<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 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 March 31, 1998.
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 333-2600
ALVEY SYSTEMS, INC.
9301 Olive Boulevard
St. Louis, MO 63132
314/993-4700
I.R.S. Employment I.D. 43-0157210
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 twelve months (or for such shorter periods that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past ninety days.
Yes X No
------ -------
The number of shares of common stock outstanding at April 30, 1998 was 1,000
shares.
<PAGE>
ALVEY SYSTEMS, INC. AND SUBSIDIARIES
INDEX
<TABLE>
<CAPTION>
Page
Number
<S> <C>
Part I - Financial Information
Item 1. Financial Statements
Consolidated Statement of Operations -
three months ended March 31, 1998 and 1997
(Unaudited) 3
Consolidated Balance Sheet - March 31, 1998
(Unaudited) and December 31, 1997 4
Consolidated Statement of Cash Flows -
three months ended March 31, 1998 and
1997 (Unaudited) 5-6
Consolidated Statement of Net Investment
of Parent for the three months ended March 31,
1998 (Unaudited) 7
Notes to Consolidated Financial Statements
(Unaudited) 8-10
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 11-14
Part II - Other Information
Item 6. Exhibits and Reports on Form 8-K 14
Signature 15
</TABLE>
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1 FINANCIAL STATEMENTS
ALVEY SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
1998 1997
--------- ---------
<S> <C> <C>
Net sales $ 92,720 $ 83,737
Cost of goods sold 69,642 61,857
--------- ---------
Gross profit 23,078 21,880
Selling, general and administrative expenses 16,165 16,029
Research and development expenses 2,847 2,053
Amortization expense 417 426
Other income, net 550 21
--------- ---------
Operating income 4,199 3,393
Interest expense 3,458 3,423
--------- ---------
Income (loss) before provision for income taxes 741 (30)
Provision for income taxes 325 113
--------- ---------
Net income (loss) $ 416 $ (143)
--------- ---------
--------- ---------
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
3
<PAGE>
ALVEY SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1998 1997
(UNAUDITED)
----------- ------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 11,611 $ 3,142
Receivables:
Trade (less allowance for doubtful accounts of $2,069 and $1,818,
respectively) 52,191 54,639
Unbilled and other 9,599 11,801
Accumulated costs and earnings in excess of billings on uncompleted contracts 9,694 12,885
Inventories:
Raw materials 14,173 14,297
Work in process 3,772 2,881
Deferred income taxes 12,257 12,307
Prepaid expenses and other assets 2,388 1,693
----------- ------------
Total current assets 115,685 113,645
Property, plant and equipment, net 35,821 35,459
Other assets 7,350 7,537
Goodwill, net 24,829 25,151
----------- ------------
$ 183,685 $ 181,792
----------- ------------
----------- ------------
LIABILITIES AND NET INVESTMENT OF PARENT
Current liabilities:
Current portion of long-term debt $ 354 $ 274
Accounts payable 29,439 33,066
Accrued expenses 37,242 41,849
Customer deposits 7,366 7,153
Billings in excess of accumulated costs and earnings on uncompleted contracts 28,329 23,585
Deferred revenues 3,079 3,134
Taxes payable 1,226 967
----------- ------------
Total current liabilities 107,035 110,028
Long-term debt 111,592 106,930
Other long-term liabilities 12,441 12,605
Deferred income taxes 742 757
Commitments and contingencies (Note 5)
Net investment of Parent (48,125) (48,528)
----------- ------------
----------- ------------
$ 183,685 $ 181,792
----------- ------------
----------- ------------
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
4
<PAGE>
ALVEY SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
1998 1997
-------- --------
<S> <C> <C>
OPERATING ACTIVITIES:
Net income (loss) $ 416 $ (143)
Adjustments to reconcile net income (loss) to net
cash provided by (used for) operating activities:
Depreciation and software amortization 1,404 1,115
Amortization 417 426
Deferred taxes 35 (360)
(Increase) decrease in current assets:
Receivables 4,650 (2,444)
Accumulated costs and earnings in excess of
billings on uncompleted contracts 3,191 4,759
Inventories (767) (1,965)
Prepaid expenses and other assets (651) 653
(Decrease) increase in current liabilities:
Accounts payable (3,627) (5,496)
Accrued expenses (4,607) (8,634)
Customer deposits 213 (5,024)
Billings in excess of accumulated costs and
earnings on uncompleted contracts 4,744 1,887
Deferred revenues (55) (1,080)
Taxes payable 259 (612)
Other liabilities (164) 504
-------- --------
Net cash provided by (used for) operating activities 5,458 (16,414)
-------- --------
INVESTING ACTIVITIES:
Cash payments to dispose of Diamond 0 (159)
