<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File
For the Quarterly Period Ended June 29, 1996 Number 0-22468
-------------- -------
WICKES LUMBER COMPANY
---------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 36-3554758
- --------------------------------------- ------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
706 North Deerpath Drive, Vernon Hills, Illinois 60061
- ------------------------------------------------- --------
(Address of principal executive offices) (Zip Code)
847-367-3400
------------
(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,
and (2) has been subject to such filing requirements for the past
90 days.
Yes X No
------ ------
As of August 1, 1996, the Registrant had 7,655,339 shares of
Common Stock, par value $.01 per share, and 499,768 shares of
Class B Non-Voting Common Stock, par value $.01 per share,
outstanding.
<PAGE> 2
WICKES LUMBER COMPANY AND SUBSIDIARIES
INDEX
-----
Page
Number
------
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets
June 29, 1996 (Unaudited) and
December 30, 1995 3
Condensed Consolidated Statements of Operations
For the three months and six months ended
June 29, 1996 and July 1, 1995 (Unaudited) 4
Condensed Consolidated Statements of Cash Flows
For the six months ended June 29, 1996
and July 1, 1995 (Unaudited) 5
Notes to Condensed Consolidated
Financial Statements (Unaudited) 6
Item 2. Management's Discussion and Analysis
of Financial Condition and Results
of Operations 10
PART II. OTHER INFORMATION
Item 5. Other Information 18
Item 6. Exhibits and Reports on Form 8-K 18
2
<PAGE> 3
WICKES LUMBER COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(in thousands except share data)
<TABLE>
<CAPTION>
June 29, December 30,
ASSETS 1996 1995
---------- ------------
<S> <C> <C>
Current assets:
Cash $ 2,582 $ 87
Accounts receivable, less allowance for doubtful
accounts of $5,776 in 1996 and $8,208 in 1995 87,567 81,792
Inventory 110,672 110,639
Deferred tax asset 25,906 25,906
Prepaid expenses 3,224 1,051
---------- ------------
Total current assets 229,951 219,475
---------- ------------
Property, plant and equipment, net 52,964 56,545
Trademark (net of accumulated amortization of
$9,941 in 1996 and $9,830 in 1995) 7,059 7,170
Deferred tax asset 250 250
Other assets (net of accumulated amortization of
$5,523 in 1996 and $4,464 in 1995) 17,013 19,075
---------- ------------
307,237 302,515
========== ============
LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt $ 211 $ 424
Accounts payable 53,277 41,457
Accrued liabilities 31,306 37,972
---------- ------------
Total current liabilities 84,794 79,853
---------- ------------
Long-term debt, less current maturities 199,330 205,221
Other long-term liabilities 2,444 2,312
Commitments and contingencies (Note 5)
Common stockholders' equity:
Common stock, par value $.01 (8,152,184 and 6,143,473 shares
issued and outstanding in 1996 and 1995, respectively) 82 61
Additional paid-in capital 86,585 76,772
Accumulated deficit (65,998) (61,704)
---------- ------------
20,669 15,129
---------- ------------
Total common stockholders' equity 307,237 302,515
========== ============
<FN>
The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.
</TABLE>
3
<PAGE> 4
WICKES LUMBER COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(in thousands except share and per share data)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------------- ------------------------
June 29, July 1, June 29, July 1,
1996 1995 1996 1995
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net sales $ 228,773 $ 272,791 $ 381,281 $ 464,495
Cost of sales 177,564 208,855 295,142 355,002
--------- --------- --------- ---------
Gross profit 51,209 63,936 86,139 109,493
--------- --------- --------- ---------
Selling, general and administrative expenses 41,512 53,998 78,561 100,887
Depreciation, goodwill and trademark amortization 1,338 1,448 2,770 2,874
Other operating income (1,647) (1,800) (2,535) (2,866)
--------- --------- --------- ---------
41,203 53,646 78,796 100,895
--------- --------- --------- ---------
Income from operations 10,006 10,290 7,343 8,598
Interest expense 5,466 6,192 11,172 12,159
Equity in loss of affiliated company 872 - 1,930 -
--------- --------- --------- ---------
Income/(Loss) before provision for income taxes 3,668 4,098 (5,759) (3,561)
Provision for income taxes 1,787 1,640 (1,466) (1,403)
Minority interest in subsidiaries - (12) - (30)
--------- --------- --------- ---------
Net Income/(loss) $ 1,881 $ 2,470 $ (4,293) $ (2,128)
========= ========= ========= =========
Income/(Loss) per common share $ 0.29 $ 0.40 $ (0.68) $ (0.35)
========= ========= ========= =========
Weighted average common shares outstanding 6,383,352 6,156,049 6,271,307 6,146,102
========= ========= ========= =========
<FN>
The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.
</TABLE>
4
<PAGE> 5
WICKES LUMBER COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in thousands)
<TABLE>
<CAPTION>
Six Months Ended
--------- ---------
June 29, July 1,
1996 1995
--------- ---------
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (4,294) $ (2,128)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation expense 2,622 2,667
Amortization of trademark 111 111
Amortization of goodwill 119 96
Amortization of deferred financing and other intangibles 899 939
Provision for doubtful accounts (2,432) 3,000
Minority interest - (30)
Gain on sale of assets (235) (90)
Changes in assets and liabilities (net of effects
from acquisitions):
Increase in accounts receivable (3,343) (13,209)
Decrease/(increase) in inventory (33) 1,185
Increase in accounts payable and
accrued liabilities 5,287 1,935
Increase in other assets (1,129) (4,748)
--------- ---------
NET CASH USED IN OPERATING ACTIVITIES (2,428) (10,272)
--------- ---------
Cash flows from investing activities:
Purchases of property, plant and equipment (1,997) (3,141)
Payments for acquisitions - (8,922)
Proceeds from sales of property, plant and equipment 3,190 572
--------- ---------
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES 1,193 (11,491)
--------- ---------
Cash flows from financing activities:
Net borrowing (repayment) under revolving line of credit (5,780) 22,447
Reductions of note payable (324) (244)
Issuance of common stock 21 -
Proceeds from issuance of common stock 9,813 556
--------- ---------
NET CASH PROVIDED BY FINANCING ACTIVITIES 3,730 22,759
--------- ---------
NET INCREASE IN CASH 2,495 996
Cash at beginning of period 87 2,037
--------- ---------
CASH AT END OF PERIOD $ 2,582 $ 3,033
========= =========
Supplemental schedule of cash flow information:
Interest paid $ 10,345 $ 11,319
Income taxes paid 498 1,291
<FN>
The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.
