<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 March 1, 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: 5,621,040 shares of Common
Stock, no par value, as of April 1, 1997.
<PAGE> 2
NORWOOD PROMOTIONAL PRODUCTS, INC.
INDEX TO FORM 10-Q
QUARTER ENDED MARCH 1, 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 4. Submission to a Vote of Shareholders 12
Item 6. Exhibits and Reports on Form 8-K 13
SIGNATURES 14
Index to Exhibits 15
</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 SIX MONTHS ENDED
----------------------- -----------------------
MARCH 1, MARCH 2, MARCH 1, MARCH 2,
1997 1996 1997 1996
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Sales $ 37,270 $ 30,086 $ 79,446 $ 63,454
Cost of sales 27,346 21,624 57,368 44,369
---------- ---------- ---------- ----------
Gross profit 9,924 8,462 22,078 19,085
Operating expenses 8,921 7,545 17,862 14,741
---------- ---------- ---------- ----------
Operating income 1,003 917 4,216 4,344
Interest expense 791 709 1,605 1,869
---------- ---------- ---------- ----------
Income before income taxes 212 208 2,611 2,475
Provision for income taxes 47 120 1,006 1,030
---------- ---------- ---------- ----------
Net income $ 165 $ 88 $ 1,605 $ 1,445
========== ========== ========== ==========
Net income per common share:
Primary $ 0.03 $ 0.02 $ 0.28 $ 0.33
Fully Diluted 0.03 0.02 0.28 0.33
Weighted average number
of common shares
outstanding:
Primary 5,800 5,055 5,775 4,383
Fully Diluted 5,800 5,055 5,775 4,383
</TABLE>
See accompanying notes.
3
<PAGE> 4
NORWOOD PROMOTIONAL PRODUCTS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
<TABLE>
<CAPTION>
MARCH 1, AUGUST 31,
1997 1996
---------- ----------
ASSETS (UNAUDITED) (AUDITED)
Current Assets:
<S> <C> <C>
Cash and cash equivalents $ 1,037 $ 1,861
Accounts receivable 19,298 21,621
Other receivables 676 724
Inventories 32,941 31,823
Prepaid expenses and other current assets 3,151 2,231
---------- ----------
Total current assets 57,103 58,260
Property, plant and equipment, net 20,913 19,585
Goodwill 40,130 35,266
Deferred income taxes 751 751
Other assets 9,067 7,514
---------- ----------
Total assets $ 127,964 $ 121,376
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Trade accounts payable $ 9,469 $ 10,269
Accrued liabilities 4,735 5,920
Income taxes payable 30 129
Current portion of long-term debt 7,406 6,694
---------- ----------
Total current liabilities 21,640 23,012
Long-term debt, excluding current portion 47,253 40,984
Shareholders' equity:
Common stock, no par value; 20,000,000 shares authorized;
5,622,470 and 5,615,791 shares issued and 5,621,040 and 5,614,361
shares outstanding at March 1, 1997 and August 31, 1996, respectively 51,651 51,568
Additional paid-in capital 369 369
Less cost of treasury stock, 1,430 shares at March 1, 1997
and August 31, 1996 respectively (8) (8)
Retained earnings 7,070 5,465
---------- ----------
59,082 57,394
Less receivables for purchase of common stock (11) (14)
---------- ----------
Total shareholders' equity 59,071 57,380
---------- ----------
Total liabilities and shareholders' equity $ 127,964 $ 121,376
========== ==========
</TABLE>
See accompanying notes.
4
<PAGE> 5
NORWOOD PROMOTIONAL PRODUCTS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED, IN THOUSANDS)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
--------------------
MARCH 1, MARCH 2,
1997 1996
-------- --------
OPERATING ACTIVITIES
<S> <C> <C>
Net income $ 1,605 $ 1,445
Adjustments to reconcile net income to net cash
provided by operating activities:
Deprecation 2,099 1,246
Amortization 1,904 1,561
(Gain) loss on sale of property & equipment -- (18)
Changes in operating assets and liabilities, net of effect of acquisitions:
Accounts receivable, net 3,710 3,569
Inventory (860) (1,568)
Prepaid expenses and other (1,274) (830)
Other receivables 48 99
Accounts payable (2,881) (2,455)
Accrued liabilities (1,478) (891)
Income taxes payable (78) (756)
-------- --------
Net cash provided by operating activities 2,795 1,402
INVESTING ACTIVITIES
Business acquisitions, net of cash (8,228) (10,809)
Purchase of property, plant & equipment (2,487) (1,959)
Proceeds from retirement of property, plant & equipment 28 26
-------- --------
Net cash used in investing activities (10,687) (12,742)
FINANCING ACTIVITIES
Proceeds from long-term debt 36,940 29,200
Payments on long-term debt (29,958) (50,290)
Debt refinancing fees -- (25)
Payments on common stock and shareholder notes 86 39
Proceeds from stock offering -- 31,176
-------- --------
Net cash provided by financing activities 7,068 10,100
-------- --------
Net change in cash (824) (1,240)
Cash at beginning of period 1,861 2,174
-------- --------
Cash at end of period $ 1,037 $ 934
======== ========
</TABLE>
See accompanying notes.
