-----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, WkoQRC2DETCdZBeIZKUxvH62wkIqhJ20onhabqYcE96WwR5XQM/Pq4BBkR1cW+Hm DDpRdvxy906C3893xf+hsQ== 0000853102-97-000016.txt : 19971117 0000853102-97-000016.hdr.sgml : 19971117 ACCESSION NUMBER: 0000853102-97-000016 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19971114 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: SEC FILE NUMBER: 000-19835 FILM NUMBER: 97717889 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 10-Q FOR QUARTER ENDED 9/30/97 FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 (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, 1997 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 registrant's classes of Common Stock, as of the latest practicable date: Number of Shares Outstanding Class at November 11, 1997 - ------------------------------- ------------------------------------- Common Stock, $0.001 par value 5,635,804 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, 1997 and June 30, 1997..............3 Consolidated Statements of Income Three Months Ended September 30, 1997 and 1996.....4 Consolidated Statements of Cash Flows Three Months Ended September 30, 1997 and 1996.....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...............................................................15 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, 1997 1997 (unaudited) (audited) ----------- --------- Current assets: Cash and cash equivalents....................................................... $ 8,080 $ 15,550 Accounts receivable (less allowances for doubtful accounts and sales returns and other allowances of $10,912 and $8,664 at September 30, 1997 and June 30, 1997, respectively)............................................... 24,646 22,303 Inventories..................................................................... 28,845 23,406 Prepaid expenses and other current assets....................................... 2,378 2,409 Deferred income taxes........................................................... 6,386 6,386 -------- -------- Total current assets....................................................... 70,335 70,054 --------- --------- Property and equipment -- At cost: Machinery and equipment......................................................... 11,103 10,316 Data processing equipment and software.......................................... 6,041 5,863 Leasehold improvements.......................................................... 1,975 1,838 Vehicles........................................................................ 167 214 --------- --------- Total...................................................................... 19,286 18,231 Accumulated depreciation and amortization....................................... (10,628) (9,543) --------- --------- Property and equipment -- net................................................... 8,658 8,688 --------- --------- Other assets......................................................................... 562 138 --------- --------- Total assets......................................................................... $ 79,555 $ 78,880 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Lines of credit................................................................. $ 376 $ 452 Accounts payable................................................................ 11,116 8,320 Accrued expenses................................................................ 11,849 9,500 Income taxes payable............................................................ 2,770 1,049 Current portion of capital lease obligations.................................... 17 23 -------- -------- Total current liabilities.................................................. 26,128 19,344 --------- --------- Long-term liabilities: Capital lease obligations....................................................... 30 52 --------- --------- 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; 6,458,978 and 6,364,429 issued ...and 5,598,084 and 5,851,329 outstanding at September 30, 1997 and June 30, 1997, respectively)...................................... 6 6 Additional paid-in capital...................................................... 24,937 23,759 Retained earnings............................................................... 53,520 49,168 Cumulative translation adjustment............................................... 40 92 Treasury stock: at cost (860,894 and 513,100 shares at September 30, 1997 and June 30, 1997, respectively)................................................ (25,106) (13,541) --------- ---------- Total stockholders' equity................................................. 53,397 59,484 --------- --------- Total liabilities and stockholders' equity........................................... $ 79,555 $ 78,880 ========= ========= 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, 1997 1996 ---- ---- Sales................................................................................... $ 38,138 $ 33,549 Cost of goods sold...................................................................... 18,032 15,964 --------- --------- Gross profit............................................................................ 20,106 17,585 --------- --------- Operating expenses: Selling, marketing and distribution................................................ 9,302 7,988 General and administrative......................................................... 3,764 3,394 --------- --------- Total operating expenses......................................................... 13,066 11,382 --------- --------- Income from operations.................................................................. 7,040 6,203 Net interest income..................................................................... 95 210 --------- --------- Income before provision for income taxes................................................ 7,135 6,413 Provision for income taxes.............................................................. 2,783 2,565 --------- --------- Net income.............................................................................. $ 4,352 $ 3,848 ========= ========= Earnings per common and common equivalent share......................................... $ 0.70 $ 0.57 ======== ======== Weighted average number of common and common equivalent shares.................................................................. 6,256 6,710 ========= =========
