<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 December 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 (I.R.S. Employer
of incorporation or Identification
organization) 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 February 10, 1997.
<PAGE> 2
PART I - FINANCIAL INFORMATION
<TABLE>
<CAPTION>
ITEM 1. FINANCIAL STATEMENTS Page
----
<S> <C> <C>
Condensed Consolidated Balance Sheets at
December 31, 1996 and June 30, 1996
(Unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . 2
Condensed Consolidated Statements of Income
for the three months ended
December 31, 1996 and 1995 (Unaudited) . . . . . . . . . . . . 3
Condensed Consolidated Statements of Income
for the six months ended
December 31, 1996 and 1995 (Unaudited) . . . . . . . . . . . . 4
Condensed Consolidated Statements of Cash
Flows for the six months ended
December 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 4. SUBMISSION OF MATTERS TO A VOTE OF
SECURITY HOLDERS . . . . . . . . . . . . . . . . . . . . . . 13
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K . . . . . . . . . . . . . . . . . . . . . 14
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
</TABLE>
<PAGE> 3
PART I - FINANCIAL INFORMATION
CELEBRITY, INC.
Condensed Consolidated Balance Sheets
(Dollars in thousands)
(Unaudited)
<TABLE>
<CAPTION>
ASSETS December 31, June 30,
1996 1996
--------------- ----------
<S> <C> <C>
Current assets:
Cash $ 326 $ 1,166
Accounts receivable, net 17,127 14,919
Inventories 30,446 33,279
Other current assets 5,876 5,191
------------ ----------
Total current assets 53,775 54,555
Property, plant and equipment, net 11,389 11,774
Other assets 6,601 7,034
------------ ----------
Total assets $ 71,765 $ 73,363
============ ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 7,908 $ 8,662
Accrued expenses 5,139 4,134
Current portion of notes payable 1,484 2,420
------------ ----------
Total current liabilities 14,531 15,216
Notes payable, net of current portion 29,256 31,081
------------ ----------
Total liabilities 43,787 46,297
------------ ----------
Redeemable common stock 175 350
Shareholders' equity:
Common stock 63 63
Paid-in capital 22,353 22,178
Subscriptions receivable (452) (461)
Retained earnings 6,378 5,292
Treasury stock (525) (350)
Cumulative translation adjustment (14) (6)
------------ ----------
Total shareholders' equity 27,803 26,716
------------ ----------
Total liabilities, redeemable common stock and
shareholder's equity $ 71,765 $ 73,363
============ ==========
</TABLE>
See accompanying notes to Condensed Consolidated Financial Statements.
-2-
<PAGE> 4
CELEBRITY, INC.
Condensed Consolidated Statements of Income
(Dollars in thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Three Months
Ended December 31,
------------------------------------------
1996 1995
--------------- --------------
<S> <C> <C>
Net sales $ 34,652 $ 27,307
--------------- --------------
Costs and operating expenses:
Cost of goods sold 26,650 20,260
Selling 1,459 1,078
General and administrative 4,345 4,583
Depreciation and amortization 587 496
--------------- --------------
33,041 26,417
--------------- --------------
Operating income 1,611 890
Interest expense, net (917) (1,012)
Other, net 13 49
--------------- --------------
Income (loss) before income taxes 707 (73)
Provision (benefit) for income taxes 106 (191)
--------------- --------------
Net income $ 601 $ 118
=============== ==============
Earnings per share $ .10 $ .02
=============== ==============
Weighted average common and common
equivalent shares outstanding 6,310 6,326
=============== ==============
</TABLE>
See accompanying notes to Condensed Consolidated Financial Statements.
-3-
<PAGE> 5
CELEBRITY, INC.
Condensed Consolidated Statements of Income
(Dollars in thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Six Months
Ended December 31,
----------------------------------
1996 1995
--------- ---------
<S> <C> <C>
Net sales $ 66,099 $ 63,240
--------- ---------
Costs and operating expenses:
Cost of goods sold 49,834 47,266
Selling 2,870 2,744
General and administrative 9,337 9,198
Depreciation and amortization 1,183 957
--------- ---------
63,224 60,165
--------- ---------
Operating income 2,875 3,075
Interest expense, net (1,768) (1,934)
Other, net 18 55
--------- ---------
Income before income taxes 1,125 1,196
Provision for income taxes 39 65
--------- ---------
Net income $ 1,086 $ 1,131
========= =========
Earnings per share $ .17 $ .18
========= =========
Weighted average common and common
equivalent shares outstanding 6,310 6,374
========= =========
</TABLE>
See accompanying notes to Condensed Consolidated Financial Statements.
