-----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, QzUfrEFWxWTzMIN3AE/VClH5YiBabdLBYi3T0qJDty2hecSL6YQZcYV65cLDEqbj BCg3HYWXpMDzYtwzLfu6mg== 0000853102-96-000025.txt : 19961115 0000853102-96-000025.hdr.sgml : 19961115 ACCESSION NUMBER: 0000853102-96-000025 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960930 FILED AS OF DATE: 19961113 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: DAY RUNNER INC CENTRAL INDEX KEY: 0000853102 STANDARD INDUSTRIAL CLASSIFICATION: BLANKBOOKS, LOOSELEAF BINDERS & BOOKBINDING & RELATED WORK [2780] IRS NUMBER: 953624280 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-19835 FILM NUMBER: 96661841 BUSINESS ADDRESS: STREET 1: 15295 ALTON PARKWAY CITY: IRVINE STATE: CA ZIP: 92718 BUSINESS PHONE: 714/680-3500 MAIL ADDRESS: STREET 1: 15295 ALTON PARKWAY CITY: IRVINE STATE: CA ZIP: 92718 10-Q 1 FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q (Mark One) |X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1996 OR |_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to . Commission file number 0-19835 DAY RUNNER, INC. (Exact name of registrant as specified in its charter) Delaware 95-3624280 (State or other jurisdiction (I.R.S. Employer of incorporation or organization) Identification Number) 15295 Alton Parkway Irvine, California 92618 (Address and zip code of principal executive offices) (714) 680-3500 (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|_| Indicate the number of shares outstanding of each of the issuer's classes of Common Stock, as of the latest practicable date: Class Number of Shares Outstanding at November 8, 1996 - --------------------- ----------------------------------------------- Common Stock, 6,329,771 $0.001 par value
DAY RUNNER, INC. INDEX Page Reference COVER PAGE....................................................................................... 1 INDEX ........................................................................................ 2 PART I -- FINANCIAL INFORMATION Item 1. Consolidated Financial Statements Consolidated Balance Sheets September 30, 1996 and June 30, 1996...................................... 3 Consolidated Statements of Income Three Months Ended September 30, 1996 and 1995............................ 4 Consolidated Statements of Cash Flows Three Months Ended September 30, 1996 and 1995............................ 5 Notes to Consolidated Financial Statements.................................. 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations............................... 9 PART II -- OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K............................................ 13 SIGNATURES....................................................................................... 14
PART I -- FINANCIAL INFORMATION Item 1. Consolidated Financial Statements.
DAY RUNNER, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Dollars in thousands) ASSETS September 30, June 30, 1996 1996 ------------- --------- (unaudited) (audited) Current assets: Cash and cash equivalents....................................................... $ 27,462 $ 19,765 Accounts receivable (less allowances for doubtful accounts and sales returns and other allowances of $7,632 and $7,374 at September 30, 1996 and June 30, 1996, respectively)............................................... 22,517 21,441 Inventories..................................................................... 17,797 20,040 Prepaid expenses and other current assets....................................... 1,519 1,710 Income taxes receivable......................................................... 1,930 Deferred income taxes........................................................... 5,200 5,200 --------- --------- Total current assets....................................................... 74,495 70,086 --------- --------- Property and equipment -- At cost: Machinery and equipment......................................................... 7,891 6,942 Data processing equipment and software.......................................... 4,966 4,707 Leasehold improvements.......................................................... 1,528 1,514 Vehicles........................................................................ 202 202 --------- --------- Total...................................................................... 14,587 13,365 Less accumulated depreciation and amortization.................................. 6,550 5,864 --------- --------- Property and equipment -- net................................................... 8,037 7,501 --------- --------- Other assets......................................................................... 340 344 --------- --------- Total assets......................................................................... $ 82,872 $ 77,931 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable................................................................ $ 7,411 $ 8,063 Accrued expenses................................................................ 11,236 10,370 Income taxes payable............................................................ 654 --------- --------- Total current liabilities.................................................. 19,301 18,433 --------- --------- Stockholders' equity: Preferred stock (1,000,000 shares authorized, $0.001 par value; no shares issued or outstanding).............................................................. Common stock (14,000,000 shares authorized, $0.001 par value; 6,329,771 and 6,304,771 issued and outstanding at September 30, 1996 and June 30, 1996, respectively).............................................. 6 6 Additional paid-in capital...................................................... 23,088 22,869 Retained earnings............................................................... 40,468 36,620 Cumulative translation adjustment............................................... 9 3 --------- --------- Total stockholders' equity................................................. 63,571 59,498 --------- --------- Total liabilities and stockholders' equity........................................... $ 82,872 $ 77,931 ========= ========= See accompanying notes to consolidated financial statements.
DAY RUNNER, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (In thousands, except per share amounts) Three Months Ended September 30, 1996 1995 -------- ------- Sales................................................................................... $ 33,549 $ 32,806 Cost of goods sold...................................................................... 16,092 16,351 --------- --------- Gross profit............................................................................ 17,457 16,455 --------- --------- Operating expenses: Selling, marketing and distribution................................................ 7,860 7,471 General and administrative......................................................... 3,394 3,519 --------- --------- Total operating expenses....................................................... 11,254 10,990 --------- --------- Income from operations.................................................................. 6,203 5,465 Net interest income..................................................................... 210 54 --------- --------- Income before provision for income taxes................................................ 6,413 5,519 Provision for income taxes.............................................................. 2,565 2,346 --------- --------- Net income.............................................................................. $ 3,848 $ 3,173 ========= ========= Earnings per common and common equivalent share......................................... $ 0.57 $ 0.49 ========= ======== Weighted average number of common and common equivalent shares.......................... 6,710 6,445 ========= ========= See accompanying notes to consolidated financial statements.
