ITEM 1. Business.
Tandy Brands Accessories, Inc. ("the Company") designs, purchases, manufactures and markets fine leather goods, accessories and neckwear for men, women and children. The Company was incorporated on November 1, 1990. However, the predecessor companies to its leather product manufacturing division ("Accessories") have been manufacturers and marketers of men's and boys' leather accessories for more than 50 years and of neckwear for more than 10 years. Men's accessories are also marketed and manufactured through not only the Accessories division, but also through Canterbury and H.A. Sheldon. In addition to its men's accessories operations, the Company designs and markets women's and children's accessories through Accessory Design Group, Inc. ("ADG") and Prince Gardner ("PG").
The Company purchased certain assets of Prince Gardner Inc. on April 4, 1994, for $7,690,000 through a foreclosure sale held by PG's secured lender. Prince Gardner was originally acquired to strengthen and broaden the Company's ability to achieve more sales in its men's and women's accessory product lines in better department stores. What Tandy Brands had hoped to acquire was a name that engendered brand loyalty and therefore sales. Prince Gardner had a very recognizable name, but brand recognition does not necessarily translate into brand loyalty and therefore into sales. Prince Gardner's operating results for the last two years were disappointing. Therefore, after a thorough review conducted in 1996 by management, based upon future estimated undiscounted cash flows, it was determined that future cash flows would be insufficient to recover the Prince Gardner division's goodwill and other intangibles. Accordingly, an impairment write-off of $3,976,000 was recognized in the fourth quarter of fiscal 1996.
On May 1, 1995, TBAC-Canterbury, Inc. ("Canterbury"), a wholly owned subsidiary of Tandy Brands Accessories, Inc., acquired substantially all the assets and assumed substantially all the liabilities of Canterbury Belts, Ltd., and its wholly owned subsidiary. The assets acquired included, but were not limited to, accounts receivable, inventory, equipment, trade names and other intangibles. The cash purchase price was approximately $4,946,000. Canterbury is a manufacturer and marketer of leather and fabric belts and suspenders for men and belts for women and children. Canterbury sells its products primarily to better specialty stores. The acquisition of Canterbury has allowed the Company to add a new distribution channel where it can market better quality, higher margin products.
On August 30, 1994, H.A. Sheldon Canada Ltd. ("HAS"), a wholly owned Canadian subsidiary of Tandy Brands Accessories, Inc., acquired substantially all the assets and assumed substantially all the liabilities of H.A. Sheldon Inc. The cash purchase price was $2,550,000. HAS is a manufacturer and marketer of men's belts, wallets and suspenders, located in Toronto, Canada.
The Company's merchandising strategy is to provide value to retailers and to the ultimate consumer through a wide range of quality products. Accessories' largest selling products are belts and wallets. Management estimates these items represented approximately 46%, 48% and 60% of the Company's sales in fiscal 1996, 1995 and 1994, respectively. Neckwear, men's jewelry, shaving kits, umbrellas and other gift accessories collectively accounted for Accessories' remaining sales. Accessories, Canterbury, HAS, PG and ADG sell their products to a variety of retail outlets, including national chain stores, discount stores, major department stores, specialty stores, catalogue retailers and the retail exchange operations of the United States military. PG sells primarily women's belts and small leather accessories. ADG's largest selling category is belts, followed by button covers, hosiery, hair goods, evening accessories and various other fashion accessories.
