-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Von3t/iibfixe4/jNocWf0T5sxTveVfq74HewLwaXXY0Pd1aiiKUXNScEN62NDRA iS+gFJB9dio5EQHN6SgFqg== 0001047469-99-009673.txt : 19990316 0001047469-99-009673.hdr.sgml : 19990316 ACCESSION NUMBER: 0001047469-99-009673 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19990129 FILED AS OF DATE: 19990315 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ACORN PRODUCTS INC CENTRAL INDEX KEY: 0001036713 STANDARD INDUSTRIAL CLASSIFICATION: CUTLERY, HANDTOOLS & GENERAL HARDWARE [3420] IRS NUMBER: 223265462 STATE OF INCORPORATION: DE FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-22717 FILM NUMBER: 99564907 BUSINESS ADDRESS: STREET 1: 500 DUBLIN AVENUE CITY: COLUMBUS STATE: OH ZIP: 43216-1930 BUSINESS PHONE: 6142224400 MAIL ADDRESS: STREET 1: 500 DUBLIN AVENUE CITY: COLUMBUS STATE: OH ZIP: 43216-1930 10-Q 1 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) [ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended January 29, 1999 OR [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from___________________ to ___________________ Commission file number: 0-22717 ACORN PRODUCTS, INC. (Exact name of registrant as specified in its charter) DELAWARE 22-3265462 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 500 DUBLIN AVENUE, COLUMBUS, OHIO 43215 (Address of principal executive offices, including zip code) (614) 222-4400 (Registrant's telephone number, including area code) NOT APPLICABLE (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 the filing requirements for at least the past 90 days. YES X NO Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date: 6,364,105 shares of Common Stock, $.001 par value, were outstanding at March 10, 1999. FORM 10-Q ACORN PRODUCTS, INC. TABLE OF CONTENTS PAGE NO. PART I. FINANCIAL INFORMATION Item 1. Financial Statements. Consolidated Balance Sheets 3 July 31, 1998 and January 29, 1999 Consolidated Statements of Operations For the 4 Three Months and Six Months Ended January 30, 1998 and January 29, 1999 Consolidated Statements of Cash Flows For the 5 Six Months Ended January 30, 1998 and January 29, 1999 Interim Notes to Consolidated Financial Statements 6 Item 2. Management's Discussion and Analysis of Financial 7-10 Condition and Results of Operations. PART II. OTHER INFORMATION Item 5. Other Matters. 11 Item 6. Exhibits and Reports on Form 8-K. 11 Signatures 12 PART 1. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS ACORN PRODUCTS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (IN THOUSANDS, EXCEPT SHARE DATA)
JULY 31, JANUARY 29, 1998 1999 ------------------- ------------------- (Unaudited) ASSETS Current assets: Cash........................................................................... $ 1,240 $ 898 Accounts receivable, less allowance for doubtful accounts ($894 and $874, respectively)............................... 24,553 20,477 Inventories.................................................................... 30,123 38,388 Prepaids and other current assets.............................................. 2,948 2,784 --------- --------- Total current assets.......................................................... 58,864 62,547 Property, plant and equipment, net of accumulated depreciation.................................................................. 16,205 16,583 Goodwill, net of accumulated amortization...................................... 35,271 35,468 Other intangible assets........................................................ 2,293 2,057 --------- --------- Total assets.................................................................. $ 112,633 $ 116,655 --------- --------- --------- --------- LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Revolving credit facility...................................................... $ 16,308 $ 20,623 Accounts payable............................................................... 7,010 9,399 Accrued expenses............................................................... 4,413 5,195 Income taxes payable........................................................... 43 (626) Other current liabilities...................................................... 445 231 --------- --------- Total current liabilities..................................................... 28,219 34,822 Long-term debt................................................................. 16,009 16,009 Other long-term liabilities.................................................... 4,054 3,637 --------- --------- Total liabilities............................................................. 48,282 54,468 Stockholders' equity: Common stock, par value of $.001 per share, 20,000,000 shares authorized, 6,464,105 shares issued and outstanding at July 31, 1998 and January 29, 1999, respectively.............................................. 78,391 78,391 Contributed capital-stock options............................................... 460 460 Minimum pension liability....................................................... (285) (285) Retained earnings (deficit)..................................................... (14,215) (16,379) --------- --------- Total stockholders' equity.................................................... 64,351 62,187 --------- --------- Total liabilities and stockholders' equity.................................... $ 112,633 $ 116,655 --------- --------- --------- ---------
See accompanying notes. -3- ACORN PRODUCTS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (IN THOUSANDS, EXCEPT PER SHARE DATA)
FOR THE QUARTER ENDED For the Six Months Ended --------------------------------------- ------------------------------------ JANUARY 30, JANUARY 29, JANUARY 30, JANUARY 29, 1998 1999 1998 1999 ------------------ ----------------- ---------------- ----------------- (Unaudited) (Unaudited) Net sales.................................... $ 21,143 $ 22,449 $ 41,559 $ 44,621 Cost of goods sold........................... 16,340 16,965 31,617 33,779 ------------------ ----------------- ---------------- ----------------- Gross profit................................. 4,803 5,484 9,942 10,842 Selling, general and administrative expenses................................... 4,411 4,981 9,230 9,791 Interest expense............................. 522 801 1,041 1,473 Amortization of intangibles.................. 219 262 437 523 Other expenses, net: Watering products consolidation............ -- 355 -- 355 Strategic transactions..................... -- 856 -- 994 Miscellaneous.............................. 38 92 79 204 ------------------ ----------------- ---------------- ----------------- Income (loss) from continuing operations before income taxes............. (387) (1,863) (845) (2,498) Income taxes (benefit)....................... (112) (373) (246) (500) ------------------ ----------------- ---------------- ----------------- Income (loss) from continuing operations................................. (275) (1,490) (599) (1,998) Loss from discontinued operations, net of tax................................. -- -- -- (166) ------------------ ----------------- ---------------- ----------------- Net income (loss)............................ $ (275) $ (1,490) $ (599) $ (2,164) ------------------ ----------------- ---------------- ----------------- ------------------ ----------------- ---------------- ----------------- PER SHARE DATA (BASIC AND DILUTED): Income (loss) from continuing operations $ (0.04) $ (0.23) $ (0.09) $ (0.31) Loss from discontinued operations............ -- -- -- (0.02) ------------------ ----------------- ---------------- ----------------- Net income (loss) ........................... $ (0.04) $ (0.23) $ (0.09) $ (0.33) ------------------ ----------------- ---------------- ----------------- ------------------ ----------------- ---------------- ----------------- Weighted average shares outstanding................................ 6,464,105 6,464,105 6,464,105 6,464,105 ------------------ ----------------- ---------------- ----------------- ------------------ ----------------- ---------------- -----------------
