<PAGE> 1
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 August 29, 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 0-6708
Nautica Enterprises, Inc.
(Exact Name of Registrant as Specified in Its Charter)
Delaware 95-2431048
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
40 West 57th Street, New York, N.Y. 10019
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code (212) 541-5757
(Former Name, Former Address and Former Fiscal Year,
if Changed Since Last Report)
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
APPLICABLE ONLY TO ISSUERS INVOLVED IN
BANKRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS
Indicate by check mark whether the registrant has filed all documents
and reports required to be filed by Section 12, 13, or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court
Yes No
APPLICABLE ONLY TO CORPORATE ISSUERS
The number of shares of Common Stock outstanding as of October 9, 1998
was 37,235,000.
<PAGE> 2
NAUTICA ENTERPRISES, INC. AND SUBSIDIARIES
AUGUST 29, 1998
(Unaudited)
INDEX
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
Part I - Financial Information:
Item 1. Financial Statements (Unaudited):
Condensed Consolidated Balance Sheets
As of August 29, 1998 and February 28, 1998.........................2
Condensed Consolidated Statements of Earnings
For the Six and Three Month Periods Ended
August 29, 1998 and August 31, 1997.................................3
Condensed Consolidated Statements of Cash Flows
For the Six Month Periods Ended
August 29, 1998 and August 31, 1997.................................4
Notes to Condensed Consolidated Financial Statements................5
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.......................7
Part II - Other information........................................11
</TABLE>
<PAGE> 3
NAUTICA ENTERPRISES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except share data)
<TABLE>
<CAPTION>
ASSETS
(unaudited)
August 29, February 28,
1997 1998
-------- --------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 2,138 $ 34,616
Short-term investments 37,062 52,680
Accounts receivable - net 102,134 81,135
Inventories 98,598 66,726
Prepaid expenses and other current assets 5,674 4,882
Deferred tax benefit 6,163 6,093
-------- --------
Total current assets 251,769 246,132
Property, plant and equipment, net of
accumulated depreciation and amortization 62,830 56,273
Other assets 10,256 8,046
-------- --------
$324,855 $310,451
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt $ 50 $ 50
Accounts payable - trade 40,466 18,743
Accrued expenses and other current liabilities 34,656 34,158
Income taxes payable 9,168 5,826
-------- --------
Total current liabilities 84,340 58,777
Long-term debt -net 50 100
Minority interest 120 405
Stockholders' equity:
Preferred stock - par value $.01, authorized,
2,000,000 shares; no shares issued
Common stock - par value $.10, authorized, 100,000,000 shares; issued
42,570,000 shares at August 29, 1998 and 42,443,000 shares at
February 28, 1998 4,257 4,244
Additional paid-in capital 65,578 64,932
Retained earnings 246,163 217,174
-------- --------
315,998 286,350
Less:
Common stock in treasury - at cost;
4,735,070 shares at August 29, 1998
and 3,070,070 at February 28, 1998 75,653 35,181
-------- --------
Total stockholders' equity 240,345 251,169
-------- --------
$324,855 $310,451
======== ========
</TABLE>
The accompanying notes are an integral part of these statements.
-2-
<PAGE> 4
NAUTICA ENTERPRISES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Amounts in thousands, except per share data)
<TABLE>
<CAPTION>
(unaudited) (unaudited)
Six Months Six Months Three Months Three Months
Ended Ended Ended Ended
August 29, 1998 August 31, 1997 August 29, 1998 August 31, 1997
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Net Sales $ 261,868 $ 228,067 $ 150,888 $ 132,260
Cost of goods sold 137,466 122,368 78,241 70,880
--------- --------- --------- ---------
Gross profit 124,402 105,699 72,647 61,380
Selling, general and administrative expenses 82,391 72,448 43,575 38,676
Net royalty income (3,002) (2,306) (1,389) (1,111)
--------- --------- --------- ---------
Operating profit 45,013 35,557 30,461 23,815
Investment income, net 2,616 1,483 1,206 674
Minority interest in consolidated subsidiary 285 592 (31) 358
--------- --------- --------- ---------
Earnings before provision for income taxes 47,914 37,632 31,635 24,847
Provision for income taxes 18,926 15,053 12,496 9,939
--------- --------- --------- ---------
NET EARNINGS $ 28,988 $ 22,579 $ 19,139 $ 14,908
========= ========= ========= =========
Net earnings per share of common stock
Basic $ 0.74 $ 0.58 $ 0.49 $ 0.39
========= ========= ========= =========
Diluted $ 0.69 $ 0.54 $ 0.46 $ 0.36
========= ========= ========= =========
Weighted average number of common shares outstanding
Basic 39,341 38,988 39,262 38,721
========= ========= ========= =========
Diluted 41,785 41,727 41,607 41,484
========= ========= ========= =========
Cash dividends per common share none none none none
========= ========= ========= =========
</TABLE>
The accompanying notes are an integral part of these statements.
