<PAGE>
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM 10-Q
---------------
(Mark One)
/X/ Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
FOR THE QUARTERLY PERIOD ENDED 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 NUMBER: 0-20850
HAGGAR CORP.
(Exact name of the registrant as specified in the charter)
<TABLE>
<S> <C>
NEVADA 75-2187001
(State or other jurisdiction (I.R.S. Employer
of Identification No.)
incorporation or
organization)
</TABLE>
6113 LEMMON AVENUE
DALLAS, TEXAS 75209
(Address of principal executive offices)
TELEPHONE NUMBER (214) 352-8481
(Registrant's telephone number including area code)
Indicate by a 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 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 ____
As of May 10, 1996, there were 8,551,382 shares of the Registrant's Common
Stock outstanding.
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<PAGE>
HAGGAR CORP. AND SUBSIDIARIES
INDEX
<TABLE>
<S> <C>
Part I. Financial Information
Item 1. Financial Statements
Consolidated Statements of Operations
(Three and six months ended March 31, 1996 and 1995)........................... 3
Consolidated Balance Sheets
(As of March 31, 1996 and September 30, 1995).................................. 4
Consolidated Statements of Cash Flows
(Six months ended March 31, 1996 and 1995)..................................... 5
Notes to Consolidated Financial Statements...................................... 6-8
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.................................................... 9-11
Part II. Other Information.
Item 1. Legal Proceedings........................................................ 11
Item 4. Submission of Matters to a Vote of Security Holders...................... 11
Item 6. Exhibits and Reports on Form 8-K......................................... 12
Signature........................................................................... 12
Exhibit
</TABLE>
2
<PAGE>
HAGGAR CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED, IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
MARCH 31, MARCH 31,
------------------------ ------------------------
1996 1995 1996 1995
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net sales..................................................... $ 110,840 $ 121,118 $ 209,258 $ 242,151
Cost of goods sold............................................ 80,740 90,088 152,073 175,768
----------- ----------- ----------- -----------
Gross profit................................................ 30,100 31,030 57,185 66,383
Selling, general and administrative expenses.................. (26,999) (27,001) (52,488) (54,048)
Royalty income, net........................................... 603 582 1,240 1,233
----------- ----------- ----------- -----------
Operating income.............................................. 3,704 4,611 5,937 13,568
Other income (expense), net................................... (271) 208 (121) 397
Interest expense.............................................. (880) (1,199) (1,649) (1,738)
----------- ----------- ----------- -----------
Income from operations before provision for income taxes...... 2,553 3,620 4,167 12,227
Provision for income taxes.................................... 969 1,453 1,579 4,724
----------- ----------- ----------- -----------
Net income.................................................... $ 1,584 $ 2,167 $ 2,588 $ 7,503
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Net income per common share and common share equivalent....... $ 0.19 $ 0.25 $ 0.30 $ 0.87
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Weighted average number of common shares and common share
equivalents outstanding...................................... 8,551 8,653 8,551 8,660
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
3
<PAGE>
HAGGAR CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
<TABLE>
<CAPTION>
MARCH 31, SEPTEMBER 30,
1996 1995
----------- -------------
(UNAUDITED)
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents.......................................... $ 2,872 $ 2,230
Accounts receivable, net........................................... 63,964 66,967
Inventories........................................................ 144,632 138,907
Deferred tax benefit............................................... 10,825 12,828
Federal income taxes receivable.................................... 530 --
Insurance receivable............................................... -- 23,990
Other current assets............................................... 2,155 4,288
----------- -----------
Total current assets............................................. 224,978 249,210
Property, plant, and equipment, net.................................. 62,761 56,616
Marketable securities................................................ -- 4,630
Other assets......................................................... 1,607 4,896
----------- -----------
$ 289,346 $ 315,352
----------- -----------
----------- -----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable................................................... $ 23,309 $ 26,448
Accrued liabilities................................................ 20,744 30,484
Accrued wages and other employee compensation...................... 2,924 3,343
Accrued workers' compensation expense.............................. 6,278 7,233
Federal income taxes payable....................................... -- 771
Short-term borrowings.............................................. 1,917 1,635
Current portion of long-term debt.................................. 453 447
----------- -----------
Total current liabilities........................................ 55,625 70,361
Long-term debt....................................................... 65,377 78,585
----------- -----------
Total liabilities.................................................. 121,002 148,946
STOCKHOLDERS' EQUITY
Common stock -- par value $0.10 per share; 25,000,000 shares
authorized and 8,560,636 shares issued at March 31, 1996 and
September 30, 1995.................................................. 856 856
Additional paid-in capital........................................... 41,641 41,641
Unrealized loss on marketable securities............................. -- (206)
Retained earnings.................................................... 125,848 124,116
----------- -----------
168,345 166,407
Less -- Treasury stock, 9,254 shares at par value.................... (1) (1)
----------- -----------
Total stockholders' equity......................................... 168,344 166,406
----------- -----------
$ 289,346 $ 315,352
----------- -----------
----------- -----------
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
4
<PAGE>
HAGGAR CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED, IN THOUSANDS)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
MARCH 31,
--------------------------
1996 1995
------------ ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income.......................................................................... $ 2,588 $ 7,503
Adjustments to reconcile net income to net cash provided by (used in) operating
activities:
Depreciation and amortization..................................................... 1,887 1,545
Loss (gain) on disposal of property, plant, and equipment......................... 51 (10)
Loss on sales of marketable securities............................................ 532 --
Changes in assets and liabilities --
Accounts receivable, net........................................................ 3,003 13,626
Inventories..................................................................... (5,725) (32,310)
Federal income tax receivable................................................... (530) --
Deferred tax benefit............................................................ 1,873 (426)
Insurance receivable............................................................ 23,990 --
Other current assets............................................................ 1,539 1,958
Accounts payable................................................................ (3,139) (15,501)
Accrued liabilities and federal income taxes payable............................ (10,511) (7,993)
Accrued wages and other employee compensation................................... (419) (3,897)
Accrued workers' compensation expense........................................... (955) (461)
------------ ------------
Net cash provided by (used in) operating activities........................... 14,184 (35,966)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property, plant and equipment, net....................................... (8,083) (14,669)
Proceeds from the sale of marketable securities....................................... 5,028 --
(Increase) decrease in other assets................................................... 3,289 (82)
------------ ------------
Net cash provided by (used in) investing activities........................... 234 (14,751)
CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds from short-term borrowings............................................... 282 197
Proceeds from issuance of long-term debt.............................................. 266,000 193,000
Payments on long-term debt............................................................ (279,202) (142,187)
Payments of cash dividends............................................................ (856) (854)
Net proceeds from the issuance of common stock........................................ -- 198
------------ ------------
Net cash provided by (used in) financing activities........................... (13,776) 50,354
Increase (decrease) in cash and cash equivalents...................................... 642 (363)
Cash and cash equivalents, beginning of period........................................ 2,230 2,612
------------ ------------
Cash and cash equivalents, end of period.............................................. $ 2,872 $ 2,249
------------ ------------
------------ ------------
Supplemental disclosure of cash flow information
Cash paid for:
Interest, net of amounts capitalized................................................ $ 1,166 $ 635
Income taxes........................................................................ $ 265 $ 7,458
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
5
<PAGE>
HAGGAR CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED FINANCIAL STATEMENTS.
