-----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, VSTeudMNEx6lZavAtS2imZEDDoROeZGghUcE8krTe/VwWczwbP06vuK5LHI2ZKQG DNO1uUBaKvq/BSscYWd7IA== 0000891618-98-004214.txt : 19980916 0000891618-98-004214.hdr.sgml : 19980916 ACCESSION NUMBER: 0000891618-98-004214 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19980801 FILED AS OF DATE: 19980915 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: GYMBOREE CORP CENTRAL INDEX KEY: 0000786110 STANDARD INDUSTRIAL CLASSIFICATION: APPAREL & OTHER FINISHED PRODS OF FABRICS & SIMILAR MATERIAL [2300] IRS NUMBER: 942615258 STATE OF INCORPORATION: DE FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-21250 FILM NUMBER: 98709802 BUSINESS ADDRESS: STREET 1: 700 AIRPORT BLVD STE 200 CITY: BURLINGAME STATE: CA ZIP: 94010 BUSINESS PHONE: 4155790600 MAIL ADDRESS: STREET 2: 700 AIRPORT BLVD #200 CITY: BURLINGAME STATE: CA ZIP: 94010 10-Q 1 FORM 10-Q 1 UNITED STATES 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 1, 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 000-21250 THE GYMBOREE CORPORATION (Exact name of registrant as specified in its charter) DELAWARE 94-2615258 (State or other jurisdiction of (IRS Employer Identification No.) incorporation or organization) 700 AIRPORT BOULEVARD, BURLINGAME, CALIFORNIA 94010-1912 (Address of principal executive offices) (Zip code) (650) 579-0600 Registrant's telephone number, including area code Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] Number of shares of common stock outstanding at August 29, 1998: 24,172,134 2 TABLE OF CONTENTS
Page Number ------ PART I FINANCIAL INFORMATION Item 1. Financial Statements Condensed Consolidated Statements of Operations.......... 3 Condensed Consolidated Balance Sheets.................... 4 Condensed Consolidated Statements of Cash Flows.......... 5 Notes to Condensed Consolidated Financial Statements..... 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations...................... 8 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........................................ 14 Item 6. Exhibits................................................. 14 SIGNATURES ............................................................... 15 EXHIBIT INDEX ............................................................ 16
2 3 PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS THE GYMBOREE CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (IN THOUSANDS, EXCEPT PER SHARE AND STORE DATA) (UNAUDITED)
13 WEEKS ENDED 26 WEEKS ENDED ------------------------- ------------------------- AUGUST 1, AUGUST 2, AUGUST 1, AUGUST 2, 1998 1997 1998 1997 --------- --------- --------- --------- Net Sales $ 99,789 $ 71,684 $ 202,895 $ 156,924 Cost of goods sold, including buying and occupancy expenses (66,471) (41,232) (128,082) (87,526) --------- --------- --------- --------- Gross Profit 33,318 30,452 74,813 69,398 Selling, general and administrative expenses (34,999) (24,011) (70,835) (50,316) Play program income 334 103 761 102 --------- --------- --------- --------- Operating income (loss) (1,347) 6,544 4,739 19,184 Currency transaction gain (loss) (124) 0 145 0 Interest income 147 722 376 1,732 --------- --------- --------- --------- Income (loss) before income taxes (1,324) 7,266 5,260 20,916 Income taxes 494 (2,688) (1,943) (7,739) --------- --------- --------- --------- Net income (loss) $ (830) $ 4,578 $ 3,317 $ 13,177 ========= ========= ========= ========= Net income (loss) per share: Basic $ (0.03) $ 0.19 $ 0.14 $ 0.53 Diluted (0.03) 0.19 0.14 0.53 Weighted average shares outstanding: Basic 24,164 24,302 24,136 24,642 Diluted 24,164 24,621 24,214 25,023 Number of stores at end of period 495 401 495 401
See notes to condensed consolidated financial statements. 3 4 THE GYMBOREE CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (IN THOUSANDS, EXCEPT SHARE DATA) (UNAUDITED)
Assets August 1, January 31, August 2, 1998 1998 1997 --------- ----------- --------- CURRENT ASSETS Cash and cash equivalents $ 19,247 $ 17,870 $ 4,776 Investments 0 18,642 46,011 Accounts receivable 8,583 5,184 4,988 Merchandise inventories 91,355 75,293 56,840 Prepaid expenses and other 5,966 4,467 1,599 --------- --------- --------- Total current assets 125,151 121,456 114,214 --------- --------- --------- PROPERTY AND EQUIPMENT Land and buildings 9,949 10,405 810 Leasehold improvements 70,218 58,082 56,515 Furniture, fixtures and equipment 80,014 66,819 57,119 --------- --------- --------- 160,181 135,306 114,444 Less accumulated depreciation and amortization (37,702) (30,934) (24,391) --------- --------- --------- 122,479 104,372 90,053 OTHER ASSETS 3,778 3,372 1,296 --------- --------- --------- Total Assets $ 251,408 $ 229,200 $ 205,563 ========= ========= ========= Liabilities and Stockholders' Equity CURRENT LIABILITIES Short-term borrowings $ 10,000 $ 0 $ 0 Trade accounts payable 34,712 26,046 18,604 Accrued liabilities 15,967 15,781 10,973 Income taxes payable 2,466 8,039 6,239 --------- --------- --------- Total current liabilities 63,145 49,866 35,816 --------- --------- --------- DEFERRED RENT AND OTHER 24,663 21,624 17,379 --------- --------- --------- STOCKHOLDERS' EQUITY: Common stock, including excess paid-in capital ($.001 par value: 100,000,000 shares authorized 24,171,770, 24,015,096 and 24,595,553 shares outstanding at August 1, 1998, January 31, 1998 and August 2, 1997, respectively) 25,058 23,109 39,928 Restricted stock deferred compensation 0 (337) (337) Unrealized change in value of investments 0 28 136 Cumulative translation adjustment 283 (32) (307) Retained earnings 138,259 134,942 112,948 --------- --------- --------- Total stockholders' equity 163,600 157,710 152,368 --------- --------- --------- Total Liabilities and Stockholders' Equity $ 251,408 $ 229,200 $ 205,563 ========= ========= =========
See notes to condensed consolidated financial statements. 4 5 THE GYMBOREE CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (IN THOUSANDS) (UNAUDITED)
26 WEEKS ENDED ----------------------- AUGUST 1, AUGUST 2, 1998 1997 --------- --------- CASH FLOWS FROM OPERATING ACTIVITIES: Net Income $ 3,317 $ 13,177 Adjustments to reconcile net income to net cash provided by / (used in) operating activities: Depreciation and amortization 8,755 5,925 Provision for deferred income tax (58) 584 Tax benefit from exercise of stock options 240 1,440 Loss on disposal of property and equipment 985 958 Other 317 109 Change in assets and liabilities: Accounts receivable (3,412) (651) Inventories (16,062) (7,862) Prepaid expenses and other assets (1,846) (496) Accounts payable 8,665 (3,346) Income tax payable (5,573) (391) Deferred liabilities 3,040 2,808 Accrued liabilities 195 (1,214) -------- -------- Net cash provided by/(used in) operating activities (1,437) 11,041 -------- -------- CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures (27,871) (26,349) Proceeds from sales of assets 24 0 Proceeds from sale of investments 18,614 36,263 -------- -------- Net cash provided by/(used in) investing activities (9,233) 9,914 -------- -------- CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issuance of stock 2,047 5,791 Repurchase of common stock 0 (29,997) Proceeds from short-term debt borrowings 10,000 0 -------- -------- Net cash provided by/(used in) financing activities 12,047 (24,206) -------- -------- NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 1,377 (3,251) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 17,870 8,027 -------- -------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 19,247 $ 4,776 ======== ========
