<PAGE>
FORM 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: JULY 5, 1997
----------------------------------------
Commission file number: 1-11908
------------------------------------------------
DEPARTMENT 56, INC.
--------------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 13-3684956
------------------- -------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
ONE VILLAGE PLACE, 6436 CITY WEST PARKWAY, EDEN PRAIRIE, MN 55344
-----------------------------------------------------------------------
(Address of principal executive offices)
(Zip Code)
(612) 944-5600
----------------------------------------------------------
(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
------- -------
As of July 18, 1997, 20,837,547 shares of the registrant's common
stock, par value $.01 per share, were outstanding.
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
DEPARTMENT 56, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
ASSETS
JULY 5, DECEMBER 28,
1997 1996
------------ ------------
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 17,895 $ 46,405
Accounts receivable, net 73,174 35,603
Inventories 21,195 20,526
Other current assets 7,808 6,769
----------- -----------
Total current assets 120,072 109,303
PROPERTY AND EQUIPMENT, net 12,061 12,318
GOODWILL AND TRADEMARKS, net 161,329 163,618
OTHER ASSETS 338 494
----------- -----------
$ 293,800 $ 285,733
----------- -----------
----------- -----------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt $ 20,000 $ 20,000
Accounts payable 6,583 7,618
Other current liabilities 16,672 13,688
----------- -----------
Total current liabilities 43,255 41,306
DEFERRED TAXES 7,670 7,670
LONG-TERM DEBT 40,000 40,000
STOCKHOLDERS' EQUITY 202,875 196,757
----------- -----------
$ 293,800 $ 285,733
----------- -----------
----------- -----------
</TABLE>
See notes to condensed consolidated financial statements.
<PAGE>
DEPARTMENT 56, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
QUARTER QUARTER
ENDED ENDED
JULY 5, 1997 JUNE 29,1996
----------------- -----------------
<S> <C> <C>
NET SALES $ 58,564 $ 75,277
COST OF SALES 24,704 30,958
--------- ----------
Gross profit 33,860 44,319
OPERATING EXPENSES:
Selling, general, and administrative 11,400 13,006
Amortization of goodwill and trademarks 1,144 1,144
Recovery of import duties - (36)
--------- ----------
Total operating expenses 12,544 14,114
--------- ----------
INCOME FROM OPERATIONS 21,316 30,205
OTHER EXPENSE (INCOME)
Interest expense 1,095 1,489
Other, net (274) (71)
--------- ----------
INCOME BEFORE INCOME TAXES 20,495 28,787
PROVISION FOR INCOME TAXES 8,096 11,515
--------- ----------
NET INCOME $ 12,399 $ 17,272
--------- ----------
--------- ----------
NET INCOME PER COMMON AND COMMON
EQUIVALENT SHARE $ 0.59 $ 0.79
--------- ----------
--------- ----------
WEIGHTED AVERAGE COMMON AND COMMON
EQUIVALENT SHARES OUTSTANDING 20,928 21,744
--------- ----------
--------- ----------
</TABLE>
See notes to condensed consolidated financial statements.
<PAGE>
DEPARTMENT 56, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
27 WEEKS 26 WEEKS
ENDED ENDED
JULY 5, 1997 JUNE 29, 1996
------------------- ----------------
<S> <C> <C>
NET SALES $ 104,293 $ 134,273
COST OF SALES 43,816 56,151
----------- -----------
Gross profit 60,477 78,122
OPERATING EXPENSES:
Selling, general, and administrative 22,494 24,506
Amortization of goodwill and trademarks 2,288 2,288
Recovery of import duties (370) (235)
----------- -----------
Total operating expenses 24,412 26,559
----------- -----------
INCOME FROM OPERATIONS 36,065 51,563
OTHER EXPENSE (INCOME)
Interest expense 2,170 2,846
Other, net (1,018) (332)
----------- -----------
INCOME BEFORE INCOME TAX 34,913 49,049
PROVISION FOR INCOME TAXES 13,791 19,620
----------- -----------
NET INCOME $ 21,122 $ 29,429
----------- -----------
----------- -----------
NET INCOME PER COMMON AND COMMON
EQUIVALENT SHARE $ .99 $ 1.35
----------- -----------
----------- -----------
WEIGHTED AVERAGE COMMON AND COMMON
EQUIVALENT SHARES OUTSTANDING 21,249 21,756
----------- -----------
----------- -----------
</TABLE>
See notes to condensed consolidated financial statements.