</TABLE>
5
<PAGE> 6
WICKES LUMBER COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
-------------------------------------------
Basis of Financial Statement Presentation
------------------------------------------
The condensed consolidated financial statements present the
results of operations, financial position, and cash flows of
Wickes Lumber Company and all its wholly-owned and majority-owned
subsidiaries (the "Company"), except for Riverside International
Corporation ("RIC"), the investment in which is recorded under
the equity method because control is likely to be temporary and
to be lost in the near term. In the first three quarters of
1995, RIC was reported on a consolidated basis.
The condensed consolidated balance sheet as of June 29, 1996,
the condensed consolidated statements of operations for the three-
month and six-month periods ended June 29, 1996 and July 1, 1995,
and the condensed consolidated statements of cash flows for the
six-month period ended June 29, 1996 and July 1, 1995 have been
prepared by the Company without audit. In the opinion of
management, all adjustments (which include only normal recurring
adjustments) necessary to present fairly the financial position,
results of operations and cash flows at June 29, 1996 and for all
periods presented have been made. The results for the six-month
periods ended June 29, 1996 and July 1, 1995 are not necessarily
indicative of the results to be expected for the full year or for
any interim period.
The year-end condensed consolidated balance sheet data was
derived from audited financial statements, but does not include
all disclosures required by generally accepted accounting
principles. Certain information and footnote disclosures
normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed
or omitted. It is suggested that these condensed consolidated
financial statements be read in conjunction with the financial
statements and notes thereto included in the Company's Annual
Report on Form 10-K for the year ended December 30, 1995 (the
"1995 Form 10-K"), filed with the Securities and Exchange
Commission.
6
<PAGE> 7
Share Data
-----------
On June 20, 1996 the Company sold 2,000,000 newly-issued
shares of Common Stock to Riverside Group, Inc. This event was
disclosed in a Form 8-K , filed on June 27, 1996 and amended on
Form 8-K/A filed on July 24, 1996. The Company also issued 5,643
shares of Common Stock to members of its board of directors as
compensation during the six-months ended June 29, 1996. In
addition, warrants held by present and former management
employees of the Company were exercised for 3,068 shares of
Common Stock.
2. LONG-TERM DEBT
---------------
Long-term debt is comprised of the following at June 29, 1996
(in thousands):
<TABLE>
<S> <C>
Revolving line of credit $ 99,241
Senior subordinated notes 100,000
Other 300
Less current maturities (211)
---------
Total long-term debt $ 199,330
==========
</TABLE>
The revolving credit agreement was amended and restated in its
entirety on March 12, 1996. Among other things, the amendment and
restatement (i) extended the term of the facility 15 months to
January 1998, (ii) reduced the maximum borrowing limit $15
million to $130 million and (iii) modified certain covenants,
including changes to accommodate the Company's fourth quarter
1995 restructuring charge.
Under the revolving line of credit, the Company may borrow
against certain levels of accounts receivable and inventory. The
unused amount available for borrowing, at June 29, 1996 was
$24,046,000.
3. INCOME TAXES
-------------
The provision for income taxes for the six-month period ended
June 29, 1996 was a benefit of $1.5 million, compared to a
benefit of $1.4 million for the six-month period ended July 1,
1995. An effective tax rate of 38.5% was used to calculate
income taxes for the first half of 1996, compared with an
effective rate of 39.7% for the first half of 1995. In addition
to the effective rate used for 1996, state franchise taxes were
calculated separately and are included in the benefit reported.
7
<PAGE> 8
4. RIVERSIDE INTERNATIONAL CORPORATION
------------------------------------
On February 21, 1996, the Company and its RIC subsidiary
entered into an agreement with two investment funds. Pursuant to
this agreement, the two funds are each to invest $5 million in
this subsidiary and are each to receive a 25% equity interest,
with the Company retaining an interest slightly less than 50% and
the subsidiary's management receiving the balance of the equity.
A total of $6 million of the funds' investment has been
advanced to RIC as a loan, which is to be converted to equity
upon funding of the remaining $4 million, which is to occur upon
satisfaction of certain conditions, including among other things
the resolution of certain legal matters and the achieving of
specified operational levels.
As of June 29, 1996, RIC has controlling interests in two
companies engaged in lumber-related businesses in Russia. The
investment in RIC is recorded under the equity method.
5. COMMITMENTS AND CONTINGENCIES
-------------------------------
At June 29, 1996, the Company had accrued approximately
$1.0 million (included in accrued liabilities at June 29, 1996)
for remediation of certain environmental and product liability
matters, principally underground storage tank removal.
Many of the building center facilities presently and formerly
operated by the Company and its predecessor contained underground
petroleum storage tanks. All such tanks known to the Company
located on facilities owned or operated by the Company have been
filled, removed, or are scheduled to be removed in accordance
with applicable environmental laws in effect at the time. As a
result of reviews made in connection with the sale or possible
sale of certain facilities, the Company has found petroleum
contamination of soil and ground water on several of these sites
and has taken, and expects to take, remedial actions with respect
thereto. In addition, it is possible that similar contamination
may exist on properties no longer owned or operated by the
Company the remediation of which the Company could under certain
circumstances be held responsible. Since 1988, the Company has
incurred approximately $2.1 million of costs, net of recoveries,
with respect to the filling or removing of underground storage
tanks and related investigatory and remedial actions.
