<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
---------------
FORM 10-Q
(Mark One)
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 28, 1996
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: 0-27892
SIPEX Corporation
- --------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in Its Charter)
Massachusetts 04-6135748
- --------------------------------------------------------------------------------
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
22 Linnell Circle, Billerica, Massachusetts 01821
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code (508) 667-8700
--------------
- --------------------------------------------------------------------------------
Former Name, Former Address and Former Fiscal Year If Changed Since Last Report.
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
----- -----
There were 6,981,996 shares of the Registration's Common Stock issued
and outstanding as of October 21, 1996.
1
<PAGE> 2
SIPEX CORPORATION
FORM 10-Q
NINE MONTHS ENDED SEPTEMBER 28, 1996
INDEX
<TABLE>
<CAPTION>
Item Number Page
- ----------- ----
<S> <C> <C>
Part I: Financial Information
Item 1. Financial Statements
Condensed Consolidated Balance Sheets at December 31, 1995 and 3
September 28, 1996.
Condensed Consolidated Statements of Operations 4
for the three months and nine months ended
September 30, 1995 and September 28, 1996.
Condensed Consolidated Statements of Cash Flows 5
for the nine months ended September 30, 1995 and
September 28, 1996.
Notes To Condensed Consolidated Financial Statements. 6-7
Item 2. Management's Discussion and Analysis of Financial Condition and 8-12
Results of Operations.
Part II: Other Information
Item 1. Legal Proceedings *
Item 2. Changes in Securities *
Item 3. Defaults Upon Senior Securities *
Item 4. Submission of Matters to a Vote of Security Holders *
Item 5. Other Information *
Item 6. Exhibits and Reports on Form 8-K 13
Exhibit 11.1 Computation of Earnings Per Common Share
Exhibit 27 Financial Data Schedule
Signatures 14
</TABLE>
* No information provided due to inapplicability of item.
2
<PAGE> 3
Part I: FINANCIAL INFORMATION
Item 1: Financial Statements
SIPEX CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
December 31, September 28,
1995 1996
-------- --------
<S> <C> <C>
Assets
Current Assets
Cash and cash equivalents $ 257 $ 3,654
Accounts receivable, less allowances of $240 and
$480 at December 31, 1995 and September 28, 1996,
respectively 5,234 5,013
Inventories 7,415 11,774
Prepaid expenses 225 124
-------- --------
Total current assets 13,131 20,565
-------- --------
Property, plant, and equipment, net 2,448 2,874
Other assets 291 292
-------- --------
Total assets $ 15,870 $ 23,731
======== ========
Liabilities and Stockholders' Equity (deficit)
Current Liabilities
Current portion of long term debt $ 210 $ 201
Accounts payable 3,922 2,991
Accrued expenses 1,692 1,464
-------- --------
Total current liabilities 5,824 4,656
-------- --------
Long term debt, net of current portion 220 78
Long term debt to affiliates 11,710 --
-------- --------
Total liabilities 17,754 4,734
-------- --------
Stockholders' Equity (deficit)
Preferred stock, $.01 par value, no shares
authorized, issued or outstanding at December 31,
1995; 1,000,000 shares authorized and no shares
issued or outstanding at September 28, 1996 -- --
Common stock, $.01 par value, 40,000,000 shares
authorized and 4,685,306 and 6,980,846 shares
issued and outstanding at December 31, 1995 and
September 28, 1996, respectively 47 70
Additional paid-in capital 45,468 63,734
Accumulated deficit (47,581) (44,975)
Cumulative translation adjustment 182 168
-------- --------
Total stockholders' equity (deficit) (1,884) 18,997
-------- --------
Total liabilities and stockholders' equity (deficit) $ 15,870 $ 23,731
======== ========
</TABLE>
See accompanying notes to condensed consolidated financial statements
3
<PAGE> 4
SIPEX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
---------------------------- -----------------------------
