Annual Report (Form 10-K), fiscal year 1994

ITEM 1. BUSINESS
Russ Berrie and Company, Inc. was incorporated in New Jersey in 1966. The term "Company" refers to Russ Berrie and Company, Inc. and its consolidated subsidiaries, unless the context requires otherwise. Its principal executive offices are located at 111 Bauer Drive, Oakland, New Jersey 07436, and its telephone number is (201) 337-9000.
The Company designs, manufactures through third parties and markets to retail stores throughout the United States and most countries throughout the world, a wide variety of impulse gift and toy items.
The gift products are designed to appeal to the emotions of consumers, who purchase the products impulsively to reflect their feelings of friendship, fun, love and affection. The Company believes that its present position as one of the leaders in the gift industry is due primarily to its imaginative product design, broad and effective marketing of its products, efficient distribution, high product quality and commitment to customer service.
Two recently acquired toy companies, Cap Toys, Inc., and OddzOn Products, Inc., market toys, novelty candy and sports related products to mass merchandisers, sporting goods and specialty toy stores. Products of these companies are marketed primarily through independent representative groups and international distributors.
Financial information related to business segments and geographic areas are presented in Note 13 in the Notes to Consolidated Financial Statements.
PRODUCTS
The Company's extensive gift product line of over 10,000 items (including distinctive variations on basic product designs) encompasses both seasonal and everyday products that focus on theme or concept groupings such as Baby, Home Decor, Lifestyles and Collectibles. Individual products include stuffed animals, picture frames, ceramic mugs, porcelain gifts, figurines, kitchen magnets, stationery products, and National Football League and Major League Baseball merchandise. The Company's toy line includes a variety of innovative toys, novelty candies, and sports related products. Cap Toys Inc. products include proprietary items such as Stretch Armstrong, Vac-Man, Katie Kiss 'N' Giggles, and Shout 'N' Shoot. OddzOn Products, Inc. items are marketed under the brand name Koosh and include products such as Koosh Ball, Koosh Vortex, Koosh Accessories and Koosh Soft Sport.
Most of the Company's gift products have suggested retail prices between $1 and $30. For example, the suggested retail prices for mugs generally range from $5 to $8. Toy products generally have suggested retail prices between $3 and $25.
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The Company markets its gift product line under the trade name "RUSS" and through its wholly-owned subsidiary, Papel/Freelance, Inc. The Company markets its product line of toys through two subsidiaries, Cap Toys, Inc. and OddzOn Products, Inc. The Company's Bright of America, Inc. subsidiary markets gift products directly to mass merchandisers. In addition, the Company operates a chain of outlet stores under the name "Russ" and a chain of retail stores, Fluf N' Stuf, Inc., which sell the Company's products and products of unaffiliated companies.
The percentages of dollar sales accounted for by business segment during the periods indicated are as follows:
* Includes Cap Toys, Inc., acquired in October 1993 and OddzOn Products, Inc., acquired in October 1994.
The Company's toy business has experienced success with its product, Stretch Armstrong, and related items. During 1994, sales of Stretch Armstrong and related items accounted for approximately 31% of the Company's toy sales.
Beginning with the third quarter of 1991 through the first quarter of 1993, the Company had experienced success with its product line of Trolls which were marketed through the Russ Gift division. Net sales of the various products associated with Trolls accounted for approximately 4%, 33% and 56% of the Company's gift sales during 1994, 1993 and 1992, respectively.
DESIGN AND PRODUCTION
The Company's gift business has a continuing program of new product development. The Company designs its own products and then generally evaluates consumer response through test marketing in selected unaffiliated retail stores and those operated by Fluf N' Stuf, Inc.Items are added to the product line only if they can be obtained and marketed on a basis that meets the Company's profitability standards. The Company believes that the breadth of its gift product line and the continuous development of new products are key elements to its success and that it is capable of designing and producing large numbers of new products quickly.
The Company has more than 190 employees responsible for gift product development and design in the United States and in the Far East. Generally, a new design is brought to market in less than nine months after a decision is made to produce a new product. Sales of the Company's gift products are, in large part, dependent on the Company's ability to identify and react quickly to changing consumer preferences and to utilize its sales and distribution systems to bring new products to market.
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The Company engages in market research and test marketing to evaluate consumer reactions to its gift products. Research into consumer buying trends often suggest new products. The Company assembles information from retail stores, including those operated by Fluf N' Stuf, Inc., the Company's salesforce and the Company's own Product Development department. The Company continually analyzes its products to determine whether they should be adapted into new or different products using elements of the initial design or whether they should be removed from the gift product line.
The Company's toy subsidiaries develop products in conjunction with independent toy inventors. The products are evaluated by the Design and Development staff and undergo a testing process to determine the reaction and acceptability in the marketplace. Products are then selected based on manufacturing and marketing profitability criteria.
Many popular toy products result in product line extensions enabling the Company to increase its product line and expand on the marketing success of these popular products.
Substantially all of the Company's products are produced by independent manufacturers, generally in the Far East, under close supervision by Company personnel. During 1994, products accounting for approximately 94% of its gift products were produced in the Far East and 6% in the United States. During 1994, products accounting for approximately 48% of toy products were produced outside the United States, primarily in the Far East and 52% in the United States. Purchases in the United States predominantly represent domestically produced component parts, packaging and labor costs associated with items requiring final assembly in the United States.
The Company utilizes approximately 280 manufacturers in the Far East, primarily in the People's Republic of China, Hong Kong, Taiwan, Korea, Thailand and Indonesia. During 1994, approximately 68% of the Company's dollar amount of purchases were attributable to manufacturing in the People's Republic of China. In December 1994, Congress passed the General Agreement on Tariffs and Trade (GATT) which eliminates or greatly reduces duty on many of the Company's imported products. For example, effective January 1, 1995, duty on items imported from the People's Republic of China classified as "toys" by U.S. Customs was reduced from 6.8% to zero. This classification includes products such as stuffed animals and dolls within the gift business as well as the products associated with the Company's toy business. Legislation has been proposed from time to time that would revoke the most-favored nation status (which is a designation determined annually by the President of the United States, subject to possible override by Congress) of the People's Republic of China. Such a revocation would cause import duties to increase or become applicable to products imported by the Company from the People's Republic of China.