<PAGE>
DEPARTMENT 56, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
27 WEEKS 26 WEEKS
ENDED ENDED
JULY 5, JUNE 29,
1997 1996
------------ ---------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES-
Net cash used in operating activities $ (12,511) $ (31,538)
CASH FLOWS FROM INVESTING ACTIVITIES-
Purchases of property and equipment (710) (479)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options 272 113
Net borrowings under revolving credit facility - 26,909
Stock repurchases (15,561) -
---------- ----------
Net cash provided by (used in) financing activities (15,289) 27,022
---------- ----------
NET DECREASE IN CASH AND CASH EQUIVALENTS (28,510) (4,995)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 46,405 7,805
---------- ----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 17,895 $ 2,810
---------- ----------
---------- ----------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for:
Interest $ 2,171 $2,399
Income taxes $ 12,204 $15,865
</TABLE>
See notes to condensed consolidated financial statements.
<PAGE>
DEPARTMENT 56, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The accompanying condensed consolidated balance sheet as of
December 28, 1996 was derived from the audited consolidated balances as
of that date. The remaining accompanying condensed consolidated
financial statements are unaudited and, in the opinion of management,
include all adjustments necessary for a fair presentation. Such
adjustments were of a normal recurring nature.
The results of operations for the quarter ended July 5, 1997 and the
twenty-seven weeks ended July 5, 1997 are not necessarily indicative of the
results for the full fiscal year.
It is suggested that these financial statements be read in
conjunction with the consolidated financial statements and notes
thereto included in the 1996 Annual Report to Stockholders and Annual
Report on Form 10-K filed by Department 56, Inc. (the "Company") with
the Securities and Exchange Commission.
2. INCOME PER SHARE
Net income and income before extraordinary item per common and
common equivalent share are based on the weighted average of common and
common equivalent shares outstanding during the period. Common
equivalent shares consist of the Company's common stock issuable upon
exercise of common stock options, determined using the treasury stock
method.
In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128, "Earnings per
Share". This Statement specifies the computation, presentation, and
disclosure requirements for earnings per share. This Statement is
effective for financial statements issued for periods ending after
December 15, 1997, including interim periods, and adoption by the
Company in 1997 is not expected to have a material impact on the
earnings per share computation.
3. STOCKHOLDERS' EQUITY
On December 10, 1996, the Board of Directors of the Company
authorized a stock repurchase program. The program allows the
repurchase in the open market of up to 1.5 million shares through the
end of June 1998. The timing, prices and number of shares repurchased
will be determined at the discretion of the Company's management based
on its view of prevailing economic and market conditions. During the
quarter ended July 5, 1997, the Company repurchased 208,900 shares at a
cost of $3.8 million. During the 27 weeks ended July 5, 1997, the
Company repurchased 840,658 shares at a cost of $15.6 million.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
COMPARISON OF RESULTS OF OPERATIONS FOR THE QUARTER ENDED JULY 5, 1997
TO THE QUARTER ENDED JUNE 29, 1996.
<TABLE>
<CAPTION>
Quarter Quarter
Ended Ended
July 5, 1997 June 29, 1996
------------- --------------
(Dollars in millions)
% of % of
Dollars Net Sales Dollars Net Sales
-------- ---------- --------- -----------
<S> <C> <C> <C> <C>
Net sales $58.6 100% $75.3 100%
Gross profit 33.9 58 44.3 59
Selling, general, and administrative expenses 11.4 19 13.0 17
Amortization of goodwill and trademarks 1.1 2 1.1 2
Income from operations 21.3 36 30.2 40
Interest expense 1.1 2 1.5 2
Other income, net (0.3) (1) (0.1) -
Income before income taxes 20.5 35 28.8 38
Provision for income taxes 8.1 14 11.5 15
Net income 12.4 21 17.3 23
</TABLE>
NET SALES. Net sales decreased $16.7 million, or 22%, from
$75.3 million in the second quarter of 1996 to $58.6 million in the
second quarter of 1997. This decrease was principally due to a
decrease in volume. Sales of the Company's Village Series products
decreased $14.4 million, or 27%, while sales of General Giftware
products decreased $2.3 million, or 10% between the two periods.
Village Series and General Giftware products represented 66% and 34%,
respectively, of the Company's net sales during the second quarter.