September 30, September 28, September 30, September 28,
1995 1996 1995 1996
------- ------ -------- --------
<S> <C> <C> <C> <C>
Net sales $ 7,882 $9,529 $ 21,913 $ 27,169
Cost of sales 4,983 5,360 14,054 15,836
------- ------ -------- --------
Gross profit 2,899 4,169 7,859 11,333
------- ------ -------- --------
Operating Expenses
Research and development 1,014 1,285 3,316 3,439
Marketing and selling 1,092 1,116 3,194 3,349
General and administrative 442 534 1,501 1,528
Write off of intangible assets -- -- 1,320 --
------- ------ -------- --------
Total operating expenses 2,548 2,935 9,331 8,316
------- ------ -------- --------
Income (loss) from operations 351 1,234 (1,472) 3,017
Other expenses, net (229) 1 (544) (327)
------- ------ -------- --------
Income (loss) before income taxes 122 1,235 (2,016) 2,690
Income tax expense 7 35 17 84
------- ------ -------- --------
Net income (loss) $ 115 $1,200 ($ 2,033) $ 2,606
======= ====== ======== ========
Net income (loss) per common and
equivalent share $ 0.02 $ 0.16 ($ 0.43) $ 0.38
======= ====== ======== ========
Weighted average common and common
equivalent shares outstanding 4,752 7,656 4,754 6,862
======= ====== ======== ========
</TABLE>
See accompanying notes to condensed consolidated financial statements
4
<PAGE> 5
SIPEX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
-----------------------------
September 30, September 28,
1995 1996
------- --------
<S> <C> <C>
Operating activities:
Net income (loss) ($ 2,033) $ 2,606
Adjustments to reconcile net income (loss)
to net cash used in operating activities
Additions to accounts receivable allowances 162 270
Depreciation and amortization 2,200 761
Changes in current assets and liabilities
Increase in accounts receivable (1,118) (49)
Increase in inventories (623) (4,360)
Decrease in prepaid expenses and other assets 14 101
Increase (decrease) in accounts payable and
accrued expenses 310 (1,158)
------- --------
Net cash used in operating activities (1,088) (1,829)
------- --------
Investing activities:
Purchase of property, plant, and equipment (591) (1,188)
------- --------
Net cash used in investing activities (591) (1,188)
------- --------
Financing activities:
Proceeds from issuance of (buyback of) common stock (1) 18,289
Proceeds from (payment of) long-term debt 1,910 (11,710)
Payment of capital lease obligations (151) (151)
------- --------
Net cash provided by financing activities 1,758 6,428
Effect of foreign currency translation adjustments (23) (14)
------- --------
Increase in cash and cash equivalents 56 3,397
Cash and cash equivalents, beginning of period 176 257
------- --------
Cash and cash equivalents, end of period $ 232 $ 3,654
======= ========
Supplemental cash flow disclosure
Cash paid during the period for
Income taxes $ 12 $ 48
Interest 499 421
======= ========
Supplemental disclosure of non-cash operating activities
Write off of intangible assets $ 1,320 --
======= ========
</TABLE>
See accompanying notes to condensed consolidated financial statements
5
<PAGE> 6
SIPEX CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Basis of Presentation
The accompanying unaudited financial statements have been prepared by
SIPEX Corporation (the "Company") pursuant to the rules and regulations
of the Securities and Exchange Commission regarding interim financial
reporting. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for
complete financial statements and should be read in conjunction with
the financial statements and notes thereto for the year ended December
31, 1995 included in the Company's Registration Statement on Form S-1
(File No. 333-1328). The accompanying financial statements reflect all
adjustments (consisting solely of normal, recurring adjustments) which
are, in the opinion of management, necessary for a fair presentation of
results for the interim periods presented. The results of operations
for the nine month period ended September 28, 1996 are not necessarily
indicative of the results to be expected for the full fiscal year.