DAY RUNNER, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in thousands) Three Months Ended September 30, 1996 1995 ---- ---- Cash flows from operating activities: Net income.................................................................... $ 3,848 $ 3,173 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization.............................................. 756 630 Provision for losses on accounts receivable................................ 113 129 Changes in operating assets and liabilities: Accounts receivable..................................................... (1,187) 1,269 Inventories............................................................. 2,202 1,196 Prepaid expenses and other current assets............................... 193 137 Income taxes receivable................................................. 1,930 Accounts payable........................................................ (601) (2,079) Accrued expenses........................................................ 864 1,930 Income taxes payable.................................................... 654 (264) --------- --------- Net cash provided by operating activities........................... 8,772 6,121 --------- --------- Cash flows from investing activities: Acquisition of property and equipment......................................... (1,291) (683) Other assets.................................................................. 5 (6) --------- ---------- Net cash used in investing activities.................................... (1,286) (689) ---------- --------- Cash flows from financing activities: Payment of long-term debt..................................................... (38) Payment of capital lease obligations.......................................... (5) Net proceeds from issuance of common stock.................................... 219 586 --------- --------- Net cash provided by financing activities................................ 219 543 --------- --------- Effect of exchange rate changes on cash and cash equivalents...................... (8) 22 ---------- --------- Net increase in cash and cash equivalents......................................... 7,697 5,997 Cash and cash equivalents at beginning of period.................................. 19,765 4,269 --------- --------- Cash and cash equivalents at end of period........................................ $ 27,462 $ 10,266 ========= ========= See accompanying notes to consolidated financial statements.
DAY RUNNER, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Information relating to the three months ended September 30, 1996 and 1995 is unaudited) 1. BASIS OF PRESENTATION AND ACCOUNTING POLICIES The accompanying consolidated balance sheet as of September 30, 1996 and the consolidated statements of income and statements of cash flows for the three-month periods ended September 30, 1996 and 1995 are unaudited but, in the opinion of management, include all adjustments consisting of normal, recurring accruals necessary for a fair presentation of the financial position and the results of operations for such periods. Certain information and footnote disclosures normally included in financial statements prepared in conformity with generally accepted accounting principles have been omitted pursuant to the requirements of the Securities and Exchange Commission, although the Company believes that the disclosures included in the financial statements included herein are adequate to make the information therein not misleading. The financial statements included herein should be read in conjunction with the Company's audited consolidated financial statements for the year ended June 30, 1996, and the notes thereto, which are included in the Company's Annual Report on Form 10-K. The results of operations for the three months ended September 30, 1996 and 1995 are not necessarily indicative of the results for a full year. The seasonality of the Company's financial results and the unpredictability of the factors affecting such seasonality make the Company's quarterly and yearly financial results difficult to predict and subject to significant fluctuation. 2. INVENTORIES Inventories consist of the following (in thousands): September 30, June 30, 1996 1996 ---- ---- Raw materials................... $ 5,450 $ 8,212 Work in process................. 437 327 Finished goods.................. 11,910 11,501 ---------- ---------- Total.................. $ 17,797 $ 20,040 ========== ========== 3. LINE OF CREDIT Effective November 1, 1996, the Company amended its credit agreement with a bank. The amended terms of the agreement allow the Company to borrow up to $5,000,000 under a line of credit and open commercial letters of credit or open standby letters of credit up to $5,000,000 through November 1, 1997. However, in no event may the aggregate of borrowings and letters of credit exceed $5,000,000. Commercial letters of credit and standby letters of credit shall be issued for a term not to exceed 180 days and shall not expire subsequent to February 1, 1998 and May 1, 1998, respectively. Borrowings are collateralized by accounts receivable, inventories and certain other assets. Borrowings under the line of credit bear interest at either the bank's prime rate (8.25% at September 30, 1996) or at LIBOR (5.43% at September 30, 1996) plus 1.75%, at the Company's election. The credit agreement requires the Company to maintain total debt to tangible net worth of not more than 1.5 to 1 and to maintain certain specified operating ratios. The agreement also requires that the Company obtain the bank's approval to declare or pay dividends in excess of $200,000. 4. STOCKHOLDERS' EQUITY During the three months ended September 30, 1996, a director exercised warrants to purchase an aggregate of 25,000 shares of the Company's Common Stock for an aggregate of $218,750. 5. OTHER TRANSACTIONS During fiscal 1995 and calendar 1993, the Company entered into barter agreements whereby it delivered $132,000 and $1,098,000, respectively, of its inventory in exchange for future advertising credits and other items. The credits, which expire in October 1998, are valued at the lower of the Company's cost or market value of the inventory transferred. The Company has recorded barter credits of $36,000 in prepaid expenses and other current assets at September 30, 1996 and at June 30, 1996. At September 30, 1996 and June 30, 1996, other assets include $279,000 of such credits. These credits are charged to expense as they are used. During the three months ended September 30, 1996 and 1995, no amounts were charged to expense for barter credits used for advertising. The Company assesses the recoverability of barter credits periodically. Factors considered in evaluating the recoverability include management's plans with respect to advertising and other expenditures for which barter credits can be used. Any impairment losses are charged to operations as they are determinable. During the three months ended September 30, 1995, the Company charged $220,000 to operations for such impairment losses. No amounts were charged to operations during the quarter ended September 30, 1996 for such impairment losses. 6. EARNINGS PER SHARE Earnings per share information is computed using the weighted average number of shares of Common Stock outstanding and dilutive common equivalent shares from stock options and warrants. For the three months ended September 30, 1995, the Company used the treasury stock method of computing earnings per share. For the three months ended September 30, 1996, the Company used the modified treasury stock method of computing earnings per share. Under generally accepted accounting principles, there is a computational difference between the treasury stock method and the modified treasury stock method which is based on the number of shares obtainable upon exercise of options and warrants. If the number of shares obtainable upon exercise of outstanding options and warrants exceeds 20% of the number of common shares outstanding at the end of the period, the modified treasury stock method is used. Since the number of shares so obtainable exceeded the 20% threshold for the three months ended September 30, 1996, the Company used the modified treasury stock method in calculating earnings per share for that period. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion should be read in conjunction with, and is qualified in its entirety by, the Consolidated Financial Statements and Notes thereto included elsewhere in this Quarterly Report. Historical results and percentage relationships among any amounts included in the Consolidated Financial Statements are not necessarily indicative of trends in operating results for any future period. OVERVIEW Since the Company's introduction of the first Day Runner System organizer in 1982, the Company's revenues have been generated by increased unit sales primarily of organizers and planners and secondarily of refills. Sales increases have resulted from higher sales of existing products, new products and product line extensions. The Company focuses the great majority of its product development, sales and marketing efforts on the office products channel, which accounted for 53.0% of first quarter fiscal 1997 sales, and the mass market channel, which accounted for 37.2% of first quarter fiscal 1997 sales. Results of Operations The following table sets forth, for the periods indicated, the percentages that selected income statement items bear to sales and the percentage change in the dollar amounts of such items.