<PAGE>
GROSS PROFIT. Gross profit decreased $10.5 million, or 24%, between the
second quarter of 1996 and the second quarter of 1997. The decrease in gross
profit was principally due to the decrease in sales volume. Gross profit as
a percentage of net sales decreased from 59% in the second quarter of 1996 to
58% in the second quarter of 1997, principally due to a change in the mix of
product shipped during the second quarter of 1997 as compared to the second
quarter of 1996.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general
and administrative expenses decreased $1.6 million, or 12%, between the
second quarter of 1996 and the second quarter of 1997 principally due
to a 24% decrease in commission expense offset by inflationary
increases in administrative expenses. Selling, general and
administrative expenses as a percentage of sales increased from
approximately 17% in the second quarter of 1996 to 19% in the second
quarter of 1997.
INCOME FROM OPERATIONS. Income from operations decreased $8.9
million, or 29%, between the second quarter of 1996 and the second
quarter of 1997 due to the factors described above. Income from
operations decreased from 40% to 36% of net sales principally due to
the increase in selling, general and administrative expense as a
percentage of sales.
INTEREST EXPENSE. Interest expense decreased $.4 million, or
27%, between the second quarter of 1996 and the second quarter of 1997
principally due to the payment of $20 million of long term debt during
1996.
PROVISION FOR INCOME TAXES. The effective tax rate was 40.0% and
39.5% in the second quarter of 1996 and 1997, respectively.
<PAGE>
RESULTS OF OPERATIONS
COMPARISON OF RESULTS OF OPERATIONS FOR THE 27 WEEKS ENDED JULY 5, 1997 TO THE
26 WEEKS ENDED JUNE 29, 1996.
27 Weeks 26 Weeks
Ended Ended
July 5, 1997 June 29,1996
------------ ------------
(Dollars in millions)
% of % of
Dollars Net Sales Dollars Net Sales
------- --------- ------- ---------
Net sales $104.3 100% $134.3 100%
Gross profit 60.5 58 78.1 58
Selling, general, and administrative expenses 22.5 22 24.5 18
Amortization of goodwill and trademarks 2.3 2 2.3 2
Recovery of import duties (.4) - (.2) -
Income from operations 36.1 35 51.6 38
Interest expense 2.2 2 2.8 2
Other income, net (1.0) (1) (0.3) -
Income before income taxes 34.9 33 49.0 37
Provision for income taxes 13.8 13 19.6 15
Net income 21.1 20 29.4 22
NET SALES. Net sales decreased $30.0 million, or 22%, from $134.3 million
in 1996 to $104.3 million in 1997. This decrease was principally due to a
decrease in volume. Sales of the Company's Village Series products decreased
$21.9 million, or 24%, while sales of General Giftware products decreased $8.1
million, or 19% between the two periods. Village Series and General Giftware
products represented 67% and 33%, respectively, of the Company's net sales in
1997.
<PAGE>
GROSS PROFIT. Gross profit decreased $17.6 million, or 23%, between 1996
and 1997. The decrease in gross profit was principally due to the decrease in
sales volume. Gross profit as a percentage of net sales was 58% in both 1996
and 1997.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses decreased $2.0 million, or 8%, between 1996 and 1997
principally due to a 25% decrease in commission expense offset by inflationary
increases in administrative expenses. Selling, general and administrative
expenses as a percentage of sales increased from approximately 18% in 1996 to
22% in 1997.
INCOME FROM OPERATIONS. Income from operations decreased $15.5 million,
or 30%, between 1996 and 1997 due to the factors described above. Income from
operations decreased from 38% to 35% of net sales principally due to the
increase in selling, general and administrative expense as a percentage of
sales.
INTEREST EXPENSE. Interest expense decreased $.7 million, or 24%, between
1996 and 1997 principally due to the payment of $20 million of long term debt
during 1996.
PROVISION FOR INCOME TAXES. The effective tax rate was 40.0% and 39.5% in
1996 and 1997, respectively.
LIQUIDITY AND CAPITAL RESOURCES
The principal sources of the Company's liquidity are its available cash
balances, internally generated cash flow and a revolving credit agreement which
provides letters of credit, bankers' acceptances and, if required, short-term
seasonal borrowings. The Company believes that these sources of liquidity will
be more than adequate to fund operations, capital expenditures and required
principal payments on its term loan for the next 12 months.
The Company maintains a revolving credit agreement providing for borrowings
of up to $90 million (subject to certain limitations) including letters of
credit and bankers' acceptances. At July 5, 1997, the Company had no
outstanding loans and acceptances and $6.0 million of outstanding letters of
credit under its revolving line of credit. The available revolving line of
credit commitment was $54.7 million.
Consistent with customary practice in the giftware industry, the Company
offers extended accounts receivable terms to many of its customers. This
practice has typically created significant working capital requirements in the
second and third quarters which the Company has generally financed with net cash
balances, internally generated cash flow and seasonal borrowings. The Company's
net cash balances peak in December, following the collection of accounts
receivable with extended payment terms.