2. Inventories
<TABLE>
<CAPTION>
(In thousands)
December 31, September 28,
1995 1996
------- -------
<S> <C> <C>
Inventories consist of:
Raw materials $ 3,316 $ 5,594
Work in process 3,118 4,209
Finished goods 981 1,971
------- -------
$ 7,415 $11,774
======= =======
</TABLE>
6
<PAGE> 7
3. Long Term Debt
The Company's long term debt at December 31, 1995 and September 28,
1996 is summarized as follows:
<TABLE>
<CAPTION>
(In thousands)
December 31, September 28,
1995 1996
------- ----
<S> <C> <C>
Revolving line of credit $ 7,200 --
Subordinated note payable to CEF 3,000 --
Subordinated note payable to affiliate 1,510 --
Capital lease obligations 416 270
Other 14 9
------- ----
12,140 279
Less current portion 210 201
------- ----
$11,930 $ 78
======= ====
</TABLE>
On April 8, 1996, the Company obtained proceeds from its initial public
offering amounting to $19.1 million before deducting expenses of the
offering estimated at $800,000. Of its total proceeds, $7.5 million was
used to pay down the outstanding balance of the revolving line of
credit and $4.8 million was used to pay off subordinated notes payable
to affiliates.
4. Net Income (loss) Per Share
Net income (loss) per share is based upon the weighted average number
of common and common equivalent shares outstanding (using the treasury
stock method) after certain adjustments described below. Common
equivalent shares, consisting of outstanding stock options, are
included in the per share calculations where the effect of their
inclusion would be dilutive. Pursuant to Securities and Exchange
Commission Staff Accounting Bulletin No. 83, all common and common
equivalent shares issued at prices less than the initial public
offering price during the twelve-month period prior to the initial
filing of the Registration Statement for the initial public offering
have been included in the calculation as if they were outstanding for
all periods using the treasury stock method. For the quarters ended
September 30, 1995 and September 28, 1996, fully diluted income (loss)
per share approximates primary income(loss) per share.
7
<PAGE> 8
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Results of operations
SIPEX Corporation (the "Company") was organized and commenced
operations in 1965. The Company designs, manufactures, markets and sells
innovative, high performance, high value-added analog integrated circuits.
The table below presents the statement of operations items for the nine
months ended September 30, 1995 and September 28, 1996 as a percentage of net
sales and provides the percentage increase (decrease) in absolute dollars of
such items comparing the interim periods ended September 28, 1996 to the
corresponding period from the prior fiscal year.
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
------------------------------------------- ------------------------------------------
% Change % Change
Of Dollar Of Dollar
September 30 September 28 Increase September 30 September 28 Increase
1995 1996 (Decrease) 1995 1996 (Decrease)
------------ ------------ ---------- ------------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C>
Net sales 100 % 100% 20.9 % 100 % 100 % 24.0 %
Cost of Sales 63.2 56.2 7.6 64.1 58.3 12.7
----- ----- ----- ----- ----- ------
Gross profit 36.8 43.8 43.8 35.9 41.7 44.2
----- ----- ----- ----- ----- ------
Operating expenses
Research and development 12.9 13.5 26.7 15.1 12.7 3.7
Marketing and selling 13.9 11.7 2.2 14.6 12.3 4.9
General and administrative 5.6 5.6 20.8 6.8 5.6 1.8
Write of off intangible assets -- -- -- 6.1 -- (100.0)
----- ----- ----- ----- ----- ------
Total operating expenses 32.4 30.8 15.2 42.6 30.6 (10.9)
----- ----- ----- ----- ----- ------
Operating income (loss) 4.4 13.0 251.6 (6.7) 11.1 305.0
Other expense, net (2.9) 0.0 (100.4) (2.5) (1.2) (39.9)
----- ----- ----- ----- ----- ------
Income (loss) before income taxes 1.5 13.0 912.3 (9.2) 9.9 233.4
Income tax expense 0.1 0.4 400.0 0.1 0.3 394.1
===== ===== ===== ===== ===== ======
Net income (loss) 1.4 % 12.6% 943.5 % (9.3)% 9.6 % 228.2
===== ===== ===== ===== ===== ======
</TABLE>
8
<PAGE> 9
Net sales for both the third quarter and the first nine months of
1996 increased 20.9% and 24.0% to $9.5 million and $27.2 million respectively,
as compared to the same periods in the previous year. For both the third quarter
and the first nine months of 1996, net sales increased over comparable periods
in the prior year primarily due to higher unit sales resulting from increased
market acceptance of the Company's proprietary and application specific
products. Both domestic and international sales grew during the third quarter
and first nine months of 1996 as compared to the corresponding periods in the
prior year.
