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 March 31, 1998
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 (I.R.S. Employer
or organization) 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 May 6, 1998, 16,045,850 shares of Common Stock of
O'Sullivan Industries Holdings, Inc., par value $1.00 per share,
and associated preferred stock purchase rights were outstanding.
PART I
-------
Item 1. Financial Statements
<TABLE>
<CAPTION>
O'SULLIVAN INDUSTRIES HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(in thousands, except for share data)
March 31, June 30,
Assets: 1998 1997
------ --------- --------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 1,776 $ 6,975
Trade receivables, net of allowance
for doubtful accounts of $1,639 and
$3,158, respectively 65,339 58,661
Inventories:
Finished merchandise 21,455 29,840
Work in process 6,845 4,224
Raw materials 14,902 10,094
------- -------
43,202 44,158
Prepaid expenses and other current assets 4,679 3,134
------- -------
Total current assets 114,996 112,928
------- -------
Property, plant and equipment, at cost 140,388 119,566
Less accumulated depreciation and
amortization (49,760) (44,643)
------- -------
90,628 74,923
Goodwill, net of accumulated amortization 43,506 44,756
------- -------
$249,130 $232,607
======= =======
Liabilities and Stockholders' Equity:
------------------------------------
Current liabilities:
Accounts payable $ 17,236 $ 7,234
Accrued liabilities 19,176 19,481
Income taxes payable 2,829 4,168
------- -------
Total current liabilities 39,241 30,883
------- -------
Long-term debt, less current maturities 34,000 30,000
Deferred income taxes 14,934 14,934
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 87,741 87,968
Retained earnings 64,259 53,418
------- -------
168,820 158,206
Less common stock in treasury at cost,
704,693 and 94,000 shares, respectively 7,865 1,416
------- -------
Total stockholders' equity 160,955 156,790
------- -------
Commitments and contingencies ------- -------
$249,130 $232,607
======= =======
The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
O'SULLIVAN INDUSTRIES HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(in thousands, except for per share data)
Three months ended Nine months ended
March 31, March 31,
------------------ ------------------
1998 1997 1998 1997
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net sales $ 92,325 $ 77,505 $254,990 $241,224
Costs and expenses:
Cost of sales 67,672 55,183 184,213 172,724
Selling, marketing and administrative 17,916 15,520 51,778 47,336
Interest, net 689 519 1,801 1,834
------- ------ ------- -------
86,277 71,222 237,792 221,894
------- ------ ------- -------
Income before income tax provision 6,048 6,283 17,198 19,330
Income tax provision 2,234 2,388 6,357 7,385
------- ------ ------- -------
Net Income $ 3,814 $ 3,895 $ 10,841 $ 11,945
======= ====== ======= =======
Earnings per common share
Basic $ 0.24 $ 0.23 $ 0.66 $ 0.71
Diluted $ 0.23 $ 0.23 $ 0.65 $ 0.70
Weighted average common shares outstanding
Basic 16,170 16,778 16,440 16,790
Diluted 16,440 17,085 16,783 17,008
The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
O'SULLIVAN INDUSTRIES HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(in thousands)
Nine months ended
March 31,
------------------
1998 1997
-------- --------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 10,841 $ 11,945
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 8,395 7,291
Employee option amortization 562 562
Changes in current assets and liabilities:
Trade receivables (6,678) (2,824)
Inventories 956 1,371
Other assets (1,560) (620)
Accounts payable, accrued liabilities
and income taxes payable 7,806 2,226
------- ------
Net cash provided by operating activities 20,322 19,951
------- ------
Cash flows for investing activities:
Capital expenditures (22,860) (9,740)
Cash flows from financing activities:
Addition to long-term debt 4,000 -
Purchase of common stock for treasury (9,253) (2,100)
Exercise of stock options 101 -
Sale of common stock to employee
benefit plans 2,491 1,643
------- ------
Net cash flows provided (used)
for financing activities (2,661) (457)
------- ------
Net increase (decrease) in cash and cash equivalents (5,199) 9,754
Cash and cash equivalents, beginning of period 6,975 506
------- ------
Cash and cash equivalents, end of period $ 1,776 $10,260
======= ======
