FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
|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 transaction period from to
Commission File Number: 33-58934
LUNDGREN BROS. CONSTRUCTION, INC.
(Exact name of registrant as specified in its charter)
Minnesota 41-0970679
(State or other jurisdiction of (I.R.S Employer
incorporation or organization) Identification No.)
935 East Wayzata Boulevard
Wayzata, Minnesota 55391
(Address of principal executive offices) (Zip Code)
(612)473-1231
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes _X_ No ___
On May 13, 1996, there were 594 voting shares and 10,031 nonvoting shares of the
registrant's no par value common stock outstanding.
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
LUNDGREN BROS. CONSTRUCTION, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
MARCH 31, DECEMBER 31,
1996 1995
------- -------
(UNAUDITED)
ASSETS
Cash and cash equivalents $ 1,450 $ 2,984
Restricted cash 359 816
Receivables 1,406 1,078
Deposits and prepaid expenses 3,389 2,861
Inventories 37,502 34,166
Land option and earnest money deposits 812 921
Property and equipment, net 1,586 1,682
Deferred income taxes 50 50
Other assets 3,367 3,205
------- -------
Total assets $49,921 $47,763
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Obligations under bank lines of credit 3,663 3,650
Debt obligations 27,768 25,260
Obligations under capital leases 503 505
Accounts payable 7,488 7,303
Cost to complete sold homes 896 1,245
Customer deposits 2,141 1,846
Accrued expenses 1,196 1,484
Income taxes payable -- 85
------- -------
Total liabilities 43,655 41,378
Commitments and contingencies -- --
Stockholders' equity:
Common stock, no par value; authorized, 12,000
shares; 594 shares voting and 10,031
shares nonvoting issued and outstanding 99 99
Retained earnings 6,167 6,286
------- -------
6,266 6,385
------- -------
Total liabilities and
stockholders' equity $49,921 $47,763
======= =======
The accompanying notes are an integral part
of the consolidated financial statements.
LUNDGREN BROS. CONSTRUCTION, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
(UNAUDITED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
THREE MONTHS ENDED
MARCH 31,
1996 1995
-------- --------
Revenues $ 10,830 $ 11,214
Cost of revenues 9,097 9,547
-------- --------
Gross profit 1,733 1,667
Operating expenses:
Selling 629 741
General and administrative 981 907
-------- --------
123 19
Other income (expense):
Interest expense (455) (326)
Other, net 134 20
-------- --------
Loss from operations before income taxes (198) (287)
Income tax benefit (79) (116)
-------- --------
Loss from operations before cumulative
effect of change in accounting method (119) (171)
Cumulative effect on prior years of change in accounting
method, net of income taxes of $527 -- 763
-------- --------
Net (loss) income (119) 592
Retained earnings, beginning of period 6,286 5,101
-------- --------
Retained earnings, end of period $ 6,167 $ 5,693
======== ========
Net (loss) income per share:
Loss from operations $ (11) $ (16)
Cumulative effect of change in accounting method -- 72
-------- --------
$ (11) $ 56
======== ========
The accompanying notes are an integral part
of the consolidated financial statements.
LUNDGREN BROS. CONSTRUCTION, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
1996 1995
------- -------
<S> <C> <C>
Cash flows from operating activities:
Net (loss) income $ (119) $ 592
Adjustments to reconcile net income to
net cash used in operating activities:
Cumulative effect of change in accounting method -- (763)
Depreciation and amortization for operations 128 128
Deferred income taxes -- 75
Gain on disposal of property and equipment -- (33)
Gain on sale of investment (123) --
Changes in operating assets and liabilities (2,630) (5,933)
------- -------
Net cash used in operating activities (2,744) (5,934)
Cash flows from investing activities:
Expenditures for property and equipment (13) (79)
Proceeds on disposal of property and equipment -- 63
Proceeds on sale of investment 159 --
Other 14 --
Increase in cash surrender value of
life insurance (231) (171)
------- -------
Net cash used in investing activities (71) (187)
Cash flows from financing activities:
Proceeds from bank lines of credit 7,718 4,330
Payment of principal on bank lines of credit (7,705) (350)
Proceeds from debt obligations 7,527 7,316
Payment of principal on debt obligations (6,257) (5,774)
Payment of principal on capital lease obligations (2) (11)
------- -------
Net cash provided by financing activities 1,281 5,511
------- -------
Decrease in cash and cash equivalents (1,534) (610)
Cash and cash equivalents, at the beginning of the period 2,984 3,318
------- -------
Cash and cash equivalents, at the end of the period $ 1,450 $ 2,708
======= =======
</TABLE>
The accompanying notes are an integral part
of the consolidated financial statements.
