Form 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[ X ]QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1996
OR
[ ]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____________ to _________________
Commission file number: 1-12754
O'Sullivan Industries Holdings, Inc.
(Exact name of registrant as specified in its charter)
Delaware 43-1659062
(State or other jurisdiction of
incorporation or organization) (I.R.S. Employer
Identification No.)
1900 Gulf Street, Lamar, Missouri 64759-1899
(Address of principal executive offices) (ZIP Code)
(417) 682-3322
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes [ X ] No [ ]
As of February 10, 1997, 16,773,533 shares of Common Stock of O'Sullivan
Industries Holdings, Inc., par value $1.00 per share, and associated
preferred stock purchase rights were outstanding.
<PAGE>
PART I
Item 1. Financial Statements
O'SULLIVAN INDUSTRIES HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(in thousands, except for per share data)
<TABLE>
<CAPTION>
December 31, June 30,
Assets: 1996 1996
------ ------------ --------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 10,378 $ 506
Trade receivables, net of allowance for
doubtful accounts of $2,006 and
$1,225, respectively 56,929 53,570
Inventories:
Finished merchandise 27,372 26,031
Work in process 5,842 5,116
Raw materials 10,547 10,334
------- -------
43,761 41,481
Prepaid expenses and other current assets 2,309 2,347
------- -------
Total current assets 113,377 97,904
------- -------
Property, plant and equipment, at cost 113,611 112,828
Less accumulated depreciation and amortization (44,996) (44,838)
------- -------
68,615 67,990
Goodwill, net of accumulated amortization 45,590 46,423
------- -------
$227,582 $212,317
======= =======
Liabilities and Stockholders' Equity:
------------------------------------
Current liabilities:
Accounts payable $ 10,735 $ 11,046
Accrued liabilities 20,403 14,955
Income taxes payable 3,306 767
------- -------
Total current liabilities 34,444 26,768
------- -------
Long-term debt, less current maturities 30,000 30,000
Deferred income taxes 13,934 13,934
Stockholders' equity:
Preferred stock; $1.00 par value, 20,000,000 shares
authorized, none issued - -
Common stock; $1.00 par value, 100,000,000 shares
authorized, 16,819,950 issued 16,820 16,820
Additional paid-in capital 87,861 87,775
Retained earnings 45,070 37,020
-------- --------
149,751 141,615
Less common stock in treasury at cost,
46,617 shares in 1997; none in 1996 547 -
-------- --------
Total stockholders' equity 149,204 141,615
-------- --------
Commitments and contingencies (Note 4)
-------- --------
$227,582 $212,317
======= =======
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE>
O'SULLIVAN INDUSTRIES HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(in thousands, except for per share data)
<TABLE>
<CAPTION>
Three months ended Six months ended
December 31, December 31,
------------------ ----------------
1996 1995 1996 1995
------- ------- ------- -------
<S> <C> <C> <C> <C>
Net sales $80,593 $79,574 $163,719 $154,348
Costs and expenses:
Cost of sales 56,967 63,430 117,541 123,320
Selling, marketing and
administrative 15,616 14,315 31,816 25,970
Interest, net 597 1,089 1,315 2,146
------- ------- ------- -------
73,180 78,834 150,672 151,436
------- ------- ------- -------
Income before income tax provision 7,413 740 13,047 2,912
Income tax provision 2,839 282 4,997 1,106
------- -------- ------- -------
Net Income $ 4,574 $ 458 $ 8,050 $ 1,806
======= ======== ======= =======
Earnings per common share $0.27 $0.03 $0.48 $0.11
===== ===== ===== =====
Weighted average common shares
outstanding 16,787 16,820 16,797 16,820
====== ====== ====== ======
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE>
O'SULLIVAN INDUSTRIES HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(in thousands)
<TABLE>
<CAPTION>
Six months ended
December 31,
---------------------
1996 1995
-------- --------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 8,050 $ 1,806
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation and amortization 4,868 4,550
Changes in current assets and liabilities:
Trade receivables (3,359) (10,705)
Inventories (2,280) 2,504
Other assets 31 167
Accounts payable, accrued liabilities and
income taxes payable 7,676 4,406
------ ------
Net cash provided by operating activities 14,986 2,728
------ ------
Cash flows from investing activities:
Capital expenditures (4,660) (1,650)
Cash flows from financing activities:
Repayment of long-term debt - (1,000)
Purchase of treasury stock (1,493) -
Sale of common stock to employee benefit plans 1,039 -
------ ------
Net cash flows provided (used)
