<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 June 29, 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 Incorporation (I.R.S. Employer
or Organization) Identification No.)
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 6,925,576 shares of the Registration's Common Stock issued
and outstanding as of August 9, 1996.
1
<PAGE> 2
\ SIPEX Corporation
FORM 10-Q
SIX MONTHS ENDED JUNE 29, 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 3
and June 29, 1996.
Condensed Consolidated Statements of Operations for the 4
three months and six months ended July 1, 1995 and June 29,
1996.
Condensed Consolidated Statements of Cash Flows for the six 5
months ended July 1, 1995 and June 29, 1996.
Notes To Condensed Consolidated Financial Statements. 6-7
Item 2. Management's Discussion And Analysis Of Financial Condition 8-12
And 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
Exhibit 27
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, June 29,
1995 1996
------------ --------
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 257 $ 5,118
Accounts receivable, less allowances of $240 and
$270 at December 31, 1995 and June 29, 1996,
respectively 5,234 4,243
Inventories 7,415 10,613
Prepaid expenses 225 114
-------- --------
Total current assets 13,131 20,088
-------- --------
Property, plant and equipment, net 2,448 2,626
Other assets 291 285
-------- --------
Total assets $ 15,870 $ 22,999
======== ========
Liabilities and Stockholders' Equity (deficit)
Current liabilities:
Current portion of long term debt $ 210 $ 206
Accounts payable 3,922 3,141
Accrued expenses 1,692 1,770
-------- --------
Total current liabilities 5,824 5,117
-------- --------
Long term debt, net of current portion 220 121
Long term debt to affiliates 11,710 -
-------- --------
Total liabilities 17,754 5,238
-------- --------
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 June 29, 1996 - -
Common stock, $.01 par value, 40,000,000 shares
authorized and 4,685,306 and 6,900,653 shares
issued and outstanding at December 31, 1995 and
June 29, 1996, respectively. 47 69
Additional paid-in capital 45,468 63,703
Accumulated deficit (47,581) (46,176)
Cumulative translation adjustment 182 165
-------- --------
Total stockholders' equity (deficit) (1,884) 17,761
-------- --------
Total liabilities and stockholders equity (deficit) $ 15,870 $ 22,999
======== ========
</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 Six Months Ended
------------------------- ----------------------------
July 1, June 29, July 1, June 29,
1995 1996 1995 1996
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net sales $7,737 $9,117 $14,031 $17,640
Cost of sales 4,945 5,313 9,071 10,475
-------- ------- -------- --------
Gross profit 2,792 3,804 4,960 7,165
-------- ------- -------- --------
Operating expenses:
Research and development 1,118 1,136 2,302 2,154
Marketing and selling 1,032 1,121 2,102 2,233
General and administrative 494 512 1,059 994
Write off of intangible assets 1,320 - 1,320 -
-------- ------- -------- --------
Total operating expenses 3,964 2,769 6,783 5,381
-------- ------- -------- --------
Income (loss) from operations (1,172) 1,035 (1,823) 1,784
Other expenses, net (163) (79) (315) (330)
-------- ------- -------- --------
Income (loss) before income taxes (1,335) 956 (2,138) 1,454
Income tax expense 5 33 10 49
-------- ------- -------- --------
Net income (loss) ($1,340) $923 ($2,148) $1,405
======== ======= ======== ========
Net income (loss) per common and
equivalent share ($0.28) $0.12 ($0.45) $0.21
======== ======= ======== ========
Weighted average common and common
equivalent shares outstanding 4,755 7,649 4,755 6,552
======== ======= ======== ========
</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>
Six Months Ended
---------------------------
July 1, June 29,
1995 1996
------- -------
<S> <C> <C>
Operating activities:
Net income (loss) ($2,148) $1,405
Adjustments to reconcile net income (loss) to net cash
used in operating activities:
Additions to accounts receivable allowances 31 30
Depreciation and amortization 1,938 507
Changes in current assets and liabilities:
(Increase) decrease in accounts receivable (740) 961
Increase in inventories (286) (3,198)
Decrease in prepaid expenses and other assets 56 111
Increase (decrease) in accounts payable and accrued
expense 331 (703)
------- -------
Net cash used in operating activities (818) (887)
------- -------
Investing activities:
Purchase of property, plant and equipment (427) (679)
------- -------
Net cash used in investing activities (427) (679)
======= =======
Financing activities:
Proceeds from issuance of (buyback of) common stock (1) 18,257
Proceeds from (payment of) long-term debt 1,393 (11,710)
Payment of capital lease obligations (103) (103)
------- -------
Net cash provided by financing activities 1,289 6,444
Effect of foreign currency translation adjustments 6 (17)
------- -------
Increase in cash and cash equivalents 50 4,861
Cash and cash equivalents, beginning of period 176 257
------- -------
Cash and cash equivalents, end of period $226 $5,118
======= =======
Supplemental cash flow disclosure:
Cash paid during the period for:
Income taxes $12 $19
Interest 338 416
======= =======
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 six
month period ended June 29, 1996 are not necessarily indicative of the
results to be expected for the full fiscal year.