Accessories manufactures and markets its leather goods primarily under the labels HICKOK, GREG NORMAN, PRINCE GARDNER, BUGLE BOY, TEX TAN, DUCKS UNLIMITED, DON LOPER of BEVERLY HILLS, MANHATTAN, FRENCH TOAST, JOHN HENRY, HAGGAR, REED ST. JAMES, JAMES B. FAIRCHILD and various private store labels. Although Accessories' leather product lines include similar types of merchandise, Accessories tailors each line to appeal to the customer base of the specific channel of distribution. The HICKOK, BUGLE BOY, MANHATTAN, FRENCH TOAST and REED ST. JAMES lines are sold principally through national chain stores and mass merchandisers. The TEX TAN, GREG NORMAN, PRINCE GARDNER, DUCKS UNLIMITED, DON LOPER of BEVERLY HILLS, JOHN HENRY, HAGGAR and JAMES B. FAIRCHILD lines are sold primarily through men's specialty stores and department stores. TEX TAN and DON LOPER of BEVERLY HILLS goods are also sold to military retail operations. Neckwear is manufactured and sold under the labels BARRY WELLS, DUCKS UNLIMITED, LUCARELLI, RHYNECLIFF, LE-BIL'S, HICKOK, JAMES B. FAIRCHILD, ORLEANS, CARLOS TOMASSINITM and various private store labels, and is sold through all of Accessories' channels of distribution. ADG and PG products are marketed under various labels including PRINCE GARDNER, PRINCESS GARDNER, JONES NEW YORK, ACCESSORY DESIGN GROUP and ADG. These products are also licensed under various private store labels. Canterbury manufactures and markets its products under the CANTERBURY label. HAS manufactures and markets its products under the label REED ST. JAMES and various private store labels.
The Company designs all of its leather products, women's accessories and neckwear. Generally, new product styles are introduced each Spring and Fall. Wallets and certain other accessories are less subject to seasonal tastes and fashion trends.
In order to reduce its exposure to periods of economic decline, the Company has diversified its channels of distribution and increased sales to other mass merchandisers and national chain and discount stores. Wal-Mart is the Company's largest customer, representing 35%, 40% and 45% of its total sales for the fiscal years ended June 30, 1996, 1995 and 1994, respectively. The Company has no long-term contracts with any of its customers and all accounts are subject to periodic reviews. The Company had firm backlog orders for fiscal years 1996 and 1995 totaling $5,056,000 and $3,684,000 respectively. Shipment of backlog orders in fiscal 1997 is subject to product availability prior to customer order cancellation dates.
The Company's marketing strategy is to develop and maintain relationships with its retail accounts by emphasizing service and product value. The Company's accounts are developed through the efforts of senior management, regional managers, account executives and a sales organization of salespeople and independent sales representatives. Senior management, regional managers, and account executives are all utilized for concentrated, specialized selling to national chain stores, discount stores, major department stores and catalogue retailers. Salespeople are involved in selling and servicing most account types and are primarily responsible for selling to specialty stores.
The Company adjusts the respective percentages of domestically manufactured and imported products and the sources of imported products, as appropriate, to reduce labor and material costs, to diversify its product lines and to reduce exposure to interruption of its product flow. ADG and PG import the majority of their product lines from various foreign sources.
The Company's inventory constitutes approximately 46% of total assets and has historically turned over about twice a year. This is consistent with other companies in the small leather goods and accessories industries, with slight variations from year to year. This rate of turnover is due to the long lead times associated with the purchase of raw materials to manufacture belts and the Company's commitment to satisfy customer's rapid delivery requirements. The major raw materials for the Company's products are readily available from a variety of foreign and domestic sources.
The Company's operating results are subject to seasonal variations as well as the status of the economy. Its sales and operating results are fairly consistent throughout the fiscal year, but there is generally a seasonal increase during the second fiscal quarter. Due to receipt of cash from seasonal sales peaks and payment terms granted certain customers of Accessories, cash receipts increases usually occur in December and June. Current financial resources (working capital and borrowing arrangements) and anticipated funds from operations are expected to be adequate to meet capital requirements in the year ahead.
The Company owns the trademarks HICKOK, CANTERBURY, PRINCE GARDNER, PRINCESS GARDNER, LUCARELLI, RHYNECLIFF, DON LOPER of BEVERLY HILLS, CARLOS TOMASSINI, ORLEANS, BARRY WELLS, and LE-BIL'S. The PRINCE GARDNER, PRINCESS GARDNER and CANTERBURY trade names, as well as various trade names used by HAS were purchased by the Company through the acquisition transactions described above. Additionally, the Company holds licenses to use the JONES NEW YORK, GREG NORMAN, BUGLE BOY, DUCKS UNLIMITED, MANHATTAN, FRENCH TOAST, JOHN HENRY, HAGGAR, TEX TAN, REED ST. JAMES, ROBERT BRUCE, and JAMES B. FAIRCHILD trademarks. Generally, the license agreements require that the Company pay annual royalties, ranging from 2% to 13%, based on minimum sales quotas or sales. The terms of the agreements are typically 4 to 10 years, with options to extend the terms, provided certain sales or royalty minimums are achieved. For fiscal 1996, no license agreement sales accounted for 5% or more of the Company's net sales.
