<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1998
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File Number 1-13082
KENNETH COLE PRODUCTIONS, INC.
(Exact name of registrant as specified in its charter)
New York 13-3131650
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
152 West 57th Street, New York, NY 10019
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 265-1500
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 ( )
Indicate the number of shares of each of the issuer's classes of common
stock, as of the latest practicable date:
Class August 10, 1998
Class A Common Stock ( $.01 par value) 7,609,029
Class B Common Stock ( $.01 par value) 5,785,398
<PAGE>
Kenneth Cole Productions, Inc.
Index to 10-Q
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Consolidated Balance Sheets as of June 30, 1998 and December 31, 1997 ..3
Consolidated Statements of Income for the three month and six month
periods ended June 30, 1998 and 1997 ...................................5
Consolidated Statement of Changes in Shareholders' Equity for the six
month period ended June 30, 1998 .......................................6
Consolidated Statements of Cash Flows for the six month periods
ended June 30, 1998 and 1997 ...........................................7
Notes to Consolidated Financial Statements .............................8
Item 2.Management's Discussion and Analysis of Financial Condition
and Results of Operations .............................................10
Part II. OTHER INFORMATION
Item 1.Legal Proceedings ...................................................14
Item 2.Changes in Securities and Use of Proceeds ...........................14
Item 3.Defaults Upon Senior Securities .....................................14
Item 4.Submission of Matters to a Vote of Security Holders .................14
Item 5.Other Information ...................................................15
Item 6.Exhibits and Reports on Form 8-K ....................................15
Signatures .................................................................16
Index of Exhibits ..........................................................17
<PAGE>
PART I - FINANCIAL INFORMATION
<TABLE>
Item 1. Kenneth Cole Productions, Inc. and Subsidiaries
Consolidated Balance Sheets
<CAPTION>
June 30, December 31,
1998 1997
(Unaudited)
<S> <C> <C>
Assets
Current assets:
Cash $ 13,262,000 $ 8,803,000
Due from factors 21,246,000 23,292,000
Accounts receivable, net 5,471,000 3,864,000
Inventories 31,698,000 23,365,000
Prepaid expenses and other current assets 1,547,000 1,420,000
Deferred taxes 1,135,000 1,135,000
------------ ------------
Total current assets 74,359,000 61,879,000
Property and equipment
Furniture and fixtures 6,341,000 5,513,000
Machinery and equipment 4,423,000 3,862,000
Leasehold improvements 9,590,000 8,217,000
------------ ------------
20,354,000 17,592,000
Less accumulated depreciation and amortization 6,832,000 5,381,000
------------ ------------
Net property and equipment 13,522,000 12,211,000
Other assets:
Deposits and deferred income taxes 1,784,000 1,876,000
Deferred compensation plan assets 3,356,000 1,949,000
------------ ------------
Total other assets 5,140,000 3,825,000
------------ ------------
Total assets $ 93,021,000 $ 77,915,000
============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
<TABLE>
Kenneth Cole Productions, Inc. and Subsidiaries
Consolidated Balance Sheets (continued)
<CAPTION>
June 30, December 31,
1998 1997
(Unaudited)
<S> <C> <C>
Liabilities and shareholders' equity
Current liabilities:
Accounts payable $ 16,318,000 $ 9,837,000
Accrued expenses and other current liabilities 2,572,000 3,147,000
Income taxes payable 450,000 1,694,000
Deferred license income 386,000 252,000
------------ ------------
Total current liabilities 19,726,000 14,930,000
Deferred rent payable 1,019,000 909,000
Deferred income tax 387,000 387,000
Deferred compensation 3,356,000 1,949,000
Commitments and Contingencies
Shareholders' equity:
Preferred stock, par value $1.00, 1,000,000
shares authorized, none outstanding
Class A common stock, par value $.01,
20,000,000 shares authorized, 7,584,550
and 7,369,556 outstanding in 1998 and 1997 76,000 74,000
Class B common stock, par value $.01,
6,000,000 shares authorized,
5,785,398 outstanding 58,000 58,000
Additional paid-in capital 21,907,000 19,684,000