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, 1997 1996 ---- ---- Cash flows from operating activities: Net income.................................................................... $ 4,352 $ 3,848 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization.............................................. 1,074 756 Provision for losses on accounts receivable................................ 113 Changes in operating assets and liabilities: Accounts receivable..................................................... (1,931) (1,187) Inventories............................................................. (4,160) 2,202 Prepaid expenses and other current assets............................... 40 193 Income taxes receivable................................................. 1,930 Accounts payable........................................................ 2,063 (601) Accrued expenses........................................................ 1,938 864 Income taxes payable.................................................... 1,719 654 --------- --------- Net cash provided by operating activities............................ 5,095 8,772 --------- --------- Cash flows from investing activities: Purchase of business.......................................................... (318) Acquisition of property and equipment......................................... (897) (1,291) Other assets.................................................................. (38) 5 ---------- --------- Net cash used in investing activities.................................... (1,253) (1,286) ---------- ---------- Cash flows from financing activities: Net repayment under lines of credit........................................... (888) Repayment of capital lease obligations........................................ (33) Net proceeds from issuance of common stock.................................... 1,178 219 Repurchase of common stock.................................................... (11,565) ---------- --------- Net cash (used in) provided by financing activities...................... (11,308) 219 ---------- --------- Effect of exchange rate changes in cash........................................... (4) (8) ---------- ---------- Net (decrease) increase in cash and cash equivalents.............................. (7,470) 7,697 Cash and cash equivalents at beginning of period.................................. 15,550 19,765 --------- --------- Cash and cash equivalents at end of period........................................ $ 8,080 $ 27,462 ========= ========= 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, 1997 and 1996 is unaudited) 1. BASIS OF PRESENTATION AND ACCOUNTING POLICIES The accompanying consolidated balance sheet as of September 30, 1997, consolidated statements of income and cash flows for the three-month periods ended September 30, 1997 and 1996 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, 1997, 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, 1997 and 1996 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, 1997 1997 ---- ---- Raw materials................... $ 8,170 $ 10,204 Work in process................. 454 426 Finished goods.................. 20,221 12,776 ---------- ---------- Total.................. $ 28,845 $ 23,406 ========== ========== 3. LINES OF CREDIT Effective September 1, 1997, the Company amended its primary credit agreement with a bank to allow the Company to borrow up to $15,000,000 under a line of credit through November 1, 1997 and open commercial letters of credit or open standby letters of credit up to $15,000,000, with the aggregate of borrowing and letters of credit not to exceed $15,000,000. On November 1, 1997, this credit agreement was further amended to allow for borrowing under the line of credit through February 1, 1998. Commercial letters of credit and standby letters of credit may be issued for a term not to exceed 180 days and shall not expire subsequent to August 1 and May 1, 1998, respectively. At September 30, 1997, the Company had no amounts outstanding under this line of credit but had outstanding secured letters of credit totaling approximately $1,000,000. Under this credit agreement, borrowings are collateralized by accounts receivable, inventories and certain other assets and bear interest at the Company's election either at the bank's prime rate (8.50% at September 30, 1997) or at LIBOR (5.65625% at September 30, 1997) plus 1.75%. The credit agreement requires the Company to maintain total debt to tangible net worth of not more than 1.5 to 1, to maintain certain specified operating ratios and to obtain the bank's approval to declare or pay dividends in excess of $200,000. The Company also has a credit agreement with a Canadian bank. Borrowings under this line of credit, which is used for working capital purposes by the Company's Canadian subsidiary, may not exceed Canadian $1,000,000, bear interest at the bank's prime rate (4.75% at September 30, 1997) and are due and payable on demand. Prior to October 17, 1997, borrowings under the line bore interest at the bank's prime rate plus 0.50%. At September 30, 1997, approximately US $376,000 was outstanding under this line of credit. 4. STOCKHOLDERS' EQUITY During the three months ended September 30, 1997, certain directors, officers and employees exercised options and warrants to purchase an aggregate of 94,549 shares of the Company's Common Stock for an aggregate of approximately $1,178,000. 5. TREASURY STOCK During the three months ended September 30, 1997, the Company repurchased 347,794 shares from certain officers and directors at a cost of $33.25 per share for an aggregate of approximately $11,565,000. 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. In computing earnings per share, the Company used the modified treasury stock method for the three months ended September 30, 1997 and 1996. 7. ACQUISITIONS On July 29, 1997, the Company purchased the stock of Ultima Distribution Inc., which was the distributor of the Company's products in Canada, for approximately $318,000. In addition, contingent payments may be paid over the next two years, based on Ultima's operating performance during that period. On October 1, 1997, the Company purchased substantially all the operating assets of Ram Manufacturing, Inc., a Little Rock, Arkansas developer, manufacturer and marketer of wall boards. The cash purchase price was approximately $2,400,000, and the Company also assumed certain liabilities totaling approximately $3,000,000. In addition, contingent payments may be paid over the next three years, based upon Ram's operating performance during that period. 8. STATEMENTS OF CASH FLOW The net cash used to purchase Ultima Distribution Inc. on July 29, 1997 was used as follows (in thousands): Working capital $ 227 Property, plant and equipment (150) Cost in excess of net assets of company acquired (395) ---------- Net cash used to acquire business $ (318) ========== Supplemental disclosure of cash flow information (in thousands): Three Months Ended September 30, 1997 1996 ------------------------------ Cash paid during the period for: Interest $ 52 $ 29 Income taxes $1,007 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. Since the Company's introduction of the first Day Runner System organizer in 1982, the Company's revenues have been generated by sales primarily of organizers and planners and secondarily of refills. Recently, much of the Company's growth has resulted from sales of related organizing products, virtually all of which have been introduced within the last three years. The Company focuses its product development, sales and marketing efforts primarily on the office products and mass market channels. The office products channel and the mass market channel accounted for 47.0% and 41.3%, respectively, of first quarter fiscal 1998 sales. RESULTS OF OPERATIONS The following table sets forth, for the periods indicated, the percentages that 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, 1997 1996 1996 to 1997 ------ ---------- ------------- Sales.................................................................. 100.0% 100.0% 13.7% Cost of goods sold..................................................... 47.3 47.6 13.0 ----- ----- Gross profit........................................................... 52.7 52.4 14.3 ----- ----- Operating expenses: Selling, marketing and distribution................................ 24.4 23.8 16.4 General and administrative......................................... 9.9 10.1 10.9 ----- ------ Total operating expenses........................................ 34.3 33.9 14.8 ----- ----- Income from operations................................................. 18.4 18.5 13.5 Net interest income.................................................... 0.3 0.6 (54.8) ---- ---- Income before provision for income taxes............................... 18.7 19.1 11.3 Provision for income taxes............................................. 7.3 7.6 8.5 ---- ---- Net income............................................................. 11.4% 11.5% 13.1 ==== =====