See notes to condensed consolidated financial statements. 5 6 THE GYMBOREE CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. BASIS OF PRESENTATION The unaudited interim condensed consolidated financial statements of The Gymboree Corporation and its wholly-owned subsidiaries (the "Company") as of and for the periods ended August 1, 1998 and August 2, 1997 have been prepared 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 omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. It is recommended that these financial statements be read in conjunction with the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended January 31, 1998. The accompanying interim condensed consolidated financial statements reflect all adjustments which are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented and necessary to present fairly the results of operations, the financial position and cash flows for the periods presented. All such adjustments are of a normal and recurring nature. Certain prior year amounts have been reclassified to conform with the current year presentation. 2. MERCHANDISE INVENTORIES Merchandise inventories are recorded under the retail method of accounting and are stated at the lower of cost or market. 3. INCOME TAXES The Company's effective tax rate in the second quarter of fiscal 1998 was 37%, consistent with the same period last year. 4. COMPREHENSIVE INCOME During the first fiscal quarter of fiscal 1998, the Company adopted Statement of Financial Accounting Standards ("SFAS") No. 130, "Reporting Comprehensive Income". SFAS 130 requires the presentation, by major components and as a single total, the change in the Company's net assets during a period from non-owner sources. The adoption of this Statement resulted in a change in financial statement presentation, but did not have an impact on the Company's condensed consolidated balance sheets, statements of operations or cash flows. Comprehensive income and its components are as follows:
13 WEEKS ENDED 26 WEEKS ENDED ------------------------------- ------------------------------- AUGUST 1, 1998 AUGUST 2, 1997 AUGUST 1, 1998 AUGUST 2, 1997 -------------- -------------- -------------- -------------- Net income (loss) $ (830) $ 4,578 $ 3,317 $ 13,177 Unrealized gain (loss) on investments 0 123 (28) (83) Cumulative translation adjustments 326 (232) 315 (308) -------- -------- -------- -------- Total comprehensive income (loss) $ (504) $ 4,469 $ 3,604 $ 12,786 ======== ======== ======== ========
6 7 5. FINANCIAL INSTRUMENTS Beginning in April 1998, the Company entered into forward foreign exchange contracts to reduce exposure to foreign currency exchange risk. These contracts are designed as hedges of certain intercompany receivables denominated in foreign currencies. The Company will continue to engage in these financial instrument transactions in an attempt to reduce exposure to foreign currency fluctuations. 6. RECENTLY ISSUED ACCOUNTING STANDARDS In June 1997, the Financial Accounting Standards Board issued SFAS No. 131, "Disclosures about Segments of an Enterprise and Related Information". SFAS No. 131 establishes annual and interim reporting standards for operating segments of an enterprise and related disclosures about its products, services, geographic areas and major customers. SFAS No. 131 is effective for the Company's fiscal years ending after January 31, 1998. Adoption of this standard will not impact the Company's consolidated balance sheets, statements of income or cash flows, and any effect will be limited to the form and content of its disclosures. 7 8 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS The following table sets forth, for the periods indicated, (i) selected statement of operations data expressed as a percentage of net sales, (ii) the percentage change from the same period of the prior year in such selected income statement data and (iii) the number of stores open at the end of each such period:
AS A PERCENTAGE OF NET SALES ------------------------------------------------ PERCENTAGE CHANGE THIRTEEN TWENTY-SIX IN DOLLAR AMOUNTS WEEKS ENDED WEEKS ENDED FROM 1997 TO 1998 ---------------------- ---------------------- ----------------- AUGUST 1, AUGUST 2, AUGUST 1, AUGUST 2, 13 26 1998 1997 1998 1997 WEEKS WEEKS --------- --------- --------- --------- ----- ----- Net sales 100.0% 100.0% 100.0% 100.0% 39% 29% Cost of goods sold, including buying and occupancy expenses (66.6) (57.5) (63.1) (55.8) 61 46 ----- ----- ----- ----- Gross Profit 33.4 42.5 36.9 44.2 9 8 Selling, general and administrative expenses (35.1) (33.5) (34.9) (32.1) 46 41 Play program income 0.3 0.1 0.4 0.1 224 646 ----- ----- ----- ----- Operating income (loss) (1.4) 9.1 2.4 12.2 (121) (75) Currency transaction gain (loss) (0.1) 0.0 0.1 0.0 N/A N/A Interest income 0.1 1.0 0.2 1.1 (80) (78) ----- ----- ----- ----- Income (loss) before income taxes (1.4) 10.1 2.7 13.3 (118) (75) Income taxes 0.5 (3.7) (1.0) (4.9) 118 75 ----- ----- ----- ----- Net income (loss) (0.9)% 6.4% 1.7% 8.4% (118)% (75)% ===== ===== ===== ===== Number of stores at end of period 495 401 495 401
THIRTEEN WEEKS ENDED AUGUST 1, 1998 COMPARED TO THIRTEEN WEEKS ENDED AUGUST 2, 1997 NET SALES Net sales in the second quarter of fiscal 1998 increased 39% to $99.8 million compared to $71.7 million in the same period last year. Sales for the additional 60 stores opened in fiscal 1998 contributed $6.8 million of the increase in net sales. Stores opened prior to fiscal 1998, but not qualifying as comparable stores, in addition to the fifteen stores that were expanded in fiscal 1998, contributed $11.3 million of the increase in net sales. Comparable store net sales increased 16% in the second quarter and contributed $10.0 million of the increase in net sales. The increase in comparable store net sales was primarily attributable to promotional pricing. GROSS PROFIT Gross profit for the thirteen weeks ended August 1, 1998 increased 9% to $33.3 million from $30.5 million in the same period last year. As a percentage of net sales, gross profit was 33.4% in the second quarter of 1998 compared to 42.5% in the same period last year. Gross profit as a percentage of net sales was adversely affected by the high degree of promotional activity during the thirteen weeks ended August 1, 1998. As the Company continues to reduce inventories, gross profit as a percentage of net sales is likely to remain below fiscal 1997 levels. 