Accumulated other comprehensive income 64,000 90,000
Retained earnings 46,428,000 39,834,000
------------ ------------
Total shareholders' equity 68,533,000 59,740,000
------------ ------------
Total liabilities and shareholders' equity $ 93,021,000 $ 77,915,000
============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
<TABLE>
Kenneth Cole Productions, Inc. and Subsidiaries
Consolidated Statements of Income
(Unaudited)
<CAPTION>
Three Months Ended Six Months Ended
June 30 June 30
1998 1997 1998 1997
<S> <C> <C> <C> <C>
Net sales $ 48,331,000 $ 40,352,000 $100,360,000 $ 85,262,000
Cost of goods sold 28,957,000 26,375,000 59,057,000 53,669,000
------------ ------------ ------------ ------------
Gross profit 19,374,000 13,977,000 41,303,000 31,593,000
Licensing and other
income 1,791,000 1,212,000 3,447,000 2,268,000
Selling, general and
administrative and
shipping and
warehousing 17,157,000 13,779,000 34,083,000 26,919,000
------------ ------------ ------------ ------------
Operating income 4,008,000 1,410,000 10,667,000 6,942,000
Interest (income)
expense, net (126,000) 87,000 (232,000) 199,000
------------ ------------ ------------ ------------
Income before provision
for income taxes 4,134,000 1,323,000 10,899,000 6,743,000
Provision for income
taxes 1,633,000 529,000 4,305,000 2,697,000
------------ ------------ ------------ ------------
Net income $ 2,501,000 794,000 6,594,000 4,046,000
============ ============ ============ ============
Earnings per share:
Basic .19 .06 .50 .31
Diluted .18 .06 .48 .30
Shares used to compute
earnings per share:
Basic 13,345,000 13,153,000 13,287,000 13,152,000
Diluted 13,874,000 13,599,000 13,858,000 13,626,000
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
<TABLE>
Kenneth Cole Productions, Inc. and Subsidiaries
Consolidated Statement of Changes in Shareholders' Equity
(Unaudited)
<CAPTION>
Class A Class B
Common Stock Common Stock Total
Number Number Common
of shares Amount of shares Amount Stock
<S> <C> <C> <C> <C> <C>
Shareholders' equity
January 1, 1998 7,410,160 $74,000 5,785,398 $58,000 $132,000
Net Income
Foreign Currency
translation adjustment
Comprehensive income
Exercise of stock options
including tax benefit 174,390 2,000 2,000
-------------------------------------------------
Shareholders' equity
June 30, 1998 7,584,550 $76,000 5,785,398 $58,000 $134,000
=================================================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Accumulated
Additional Other
Paid-in Comprehensive Retained
Capital Income Earnings Total
<S> <C> <C> <C> <C>
Shareholders' equity
January 1, 1998 $19,684,000 $90,000 $39,834,000 $59,740,000
Net Income 6,594,000 6,594,000
Foreign Currency
translation adjustment (26,000) (26,000)
-----------
Comprehensive income 6,568,000
Exercise of stock options
including tax benefit 2,223,000 2,225,000
-----------------------------------------------------
Shareholders' equity
June 30, 1998 $21,907,000 $64,000 $46,428,000 $68,533,000
=====================================================
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
<TABLE>
Kenneth Cole Productions, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)
<CAPTION>
Six Months Ended
June 30,
1998 1997
<S> <C> <C>
Cash flows from operating activities
Net income $ 6,594,000 $ 4,046,000
Adjustments to reconcile net income to net cash
Provided by (used in) operating activities:
Depreciation and amortization 1,451,000 896,000
Amortization of deferred compensation 69,000
Provision for doubtful accounts 55,000 5,000
Changes in assets and liabilities:
Decrease (increase) in due from factors 2,046,000 (2,179,000)
Increase (decrease) increase in
accounts receivable (1,662,000) 603,000
Increase in inventories (8,333,000) (37,000)
Increase (decrease) in prepaid expenses and
other current assets (127,000) 130,000
Increase in deposits (1,580,000) (321,000)
Increase (decrease) in accounts payable 6,481,000 (6,094,000)
Decrease in income taxes payable (277,000) (848,000)
(Decrease) increase in accrued expenses and
other current liabilities (441,000) 239,000
Increase in other non-current liabilities 1,517,000 491,000
------------ ------------
Net cash provided by (used in) operating activities 5,724,000 (3,000,000)
Cash flows from investing activities
Acquisition of property and equipment, net (2,497,000) (1,365,000)
