FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from..............to...................
Commission File Number: 0-29126
JENNA LANE, INC.
(Exact name of registrant as specified in its charter)
Delaware 22-3351399
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
1407 Broadway, Suite 2004
New York, New York 10018
(Address of principal executive offices)
(Zip Code)
(212) 704-0002
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
As of January 31, 1999, there were 4,339,707 shares of registrant's Common
Stock, par value $.01 per share, outstanding.
PART I - FINANCIAL INFORMATION
Page of
ITEM 1. FINANCIAL STATEMENTS. Form 10-Q
Consolidated Balance Sheet as of December 31, 1998 (Unaudited)
and March 31, 1998 3
Consolidated Statements of Operations for the three and nine months ended
December 31, 1998 and 1997 (Unaudited) 4
Consolidated Statements of Cash Flows for the three and nine months ended
December 31, 1998 and 1997 (Unaudited) 5
Notes to Consolidated Financial Statements (Unaudited) 6-8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS. 9-11
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REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
2
JENNA LANE, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 31, March 31,
ASSETS 1998 1998
------------------ -----------------
(Unaudited)
Current Assets:
Cash $ 24,009 $ 6,595
Due from factors 1,409,519 4,440,310
Inventories 7,177,260 5,888,085
Prepaid expenses and other 847,652 379,270
Prepaid income taxes 146,822 -
Deferred income taxes 50,000 43,000
------------------ -----------------
Total Current Assets 9,655,262 10,757,260
Property and Equipment, net 933,272 501,617
Other Assets 930,236 278,292
------------------ -----------------
$11,518,770 $11,537,169
================== =================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 2,580,755 $2,925,661
Accrued liabilities 146,099 187,208
Income taxes payable - 305,645
Current maturities of long-term debt 105,049 12,449
------------------ -----------------
Total Current Liabilities 2,831,903 3,430,963
------------------ -----------------
Long-Term Debt 366,347 3,653
------------------ -----------------
Deferred Income Taxes 32,000 30,000
------------------ -----------------
Shareholders' Equity:
Common stock, $.01 par value; 18,000,000 shares authorized; issued,
4,414,707 and 4,728,993 shares respectively; outstanding 4,359,707 and
4,728,993 shares respectively 44,147 47,290
Capital in excess of par value 7,980,635 7,980,635
Retained earnings 367,068 44,628
Treasury stock, at cost (103,330) -
------------------ -----------------
Total Shareholders' Equity 8,288,520 8,072,553
------------------ -----------------
$11,518,770 $11,537,169
================== =================
See notes to unaudited consolidated financial statements.
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JENNA LANE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Nine Months Ended
December 31, 1998 December 31, 1998
---------------------------------------- -------------------------------------------
1998 1997 1998 1997
------------------ ------------------ ------------------- --------------------
Net Sales $ 9,253,459 $ 7,723,861 $40,200,658 $30,753,741
Cost of Sales 7,356,595 6,474,112 31,958,643 25,081,214
------------------ ------------------ ------------------- --------------------
Gross Profit 1,896,864 1,249,749 8,242,015 5,672,527
------------------ ------------------ ------------------- --------------------
Operating Expenses:
Selling, general and administrative 2,335,839 1,557,734 6,868,663 4,695,515
Factoring charges and interest 286,069 148,389 867,119 515,553
------------------ ------------------ ------------------- --------------------
Total Operating Expenses 2,621,908 1,706,123 7,735,782 5,211,068
------------------ ------------------ ------------------- --------------------
(Loss) Income Before Income Taxes (725,044) (456,374) 506,233 461,459
(Credit) Provision for Income Taxes (330,207) (170,000) 183,793 212,072
------------------ ------------------ ------------------- --------------------
Net (Loss) Income $ (394,837) $ (286,374) $ 322,440 $ 249,387
================== ================== =================== ====================
Net (Loss) Income Per Share:
Basic $ (0.09) $ (0.06) $ 0.07 $ 0.05
================== ================== =================== ====================
Diluted $ (0.09) $ (0.06) $ 0.07 $ 0.04
================== ================== =================== ====================
See notes to unaudited consolidated financial statements.