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: 1997 1996 - ----------------- ---- ---- (unaudited; dollars in thousands) Organizers and planners.............................. $ 21,188 55.6% $ 21,061 62.8% Refills.............................................. 10,875 28.5 10,444 31.1 Related organizing products.......................... 6,075 15.9 2,044 6.1 -------- ----- --------- ----- Total............................................ $ 38,138 100.0% $ 33,549 100.0% ======== ===== ========= =====
Three Months Ended September 30, Distribution Channel: 1997 1996 - --------------------- ---- ---- (unaudited; dollars in thousands) Office products...................................... $ 17,924 47.0% $ 17,783 53.0% Mass market.......................................... 15,750 41.3 12,480 37.2 Foreign customers.................................... 2,415 6.3 1,364 4.1 Other................................................ 2,049 5.4 1,922 5.7 ---------- ----- --------- ------ Total............................................ $ 38,138 100.0% $ 33,549 100.0% ========== ===== ========= =====
THREE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED WITH THE THREE MONTHS ENDED SEPTEMBER 30, 1996 SALES. Sales consist of revenues from gross product shipments net of allowances for returns, rebates and credits. In the first quarter of fiscal 1998, sales increased by $4,589,000, or 13.7%, primarily because of increased sales of related organizing products. In the quarter ended September 30, 1997, sales of related organizing products grew by $4,031,000, or 197.2%; sales of refills (which include calendars and accessories) grew by $431,000, or 4.1%; and sales of organizers and planners grew by $127,000, or 0.6%. Product sales were primarily to office products customers and secondarily to mass market customers. Sales to mass market customers grew by $3,270,000, or 26.2%; sales to foreign customers grew by $1,051,000, or 77.1%; sales to the office products customers grew by $141,000, or 0.8%; and sales to miscellaneous customers grouped together as "other" increased by $127,000, or 6.6%. 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, sales returns, purchasing and manufacturing efficiencies, tariffs, duties and inventory carrying costs. Gross profit as a percentage of sales increased from 52.4% in the first quarter of fiscal 1997 to 52.7% in the first quarter of fiscal 1998. OPERATING EXPENSES. Total operating expenses increased by $1,684,000, or 14.8%, in the first quarter of fiscal 1998 compared with the first quarter of fiscal 1997 and increased as a percentage of sales from 33.9% to 34.3%. Primarily because of higher personnel costs and secondarily because of higher promotional display costs, selling, marketing and distribution expenses increased by $1,314,000 and from 23.8% to 24.4% as a percentage of sales. General and administrative expenses increased by $370,000, but decreased from 10.1% to 9.9% as a percentage of sales primarily because of the Company's increased ability to absorb fixed costs as a result of higher sales. NET INTEREST INCOME. Primarily because of a decrease in the Company's cash available for short-term investment resulting from the Company's repurchase of common stock, net interest income in the first quarter of fiscal 1998 compared with the first quarter of fiscal 1997 decreased by $115,000 and from 0.6% to 0.3% as a percentage of sales. INCOME TAXES. Primarily because of the improved financial results of the Company's Hong Kong subsidiary, the Company's first quarter fiscal 1998 effective tax rate was 39.0%, compared with 40.0% for the first quarter of fiscal 1997. 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 new product introductions and line extensions, the timing of large orders, changes in product sales or customer mix, vendor and customer pricing, production levels, supply and manufacturing delays, large customers' inventory management and general industry and economic conditions. 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, 1997 decreased to $8,080,000 from $15,550,000 at June 30, 1997. In the three months ended September 30, 1997, net cash of $5,095,000 provided by operating activities, offset net cash of $1,253,000 and $11,308,000 used in investing activities and financing activities, respectively. Of the $5,095,000 net amount provided by the Company's operating activities, $4,352,000 was provided by net income, $2,063,000 was provided by an increase in accounts payable, $1,938,000 was provided by an increase in accrued expenses, and $1,719,000 was provided by an increase in income taxes payable, which amounts were partially offset by an increase of $4,160,000 in inventories and an increase of $1,931,000 in accounts receivable. Of the $1,253,000 net amount used in the Company's investing activities, $897,000 was used to acquire primarily machinery and equipment and secondarily computer equipment and software and $318,000 was used to acquire Ultima Distribution Inc. Of the $11,308,000 net amount used in the Company's financing activities, $11,565,000 was used to repurchase 347,794 shares of Common Stock from certain officers and directors, which amount was partially offset by $1,178,000 that was provided by the issuance of Common Stock upon exercise of then-outstanding stock options and warrants. Primarily because of the Company's increased sales of certain dated products, the timing of such sales and the payment terms customary for such products, accounts receivable (net) at September 30, 1997 increased by 10.5% from the fiscal 1997 year-end amount. Compared with the September 30, 1996 amount, accounts receivable (net) increased by 9.5% primarily because of the growth in sales. The average collection period of accounts receivable at September 30, 1997 was 47 days, compared with 47 and 45 days at June 30, 1997 and September 30, 1996, respectively. Inventories at September 30, 1997 increased by 23.2% from the fiscal 1997 year-end amount and by 62.1% compared with the September 30, 1996 amount primarily because of continuing expansion of distribution of new and recently introduced products and the Company's anticipated growth in sales. At September 30, 1997, Day Runner had no amounts outstanding under its primary $15,000,000 bank line but had used the line to secure outstanding letters of credit of approximately $1,000,000, which reduced the availability under the line to approximately $14,000,000. Borrowings under this line of credit bear interest at the Company's election at either the bank's prime rate or at LIBOR plus 1.75%. Effective November 1, 1997, the Company amended this credit agreement to be due and payable on February 1, 1998, except that