SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30,
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 1-13066
MIKASA, INC.
(Exact name of Registrant as specified in its charter)
Delaware 33-0099676
------------------------------- ----------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
20633 South Fordyce Ave., Long Beach, California 90810
------------------------------------------------ ----------
(Address of principal executive offices) (Zip Code)
(310) 886-3700
--------------
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 September 30, 1996, a total of 18,359,195 shares of
the Registrant's Common Stock, $0.01 par value, were outstanding.
Manually Signed Original
Exhibit Index on Page 19
Page 1 of 20 pages
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MIKASA, INC.
TABLE OF CONTENTS
Page
----
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets as of 3
September 30, 1996 and December 31, 1995
Consolidated Statements of Income 4
for the three months ended September 30,
1996 and 1995, and nine months ended
September 30, 1996 and 1995
Consolidated Statements of Cash Flows 5
for the nine months ended September 30,
1996 and 1995
Notes to Consolidated Financial 6
Statements
Item 2. Management's Discussion and Analysis 8
of Financial Condition and Results of
Operations
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 17
Signatures 18
2
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
MIKASA, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
September 30, December 31,
1996 1995
------------- ------------
(Unaudited)
ASSETS
Cash, cash equivalents and short-term investments $ 5,614 $ 73,726
Accounts receivable trade, net 34,314 23,436
Inventories 162,788 152,679
Prepaid expenses and other current assets 6,713 6,906
-------- --------
Total current assets 209,429 256,747
Property and equipment, net 59,032 36,076
Notes receivable and other assets 665 769
Intangible assets, net 5,427 5,420
-------- --------
Total assets $274,553 $299,012
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Notes payable $ 13,793 $ 1,844
Accounts payable 13,620 15,980
Other current liabilities 18,499 19,656
-------- --------
Total current liabilities 45,912 37,480
Deferred income taxes 1,464 1,464
Notes payable 60,000 60,000
-------- --------
Total liabilities 107,376 98,944
-------- --------
Preferred stock, undesignated, $0.01 par
value; authorized 20,000 shares; none
issued and outstanding -- --
Common stock, $0.01 par value; authorized
80,000 shares; issued and outstanding
18,359 and 22,280 shares at September 30,
1996 and December 1995, respectively 49,532 49,532
Cumulative translation adjustment 654 1,026
Retained earnings 156,603 149,510
-------- --------
206,789 200,068
Less treasury stock, 3,921 shares, at cost 39,612 --
-------- --------
Total stockholders' equity 167,177 200,068
-------- --------
Total liabilities and stockholders' equity $274,553 $299,012
======== ========
The accompanying notes are an integral part of
these consolidated financial statements.
3
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MIKASA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In thousands, except per share data)
For The Three Months For The Nine Months
Ended September 30, Ended September 30,
------------------- --------------------
1996 1995 1996 1995
-------- -------- -------- ---------
Net sales $ 94,944 $ 94,576 $240,640 $241,250
Cost of sales 52,260 52,350 132,820 134,454
-------- -------- -------- --------
Gross profit 42,684 42,226 107,820 106,796
Selling, general and
administrative expenses 30,995 27,635 91,060 78,661
Store closure charge -- -- 4,100 --
-------- -------- -------- --------
Income from operations 11,689 14,591 12,660 28,135
Interest expense, net 386 195 937 49
-------- -------- -------- --------
Income before income taxes 11,303 14,396 11,723 28,086
Income tax provision 4,464 5,629 4,630 10,982
-------- -------- -------- --------
Net income $ 6,839 $ 8,767 $ 7,093 $ 17,104
======== ======== ======== ========
Net income per share of
common stock $ 0.33 $ 0.39 $ 0.33 $ 0.77
======== ======== ======== ========
Weighted average number of
shares of common stock and
common stock equivalents
outstanding 20,688 22,280 21,746 22,280
======== ======== ======== ========
The accompanying notes are an integral part
of these consolidated financial statements.