for financing activities (454) (1,000)
------ ------
Net increase in cash and cash equivalents 9,872 78
Cash and cash equivalents, beginning of period 506 564
------ ------
Cash and cash equivalents, end of period $10,378 $ 642
====== ======
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE>
O'SULLIVAN INDUSTRIES HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED)
(in thousands)
<TABLE>
<CAPTION>
Preferred stock Common stock
--------------- ------------
<S> <C> <C> <C> <C>
Shares Dollars Shares Dollars
------ ------- -------- -------
Balance, June 30, 1996 - $ - 16,820 $16,820
Net income - - - -
Translation adjustment - - - -
Purchase of common stock
Sale of common stock
------ -------- ------ -------
Balance, December 31, 1996 - $ - 16,820 $16,820
====== ======== ====== =======
</TABLE>
<TABLE>
<CAPTION>
Additional Treasury stock Total
paid-in Retained stockholders'
capital earnings Shares Dollars equity
---------- -------- ------ ------- -------------
<S> C> <C> <C> <C> <C>
Balance, June 30, 1996 $87,775 $37,020 - $ - $141,615
Net income - 8,050 8,050
Translation adjustment (7) - (7)
Purchase of common stock (154) (1,493) (1,493)
Sale of common stock 93 107 946 1,039
------ ------ ---- ------ -------
Balance, December 31, 1996 $87,861 $45,070 (47) $ (547) $149,204
====== ====== ==== ====== =======
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
<PAGE>
O'SULLIVAN INDUSTRIES HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
December 31, 1996
Note 1 - Basis of Presentation
The unaudited consolidated financial statements included
herein have been prepared by O Sullivan Industries Holdings, Inc.
and subsidiaries (the "Company") in accordance with generally
accepted accounting principles for interim financial information
and with instructions to Form 10-Q and Article 10 of Regulation
S-X. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with
generally accepted accounting principles have been condensed or
omitted pursuant to such rules and regulations. The financial
statements should be read in conjunction with the audited
financial statements and notes thereto included in the Company's
Annual Report on Form 10-K for the year ended June 30, 1996. The
interim results are not necessarily indicative of the results
which may be expected for a full year.
Note 2 - Summary of Significant Accounting Policies
Accounting for Stock-Based Compensation: In October 1995,
the FASB issued FAS No. 123, Accounting for Stock-Based
Compensation ("FAS 123"), which is effective for fiscal years
beginning after December 15, 1995. Effective July 1, 1996, the
Company adopted FAS 123 establishing financial accounting and
reporting standards for stock-based employee compensation plans.
The pronouncement defines a fair value based method of accounting
for an employee stock option or similar equity instrument and
encourages all entities to adopt that method of accounting for
all of their employee stock option compensation plans. However,
it also allows an entity to continue to measure compensation cost
for those plans using the intrinsic value based method of
accounting as prescribed by Accounting Principles Board Opinion
No. 25, Accounting for Stock Issued to Employees ("APB 25").
Entities electing to remain with the intrinsic method of
accounting pursuant to APB 25 must make pro forma disclosures of
net income and earnings per share as if the fair value based
method of accounting defined in FAS 123 had been applied. The
Company will account for stock-based employee compensation plans
under the intrinsic method pursuant to APB 25 and will make the
disclosures in its footnotes as required by FAS 123.
Impairment of Long-Lived Assets: In March 1995, the FASB
issued FAS No. 121, Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to Be Disposed Of ("FAS 121"),
which is effective for fiscal years beginning after December 15,
1995. Effective July 1, 1996, the Company adopted FAS 121, which
requires that long-lived assets (i.e., property, plant and
equipment and goodwill) held and used by an entity be reviewed
for impairment whenever events or changes in circumstances
indicate that the net book value of the asset may not be
recoverable. An impairment loss will be recognized if the sum of
the expected future cash flows (undiscounted and before interest)
from the use of the asset is less than the net book value of the
asset. Generally, the amount of the impairment loss is measured
as the difference between the net book value of the assets and
the estimated fair value of the related assets. The adoption of
this statement had no impact on the Company's results of
operations nor its financial position.
