<PAGE> 1
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 Period Ended May 31, 1997
------------
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 0-21800
-------
NORWOOD PROMOTIONAL PRODUCTS, INC.
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
TEXAS 74-2553074
----- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
70 N.E. LOOP 410, SUITE 295 SAN ANTONIO, TEXAS 78216
- -------------------------------------------------------------------------------
(Address of Principal executive offices) (Zip Code)
(210)341-9440
- -------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
- -------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if
changed since last report)
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 periods 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 [ ]
Applicable Only to Corporate Issuers
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: 5,046,616 shares of Common
Stock, no par value, as of July 7, 1997.
<PAGE> 2
NORWOOD PROMOTIONAL PRODUCTS, INC.
INDEX TO FORM 10-Q
QUARTER ENDED MAY 31, 1997
<TABLE>
<CAPTION>
PAGE NO.
--------
<S> <C>
PART I. Financial Information
Item 1. Interim Condensed Consolidated Financial Statements (Unaudited)
Condensed Consolidated Statements of Income 3
Condensed Consolidated Balance Sheets 4
Consolidated Statements of Cash Flows 5
Consolidated Statements of Shareholders' Equity 6
Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial Condition and Results of
Operations 8
PART II. Other Information
Item 5. Other Information 12
Item 6. Exhibits and Reports on Form 8-K 12
SIGNATURES 13
Index to Exhibits 14
</TABLE>
2
<PAGE> 3
NORWOOD PROMOTIONAL PRODUCTS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED, IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
----------------------- -----------------------
MAY 31, JUNE 1, MAY 31, JUNE 1,
1997 1996 1997 1996
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Sales $ 54,391 $ 45,034 $ 133,837 $ 108,488
Cost of sales 39,334 31,379 96,702 75,749
---------- ---------- ---------- ----------
Gross profit 15,057 13,655 37,135 32,739
Operating expenses 9,378 8,747 27,240 23,487
---------- ---------- ---------- ----------
Operating income 5,679 4,908 9,895 9,252
Interest expense 988 765 2,593 2,634
---------- ---------- ---------- ----------
Income before income taxes 4,691 4,143 7,302 6,618
Provision for income taxes 1,914 1,617 2,921 2,647
---------- ---------- ---------- ----------
Net income $ 2,777 $ 2,526 $ 4,381 $ 3,971
========== ========== ========== ==========
Net income per common share:
Primary $ 0.52 $ 0.44 $ 0.78 $ 0.82
Fully Diluted 0.52 0.44 0.78 0.82
Weighted average number
of common shares
outstanding:
Primary 5,340 5,767 5,623 4,869
Fully Diluted 5,340 5,767 5,623 4,869
</TABLE>
See accompanying notes.
3
<PAGE> 4
NORWOOD PROMOTIONAL PRODUCTS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
<TABLE>
<CAPTION>
MAY 31, 1997 AUGUST 31, 1996
------------ ---------------
ASSETS (UNAUDITED) (AUDITED)
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 1,079 $ 1,861
Accounts receivable 27,629 21,621
Other receivables 858 724
Inventories 33,430 31,823
Prepaid expenses and other current assets 3,065 2,231
------------ ------------
Total current assets 66,061 58,260
Property, plant and equipment, net 20,857 19,585
Goodwill 39,612 35,266
Deferred income taxes 751 751
Other assets 8,775 7,514
------------ ------------
Total assets $ 136,056 $ 121,376
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Trade accounts payable $ 14,410 $ 10,269
Accrued liabilities 5,061 5,920
Income taxes payable 1,168 129
Current portion of long-term debt 7,501 6,694
------------ ------------
Total current liabilities 28,140 23,012
Long-term debt, excluding current portion 53,446 40,984
Shareholders' equity:
Common stock, no par value; 20,000,000 shares authorized;
5,623,146 and 5,615,791 shares issued at May 31, 1997 and August 31, 1996,
respectively 51,654 51,568
Additional paid-in capital 369 369
Less cost of treasury stock, 576,530 and 1,430 shares at May 31, 1997
and August 31, 1996, respectively (7,391) (8)
Retained earnings 9,846 5,465
------------ ------------
54,478 57,394
Less receivables for purchase of common stock (8) (14)
------------ ------------
Total shareholders' equity 54,470 57,380
------------ ------------
Total liabilities and shareholders' equity $ 136,056 $ 121,376
============ ============
</TABLE>
See accompanying notes.