-3-
<PAGE> 5
NAUTICA ENTERPRISES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
<TABLE>
<CAPTION>
(unaudited)
Six Months Six Months
Ended Ended
August 29, 1998 August 31, 1997
--------------- ---------------
<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 28,988 $ 22,579
-------- --------
Adjustments to reconcile net earnings to net cash provided by operating
activities:
Minority interest in consolidated subsidiary (285) (591)
Depreciation and amortization 6,149 4,657
Provision for accounts receivable allowances and sales
returns and discounts 936 623
Changes in operating assets and liabilities
Accounts receivable (21,935) (31,122)
Inventories (31,872) (26,275)
Prepaid expenses and other current assets (791) (1,757)
Other assets (2,495) (577)
Accounts payable - trade 21,722 14,670
Accrued expenses and other current liabilities 499 5,664
Income taxes payable 3,342 5,185
-------- --------
Total adjustments (24,731) (29,523)
-------- --------
Net cash provided by (used in) operating activities 4,257 (6,944)
-------- --------
Cash flows from investing activities:
Proceeds from minority shareholders of consolidated subsidiary -- 680
Purchase of property, plant and equipment (12,420) (9,954)
Proceeds from sale (Purchases) of short-term investments 15,443 (34,750)
-------- --------
Net Cash provided by (used in) investing activities 3,023 (44,024)
-------- --------
Cash flows from financing activities:
Principal payments on long-term debt (50) (50)
Purchase of treasury stock (40,472) (17,872)
Proceeds from issuance of common stock 764 228
-------- --------
Net cash used in financing activities (39,758) (17,694)
-------- --------
Decrease in cash and cash equivalents (32,478) (68,662)
Cash and cash equivalents at beginning of period 34,616 71,887
-------- --------
Cash and cash equivalents at end of period $ 2,138 $ 3,225
-------- --------
Supplemental Information:
Cash payments for the periods ended:
Income taxes $ 15,548 $ 9,868
======== ========
</TABLE>
The accompanying notes are an integral part of these statements.
-4-
<PAGE> 6
NAUTICA ENTERPRISES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AUGUST 29, 1998
(Unaudited)
NOTE 1 - The accompanying financial statements have been prepared
without audit pursuant to the rules and regulations of the
Securities and Exchange Commission. 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. These statements include all
adjustments, consisting only of normal recurring accruals,
considered necessary for a fair presentation of financial
position and results of operations. The financial statements
included herein should be read in conjunction with the
financial statements and notes thereto included in the latest
annual report on Form 10-K.
NOTE 2 - Effective March 1, 1998, the Company changed its fiscal year
end to a 52/53 week year. There was no impact on the results
of operations.
NOTE 3 - The results of operations for the six and three month periods
ended August 29, 1998 are not necessarily indicative of the
results to be expected for the full year.
NOTE 4 - The Company utilized the last-in, first-out "Lifo" method for
inventories as at August 29, 1998 and February 28, 1998 and
for the three month periods ended August 29, 1998 and August
31, 1997. The "Lifo" inventory for the three month periods
ended August 29, 1998 and August 31, 1997 are based upon end
of year estimates. Inventories at August 29, 1998 and February
28, 1998 consist primarily of finished goods.