commercial letters of credit and standby letters of credit may be issued to expire no later than August 1 and May 1, 1998, respectively. (See Note 3 to Consolidated Financial Statements.) The Company's Canadian line of credit allows for borrowings of up to Canadian $1,000,000 (approximately US $784,000). Borrowings bear interest at the Canadian bank's prime rate and are due and payable on demand. Prior to October 17, 1997, borrowings under the line bore interest at the bank's prime rate plus 0.50%. At September 30, 1997, approximately Canadian $519,000 (approximately US $376,000) was outstanding under this line of credit, which reduced the availability under the line to approximately Canadian $481,000 (approximately US $348,000). (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 international operations 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 for corporate finance purposes 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 and elsewhere in this quarterly report are forward looking statements that involve risks and uncertainties that could affect actual future results. Such risks and uncertainties include, but are not limited to: timing and size of orders from large customers, timing and size of orders for 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 3.1 Certificate of Incorporation of the Registrant, as amended(1) 3.2 Bylaws of the Registrant, as amended(2) 10.1 1998 Officer Bonus Plan 10.2 Form of Stock Purchase Agreement dated August 27, 1997 and Schedule of Sellers 10.3 Form of Warrant dated August 19, 1997 to purchase shares of the Registrant's Common Stock issued to certain officers of the Company and Schedule of Warrants(3) 10.4 Credit Agreement dated as of May 1, 1993 between the Registrant and Wells Fargo Bank, National Association, including Line of Credit Note(4), Assumption and Consent to Merger Agreement dated as of June 30, 1993(5), First Amendment to Credit Agreement dated as of December 15, 1993(5), Second Amendment to Credit Agreement dated as of May 1, 1994, including Line of Credit Note(6), Third Amendment to Credit Agreement dated as of October 1, 1994, including Line of Credit Note(7), Fourth Amendment to Credit Agreement dated as of October 2, 1995, including Revolving Line of Credit Note(8) , Fifth Amendment to Credit Agreement dated as of November 1, 1996, including Revolving Line of Credit Note (9), Sixth Amendment to Credit Agreement dated as of September 1, 1997, including Revolving Line of Credit Note(3) and Letter Agreement dated as of November 1, 1997 11.1 Statement of Computation of Earnings per Share 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, 1997. (1) Incorporated by reference to the Registrant's Transition Report on Form 10-K (File No. 0-19835) filed with the Commission on September 27, 1994. (2) Incorporated by reference to the Registrant's Current Report on Form 8-K (File No. 0-19835) filed with the Commission on August 5, 1993. (3) Incorporated by reference to the Registrant's Annual Report on Form 10-K (File No. 0-19835) filed with the Commission on September 29, 1997. (4) 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. (5) 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. (6) 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. (7) 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. (8) 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. (9) Incorporated by reference to the Registrant's Quarterly Report on Form 10-Q (File No. 0-19835)filed with the Commission on November 13, 1996. 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, 1997 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 EX-99 2 OFFICER BONUS PLAN ATTACHMENT II EXHIBIT 10.1 DAY RUNNER, INC. OFFICER BONUS PLAN FOR THE FISCAL YEAR ENDING JUNE 30,1998 The Officer Bonus Plan (the "Bonus Plan") for the fiscal year ending June 30, 1998, will be paid based on the Company's fiscal year ending June 30, 1998 financial performance as measured by the degree of attainment of a pre-set, Compensation Committee -approved, net income goal. The established net income goal for the fiscal year ending June 30, 1998 to be used for calculation of the fiscal 1998 bonuses is after bonuses net income (after taxes and all other expense items) of $12,548,000. The percentage attainment of the net income goal will be applied to the matrix on the following pages to determine the bonus. (For the purposes of this attachment, only a partial matrix is shown.) Percentage calculations for net income and bonus percentages will be calculated to two decimal places and will be rounded up. A minimum of 115% of the after-bonuses net income goal must be achieved to receive any bonus. Bonus payments, if any, will be made in one lump sum payable within 30 days after the net income results for fiscal 1998 have been finalized and any review and audit by the Company's outside accountants have been completed (as evidenced by the Company's auditors executing its financial report and delivering copies to the Compensation Committee). In the event any officer included in the Bonus Plan is an officer of the Company for only a portion of the 12-month period ending June 30,1998 (or changes his/her officer position during this period), then his/her participation in the Bonus Plan will be pro-rata based on the number of days as a Company officer (or as he/she held each respective office) in the fiscal year ending June 30, 1998 divided by 365, without regard to the actual net income earned by the Company during the period he/she was an officer; provided, however, that in order to be eligible for participation in the Bonus Plan, an officer must be an officer for at least six months of the Company's 1998 fiscal year, and prior to July 1, 1998, the Company must not have terminated such officer's employment for "Cause" (as defined in the Company's Officer Severance Plan) and such officer must not have resigned as an officer of the Company without "Good Reason" (as defined in the Company's Officer Severance Plan) prior to July 1, 1998. Unless additional officers are explicitly included in the Bonus Plan pursuant to a subsequent, duly adopted Board or Compensation Committee resolution, only the following officers shall be eligible to participate in the Bonus Plan: Chief Executive Officer; President & Chief Operating Officer; Chief Financial Officer & Executive Vice President, Finance & Administration; Vice President, Sales; Vice President, Marketing; Vice President, Product Development; Vice President, International Sales; Vice President, Chief Information Officer; and Vice President, Corporate Development. Bonuses will be calculated and paid according to the partial matrix on the following pages which is to be used by applying the applicable bonus percentage to the annual base salary for each eligible officer.