-4-
<PAGE> 6
CELEBRITY, INC.
Condensed Consolidated Statements of Cash Flows
(Dollars in thousands)
(Unaudited)
<TABLE>
<CAPTION>
Six Months
Ended December 31,
-------------------------------
1996 1995
---------- ----------
<S> <C> <C>
Operating activities:
Net income $ 1,086 $ 1,131
Adjustments to reconcile net income to net cash
provided by (used in) operations:
Depreciation and amortization 1,183 957
Deferred income taxes (291) (99)
Changes in operating assets and liabilities:
Accounts receivable (2,208) (2,483)
Inventory 2,833 (883)
Other current assets (46) 141
Accounts payable and accrued expenses 82 (2,941)
---------- ----------
Net cash provided by (used in) operating
activities 2,639 (4,177)
---------- ----------
Investing activities:
Additions to property and equipment (553) (945)
---------- -----------
Net cash used in investing activities (553) (945)
---------- ----------
Financing activities:
Payments on notes payable (1,623) (1,922)
Net proceeds (payments) under lines of (1,138) 5,945
credit
Proceeds on subscriptions receivable 10 87
Redemption of common stock (175) (175)
---------- ----------
Net cash provided by (used in) financing
activities (2,926) 3,935
---------- ----------
Decrease in cash (840) (1,187)
Cash and cash equivalents, beginning of period 1,166 1,921
---------- ----------
Cash and cash equivalents, end of period $ 326 $ 734
========== ==========
</TABLE>
See accompanying notes to Condensed Consolidated Financial Statements.
-5-
<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, and other decorative
accessories to craft store chains and other retailers and to wholesale florists
throughout North America and Europe. Celebrity imports and/or produces
approximately 9,000 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 of 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, 1996.
2. INVENTORY
<TABLE>
<CAPTION>
The composition of inventories at December 31, 1996, and June 30, 1996 is as follows:
December 31, June 30,
1996 1996
------------------ ------------------
<S> <C> <C>
Raw materials $ 7,509 $ 6,165
Finished goods 22,937 27,114
------------------ ------------------
$ 30,446 $ 33,279
================== ==================
</TABLE>
-6-
<PAGE> 8
3. REDEEMABLE COMMON STOCK
In October 1996 the Company repurchased 13,461 shares of Celebrity
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 on one
more occasion in September 1997 to put additional shares, with the Company's
total remaining purchase obligation limited to $175,000.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
CAUTIONARY STATEMENT REGARDING RISKS AND UNCERTAINTIES THAT MAY AFFECT FUTURE
RESULTS
This Quarterly Report on Form 10-Q contains forward-looking statements
about the business, financial condition and prospects of Celebrity. The actual
results of Celebrity could differ materially from those indicated by the
forward-looking statements because of various risks and uncertainties,
including without limitation (i) changes in customer demand for the Company's
products at the retail level, (ii) trends in the retail and wholesale
decorative accessories industries, (iii) inventory risks attributable to
possible changes in customer demand, compounded by extended lead times in
ordering the Company's products from overseas suppliers and the Company's
strategy of maintaining a high merchandise in stock percentage, (iv) the
effects of economic conditions, (v) supply and/or shipment constraints or
difficulties, (vi) the impact of competitors' pricing, (vii) the effects of the
Company's accounting policies, (viii) changes in foreign trade regulations,
including changes in duty rates, possible trade sanctions, import quotas and
other restrictions imposed by U.S. and foreign governments and (ix) other risks
detailed in the Company's Securities and Exchange Commission filings. These
risks and uncertainties are beyond the ability of the Company to 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. When used herein, the words "believes", "expects",
"plans" and similar expressions as they relate to the Company or its management
generally are intended to identify forward-looking statements.