8
<PAGE> 9
In February 1994, the Company was notified that a stock
certificate representing 103,922 shares of Common Stock that had
been previously reported as lost and that had been reissued and
transferred to an affiliate of the Company may in fact not have
been lost but instead previously transferred by the original
owner to a third party. In connection with the reissuance of the
allegedly lost stock certificate, the Company examined its
records, found no information concerning a possible prior
transfer of the stock certificate, and received an indemnity from
the original owner. If both transferees are determined to be
bona fide purchasers, both may be entitled to ownership of the
103,922 shares, which would result in a corresponding increase in
the number of outstanding shares of Common Stock. In such a
case, the Company believes it would be entitled to indemnity from
the original owner, which could be utilized to purchase and
retire an equivalent number of shares. If either of the
purported transferees is determined not to be a bona fide
purchaser, its certificate would be canceled. Litigation has
commenced in which, among other things, the Company is seeking
indemnity and a declaratory judgment concerning the rights and
obligations of the various parties and the original owner is
disputing its obligation to indemnify the Company.
At June 29, 1996, the Company's investment in RIC was $2.6
million. This investment entails significant inherent risks,
including expropriation, legal, currency, crime, management,
labor, weather and other operational risks.
The Company is one of many defendants in approximately 150
actions, each of which seeks unspecified damages, brought in
1993, 1994, 1995, and 1996 in various Michigan state courts
against manufacturers and building material retailers by
individuals who claim to have suffered injuries from products
containing asbestos. All of the plaintiffs in these actions are
represented by the same counsel. The Company is aggressively
defending these actions and does not believe that these actions
will have a material adverse effect on the Company.
On November 3, 1995, a complaint was filed against the
Company, its directors and Riverside Group, Inc. seeking to
enjoin or to obtain damages with respect to the Company's
agreement to issue two million newly-issued shares of common
stock to Riverside Group, Inc. for $10 million.
In the opinion of management, the potential liability in
excess of amounts accrued for the above matters would not
materially affect its financial condition or results of
operations.
9
<PAGE> 10
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
----------------------------------------------------------------
RESULTS OF OPERATIONS
---------------------
The following discussion should be read in conjunction with
the Condensed Consolidated Financial Statements and Notes thereto
contained elsewhere herein and in conjunction with the
Consolidated Financial Statements and Notes thereto and
Management's Discussion and Analysis of Financial Condition and
Results of Operations contained in the Company's Annual Report on
Form 10-K for the year ended December 30, 1995.
RESULTS OF OPERATIONS
The following table sets forth, for the periods indicated, the
percentage relationship to net sales of certain expense and
income items. This information includes the results from all
building centers and component manufacturing facilities operated
by the Company, including those subsequently closed or sold.
<TABLE>
Three Months Ended Six Months Ended
------------------ ----------------
June 29, July 1, June 29, July 1,
1996 1995 1996 1995
------ ------ ------ ------
<S> <C> <C> <C> <C>
Net sales 100.0% 100.0% 100.0% 100.0%
Gross profit 22.4% 23.4% 22.6% 23.6%
Selling, general and
administrative expense 18.1% 19.8% 20.6% 21.7%
Depreciation, goodwill and
trademark amortization 0.6% 0.5% 0.7% 0.6%
Other operating income (0.7)% (0.7)% (0.6)% (0.6)%
Income from operations 4.4% 3.8% 1.9% 1.9%
</TABLE>
10
<PAGE> 11
Net Earnings
- ------------
Net income(loss) was $1,881,000 and $(4,293,000) for the three
months and six months ended June 29, 1996, respectively, compared
with $2,470,000 and $(2,128,000) for the three months and six
months ended July 1, 1995. The decrease for the three-month
period primarily results from lower sales, reduced gross profit
margins, and equity in loss of affiliated company, partially
offset by decreased selling, general and administrative expenses
("SG&A").
Three Months Ended June 29, 1996 Compared
with the Three Months Ended July 1, 1995
Net Sales
- ---------
Net sales for the second quarter of 1996 decreased 16.1% to
$228.8 million from $272.8 million for the second quarter of
1995. Same store sales declined 9.6% compared with the same
period last year. The Company believes that the decrease in same
store sales is primarily attributable to a slowdown in
residential construction, severe spring rains in the midwest and
a 23% reduction in sales staff. The Company estimates that
deflation in lumber prices accounted for a decrease in total
sales of approximately 0.8%, or $1.9 million. Same store sales
to the Company's primary customer, residential and commercial
builders, declined only 1.8% when compared with the second
quarter of 1995. The Company's program to reduce the number of
under-performing building centers was also a major cause of the
1996 sales decline compared with 1995. The Company currently
operates 110 building centers, 17 fewer than at the end of the
first quarter of 1995.
Gross Profit
- ------------
1996 second quarter gross profit decreased to $51.2 million
from $63.9 million for the second quarter of 1995, a 19.9%
decrease. Gross profit as a percent of sales decreased to 22.4%
of sales for the second quarter of 1996 from 23.4% in 1995. The
decline in gross profit as a percent of sales is primarily
attributable to the Company's continued emphasis on sales to the
professional builder, resulting in an increase in the portion of
the Company's sales comprised of lower margin commodity products,
and to a lesser extent a program to reduce the amount of excess
and slow-moving inventory. Sales to the professional builder,
as a percent of total sales, increased to 84.1% for the second
quarter of 1996 from 79.9% for the same period in 1995.
Selling, General and Administrative Expense
- --------------------------------------------
SG&A expense decreased to 18.1% of net sales in the second
quarter of 1996 compared with 19.8% of net sales in the second
quarter of 1995. Despite a 16.1% total sales decline for the
second quarter the Company was able to reduce its total SG&A
expense by 23.1%, as a result of several cost reduction
initiatives implemented since mid 1994.
Improved credit controls at various lumber centers and good
success in collecting previously reserved accounts receivable,
reduced bad debt expense as a percent of sales by 1.0 %. Total
salaries, wages and employee benefits decreased, as a percent of
sales, by 0.8%. As of June 30, 1996, the Company had 3,854 full
time and part time employees, down 18% from June 1995. As a
percent of sales, the Company experienced an increase in delivery
and accounts receivable collection expenses, partially offset by
decreases in professional and legal fees and marketing expenses.