Additions to property, plant and equipment, net (1,718) (1,686)
-------- --------
Net cash used for investing activities (1,718) (1,845)
-------- --------
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS. (CONTINUED)
5
<PAGE>
ALVEY SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)
(UNAUDITED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
1998 1997
--------- ---------
<S> <C> <C>
FINANCING ACTIVITIES:
Proceeds of borrowings $ 27,910 $ 39,300
Payments of debt and capital leases (23,168) (22,666)
Net contributions to Parent (13) (24)
--------- ---------
Net cash provided by financing activities 4,729 16,610
--------- ---------
Net increase (decrease) in cash and cash equivalents 8,469 (1,649)
Cash and cash equivalents, beginning of period 3,142 5,025
--------- ---------
Cash and cash equivalents, end of period $ 11,611 $ 3,376
--------- ---------
--------- ---------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest on financings $ 6,023 $ 5,774
Income taxes 80 1,085
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
6
<PAGE>
ALVEY SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF NET INVESTMENT OF PARENT
(UNAUDITED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED NET INVESTMENT
MARCH 31, 1998 OF PARENT
<S> <C>
Balance December 31, 1997 $(48,528)
Net income 416
Net contributions from (to) Parent (13)
--------
Balance March 31, 1998 $(48,125)
--------
--------
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
7
<PAGE>
ALVEY SYSTEMS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
The accompanying unaudited consolidated financial statements of Alvey
Systems, Inc. ( "Alvey" or the "Company ") have been prepared in
accordance with the instructions for Form 10-Q and do not include all of
the information and footnotes required by generally accepted accounting
principles for complete financial statements. However, in the opinion of
management, such information includes all adjustments, consisting only of
normal recurring adjustments, necessary for a fair presentation of the
results of operations for the periods presented. Operating results for
any quarter are not necessarily indicative of the results for any other
quarter or for the full year. These statements should be read in
conjunction with the consolidated financial statements and notes to the
consolidated financial statements thereto included in the Company's Annual
Report on Form 10-K for the year ended December 31, 1997.
2. PRINCIPLES OF CONSOLIDATION, EARNINGS PER SHARE INFORMATION
Alvey is a wholly-owned subsidiary of Pinnacle Automation, Inc.
("Pinnacle" or "Parent"). Pinnacle has no operations and no assets other
than its investment in Alvey. The financial statements of the Company
include the accounts of Alvey and Alvey's wholly-owned subsidiaries:
McHugh Software International, Inc. ("McHugh") and its wholly-owned
subsidiary, Weseley Software Development Corp. ("Weseley" or "WSDC");
Busse Bros., Inc. ("Busse"); The Buschman Company ("Buschman"); White
Systems, Inc. ("White"); and Real Time Solutions, Inc. ("RTS"). All
significant intercompany transactions, which primarily consist of sales,
have been eliminated.
Given the historical organization and capital structure of the Company,
earnings per share information is not considered meaningful or relevant
and has not been presented in the accompanying unaudited consolidated
financial statements or notes thereto.
8
<PAGE>
3. RESTRUCTURING CHARGES
During the second quarter of 1997, the Company established a restructuring
reserve which included costs to discontinue offering certain proprietary
systems software products at one subsidiary, to reorganize and reduce the
size of the Company's corporate organization and to restructure and
streamline the executive and marketing functions at the Software Logistics
Group ("SLG"). Costs to discontinue certain proprietary software products
consisted primarily of costs to complete certain projects incorporating
this software, payroll and facility charges during the phase-out of the
product, severance charges, sales returns and allowances (relative to
prior period sales) anticipated as a result of the discontinuance, the
write-off of assets that became obsolete or slow-moving as a result of the
discontinuance and other miscellaneous restructuring costs. The corporate
reorganization and SLG reorganization charges are primarily severance
costs. The 1998 year-to-date reduction of accrued restructuring costs
consisted primarily of the recording of payroll and facility costs
associated with the discontinued software products, costs to complete
projects involving the discontinued products, severance and other costs.
It is anticipated that costs accrued as restructuring will be fully paid
by April 30, 2004.
