<PAGE>
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 JUNE 30, 1998.
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)
NEVADA 75-2187001
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
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 August 13, 1998, there were 8,567,722 shares of the Registrant's
Common Stock outstanding.
<PAGE>
HAGGAR CORP. AND SUBSIDIARIES
INDEX
<TABLE>
<S> <C>
Part I. Financial Information
Item 1. Financial Statements
Consolidated Statements of Operations
(Three and nine months ended June 30, 1998 and 1997) 3
Consolidated Balance Sheets
(As of June 30, 1998 and September 30, 1997) 4
Consolidated Statements of Cash Flows
(Nine months ended June 30, 1998 and 1997) 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 6. Exhibits and Reports on Form 8-K 12
Signature 12
</TABLE>
2
<PAGE>
HAGGAR CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED, IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
Three Months Ended Nine Months Ended
June 30, June 30,
-------------------- --------------------
1998 1997 1998 1997
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net sales $ 90,192 $ 87,996 $287,346 $290,761
Cost of goods sold 61,577 63,492 198,403 207,095
-------- -------- -------- --------
Gross profit 28,615 24,504 88,943 83,666
Selling, general and administrative expenses (26,687) (27,550) (82,877) (83,831)
Royalty income, net 482 489 1,570 1,251
-------- -------- -------- --------
Operating income (loss) 2,410 (2,557) 7,636 1,086
Other income, net 469 116 739 1,305
Interest expense (883) (772) (2,625) (2,563)
-------- -------- -------- --------
Income (loss) from operations before provision
(benefit) for income taxes 1,996 (3,213) 5,750 (172)
Provision (benefit) for income taxes 765 (1,287) 2,215 (69)
-------- -------- -------- --------
Net income (loss) $ 1,231 $ (1,926) $ 3,535 $ (103)
-------- -------- -------- --------
-------- -------- -------- --------
Basic and Diluted Net income (loss) per share $ 0.14 $ (.23) $ 0.41 $ (.01)
-------- -------- -------- --------
-------- -------- -------- --------
Weighted average shares outstanding- Basic 8,567 8,551 8,567 8,551
-------- -------- -------- --------
-------- -------- -------- --------
Weighted average shares outstanding- Diluted 8,607 8,552 8,587 8,552
-------- -------- -------- --------
-------- -------- -------- --------
</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>
June 30, September 30,
1998 1997
(unaudited)
----------- -------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 19,392 $ 2,176
Accounts receivable, net 45,677 70,969
Inventories 100,260 105,242
Deferred tax benefit 9,691 10,073
Other current assets 1,663 3,833
---------- ----------
Total current assets 176,683 192,293
Property, plant, and equipment, net 65,819 68,697
Other assets 2,344 1,063
---------- ----------
Total Assets $ 244,846 $ 262,053
---------- ----------
---------- ----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 17,616 $ 28,423
Accrued liabilities 21,181 26,195
Accrued wages and other employee compensation 3,459 3,481
Accrued workers' compensation expense 3,091 4,948
Short-term borrowings 3,722 2,362
Current portion of long-term debt 3,671 330
---------- ----------
Total current liabilities 52,740 65,739
Long-term debt 25,119 31,800
---------- ----------
Total liabilities 77,859 97,539
STOCKHOLDERS' EQUITY
Common stock par value $0.10 per share; 25,000,000
shares authorized and 8,576,976 shares issued at
June 30, 1998 and 8,560,636 shares issued at
September 30, 1997 857 856
Additional paid-in capital 41,858 41,641
Retained earnings 124,273 122,018
---------- ----------
166,988 164,515
Less - Treasury stock, 9,254 shares at par value (1) (1)
---------- ----------
Total stockholders' equity 166,987 164,514
---------- ----------
Total Liabilities and Stockholders' Equity $ 244,846 $ 262,053
---------- ----------
---------- ----------
</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>
Nine Months Ended
June 30,
--------------------------
1998 1997
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ 3,535 $ (103)
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Depreciation and amortization 9,614 8,440
Gain on disposal of property, plant, and equipment (64) (357)
Changes in assets and liabilities
Accounts receivable, net 25,292 28,732
Inventories 4,982 1,528
Deferred tax benefit 382 (1,054)
Other current assets 2,170 (1,061)
Accounts payable (10,807) (2,674)
Accrued liabilities (5,014) (10,478)
Accrued wages and other employee compensation (22) (785)
Accrued workers' compensation expense (1,857) 230
----------- -----------
Net cash provided by operating activities 28,211 22,418
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property, plant and equipment, net (6,771) (9,077)
Proceeds from the sale of property, plant and equipment 99 956
(Increase) decrease in other assets (1,281) 1,937
----------- -----------
Net cash used in investing activities (7,953) (6,184)
CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds from short-term borrowings 1,360 142
Proceeds from issuance of long-term debt 18,000 30,000
Proceeds from issuance of common stock 218 --
Payments on long-term debt (21,340) (43,272)
Payments of cash dividends (1,280) (1,283)
----------- -----------
Net cash used in financing activities (3,042) (14,413)
Increase in cash and cash equivalents 17,216 1,821
Cash and cash equivalents, beginning of period 2,176 2,944
----------- -----------
Cash and cash equivalents, end of period $ 19,392 $ 4,765
----------- -----------
----------- -----------
Supplemental disclosure of cash flow information
Cash paid for:
Interest $ 3,097 $ 1,983
Income taxes $ 817 $ 1,171
</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 June 30, 1998, the consolidated
statements of operations for the three and nine months ended June 30, 1998
and 1997, and the consolidated statements of cash flows for the nine months
ended June 30, 1998 and 1997, 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 June 30, 1998, 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, 1997.