LUNDGREN BROS. CONSTRUCTION, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(DOLLARS IN THOUSANDS)
NOTE 1. GENERAL
SIGNIFICANT ACCOUNTING POLICIES
The audited 1995 annual report of Lundgren Bros. Construction, Inc. and
Subsidiaries (the Company), filed in its 1995 Form 10-K, contains a summary of
significant accounting policies in the Notes to the Consolidated Financial
Statements. The same accounting policies are followed in the preparation of the
interim financial statements.
PER SHARE AMOUNTS
Per share amounts are computed by dividing by the weighted average number of
shares of voting and nonvoting common stock outstanding during each period. The
number of outstanding shares of common stock for the three months ended March
31, 1996 and 1995 was 10,625.
BASIS OF PRESENTATION AND INTERIM PERIODS
The accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information
and with the instructions to Form 10-Q and Article 10 of Regulation S-X.
Accordingly, they do not include all the information and footnotes required by
generally accepted accounting principles for complete financial statements. In
the opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for fair presentation have been included. The
interim results are not necessarily indicative of the results for a fiscal year
as a whole.
NOTE 2. SELECTED FINANCIAL DATA
March 31, 1996 December 31, 1995
----------- -----------------
(UNAUDITED)
RECEIVABLES
Trade $ 933 $ 768
Escrows 480 319
Contracts and notes 24 26
Employees and officers 13 17
Other 11 3
--------- --------
1,461 1,133
Less allowance for doubtful accounts 55 55
--------- --------
$ 1,406 $ 1,078
========= ========
LUNDGREN BROS. CONSTRUCTION, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
(UNAUDITED)
(DOLLARS IN THOUSANDS)
SELECTED FINANCIAL DATA, CONTINUED
March 31, 1996 December 31, 1995
----------- -----------------
(UNAUDITED)
INVENTORIES
Homes under construction $ 15,568 $ 10,822
Model homes 3,266 3,539
Lots held for sale 12,952 14,464
Land held for future development 5,716 5,341
--------- --------
$ 37,502 $ 34,166
========= ========
ACCRUED EXPENSES
Payroll, bonuses and payroll taxes $ 415 $ 926
Other 781 558
--------- --------
$ 1,196 $ 1,484
========= ========
DEBT OBLIGATIONS
Construction loans on single family
homes $ 12,086 $ 9,317
Promissory notes 5,035 3,860
Development loans 5,129 6,415
Subordinate debenture series 2,962 2,962
Street, sewer and water assessments on land
under development and lots held for sale 1,492 1,598
Installment loans 701 736
Unsecured demand notes payable,
stockholders 348 357
Noncompete obligation, officer 15 15
--------- --------
$ 27,768 $ 25,260
========= ========
SUPPLEMENTAL DISCLOSURE OF NONCASH TRANSACTIONS
The Company acquired developed lots and land for future development under
promissory notes with the sellers aggregating $1,238 and $512 during the three
months ended March 31,1996 and 1995, respectively.
NOTE 3. SEGMENT REPORTING
The Company operates principally in two business segments as follows:
* The new homes division, engaged in the interrelated activities of land
acquisition and development and the design, construction, painting,
staining and sale of detached single family homes.
* The remodeling division, engaged in the activities of designing and
construction of residential remodeling projects. These projects include
complete house renovations, kitchen remodelings, bathroom remodelings,
second story additions, finished basements, enclosed porches and patios
and other miscellaneous projects.