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JENNA LANE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended Nine Months Ended
December 31, December 31,
-----------------------------------------------------------------
1998 1997 1998 1997
-------------- --------------- --------------- --------------
Operating Activities:
Net (loss) income $ (394,837) $ (286,374) $322,440 $249,387
Adjustments to reconcile net (loss) income to net cash
provided by(used in) operating activities:
Depreciation and amortization 71,935 39,548 128,335 117,349
Deferred income taxes (14,000) (12,000) (5,000) (27,000)
Write-off of note receivable - - 35,760 -
Other - 743 - 743
Changes in assets and liabilities:
Due from factors 2,173,953 2,109,522 3,030,791 1,270,070
Inventories (1,899,153) (1,588,743) (1,289,175) (1,743,448)
Prepaid expenses and other 115,874 (22,582) (457,944) 19,201
Income taxes (387,142) (188,335) (452,467) 308,665
Accounts payable and accrued liabilities 445,983 (7,942) (386,015) (225,260)
-------------- --------------- --------------- --------------
Net Cash Provided By (Used In) Operating
Activities 112,613 43,837 926,725 (30,293)
-------------- --------------- --------------- --------------
Investing Activities:
Acquisition of business - - (630,209) -
Capital expenditures (5,564) (41,705) (75,489) (275,699)
Security deposits (1,378) - (22,950) (13,914)
Issuance of notes receivable (20,000) (11,000) (114,627) (285,030)
Repayment of notes receivable 16,122 18,830 69,644 74,297
-------------- --------------- --------------- --------------
Net Cash Used In Investing Activities (10,820) (33,875) (773,631) (500,346)
-------------- --------------- --------------- --------------
Financing Activities:
Principal payments on equipment notes payable (21,624) (3,529) (29,207) (10,247)
Repurchase of stock (103,330) - (103,330) -
Repurchase of performance shares - - (3,143) -
-------------- --------------- --------------- --------------
Net Cash Used In Financing Activities (124,954) (3,529) (135,680) (10,247)
-------------- --------------- --------------- --------------
Net (Decrease) Increase In Cash (23,161) 6,433 17,414 (540,886)
Cash at beginning 47,170 1,000 6,595 548,319
-------------- --------------- --------------- --------------
Cash at end $ 24,009 $ 7,433 $ 24,009 $ 7,433
============== =============== =============== ==============
Supplemental Disclosures of Cash Flow Information:
Interest paid $158,046 $ 68,940 $446,311 $202,025
============== =============== =============== ==============
Income taxes paid $ 67,797 $ 30,335 $633,742 $ 30,335
============== =============== =============== ==============
Noncash Transactions:
Capital lease obligations incurred for the
acquisition of equipment $484,501 $ - $484,501 $ -
============== =============== =============== ==============
See notes to unaudited consolidated financial statements.
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JENNA LANE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF PRESENTATION
The consolidated financial statements include the accounts of Jenna
Lane, Inc. and its wholly-owned subsidiaries (collectively, the
"Company"). The financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial
information and the instructions for Form 10-Q. Accordingly, certain
information and footnote disclosures normally included in consolidated
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. These
consolidated financial statements should be read in conjunction with
the financial statements and notes thereto included in the Company's
Annual Report on Form 10-K filed with the Securities and Exchange
Commission for the year ended March 31, 1998. In the opinion of
management, all adjustments (which include only normal recurring
adjustments) considered necessary for a fair presentation of interim
results have been included. The results of operations for the nine
months ended December 31, 1998 are not necessarily indicative of the
operating results for the full year.