5
<PAGE> 6
NORWOOD PROMOTIONAL PRODUCTS, INC.
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
(UNAUDITED, IN THOUSANDS)
<TABLE>
<CAPTION>
COMMON STOCK ADDITIONAL RECEIVABLES FOR PURCHASES TOTAL
------------ 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
Purchases of common stock 6 83 83
Payment on shareholder notes 3 3
Net income 1,605 1,605
---------- ---------- ---------- ---------- ---------- ---------- ----------
Balance at March 1, 1997 5,622 $ 51,651 $ 369 $ 7,070 $ (11) $ (8) $ 59,071
========== ========== ========== ========== ========== ========== ==========
</TABLE>
See accompanying notes
6
<PAGE> 7
NORWOOD PROMOTIONAL PRODUCTS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 1, 1997 AND MARCH 2, 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 March 1, 1997 and August 31, 1996 consist of (in
thousands):
<TABLE>
<CAPTION>
MARCH 1, AUGUST 31,
1997 1996
----------- ---------
<S> <C> <C>
Raw materials $ 10,731 $ 9,132
Work in process 1,241 1,099
Finished goods 20,969 21,592
----------- ---------
Total $ 32,941 $ 31,823
=========== =========
</TABLE>
3. ACQUISITIONS
On February 14, 1997, the Company, through its wholly-owned subsidiary
Artmold, acquired substantially all of the assets of Wesburn Golf. Wesburn Golf
is a leading supplier of logo-imprinted golf balls. In connection with the
acquisition, the Company paid approximately $6.8 million in cash, notes payable
and non-competition agreements and assumed or incurred liabilities of
approximately $1.5 million.
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 six months
ended March 1, 1997 as compared to the same period ended March 2, 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 MARCH 1, 1997 COMPARED WITH THREE MONTHS ENDED MARCH 2, 1996
Sales for the second quarter of fiscal 1997 increased $7.2 million, or
23.9%, to $37.3 million from $30.1 million in the second quarter of fiscal
1996. Of this increase, $2.0 million was attributable to increased sales of the
Company's core product lines, and $5.2 million was due to sales generated by
the fiscal 1996 and 1997 acquisitions.
Gross profit for the second quarter of fiscal 1997 increased $1.4 million,
or 17.3%, to $9.9 million from $8.5 million in the second quarter of fiscal
1996. This increase was attributable to the fiscal 1996 and 1997 acquisitions
and to improved margins on the Company's pre-existing businesses. Excluding the
fiscal 1996 and 1997 acquisitions, gross profit as a percentage of sales
increased from 28.7% to 30.5%. Including the fiscal 1996 and 1997 acquisitions,
gross profit as a percentage of sales decreased from 28.1% to 26.6%. This
decrease was attributable to the fiscal 1996 and 1997 acquisitions which
operate in market segments that traditionally have lower gross profit
percentages than the Company's pre-existing businesses.
Operating expenses for the second quarter of fiscal 1997 increased $1.4
million, or 18.2%, to $8.9 million from $7.5 million in the second 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
25.1% to 23.9%. 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 second quarter of fiscal 1997 increased $86,000,
or 9.4%, to $1.0 million from $917,000 in the second quarter of fiscal 1996.
Operating income as a percentage of sales decreased from 3.0% to 2.7%. This
percentage decrease was mainly attributable to a lower contribution from the
Alpha product line retail division. Excluding the Alpha division, operating
income as a percentage of sales increased from 3.0% to 4.8%.
Interest expense was $791,000 for the second quarter of fiscal 1997
compared to $709,000 in the second quarter of fiscal 1996. The increase was
attributable to borrowings used to finance the fiscal 1996 and 1997
acquisitions.