-7-
<PAGE> 9
RESULTS OF OPERATIONS
The following table sets forth certain items in the condensed
consolidated statements of income of Celebrity expressed as a percentage of net
sales for the periods indicated:
<TABLE>
<CAPTION>
THREE MONTHS SIX MONTHS
ENDED ENDED
DECEMBER 31, DECEMBER 31,
--------------------------- ----------------------------
1996 1995 1996 1995
----------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
Net sales 100% 100% 100% 100%
--- --- --- ---
Costs and operating expenses:
Cost of goods sold 77% 74% 75% 75%
Selling expenses 4% 4% 4% 4%
General and administrative
expenses 13% 17% 14% 15%
Depreciation and amortization 2% 2% 2% 1%
--- --- --- ---
Total expenses 96% 97% 95% 95%
--- --- --- ---
Operating income 4% 3% 5% 5%
Interest expense, net (2)% (4)% (3)% (3)%
--- --- --- ---
Income (loss) before income taxes 2% (1)% 2% 2%
Income tax provision (benefit) 0% (1)% 0% 0%
--- --- --- ---
Net income 2% 0% 2% 2%
=== === === ===
</TABLE>
THREE MONTHS ENDED DECEMBER 31, 1996, COMPARED WITH THREE MONTHS ENDED DECEMBER
31, 1995
Net sales increased 27% from $27.3 million in fiscal 1996 to $34.7
million in fiscal 1997. The increase was primarily attributable to an increase
in sales to existing customers.
Cost of goods sold increased from $20.3 million in fiscal 1996 to
$26.7 million in fiscal 1997. The increase was primarily attributable to the
higher sales volume in fiscal 1997. Cost of goods sold increased as a
percentage of net sales from 74% in fiscal 1996 to 77% in fiscal 1997. The
decrease in gross margin was primarily attributable to sales of merchandise at
reduced margins in conjunction with the Company's inventory reduction program
and the fact that direct shipment sales represented a higher percentage of net
sales in fiscal 1997 than in fiscal 1996. Direct shipment sales are those for
which products are shipped directly from
-8-
<PAGE> 10
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. The Company expects gross margins to remain at levels that are lower
than those reported for comparable quarters last fiscal year due to the
continuance of the inventory reduction program, which the Company believes will
be substantially complete by the end of the third quarter of fiscal 1997, and
the fact that direct shipment sales are expected to account for a higher
percentage of net sales in fiscal 1997 than in fiscal 1996. However,
management expects the decrease in gross margin to be partially offset by
higher sales volume.
Selling expenses increased from $1.1 million in fiscal 1996 to $1.5
million in fiscal 1997. The increase was attributable to the higher sales
volume, which resulted in higher salaries, commissions and travel costs.
Selling expenses as a percentage of net sales remained unchanged at 4% in both
fiscal 1997 and fiscal 1996.
General and administrative expenses decreased from $4.6 million, or
17% of net sales, in fiscal 1996 to $4.3 million, or 13% of net sales, in
fiscal 1997. The decrease was attributable to the fact that direct shipment
sales represented a higher percentage of net sales in fiscal 1997 than in
fiscal 1996. General and administrative expenses decreased as a percentage of
net sales as a result of (i) the fact that direct shipment sales represented a
higher percentage of net sales in fiscal 1997 than in fiscal 1996 and (ii)
lower facility costs, including rent, utilities and labor, resulting from lower
average inventory levels carried by the Company during fiscal 1997 due to the
higher sales volume and the Company's inventory reduction program.
Depreciation and amortization expense increased from $496,000 in
fiscal 1996 to $587,000 in fiscal 1997, primarily as a result of (i) additional
building and equipment depreciation associated with the expansion of floral
arrangement production facilities in Tyler, Texas and Encinitas, California and
(ii) depreciation associated with a new computer system placed in service
during fiscal 1996.
SIX MONTHS ENDED DECEMBER 31, 1996, COMPARED WITH SIX MONTHS ENDED DECEMBER 31,
1995
Net sales increased 5% from $63.2 million in fiscal 1996 to $66.1
million in fiscal 1997. The increase was primarily attributable to an increase
in sales to existing customers.
