<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
/X/ QUARTERLY REPORT UNDER SECTION 13 OR 15 (D) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES AND EXCHANGE ACT OF 1934.
For the transition period from ______________ to _________________
Commission File Number : 33-61300 and 33-61096
UNITED MERCHANDISING CORP.
(Exact name of registrant as specified in its charter)
California
(State of Incorporation)
95-1854273
(I.R.S employer identification number)
2525 EAST EL SEGUNDO BOULEVARD
EL SEGUNDO, CALIFORNIA 90245
(310) 536-0611
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
Indicate by check mark whether the registrant 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). Yes X No ___
Indicate by check mark whether the registrant has been subject to such filing
requirements for the past 90 days. Yes X No ____
Indicate the number of shares outstanding for each of the registrant's classes
of common stock, as of the latest practicable date. 1,300 shares of common
stock, zero par value, at August 12, 1996.
1
<PAGE> 2
UNITED MERCHANDISING CORP.
INDEX
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
Title Page 1
Index 2
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Balance Sheets - June 30, 1996 and
December 31, 1995 3
Statements of Operations -
13 and 26 weeks ended June 30, 1996 and July 2, 1995 4
Statements of Cash Flows -
26 weeks ended June 30, 1996 and July 2, 1995 5
Notes to Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 7-12
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 13
Item 2. Changes in Securities 13
Item 3. Defaults Upon Senior Securities 13
Item 4. Submission of Matters to a Vote of
Security-Holders 13
Item 5. Other Information 13
Item 6. Exhibits and Reports on Form 8-K 13-15
SIGNATURES 16
</TABLE>
2
<PAGE> 3
UNITED MERCHANDISING CORP.
Balance Sheets
(Dollars in Thousands)
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
------------- -------------
Assets (Unaudited)
<S> <C> <C>
Current assets
Cash and cash equivalents $ 1,062 $ 3,198
Trade and other receivables, net of allowance for
doubtful accounts of $753 and $267, respectively 2,308 3,377
Merchandise inventories 140,257 137,512
Prepaid expenses 550 1,106
------------ -------------
Total current assets 144,177 145,193
------------ -------------
Property and equipment:
Land 786 3,341
Buildings and improvements 13,437 13,261
Furniture and equipment 28,730 27,937
Less accumulated depreciation and
amortization (14,601) (12,023)
------------ -------------
Net property and equipment 28,352 32,516
------------ -------------
Leasehold interest, net of amortization of $10,876 and
$10,202, respectively 18,093 21,130
Other assets, at cost, less accumulated
amortization of $534 and $652, respectively 2,430 2,365
Excess of cost over net assets acquired, less
accumulated amortization of $754 and $630, respectively 5,791 5,915
------------ ------------
$ 198,843 $ 207,119
============ ============
Liabilities and stockholder's equity
Current liabilities:
Accounts payable $ 43,188 $ 42,812
Accrued expenses 25,741 27,387
------------ ------------
Total current liabilities 68,929 70,199
Deferred rent 4,820 4,252
Long-term debt 99,905 103,594
------------ ------------
Total liabilities 173,654 178,045
------------ ------------
Commitments and contingencies
Stockholder's equity
Common stock, no par value. Authorized 2,500
shares; issued and outstanding 1,300 shares 35,080 35,080
Accumulated deficit (9,891) (6,006)
------------ ------------
Total stockholder's equity 25,189 29,074
------------ ------------
$ 198,843 $ 207,119
============ ============
</TABLE>
See accompanying notes to financial statements
3
<PAGE> 4
UNITED MERCHANDISING CORP.
Statements of Operations
(Dollars in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
13 Weeks Ended 26 Weeks Ended
------------------------------ ------------------------------
June 30, 1996 July 2, 1995 June 30, 1996 July 2, 1995
------------- ------------ ------------- ------------
<S> <C> <C> <C> <C>
Net sales $ 98,216 $ 90,023 $ 189,833 $ 173,456
Cost of goods sold, buying
and occupancy 66,260 61,513 130,148 119,279
----------- --------- ----------- -----------
Gross profit 31,956 28,510 59,685 54,177
----------- --------- ----------- -----------
Operating expenses:
Selling and administration 25,318 23,824 50,660 47,637
Depreciation and amortization 2,459 2,418 4,799 4,724
----------- --------- ----------- -----------
Total operating expenses 27,777 26,242 55,459 52,361
----------- --------- ----------- -----------
Operating income 4,179 2,268 4,226 1,816
Interest expense, net 2,927 3,184 5,889 6,141
----------- --------- ----------- -----------
Income (loss) before
income taxes and extraordinary loss 1,252 (916) (1,663) (4,325)
Income taxes - - - - - - - -
----------- -------- ----------- -----------
Net income (loss) before extraordinary
loss 1,252 (916) (1,663) (4,325)
Extraordinary loss from early
extinguishment of debt - - - - (2,222) - -
----------- ------ ---------- ------------
Net income (loss) $1,252 ($916) ($3,885) ($4,325)
=========== ====== ========== =============
</TABLE>
See accompanying notes to financial statements.