Gross profit increased for both the third quarter and the first nine
months of 1996 by $1.3 million and $3.5 million, respectively as compared with
the same periods in the previous year. As a percentage of net sales, gross
profit increased to 43.8% and 41.7% for both the third quarter and the first
nine months of 1996, respectively over comparable periods in the prior year
primarily due to the absorption of certain fixed costs over the increased sales
volume and due to increased market acceptance of the Company's proprietary and
application specific products.
Research and development expenses for both the third quarter and first
nine months of 1996 increased $271,000 or 26.7% and $123,000 or 3.7%,
respectively as compared to the same periods in the previous year. The increase
in spending was due to salary and other expenses relating to the hiring of
additional engineering personnel, outside consulting, and mask set expense. As a
percentage of net sales, research and development expenses increased to 13.5%
for the third quarter and decreased to 12.7% for the nine months of 1996.
Marketing and selling expenses increased 2.2% and 4.9% to $1.1 million
and $3.3 million, respectively for the third quarter and first nine months of
1996 as compared with the same periods of the previous year. As a percentage of
net sales, marketing and selling expenses for the third quarter and first nine
months of 1996 declined to 11.7% and 12.3%, respectively as compared to the
previous year due to staffing and compensation increasing at a slower rate than
sales growth as compared with the same period of the previous year. The increase
in absolute terms was due primarily to higher costs associated with commissions,
marketing and advertising programs.
General and administrative expenses increased by $92,000 for the third
quarter and remained essentially constant at $1.5 million for the first nine
months of 1996 as compared to the same periods of the previous year. The
increase in spending for the third quarter of 1996 as compared to the same
period a year ago was due to increased travel related expense and an increase in
the bad debt reserve. As a percentage of net sales, general and administrative
expenses remained constant at 5.6% and for the first nine months of 1996
declined slightly from 6.8% in 1995 to 5.6%.
In the quarter ended July 1, 1995, the Company wrote-off the
unamortized balance of intangible assets associated with the acquisition of
certain businesses involved in the development and design of custom and standard
products with military applications. The Company wrote-off this amount as a
result of its increased focus on commercial products and review of actual and
expected revenues and cash flows from specific military products related to the
acquired technology. These amounts are included in the first nine months of
1995.
9
<PAGE> 10
Other expense, net consists primarily of interest on subordinated
indebtedness to affiliates and borrowings under the Company's bank credit
facility. For both the third quarter of 1996 and the first nine months of 1996
other expenses, net decreased $230,000 and $217,000 respectively as compared to
the same period in the previous year due primarily to the payoff of its
revolving line of credit and subordinated notes to affiliates, and income earned
on the Company's initial public offering proceeds which offset interest expense.
The Company recorded income tax expense of $35,000 for the three months
ended September 28, 1996 and $84,000 for the nine months ended September 28,
1996, an effective rate of 3% for each period. These effective rates differed
from the statutory rate of 34% due to the Company's utilization of its net
operating loss carry forwards.
Liquidity and Capital Resources.
Since 1991, the Company has financed its operations and met its capital
requirements primarily through cash flow from operations, loans from affiliates
of Tractebel S.A. and a $7.5 million revolving credit agreement with Generale
Bank, which is an affiliate of Sipex by virtue of common ownership. The Company
subsequently terminated its revolving credit facility and is evaluating
replacement bank credit facilities. On September 28, 1996, the Company had cash
and cash equivalents of $3.6 million which primarily represents the remaining
net proceeds from the Company's initial public offering. The Company believes
that cash generated from operations and the net proceeds of its initial public
offering will fund necessary capital expenditures and provide adequate working
capital for the foreseeable future.
Factors Affecting Future Operating Results.