Percentage Percentage Change of Sales Three Three Months Ended Months Ended September 30, September 30, 1995 1996 1995 to 1996 ------ ---------- ------------ Sales.................................................................. 100.0% 100.0% 2.3% Cost of goods sold..................................................... 48.0 49.8 (1.6) ----- ----- Gross profit........................................................... 52.0 50.2 6.1 ----- ----- Operating expenses: Selling, marketing and distribution................................ 23.4 22.8 5.2 General and administrative......................................... 10.1 10.7 (3.6) ----- ---- Total operating expenses........................................ 33.5 33.5 2.4 ----- ----- Income from operations................................................. 18.5 16.7 13.5 Net interest income.................................................... 0.6 0.1 288.9 ---- ---- Income before provision for income taxes............................... 19.1 16.8 16.2 Provision for income taxes............................................. 7.6 7.1 9.3 ---- ---- Net income............................................................. 11.5% 9.7% 21.3 ==== ====
The following tables set forth, for the periods indicated, the Company's approximate sales by product category and distribution channel and as a percentage of total sales.
Three Months Ended September 30, Product Category: 1996 1995 - ----------------- -------------------- -------------------- (unaudited; dollars in thousands) Organizers and planners.............................. $ 21,061 62.8% $ 20,175 61.5% Refills.............................................. 10,444 31.1 11,900 36.3 Other................................................ 2,044 6.1 731 2.2 -------- ---- --------- ---- Total............................................ $ 33,549 100.0% $ 32,806 100.0% ======== ===== ========= =====
Three Months Ended September 30, Distribution Channel: 1996 1995 - --------------------- ------------------- -------------------- (unaudited; dollars in thousands) Office products...................................... $ 17,783 53.0% $ 16,622 50.7% Mass market.......................................... 12,480 37.2 11,767 35.9 Foreign customers.................................... 1,364 4.1 2,182 6.6 Other................................................ 1,922 5.7 2,235 6.8 -------- ----- --------- ----- Total............................................ $33,549 100.0% $ 32,806 100.0% ======== ====== ========= =====
THREE MONTHS ENDED SEPTEMBER 30, 1996 COMPARED WITH THE THREE MONTHS ENDED SEPTEMBER 30, 1995 SALES. Sales consist of revenues from gross product shipments net of allowances for returns, rebates and credits. In the first quarter of fiscal 1997, sales increased by $743,000, or 2.3%, primarily due to increased unit sales of miscellaneous products grouped together as "other." Sales of "other" products grew by $1,313,000, or 179.6%; sales of organizers and planners grew by $886,000, or 4.4%; and sales of refills (which include calendars and accessories) decreased by $1,456,000, or 12.2%. Product sales were primarily to the office products channel and secondarily to mass market customers. Sales to office products customers grew by $1,161,000, or 7.0%, and sales to mass market customers grew by $713,000, or 6.1%. Higher sales to these channels were partially offset by declines of $818,000, or 37.5%, in sales to foreign customers, and $313,000, or 14.0%, in sales to miscellaneous customers grouped together as "other." GROSS PROFIT. Gross profit is sales less cost of goods sold, which is comprised of materials, labor and manufacturing overhead. Gross profit may be affected by, among other things, product mix, production levels, changes in vendor and customer prices and discounts, sales volume and growth rate, purchasing and manufacturing efficiencies, tariffs, duties and inventory carrying costs. Gross profit as a percentage of sales increased from 50.2% in the first quarter of fiscal 1996 to 52.0% in the first quarter of fiscal 1997 primarily as a result of lower discounts to customers. OPERATING EXPENSES. Total operating expenses increased by $264,000, or 2.4%, in the first quarter of fiscal 1997 compared with the first quarter of fiscal 1996, but remained flat as a percentage of sales at 33.5%. Due primarily to higher amortization of displays, selling, marketing and distribution expenses increased $389,000 and increased as a percentage of sales from 22.8% to 23.4%. Due primarily to a decrease in legal and accounting costs, general and administrative expenses declined by $125,000 and from 10.7% to 10.1% as a percentage of sales. NET INTEREST INCOME. Primarily because of the Company's higher levels of cash available for short-term investment, net interest income in the first quarter of fiscal 1997 increased by $156,000 compared with the first quarter of fiscal 1996 and increased as a percentage of sales from 0.1% to 0.6%. INCOME TAXES. Primarily because of the improved financial results of the Company's Hong Kong subsidiary, the Company's first quarter fiscal 1997 effective tax rate was 40.0%, compared with 42.5% for the first quarter of fiscal 1996. SEASONAL FLUCTUATIONS The Company has historically experienced and expects to continue to experience significant seasonal fluctuations in its sales and other financial results that it believes have resulted and will continue to result primarily from its customers' and users' buying patterns. These buying patterns have typically adversely affected orders for the Company's products in the third quarter of each fiscal year. Although it is difficult to predict the future seasonality of sales, the Company believes that future seasonality should be influenced at least in part by customer and user buying patterns similar to those that have historically affected the Company. Quarterly financial results are also affected by timing and size of orders from large customers, new product introductions and line extensions, timing and size of orders for new products, changes in product mix, customer mix, competition, large customers' inventory management, vendor and customer pricing, general economic conditions, the health of the retail environment, production levels, supply constraints, manufacturing delays and supplier performance. The seasonality of the Company's financial results and the unpredictability of the factors affecting such seasonality make the Company's quarterly and yearly financial results difficult to predict and