Accounts receivable decreased $34.0 million from $107.2 million at June 29,
1996 to $73.2 million at July 5, 1997 principally due to the decrease in sales
in 1997 as compared to 1996.
Inventory decreased $4.2 million from $25.4 million at June 29, 1996 to
$21.2 million at July 5, 1997 principally due to the decrease in sales volume in
1997 as compared to 1996.
<PAGE>
On December 10, 1996, the Board of Directors of the Company authorized a
stock repurchase program. The program allows the repurchase in the open market
of up to 1.5 million shares through the end of June 1998. The timing, prices
and number of shares repurchased will be determined at the discretion of the
Company's management based on its view of prevailing economic and market
conditions. As of July 18, 1997, the Company had repurchased 840,658 shares at
a cost of $15.6 million in the open market.
FOREIGN EXCHANGE
The dollar value of the Company's assets abroad is not significant. The
Company's sales are denominated in United States dollars and, as a result, are
not subject to changes in exchange rates.
The Company imports its products from manufacturers located in the Pacific
Rim, primarily The People's Republic of China, Taiwan (Republic of China) and
The Philippines. These transactions are principally denominated in U.S.
dollars, except for imports from Taiwan which are principally denominated in New
Taiwan dollars. The Company, from time to time, will enter into foreign
exchange contracts or build currency deposits as a partial hedge against
currency fluctuations. The Company intends to manage foreign exchange risks to
the extent possible and take appropriate action where warranted. The Company's
costs could be adversely affected if the currencies of the countries in which
the manufacturers operate appreciate significantly relative to the U.S. dollar.
At July 5, 1997 the Company had $7.5 million of foreign exchange contracts
outstanding to hedge 1997 New Taiwan dollar denominated inventory purchases.
These contracts mature from July 1997 through December 1997 at a rate of
approximately 27.50 NT$/US$.
EFFECT OF INFLATION
The Company continually attempts to minimize any effect of inflation on
earnings by controlling its operating costs and selling prices. During the past
few years, the rate of inflation has not had a material impact on the Company's
results of operations.
<PAGE>
SEASONALITY AND CUSTOMER ORDERS
The Company generally records its highest level of sales during the second
and third quarters as retailers stock merchandise in anticipation of the holiday
season. The Company can also experience fluctuations in quarterly sales
and related net income compared with the prior year due to timing of receipt of
product from suppliers and subsequent shipment of product from the Company to
customers.
CUSTOMER ORDERS ENTERED (1)
(IN MILLIONS)
1st 2nd 3rd 4th
Qtr Qtr Qtr Qtr Total
---- ---- ---- ---- -----
1995 $210 $30 $27 $9 $276
1996 178 35 28 8 249
1997 161 44 - - -
(1) Customer orders entered are orders received and approved by the
Company, subject to cancellation for various reasons, including credit
considerations, inventory shortages and customer requests.
Historically, principally due to the timing of trade shows early in the
calendar year and the limited supply of the Company's products, the Company has
received the majority of its orders in the first quarter of each year. The
Company entered 71% and 76% of its total annual customer orders during the first
quarter of both 1996 and 1995, respectively. Cancellations were approximately
6% and 7% of total annual orders in 1996 and 1995, respectively.
The Company shipped and recorded as net sales approximately 92% and 91% of
its annual customer orders in 1996 and 1995, respectively. Orders not shipped
in a particular year, net of cancellations, returns, allowances and cash
discounts, are carried into backlog for the following year and have historically
been Easter orders. Unfilled orders were $99 million as of July 5, 1997, as
compared to $81 million as of June 29, 1996.
Through the second quarter of 1997, customer orders entered decreased 4% as
compared to the same period for 1996. Customer orders entered for Village
Series products have decreased 9% through the second quarter of 1997 while
customer orders entered for General Giftware products have increased 9%.
Certain General Giftware products have lower gross profit rates than the
Company's average gross profit rate. In addition, from time to time, the
Company liquidates product at lower than average gross profit rates. As a
result, gross profit may vary depending on the mix of product shipped.