2. INVENTORIES
December 31, March 31,
1998 1998
------------ ----------
(Unaudited)
Raw materials $2,214,569 $2,308,517
Work-in-process 1,528,243 368,954
Finished goods 3,434,448 3,210,614
------------ ----------
$7,177,260 $5,888,085
------------ ----------
------------ ----------
3. EARNINGS PER SHARE
The Company adopted Statement of Financial Accounting Standards No. 128
"Earnings per Share" which modifies the calculation of earnings per
share ("EPS"). The Standard replaces the previous presentation of
primary and fully diluted EPS. Basic EPS excludes dilution and is
computed by dividing income available to common shareholders by the
weighted average number of common shares outstanding during the period.
Diluted EPS includes the dilution of common stock equivalents, and is
computed similarly to fully diluted EPS pursuant to APB Opinion 15. All
prior periods presented have been restated to reflect this adoption.
- 6 -
JENNA LANE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
3. EARNINGS PER SHARE (Continued)
The following table reconciles the number of common shares outstanding
with the number of common and common equivalent shares used in
computing earnings per share (1997 share data has been adjusted to
reflect a 10% stock dividend paid March, 1998):
Three Months Ended Nine Months Ended
December 31, December 31,
--------------------- ----------------------
1998 1997 1998 1997
--------- --------- --------- ---------
Basic:
Common shares outstanding 4,359,707 4,718,993 4,359,707 4,718,993
Effect of using weighted average 29,326 - 115,490 -
--------- --------- --------- ---------
Weigted average number of
shares outstanding 4,389,033 4,718,993 4,475,197 4,718,993
Diluted:
Effect of assuming exercise of
outstanding stock options
and warrants based on the
treasury stock method - - 81,460 840,041
--------- --------- --------- ---------
Shares used in computing
diluted earnings per share 4,389,033 4,718,993 4,556,657 5,559,034
--------- --------- --------- ---------
--------- --------- --------- ---------
Computation of diluted earnings per share is not reflected for the
three months ended December 31, 1998 and 1997 because including
potential common shares will result in an antidilutive per-share amount
due to the net loss in each period.
Additional shares issuable assuming conversion of warrants is
antidilutive for the nine months ended December 31, 1998.
4. SHAREHOLDERS' EQUITY
During the nine months ended December 31, 1998, the Company repurchased
314,286 performance shares for $3,143 ($.01 per share).
In September 1998, the Company adopted a share repurchase program to
buy back up to 500,000 shares of the Company's stock. As of December
31, 1998, the Company has repurchased 55,000 shares at an aggregate
cost of $103,330.
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JENNA LANE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
5. ACQUISITION
On June 19, 1998, the Company acquired substantially all the assets of
T.L.C. for Girls, Inc. (TLC), a manufacturer of children's wear for
approximately $630,000 in cash, including related acquisition costs.
The acquisition has been accounted for as a purchase and accordingly,
TLC's results are included in the consolidated financial statements
since the date of acquisition. The excess of the purchase price over
assets acquired (goodwill) represents substantially the entire
acquisition cost.
6. LICENSE AGREEMENT
In July 1998, the Company entered into a license agreement to
manufacture large size women's sportswear under the "BONGO" trademark.
The agreement requires royalty payments based on net sales with annual
minimums of $250,000, $425,000 and $650,000 during the initial three
year term. An advance royalty of $88,000 was paid in June 1998.
7. LEASES
Operating Leases:
In October 1998, the Company executed a six year lease for new
administrative and warehouse space in Secaucus, New Jersey. The lease
provides for a monthly rental of $33,400 through December, 2004.
In January 1999, the Company executed a lease for larger showroom
space. Upon occupancy, which is expected to take place in the late
spring or early summer, the Company intends to consolidate a number of
its other showrooms into this location. The lease provides for a
monthly rental of $34,200 through July, 2006.
Capital Leases:
In November 1998, the Company entered into capital leases for the
acquisition of computer hardware and software for its design, shipping
and administrative departments and improvements to its new premises.
The present value of the minimum lease payments amounted to $484,500.
The leases require monthly payments of $11,900 through October 2001 and
$7,300 thereafter, through October 2003, inclusive of interest ranging
from 9.96% to 11.48%.