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. One customer accounted for 29.8% and
25.0% of the Company's net sales for the three months ended June 30, 1998 and
1997, respectively. The same customer accounted for 31.3% and 27.1% of the
Company's net sales for the nine months ended June 30, 1998 and 1997,
respectively. 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 June 30, 1998, and September 30, 1997 (in
thousands):
<TABLE>
June 30, September 30,
1998 1997
-------- -------------
<S> <C> <C>
Piece goods $ 11,017 $ 17,455
Trimmings & supplies 3,284 3,841
Work-in-process 13,369 16,162
Finished garments 72,590 67,784
-------- --------
$100,260 $105,242
-------- --------
-------- --------
</TABLE>
Work-in-process and finished garments inventories consisted of materials,
labor and manufacturing overhead.
6
<PAGE>
LONG-TERM DEBT.
Long-term debt consisted of the following at June 30, 1998, and September 30,
1997 (in thousands):
<TABLE>
June 30, September 30,
1998 1997
-------- -------------
<S> <C> <C>
Borrowings under revolving
credit line $ -- $ 3,000
Industrial Development Revenue
Bonds with interest at a rate equal
to that of high-quality, short-term,
tax-exempt obligations, as defined
(3.60% at June 30, 1998),
payable in annual installments of
$100, and a final payment of
$2,000 in 2005, secured by
certain buildings and equipment 2,700 2,800
Senior Notes Payable 25,000 25,000
Other 1,090 1,330
------- -------
28,790 32,130
Less - Current portion 3,671 330
------- -------
$25,119 $31,800
------- -------
------- -------
</TABLE>
As of June 30, 1998, 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 no borrowings outstanding under the credit
line and available borrowing capacity was approximately $84,000,000 under
this Agreement at June 30, 1998. The Company incurred approximately $130,000
in commitment fees related to the available borrowing capacity during the
nine month period ended June 30, 1998. The interest rates for the nine month
period ended June 30, 1998, ranged from 6.63% to 8.50% and the weighted
average interest rate for the quarter and nine month period was 6.25% and
8.50%, respectively. The agreement was amended and extended during the
quarter to extend the facility to June 30, 2001, with a one year renewal at
the option of the banks and is unsecured, except that the Company is
prohibited from pledging its accounts receivable and inventories during the
term of the Agreement. The Agreement contains limitations on incurring
additional indebtedness and requires the maintenance of certain financial
ratios. 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 $151,000,000 and $55,000,000, respectively, as of
June 30, 1998. The agreement requires the Company to maintain a tangible net
worth in excess of the tangible net worth of the preceding fiscal year plus
50% of the Company's consolidated net income. The Agreement prohibits the
payment of any dividend if a default exists after giving effect to such
dividend.
In 1995, the Company completed the sale and issuance of $25,000,000 in senior
notes. Proceeds from the notes were used to partially fund the construction
of the Company's new Customer Service Center ("CSC"). 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.
7
<PAGE>
NET INCOME PER COMMON SHARE AND COMMON SHARE EQUIVALENT.
SFAS No. 128, "Earnings Per Share", issued in February 1997, mandates a change
in the methodology for calculating earnings per share. The Company
implemented the provisions of SFAS No. 128 in the first quarter of fiscal
1998. All periods prior to October 1, 1997, have been restated to conform
with the standards of SFAS No. 128.