11
<PAGE> 12
Depreciation, Goodwill and Trademark Amortization
- --------------------------------------------------
Depreciation, goodwill and trademark amortization decreased to
$1.3 million for the second quarter of 1996 compared with $1.4
million for the same period in 1995. This decrease is primarily
due to the sale of excess facilities and equipment since March of
1996.
Other Operating Income
- -----------------------
Other operating income for the second quarter 1996 was $1.6
million. This was relatively unchanged, as a percent of sales,
when compared with the $1.8 million recorded for the same period
in 1995.
Interest Expense
- -----------------
In the second quarter of 1996 interest expense decreased 11.7%
to $5.5 million from $6.2 million in the second quarter of 1995.
This change reflects a $29.5 million decrease in average
borrowings on the Company's revolving credit facility. The
effective borrowing rate on total long term debt for the second
quarter increased 24 basis points from the second quarter of
1995. Approximately 92% of the Company's second quarter average
borrowings on its revolving credit facility were LIBOR-based.
Equity in Loss of Affiliated Company
- -------------------------------------
In the second quarter of 1996, the Company recorded a loss of
$0.9 million with respect to its investment in its subsidiary
engaged in operations in Russia. In the second quarter of 1995
the Company recorded a loss of $0.5 million, recorded on a
consolidated basis, with respect to this subsidiary.
12
<PAGE> 13
Provision for Income Taxes
- ---------------------------
The Company recorded an income tax expense of $1.8 million for
the second quarter of 1996 compared with $1.6 million in the
second quarter of 1995. An effective tax rate of 38.5% was used
to calculate income taxes for the second quarter of 1996 compared
with an effective rate of 39.7% for the second quarter of 1995.
In addition to the effective rate used, state franchise taxes
were calculated separately and are included in the benefit
reported for 1996.
The Company continues to review future earnings projections to
determine that there is sufficient support for its deferred
tax assets and valuation allowance. In spite of the losses
incurred during 1995, management believes that it is more likely
than not that the Company will receive full benefit of its
deferred tax asset and that the valuation allowance is properly
stated.
Six Months Ended June 29, 1996 Compared
with the Six Months Ended July 1, 1995
Net Sales
- ----------
Net sales for the first six months of 1996 decreased 17.9% to
$381.3 million from $464.5 million for the first six months of
1995. Same store sales declined 11.6% compared with the same
period last year. The Company believes that the decrease in same
store sales is primarily attributable to a slowdown in
residential construction, deflation in lumber prices, severe
weather conditions, and a 22.4% decrease in sales staff. The
Company estimates that deflation in lumber prices accounted for a
decrease in total sales of approximately 2.7%, or $10.4 million.
Same store sales to the Company's primary customer, residential
and commercial builders, declined only 3.4% when compared with
the second quarter of 1995. The Company's program to reduce the
number of under-performing building centers was also a major
cause of the 1996 sales decline compared with 1995. The Company
currently operates 110 building centers, 17 fewer than at the end
of the second quarter of 1995.
Gross Profit
- -------------
1996 first half gross profit decreased to $86.1 million from
$109.5 million for the first half of 1995, a 21.3% decrease.
Gross profit as a percent of sales decreased to 22.6% of sales
for the first half of 1996 from 23.6% in 1995. The decline in
gross profit as a percent of sales is primarily attributable to
the Company's continued emphasis on sales to the professional
builder, resulting in an increase in the portion of the Company's
sales comprised of lower margin commodity products, and to a
lesser extent a program to reduce the amount of excess and slow-
moving inventory. During the first half of 1996, the percent of
Company sales attributable to professional builders increased to
85.3% from 81.5% in the first half of 1995. The Company also
estimates the decline in lumber prices during the first half of
1996, compared with the first half of 1995, resulted in a
decrease of approximately $1.7 million in total gross profit.
13
<PAGE> 14
Selling, General and Administrative Expense
- --------------------------------------------
SG&A expense decreased to 20.6% of net sales in the first half
of 1996 compared with 21.7% of net sales in the first half of
1995. In spite of its 17.9% total sales decline for the first
half the Company was able to reduce its total SG&A expense by
22.1%, as a result of several cost reduction initiatives
implemented since mid 1994.
Bad debt expense, as a percent of sales, decreased in the
first half of 1996 by .7% when compared with the first half of
1995. Total salaries, wages and employee benefits also
decreased, as a percent of sales, by 0.5%. As a percent of
sales, the Company also experienced smaller decreases in travel,
office supplies, professional and legal fees, and marketing,
offset by increases in accounts receivable collection costs,
rentals and delivery expense.
Depreciation, Goodwill and Trademark Amortization
- --------------------------------------------------
Depreciation, goodwill and trademark amortization decreased to
$2.8 million in the first half of 1996 from $2.9 million in the
first half of 1995. This decrease is primarily due to the sale
of excess facilities and equipment since March of 1996.
Other Operating Income
- -----------------------
Other operating income for the first half 1996 was $2.5
million. This was relatively unchanged, as a percent of sales,
when compared with the $2.9 million recorded for the same period
in 1995.
Interest Expense
- -----------------
In the first half of 1996 interest expense decreased 8.1% to
$11.2 million from $12.2 million in the first half of 1995. This
change reflects a $22.1 million decrease in average borrowings on
the Company's revolving credit facility. The effective borrowing
rate on total long term debt for the first half increased 22
basis points from the first half of 1995. Approximately 94% of
the Company's first quarter average borrowings on its revolving
credit facility were LIBOR-based.
14
<PAGE> 15
Equity in Loss of Affiliated Company
- -------------------------------------
In the first half of 1996, the Company recorded a loss of $1.9
million with respect to its investment in its subsidiary engaged
in operations in Russia. In the first half of 1995 the Company
recorded a loss of $0.8 million, recorded on a consolidated
basis, with respect to this subsidiary.