A significant portion of the Company's staff of approximately 350 employees in Hong Kong, Taiwan, Korea, Thailand and Indonesia monitors the production process with responsibility for ensuring the quality, safety and prompt delivery of Company products. Members of the Company's Far East staff make frequent visits to the manufacturers for
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which they are responsible. Many of the Company's manufacturers are small operations, some selling exclusively to the Company. The Company believes that there are many alternate manufacturers for the Company's products and the loss of any manufacturer will not significantly adversely affect the operations of the Company. In 1994, the supplier accounting for the greatest dollar volume of the Company's purchases accounted for approximately 8% of such purchases and the five largest suppliers accounted for approximately 26% in the aggregate.
MARKETING
The Company's gift products are marketed primarily through its own direct salesforce of approximately 500 full-time employees. Products are sold directly to retail stores in the United States, and in certain foreign countries, including gift stores, pharmacies, card shops, book stores, stationery stores, hospitals, college and airport gift shops, resort and hotel shops, florists, chain stores and military post exchanges. During 1994, the Company sold gift products to approximately 75,000 customers. No single gift customer accounted for more than 1.8% of gift dollar sales.
The Company reinforces the marketing efforts of its salesforce through an active promotional program, including showrooms, participation in trade shows, trade advertising and catalogs. In addition, beginning in 1992, the Company engaged in advertising through consumer publications. These advertising programs are designed to increase consumer awareness of, and esteem toward, RUSS products. The amount of consumer advertising related to this program for the years ended December 31, 1994, 1993 and 1992 were $1,342,000, $4,071,000, and $10,474,000, respectively.
The Company believes that effective packaging and merchandising of its gift products are very important to its marketing success. Many gift products are shipped in colorful corrugated cartons which can be used as free-standing displays and can be discarded when all the products have been sold. The Company also prepares semi-permanent free-standing lucite, metal and wooden displays, thereby providing an efficient promotional vehicle for selling the Company's products. The displays are designed to stimulate consumers' impulse purchase decisions.
The Company believes that customer service is an important component of its marketing strategy and therefore has established a Customer Service Department at each distribution facility that responds to customer requests, investigates and resolves problems and generally assists customers.
The Company's general terms of sale are believed to be competitive in the gift industry. The Company provides limited extended payment terms to gift customers on sales of seasonal merchandise, e.g., Christmas, Halloween, Easter and other seasons. Within the gift business, the Company has a general policy of not accepting returns or selling on consignment.
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The Company supports certain of its toy products through an extensive advertising campaign, which is unrelated to the consumer advertising program promoting its gift products under the name RUSS. Advertising expense related to the Company's toy business for the years ended December 31, 1994 and 1993 was $10,650,000 and $1,883,000, respectively. The majority of its advertising budget is allocated to television advertising.
The Company's toy business sells its products primarily through independent representative organizations to mass merchandisers, which represent a significant portion of its sales. During 1994, approx-imately 24% of the toy business sales were sold to its largest customer and 58% to its five largest customers.
The Company's toy business generally does not sell its products on consignment and ordinarily accepts returns only for defective merchandise. In certain instances, the Company may, in accordance with industry practice, assist retailers in order to enable them to sell excess inventory by offering discounts and other concessions.
The Company maintains a direct salesforce and distribution network to serve its gift customers in Great Britain, Holland, Belgium, Ireland and Canada. The remainder of the Company's foreign sales, primarily in Japan, Australia, Italy, Germany, Latin America, Spain and Portugal, are made to distributors for resale to their customers. Additionally, sales of toy products are sold through distributors in Great Britain, Canada and many other foreign countries. The Company's foreign sales, including export sales from the United States, aggregated $62,342,000, $68,295,000 and $101,471,000 in the years ended December 31, 1994, 1993 and 1992, respectively.
DISTRIBUTION
The Company has customers located throughout the United States and throughout the world. In order to serve them quickly and effectively, the Company maintains U.S. distribution centers for its gift business in South Brunswick, New Jersey, Columbus, Ohio, and Petaluma, California which receive products directly from suppliers and then distributes them to the Company's customers. The Company also maintains a facility in the Toronto, Canada area for its Canadian customers and two distribution centers in Southampton, England to serve its customers in Europe. The Company generally uses common carriers to distribute to its customers.
The Company's toy product line is distributed through Cap Toys, Inc., which maintains an office and warehouse distribution facility in Bedford Heights, Ohio and through OddzOn Products, Inc., which maintains an office in Campbell, California and a warehouse distribution facility in Santa Clara, California.
SEASONALITY
In addition to its everyday gift products, the Company produces specially designed products for individual seasons during the year, including Christmas, Valentine's Day, St. Patrick's Day, Easter, Mother's Day, Graduation, Father's Day, Halloween and Thanksgiving.
The pattern of the Company's gift sales is influenced by the shipment of seasonal merchandise. The Company generally ships the majority of gift orders each year for Christmas in the quarter ended
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September 30, for Valentine's Day in the quarter ended December 31 and for Easter in the quarter ended March 31.
During 1994, gift items specially designed for individual seasons accounted for approximately 44% of the Company's gift sales; no individual season accounted for more than 14% of the Company's gift sales.
The toy industry is highly seasonal in nature due to the demand for toy products during the Christmas season. To reduce the impact of this seasonality, the Company's toy business produces items specially designed for the summer season. Such items include Shout 'N' Shoot and sports related products.
The following table sets forth the Company's quarterly sales by business segment during 1994, 1993 and 1992.
* Includes Cap Toys, Inc., acquired in October 1993 and OddzOn Products, Inc., acquired in October 1994.