- 8 -
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The following is a discussion of the financial condition and results of
operations of the Company for the three and nine months ended December 31, 1998
and 1997, respectively.
Results of Operations
The following table sets forth, for the periods indicated, the Company's
statements of operation data as a percentage of net sales.
Three Months Ended Nine Months Ended
December 31, December 31,
------------------ ------------------
1998 1997 1998 1997
------ ------- ------- -------
Net sales 100.0% 100.0% 100.0% 100.0%
Cost of Sales 79.5 83.8 79.5 81.6
------ ------- ------- -------
Gross profit 20.5 16.2 20.5 18.4
Operating expenses 28.3 22.1 19.2 16.9
------ ------- ------- -------
Income before income taxes (7.8) (5.9) 1.3 1.5
Provision for income taxes (3.6) (2.2) 0.5 0.7
------ ------- ------- -------
Net (Loss) Income (4.2)% (3.7)% 0.8% 0.8%
------ ------- ------- -------
------ ------- ------- -------
Three Months Ended December 31, 1998 Compared with Three Months Ended December
31, 1997
Net sales of $9.3 million in the three months ended December 31, 1998
represented an increase of $1.6 million, or 19.8% over net sales of $7.7 million
in the three months ended December 31, 1997. The increase in net sales was
primarily attributable to the addition of the Company's sweater sales group
(Smart Objects), and its children's sales group (TLC for Kidz) with sales of
$1.2 million, and $1.0 million, respectively.
The Company's gross profit increased $647,000, or 51.8% to $1.9 million for the
three months ended December 31, 1998 from $1.2 million for the three months
ended December 31, 1997. Gross profit margin increased to 20.5% in the three
months ended December 31, 1998 from 16.2% in the three months ended December 31,
1997. This increase was primarily attributable to improved operating
efficiencies in domestic production areas as well as continued migration from
domestic factories to Carribbean basin regions. Gross margins, however, were
negatively impacted in the quarter by a higher percentage of off-price sales on
import products.
Operating expenses, including all transactions with the factor, increased
$916,000, or 53.7%, to $2.6 million in the three months ended December 31, 1998
from $1.7 million in the three months ended December 31, 1997. The increase was
primarily due to costs associated with the addition of new children's, sweater
and dress sales groups and reorganization of the existing mail order sales
group. An increase of $584,000 in payroll and related costs, including $157,000
in increased selling salaries, as well as an increase of $132,000 in selling
related expenses resulted from this expansion strategy. Factoring costs
increased $138,000 as a result of higher sales volume and additional interest on
increased factor borrowing.
- 9 -
As a result of the above factors, pre-tax loss increased from $456,000 in the
three months ended December 31, 1997 to $725,000 in the three months ended
December 31, 1998. The Company believes that its core business remains strong as
evidenced by its increasing revenues and margins. however, overall performance
was negatively impacted by the lower than anticipated sales volume in its "US
Polo", "Mail Order", "TLC for Kidz" and "Impatiens" sales groups, which did not
contribute to the Company's business as expected in 1998. The Company expects
the majority of these sales group to contribute to earnings in the fourth
quarter.
Nine Months Ended December 31, 1998 Compared with Nine Months Ended December
31, 1997
Net sales of $40.2 million in the nine months ended December 31, 1998
represented an increase of $9.4 million, or 30.7% over net sales of $30.8
million in the nine months ended December 31, 1997. The increase in net sales
was primarily attributable to the addition of the Company's sweater sales group
(Smart Objects), and its children's sales group (TLC for Kidz) with sales of
$2.7 million, and $4.4 million, respectively.
The Company's gross profit increased $2.6 million, or 45.3% to $8.2 million for
the nine months ended December 31, 1998 from $5.6 million for the nine months
ended December 31, 1997. Gross profit margin increased to 20.5% in the nine
months ended December 31, 1998 from 18.4% in the nine months ended December 31,
1997. This increase is primarily attributable to improved domestic production
operating efficiencies, a change in the Company's sales mix towards higher
margin fashion apparel rather than basic, and the overall higher margins on
import product.