subject to significant fluctuation. LIQUIDITY AND CAPITAL RESOURCES The Company's cash and cash equivalents at September 30, 1996 increased to $27,462,000 from $19,765,000 at June 30, 1996. In the first quarter of fiscal 1997, net cash of $8,772,000 and $219,000 provided by operating activities and financing activities, respectively, offset net cash of $1,286,000 used in investing activities. Of the $8,772,000 net amount provided by the Company's operating activities, $3,848,000 was provided by net income, $2,202,000 was provided by a decrease in inventories and $1,930,000 was provided by a decrease in income taxes receivable, which amounts were partially offset by an increase of $1,187,000 in accounts receivable. The $219,000 net amount provided by the Company's financing activities was provided by the issuance of Common Stock upon the exercise of warrants. The $1,286,000 used in the Company's investing activities was used primarily to acquire machinery and equipment and secondarily computer equipment and software. Primarily because of the timing of orders and shipments, accounts receivable (net) increased by 5.0% in the first quarter of fiscal 1997 from the fiscal 1996 year-end amount. Compared with the September 30, 1995 amount, accounts receivable increased by 25.3% primarily because of terms given to certain large customers. The average collection period of accounts receivable at September 30, 1996 was 45 days, compared with 43 and 42 days at June 30, 1996 and September 30, 1995, respectively. Inventories decreased by 11.2% compared with the fiscal 1996 year-end amount and by 29.8% compared with the September 30, 1995 amount primarily because of the Company's better control and management of inventory levels. The Company's bank line of credit allows for borrowings and the issuance of commercial or standby letters of credit up to an aggregate of $5,000,000. Borrowings under the line of credit bear interest at either the bank's prime rate or at LIBOR plus 1.75%, at the Company's election. At September 30, 1996, Day Runner had no borrowings under its bank line of credit but had used the line of credit to secure outstanding letters of credit of approximately $1,000,000, which reduced the availability under the line of credit to approximately $4,000,000. Effective November 1, 1996, the Company amended its credit agreement to be due and payable in full on November 1, 1997. (See Note 3 to Consolidated Financial Statements.) The Company has not incurred significant losses or gains from foreign currency exchange rate fluctuations. The continuing expansion of the Company's Hong Kong, Mexican and United Kingdom subsidiaries could, however, result in larger gains or losses as a result of fluctuations in foreign currency exchange rates as those subsidiaries conduct business in whole or in part in foreign currencies. The Company believes that cash flow from operations, vendor credit, its existing working capital and its bank line of credit will be sufficient to satisfy the Company's anticipated cash requirements at least through the next 12 months. Nonetheless, the Company may seek additional sources of capital as necessary or appropriate to finance acquisitions or to otherwise finance the Company's growth or operations; however, there can be no assurance that such funds if needed will be available on favorable terms, if at all. FORWARD LOOKING STATEMENTS With the exception of the actual reported financial results and other historical information, the statements made in the Management's Discussion and Analysis of Financial Condition and Results of Operations are forward looking statements that involve risks and uncertainties that could affect actual future results. Such risk and uncertainties include, but are not limited to: timing and size of orders from large customers, timing and size of orders of new products, competition, large customers' inventory management, general economic conditions, the health of the retail environment, supply constraints, supplier performance and other risks indicated in the Company's filings with the Securities and Exchange Commission. PART II --OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) Exhibits 10.1 Credit Agreement dated as of May 1, 1993 between the Registrant and Wells Fargo Bank, National Association, including Line of Credit Note(1), Assumption and Consent to Merger Agreement dated as of June 30, 1993, First Amendment to Credit Agreement dated as of December 15, 1993(2), Second Amendment to Credit Agreement dated as of May 1, 1994, including Line of Credit Note(3), Third Amendment to Credit Agreement dated as of October 1, 1994, including Line of Credit Note(4), Fourth Amendment to Credit Agreement dated as of October 2, 1995, including Revolving Line of Credit Note(5) and Fifth Amendment to Credit Agreement dated as of November 1, 1996, including Revolving Line of Credit Note. 27.1 Financial Data Schedule (b) Reports on Form 8-K No reports on Form 8-K were filed by the Company during the quarter ended September 30, 1996. (1)Incorporated by reference to the Registrant's Quarterly Report on Form 10-Q (File No. 0-19835) filed with the Commission on August 16, 1993. (2)Incorporated by reference to the Registrant's Annual Report on Form 10-K (File No. 0-19835) filed with the Commission on March 30, 1994. (3)Incorporated by reference to the Registrant's Quarterly Report on Form 10-Q (File No. 0-19835) filed with the Commission on May 16, 1994. (4)Incorporated by reference to the Registrant's Quarterly Report on Form 10-Q (File No. 0-19835) filed with the Commission on November 14, 1994. (5)Incorporated by reference to the Registrant's Quarterly Report on Form 10-Q (File No. 0-19835) filed with the Commission on November 13, 1995. 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. Date: November 13, 1996 Day Runner, Inc. By: /s/ MARK A. VIDOVICH ---------------------- Mark A. Vidovich Chairman of the Board and Chief Executive Officer By: /s/ DENNIS K. MARQUARDT ----------------------- Dennis K. Marquardt Executive Vice President, Finance & Administration and Chief Financial Officer
INDEX TO EXHIBITS SEQUENTIALLY NUMBERED EXHIBIT NUMBER AND DESCRIPTION PAGE 10.1 Fifth Amendment to Credit Agreement dated as of November 1, 1996 between the Registrant and Wells Fargo Bank, National Association, including Revolving Line of Credit Note..................................................................... 27.1 Financial Data Schedule.................................................................