Cost of goods sold increased from $47.3 million in fiscal 1996 to
$49.8 million in fiscal 1997. The increase was attributable to the higher
sales volume in fiscal 1997. Cost of goods sold as a percentage of net sales
remained unchanged at 75% in both fiscal 1996 and 1997. Direct shipment sales
represented a higher percentage of net sales in fiscal 1997 than in fiscal
1996. The decline in gross margin that typically occurs with this change in
sales mix was partially offset by sales of higher margin plan-o-gram items that
the Company did not have last year.
-9-
<PAGE> 11
Selling expenses increased from $2.7 million in fiscal 1996 to $2.9
million in fiscal 1997. The increase was attributable to the higher sales
volume in fiscal 1997. Selling expenses as a percentage of net sales remained
unchanged at 4% in both fiscal 1996 and fiscal 1997.
General and administrative expenses increased from $9.2 million, or
15% of net sales, in fiscal 1996 to $9.3 million, or 14% of net sales, in
fiscal 1997. The increase was primarily attributable to the higher sales
volume in fiscal 1997. General and administrative expenses decreased as
percentage of net sales due to (i) the fact that direct shipment sales
represented a higher percentage of net sales in fiscal 1997 than in fiscal 1996
and (ii) lower facility costs, including rent, utilities, labor and insurance
resulting from lower average inventory carried by the Company during fiscal
1997 due to the higher sales volume and the Company's inventory reduction
program.
Depreciation and amortization increased from $1.0 million in fiscal
1996 to $1.2 million in fiscal 1997 primarily as a result of (i) additional
building and equipment depreciation associated with the expansion of floral
arrangement production facilities in Tyler, Texas and Encinitas, California and
(ii) depreciation associated with a new computer system placed in service
during fiscal 1996. Depreciation and amortization will continue to increase as
the Company proceeds with its program of updating its management information
systems.
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 for 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 all year, 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 a significantly increased investment in inventory. At
the end of fiscal 1996, however, the Company adopted a strategy to reduce
inventories, which were then $33.3 million. Inventories have since declined
approximately $2.8 million to $30.4 million at December 31, 1996.
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
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<PAGE> 12
has traditionally relied on borrowings under its revolving line of credit and
cash flows from operations to fund these and other working capital needs.
The Company has a revolving line of credit in a maximum amount of
$35.0 million. At December 31, 1996, the outstanding balance on this line of
credit was approximately $24.6 million. Borrowing limits 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 December 31, 1996 was $24.8 million. Interest is charged monthly on
the daily outstanding balance at the bank'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 line of credit are secured by accounts receivable and inventory of
Celebrity and its wholly-owned subsidiaries, Magicsilk, Cluett and India
Exotics, and by guarantees by Magicsilk, Cluett and India Exotics. The line of
credit expires in March 1998.
Celebrity Hong Kong generally makes full cash payments for products
ordered for Celebrity's account or for direct shipment to customers 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 a credit facility with a Hong Kong bank. Generally, under the
terms of this facility the bank finances, with recourse, export bills for
specific shipments by Celebrity Hong Kong. The bank is reimbursed when payment
for these shipments is received. Under the terms of the facility, the maximum
aggregate amount of Celebrity Hong Kong export bills the bank is obligated to
finance at any time is $5.8 million. At December 31, 1996, export bills of
Celebrity Hong Kong aggregating $5.7 million were being financed by the bank.
All of these bills were related to direct shipments to customers and Celebrity
Hong Kong's related potential recourse liability was accounted for as a
contingent obligation.
The Company utilizes its existing management information systems to
monitor the turnover and rate of sale of inventory. Additionally, its credit
department carefully monitors the credit status of each customer.
The Company plans approximately $750,000 in capital expenditures in
fiscal 1997, primarily in connection with the Company's continuing program to
upgrade its management information systems.
In October 1996, the Company repurchased 13,461 shares of Common Stock
for an aggregate consideration of $175,000. This repurchase was pursuant to
certain put options issued in connection with the Magicsilk acquisition. The
holders of such put options have the right on one more occasion in September
1997 to put additional shares, with the Company's total remaining purchase
obligation limited to $175,000. 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.