4
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MIKASA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
For The Nine Months Ended
September 30,
-------------------------
1996 1995
-------- --------
Cash flows from operating activities:
Net income $ 7,093 $ 17,104
Adjustments to reconcile net income to net cash
used in operating activities:
Depreciation and amortization 3,534 2,608
Changes in operating assets and liabilities (24,723) (63,857)
-------- --------
Net cash used in operating activities (14,096) (44,145)
-------- --------
Cash flows from investing activities:
Capital expenditures (26,510) (3,777)
Decrease in notes receivable 231 1,619
-------- --------
Net cash used in investing activities (26,279) (2,158)
-------- --------
Cash flows from financing activities:
Net borrowings of short-term debt 12,039 155
Purchase of treasury stock (39,612) --
-------- --------
Net cash (used in) provided by financing
activities (27,573) 155
Effect of exchange rate changes on cash
and cash equivalents (164) (2)
-------- --------
Net decrease in cash, cash equivalents and
short-term investments (68,112) (46,150)
Cash, cash equivalents and short-term
investments, beginning of period 73,726 76,885
-------- --------
Cash, cash equivalents and short-term
investments, end of period $ 5,614 $ 30,735
======== ========
The accompanying notes are an integral part of
these consolidated financial statements.
5
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MIKASA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(In thousands)
1. Interim Financial Statements:
The accompanying consolidated financial statements of Mikasa,
Inc. and its wholly-owned and majority-owned subsidiaries (the
"Company") have not been audited by independent accountants, except
for the balance sheet as of December 31, 1995. In the opinion of
management, all adjustments (consisting of normal recurring
adjustments) considered necessary for a fair presentation have been
included. Operating results for the nine months ended September 30,
1996 are not necessarily indicative of the results that may be
expected for the year ending December 31, 1996.
2. Income Taxes:
For the nine months ended September 30, 1996, income taxes have
been provided at an estimated annual rate of 39.5% of income before
taxes. For the nine months ended September 30, 1995, income taxes
have been provided at an estimated annual rate of 39.1% of income
before taxes.
3. Accounts Receivable, Trade:
Receivables are net of allowances for uncollectible accounts of
$613 at September 30, 1996 and $614 at December 31, 1995.
4. Property and Equipment:
Property and equipment, at cost, are net of accumulated
depreciation and amortization of $22,255 at September 30, 1996 and
$19,098 at December 31, 1995.
5. Intangible Assets:
Intangible assets are net of accumulated amortization of $2,088
at September 30, 1996 and $1,888 at December 31, 1995.
6. Store Closures Charge:
During the second quarter ended June 30, 1996, the Company
decided to close ten stores that were not performing up to its
expectations. The Company recognized an estimated $4,100 in non-
recurring pre-tax charges related to these anticipated store
closures in the quarter ended June 30, 1996, or $0.11 per share
after tax.
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7. Repurchase of Common Stock:
During the third quarter ended September 30, 1996, the Company
repurchased 2,235 shares of common stock from its Chairman at $8.95
per share through a private sale and 1,686 shares of common stock
from stockholders (excluding executive officers and directors) at
$11.25 per share through a "Dutch Auction" tender offer. The
approximate aggregate cost of $40 million from the repurchase was
treated as a reduction of stockholders' equity.
7
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Results of Operations
- ---------------------
The following table sets forth certain financial and operations
data for the periods indicated:
Three Months Ended
September 30,
------------------------
1996 1995
-------- --------
Net Sales by Channel of Distribution:
Direct to consumers $ 44,856 $ 41,788
Retail accounts 43,776 49,224
International 6,312 3,564
-------- --------
Total $ 94,944 $ 94,576
======== ========
Operations Data:
Stores open at beginning of period 125 107
U. S. stores opened during period 2 7
Stores closed during period <F1> 1 1
-------- --------
Stores open at end of period 126 113
======== ========
Percentage decrease in comparable
store net sales (3.6%) (2.4%)
As Of September 30,
------------------------
1996 1995
-------- --------
Total U. S. store gross square footage 1,157,600 1,036,300
[FN]
<F1> During the second quarter of 1996, the Company decided to close
ten stores that were not performing up to its expectations.
See "Management's Discussion and Analysis of Financial Condition
and Results of Operations-Store Closures Charge."
THREE MONTHS ENDED SEPTEMBER 30, 1996 COMPARED TO THREE MONTHS ENDED
SEPTEMBER 30, 1995
NET SALES. Net sales for the three months ended September 30,
1996 (the "current period") were $94.9 million, an increase of $0.3
million or 0.4% from net sales of $94.6 million for the three months
ended September 30, 1995 (the "prior period"). Net sales generated
from United States operations decreased to $88.6 million in the
current period from $91.0 million in the prior period, a decrease of
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$2.4 million or 2.6%. Of the Company's net sales decline in the
United States, a decrease of $5.4 million or 11.1% from 1995 was
accounted for by the retail account channel of distribution which
was offset by an increase of $3.0 million or 7.3% over the prior
period by the direct consumer channel of distribution. The
Company's international business contributed $6.3 million in net
sales in the current period, an increase of $2.7 million or 77.1%
over the prior period net sales of $3.6 million. Sales to retail
accounts during the current period were below the prior period
because of several factors, including reduced orders resulting from
the consolidation in the department store and mass merchant markets
and the election of certain customers to switch to electronic data
interchange. The decrease in net sales from the domestic operations
discussed above resulted from a decrease in the number of units sold
which was partially offset by an increase in prices.