4
<PAGE> 5
UNITED MERCHANDISING CORP.
Statements of Cash Flows
(Dollars in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
26 Weeks Ended
---------------------------------
June 30, 1996 July 2, 1995
--------------- --------------
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (3,885) $ (4,325)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and amortization 4,799 4,724
Non-cash charge related to refinancing 1,063 -.-
Change in assets and liabilities:
Merchandise inventories (2,745) (3,971)
Accounts receivable 1,069 2,700
Prepaid expenses 556 509
Accounts payable 376 (22,113)
Accrued expenses (2,285) (6,677)
-------------- -------------
Net cash (used in) operating activities (1,052) (29,153)
-------------- -------------
Cash flows from investing activities:
Purchases of property and equipment (988) (3,343)
Purchases of assets held pending sale and leaseback (8,910) -.-
Proceeds from sale and lease back of assets 13,900 -.-
Other assets (1,397) 505
-------------- -------------
Net cash provided by (used in) investing activities 2,605 (2,838)
-------------- -------------
Cash flows from financing activities:
Net borrowings under revolving credit facilities 63,455 26,000
Repayment of long-term debt, net (67,144) -.-
-------------- -------------
Net cash provided by (used in) financing activities (3,689) 26,000
-------------- -------------
Net decrease in cash and cash equivalents (2,136) (5,991)
Cash and cash equivalents at beginning of period 3,198 7,668
-------------- -------------
Cash and cash equivalents at end of period $ 1,062 $ 1,677
============== =============
</TABLE>
See accompanying notes to financial statements.
5
<PAGE> 6
UNITED MERCHANDISING CORP.
Notes to Financial Statements
(Dollars in Thousands)
FINANCIAL INFORMATION
1. In the opinion of management of United Merchandising Corp. ("the
Company"), the accompanying unaudited financial statements contain all
adjustments, consisting only of normal recurring adjustments,
necessary to present the financial position and cash flows as of and
for the period ended June 30, 1996.
2. These financial statements should be read in conjunction with the
Company's 1995 audited financial statements included in the
Company's Report on Form 10-K for the year ended December 31, 1995.
3. Effective March 8, 1996, the Company entered into a Financing
Agreement, dated as of such date (the "CIT Credit Agreement"), between
the Company and The CIT Group/Business Credit, Inc., which provides
the Company with a three-year, non-amortizing, $100,000 revolving debt
facility (the "CIT Facility"). Proceeds from the initial funding
under the CIT Facility were used to repay in full all of the
obligations under the Company's revolving debt facility with General
Electric Capital Corporation (the "GECC Facility"). The CIT Facility
bears interest at a rate of LIBOR plus 2.5%, or the Chemical Bank
prime lending rate plus .75%, is secured by trade accounts receivable,
merchandise inventories and general intangible assets (as defined) of
the Company, and has a borrowing limit, including advances,
outstanding letters of credit and unreimbursed drawings under letters
of credit at any time equal to the lesser of $100,000 and the
Borrowing Base. The Borrowing Base is equal to 65% of the aggregate
value of Eligible Inventory (as defined) from time to time.
4. On March 5, 1996 the Company entered into a sale and leaseback
agreement (the "transaction") with regard to its warehouse facility
located in Fontana, California. Prior to this transaction, the
Company owned the land associated with the facility and leased the
buildings and improvements. In contemplation of the transaction, the
Company purchased the building and improvements at a purchase price of
$8,910. The transaction was then completed with the sale of the land,
building and improvements at a sale price of $13,900. The gain on the
transaction was insignificant and will be amortized on a straight-line
basis over the related lease term. The net cash proceeds after
expenses totaled $4,728, which were used to repay a portion of the
GECC Facility. Under the leaseback agreement, the Company has
committed to lease the facility for ten years under a noncancelable
operating lease.