NOTE 5 - On March 1, 1998, the Company adopted Statement of Financial
Accounting Standards No. 130, "Reporting Comprehensive
Income," which requires companies to report certain changes in
equity during a period, as comprehensive income, which
includes net earnings and the effects of changes in unrealized
gains and losses on securities, as follows:
<TABLE>
<CAPTION>
Six Six Three Three
Months Months Months Months
ended Ended ended ended
August 29, August 31, August 29, August 31,
(AMOUNTS IN THOUSANDS) 1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net earnings $28,988 $22,579 $19,139 $14,908
Changes in unrealized gains
and losses on securities,
net of tax (105) 0 (48) 0
----- - ---- -
Comprehensive Income $28,883 $14,908 $19,091 $14,908
======= ======= ======= =======
</TABLE>
-5-
<PAGE> 7
NAUTICA ENTERPRISES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
AUGUST 29, 1998
(Unaudited)
NOTE 6 - Short-term investments consist primarily of government and
agency bonds, tax exempt municipal bonds and corporate bonds.
At August 29, 1998, all securities were designated as
available for sale. As of August 29, 1998, gross unrealized
gains of $190,000 and gross unrealized losses of $15,000 (less
deferred tax of $70,000) were credited to stockholders'
equity. For the six month period ended August 29, 1998, gross
realized gains and losses on sales of investments totaled
$308,000 and $31,000, respectively. For the three month period
ended August 29, 1998, gross realized gains and losses on
sales of investments totaled $247,000 and $4,000,
respectively.
NOTE 7 - Basic net earnings per share excludes dilution and is computed
by dividing income available to common shareholders by the
weighted-average common shares outstanding for the period.
Diluted net earnings per share reflects the weighted-average
common shares outstanding plus the potential dilutive effect
of options which are convertible into common shares. The
effect of stock options which were excluded from the
calculation of diluted weighted-average shares was not
material to the financial statements.
NOTE 8 - During 1997, the FASB issued SFAS No. 131 "Disclosures about
Segments of an Enterprise and Related Information". Adoption
of this statement will not impact the Company's consolidated
financial position, results of operations or cash flows, and
will be limited to the form and content of its disclosures.
This statement is effective for fiscal years beginning after
December 15, 1997. In accordance with SFAS No. 131, the
Company has elected to defer the initial application until the
fiscal year end.
-6-
<PAGE> 8
NAUTICA ENTERPRISES, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
AUGUST 29, 1998
(Unaudited)
RESULTS OF OPERATIONS
For the Six Months Ended August 29, 1998:
Net sales increased 15% to $261.9 million in the six months ended
August 29, 1998 from $228.1 million in the comparable prior year period.
Wholesale sales increased due to the growth of Nautica's in-store shop program,
including new shops and expansions of existing shops. Nautica retail sales
increased as a result of opening additional outlet stores and increased sales at
existing stores. The increase in sales is due primarily to increased unit volume
rather than price increases.
Gross profit for the period was 47.5% compared to 46.3% in the
comparable prior year period. The increase resulted primarily from a shift to
higher margin Nautica wholesale products and an increase in retail outlet store
sales. The Nautica wholesale products achieved higher margins due primarily to
changes in the mix of products sold.
Total selling, general and administration expenses increased by $10.0
million to $82.4 million from $72.4 million. The increase was principally a
result of increased retail outlet store expenses and increased retail
development costs. Selling, general and administrative expenses as a percentage
of net sales decreased to 31.5% from 31.8% in the comparable prior year period.
The net decrease resulted from the ability to leverage these expenses with
increased sales volume.
Net royalty income increased by $.7 million to $3.0 million from $2.3
million in the comparable prior year period. The increased royalty revenue was
generated from both new and existing licensees.
Investment income increased by $1.1 million to $2.6 million from $1.5
million in the comparable prior year period. The increase is primarily the
result of higher average cash balances and higher rates of return on
investments.
The provision for income taxes decreased to 39.5% from 40.0% of
earnings before income taxes in the comparable prior year period. The decrease
is due primarily to a reduction in the effective state income tax rates.