Discontinued Operation
During fiscal year 1995, the Company announced its decision to dispose of the Always In Style operations. Always In Style was acquired in November of 1993 for total consideration of $1,350,000 which included 36,364 shares of Company common stock and cash. Always In Style was originally acquired by the Company in an effort to establish a position in the emerging shop-at-home market. The decision to discontinue Always In Style was made after a reevaluation of the Company's present position in the home-TV shopping business.
The consolidated statements of income for fiscal years 1996, 1995 and 1994 exclude sales and expenses of the discontinued operation from captions applicable to continuing operations. Net sales for Always In Style were approximately $2,690,000 and $1,190,000 for the period prior to the measurement date in 1995 and for the year ended June 30, 1994, respectively. The after-tax loss from discontinuing Always In Style, including the write-off of $1,363,000 of goodwill, reduced income by approximately $3,242,000, or $.62 per share, for the year ending June 30, 1995.
Competition
The market for finished leather goods, neckwear and women's accessories is fragmented and highly competitive. There are numerous competitors who serve the same customers and markets as the Company.
Employees
The Company had approximately 659 employees at June 30, 1996. In the opinion of the Company's management, employee relations are good. The Company's employees are not subject to a collective bargaining agreement.
ITEM 2.
ITEM 2. Properties.
The Company owns and operates a facility in Yoakum, Texas, which is used for leather product manufacturing, product distribution and offices. This facility has the capacity to manufacture approximately 4.0 million belts in a year. During fiscal 1996, the Company's utilization averaged about 72%. The Company leases facilities in Little Rock, Arkansas, Scarborough, Canada, and Dominican Republic which are used for the manufacturing of neckwear and leather goods, respectively. Additionally, the Company leases warehouse space in Dallas, Texas, for ADG and office space in Arlington, Texas, for the corporate headquarters, ADG and PG. The Company has a renewal option for its office space in Arlington. In the opinion of management, the various corporate, ADG, PG, HAS and neckwear spaces are adequate and suitable for the particular use involved. The Yoakum, Texas, manufacturing and distribution centers are considered adequate.
The total space owned, leased and occupied by the Company as of June 30, l996, was as follows:
Approximate Square Feet ------------------------------------- Owned Leased Total --------- ---------- ------------ Warehouse and Office 127,000 107,000 234,000 Factory 63,000 39,000 102,000 -------- -------- -------- Total 190,000 146,000 336,000 ======== ======== =======
ITEM 3.
ITEM 3. Legal Proceedings.
The Company is not involved in any material pending legal proceedings, other than ordinary routine litigation incidental to the Company's business. No material legal proceedings were terminated during the fourth quarter of the 1996 fiscal year.
ITEM 4.
ITEM 4. Submission of Matters to a Vote of Security Holders.
There were no matters submitted to a vote of security holders during the fourth quarter of the 1996 fiscal year.
Part II
ITEM 5.
ITEM 5. Market for the Registrant's Common Equity and Related Stockholder Matters.
(a) The principal market for the registrant's common stock is the NASDAQ National Market System. The high and low bid information for the Company's common stock for each full quarterly period within the two most recent fiscal years appears on page 24 of the Company's l996 Annual Report to Stockholders, which information is incorporated herein by reference.
(b) The approximate number of holders of common stock on August 30, l996, was 1,302.
(c) The Company has not paid any cash dividends since its inception and does not intend to pay cash dividends in the foreseeable future. The Company presently intends to retain earnings for use in its business, although there are currently no restrictions on the Company's present or future ability to pay dividends.
ITEM 6.
ITEM 6. Selected Financial Data.
The information required by this item appears on page 24 of the 1996 Annual Report to Stockholders, which information is incorporated herein by reference.
ITEM 7.
ITEM 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.
The information required by this item appears on pages 20 through 23 of the l996 Annual Report to Stockholders, which information is incorporated herein by reference.
ITEM 8.
ITEM 8. Financial Statements and Supplementary Data.