The following table displays a roll-forward of the liabilities, both
current and long- term, for restructuring from December 31, 1997 to March
31, 1998 (unaudited) (in thousands):
<TABLE>
<CAPTION>
December 31, March 31,
1997 Reductions/ 1998
Type of Cost Balance Payments Balance
------------ ------------ ----------- ---------
<S> <C> <C> <C>
Costs to discontinue
product offerings $2,922 ($755) $2,167
Corporate
reorganization 1,416 (210) 1,206
SLG reorganization 3,204 (34) 3,170
------------ ----------- ---------
Total $7,542 ($999) $6,543
------------ ----------- ---------
------------ ----------- ---------
</TABLE>
4. SUPPLEMENTAL BALANCE SHEET INFORMATION
Accrued expenses include the following (in thousands):
<TABLE>
<CAPTION>
MARCH 31,
1998 DECEMBER 31,
(unaudited) 1997
----------- -----------
<S> <C> <C>
Project expenses $ 6,300 $ 6,651
Bonuses, incentives and profit sharing 6,069 9,782
Wages and salaries 3,331 2,558
Vacation and other employee costs 7,934 7,484
Interest expense 2,026 4,867
Restructuring costs, current portion 3,855 4,707
Other expenses 7,727 5,800
----------- -----------
$ 37,242 $ 41,849
----------- -----------
----------- -----------
</TABLE>
9
<PAGE>
5. COMMITMENTS AND CONTINGENCIES
The Company is involved in various litigation consisting almost entirely
of product and general liability claims arising in the normal course of
its business. After deduction of a per occurrence self-insured retention,
the Company is insured for losses of up to $27 million per year for
products and general liability claims. The Company has provided reserves
for the estimated cost of the self-insured retention; accordingly, these
actions, when ultimately concluded, are not expected to have a material
adverse effect on the financial position, results of operations or
liquidity of the Company.
6. SUBSEQUENT EVENT
On April 1, 1998, McHugh purchased all of the outstanding capital stock of
Software Architects, Inc. ("SAI") for a purchase price of $1.5 million in
cash. The acquisition was financed through the Company's working capital
facility. In addition, subject to their continued employment, certain
employees of SAI have an opportunity to earn stay bonuses in the aggregate
of $1,125,000 per year for each of four years. At closing, McHugh also
granted options to purchase an aggregate number of shares of the common
stock of McHugh equal to 1.5% of the fully diluted equity of McHugh.
Additional options in an aggregate amount corresponding to .5% of the
fully diluted equity of McHugh will be awarded to SAI employees on each of
the four anniversaries of the acquisition date commencing April 1, 1999.
The exercise price of all such options is equal to the fair market value
of the common stock of McHugh on the date of the grant of the options.
The options vest ratably over four years, expire on the eighth anniversary
of the date of grant and are only exercisable upon the occurrence of
certain trigger events set forth in the option agreements.
The purchase of SAI will not have a material effect on the results of
operations of the Company, and accordingly, pro forma information is not
included herein.
7. STRATEGIC MATTERS
In February 1998, Pinnacle engaged a consulting firm to evaluate various
strategic alternatives available to Pinnacle and its affiliated companies.
One alternative would involve spinning-off the common stock of McHugh to
Pinnacle's stockholders (after an initial spin-off of such stock from the
Company to Pinnacle) and, in connection therewith, raising additional
equity capital in McHugh. This potential transaction, and any other
similar transaction, would be conditioned on a number of factors,
including the possible redemption or restructuring of the Company's
outstanding Senior Subordinated Notes (including the Company's ability to
obtain suitable financing for any such redemption or restructuring), the
consent of the holders of Pinnacle's preferred stock and certain other
significant contingencies. As a result of these and other contingencies,
no assurances can be given that this transaction, or any other similar
strategic transaction, will be consummated in the near-term or at all. No
offer with respect to either the possible redemption or restructuring of
the Senior Subordinated Notes or equity investment in McHugh is made
hereby.
10
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
When used in the following discussion, the words "believes", "anticipates"
and similar expressions are intended to identify forward-looking statements.
Such statements are subject to certain risks and uncertainties which could
cause actual results to differ materially from those projected. Readers are
cautioned not to place undue reliance on these forward-looking statements,
which speak only as of the date hereof. The Company undertakes no obligation
to publicly release the result of any revisions to these forward-looking
statements which may be made to reflect events or circumstances after the
date hereof or to reflect the occurrence of unanticipated events.
GENERAL
The following discussion summarizes the significant factors affecting the
consolidated operating results and financial condition of Alvey Systems, Inc.
for the three months ended March 31, 1998 compared to the three months ended
March 31, 1997. This discussion should be read in conjunction with the
consolidated financial statements and notes thereto included in the Company's
Annual Report on Form 10-K for the year ended December 31, 1997.