8 9 RESULTS OF OPERATIONS (CONTINUED) SELLING, GENERAL AND ADMINISTRATIVE EXPENSES Selling, general and administrative expenses ("S, G&A"), which principally consist of non-occupancy store expenses, corporate overhead and distribution expenses, increased to 35.1% of net sales in the second quarter of fiscal 1998, compared to 33.5% of net sales in the same period last year. The increase in S, G&A was primarily attributable to the funding of the Company's international expansion into the United Kingdom, Ireland and Japan, start-up expenses for the development of the new retail concept, and increased distribution costs. The Company expects total S, G&A expenses, as a percentage of net sales, to remain above last year levels due to funding of the development of the Company's new retail concept, increased marketing efforts in the form of direct mail, print and television advertising and continued S, G&A expense funding of international expansion into Canada, the United Kingdom and Ireland. The Company has decided, however, to defer its expansion into Japan and Hong Kong. These higher expenses, combined with the expected lower gross profit as a percentage of net sales, are expected to result in full year net earnings growth at a level less than those achieved in recent years. FOREIGN EXCHANGE TRANSACTIONS Foreign exchange transaction losses were $0.1 million during the second quarter 1998. This loss resulted from currency fluctuations in intercompany transactions between the Company's U.S. operations and its foreign subsidiaries. No foreign exchange gains or losses were incurred during the second quarter of fiscal 1997. INTEREST INCOME Interest income decreased 80% to $147,000 during the second quarter of 1998 from $722,000 during the second quarter of the prior year. The decrease in interest income was due to the decrease in cash, cash equivalents, and investments during the second quarter of 1998 as compared to the same period in 1997 which was primarily the result of two stock repurchases completed during fiscal 1997 for a total of $50.0 million. This trend of declining interest income is expected to continue for the foreseeable future. INCOME TAX The Company's effective tax rate for the second quarter of fiscal 1998 was 37%, consistent with the same period last year. 9 10 RESULTS OF OPERATIONS (CONTINUED) TWENTY-SIX WEEKS ENDED AUGUST 1, 1998 COMPARED TO TWENTY-SIX WEEKS ENDED AUGUST 2, 1997 NET SALES Net sales for the twenty-six weeks ended August 1, 1998 increased 29% to $202.9 million compared to $156.9 million in the same period last year. Sales for the additional 60 stores opened in fiscal 1998 contributed $9.5 million of the increase in net sales. Stores opened prior to fiscal 1998, but not qualifying as comparable stores, in addition to the fifteen stores that were expanded in fiscal 1998, contributed $25.3 million of the increase in net sales. Comparable store net sales increased 8% in the twenty-six weeks ended August 1, 1998. The increase in comparable store net sales was primarily attributable to promotional pricing and contributed $11.2 million of the increase in net sales. GROSS PROFIT Gross profit for the twenty-six weeks ended August 1, 1998 increased 8% to $74.8 million from $69.4 million in the same period last year. As a percentage of net sales, gross profit was 36.9% in the first six months of fiscal 1998 compared to 44.2% in the same period last year. The decrease in gross profit as a percentage of net sales was attributable to a significant increase in the promotional pricing of merchandise and increases in occupancy expenses attributable to larger domestic stores and higher rents paid in Europe during the first half of fiscal 1998 as compared to the same period last year. SELLING, GENERAL AND ADMINISTRATIVE EXPENSES S, G&A increased to 34.9% of net sales in the twenty-six weeks ended August 1, 1998 compared to 32.1% of net sales in the same period last year. The increase in S, G&A was primarily attributable to the funding of the Company's international expansion into Canada, the United Kingdom, Ireland, Japan and Hong Kong, start-up expenses for the development of the new retail concept, and increases in distribution costs due to the opening of a new distribution center in Dixon, California and the closure of the existing facility located in Hayward, California. Other increases in S, G&A included marketing, expenses associated with direct mail and other promotional campaigns. FOREIGN EXCHANGE TRANSACTIONS Foreign exchange transaction gains were $0.1 million for the twenty-six weeks ended August 1, 1998. This gain resulted from currency fluctuations in intercompany transactions between the Company's U.S. operations and its foreign subsidiaries. No foreign exchange gains or losses were incurred during the twenty-six weeks ended August 2, 1997. INTEREST INCOME Interest income decreased 78% to $376,000 from $1.7 million in the prior year. The decrease in interest income was due to the decrease in cash, cash equivalents, and investments during the first half of 1998 as compared to the same period in 1997 which was primarily the result of two stock repurchases completed during fiscal 1997 for a total of $50.0 million. INCOME TAX The Company's effective tax rate in the first six months of fiscal 1998 was 37%, consistent with the same period last year. 10 11 FINANCIAL CONDITION LIQUIDITY AND CAPITAL RESOURCES Cash used in operating activities was $1.4 million compared to cash provided by operating activities of $11.0 in the prior year. The use of cash in operating activities was primarily due to lower net income and increased working capital. Cash used in investing activities of $9.2 million resulted from $27.9 million in capital expenditures related primarily to new store openings, as well as relocations and/or expansion of certain existing stores offset by $18.6 million generated from sales of marketable securities. Cash provided by financing activities of $12.0 million was primarily due to $10.0 million of short-term borrowings. The combined balances of cash, cash equivalents and investments were $19.2 million at August 1, 1998, a decrease of $17.2 million from January 31, 1998. Working capital as of August 1, 1998 was $62.0 million compared to $71.6 million at the end of fiscal 1997. The decrease in working capital was primarily due to increases in current liabilities. The Company estimates that capital expenditures during fiscal 1998 will be between $50 million and $55 million, and will be principally used to fund the opening of approximately 100 to 130 new stores and the remodeling or expansion of approximately 20 to 30 existing stores. At the end of the second quarter of fiscal 1998, the Company had a line of credit that allowed up to $70 million in unsecured letters of credit (of which $11 million can be used for standby letters of credit) and up to $30 million in borrowings through the end of November, up to $15 million in borrowings during