-----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, RG2KNr9NIT32hi4QpJ1vEXHrJd3KvJX9uyh59LT6DQhC6SM6/rNYuJFb9oGrX4yF 3uVySKaDAmEE+koo/jDNXA== 0001032210-98-000070.txt : 19980210 0001032210-98-000070.hdr.sgml : 19980210 ACCESSION NUMBER: 0001032210-98-000070 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19971227 FILED AS OF DATE: 19980209 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: SEATTLE FILMWORKS INC CENTRAL INDEX KEY: 0000791050 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PHOTOFINISHING LABORATORIES [7384] IRS NUMBER: 910964899 STATE OF INCORPORATION: WA FISCAL YEAR END: 0928 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-15338 FILM NUMBER: 98525460 BUSINESS ADDRESS: STREET 1: 1260 16TH AVE WEST CITY: SEATTLE STATE: WA ZIP: 98119 BUSINESS PHONE: 2062811390 MAIL ADDRESS: STREET 1: 1260 16TH AVENUE WEST CITY: SEATTLE STATE: WA ZIP: 98119 FORMER COMPANY: FORMER CONFORMED NAME: AMERICAN PASSAGE MARKETING CORP DATE OF NAME CHANGE: 19890320 10-Q 1 FORM 10-Q FOR PERIOD ENDED 12/27/1997 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: DECEMBER 27, 1997 Commission file No. 0-15338 SEATTLE FILMWORKS, INC. ----------------------- (Exact name of registrant as specified in its charter.) WASHINGTON 91-0964899 ---------- ---------- (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 1260 16TH AVENUE WEST, SEATTLE, WA 98119 ---------------------------------- ----- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (206) 281-1390 --------------
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 the filing requirements for the past 90 days. Yes X No --- --- As of January 30, 1998, there were issued and outstanding 16,551,082 shares of common stock, par value $.01 per share. No exhibits Page 1 of 12 SEATTLE FILMWORKS, INC. INDEX -----
Page No. -------- PART I -- FINANCIAL INFORMATION Item 1 - Financial Statements 3-7 Consolidated Balance Sheets as of December 27, 1997 and September 27, 1997 3-4 Consolidated Statements of Income for the first quarter ended December 27, 1997 and December 28, 1996 5 Consolidated Statements of Cash Flows for the first quarter ended December 27, 1997 and December 28, 1996 6 Notes to Consolidated Financial Statements 7 Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations 8-11 PART II -- OTHER INFORMATION Item 6 - Exhibits and Reports on Form 8-K 11 SIGNATURES 12
Page 2 of 12 PART I -- FINANCIAL INFORMATION ------------------------------- ITEM 1 - FINANCIAL STATEMENTS SEATTLE FILMWORKS, INC. CONSOLIDATED BALANCE SHEETS (in thousands)
(UNAUDITED) (NOTE) December 27, September 27, ASSETS 1997 1997 =============================================================================================== CURRENT ASSETS Cash and cash equivalents $ 8,623 $10,252 Securities available-for-sale 6,691 5,062 Accounts receivable, net of allowance for doubtful accounts 1,893 3,680 Inventories 9,755 8,998 Capitalized promotional expenditures 171 211 Prepaid expenses and other 496 743 Deferred income taxes 313 313 ------- ------- TOTAL CURRENT ASSETS 27,942 29,259 FURNITURE, FIXTURES, AND EQUIPMENT, at cost, less accumulated depreciation 8,282 7,564 CAPITALIZED CUSTOMER ACQUISITION EXPENDITURES 15,121 13,882 DEPOSITS AND OTHER ASSETS 167 285 NON-COMPETE AGREEMENT, net of accumulated amortization 282 376 ------- ------- TOTAL ASSETS $51,794 $51,366 ======= =======
Note: The September 27, 1997 consolidated balance sheet has been derived from audited consolidated financial statements. See notes to consolidated financial statements. Page 3 of 12 SEATTLE FILMWORKS, INC. CONSOLIDATED BALANCE SHEETS (CONTINUED) (in thousands, except per share and share data)
(UNAUDITED) (NOTE) December 27, September 27, LIABILITIES AND SHAREHOLDERS' EQUITY 1997 1997 ======================================================================================== CURRENT LIABILITIES Accounts payable $ 7,005 $ 3,588 Accrued expenses 817 1,402 Accrued compensation 1,701 1,931 Income taxes payable 763 2,450 ------- ------- TOTAL CURRENT LIABILITIES 10,286 9,371 DEFERRED INCOME TAXES 4,394 4,394 ------- ------- TOTAL LIABILITIES 14,680 13,765 SHAREHOLDERS' EQUITY Preferred Stock, $.01 par value, authorized 2,000,000 shares, none issued Common Stock, $.01 par value, authorized 101,250,000 shares, issued and outstanding 16,541,960 165 164 Additional paid-in capital 413 2,459 Retained earnings 36,536 34,978 ------- ------- TOTAL SHAREHOLDERS' EQUITY 37,114 37,601 ------- ------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $51,794 $51,366 ======= =======