The following is a summary of the financial information relating to the
Company's two business segments. A substantial amount of cost allocations are
necessary to determine the operating income (loss) by segment. For this reason,
and because the Company is an integrated enterprise, management does not
represent that these segments, if operated as independent businesses, would
result in the operating income (loss) amounts shown. Intersegment sales are not
significant.
THREE MONTHS ENDED
MARCH 31,
---------
1996 1995
---- ----
Revenues:
New homes $ 9,924 $ 10,240
Remodeling 906 974
Operating income (loss):
New homes 233 155
Remodeling (110) (136)
NOTE 4. LAND OPTION AND EARNEST MONEY DEPOSITS
The Company has entered into option and purchase agreements to acquire lots in
residential housing developments and land for future development. On exercise of
an option, option payments are generally applied to the purchase price of land
acquired in accordance with the terms of the agreement. Earnest money deposits
are to be credited against future purchases. The Company had land purchase
commitments totaling approximately $5,354 and $3,069 at March 31, 1996 and
December 31, 1995, respectively, related to the earnest money deposits.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
The Company is organized in two business segments: new homes and remodeling. New
homes segment includes land acquisition and development, home building and home
sales and painting and staining services. Remodeling consists of home remodeling
design and construction services.
NEW HOMES
Revenues for the three months ended March 31, 1996 decreased $316,000 or 3.1%
from the same period in 1995. The Company closed on sales of 27 homes in the
first three months of 1996 as compared to 30 closings in the same period in
1995, and the average selling price of homes closed in the first three months of
1996 increased by 7.7% from the average selling price of homes closed in the
same period in 1995. The Company believes that the decrease in homes closed was
due to the timing of the removal of customer purchase contingencies and
subsequent house starts in 1996 compared to 1995. The increase in average
selling price is due to changes in the mix of homes closed in the first three
months of 1996 compared to the same period in 1995.
Gross profit for the new homes segment for the three months ended March 31, 1996
was $1.6 million, an increase from $1.5 million in the same period in 1995. The
Company's gross profit margin in the three months ended March 31, 1996 increased
to 16.0% as compared to 14.8% in the same period in 1995. The Company believes
that this increase in gross profit margin is due to changes in the location of
the home developments and increase in the mix of homes sold on land developed by
the Company versus lots purchased from other developers.
Operating expenses for the new homes segment (which include selling, general and
administrative expenses) for the three months ended March 31, 1996 were
approximately the same as in 1995. As a percentage of total new home revenues,
these expenses increased to 13.7% in 1996 as compared to 13.3% in 1995, as most
are fixed in nature.
REMODELING
Operating loss for the remodeling segment for the three months ended March 31,
1996 decreased to $110,000 from $136,000 in the same period in 1995. This
decrease is due to improved cost controls in 1996.
OTHER INCOME (EXPENSE), NET
Interest expense for the three months ended March 31, 1996 increased $129,000 or
39.6% from the same period in 1995. This increase is mainly due to higher
interest rates and increased borrowings for additional developed land
inventories in 1996. Other income (expense), net increased $114,000 in the three
months ended March 31, 1996 from the same period in 1995. The increase is mainly
due to a gain on the sale of an investment in a land development partnership.
NET INCOME (LOSS)
Net loss in the three months ended March 31, 1996 was $119,000, a decrease of
$711,000 from $592,000 of net income in the same period in 1995. This decrease
is mainly due to the 1995 change in accounting for land acquisition and
development costs of $763,000 and increased interest expense of $129,000 which
is partially offset by a gain on the sale of an investment in a land development
partnership and improved operating income from new home sales.
LIQUIDITY AND CAPITAL RESOURCES
Cash flows used in operating activities were $2.7 million for the three months
ended March 31, 1996, a decrease of approximately $3.2 million from the same
period in 1995, during which operating activities used $5.9 million of cash. The
decrease was primarily due to a decrease of $4.8 million, relative to 1995, in
the amount of cash used to reduce accounts payable and increase prepaid expenses
for land acquisition projects. These decreased cash uses are partially offset by
an increase of $1.3 million, relative to 1995, of cash used for inventory.