6
<PAGE> 7
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
(Dollars in Thousands)
RESULTS OF OPERATIONS
The results of the interim periods are not necessarily indicative of results
for the entire year.
13 WEEKS ENDED JUNE 30, 1996 VERSUS 13 WEEKS ENDED JULY 2, 1995
The following table sets forth for the periods indicated operating results in
thousands of dollars and expressed as a percentage of sales.
<TABLE>
<CAPTION>
13 Weeks Ended
--------------------------------------------------------------
June 30, 1996 July 2,1995
----------------------- ----------------------------
<S> <C> <C> <C> <C>
Net sales $98,216 100.0% $90,023 100.0%
Cost of goods sold, buying and occupancy 66,260 67.5 61,513 68.3
------ ----- ------ -----
Gross profit 31,956 32.5 28,510 31.7
------ ----- ------ -----
Operating expenses:
Selling and administration 25,318 25.7 23,824 26.5
Depreciation and amortization 2,459 2.5 2,418 2.7
------ ----- ----- -----
Total operating expense 27,777 28.2 26,242 29.2
------ ----- ------ -----
Operating income 4,179 4.3 2,268 2.5
Interest expense, net 2,927 3.0 3,184 3.5
----- ----- ----- -----
Income (loss) before income taxes 1,252 1.3 (916) (1.0)
Income taxes -- -- -- --
------- ----- -------- -----
Net income (loss) $1,252 1.3% ($916) (1.0)%
======= ===== ======== =====
EBITDA (a) $6,638 6.8% $4,686 5.2%
</TABLE>
(a) EBITDA represents income before taking into consideration interest expense,
income tax expense, depreciation expense, amortization expense and
non-cash rent expense.
7
<PAGE> 8
1. Sales
Net sales for the 13 weeks ended June 30, 1996 of $98,216 increased
9.1% (or $8,193) from $90,023 reported for the 13 weeks ended July 2,
1995. Same store sales increased 1.6% compared with the same period
last year. Sales generated from an increase in store count from 178 at
July 2, 1995 to 193 at June 30, 1996 created the remaining 7.5% of the
9.1% increase in total sales for the quarter.
2. Gross Profit
Gross profit increased 12.1% (or $3,446) from $28,510 for the 13 weeks
ended July 2, 1995 to $31,956 for the 13 weeks ended June 30, 1996,
while the Company's gross profit margin increased from 31.7% of sales
in the 1995 quarter to 32.5% of sales in the 1996 period. These
improvements resulted from increased sales, improved point of sale
margins and positive store inventory results, partially offset by
increased occupancy and distribution costs which were impacted by the
Company's store growth.
3. Operating Expenses
Selling and administration expenses increased 6.3% (or $1,494) from
$23,824 for the 13 weeks ended July 2, 1995 to $25,318 for the 13 weeks
ended June 30, 1996. This increase resulted primarily from the store
growth achieved by the Company during the past year. When measured as
a percentage of sales, selling and administration expenses decreased
from 26.5% of sales for the 1995 period to 25.7% of sales for the 1996
period. This decrease reflects the Company's focus on controllable
expense categories in response to general weakness in the economy
experienced throughout 1995.
Depreciation and amortization increased 1.7% (or $41) from $2,418 for
the prior year period to $2,459 for the 13 weeks ended June 30, 1996.
4. Interest Expense, Net
Interest expense, net decreased 8.1% (or $257) from $3,184 for the
prior year period to $2,927 for the 13 weeks ended June 30, 1996.
This decrease reflects lower average borrowing levels on the Company's
revolving credit facility during the 13 weeks ended June 30, 1996.
5. Net Income
Net income for the 13 weeks ended June 30, 1996 increased to $1,252
from a net loss of $916 for the 13 weeks ended July 2, 1995
reflecting increased sales and gross margins, coupled with the
Company's focus on expense reduction.
Earnings Before Interest, Taxes, Depreciation, and Amortization ("EBITDA")
BITDA increased 41.7% (or $1,952) from $4,686 for the 13 weeks ended
July 2, 1995 to $6,638 for the 13 weeks ended June 30, 1996. Increased sales
and gross margins, coupled with the Company's focus on expense reduction were
the primary factors contributing to this increase.