Note: The September 27, 1997 consolidated balance sheet has been derived from audited consolidated financial statements. See notes to consolidated financial statements. Page 4 of 12 SEATTLE FILMWORKS, INC. CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (in thousands, except per share and share data)
First Quarter Ended ---------------------------- December 27, December 28, 1997 1996 ======================================================================== Net revenues $22,471 $21,236 Cost of goods and services 12,972 12,982 ------- ------- GROSS PROFIT 9,499 8,254 Operating expenses: Customer acquisition costs 4,164 3,482 Other selling expenses 1,979 1,760 Research and development 143 173 General and administrative 1,056 907 ------- ------- Total operating expenses 7,342 6,322 ------- ------- INCOME FROM OPERATIONS 2,157 1,932 Other income: Interest income 214 146 Nonoperating income, net 2 ------- ------- Total other income 214 148 ------- ------- INCOME BEFORE INCOME TAXES 2,371 2,080 Provision for income taxes (813) (723) ------- ------- NET INCOME $ 1,558 $ 1,357 ======= ======= BASIC AND DILUTED EARNINGS PER SHARE $.09 $.08 ==== ==== WEIGHTED AVERAGE SHARES AND EQUIVALENTS OUTSTANDING 17,640,000 17,825,000 ========== ==========
See notes to consolidated financial statements. Page 5 of 12 SEATTLE FILMWORKS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (in thousands)
First Quarter Ended ---------------------------- December 27, December 28, 1997 1996 ============================================================================================== OPERATING ACTIVITIES: Net income $ 1,558 $ 1,357 Charges to income not affecting cash: Depreciation and amortization 919 697 Amortization of capitalized customer acquisition expenditures 3,828 3,214 Deferred income taxes 607 Net change in receivables, inventories, payables and other 2,187 (1,466) Capitalized promotional expenditures, net 40 92 Additions to capitalized customer acquisition expenditures (5,067) (4,555) ------- ------- NET CASH FROM (USED IN) OPERATING ACTIVITIES 3,465 (54) INVESTING ACTIVITIES: Purchase of furniture, fixtures, and equipment (1,420) (509) Purchases of securities available-for-sale (2,354) (3,283) Sales of securities available-for-sale 725 ------- ------- NET CASH USED IN INVESTING ACTIVITIES (3,049) (3,792) FINANCING ACTIVITIES: Proceeds from issuance of Common Stock 592 191 Payment on purchase of Common Stock (2,637) ------- ------- NET CASH FROM (USED IN) FINANCING ACTIVITIES (2,045) 191 DECREASE IN CASH AND CASH EQUIVALENTS (1,629) (3,655) Cash and cash equivalents at beginning of period 10,252 6,135 ------- ------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 8,623 $ 2,480 ======= =======
See notes to consolidated financial statements. Page 6 of 12 SEATTLE FILMWORKS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE A -- BASIS OF PRESENTATION Seattle FilmWorks, Inc. (the "Company") is a leading direct-to-consumer marketer and provider of high-quality amateur photofinishing services and products. The Company offers an array of complementary services and products, primarily on a mail-order basis, under the brand name Seattle FilmWorks(R). To a lesser extent, the Company provides services, products and photofinishing supplies on a wholesale basis to a variety of commercial customers. The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for fair presentation of interim results have been included. The Company follows a policy of recording its interim periods and year-end on a 5 week, 4 week and 4 week basis for comparability of results and to be consistent with its internal weekly reporting. Operating results for the first quarter ended December 27, 1997 are not necessarily indicative of the results that may be expected for the fiscal year ending September 26, 1998. For further information, refer to the "Management's Discussion and Analysis of Financial Condition and Results of Operations" and consolidated financial statements and footnotes thereto included in the Company's Annual Report on Form 10-K for the year ended September 27, 1997. NOTE B -- STOCK SPLIT On March 17, 1997 the Company effected a three-for-two stock split by declaring a stock dividend of one share for every two