The Company has historically had higher profit margins in the quarter ended September 30 as a result of the economies of scale which accompany the higher sales volume. Commencing late in the second quarter of 1991, net sales of the Company were favorably impacted by the success of products associated with the Troll product line which continued into the first quarter of 1993.
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BACKLOG
It is characteristic of the Company's gift business that orders for seasonal merchandise are taken in advance of shipment. In the toy industry, historically, new toy products have been introduced to the trade at the annual industry trade shows during the quarter ended March 31 and, as such, the order backlog at the end of any fiscal year may not be a meaningful predictor of financial results of the succeeding year. The Company's total backlog at December 31, 1994 was $30,340,000 and at December 31, 1993 was $32,546,000.
COMPETITION
The gift and toy industries are highly competitive and certain of the Company's existing or potential competitors may have financial resources that are substantially greater than those of the Company. The Company believes that the principal competitive factors in the gift and toy business are marketing ability, reliable delivery, product design, quality, customer service and price. The Company's principal gift competitors are Gund, Inc., Ganz Bros., Ty, Inc., Applause, Inc., Dakin Inc., American Greetings, Hallmark, Recycled Paper Products, Enesco and numerous small suppliers. The Company's principal toy competitors are Bandai, Toy Biz, Tyco, Mattel and Hasbro Inc.
COPYRIGHTS, TRADEMARKS, PATENTS AND LICENSES
The Company prints notices of claim of copyright on substantially all of its products and has registered hundreds of its designs with the United States Copyright Office. It also has registered, in the United States and certain foreign countries, the trademark "RUSS" with a distinctive design, which it utilizes on most of its gift products. The Company believes its copyrights, trademarks and patents are valid, and has pursued a policy of aggressively protecting them from infringement. However, it does not consider its business materially dependent on copyright, trademark or patent protection.
The Company enters into various license agreements to market gift products compatible with its product line. Examples of licensed products include designs of the National Football League and Major League Baseball. Licensed products represented approximately 7% of the Company's gift dollar sales in 1994 and 10% in 1993. During 1994, no single gift business license accounted for more than 2% of gift dollar sales.
The Company's toy products are most often developed in conjunction with independent toy inventors and, as such, license agreements exist for the majority of the toy product line. Products are also developed around popular characters and additional license agreements exist.
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EMPLOYEES
As of January 31, 1995, the Company employed approximately 1,850 persons on a full-time basis. The Company considers its employee relations to be good; substantially all of the Company's employees are not covered by a collective bargaining agreement. The Company's policy is to require that its management, sales and product development and design personnel enter into contracts in which they agree not to disclose confidential information concerning the Company and, in the case of management and sales personnel, not to compete with the Company(subject to certain territorial limitations in the case of salespersons) for a period of six months after termination of their employment.
GOVERNMENT REGULATION
Certain of the Company's products are subject to the provisions of, among other laws, the Federal Hazardous Substances Act and the Federal Consumer Product Safety Act. Those laws empower the Consumer Product Safety Commission to protect children from certain hazardous articles by excluding them from the market and requiring a manufacturer to repurchase articles which become banned. The Commission's determination is subject to judicial review. Similar laws exist in some states and cities in the United States and in Canada and Europe. The Company maintains a quality control program to ensure compliance with applicable laws.
ITEM 2.



ITEM 2. PROPERTIES
The Company's principal facilities consist of its corporate offices in Oakland, New Jersey, and distribution centers in South Brunswick, New Jersey; Petaluma, California; and Reynoldsburg, Ohio. Additionally, office and distribution facilities are located in Southampton, England and in the Toronto, Canada area. The Company's toy subsidiary Cap Toys, Inc., maintains an office and warehouse distribution facility in Bedford Heights, Ohio and OddzOn Products, Inc., maintains an office in Campbell, California and a warehouse distribution facility in Santa Clara, California. The Company owns the facility used by Bright of America, Inc. in Summersville, West Virginia, one of its facilities in Southampton, England and most of the office space it uses in Hong Kong. The Company leases its other facilities. The facilities of the Company are maintained in good operating condition, are generally adequate for the Company's purposes and, except for the Dayton, New Jersey and Lakeland, Florida facilities, which were closed as part of restructuring of the Company's distribution system, are generally fully utilized.
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THE COMPANY'S CURRENT PRINCIPAL FACILITIES ARE AS FOLLOWS:
(1) Not including renewal options.
(2) Properties owned directly or indirectly by Russell Berrie or members of his immediate family. See ITEM 13 - "CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS".
(3) Regional distribution center.
(4) Corporate headquarters.
(5) Property leased from a partnership of which a director of the Company is a general partner. See ITEM 13 - "CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS".
(6) Subsidiary (or division) headquarters.
(7) Subsidiary (or division) distribution center.
(8) Facility closed in connection with a restructuring undertaken by the Company. The Company has subleased the Lakeland facility, and continues its efforts to sublease or otherwise terminate the lease with regard to the Dayton and Rexdale Facilities.
In addition, the Company leases an aggregate of approximately 24,375 square feet of showroom facilities in New York City; Los Angeles and San Francisco, California; Atlanta, Georgia; Chicago, Illinois; Dallas, Texas; Montreal and Vancouver, Canada; Brussels, Belgium; and Utrecht, Holland. The remaining lease terms at these facilities range between one and ten years.
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Fluf N' Stuf, Inc., leases retail store space in shopping and outlet malls located within the United States. The aggregate square footage of these 23 stores is approximately 47,000 square feet. The remaining lease terms at these facilities range between two and eight years.
ITEM 3.

ITEM 3. LEGAL PROCEEDINGS
In the ordinary course of its business, the Company is party to various copyright, patent and trademark infringement, unfair competition, breach of contract, customs, employment and other legal actions, as plaintiff or defendant.
The Company believes that the outcome of the proceedings to which it is currently a party will not have a material adverse effect on its business or financial condition. (See Note 14 of the Notes to Consolidated Financial Statements).