Cash flows used in investing activities decreased by approximately $116,000 from
$187,000 for the three months ended March 31, 1995 to $71,000 for the same
period in 1996. The decrease was primarily due to proceeds from the sale of an
investment in a land development partnership and a reduction of expenditures for
property and equipment, which were partially offset by an increase in cash
surrender value of life insurance.
Cash flows provided by financing activities decreased approximately $4.2 million
to $1.3 million for the three months ended March 31, 1996 from $5.5 million in
the same period in 1995. The decrease was primarily due to decreased net
borrowings on the Company's bank lines of credit primarily due to the decrease,
relative to 1995, in cash used in operating activities.
Financing
The Company believes that internally generated funds, amounts available under
its two lines of credit and borrowing arrangements entered into in the ordinary
course of business will continue to be the primary sources of capital for
liquidity. However, the Company may seek additional long-term financing.
The Company's financing needs depend primarily upon sales volume, asset
turnover, land acquisition and inventory balances. The Company presently
finances substantially all of its land acquisition and development and home
construction activities through borrowing arrangements for individual projects
or homes under construction. The borrowing arrangements evolve with each stage
of the process from land acquisition, to development, to construction of a home
and sale of the home and lot.
The Company also utilizes secured lines of credit to finance its operations. The
Company has approved aggregate credit of $6.5 million. At March 31, 1996, the
aggregate maximum credit available under the lines of credit was $6.1 million,
of which $3.7 million was utilized and $2.4 million was available.
The Company's outstanding indebtedness as of March 31, 1996 included $17.5
million due within one year. The Company has historically operated with a
substantial amount of its outstanding indebtedness due within one year and has
historically paid such debt out of earnings or through refinancing, where
applicable. The Company believes that the amounts available under its credit and
amounts generated from operations will be sufficient to satisfy its debt
obligations due in the next year. However, there can be no assurance that the
Company will be able to continue to obtain adequate short-term financing,
including bank financing, in the future.
PART II. OTHER INFORMATION
Items 1 through 5.
Not applicable
Item 6. Exhibits and Reports on Form 8-K.
(a) The following exhibits are hereby incorporated by reference or filed
herewith as indicated.
*3.1 Articles of Incorporation of Lundgren in effect on the date
hereof.
*3.2 Bylaws of Lundgren on the date hereof.
*4.1 Form of Debenture (included as Sections 202(A) and (B) of
Indenture filed as Exhibit 4.2 hereto to this Annual Report on
Form 10-K).
*4.2 Form of Indenture by and between Lundgren and National City
Bank Minnesota, National Association, as Trustee, including a
Form of Debenture.
*10.1 Lease by and between Lundgren, as lessor, Glenbrook Office
Building Partnership, and Peter Pflaum and Patrick C. Wells,
general partners, dated September 28, 1978.
*10.2 Amended and Restated Stock Purchase Agreement, dated February
1, 1993, by and among Lundgren, Peter Pflaum, Patrick Wells,
Edmund M. Lundgren, Gerald T. Lundgren and Allan D. Lundgren.
***10.3 Revolving Credit Line Agreement between the Company and
Builders Development & Finance, Inc., dated March 18, 1994.
10.4 Amended and Restated Mortgage Note, dated January 25, 1995, of
the Company payable to Builders Development & Finance, Inc.
***10.5 Combination Mortgage, Security Agreement and Fixture Financing
Statement between the Company and Builders Development &
Finance, Inc., dated March 18, 1994.
*10.6 Guaranty by Peter Pflaum, Patrick C. Wells, Allan D. Lundgren,
Edmund M. Lundgren and Gerald T. Lundgren for the benefit of
Builders Development & Finance, Inc., dated July 27, 1990.
*10.7 Demand Discretionary Revolving Credit Agreement between the
Company and Norwest Bank Minnesota, National Association,
dated November 30, 1990.