GROSS PROFIT. Gross profit for the current period was $42.7
million, an increase of $0.5 million or 1.1% over the prior period's
gross profit of $42.2 million. Gross profit as a percentage of net
sales increased to 45.0% in the current period from 44.6% in the
prior period. The gross profit increase as a percentage of net
sales was primarily due to the heavier weighting of more profitable
direct to consumer business and the higher margins in the current
period from the international business.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general
and administrative expenses in the current period were $31.0
million, an increase of $3.4 million or 12.2% over the prior period
selling, general and administrative expenses of $27.6 million. As a
percentage of net sales, such expenses increased to 32.6% in the
current period from 29.2% in the prior period. During the current
period, expenses associated with stores opened less than one year
accounted for $2.5 million of the increase in selling, general and
administrative expenses. The Company's practice of expensing all
costs associated with new store openings as incurred contributed
$0.2 million to expenses in the current period, a decrease of $0.4
million from the prior period's pre-opening expenses. The balance
of the increase in expenses was from the addition of the Canadian
subsidiary acquired in October 1995 and the increase in operating
expenses from sales to the Company's retail account base. Many of
the Company's large corporate retail account customers have
instituted electronic data interchange ordering. This produces
smaller and more frequent orders from these customers resulting in
greater labor and supply costs for the Company. Most of the expense
increase from the retail account base was from this added cost and
the bad debt expense related to the bankruptcy filing of one of the
Company's customers.
INCOME FROM OPERATIONS. Income from operations in the current
period was $11.7 million, a decrease of $2.9 million or 19.9% from
the prior period's income from operations of $14.6 million. This
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represented a decrease as a percentage of net sales to 12.3% in the
current period from 15.4% in the prior period. This decrease was
primarily attributable to the increase in selling, general and
administrative expenses as a percentage of net sales, partially
offset by the increase in gross profit as a percentage of net sales.
Additionally, the combined effect of higher anticipated operating
expenses associated with the Company's expanded retail store base
and lower domestic sales contributed to the decline in income from
operations.
INTEREST EXPENSE, NET. Net interest expense was $0.4 million
in the current period, an increase of $0.2 million from the prior
period net interest expense of $0.2 million. The increase in net
interest expense was primarily due to decreased interest income in
the current period as a result of less cash available for investment
and lower earnings yields.
NINE MONTHS ENDED SEPTEMBER 30, 1996 COMPARED TO NINE MONTHS ENDED
SEPTEMBER 30, 1995
NET SALES. Net sales for the nine months ended September 30,
1996 (the "current period") were $240.6 million, a decrease of $0.7
million or 0.3% over net sales of $241.3 million for the nine months
ended September 30, 1995 (the "prior period"). Net sales generated
from United States operations decreased to $222.9 million in the
current period from $229.1 million in the prior period, a decrease
of $6.2 million or 2.7%. Of the Company's net sales decline in the
United States, a decrease of $16.7 million or 13.9% from 1995 was
accounted for by the retail account channel of distribution which
was offset by an increase of $10.5 million or 9.6% over the prior
period by the direct to consumer channel of distribution. The
Company's international business contributed $17.8 million in net
sales in the current period, an increase of $5.6 million or 46.1%
over the prior period net sales of $12.2 million. Sales to retail
accounts during the current period were below the prior period
because of several factors, including reduced orders resulting from
the continued consolidation in the department store and mass
merchant markets and the election of certain customers to switch to
electronic data interchange. The decrease in net sales from
domestic operations discussed above resulted from a decrease in the
number of units sold which was partially offset by an increase in
prices.
GROSS PROFIT. Gross profit for the current period was $107.8
million, an increase of $1.0 million or 1.0% over the prior period's
gross profit of $106.8 million. Gross profit as a percentage of net
sales increased to 44.8% in the current period from 44.3% in the
prior period. The gross profit increase as a percentage of net
sales was due to the heavier weighting of more profitable direct
consumer business and the higher margins in the current period from
the international business.