The consolidated balance sheet as of March 31, 1996, the consolidated
statements of operations for the three and six months ended March 31, 1996, and
the consolidated statements of cash flows for the six months ended March 31,
1996, have been prepared by Haggar Corp. (the "Company") without audit. In the
opinion of management, all necessary adjustments (which include only normal
recurring adjustments) to present fairly the consolidated financial position,
results of operations, and cash flows of the Company at March 31, 1996, and for
all other periods presented, have been made. Certain information and footnote
disclosures normally included in the financial statements prepared in accordance
with generally accepted accounting principles have been omitted. These financial
statements should be read in conjunction with the financial statements and
accompanying footnotes in the Company's Annual Report on Form 10-K for the year
ended September 30, 1995.
CONCENTRATIONS OF CREDIT RISK.
Financial instruments which potentially expose the Company to concentrations
of credit risk, as defined by Statement of Financial Accounting Standards
("SFAS") No. 105, "Disclosure of Information about Financial Instruments with
Off-Balance Sheet Risk and Financial Instruments with Concentrations of Credit
Risk," consist primarily of trade accounts receivable. The Company's customers
are not concentrated in any specific geographic region but are concentrated in
the apparel industry. For the three months ended March 31, 1996, two customers
accounted for 25.8% and 9.2%, respectively, of the Company's net sales and for
the three months ended March 31, 1995, the same two customers accounted for
26.3% and 10.1%, respectively, of the Company's net sales. The same two
customers accounted for 28.0% and 8.8%, respectively, of the Company's net sales
during the six months ended March 31, 1996, and 31.3% and 9.1%, respectively, of
the Company's net sales during the six months ended March 31, 1995. The Company
performs ongoing credit evaluations of its customers' financial condition and
establishes an allowance for doubtful accounts based upon factors surrounding
the credit risk of specific customers, historical trends, and other information.
INVENTORIES.
Inventories are stated at the lower of cost (first-in, first-out) or market
and consisted of the following at March 31, 1996, and September 30, 1995 (in
thousands):
<TABLE>
<CAPTION>
MARCH 31, SEPTEMBER 30,
1996 1995
----------- -------------
<S> <C> <C>
Piece goods................................................................. $ 24,347 $ 22,260
Trimmings & supplies........................................................ 8,729 11,808
Work-in-process............................................................. 19,909 27,614
Finished garments........................................................... 91,647 77,225
----------- -------------
$ 144,632 $ 138,907
----------- -------------
----------- -------------
</TABLE>
Work-in-process and finished garments inventories consisted of materials,
labor and manufacturing overhead.
INSURANCE RECEIVABLE.
On May 5, 1995, severe thunderstorms struck the Dallas-Fort Worth
metropolitan area causing widespread damage. During the high winds and heavy
rains caused by these thunderstorms, a portion of the roof over the Company's
main distribution center collapsed. The Company has received a $35,000,000
insurance settlement related to the inventory and approximately $5,100,000
related to real and personal property damaged during the storm. As of September
30, 1995, the Company had received $15,000,000 of the $35,000,000 insurance
inventory claim. At that point in time the claims for real and other personal
property damage had not yet been submitted to the insurance carrier.
Accordingly, a receivable of $20,000,000 related to the uncollected portion of
the inventory claim and
6
<PAGE>
approximately $4,000,000 related to the estimated real and other personal
property claim is reflected in the accompanying balance sheet as of September
30, 1995. Collections in excess of the recorded receivable resulted in a
$1,100,000 gain, from the settlement of the real and other personal property
claims and is included in selling, general and administrative expenses for the
three and six months ended March 31, 1996.
FINANCIAL INSTRUMENTS.
The Financial Accounting Standards Board ("FASB") issued SFAS No. 115,
"Accounting for Certain Investments in Debt and Equity Securities," which
addresses the accounting and reporting requirements for both investments in
equity securities that have readily determinable fair values and for all
investments in debt securities. The Company had net investments in preferred
stock of approximately $5,224,000 as of September 30, 1995. These investments
were classified as available-for-sale securities and were reported at their fair
value as of September 30, 1995, with unrealized gains and losses excluded from
earnings and reported as a separate component of stockholders' equity, net of
tax. During the second quarter of fiscal 1996, the Company sold all of its
investments in preferred stock and equity securities. The proceeds from the sale
were used to reduce borrowings under the Company's line of credit.
Realized gains and losses on investments in preferred stocks were determined
on a specific identification basis. For the three and six months ended March 31,
1996, realized losses of $532,000 have been recorded. For the three and six
months ended March 31, 1995, there were no realized gains or losses recognized.
The realized gains and losses for the three and six months ended March 31, 1996,
are included in "Other income, net" stated in the accompanying Consolidated
Statements of Operations.