8
<PAGE> 9
26 WEEKS ENDED JUNE 30, 1996 VERSUS 26 WEEKS ENDED JULY 2, 1995
The following table sets forth for the periods indicated operating results in
thousands of dollars and expressed as a percentage of sales.
<TABLE>
<CAPTION>
26 Weeks Ended
-----------------------------------------------------------
June 30, 1996 July 2, 1995
---------------------- -------------------------
<S> <C> <C> <C> <C>
Net sales $189,833 100.0% $173,456 100.0%
Cost of goods sold, buying and occupancy 130,148 68.6 119,279 68.8
------- ------ ------- -------
Gross profit 59,685 31.4 54,177 31.2
------- ------ ------- -------
Operating expenses:
Selling and administration 50,660 26.7 47,637 27.5
Depreciation and amortization 4,799 2.5 4,724 2.7
------- ------ ------- -------
Total operating expense 55,459 29.2 52,361 30.2
------- ------ ------- -------
Operating income 4,226 2.2 1,816 1.0
Interest expense, net 5,889 3.1 6,141 3.5
------- ------ ------- -------
Loss before income taxes
and extraordinary loss (1,663) (0.9) (4,325) (2.5)
Income taxes -- -- --
------- ------- ------- -------
Net loss before extraordinary loss (1,663) (0.9) (4,325) (2.5)
Extraordinary loss from early
extinguishment of debt (2,222) (1.1) -- --
------- ------- ------- -------
Net loss ($3,885) (2.0%) ($4,325) (2.5%)
======= ======== ======= =======
EBITDA (a) $9,025 4.8% $6,540 3.8%
</TABLE>
(a) EBITDA represents income before taking into consideration interest
expense, income tax expense, depreciation expense, amortization expense
and non-cash rent expense.
9
<PAGE> 10
1. Sales
Net sales for the 26 weeks ended June 30, 1996 of $189,833 increased
9.4% (or $16,377) from $173,456 reported for the 26 weeks ended July 2,
1995. Same store sales increased 1.5% compared with the same period
last year. Sales generated from an increase in store count from 178 at
July 2, 1995 to 193 at June 30, 1996 created the remaining 7.9% of the
9.4% sales increase for the 26 week period.
2. Gross Profit
Gross profit increased 10.2% (or $5,508) from $54,177 for the 26 weeks
ended July 2, 1995 to $59,685 for the 26 weeks ended June 30, 1996,
while the Company's gross profit margin increased from 31.2% of sales
in the 1995 period to 31.4% of sales in the 1996 period. These
improvements resulted from increased sales, improved point of sale
margins and positive store inventory results partially offset by
increased occupancy and distribution costs which were impacted by the
Company's store growth and lower first quarter 1996 margins arising
from higher volumes of sales of lower margin ski-related products.
3. Operating Expenses
Selling and administration expenses increased 6.3% (or $3,023) from
$47,637 for the 26 weeks ended July 2, 1995 to $50,660 for the 26 weeks
ended June 30, 1996. This increase resulted primarily from the store
growth achieved by the Company during the past year. When measured as
a percentage of sales, selling and administration expenses decreased
from 27.5% of sales for the 1995 period to 26.7% of sales in the 1996
period. This decrease reflects the Company's focus on controllable
expense categories in response to general weakness in the economy
experienced throughout 1995.
Depreciation and amortization increased 1.6% (or $75) from $4,724 for
the prior year period to $4,799 for the 26 weeks ended June 30, 1996.
4. Interest Expense, Net
Interest expense, net decreased 4.1% (or $252) from $6,141 for the
prior year period to $5,889 for the 26 weeks ended June 30, 1996.
This decrease reflects lower average borrowing levels on the Company's
revolving credit facility during the 26 weeks ended June 30, 1996.
5. Extraordinary Loss from Early Extinguishment of Debt
During the 26 weeks ended June 30, 1996, the Company refinanced its
indebtedness under the GECC Facility with borrowings under the CIT
Facility. In connection with the refinancing, the Company accelerated
amortization of $1,063 of certain fees, and paid $1,159 in prepayment
premiums and other fees. Accordingly, a charge of $2,222 is recorded
as an extraordinary loss for the 26 weeks ended June 30, 1996. No
such event occurred during the 26 weeks ended July 2, 1995.