ITEM 4.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
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ITEM 4A. EXECUTIVE OFFICERS OF THE REGISTRANT
The following table provides information with respect to the executive officers of the Company. All officers are elected by the Board of Directors and may be removed with or without cause by the Board.
Russell Berrie, the founder of the Company, has been Chairman of the Board and Chief Executive Officer of the Company since its incorporation in 1966.
Arnold S. Bloom has been employed by the Company as Vice President and General Counsel since January 1988 and as Secretary since March 1990.
Paul Cargotch has been employed by the Company as Chief Financial Officer since March 1990 and Vice President - Finance for more than the past five years.
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A. Curts Cooke has been employed as President and Chief Operating Officer of the Company since March 17, 1990; Executive Vice President of the Company, from December 1984 and Chief Financial Officer and Secretary of the Company from 1984 until March 17, 1990. Mr. Cooke has served as a director of the Company since 1982.
Jimmy Hsu has been employed by the Company as Executive Vice President of the Company since July 1, 1994. Prior to that, Mr. Hsu's titles were Senior Vice President - Product Development and Far East Operations since August 1991 and Senior Vice President - Far East Operations from January 1987 through July 1991.
Y.B. Lee has been employed by the Company as either Managing Director or President - Korean Operations from 1977 to February 1990, when he was elected Vice President - Far East Plush Division.
Guy M. Lombardo has been employed by the Company as Vice President - Administration and Information Systems since January 1994; and prior to that, was Vice President-Management Information Systems for more than the past five years.
Bernard Tenenbaum has been employed by the Company as Vice President - Corporate Development since January 14, 1993; he also serves as President and Chief Executive Officer of a division of the Company which focuses on evaluating possible acquisitions for the Company and overseeing the management of the Company's toy subsidiaries. From September 1988 until joining the Company as an officer, Mr. Tenenbaum was a founding Director of the George Rothman Institute of Entrepreneurial Studies, Fairleigh Dickenson University, and was previously Associate Director of the Snider Entrepreneurial Center of the Wharton School.
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PART II
ITEM 5.

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
At December 31, 1994 the Company's Common Stock was held by approximately 817 shareholders of record. The following table sets forth the high and low sale prices on the New York Stock Exchange Composite Tape for the calendar periods indicated, as furnished by the New York Stock Exchange:
The Board of Directors declared its first dividend to holders of the Company's Common Stock in November 1986. Since then, a cash dividend has been paid quarterly. The current quarterly rate is $.15 per share. This rate has been in effect since February 1993. From February 1992 to February 1993 the quarterly rate was $.117 per share (restated to reflect the 3-for-2 stock split effective April 1, 1993). The quarterly rate from December 1990 to February 1992 was $.10 (restated). The Board of Directors will review its dividend policy from time to time and declaration of dividends will remain within its discretion.
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ITEM 6.

ITEM 6. SELECTED FINANCIAL DATA
* Includes a restructuring charge of $5.0 million in 1993 and $9.5 million in 1989.
** Includes special dividend of $.40 per share.
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ITEM 7.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION
RESULTS OF OPERATIONS - YEARS ENDED DECEMBER 31, 1994 AND 1993
For the year ended December 31, 1994 the Company's net sales of $278,105,000 compares to net sales for the year ended December 31, 1993 of $279,111,000. Included in the results for the year ended December 31, 1994 are the net sales of $82,402,000 achieved by Cap Toys, Inc., which was acquired in October 1993, compared to net sales of Cap Toys, Inc. of $12,653,000 included in the year ended December 31, 1993. Also included in the results for the year ended December 31, 1994 are net sales of $8,315,000 of OddzOn Products, Inc. which was acquired in October 1994. Excluding the net sales of Cap Toys, Inc. and OddzOn Products, Inc., consolidated net sales for the year ended December 31, 1994 decreased $79,070,000 compared to the year ended December 31, 1993. This decrease can be attributed to the significant decrease in the sales of Troll products compared to the prior year. During the year ended December 31, 1994 net sales of Troll products were approximately $7,300,000 compared to approximately $86,700,000 for the year ended December 31, 1993.
Cost of sales were 51.7% of net sales in 1994 compared to 45.1% of net sales in 1993. This increase can be attributed primarily to the higher gross profit margins on sales of Troll products which represented a larger portion of net sales during 1993 and the effects of the reduction of the selling price of certain of the Company's products in August 1993. Also contributing to the increase in cost of sales are the lower gross profit margins achieved by Cap Toys, Inc. compared to certain of the Company's other sales and distribution channels.
Selling, general and administrative expense was $129,645,000 or 46.6% of net sales for the year ended December 31, 1994 compared to $133,188,000 or 47.7% of net sales in 1993, a decrease of $3,543,000 or 2.7%. Excluding the increase in selling, general and administrative expense of Cap Toys, Inc. (approximately $20,400,000) and the inclusion of the selling, general and administrative expense of OddzOn Products, Inc.(approximately $3,100,000), selling, general and administrative expense decreased $27,043,000. This decrease can be attributed to a decrease in expenses required to support lower sales levels (approximately $16,600,000), including a reduction in of the number of salespeople, and cost reductions associated with the restructuring program implemented during 1993 of closing and consolidating distribution centers and administrative functions (approximately $7,700,000). Cost reductions related to this restructuring were partly realized in the year ended December 31, 1993, resulting in total annualized savings in excess of $10,000,000. Also contributing to the decrease in selling, general and administrative expense are lower expenses related to the Company's "Just say it with a Russ" consumer advertising program (approximately $2,500,000).
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Investment and other income of $2,431,000 for the year ended December 31, 1994 compares to $2,573,000 in 1993.
The provision for income taxes as a percent of income before taxes for the year ended December 31, 1994 was 24.2% compared to 25.0% in the prior year.