For the three and six months ended March 31, 1996, the Company earned
dividend and interest income of $35,000 and $146,000, respectively, compared to
dividend and interest income for the same periods in the prior fiscal year of
$158,000 and $321,000, respectively.
LONG-TERM DEBT
Long-term debt consisted of the following at March 31, 1996, and September
30, 1995 (in thousands):
<TABLE>
<CAPTION>
MARCH 31, SEPTEMBER 30,
1996 1995
----------- -------------
<S> <C> <C>
Borrowings under revolving credit line....................................... $ 36,000 $ 49,000
Industrial Development Revenue Bonds with interest at a rate equal to that of
high-quality, short-term, tax-exempt obligations, as defined (3.35% at March
31, 1996), payable in annual installments of $100, and a final payment of
$2,000 in 2005, secured by certain buildings and equipment.................. 2,900 3,000
Senior Notes Payable......................................................... 25,000 25,000
Other........................................................................ 1,930 2,032
----------- -------------
65,830 79,032
Less -- Current portion...................................................... 453 447
----------- -------------
$ 65,377 $ 78,585
----------- -------------
----------- -------------
</TABLE>
As of March 31, 1996, the Company had a $100,000,000 revolving credit line
agreement (the "Agreement") with certain banks subject to certain borrowing base
limitations. The Company had additional available borrowing capacity of
approximately $55,000,000 under this Agreement at March 31, 1996. The Company
incurred approximately $72,000 in commitment fees related to the available
borrowing capacity during the six month period ended March 31, 1996. The
interest rates for the six month period ended March 31, 1996, ranged from 6.63%
to 8.75%. The facility will mature December 31, 1997, with a one year renewal at
the option of the banks and is unsecured, except that
7
<PAGE>
the Company is prohibited from pledging its accounts receivables and inventories
during the term of the Agreement. The Agreement contains limitations on
incurring additional indebtedness and requires the maintenance of certain
financial ratios. Effective December 31, 1995, the Agreement was amended to
relax certain of these financial ratios for the first and second quarters of
fiscal 1996. In addition, the Agreement requires the Company and Haggar Clothing
Co. (the Company's main operating subsidiary) to maintain tangible net worth, as
defined, in excess of $144,900,000 and $40,000,000, respectively, as of March
31, 1996.
In the first quarter of fiscal 1995, the Company completed the sale and
issuance of $25,000,000 in senior notes. The proceeds from the notes have been
used to partially fund the construction of the Company's new Customer Service
Center. Significant terms of the senior notes include a maturity date of ten
years from the date of issuance, interest payable semi-annually and annual
principal payments beginning in the fourth year. The interest rate on the senior
notes is fixed at 8.49%. The terms and conditions of the note purchase agreement
governing the senior notes include restriction on the sale of assets, limitation
on additional indebtedness and the maintenance of certain net worth
requirements. The balance of the cost of the Customer Service Center has been
financed with internally generated funds and bank borrowings.
NET INCOME PER COMMON SHARE AND COMMON SHARE EQUIVALENT
Net income per common share and common share equivalent is calculated by
dividing net income applicable to common stock by the weighted average shares of
common stock and common stock equivalents outstanding. Common share equivalents
represent the effect, if any, of the assumed purchase of common shares, using
the treasury stock method, under the Company's long-term incentive plan.
SUBSEQUENT EVENTS
Subsequent to March 31, 1996, the Company declared a cash dividend of $0.05
per share payable to the stockholders of record on April 29, 1996. The dividend
of approximately $428,000 will be paid on May 13, 1996.
8
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion should be read in conjunction with the attached
consolidated financial statements and the notes thereto, and with the Company's
Annual Report on Form 10-K for the fiscal year ended September 30, 1995.
RESULTS OF OPERATIONS
The Company's second quarter of fiscal 1996 net income to common
stockholders of $1.6 million compares to net income of $2.2 million in the
second quarter of fiscal 1995. The reduction in net income is primarily the
result of decreased net sales during the second quarter of fiscal 1996 compared
to net sales during the second quarter of fiscal 1995.
Net sales for the second quarter ended March 31, 1996, decreased 8.5% to
$110.8 million from $121.1 million for the second quarter of fiscal 1995. The
decrease in net sales for the second quarter of fiscal 1996 is the combined
result of a 3.7% decrease in unit sales and a 4.6% decrease in the average sales
price. Net sales for the six months ended March 31, 1996, decreased 13.6% to
$209.3 million compared to $242.2 million in the prior fiscal year. The 13.6%
decrease in the first six months of fiscal 1996 is the combined result of a
11.2% decrease in unit sales and a 2.2% decrease in the average sales price. For
the three and six months ended March 31, 1996, the decrease in net sales is
primarily the result of decreased holiday sales at the retail level during the
first quarter of fiscal 1996, and severe weather conditions in the Eastern U.S.
during portions of the second quarter of fiscal 1996, which slowed the efforts
to clear year-end inventory left over from the decreased holiday sales.
Gross profit as a percentage of net sales increased to 27.2% in the second
quarter of fiscal 1996 compared to 25.6% in the second quarter of the prior
fiscal year. Gross profit for the first six months of fiscal 1996 remained
relatively stable at 27.3% compared to 27.4% in the first six months of fiscal
1995. For the second quarter of fiscal 1995 gross profit was reduced as a result
of a $3.0 million markdown on shirts and a $2.0 million write-off as a result of
the Company closing its Robstown manufacturing facility. The Company took the
markdown on sport shirts because those shirts had not been delivered as well as
expected, due to initial start-up problems in this new business line. The
Company closed its Robstown facility to reduce domestic manufacturing capacity
to control inventory growth that had resulted from overall softness in the
retail environment. The Company's continuing efforts to reduce its excess
inventories during the second quarter of fiscal 1996 resulted in lower sales
prices and lower gross margins and may again result in lower sales prices and
lower gross margins in the third quarter of fiscal 1996.