EX-99 2 BANK CREDIT AGREEMENT FIFTH AMENDMENT TO CREDIT AGREEMENT THIS FIFTH AMENDMENT TO CREDIT AGREEMENT (this "Amendment") is entered into as of November 1, 1996, by and between DAY RUNNER, INC., a Delaware corporation ("Borrower"), and WELLS FARGO BANK, NATIONAL ASSOCIATION ("Bank"). RECITALS WHEREAS, Borrower is currently indebted to Bank pursuant to the terms and conditions of that certain Credit Agreement between Borrower and Bank dated as of May 1, 1993, as amended from time to time ("Credit Agreement"). WHEREAS, Bank and Borrower have agreed to certain changes in the terms and conditions set forth in the Credit Agreement and have agreed to amend the Credit Agreement to reflect said changes. NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree that the Credit Agreement shall be amended as follows: 1. Section 1.1(a) is hereby amended by deleting "October 31, 1996" as the last day on which Bank will make advances under the Line of Credit, and by substituting for said date "November 1, 1997," with such change to be effective upon the execution and delivery to Bank of a promissory note substantially in the form of Exhibit A attached hereto (which promissory note shall replace and be deemed the Line of Credit Note defined in and made pursuant to the Credit Agreement) and all other contracts, instruments and documents required by Bank to evidence such change. 2. Section 1.1(c) is hereby amended (a) by deleting "October 31, 1996" as the last day on which Bank will issue Standby Letters of Credit under the subfeature therefor under the Line of Credit, and by substituting for said date "November 1, 1997," and (b) by deleting "February 1, 1997" as the last date any such Standby Letter of Credit may expire, and by substituting for said date "May 1, 1998." 3. Section 1.1(d) is hereby amended (a) by deleting "October 31, 1996" as the last day on which Bank will issue Commercial Letters of Credit under the subfeature therefor under the Line of Credit, and by substituting for said date "November 1, 1997," and (b) by deleting "February 1, 1997" as the last date any such Commercial Letter of Credit may expire, and by substituting for said date "February 1, 1998." 4. The following is hereby added to the Credit Agreement as Section 7.10: "SECTION 7.10. ARBITRATION. (a) Arbitration. Upon the demand of any party, any Dispute shall be resolved by binding arbitration (except as set forth in (e) below) in accordance with the terms of this Agreement. A "Dispute" shall mean any action, dispute, claim or controversy of any kind, whether in contract or tort, statutory or common law, legal or equitable, now existing or hereafter arising under or in connection with, or in any way pertaining to, any of the Loan Documents, or any past, present or future extensions of credit and other activities, transactions or obligations of any kind related directly or indirectly to any of the Loan Documents, including without limitation, any of the foregoing arising in connection with the exercise of any self-help, ancillary or other remedies pursuant to any of the Loan Documents. Any party may by summary proceedings bring an action in court to compel arbitration of a Dispute. Any party who fails or refuses to submit to arbitration following a lawful demand by any other party shall bear all costs and expenses incurred by such other party in compelling arbitration of any Dispute. (b) Governing Rules. Arbitration proceedings shall be administered by the American Arbitration Association ("AAA") or such other administrator as the parties shall mutually agree upon in accordance with the AAA Commercial Arbitration Rules. All Disputes submitted to arbitration shall be resolved in accordance with the Federal Arbitration Act (Title 9 of the United States Code), notwithstanding any conflicting choice of law provision in any of the Loan Documents. The arbitration shall be conducted at a location in California selected by the AAA or other administrator. If there is any inconsistency between the terms hereof and any such rules, the terms and procedures set forth herein shall control. All statutes of limitation applicable to any Dispute shall apply to any arbitration proceeding. All discovery activities shall be expressly limited to matters directly relevant to the Dispute being arbitrated. Judgment upon any award rendered in an arbitration may be entered in any court having jurisdiction; provided however, that nothing contained herein shall be deemed to be a waiver by any party that is a bank of the protections afforded to it under 12 U.S.C. ss.91 or any similar applicable state law. (c) No Waiver; Provisional Remedies, Self-Help and Foreclosure. No provision hereof shall limit the right of any party to exercise self-help remedies such as setoff, foreclosure against or sale of any real or personal property collateral or security, or to obtain provisional or ancillary remedies, including without limitation injunctive relief, sequestration, attachment, garnishment or the appointment of a receiver, from a court of competent jurisdiction before, after or during the pendency of any arbitration or other proceeding. The exercise of any such remedy shall not waive the right of any party to compel arbitration or reference hereunder. (d) Arbitrator Qualifications and Powers; Awards. Arbitrators must be active members of the California State Bar or retired judges of the state or federal judiciary of California, with expertise in the substantive laws applicable to the subject matter of the Dispute. Arbitrators are empowered to resolve Disputes by summary rulings in response to motions filed prior to the final arbitration hearing. Arbitrators (i) shall resolve all Disputes in accordance with the substantive law of the state of California, (ii) may grant any remedy or relief that a court of the state of California could order or grant within the scope hereof and such ancillary relief as is necessary to make effective any award, and (iii) shall have the power to award recovery of all costs and fees, to impose sanctions and to take such other actions as they deem necessary to the same extent a judge could pursuant to the Federal Rules of Civil Procedure, the California Rules of Civil Procedure or other applicable law. Any Dispute in which the amount in controversy is $5,000,000 or less shall be decided by a single arbitrator who shall not render an award of greater than $5,000,000 (including damages, costs, fees and expenses). By submission to a single arbitrator, each party expressly waives any right or claim to recover more than $5,000,000. Any Dispute in which the amount in controversy exceeds $5,000,000 shall be decided by majority vote of a panel of three arbitrators; provided however, that all three arbitrators must actively participate in all hearings and deliberations. (e) Judicial Review. Notwithstanding anything herein to the contrary, in any arbitration in which the amount in controversy exceeds $25,000,000, the arbitrators shall be required to make specific, written findings of fact and conclusions of law. In such arbitrations (i) the arbitrators shall not have the power to make any award which is not supported by substantial evidence or which is based on legal error, (ii) an award shall not be binding upon the parties unless the findings of fact are supported by substantial evidence and the conclusions of law are not erroneous under the substantive law of the state of California, and (iii) the parties shall have in addition to the grounds referred to in the Federal Arbitration Act for vacating, modifying or