Net earnings increased 28% to $29.0 million from $22.6 million in the
comparable prior year period as a result of the factors discussed above.
-7-
<PAGE> 9
For the Three Months Ended August 29, 1998:
Net sales increased 14% to $150.9 million in the three months ended
August 29, 1998 from $132.3 million in the comparable prior year period.
Wholesale sales increased due to the growth of Nautica's in-store shop program,
including both new shops and expansions of existing shops. Nautica retail sales
increased as a result of opening additional outlet stores and increased sales at
existing stores. The increase in sales is due primarily to increased unit volume
rather than price increases.
Gross profit for the period was 48.1% compared to 46.4% in the
comparable prior year period. The increase resulted primarily from a shift to
higher margin Nautica wholesale products and an increase in retail outlet store
sales. The Nautica wholesale products achieved higher margins due primarily to
changes in the mix of products sold.
Total selling, general and administration expenses increased by $4.9
million to $43.6 million from $38.7 million. The increase was principally a
result of increased retail development and retail outlet store expenses.
Selling, general and administrative expenses as a percentage of net sales
decreased to 28.9% from 29.2% in the comparable prior year period. The net
decrease resulted from the ability to leverage these expenses with increased
sales volume.
Net royalty income increased by $.3 million to $1.4 million from $1.1
million in the comparable prior year period. The increased royalty revenue was
generated from both new and existing licensees.
Investment income increased by $.5 million to $1.2 million from $.7
million in the comparable prior year period. The increase is primarily the
result of higher average cash balances and higher rates of return on
investments.
The provision for income taxes decreased to 39.5% from 40.0% of
earnings before income taxes in the comparable prior year period. The decrease
is due primarily to a reduction in the effective state income tax rates.
Net earnings increased 28% to $19.1 million from $14.9 million in the
comparable prior year period as a result of the factors discussed above.
-8-
<PAGE> 10
LIQUIDITY AND CAPITAL RESOURCES
During the six months ended August 29, 1998, the Company generated cash
from operating activities of $4.3 million principally from net earnings.
Increases in accounts receivable and inventory of $21.9 and $31.9 million,
respectively, resulted from increased sales, and were financed principally by
cash generated from net earnings, and increases in accounts payable. Accounts
receivable and inventory balances were higher by 12% and 13%, respectively, than
balances in the prior year. These increases were commensurate with sales
increases. During the six months ended August 31, 1997, the Company used cash
related to operating activities of approximately $6.9 million. The cash used was
principally attributable to increases in accounts receivable and inventory of
$31.1 and $26.3 million, respectively, resulting from increased sales. The
increases in accounts receivable and inventory were principally offset by cash
generated from net earnings, increases in accounts payable, accrued expenses and
income taxes payable. Accounts receivable and inventory balances were higher by
34% and 31%, respectively, than balances in the prior year. These increases were
commensurate with sales increases.
During the six months ended August 29, 1998, the Company's principal
investing activities related to the continued expansion of the Nautica in-store
shop program and amounts related to the expansion of showroom space. The Company
expects to continue to incur capital expenditures to expand the in-store shop
program. At August 29, 1998, there were no other material commitments for
capital expenditures.
During the year ended February 28, 1998 and the six months ending
August 29, 1998, the Board of Directors approved two stock repurchase programs,
authorizing the Company to repurchase up to a total of 2,000,000 shares of its
common stock. During the six months ended August 29, 1998, the Company
repurchased 1,665,000 shares at a cost of $40.5 million. During the month of
September 1998, the Company completed the balance of the repurchase programs at
an additional cost of $7.6 million.
The Company has a total of $100.0 million in lines of credit with two
commercial banks available for short-term borrowings and letters of credit.
These lines are collateralized by imported inventory and accounts receivable. At
August 29, 1998, letters of credit outstanding under the lines were $50.7
million and there were no short-term borrowings outstanding.