10
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SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general
and administrative expenses in the current period were $91.1
million, an increase of $12.4 million or 15.8% over the prior period
selling, general and administrative expenses of $78.7 million. As a
percentage of net sales, such expenses increased to 37.8% in the
current period from 32.6% in the prior period. During the current
period, expenses associated with stores opened less than one year
accounted for $7.6 million of the increase in selling, general and
administrative expenses. The Company's practice of expensing all
costs associated with new store openings as incurred contributed
$1.3 million to expenses in the current period, a decrease of $0.4
million from the prior period's pre-opening expenses. The balance
of the increase in expenses was from the addition of the Canadian
subsidiary acquired in October 1995 and the increase in operating
expenses from sales to the Company's retail account base. Many of
the Company's large corporate retail account customers have
instituted electronic data interchange ordering. This produces
smaller and more frequent orders from these customers resulting in
greater labor and supply costs for the Company. Most of the expense
increase from the retail account base was from this added cost and
the bad debt expense related to the bankruptcy filing of one of the
Company's customers.
STORE CLOSURES CHARGE. During the second quarter ended
June 30, 1996, the Company decided to close ten stores that were not
performing up to its expectations of which nine have been operating
for more than one year. The Company recognized an estimated $4.1
million in non-recurring pre-tax charges related to these
anticipated store closures in the quarter ended June 30, 1996, or
$0.11 per share after-tax. The Company believes these closures
should have a positive impact on future earnings. The Company will
continue to review its store performances to identify stores that
are not performing to the Company's expectations.
INCOME FROM OPERATIONS. Income from operations in the current
period was $12.7 million, a decrease of $15.4 million or 55% from
the prior period's income from operations of $28.1 million. This
represented a decrease as a percentage of net sales to 5.3% in the
current period from 11.7% in the prior period. This decrease was
primarily attributable to the expenses related to certain
anticipated store closures and the increase in selling, general and
administrative expenses as a percentage of net sales, partially
offset by the increase in gross profit as a percentage of net sales.
Additionally, the combined effect of higher anticipated operating
expenses associated with the Company's expanded retail store base
and lower domestic sales contributed to the decline in income from
operations.
11
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INTEREST EXPENSE, NET. Net interest expense was $0.9 million
in the current period an increase of $0.9 million from the prior
period net interest expense or $0.05 million. The increase in net
interest expense was due to decreased interest income in the current
period which was primarily the result of less cash available for
investment and lower earnings yields.
Liquidity and Capital Resources
- -------------------------------
Historically, the Company has used cash from operations and
debt financing to fund working capital requirements and capital
expenditures. On June 2, 1994, the Company obtained $23.1 million
in net proceeds from its initial public offering. Also, on May 19,
1993, the Company obtained $60.0 million in a placement of unsecured
senior notes with a group of insurance companies and a $50.0 million
unsecured revolving credit facility provided by two banks. The
senior notes bear interest at the rate of 6.66% per annum payable
semi-annually and mature on May 19, 2003. Principal payments of
$10.0 million per year will be due annually, commencing on May 19,
1998. The maturity date of the revolving credit facility is May 19,
1999, subject to automatic extensions in one year increments at the
end of each commitment year, unless either bank delivers a notice of
intention not to extend the maturity date. As of September 30,
1996, $4.5 million had been used for letters of credit under the
revolving credit facility, as well as $12.0 million had been used to
partially finance its repurchase of common stock, capital
expenditures and working capital needs. The balance of $33.5
million was unused and available.
The Company had working capital of $163.5 million at
September 30, 1996 and working capital of $219.3 million at
December 31, 1995. Net cash used in operating activities was $14.1
million and $44.1 million in the nine months ended September 30,
1996 and 1995, respectively. The decrease in net cash used in
operating activities in the nine months ended September 30, 1996
compared to the same period of 1995 is attributable to the reduction
in inventory purchases and reduction in trade accounts receivables
partially offset by the decrease in net income. During 1995, the
Company purchased inventory at a level greater than its rate of
sales which resulted in a higher inventory level and greater use of
cash of $34.9 million for fiscal year 1995. The Company has
decreased its level of inventory purchases during 1996 and expects
to continue such decreased purchase levels until the inventory
balance is restored to an acceptable balance for its business
without impairing its expansion plans. Use of cash in operating
activities for inventory for the nine months ended September 30,
1996 increased by $10.2 million compared to an increase of $46.0
million for the nine months ended September 30, 1995.