Net income for the year ended December 31, 1994 of $5,327,000 compares to net income of $13,182,000 in 1993. This decrease in net income can be attributed to the increase in cost of sales as described above partially offset by the decrease in selling, general and administrative expense. Included in the results of operation for the year ended December 31, 1993 is a restructuring charge of $5,000,000 resulting in an after tax effect on net income of $3,150,000.
RESULTS OF OPERATIONS - YEARS ENDED DECEMBER 31, 1993 AND 1992
For the year ended December 31, 1993 the Company's net sales of $279,111,000 represents a decrease of $165,271,000 or 37.2% compared to the year ended December 31, 1992. This decrease can be attributed to the significant reduction in net sales of the Company's Troll product line. During 1993 net sales of the products associated with the Troll product line were approximately $86,700,000 or 31.1% of consolidated net sales compared to approximately $250,000,000 or 56.3% of consolidated net sales during 1992. In addition, the Company believes that its customers had experienced a general softness in their business as a result of the growth of mass merchandisers, factory outlet malls and warehouse clubs. Included in the results for the year ended December 31, 1993 are the net sales of $12,653,000 achieved by Cap Toys, Inc., since its acquisition in October 1993.
Cost of sales was 45.1% of net sales in 1993 compared to 39.7% of net sales in 1992. This increase can be attributed to the higher gross profit margins on sales of Troll products during 1992. In addition, certain components of cost of sales are fixed costs, primarily costs associated with the sourcing of product in the Far East and provisions for slow moving inventory, which were absorbed by the higher sales volume in 1992. Also contributing to the increase are the effects of the reduction of the selling price of certain of the Company's products in August 1993.
Selling, general and administrative expense was $133,188,000 for the year ended December 31, 1993 compared to $170,948,000 in 1992, a decrease of $37,760,000 or 22.1%. This decrease can be primarily attributed to a decrease in the expenses required to support lower sales levels, principally salesforce commissions (approximately $30,750,000), and to lower expenses related to the Company's consumer advertising program (approximately $6,200,000).
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Included in the results of operations in 1993 is a restructuring charge of $5,000,000 representing the write-down of certain assets, employee severance costs and other costs related to the closing and consolidating of distribution centers and administrative functions. Also included are additional provisions for future lease obligations relating to a previously closed facility. The restructuring charge resulted in an after tax effect on net income of $3,150,000 or $.15 per share. As expected, this restructuring, in addition to a reduction in the salesforce, resulted in an annualized savings in selling, general and administrative expense of approximately $10,000,000.
The provision for income taxes as a percentage of income before taxes decreased to 25.0% in 1993 compared to 35.1% in 1992. The lower effective rate can be attributed to an increased relative benefit associated with investment income resulting from tax- advantaged investments within the Company's short-term investment portfolio, an increased proportion of income before income taxes related to certain foreign subsidiaries with lower tax provisions and to an increased relative benefit for deductions permitted on contribution to charitable organizations.
Net income of $13,182,000 for 1993 decreased by $47,166,000 when compared to 1992. The decrease in net income can be attributed to the decrease in net sales, partially offset by the decrease in selling, general and administrative expense.
LIQUIDITY AND CAPITAL RESOURCES
At December 31, 1994 the Company had cash and cash equivalents and short-term investments of $47,961,000 compared to $82,899,000 at December 31, 1993.
During the year ended December 31, 1994, the Company generated net cash flows from operating activities of $787,000. In 1994 funds of $23,709,000 were used for the acquisition of OddzOn Products, Inc., which was acquired in October, 1994. Funds were also used for the payment of dividends amounting to $12,874,000.
The Company has available $88,089,000 in bank lines of credit that provide for direct borrowings and letters of credit used for the purchase of inventory. At December 31, 1994 letters of credit of $29,894,000 were outstanding. There were no direct borrowings under the bank lines of credit. Working capital requirements during 1994 were met entirely through internally generated funds. The Company remains in a highly liquid position and believes that the resources available from operations and bank lines of credit are sufficient to meet the foreseeable requirements of its business.
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ITEM 8.


ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors Russ Berrie and Company, Inc.:
We have audited the accompanying consolidated balance sheets of Russ Berrie and Company, Inc. and subsidiaries as of December 31, 1994 and 1993, and the related consolidated statements of income, shareholders' equity, and cash flows for each of the three years in the period ended December 31, 1994. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Russ Berrie and Company, Inc. and subsidiaries as of December 31, 1994 and 1993, and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 31, 1994 in conformity with generally accepted accounting principles.
As discussed in Note 1 to the Consolidated Financial Statements, effective January 1, 1992 the Company changed its method of accounting for income taxes.
COOPERS & LYBRAND L.L.P.
Parsippany, New Jersey February 3, 1995
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CONSOLIDATED STATEMENT OF INCOME FOR THE YEARS ENDED DECEMBER 31
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
The accompanying notes are an integral part of the consolidated financial statements.
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CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
(Dollars in Thousands)
The accompanying notes are an integral part of the consolidated financial statements.
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CONSOLIDATED BALANCE SHEET AT DECEMBER 31, (Dollars in Thousands)
The accompanying notes are an integral part of the consolidated financial statements.
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CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31 (Dollars in Thousands)
The accompanying notes are an integral part of the consolidated financial statements.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES:
PRINCIPALS OF CONSOLIDATION
The consolidated financial statements include the accounts of Russ Berrie and Company, Inc. and its wholly-owned subsidiaries (collectively, the "Company") after elimination of intercompany accounts and transactions.
ADVERTISING COSTS
Production costs for advertising are charged to operations in the year the related advertising campaign begins. All other advertising costs are charged to results of operations during the year in which they are incurred.
CASH EQUIVALENTS
Cash equivalents consist of investments in interest bearing accounts and highly liquid securities having a maturity of three months or less.
SHORT-TERM INVESTMENTS
The Company adopted Statement of Financial Accounting Standards No. 115, "Accounting for Certain Investments in Debt and Equity Securities", effective with the year ended December 31, 1994.