------------ ------------
Net cash used in investing activities (2,497,000) (1,365,000)
Cash flows from financing activities
Proceeds from revolving line of credit, net 3,940,000
Proceeds from exercise of stock options 1,258,000 134,000
------------ ------------
Net cash provided by financing activities 1,258,000 4,074,000
Effect of exchange rate changes on cash (26,000) 71,000
------------ ------------
Net increase (decrease) in cash 4,459,000 (220,000)
Cash, beginning of period 8,803,000 1,626,000
------------ ------------
Cash, end of period $ 13,262,000 $ 1,406,000
============ ============
Supplemental disclosures of cash flow information
Cash paid during the period for:
Interest $ 21,000 $ 245,000
Income taxes $ 4,581,000 $ 3,545,000
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
Kenneth Cole Productions, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(Unaudited)
1. Basis of Presentation
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles
for interim financial information. Accordingly, they do not include
all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. The data
contained in these financial statements are unaudited and are subject
to year end adjustment; however, in the opinion of management, all
adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. Operating
results for the three and six month periods ended June 30, 1998 are not
necessarily indicative of the results that may be expected for the year
ended December 31, 1998. For further information, refer to the
consolidated financial statements and footnotes thereto included in the
Company's annual report on Form 10-K for the year ended December 31,
1997.
The consolidated balance sheet at December 31, 1997 was derived from
the audited financial statements.
2. Earnings Per Share
The Company adopted Statement of Financial Accounting Standards No. 128
"Earnings Per Share" ("SFAS 128,") effective December 31, 1997, which
superseded Accounting Principles Board Opinion 15, "Earnings Per Share"
("APB 15"). SFAS 128 requires the Company to report: (i) basic
earnings per common share, which is computed by dividing net income by
weighted average number of shares of common stock outstanding during
the periods presented, and (ii) diluted earnings per common share,
which is determined on the assumption that options issued to employees
are exercised and repurchased at the average price for the periods
presented. The difference between the number of shares used to
compute basic and diluted earnings per share relates to outstanding
stock options for all periods presented. The Company has restated
prior period calculations in accordance with SFAS 128. The impact of
adopting SFAS 128 did not result in material adjustments to previously
reported amounts.
3. Segment Reporting
In June 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 131, "Disclosures about Segments
of an Enterprise and Related Information" ("SFAS 131,") which is
effective for 1998. The Company is required to report the segment
information required by SFAS 131 when it issues its 1998 annual report.
SFAS 131 establishes new standards for reporting information about
operating segments using a "management approach". The Company has not
completed its review of SFAS 131, and has not yet determined the impact
the new requirements will have on reportable segments.
<PAGE>
4. Comprehensive Income
In 1998, the Company adopted Statement of Financial Accounting
Standards No. 130 "Reporting Comprehensive Income" ("SFAS 130").
Comprehensive income is generally defined as all changes in
shareholders' equity exclusive of transactions with owners. SFAS 130
requires the disclosure of comprehensive income and its components.
<TABLE>
Comprehensive income is comprised of:
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
1998 1997 1998 1997
<S> <C> <C> <C> <C>
Net income $ 2,501,000 $ 794,000 $ 6,594,000 $ 4,046,000
Currency translation
adjustment (38,000) 26,000 (26,000) 71,000
----------- ----------- ----------- -----------
Comprehensive income $ 2,463,000 $ 820,000 $ 6,568,000 $ 4,117,000
=========== =========== =========== ===========
</TABLE>
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
The following table sets forth the Company's consolidated statements of
income as a percentage of net sales for the three and six month periods
ended June 30, 1998 and June 30, 1997.