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<PAGE> 13
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
retaliation for 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) ask its suppliers to 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 that its current financial position, credit
facilities and cash flows from operations will be adequate to fund its
operations and expansion plans for the foreseeable future. There is no
assurance, 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> 14
PART II - OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company held its annual meeting of shareholders on December 2,
1996. The following are the results of certain matters voted upon at the
meeting:
(a) With respect to the election of directors whose terms expired in 1996,
shares were voted as follows:
<TABLE>
<CAPTION>
Robert H. Richard B.D. C.A. Valerie Anne
Patterson, Jr. Yuen Hunter Langner Mars
-------------- --------- --------- --------- ------------
<S> <C> <C> <C> <C> <C>
For 5,727,778 5,727,828 5,710,128 5,710,128 5,723,028
Withheld 10,995 10,945 28,645 28,645 15,745
--------- --------- --------- --------- ---------
Total 5,738,773 5,738,773 5,738,773 5,738,773 5,738,773
========= ========= ========= ========= =========
</TABLE>
(b) With respect to the ratification of the selection of Price Waterhouse
LLP as the Company's independent auditors for the Company's 1997
fiscal year, shares were voted as follows:
<TABLE>
<CAPTION>
<S> <C>
For . . . . . . . . . . . . . . . . . . . . . . . . 5,704,063
Against . . . . . . . . . . . . . . . . . . . . . . 4,900
Abstentions . . . . . . . . . . . . . . . . . . . . 29,810
---------
Total . . . . . . . . . . . . . . . . . . . . . 5,738,773
=========
</TABLE>
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<PAGE> 15
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
<TABLE>
<S> <C>
(a) Exhibits:
2.1 Asset Purchase Agreement dated 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. (6)
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 June 16, 1992, between the Registrant and Magicsilk, Inc. (1)
10.1 Loan Agreement dated March 21, 1994, between Registrant and NationsBank of Texas, N.A. (2)
10.2 Amendment to Loan Agreement dated December 21, 1994, between Registrant and NationsBank of Texas, N.A.
(6)
10.3 Second Amendment to Loan Agreement dated March 20, 1995, between Registrant and NationsBank of Texas,
N.A. (7)
10.4 Third Amendment to Loan Agreement dated February 9, 1996, between Registrant and NationsBank of Texas,
N.A. (11)
10.5 Fourth Amendment and Modification Agreement dated May 15, 1996, between Registrant and NationsBank of
Texas, N.A. (13)
10.6 Fifth Amendment and Modification Agreement dated September 30, 1996, between Registrant and NationsBank
of Texas, N.A. (13)
10.7 Modification of Note and Deed of Trust dated December 21, 1994, between Registrant and NationsBank of
Texas, N.A. (6)
10.8 Modification of Promissory Note and Deed of Trust dated March 20, 1995, between Registrant and
NationsBank of Texas, N.A. (7)
10.9 Guaranty dated March 21, 1994, executed by The Cluett Corporation in favor of NationsBank of Texas,
N.A. (2)
10.10 Guaranty dated March 21, 1994, executed by Magicsilk, Inc. in favor of NationsBank of Texas, N.A. (2)
10.11 Guaranty dated March 21, 1994, executed by Star Wholesale Florist, Inc. in favor of NationsBank of
Texas, N.A. (2)
</TABLE>
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<PAGE> 16
<TABLE>
<S> <C>
10.12 Guaranty dated February 7, 1995, executed by India Exotics, Inc. in favor of NationsBank of Texas, N.A.
(7)
10.13 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. (2)
10.14 Transfer of Lien dated March 21, 1994, executed by Tyler Bank and Trust, N.A. in favor of NationsBank
of Texas, N.A. (2)
10.15 $2,290,409.98 Promissory Note dated March 21, 1994, signed by Registrant and payable to the order of
NationsBank of Texas, N.A. (2)
10.16 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. (2)
10.17 $1,800,000 Promissory Note (Winston-Salem, N.C.) dated March 21, 1994, signed by Registrant and payable
to the order of NationsBank of Texas, N.A. (2)
10.18 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. (2)