Note 3 - Incentive Stock Plan
On July 1, 1996, the Board of Directors granted, subject to
stockholder approval, options to purchase 625,250 shares of
common stock to the Company's officers and other key employees.
To the extent certain performance objectives regarding (a)
Company quarterly earnings measured against Company goals and
(b) quarterly percentage sales increases measured against a
competitor are met, the options become exercisable in one-third
increments on each of the first three anniversaries of the date
of the grant and expire ten years after the date of the grant.
To the extent the performance objectives are not met, the options
become exercisable on August 10, 2003 and expire September 10,
2003. On November 14, 1996, stockholders approved the amendment
and restatement of the Company's 1994 Incentive Stock Plan and
the Special Option awards under the plan. Accordingly, the
Company will recognize compensation expense equal to the
difference between the exercise price of $7.1875 and the fair
market value of the Company's common stock on the date of
stockholder approval, $12.25, over the appropriate vesting
period. During the quarter ended December 31, 1996, the Company
recognized deferred compensation expense of $375,000 related to
the granting of these options.
Additionally, the Board of Directors granted 260,200 options
that were not based on attaining performance objectives. Full
vesting terms ranged from three to five years with the options
expiring ten years from the date of the grant. The exercise
price for these options is equal to the fair market value on the
date of the grant, July 1, 1996; therefore, no compensation
expense was recognized.
Note 4 - Commitments and Contingencies
On July 30, 1996, Fisher-Price, Inc. filed suit against
O'Sullivan Industries, Inc. in the Supreme Court of New York,
Erie County, alleging breach of a License Agreement between
O'Sullivan Industries, Inc. and Fisher-Price. Pursuant to the
License Agreement, the Company was to have manufactured a line of
furniture under the Fisher-Price name. The suit alleged a failure
to pay minimum royalties under the License Agreement of
$1,400,000. In December 1996, the Company paid Fisher-Price
$75,000 to settle this litigation, and the case was dismissed
with prejudice on December 27, 1996.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Results of Operations
Net sales for the quarter ended December 31, 1996 increased
1.3% to $80.6 million from $79.6 million for the quarter ended
December 31, 1995. Sales for the six month period ended
December 31, 1996 increased 6.1% to $163.7 million from $154.3
million for the six months ended December 31, 1995. During the
quarter, the Company's sales increased in all distribution
channels except catalog showroom and OEM. The sales decrease in
the catalog showroom distribution channel was due to the
bankruptcy of a major customer, Best Products Co., Inc. in
September 1996. Sales to Best approximated $7.5 million in the
quarter ended December 31, 1995, and $20 million in the fiscal
year ended June 30, 1996. There can be no certainty that the
Company will be able to replace these sales. The revenue
decrease associated with the bankruptcy was offset by sales to a
major home improvement retailer and by increased sales to other
customers during the second quarter. The Company anticipates
future sales growth in the home improvement retail channel,
although the quarterly sales may vary significantly because of
the seasonal nature of the products offered for sale by these
retailers. For the six month period ended December 31, 1996, the
Company had strong sales increases through the office products,
mass merchants and export channels. These increases were
partially offset by lower sales through the furniture/specialty,
catalog showroom and OEM channels as compared with the first six
months of fiscal 1996.
On September 4, 1996, two of the Company's office superstore
customers, Office Depot, Inc. and Staples, Inc., announced a
definitive agreement to merge into a single company. This
merger, which is subject to stockholder approval, is undergoing
review by the Federal Trade Commission, which is currently
anticipated to issue its decision in late February 1997.
O'Sullivan sells its products to both Office Depot and Staples.
Management does not currently anticipate this merger to
materially impact sales to these customers; however, there can be
no assurance that future purchases will not be materially
changed.
Gross profit increased 46.3% to $23.6 million, or 29.3% of
sales, for the three month period ended December 31, 1996, from
$16.1 million, or 20.3% of sales, for the three months ended
December 31, 1995. Gross profit increased 48.8% to $46.2
million, or 28.2% of sales, for the six month period ended
December 31, 1996, from $31.0 million, or 20.1% of sales for the
comparable prior year period. The Company's higher gross margins
were due to several factors, including: (i) lower material costs,
particularly packaging materials, laminating papers and
particle board; (ii) decreased overhead on a per unit basis due to
increased volume and capacity utilization rates and improved
efficiency; and (iii) changes in product mix resulting in the
production and sale of higher priced, higher margin products.