*10.8 First Amended and Restated Revolving Note, dated May 1, 1992,
of the Company payable to Norwest Bank Minnesota, National
Association.
*10.9 Assignment of Life Insurance Policy as Collateral by the
Company in favor of Norwest Bank Minnesota, National
Association, dated November 30, 1990.
*10.10 Assignment of Life Insurance Policy as Collateral by the
Company in favor of Norwest Bank Minnesota, National
Association, dated May 1, 1992.
*10.11 Guaranty by Peter Pflaum, Patrick C. Wells, Allan D. Lundgren,
Edmund M. Lundgren and Gerald T. Lundgren for the benefit of
Norwest Bank Minnesota, National Association, dated November
5, 1990 and all extensions thereof.
*****10.12 Commercial Lease, dated June 1, 1995, by and between
Koecheler & Olson Leasing and Lundgren Bros. Plumbing.
*****10.13 Lease Agreement, dated April 10, 1995, by and between B.M.
Acquisitions Corporation (Brush Masters, Inc.) and John J.
Day.
*10.14 Loan Agreement, dated as of May 8, 1992, by and between the
Company and Builders Development & Finance, Inc.
*10.15 First Mortgage Note, dated May 8, 1992, of the Company payable
to Builders Development & Finance, Inc.
*10.16 Second Mortgage Note, dated May 8, 1992, of the Company
payable to Builders Development & Finance, Inc.
*10.17 First Mortgage, dated May 8, 1992, by the Company in favor of
Builders Development & Finance, Inc.
*10.18 Second Mortgage, dated May 8, 1992, by the Company in favor of
Builders Development & Finance, Inc.
*10.19 Guaranty, dated as of May 8, 1992, by Peter Pflaum, Edmund M.
Lundgren, Gerald T. Lundgren, Allan D. Lundgren and Patrick C.
Wells for the benefit of Builders Development & Finance, Inc.
*10.20 Construction Loan Agreement, dated as of July 22, 1992, by and
between the Company and Scherer Bros. Financial Services Co.
*10.21 Mortgage and Security Agreement, dated July 22, 1992, between
the Company and Scherer Bros. Financial Services Co.
*10.22 Promissory Note, dated July 22, 1992, of the Company payable
to Scherer Bros. Financial Services Co.
*10.23 Guaranty, dated as of July 22, 1992, by Allan Lundgren for the
benefit of Scherer Bros. Financial Services Co.
*10.24 Guaranty, dated as of July 22, 1992, by Patrick Wells for the
benefit of Scherer Bros. Financial Services Co.
*10.25 Guaranty, dated as of July 22, 1992, by Peter Pflaum for the
benefit of Scherer Bros. Financial Services Co.
*10.26 Guaranty, dated as of July 22, 1992, by Edmund Lundgren for
the benefit of Scherer Bros. Financial Services Co.
*10.27 Guaranty, dated as of July 22, 1992, by Gerald Lundgren for
the benefit of Scherer Bros. Financial Services Co.
*10.28 Development Loan Agreement, dated May 15, 1992, by and between
the Company and Construction Mortgage Investors Co.
*10.29 First Mortgage Note, dated May 15, 1992, of the Company
payable to Construction Mortgage Investors Co.
*10.30 First Mortgage, dated May 15, 1992, by the Company in favor of
Construction Mortgage Investors Co.
*10.31 Guaranty, dated May 15, 1992, by Peter Pflaum, Patrick C.
Wells, Allan D. Lundgren, Edmund M. Lundgren and Gerald T.
Lundgren for the benefit of Construction Mortgage Investors
Co.
*10.32 Contribution Agreement, dated as of February 17, 1993, by and
among the Company, Peter Pflaum, Patrick C. Wells, Allan D.
Lundgren, Edmund M. Lundgren and Gerald T. Lundgren.
*****10.33 Shopping Center Lease, dated February 9, 1994, by and
between Oakdale Mall Associates and Lundgren Bros.
Construction, Inc. d/b/a Lundgren Bros. Remodeling.
*10.34 Form of Option to Purchase Land.