See accompanying notes. -4- ACORN PRODUCTS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (IN THOUSANDS)
FOR THE SIX MONTHS ENDED ---------------------------------------- JANUARY 30, JANUARY 29, 1998 1999 ------------------- ------------------ (Unaudited) CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss).......................................................... $ (599) $ (2,164) Adjustments to reconcile net income (loss) to net cash provided by (used in) continuing operations: Depreciation and amortization............................................ 1,849 2,048 Changes in operating assets and liabilities: Accounts receivable.................................................... (1,185) 4,076 Inventories............................................................ (5,745) (8,265) Other assets........................................................... 1,195 400 Accounts payable and accrued expenses.................................. 2,288 3,171 Income taxes payable................................................... (508) (669) Other liabilities...................................................... (116) (465) ------------------- ------------------ Net cash provided by (used in) continuing operations....................... (2,821) (1,868) Net cash provided by (used in) discontinued operations..................... (469) (166) ------------------- ------------------ Net cash provided by (used in) operating activities........................ (3,290) (2,034) CASH FLOWS FROM INVESTING ACTIVITIES: Additional cost of net assets acquired in acquisitions..................... -- (720) Purchases of property, plant and equipment, net............................ (2,119) (1,903) ------------------- ------------------ Net cash provided by (used in) investing activities........................ (2,119) (2,623) CASH FLOWS FROM FINANCING ACTIVITIES: Net activity on revolving loan............................................. 4,478 4,315 ------------------- ------------------ Net cash provided by (used in) financing activities........................ 4,478 4,315 ------------------- ------------------ Net increase (decrease) in cash............................................ (931) (342) Cash at beginning at period................................................ 1,509 1,240 ------------------- ------------------ Cash at end of period...................................................... $ 578 $ 898 ------------------- ------------------ ------------------- ------------------ Interest paid.............................................................. $ 834 $ 1,469 ------------------- ------------------ ------------------- ------------------
See accompanying notes. -5- ACORN PRODUCTS, INC. AND SUBSIDIARIES INTERIM NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. Footnote disclosure which would substantially duplicate the disclosure contained in the Annual Report to Stockholders for the year ended July 31, 1998 has not been included. The unaudited interim consolidated financial statements reflect all adjustments that in the opinion of management are necessary to a fair statement of results for the periods presented and to present fairly the consolidated financial position of Acorn Products, Inc. (the "Company") as of January 29, 1999. All such adjustments are of a normal recurring nature. 2. Inventories of Acorn Products, Inc. are stated at the lower of cost or market. Cost is determined using the first-in, first-out (FIFO) method. Inventories consist of the following:
JULY 31, JANUARY 29, 1998 1999 -------------- --------------- (In thousands) Finished goods..................... $ 16,270 $ 21,030 Work in process.................... 5,709 7,229 Raw materials and supplies......... 9,212 11,163 -------------- --------------- 31,191 39,422 Valuation reserves................. (1,068) (1,034) -------------- --------------- Total inventories.................. $ 30,123 $ 38,388 -------------- --------------- -------------- ---------------
3. In November 1998, the Company received notification of an assessment of approximately $200,000 in state taxes and interest related to the sale in August 1997 of substantially all of the assets of its McGuire-Nicholas Company, Inc. subsidiary. The Company is contesting the amount of the assessment. The Company has recorded the contingent liability associated with the assessment, net of the effect of taxes, as a loss from discontinued operations. See "Management's Discussion and Analysis of Financial Condition and Results of Operations -- Disposition of Non-Lawn and Garden Business Operations." 4. In June 1997, the Financial Standards Board issued Statement No. 130, Reporting Comprehensive Income ("SFAS 130"). SFAS 130 requires adoption for fiscal years beginning after December 15, 1997. Therefore, the Company was required to adopt SFAS 130 effective August 1, 1998. The total comprehensive loss for the quarter and the six months ended January 29, 1999 was $599 and $2,164 respectively. 5. In January 1999 the Company incurred expenses of $355 in consolidating its watering products division into a single facility. 6. The Company incurred expenses for legal, accounting, consulting and other expenses related to certain strategic transactions in the amount of $856 in the second quarter of fiscal 1999 and $994 for the six months ended January 29, 1999. -6- ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. The following discussion should be read in conjunction with the consolidated financial statements of the Company and the other financial information included elsewhere in this Quarterly Report on Form 10-Q, as well as the factors set forth under the caption "Forward-Looking Information" below. FORWARD-LOOKING INFORMATION Statements in the following discussion that indicate the Company's or management's intentions, hopes, beliefs, expectations or predictions of the future are forward-looking statements. It is important to note that the Company's actual results could differ materially from those projected in such forward-looking statements. Additional information concerning factors that could cause actual results to differ materially from those suggested in the forward-looking statements is contained under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company's Annual Report on Form 10-K for the year ended July 31, 1998, as well as in the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on September 18, 1997, as amended on October 29,1998 and as the same may be amended from time to time. THREE MONTHS ENDED JANUARY 29, 1999 COMPARED TO THREE MONTHS ENDED JANUARY 30, 1998 NET SALES. Net