10.19 Loan Agreement dated May 10, 1993, among Registrant, Magicsilk, Inc. and National Canada Finance Corp.
(3)
10.20 First Amendment to Loan Agreement dated July 27, 1993, among Registrant, Magicsilk, Inc. and National
Canada Finance Corp. (4)
10.21 Second Amendment to Loan Agreement dated effective as of November 17, 1993, among Registrant,
Magicsilk, Inc., The Cluett Corporation and National Canada Finance Corp. (5)
10.22 Third Amendment to Loan Agreement dated effective as of March 18, 1994, among Registrant, Magicsilk,
Inc., The Cluett Corporation and National Canada Finance Corp. (2)
10.23 Fourth Amendment to Loan Agreement dated effective as of November 4, 1994, among Registrant, Magicsilk,
Inc., The Cluett Corporation and National Canada Finance Corp. (6)
10.24 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. (6)
10.25 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. (7)
10.26 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. (9)
10.27 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. (9)
10.28 Security Agreement dated May 10, 1993, among Registrant, Magicsilk, Inc. and National Canada Finance
Corp. (4)
</TABLE>
-15-
<PAGE> 17
<TABLE>
<S> <C>
10.29 Security Agreement dated November 17, 1993, between The Cluett Corporation and National Canada Finance
Corp. (5)
10.30 Security Agreement dated February 3, 1995, between India Exotics, Inc. and National Canada Finance
Corp. (6)
10.31 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)
10.32 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. (10)
10.33 General Security Agreement Relating to Goods, dated April 30, 1984, between Celebrity Exports
International Limited and The Hongkong and Shanghai Banking Corporation Limited. (1)
10.34 Form of Guarantee by Limited Company executed by Registrant in favor of the Hongkong and Shanghai
Banking Corporation Limited. (10)
10.35 Commitment of Celebrity Exports International Limited to maintain a net worth of HK$30,000,000. (10)
10.36 Employment Agreement dated February 7, 1995, between India Exotics, Inc. and Surendra Khokha. (6)
10.37 Letter Agreement dated June 20, 1996, amending the Employment Agreement dated February 7, 1995, between
India Exotics, Inc. and Surendra Khokha. (12)
10.38 Employment Agreement dated February 7, 1995, between India Exotics, Inc. and Meena Khokha. (6)
10.39 Letter Agreement dated June 20, 1996, amending the Employment Agreement dated February 7, 1995, between
India Exotics, Inc. and Meena Khokha. (12)
10.40 Noncompetition Agreement dated February 7, 1995, among India Exotics, Inc., Surendra Khokha, Rajneesh
Khokha, Asheesh Khokha and Meena Khokha. (6)
10.41 Promissory Note of India Exotics, Inc., a Texas corporation, guaranteed by Registrant, dated February
7, 1995, payable to the order of India Exotics, Inc., a Missouri corporation. (6)
10.42 First Amendment to Promissory Note dated June 20, 1996, amending the Promissory Note of India Exotics,
Inc., a Texas corporation, guaranteed by Registrant, dated February 7, 1995, payable to the order of
India Exotics, Inc., a Missouri corporation. (12)
10.43 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. (6)
10.44 Form of Indemnity Agreement. (1)
10.45 Amended and Restated 1992 Stock Option Plan. (2)
10.46 Amended and Restated 1993 Employee Stock Purchase Plan. (6)
</TABLE>
-16-
<PAGE> 18
<TABLE>
<S> <C>
10.47 1997 Employee Bonus Plan. (12)
27.1 Financial Data Schedule. (14)
(b) Reports on Form 8-K:
None.
</TABLE>
_____________________
(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 Quarterly Report
on Form 10-Q for the quarter ended March 31, 1994, 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, 1993, as amended, and
incorporated herein by reference.
(4) 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.
(5) 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.
(6) 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.
(7) 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.
(8) 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.
(9) Previously filed as an exhibit to the Registrant's Annual Report on
Form 10-K for the fiscal year ended June 30, 1995, and incorporated
herein by reference.
(10) 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.
(11) Previously filed as an exhibit to the Registrants's Quarterly Report
on Form 10-Q for the quarter ended March 31, 1996, and incorporated
herein by reference.
(12) Previously filed as an exhibit to the Registrant's Annual Report
on Form 10-K for the fiscal year ended June 30, 1996, and incorporated
herein by reference.
(13) Previously filed as an exhibit to the Registrant's Quarterly Report
on Form 10-Q for the quarter ended September 30, 1996, and
incorporated herein by reference.