4
<PAGE> 5
NORWOOD PROMOTIONAL PRODUCTS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED, IN THOUSANDS)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
------------------------
MAY 31, JUNE 1,
1997 1996
---------- ----------
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 4,381 $ 3,971
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 3,197 2,064
Amortization 2,940 2,522
(Gain) loss on sale of property & equipment -- (20)
Changes in operating assets and liabilities, net of effect of acquisitions:
Accounts receivable (4,621) (3,964)
Inventory (1,350) (2,150)
Prepaid expenses and other (1,413) (523)
Other receivables (134) 261
Accounts payable 2,051 (354)
Accrued liabilities (1,197) (380)
Income taxes payable 1,061 (55)
---------- ----------
Net cash provided by operating activities 4,915 1,372
INVESTING ACTIVITIES
Business acquisitions, net of cash (8,229) (17,736)
Purchase of property, plant & equipment (3,490) (3,116)
Proceeds from retirement of property, plant & equipment 44 27
---------- ----------
Net cash used in investing activities (11,675) (20,825)
FINANCING ACTIVITIES
Proceeds from long-term debt 61,140 50,450
Payments on long-term debt (47,871) (62,915)
Debt refinancing fees -- (36)
Proceeds on common stock options and shareholder notes 92 240
Purchase of treasury stock (7,383) --
Proceeds from stock offering -- 30,990
---------- ----------
Net cash provided by financing activities 5,978 18,729
---------- ----------
Net change in cash (782) (724)
Cash at beginning of period 1,861 2,174
---------- ----------
Cash at end of period $ 1,079 $ 1,450
========== ==========
</TABLE>
See accompanying notes
5
<PAGE> 6
NORWOOD PROMOTIONAL PRODUCTS, INC.
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
(UNAUDITED, IN THOUSANDS)
<TABLE>
<CAPTION>
ADDITIONAL RECEIVABLES FOR COST TOTAL
COMMON STOCK PAID-IN RETAINED PURCHASES OF OF TREASURY SHAREHOLDERS'
SHARES AMOUNT CAPITAL EARNINGS COMMON STOCK STOCK EQUITY
---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at August 31, 1996 5,616 $ 51,568 $ 369 $ 5,465 $ (14) $ (8) $ 57,380
Exercise of common stock options 7 86 86
Payment on shareholder notes 6 6
Purchase of treasury stock (7,383) (7,383)
Net income 4,381 4,381
---------- ---------- ---------- ---------- ---------- ---------- ----------
Balance at May 31, 1997 5,623 $ 51,654 $ 369 $ 9,846 $ (8) $ (7,391) $ 54,470
========== ========== ========== ========== ========== ========== ==========
</TABLE>
See accompanying notes
6
<PAGE> 7
NORWOOD PROMOTIONAL PRODUCTS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NINE MONTHS ENDED MAY 31, 1997 AND JUNE 1, 1996
1. SIGNIFICANT ACCOUNTS POLICIES
The consolidated financial statements include the accounts of Air-Tex
Corporation ("Air-Tex"), ArtMold Products Corporation ("ArtMold"), Barlow
Promotional Products, Inc. ("Barlow"), Key Industries, Inc. ("Key"), Radio Cap
Company, Inc. ("RCC"), Norwood Travel, Inc. and Norcorp, Inc. ("Norcorp") and
have been presented in accordance with the reporting requirements for interim
financial statements. Such requirements do not include all of the disclosures
normally required by generally accepted accounting principles or those normally
made in an Annual Report of the registrant on Form 10-K. The information
furnished herein reflects all adjustments which, in the opinion of management,
are of a normal recurring nature and necessary for a fair statement of the
results of interim periods. Such results for interim periods are not
necessarily indicative of the results to be expected for a full year,
principally due to seasonal fluctuations in product line revenue.