Selling, general and administrative expenses as a percentage of net sales
increased to 24.4% in the second quarter of fiscal 1996 compared to 22.3% in the
second quarter of fiscal 1995. For the six months ended March 31, 1996, selling,
general and administrative expenses as a percentage of net sales increased to
25.1% compared to 22.3% in the first six months of the prior fiscal year. The
increase in selling, general and administrative expenses as a percent of net
sales is primarily the result of lower net sales volume in the second quarter
and the first six months of fiscal 1996. In addition, distribution costs for the
three and six months ended March 31, 1996 exceeded the distribution costs for
the three and six months ended March 31, 1995 by $0.3 million and $1.8 million,
respectively. The increase in distribution costs resulted primarily from the use
of additional labor, used in temporary distribution facilities, pending
completion of the Company's new Customer Service Center (CSC) located in Fort
Worth, Texas. As the Company completes its ongoing transition to the CSC it
anticipates less need for that additional labor, and such costs should gradually
decrease. However, delays in completing this transition could impact how quickly
those costs can be decreased. Additionally, $2.3 million of the increased
selling, general and administrative expenses was the result of the 18 retail
stores now open and operational as a part of the Company's retail division. The
increase in selling, general and administrative expenses was offset by a $1.1
million gain resulting from the final settlement of substantially all claims
with the Company's insurance carrier related to the Company's damaged
distribution center and warehouse.
9
<PAGE>
Other expense, for the second quarter of fiscal 1996, increased to $0.3
million compared to $0.2 million in other income for the second quarter of
fiscal 1995. For the first six months of fiscal 1996, other expense increased to
$0.1 million compared to other income of $0.4 million in the first six months of
the prior fiscal year. The increase in other expense primarily reflects the sale
of the marketable security portfolio for a loss of approximately $0.5 million in
the second quarter of fiscal 1996.
Interest expense in the second quarter of fiscal 1996 decreased to $0.9
million compared to $1.2 million in the second quarter of fiscal 1995. Interest
expense for the first six months of fiscal 1996 decreased to $1.6 million
compared to interest expense of $1.7 million in the first six months of fiscal
1995. The decrease in interest expense for the second quarter and the first six
months of fiscal 1996 is the result of capitalization of interest related to the
Company's new Customer Service Center. The Company capitalized interest expense
related to the Customer Service Center of approximately $0.7 million and $1.4
million during the second quarter and first six months of fiscal 1996,
respectively.
Income tax expense for the second quarter of fiscal 1996, as a percent of
income before provision for income taxes, was 38.0% compared to 40.1% in the
second quarter of fiscal 1995. For the six months ended March 31, 1996, income
tax expense as a percent of income before provision for income taxes was 37.9%
compared to 38.6% in the first six months of 1995. The effective tax rates for
both the second quarter and the first six months of fiscal 1996 and 1995 differ
from the statutory rate because of certain permanent tax differences. The
permanent tax differences include income from tax-free investments and equity
securities which qualify for the 70% dividend exclusion and losses from a
foreign subsidiary for which the Company receives no tax benefit.
LIQUIDITY AND CAPITAL RESOURCES
The Company's trade accounts receivable potentially expose the Company to
concentrations of credit risks because most of its customers are in the retail
apparel industry. The Company performs ongoing credit evaluations of its
customers' financial condition and establishes an allowance for doubtful
accounts based upon the factors related to the credit risk of specific
customers, historical trends and other information. The Company's trade accounts
receivable decreased approximately $3.0 million to $64.0 million at March 31,
1996 from $67.0 million at September 30, 1995. This decrease in trade accounts
receivable is the result of decreased sales volume in the second quarter of
fiscal 1996, and seasonal reductions.
Inventories as of March 31, 1996, increased to $144.6 million from $138.9
million at September 30, 1995. Lower than expected sales during the first
quarter holiday season and inclement weather counteracted the Company's efforts
to reduce inventory during the first six months of fiscal 1996. Although
inventory levels were reduced during the second quarter of fiscal 1996,
adjustments in both domestic and offshore production have not yet brought
inventories back to their desired levels.
The Company's ongoing external financing needs are met through an unsecured
revolving credit facility with certain banks. The Agreement provides the Company
with a $100.0 million line of credit. The amount available under the Agreement
is limited to the lesser of $100.0 million minus any letter of credit exposure
or the borrowing base as defined in the Agreement. Effective December 31, 1995,
the Agreement was amended to relax certain financial covenants for the first and
second quarters of fiscal 1996. As of March 31, 1996, the Company had $36.0
million outstanding under the Agreement and had additional borrowing capacity of
approximately $55.0 million. The interest rates for the six month period ended
March 31, 1996, ranged from 6.63% to 8.75%.
In the first quarter of fiscal 1995, the Company completed the sale and
issuance of $25.0 million in senior notes. Significant terms of the senior notes
include a maturity date of ten years from the date of issuance, interest payable
semi-annually and annual principal payments beginning in the fourth year.
10
<PAGE>
The interest rate on the senior notes is fixed at 8.49%. The terms and
conditions of the note purchase agreement governing the senior notes include
restrictions on the sale of assets, limitations on additional indebtedness, and
the maintenance of certain net worth requirements.
In addition, the Haggar UK subsidiary has established a $2.4 million line of
credit with a bank in the United Kingdom to fund operating activities. As of
March 31, 1996, the subsidiary had approximately $1.9 million outstanding under
this line of credit. The line of credit is collateralized by a letter of credit
from the Company and is payable upon demand. Interest under the line of credit
is payable at 1% above the bank's base rate.
Although there are no material commitments for capital expenditure, the
Company expects to continue to open retail stores.