Operating expenses, including all transactions with the factor, increased $2.5
million or 48.4% to $7.7 million in the nine months ended December 31, 1998 from
$5.2 million in the nine months ended December 31, 1997. The increase was
primarily due to an increase of $1.4 in payroll and related costs, including
$492,000 in increased selling salaries, as well as $612,000 in selling related
expenses which resulted from increased sales volume and the costs associated
with the expansion into new sales groups. Factoring costs increased $352,000 as
a result of higher sales volume and interest costs on increased factor
borrowings for working capital needs.
As a result of the above factors, pre-tax income increased 9.8% from $461,000 in
the nine months ended December 31, 1997 to $506,000 in the nine months ended
December 31, 1998.
Liquidity and Capital Resources
Operating activities provided net cash of $113,000 and of $927,000 for the three
and nine months ended December 31, 1998, respectively. The principal use of
operating cash during the nine months was to finance the acquisition of
substantially all the assets of children's wear manufacturer, TLC for Girls,
Inc. for $630,000 and to repurchase the Company's common stock under its
September 1998 buyback program for $103,000.
The Company's capital expenditures totalled $490,000 and $560,000 for the three
and nine months ended December 31, 1998, respectively. $485,000 of these capital
expenditures were for computer, material handling, design, and office equipment
associated with upgrading information technology and its core business systems
as well as improvements to its new warehouse and distribution center and
administrative offices. These expenditures have been financed through a leasing
company. In connection with the foregoing, in October 1998, the Company executed
a six year lease agreement for the new premises (see Item 5, "Other
Information"). The lease provides for monthly rental of $33,400 through December
2004.
- 10 -
In January, 1999, the Company executed a lease for larger showroom space. The
lease provides for monthly rental of $34,200 through July, 2006.
In September 1998, the Company adopted a share repurchase program to buy back up
to 500,000 shares of the Company's stock. As of December 31, 1998 the Company
has repurchased 55,000 shares at an average price of $1.88 a share.
The Company believes that existing cash, anticipated cash flows from operations
and availability of advances under its factoring arrangement will be sufficient
to support the Company's operations for at least the next 12 months.
Recently Issued Accounting Pronouncements
In June 1997, the Financial Accounting Standards Board (FASB) issued Statement
of Financial Accounting Standards (SFAS) No. 130, "Reporting Comprehensive
Income", which establishes standards for reporting the components of
comprehensive income and SFAS No. 131, "Disclosures about Segments of an
Enterprise and Related Information", which replaces existing segment disclosure
requirements and requires reporting certain financial information regarding
operating segments. It also establishes standards for related disclosures about
products and services, geographic areas, and major customers. SFAS No. 130 and
131 are effective for financial statements for fiscal years beginning after
December 15, 1997. The Company is not currently affected by SFAS No. 130 and is
in the process of evaluating the specific requirements of SFAS No. 131. These
statements will affect disclosure and presentation in the financial statements,
but will have no impact on the Company's consolidated financial position,
results of operations or cash flows.
-11 -
PART II - OTHER INFORMATION
Item 1. Legal Proceedings: There are no material pending legal
proceedings to which the Company is a party or to which any
of its property is subject. The Company is subject to normal
litigations in the ordinary course of business.
Item 2. Changes in Securities: None.
Item 3. Defaults Upon Senior Securities: None.
Item 4. Submissions of Matters to a Vote of Security Holders: None.
Item 5. Other Information:
New Showroom and Warehouse Leases
In January 1999, the Company executed a lease with respect to the
entire 24th floor in its current building at 1407 Broadway in Manhattan. The
Company intends, upon occupying this space in the late spring or early summer,
to consolidate a number of its other showrooms into a single space. Monthly
rental of this space will be $34,200. The landlord also is providing $342,000 in
construction allowances to the Company. The lease runs from occupancy through
July 31, 2006. Upon occupancy of the new space, the Company's current lease of
Suite 2004 in the same building will be terminated. The Company has not yet
received an executed counterpart of the lease from the landlord, but anticipates
that it will be received shortly.