Selling, marketing and administrative expenses increased to
$15.6 million, or 19.4% of sales, for the three months ended
December 31, 1996, from $14.3 million, or 18.0% of sales, for the
three months ended December 31, 1995. Selling, marketing and
administrative expenses for the six months ended December 31,
1996, increased to $31.8 million, or 19.4% of sales, from $26.0
million, or 16.8% of sales, for the comparable prior year period.
The increase in selling, marketing and administrative expenses
for the six month period is due primarily to: (i) higher outbound
freight costs associated with the change in the freight program
of a large customer; (ii) bad debt expense of $0.8 million ($0.5
million after-tax) relating to the bankruptcy of Best Products;
(iii) increased profit sharing and incentive compensation costs
associated with the Company's improved financial results compared
to the prior year same period; and (iv) increased salaries and
wages due to additional management, marketing and clerical staff.
During the three month period ended December 31, 1996, the
increased cost of incentive and profit sharing programs and wages
was offset to some degree by decreased advertising costs due to
the bankruptcy of Best Products and the elimination of the
promotional expenditures supporting Best's sales program.
On July 1, 1996, the Board of Directors granted, subject to
stockholder approval, options to purchase 625,250 shares of
common stock to the Company's officers and other key employees.
On November 14, 1996, stockholders approved the amendment and
restatement of the Company's 1994 Incentive Stock Plan and the
Special Option awards under the plan. Accordingly, during the
quarter, the Company recognized deferred compensation expense of
$375,000 related to the granting of these options. Additional
compensation expense of approximately $1.9 million will be
recognized over the appropriate vesting period, which is
dependent on the attainment of certain performance objectives.
Based on the Company's progress toward meeting these performance
objectives thus far in fiscal 1997, the Company currently
anticipates that most of the $1.9 million expense will be
recognized over the next thirty months.
Interest expense decreased 45.2% from $1.1 million in the
second quarter of fiscal 1996 to $597,000 during the second
quarter of fiscal 1997. For the first six months of fiscal 1997,
interest expense totaled $1.3 million compared to $2.1 million
during the prior year same period. The decrease was due to reduced
borrowings caused by lower working capital requirements and
increased cash flow from operations.
Liquidity and Capital Resources
As of December 31, 1996, the Company had cash and cash
equivalents amounting to $10.4 million and net working capital of
$78.9 million.
Cash provided by operating activities during the six month
period ended December 31, 1996, amounted to $15.0 million
compared to cash provided by operating activities of $2.7 million
in the comparable prior year period. The increase in cash flows
from operations was due in large part to increased net income.
The Company also invested less capital in receivables, which was
partially offset by an increased investment in inventories,
during the six months ended December 31, 1996 compared to 1995.
Capital expenditures for the six months ending December 31, 1996
totaled approximately $4.7 million, which were used for the purchase
and installation of new machinery and equipment and the installation
of new management systems and related hardware and software.
At December 31, 1996, the Company had long-term debt
outstanding of $30.0 million; $10.0 million of industrial revenue
bonds that bear interest at 8.25% and mature on October 1, 2008;
and $20.0 million in private placement debt with certain
insurance companies at 8.01% due fiscal 2003. The Company also
has a $30 million Revolving Credit Agreement with two banks. At
December 31, 1996 there were no borrowings under the revolving
line of credit. The Credit Agreement also includes a $10.8
million standby letter of credit established in favor of Tandy
Corporation. The letter of credit indemnifies Tandy Corporation
from its obligations as guarantor of the $10 million industrial
revenue bonds for which a subsidiary of the Company is the
obligor. Tandy can draw against the standby letter of credit
only in the event that it must pay any amount with respect to the
bonds. Debt as a percentage of total capitalization was 16.7%
and 25.9% at December 31, 1996 and December 31, 1995, respectively.
The Company believes that cash flow from operations,
existing cash and current unused balances under existing credit
agreements will be sufficient to fund the Company's operations
throughout the remainder of fiscal 1997, including capital
expenditures, which are currently estimated at approximately $5.0
to $8.0 million.