The Company provided cash from operating activities for the six months ended
March 31, 1996 primarily as a result of the decrease in insurance receivable of
$24.0 million due to the collection of proceeds from the insurance carrier,
offset by a decrease in accrued liabilities and federal income taxes payable of
$10.5 million. For the six months ended March 31, 1995 the Company used cash in
operating activities primarily as the result of an increase in inventories of
$32.2 million offset by a decrease in accounts payable of $15.5 million as well
as a decrease in accounts receivable, net of $13.6 million. For the six months
ended March 31, 1996, the Company provided cash flows in investing activities of
$5.0 million by selling all of its investments in preferred stock and equity
securities in the first quarter of 1996. Additional investing cash flows were
provided by a decrease in other assets of $3.3 million offset by the purchase
of $8.1 million in property, plant and equipment. For the six months ended
December 31, 1995 cash flows were used in investing activities as the result of
the purchase of $14.7 million in property, plant and equipment. Cash flows used
in financing activities for the six months ended March 31, 1996, were primarily
the result of payment of $279.2 million on long-term debt offset by the issuance
of $266.0 million in long-term debt. For the six months ended March 31, 1995
cash provided by financing activities was primarily the result of issuance of
long-term debt of $193.0 million offset by payments on long-term debt of $142.1
million.
The Company believes that the cash flow generated from operations and the
funds available under the foregoing credit facilities will be adequate to meet
its working capital and related financing needs for the foreseeable future.
PART
II. OTHER INFORMATION.
ITEM 1. LEGAL PROCEEDINGS.
An additional party has sought to intervene as a plaintiff in the suit filed
on August 31, 1995, in the 103rd Judicial District Court of Cameron County,
Texas, by Ernest Jaramillo, et al. The intervening parties, Annie V. Coleman
individually and as next friend to Valencia Henry, Christopher Henry, and Ira H.
Jeffrey, minors, seek unspecified actual and punitive damages allegedly
resulting from the death of Lynnice W. Henry during the storm and roof collapse
on May 5, 1995. Although the amount of any liability that could arise with
respect to the current or any such future actions cannot be accurately
predicted, the Company does not believe any such liability will have a material
adverse effect on the financial position of the Company.
The Company maintains general liability, workers compensation, and employers
liability insurance. The Company intends to pass back the costs associated with
the storm related lawsuits to its insurance carriers, under the applicable
policies, subject to the deductible limits and other provisions of those
policies.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
The Company's Annual Meeting of Stockholders was held on February 8, 1996.
At such meeting, J.M. Haggar, III and Norman E. Brinker were elected to serve as
directors of the Company for a three-year term and until their respective
successors are elected and qualified. Of 7,674,469 shares represented at the
meeting in person or by proxy, Messrs. Haggar and Brinker received 7,658,881 and
11
<PAGE>
7,658,911 votes, respectively, for their election as directors. Other directors
whose term of office continued after the meeting are Frank D. Bracken, Ralph A.
Beattie, Richard W. Heath, Rae F. Evans and Carlos H. Cantu.
The appointment of Arthur Andersen LLP was ratified with 7,661,586 shares
voted for, 9,151 shares voted against, no broker nonvotes and 3,732 shares
abstained.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
<TABLE>
<CAPTION>
PAGES
---------
<C> <S> <C>
10(a) Fifth Amendment to Credit Agreement between the Company and Texas 14-31
Commerce Bank, as Agent for a bank syndicate.
11 Statement Regarding Computation of Net Income per Common Share. 32
(b) No reports on Form 8-K filed have been filed during the quarter for which
this report is filed.
</TABLE>
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.
Haggar Corp.,
Date: May 10, 1996 By: /s/ Ralph A. Beattie
-----------------------------------
Ralph A. Beattie
Executive Vice President
Chief Financial Officer
Signed on behalf of the registrant
and as principal financial officer.
12
<PAGE>
FIFTH AMENDMENT TO CREDIT AGREEMENT
This FIFTH AMENDMENT TO CREDIT AGREEMENT (this "AGREEMENT") is entered into
as of December 31, 1995, by and among Haggar Clothing Co., a Nevada corporation,
f/k/a Haggar Apparel Company (the "COMPANY"), Haggar Corp., a Nevada corporation
("HAGGAR"), the banks listed on the signature pages of this Agreement
(collectively, the "BANKS"), Texas Commerce Bank National Association, successor
by merger to Texas Commerce Bank, National Association, a national banking
association, individually and as agent (the "AGENT") for the Banks, and in its
capacity as funds administrator (the "FUNDS ADMINISTRATOR"), and is consented to
by Haggar and the domestic subsidiaries of the Company listed on the signature
pages of this Agreement (collectively, the "SUBSIDIARIES").
RECITALS:
WHEREAS, pursuant to that certain Credit Agreement (the "Credit Agreement")
dated as of September 14, 1992, executed by and among the Company, Haggar, the
Banks and the Funds Administrator, the Banks agreed to make advances to the
Company on certain terms and conditions set forth therein (each capitalized term
used but not defined herein shall have the meaning given to such term in the
Credit Agreement as amended); and
WHEREAS, the Credit Agreement has been amended pursuant to that certain
First Amendment to Credit Agreement (the "FIRST AMENDMENT") dated as of March
31, 1993, executed by and among the Company, Haggar, the Banks, the Agent and
the Funds Administrator, and consented to by Haggar and the Company's Domestic
Subsidiaries in existence as of such date; and
WHEREAS, the Credit Agreement has been further amended pursuant to that
certain Second Amendment to Credit Agreement (the "SECOND AMENDMENT") dated as
of April 20, 1994, executed by and among the Company, Haggar, the Banks, the
Agent and the Funds Administrator, and consented to by Haggar and the Company's
Domestic Subsidiaries in existence as of such date; and
WHEREAS, the Credit Agreement has been further amended pursuant to that
certain Third Amendment to Credit Agreement (the "THIRD AMENDMENT") dated as of
November 9, 1994, executed by and among the Company, Haggar, the Banks, the
Agent and the Funds Administrator, and consented to by Haggar and the Company's
Domestic Subsidiaries in existence as of such date; and
WHEREAS, the Credit Agreement has been further amended pursuant to that
certain Fourth Amendment to Credit Agreement (the "FOURTH AMENDMENT") dated as
of March 17, 1995, executed by and among the Company, Haggar, the Banks, the
Agent and the Funds Administrator, and consented to by Haggar and the Company's
Domestic Subsidiaries in existence as of such date; and
WHEREAS, the Company has requested that the Credit Agreement be amended to
change the ratios set forth in Sections 7.6, 7.7 and 7.9 of the Credit
Agreement, to amend the definitions of the terms "CD Margin", "Eurodollar
Margin" and "Fixed Charges" as set forth in Section 1.1 thereof; and
WHEREAS, the Agent and the Banks are agreeable to such requests under the
present circumstances.