Basic earnings per share excludes dilution and is computed by dividing net
income by the weighted-average number of common shares outstanding for the
period. Diluted earnings per share is computed by dividing net income by the
sum of the weighted-average number of common shares outstanding for the
period and the number of equivalent shares assumed outstanding under the
Company's stock based compensation plans.
Options to purchase 220,999 common shares at prices ranging from $15.88 to
$23.00 were not dilutive and were outstanding for the three and nine months
ended June 30, 1998. Options to purchase 782,400 and 776,400 common shares
at prices ranging from $16.50 to $37.88 were not dilutive and were
outstanding for the three and nine months ended June 30, 1997. These shares
for the aforementioned periods were not included in the diluted earnings per
share calculation because the options exercise prices were greater than the
average market price of the common shares. Diluted earnings per share was
calculated as follows (unaudited, in thousands, except per share data):
<TABLE>
Three Months Ended Nine Months Ended
June 30, June 30,
------------------- -----------------
1998 1997 1998 1997
------ ------- ------ ------
<C> <C> <C> <C>
Net income (loss) to common stockholders $1,231 $(1,926) $3,535 $ (103)
Weighted average common shares outstanding 8,567 8,551 8,567 8,551
Shares equivalents, due to stock options 40 1 20 1
------ ------- ------ ------
8,607 8,552 8,587 8,552
------ ------- ------ ------
------ ------- ------ ------
Net Income (loss) per share - Diluted $0.14 (.23) $0.41 (.01)
------ ------- ------ ------
------ ------- ------ ------
</TABLE>
SUBSEQUENT EVENTS.
Subsequent to June 30, 1998, the Company declared a cash dividend of $0.05
per share payable to the stockholders of record on August 3, 1998. The
dividend of approximately $428,000 will be paid on August 17, 1998.
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, 1997.
RESULTS OF OPERATIONS
The Company's third quarter of fiscal 1998 net income to common stockholders of
$1.2 million compares to a net loss of $1.9 million in the third quarter of
fiscal 1997. Net income to common stockholders for the nine months ended June
30, 1998, was $3.5 million compared to a net loss of $0.1 million for the nine
months ended June 30, 1997. The increase in net income is primarily the result
of increased gross profit and decreased selling, general, and administrative
expenses during the three and nine months ended June 30, 1998, as compared to
the three and nine months ended June 30, 1997.
Net sales for the third quarter ended June 30, 1998, increased 2.5% to $90.2
million from $88.0 million for the third quarter of fiscal 1997. The increase
in net sales for the third quarter of fiscal 1998 is the result of a 5.6%
increase in unit sales, offset by a 3.1% decrease in the average sales price.
Net sales for the nine months ended June 30, 1998, decreased 1.2% to $287.3
million compared to $290.8 million in the prior fiscal year. The decrease in
the first nine months of fiscal 1998 is the result of a 2.9% decrease in unit
sales, offset by a 1.7% increase in the average sales price.
Gross profit as a percentage of net sales increased to 31.7% in the third
quarter of fiscal 1998 compared to 27.8% in the third quarter of the prior
fiscal year. Gross profit as a percentage of net sales for the first nine
months of fiscal 1998 increased to 30.9% compared to 28.8% in the first nine
months of fiscal 1997. The increase in gross profit is primarily the result of
lower manufacturing costs and fewer inventory markdowns in fiscal 1998.
Selling, general and administrative expenses as a percentage of net sales
decreased to 29.6% in the third quarter of fiscal 1998 compared to 31.3% in
the third quarter of fiscal 1997. Shipping, distribution, marketing and
other administrative costs decreased approximately $1.8 million which were
offset by an increase of $0.9 million in expenses related to the opening as
operations of new retail stores. At the end of the third quarter June 30,
1998, 52 retail stores were open and operational as compared to 40 stores at
the end of the same period one year ago. For the nine months ended June 30,
1998, selling, general and administrative expenses as a percentage of net
sales remained constant at 28.8% compared to the first nine months of the
prior fiscal year.
For the nine month period ended June 30, 1998, other income is $0.7 million
compared to other income of $1.3 million for the same period during fiscal
1997. In the second quarter of fiscal 1997, a gain of $0.4 million from the
sale of two properties and a gain of $0.5 million from the dissolution of a
United Kingdom joint venture were recognized. These transactions are the
primary reasons for the decrease in other income for the nine months ended
June 30, 1998.