<TABLE>
<CAPTION>
Three Months Ended
(in thousands) June 30, 1998 June 30, 1997
<S> <C> <C> <C> <C>
Net Sales $ 48,331 100.0% $ 40,352 100.0%
Gross Profit 19,374 40.1 13,977 34.6
Licensing Income 1,791 3.7 1,212 3.0
Selling, general and
administrative expenses 17,157 35.5 13,779 34.1
Operating income 4,008 8.3 1,410 3.5
Interest (income) expense, net (126) (.3) 87 .2
Income before income taxes 4,134 8.6 1,323 3.3
Income tax expense 1,633 3.4 529 1.3
Net Income 2,501 5.2 794 2.0
Six Months Ended
(in thousands) June 30, 1998 June 30, 1997
Net Sales $100,360 100.0% $ 85,262 100.0%
Gross Profit 41,303 41.2 31,593 37.1
Licensing Income 3,447 3.4 2,268 2.6
Selling, general and
administrative expenses 34,083 34.0 26,919 31.6
Operating income 10,667 10.6 6,942 8.1
Interest (income) expense, net (232) (.2) 199 .2
Income before income taxes 10,899 10.8 6,743 7.9
Income tax expense 4,305 4.2 2,697 3.2
Net Income 6,594 6.6 4,046 4.7
</TABLE>
<PAGE>
Three Months Ended June 30, 1998 Compared to Three Months Ended June
30, 1997
Net sales increased $8.0 million, or 19.8%, to $48.3 million for the
three months ended June 30, 1998 compared with net sales of $40.4
million for the three months ended June 30, 1997. The increase was
primarily attributable to increased net sales of men's footwear,
Kenneth Cole Reaction handbags and new retail store openings, partially
offset by lower net sales of women's footwear. Net sales of the
Company's wholesale operations, excluding sales to its retail division,
increased $4.6 million, or 15.9%, to $33.7 million from $29.0 million.
Net sales by the Company's retail and outlet stores increased $3.4
million, or 29.6%, to $14.7 million for the three months ended June 30,
1998 compared to the three months ended June 30, 1997. This increase
reflects the sales from thirty-six stores which generated a 9.4%
increase or $1.1 million in comparable store sales, and the sales of
$2.3 million generated from eleven stores open for the entire second
quarter of 1998, which were not open in the second quarter of 1997.
Gross profit was $19.4 million for the three months ended June 30,
1998, an increase of approximately $5.4 million, or 38.6%, from $14.0
million for the three months ended June 30, 1997. As a percentage of
net sales, gross profit was 40.1% compared to 34.6%. The increase in
gross profit percentage was primarily attributable to higher sell-
throughs generating fewer off price sales as compared to the prior
period which experienced lower than expected sel1-throughs which
resulted in excess wholesale inventories that were disposed of at
significant discounts.
Selling, general and administrative expenses, including shipping and
warehousing costs, were $17.2 million (35.5% of net sales) for the
three months ended June 30, 1998 compared to $13.8 million (34.1% of
net sales) for the three months ended June 30, 1997. The increase in
selling, general and administrative expenses as a percentage of net
sales is primarily due to the additional retail stores (which carry a
higher expense level than the wholesale division) and additional
selling payroll costs to support certain of the Company's sales
initiatives, including launching children's footwear and enhancing the
merchandise coordinator program.
Licensing income increased 47.7% to $1.8 million for the three months
ended June 30, 1998 compared to $1.2 million for the comparable period
in 1997. This increase primarily reflects incremental revenues from
the increase in sales from existing licenses.
Interest income was $126,000 for the three months ended June 30, 1998,
compared to interest expense of $87,000 for the three months ended June
30, 1997. The change to interest income from interest expense was
primarily due to higher cash balances generated from cash flows from
operations.
As result of the foregoing, operating income increased 184.3% to $4.0
million (8.3% of net sales) from $1.4 million (3.5% of net sales) for
the three months ended June 30, 1998 and 1997, respectively.