10
<PAGE> 11
6. Net Loss
Net loss for the 26 weeks ended June 30, 1996 decreased to $3,885 from
a net loss of $4,325 for the 26 weeks ended July 2, 1995. The net
loss for the 26 weeks ended June 30, 1996 is $1,663 before the
extraordinary loss described above.
Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA")
EBITDA increased 38.0% (or $2,485) from $6,540 for the 26 weeks ended
July 2, 1995 to $9,025 for the 26 weeks ended June 30, 1996. Increased sales
coupled with the Company's focus on expenses were the primary factors
contributing to this increase.
LIQUIDITY AND CAPITAL RESOURCES
Effective March 8, 1996, the Company entered into the CIT Credit
Agreement, which provides the Company with a three-year, non-amortizing, $100
million revolving debt facility (the "CIT Facility"). Proceeds from the
initial funding under the CIT Facility were used to repay in full all of the
Company's obligations under its existing GECC Facility. The CIT Facility bears
interest at a rate of LIBOR plus 2.5%, or the Chemical Bank prime lending rate
plus .75%, is secured by trade accounts receivable, merchandise inventories and
general intangible assets (as defined) of the Company, and has a borrowing
limit, including advances, outstanding letters of credit and unreimbursed
drawings under letters of credit at any time equal to the lesser of $100
million and the Borrowing Base. The Borrowing Base is equal to 65% of the
aggregate value of Eligible Inventory (as defined) from time to time. As of
June 30, 1996, the Company maintained eligible inventory of $129,964 with an
aggregate balance of $63,455 outstanding under the CIT Facility. The Company
is in compliance with all of the covenants under the CIT Credit Agreement.
As of June 30, 1996, the Company maintained a cash and cash
equivalents balance of $1,062 versus a balance of $1,677 at July 2, 1995.
Net cash used in operating activities was $1,052 for the 26 weeks
ended June 30, 1996 versus $29,153 for the 26 weeks ended July 2, 1995.
Reduced inventory purchases and related payables decreases were the primary
factors in the improvement in cash requirements for this year's period. The
Company's inventory levels were 9.5% (or $14,765) lower than last year's
comparable period levels, totaling $140,257 at June 30, 1996 versus $155,022 at
July 2, 1995. This reduction has been accomplished even as the Company has
grown its store base from 178 at July 2, 1995 to 193 at June 30, 1996. Net
cash provided by investing activities was $2,605 for the 26 weeks ended June
30, 1996 versus cash use of $2,838 for the 26 weeks ended July 2, 1995
reflecting $4,728 in net proceeds from the sale/leaseback of the Company's
Fontana distribution center. The cumulative effect of net cash used in
operating activities and net cash provided by investing activities resulted in
a reduction in the Company's borrowings of $3,689 for the 26 weeks ended June
30, 1996, versus an increase of $26,000 for the 26 weeks ended July 2, 1995,
and a decrease in cash and cash equivalents of $2,136 versus $5,991 for the
comparable 26 week periods in 1996 and 1995, respectively.
11
<PAGE> 12
The Company believes that net cash provided by operating activities
and borrowings under the CIT Facility will be sufficient to fund anticipated
capital expenditures and working capital requirements.
IMPACT OF INFLATION
Although the operations of the Company are influenced by general
economic conditions, the Company does not believe that inflation has had a
material effect on its results of operations during the 26 weeks ended June 30,
1996.
12
<PAGE> 13
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
The Company is involved in various legal actions arising in the
ordinary course of business. In the opinion of management, the
ultimate disposition of matters currently pending against the Company
will not have a material adverse effect on the Company's financial
position.
Item 2. Changes in Securities
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security-Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<S> <C>
3.1 (a)* Articles of Incorporation of the Company filed with the California Secretary of State on
September 7, 1955.
3.1 (b)* Amendment to Articles of Incorporation of the Company filed with the California Secretary
of State on September 21, 1992.
3.2 * By laws of the Company.
4.1 * Indenture among the Company, Big 5 Holdings and First Trust National Association relating
to the Notes dated as of September 25, 1992.
4.2 * Form of the Notes.
4.3 * Purchase Agreement among the Company, Big 5 Holdings and the original purchasers of the
Notes dated as of September 25, 1992.
</TABLE>
13
<PAGE> 14
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<S> <C>
4.4 * Registration Rights Agreement among the Company, Big 5 Holdings and the original purchasers
of the Notes dated as of September 25, 1992.