*10.35 Form of Contingent Purchase Agreement.
*****10.36 Amendment No. 1 to Amended and Restated Stock Purchase
Agreement, dated April 1, 1993.
**10.37 Amended and Restated Demand Discretionary Revolving Credit
Agreement, dated March 18, 1994, by and between Norwest Bank
Minnesota, National Association and Lundgren Bros.
Construction, Inc.
****10.38 Fourth Amended and Restated Revolving Note (Demand), dated
March 14, 1995, of the Company payable to Norwest Bank
Minnesota, National Association.
****10.39 Consent and Reaffirmation of Guaranty, dated March 14, 1995,
by Peter Pflaum, Patrick C. Wells, Edmund M. Lundgren, Allan
D. Lundgren and Gerald T. Lundgren in favor of Norwest Bank
Minnesota, National Association.
***10.40 Satisfaction of Combination Mortgage, Security Agreement and
Fixture Financing Statement executed by Builders Development &
Finance, Inc. on March 29, 1994.
***10.41 Letter Agreement, dated February 17, 1994, between Builders
Funding Corporation and Lundgren Bros. Construction, Inc.
****10.42 Amendment, Extension and Reaffirmation Agreement, dated March
14, 1995, by and among Lundgren Bros. Construction, Inc.,
Patrick C. Wells, Peter Pflaum, Edmund M. Lundgren, Allan D.
Lundgren and Gerald T. Lundgren and Norwest Bank Minnesota,
National Association.
****10.43 Supplemental Assignment of Life Insurance Policies as
Collateral, dated March 14, 1995, by Lundgren Bros.
Construction, Inc. in favor of Norwest Bank Minnesota,
National Association.
****10.44 Second Supplemental Assignment of Life Insurance Policies as
Collateral, dated March 16, 1995, by Lundgren Bros.
Construction, Inc. in favor of Norwest Bank Minnesota,
National Association.
*****10.45 Third Amendment to Combination Mortgage, Security Agreement
and Fixture Financing Statement and Amendment to Revolving
Credit Line Agreement, dated January 25, 1995, by Lundgren
Bros. Construction, Inc. and Builders Development & Finance,
Inc.
****18.1 Letter on accounting change, Coopers & Lybrand, LLP, dated May
12, 1995.
27 Financial Data Schedule
* Incorporated by reference to the Exhibit of the same number to the
Company's Registration Statement on Form S-1, Registration No.
33-58934.
** Incorporated by reference to the Exhibit of the same number to the
Company's Annual Report on Form 10-K for the year ended December 31,
1993.
*** Incorporated by reference to the Exhibit of the same number to the
Company's Quarterly Report on Form 10-Q for the quarter ended March 31,
1994.
**** Incorporated by reference to the Exhibit of the same number to the
Company's Quarterly Report on Form 10-Q for the quarter ended March 31,
1995.
***** Incorporated by reference to the Exhibit of the same number to the
Company's Annual Report on Form 10-K for the year ended December 31,
1995.
(b) Reports on Form 8-K.
The Registrant filed no reports on Form 8-K during the quarter ended
March 31, 1996.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
LUNDGREN BROS. CONSTRUCTION, INC.
Date: May 14, 1996 By: /s/ Peter Pflaum
Peter Pflaum
President, Chief Executive Officer and
Principal Financial Officer
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<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 1,809
<SECURITIES> 0
<RECEIVABLES> 1,461
<ALLOWANCES> 55
<INVENTORY> 37,502
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<PP&E> 3,198
<DEPRECIATION> 1,612
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<BONDS> 27,768
0
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<COMMON> 99
<OTHER-SE> 6,167
<TOTAL-LIABILITY-AND-EQUITY> 49,921
<SALES> 10,830
<TOTAL-REVENUES> 10,830
<CGS> 9,097
<TOTAL-COSTS> 9,097
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<INTEREST-EXPENSE> 455
<INCOME-PRETAX> (198)
<INCOME-TAX> (79)
<INCOME-CONTINUING> (119)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (119)
<EPS-PRIMARY> (11)
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