DAY RUNNER, INC. FISCAL YEAR 1998 OFFICER BONUS SCHEDULE * Chief Executive President and Chief Financial Vice President - Officer Chief Operating Officer Officer Sales Base Salary Base Salary Base Salary Base Salary 1997 N/I(1)=$12,548 $330,000 $275,000 $180,000 $155,000 ----------------------- ------------------------ --------------------------------------------------------------------------------- Net Income Net Income Percent of Bonus Percent of Bonus Percent of Bonus Percent of Bonus Growth Rate Target Salary Amount Salary Amount Salary Amount Salary Amount - ------------------------------------------------------------------------------------------------------------------------------------ 15.0% $14,430 15.0% $ 49,500 15.0% $41,250 15.0% $27,000 15.0% $23,250 16.0% $14,556 17.4% $ 57,514 17.4% $47,929 17.1% $30,857 17.1% $26,571 17.0% $14,681 19.9% $ 65,529 19.9% $54,607 19.3% $34,714 19.3% $29,893 18.0% $14,807 22.3% $ 73,543 22.3% $61,286 21.4% $38,571 21.4% $33,214 19.0% $14,932 24.7% $ 81,557 24.7 $67,964 23.6% $42,429 23.6% $36,536 20.0% $15,058 27.1% $ 89,571 27.1% $74,643 25.7% $46,286 25.7% $39,857 21.0% $15,183 29.6% $ 97,586 29.6% $81,321 27.9% $50,143 27.9% $43,179 22.0% $15,309 32.0% $105,600 32.0% $88,000 30.0% $54,000 30.0% $46,500 23.0% $15,434 34.4% $113,614 34.4% $94,679 32.1% $57,857 32.1% $49,821 24.0% $15,560 36.9% $121,629 36.9% $101,357 34.3% $61,714 34.3% $53,143 25.0% $15,685 39.3% $129,643 39.3% $108,036 36.4% $65,571 36.4% $56,464 26.0% $15,810 41.7% $137,657 41.7% $114,714 38.6% $69,429 38.6% $59,786 27.0% $15,936 44.1% $145,671 44.1% $121,393 40.7% $73,286 40.7% $63,107 28.0% $16,061 46.6% $153,686 46.6% $128,071 42.9% $77,143 42.9% $66,429 29.0% $16,187 49.0% $161,700 49.0% $134,750 45.0% $81,000 45.0% $69,750 30.0% $16,312 51.4% $169,714 51.4% $141,429 47.1% $84,857 47.1% $73,071 31.0% $16,438 53.9% $177,729 53.9% $148,107 49.3% $88,714 49.3% $76,393 32.0% $16,563 56.3% $185,743 56.3% $154,786 51.4% $92,571 51.4% $79,714 33.0% $16,689 58.7% $193,757 58.7% $161,464 53.6% $96,429 53.6% $83,036 34.0% $16,814 61.1% $201,771 61.1% $168,143 55.7% $100,286 55.7% $86,357 35.0% $16,940 63.6% $209,786 63.6% $174,821 57.9% $104,143 57.9% $89,679 36.0% $17,065 66.0% $217,800 66.0% $181,500 60.0% $108,000 60.0% $93,000 37.0% $17,191 68.4% $225,814 68.4% $188,179 62.1% $111,857 62.1% $96,321 38.0% $17,316 70.9% $233,829 70.9% $194,857 64.3% $115,714 64.3% $99,643 39.0% $17,442 73.3% $241,843 73.3% $201,536 66.4% $119,571 66.4% $102,964 40.0% $17,567 75.7% $249,857 75.7% $208,214 68.6% $123,429 68.6% $106,286 41.0% $17,693 78.1% $257,871 78.1% $214,893 70.7% $127,286 70.7% $109,607 42.0% $17,818 80.6% $265,886 80.6% $221,571 72.9% $131,143 72.9% $112,929 43.0% $17,944 83.0% $273,900 83.0% $228,250 75.0% $135,000 75.0% $116,250 44.0% $18,069 85.4% $281,914 85.4% $234,929 77.1% $138,857 77.1% $119,571 45.0% $18,195 87.9% $289,929 87.9% $241,607 79.3% $142,714 79.3% $122,893 46.0% $18,320 90.3% $297,943 90.3% $248,286 81.4% $146,571 81.4% $126,214 47.0% $18,446 92.7% $305,957 92.7% $254,964 83.6% $150,429 83.6% $129,536 48.0% $18,571 95.1% $313,971 95.1% $261,643 85.7% $154,286 85.7% $132,857 49.0% $18,697 97.6% $321,986 97.6% $268,321 87.9% $158,143 87.9% $136,179 50.0% $18,822 100.0% $330,000 100.0% $275,000 90.0% $162,000 90.0% $139,500 -------------------------------------------------------------------------------------------------------------------------- Continued Vice President Vice President - Vice President - Vice President Product Development Marketing Information Services International Sales Base Salary Base Salary Base Salary Base Salary 1997 N/I(1)=$12,548 $155,000 $125,000 $135,000 $125,000 ----------------------- ---------------------- --------------------- --------------------- --------------------- Net Income Net Income Percent of Bonus Percent of Bonus Percent of Bonus Percent of Bonus Growth Rate Target Salary Amount Salary Amount Salary Amount Salary Amount ------------------------ ---------------------- --------------------- -------------------- 15.0% $14,430 15.0% $23,250 15.0% $18,750 15.0% $20,250 15.0% $18,750 16.0% $14,556 17.1% $26,571 17.1% $21,429 16.3% $21,986 16.3% $20,357 17.0% $14,681 19.3% $29,893 19.3% $24,107 17.6% $23,721 17.6% $21,964 18.0% $14,807 21.4% $33,214 21.4% $26,786 18.9% $25,457 18.9% $23,571 19.0% $14,932 23.6% $36,536 23.6% $29,464 20.1% $27,193 20.1 $25,179 20.0% $15,058 25.7% $39,857 25.7% $32,143 21.4% $28,929 21.4% $26,786 21.0% $15,183 27.9% $43,179 27.9% $34,821 22.7% $30,664 22.7% $28,393 22.0% $15,309 30.0% $46,500 30.0% $37,500 24.0% $32,400 24.0% $30,000 23.0% $15,434 32.1% $49,821 32.1% $40,179 25.3% $34,136 25.3% $31,607 24.0% $15,560 34.3% $53,143 34.3% $42,857 26.6% $35,871 26.6% $33,214 25.0% $15,685 36.4% $56,464 36.4% $45,536 27.9% $37,607 27.9% $34,821 26.0% $15,810 38.6% $59,786 38.6% $48,214 29.1% $39,343 29.1% $36,429 27.0% $15,936 40.7% $63,107 40.7% $50,893 30.4% $41,079 30.4% $38,036 28.0% $16,061 42.9% $66,429 42.9% $53,571 31.7% $42,814 31.7% $39,463 29.0% $16,187 45.0% $69,750 45.0% $56,250 33.0% $44,550 33.0% $41,250 30.0% $16,312 47.1% $73,071 47.1% $58,929 34.3% $46,286 34.3% $42,857 31.0% $16,438 49.3% $76,393 49.3% $61,607 35.6% $48,021 35.6% $44,464 32.0% $16,563 51.4% $79,714 51.4% $64,286 36.9% $49,757 36.9% $46,071 33.0% $16,689 53.6% $83,036 53.6% $66,964 38.1% $51,493 38.1% $47,679 34.0% $16,814 55.7% $86,357 55.7% $69,643 39.4% $53,229 39.4% $49,286 35.0% $16,940 57.9% $89,679 57.9% $72,321 40.7% $54,964 40.7% $50,893 36.0% $17,065 60.0% $93,000 60.0% $75,000 42.0% $56,700 42.0% $52,500 37.0% $17,191 62.1% $96,321 62.1% $77,679 43.3% $58,436 43.3% $54,107 38.0% $17,316 64.3% $99,643 64.3% $80,357 44.6% $60,171 44.6% $55,714 39.0% $17,442 66.4% $102,964 66.4% $83,036 45.9% $61,907 45.9% $57,321 40.0% $17,567 68.6% $106,286 68.6% $85,714 47.1% $63,643 47.1% $58,929 41.0% $17,693 70.7% $109,607 70.7% $88,393 48.4% $65,379 48.4% $60,536 42.0% $17,818 72.9% $112,929 72.9% $91,071 49.7% $67,114 49.7% $62,143 43.0% $17,944 75.0% $116,250 75.0% $93,750 51.0% $68,850 51.0% $63,750 44.0% $18,069 77.1% $119,571 77.1% $96,429 52.3% $70,586 52.3% $65,357 45.0% $18,195 79.3% $122,893 79.3% $99,107 53.6% $72,321 53.6% $66,964 46.0% $18,320 81.4% $126,214 81.4% $101,786 54.9% $74,057 54.9% $68,571 47.0% $18,446 83.6% $129,536 83.6% $104,464 56.1% $75,793 56.1% $70,179 48.0% $18,571 85.7% $132,857 85.7% $107,143 57.4% $77,529 57.4% $71,786 49.0% $18,697 87.9% $136,179 87.9% $109,821 58.7% $79,264 58.7% $73,393 50.0% $18,822 90.0% $139,500 90.0% $112,500 60.0% $81,000 60.0% $75,000 Continued Vice President Corporate Development Base Salary 1997 N/I(1)=$12,548 $125,000 ----------------------- --------------------- Net Income Net Income Percent of Bonus Growth Rate Target Salary Amount ------------------------ --------------------- 15.0% $14,430 15.0% $18,750 16.0% $14,556 16.3% $20,357 17.0% $14,681 17.6% $21,964 18.0% $14,807 18.9% $23,571 19.0% $14,932 20.1 $25,179 20.0% $15,058 21.4% $26,786 21.0% $15,183 22.7% $28,393 22.0% $15,309 24.0% $30,000 23.0% $15,434 25.3% $31,607 24.0% $15,560 26.6% $33,214 25.0% $15,685 27.9% $34,821 26.0% $15,810 29.1% $36,429 27.0% $15,936 30.4% $38,036 28.0% $16,061 31.7% $39,463 29.0% $16,187 33.0% $41,250 30.0% $16,312 34.3% $42,857 31.0% $16,438 35.6% $44,464 32.0% $16,563 36.9% $46,071 33.0% $16,689 38.1% $47,679 34.0% $16,814 39.4% $49,286 35.0% $16,940 40.7% $50,893 36.0% $17,065 42.0% $52,500 37.0% $17,191 43.3% $54,107 38.0% $17,316 44.6% $55,714 39.0% $17,442 45.9% $57,321 40.0% $17,567 47.1% $58,929 41.0% $17,693 48.4% $60,536 42.0% $17,818 49.7% $62,143 43.0% $17,944 51.0% $63,750 44.0% $18,069 52.3% $65,357 45.0% $18,195 53.6% $66,964 46.0% $18,320 54.9% $68,571 47.0% $18,446 56.1% $70,179 48.0% $18,571 57.4% $71,786 49.0% $18,697 58.7% $73,393 50.0% $18,822 60.0% $75,000 *The officer's bonus amount is calculated by multiplying the officer's base salary times a percent of salary at various targeted income levels. Additionally, this is only a partial table.