From time to time, information provided by the Company, statements made
by its employees or information included in its filings with the Securities and
Exchange Commission (including statements in this Form 10-Q) may contain
statements which are not historical facts, so called "forward-looking
statements", and are made pursuant to the safe harbor provision of the Private
Securities Litigation Reform Act of 1995 and releases of the Securities and
Exchange Commission. In particular, certain statements contained in the
Management's Discussion and Analysis of Financial Condition and Results of
Operations which are not historical facts (including, but not limited to,
statements concerning anticipated availability of capital for working capital
and for capital expenditures) constitute "forward-looking" statements. The
Company's actual future results may differ significantly from those stated in
any forward-looking statements. Factors that may cause such differences include,
but are not limited to, the factors discussed below and the other risks
discussed in the Company's Prospectus dated April 2, 1996 included in its
Registration Statement on Form S-1 (Reg. No. 333-1328) and from time to time in
the Company's other filings with the Securities and Exchange Commission.
10
<PAGE> 11
Supply and Manufacturing Risks. The Company currently relies on three outside
foundries to supply fully processed semiconductor wafers. There are significant
risks associated with reliance on outside foundries, including the lack of
assured wafer supply and control over delivery schedules, the unavailability of
or delays in obtaining access to key process technologies and limited control
over quality assurance, manufacturing yields and production costs. The Company
is also subject to significant manufacturing risks including yield variances
which the Company or its outside foundries may experience.
Intellectual Property Rights. The Company relies on certain intellectual
property protections to preserve its intellectual property rights. Any
invalidation of these intellectual property rights or lengthy and expensive
defense of these rights could have a material adverse effect on the Company.
Dependence on New Products. The Company's success will depend upon its ability
to develop new semiconductor devices for existing and new markets, to introduce
such products in a timely manner and to have such products selected for design
into new products of its customers. Successful product development and
introduction depends on a number of factors, including accurate new product
definition, timely completion and introduction of new product designs,
availability of foundry capacity, achievement of manufacturing yields and market
acceptance of the Company's and its customers' products.
Competition; The Semiconductor Industry. The Company competes with several
domestic semiconductor companies, most of which have substantially greater
financial, technical, manufacturing, marketing, distribution and other resources
and broader product lines than the Company. The Company believes that its
ability to compete successfully depends on a number of factors, including the
breadth of its product line, the ability to develop and introduce new products
rapidly, product innovation, product quality and reliability, product
performance, price, technical service and support, adequacy of manufacturing
quality and capacity and sources of raw materials, efficiency of production,
delivery capabilities and protection of the Company's products by intellectual
property laws. The semiconductor industry has been highly cyclical and is
subject to significant economic downturns at various times, characterized by
diminished product demand, accelerated erosion of average selling prices and
production over-capacity. The Company may experience substantial
period-to-period fluctuation in future operating results due to general
semiconductor industry conditions and overall economic conditions.
International Sales. The Company derives a significant portion of its net sales
from international sales which are subject to certain risks, including
unexpected changes in legal and regulatory requirements, changes in tariffs,
exchange rates and other barriers, political and economic instability,
difficulties in accounts receivable collection, difficulties in managing
distributors or representatives, difficulties in staffing and managing
international operations, difficulties in protecting the Company's intellectual
property overseas, seasonality of sales and potentially adverse tax
consequences.
11
<PAGE> 12
Potential Fluctuations in Operating Results. The Company's quarterly and annual
operating results are affected by a wide variety of factors that could
materially and adversely affect net sales and profitability from
period-to-period, including competitive pressures on selling prices; the timing
and cancellation of customer orders; availability of foundry capacity and raw
materials; fluctuations in yields; changes in product mix; the Company's ability
to introduce new products and technologies on a timely basis; introduction of
products and technologies by the Company's competitors; market acceptance of the
Company's and its customers' products; the level of orders received which can be
shipped in a quarter; the timing of investments in research and development,
including tooling expenses associated with product development, process
improvements and production; and the cyclical nature of the semiconductor
industry. Due to the absence of substantial noncancellable backlog, the Company
typically plans its production and inventory levels based on internal forecasts
of customer demand, which are highly unpredictable and can fluctuate
substantially. Because the Company is continuing to increase its operating
expenses for personnel and new product development and for inventory in
anticipation of increasing sales levels, operating results would be adversely
affected if increased sales are not achieved. In addition, the Company is
limited in its ability to reduce costs quickly in response to any revenue
shortfalls. As a result of the foregoing or other factors, the Company may
experience material fluctuations in future operating results on a quarterly or
annual basis which could materially and adversely affect its business, financial
condition and operating results.