FIFTH AMENDMENT TO CREDIT AGREEMENT PAGE 1
<PAGE>
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged and confessed, the Company, Haggar,
the Banks, the Agent and the Funds Administrator hereby agree as follows:
AGREEMENT:
1. AMENDMENTS TO DEFINITIONS. The definitions of "CD Margin" and
"Eurodollar Margin" as set forth in Section 1.1 of the Credit Agreement (as
previously amended by the First Amendment and the Fourth Amendment) are hereby
amended in their entirety to read as follows:
"CD Margin" means (a) at any time when the Funded Debt Ratio is equal to or
less than 1.50 to 1, five-eighths of one percent (5/8%) per annum, (b) at any
time when the Funded Debt Ratio is greater than 1.50 to 1 but less than or equal
to 2.00 to 1, three quarters of one percent (3/4%) per annum, (c) at any time
when the Funded Debt Ratio is greater than 2.00 to 1 but less than or equal to
2.50 to 1, seven-eighths of one percent (7/8%) per annum, (d) at any time when
the Funded Debt Ratio is greater than 2.50 to 1 but less than or equal to 3.00
to 1, one percent (1%) per annum, (e) at any time when the Funded Debt Ratio is
greater than 3.00 to 1 but less than or equal to 3.50 to 1, one and one-quarter
percent (1 1/4%) per annum, (f) at any time when the Funded Debt Ratio is
greater than 3.50 to 1 but less than or equal to 4.00 to 1, one and one-half
percent (1 1/2%) per annum, and (g) at any time when the Funded Debt Ratio is
greater than 4.00 to 1, one and five-eighths percent (1 5/8%) per annum. Each
adjustment to the previously calculated CD Margin shall be effective five (5)
Business Days following Agent's receipt of the reports to be delivered by the
Company pursuant to Subsections 6.1(a) and (b).
"Eurodollar Margin" means (a) at any time when the Funded Debt Ratio is
equal to or less than 1.50 to 1, one-half of one percent (1/2%) per annum, (b)
at any time when the Funded Debt Ratio is greater than 1.50 to 1 but less than
or equal to 2.00 to 1, five-eighths of one percent (5/8%) per annum, (c) at any
time when the Funded Debt Ratio is greater than 2.00 to 1 but less than or equal
to 2.50 to 1, three-quarters of one percent (3/4%) per annum, (d) at any time
when the Funded Debt Ratio is greater than 2.50 to 1 but less than or equal to
3.00 to 1, seven-eighths of one percent (7/8%) per annum, (e) at any time when
the Funded Debt Ratio is greater than 3.00 to 1 but less than or equal to 3.50
to 1, one and one-eighth percent (1 1/8%) per annum, (f) at any time when the
Funded Debt Ratio is greater than 3.50 to 1 but less than or equal to 4.00 to 1,
one and three-eighths percent (1 3/8%) per annum, and (g) at any time when the
Funded Debt Ratio is greater than 4.00 to 1, one and one-half percent (1 1/2%)
per annum. Each adjustment to the previously calculated Eurodollar Margin shall
be effective five (5) Business Days following Agent's receipt of the reports to
be delivered by the Company pursuant to Subsections 6.1(a) and (b).
2. AMENDMENT TO DEFINITION OF FIXED CHARGES. The definition of the term
"Fixed Charges" (as amended by the Third Amendment) is hereby amended to replace
the figure "$35,000,000" in the last line thereof with the figure "$38,000,000".
3. AMENDMENT OF SECTION 7.6. Section 7.6 of the Credit Agreement (as
amended by the Third Amendment) is hereby amended to read in its entirety as
follows:
7.6. FIXED CHARGE REQUIREMENT. Permit the ratio of Operating Cash Flow
to Fixed Charges for the prior twelve (12) months, as measured at the end of
each fiscal quarter, to be or become less than 1.25 to 1.0, or, with respect
only to the two fiscal quarters ending December 31, 1995 and March 31, 1996,
respectively, 0.9 to 1.0. In calculating the ratio of Operating Cash Flow to
Fixed Charges for the prior twelve (12) months, as measured at the end of
each fiscal quarter or at any specific point in time, the amount of any cash
payments made by the Company as Capital Expenditures in connection with the
Customer Service and Distribution Center (to the extent such expenditures in
the aggregate do not exceed $38,000,000) or the Warehouse Acquisition shall
not be included as a Fixed Charge.
FIFTH AMENDMENT TO CREDIT AGREEMENT PAGE 2
<PAGE>
4. AMENDMENT OF SECTION 7.7. Section 7.7 of the Credit Agreement (as
amended by the Fourth Amendment) is hereby amended to read in its entirety as
follows:
7.7 FUNDED DEBT LIMITATION. Permit the Funded Debt Ratio, as measured
at the end of each fiscal quarter, to be or become greater than 4.0 to 1.0,
or, with respect only to the two fiscal quarters ending December 31, 1995
and March 31, 1996, respectively, 4.25 to 1.0.
5. AMENDMENT TO SECTION 7.9. Section 7.9 is hereby amended to read in its
entirety as follows:
7.9. INVENTORY TURN. Permit the quotient, as measured for the Company
Group on a consolidated basis at the end of each fiscal quarter, with
reference to the financial statements described in Section 6.1, of (a) the
cost of goods sold during the prior twelve (12) months divided by (b) the
Dollar amount of the cost of Inventory at the end of such fiscal quarter, to
be (if measured at a specific point in time) or become less than 2.0, or,
with respect only to the two fiscal quarters ending December 31, 1995 and
March 31, 1996, respectively, 1.9.