correcting an award the right to judicial review of (A) whether the findings of fact rendered by the arbitrators are supported by substantial evidence, and (B) whether the conclusions of law are erroneous under the substantive law of the state of California. Judgment confirming an award in such a proceeding may be entered only if a court determines the award is supported by substantial evidence and not based on legal error under the substantive law of the state of California. (f) Real Property Collateral; Judicial Reference. Notwithstanding anything herein to the contrary, no Dispute shall be submitted to arbitration if the Dispute concerns indebtedness secured directly or indirectly, in whole or in part, by any real property unless (i) the holder of the mortgage, lien or security interest specifically elects in writing to proceed with the arbitration, or (ii) all parties to the arbitration waive any rights or benefits that might accrue to them by virtue of the single action rule statute of California, thereby agreeing that all indebtedness and obligations of the parties, and all mortgages, liens and security interests securing such indebtedness and obligations, shall remain fully valid and enforceable. If any such Dispute is not submitted to arbitration, the Dispute shall be referred to a referee in accordance with California Code of Civil Procedure Section 638 et seq., and this general reference agreement is intended to be specifically enforceable in accordance with said Section 638. A referee with the qualifications required herein for arbitrators shall be selected pursuant to the AAA's selection procedures. Judgment upon the decision rendered by a referee shall be entered in the court in which such proceeding was commenced in accordance with California Code of Civil Procedure Sections 644 and 645. (g) Miscellaneous. To the maximum extent practicable, the AAA, the arbitrators and the parties shall take all action required to conclude any arbitration proceeding within 180 days of the filing of the Dispute with the AAA. No arbitrator or other party to an arbitration proceeding may disclose the existence, content or results thereof, except for disclosures of information by a party required in the ordinary course of its business, by applicable law or regulation, or to the extent necessary to exercise any judicial review rights set forth herein. If more than one agreement for arbitration by or between the parties potentially applies to a Dispute, the arbitration provision most directly related to the Loan Documents or the subject matter of the Dispute shall control. This arbitration provision shall survive termination, amendment or expiration of any of the Loan Documents or any relationship between the parties." 5. Except as specifically provided herein, all terms and conditions of the Credit Agreement remain in full force and effect, without waiver or modification. All terms defined in the Credit Agreement shall have the same meaning when used in this Amendment. This Amendment and the Credit Agreement shall be read together, as one document. 6. Borrower hereby remakes all representations and warranties contained in the Credit Agreement and reaffirms all covenants set forth therein. Borrower further certifies that as of the date of this Amendment there exists no Event of Default as defined in the Credit Agreement, nor any condition, act or event which with the giving of notice or the passage of time or both would constitute any such Event of Default. IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed as of the day and year first written above. DAY RUNNER, INC. WELLS FARGO BANK, NATIONAL ASSOCIATION By: /s/ Dennis Marquardt /s/Clare Gurbach -------------------- ---------------- Title: Executive Vice President Clare Gurbach Finance & Administration Vice President REVOLVING LINE OF CREDIT NOTE $5,000,000.00 Los Angeles, California November 1, 1996 FOR VALUE RECEIVED, the undersigned DAY RUNNER, INC. ("Borrower") promises to pay to the order of WELLS FARGO BANK, NATIONAL ASSOCIATION ("Bank") at its office at Los Angeles RCBO, 333 South Grand Avenue, Third Floor, Los Angeles, California, or at such other place as the holder hereof may designate, in lawful money of the United States of America and in immediately available funds, the principal sum of Five Million Dollars ($5,000,000.00), or so much thereof as may be advanced and be outstanding, with interest thereon, to be computed on each advance from the date of its disbursement as set forth herein. DEFINITIONS: As used herein, the following terms shall have the meanings set forth after each, and any other term defined in this Note shall have the meaning set forth at the place defined: (a) "Business Day" means any day except a Saturday, Sunday or any other day on which commercial banks in California are authorized or required by law to close. (b) "Fixed Rate Term" means a period commencing on a Business Day and continuing for one (1), two (2), three (3) or six (6) months, as designated by Borrower, during which all or a portion of the outstanding principal balance of this Note bears interest determined in relation to LIBOR; provided however, that no Fixed Rate Term may be selected for a principal amount less than Five Hundred Thousand Dollars ($500,000.00); and provided further, that no Fixed Rate Term shall extend beyond the scheduled maturity date hereof. If any Fixed Rate Term would end on a day which is not a Business Day, then such Fixed Rate Term shall be extended to the next succeeding Business Day. (c) "LIBOR" means the rate per annum (rounded upward, if necessary, to the nearest whole 1/8 of 1%) and determined pursuant to the following formula: LIBOR = Base LIBOR ----------------------------------- 100% - LIBOR Reserve Percentage (i) "Base LIBOR" means the rate per annum for United States dollar deposits quoted by Bank as the Inter-Bank Market Offered Rate, with the understanding that such rate is quoted by Bank for the purpose of calculating effective rates of interest for loans making reference thereto, on the first day of a Fixed Rate Term for delivery of funds on said date for a period of time approximately equal to the number of days in such Fixed Rate Term and in an amount approximately equal to the principal amount to which such Fixed Rate Term applies. Borrower understands and agrees that Bank may base its quotation of the Inter-Bank Market Offered Rate upon such offers or other market indicators of the Inter-Bank Market as Bank in its discretion deems appropriate including, but not limited to, the rate offered for U.S. dollar deposits on the London Inter-Bank Market. (ii) "LIBOR Reserve Percentage" means the reserve percentage prescribed by the Board of Governors of the Federal Reserve System (or any successor) for "Eurocurrency Liabilities" (as defined in Regulation D of the Federal Reserve Board, as amended), adjusted by Bank for expected changes in such reserve percentage during the applicable Fixed Rate Term. (d) "Prime Rate" means at any time the rate of interest most recently announced within Bank at its principal office as its Prime Rate, with the understanding that the Prime Rate is one of Bank's base rates and serves as the basis upon which effective rates of interest are calculated for those loans making reference thereto, and is evidenced by the recording thereof after its announcement in such internal publication or publications as Bank may designate. INTEREST: (a) Interest. The outstanding principal balance of this Note shall bear interest (computed on the basis of a 360-day year, actual