Historically, the Company has experienced its lowest level of sales in
the first quarter and its highest level in the third quarter. This pattern has
resulted primarily from the timing of shipments to retail customers for spring
and fall seasons. In the future, the timing of seasonal shipments may vary by
quarter.
INFLATION AND CURRENCY FLUCTUATIONS
The Company believes that inflation and the effect of fluctuations of
the dollar against foreign currencies have not had a material effect on the cost
of imports or the Company's results of operations.
-9-
<PAGE> 11
YEAR 2000
The Company recognizes the need to ensure that its systems, applications and
hardware will recognize and process transactions for the year 2000 and beyond.
The Company expects to implement successfully the systems and programming
changes necessary to address year 2000 issues with respect to its internal
systems and does not believe that the cost of such actions will have a material
adverse effect on its results of operations or financial condition. The Company
has established a plan which identifies all systems applications, a timeframe
for ensuring it's year 2000 readiness and a responsible party in the
organization for the particular system. This plan encompasses both information
system technologies and non-information technologies. The Company expects to
have all systems ready by the middle of 1999 while the majority of the systems
are expected to be year 2000 compliant by the end of December 1998. The Company
does not have a contingency plan in place at this time but will initiate
development of such a plan depending upon the criticality of the particular
system if the anticipated deadlines are not met. The Company also has initiated
discussions with its significant suppliers, customers and financial institutions
to ensure that those parties have appropriate plans to remediate year 2000
issues when their systems interface with the Company's systems or may otherwise
impact operations. Although the Company is not aware of any material operational
issues or costs associated with preparing its internal systems for the year
2000, there can be no assurance that there will not be a delay in, or increased
costs associated with, the implementation of the necessary systems and changes
to address the year 2000 issues. The Company's current estimate of costs to be
incurred is less than $500,000, which is mostly being incurred internally and
does not reflect significant incremental costs. The Company and its' significant
suppliers, customers, and financial institutions' inability to implement such
systems and changes could have an adverse effect on future results of
operations.
FORWARD-LOOKING AND CAUTIONARY STATEMENTS
Certain statements included in this report, including the words
"believes," "anticipates," "expects" and similar expressions are intended to
identify forward-looking statements. Such statements are subject to certain
risks and uncertainties which could cause actual results to differ materially
from those projected. Readers are cautioned not to place undue reliance on these
forward-looking statements which speak only as of the date hereof. The Company
undertakes no obligation to republish revised forward-looking statements to
reflect events or circumstances after the date hereof or to reflect the
occurrence of unanticipated events. Readers are also urged to carefully review
and consider the various disclosures made by the Company in this report, as well
as the Company's periodic reports on Forms 10-K and 10-Q and other filings with
the Securities and Exchange Commission.
NEW ACCOUNTING PRONOUNCEMENTS
During 1997, the FASB issued SFAS No. 131 "Disclosures about Segments
of an Enterprise and Related Information". Adoption of this statement will not
impact the Company's consolidated financial position, results of operations or
cash flows, and will be limited to the form and content of its disclosures. This
statement is effective for fiscal years beginning after December 15, 1997. In
accordance with SFAS No. 131, the Company has elected to defer the initial
application until the fiscal year end.
-10-
<PAGE> 12
PART II
OTHER INFORMATION
Items I through 9. - All items are inapplicable except:
Item 4. Submission of Matters to a Vote of Security-Holders
(a) The Annual Meeting of Stockholders of Nautica Enterprises, Inc. was
held on July 1, 1998.
(b) The directors named in the Proxy Statement constituting the entire
Board of Directors were elected to one-year terms expiring in 1999, as
follows:
<TABLE>
<CAPTION>
FOR WITHHELD
--- --------
<S> <C> <C>
Harvey Sanders 35,958,396 218,764
David Chu 35,967,744 209,416
George Greenberg 35,958,643 218,517
Robert B. Bank 36,008,660 168,500
Israel Rosenzweig 36,004,374 172,786
Charles Scherer 35,967,967 209,193
Ronald G. Weiner 36,006,543 170,617
</TABLE>
The Notice of Annual Meeting of Stockholders and Proxy Statement for Nautica
Enterprises, Inc. dated June 5, 1998 was filed with the Securities and Exchange
Commission pursuant to Regulation 14A of the Act.