8
<PAGE> 9
The Company's effective tax rate was 22.2% during the second quarter of
fiscal 1997 compared with 57.7% in the second quarter of fiscal 1996. The
Company's tax rate was favorably impacted by a partial tax refund received
during fiscal 1997.
As a result of the above, net income for the second quarter of fiscal 1997
increased $77,000, or 87.5%, to $165,000 from $88,000 in the second quarter of
fiscal 1996.
SIX MONTHS ENDED MARCH 1, 1997 COMPARED WITH SIX MONTHS ENDED MARCH 2, 1996
Sales for the first six months of fiscal 1997 increased $16.0 million, or
25.2%, to $79.4 million from $63.4 million in the first six months of fiscal
1996. Of this increase, $3.7 million was attributable to increased sales of the
Company's core product lines, and $12.3 million was due to sales generated by
the fiscal 1996 and 1997 acquisitions.
Gross profit for the first six months of fiscal 1997 increased $3.0
million, or 15.7%, to $22.1 million from $19.1 million in the first six months
of fiscal 1996. This increase was attributable to the fiscal 1996 and 1997
acquisitions and to improved margins on the Company's pre-existing businesses.
Excluding the fiscal 1996 and 1997 acquisitions, gross profit as a percentage
of sales increased from 30.4% to 31.5%. Including the fiscal 1996 and 1997
acquisitions, gross profit as a percentage of sales decreased from 30.1% to
27.8%. This decrease was attributable to the fiscal 1996 and 1997 acquisitions
which operate in market segments that traditionally have lower gross profit
percentages than the Company's pre-existing businesses.
Operating expenses for the first six months of fiscal 1997 increased $3.2
million, or 21.2%, to $17.9 million from $14.7 million in the first six 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
23.2% to 22.5%. 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 six months of fiscal 1997 decreased
$128,000, or 2.9%, to $4.2 million from $4.3 million in the first six months of
fiscal 1996. Operating income as a percentage of sales decreased from 6.8% to
5.3%. This percentage decrease was mainly attributable to a lower contribution
from the Alpha product line retail division. Excluding the Alpha division,
operating income as a percentage of sales increased from 6.8% to 7.4%.
Interest expense was $1.6 million for the first six months of fiscal 1997
compared to $1.9 million in the first six months of fiscal 1996. The decrease
was attributable to 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.
The Company's effective tax rate was 38.5% during the first six months of
fiscal 1997 compared with 41.6% in the first six months of fiscal 1996. The
Company's tax rate was favorably impacted by a partial tax refund received
during fiscal 1997.
As a result of the above, net income for the first six months of fiscal
1997 increased $160,000, or 11.1 %, to $1.6 million from $1.4 million in the
first six months of fiscal 1996.
9
<PAGE> 10
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, comprised of a $20.0 million revolving credit facility ($14.2 million
outstanding at March 1, 1997), a $21.5 million term loan facility ($10.4
million outstanding at March 1, 1997) and an $18.5 million acquisition loan
facility ($14.2 million outstanding at March 1, 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.
On December 20, 1995, the Company completed the sale of 2,015,481 shares
of Common Stock in a public offering. The net proceeds of this offering of
approximately $31 million were used to prepay indebtedness under the Bank
Credit Facility. The Company may, subject to certain conditions, reborrow such
amounts from time to time for general corporate purposes, including financing
future acquisitions.
WORKING CAPITAL AND CAPITAL EXPENDITURES
Net cash provided by operating activities was $2.8 million and $1.4
million for the six months ended March 1, 1997 and March 2, 1996, respectively.
Capital expenditures were approximately $2.5 million and $2.0 million for the
six months ended March 1, 1997 and March 2, 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 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 fiscal 1997
capital expenditure requirements will be approximately $4.5 million primarily
to acquire additional processing equipment, management information systems,
furniture and fixtures and leasehold improvements.
10
<PAGE> 11
FORWARD LOOKING STATEMENTS
This report 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 those in any
forward looking statement contained in this report: (i) 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; (ii) a change in risks
inherent in the Company's foreign sourcing of supplies; (iii) the loss of
services of one or more key management personnel; (iv) a change in the risks
inherent in the Company's leverage position; (v) the loss of the Company's
single supplier of Koozie(R) insulation material; and (vi) an increase in
competition.
11
<PAGE> 12
NORWOOD PROMOTIONAL PRODUCTS, INC.