sales increased 6.2%, or $1.3 million, to $22.4 million in the second quarter of fiscal 1999 compared to $21.1 million in the second quarter of fiscal 1998. The increase in net sales reflected the addition of the Company's watering products division and increased net sales by the Company's injection molding division, partially offset by a decrease in reported wheelbarrow sales. Although the Company's overall wheelbarrow sales increased in the period, most of those sales were attributable to the Company's wheelbarrow joint venture. Only the Company's portion of the profit or loss from the wheelbarrow joint venture is included in the Company's financial statements. GROSS PROFIT. Gross profit increased 14.2%, or $0.7 million, to $5.5 million in the second quarter of fiscal 1999 compared to $4.8 million in the comparable period of fiscal 1998. Gross margin increased to 24.4% in the second quarter of fiscal 1999 from 22.7% in the second quarter of fiscal 1998. The increase in gross margin primarily was due to realization of benefits from the Company's cost reduction programs as well as greater overhead absorption rates. SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and administrative expenses increased 12.9%, or $570,000, to $5.0 million in the second quarter of fiscal 1999 from $4.4 million in the second quarter of fiscal 1998. As a percentage of net sales, selling general and administrative expenses increased to 22.2% in the second quarter of fiscal 1999 from 20.9% in the second quarter of fiscal 1998. The increase in selling, general and administrative expenses resulted primarily from increased customer program costs, as well as the addition of the company's watering products division. OTHER EXPENSES, NET. Other expenses, net, increased to $1.3 million in the second quarter of fiscal 1999 from $38,000 in the second quarter of fiscal 1998. Approximately $856,000 of other expense, net, in the second quarter of fiscal 1999 related to accounting, legal, consulting and other expenses incurred in connection with the exploration of strategic transactions. In addition, the Company incurred expenses of approximately $355,000 in the second quarter of fiscal 1999 related to the consolidation of the manufacturing operations of the Company's watering products division. The Company also incurred other expenses, net, of approximately $92,000 in the second quarter of fiscal 1999 primarily related to the amortization of bank financing fees. LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES. Loss from continuing operations before income taxes increased to $1.9 million in the second quarter of fiscal 1999 from $387,000 in the second quarter of fiscal 1998. The increase in loss from continuing operations before income taxes resulted primarily from the strategic transaction and watering products consolidation expenses described above. NET LOSS. The Company recognized a tax benefit of $373,000 in the second quarter of fiscal 1999 compared to a tax benefit of $112,000 in the second quarter of fiscal 1998, bringing the loss from continuing operations to $1.5 million in the second quarter of fiscal 1999 compared to a loss of $275,000 in the second quarter of fiscal 1998. SIX MONTHS ENDED JANUARY 29, 1999 COMPARED TO SIX MONTHS ENDED JANUARY 30, 1998 NET SALES. Net sales increased 7.4%, or $3.0 million to $44.6 million in the first six months of fiscal 1999 compared to $41.6 million in the first six months of fiscal 1998. The increase in net sales reflected the addition of the Company's watering products division and increased net sales by the Company's injection molding division. -7- GROSS PROFIT. Gross profit increased 9.1%, or $900,000, in the first six months of fiscal 1999 to $10.8 million from $9.9 million in the first six months of fiscal 1998. Gross margin increased to 24.3% in the first six months of fiscal 1999 from 23.9% in the comparable period of fiscal 1998. The increase in gross margin primarily was due to realization of benefits from the Company's cost reduction program, as well as greater overhead absorption rates. SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and administrative expenses increased 6.1%, or $561,000, to $9.8 million in the first six months of fiscal 1999 compared to $9.2 million in the first six months of fiscal 1998. As a percentage of net sales, selling, general and administrative expenses decreased to 21.9% in the first six months of fiscal 1999 compared to 22.2% in the first six months of fiscal 1998. The increase in selling, general and administrative expenses resulted primarily from the addition of the Company's watering products division. OTHER EXPENSES, NET. Other expenses, net increased to $1.6 million in the first six months of fiscal 1999 from $79,000 in the first six months of fiscal 1998. Approximately $994,000 of other expenses, net in the first six months of 1999 related to accounting, legal, consulting and other related expenses incurred in connection with the exploration of strategic transactions. In addition, the Company incurred expenses of approximately $355,000 in the first six months of fiscal 1999 related to the consolidation of the manufacturing operations of the Company's watering products division. The Company also incurred other expenses, net of approximately $204,000 in the first six months of fiscal 1999 primarily related to the amortization of bank financing fees. LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES. Loss from continuing operations before income taxes increased to $2.5 million in the first six months of fiscal 1999 from $845,000 in the comparable period of fiscal 1998. The increase in loss from continuing operations before income taxes resulted primarily from the strategic transaction and watering products consolidation expenses described above. LOSS FROM CONTINUING OPERATIONS. The Company recognized a tax benefit of $500,000 in the first six months of fiscal 1999 compared to a tax benefit of $246,000 in the comparable period of fiscal 1998, bringing the loss from continuing operations to $2.0 million in the first six months of fiscal 1999 compared to a loss of $599,000 in the first six months of fiscal 1998. NET LOSS. The Company incurred a loss from discontinued operations, net of tax, of $166,000 in the first six months of fiscal 1999, bringing the net loss to $2.2 million for the period compared to a loss of $599,000 for the first six months of fiscal 1998. SEASONAL AND QUARTERLY FLUCTUATIONS; IMPACT OF WEATHER The lawn and garden industry is seasonal in nature, with a high proportion of sales and operating income generated in January through May. Accordingly, the Company's sales tend to be greater during its third and fourth fiscal quarters. As a result, the Company's operating results depend significantly on the spring selling season. To support this sales peak, the Company must anticipate demand and build inventories of finished goods throughout the fall and winter. Accordingly, the Company's level of raw materials and finished goods inventories tend to be at their highest, relative to sales, during the Company's first and second fiscal quarters. These factors increase variations in the Company's quarterly results of operations and potentially expose the Company to greater adverse effects of changes in economic and industry trends. Moreover, actual