The Company currently is in compliance with all covenants of
its debt agreements.
Seasonality
The Company generally experiences increased sales in the
first and second quarters of the fiscal year in anticipation of
the holiday selling season.
PART II OTHER INFORMATION
Item 1. Legal Proceedings.
On July 30, 1996, Fisher-Price, Inc. filed suit against
O'Sullivan Industries, Inc. ("Industries") in the Supreme Court
of New York, Erie County, alleging a breach of a License
Agreement between Industries and Fisher-Price. Pursuant to the
License Agreement, Industries was to have manufactured a line of
furniture under the Fisher-Price name. The suit alleged a
failure to pay minimum royalties under the License Agreement of
$1,400,000. Industries paid Fisher-Price $75,000 to settle this
litigation, and the case was dismissed with prejudice on
December 27, 1996.
Item 4. Submission of Matters to a Vote of Security Holders.
The annual meeting of stockholders of the Company was held
on November 14, 1996 (a) to elect three Class III directors and
(b) to consider approval of the amendment and restatement of the
Company's 1994 Incentive Stock Plan and the approval of Special
Option awards under such plan. The nominees for Class III
directors and the votes for, and withheld with respect to, each
nominee are as follows:
<TABLE>
<CAPTION>
Nominee Votes For Votes Withheld
--------------------- ---------- --------------
<S> <C> <C>
William C. Bousquette 14,502,131 967,780
Stewart M. Kasen 14,498,731 921,180
Daniel F. O'Sullivan 14,445,567 1,024,344
</TABLE>
The votes for the amendment and restatement of the plan and the
approval of Special Option awards were as follows:
For Against Abstain Broker Nonvotes
--------- --------- -------- ---------------
5,661,201 5,401,820 71,576 4,335,314
Item 5. Other Information.
Certain portions of this Report, and particularly the Notes
to the Consolidated Financial Statements and the Management's
Discussion and Analysis of Financial Condition and Results of
Operation in Part I of this report contain forward-looking
statements. These statements can be identified by the use of
future tense or dates or terms such as "believe," "expect" or
"anticipate". There are certain important factors which could
cause results to differ materially from those anticipated by some
of the statements made in this report. Some of the factors
include, among other things, changes from anticipated levels of
sales, whether due to future national or regional economic and
competitive conditions, customer acceptance of existing and new
products, or otherwise, pricing pressures due to excess capacity,
raw material cost increases, transportation cost increases, the
inability of a major customer to meet its obligations, loss of
significant customers in connection with a merger or acquisition
or otherwise, actions of current or new competitors, increased
advertising costs associated with promotional efforts, change of
tax rates, change of interest rates, pending or new litigation,
future business decisions and other uncertainties, all of which
are difficult to predict and many of which are beyond the control
of the Company.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits:
<TABLE>
<CAPTION>
Exhibit
No. Description
<S> <C>
2 Amended and Restated Stock Exchange Agreement dated as
of February 1, 1994 between O'Sullivan Industries Holdings, Inc.
(the "Company") and TE Electronics Inc. ("TE") (incorporated by
reference from Exhibit 2 to Quarterly Report on Form 10-Q for the
quarter ended March 31, 1994(File No. 1-12754))
3.1
& 4.1 Certificate of Incorporation of the Company (incorporated by
reference from Exhibit 3.1 to Registration Statement on Form S-1
(File No. 33-72120))
3.2
& 4.2 Bylaws of the Company (incorporated by reference from Exhibit 3.2
to Registration Statement on Form S-1 (File No. 33-72120))
4.3 Specimen Stock Certificate of the Company (incorporated by reference
from Exhibit 4.1 to Amendment No. 3 to Registration Statement on
Form S-1 (File No. 33-72120))
4.4 Rights Agreement dated as of February 1, 1994 between the Company
and the First National Bank of Boston, as Rights Agent (incorporated
by reference from Exhibit 4.4 to Quarterly Report on Form 10-Q for
the quarter ended March 31, 1994 (File No. 1-12754))
10.1 Amended and Restated O'Sullivan Industries Holdings, Inc. 1994
Incentive Stock Plan (incorporated by reference from Exhibit 4.5 to
Registration Statement on Form S-8 (File No. 333-21609))
10.1a First Amendment to Amended and Restated O'Sullivan Industries
Holdings, Inc. 1994 Incentive Stock Plan (incorporated by reference
from Exhibit 4.5(a) to Registration Statement on Form S-8
(File No. 333-21609))
11 Statement of Computation of Earnings per Share
27 Financial Data Schedule
</TABLE>
(b) Reports on Form 8-K:
None
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
O'SULLIVAN INDUSTRIES HOLDINGS, INC.