The information required by this item appears on pages 6 through 24 of the 1996 Annual Report to Stockholders, which information is incorporated herein by reference. Following is a cross reference for location of the requested information:
Page Number in the Tandy Brands Accessories, Inc. 1996 Annual Report to Stockholders -----------------
Financial Statements and Supplementary Data
Consolidated Statements of Income for the Years Ended June 30, 1996, 1995 and 1994 6
Consolidated Balance Sheets at June 30, 1996 and 1995 7
Consolidated Statements of Cash Flows for the Years Ended June 30, 1996, 1995 and 1994 8
Consolidated Statements of Stockholders' Equity for the Years Ended June 30, 1996, 1995 and 1994 9
Notes to Consolidated Financial Statements 10-18
Selected Unaudited Quarterly Financial Data 18
Report of Independent Auditors 19
Selected Financial Data 24
ITEM 9.
ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
None.
Part III
ITEM l0. Directors and Executive Officers of the Registrant.
The information required by this item appears under the captions "Election of Directors" and "Executive Officers" included in the Company's definitive Proxy Statement relating to the Company's l996 Annual Meeting of Stockholders, which information is incorporated herein by reference.
ITEM ll. Executive Compensation.
The information required by this item appears under the caption "Executive Compensation" included in the Company's definitive Proxy Statement relating to the Company's l996 Annual Meeting of Stockholders, which information is incorporated herein by reference.
ITEM l2. Security Ownership of Certain Beneficial Owners and Management.
The information required by this item appears under the caption "Security Ownership of Certain Beneficial Owners" included in the Company's definitive Proxy Statement relating to the Company's l996 Annual Meeting of Stockholders, which information is incorporated herein by reference.
ITEM l3. Certain Relationships and Related Transactions.
The information required by this item appears under the caption "Certain Transactions" included in the Company's definitive Proxy Statement relating to the Company's 1996 Annual Meeting of Stockholders, which information is incorporated herein by reference.
PART IV
ITEM 14.
ITEM 14. Exhibits, Financial Statement Schedule, and Reports on Form 8-K.
(a) The following documents are filed as a part of this Report:
(l) The financial statements listed in response to Item 8 of this Report have been incorporated herein by reference to pages 6 through 24 of the Company's 1996 Annual Report to Stockholders.
(2) Financial Statement Schedule:
Report of Independent Auditors on Financial Statement Schedule For the three years in the period ended June 30, 1996 Schedule II -- Valuation and Qualifying Accounts
The financial statement schedule should be read in conjunction with the consolidated financial statements in the Company's 1996 Annual Report to Stockholders. Financial statement schedules not included in this Report have been omitted because they are not applicable or the required information is shown in the consolidated financial statements or notes thereto.
(3) Exhibits:
A list of the exhibits required to be filed as part of this Report is set forth in the Index to Exhibits, which immediately precedes such exhibits and is incorporated herein by reference.
(b) Reports on Form 8-K.
No reports on Form 8-K were filed during the fourth quarter of fiscal 1996.
SIGNATURES
Pursuant to the requirements of Section l3 or l5(d) of the Securities Exchange Act of l934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
TANDY BRANDS ACCESSORIES, INC. (Registrant)
Date: September 20, 1996 By:/s/J.S.B. JENKINS ------------------------------------- President and Chief Executive Officer
Pursuant to the requirements of the Securities and Exchange Act of l934, this has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Name Position Date - ---------------------- -------------------------- ------------------- /s/Clayton E. Niles Director and Chairman September 20, 1996 of the Board
/s/J.S.B. Jenkins Director September 20, 1996
/s/Dr. James Gaertner Director September 20, 1996
/s/C. A. Rundell, Jr. Director September 20, 1996
/s/Robert E. Runice Director September 20, 1996
/s/Maxine Clark Director September 20, 1996
/s/Bruce Cole Vice President, Treasurer, September 20, 1996 Chief Financial Officer and Chief Accounting Officer
REPORT OF INDEPENDENT AUDITORS ON FINANCIAL STATEMENT SCHEDULE
To the Board of Directors and Stockholders Tandy Brands Accessories, Inc.
We have audited the consolidated financial statements of Tandy Brands Accessories, Inc. and subsidiaries as of June 30, 1996 and 1995, and for each of the three years in the period ended June 30, 1996, and have issued our report thereon dated August 7, 1996. Our audits also included the financial statement schedule listed in Item 14(a) of this Annual Report on Form 10-K. The schedule is the responsibility of the Company's management. Our responsibility is to express an opinion based on our audits.