demand for the Company's products may vary substantially from the anticipated demand, leaving the Company with excess inventory or insufficient inventory to satisfy customer orders. Weather is the single most important factor in determining market demand for the Company's products and also is the least predictable. For example, while floods in the Midwest adversely affected the sale of most types of lawn and garden equipment in 1992, the severe winter of 1994 resulted in a surge in demand for snow shovels. In addition, bad weather during the spring gardening season, such as that experienced throughout most of the U.S. in the spring of 1995 and 1998, can adversely affect overall annual sales. LIQUIDITY AND CAPITAL RESOURCES The Company entered into an amendment to its Credit Facility on February 26, 1999. This amendment provided for modifications to certain financial and reporting covenants as well as other modifications to the agreement including a $10.0 million increase in the revolving portion of the Credit Facility. This increase will be available annually from January 1 to June 30 of each fiscal year. On March 3, 1999, the Company's Board of Directors authorized a stock repurchase program to permit the acquisition of up to $2.5 million of the Company's common stock during the next 12 months. The purchases may be made from time to time on the open market or in privately negotiated transactions, depending upon market conditions. There have been no other significant changes in the Company's liquidity and capital resources as of January 29, 1999 from those discussed in the Company's Annual Report on Form 10-K for the year ended July 31, 1998. -8- DISPOSITION OF NON-LAWN AND GARDEN BUSINESS OPERATIONS In December 1996, the Company sold substantially all of the assets of VSI Fasteners, Inc. ("VSI"), a distributor of packaged fasteners, for approximately $6.9 million, plus the assumption of approximately $2.3 million of related liabilities. In August 1997, the Company sold substantially all of the assets of McGuire-Nicholas Company, Inc. ("McGuire-Nicholas"), a manufacturer and distributor of leather, canvas and synthetic fabric tool holders and work aprons, for approximately $4.7 million, plus the assumption of approximately $4 million of related liabilities. VSI's and McGuire-Nicholas' results of operations are shown as "Loss from Discontinued Operations" in the consolidated financial statements appearing elsewhere in this Quarterly Report on Form 10-Q. CONSOLIDATION OF MANUFACTURING FACILITIES On March 3, 1999, the Company announced that it will close its Columbus, Ohio manufacturing facility and consolidate the operations into its primary manufacturing facility in Frankfort, New York. The Company will continue to operate the Columbus facility, which has about 110 manufacturing positions, through August 1999. The Company plans to add 110 new employees at the Frankfort plant. The net consolidation costs are expected to be under $3 million, while savings will be over $1 million annually. The Company expects to incur the costs of the consolidation over the next nine months. IMPACT OF THE YEAR 2000 ON COMPUTER SYSTEMS STATE OF READINESS. The Company has reviewed its Year 2000 issues in regard to both its information-technology and its non-information-technology. The Company's operating system software as well as some of the Company's older software applications were written using two digits rather than four to define the applicable year. As a result, those software applications have time-sensitive software that recognize a date using "00" as the year 1900 rather than the Year 2000. This could cause a system failure or miscalculations causing disruptions of operations, including a temporary inability to process transactions, send invoices or engage in similar normal business activities. The Company has determined that it will have to modify or replace portions of its software applications and hardware so that its computer systems will function properly with respect to dates in the Year 2000 and thereafter. The Company expects that its information-technology will be Year 2000-ready by June 1, 1999, which is prior to any anticipated impact on its operating systems. The Company does not believe that there any material Year 2000 issues with regard to its non-information-technology. In addition, the Company has initiated communications with its significant customers and suppliers to determine the extent to which the Company's interface systems are vulnerable to the failure of such customers and suppliers to remediate their own Year 2000 issues. Based on such communications, the Company is not currently aware of any third-party issue applicable to the Year 2000 that is likely to have a material impact on the conduct of the business, the results of operations or the financial condition of the Company. COSTS TO ADDRESS THE COMPANY'S YEAR 2000 ISSUES. Although the Company is currently updating its computer systems, such updating was not accelerated due to Year 2000 issues. The following chart reflects the Company's estimated Year 2000-specific costs plus the estimated cost to update its current computer systems.
ESTIMATED CONVERSION COST EXPENSE CAPITAL ------- ------- Hardware -- $200,000 Project Management $125,000 75,000 Software and Custom Coding 165,000 -- -------- -------- $290,000 $275,000 -------- -------- -------- --------
RISKS OF THE COMPANY'S YEAR 2000 ISSUES. The Company does not believe that any Year 2000 issues will impact its manufacturing. The Company believes that its greatest Year 2000 risk is the risk that its customers and suppliers are not Year 2000-ready. Failure by the Company, or its customers or suppliers to adequately address the Year 2000 issues in a timely manner could have a material impact on the conduct of the business, the results of operations and the financial -9- condition of the Company. Accordingly, the Company plans to address all Year 2000 issues before problems materialize. The Company believes that the associated costs are adequately budgeted for in its fiscal 1999 business plans. However, should efforts on the part of the Company, its customers and suppliers fail to adequately address their relevant Year 2000 issues, the most likely worst case scenario would be a material loss of revenue to the Company. THE COMPANY'S CONTINGENCY PLANS. The Company will produce contingency plans on a case by case basis as required as it completes its Year 2000 efforts. At the present time, as no material risks have been identified, no contingency plans have been formed. RISKS. There can be no assurance that the Company will not experience cost overruns or delays in the completion of its year 2000 project. Factors that could cause such cost overruns or delays include, among other things, an unavailability of properly trained personnel, unforeseen difficulty locating and correcting relevant computer codes and similar uncertainties. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. None. -10- PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS. None. ITEM 2. CHANGES IN SECURITIES. None. ITEM 3. DEFAULTS UPON SENIOR SECURITIES. None. Item 4. Submission of Matters to a Vote of Security Holders. None. ITEM 5. OTHER MATTERS. If any stockholder of the Company wishes to submit a proposal to be included in this year's Proxy Statement and acted upon at the Company's 1999 Annual Meeting of Stockholders which will be held on June 15, 1999, the proposal must be received by the Secretary of the Company at the principal executive offices of the Company, 500 Dublin Avenue, Columbus, Ohio 43215 prior to the close of business on March 31, 1999. Any stockholder proposal submitted outside the processes of Rule 14a-8 under the Securities Exchange Act of 1934 for presentation to the Company's 1999 Annual Meeting of Stockholders will be considered untimely for purposes of Rule 14a-4 and 14a-5 if notice thereof is received by the Company after March 31, 1999. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. (a) EXHIBITS. EXHIBIT EXHIBIT NUMBER DESCRIPTION 10.1 Fourth Amendment to Amended and Restated Credit Agreement, February 26, 1999, between UnionTools, Inc. and Heller Financial, Inc., in its capacity as Agent for the Lenders party to the Amended and Restated Credit Agreement. 27 Financial Data Schedule. (b) REPORTS ON FORM 8-K. None. -11- 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. ACORN PRODUCTS, INC. Date: March 12, 1999 By: /S/ GABE MIHALY ---------------------------------------- Gabe Mihaly, President and Chief Executive Officer (Principal Executive Officer) Date: March 12, 1999 By: /S/ STEPHEN M. KASPRISIN ---------------------------------------- Stephen M. Kasprisin, Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) -12- ACORN PRODUCTS, INC. AND SUBSIDIARIES FORM 10-Q EXHIBIT INDEX EXHIBIT EXHIBIT NUMBER DESCRIPTION 10.1 Fourth Amendment to Amended and Restated Credit Agreement, February 26, 1999, between UnionTools, Inc. and Heller Financial, Inc., in its capacity as Agent for the Lenders party to the Amended and Restated Credit Agreement. 27 Financial Data Schedule. EX-10.1 2 EXHIBIT 10.1 FOURTH AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT THIS FOURTH AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (this "AMENDMENT") is dated as of February 26, 1999 and entered into by and among UNIONTOOLS, INC., a Delaware corporation ("BORROWER"), ACORN PRODUCTS, INC., a Delaware corporation ("HOLDINGS"), H.B. SHERMAN MANUFACTURING COMPANY, a Missouri corporation ("H.B. SHERMAN"), UNIONTOOLS IRRIGATION, INC., a Delaware corporation formerly known as UnionTools Watering Products, Inc. ("IRRIGATION" and together with Borrower, Holdings and H.B. Sherman collectively, the "LOAN PARTIES"), HELLER FINANCIAL, INC., in its individual capacity as a Lender and as Agent for all Lenders ("AGENT"), and the other Lenders. RECITALS WHEREAS, Borrower, Agent and Lenders have entered into an Amended and Restated Credit Agreement dated as of May 20, 1997, as amended by that certain Amendment No. 1 to Credit Agreement dated November 24, 1997, Second Amendment to Credit Agreement dated as of May 22, 1998 and Third Amendment to Amended and Restated Credit Agreement dated as of October 29, 1998 (as the same may be further amended, restated, supplemented or otherwise modified from time to time, the "CREDIT AGREEMENT"), pursuant to which, among other things, Lenders have agreed, subject to the terms and conditions set forth in the Credit Agreement, to make loans and financial accommodations to Borrower; and WHEREAS, the Loan Parties have requested that the Agent and Lenders agree to modify the Credit Agreement pursuant to the terms and conditions of this Amendment; and NOW, THEREFORE, in consideration of the premises and the agreements, provisions and covenants herein contained, the Loan Parties, Lenders and Agent agree as follows: 1. DEFINED TERMS. All capitalized terms used herein but not elsewhere defined shall have the respective meanings ascribed to such terms in the Credit Agreement, as amended by this Amendment. 2. AMENDMENTS TO CREDIT AGREEMENT. The Credit Agreement is amended as follows: 2.1 REVOLVING LOAN COMMITMENT. With respect to subsection 1.1.(A)(1) of the Credit Agreement, the Revolving Loan Commitment for all Lenders in the aggregate shall be $40,000,000 during the period from January 1 through June 30, inclusive, of each year, and $30,000,000 during the period from July 1 through December 31, inclusive, of each year. 2.2 ACQUISITIONS BY HOLDINGS. With respect to subsection 1.1(C) of the Credit Agreement, and subject to the terms and conditions thereof, the proceeds of an Acquisition Loan may be used to fund the acquisition by Holdings or its wholly-owned Subsidiaries of all of the issued and outstanding capital stock of another Person, or the acquisition by Holdings' wholly-owned Subsidiaries of all or substantially all of the assets of another Person or of a division of another Person. In the event of any such acquisition, each wholly-owned Subsidiary of Holdings that either owns or has rights in any assets or properties or maintains any business operations (other than Borrower) shall become a co-borrower under the Credit Agreement (and for the purposes of the Credit Agreement shall thereupon be included in the definition of "Borrower"), whereby such Subsidiary shall become jointly and severally liable with Borrower in respect of the Obligations, and shall, together with the other Loan Parties, duly execute and deliver such documents as are reasonably requested by Agent to reflect such co-borrowing or guaranty arrangement. All present and future Subsidiaries of Holdings that either own or have rights in any assets or properties or maintain any business operations shall be required to take the actions and duly execute and deliver the documents as set forth in subsection 2.5(B) of the Credit Agreement, whether or not they have received a request from Agent or Requisite Lenders to take such actions or deliver such documents. The references to Borrower in subsections 1.1(C)(3), (5) and (8) of the Credit Agreement shall mean and be references to Holdings and its Subsidiaries. 2.3 REBORROWINGS OF ACQUISITION LOANS. With respect to subsection 1.1(C) of the Credit Agreement, the amounts of the Acquisition Loans borrowed under that subsection and repaid from Excess Cash Flow pursuant to subsection 1.5(B) thereof may be reborrowed subject to the other terms and conditions set forth in subsection 1.1(C). 2.4 PRO FORMA TOTAL INDEBTEDNESS TO OPERATING CASH FLOW RATIO. Subsection 1.1(C)(7) of the Credit Agreement is hereby deleted in its entirety and replaced with the following: "(7) Based upon the financial performance of Holdings, its Subsidiaries and the subject Target during the twelve (12) months immediately preceding the acquisition of the subject Target, the Pro Forma Total Indebtedness to Operating Cash Flow Ratio of Holdings, its Subsidiaries and the subject Target on a pro forma combined basis would not be more than 4.00:1 as of the last day of any month in the first, second or third Loan Year. For the purposes of this subsection 1.1(C)(7), "Pro Forma Total Indebtedness to Operating Cash Flow Ratio" means the ratio of (i) the sum of (a) the average daily principal balance of the Revolving Loans during the twelve (12) month period ending on the last day of the subject month, plus (b) the aggregate outstanding principal balance of the Acquisition Loans, the Lender Letters of Credit and Risk Participation Agreements as of the last day of such month, plus (c) all other Indebtedness for borrowed money of Holdings, its Subsidiaries and the subject Target on a consolidated basis as of the last day of such month, to (ii) Operating Cash Flow of Holdings, its Subsidiaries and the subject Target on a consolidated basis (calculated as illustrated on Exhibit 4.10(C) with EBIDAT calculated in accordance with subsection 1.1(C)(4)) for the twelve (12) month period ending on the last day of such month." 2.5 INTEREST RATE MARGINS. The pricing table in subsection 1.2(A) of the Credit Agreement is hereby deleted in its entirety and replaced with the following: 2 PRICING TABLE