Income tax expense for the third quarter of fiscal 1998, as a percentage of
income before provision for income taxes, was 38.3% compared to a 40.1% benefit
in the third quarter of fiscal 1997. For the nine months ended June 30, 1998,
the income tax provision as a percentage of net income before provision for
income taxes is 38.5% compared to a 40.1% benefit in the first nine months of
1997. The effective tax rates for both the third quarter and the nine months
of fiscal 1998 and 1997 differ between periods and from the statutory rate
because of certain permanent tax differences and state income taxes.
9
<PAGE>
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 $25.3 million to $45.7 million at
June 30, 1998 from $71.0 million at September 30, 1997. This decrease in trade
accounts receivable is mainly the result of seasonal reductions.
Inventories as of June 30, 1998, decreased to $100.3 million from $105.2
million at September 30, 1997. The continued decrease in inventory levels
reflect the Company's ongoing efforts to maintain adequate inventory 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. The facility will
mature June 30, 2001, with a one year renewal at the option of the bank. As of
June 30, 1998, the Company had no borrowings outstanding under the Agreement
and had available borrowing capacity of approximately $84 million.
In fiscal 1995, the Company issued $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. 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.
The Company's Haggar UK subsidiary maintains a $4.0 million line of credit with
a bank in the United Kingdom to fund operating activities. As of June 30,
1998, the subsidiary had approximately $3.7 million outstanding under this line
of credit. The line of credit is collateralized by an approximate $4.0 million
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.
For the nine months ended June 30, 1998, the Company provided cash from
operating activities of approximately $28.2 million primarily as a result of a
$25.3 million decrease in accounts receivable due to seasonal reductions. For
the nine months ended June 30, 1997 the Company provided cash from operating
activities of approximately $22.4 million primarily as a result of a decrease
in accounts receivable of $28.7 million. For the nine months ended June 30,
1998, the Company used cash flows in investing activities of $7.9 million,
primarily to purchase property, plant and equipment. For the nine months
ended June 30, 1997, the Company used approximately $6.2 million in investing
activities primarily to purchase property, plant and equipment, partially
offset by a decrease in other assets of approximately $1.9 million. For the
nine months ending June 30, 1998, cash flows used in financing activities were
primarily the result of a $3.3 million net decrease in long-term debt.
Comparatively, cash flows used in financing activities for the nine months
ended June 30, 1997, were primarily the result of a $13.3 million net decrease
in long-term debt.
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.
10
<PAGE>
YEAR 2000 CONSIDERATIONS
Many computerized systems contain software or microprocessors with date
functions that use only the last two digits of a date to refer to a year and,
therefore, may not properly recognize dates in the year 2000 and after.
Unless corrected, these systems could fail or produce erroneous results for
years after 1999. The Company continues to assess the impact of these year
2000 issues on its operations.
The Company has appointed a full-time project manager to coordinate the
assessment and remediation of year 2000 issues affecting the Company. The
Company's ongoing assessment of year 2000 issues includes analysis of the
ability of its computer hardware, software programs and microprocessing
systems to function properly in the year 2000 and beyond. The Company's
assessment also includes written communications with the Company's suppliers
and customers to determine the status of their compliance programs and the
potential impact on the Company of their failure to be year 2000 compliant.
During the fourth quarter of fiscal 1998, the Company expects to review a
preliminary assessment of its year 2000 readiness and approve a schedule for
resolving remaining year 2000 issues.
The costs to address year 2000 issues have not been material to the Company's
results of operations to date and are not presently anticipated to be
material in the future. However, there can be no assurance that the Company
will not incur significant unforeseen costs in connection with its year 2000
compliance. Further, although the Company presently expects timely
completion of its year 2000 readiness program, there can be no assurance that
all of the computerized systems of the Company, its suppliers and its
customers will be rendered fully year 2000 compliant in a timely manner. The
Company has not yet established a contingency plan for addressing year 2000
computer failures or determined whether a contingency plan is appropriate.
The failure of the Company, its suppliers or its customers to timely resolve
all year 2000 issues could have a material adverse impact on the future
business, results of operations and financial condition of the Company.
FORWARD LOOKING STATEMENTS
This report contains certain forward-looking statements. In addition, from
time to time the Company may issue press releases and other written
communications, and representatives of the Company may make oral statements,
which contain forward-looking information. Except for historical information,
matters discussed in such oral and written communications are forward-looking
statements that involve risks and uncertainties which could cause actual
results to differ materially from those in such forward-looking statements.
Risks and uncertainties inherent to the Company's line of business include such
factors as natural disasters, general economic conditions, the performance of
the retail sector in general and the apparel industry in particular, the
competitive environment, consumer acceptance of new products, and the success
of advertising, marketing and promotional campaigns. Additional risks and
uncertainties which could cause the Company's actual results to differ from
those contained in any forward-looking statements are discussed elsewhere
herein.