<PAGE>
Six Months Ended June 30, 1998 Compared to Six Months Ended June 30,
1997
Net sales were $100.4 million for the first six months of 1998 compared
to $85.3 million in the prior year's period, an increase of $15.1
million or 17.7 %. The increase was primarily attributable to
increased net sales of men's footwear, Kenneth Cole Reaction handbags
and new retail store openings, partially off-set by lower net sales of
women's footwear. Net sales of the Company's wholesale operations,
excluding sales to its retail division, increased $8.6 million or 13.2%
to $73.7 million in the six months from $65.1 million in the comparable
period last year. This increase was primarily due to increased
consumer awareness of the Kenneth Cole life style brand generated from
licensing ventures such as men's apparel. Net sales by the Company's
retail and outlet stores increased $6.5 million or 32.1% to $26.6
million. This increase reflects a 7.0% or $1.4 million comparable
store sales increase, sales of $4.0 million for ten stores open for the
entire first half of 1998, which were not open in the first half of
1997 and the sales of one store opened during the first six months of
1998.
Gross profit was $41.3 million for the six month period ended June 30,
1998, an increase of $9.7 million or 30.7% from $31.6 million in the
comparable period last year. As a percentage of net sales, gross
profit was 41.2% compared to 37.1%. The increase in gross profit
percentage was primarily attributable to higher sell-throughs
generating fewer off price sales as compared to the prior period which
experienced lower than expected sell-throughs which resulted in excess
wholesale inventories that were disposed of at significant discounts.
Selling, general and administrative expenses, including shipping and
warehousing costs, were $34.1 million (34.0% of net sales) in the six
month period of 1998 and $26.9 million (31.6% of net sales) in the
comparable period last year. The increase in selling, general and
administrative expenses as a percentage of net sales is primarily due
to additional retail stores (which carry a higher expense level than
the wholesale division) and additional administrative costs to support
the Company's growth.
Interest income was $232,000 for the six months ended June 30, 1998
compared to interest expense of $199,000 for the six months ended June
30, 1997. The change to interest income from interest expense was
primarily due to higher cash balances generated from cash flows from
operations.
As a result of the above, operating income increased 53.7% in the six
month period of 1998 to $10.7 million (10.6% of net sales) from $6.9
million (8.1% of net sales) in the same period last year.
Liquidity and Capital Resources
The Company relies on cash flow from operating activities and
borrowings under its revolving credit agreement as the primary sources
of financing for its operations and expansion. This includes the
purchase of inventory in anticipation of increased sales as well as
capital expenditures related to implementing information systems
technology and additional retail and outlet stores. Cash requirements
vary from time to time as a result of seasonal requirements, the timing
of the receipt of merchandise from suppliers and the Company's "open
stock" inventory program which requires an increased investment in
inventories. Cash provided by operating activities was $5.7 million
for the six months ended June 30, 1998, compared to $3.0 used in
operations for the six months ended June 30, 1997. The increase in
cash provided by operating activities is primarily attributable, to net
earnings and the timing of payment of trade payables offset by
inventory investment. At June 30, 1998 and December 31, 1997, working
capital was $54.6 million and $46.9 million, respectively.
The Company currently has a line of credit, which allows for
borrowings, letter of credits and bankers acceptances up to a maximum
of $25.0 million to finance working capital requirements, of which
$23.9 million was available at June 30, 1998.
Capital expenditures totaled $2.8 million and $1.4 for the six months
ended June 30, 1998 and 1997, respectively. Capital expenditures
relate primarily to the Company's retail and outlet store expansion and
to the further development and enhancement of the Company's management
information systems.
The Company believes that cash flows from operations and borrowings
under its existing credit facility will be sufficient to satisfy the
Company's working capital requirements for the next twelve months.
Year 2000
The Company determined that it would benefit by replacing, rather than
reprogramming, its wholesale distribution and financial systems with
newer technologically advanced systems that offer greater functionality
and enhanced reporting. The Company has purchased and installed these
new systems and is in the process of implementation. The Company will
utilize both internal and external resources to perform the
implementation and anticipates completing the initial implementation on
or about December 31, 1998, which is prior to any anticipated impact on
its operating systems. However, there can be no guarantee that the
data and systems will be converted timely and if such conversions are
not made, the Year 2000 Issue could have a material impact on the
Company's operations. The total cost of the implementation including
the Year 2000 Issue is estimated at approximately $2.0 million, which
is being funded through both leasing arrangements and operating cash
flows.