In our opinion, the financial statement schedule referred to above, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.
ERNST & YOUNG LLP
Fort Worth, Texas August 7, 1996
TANDY BRANDS ACCESSORIES, INC. AND SUBSIDIARIES SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS For the Year Ended June 30,
Additions ---------------------- Balance at Charged to Charged to Balance Beginning Costs and Other at End of Description of Period Expenses Accounts Deductions(1) Period - --------------- --------- ---------- ---------- ------------- -------- - ---- Allowance for Doubtful Accts and Returns $520,000 $343,000 $-0- $257,000 $606,000
- ---- Allowance for Doubtful Accts and Returns $379,000 $1,372,000 $-0- $1,231,000 $520,000
- ---- Allowance for Doubtful Accts and Returns $229,000 $199,000 $-0- $49,000 $379,000
(1) Represents uncollectible accounts written off, net of recoveries.
TANDY BRANDS ACCESSORIES, INC. AND SUBSIDIARIES EXHIBIT INDEX
Incorporated by Reference (if applicable) ------------------------- Sequent- ially Numbered Exhibit Number and Description Page Form Date File No. Exhibit - ------------------------------ -------- ---- -------- -------- ------- (3) Articles of Incorporation and by-laws
3.1 Certificate of Incorporation of Tandy Brands Accessories, Inc. N/A S-1 11/02/90 33-37588 3.1 3.2 By-laws of Tandy Brands Accessories, Inc. N/A S-1 11/02/90 33-37588 3.2
(4) Instruments defining the rights of security holders, including indentures
4.1 Certificate of Designations, Powers, Preferences, and Rights of Series A Junior Participating Cumulative Preferred Stock of Tandy Brands Accessories, Inc. N/A S-1 11/02/90 33-37588 4.1 4.2 Form of Common Stock Certificates of Tandy Brands Accessories, Inc. N/A S-1 11/02/90 33-37588 4.2 4.3 Form of Preferred Share Purchase Rights Certificate of Tandy Brands Accessories, Inc. N/A S-1 11/02/90 33-37588 4.3 4.4 Rights Agreement dated November 7, 1990, between Tandy Brands Accessories, Inc. and First National Bank of Boston N/A S-1 11/02/90 33-37588 4.4
(10) Material Contracts
10.1 Form of Distribution Agreement dated December 31, 1990, between The Bombay Company, Inc. and Tandy Brands Accessories, Inc. N/A S-1 11/02/90 33-37588 10.1 10.2 Form of Service Agreement dated December 31, 1990, between The Bombay Company, Inc. and Tandy Brands Accessories, Inc. N/A S-1 11/02/90 33-37588 10.2 10.3 Form of Tax Sharing Agreement dated December 31, 1990, between The Bombay Company, Inc. and Tandy Brands Accessories, Inc. N/A S-1 11/02/90 33-37588 10.3 10.4 Form of Purchase Agreement dated December 31, 1990, between The Bombay Company, Inc. and Mr. J.S.B. Jenkins N/A S-1 11/02/90 33-37588 10.4 10.6 Tandy Brands Accessories, Inc. Stock Purchase Program N/A S-1 11/02/90 33-37588 10.6 10.7 Tandy Brands Accessories, Inc. Employees Investment Plan N/A S-1 11/02/90 33-37588 10.7 * 10.8 Tandy Brands Accessories, Inc. 1991 Stock Option Plan N/A S-1 11/02/90 33-37588 10.8 10.9 Form of Stock Option Agreement - 1991 Stock Option Plan N/A S-1 11/02/90 33-37588 10.9 * 10.10 Tandy Brands Accessories, Inc. Stock Bonus Plan N/A S-1 11/02/90 33-37588 10.10 * 10.11 Tandy Brands Accessories, Inc. Family Security Plan N/A S-1 11/02/90 33-37588 10.11 10.12 Form of Agreement under Family Security Plan N/A S-1 11/02/90 33-37588 10.12 * 10.13 Tandy Brands Accessories, Inc. Key Executive Disability Plan N/A S-1 11/02/90 33-37588 10.13 10.14 Lease Agreement dated December 12, 1990, to be effective February 1, 1991, between Bill Humble and others and Tandy Brands Accessories, Inc. relating to the Little Rock, Arkansas, manufacturing facility N/A S-1 11/02/90 