EX-99 3 FORM OF STOCK PURCHASE AGREEMENT STOCK PURCHASE AGREEMENT EXHIBIT 10.2 THIS STOCK PURCHASE AGREEMENT (this "Agreement") is entered into effective as of August 27, 1997 (the "Effective Date"), by and between _____________________ ("Seller"), and Day Runner, Inc., a Delaware corporation ("Purchaser"). WHEREAS, Seller desires to sell to Purchaser, and Purchaser desires to purchase from Seller, ________ shares of Common Stock of Purchaser (the "Shares") on the terms and subject to the conditions set forth herein. NOW, THEREFORE, in consideration of the above recital and the mutual promises and covenants set forth below, the parties hereto hereby agree as follows: 1. Purchase and Sale of Stock. 1. 1 Purchase. On the basis of and in reliance upon the representations and warranties set forth herein and subject to the terms and conditions of this Agreement, Seller hereby sells, transfers, and assigns to Purchaser, and Purchaser hereby purchases from Seller, the Shares for a purchase price equal to the closing price of a share of Purchaser's Common Stock on the Nasdaq National Market System on the Effective Date multiplied by the number of Shares (the "Purchase Price"). 1. 2 Delivery of Shares; Payment. Prior to the close of business on September 4, 1997, Seller shall deliver the Shares to Purchaser by either (a) delivering to Purchaser an original executed Assignment Separate from Certificate, together with a stock certificate representing all or a portion of the Shares and/or (b) causing the Shares (or such portion of the Shares not delivered in accordance with Section 1.2(a) hereof) to be transferred electronically to the account of Montgomery Securities, 600 Montgomery Street, San Francisco, California (DTC Account No. 773) for further credit to the account of Purchaser (Account No. 110-61298). Within three business days after the receipt of the Shares, Purchaser will pay or cause to be paid to Seller the Purchase Price by check or wire transfer at the election of Purchaser. 1. 3 No Additional Consideration. Except for the Purchase Price set forth in this Section 1 hereof, Seller is neither owed nor entitled to any additional compensation or consideration from Purchaser or its directors, officers, agents, representatives or stockholders with respect to the purchase and sale of the Shares. 2. Representations and Warranties of Seller. Seller hereby represents and warrants to Purchaser as follows: 2. 1 Ownership of the Shares. Seller is the lawful record and beneficial owner of, and has good and marketable title to, the Shares. The Shares are owned by Seller free and clear of all liens, encumbrances, security interests, equities, claims, options, licenses, charges and assessments, and are subject to no restrictions with respect to transferability by Seller to Purchaser except compliance with applicable securities laws. Upon delivery of the Shares to Purchaser, Seller shall have conveyed to Purchaser good and marketable title in and to the Shares free and clear of all liens, encumbrances, security interests, equities, claims, options, licenses, charges, assessments and restrictions whatsoever. The Shares do not represent more than 10% of all shares of Common Stock of Purchaser that Seller beneficially owns as of the Effective Date, and for purposes of determining such percentage ownership, all shares of Common Stock of Purchaser that are subject to outstanding options or warrants, whether vested or unvested, held by Seller or an affiliate of Seller as of the Effective Date shall be deemed beneficially owned by Seller. The Shares do not exceed the maximum number of shares of Common Stock of Purchaser that Seller, as of the Effective Date, could sell pursuant to Rule 144 under the Securities Exchange Act of 1934. 2. 2 Authority. Seller represents and warrants that all action by Seller necessary for the sale of the Shares pursuant to this Agreement and the performance of Seller's obligations hereunder has been taken. Seller further represents that this Agreement is a legal, valid and binding obligation of Seller enforceable in accordance with its terms, that Seller has all right, legal capacity, authority and requisite legal power to enter into this Agreement and to carry out and perform Seller's obligations under the terms of this Agreement. The execution and delivery of, and the performance of the obligations under, this Agreement by Seller do not and will not contravene or result in any breach of any law or of any regulation, order, writ, injunction or decree of any court, tribunal, governmental body, authority, agency or instrumentality applicable to Seller or the Shares, nor do or will such execution, delivery or performance violate, conflict with or result in (or with notice or lapse of time or both result in) a breach of or default under any term or provision of any agreement, oral or written, to which Seller is a party or is bound or to which the Shares are subject. 2. 3 Disclosure. (a) (Seller to check and initial the box that applies): Seller is currently an executive officer and/or a director of Purchaser and, in such capacity, Seller is familiar with and fully informed with respect to Purchaser's business, operations, financial condition, affairs and prospects. If Seller is a trust, then its trustee (or one of its trustees) is a beneficial owner of the Shares, is currently an executive officer and/or director of Purchaser and has executed this Agreement on behalf of such trust, and by virtue of such relationship with Purchaser, such trustee is familiar with and fully informed with respect to Purchaser's business, operations, financial condition, affairs and prospects. If Seller is a partnership, then its general partner (or an officer or affiliate of its general partner) is a beneficial owner of the Shares, is currently an executive officer and/or director of Purchaser and has executed this Agreement on behalf of such partnership, and by virtue of such relationship with Purchaser, such person is familiar with and fully informed with respect to Purchaser's business, operations, financial condition, affairs and prospects. If Seller is a corporation, then its chief executive officer (or one of its executive officers) is a beneficial owner of the Shares, is currently an executive officer and/or director of Purchaser and has executed this Agreement on behalf of such corporation, and by virtue of such relationship with Purchaser, such person is familiar with and fully informed with respect to Purchaser's business, operations, financial condition, affairs and prospects. (b) Seller has had an opportunity to seek the advice of counsel with regard to the sale of the Shares under, and with regard to the other terms of, this Agreement. Seller and/or Seller's advisors have had a reasonable opportunity to ask questions of and receive answers from Purchaser, or a person or persons acting on its behalf, concerning this transaction, and to obtain additional information, to the extent possessed by Purchaser or obtainable by Purchaser without unreasonable effort or expense. To Seller's best knowledge and belief,all such questions have been answered to the full satisfaction of Seller. Seller has had sufficient opportunity to review Purchaser's historical and current financial data. (c) Seller is not aware of any material adverse non-public information concerning Purchaser or its business, operations, financial condition, affairs or prospects that Seller has not disclosed in all material respects to the Board of Directors of Purchaser. 2. 4 Brokers. No broker, finder or other person is entitled to any broker's, finder's or other fee or commission in connection with this Agreement or the transactions contemplated hereby by reason of any claim arising by, through or under Seller. 