FORM 10-Q FOR THE QUARTER ENDED MARCH 1, 1997
PART II
Item 4. Submission to a Vote of Shareholders
At the annual meeting of shareholders of the Company held on Tuesday,
January 21, 1997, the shareholders:
(1) Elected the following directors: Frank P. Krasovec, Robert P.
Whitesell, Robert L. Seibert, John H. Wilson III, John H. Josephson, Harold
Holland and Roy D. Terracina.
<TABLE>
<CAPTION>
Election of Directors For Withheld
- --------------------- --- --------
<S> <C> <C>
Frank P. Krasovec 4,416,603 3,800
Robert P. Whitesell 4,416,603 3,800
Robert L. Seibert 4,416,603 3,800
John H. Wilson III 4,416,603 3,800
John H. Josephson 4,414,603 5,800
Harold Holland 4,366,671 53,732
Roy D. Terracina 4,416,603 3,800
</TABLE>
(2) Approved an amendment to the Norwood Promotional Products, Inc.
Incentive Stock Compensation Plan to increase the number of shares of Common
Stock available for issuance under the Plan from 190,000 shares to 410,000
shares.
For Against Abstain
--- ------- -------
3,674,503 738,360 7,540
(3) Ratified the appointment by the Board of Directors of the firm of
Ernst & Young LLP as independent public accountants of the Company for the
fiscal year ending August 30, 1997.
For Against Abstain
--- ------- -------
4,365,837 800 53,766
12
<PAGE> 13
NORWOOD PROMOTIONAL PRODUCTS, INC.
FORM 10-Q FOR THE QUARTER ENDED MARCH 1, 1997
PART II
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 second quarter of 1997:
<TABLE>
<CAPTION>
Date of Earliest Event
Reported on Form 8-K Description
---------------------- -----------
<S> <C>
None
</TABLE>
13
<PAGE> 14
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: April 1, 1997 /s/ J. Max Waits
---------------------------------------
J. Max Waits
Secretary, Treasurer and Chief
Financial Officer
14
<PAGE> 15
INDEX TO EXHIBITS
EXHIBIT NUMBER DESCRIPTION
11.0 -- Computation of earnings per share
27.0 -- Financial data schedule
15
<PAGE> 1
EXHIBIT 11.0
COMPUTATION OF EARNINGS PER SHARE
(UNAUDITED, IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
----------------- ------------------
MARCH 1, MARCH 2, MARCH 1, MARCH 2,
1997 1996 1997 1996
----- ------ ------ ------
<S> <C> <C> <C> <C>
PRIMARY:
Weighted average common shares outstanding 5,620 4,883 5,615 4,213
Weighted average common equivalent shares 180 172 160 170
outstanding
------ ------ ------ ------
Total 5,800 5,055 5,775 4,383
====== ====== ====== ======
Net Income $ 165 $ 88 $1,605 $1,445
Per share amount $ 0.03 $ 0.02 $ 0.28 $ 0.33
FULLY DILUTED:
Weighted average common shares outstanding 5,620 4,883 5,615 4,213
Weighted average common equivalent shares 180 172 160 170
outstanding
------ ------ ------ ------
Total 5,800 5,055 5,775 4,383
====== ====== ====== ======
Net Income $ 165 $ 88 $1,605 $1,445
Per share amount $ 0.03 $ 0.02 $ 0.28 $ 0.33
</TABLE>
16
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF NORWOOD PROMOTIONAL PRODUCTS, INC. FOR THE SIX MONTHS
ENDED MARCH 1, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH 10-Q.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> AUG-30-1997
<PERIOD-START> SEP-01-1996
<PERIOD-END> MAR-01-1997
<CASH> 1,037
<SECURITIES> 0
<RECEIVABLES> 19,918
<ALLOWANCES> 620
<INVENTORY> 32,941
<CURRENT-ASSETS> 57,103
<PP&E> 32,987
<DEPRECIATION> 12,074
<TOTAL-ASSETS> 127,964
<CURRENT-LIABILITIES> 21,640
<BONDS> 0
0
0
<COMMON> 51,651
<OTHER-SE> 7,420
<TOTAL-LIABILITY-AND-EQUITY> 127,964
<SALES> 79,446
<TOTAL-REVENUES> 79,446
<CGS> 57,368
<TOTAL-COSTS> 57,368
<OTHER-EXPENSES> 17,862
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,605
<INCOME-PRETAX> 2,611
<INCOME-TAX> 1,006
<INCOME-CONTINUING> 1,605
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,605
<EPS-PRIMARY> 0.28
<EPS-DILUTED> 0.28
</TABLE>