As of October 13, 1998, the Company executed a lease with respect to
72,206 square feet of office and warehouse space in Secaucus, New Jersey. The
Company's warehouse and related office staff (including certain of its senior
executives) moved into this space in February 1999. The Company also intends to
move most of its design staff from its current location in Manhattan into the
new Secaucus space in the near future. This move continues the Company's effort
to consolidate its operations into two primary locations. Monthly rent on the
Secaucus space is $33,395.28. As part of the lease, the landlord performed a
significant amount of work at its expense to prepare the space for the Company's
occupancy. The Company also expended and will expend approximately $250,000 as
additional efforts to prepare the space, which amounts will be paid through a
third-party leasing arrangement. The lease runs from January 1, 1999 through
December 31, 2004.
The Company has sent a termination notice to the landlord of its
previous warehouse space in Cranbury, New Jersey, which termination is based
upon the Company's belief that the landlord breached certain material
obligations under the agreement. Notwithstanding this termination by the
Company, there can be no assurance that the landlord will not claim that the
Company's termination was improper and seek continuing payment of rent or other
unspecified damages, or seek to negotiate a settlement of the matter which
could involve substantial cost to the Company, despite the Company's position
that the landlord's breach justified the Company's termination. The Company has
been seeking and continues to seek a new tenant for its former warehouse space
in an effort to mitigate any potential damages in this matter, but there can be
no assurance that it will be able to successfully locate such a tenant, or that
the landlord will be willing to enter into a lease with that tenant.
New Computer Hardware and Software
The Company recently acquired new computer hardware and software,
timed to be
- 12 -
delivered and installed in the new warehouse in Secaucus, which the Company
believes will significantly enhance the flow and extent of information
throughout the Company, including integration of all sales groups and other
units within the Company's administrative infrastructure, and will ensure that
the Company's operations will not encounter problems associated with the
so-called "Year 2000" computer problem (see "Year 2000 Computer Issue" below).
The system, including software, hardware and related training and consulting, is
expected to cost approximately $600,000, most of which will be paid in the form
of a lease over a five year period. The final amount will depend on the extent
of training and consulting required. The Company plans for the new system to be
fully operational throughout the Company in early to mid-summer of 1999.
Stock Buyback Program
In September 1998, the Board of Directors of the Company approved an
18-month program to repurchase up to 500,000 shares of the Company's common
stock in the public market. Repurchases have taken place in the discretion of
the management, subject to market price at the time, and are subject to
available financing. Through January 31, 1999, the Company has repurchased an
aggregate of 75,000 shares of common stock at prices ranging from $1.37 per
share to $2.15 per share.
Year 2000 Computer Issue
What is commonly known as the "Year 2000 Issue" arises because many
computer hardware and software systems use only two digits to represent the
year. As a result, these systems and programs may not calculate dates beyond
1999, which may cause errors in information or system failures.
With respect to its internal systems, as indicated above, the Company
is taking appropriate steps to remedy the Year 2000 issues and does not expect
the costs of these efforts to be material. However, the Year 2000 readiness of
the Company's suppliers may vary. While the Company does not believe the Year
2000 matters disclosed above will have a material impact on its business,
financial condition or results of its operations, it is uncertain whether or to
what extent the Company may be effected by such matters.
Item 6. Exhibits and Reports on Form 8-K:
(a) Exhibits:
27.1 Financial Data Schedule
(b) Reports on Form 8-K: None.
- 13 -
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.
Dated: February 11, 1999
JENNA LANE, INC.
By: /s/ Mitchell Dobies
Mitchell Dobies
Co-Chief Executive Officer
By: /s/ Charles Sobel
Charles Sobel
Co-Chief Executive Officer