2. INVENTORIES
Inventories at May 31, 1997 and August 31, 1996 consist of (in
thousands):
<TABLE>
<CAPTION>
MAY 31, AUGUST 31,
1997 1996
---------- ----------
<S> <C> <C>
Raw materials $ 10,859 $ 9,132
Work in process 1,011 1,099
Finished goods 21,560 21,592
---------- ----------
Total $ 33,430 $ 31,823
========== ==========
</TABLE>
7
<PAGE> 8
NORWOOD PROMOTIONAL PRODUCTS, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
GENERAL
The following is management's discussion and analysis of the results
of operations and financial condition of Norwood Promotional Products, Inc. and
its subsidiaries ("the Company") during the periods included in the
accompanying consolidated financial statements. The discussion below relates to
material changes in the results of operations for the three and nine months
ended May 31, 1997 as compared to the same period ended June 1, 1996, and to
material changes in the financial condition of the Company occurring since the
prior fiscal year end of August 31, 1996. The Company's results of operations
for the periods discussed below were significantly affected by the acquisitions
of Ocean Specialty Manufacturing Corporation (acquired in November 1995),
TEE-OFF Enterprises, Inc. (acquired in January 1996), Alpha Products, Inc.
(acquired in April 1996) and Wesburn Golf (acquired in February 1997)
(collectively referred to as the "fiscal 1996 and 1997 acquisitions"). For
further information, refer to the Company's Annual Report on Form 10-K for the
year ended August 31, 1996.
THREE MONTHS ENDED MAY 31, 1997 COMPARED WITH THREE MONTHS ENDED JUNE 1, 1996
Sales for the third quarter of fiscal 1997 increased $9.4 million, or
20.8%, to $54.4 million from $45.0 million in the third quarter of fiscal 1996.
Of this increase, $2.0 million was attributable to increased sales of the
Company's core product lines which represents an increase of 5.6%, and $7.4
million was due to sales generated by the fiscal 1996 and 1997 acquisitions.
Gross profit for the third quarter of fiscal 1997 increased $1.4
million, or 10.3%, to $15.1 million from $13.7 million in the third quarter of
fiscal 1996. This increase was attributable to the fiscal 1996 and 1997
acquisitions and to improved margins on the Company's core businesses.
Excluding the fiscal 1996 and 1997 acquisitions, gross profit as a percentage
of sales increased from 33.6% to 35.4%. Including the fiscal 1996 and 1997
acquisitions, gross profit as a percentage of sales decreased from 30.3% to
27.7%. This decrease in gross profit margin was primarily attributable to the
fiscal 1996 and 1997 acquisitions of imprinted golf ball companies which
operate in a market segment that traditionally has a lower gross profit
percentage than the Company's core businesses.
Operating expenses for the third quarter of fiscal 1997 increased
$631,000, or 7.2%, to $9.4 million from $8.8 million in the third quarter of
fiscal 1996. This increase was primarily attributable to the fiscal 1996 and
1997 acquisitions. Operating expenses as a percentage of sales decreased from
19.4% to 17.2%. This decrease is primarily a result of the effort undertaken in
the fourth quarter of fiscal 1996 to consolidate operations by realigning the
subsidiaries into three primary operating groups and to other cost saving
initiatives undertaken by management.
Operating income for the third quarter of fiscal 1997 increased
$771,000, or 15.7%, to $5.7 million from $4.9 million in the third quarter of
fiscal 1996. Operating income as a percentage of sales decreased from 10.9% to
10.4%. This percentage decrease was mainly attributable to a lower contribution
from the Alpha direct markets and convenience store divisions. Excluding the
results of all Alpha divisions, operating income as a percentage of sales
increased from 11.3% to 12.7%.
Interest expense was $1.0 million for the third quarter of fiscal 1997
compared to $765,000 in the third quarter of fiscal 1996. The increase was
attributable to borrowings used to finance the fiscal 1996 and 1997
acquisitions and to purchase 575,100 shares of the Company's common stock.
8
<PAGE> 9
The Company's effective tax rate was 40.8% during the third quarter of
fiscal 1997 compared with 39.0% in the third quarter of fiscal 1996. The 1997
third quarter effective tax rate reflects the expected fiscal 1997 tax rate
before taking into account any tax refunds received during the first half of
1997.