shares outstanding. All share data, per share data and related accounts in the accompanying consolidated financial statements have been retroactively adjusted for this stock split. NOTE C -- EARNINGS PER SHARE In 1997 the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 128, Earnings per Share. Statement No. 128 replaced the previously reported primary and fully diluted earnings per share with basic and diluted earnings per share. Unlike primary earnings per share, basic earnings per share excludes any dilutive effects of options. Diluted earnings per share is similar to the previously reported fully diluted earnings per share. All earnings per share amounts for all periods have been presented, and where necessary, restated to conform to the Statement No. 128 requirements. The following table sets forth the computation of basic and diluted earnings per share:
First Quarter Ended ------------------------------------- December 27, 1997 December 28, 1996 ================================================================================================================ Numerator for basic and diluted earnings per share: Net income $ 1,558,000 $ 1,357,000 =========== =========== Denominator: Denominator for basic earnings per share - weighted-average shares 16,541,000 16,253,000 Effect of dilutive securities: Stock options 1,099,000 1,572,000 ----------- ----------- Denominator for diluted earnings per share 17,640,000 17,825,000 =========== =========== BASIC EARNINGS PER SHARE $ .09 $ .08 =========== =========== DILUTED EARNINGS PER SHARE $ .09 $ .08 =========== ===========
Page 7 of 12 ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Forward-Looking Information - --------------------------- Statements in this report concerning future results, growth in sales, achievements, trends, new product or service development or introduction plans or any other statement which may be construed as a prediction of future performance or events are forward-looking statements, the occurrence of which are subject to a number of known and unknown risks and uncertainties which might cause actual results, achievements or occurrences to differ materially from those expressed or implied by such statements. These risks and uncertainties include the Company's ability to create and implement effective customer acquisition techniques; timely development, delivery and market acceptance of products and services which differentiate the Company from other photofinishers; technological changes; product development or production difficulties or delays due to technical difficulties, supply constraints or other factors; changing economic conditions; the impact of competitive products and pricing; and other risks including those described in the Company's Annual Report on Form 10-K and those described from time to time in the Company's other filings with the Securities and Exchange Commission, press releases and other communications. General - ------- Seattle FilmWorks, Inc. (the "Company") is a leading direct-to-consumer marketer and provider of high-quality amateur photofinishing services and products. The Company offers an array of complementary services and products primarily on a mail-order basis under the brand name Seattle FilmWorks(R). The Company has experienced an increase in net revenues in each year since 1990. Management believes this growth is attributable principally to its direct- marketing programs, including the customer acquisition technique of offering two rolls of film for $2.00 or less (the "Introductory Offer"). The Introductory Offer has been nationally advertised in package inserts, newspaper supplements and magazines and through various other direct-response media. Beginning in fiscal 1995, the Company shifted the focus of, and substantially expanded, its customer acquisition programs. Management believes that these steps are the primary reasons for the growth of net revenues and net income during fiscal 1997, 1996 and the first three months of fiscal 1998. In addition, management believes its core photofinishing business has benefited from the introduction of new products, such as the January 1994 introduction of Pictures On Disk(TM) and PhotoWorks(R). Customer acquisition costs are comprised of the costs of generating a lead and the amortization of direct costs associated with the Company's promotional offers sent to prospective and