Date: February 14, 1997
By: Richard D. Davidson
President and
Chief Operating Officer
Date: February 14, 1997
By: Terry L. Crump
Vice President-Finance and
Chief Financial Officer
(Principal Financial and Accounting Officer)
<PAGE>
EXHIBIT 11
O'SULLIVAN INDUSTRIES HOLDINGS, INC.
STATEMENT OF COMPUTATION OF EARNINGS PER SHARE
<TABLE>
<CAPTION>
Three months ended
December 31,
------------------------
1996 1995
----------- --------
<S> <C> <C>
Net income available to common
stockholders; as reported $4,574,000 $458,000
========== ========
Weighted average number of common
shares outstanding 16,787,077 16,819,950
Weighted average number of common
shares issuable under stock
option plans, net of assumed
treasury stock repurchases at
average market prices 226,645 -
--------- ---------
Weighted average number of common
shares and common share
equivalents outstanding,
as adjusted 17,013,722 16,819,950
========== ==========
Primary earnings per share $ 0.27 $ 0.03
========== ==========
Weighted average number of common
shares outstanding 16,787,077 16,819,950
Weighted average number of common
shares issuable under stock
option plans, net of assumed
treasury stock repurchases at
ending market prices 374,311 -
---------- ----------
Weighted average number of common
shares and common share
equivalents outstanding,
as adjusted 17,161,388 16,819,950
========== ==========
Fully diluted earnings per share
<Fn1> $ 0.27 $ 0.03
========== ==========
</TABLE>
<TABLE>
<CAPTION>
Six months ended
December 31,
-----------------------
1996 1995
---------- ----------
<S> <C> <C>
Net income available to common
stockholders; as reported $8,050,000 $1,806,000
========== ========
Weighted average number of common
shares outstanding 16,796,580 16,819,950
Weighted average number of common
shares issuable under stock
option plans, net of assumed
treasury stock repurchases at
average market prices 159,901 -
--------- ---------
Weighted average number of common
shares and common share
equivalents outstanding,
as adjusted 16,956,481 16,819,950
========== ==========
Primary earnings per share $ 0.48 $ 0.11
========== ==========
Weighted average number of common
shares outstanding 16,796,580 16,819,950
Weighted average number of common
shares issuable under stock
option plans, net of assumed
treasury stock repurchases at
ending market prices 374,311 -
---------- ----------
Weighted average number of common
shares and common share
equivalents outstanding,
as adjusted 17,170,891 16,819,950
========== ==========
Fully diluted earnings per share
<Fn1> $ 0.47 $ 0.11
========== ==========
</TABLE>
[FN]
1. This calculation is submitted in accordance with Regulation
S-K, Item 601(b)(11) although not required by footnote 2 to
paragraph 14 of APB No. 15 because it results in dilution of less
than 3%.
[/FN]
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF O'SULLIVAN INDUSTRIES HOLDINGS, INC. FOR THE PERIOD
ENDED DECEMBER 31, 1996, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 10,378
<SECURITIES> 0
<RECEIVABLES> 58,935
<ALLOWANCES> 2,006
<INVENTORY> 43,761
<CURRENT-ASSETS> 113,377
<PP&E> 113,611
<DEPRECIATION> 44,996
<TOTAL-ASSETS> 227,582
<CURRENT-LIABILITIES> 34,444
<BONDS> 30,000
0
0
<COMMON> 16,820
<OTHER-SE> 132,384
<TOTAL-LIABILITY-AND-EQUITY> 227,582
<SALES> 163,719
<TOTAL-REVENUES> 163,719
<CGS> 117,541
<TOTAL-COSTS> 117,541
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,315
<INCOME-PRETAX> 13,047
<INCOME-TAX> 4,997
<INCOME-CONTINUING> 8,050
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 8,050
<EPS-PRIMARY> 0.48
<EPS-DILUTED> 0
</TABLE>