The Company serves its major markets through three groups. The Consumer
Products Group ("CPG"), which is comprised of Alvey and Busse, serves the
food, beverage and manufacturing sector of the Company's market. The
Distribution Logistics Group ("DLG"), which is comprised of Buschman, White
and RTS, serves the distribution logistics market. The SLG, which is
comprised of McHugh and Weseley, provides logistics solutions for warehouse
and transportation management needs.
11
<PAGE>
RESULTS OF OPERATIONS
The following table sets forth, for the periods indicated, net sales,
categories of expenses and income data in thousands of dollars and as a
percentage of net sales.
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
(unaudited)
1998 % 1997 %
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net sales $ 92,720 100.0% $ 83,737 100.0%
Cost of goods sold 69,642 75.1 61,857 73.9
--------- ---------
Gross profit 23,078 24.9 21,880 26.1
Selling, general & administrative
expenses 16,165 17.4 16,029 19.1
Research & development
expenses 2,847 3.1 2,053 2.4
Amortization expense 417 0.5 426 0.5
Other income, net 550 0.6 21 0.0
--------- ---------
Operating income 4,199 4.5 3,393 4.1
Interest expense 3,458 3.7 3,423 4.1
--------- ---------
Income (loss) before income taxes 741 0.8 (30) 0.0
Provision for income taxes 325 0.4 113 0.2
--------- ---------
Net income (loss) $ 416 0.4% $ (143) (0.2)%
--------- ---------
--------- ---------
</TABLE>
COMPARISON OF THE QUARTER ENDED MARCH 31, 1998 TO THE QUARTER
ENDED MARCH 31, 1997
NET SALES were $92.7 million for the quarter ended March 31, 1998,
representing an increase of $9.0 million, or 10.7%, over net sales of $83.7
million for the quarter ended March 31, 1997. First quarter 1998 sales
increases at the DLG and SLG, as compared to the first quarter of 1997, were
offset in part by decreases in sales at the CPG.
NEW ORDER BOOKINGS were $91.6 million for the quarter ended March 31, 1998,
representing a decrease of $12.6 million, or 12.1%, from record bookings in
the quarter ended March 31, 1997. Although the SLG and DLG succeeded in
producing first quarter bookings levels in excess of first quarter 1997, the
CPG fell short of the record bookings produced in the first quarter of 1997.
GROSS PROFIT was $23.1 million for the quarter ended March 31, 1998, an
increase of $1.2 million, or 5.5%, over the quarter ended March 31, 1997. As
a percent of sales, gross margins were 24.9% for the first quarter of 1998,
decreasing 1.2 percentage points from the same period of 1997. The DLG
realized an increase of $3.8 million and 3.4 percentage points as a
percentage of sales, primarily attributable to the effects of increased
volume and favorable project results. Gross profit at the CPG decreased
12
<PAGE>
$1.9 million due entirely to a decrease in volume; however, margins remained
unchanged as project performance improvements offset the effects of lower
volume. At the SLG, decreased gross profit of $766,000 was attributable to a
lower level of high-margin license fee revenue for the first quarter of 1998
as compared to the same period of 1997.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (SG&A) were $16.2 million for
the quarter ended March 31, 1998, representing an increase of $136,000, or
0.8%, over the quarter ended March 31, 1997. As a percentage of sales, SG&A
was 17.4% or 1.7 percentage points lower than the first quarter of 1997.
Increases in SG&A attributable to increased staffing levels to support higher
sales volumes, particularly at the SLG, were offset by decreases in SG&A
resulting from the 1997 restructuring efforts.
RESEARCH AND DEVELOPMENT EXPENSES were $2.8 million for the first quarter of
1998, an increase of $794,000 compared to $2.1 million for the first quarter
of 1997. This increase is primarily the result of increased development
activities at the SLG.
OTHER INCOME, NET was $550,000 for the quarter ended March 31, 1998 compared
to $21,000 for the quarter ended March 31, 1997. This increase of $529,000
is almost entirely attributable to income recognized from the proceeds of a
life insurance settlement in the first quarter of 1998.
OPERATING INCOME for the quarter ended March 31, 1998 was $4.2 million as
compared to $3.4 million in the first quarter of 1997, an increase of
$806,000, or 23.8%. As a percentage of sales, operating income was 4.5% in
the first quarter of 1998 compared to 4.1% for the same period of 1997. The
increase in operating income reflects the various factors described above.