Provision for Income Taxes
- ---------------------------
The Company recorded an income tax benefit of $1.5 million for
the first six months of 1996 compared with a benefit of $1.4
million in the first six months of 1995. An effective tax rate
of 38.5% was used to calculate income taxes for the first half
of 1996 compared with an effective rate of 39.7% for the first
half of 1995. In addition to the effective rate used, state
franchise taxes were calculated separately and are included in
the benefit reported for 1996.
The Company continues to review future earnings projections to
determine that there is sufficient support for its deferred
tax assets and valuation allowance. In spite of the losses
incurred during 1995, management believes that it is more likely
than not that the Company will receive full benefit of its
deferred tax asset and that the valuation allowance is properly
stated.
15
<PAGE> 16
LIQUIDITY AND CAPITAL RESOURCES
The Company's principal sources of working capital and
liquidity are earnings and borrowings under its revolving credit
facility. The Company's primary need for capital resources is to
finance inventory and accounts receivable.
The first half of the year, historically, generates negative
cash flows from operating activities. With the peak building
season historically occurring in the second and third quarters,
the Company normally experiences increases in its accounts
receivable and inventory levels during the first quarter to meet
the anticipated increase in sales and in the second quarter as a
result of increased sales activity. In the first half of 1996,
the Company utilized its revolving line of credit as well as
proceeds from the sales of excess property, plant and equipment
to provide funds used by operations. Net cash used in operations
during the first six months of 1996 was only $2.4 million
compared with $10.3 million in the first half of 1995 and $29.8
million in the first half of 1994. In the first three months of
1996, operating activities generated a positive cash flow as the
Company made significant reductions in its working capital.
The Company's accounts receivable balance at the end of the
second quarter of 1996 decreased $20.4 million when compared to
the second quarter of 1995, a decrease of 18.9%. Adjusting for
building centers acquired, consolidated and closed since the
beginning of 1995, the Company estimates that comparable accounts
receivable were down 16.5%. This decrease is primarily a result
of reduced sales for 1996 when compared with 1995 and improved
collections at recently acquired building centers.
Inventory at the end of the second quarter of 1996 was $19.8
million, or 15.2%, lower than at the end of the second quarter of
1995. Approximately $13.6 million of this reduction is
attributable to inventory disposed from building centers closed
in 1995. The Company's inventory control processes are primarily
responsible for the remainder of the inventory reduction.
On June 20, 1996, the Company sold to Riverside Group, Inc.
("Riverside") 2 million newly-issued shares of the Company's
common stock for $10 million in cash. As a result of this issue,
approximately $12 million in real estate was released from the
total collateral required under the Company's revolving line of
credit.
The Company's capital expenditures consist primarily of the
construction of storage facilities, the remodeling of building
centers and component manufacturing facilities, and the purchase
of vehicles, equipment and management information systems. In
the first six months of 1996 the Company spent $2.0 million
on capital expenditures. The Company expects to spend
approximately $4 million for all of 1996. Under the Company's
bank revolving credit agreement, as amended, capital expenditures
during 1996 are limited to $6 million plus any portion of 1995's
capital expenditures that were not spent. The Company expects to
fund capital expenditures through borrowings and its internally
generated cash flow.
16
<PAGE> 17
In April of 1996 the Company began operating a new component
manufacturing facility in Elwood, IN. The operation manufactures
trusses and wall panels for several of the Company's Indiana and
Ohio centers. The facility is located on the site of a former
Wickes Lumber center.
Through the first six months of 1996 the Company has also
generated $3.2 million from the sale of real estate for two
closed lumber centers and 280 excess delivery vehicles and
forklifts. This compares with only $0.6 million generated in the
first six months of 1995.
The Company maintained excess availability under its revolving
line of credit, throughout the first six months of 1996. At the
end of the second quarter of 1996 total borrowings under the
revolving line of credit were $33.7 million lower than at the end
of the second quarter of 1995. Under the current terms of the
Company's bank revolving credit agreement the Company believes
that it will continue to have sufficient funds available for
its anticipated operations and capital expenditures. At July
27, 1996, $99.5 million was outstanding under the Company's
revolving line of credit, and the unused availability was
approximately $25.0 million.
17
<PAGE> 18
PART II
OTHER INFORMATION
Item 5. Other Information
On June 20, 1996, the Company sold 2,000,000 newly-issued
shares of Common Stock to Riverside Group, Inc. This event was
reported in a Current Report on Form 8-K filed on June 27, 1996
and amended on Form 8-K/A on July 24, 1996.
On July 24, Douglas J. Woods, President of Wickes Lumber
Company, announced he was leaving Wickes to pursue other
interests. Mr. J. Steven Wilson, Chairman and Chief Executive
Officer of the Company will re-assume the office of President.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
10.01 Mortgage Lending Agreement between Wickes Lumber
Company,Inc.and Wickes Mortgage Lending,Inc. dated
as of June 30, 1996.
11.01 Statement regarding computation of earnings per
share.
27.1 Financial data schedule (SEC use only).
(b) Reports on Form 8-K
The Company filed a Current Report on Form 8-K dated
June 20, 1996, reporting under Item 5. Other Events
the sale of 2 million newly-issued shares of the
registrant's Common Stock to Riverside Group, Inc. for
$10,000,000 in cash. An amendment to this report was
filed on July 24, 1996 and included additional pro
forma information under Item 7. Financial Statements
and Exhibits.
18
<PAGE> 19
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) 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.
WICKES LUMBER COMPANY
By: /s/ J. Steven Wilson
---------------------------------
J. Steven Wilson
Chairman and Chief Executive
Officer
By: /s/ George A. Bajalia
---------------------------------
George A. Bajalia
Senior Vice President and Chief
Financial Officer
Date: August 13, 1996
19
<PAGE> 1
Exhibit 10.01
MORTGAGE MARKETING AGREEMENT
This Agreement made as of June 30, 1996 by and between
Wickes Lumber Company, a Delaware corporation ("Wickes"), and
Wickes Mortgage Lending, Inc., a Delaware corporation ("WML")
WITNESSETH:
WHEREAS, Wickes is engaged in the retail and wholesale sale
and distribution of lumber and building products; and
WHEREAS, WML is an indirect wholly-owned subsidiary of
Riverside Group, Inc. engaged in mortgage lending operations;
WHEREAS, Wickes and WML desire to jointly develop, market
and implement a mortgage lending program to and through Wickes'
builder customers; and
WHEREAS, Wickes is willing to grant a sublicense to WML to
use the Trademarks (as defined below) for such purpose in
accordance with the terms and conditions hereof.