Historically, the Company has also experienced quarterly fluctuations
in net sales and gross profit, principally arising from the amount and timing of
orders of products for military applications. These sales generally result in
lower gross margins than sales of commercial products. The Company anticipates a
continuing decline in sales of products for military applications as part of its
transition from a supplier of product with military applications to a supplier
of commercial products. Should sales of these products decline more rapidly than
the Company anticipates in the near future, such decline could have the effect
of causing further fluctuations in quarterly or annual operating results.
Stock Price Volatility. The trading price of the Company's common stock could be
subject to wide fluctuations in response to quarter-to-quarter variations in
operating results, announcements of technological innovations or new products by
the Company or its competitors, general conditions in the semiconductor
manufacturing and electronic markets, changes in earnings estimates by analysts,
or other events or factors. In addition, the public stock markets have
experienced extreme price and trading volume volatility in recent months. This
volatility has significantly affected the market prices of securities of many
technology companies for reasons frequently unrelated to the operating
performance of the specific companies. These broad market fluctuations may
adversely affect the market price of the Company's common stock.
12
<PAGE> 13
Part II: OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
a) Exhibit 11.1 Computation of Earnings Per Common Share
Exhibit 27 Financial Data Schedule
b) Reports on Form 8-K
None
13
<PAGE> 14
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.
SIPEX CORPORATION
DATE: October 22, 1996 BY /s/ Frank R. DiPietro
-------------------------
Frank R. DiPietro
Senior Vice President, Finance &
Chief Financial Officer
(Duly Authorized Officer &
Principal Financial Officer)
14
<PAGE> 1
Exhibit 11.1
Computation of Shares Used in Computing
Net Income (Loss) Per Share
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
-------------------------------- ------------------------------
September 30 September 28 September 30 September 28
1995 1996 1995 1996
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Common shares, beginning 4,678,613 6,900,661 4,681,186 4,685,306
of period
Common stock equivalents -- 757,364 -- 646,189
SAB shares (1) 126,988 115,815 126,988 115,815
Treasury stock buyback (53,242) (153,133) (53,242) (87,494)
Weighted average shares issued -- 35,038 (809) 1,501,841
========= ========= ========= =========
4,752,359 7,655,745 4,754,123 6,861,657
========= ========= ========= =========
</TABLE>
(1) In accordance with SEC Staff Accounting Bulletin No. 83 ("SAB" No.
83"), issuance of Common Stock equivalents (common stock, stock
options) one year prior to the initial filing date of the registration
statement at share prices below the public offering price of $9.50 per
share, are considered to have been made in anticipation of the public
offering and have been included as if the shares were outstanding for
all periods presented until issued and outstanding using the treasury
stock method.
15
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
EXHIBIT 27 - THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE CONDENSED CONSOLIDATED BALANCE SHEET AS OF SEPTEMBER 28, 1996 AND
FROM THE INTERIM CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE NINE
MONTHS ENDED SEPTEMBER 28, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-28-1996
<CASH> 3,654
<SECURITIES> 0
<RECEIVABLES> 5,493
<ALLOWANCES> 480
<INVENTORY> 11,774
<CURRENT-ASSETS> 20,565
<PP&E> 27,155
<DEPRECIATION> 24,281
<TOTAL-ASSETS> 23,731
<CURRENT-LIABILITIES> 4,656
<BONDS> 0
0
0
<COMMON> 70
<OTHER-SE> 18,927
<TOTAL-LIABILITY-AND-EQUITY> 23,731
<SALES> 0
<TOTAL-REVENUES> 27,169
<CGS> 0
<TOTAL-COSTS> 15,836
<OTHER-EXPENSES> 8,488
<LOSS-PROVISION> 480
<INTEREST-EXPENSE> 155
<INCOME-PRETAX> 2,690
<INCOME-TAX> 84
<INCOME-CONTINUING> 2,606
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,606
<EPS-PRIMARY> 0.38
<EPS-DILUTED> 0.38
</TABLE>