6. CERTIFICATES. This Agreement shall be effective as of the date first
above written when executed by all parties hereto and consented to by the
Guarantors as provided on the signature pages hereto, and upon receipt by the
Agent of the following, each in form, substance and bearing a date satisfactory
to the Agent and its counsel:
(a) A certificate of the Secretary or Assistant Secretary of the Company
and the Guarantors, respectively, certifying (i) that, except as indicated
therein, there has been no change to the articles of incorporation or bylaws
of the Company or the Guarantors since the same were furnished to the Agent
in connection with the execution of the Credit Agreement, (ii) as to the
name and title of the officers of the Company and the Guarantors and the
authority of such officers to execute this Agreement, (iii) that attached
thereto are true, correct and complete excerpts of resolutions of the Board
of Directors of the Company or the applicable Guarantor authorizing the
execution of this Agreement.
(b) A certificate, signed by the Treasurer of the Company or the Chief
Financial Officer of the Company, stating that as of the date of this
Agreement and after giving effect to this Agreement the statements set forth
in Sections 4.2(a), (b) and (g) of the Credit Agreement are true and
correct.
7. EFFECTIVENESS OF DOCUMENTS. Except as expressly modified hereby, all
terms, provisions, representations, warranties, covenants and agreements of the
Company and Haggar related to the Loans, whether contained in the Notes, the
Credit Agreement as amended and/or any of the other Loan Documents, are hereby
ratified and confirmed by the Company and Haggar, and all such agreements shall
be and shall remain in full force and effect, enforceable in accordance with
their terms.
8. NO CLAIMS OR DEFENSES. Each of the Company and Haggar, by the execution
of this Agreement, hereby declares that it has no offsets, claims,
counterclaims, defenses or other causes of action against the Agent or the Banks
related to any Loan, the Credit Agreement as amended, any of the other Loan
Documents or the modification of the Credit Agreement pursuant to this
Agreement.
9. AUTHORITY. Each of the Company and Haggar represents and warrants that
all requisite corporate action necessary for it to enter into this Agreement has
been taken.
10. BINDING AGREEMENT. This Agreement shall be binding upon, and shall
inure to the benefit of, each party hereto and such party's legal
representatives, successors and assigns.
11. ENTIRE AGREEMENT. THIS WRITTEN AGREEMENT AND THE LOAN DOCUMENTS
REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES HERETO AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS AMONG THE PARTIES HERETO. THERE ARE NO UNWRITTEN ORAL AGREEMENTS
AMONG THE PARTIES HERETO.
FIFTH AMENDMENT TO CREDIT AGREEMENT PAGE 3
<PAGE>
12. CHOICE OF LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH
THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF TEXAS, BUT
GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
13. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one agreement, and
any of the parties hereto may execute this Agreement by signing any such
counterpart.
EXECUTED as of the date first above written.
HAGGAR CLOTHING CO., a Nevada
corporation, f/k/a Haggar Apparel
Company
By: /s/ J. M. HAGGAR, III
--------------------------------------
J. M. Haggar, III
Chairman/Chief Executive Officer
HAGGAR CORP., a Nevada corporation
By: /s/ J. M. HAGGAR, III
-----------------------------------
J. M. Haggar, III
Chairman/Chief Executive Officer
TEXAS COMMERCE BANK National
Association, successor by merger to
Texas Commerce Bank, National
Association, Individually, as the
Agent and as Funds Administrator
By: /s/ JOHN P. DEAN
-----------------------------------
John P. Dean
Senior Vice President
NATIONSBANK OF TEXAS, N.A.
By: /s/ SHARON M. ELLIS
-----------------------------------
Sharon M. Ellis
Vice President
FIFTH AMENDMENT TO CREDIT AGREEMENT PAGE 4
<PAGE>
COMERICA BANK -- TEXAS
By: /s/ MELINDA A. CHAUSSE
-----------------------------------
Melinda A. Chausse
Vice President
NBD BANK, N.A.
By: /s/ JAMES D. HEINZ
-----------------------------------
James D. Heinz
Vice President
THE BANK OF TOKYO, LTD., DALLAS AGENCY
By: /s/ JOHN M. MEARNS
-----------------------------------
John M. Mearns
Vice President/Manager
BANK OF SCOTLAND
By: /s/ CATHERINE M. ONIFFREY
-----------------------------------
Catherine M. Oniffrey
Vice President
NATIONAL CITY BANK, KENTUCKY
f/k/a First National Bank of
Louisville
By: /s/ DONALD R. PULLEN, JR.
-----------------------------------
Donald R. Pullen, Jr.
Vice President
FIFTH AMENDMENT TO CREDIT AGREEMENT PAGE 5
<PAGE>
CONSENT OF HAGGAR
Haggar hereby (a) acknowledges its consent to this Agreement, (b) ratifies
and confirms all terms and provisions of the Parent Guaranty, (c) agrees that
the Parent Guaranty is and shall remain in full force and effect, (d)
acknowledges that there are no claims or offsets against, or defenses or
counterclaims to, the terms and provisions of and the obligations created and
evidenced by the Parent Guaranty, (e) reaffirms all agreements and obligations
under the Parent Guaranty with respect to the Loans, the Notes, the Credit
Agreement as amended and all other documents, instruments or agreements
governing, securing or pertaining to the Loans, as the same may be modified by
this Agreement, and (f) represents and warrants that all requisite corporate
action necessary for it to execute this Agreement has been taken.
HAGGAR CORP.,
a Nevada corporation
By: /s/ J.M. HAGGAR, III
-----------------------------------
J.M. Haggar, III
Chairman/Chief Executive Officer
FIFTH AMENDMENT TO CREDIT AGREEMENT PAGE 6
<PAGE>
CONSENT OF DOMESTIC SUBSIDIARIES
Each of the undersigned Subsidiaries hereby (a) acknowledges its consent to
this Agreement, (b) ratifies and confirms all terms and provisions of the
Subsidiary Guaranty to which it is a signatory, (c) agrees that the Subsidiary
Guaranty to which it is a signatory is and shall remain in full force and
effect, (d) acknowledges that there are no claims or offsets against, or
defenses or counterclaims to, the terms and provisions of and the obligations
created and evidenced by the Subsidiary Guaranty to which it is a signatory, (e)
reaffirms all agreements and obligations under the Subsidiary Guaranty to which
it is a signatory with respect to the Loans, the Notes, the Credit Agreement as
amended and all other documents, instruments or agreements governing, securing
or pertaining to the Loans, as the same may be modified by this Agreement, and
(f) represents and warrants that all requisite corporate action necessary for it
to execute this Agreement has been taken.
