The
undersigned covenant and agree to be bound by all of the provisions of the Loan
Agreement, as amended thereby.
THE CLUETT CORPORATION STAR WHOLESALE FLORIST, INC.
By: /s/ JAMES R. THOMPSON By: /s/ JAMES R. THOMPSON
----------------------------- -------------------------
James R. Thompson James R. Thompson
Vice President-Finance Vice President-Finance
MAGICSILK, INC. INDIA EXOTICS, INC.
By: /s/ JAMES R. THOMPSON By: /s/ JAMES R. THOMPSON
----------------------------- -------------------------
James R. Thompson James R. Thompson
Vice President-Finance Vice President-Finance
3
<PAGE> 4
EXHIBIT "A"
(TRACT D)
TRACT ONE:
All that certain tract or parcel of land situated in the William Keys Survey,
Abstract 526, Smith County, Texas, being out of and a part of that certain
called 19.705 acre tract described in a Warranty Deed with Vendor's Lien from
Ethel Lee Green to M.L. Hayes et ux et al, dated January 8, 1970, and recorded
in Volume 1324, Page 606 of the Deed Records of Smith County, Texas, and being
more particularly described by metes and bounds as follows:
BEGINNING at a 1/2" iron rod found for the northeast corner of said 19.705 acre
tract, same being the southeast corner of Lot 1, New City Block 1557, Celebrity
Industrial Park, according to the plat thereof recorded in Cabinet 'C', Slide
10-C of the Plat Records of Smith County;
THENCE, South 00 degrees 40'00" East, with the east line of said 19.705 acre
tract, a distance of 483.22 feet to a 1/2" iron rod set for the southeast
corner of same;
THENCE, South 84 degrees 18'06" West, with the south line of said 19.705 acre
tract, a distance of 1,515.93 feet to a 1/2" iron rod set for the southwest
corner of the herein described tract;
THENCE, North 18 degrees 12'42" West, a distance of 392.52 feet to a 1/2" iron
rod set for the northwest corner of the herein described tract, same being in
the north line of said 19.705 acre tract, same being the south line of said
Celebrity Industrial Park;
THENCE, North 80 degrees 53'00" East, with the north line of said 19.705 acre
tract, same being the south line of said Celebrity Industrial Park (and the
bearing basis of this survey as related to the record bearing), a distance of
1,646.29 feet to the POINT OF BEGINNING and containing 15.700 acres of land.
TRACT TWO:
EASEMENT TRACT
30 foot easement described in Right of Way Deed dated August 24, 1978, by and
between M.L. Hayes, A.H. Hayes and Billy R. Thompson, recorded in Volume 1701,
Page 520 of the Land Records of Smith County, Texas.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-END> MAR-31-1996
<CASH> 934
<SECURITIES> 0
<RECEIVABLES> 14,717
<ALLOWANCES> 1,765
<INVENTORY> 33,295
<CURRENT-ASSETS> 53,099
<PP&E> 11,585
<DEPRECIATION> 3,638
<TOTAL-ASSETS> 70,458
<CURRENT-LIABILITIES> 8,674
<BONDS> 0
<COMMON> 63
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 70,458
<SALES> 84,841
<TOTAL-REVENUES> 84,841
<CGS> 63,829
<TOTAL-COSTS> 20,498
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 473
<INTEREST-EXPENSE> 2,741
<INCOME-PRETAX> (2,168)
<INCOME-TAX> (1,074)
<INCOME-CONTINUING> (1,074)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,094)
<EPS-PRIMARY> (.17)
<EPS-DILUTED> (.17)
</TABLE>