- -------------------------------------------------------------------------------- ADJUSTED TOTAL INDEBTEDNESS TO OPERATING CASH FLOW RATIO BASE RATE MARGIN LIBOR MARGIN - -------------------------------------------------------------------------------- Greater than 4.50:1 1.00% 3.00% - -------------------------------------------------------------------------------- Equal to or greater than 3.75:1 but equal 0.75% 2.75% to or less than 4.50:1 - -------------------------------------------------------------------------------- Equal to or greater than 3.00:1 but less 0.50% 2.50% than 3.75:1 - -------------------------------------------------------------------------------- Less than 3.00:1 0.25% 2.25% - --------------------------------------------------------------------------------
With respect to clause (i)(c) of the definition of "Adjusted Total Indebtedness to Operating Cash Flow Ratio", Adjusted Total Indebtedness shall include all other Indebtedness for borrowed money of Holdings and its Subsidiaries on a consolidated basis. 2.6 FURTHER ASSURANCES. With respect to subsection 2.5(B) of the Credit Agreement, all present and future Subsidiaries of Holdings that either own or have rights in any assets or properties or maintain any business operations shall be required to take the actions and duly execute and deliver the documents as set forth therein, whether or not they have received a request from Agent or Requisite Lenders to take such actions or deliver such documents. 2.7 INVESTMENTS. With respect to subsection 3.3 of the Credit Agreement, Borrower and its Subsidiaries may make loans and advances to Holdings to fund a Permitted Acquisition, or for any corporate expenditures made by Holdings or by any Borrower or a Subsidiary thereof in the ordinary course of business (it being understood and agreed that such corporate expenditures shall specifically exclude (i) subject to Paragraph 2.9 of this Amendment, any Restricted Junior Payment by Holdings, (ii) any Investment by Holdings in a Person that is not a Borrower or a Subsidiary thereof, except for a Permitted Acquisition, and (iii) any expenditures related to a Subsidiary of Holdings other than a Borrower or a Subsidiary thereof, and it being further understood and agreed that the proceeds of any such loans and advances to Holdings may be used only for such permitted corporate expenditures); provided, however, that no Default or Event of Default would exist after giving effect to such loans and advances; and provided further that the proceeds of such loans and advances, to the extent not used by Holdings or by a Borrower or a Subsidiary thereof, shall be pledged by Holdings to Agent in a manner reasonably satisfactory to Agent. "Permitted Acquisitions" shall mean acquisitions by Holdings or any of its Subsidiaries of the stock or assets of any Person in a negotiated transaction; provided that such acquisition either is funded by an Acquisition Loan made pursuant to subsection 1.1(C) or is consented to in writing by the Requisite Lenders. 2.8 RESTRICTED JUNIOR PAYMENTS. Subsection 3.5(C) of the Credit Agreement is hereby deleted in its entirety and replaced with the following: 3 "(C) Any Borrower may make payments and distributions in cash to Holdings to fund a Permitted Acquisition, or for any corporate expenditures made by Holdings or by any Borrower or a Subsidiary thereof in the ordinary course of business (it being understood and agreed that such corporate expenditures shall specifically exclude (i) subject to Paragraph 2.9 of a certain Fourth Amendment to the Agreement, any Restricted Junior Payment by Holdings, (ii) any Investment by Holdings in a Person that is not a Borrower or a Subsidiary thereof, except for a Permitted Acquisition, and (iii) any expenditures related to a Subsidiary of Holdings other than a Borrower or a Subsidiary thereof, and it being further understood and agreed that any such payments and distributions to Holdings may be used only for such permitted corporate expenditures); provided, however, that such payments and distributions, to the extent not used by Holdings or by a Borrower or a Subsidiary thereof, shall be pledged by Holdings to Agent in a manner reasonably satisfactory to Agent; and" 2.9 STOCK REPURCHASE. With respect to subsection 3.5 of the Credit Agreement, and that certain Consent by Agent and Lenders dated as of March 3, 1998, Borrower may make Restricted Junior Payments to Holdings for the repurchase of Holdings' Common Stock issued pursuant to the IPO, provided that (i) the aggregate sum of such Restricted Junior Payments shall not exceed $2,500,000, (ii) the Maximum Revolving Loan Balance after giving effect to any such Restricted Junior Payment must exceed the Revolving Loans then outstanding by not less than $4,000,000, (iii) any such Restricted Junior Payment shall not be made from the proceeds of any Loans other than the Revolving Loans, and (iv) no event shall have occurred and be continuing or would result from any such Restricted Junior Payment that would constitute an Event of Default or a Default. 2.10 RESTRICTION ON FUNDAMENTAL CHANGES. With respect to subsection 3.6 of the Credit Agreement, Borrower will not permit Holdings to: (a) enter into any transaction of merger or consolidation; (b) liquidate, wind-up or dissolve itself (or suffer any liquidation or dissolution); or (c) acquire, directly or indirectly, by purchase or otherwise, either the stock, partnership interest or other equity securities of any other Person or all or any substantial part of the business or assets of any other Person, except Permitted Acquisitions by Holdings and its Subsidiaries. 2.11 SALE/LEASEBACK TRANSACTIONS. With respect to subsection 3.7 of the Credit Agreement, Borrower and its Subsidiaries may sell assets and concurrently lease those assets back from the purchaser, subject to the conditions set forth in clauses (b)(ii) through (vi), inclusive, of subsection 3.7 of the Credit Agreement, and provided that the aggregate market value of assets sold in such sale/leaseback transactions shall not exceed $500,000 during any of their fiscal years. 2.12 CAPITAL EXPENDITURE LIMITS. With respect to subsection 4.1 of the Credit 4 Agreement, the Capex Limit shall be $4,000,000 for each fiscal year ending on or after July 31, 1999 for Holdings and its Subsidiaries on a consolidated basis. 2.13 EBIDAT. Subsection 4.3 of the Credit Agreement is hereby deleted in its entirety and replaced with the following: "4.3 EBIDAT. Borrower shall not permit EBIDAT of Holdings and its Subsidiaries on a consolidated basis for the twelve (12) month period ending on the last day of any fiscal quarter ending on the dates or during the periods set forth below to be less than the amount set forth below for such date or period.