Item 6. Exhibits and Reports on Form 8-K
(a) EXHIBIT INDEX
Exhibit No. Distribution
3(a) Registrant's By-laws as currently in effect are incorporated
herein by reference to Registrant's Registration statement on
Form S-1 (Registration No. 33-21998).
3(b) Registrant's Certificate of Incorporation is incorporated by
reference to the Registration statement on Form S-3
(Registration No. 33-71926), as amended by a Certificate of
Amendment dated June 29,1995 and July 2, 1996, incorporated by
reference to the Registrant Annual Report on Form 10-K for the
year ended February 29, 1996, and the Quarterly Report on Form
10-Q for the quarter ended May 31, 1996, respectively.
10(iii)(a) Registrant's Executive Incentive Stock Option Plan is
incorporated by reference herein from the Registrant's
Registration Statements on Form S-8 (Registration Number
33-1488), as amended by the Company's Registration Statement
on Form S-8 (Registration Number 33-45823).
-11-
<PAGE> 13
10 (iii) (b) Registrant's 1989 Employee Incentive Stock Option Plan is
incorporated by reference herein from the Registrant's
Registration Statements on Form S-8 (Registration Number
33-36040).
10 (iii) (c) Registrant's 1994 Incentive Compensation Plan is incorporated
by reference herein from the Registrant's Annual Report on
Form 10-K for the year ended February 29, 1996.
10 (iii) (d) Registrant's 1996 Stock Incentive Plan is incorporated by
reference herein from the Registrant's Annual report on Form
10-K for the year ended February 28, 1997.
10 (iii) (e) Registrant's Deferred Compensation Plan is incorporated by
reference herein from the Registrant's Annual Report on Form
10-K for the year ended February 28, 1998.
10 (iii) (f) Option Agreement and Royalty Agreement, each dated July 1,
1987 by and among the Registrant and David Chu are
incorporated herein by reference from the Registrant's
Registration Statement on Form S-1 (Registration No. 33-21998)
and the Letter Agreement dated May 1, 1998 between Mr. Chu and
the Registrant is incorporated by reference from the
Registrant's Annual Report on Form 10-K (as amended by form
10-K/A) for the year ended February 28, 1998. Certain portions
of the Letter Agreement have been omitted based upon a request
for confidential treatment made by the Registrant with the
Securities Exchange Commission. Such omitted portions have
been filed separately with the Securities and Exchange
Commission.
27 Financial Data Schedule.
(b) Reports on Form 8-K. None
-12-
<PAGE> 14
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.
NAUTICA ENTERPRISES, INC.
By: s/Harvey Sanders
-----------------------------------
Harvey Sanders
Chairman of the Board
and President
Date: October 9, 1998
By: s/Neal S. Nackman
-----------------------------------
Neal S. Nackman
V.P. Finance and
Chief Accounting Officer
Date: October 9, 1998
-13-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED STATEMENTS OF THE COMPANY AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> FEB-27-1999
<PERIOD-START> MAR-1-1998
<PERIOD-END> AUG-29-1998
<CASH> 2,138
<SECURITIES> 37,062
<RECEIVABLES> 105,136
<ALLOWANCES> 3,002
<INVENTORY> 98,598
<CURRENT-ASSETS> 251,769
<PP&E> 91,285
<DEPRECIATION> 28,455
<TOTAL-ASSETS> 324,855
<CURRENT-LIABILITIES> 84,340
<BONDS> 0
0
0
<COMMON> 4,257
<OTHER-SE> 236,088
<TOTAL-LIABILITY-AND-EQUITY> 324,855
<SALES> 261,868
<TOTAL-REVENUES> 267,486
<CGS> 137,466
<TOTAL-COSTS> 137,466
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 47,914
<INCOME-TAX> 18,926
<INCOME-CONTINUING> 28,988
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 28,988
<EPS-PRIMARY> 0.74
<EPS-DILUTED> 0.69
</TABLE>