11
<PAGE>
PART II. OTHER INFORMATION.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibit 10 Fourth Amendment to First Amended and Restated Credit
Agreement dated June 30, 1998, between the Company and Chase Bank
of Texas, as agent for a bank syndicate.
(b) Exhibit 27 Financial Data Schedule
(c) Exhibit 27.1 Restated Financial Data Schedule for the quarterly
period ended June 30, 1997
(d) No reports on Form 8-K have been filed during the quarter for which
this report is filed.
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: August 14, 1998 By: /s/ David M. Tehle
----------------------------------
David M. Tehle
Executive Vice President
Chief Financial Officer
Signed on behalf of the
registrant and as principal
financial officer.
12
<PAGE>
FOURTH AMENDMENT TO
FIRST AMENDED AND RESTATED CREDIT AGREEMENT
This FOURTH AMENDMENT TO FIRST AMENDED AND RESTATED CREDIT AGREEMENT
(this "AGREEMENT") is entered into as of June 30, 1998 (the "EFFECTIVE
DATE"), 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"), Chase Bank of Texas, National Association, a
national banking association, f/k/a Texas Commerce Bank National Association,
individually and as agent (the "AGENT") for the Banks, and is consented to by
Haggar and the domestic subsidiaries of the Company listed on the signature
pages of this Agreement (collectively, the "SUBSIDIARIES").
R E C I T A L S:
WHEREAS, pursuant to that certain First Amended and Restated Credit
Agreement (as heretofore and herein amended, the "CREDIT AGREEMENT") dated as
of September 18, 1996, executed by and among the Company, Haggar, the Banks
and the Agent, 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 was amended by First Amendment to First
Amended and Restated Credit Agreement dated as of December 31, 1996, and
pursuant to Article 1 thereof, the Termination Date was extended to December
31, 1999, by notice from the Company dated April 25, 1997, and written
concurrence by the Banks pursuant to request dated April 30, 1997; and
WHEREAS, the Credit Agreement was further amended by Second Amendment to
First Amended and Restated Credit Agreement dated as of June 30, 1997, and by
Third Amendment to First Amended and Restated Credit Agreement dated as of
December 15, 1997;
WHEREAS, upon the execution of this Agreement, Bank of Scotland (the
"WITHDRAWING BANK") is withdrawing from the Credit Agreement and the Banks
are adjusting their relative Commitment amounts;
WHEREAS, the Company has requested that the Termination Date be extended
and that certain definitions be modified as set forth below; and
WHEREAS, the Agent and the Banks are agreeable to such request under the
present circumstances and in consideration of certain additional amendments
to the Credit Agreement as set forth below.
FOURTH AMENDMENT TO FIRST AMENDED AND RESTATED 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 and the Agent hereby agree as follows:
A G R E E M E N T:
1. AMENDMENT TO DEFINITIONS. The following definitions 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, three-quarters of one percent (3/4%) 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, one percent (1%) 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, one and one-eighth percent (1-1/8%) 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 and one-quarter percent (1-1/4%) per annum,
and (e) at any time when the Funded Debt Ratio is greater than 3.00 to 1,
one and three-eighths percent (1-3/8%) per annum. Each adjustment to the
previously calculated CD Margin shall be effective five (5) Business Days
following the Agent's receipt of the reports to be delivered by the
Company pursuant to Sections 6.1(a), (b) and (c).
"Eurodollar 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, seven-eighths of one percent (7/8%)
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, one percent (1%) 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 and one-eighth percent (1-1/8%) per annum,
and (e) at any time when the Funded Debt Ratio is greater than 3.00 to 1,
one and one-quarter percent (1-1/4%) 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 Sections 6.1(a), (b) and (c).
"Termination Date" means June 30, 2001, unless the Commitments are
terminated prior to such date pursuant to Sections 2.4 or 9.1; provided,
however, if the Agent receives written notice from the Company by April 30,
1999 (and consent by Haggar and Domestic Subsidiaries); and each April
thereafter, of its intention to extend for one (1) additional year (and the
Company receives notice from the Agent by June 15, 1999, and each June 15
thereafter, of the election of all the Banks to so extend), then the
Termination Date shall be extended for one (1) additional year, unless the
Commitments are terminated prior to such extended date pursuant to Sections
2.4 or 9.l.
FOURTH AMENDMENT TO FIRST AMENDED AND RESTATED CREDIT AGREEMENT Page 2
<PAGE>
2. AMENDMENT TO COMMITMENTS. The Commitment of each Bank is hereby
revised to equal the amount set opposite such Bank's name on the signature
pages of this Agreement.