The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
O'SULLIVAN INDUSTRIES HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(UNAUDITED) (in thousands)
Preferred stock Common stock Additional
--------------- -------------- paid-in
Shares Dollars Shares Dollars capital
------ ------- ------ ------- ----------
<S> <C> <C> <C> <C> <C>
Balance, June 30, 1997 - $ - 16,820 $16,820 $87,968
Net income - - - - -
Translation adjustment - - - - (15)
Purchase of common stock -
Exercise of stock options (127)
Sale of common stock (85)
----- ----- ------ ------- -------
Balance, March 31, 1998 - $ - 16,820 $16,820 $87,741
===== ===== ====== ======= =======
</TABLE>
<TABLE>
<CAPTION>
Treasury stock Total
Retained --------------- stockholders'
earnings Shares Dollars equity
-------- ------ ------- -------------
<S> <C> <C> <C> <C>
Balance, June 30, 1997 $53,418 (94) $(1,416) $156,790
Net income 10,841 10,841
Translation adjustment (15)
Purchase of common stock (827) (9,253) (9,253)
Exercise of stock options 15 228 101
Sale of common stock 201 2,576 2,491
------- ---- ------ -------
Balance, March 31, 1998 $64,259 (705) $(7,865) $160,955
======= ==== ======= ========
The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>
<PAGE>
O'SULLIVAN INDUSTRIES HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
March 31, 1998
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 in 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, 1997. 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
Earnings per Share: During the three months ended
December 31, 1997, the Company adopted Statement of Financial
Accounting Standards No. 128, Earnings per Share. The statement
requires dual presentation of basic and diluted earnings per
share ("EPS") on the face of the income statement for entities
with complex capital structures and requires a reconciliation of
the numerator and denominator of the basic EPS computation to the
numerator and denominator of the diluted EPS computation. Basic
EPS excludes dilution, while diluted EPS reflects the potential
dilution that could occur if securities or other contracts to
issue common stock were exercised or converted into common stock
or resulted in the issuance of common stock that then shared in
the earnings of the entity. EPS data for the period ended March
31, 1998 and all prior periods have been restated to conform with
the provisions of this statement. The following is a
reconciliation of the numerator and denominator used in the basic
and diluted EPS calculation:
<TABLE>
<CAPTION>
Three months ended Nine months ended
March 31, March 31,
----------------------- ----------------------
1998 1997 1998 1997
---------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
Income available to common
stockholders (numerator) $3,814,000 $3,895,000 $10,841,000 $11,945,000
========== ========== =========== ===========
Weighted average shares
outstanding (basic EPS
denominator) 16,169,830 16,777,857 16,439,689 16,790,430
Effect of dilutive
securities--options 269,877 306,716 343,427 218,000
---------- ---------- ---------- ----------
Weighted average shares,
plus assumed conversions
(diluted EPS denominator) 16,439,707 17,084,573 16,783,116 17,008,430
========== ========== ========== ==========
</TABLE>
Options to purchase 503,450 additional shares of common stock at
prices ranging from $11.40 to $16.09 per share were outstanding
but were not included in the computation of diluted EPS because
the options' exercise prices were greater than the average market
price of the common shares, and thus the effect would have been
antidilutive.
NOTE 3 - DERIVATIVE FINANCIAL INSTRUMENTS
Derivative financial instruments are utilized by the Company
to reduce interest rate risk. The Company does not hold or issue
derivative financial instruments for trading purposes. During
fiscal 1997, the Company entered into a forward starting interest
rate swap agreement with a notional principal amount of
$10.0 million. The effective date of the agreement is October 1,
1998 and the termination date is October 1, 2008. The Company
has contracted to pay a fixed rate of 7.13% and receive a
floating interest rate during the duration of the swap agreement.
The Company has the ability and intent to call its existing
$10.0 million of 8.25% industrial development revenue bonds
commencing October 1, 1998 at a redemption premium of 103%. The
bonds would be refinanced at the then existing interest rate.