days elapsed) either (i) at a fluctuating rate per annum equal to the Prime Rate in effect from time to time, or (ii) at a fixed rate per annum determined by Bank to be one and three quarters percent (1.75%) above LIBOR in effect on the first day of the applicable Fixed Rate Term. When interest is determined in relation to the Prime Rate, each change in the rate of interest hereunder shall become effective on the date each Prime Rate change is announced within Bank. With respect to each LIBOR selection hereunder, Bank is hereby authorized to note the date, principal amount, interest rate and Fixed Rate Term applicable thereto and any payments made thereon on Bank's books and records (either manually or by electronic entry) and/or on any schedule attached to this Note, which notations shall be prima facie evidence of the accuracy of the information noted. (b) Selection of Interest Rate Options. At any time any portion of this Note bears interest determined in relation to LIBOR, it may be continued by Borrower at the end the Fixed Rate Term applicable thereto so that all or a portion thereof bears interest determined in relation to the Prime Rate or to LIBOR for a new Fixed Rate Term designated by Borrower. At any time any portion of this Note bears interest determined in relation to the Prime Rate, Borrower may convert all or a portion thereof so that it bears interest determined in relation to LIBOR for a Fixed Rate Term designated by Borrower. At such time as Borrower requests an advance hereunder or wishes to select a LIBOR option for all or a portion of the outstanding principal balance hereof, and at the end of each Fixed Rate Term, Borrower shall give Bank notice specifying: (i) the interest rate option selected by Borrower; (ii) the principal amount subject thereto; and (iii) for each LIBOR selection, the length of the applicable Fixed Rate Term. Any such notice may be given by telephone so long as, with respect to each LIBOR selection, (A) Bank receives written confirmation from Borrower not later than three (3) Business Days after such telephone notice is given, and (B) such notice is given to Bank prior to 10:00 a.m., California time, on the first day of the Fixed Rate Term. For each LIBOR option requested hereunder, Bank will quote the applicable fixed rate to Borrower at approximately 10:00 a.m., California time, on the first day of the Fixed Rate Term. If Borrower does not immediately accept the rate quoted by Bank, any subsequent acceptance by Borrower shall be subject to a redetermination by Bank of the applicable fixed rate; provided however, that if Borrower fails to accept any such rate by 11:00 a.m., California time, on the Business Day such quotation is given, then the quoted rate shall expire and Bank shall have no obligation to permit a LIBOR option to be selected on such day. If no specific designation of interest is made at the time any advance is requested hereunder or at the end of any Fixed Rate Term, Borrower shall be deemed to have made a Prime Rate interest selection for such advance or the principal amount to which such Fixed Rate Term applied. (c) Additional LIBOR Provisions. (i) If Bank at any time shall determine that for any reason adequate and reasonable means do not exist for ascertaining LIBOR, then Bank shall promptly give notice thereof to Borrower. If such notice is given and until such notice has been withdrawn by Bank, then (A) no new LIBOR option may be selected by Borrower, and (B) any portion of the outstanding principal balance hereof which bears interest determined in relation to LIBOR, subsequent to the end of the Fixed Rate Term applicable thereto, shall bear interest determined in relation to the Prime Rate. (ii) If any law, treaty, rule, regulation or determination of a court or governmental authority or any change therein or in the interpretation or application thereof (each, a "Change in Law") shall make it unlawful for Bank (A) to make LIBOR options available hereunder, or (B) to maintain interest rates based on LIBOR, then in the former event, any obligation of Bank to make available such unlawful LIBOR options shall immediately be cancelled, and in the latter event, any such unlawful LIBOR-based interest rates then outstanding shall be converted, at Bank's option, so that interest on the portion of the outstanding principal balance subject thereto is determined in relation to the Prime Rate; provided however, that if any such Change in Law shall permit any LIBOR-based interest rates to remain in effect until the expiration of the Fixed Rate Term applicable thereto, then such permitted LIBOR-based interest rates shall continue in effect until the expiration of such Fixed Rate Term. Upon the occurrence of any of the foregoing events, Borrower shall pay to Bank immediately upon demand such amounts as may be certified to Borrower by Bank in writing as necessary to compensate Bank for any fines, fees, charges, penalties or other costs incurred or payable by Bank as a result thereof and which are attributable to any LIBOR options made available to Borrower hereunder, and any reasonable allocation made by Bank among its operations shall be conclusive and binding upon Borrower. (iii) If any Change in Law or compliance by Bank with any request or directive (whether or not having the force of law) from any central bank or other governmental authority shall: (A) subject Bank to any tax, duty or other charge with respect to any LIBOR options, or change the basis of taxation of payments to Bank of principal, interest, fees or any other amount payable hereunder (except for changes in the rate of tax on the overall net income of Bank); or (B) impose, modify or hold applicable any reserve, special deposit, compulsory loan or similar requirement against assets held by, deposits or other liabilities in or for the account of, advances or loans by, or any other acquisition of funds by any office of Bank; or (C) impose on Bank any other condition; and the result of any of the foregoing is to increase the cost to Bank of making, renewing or maintaining any LIBOR options hereunder and/or to reduce any amount receivable by Bank in connection therewith, then in any such case, Borrower shall pay to Bank such amounts as may be certified to Borrower by Bank in writing as necessary, immediately upon receipt of such certification, to compensate Bank for any additional costs incurred by Bank and/or reductions in amounts received by Bank which are attributable to such LIBOR options. In determining which costs incurred by Bank and/or reductions in amounts received by Bank are attributable to any LIBOR options made available to Borrower hereunder, any reasonable allocation made by Bank among its operations shall be conclusive and binding upon Borrower. (d) Payment of Interest. Interest accrued on this Note shall be payable in arrears on the first day of each month, commencing December 1, 1996. (e) Default Interest. From and after the maturity date of this Note, or such earlier date as all principal owing hereunder becomes due and payable by acceleration or otherwise, the outstanding principal balance of this Note shall bear interest until paid in full at an increased rate per annum (computed on the basis of a 360-day year, actual days elapsed) equal to two percent (2%) above the rate of interest from time to time applicable to this Note. BORROWING AND REPAYMENT: (a) Borrowing and Repayment. Borrower may from time to time during the term of this Note borrow, partially or wholly repay its outstanding borrowings, and reborrow, subject