existing customers. The costs of generating a lead include all direct-response media, advertising and other costs associated with developing target customer lists. These costs per lead have declined during each of the last three fiscal years. The direct costs of customer acquisition include film, postage and printed material costs associated with mailings to prospective and existing customers. The direct costs of customer acquisition are capitalized as an asset on the Company's balance sheet as "capitalized customer acquisition expenditures." Capitalized customer acquisition expenditures relating to prospective customers are amortized over three years, and capitalized customer acquisition expenditures relating to certain marketing activities to groups of existing customers are amortized over six months. These amortization rates are based on estimates of the timing of future roll processing volumes per customer. The proportion of capitalized customer acquisition expenditures to be amortized over three years relative to those to be amortized over six months will vary from period to period based on the timing and mix of promotional activities. Rates of amortization are compared from time to time with the actual timing of roll processing volumes in order to assess whether the amortization rates appropriately match the direct costs of customer acquisition with the related revenues. If the Company were to experience a material change in the timing of roll processing volumes, it could be required to accelerate the rate of amortization of capitalized customer acquisition expenditures, which could have a material adverse effect on the Company's business, financial condition and operating results. Page 8 of 12 Customer acquisition costs as a percentage of net revenues have increased to 18.5% in the first quarter of fiscal 1998 as compared to 16.4% in the first quarter of fiscal 1997. Management believes this increase in customer acquisition costs as a percentage of net revenues was due primarily to expansion of the Company's customer acquisition programs. Future periods may reflect increased customer acquisition costs due to timing of the amortization of capitalized expenditures or the development and initiation of additional marketing programs. For tax purposes, customer acquisition expenditures are expensed as incurred, thereby reducing current federal income tax liabilities and increasing deferred federal income tax liabilities. Net income as a percentage of net revenues increased to 6.9% for the first three months of fiscal 1998 as compared to 6.4% for the same period of fiscal 1997 primarily due to the relationship between changes in costs of goods sold, customer acquisition costs and other selling expenses which in turn are primarily driven by changes in sales mix and the Company's customer acquisition strategy. Operating results will fluctuate in the future due to changes in the mix of sales, intensity and effectiveness of promotional activities, price increases by suppliers, introductions of new products, research and development requirements, actions by competitors, foreign currency exchange rates, conditions in the direct-to-consumer market and the photofinishing industry in general, national and global economic conditions and other factors. Demand for the Company's photo-related services and products is highly seasonal, with the highest volume of photofinishing activity occurring during the summer months. However, seasonality of demand may be offset by the introduction of new services and products, changes in the level of effectiveness of customer acquisition programs and other factors. This seasonality, when combined with the general growth of the Company's photofinishing business, has produced greater photofinishing net revenues during the last half of the Company's fiscal year (April through September), with a peak occurring in the fourth fiscal quarter. Net income is affected by the seasonality of the Company's net revenues due to the fixed nature of a portion of the Company's operating expenses, seasonal variation in sales mix and the Company's practice of relatively higher expenditures on marketing programs prior to the summer months. RESULTS OF OPERATIONS The following table presents information from the Company's consolidated statements of income, expressed as a percentage of net revenues for the periods indicated.