the month of December, and no borrowings thereafter until the expiration of the agreement on May 31, 1999. As the borrowing capacity is reduced, the amount available for unsecured letters of credit is increased. The interest rate for any borrowings is the Bank of America NT&SA's reference rate or the LIBOR rate plus 0.75 percentage points. The Company uses these lines primarily to support letters of credit which fund its foreign sourcing of merchandise inventories. As of August 1, 1998, $20.0 million was available in borrowings. In addition, under this same facility, the Company may engage in up to $50 million in foreign exchange contracts, of which $28 million was available at August 1, 1998. The Company continues to explore a number of financing alternatives, however, the Company anticipates that cash generated from operations, together with its existing cash resources and funds that are expected to be available from its current and planned future credit facilities, will be sufficient to satisfy its cash needs through at least fiscal 1998. 11 12 OTHER FACTORS THAT MAY AFFECT FUTURE PERFORMANCE This Form 10-Q contains certain forward-looking statements reflecting the Company's current expectations, including statements regarding anticipated store openings, and future comparable store net sales, inventory, expense, earnings and liquidity levels. There can be no assurance that actual results will not vary materially from results projected in such forward-looking statements as a result of a number of factors, including competitive market conditions, levels of discretionary consumer spending, general economic conditions, the degree of promotional pricing activity by the Company, inventory levels, and the ability of the Company to successfully identify and respond to emerging children's fashion trends, to effectively monitor and control costs, and to effectively manage anticipated international and domestic growth. Other factors that may cause actual results to differ materially include those set forth in the reports that the Company files from time to time with the Securities and Exchange Commission. Other factors that may affect future performance include the following: COMPETITION The children's apparel segment of the specialty retail business is becoming more competitive. The Company competes on a national level with GapKids (a part of The Gap, Inc.) and certain leading department stores as well as certain discount retail chains such as Kids `R' Us (a division of Toys `R' Us, Inc.). Gymboree also competes with a wide variety of local and regional specialty stores and with certain other retail chains. The continued success of the Company is contingent upon its ability to compete. INVENTORY LEVELS The Company is taking steps to reduce inventories and to pursue new merchandising and marketing initiatives, including a higher level of promotional activity. This is likely to cause gross profit as a percentage of net sales to continue to remain below fiscal 1997 levels for the balance of fiscal 1998. INTERNATIONAL EXPANSION During the second quarter of fiscal 1998, the Company opened one additional store in Canada, bringing the number of stores in Canada to thirteen and also opened two stores in the United Kingdom, bringing the total number of stores in the United Kingdom and Ireland to thirteen. For the remainder of fiscal 1998, the Company plans to further its international expansion in Canada, the United Kingdom and Ireland. The success of this planned expansion will depend upon a number of factors, including the availability of suitable store locations, the ability to provide an adequate supply of inventory and the ability to hire and train qualified employees, of which there can be no assurance. The Company has decided, however, to defer its expansion into Japan and Hong Kong. NEW RETAIL CONCEPT During the first quarter of 1998, the Company announced its plans to launch a new retail concept. It is intended to broaden the Company's market by introducing clothing stores targeted for children between the ages of 6 and 12 years old. This retail concept will offer apparel, footwear and accessories to boys and girls within those ages. This new concept represents a significant shift in concept, design and target market demographics from the Company's traditional products. These products may have short life cycles, thereby requiring more frequent product introductions than the Company's traditional product line. Further, these products and the introduction of more products could dilute the Company's image as a leading supplier of children's apparel in the 0-7 age range and lead to a reduced demand for its existing products. 12 13 YEAR 2000 The Company has developed a plan to address Year 2000 issues. The plan covers systems and vendor issues that will be encountered before, during and after December 31, 1999. The systems portion of the plan includes a detailed survey of the current systems and associated upgrades, as well as options related to the replacement or reprogramming of current systems as would be required to bring the Company's systems into compliance prior to the Year 2000. The plan, which was developed to address vendor issues, covers product and systems issues, and includes product certifications, systems integration, systems testing and communication strategies. There can be no guarantee that the systems of other companies on which the Company's systems rely will be converted timely and would not have an adverse effect on the Company's systems. The Plan however, offers a best effort approach to ascertain the readiness of the system of key companies through the use of surveys and testing methodologies. Customers are not likely to be affected by Year 2000 issues. The Company will utilize both internal and external resources to test, remediate, and/or replace the software. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The Company enters into forward foreign exchange contracts to hedge certain intercompany receivables denominated in foreign currencies (principally Irish Punts, British Pounds Sterling, and Canadian Dollars). The term of the forward exchange contracts is generally less than 90 days. The purpose of the Company's foreign currency hedging activities is to protect the Company from the risk that the eventual dollar net cash inflow resulting from the repayment of certain intercompany receivables from Gymboree's foreign subsidiaries will be adversely affected by changes in exchange rates. However, the Company may not be able to realize the benefits from these hedging activities due to the inherent risks associated with fluctuation in foreign currency exchange rates. The table below summarizes by major currency the contractual amounts of Gymboree's forward exchange contracts in U.S. dollars. Foreign currency amounts are translated at rates current at the reported date. The amounts represent the U.S. dollar equivalent of commitments to buy or sell foreign currencies.