NOW, THEREFORE, in consideration of the foregoing and for
other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Wickes and WML
agree as follows:
ARTICLE I
Marketing
----------
1.1 Conduct of the Business by WML.
-------------------------------
During the term of this Agreement, WML shall use good faith
efforts to market to Wickes' builder customers mortgage loans and
related products and services and such other services and
products as agreed to by the parties from time to time
(collectively, the "Business"). WML shall maintain adequate
resources to conduct the Business and perform its obligations
hereunder in a manner meeting the highest industry standards,
including but not limited to promptness of administrative action
and courtesy to customers of Wickes. WML shall conduct the
Business in accordance with all applicable laws, rules and
regulations and shall use reasonable efforts to conduct the
Business in such a manner that Wickes is not considered as
engaging in the Business.
<PAGE> 2
1.2 Agreements of Wickes.
----------------------
Wickes agrees that during the term of this Agreement it
shall without charge (except as provided below):
(a) provide such cooperation as may be necessary to enable
WML to carry out the purposes of this Agreement, including but
not limited to allowing WML to participate in direct mail
solicitations and other marketing programs of Wickes relating to
such purposes;
(b) provide to WML customer lists and such other
information on Wickes' customers as WML may reasonably request
relating to such purposes;
(c) reasonably endorse the Business, including but not
limited to the delivery of such letters of endorsement of the
Business as WML may reasonably request (subject to WML
reimbursing Wickes for paper and postage); and
(d) use reasonable best efforts to assist WML to locate a
substitute builder to complete construction of any structure
subject to a mortgage included in the Business after default by
the original builder and to continue on a commercially reasonable
basis under the circumstances the supply of building materials
for such construction.
1.3 Cost Sharing.
-------------
(a) Wickes agrees to reimburse WML for those costs incurred
by WML and its affiliates from January 1 through June 30, 1996,
for the hiring, training, office setup and other operating costs
of loan representatives with respect to the Business ("Start-up
Costs"), provided that such reimbursement shall not exceed the
cumulative sum shown of Wickes' Total Participation Funding on
Exhibit A hereto through June 1996.
(b) Wickes agrees to reimburse WML on a monthly basis for
Start-up Costs incurred after June 30, 1996, provided that:
(i) Wickes shall not be required to reimburse WML more
than $60,000 with respect to the Start-up Costs related to any
single loan representative;
(ii) at no time during 1996 shall Wickes be required to
reimburse WML for an aggregate amount in excess of the Wickes'
Total Participation Funding shown on Exhibit A (on a cumulative
basis through the end of the month for which payment is made);
and
(iii) at no time during any year after 1996 shall
Wickes be required to reimburse WML for an aggregate amount in
excess of $100,000 multiplied by the number of months elapsed in
such year through the end of the month for which payment is made.
Such reimbursement shall be paid promptly upon receipt of an
invoice from WML setting forth in reasonable detail the amount
due under this Section 1.3.
2
<PAGE> 3
(c) Other than the reimbursement set forth in this Section
1.3, Wickes is not obligated to pay any compensation to WML
hereunder, and WML shall be responsible for the payment of any
and all expenses of any type or nature whatsoever, whether billed
to WML or Wickes, incurred in connection with performance of
WML's obligations hereunder. WML will remit promptly to Wickes
any such item billed to Wickes upon notice by Wickes to WML
thereof.
1.4 Reports and Records.
--------------------
WML shall furnish to Wickes monthly reports regarding the
Business in such form and containing such information as Wickes
may reasonably request. WML shall keep true and complete records
of all transactions and correspondence with customers of Wickes.
Such records and all accounting records of WML pertaining to the
Business may be examined by representatives of Wickes at any time
during normal business hours, whether during or after the term of
this Agreement. WML also shall provide any financial information
reasonably requested by Wickes at any time.
1.5 Exclusivity.
-------------
During the term of this Agreement, Wickes shall not provide
a list of its customers to any other person or entity for
purposes of using it to market mortgage loans to or through such
customers, except as set forth in the next sentence. If Wickes
desires to provide all or part of such a list to a person or
entity in a market area in which WML is not then operating it may
do so provided it first gives WML written notice of its intention
to do so and WML does not represent in writing to Wickes within
30 days of receipt of the notice that it will use reasonable
efforts to begin operations in the subject market within six
months.
1.6 Customer Complaints.
---------------------
Wickes retains the right to investigate any and all
complaints of its customers, agents, employees and others
relating to the Business. In the event that WML becomes aware of
a customer complaint relating to the Business, it shall promptly
give Wickes notice of such complaint. WML agrees to resolve all
Wickes customers' complaints to the reasonable satisfaction of
Wickes.
3
<PAGE> 4
ARTICLE II
Trademarks
-----------
2.1 Grant of License.
------------------
Wickes hereby grants to WML a royalty-free, non-exclusive
license to use the name "Wickes" and the Flying W trademark
depicted on Exhibit B hereto (collectively, the "Trademarks")
solely in connection with carrying on the Business in accordance
with the terms of this Agreement during the term of this
Agreement. Any use of the name "Wickes" pursuant to the license
granted hereby shall be made only in conjunction with the words
"Wickes Mortgage Lending, Inc." The Trademarks are and shall
remain the property of Wickes and no right, title or interest has
been transferred or is transferred to WML hereunder, except the
right to use the same as herein provided. Any use of the name
"Wickes" by WML shall be expressly subordinate to the use of said
name by Wickes.
2.2 Use of Trademarks.
------------------
WML shall use the Trademarks only to conduct the Business in
accordance with the terms hereof and for no other purpose
whatsoever, in a manner consistent with the maintenance of the
existent goodwill associated with the Trademarks.