3. AMENDMENT TO SECTION 2.5(A). Section 2.5(a) is hereby amended in
its entirety to read as follows:
(a) On each Payment Date and on the Termination Date, a commitment
fee equal to a fluctuating percentage of the average daily amount of the
Total Commitments minus the sum of (i) the outstanding principal amount
of all Advances and (ii) the Letter of Credit Exposure during the quarter
ending on and including such Payment Date, or such shorter period ending
on and including the Termination Date, as the case may be. The percentage
shall be equal to the following: (a) at any time when the Funded Debt
Ratio is equal to or less than 1.50 to 1, one-fifth of one percent (1/5%)
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, nine-fortieths of one percent
(9/40%) 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, one-quarter of one
percent (1/4%) 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, three-tenths
of one percent (3/10%) per annum, and (e) at any time when the Funded Debt
Ratio is greater than 3.00 to 1, three-eighths of one percent (3/8%) per
annum. Each adjustment to the percentage used to calculate the Commitment
Fee shall be effective five (5) Business Days following Agent's receipt
of the reports to be delivered by the Company pursuant to Sections 6.1(a),
(b) and (c);
4. WITHDRAWAL OF CERTAIN BANK AND REARRANGEMENT OF COMMITMENTS. The
Withdrawing Bank executes below to evidence its understanding and agreement
that it is withdrawing from the Credit Agreement and shall no longer have any
rights or obligations thereunder and each remaining Bank agrees that its
Commitment shall from and after the Effective Date of this Agreement be the
amount set opposite its signature hereto: The Withdrawing Bank agrees to
tender its Note to the Agent on the Effective Date for cancellation and each
remaining Bank agrees to return its Note to the Agent on the Effective Date
to be exchanged for a new Note in the amount of its Commitment as revised
pursuant to this Agreement. The Agent shall promptly thereafter deliver such
canceled Notes to the Company.
5. ADDITION OF SECTION 5.18. Section 5.18 is hereby added to read as
follows:
YEAR 2000 REPRESENTATION. The Company is taking actions to
determine that its computer systems are capable of processing periods
for the year 2000 and beyond. The Company has assessed and continues
to assess the impact of the year 2000 on its operations, including the
development of cost estimates for and the extent of programming
changes required to address the issue, and to date has determined the
cost related thereto would not result in an Unmatured Default, a
Default or a Material Adverse Effect. Also, the Company is assessing
the impact of its customers' and vendors' compliance to year 2000 and
what the impact will be on the Company's ongoing results of
operations.
FOURTH AMENDMENT TO FIRST AMENDED AND RESTATED CREDIT AGREEMENT Page 3
<PAGE>
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, and (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.
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 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 fill 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, 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.
FOURTH AMENDMENT TO FIRST AMENDED AND RESTATED CREDIT AGREEMENT Page 4
<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.
[SEE SIGNATURES ON ATTACHED PAGES]
FOURTH AMENDMENT TO FIRST AMENDED AND RESTATED CREDIT AGREEMENT Page 5
<PAGE>
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
Chief Executive Officer
HAGGAR CORP., a Nevada corporation
By: /s/ J.M. Haggar, III
----------------------------------------
J.M. Haggar, III
Chief Executive Officer
THE BANKS CHASE BANK OF TEXAS, NATIONAL ASSOCIATION, f/k/a TEXAS
COMMERCE BANK National Association, Individually, as
the Agent
$22,222,222.22
By:
----------------------------------------
Mae Kantipong
Vice President
$22,222,222.22 NATIONSBANK, N.A.,
successor-in-interest by merger to NationsBank of
Texas, N.A.
By:
----------------------------------------
Suzanne Johnson
Vice President
FOURTH AMENDMENT TO FIRST AMENDED AND RESTATED CREDIT AGREEMENT Page 6
<PAGE>
EXECUTED as of the date first above written.
HAGGAR CLOTHING CO., a Nevada corporation, f/k/a Haggar
Apparel Company
By:
----------------------------------------
J.M. Haggar, III
Chief Executive Officer
HAGGAR CORP., a Nevada corporation
By:
----------------------------------------
J.M. Haggar, III
Chief Executive Officer
THE BANKS CHASE BANK OF TEXAS, NATIONAL ASSOCIATION, f/k/a TEXAS
COMMERCE BANK National Association, Individually, as
the Agent
$22,222,222.22
By: /s/ Mae Kantipong
----------------------------------------
Mae Kantipong
Vice President
$22,222,222.22 NATIONSBANK, N.A.,
successor-in-interest by merger to NationsBank of
Texas, N.A.