As a result of the above, net income for the third quarter of fiscal
1997 increased $251,000, or 9.9%, to $2.8 million from $2.5 million in the
third quarter of fiscal 1996.
NINE MONTHS ENDED MAY 31, 1997 COMPARED WITH NINE MONTHS ENDED JUNE 1, 1996
Sales for the first nine months of fiscal 1997 increased $25.3
million, or 23.4%, to $133.8 million from $108.5 million in the first nine
months of fiscal 1996. Of this increase, $5.6 million was attributable to
increased sales of the Company's core product lines which represents an
increase of 5.9%, and $19.7 million was due to sales generated by the fiscal
1996 and 1997 acquisitions.
Gross profit for the first nine months of fiscal 1997 increased $4.4
million, or 13.4%, to $37.1 million from $32.7 million in the first nine months
of fiscal 1996. This increase was attributable to the fiscal 1996 and 1997
acquisitions and to improved margins on the Company's core businesses.
Excluding the fiscal 1996 and 1997 acquisitions, gross profit as a percentage
of sales increased from 31.8% to 32.9%. Including the fiscal 1996 and 1997
acquisitions, gross profit as a percentage of sales decreased from 30.2% to
27.7%. This decrease in gross profit margin was primarily attributable to the
fiscal 1996 and 1997 acquisitions of imprinted golf ball companies which
operate in a market segment that traditionally has a lower gross profit
percentage than the Company's core businesses.
Operating expenses for the first nine months of fiscal 1997 increased
$3.7 million, or 16.0%, to $27.2 million from $23.5 million in the first nine
months of fiscal 1996. This increase was primarily attributable to the fiscal
1996 and 1997 acquisitions. Operating expenses as a percentage of sales
decreased from 21.6% to 20.4%. This decrease is primarily a result of the
effort undertaken in the fourth quarter of fiscal 1996 to consolidate
operations by realigning the subsidiaries into three primary operating groups
and to other cost saving initiatives undertaken by management.
Operating income for the first nine months of fiscal 1997 increased
$643,000, or 6.9%, to $9.9 million from $9.3 million in the first nine months
of fiscal 1996. Operating income as a percentage of sales decreased from 8.5%
to 7.4%. This percentage decrease was mainly attributable to a lower
contribution from the Alpha direct markets and convenience store divisions.
Excluding the results of all Alpha divisions, operating income as a percentage
of sales increased from 8.5% to 9.6%.
Interest expense was $2.6 million for the first nine months of fiscal
1997 and fiscal 1996. Interest expense in 1996 and 1997 was affected by the use
of the proceeds received from the December 1995 stock offering to pay down
debt, offset by borrowings used to finance the fiscal 1996 and 1997
acquisitions and to purchase 575,100 shares of the Company's common stock.
The Company's effective tax rate was 40.0% during the first nine
months of fiscal 1997 and fiscal 1996.
As a result of the above, net income for the first nine months of
fiscal 1997 increased $410,000, or 10.3%, to $4.4 million from $4.0 million in
the first nine months of fiscal 1996.
OUTLOOK FOR FOURTH QUARTER 1997
The results of the Alpha direct markets and convenience store
divisions for the third quarter and for the first nine months of fiscal 1997
were disappointing. While Alpha's promotional products division has exceeded
9
<PAGE> 10
management's sales target, sales at Alpha's direct markets and convenience
store divisions have lagged and will continue to suffer in the fourth quarter.
Alpha's direct markets and convenience store divisions sales are characterized
by large orders and therefore, these sales have a much greater degree of
unpredictability than the Company's other businesses. Alpha's results have
adversely impacted the Company's profitability and will continue to impact the
Company's results in the fourth quarter. Based on this trend at Alpha and
information currently available to management, the Company expects to report
earnings in a range of $0.20 to $0.25 per share for the fourth quarter and
$1.00 to $1.05 per share for the fiscal year ending August 31, 1997. If the
results of all Alpha divisions were excluded, management estimates that
earnings would be in a range of $0.25 to $0.30 per share for the fourth
quarter, and $1.30 to $1.35 per share for the fiscal year. Management has
concluded that it must explore alternatives for Alpha and has instituted a
process of identifying and evaluating various alternatives.