12
<PAGE>
Net cash used in investing activities was $26.3 million and
$2.2 million in the nine months ended September 30, 1996 and 1995,
respectively. The Company made capital expenditures of $26.5
million in the nine months ended September 30, 1996 (consisting
primarily of the construction of the new distribution center in
South Carolina, new retail stores' fixtures and leasehold
improvements, distribution facilities' fixtures and renovation of
existing retail stores) and $3.8 million in the nine months ended
September 30, 1995 (consisting primarily of new retail stores'
fixtures and leasehold improvements, distribution facilities'
fixtures and renovation of existing stores).
Net cash (used in) provided by financing activities was ($27.6)
million and $0.2 million in the nine months ended September 30, 1996
and 1995, respectively. During the quarter ended September 30,
1996, the Company utilized $12.0 million of its revolving credit
facility to partially finance its repurchase of common stock,
capital expenditures and working capital needs. The repurchase
consisted of 2,234,637 shares of common stock from the Company's
Chairman at $8.95 per share through a private sale and 1,686,658
shares of common stock from stockholders (excluding executive officers
and directors) at $11.25 per share through a "Dutch Auction" tender
offer. The aggregate cost of the repurchase was approximately $40
million.
Certain monetary assets and liabilities of the Company are in
foreign currencies and may be subject to foreign exchange risk.
Foreign currency exchange losses have not in the past had a material
effect on the Company's financial condition since these assets and
liabilities are not material to its consolidated monetary assets and
liabilities. As such, these items have not been hedged by the
Company.
The Company's inventory purchases in 1995 were approximately
31% from Japanese factories and approximately 32% from Germany and
Austria combined. The significant portion of the inventory
purchases in foreign currencies exposes the Company to foreign
currency fluctuations that can affect the Company's gross profit
margin. The U.S. dollar has stabilized recently in relation to the
Japanese yen and German mark from its substantial weakening early in
1995. To hedge against foreign currency swings, the Company has
strategies in place which are intended to minimize the adverse
impact of foreign currency on its business. These strategies are:
(i) Currency risk sharing arrangements with certain of the Company's
suppliers; (ii) Forward exchange contract coverage on part of its
German mark related purchases; (iii) Sourcing of products from
currencies other than Japanese and German where feasible; and (iv)
Converting certain purchases from foreign currency to U.S. dollar
denominations. The currency risk sharing arrangements are intended
to minimize the impact of currency swings by the equal sharing of
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currency exposures against inventory purchases denominated in
Japanese yen between the suppliers and the Company. Future
fluctuations of the U.S. dollar in relation to foreign currencies
can impact earnings in future periods.
The Company has two primary distribution centers in the United
States, located in Secaucus, New Jersey and Long Beach, California.
While the Secaucus facility is owned, the Long Beach facility is
leased pursuant to a lease expiring in January 1998 which includes
two one-year extension options. The Company also leases additional
off-site warehouse space on a short-term and mid-term basis in
separate buildings to augment each of these primary facilities. In
March 1996, the Company announced plans to construct a new
distribution facility in South Carolina. Construction of the
580,000 square foot facility commenced in the second quarter of 1996
and is anticipated to be completed in the latter part of 1997. As of
September 30, 1996, $19 million of the estimated $60 million capital
commitments associated with this facility was incurred. The Company
expects to finance the balance of this capital commitment
principally with cash generated from operations. The Company is
also evaluating possible alternative methods of financing the
facility. The new facility should enable the Company to eliminate
the need for offsite facilities in Long Beach and Secaucus and
accommodate substantially increased volume. The Company believes
that the use of state of the art distribution technology in the new
facility and relief from inefficiencies resulting from overcrowding
of existing facilities should provide long term benefits. The
Company anticipates certain transition costs in the mid-term which
may impact earnings at that time.
As of the close of the third quarter of 1996, Company owned
stores increased to 126, including the store in Canada that was
opened in June 1996. The number of states in which the Company
operates stores remained at 41. The Company plans to continue to
pursue expansion of its store network. Present plans include
opening 18 stores in 1996, of which 9 stores have been opened
through the third quarter, and between 20 and 30 stores in 1997.
Each store requires a commitment of inventory, fixtures, equipment
and pre-opening store expenses. Additional capital will be required
in order to meet the inventory needs of the Company's expanding
retail store network.
14
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The Company currently estimates that its aggregate capital
expenditures in 1996 and 1997 will approximate up to $90 million,
including the $60 million estimated for the construction of the new
distribution facility, expansion of its retail store network
(including initial investments in inventory) and for expansion of
its international operations. In each of these cases, there can be
no assurance that the Company's capital expenditures will not exceed
this estimated amount.