Balance at August 1, 1998 ($ in millions) --------------- Irish Punts 0.4 British Pounds Sterling 13.0 Canadian Dollars 9.0 ----- Total $22.4 =====
There were no open currency contracts at the end of the second quarter last year. 13 14 PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS Not applicable. ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS Not applicable. ITEM 3. DEFAULTS UPON SENIOR SECURITIES Not applicable. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS Not applicable ITEM 5. OTHER INFORMATION ITEM 6. EXHIBITS (a) Exhibits 10.24 Amendment No. 7 to the Amended and Restated Line of Credit Agreement with Bank of America, dated June 26, 1998. 10.25 Amendment No. 8 to the Amended and Restated Line of Credit Agreement with Bank of America, dated August 14, 1998. 11 Computation of Net Income per Share 27 Financial Data Schedule
14 15 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. THE GYMBOREE CORPORATION (Registrant) September 15, 1998 By: /s/ GARY WHITE - -------------------- -------------------------------------------- Date Gary White President and Chief Executive Officer (Principal executive officer of the registrant) September 15, 1998 By: /s/ ESTHER L. KOCH - -------------------- -------------------------------------------- Date Esther L. Koch Vice President, Finance and Corporate Controller (Principal financial and accounting officer of the registrant) 15 16 EXHIBIT INDEX
Exhibit Number Description Page No. 10.24 Amendment No. 7 to the Amended and Restated Line of Credit Agreement with Bank of America, dated June 26, 1998 10.25 Amendment No. 8 to the Amended and Restated Line of Credit Agreement with Bank of America, dated August 14, 1998 11 Computation of Net Income per Share 27 Financial Data Schedule
16 EX-10.24 2 AMENDMENT NO. 7 TO AMENDED AND RESTATED LINE 1 EXHIBIT 10.24 AMENDMENT NO. 7 TO AMENDED AND RESTATED LINE OF CREDIT AGREEMENT This Amendment No. 7 (the "Amendment") dated as of June 26, 1998, is among Bank of America National Trust and Savings Association (the "Bank"), The Gymboree Corporation ("TGC"), Gymboree Manufacturing, Inc. ("GMI"), Gymboree, Inc. ("GI"), Gymboree Industries Limited ("GIL"), Gymboree U.K., Limited ("GUKL"), Gymboree U.K. Leasing Limited ("GUKLL"), Gymboree Ireland Leasing Limited ("GILL"), Gymboree of Ireland, Limited ("GOIL"), Gymboree Industries Holdings Limited ("GIHL"), Gymboree Hong Kong Limited ("GHKL"), and Gymboree Japan K.K. ("GJKK"). (TGC, GMI, GI, GIL, GUKL, GUKLL, GILL, GOIL, GIHL, GHKL, and GJKK are hereinafter referred to collectively as the "Borrowers" and individually as a "Borrower"). RECITALS A. The Bank, TGC, and GMI entered into a certain Amended and Restated Line of Credit Agreement dated as of October 27, 1995, as previously amended (the "Agreement"). Pursuant to Amendment No. 1 to Amended and Restated Line of Credit Agreement dated as of July 17, 1997, GI and GIL were added as Borrowers. Pursuant to Amendment No. 2 to Amended and Restated Line of Credit Agreement dated as of August 11, 1997 ("Amendment No. 2"), GUKL was added as a Borrower for the limited purpose of making available to GUKL the new foreign exchange facility added to the Agreement by Amendment No. 2. Pursuant to Amendment No. 3 to Amended and Restated Line of Credit Agreement and Waiver dated as of January 9, 1998 ("Amendment No. 3 and Waiver"), GUKLL was added as a Borrower for the limited purpose of making standby letters of credit available to GUKLL. Standby letters of credit were also made available to GUKL pursuant to Amendment No. 3 and Waiver. Pursuant to Amendment No. 4 to Amended and Restated Line of Credit Agreement dated as of January 30, 1998, TGC's liquidity covenant was amended for and only for TGC's fiscal year ending as of January 31, 1998. Pursuant to Amendment No. 5 to Amended and Restated Line of Credit Agreement dated as of March 9, 1998 ("Amendment No. 5"), cash advances for use by TGC were made available under the Agreement, TGC's tangible net worth covenant was amended, TGC's liquidity covenant was further amended, and a requirement for certain additional guaranties was added to the Agreement. 1 2 Pursuant to Amendment No. 6 to Amended and Restated Line of Credit Agreement dated as of March 9, 1998 ("Amendment No. 6"), GILL, GOIL, GIHL, GHKL, and GJKK were added as Borrowers for the limited purpose of making available to GILL, GOIL, GIHL, GHKL, and GJKK the foreign exchange facility added to the Agreement by Amendment No. 2. The foreign exchange facility was also made available to GUKLL pursuant to Amendment No. 6. In conjunction with making the foreign exchange facility available to these Borrowers, the foreign exchange contract limit, the settlement limit, and the Revaluation Limit were increased accordingly pursuant to Amendment No. 6. B. The Borrowers have requested the Bank to amend the Agreement by adjusting certain within-line limitations applicable to letters of credit issued under the Agreement in order to make those limitations more flexible and less restrictive. The Bank is willing to grant that request subject to the additional terms and conditions set forth in this Amendment. C. Finally, the Bank has waived on a one-time basis a restriction applicable to standby letters of credit in order to renew a certain standby letter of credit for the account of TGC, and the Bank has decided to extend the date by which it was to receive certain guaranties and related ancillary documents from GOIL, GILL, GHKL, and GJKK under Amendment No. 5. By its execution of this Amendment, the Bank wishes to confirm this one-time waiver and its decision regarding those certain guaranties. AGREEMENT 1. Definitions. Capitalized terms used but not defined in this Amendment shall have the meaning given to them in the Agreement. 