10.1(a) *** Financing Agreement dated March 8, 1996 between The CIT Group/Business Credit, Inc. and the
Company.
10.1(b) *** Grant of Security Interest in and Collateral Assignment of Trademarks and Licenses dated as
of March 8, 1996 by the Company in favor of The CIT Group/Business Credit, Inc.
10.1(c) *** Guarantee dated March 8, 1996 by Big 5 Corporation in favor of The CIT Group/Business
Credit, Inc.
10.2 * Tax Indemnity Agreement by and among PE, TCH, Thrifty and Big 5 Holdings dated as of
September 25, 1992.
10.4 (a) ** Amended and Restated Indemnification Implementation Agreement between UMC and TPH dated as
of April 20, 1994.
10.4 (b) ** Agreement and Release among PE, TPH, TPI, Thrifty and UMC dated as of March 11, 1994.
10.5 (a) * Big 5 Corporation 1992 Equity Plan.
10.5 (b) * Stock Subscription Agreement between Parent and GEI dated as of September 25, 1992.
10.6 (a) * Employment Agreement between the Company and Robert W. Miller dated as of January 1, 1993.
10.6 (b) * Employment Agreement between the Company and Steve G. Miller dated as of January 1, 1993.
10.6 (d) * Sublease between the Company and Thrifty dated as of September 25, 1992 (1).
10.6 (e) * Form of Amendment of Registration Rights Agreement among the Company, Big 5 Holdings and
Holders of the Securities (re: ongoing registration rights).
10.6 (f) * Form of Amendment of Registration Rights Agreement among the Company, Big 5 Holdings and
Holders of the Securities (re: extension of Effectiveness Date).
</TABLE>
14
<PAGE> 15
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<S> <C>
10.7(a)*** Agreement of Purchase and Sale among the Company and the State of Wisconsin dated as of
February 13, 1996.
10.7(b)*** Lease among the Company (Lessee) and the State of Wisconsin Investment Board (Lessor) dated
as of March 5, 1996.
21 Subsidiaries of the Company: None
</TABLE>
________________________________
* Incorporated by reference to the Company's
Registration Statement on Form S-4 (file no.
33-61096) effective as of June 29, 1993.
** Incorporated by reference to the Company's
report on Form 10-K for the year ended
January 1, 1995.
*** Incorporated by reference to the Company's
report on Form 10-K for the year ended
December 31, 1995.
(b) Reports on Form 8-k
None.
SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED
PURSUANT TO SECTION 15 (d) OF THE ACT BY REGISTRANTS WHICH HAVE
NOT REGISTERED SECURITIES PURSUANT TO SECTION 12 OF THE ACT.
The Company has not provided any annual report covering its last
fiscal year nor any proxy statement to security holders.
15
<PAGE> 16
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.
UNITED MERCHANDISING CORP.,
A CALIFORNIA CORPORATION
Date: 08/12/96 By: /S/ STEVEN G. MILLER
-------- ---------------------
Steven G. Miller
President and
Chief Operating Officer
Date: 08/12/96 By: /S/ CHARLES P. KIRK
-------- ---------------------
Charles P. Kirk
Senior Vice President and
Chief Financial Officer
(Principal Financial and
Accounting Officer)
16
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S STATEMENTS OF EARNINGS AND BALANCE SHEETS AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-30-1996
<PERIOD-END> JUN-30-1996
<CASH> 1,062
<SECURITIES> 0
<RECEIVABLES> 2,308
<ALLOWANCES> 753
<INVENTORY> 140,257
<CURRENT-ASSETS> 144,177
<PP&E> 28,352
<DEPRECIATION> (14,601)
<TOTAL-ASSETS> 198,843
<CURRENT-LIABILITIES> 68,929
<BONDS> 99,905
0
0
<COMMON> 35,080
<OTHER-SE> (9,891)
<TOTAL-LIABILITY-AND-EQUITY> 198,843
<SALES> 189,833
<TOTAL-REVENUES> 189,833
<CGS> 130,148
<TOTAL-COSTS> 130,148
<OTHER-EXPENSES> 55,459
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5,889
<INCOME-PRETAX> (1,663)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,663)
<DISCONTINUED> 0
<EXTRAORDINARY> (2,222)
<CHANGES> 0
<NET-INCOME> (3,885)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