33-37588 10.14 10.15 Form of Indemnification Agreement between Tandy Brands Accessories, Inc. and each of its directors and officers N/A S-1 11/02/90 33-37588 10.15 10.16 Office Lease Agreement dated March 6, 1991, between John Hancock Mutual Life Insurance Co. and Tandy Brands Accessories, Inc. relating to the corporate offices N/A S-1 11/02/90 33-37588 10.16 10.17 Tandy Brands Accessories, Inc. Non-qualified Formula Stock Option Plan for Non-Employee Directors N/A S-8 02/10/94 33-75114 28.1 * 10.18 Tandy Brands Accessories, Inc. 1993 Employee Stock Option Plan and form of Stock Option Agreement thereunder N/A S-8 02/10/94 33-75114 28.2 10.19 Tandy Brands Accessories, Inc. Non-qualified Stock Option Plan for Non- Employee Directors N/A S-8 02/10/94 33-75114 28.3 10.20 Tandy Brands Accessories, Inc. 1995 Stock Deferral Plan for Non-Employee Directors N/A S-8 06/03/96 333-8579 99.1
(11) Statement re computation of per share earnings
11.1 Earnings per share statement N/A N/A N/A N/A 11.1
(13) Annual Report to security holders, Form 10-Q or quarterly report to security holders
13.1 Annual Report to Stockholders of Tandy Brands Accessories, Inc. N/A N/A N/A N/A 13.1
(22) Subsidiaries of the registrant
22.1 List of subsidiaries N/A N/A N/A N/A 22.1
(24) Consents of experts and counsel
24.1 Consent of Ernst & Young LLP N/A N/A N/A N/A 24.1
* Management compensatory plan.
EXHIBIT (11): Statement Re: Computation of Earnings Per Share - --------------------------------------------------------------
Earnings per Share - Earnings per share is determined by dividing net income by the average number of common shares outstanding plus common stock equivalents of dilutive stock options. Earnings per share, as presented, is both primary and fully diluted.
(In thousands) Year Ended June 30, ------------------------------ 1996 1995 1994 ------ ------ ------ Common shares outstanding: Weighted average shares outstanding 5,329 5,201 5,056 Share equivalents 36 68 153 ----- ----- ----- Total 5,365 5,269 5,209 ===== ===== =====
EXHIBIT (22): Subsidiaries of the Registrant - ---------------------------------------------
State or Other Jurisdiction of Names Under Which Subsidiaries of Incorporation or Such Subsidiaries the Registrant Organization Do Business - ---------------------------- ---------------- ----------------------------
Accessory Design Group, Inc. Delaware Accessory Design Group, Inc. Accessory Design Group
TBAC-Prince Gardner, Inc. Delaware TBAC-Prince Gardner, Inc. Prince Gardner
TBAC-AIS, Inc. Delaware TBAC-AIS, Inc.
H.A. Sheldon Canada Ltd. Canada 1088258 Ontario, Inc. H.A. Sheldon Canada Ltd.
TBAC-Canterbury, Inc. Delaware TBAC-Canterbury, Inc.
EXHIBIT (24): Consents of Experts and Counsel - ----------------------------------------------
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Annual Report on Form 10-K of Tandy Brands Accessories, Inc. of our report dated August 7, 1996, included in the 1996 Annual Report to Stockholders of Tandy Brands Accessories, Inc.
We also consent to the incorporation by reference in the Registration Statements on Form S-8 (Nos. 33-41262, 33-46814, 33- 91996, 33-75114 and 333-8579) and in the related Prospectuses of (i) our report dated August 7, 1996, with respect to the consolidated financial statements of Tandy Brands Accessories, Inc. included in the 1996 Annual Report to Stockholders of Tandy Brands Accessories, Inc. and (ii) our report dated August 7, 1996, with respect to the financial statement schedule included in this Annual Report on Form 10-K for the year ended June 30, 1996.
ERNST & YOUNG LLP
Fort Worth, Texas September 17, 1996