(14) Filed herewith.
-17-
<PAGE> 19
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: February 14, 1997 By /s/ Robert H. Patterson, Jr.
-----------------------------------
Robert H. Patterson, Jr.,
Chief Executive Officer
Dated: February 14, 1997 By /s/ James R. Thompson
-----------------------------------
James R. Thompson, Vice
President -- Finance
-18-
<PAGE> 20
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibit Page
- ------ ---------------------- ----
<S> <C>
2.1 Asset Purchase Agreement dated 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. (6)
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 June 16, 1992, between the Registrant and Magicsilk, Inc.
(1)
10.1 Loan Agreement dated March 21, 1994, between Registrant and NationsBank of Texas,
N.A. (2)
10.2 Amendment to Loan Agreement dated December 21, 1994, between Registrant and
NationsBank of Texas, N.A. (6)
10.3 Second Amendment to Loan Agreement dated March 20, 1995, between Registrant and
NationsBank of Texas, N.A. (7)
10.4 Third Amendment to Loan Agreement dated February 9, 1996, between Registrant and
NationsBank of Texas, N.A. (11)
10.5 Fourth Amendment and Modification Agreement dated May 15, 1996, between Registrant
and NationsBank of Texas, N.A. (13)
10.6 Fifth Amendment and Modification Agreement dated September 30, 1996, between
Registrant and NationsBank of Texas, N.A. (13)
10.7 Modification of Note and Deed of Trust dated December 21, 1994, between Registrant
and NationsBank of Texas, N.A. (6)
10.8 Modification of Promissory Note and Deed of Trust dated March 20, 1995, between
Registrant and NationsBank of Texas, N.A. (7)
10.9 Guaranty dated March 21, 1994, executed by The Cluett Corporation in favor of
NationsBank of Texas, N.A. (2)
10.10 Guaranty dated March 21, 1994, executed by Magicsilk, Inc. in favor of NationsBank
of Texas, N.A. (2)
10.11 Guaranty dated March 21, 1994, executed by Star Wholesale Florist, Inc. in favor of
NationsBank of Texas, N.A. (2)
</TABLE>
<PAGE> 21
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibit Page
- ------ ---------------------- ----
<S> <C>
10.12 Guaranty dated February 7, 1995, executed by India Exotics, Inc. in favor of
NationsBank of Texas, N.A. (7)
10.13 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. (2)
10.14 Transfer of Lien dated March 21, 1994, executed by Tyler Bank and Trust, N.A. in
favor of NationsBank of Texas, N.A. (2)
10.15 $2,290,409.98 Promissory Note dated March 21, 1994, signed by Registrant and payable
to the order of NationsBank of Texas, N.A. (2)
10.16 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. (2)
10.17 $1,800,000 Promissory Note (Winston-Salem, N.C.) dated March 21, 1994, signed by
Registrant and payable to the order of NationsBank of Texas, N.A. (2)
10.18 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. (2)
10.19 Loan Agreement dated May 10, 1993, among Registrant, Magicsilk, Inc. and National
Canada Finance Corp. (3)
10.20 First Amendment to Loan Agreement dated July 27, 1993, among Registrant, Magicsilk,
Inc. and National Canada Finance Corp. (4)
10.21 Second Amendment to Loan Agreement dated effective as of November 17, 1993, among
Registrant, Magicsilk, Inc., The Cluett Corporation and National Canada Finance
Corp. (5)
10.22 Third Amendment to Loan Agreement dated effective as of March 18, 1994, among
Registrant, Magicsilk, Inc., The Cluett Corporation and National Canada Finance
Corp. (2)
10.23 Fourth Amendment to Loan Agreement dated effective as of November 4, 1994, among
Registrant, Magicsilk, Inc., The Cluett Corporation and National Canada Finance
Corp. (6)
10.24 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. (6)
10.25 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. (7)
</TABLE>
<PAGE> 22
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibit Page
- ------ ---------------------- ----
<S> <C>
10.26 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. (9)
10.27 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. (9)
10.28 Security Agreement dated May 10, 1993, among Registrant, Magicsilk, Inc. and
National Canada Finance Corp. (4)
10.29 Security Agreement dated November 17, 1993, between The Cluett Corporation and