As of December 31, 1994 short-term investments in debt securities have been categorized as available for sale and as a result are stated at fair value. As of December 31, 1993 short-term investments were stated at cost plus accrued interest which approximates market.
INVENTORIES
Inventories, which mainly consist of finished goods, are stated at the lower of cost (first-in, first-out) or market value.
PROPERTY
Property, plant and equipment are stated at cost and are depreciated using the straight-line method over their estimated useful lives which range from three to eighteen years. Leasehold improvements are amortized using the straight-line method over the term of the respective lease or asset life, whichever is shorter. Expenditures for maintenance and repairs are charged to operations as incurred. Gain or loss on retirement or disposal of individual assets is recorded as income or expense.
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GOODWILL AND OTHER INTANGIBLE ASSETS
Goodwill, which represents the excess of purchase price of acquired assets over the fair market value of net assets acquired, is being amortized using the straight-line method over fifteen years or less. The Company evaluates the recoverability of goodwill based upon estimated future income of operating entities. Other intangible assets acquired are being amortized over the period for which benefit is derived which ranges from two to six years. Accumulated amortization was $6,366,000 and $3,876,000 at December 31, 1994 and 1993, respectively.
FOREIGN CURRENCY TRANSLATION
Aggregate foreign exchange gains or losses resulting from the translation of those foreign currency financial statements which are denominated in the local currency of each foreign subsidiary are recorded as a separate component of shareholders' equity. Gains and losses from foreign currency transactions are included in investment and other income - net.
ACCOUNTING FOR INCOME TAXES
For the year ended December 31, 1992 the Company adopted the provisions of Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes".
NET INCOME PER SHARE
Net income per share is based on the weighted average number of shares outstanding during the year. The number of shares used in the computation at December 31, 1994, 1993 and 1992 were 21,458,099; 21,470,672; and 22,391,739, respectively.
POST-EMPLOYMENT BENEFITS
In November 1992, Statement of Financial Accounting Standards No. 112 was issued which establishes the method of accounting for post-employment benefits. The Company does not offer any post-employment benefits to employees and, as such, there is no impact of this statement on the consolidated financial statements.
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FOREIGN CURRENCY CONTRACTS
The Company enters into forward exchange contracts and currency options, principally to hedge the purchase of inventory by its foreign subsidiaries. Gains and losses are reported as a component of the related transactions. The Company does not speculate in foreign currencies. At December 31, 1994 and 1993 the aggregate amount of foreign exchange contracts was $1,500,000 and $1,000,000, respectively.
ACQUISITION
In October 1994, the Company completed the acquisition of substantially all of the assets, including inventory, of OddzOn Products, Inc., a toy company based in Campbell, California. The acquisition, accounted for as a purchase, was funded entirely by the Company's cash and $19,344,000 of goodwill was recorded. Additional payments may be required based upon the attainment of certain future operating profit levels of OddzOn Products, Inc. Amounts related to additional payments will be accrued and charged to goodwill when they become earned.
In October 1993, the Company acquired substantially all of the assets of Cap Toys, Inc., a toy company based in Ohio, and $13,606,000 of goodwill was recorded. Under the purchase agreement, additional payments may be required based upon the attainment of certain operating profit levels of Cap Toys, Inc. During the year ended December 31, 1994, $2,563,000 was charged to goodwill related to these additional payments.
NOTE 2 - SHORT-TERM INVESTMENTS
Short-term investments as of December 31, 1994 and December 31, 1993 include the following:
The maturities of short-term investments as of December 31, 1994 are due after one year and before five years.
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NOTE 3 - PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment consist of the following:
NOTE 4 - LINES OF CREDIT
Under its existing domestic bank lines of credit, the Company has available $75,000,000 of direct borrowings and letters of credit at any one time.
The maximum amount available to the Company's foreign operations at December 31, 1994 under local lines of credit is $13,089,000. These lines, which are guaranteed by the Company, provide for direct borrowings, letters of credit, and overdraft facilities.
In connection with the purchase of imported merchandise, the Company, at December 31, 1994 had letters of credit outstanding of $29,894,000.
NOTE 5 - ACCRUED EXPENSES
Accrued expenses at December 31, 1994 and 1993 include accrued sales commissions of $1,625,000 and $2,110,000, respectively. At December 31, 1994 accrued expenses include accrued advertising of $2,653,000 and an accrual of $2,349,000 related to additional payments required pursuant to the asset purchase agreement with Cap Toys, Inc. Accrued expenses at December 31, 1994 and 1993 also include accrued litigation of $6,300,000 (see Note 14).
NOTE 6 - RESTRUCTURING CHARGE
A restructuring charge of $5,000,000 was recorded in the year ended December 31, 1993. This charge includes the write-down of certain assets, employee severance costs and other incremental costs related to the closing, moving and consolidating of distribution and administrative functions. As of December 31, 1994 the remaining accrual primarily represents future lease obligations, through 1997, related to previously closed facilities. One such facility is leased from a partnership in which a director of the Company is a general partner (see Note 9).
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NOTE 7 - INVESTMENT AND OTHER INCOME - NET
The significant components of investment and other income - net for the years ended December 31, 1994, 1993, and 1992 are shown as follows:
NOTE 8 - INCOME TAXES
The Company and its domestic subsidiaries file a consolidated Federal income tax return.
Income before income taxes was:
The provision for income taxes consists of the following:
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A reconciliation of the provision for income taxes with amounts computed at the statutory Federal rate is shown below:
The components of the net deferred tax asset, net of a valuation allowance of $2,025,000 (primarily relating to deferred state taxes), resulting from differences between accounting for financial reporting purposes and accounting for tax purposes were as follows:
U.S. income taxes or foreign withholding taxes are not provided on undistributed earnings of foreign subsidiaries, which are considered to be permanently reinvested. The amount of such earnings was approximately $58,566,000 as of December 31, 1994. Determination of the net amount of unrecognized deferred tax liability with respect to these earnings is not practicable.