2. Amendment. The Agreement is hereby amended as follows: 2.1 Paragraph 1.1 is amended to read in its entirety as follows: 1.1 Line of Credit Amount. (a) During the availability period described below, the Bank will provide a line of credit to the Borrowers. The amount of the line of credit (the "Commitment") is equal to One Hundred Million Dollars ($100,000,000). (b) This is a revolving line of credit providing for cash advances and letters of credit. During the availability period, the Borrowers may repay principal amounts of cash advances and reborrow them. The aggregate principal balance of cash advances 2 3 outstanding at any one time may not exceed Fifteen Million Dollars ($15,000,000) (the "Advance Limit"). (c) The Borrowers agree not to permit the outstanding amounts of any letters of credit, including amounts drawn on letters of credit and not yet reimbursed, plus the Advance Limit to exceed the Commitment. It is provided, however, that the outstanding amount of any standby letters of credit, including amounts drawn on such letters of credit and not yet reimbursed, may not exceed Eleven Million Dollars ($11,000,000). (In calculating the amounts described above, the Bank will use Equivalent Amounts for letters of credit denominated in Canadian Dollars, Irish Punts, or English Pounds Sterling. "Equivalent Amount" means the equivalent in U.S. Dollars of another currency calculated at the spot rate for the purchase of such other currency with U.S. Dollars quoted by the Bank's Foreign Exchange Trading Center in San Francisco, California, at approximately 8:00 a.m. San Francisco time two (2) banking days (as determined by Bank with respect to such currency) prior to the relevant date. 2.2 Paragraph 6.1 is amended to read in its entirety as follows: 6.1 Use of Proceeds. To request (a) cash advances only for use by TGC in order to fund TGC's short-term working capital needs and (b) commercial or standby letters of credit only for use in the usual course of business. 3. Representations and Warranties. When the Borrowers sign this Amendment, the Borrowers represent and warrant to the Bank that: (a) there is no event which is, or with notice or lapse of time or both would be, a default under the Agreement, except those events, if any, that have been disclosed in writing to the Bank or waived in writing by the Bank, (b) the representations and warranties in the Agreement are true as of the date of this Amendment as if made on the date of this Amendment, (c) this Amendment is within each Borrower's powers, has been duly authorized, and does not conflict with any Borrower's organizational papers, (d) this Amendment does not conflict with any law, agreement, or obligation by which any Borrower is bound, and (e) the Borrowers are entering into this Amendment on the basis of their own investigation and for their own reasons, without reliance upon the Bank or any other entity or individual. 4. TGC's Standby Letter of Credit. By its execution of this Amendment, the Bank confirms that on June 15, 1998, it 3 4 waived Paragraph 1.3(ii) of the Agreement for the sole and express purpose of complying with the Borrowers' request to extend the maturity date of standby letter of credit number 3001497 to July 31, 1999, instead of the maximum maturity date of May 31, 1999 permitted under Paragraph 1.3(ii). 5. GOIL's, GILL's, GHKL's, and GJKK's Guaranties. By its execution of this Amendment, the Bank confirms its unilateral decision to extend to August 15, 1998, the deadline for its receipt of the guaranties to be signed by GOIL, GILL, GHKL, and GJKK, respectively, and the related ancillary documents required under Section 4 of Amendment No. 5. 6. Effect of Amendment. Except as provided in this Amendment, all of the terms and conditions of the Agreement shall remain in full force and effect. This Amendment is executed as of the date stated at the beginning of this Amendment. Bank of America National Trust and Savings Association By -------------------------------------- Title ------------------------------------ By -------------------------------------- Title ------------------------------------ The Gymboree Corporation By -------------------------------------- Title ------------------------------------ By -------------------------------------- Title ------------------------------------ 4 5 Gymboree Manufacturing, Inc. By -------------------------------------- Title ------------------------------------ By -------------------------------------- Title ------------------------------------ Gymboree, Inc. By -------------------------------------- Title ------------------------------------ By -------------------------------------- Title ------------------------------------ Gymboree Industries Limited By -------------------------------------- Title ------------------------------------ By -------------------------------------- Title ------------------------------------ Gymboree U.K., Limited By -------------------------------------- Title ------------------------------------ By -------------------------------------- Title ------------------------------------ 5 6 Gymboree U.K. Leasing Limited By -------------------------------------- Title ------------------------------------ By -------------------------------------- Title ------------------------------------ Gymboree Ireland Leasing Limited By -------------------------------------- Title ------------------------------------ By -------------------------------------- Title ------------------------------------ Gymboree of Ireland, Limited By -------------------------------------- Title ------------------------------------ By -------------------------------------- Title ------------------------------------ Gymboree Industries Holdings Limited By -------------------------------------- Title ------------------------------------ By -------------------------------------- Title ------------------------------------ 6 7 Gymboree Hong Kong Limited By -------------------------------------- Title ------------------------------------ By -------------------------------------- Title ------------------------------------ Gymboree Japan K.K. By -------------------------------------- Title ------------------------------------ By -------------------------------------- Title ------------------------------------ 7 EX-10.25 3 AMENDMENT NO. 8 TO AMENDED AND RESTATED LINE 1 EXHIBIT 10.25 AMENDMENT NO. 8 TO AMENDED AND RESTATED LINE OF CREDIT AGREEMENT This Amendment No. 8 (the "Amendment") dated as of August 14, 1998, is among Bank of America National Trust and Savings Association (the "Bank"), The Gymboree Corporation ("TGC"), Gymboree Manufacturing, Inc. ("GMI"), Gymboree, Inc. ("GI"), Gymboree Industries Limited ("GIL"), Gymboree U.K., Limited ("GUKL"), Gymboree U.K. Leasing Limited ("GUKLL"), Gymboree Ireland Leasing Limited ("GILL"), Gymboree of Ireland, Limited ("GOIL"), Gymboree Industries Holdings Limited ("GIHL"), Gymboree Hong Kong Limited ("GHKL"), and Gymboree Japan K.K. ("GJKK"). (TGC, GMI, GI, GIL, GUKL, GUKLL, GILL, GOIL, GIHL, GHKL, and GJKK are hereinafter referred to collectively as the "Borrowers" and individually as a "Borrower"). RECITALS A. The Bank, TGC, and GMI entered into a certain Amended and Restated Line of Credit Agreement dated as of October 27, 1995, as previously amended (the "Agreement"). Pursuant to Amendment No. 1 to Amended and Restated Line of Credit Agreement dated as of July 17, 1997, GI and GIL were added as Borrowers. Pursuant to Amendment No. 2 to Amended and Restated Line of Credit Agreement dated as of August 11, 1997 ("Amendment No. 2"), GUKL was added as a Borrower for the limited purpose of making available to GUKL the new foreign exchange facility added to the Agreement by Amendment No. 2. Pursuant to Amendment No. 3 to Amended and Restated Line of Credit Agreement and Waiver dated as of January 9, 1998 ("Amendment No. 3 and Waiver"), GUKLL was added as a Borrower for the limited purpose of making standby letters of credit available to GUKLL. Standby letters of credit were also made available to GUKL pursuant to Amendment No. 3 and Waiver. Pursuant to Amendment No. 4 to Amended and Restated Line of Credit Agreement dated as of January 30, 1998, TGC's liquidity covenant was amended for and only for TGC's fiscal year ending as of January 31, 1998. Pursuant to Amendment No. 5 to Amended and Restated Line of Credit Agreement dated as of March 9, 1998 ("Amendment No. 5"), cash advances for use by TGC were made available under the Agreement, TGC's tangible net worth covenant was amended, TGC's 1 2 liquidity covenant was further amended, and a requirement for certain additional guaranties was added to the Agreement. Pursuant to Amendment No. 6 to Amended and Restated Line of Credit Agreement dated as of March 9, 1998 ("Amendment No. 6"), GILL, GOIL, GIHL, GHKL, and GJKK were added as Borrowers for the limited purpose of making available to GILL, GOIL, GIHL, GHKL, and GJKK the foreign exchange facility added to the Agreement by Amendment No. 2. The foreign exchange facility was also made available to GUKLL pursuant to Amendment No. 6. In conjunction with making the foreign exchange facility available to these Borrowers, the foreign exchange contract limit, the settlement limit, and the Revaluation Limit were increased accordingly pursuant to Amendment No. 6. Pursuant to Amendment No. 7 to Amended and Restated Line of Credit Agreement dated June 26, 1998 ("Amendment No. 7"), certain within-line limitations applicable to letters of credit were adjusted in order to make those limitations more flexible and less restrictive. B. The Borrowers have requested the Bank to amend the Agreement in order to increase the Advance Limit during a specific period of time and to delete TGC's liquidity covenant. The Bank is willing to grant those requests subject to the additional terms and conditions set forth in this Amendment. C. Finally, the Bank has decided to further extend the date by which it was to receive certain guaranties and related ancillary documents from GOIL, GILL, GHKL, and GJKK under Amendment No. 5, as previously extended under Amendment No. 7. By its execution of this Amendment, the Bank wishes to confirm its decision regarding those certain guaranties. AGREEMENT 1. Definitions. Capitalized terms used but not defined in this Amendment shall have the meaning given to them in the Agreement. 2. Amendment. The Agreement is hereby amended as follows: 2.1 Paragraph 1.1(b) is amended to read in its entirety as follows: (b) This is a revolving line of credit providing for cash advances and letters of credit. During the period that cash advances are available (which period is shorter than this line of credit's overall availability period described below), the Borrowers may repay principal amounts of cash advances and reborrow 2 3 them. The aggregate principal balance of cash advances permitted to be outstanding at any one time (the "Advance Limit") is Thirty Million Dollars ($30,000,000) from July 28, 1998, through November 29, 1998, Fifteen Million Dollars ($15,000,000) from November 30, 1998, through December 30, 1998, and Zero Dollars ($0.00) from December 31, 1998, through the Expiration Date. 2.2 Paragraph 1.6(a) is amended to read in its entirety as follows: (a) Unless the Borrowers elect an optional interest rate as described below, the interest rate is the Bank's Reference Rate. 2.3 In the last sentence of Paragraph 1.8(a), the spread "plus 0.75 percentage point" is substituted for the spread "plus 0.5 percentage point." 2.4 Article 2 is amended to read in its entirety as follows: 2. PERIODIC FEE. The Borrowers agree to pay a fee equal to 0.0625% per annum of the Advance Limit, payable in arrears. It is provided, however, that during any period when the Advance Limit exceeds Fifteen Million Dollars ($15,000,000), the Borrowers agree to pay a fee, payable in arrears, equal to 0.0625% per annum of that portion of the Advance Limit up to and including Fifteen Million Dollars ($15,000,000) and 0.15% per annum of that portion of the Advance Limit that exceeds Fifteen Million Dollars ($15,000,000). This fee was paid on July 31, 1998, and is next due on October 31, 1998, and thereafter on December 31, 1998. 2.5 In Paragraph 7.2, the first sentence is amended to read in its entirety as follows: To maintain on a consolidated basis tangible net worth equal to at least the amount indicated as of the last day of each fiscal period specified below:
Period Amount ------ ------ 2nd fiscal quarter of $157,000,000 1998 fiscal year 3rd fiscal quarter of $160,000,000 1998 fiscal year
3 4 1998 fiscal year $166,000,000