By:
----------------------------------------
Suzanne Johnson
Vice President
FOURTH AMENDMENT TO FIRST AMENDED AND RESTATED CREDIT AGREEMENT Page 7
<PAGE>
EXECUTED as of the date first above written.
HAGGAR CLOTHING CO., a Nevada corporation, f/k/a Haggar
Apparel Company
By:
----------------------------------------
J.M. Haggar, III
Chief Executive Officer
HAGGAR CORP., a Nevada corporation
By:
----------------------------------------
J.M. Haggar, III
Chief Executive Officer
THE BANKS CHASE BANK OF TEXAS, NATIONAL ASSOCIATION, f/k/a TEXAS
COMMERCE BANK National Association, Individually, as
the Agent
$22,222,222.22
By:
----------------------------------------
Mae Kantipong
Vice President
$22,222,222.22 NATIONSBANK, N.A.,
successor-in-interest by merger to NationsBank of
Texas, N.A.
By: /s/ Suzanne Johnson
----------------------------------------
Suzanne Johnson
Vice President
FOURTH AMENDMENT TO FIRST AMENDED AND RESTATED CREDIT AGREEMENT Page 8
<PAGE>
$18,518,518.51 COMERICA BANK-TEXAS
By: /s/ Paul L. Strange
----------------------------------------
Paul L. Strange
Vice President
$11,111,111.12 THE FIRST NATIONAL BANK OF CHICAGO
By:
----------------------------------------
Jenny A. Gilpin
Vice President
$14,814,814.81 THE BANK OF TOKYO-MITSUBISHI, LTD.,
DALLAS OFFICE
By:
----------------------------------------
Douglas M. Barnell
Vice President
$0.00 BANK OF SCOTLAND
By:
----------------------------------------
Annie Chin Tat
Vice President
$11,111,111.12 NATIONAL CITY BANK, KENTUCKY,
f/k/a First National Bank of Louisville
By:
----------------------------------------
Donald R. Pullen, Jr.
Vice President
FOURTH AMENDMENT TO FIRST AMENDED AND RESTATED CREDIT AGREEMENT Page 9
<PAGE>
$18,518,518.51 COMERICA BANK-TEXAS
By:
----------------------------------------
Paul L. Strange
Vice President
$11,111,111.12 THE FIRST NATIONAL BANK OF CHICAGO
By: /s/ Jenny A. Gilpin
----------------------------------------
Jenny A. Gilpin
Vice President
$14,814,814.81 THE BANK OF TOKYO-MITSUBISHI, LTD.,
DALLAS OFFICE
By:
----------------------------------------
Douglas M. Barnell
Vice President
$0.00 BANK OF SCOTLAND
By:
----------------------------------------
Annie Chin Tat
Vice President
$11,111,111.12 NATIONAL CITY BANK, KENTUCKY,
f/k/a First National Bank of Louisville
By:
----------------------------------------
Donald R. Pullen, Jr.
Vice President
FOURTH AMENDMENT TO FIRST AMENDED AND RESTATED CREDIT AGREEMENT Page 10
<PAGE>
$18,518,518.51 COMERICA BANK-TEXAS
By:
----------------------------------------
Paul L. Strange
Vice President
$11,111,111.12 THE FIRST NATIONAL BANK OF CHICAGO
By:
----------------------------------------
Jenny A. Gilpin
Vice President
$14,814,814.81 THE BANK OF TOKYO-MITSUBISHI, LTD.,
DALLAS OFFICE
By: /s/ Douglas M. Barnell
----------------------------------------
Douglas M. Barnell
Vice President
$0.00 BANK OF SCOTLAND
By:
----------------------------------------
Annie Chin Tat
Vice President
$11,111,111.12 NATIONAL CITY BANK, KENTUCKY,
f/k/a First National Bank of Louisville
By:
----------------------------------------
Donald R. Pullen, Jr.
Vice President
FOURTH AMENDMENT TO FIRST AMENDED AND RESTATED CREDIT AGREEMENT Page 11
<PAGE>
$18,518,518.51 COMERICA BANK-TEXAS
By:
----------------------------------------
Paul L. Strange
Vice President
$11,111,111.12 THE FIRST NATIONAL BANK OF CHICAGO
By:
----------------------------------------
Jenny A. Gilpin
Vice President
$14,814,814.81 THE BANK OF TOKYO-MITSUBISHI, LTD.,
DALLAS OFFICE
By:
----------------------------------------
Douglas M. Barnell
Vice President
$0.00 BANK OF SCOTLAND
By: /s/ Annie Chin Tat
----------------------------------------
Annie Chin Tat
Vice President
$11,111,111.12 NATIONAL CITY BANK, KENTUCKY,
f/k/a First National Bank of Louisville
By:
----------------------------------------
Donald R. Pullen, Jr.