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NOTE 9 - RELATED PARTY TRANSACTIONS
Certain buildings, referred to in Note 10, are leased from Russell Berrie, the Company's majority shareholder, or entities owned or controlled by him. Rentals under these leases for the years ended December 31, 1994, 1993 and 1992 were $4,307,000, $4,406,000 and $4,133,000, respectively. The Company is also a guarantor under two mortgages for property so leased with a principal amount aggregating approximately $8,373,000 as of December 31, 1994, $2,000,000 of which is collateralized by assets of the Company.
The Company also leases a facility from a partnership in which a director of the Company is a general partner. Annual rentals under this lease agreement for the years ended December 31, 1994, 1993, and 1992 were $996,000, $996,000 and $831,000, respectively. This facility is included in the estimate for future lease obligations with respect to the accrued restructuring costs (see Note 6).
NOTE 10 - LEASES
At December 31, 1994, the Company and its subsidiaries are obligated under operating lease agreements (principally for buildings and other leased facilities) for remaining lease terms ranging from one to twenty-four years.
Rent expense for the years ended December 31, 1994, 1993 and 1992, amounted to $8,264,000, $8,456,000 and $8,167,000, respectively.
The approximate aggregate future rental payments as of December 31, 1994 under operating leases are as follows:
NOTE 11 - STOCK OPTION AND EMPLOYEE STOCK PURCHASE PLANS
The Company has three stock option plans and an employee stock purchase plan. As of December 31, 1994 and January 1, 1994 there were 3,533,713 and 3,800,000 shares of common stock, respectively, reserved for issuance under all stock plans. There are outstanding options under prior plans; however, these plans have been terminated and no additional options can be granted. The option price for all stock option plans is equal to the closing price of the stock as of the date the option is granted and no options may be exercised within one year from the date of grant.
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Options are exercisable at prices ranging from $9.34 to $21.17 per share under the various plans. The exercise price of options exercised during 1994 ranged from $9.34 to $14.25. Summarized stock option data follows:
* These plans allowed for the granting of Stock Appreciation Rights (SARs). The SARs, which relate to specific options under the plans, permit the participant to exercise the SAR and be entitled to an amount equal to the excess of the closing market price of Russ Berrie and Company, Inc. Common Stock on the date of exercise over the exercise price of the related option.
Under the Employee Stock Purchase Plan, the option price is 90% of the closing market price of the stock on the first business day of the plan year. During 1994, 4,981 shares were acquired under this plan. The 1994 Employee Stock Purchase Plan has 145,019 shares reserved for future issuance.
NOTE 12 - RETIREMENT PLAN AND 401(K) PLAN
As of December 31, 1994, the Company had a non-contributory retirement plan for substantially all employees which provides for contributions by the Company, on a calendar year basis, in such amounts (subject to certain maximum limitations) as the Board of Directors may determine.
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There were no provisions for contributions charged to operations for the year ended December 31, 1994. The provisions for contributions charged to operations for the years ended December 31, 1993 and 1992 were $1,991,000 and $2,384,000, respectively. Effective February 1, 1995, the Company converted its retirement plan to a 401(k) Plan. Employees may, up to certain prescribed limits, contribute to the 401(k) Plan and a portion of these contributions is matched by the Company.
NOTE 13 - BUSINESS SEGMENTS AND GEOGRAPHIC AREAS
The Company's operations by business segment and geographic area are presented below:
*Includes short-term investments.
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NOTE 14 - LITIGATION
The Company is subject to legal proceedings and claims which arise in the ordinary course of its business. In the opinion of management, the amount of ultimate liability with respect to these actions will not materially affect the results of operations or the financial position of the Company.
For the year ended December 31, 1992, the Company reserved $6,300,000 relating to an award by a jury in February 1993 for slander and other pending claims made by the plaintiff. It is the opinion of the Company that the verdict is not supported by the evidence and the claims are without merit. The Company will vigorously defend its position before the trial court and, if necessary, on appeal.
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NOTE 15 - QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
The following selected financial data for the eight quarters ended December 31, 1994 are derived from unaudited financial statements and include, in the opinion of management, all adjustments necessary for fair presentation of the results for the interim periods presented and are of a normal recurring nature. However, the quarter ended December 31, 1993 includes a restructuring charge of $5,000,000 ($3,150,000 or $.15 per share after taxes) and a provision for slow moving inventory of $4,380,000 ($2,760,000 or $.13 per share after taxes):
ITEM 9.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
Not applicable.
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PART III
ITEM 10.



ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information relating to this item appears under the caption "ELECTION OF DIRECTORS" on pages 1 through 3 of the 1995 Proxy Statement, which is incorporated herein by reference and under the caption "EXECUTIVE OFFICERS OF THE REGISTRANT" on pages 12 and 13 of this Annual Report on Form 10-K.
ITEM 11.

ITEM 11. EXECUTIVE COMPENSATION
Information relating to this item appears under the caption "THE BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD" on page 3, "DIRECTOR COMPENSATION" on pages 3 through 5, "EXECUTIVE COMPENSATION" on pages 11 through 13 and "COMPENSATION COMMITTEE REPORT" on pages 6 and 7 in the 1995 Proxy Statement, which are incorporated herein by reference.
ITEM 12.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Information relating to this item appears under the captions "SECURITY OWNERSHIP OF MANAGEMENT" and "SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS" on pages 9 and 10 of the 1995 Proxy Statement, which is incorporated herein by reference.
ITEM 13.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information relating to this item appears under the captions "EXECUTIVE COMPENSATION" on pages 11 through 13, "CERTAIN TRANSACTIONS" on pages 14 and 15 and "COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION" on page 7 of the 1995 Proxy Statement, which is incorporated herein by reference.
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PART IV
ITEM 14.

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULE AND REPORTS ON FORM 8-K
(a) DOCUMENTS FILED AS PART OF THIS REPORT.