Accordingly, the swap will have the effect of hedging the Company
against an increase in interest rates prior to the first
opportunity to refinance these bonds. Management has designated
this swap as a hedge of the future interest rate exposure of
refinancing these bonds.
Amounts to be paid or received under the swap agreement will
be accrued as interest rates change and will be recognized over
the life of the swap agreement as adjustments to interest
expense. Gains or losses on terminated swaps will be recognized
over the remaining life of the underlying obligation as an
adjustment to interest expense. The fair value of the forward
starting swap agreement approximated $780,000 at March 31, 1998
(representing the amount the Company would have to pay to
terminate the swap) and has not been recognized in the
Consolidated Financial Statements, since it is accounted for as a
hedge.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
- ---------------------
Net sales for the quarter ended March 31, 1998 increased
19.1% to $92.3 million from $77.5 million for the quarter ended
March 31, 1997. Sales for the nine month period ended March 31,
1998 increased 5.7% to $255.0 million from $241.2 million for the
nine months ended March 31, 1997. During the quarter, sales
increased in all channels except for the original equipment
manufacturer channel, which was slightly lower. These sales
increases may be attributed primarily to strong market growth
fueled in part by the sub-$1,000 computer market, the addition of
new customers in the home improvement and department store
channels and the expansion of the Company's market share in the
consumer electronics channel.
For the nine month period ended March 31, 1998, sales
decreased in the mass merchant distribution channel due to the
bankruptcy of a major customer, Best Products Co., Inc., in
September 1996. Sales to Best Products approximated $6.7 million
in the nine months ended March 31, 1997; Best Products ceased
operations in early calendar 1997. Sales in the home improvement
retail channel continue to lag behind the prior year as the
products introduced by a major home improvement retailer last
year were not reordered during the current year. This was offset
somewhat by the increase in sales to a national home improvement retailer.
Sales grew at a slower pace in the discount mass merchant channel
as a major discount retailer placed unusually large orders for
shipment during the fourth quarter of fiscal 1997 and reduced
purchases during the first quarter ended September 30, 1997. The
customer returned to a more normal purchasing pattern in the
second and third quarters of this fiscal year. Sales decreases
were offset by strong increases in the regional mass merchant,
consumer electronics and export distribution channels as
discussed above. Sales to the office superstore channel
increased significantly during the quarter when compared to the
same period of the prior year.
In July 1997, a large customer of the Company, Montgomery
Ward & Co., filed for bankruptcy protection under Chapter 11.
Montgomery Ward expects that it will be able to reorganize its
operations under Chapter 11 protection and will continue to
purchase products from the Company. Although sales to Montgomery Ward
for the nine month period have increased when compared to the prior year,
sales for the quarter have declined when compared to last year.
The level of purchases could decline further as a result of
reorganization or otherwise.
In the event that Montgomery Ward or another major customer
ceases or substantially reduces its purchases of products from
the Company, there can be no certainty that the Company will be
able to replace these sales.
Gross profit increased slightly to $24.7 million, or 26.7%
of sales, for the three month period ended March 31, 1998, from
$22.3 million, or 28.8% of sales, for the comparable prior year
quarter. Gross profit increased slightly to $70.8 million, or
27.8% of sales, for the nine month period ended March 31, 1998,
compared to $68.5 million, or 28.4% of sales for the comparable
prior year period. The Company's lower gross margin during the
quarter was primarily due to higher labor and overhead costs
associated with the implementation of new manufacturing software
systems, the installation of new equipment and the related
adaptation of manufacturing processes. Further, demand
unexpectedly surged during the quarter, resulting in scheduling
adjustments and significant overtime that reduced manufacturing
efficiency. The increased demand was met, in part, by a
reduction of finished goods inventories as the Company continued
its implementation of these upgrades. The Company believes that
these additions and improvements will better enable the Company
to meet demand, enhance efficiency and support long-term growth
of the Company. These changes are expected to affect sales and
gross profits during the remainder of the fiscal year, although
the Company continues to take steps to minimize the impact.