Vice President
FOURTH AMENDMENT TO FIRST AMENDED AND RESTATED CREDIT AGREEMENT Page 12
<PAGE>
$11,111,111.12 NATIONAL CITY BANK OF KENTUCKY f/k/a First
National Bank of Louisville
By: /s/ Thomas M. Gurbach
----------------------------------------
Thomas M. Gurbach
Vice President
FOURTH AMENDMENT TO FIRST AMENDED AND RESTATED CREDIT AGREEMENT Page 13
<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 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
Chief Executive Officer
Dated as of June 30, 1998.
FOURTH AMENDMENT TO FIRST AMENDED AND RESTATED CREDIT AGREEMENT Page 14
<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 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
FOURTH AMENDMENT TO FIRST AMENDED AND RESTATED CREDIT AGREEMENT Page 15
<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. Hagger, 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
FOURTH AMENDMENT TO FIRST AMENDED AND RESTATED CREDIT AGREEMENT Page 16
<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
FOURTH AMENDMENT TO FIRST AMENDED AND RESTATED CREDIT AGREEMENT Page 17
<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. Hagger, III
Chairman/Chief Executive Officer
Dated as of June 30, 1998.
FOURTH AMENDMENT TO FIRST AMENDED AND RESTATED CREDIT AGREEMENT Page 18
<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 10-K AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-START> OCT-01-1997
<PERIOD-END> JUN-30-1998
<CASH> 19,392
<SECURITIES> 0
<RECEIVABLES> 46,603
<ALLOWANCES> 926
<INVENTORY> 100,260
<CURRENT-ASSETS> 176,683
<PP&E> 133,052
<DEPRECIATION> 67,233
<TOTAL-ASSETS> 244,846
<CURRENT-LIABILITIES> 52,740
<BONDS> 0
0
0
<COMMON> 857
<OTHER-SE> 166,130
<TOTAL-LIABILITY-AND-EQUITY> 244,846
<SALES> 287,346
<TOTAL-REVENUES> 287,346
<CGS> 198,403
<TOTAL-COSTS> 81,307
<OTHER-EXPENSES> (739)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,625
<INCOME-PRETAX> 5,750
<INCOME-TAX> 2,215
<INCOME-CONTINUING> 3,535
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,535
<EPS-PRIMARY> .41<F1>
<EPS-DILUTED> .41<F1>
<FN>
<F1>THE EARNINGS PER SHARE INFORMATION HAS BEEN PREPARED IN ACCORDANCE WITH SFAS
NO. 128, AND BASIC AND DILUTED EARNINGS PER SHARE HAVE BEEN ENTERED IN PLACE OF
PRIMARY AND FULLY DILUTED, RESPECTIVELY.
</FN>
</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 10-K AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-START> OCT-01-1996
<PERIOD-END> JUN-30-1997
<CASH> 4,765
<SECURITIES> 0
<RECEIVABLES> 46,791
<ALLOWANCES> 967
<INVENTORY> 114,828
<CURRENT-ASSETS> 183,588
<PP&E> 121,031
<DEPRECIATION> 55,233
<TOTAL-ASSETS> 250,111
<CURRENT-LIABILITIES> 60,057
<BONDS> 0
0
0
<COMMON> 856
<OTHER-SE> 160,240
<TOTAL-LIABILITY-AND-EQUITY> 250,111
<SALES> 290,761
<TOTAL-REVENUES> 290,761
<CGS> 207,095
<TOTAL-COSTS> 82,580
<OTHER-EXPENSES> (1,305)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,563
<INCOME-PRETAX> (172)
<INCOME-TAX> (69)
<INCOME-CONTINUING> (103)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (103)
<EPS-PRIMARY> (.01)<F1>
<EPS-DILUTED> (.01)<F1>
<FN>
<F1>THE EARNINGS PER SHARE INFORMATION HAS BEEN PREPARED IN ACCORDANCE WITH SFAS
NO. 128, AND BASIC AND DILUTED EARNINGS PER SHARE HAVE BEEN ENTERED IN PLACE OF
PRIMARY AND FULLY DILUTED RESPECTIVELY.
</FN>
</TABLE>