PROVISION FOR INCOME TAXES was $325,000 for the quarter ended March 31, 1998,
representing an increase of $212,000 from the $113,000 of tax expense for the
first quarter of 1997. The significant difference between the effective tax
rate on income (loss) before income taxes and the expected statutory rates is
attributable to the non-deductibility of expenses related to the amortization
of goodwill.
NET INCOME (LOSS) was income of $416,000 for the quarter ended March 31,
1998, an improvement of $559,000 from the quarter ended March 31, 1997. This
increase is the result of the various factors discussed above.
LIQUIDITY AND CAPITAL RESOURCES
CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES. During the three months
ended March 31, 1998 and 1997, cash provided by (used for) operating
activities was $5.5 million and ($16.4) million, respectively. This
$21.9 million year-over-year improvement is primarily attributable to:
significant cash collections resulting from record fourth quarter 1997 sales;
lower bonus and profit sharing payments; lower project costs in 1998 as
compared to the significant use of cash to fund project overrun levels
13
<PAGE>
experienced in the first quarter of 1997; and an overall improvement in cash
management. First quarter funding of annual profit sharing plan
contributions, incentive compensation and bonus plans, disproportionate tax
withholding requirements and certain professional services historically have
resulted in a significant use of cash in the first quarter.
CAPITAL EXPENDITURES for each of the three months ended March 31, 1998 and
1997 were $1.7 million. Management anticipates that current year capital
expenditures will approximate $7.8 million.
CASH FLOW FROM FINANCING ACTIVITIES. See Note 7 to the consolidated
financial statements included in the Company's Annual Report on Form 10-K for
the year ended December 31, 1997. Net borrowings increased by $4.7 million
and $16.6 million in the three months ended March 31, 1998 and 1997,
respectively. The increase in borrowings in the first quarter of 1997 was
primarily used to fund operating activities, while the year over year
decrease reflects the significant improvement in cash provided by operating
activities. The Company typically borrows to fund short-term cash
requirements using a combination of LIBOR contracts of 30-day duration and
daily borrowings at prime plus 1-1/2%. At quarter-end 1998, all of the
Company's short-term borrowings were under LIBOR commitments. Had the
Company elected to incur a penalty and terminate certain of the LIBOR
contracts, cash and short-term borrowings could have been reduced by $4,000
each.
ONGOING CASH FLOWS FROM OPERATIONS. The Company believes that its funds from
operations, together with available funds under the Company's existing credit
facility, will be sufficient to meet its currently anticipated operating,
debt service and capital expenditure requirements, including capital
requirements related to potential acquisitions, although no significant
acquisitions are pending or contemplated.
BACKLOG. As of March 31, 1998 the Company had a backlog of $142.6 million,
as compared to $155.7 million and $143.7 million as of March 31, 1997 and
December 31, 1997, respectively. The Company's backlog is based upon firm
customer commitments that are supported by purchase orders, other contractual
documents and cash payments. While the level of backlog at any particular
time may be an indication of future sales, it is not necessarily indicative
of the future operating performance of the Company. Additionally, certain
backlog orders may be subject to cancellation in certain circumstances. The
Company believes that substantially all orders in backlog at March 31, 1998
will be shipped within one year.
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) No exhibits are required to be filed herewith.
(b) No current reports on Form 8-K were filed during the quarter ended
March 31, 1998.
14
<PAGE>
SIGNATURE
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.
ALVEY SYSTEMS, INC.
/s/ J.A. Sharp
---------------------------------
Date: May 15, 1998 James A. Sharp
Secretary and Senior Vice President, Finance
Chief Financial Officer
(Principal Financial and Accounting Officer)
15
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 11,611
<SECURITIES> 0
<RECEIVABLES> 61,790
<ALLOWANCES> 2,069
<INVENTORY> 17,945
<CURRENT-ASSETS> 115,685
<PP&E> 57,101
<DEPRECIATION> 21,280
<TOTAL-ASSETS> 183,685
<CURRENT-LIABILITIES> 107,035
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> (48,125)
<TOTAL-LIABILITY-AND-EQUITY> 183,685
<SALES> 92,720
<TOTAL-REVENUES> 92,720
<CGS> 69,642
<TOTAL-COSTS> 69,642
<OTHER-EXPENSES> 18,218
<LOSS-PROVISION> 661
<INTEREST-EXPENSE> 3,458
<INCOME-PRETAX> 741
<INCOME-TAX> 325
<INCOME-CONTINUING> 416
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 416
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