ARTICLE III
Representations and Warranties
-------------------------------
3.1 WML represents to Wickes that:
(a) WML is a corporation duly incorporated under the laws
of the State of Delaware and has full power and authority to
enter into and perform the transactions contemplated by this
Agreement; and
(b) this Agreement and the transactions contemplated hereby
have been duly authorized by the Board of Directors of WML.
3.2 Wickes represents to WML that:
(a) Wickes is a corporation duly incorporated under the
laws of the State of Delaware and has full power and authority to
enter into and perform the transactions contemplated by this
Agreement;
(b) this Agreement and the transactions contemplated hereby
have been duly authorized by the Board of Directors of Wickes;
and
(c) Wickes has a valid license to use the Trademarks.
4
<PAGE> 5
ARTICLE IV
Insurance, Indemnification and Confidentiality
------------------------------------------------
4.1 E & O Coverage.
----------------
WML shall maintain in full force and effect during the term
of this Agreement, at its sole cost and expense, a policy or
policies of Errors and Omissions insurance, issued by an insurer
acceptable to Wickes, to afford coverage in the amount of at
least $1,000,000.
4.2 Indemnification.
-----------------
WML agrees to defend, indemnify and hold harmless Wickes,
its agents and employees from and against all costs, expenses,
claims, liabilities and losses which result or arise from or
relate to the negligent or willful acts, or errors or omissions
of WML, its agents, sub-agents or employees under this Agreement.
Such costs, expenses, claims, liabilities and losses shall
include, but not be limited to, attorney fees (whether or not
litigation ensues) and other legal fees, penalties, fines, direct
or consequential damages, assessments and verdicts (including
punitive damages).
4.3 Confidentiality.
------------------
(a) WML hereby acknowledges that the confidential and
proprietary information to be furnished by Wickes to WML
hereunder, including but not limited to all information regarding
customers (the "Information") is confidential information
belonging to Wickes. WML further acknowledges that unauthorized
use or disclosure of the Information would irreparably injure
Wickes.
(b) WML shall not, and shall use reasonable efforts to
cause its agents, subagents, employees, affiliates and
contractors not to, during or after the term of this Agreement,
use or disclose the Information for any reason whatsoever to any
person or entity except for such use or disclosure reasonably
necessary in conducting the Business. WML will implement such
practices and measures as are reasonably necessary to preserve
and protect the confidentiality of the Information.
(c) In the event of a breach or threatened breach of
Section 4.3(b) hereof, Wickes shall be entitled to an injunction
restraining WML, or its agents, subagents or employees, from
disclosing the Information in whole or part or conducting the
Business with any person or entity to whom the Information has
been disclosed or is threatened to be disclosed. Nothing herein
shall be construed as prohibiting Wickes from pursuing any other
remedies available to Wickes for such breach or threatened
breach, including the recovery of damages.
5
<PAGE> 6
ARTICLE V
Term, Restrictions After Term, Etc.
-------------------------------------
5.1 Term.
------
The term of this Agreement shall take effect upon the
obtaining by Wickes of all necessary consents of its lenders and
shall be terminated on December 31, 1997; provided, that the term
----------
shall automatically be extended for an additional month on the
last day of December 1997 and each month thereafter unless either
party notifies the other to the contrary 30 days prior to the
commencement of such extension; and provided further, that the term
------------------
of this Agreement may be terminated by Wickes prior to December
31, 1997 on 30 days' written notice to WML.
5.2 Restrictions and Rights After Term; Effect of
----------------------------------------------
Termination or Expiration.
--------------------------
(a) After the term of this Agreement, WML may continue to
operate the Business as to customers to whom it has made mortgage
loans or issued mortgage loan commitments, but only with respect
to and to the extent of such loans or commitments.
Notwithstanding the foregoing, on the termination date of the
term of this Agreement, the sublicense granted to WML to use the
Trademarks shall be automatically revoked and of no further force
and effect, and WML agrees (i) not to conduct any business under
the name Wickes Mortgage Lending, Inc. or any name containing the
word "Wickes", (ii) not to otherwise use the name "Wickes",
(iii) to change its name such that the word "Wickes" is not part
of its name, and (iv) upon request from Wickes to assign Wickes
all of WML's right, title and interest in and to the name "Wickes
Mortgage Lending, Inc." and all variations thereof.
(b) For two (2) years after the termination of the term of
this Agreement for any reason, WML agrees not, directly or
indirectly, to market construction loans to any professional
builder that is a customer of Wickes at the time of termination
or whose name has been on any customer list provided to Wickes
written one year prior to the time of termination.
(c) Sections 4.3, 5.2, 5.3, 6.1 and 6.10 shall survive the
termination or expiration of this agreement for the respective
periods set forth therein or, if no such period is specified,
indefinitely. The termination or expiration of this Agreement in
accordance with its terms: (i) shall not affect the obligations
of the parties to make all payments accrued on the date of such
termination or expiration and (ii) shall not result in any other
liability on the part of any party hereof.
5.3 Return of Information.
----------------------
Upon the termination of the term of this Agreement for any
reason, each party shall return to the other within ten (10) days
of the expiration or termination date hereof all documents,
contracts, records or properties of any kind furnished by the
other party, including but not limited to any information
provided on magnetic medium, and destroy all copies thereof.
Notwithstanding the foregoing, WML and Wickes may retain such
information as is reasonably necessary to enable it to conduct
business or as required by law.
6
<PAGE> 7
ARTICLE VI
Miscellaneous
---------------
6.1 Expenses.
---------
Each party to this Agreement shall pay its own attorneys'
fees and expenses in connection with the transactions
contemplated hereby.
6.2 Waiver.
--------
The terms and provisions of this Agreement may be waived at
any time by the party which is entitled to the benefit thereof,
but only by a written instrument executed by the party waiving
compliance.
6.3 Amendment, etc.
----------------
Anything herein or elsewhere to the contrary
notwithstanding, to the extent permitted by law this Agreement
may be amended, or supplemented at any time, but only by a
written instrument executed by Wickes and WML.