First Quarter Ended --------------------------- December 27, December 28, 1997 1996 ============================================================= Net revenues 100.0% 100.0% Cost of goods and services 57.7 61.1 ----- ----- GROSS PROFIT 42.3 38.9 Operating expenses: Customer acquisition costs 18.5 16.4 Other selling expenses 8.8 8.3 Research and development .7 .8 General and administrative 4.7 4.3 ----- ----- Total operating expenses 32.7 29.8 ----- ----- INCOME FROM OPERATIONS 9.6 9.1 Total other income .9 .7 ----- ----- INCOME BEFORE INCOME TAXES 10.5 9.8 Provision for income taxes 3.6 3.4 ----- ----- NET INCOME 6.9% 6.4% ===== =====
Page 9 of 12 Net revenues for the first quarter of fiscal 1998 increased 5.8% to $22,471,000 as compared to net revenues of $21,236,000 in the first quarter of fiscal 1997. The growth in net revenues was affected by a lower-than-expected rate of photofinishing growth and a decline in net revenues from ancillary businesses, primarily wholesale film sales. Management attributes the reduced photofinishing growth to increased competition and a continuing impact of extended delivery times experienced by customers during the summer months. Wholesale film sales declined primarily because of weaker demand and price competition. Cost of goods and services consist of labor, postage and supplies related to the Company's services and products. Gross profit in the first quarter of fiscal 1998 increased to 42.3% of net revenues compared to 38.9% in the first quarter of fiscal 1997. The increase in fiscal 1998 was due primarily to lower material costs and a product mix containing a higher percentage of the Company's Seattle FilmWorks(R) branded products which carry a higher gross profit margin than the Company's other services and products. Fluctuations in gross profit will occur in future periods due to the seasonal nature of revenues, mix of product sales, intensity of promotional activities and other factors. Total operating expenses in the first quarter of fiscal 1998 increased to 32.7% of net revenues compared to 29.8% in the first quarter of fiscal 1997. This increase was due primarily to an increase in customer acquisition and other selling activities, which affect revenues in current and future periods. The Company's principal technique for acquiring new customers is its Introductory Offer of two rolls of 35 mm film for $2.00 or less. The Company capitalized $5,067,000 of customer acquisition expenditures in the first quarter of fiscal 1998 compared to $4,555,000 for the first quarter of fiscal 1997. Capitalized customer acquisition expenditures as of December 27, 1997, increased to $15,121,000 compared to $13,882,000 as of September 27, 1997. Management believes this increased investment in customer acquisition combined with new service and product introductions are the primary reasons for the increase in photofinishing-related revenues. Each year the Company prepares detailed plans for its various marketing activities, including the mix between customer acquisition expenditures and other selling expenses. However, the Company occasionally changes both the mix and total marketing expenditures between periods to take advantage of marketing opportunities as they become available. Future periods may reflect increased customer acquisition costs due to the timing of the amortization of capitalized expenditures or the development and initiation of additional marketing programs. Other selling expenses include marketing costs associated with building brand awareness, testing of new marketing strategies and marketing to existing customers, as well as certain costs associated with acquiring new customers. Other selling expenses in the first quarter of fiscal 1998 increased to 8.8% of net revenues compared to 8.3% of net revenues for the first quarter of fiscal 1997. This increase was primarily due to increased marketing activities associated with expanded promotional activities to new and existing customers compared to the fiscal 1997 period. Research and development expenses decreased to $143,000 in the first quarter of fiscal 1998 as compared to $173,000 for the first quarter of fiscal 1997. The decrease resulted primarily from lower contract service costs and reduced equipment costs during the first quarter of fiscal 1998. Research and development expenses consist primarily of costs incurred in researching new computerized digital imaging concepts, developing computer software products and creating equipment necessary to provide customers with new computer-related photographic services and products. General and administrative expenses increased to $1,056,000 for the first quarter of fiscal 1998 as compared to $907,000 for the first quarter of fiscal 1997. This increase was primarily due to increased costs related to the Company's management information systems and other equipment related costs. General and administrative expenses consist of costs related to computer