<PAGE>
PART II - OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
At the Company's Annual Meeting of Stockholders held on May 15, 1997 (the
"Annual Meeting"), all of the persons named in the Company's proxy materials as
management nominees for the Board of Directors were elected. All the nominees
were incumbent directors and their election at the Annual Meeting was
uncontested. Also at the Annual Meeting, stockholders approved the Company's
1997 Stock Incentive Plan as follows: 11,723,696 voting for approval; 4,114,706
voting against; 198,451 abstentions; 5,230,876 not voting. In addition, the
Company's stockholders at the Annual Meeting ratified the appointment by the
Board of Directors of Deloitte & Touche LLP, independent public accountants, as
auditors for the Company for the fiscal year ending January 3, 1998 as follows:
19,005,771 voting for ratification; 31,558 voting against; 27,135 abstentions;
2,203,265 not voting.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) 11.1 Computation of net income per share.
<PAGE>
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.
DEPARTMENT 56, INC.
Date: July 24, 1997 /S/SUSAN ENGEL
-----------------------
Susan Engel
President and Chief Executive Officer
Date: July 24, 1997 /S/TIMOTHY J. SCHUGEL
-----------------------
Timothy J. Schugel
Vice President - Finance and Principal
Accounting Officer
<PAGE>
EXHIBIT INDEX
EXHIBIT EXHIBIT PAGE
NUMBER NAME NUMBER
-------- ---- -------
11.1 Computation of net income per share.
<PAGE>
Exhibit 11.1
DEPARTMENT 56, INC.
COMPUTATION OF NET INCOME PER SHARE
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Quarter Quarter
Ended Ended
July 5, 1997 June 29, 1996
------------- -------------
PRIMARY:
Net Income $12,399 $17,272
------- -------
------- -------
Weighted average number of common shares outstanding 20,814 21,547
The number of shares resulting from the assumed
exercise of stock options reduced by the number
of shares which could have been purchased with
the proceeds from such exercise, using the average
market price during the period 114 197
------- -------
Weighted average number of common and
common equivalent shares 20,928 21,744
------- -------
------- -------
Net Income per Common and
Common Equivalent Share $0.59 $0.79
------- -------
------- -------
FULLY DILUTED:
Net Income $12,399 $17,272
------- -------
------- -------
Weighted average number of common shares outstanding 20,814 21,547
The number of shares resulting from the assumed
exercise of stock options reduced by the number
of shares which could have been purchased with
the proceeds from such exercise, using the greater
of average market price during the period or period-
end market price 135 197
------- -------
Weighted average number of common and
common equivalent shares 20,949 21,744
------- -------
------- -------
Fully Diluted Net Income per Common and
Common Equivalent Share $0.59 $0.79
------- -------
------- -------
<PAGE>
DEPARTMENT 56, INC.
COMPUTATION OF NET INCOME PER SHARE
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
27 Weeks 26 Weeks
Ended Ended
July 5, 1997 June 29, 1996
------------- -------------
PRIMARY:
Net Income $21,122 $29,429
------- -------
------- -------
Weighted average number of common shares outstanding 21,120 21,549
The number of shares resulting from the assumed
exercise of stock options reduced by the number
of shares which could have been purchased with
the proceeds from such exercise, using the average
market price during the period 129 207
------- -------
Weighted average number of common and
common equivalent shares 21,249 21,756
------- -------
------- -------
Net Income per Common and
Common Equivalent Share $0.99 $1.35
------- -------
------- -------
FULLY DILUTED:
Net Income $21,122 $29,429
------- -------
------- -------
Weighted average number of common shares outstanding 21,120 21,549
The number of shares resulting from the assumed
exercise of stock options reduced by the number
of shares which could have been purchased with
the proceeds from such exercise, using the greater
of average market price during the period or period-
end market price 147 207
------- -------
Weighted average number of common and
common equivalent shares 21,267 21,756
------- -------
------- -------
Fully Diluted Net Income per Common and
Common Equivalent Share $0.99 $1.35
------- -------
------- -------
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-03-1998
<PERIOD-END> JUL-05-1997
<CASH> 17,895
<SECURITIES> 0
<RECEIVABLES> 73,174
<ALLOWANCES> 0
<INVENTORY> 21,195
<CURRENT-ASSETS> 120,072
<PP&E> 12,061
<DEPRECIATION> 0
<TOTAL-ASSETS> 293,800
<CURRENT-LIABILITIES> 43,255
<BONDS> 40,000
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 293,800
<SALES> 104,293
<TOTAL-REVENUES> 104,293
<CGS> 43,816
<TOTAL-COSTS> 43,816
<OTHER-EXPENSES> 24,412
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,170
<INCOME-PRETAX> 34,913
<INCOME-TAX> 13,791
<INCOME-CONTINUING> 21,122
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 21,122
<EPS-PRIMARY> .99
<EPS-DILUTED> .99
</TABLE>