BOWIE MANUFACTURING COMPANY,
a Nevada corporation
By: /s/ J.M. HAGGAR, III
-----------------------------------
J.M. Haggar, III
Chairman/Chief Executive Officer
CORSICANA COMPANY,
a Nevada corporation
By: /s/ J.M. HAGGAR, III
-----------------------------------
J.M. Haggar, III
Chairman/Chief Executive Officer
DALLAS PANT MANUFACTURING COMPANY,
a Nevada corporation
By: /s/ J.M. HAGGAR, III
-----------------------------------
J.M. Haggar, III
Chairman/Chief Executive Officer
FIFTH AMENDMENT TO CREDIT AGREEMENT PAGE 7
<PAGE>
GREENVILLE PANT MANUFACTURING
COMPANY, a Nevada corporation
By: /s/ J.M. HAGGAR, III
-----------------------------------
J.M. Haggar, III
Chairman/Chief Executive Officer
MCKINNEY PANT MANUFACTURING
COMPANY, a Nevada corporation
By: /s/ J.M. HAGGAR, III
-----------------------------------
J.M. Haggar, III
Chairman/Chief Executive Officer
OLNEY MANUFACTURING COMPANY,
a Nevada corporation
By: /s/ J.M. HAGGAR, III
-----------------------------------
J.M. Haggar, III
Chairman/Chief Executive Officer
WAXAHACHIE GARMENT COMPANY,
a Nevada corporation
By: /s/ J.M. HAGGAR, III
-----------------------------------
J.M. Haggar, III
Chairman/Chief Executive Officer
FIFTH AMENDMENT TO CREDIT AGREEMENT PAGE 8
<PAGE>
LA ROMANA MANUFACTURING CORPORATION,
a Nevada corporation
By: /s/ J.M. HAGGAR, III
-----------------------------------
J.M. Haggar, III
Chairman/Chief Executive Officer
HAGGAR SERVICES, INC.,
a Texas corporation
By: /s/ J.M. HAGGAR, III
-----------------------------------
J.M. Haggar, III
Chairman/Chief Executive Officer
AIRHAGGAR, INC., f/k/a HAGAIR, INC.,
a Texas corporation
By: /s/ J.M. HAGGAR, III
-----------------------------------
J.M. Haggar, III
Chairman/Chief Executive Officer
DUNCAN MANUFACTURING COMPANY,
an Oklahoma corporation
By: /s/ J.M. HAGGAR, III
-----------------------------------
J.M. Haggar, III
Chairman/Chief Executive Officer
FIFTH AMENDMENT TO CREDIT AGREEMENT PAGE 9
<PAGE>
WESLACO CUTTING, INC.,
a Nevada corporation
By: /s/ J.M. HAGGAR, III
-----------------------------------
J.M. Haggar, III
Chairman/Chief Executive Officer
WESLACO SEWING, INC.,
a Nevada corporation
By: /s/ J.M. HAGGAR, III
-----------------------------------
J.M. Haggar, III
Chairman/Chief Executive Officer
HAGGAR DIRECT, INC.,
a Nevada corporation
By: /s/ J.M. HAGGAR, III
-----------------------------------
J.M. Haggar, III
Chairman/Chief Executive Officer
FIFTH AMENDMENT TO CREDIT AGREEMENT PAGE 10
<PAGE>
EXHIBIT 11
HAGGAR CORP. AND SUBSIDIARIES
COMPUTATION OF NET INCOME PER COMMON SHARE
(UNAUDITED, IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS
MARCH 31, ENDED MARCH 31,
-------------------- --------------------
1996 1995 1996 1995
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net income to common stockholders....................................... $ 1,584 $ 2,167 $ 2,588 $ 7,503
Weighted average common shares and common share equivalents
outstanding............................................................ 8,551 8,653 8,551 8,660
--------- --------- --------- ---------
Net income per common share and common share equivalents................ $ 0.19 $ 0.25 $ 0.30 $ 0.87
--------- --------- --------- ---------
--------- --------- --------- ---------
Computation of weighted average common shares and common share
equivalents outstanding:
Weighted average common shares outstanding.............................. 8,551 8,544 8,551 8,544
Shares equivalents, due to stock options................................ -- 109 -- 116
--------- --------- --------- ---------
8,551 8,653 8,551 8,660
--------- --------- --------- ---------
--------- --------- --------- ---------
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AND CONSOLIDATED STATEMENT OF INCOME FILED AS PART OF
THE ANNUAL REPORT ON FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH ANNUAL REPORT ON FORM 10-Q.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-START> OCT-01-1995
<PERIOD-END> MAR-31-1996
<CASH> 2,872
<SECURITIES> 0
<RECEIVABLES> 65,158
<ALLOWANCES> 1,194
<INVENTORY> 144,632
<CURRENT-ASSETS> 224,978
<PP&E> 118,793
<DEPRECIATION> 56,032
<TOTAL-ASSETS> 289,346
<CURRENT-LIABILITIES> 55,625
<BONDS> 0
0
0
<COMMON> 856
<OTHER-SE> 167,488
<TOTAL-LIABILITY-AND-EQUITY> 289,346
<SALES> 209,258
<TOTAL-REVENUES> 209,258
<CGS> 152,073
<TOTAL-COSTS> 152,073
<OTHER-EXPENSES> 0
<LOSS-PROVISION> (171)
<INTEREST-EXPENSE> 1,649
<INCOME-PRETAX> 4,167
<INCOME-TAX> 1,579
<INCOME-CONTINUING> 2,588
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,588
<EPS-PRIMARY> 0.30
<EPS-DILUTED> 0.30
</TABLE>