6.4 Notices.
---------
All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given upon personal
delivery, being sent via confirmed facsimile or three (3) days
after being mailed first class postage prepaid, to the parties at
the following address or fax number (or at such other address or
fax number for a party as shall be specified by like notice):
If to Wickes:
Wickes Lumber Company
706 Deerpath Drive
Vernon Hills, IL 60606
Attention: George A. Bajalia
Facsimile No.: (847) 367-3750
If to WML:
Wickes Mortgage Lending, Inc.
7800 Belfort Parkway, Suite 100
Jacksonville, FL 32256
Attention: Edward B. Salem
Facsimile No.: (904) 296-0584
6.5 Headings/Exhibits.
-------------------
The section headings contained in this Agreement are for
convenience only and shall not control or affect the meaning or
construction of any of the provisions of this Agreement. The
exhibits attached hereto are incorporated herein by reference and
made a part hereof.
7
<PAGE> 8
6.6 Counterparts; Entire Agreement.
--------------------------------
This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
This Agreement supersedes all prior negotiations and agreements
(written or oral) among the parties with respect to the subject
matter covered hereby and, with respect to such subject matter,
constitutes the entire understanding among the parties hereto.
6.7 Saving Provision.
------------------
In the event any provision of this Agreement is adjudged to
be unenforceable, all remaining provisions shall continue in full
force and effect.
6.8 Miscellaneous.
---------------
This Agreement shall inure to the benefit of and be binding
upon the parties named herein and their respective successors.
This Agreement may not be assigned by WML, and nothing in this
Agreement, express or implied, is intended to confer upon any
other person, any rights or remedies under or by reason of this
Agreement.
6.9 Governing Law.
---------------
This Agreement shall be construed and enforced in accordance
with the laws of the State of Illinois.
6.10 Arbitration.
-------------
Any claim or controversy arising out of this Agreement, or
breach hereof, shall be settled by arbitration in accordance with
the rules of the American Arbitration Association in Chicago,
Illinois. Judgment on an arbitration award may be entered in the
court of jurisdiction thereof. Notwithstanding the foregoing
provisions of this Section 6.10: (i) Wickes shall be entitled to
seek injunctive relief pursuant to Section 4.3(c) hereof for the
breach or threatened breach of Section 4.3(b) or 5.2 hereof by
WML, (ii) WML shall be entitled to injunctive relief for the
present or threatened breach of Section 1.5 hereof by Wickes and
(iii) Wickes and WML shall be entitled to seek injunctive relief
for the present or threatened breach by the other of Section 1.8
or 5.3 hereof. IN THE EVENT THAT FOR ANY REASON ARBITRATION DOES
NOT RESULT IN A FINAL SETTLEMENT OF SUCH DISPUTED MATTER OR
BREACH, WICKES AND WML HEREBY WAIVE TRIAL BY JURY OF ANY MATTER
WHICH ARISES OUT OF OR RELATES TO THIS AGREEMENT.
8
<PAGE> 9
IN WITNESS WHEREOF, the parties have duly executed this
Agreement as of the date first above written.
WICKES LUMBER COMPANY
By: /s/ George A. Bajalia
-----------------------
Name: George A. Bajalia
-------------------
Title: Chief Financial Officer
-------------------------
WICKES MORTGAGE LENDING, INC.
By: /s/ Edward B. Salem
-----------------------
Name: Edward B. Salem
------------------
Title: President
------------------
Lumber Trademark Company, a Delaware corporation, licensor
of the Trademarks, hereby joins in this Agreement for the sole
purpose of consenting to the sublicense granted to WML pursuant
to Article II hereof.
LUMBER TRADEMARK COMPANY
By:/s/ George A. Bajalia
------------------------
Name: George A. Bajalia
-----------------------
Title: Vice President\ Treasurer
----------------------------
9
<PAGE> 1
Exhibit
COMPUTATION OF EARNINGS PER SHARE
AND EQUIVALENT SHARES OF COMMON STOCK 11.01
(Unaudited)
(thousands except share and per share amounts)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
--------- --------- --------- ---------
June 29, July 1, June 29, July 1,
1996 1995 1996 1995
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Average Shares Outstanding
1. Weighted average number of shares of
common stock outstanding during the
period 6,371,310 6,139,924 6,258,265 6,129,365
2. Net additional common equivalent shares
assuming exercise of common stock
warrants as computed under the treasury
stock method 12,042 16,125 13,042 16,737
--------- --------- --------- ---------
3. Weighted average number of shares and
equivalent shares of common stock
outstanding during the period 6,383,352 6,156,049 6,271,307 6,146,102
========= ========= ========= =========
Income (Loss)
4. Net income (loss) available for common stock $ 1,881 $ 2,470 $ (4,293) $ (2,128)
========= ========= ========= =========
Per Share Amounts
5. Earnings (loss) $ 0.29 $ 0.40 $ (0.68) $ (0.35)
========= ========= ========= =========
Earnings (loss) per share is computed by dividing net income (loss) available for common
stock, by weighted average number of shares of common stock and common stock equivalents (warrants),
unless anti-dilutive, outstanding during the periods.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE JUNE 29,
1996 FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-28-1996
<PERIOD-END> JUN-29-1996
<CASH> 2582
<SECURITIES> 0
<RECEIVABLES> 93343
<ALLOWANCES> 5776
<INVENTORY> 110672
<CURRENT-ASSETS> 229951
<PP&E> 82050
<DEPRECIATION> 29086
<TOTAL-ASSETS> 307237
<CURRENT-LIABILITIES> 84794
<BONDS> 100000
0
0
<COMMON> 82
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 307237
<SALES> 381281
<TOTAL-REVENUES> 381281
<CGS> 295142
<TOTAL-COSTS> 295142
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 11172
<INCOME-PRETAX> (5759)
<INCOME-TAX> (1466)
<INCOME-CONTINUING> (4293)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (4293)
<EPS-PRIMARY> (0.68)
<EPS-DILUTED> 0
</TABLE>