2.6 A new sentence is added at the end of Paragraph 7.2, and it reads in its entirety as follows: In calculating TGC's tangible net worth in accordance with the foregoing definition, the gross book value of TGC's assets shall include the aggregate gross book value of TGC's lease rights up to a maximum aggregate value of Two Million Five Hundred Thousand Dollars ($2,500,000) for all such lease rights. 2.7 Paragraph 7.4 is deleted. 2.8 A new Paragraph 7.5 is added to the Agreement, and it reads in its entirety as follows: 7.5 Dividends. Not to declare or pay any dividends on any of its shares except dividends payable in capital stock of TGC, and not to purchase, redeem, or otherwise acquire for value any of its shares, or create any sinking fund in relation thereto. It is provided, however, that TGC may at any time and in any amount purchase, redeem, or otherwise acquire its shares for value from its employees. It is further provided that TGC may spend up to Three Million Dollars ($3,000,000) in each fiscal year in order to purchase, redeem, or otherwise acquire its shares for value from shareholders who are not its employees. 3. Representations and Warranties. When the Borrowers sign this Amendment, the Borrowers represent and warrant to the Bank that: (a) there is no event which is, or with notice or lapse of time or both would be, a default under the Agreement, except those events, if any, that have been disclosed in writing to the Bank or waived in writing by the Bank, (b) the representations and warranties in the Agreement are true as of the date of this Amendment as if made on the date of this Amendment, (c) this Amendment is within each Borrower's powers, has been duly authorized, and does not conflict with any Borrower's organizational papers, (d) this Amendment does not conflict with any law, agreement, or obligation by which any Borrower is bound, and (e) the Borrowers are entering into this Amendment on the basis of their own investigation and for their own reasons, without reliance upon the Bank or any other entity or individual. 4. GOIL's, GILL's, GHKL's, and GJKK's Guaranties. By its execution of this Amendment, the Bank confirms its unilateral decision to further extend to October 31, 1998, the deadline for its receipt of the guaranties to be signed by GOIL, GILL, GHKL, 4 5 and GJKK, respectively, and the related ancillary documents required under Section 4 of Amendment No. 5. 5. Effect of Amendment. Except as provided in this Amendment, all of the terms and conditions of the Agreement shall remain in full force and effect. This Amendment is executed as of the date stated at the beginning of this Amendment. Bank of America National Trust and Savings Association By -------------------------------------- Title ----------------------------------- By -------------------------------------- Title ----------------------------------- The Gymboree Corporation By -------------------------------------- Title ----------------------------------- By -------------------------------------- Title ----------------------------------- Gymboree Manufacturing, Inc. By -------------------------------------- Title ----------------------------------- By -------------------------------------- Title ----------------------------------- 5 6 Gymboree, Inc. By -------------------------------------- Title ----------------------------------- By -------------------------------------- Title ----------------------------------- Gymboree Industries Limited By -------------------------------------- Title ----------------------------------- By -------------------------------------- Title ----------------------------------- Gymboree U.K., Limited By -------------------------------------- Title ----------------------------------- By -------------------------------------- Title ----------------------------------- Gymboree U.K. Leasing Limited By -------------------------------------- Title ----------------------------------- By -------------------------------------- Title ----------------------------------- 6 7 Gymboree Ireland Leasing Limited By -------------------------------------- Title ----------------------------------- By -------------------------------------- Title ----------------------------------- Gymboree of Ireland, Limited By -------------------------------------- Title ----------------------------------- By -------------------------------------- Title ----------------------------------- Gymboree Industries Holdings Limited By -------------------------------------- Title ----------------------------------- By -------------------------------------- Title ----------------------------------- Gymboree Hong Kong Limited By -------------------------------------- Title ----------------------------------- By -------------------------------------- Title ----------------------------------- 7 8 Gymboree Japan K.K. By -------------------------------------- Title ----------------------------------- By -------------------------------------- Title ----------------------------------- 8 EX-11 4 THE GYMBOREE CORPORATION COMPUTATION OF NET INCOME 1 EXHIBIT 11 THE GYMBOREE CORPORATION COMPUTATION OF NET INCOME (LOSS) PER SHARE (IN THOUSANDS, EXCEPT PER SHARE DATA)
13 Weeks Ended 26 Weeks Ended ------------------------ ----------------------- August 1, August 2, August 1, August 2, 1998 1997 1998 1997 --------- --------- --------- --------- NET INCOME (LOSS) $ (830) $ 4,578 $ 3,317 $ 13,177 ======== ======== ======== ======== Weighted average number of shares outstanding during the period: Common Stock 24,164 24,302 24,136 24,642 Add incremental shares from assumed exercise of stock options 0 319 78 381 -------- -------- -------- -------- Weighted average common and common equivalent shares outstanding 24,164 24,621 24,214 25,023 ======== ======== ======== ======== BASIC NET INCOME (LOSS) PER SHARE $ (0.03) $ 0.19 $ 0.14 $ 0.53 ======== ======== ======== ======== DILUTED NET INCOME (LOSS) PER SHARE $ (0.03) $ 0.19 $ 0.14 $ 0.53 ======== ======== ======== ========
EX-27 5 FINANCIAL DATA SCHEDULE
5 1,000 3-MOS JAN-20-1999 FEB-01-1998 AUG-01-1998 19,247 0 8,583 0 91,355 125,151 160,181 (27,902) 251,408 63,145 0 0 0 25,058 128,542 251,408 99,789 99,789 66,471 101,470 0 0 0 (1,324) 494 (830) 0 0 0 (830) (.03) (.03)
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