1. FINANCIAL STATEMENTS:
-------------- Other schedules are omitted because they are either not applicable or not required or the information is presented in the Consolidated Financial Statements or Notes thereto.
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----------------
(1) Incorporated by reference to Amendment No. 2 to Registration Statement No. 2-88797 on Form S-1, as filed on March 29, 1984.
(2) Incorporated by reference to Annual Report on Form 10-K for the year ended December 31, 1984.
(3) Incorporated by reference to Amendment No. 1 to Registration Statement No. 2-88797 on Form S-1, as filed on March 13, 1984.
(9) Incorporated by reference to Amendment No. 1 to Registration Statement No. 33-10077 on Form S-1, as filed on December 16, 1986.
(11) Incorporated by reference to Annual Report on Form 10-K for the year ended December 31, 1987.
(23) Incorporated by reference to Registration No. 33-51823 on Form S-8, as filed on January 6, 1994.
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---------------- (4) Incorporated by reference to Registration Statement No. 2-88797 on Form S-1 as filed on February 2, 1984.
(39)
---------------- (1) Incorporated by reference to Amendment No. 2 to Registration Statement No. 2-88797 on Form S-1, as filed on March 29, 1984.
(4) Incorporated by reference to Registration Statement No. 2-88797 on Form S-1, as filed on February 2, 1984.
(6) Incorporated by reference to Post-Effective Amendment No. 1 to Registration Statement No. 2-96238 on Form S-8, as filed on November 6, 1985.
(8) Incorporated by reference to Annual Report on Form 10-K for the year ended December 31, 1985.
(9) Incorporated by reference to Amendment No. 1 to Registration Statement No. 33-10077 of Form S-1, as filed on December 16, 1986.
(11) Incorporated by reference to Annual Report on Form 10-K for the year ended December 31, 1987.
(13) Incorporated by reference to Form S-8 Registration Statement No. 33-26161, as filed on December 16, 1988.
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--------------
(9) Incorporated by reference to Amendment No. 1 to Registration Statement No. 33-10077 of Form S-1, as filed on December 16, 1986.
(11) Incorporated by reference to Annual Report on Form 10-K for the year ended December 31, 1987.
(14) Incorporated by reference to Form S-8 Registration Statement No. 33-27406, as filed on March 16, 1989.
(15) Incorporated by reference to Form S-8 Registration Statement No. 33-27897, as filed on April 5, 1989.
(16) Incorporated by reference to Form S-8 Registration Statement No. 33-27898, as filed on April 5, 1989.
(17) Incorporated by reference to Annual Report on Form 10-K for the year ended December 31, 1988.
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---------------- (17) Incorporated by reference to Annual Report on Form 10-K for the year ended December 31, 1988.
(18) Incorporated by reference to Annual Report on Form 10-K for the year ended December 31, 1989.
(19) Incorporated by reference to Annual Report on Form 10-K for the year ended December 31, 1990.
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----------------
(20) Incorporated by reference to Annual Report on Form 10-K for the year ended December 31, 1991.
(21) Incorporated by reference to Annual Report on Form 10-K for the year ended December 31, 1992.
(22) Incorporated by reference to Quarterly Report on Form 10-Q for the quarter ended September 30, 1993.
(23) Incorporated by Reference to Quarterly Report on Form 10-Q for the quarter ended September 30, 1994.
(b) REPORTS ON FORM 8-K
No reports on From 8-K were filed by the Company during the quarter ended December 31, 1994.
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Undertaking
In order to comply with amendments to the rules governing the use of Form S-8 under the Securities Act of 1933, as amended, as set forth in Securities Act Release No. 33-6867, the undersigned Registrant hereby undertakes as follows, which undertaking shall be incorporated by reference into Registrant's Registration Statements on Forms S-8 (File Nos. 2-96238, 2-96239, 2-96240, 33-10779, 33-26161, 33-27406, 33-27897 and 33-27898):
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
Russ Berrie and Company, Inc. (Registrant)
By /s/ Paul Cargotch ----------------------------- Paul Cargotch Vice President - Finance and Chief Financial Officer
3/24/95 -----------------------
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signatures Date ---------- ----
/s/ Russell Berrie 3/24/95 ---------------------------------------------- --------- Russell Berrie, Chairman of the Board, Chief Executive Officer, and Director (Principal Executive Officer)
/s/ A. Curts Cooke 3/24/95 ---------------------------------------------- --------- A. Curts Cooke, President, Chief Operating Officer and Director (Principal Operating Officer)
/s/ Paul Cargotch 3/24/95 ---------------------------------------------- --------- Paul Cargotch, Vice President - Finance and Chief Financial Officer (Principal Financial and Accounting Officer)
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3/ /95 ----------------------------------------------- ------- Raphael Benaroya, Director
/s/ Art Charpentier 3/24/95 ----------------------------------------------- ------- Arthur D. Charpentier, Director
/s/ Jimmy Hsu 3/23/95 ----------------------------------------------- ------- Jimmy Hsu, Director
3/ /95 ----------------------------------------------- ------- Charles Klatskin, Director
/s/ Joseph Kling 3/24/95 ----------------------------------------------- ------- Joseph Kling, Director
3/ /95 ----------------------------------------------- ------- William A. Landman, Director
/s/ Sidney Slauson 3/24/95 ----------------------------------------------- ------- Sidney Slauson, Director
/s/ Bernard Tenenbaum 3/24/95 ----------------------------------------------- ------- Bernard Tenenbaum, Director
S-2
RUSS BERRIE AND COMPANY, INC. AND SUBSIDIARIES SCHEDULE VIII -- VALUATION AND QUALIFYING ACCOUNTS (Dollars in Thousands)
*Principally account write-offs, allowances and disposal of merchandise, respectively.
Exhibit Index
Exhibit Numbers
21.1 List of Subsidiaries
23.1 Report of Independent Accountants
23.2 Consent of Independent Accountants
27.1 Financial Data Schedule