LIQUIDITY AND CAPITAL RESOURCES
The Company has financed its business activities primarily with
borrowings under the bank credit facility (the "Bank Credit Facility"), notes
payable to former owners of acquired businesses, the sale of Common Stock and
cash provided from operations.
The Bank Credit Facility provides for aggregate borrowings of up to
$60.0 million, which has been amortized to $55.0 million at May 31, 1997 by
principal payments on the term loan facility of $5.0 million. The Bank Credit
Facility is comprised of a $20.0 million revolving credit facility ($14.8
million outstanding at May 31, 1997), a $16.5 million term loan facility ($16.3
million outstanding at May 31, 1997) and an $18.5 million acquisition loan
facility ($14.2 million outstanding at May 31, 1997). The revolving loan
facility is available to finance acquisitions and for working capital and
general corporate purposes. The acquisition loan facility is available to
finance acquisitions.
Pursuant to the terms of the Bank Credit Facility, the Company is
required to maintain certain financial ratios and minimum tangible net worth
and is subject to a prohibition on dividends and limitations on additional
indebtedness, liens, investments, issuance of stock of subsidiaries, changes in
management and ownership, mergers and acquisitions, sale/leaseback transactions
and sales of assets. An event of default occurs under the Bank Credit Facility
if any person becomes the owner of more than 35.0% of the outstanding capital
stock of the Company or if within a 12-month period, a majority of the
Company's Board of Directors shall be comprised of new directors. The Company
is required to make quarterly amortization payments on certain amounts
outstanding under the Bank Credit Facility. The final maturity of the Bank
Credit Facility is July 31, 2000. Amounts outstanding under the Bank Credit
Facility bear interest at a rate equal to either the agent bank's prime rate or
the London Interbank Offered Rate, plus an interest rate spread which varies
based on the ratio of the Company's Consolidated Senior Funded Debt to Earnings
Before Interest, Taxes, Depreciation and Amortization (as such terms are
defined in the Bank Credit Facility). Indebtedness under the Bank Credit
Facility is secured by a first lien priority security interest in substantially
all the assets of the Company, including a pledge of the stock of each of the
Company's subsidiaries. Additionally, any entities and assets acquired with
financing under the Bank Credit Facility will serve as security. Borrowings
under the Bank Credit Facility are jointly and severally guaranteed by all
subsidiaries acquired or created by the Company.
WORKING CAPITAL AND CAPITAL EXPENDITURES
Net cash provided by operating activities was $4.9 million and $1.4
million for the nine months ended May 31, 1997 and June 1, 1996, respectively.
Capital expenditures were approximately $3.5 million and $3.1 million for the
nine months ended May 31, 1997 and June 1, 1996, respectively.
During the current fiscal year, the Company's principal capital needs
will be to finance any future acquisitions and ongoing capital expenditures.
Although the Company currently believes that cash flow from
10
<PAGE> 11
operations and available borrowings under the Bank Credit Facility will be
sufficient to meet the Company's working capital and capital expenditure
requirements and future debt service obligations for at least the next 12
months, there can be no assurance that this will be the case. The Company
believes its capital expenditure requirements for the fourth quarter of 1997
will be approximately $0.5 million primarily to acquire additional processing
equipment, management information systems, furniture and fixtures and leasehold
improvements.
FORWARD LOOKING STATEMENTS
This report, including the discussion under the caption "Outlook for
Fourth Quarter 1997" above, contains forward looking statements within the
meaning of Sections 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Act of 1934, as amended, that are not historical facts.
Such statements may include, but not be limited to, projections of revenues,
income, capital expenditures, plans for future operations, financing needs or
plans, and plans relating to products or services of the Company, as well as
assumptions relating to the foregoing. These statements involve management
assumptions and are subject to risks and uncertainties, including those set
forth below, along with factors set forth in the Company's Annual Report on
Form 10-K in "Business--Risk Factors". The following factors could affect the
Company's results, causing such results to differ materially from management's
estimates referred to under "Outlook for Fourth Quarter 1997" and in other
forward looking statements contained in this report: (i) non-recurring charges,
if any, related to acquired businesses (ii) the failure of the Company to
maintain or control its internal growth or that the Company will be able to
manage its expanding operations effectively; (iii) the risks inherent in the
Company's foreign sourcing of supplies; (iv) the loss of services of one or
more key management personnel; (v) the risks inherent in the Company's leverage
position; and (vi) an increase in competition.