to all of the limitations, terms and conditions of this Note and of any document executed in connection with or governing this Note; provided however, that the total outstanding principal amount of borrowings under this Note shall not at any time exceed the principal amount stated above. The unpaid principal balance of this obligation at any time shall be the total amounts advanced hereunder by the holder hereof less the amount of principal payments made hereon by or for any Borrower, which balance may be endorsed hereon from time to time by the holder. The outstanding principal balance of this Note shall be due and payable in full on November 1, 1997. (b) Advances. Advances hereunder, to the total amount of the principal sum stated above, may be made by the holder at the oral or written request of (i) Dennis K. Marquardt or James Freeman, Jr. or Kevin Marquez or Mark Vidovich or Tom McCullough, any one acting alone, who are authorized to request advances and direct the disposition of any advances until written notice of the revocation of such authority is received by the holder at the office designated above, or (ii) any person, with respect to advances deposited to the credit of any account of any Borrower with the holder, which advances, when so deposited, shall be conclusively presumed to have been made to or for the benefit of each Borrower regardless of the fact that persons other than those authorized to request advances may have authority to draw against such account. The holder shall have no obligation to determine whether any person requesting an advance is or has been authorized by any Borrower. (c) Application of Payments. Each payment made on this Note shall be credited first, to any interest then due and second, to the outstanding principal balance hereof. All payments credited to principal shall be applied first, to the outstanding principal balance of this Note which bears interest determined in relation to the Prime Rate, if any, and second, to the outstanding principal balance of this Note which bears interest determined in relation to LIBOR, with such payments applied to the oldest Fixed Rate Term first. PREPAYMENT: (a) Prime Rate. Borrower may prepay principal on any portion of this Note which bears interest determined in relation to the Prime Rate at any time, in any amount and without penalty. (b) LIBOR. Borrower may prepay principal on any portion of this Note which bears interest determined in relation to LIBOR at any time and in the minimum amount of One Hundred Thousand Dollars ($100,000.00); provided however, that if the outstanding principal balance of such portion of this Note is less than said amount, the minimum prepayment amount shall be the entire outstanding principal balance thereof. In consideration of Bank providing this prepayment option to Borrower, or if any such portion of this Note shall become due and payable at any time prior to the last day of the Fixed Rate Term applicable thereto by acceleration or otherwise, Borrower shall pay to Bank immediately upon demand a fee which is the sum of the discounted monthly differences for each month from the month of prepayment through the month in which such Fixed Rate Term matures, calculated as follows for each such month: (i) Determine the amount of interest which would have accrued each month on the amount prepaid at the interest rate applicable to such amount had it remained outstanding until the last day of the Fixed Rate Term applicable thereto. (ii) Subtract from the amount determined in (i) above the amount of interest which would have accrued for the same month on the amount prepaid for the remaining term of such Fixed Rate Term at LIBOR in effect on the date of prepayment for new loans made for such term and in a principal amount equal to the amount prepaid. (iii) If the result obtained in (ii) for any month is greater than zero, discount that difference by LIBOR used in (ii) above. Borrower acknowledges that prepayment of such amount may result in Bank incurring additional costs, expenses and/or liabilities, and that it is difficult to ascertain the full extent of such costs, expenses and/or liabilities. Borrower, therefore, agrees to pay the above-described prepayment fee and agrees that said amount represents a reasonable estimate of the prepayment costs, expenses and/or liabilities of Bank. If Borrower fails to pay any prepayment fee when due, the amount of such prepayment fee shall thereafter bear interest until paid at a rate per annum two percent (2%) above the Prime Rate in effect from time to time (computed on the basis of a 360-day year, actual days elapsed). Each change in the rate of interest on any such past due prepayment fee shall become effective on the date each Prime Rate change is announced within Bank. EVENTS OF DEFAULT: This Note is made pursuant to and is subject to the terms and conditions of that certain Credit Agreement between Borrower and Bank dated as of May 1, 1993, as amended from time to time (the "Credit Agreement"). Any default in the payment or performance of any obligation under this Note, or any defined event of default under the Credit Agreement, shall constitute an "Event of Default" under this Note. MISCELLANEOUS: (a) Remedies. Upon the occurrence of any Event of Default, the holder of this Note, at the holder's option, may declare all sums of principal and interest outstanding hereunder to be immediately due and payable without presentment, demand, notice of nonperformance, notice of protest, protest or notice of dishonor, all of which are expressly waived by Borrower, and the obligation, if any, of the holder to extend any further credit hereunder shall immediately cease and terminate. Borrower shall pay to the holder immediately upon demand the full amount of all payments, advances, charges, costs and expenses, including reasonable attorneys' fees (to include outside counsel fees and all allocated costs of the holder's in-house counsel), expended or incurred by the holder in connection with the enforcement of the holder's rights and/or the collection of any amounts which become due to the holder under this Note, and the prosecution or defense of any action in any way related to this Note, including without limitation, any action for declaratory relief, whether incurred at the trial or appellate level, in an arbitration proceeding or otherwise, and including any of the foregoing incurred in connection with any bankruptcy proceeding (including without limitation, any adversary proceeding, contested matter or motion brought by Bank or any other person) relating to Borrower or any other person or entity. (b) Governing Law. This Note shall be governed by and construed in accordance with the laws of the State of California. IN WITNESS WHEREOF, the undersigned has executed this Note as of the date first written above. DAY RUNNER, INC. By: /s/Dennis Marquardt - ----------------------- Title: Executive Vice President Finance & Administration EX-27 3 FINANCIAL DATA SCHEDULE
5 This schedule contains summary financial information extracted from the consolidated balance sheet and the consolidated statement of income filed as part of the quarterly report on form 10-Q and is qualified in its entirety by reference to such quarterly report on form 10-Q. 0000853102 Day Runner, Inc. 1,000 3-mos Jun-30-1997 JUL-01-1996 SEP-30-1996 27,462 0 30,149 7,632 17,797 74,495 14,587 6,550 82,872 19,301 0 0 0 6 63,565 82,872 33,549 33,549 16,092 16,092 11,254 0 (210) 6,413 2,565 3,848 0 0 0 3,848 0.57 0.57
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