Date/Period Amount ----------- ------ January 31, 1999 $7,500,000 April 30, 1999 $9,000,000 July 31, 1999 $9,500,000 On and after October 31, 1999 $13,100,000
"EBIDAT" will be calculated as illustrated on Exhibit 4.10(C)." 2.14 FIXED CHARGE COVERAGE. Subsection 4.4 of the Credit Agreement is hereby deleted in its entirety and replaced with the following: "4.4 FIXED CHARGE COVERAGE. Borrower shall not permit Fixed Charge Coverage of Holdings and its Subsidiaries on a consolidated basis for the twelve (12) month period ending on the last day of any fiscal quarter ending on the dates or during the periods set forth below to be less than the amount set forth below for such date or period.
Date/Period Amount ----------- ------ On and after January 31, 1999 1.20:1
"Fixed Charge Coverage" will be calculated as illustrated on Exhibit 4.10(C)." 2.15 TOTAL INTEREST COVERAGE. Subsection 4.5 of the Credit Agreement is hereby deleted in its entirety and replaced with the following: "4.5 TOTAL INTEREST COVERAGE. Borrower shall not permit Total Interest Coverage of Holdings and its Subsidiaries on a consolidated basis for the twelve (12) month period ending on the last day of any 5 fiscal quarter ending on the dates or during the periods set forth below to be less than the amount set forth below for such date or period.
Date/Period Amount ----------- ------ January 31, 1999 1.50:1 April 30, 1999 2.50:1 July 31, 1999 2.50:1 October 31, 1999 2.75:1 On and after January 31, 2000 3.00:1
"Total Interest Coverage" will be calculated as illustrated in Exhibit 4.10(C)." 2.16 TOTAL INDEBTEDNESS TO OPERATING CASH FLOW RATIO. Subsection 4.6 of the Credit Agreement is hereby deleted in its entirety and replaced with the following: "4.6 TOTAL INDEBTEDNESS TO OPERATING CASH FLOW RATIO. Borrower shall not permit the ratio of Total Indebtedness to Operating Cash Flow of Holdings and its Subsidiaries on a consolidated basis for the twelve (12) month period ending on the last day of any fiscal quarter ending on the dates or during the periods set forth below to be greater than the amount set forth below for such date or period.
Date/Period Amount ----------- ------ January 31, 1999 7.00:1 April 30, 1999 4.65:1 July 31, 1999 4.50:1 On and after October 31, 1999 3.00:1
"Total Indebtedness" and "Operating Cash Flow" will be calculated as illustrated on Exhibit 4.10(C)." 2.17 DUE DILIGENCE EXPENSES. The expenses in the sum of $1,200,000.00 incurred in connection with the due diligence on the potential acquisitions disclosed to the Agent prior to the date hereof shall not be deducted in calculating EBIDAT for the purposes of determining (i) satisfaction of the condition to the Acquisition Loans set forth in subsection 1.1(C)(7) of the Credit Agreement, and (ii) compliance with the financial covenants set forth in subsections 4.3, 4.4, 4.5 and 4.6 thereof. 2.18 QUARTERLY FINANCIALS. The financial statements and schedules as required 6 in subsection 4.10(A) of the Credit Agreement for any fiscal quarter shall be delivered within forty-five (45) days after the end of such fiscal quarter. 2.19 YEAR-END FINANCIALS. The financial statements, schedules and reports as required in subsection 4.10(B) of the Credit Agreement for any fiscal year shall be delivered within ninety (90) days after the end of such fiscal year. 2.20 COMPLIANCE CERTIFICATE. Exhibit 4.10(C) to the Credit Agreement shall be deleted in its entirety and replaced with Exhibit 4.10(C) attached hereto and incorporated herein by reference. 2.21 YEAR 2000. A new subsection 5.10 is hereby added to the Credit Agreement as follows: "5.10 YEAR 2000. Holdings and its Subsidiaries have made an assessment of the microchip and computer-based systems and the software used in their business and based upon such assessment believes that they will be "Year 2000 Compliant" by January 1, 2000, except where the failure to be Year 2000 Compliant would not have a Material Adverse Effect. For purposes of this paragraph, "Year 2000 Compliant" means that all software, embedded microchips and other processing capabilities utilized by, and material to the business operations or financial condition of, Holdings and its Subsidiaries are able to interpret, store, transmit, receive and manipulate data on and involving all calendar dates correctly and without causing any abnormal ending scenarios in relation to dates in and after the Year 2000. From time to time, at the request of Agent or any Lender, Holdings and its Subsidiaries shall provide to Lenders such updated information as is requested regarding the status of their efforts to become Year 2000 Compliant." 3. ACCOMMODATION FEE. Upon the effectiveness of this Amendment, Borrower shall pay an accommodation fee in the amount of $100,000 to Agent for the benefit of all Lenders (based upon their respective Pro Rata Shares). 4. CONDITIONS TO EFFECTIVENESS. The effectiveness of this Amendment shall be subject to the satisfaction of the following conditions in a manner, form and substance satisfactory to Agent: 4.1 DELIVERY OF DOCUMENTS. This Amendment shall have been delivered to Agent, duly authorized and executed by the parties hereto, together with replacement Notes in favor of the respective Lenders for their Pro Rata Shares of the increased Revolving Loan Commitment, and such other instruments, documents, certificates, consents, waivers, opinions and financing statements as Agent may reasonable request. 7 4.2 MATERIAL ADVERSE CHANGE. No event shall have occurred since the Closing Date which has had or reasonably could be expected to have a Material Adverse Effect. 4.3 PERFORMANCE; NO DEFAULT. Each Loan Party shall have performed and complied with all agreements and conditions contained in the Loan Documents to be performed by or complied with by such Loan Party prior to the date hereof, and no Event of Default shall exist. 5. REPRESENTATIONS AND WARRANTIES. Each Loan Party hereby confirms to Agent and the Lenders that the representations and warranties set forth in Section 5 of the Credit Agreement are true and correct in all material respects as of the date hereof, and shall be deemed to be remade as of the date hereof. 