11
<PAGE> 12
NORWOOD PROMOTIONAL PRODUCTS, INC.
FORM 10-Q FOR THE QUARTER ENDED MAY 31, 1997
PART II
Item 5. Other Information
On June 19, 1997, the Company announced that it had obtained a commitment
from a financial institution to provide the Company $125 million aggregate
principal amount of senior secured credit facilities. These facilities
would replace the Company's existing Bank Credit Facility. The commitment
is subject to the satisfactory completion of ongoing due diligence, the
negotiation, execution and delivery of definitive documentation and other
conditions. There can be no assurance that these conditions will be
satisfied or that the proposed credit facilities will be obtained by the
Company.
Item 6. Exhibits and Reports on Form 8-K
6 (a) Exhibits:
See Index to Exhibits.
6 (b) Reports on Form 8-K:
The following is the date and description of the events reported on Forms
8-K filed during the third quarter of 1997:
<TABLE>
<CAPTION>
Date of Earliest Event
Reported on Form 8-K Description
-------------------- -----------
<S> <C>
April 8, 1997 Purchase 526,700 shares of the Company's
common stock
</TABLE>
12
<PAGE> 13
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Norwood Promotional Products, Inc.
------------------------------------------------
(Registrant)
Date: July 8, 1997 /s/ J. Max Waits
------------------------------------------------
J. Max Waits
Secretary, Treasurer and Chief Financial Officer
13
<PAGE> 14
INDEX TO EXHIBITS
EXHIBIT NUMBER DESCRIPTION
11.0 Computation of earnings per share
27.0 Financial data schedule
14
<PAGE> 1
EXHIBIT 11.0
COMPUTATION OF EARNINGS PER SHARE
(UNAUDITED, IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
----------------------------- -----------------------------
MAY 31, 1997 JUNE 1, 1996 MAY 31, 1997 JUNE 1, 1996
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
PRIMARY:
Weighted average common shares outstanding 5,278 5,556 5,504 4,660
Weighted average common equivalent shares
outstanding 62 211 119 209
------------- ------------- ------------- -------------
Total 5,340 5,767 5,623 4,869
============= ============= ============= =============
Net Income $ 2,777 $ 2,526 $ 4,381 $ 3,971
Per share amount $ 0.52 $ 0.44 $ 0.78 $ 0.82
FULLY DILUTED:
Weighted average common shares outstanding 5,278 5,556 5,504 4,660
Weighted average common equivalent shares
outstanding 62 211 119 209
------------- ------------- ------------- -------------
Total 5,340 5,767 5,623 4,869
============= ============= ============= =============
Net Income $ 2,777 $ 2,526 $ 4,381 $ 3,971
Per share amount $ 0.52 $ 0.44 $ 0.78 $ 0.82
</TABLE>
15
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF NORWOOD PROMOTIONAL PRODUCTS, INC. FOR THE NINE MONTHS
ENDED MAY 31, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH 10-Q.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> AUG-30-1997
<PERIOD-START> SEP-01-1996
<PERIOD-END> MAY-31-1997
<CASH> 1,079
<SECURITIES> 0
<RECEIVABLES> 28,354
<ALLOWANCES> 725
<INVENTORY> 33,430
<CURRENT-ASSETS> 66,061
<PP&E> 34,028
<DEPRECIATION> 13,171
<TOTAL-ASSETS> 136,056
<CURRENT-LIABILITIES> 28,140
<BONDS> 0
0
0
<COMMON> 51,654
<OTHER-SE> 2,816
<TOTAL-LIABILITY-AND-EQUITY> 136,056
<SALES> 133,837
<TOTAL-REVENUES> 133,837
<CGS> 96,702
<TOTAL-COSTS> 96,702
<OTHER-EXPENSES> 27,240
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,593
<INCOME-PRETAX> 7,302
<INCOME-TAX> 2,921
<INCOME-CONTINUING> 4,381
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,381
<EPS-PRIMARY> 0.78
<EPS-DILUTED> 0.78
</TABLE>