National Canada Finance Corp. (5)
10.30 Security Agreement dated February 3, 1995, between India Exotics, Inc. and National
Canada Finance Corp. (6)
10.31 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)
10.32 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. (10)
10.33 General Security Agreement Relating to Goods, dated April 30, 1984, between
Celebrity Exports International Limited and The Hongkong and Shanghai Banking
Corporation Limited. (1)
10.34 Form of Guarantee by Limited Company executed by Registrant in favor of the Hongkong
and Shanghai Banking Corporation Limited. (10)
10.35 Commitment of Celebrity Exports International Limited to maintain a net worth of
HK$30,000,000. (10)
10.36 Employment Agreement dated February 7, 1995, between India Exotics, Inc. and
Surendra Khokha. (6)
10.37 Letter Agreement dated June 20, 1996, amending the Employment Agreement dated
February 7, 1995, between India Exotics, Inc. and Surendra Khokha. (12)
10.38 Employment Agreement dated February 7, 1995, between India Exotics, Inc. and Meena
Khokha. (6)
10.39 Letter Agreement dated June 20, 1996, amending the Employment Agreement dated
February 7, 1995, between India Exotics, Inc. and Meena Khokha. (12)
10.40 Noncompetition Agreement dated February 7, 1995, among India Exotics, Inc., Surendra
Khokha, Rajneesh Khokha, Asheesh Khokha and Meena Khokha. (6)
</TABLE>
<PAGE> 23
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibit Page
- ------ ---------------------- ----
<S> <C>
10.41 Promissory Note of India Exotics, Inc., a Texas corporation, guaranteed by
Registrant, dated February 7, 1995, payable to the order of India Exotics, Inc., a
Missouri corporation. (6)
10.42 First Amendment to Promissory Note dated June 20, 1996, amending the Promissory Note
of India Exotics, Inc., a Texas corporation, guaranteed by Registrant, dated
February 7, 1995, payable to the order of India Exotics, Inc., a Missouri
corporation. (12)
10.43 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. (6)
10.44 Form of Indemnity Agreement. (1)
10.45 Amended and Restated 1992 Stock Option Plan. (2)
10.46 Amended and Restated 1993 Employee Stock Purchase Plan. (6)
10.47 1997 Employee Bonus Plan. (12)
27.1 Financial Data Schedule. (14)
</TABLE>
_____________________
(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 Quarterly Report on
Form 10-Q for the quarter ended March 31, 1994, 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, 1993, as amended, and
incorporated herein by reference.
(4) 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.
(5) 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.
(6) 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.
(7) 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.
(8) 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.
(9) Previously filed as an exhibit to the Registrant's Annual Report on
Form 10-K for the fiscal year ended June 30, 1995, and incorporated
herein by reference.
(10) 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.
(11) Previously filed as an exhibit to the Registrants's Quarterly Report
on Form 10-Q for the quarter ended March 31, 1996, and incorporated
herein by reference.
(12) Previously filed as an exhibit to the Registrant's Annual Report on
Form 10-K for the fiscal year ended June 30, 1996, and incorporated
herein by reference.
<PAGE> 24
(13) Previously filed as an exhibit to the Registrant's Quarterly Report on
Form 10-Q for the quarter ended September 30, 1996, and incorporated
herein by reference.
(14) Filed herewith.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-END> DEC-31-1996
<CASH> 326
<SECURITIES> 0
<RECEIVABLES> 17,127
<ALLOWANCES> 0
<INVENTORY> 30,446
<CURRENT-ASSETS> 53,775
<PP&E> 11,389
<DEPRECIATION> 0
<TOTAL-ASSETS> 71,765
<CURRENT-LIABILITIES> 14,531
<BONDS> 0
0
0
<COMMON> 63
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 71,765
<SALES> 66,099
<TOTAL-REVENUES> 66,099
<CGS> 49,834
<TOTAL-COSTS> 63,224
<OTHER-EXPENSES> 18
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,768
<INCOME-PRETAX> 1,125
<INCOME-TAX> 39
<INCOME-CONTINUING> 1,086
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,086
<EPS-PRIMARY> .17
<EPS-DILUTED> .17
</TABLE>