operations, human resource functions, finance, accounting, investor relations and general corporate activities. Total other income for the first quarter of fiscal 1998 increased to $214,000 as compared to $148,000 for the first quarter of fiscal 1997. The increase resulted from higher interest income due to greater levels of cash generated by operations. The federal income tax rate for the first three months of fiscal 1998 as compared to the first three months of fiscal 1997 decreased to 34.3% from 34.8%. The decrease in the effective tax rate for fiscal 1998 as compared to fiscal 1997 was due primarily to an increase in tax exempt interest income. Page 10 of 12 Net income in the first quarter of fiscal 1998 was $1,558,000, or diluted earnings per share of $.09, compared to $1,357,000 or diluted earnings per share of $.08 for the first quarter of fiscal 1997. The increase in net income was primarily attributable to the increase in net revenues and gross profit partially offset by the increase in operating expenses. LIQUIDITY AND CAPITAL RESOURCES As of January 30, 1998, the Company's principal sources of liquidity included cash and short-term investments of $15,191,000 and an unused revolving line of credit of $6,000,000. The ratio of current assets to current liabilities for the Company was 2.7 to 1 at the end of the first quarter of fiscal 1998, down from the current ratio of 3.1 to 1 at September 27, 1997 primarily due to an increase in accounts payable and a decrease in accounts receivable. During the first quarter of fiscal 1998 accounts receivable was reduced by $1,787,000 primarily due to payments received from wholesale orders shipped in the fourth quarter of fiscal 1997. Accounts payable increased $3,417,000 primarily due to the timing of payments related to inventory purchases. Federal income taxes payable were also lower primarily due to payments made during the first quarter of fiscal 1998. On January 22, 1997, the Company announced that it may repurchase shares of its Common Stock, either through open market purchases at prevailing market prices, through block purchases or in privately negotiated transactions. Repurchases may be commenced or discontinued by the Company at any time. Although the number of shares to be repurchased is uncertain, any repurchased shares will serve to offset the dilutive effect of shares of Common Stock issued under the Company's stock option and stock purchase plans. During the first quarter of fiscal 1998 the Company repurchased 267,300 shares of its common stock for a total of $2,637,000. Although the Company does not currently have any fixed material commitments with regard to capital expenditures, it currently expects to spend approximately $5,000,000 during the remainder of fiscal 1998, principally for photofinishing equipment, data storage equipment and for leasehold improvements. The Company has preliminarily addressed Year 2000 issues relating to existing software and hardware. The Company believes costs associated with these issues will not have a material effect on future operating results or future financial condition. The Company currently anticipates that existing funds together with anticipated cash flow from operations and the Company's available line of credit of $6,000,000 will be sufficient to finance its operations and planned capital expenditures and to service its indebtedness for the foreseeable future. However, if the Company does not generate sufficient cash from operations to satisfy its ongoing expenses, the Company will be required to seek external sources of financing or to refinance its obligations. Possible sources of financing include the sale of equity securities or additional bank borrowings. There can be no assurance that the Company will be able to obtain adequate financing in the future. PART II -- OTHER INFORMATION ---------------------------- ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K. (A) EXHIBITS. Information required by Exhibit 11 concerning calculation of earnings per share is set forth in Note C of Item 1 in Part I above. (B) REPORTS ON FORM 8-K. None Page 11 of 12 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. SEATTLE FILMWORKS, INC. DATED: February 9, 1998 /s/ Gary R. Christophersen ------------------------------------ Gary R. Christophersen President/Chief Executive Officer (Principal Executive Officer) /s/ Case H. Kuehn ------------------------------------ Case H. Kuehn Vice President-Finance/Treasurer (Principal Financial and Chief Accounting Officer) Page 12 of 12 EX-27 2 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM SEATTLE FILMWORKS, INC. FIRST QUARTER 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 3-MOS SEP-26-1998 SEP-28-1997 DEC-27-1997 15,314 0 1,893 0 9,755 27,942 8,282 0 51,794 10,286 0 0 0 165 36,949 51,794 0 22,471 12,972 7,342 (214) 0 0 2,371 813 0 0 0 0 1,558 .09 .09 ASSET VALUES REPRESENT NET AMOUNTS.
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