2. 5 Adequacy of Consideration. The consideration Seller is receiving in exchange for the consideration Seller is giving under this Agreement is fair, just and reasonable. Seller is aware that the value of the Shares is subject to considerable potential fluctuation and may now, or in the future, have an actual value substantially above, or below, the Purchase Price Purchaser is paying therefor, and it is possible that Seller might realize a higher price for the Shares if Seller held them for an additional period. Seller has such knowledge of business, financial and legal matters, and has had sufficient access to experts on such matters, to assess the value of the Shares and the advisability of this transaction. 2. 6 Miscellaneous Representations. (a) Seller and/or Seller's advisors have such knowledge and experience in financial, tax and business matters to enable Seller and/or them to utilize the information made available to Seller and/or them in connection with the sale of the Shares, to evaluate the merits and risks of the transaction and to make an informed decision with respect thereto. (b) Seller understands that the tax consequences to Seller from the sale of the Shares depend on Seller's individual circumstances and Seller has not received or relied on any advice from Purchaser or its agents or representatives regarding such tax consequences. 3. Representations and Warranties of Purchaser. Purchaser represents and warrants that all action by Purchaser necessary for the purchase of the Shares pursuant to this Agreement and the performance of Purchaser's obligations hereunder has been taken. Purchaser further represents that this Agreement is a legal, valid and binding obligation of Purchaser enforceable in accordance with its terms. The execution and delivery of, and the performance of the obligations under, this Agreement by Purchaser do not and will not contravene or result in any breach of any law or of any regulation, order, writ, injunction or decree of any court, tribunal, governmental body, authority, agency or instrumentality, nor do or will such execution, delivery or performance violate, conflict with or result in (or with notice or lapse of time or both result in) a breach of or default under any term or provision of any agreement, oral or written, to which Purchaser is a party or is bound. Purchaser is not aware of any material nonpublic information concerning Purchaser or its business, operations, financial condition, affairs or prospects that Purchaser has not disclosed in all material respects to Seller. 4. Market Stand-Off Agreement. Seller agrees not to sell, offer to sell or contract to sell, directly or indirectly, any shares of Common Stock (or other securities) of Purchaser owned beneficially or of record by Seller at any time during the 60-day period following the Effective Date. 5. Indemnification. Each party hereto shall indemnify and hold harmless the other party in respect of: (a) any and all loss, liability, damage or deficiency resulting from any breach of the representations and warranties of such party set forth in this Agreement, or from the breach or nonfulfillment of any covenant or agreement on the part of such indemnifying party under this Agreement; and (b) any and all actions, suits, proceedings, judgments, costs and expenses (including reasonable legal fees) incident to the foregoing. No party shall be entitled to indemnification pursuant to this Section 5 unless such party shall have given prompt notice of the relevant claim to the party from whom indemnification is sought and shall have provided such party with the opportunity to conduct the defense thereof at its own expense. 6. Miscellaneous. 6. 1 Notices. All notices and demands referred to or required herein or pursuant hereto shall be in writing, shall specifically reference this Agreement and shall be deemed to be duly sent and given upon actual delivery to and receipt by the relevant party (which notice, in the case of Purchaser, must be from an executive officer of Purchaser other than Seller even if Seller is an officer or authorized agent of Purchaser) or five days after deposit in the U.S. mail by certified or registered mail, return receipt requested, with postage prepaid, addressed to the other party at the address set forth on the signature page hereof (if, however, a party has given the other party due notice of another address for the sending of notices, then future notices shall be sent to such new address). 6. 2 Legal Advice and Construction of Agreement. Each party represents that such party has had the opportunity to seek independent legal advice with respect to the advisability of entering into this Agreement and neither has been entitled to rely upon nor has in fact relied upon the legal or other advice of the other party or such other party's counsel in entering into this Agreement. 6. 3 Parties' Understanding. Each party represents that such party has carefully read this Agreement, that such party fully understands the final and binding effect of this Agreement, that the only promises made to such party to sign this Agreement are those stated above, and that such party is signing this Agreement voluntarily. 6. 4 Entire Agreement. This Agreement constitutes a single integrated contract expressing the entire agreement of the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous oral and written agreements and discussions with respect to the subject matter hereof. 6. 5 Amendment. This Agreement and each provision hereof may be amended, modified, supplemented or waived only by a written document specifically identifying this Agreement and duly executed by each party hereto or the authorized representative of such party. 6. 6 California Law and Location. This Agreement was negotiated, finalized and delivered within the State of California, and the rights and obligations of the parties hereto shall be construed and enforced in accordance with and governed by the internal (and not the conflict of laws) laws of the State of California applicable to the construction and enforcement of contracts between parties resident in California which are entered into and fully performed in California. Any action or proceeding arising out of, relating to or concerning this Agreement, including, without limitation, any claim of breach of contract, shall be filed in the state courts of the County of Los Angeles, State of California or in a United States District Court in the Central District of California and in no other location. The parties hereby waive the right to object to such location on the basis of venue. 6. 7 Attorneys' Fees. In the event a lawsuit is instituted by either party concerning a dispute under this Agreement, the prevailing party in such lawsuit shall be entitled to recover from the losing party all reasonable attorneys' fees, costs of suit and expenses (including fees, costs and expenses of appeals), in addition to whatever damages or other relief the injured party is otherwise entitled to under law and in connection with such dispute. 6. 8 Force Majeure. Neither Purchaser nor Seller shall be deemed in default if such party's performance or obligations hereunder are delayed or become impossible or impractical by reason of any act of God, war, fire, earthquake, strike, civil commotion, epidemic or any other cause beyond such party's reasonable control. 6. 9 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but which together shall constitute one and the same instrument. 6. 