2. Inventories
<TABLE>
<CAPTION>
(In thousands)
December 31, June 29,
1995 1996
------------ --------
<S> <C> <C>
Inventories consist of:
Raw materials $3,316 $ 4,921
Work in process 3,118 3,763
Finished goods 981 1,929
------- --------
$7,415 $10,613
======= ========
</TABLE>
6
<PAGE> 7
3. Long Term Debt
The Company's long term debt at December 31, 1995 and June 29, 1996 is
summarized as follows:
<TABLE>
<CAPTION>
(In thousands)
December 31, June 29,
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 416 322
Other 14 5
-------- -----
12,140 327
Less current portion 210 206
-------- -----
$11,930 $121
======== =====
</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 and the aforementioned
initial public offering price. For the quarters ended July 1, 1995
and June 29, 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 six
months ended July 1, 1995 and June 29, 1996 as a percentage of net sales and
provides the percentage increase (decrease) in absolute dollars of such items
comparing the interim periods ended June 29, 1996 to the corresponding period
from the prior fiscal year.
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
% Change Of % Change Of
Dollar Dollar
July 1, June 29, Increase July 1, June 29, Increase
1995 1996 (Decrease) 1995 1996 (Decrease)
------- -------- ---------- ------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net sales 100.0% 100.0% 17.8% 100.0% 100.0% 25.7%
Cost of sales 63.9 58.3 7.5 64.6 59.4 15.5
------ ------ ------ ------ ------ ------
Gross profit 36.1 41.7 36.2 35.4 40.6 44.4
------ ------ ------ ------ ------ ------
Operating expenses:
Research and development 14.4 12.5 1.6 16.4 12.2 (6.4)
Marketing and selling 13.3 12.3 8.7 15.0 12.7 6.2
General and administrative 6.4 5.6 3.6 7.5 5.6 (6.1)
Write off of Intangible 17.1 - - 9.4 -
------ ------ ------ ------ ------ ------
Total operating expenses 51.2 30.4 (30.1) 48.3 30.5 (20.7)
------ ------ ------ ------ ------ ------
Operating income (loss) (15.1) 11.3 188.2 (13.0) 10.1 197.8
Other expense, net (2.1) (0.8) (52.1) (2.2) (1.9) 4.3
------ ------ ------ ------ ------ ------
Income (loss) before income (17.2) 10.5 171.6 (15.2) 8.2 168.0
taxes
Income tax expense 0.1 0.4 - 0.1 0.2 -
------ ------ ------ ------ ------ ------
Net income (loss) (17.3%) 10.1% 168.9% (15.3%) 8.0% 165.4%
====== ====== ====== ====== ====== ======
</TABLE>
8
<PAGE> 9
Net sales for both the second quarter and the first six months of
1996 increased 17.8% and 25.7% to $9.1 million and $17.6 million respectively,
as compared to the same periods in the previous year. For both the second
quarter and the first six 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 second source
products. Both domestic and international sales grew during the second quarter
and first six months of 1996 as compared to the corresponding periods in the
prior year.