Important Factors Relating to Forward Looking Statements
This report contains certain forward looking statements, as defined in
The Private Securities Litigation Reform Act of 1994. The forward-
looking statements contained in this Form 10-Q were prepared by
management and are qualified by, and subject to, significant business,
economic, competitive, regulatory and other uncertainties and
contingencies, all of which are difficult or impossible to predict and
many of which are beyond the control of the Company. Accordingly,
there can be no assurance that the forward-looking statements contained
in this Form 10-Q will be realized or that actual results will not be
significantly higher or lower.
Quantitative and Qualitative Disclosures About Market Risk
Pursuant to the General Instructions to Rule 305 of Regulation S-K, the
quantitative and qualitative disclosures called by Rule 305 of
Regulation S-K is not applicable to the Registrant at this time.
<PAGE>
Part II - OTHER INFORMATION
Item 1.Legal Proceedings. There have been no updates since the
Company's report on Form 10-K for the year ended December 31, 1997.
Item 2.Changes in Securities and Use of Proceeds. None
Item 3.Defaults Upon Senior Securities. None
Item 4.Submission of Matters to a Vote of Security Holders.
(a) Kenneth Cole Productions, Inc. Annual Meeting of Shareholders was
held on May 28, 1998.
(b) Election of Directors - All nominees were elected through
proxies solicited pursuant to Regulation 14A under the
Securities and Exchange Act of 1934. There was no solicitation
in opposition to management's nominees as listed in the Proxy
Statement, and each of the nominees were elected to hold office
until the next Annual Meeting of Shareholders.
(c) Matters voted on at the Annual Meeting of Shareholders included
the election of directors and the ratification of the selection of
the independent public accountants.
The results of the election of directors were as follows:
For Withheld
Paul Blum 64,664,182 1,750
Kenneth D. Cole 64,664,182 1,750
Robert C. Grayson 64,664,182 1,750
Denis F. Kelly 6,810,202 1,750
Jeffrey G. Lynn 6,810,102 1,850
Stanley A. Mayer 64,663,982 1,950
Holders of 6,811,952 shares of Class A Common Stock and 5,785,398
shares of Class B Common Stock, constituting approximately 94.68%
of the shares entitled to vote, were present in person or by proxy
at the Annual Meeting of Shareholders. Each record holder of
Class A Common Stock is entitled to one vote per share,
and each record holder of Class B Common Stock is entitled to 10
votes per share. Holders of Class A Common Stock voted separately
to elect Jeffrey G. Lynn and Denis Kelly.
With regard to the ratification of the appointment of Ernst &
Young LLP as the independent certified public accountants, the results
were as follows:
FOR AGAINST ABSTAIN
64,662,192 900 2,840
Item 5. Other Information. None
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits:
27 Financial Data Schedule.
(b) Reports on Form 8-K: The Company did not file any reports on
Form 8-K during the three months ended June 30, 1998.
<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.
Kenneth Cole Productions, Inc.
Registrant
August 10, 1998 /s/ STANLEY A. MAYER
Executive Vice President and
Chief Financial Officer
<PAGE>
INDEX OF EXHIBITS
Sequential
Exhibit Number: Description
Page No.
27 Financial Data Schedule. 18
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<CASH> 13,262
<SECURITIES> 0
<RECEIVABLES> 26,797
<ALLOWANCES> (80)
<INVENTORY> 31,698
<CURRENT-ASSETS> 74,359
<PP&E> 20,354
<DEPRECIATION> 6,832
<TOTAL-ASSETS> 93,021
<CURRENT-LIABILITIES> 19,726
<BONDS> 0
0
0
<COMMON> 134
<OTHER-SE> 68,399
<TOTAL-LIABILITY-AND-EQUITY> 93,021
<SALES> 100,360
<TOTAL-REVENUES> 103,807
<CGS> 59,057
<TOTAL-COSTS> 59,057
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (232)
<INCOME-PRETAX> 10,899
<INCOME-TAX> 4,305
<INCOME-CONTINUING> 6,594
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6,594
<EPS-PRIMARY> .50
<EPS-DILUTED> .48
</TABLE>