Selling, marketing and administrative expenses increased to
$17.9 million, or 19.4% of sales, for the three month period
ended March 31, 1998, from $15.5 million, or 20.0% of sales, for
the three months ended March 31, 1997. Selling, marketing and
administrative expenses for the nine month period ended March 31,
1998, increased to $51.8 million, or 20.3% of sales, from
$47.3 million, or 19.6% of sales, for the comparable prior year
period. The increase in selling, marketing and administrative
expenses for the quarter is due primarily to increased
advertising and promotional costs and, to a lesser extent,
increased salaries and wages due to additional management,
marketing and MIS staff. For the nine months ended March 31,
1998, selling, marketing and administrative expenses were up due
to increased advertising, store display expenses and salaries,
offset to some degree by decreased bad debt expense associated
with the Best Products bankruptcy in fiscal 1997.
Interest expense increased slightly during the quarter as
borrowings increased in comparison to the prior year. Interest
expense of $1.8 million for the nine months ended March 31, 1998
was approximately the same as for the first nine months of fiscal
1997. The Company utilized cash on hand and increased borrowings
primarily for equipment purchases and share repurchases in the
current fiscal year.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
Cash provided by operating activities during the nine month
period ended March 31, 1998, amounted to $20.3 million compared
to $20.0 million in the comparable prior year period. The
increase in cash flows resulted primarily from a larger increase
in accounts payable during the nine months of fiscal 1998 versus
fiscal 1997 offset by increased receivables related to higher
sales levels for this fiscal year. Cash used in investing
activities for the first nine months of fiscal 1998 included
approximately $22.9 million for capital expenditures compared to
$9.7 million for the comparable prior year period. Current year
additions primarily relate to equipment to improve production
capabilities, to increase capacity in the Company's Virginia
facility and to improve manufacturing efficiencies.
The Company has an unsecured $25.0 million revolving credit
facility with a bank that expires on February 28, 2000. The
Credit Facility 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 $10.0 million of industrial revenue bonds for which
a subsidiary of the Company is the obligor. Tandy Corporation
can draw against the standby letter of credit only in the event
that it must pay any amounts with respect to the bonds.
The Credit Agreement has several financial ratio covenants
including the maintenance of a minimum working capital ratio and
a minimum net worth. In addition, the Credit Agreement has
provisions specifying certain limitations on dividends,
investments and future indebtedness. The Company is currently in
compliance with all of its debt agreements.
At March 31, 1998, the Company had long-term debt
outstanding of $34.0 million; $10.0 million of industrial revenue
bonds that bear interest at 8.25% and mature on October 1, 2008;
$20.0 million in private placement debt with certain insurance
companies at 8.01% due fiscal 2003; and $4.0 million under the
Company's revolving credit facility.
On May 6, 1997, the Company announced that its Board of
Directors had authorized the purchase of up to five percent of
the outstanding shares of its common stock during the next 24
months. The actual number of shares purchased, the timing of the
purchases and the prices paid for the shares will be dependent
upon future market conditions and cash flow needs of the Company.
Funding for the purchases is expected to come from available
working capital and existing borrowing facilities. The program
includes no specific pricing nor timing targets and may be
suspended at any time or terminated prior to completion. For the
three months ended March 31, 1998, the Company purchased 118,000
shares of its stock for approximately $1.2 million. For the nine
months ended March 31, 1998, the Company purchased 594,000 shares
for approximately $6.5 million.
The Company also purchases Company common stock to fund its
employee benefit programs. For the nine months ended March 31,
1998, the Company transferred shares with a cost of $2.6 million
to the Company's employee benefit plans.
Derivative financial instruments are utilized by the Company
to reduce interest rate risk. The Company does not hold or issue
derivative financial instruments for trading purposes. During
fiscal 1997, the Company entered into a forward starting interest
rate swap agreement with a notional principal amount of
$10.0 million. The effective date of the agreement is October 1,
1998 and the termination date is October 1, 2008. The Company
has contracted to pay a fixed rate of 7.13% and receive a
floating interest rate during the duration of the swap agreement.
The Company has the ability and intent to call its existing
$10.0 million of 8.25% industrial development revenue bonds
commencing October 1, 1998 at a redemption premium of 103%. The
bonds would be refinanced at the then existing interest rate.