Seasonality and Quarterly Fluctuations
- --------------------------------------
Historically, the Company's operations have been seasonal, with
higher sales and net income occurring in the third and fourth
quarters, reflecting increased demand during the year-end holiday
selling season. Since the biggest retail selling season is the
year-end holiday season, and as more of the Company's principal
department store customers adopt electronic data interchange which
allows them to defer shipments until later in the selling season,
future sales are expected to be more heavily weighted toward the
third and fourth quarters. In addition, the Company's retail stores
experience a seasonal selling pattern similar to that of department
stores although, in the case of the Company, sales are more heavily
weighted toward the fourth quarter. As a result, as the Company
increases the number of stores, the shift of sales volume toward
the latter part of the year is expected to continue.
The Company's results of operations may also fluctuate from
quarter to quarter in the future as a result of the amount and
timing of sales contributed by, and expenses related to the opening
of, new retail stores and the integration of such stores into the
operations of the Company, as well as other factors. The addition
of a significant number of retail stores, as is anticipated with the
Company's store expansion program, can therefore significantly
affect results of operations on a quarter-to-quarter basis.
Forward-Looking Information
- ---------------------------
Certain statements or assumptions in Management's Discussion
and Analysis contain or are based on "forward-looking" information
(as defined in the Private Securities Litigation and Reform Act of
1995) that involves risk and uncertainties inherent in the Company's
business. Actual outcomes are dependent upon the Company's
successful performance of internal plans, its ability to control
inventory levels, customer changes in short range and long range
plans, domestic and international competition in the Company's
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product areas, whether the Company will be able to accomplish store
closures within the current time table for closure and within the
parameters of the loss provision (which are based on current
estimates of closure costs), successful completion of construction
within current cost estimates, continued acceptance of existing
products and the development and acceptance of new products,
performance issues with key suppliers, changes in government import
and export policies, risks related to international transactions and
hedging strategies, as well as general economic risks and
uncertainties.
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PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
(10) Material contracts
-- Stock Purchase Agreement dated August 6,
1996, between Alfred J. Blake and Mikasa,
Inc. incorporated by reference to the
exhibit filed with the Company's Issuer
Tender Offer Statement on Schedule 13E-4
filed August 8, 1996 as Exhibit No. (c)(1).
-- Employment and Consulting Agreement dated
August 6, 1996 between Alfred J. Blake and
American Commercial, Incorporated and
Mikasa, Inc. incorporated by reference to
the exhibit filed with the Company's Issuer
Tender Offer Statement on Schedule 13E-4
filed August 8, 1996 as Exhibit No. (c)(2).
(27) Financial Data Schedule
(99) Additional Exhibits
-- Offer to Purchase, dated August 8, 1996
incorporated by reference to the exhibit
filed with the Company's Issuer Tender Offer
Statement on Schedule 13E-4 filed August 8,
1996 as Exhibit No. (a)(1).
(b) Reports on Form 8-K
None.
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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.
MIKASA, INC.
(Registrant)
Date: November 14, 1996 /s/ Raymond B. Dingman
-------------------------------------
Raymond B. Dingman
President and Chief Executive Officer
/s/ Brenda W. Flores
-------------------------------------
Brenda W. Flores
Vice President and Chief Financial Officer
(Principal Financial and Accounting
Officer)
18
<PAGE>
EXHIBIT INDEX
-------------
Exhibit
No. Description Page
- -------------------------------------------------------------------------
27 Financial Data Schedule 20
19
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 5,614
<SECURITIES> 0
<RECEIVABLES> 34,927
<ALLOWANCES> 613
<INVENTORY> 162,788
<CURRENT-ASSETS> 209,429
<PP&E> 81,287
<DEPRECIATION> 22,255
<TOTAL-ASSETS> 274,553
<CURRENT-LIABILITIES> 45,912
<BONDS> 60,000
0
0
<COMMON> 18,359
<OTHER-SE> 157,257
<TOTAL-LIABILITY-AND-EQUITY> 274,553
<SALES> 240,640
<TOTAL-REVENUES> 240,640
<CGS> 132,820
<TOTAL-COSTS> 223,880
<OTHER-EXPENSES> 4,100
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 937
<INCOME-PRETAX> 11,723
<INCOME-TAX> 4,630
<INCOME-CONTINUING> 7,093
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 7,093
<EPS-PRIMARY> 0.33
<EPS-DILUTED> 0.33
</TABLE>