6. NO FURTHER AMENDMENTS; RATIFICATION OF LIABILITY. Each Loan Party hereby consents to the execution and delivery of this Amendment. Each Loan Party hereby agrees that except as amended hereby, the Credit Agreement and each of the other Loan Documents shall remain in full force and effect in accordance with their respective terms. Each Loan Party hereby ratifies and confirms its liabilities, obligations and agreements under the Credit Agreement and each other Loan Document, all as amended by this Amendment, and acknowledges that: (i) as of the date of the Amendment, such Loan Party, to its knowledge, has no defenses, claims or set-offs to the enforcement by Agent and Lenders of such liabilities, obligations and agreements; and (ii) other than as specifically set forth herein, Agent and Lenders do not waive, diminish or limit any term or condition contained in the Credit Agreement or any of the other Loan Documents. Agent's and each Lender's agreement to the terms of this Amendment or any other amendment shall not be deemed to establish or create a custom or course of dealing between Agent or Lenders, on the one hand, and any Loan Party, on the other hand. 7. COUNTERPARTS. This Amendment may be executed in one or more counterparts, each of which shall be deemed to be an original, and all of which, when taken together, shall constitute one and the same instrument. 8. FURTHER ASSURANCES AND FEES AND EXPENSES. Each Loan Party covenants and agrees that it will at any time and from time to time do, execute, acknowledge and deliver, or will cause to be done, executed, acknowledged and delivered, all such further acts, documents and instruments as reasonably may be required by Agent in order to effectuate fully the intent of this Amendment. The Borrower shall pay all fees and expenses incurred in the preparation, negotiation and execution of this Amendment, including, without limitation, the fees and expenses of counsel for Agent. 9. GOVERNING LAW. This Amendment shall be a contract made under and governed by the laws of the State of Illinois, without regard to conflict of laws principles. 10. SEVERABILITY. In the event that any provision of this Amendment is deemed to be invalid by reason of the operation of any law or by reason of the interpretation placed thereon by 8 any court or governmental authority, this Amendment shall be construed as not containing such provision and the invalidity of such provision shall not affect the validity of any other provisions hereof, and any and all other provisions hereof which otherwise are lawful and valid shall remain in full force and effect. 11. HEADINGS AND RECITALS. The paragraph headings used in this Amendment are for convenience of reference only and in no way define, describe or limit the scope or intent of this Amendment. The foregoing recitals are hereby incorporated herein by this reference thereto. 12. NO STRICT CONSTRUCTION. The language used in this Amendment shall be deemed to be the language chosen by the parties hereto to express their mutual intent, and no rule of strict construction shall be applied against any party hereto. IN WITNESS WHEREOF, this Amendment has been executed and delivered by each of the parties hereto on the date first set forth above. UNIONTOOLS, INC., a Delaware corporation By: /s/ Stephen M. Kasprisin -------------------------------------- Name: Stephen M. Kasprisin -------------------------------------- Title: Vice President and Chief Financial Officer -------------------------------------- ACORN PRODUCTS, INC., a Delaware corporation By: /s/ Stephen M. Kasprisin -------------------------------------- Name: Stephen M. Kasprisin -------------------------------------- Title: Vice President and Chief Financial Officer -------------------------------------- H.B. SHERMAN MANUFACTURING COMPANY, a Missouri corporation By: /s/ J. Mitchell Dolloff -------------------------------------- Name: J. Mitchell Dolloff -------------------------------------- Title: President -------------------------------------- 9 UNIONTOOLS IRRIGATION, INC., a Delaware corporation By: /s/ J. Mitchell Dolloff -------------------------------------- Name: J. Mitchell Dolloff -------------------------------------- Title: President -------------------------------------- HELLER FINANCIAL, INC., a Delaware corporation, in its individual capacity as a Lender and as Agent for all Lenders By: /s/ William Vokevich -------------------------------------- Name: William Vokevich -------------------------------------- Title: A.V.P. -------------------------------------- FLEET CAPITAL CORPORATION By: /s/ Matthew R. Van Steenhuysr -------------------------------------- Name: Matthew R. Van Steenhuysr -------------------------------------- Title: Senior Vice President -------------------------------------- PNC BANK, NATIONAL ASSOCIATION By: /s/ John L. Nielck -------------------------------------- Name: John L. Nielck -------------------------------------- Title: Senior Vice President -------------------------------------- BANKBOSTON, N.A., (formerly known as The First National Bank of Boston) By: /s/ Cheryl J. Carangelo -------------------------------------- Name: Cheryl J. Carangelo -------------------------------------- Title: Vice President -------------------------------------- 10 FIRSTAR BANK, N.A. By: /s/ Derek S. Roudebush -------------------------------------- Name: Derek S. Roudebush -------------------------------------- Title: Vice President -------------------------------------- SANWA BUSINESS CREDIT CORPORATION By: /s/ Matthew R. Van Steenhuysr -------------------------------------- Name: Matthew R. Van Steenhuysr -------------------------------------- Title: Senior Vice President -------------------------------------- 11 EX-27 3 EXHIBIT 27
5 1,000 3-MOS 6-MOS JUL-30-1999 JUL-30-1999 OCT-31-1998 AUG-01-1998 JAN-29-1999 JAN-29-1999 898 898 0 0 21,351 21,351 (874) (874) 38,388 38,388 62,547 62,547 28,771 28,771 (12,188) (12,188) 116,655 116,655 34,822 34,822 0 0 0 0 0 0 78,391 78,391 (16,204) (16,204) 116,655 116,655 22,449 44,621 22,449 44,621 16,965 33,779 16,965 33,779 5,335 10,518 0 0 801 1,473 (1,863) (2,498) (373) (500) (1,490) (1,998) 0 (166) 0 0 0 0 (1,490) (2,164) (0.23) (0.33) (0.23) (0.33)
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