Gross profit increased for both the second quarter and the first six
months of 1996 by $1.0 million and $2.2 million, as compared with the same
periods in the previous year. As a percentage of net sales, gross profit
increased to 41.7% and 40.6% for both the second quarter and the first six
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
second source products.
Research and development expenses remained essentially constant for
the second quarter of 1996 as compared to the same period one year ago and
decreased $148,000 or 6.4% in the first six months of 1996 as compared to the
same period in the previous year. As a percentage of net sales, research and
development expenses decreased to 12.5% for the second quarter and 12.2% for
the six months of 1996. The decrease in spending in each period was related to
lower mask sets expense.
Marketing and selling expenses increased 8.7% and 6.2% to $1.1 million
and $2.2 million respectively for the second quarter and first six 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 second quarter and first six
months of 1996 declined to 12.3% and 12.7%, 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 remained essentially constant at
$512,000 for the second quarter and decreased slightly to $1.0 million for the
first six months of 1996 as compared to the same periods of the previous year.
As a percentage of net sales, general and administrative expenses for the
second quarter and first six months of 1996 declined slightly to 5.6% for each
period as compared to the previous year. The decrease in expenses for the six
month period was primarily due to the elimination of amortization relating to
intangible assets written off during the quarter ended July 1, 1995.
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.
9
<PAGE> 10
Other expense, net consists primarily of interest on outstanding
subordinated indebtedness to affiliates and borrowings under the Company's bank
credit facility. The decrease in the second quarter of 1996 to $78,000 from
$163,000 for the previous year was due primarily to the payoff of its revolving
line of credit and subordinated notes to affiliates, and income earned from the
IPO which offset interest expense. Other expense, net for the first six months
of 1996 remained approximately the same as compared to the same period in the
prior fiscal year.
The Company recorded income tax expense of $33,000 for the three
months ended June 29, 1996 and $49,000 for the six months ended June 29, 1996,
an effective rate of 3.4% 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 June 29, 1996, the Company
had cash and cash equivalents of $5.1 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
b) Exhibit 27
c) 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: August 10, 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 Six Months Ended
-------------------------- ----------------------------
July 1, June 29, July 1, June 29,
1995 1996 1995 1996
---------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
Common shares, beginning of period 4,681,186 4,685,306 4,681,186 4,685,306
Common stock equivalents - 733,549 - 733,549
SAB 83 shares (1) 126,988 126,988 126,988 126,988
Treasury stock buyback (54,367) (107,742) (53,804) (124,225)
Weighted average shares issued 719 2,210,995 635 1,130,565
---------- ---------- ---------- -----------
4,754,526 7,649,096 4,755,005 6,552,183
========== ========== ========== ==========
</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 at the public offering price of $9.50 per share.
15
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> DEC-31-1996
<PERIOD-END> JUN-29-1996
<EXCHANGE-RATE> 1
<CASH> 5,118
<SECURITIES> 0
<RECEIVABLES> 4,513
<ALLOWANCES> 270
<INVENTORY> 10,613
<CURRENT-ASSETS> 20,088
<PP&E> 26,667
<DEPRECIATION> 24,042
<TOTAL-ASSETS> 22,999
<CURRENT-LIABILITIES> 5,117
<BONDS> 0
<COMMON> 69
0
0
<OTHER-SE> 17,692
<TOTAL-LIABILITY-AND-EQUITY> 22,999
<SALES> 0
<TOTAL-REVENUES> 17,640
<CGS> 0
<TOTAL-COSTS> 10,475
<OTHER-EXPENSES> 5,480
<LOSS-PROVISION> 270
<INTEREST-EXPENSE> 231
<INCOME-PRETAX> 1,454
<INCOME-TAX> 49
<INCOME-CONTINUING> 1,405
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,405
<EPS-PRIMARY> 0.210
<EPS-DILUTED> 0.210
</TABLE>