Accordingly, the swap will have the effect of hedging the Company
against an increase in interest rates prior to the first
opportunity to refinance these bonds. Management has designated
this swap as a hedge of the future interest rate exposure of
refinancing these bonds.
Amounts to be paid or received under the swap agreement will
be accrued as interest rates change and will be recognized over
the life of the swap agreement as adjustments to interest
expense. Gains or losses on terminated swaps will be recognized
over the remaining life of the underlying obligation as an
adjustment to interest expense. The fair value of the forward
starting swap agreement approximated $780,000 at March 31, 1998
(representing the amount the Company would have to pay to
terminate the swap) and has not been recognized in the
Consolidated Financial Statements, since it is accounted for as a
hedge.
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 in
fiscal 1998, as well as capital expenditures and share
repurchases. Capital expenditures for the remainder of this
fiscal year are currently estimated in the range of $7.0 to
$12.0 million for increased production capacity, improved
productivity, enhanced new product development and replacement
equipment.
YEAR 2000 SOFTWARE COMPLIANCE
- -----------------------------
Since fiscal 1996, the Company has been implementing a new
integrated software package to support the Company's sales,
manufacturing and accounting functions. The installation of this
software package is expected to be complete by June 30, 1998. In
addition to providing the support necessary for more efficient
operation of the Company, the software package is capable of
handling dates subsequent to December 31, 1999. The Company
expects to substantially complete all year 2000 conversion
projects by the end of fiscal 1998.
SEASONALITY
- -----------
The Company generally experiences higher sales levels in the
first and second quarters of the fiscal year in anticipation of
the holiday selling season.
PART II -- OTHER INFORMATION
------------------------------
ITEM 5. OTHER INFORMATION.
FORWARD LOOKING STATEMENTS
- --------------------------
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,"
"anticipate" or "plan." Important factors 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 of the Company's
products, 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 in the
ready-to-assemble furniture industry, as occurred in
1995, or customer demand in excess of the Company's
ability to supply product;
* raw material cost increases, particularly in particle
board and fiberboard, such as the increases that reduced
the Company's earnings in fiscal 1994 and 1995;
* transportation cost increases due to a shortage of supply
of trucks or railcars;
* the bankruptcy of a major customer, such as Best Products
Co., Inc. in 1996 and Montgomery Ward & Co. in 1997;
* loss of significant customers in connection with a merger
or acquisition or bankruptcy;
* actions of current or new competitors, such as reduction
of prices on competitive products or introduction of new
products competitive with the Company's products;
* the consolidation of manufacturers in the
ready-to-assemble furniture industry;
* increased advertising costs associated with promotional
efforts;
* pending or new litigation;
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>
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))
27 Financial Data Schedule
(b) Reports on Form 8-K:
None
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: May 8, 1998 By: /s/ Daniel F. O'Sullivan
Chairman and
Chief Executive Officer
Date: May 8, 1998 By: /s/ Terry L. Crump
Executive Vice President
and Chief Financial Officer
(Principal Financial and
Accounting Officer)
</TABLE>
<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 MARCH 31, 1998, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JUL-01-1997
<PERIOD-END> MAR-31-1998
<CASH> 1,776
<SECURITIES> 0
<RECEIVABLES> 66,978
<ALLOWANCES> 1,639
<INVENTORY> 43,202
<CURRENT-ASSETS> 114,996
<PP&E> 140,388
<DEPRECIATION> 49,760
<TOTAL-ASSETS> 249,130
<CURRENT-LIABILITIES> 39,241
<BONDS> 34,000
0
0
<COMMON> 16,820
<OTHER-SE> 144,135
<TOTAL-LIABILITY-AND-EQUITY> 249,130
<SALES> 254,990
<TOTAL-REVENUES> 254,990
<CGS> 184,213
<TOTAL-COSTS> 184,213
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,801
<INCOME-PRETAX> 17,198
<INCOME-TAX> 6,357
<INCOME-CONTINUING> 10,841
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 10,841
<EPS-PRIMARY> .66
<EPS-DILUTED> .65
</TABLE>