10 Successors and Assigns. Neither party may assign this Agreement or any of such party's rights or obligations hereunder (including without limitation rights and duties of performance) to any third party or entity, and this Agreement may not be involuntarily assigned or assigned by operation of law, without the prior written consent of the non-assigning party, which consent may be given or withheld by such non-assigning party in the sole exercise of such party's discretion. Any prohibited assignment shall be null and void, and any attempted assignment of this Agreement in violation of this Section shall constitute a material breach of this Agreement and cause for its termination by and at the election by notice of the other party hereto. This Agreement shall be binding upon and inure to the benefit of each of the parties hereto and, except as otherwise provided herein, their respective legal successors and permitted assigns. 6. 11 Survival. The representations and warranties herein shall survive the execution and delivery of this Agreement and each party hereto is estopped from making a claim which conflicts with such party's representations and warranties hereunder. 6. 12 Limitation of Damages. Except as expressly set forth herein, in any action or proceeding arising out of, relating to or concerning this Agreement, including, without limitation, any claim of breach of contract, liability shall be limited to compensatory damages proximately caused by such breach and neither party shall, under any circumstances, be liable to the other party for consequential, incidental, indirect or special damages, including but not limited to lost profits or income, even if such party has been apprised of the likelihood of such damages occurring. IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the Effective Date. PURCHASER: SELLER (if an individual): DAY RUNNER, INC. Signature(s): By: /s/ Mark A. Vidovich Address: Print Name: Mark A. Vidovich Title: Chief Executive Officer Address: 15295 Alton Parkway Irvine, CA 92718 Attention: Chief Executive Officer SELLER (if trust, partnership or corporation): (Print Name of Entity) By: Print Name: Title: By: Print Name: Title: Address: SCHEDULE OF SELLERS Name of Seller Number of Shares Repurchased Dennis Baglama 6,930 Ronald Bianco 10,000 Donald E. Bottinelli 2,163 James E. Freeman, Jr. 27,329 James P. Higgins 3,500 O.S. II, Inc. 91,174 Lakeside Enterprises 10,000 Stan Littley 4,158 Dennis Marquardt 21,000 Charles Miller 3,267 Alan Rachlin 34,500 Judy Tucker 7,827 Mark Vidovich 70,000 Richard Whatley 1,500 Boyd Willat 23,236 Felice Willat 31,210 EX-99 4 CREDIT AGREEMENT EXHIBIT 10.4 Los Angeles Regional Commercial Banking Office 333 South Grand Avenue, 3rd Floor Los Angeles, CA 90071 November 1, 1997 Day Runner, Inc. 2750 W. Moore Avenue Fullerton, CA 9283 Gentlemen: This letter is to confirm that Wells Fargo Bank, National Association ("Bank") has agreed to extend the maturity date of that certain credit accommodation granted by Bank to Day Runner, Inc. ("Borrower") in the maximum principal amount of Fifteen Million Dollars ($15,000,000.00) pursuant to the terms and conditions of that certain Credit Agreement between Bank and Borrower as of May 1, 1993, as amended from time to time. The maturity date of said credit accommodation, and the last day on which Bank will issue Standby Letters of Credit under the subfeature relating to said credit accommodation, and the last day on which Bank will issue Commercial Letters of Credit under the subfeaure relating to said credit accomodation, as described in Agreement, is hereby extended until February 1, 1998. Until such date, all terms and conditions of the Agreement which pertain to said credit accommodation shall remain in full force and effect, except as expressly modified hereby. The promissory note dated as of September 1, 1997, executed by Borrower and payable to the order of Bank which evidences said credit accommodation, a copy of which is attached hereto as Exhibit A, shall be deemed modified as of the date this letter is acknowledged by Borrower to reflect the new maturity date set forth above. Further, the last date on which the above-described Standby Letters of Credit may expire is hereby extended to May 1, 1998, and the last date on which the above-described Commercial Letters of Credit may expire is hereby extended to August 1, 1998. All other terms and conditions of the Note remain in full force and effect, without waiver or modification. Borrower acknowledges that Bank has not committed to make any renewal or further extension of the maturity date of the above-described credit accommodation beyond the new maturity date specified herein, and that any such renewal or further extension remains in the sole discretion of Bank. This letter constitutes the entire agreement between Bank and Borrower with respect to the maturity date extension for the above-described credit accommodation, and supersedes all prior negotiations, discussions and correspondence concerning said extension. Please acknowledge your acceptance of the terms and conditions contained herein by dating and signing one copy below and returning it to my attention at the above address on or before November 14, 1997. Very truly yours, WELLS FARGO BANK, NATIONAL ASSOCIATION By: /s/ Clare Gurbach --------------------- Vice President Acknowledged and accepted as of DAY RUNNER, INC. By: /s/ Dennis K. Marquardt -------------------------------------------- Title: Executive Vice President, Finance & Admin. Exhibit A REVOLVING LINE OF CREDIT NOTE $15,000,000.00 Los Angeles, California September 1, 1997 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 Fifteen Million Dollars ($15,000,000.00), 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) or two (2) 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) NLIBOR" 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 October 1, 1997. (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 riot 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 E. Freeman, Jr. or Kevin Marquez or Mark Vidovich or Ravi Shan or 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 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 K. Marquardt ----------------------------------------------- Title: Executive Vice President, Finance and Admin. EX-11 5 COMPUTATION OF PER SHARE EARNINGS
EXHIBIT 11.1 DAY RUNNER, INC. COMPUTATION OF EARNINGS PER COMMON AND COMMON EQUIVALENT SHARES Three Months Ended September 30, 1997 1996 --------------------------------------------- Net Income $ 4,352,000 $3,848,000 =========== ========== Weighted average shares outstanding 5,756,000 6,317,000 Additional shares from assumed exercise of options and warrants 1,561,000 1,310,000 Shares assumed to be repurchased under the treasury stock method (812,000) (726,000) NQ tax benefit (249,000) (191,000) -------- --------- Total 6,256,000 6,710,000 ========= ========= FULLY DILUTED: Weighted average shares outstanding 5,756,000 6,317,000 Additional shares from assumed exercise of options and warrants 1,561,000 1,310,000 Shares assumed to be repurchased under the treasury stock method (729,000) (708,000) NQ tax benefit (281,000) (198,000) -------- -------- Total 6,307,000 6,721,000 ========= ========= EARNINGS PER SHARE: Primary $ 0.70 $ 0.57 ========== =========== Fully diluted $ 0.69 $ 0.57 ========== ===========
EX-27 6 FDS --
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-30-1998 Jul-01-1997 Sep-30-1997 8,080 0 35,558 10,912 28,845 70,335 19,286 10,628 79,555 26,128 0 0 0 6 53,391 79,555 38,138 38,138 18,032 18,032 13,066 0 (95) 7,135 2,783 4,352 0 0 0 4,352 0.70 0.69
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