<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 30, 1997
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 No. 333-3621
CHANNELL COMMERCIAL CORPORATION
(Exact name of Registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation or organization)
95-2453261
(I.R.S. Employer Identification No.)
26040 Ynez Road, Temecula, California
(Address of principal executive offices)
92591
(Zip Code)
(909) 694-9160
(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 _____
9,237,000 shares of common stock of the Registrant were outstanding at
September 30, 1997.
<PAGE>
CHANNELL COMMERCIAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(amounts in thousands, except per share data)
<TABLE>
<CAPTION>
Nine months ended Three months ended
September 30, September 30,
----------- ----------- ----------- ---------
1997 1996 1997 1996
----------- ----------- ----------- ---------
<S> <C> <C> <C> <C>
Net sales $43,821 $35,194 $15,353 $11,954
Cost of goods sold 25,274 19,136 8,954 6,423
----------- ----------- ----------- ---------
Gross profit 18,547 16,058 6,399 5,531
Commission income 498 784 162 274
----------- ----------- ----------- ---------
19,045 16,842 6,561 5,805
Operating expenses
Selling 5,283 4,984 1,712 1,543
General and administrative 3,221 1,124 973 329
License fees -- related party -- 531 -- --
Research and development 679 398 206 131
----------- ----------- ----------- ---------
9,183 7,037 2,891 2,003
----------- ----------- ----------- ---------
Income from operations 9,862 9,805 3,670 3,802
Interest income 711 64 210 192
----------- ----------- ----------- ---------
Income before income taxes 10,573 9,869 3,880 3,994
Income taxes 4,335 574 1,591 354
----------- ----------- ----------- ---------
Net income $ 6,238 $ 9,295 $ 2,289 $ 3,640
========== ========== ========== ========
Net income per share $ 0.68 $ 0.25 $ 0.41
========== ========== ========
Weighted average shares outstanding 9,237 9,237 8,984
========== ========== ========
Pro forma information:
Historical income before income taxes $ 9,869
Pro forma income taxes 2,763
-----------
Pro forma net income $ 7,106
==========
Pro forma net income per share $ 0.88
==========
Pro forma weighted average shares outstanding 8,125
==========
</TABLE>
Page 1 of 13
<PAGE>
CHANNELL COMMERCIAL CORPORATION
CONSOLIDATED BALANCE SHEETS
(amounts in thousands, except share and per share data)
<TABLE>
<CAPTION>
Unaudited
September 30, December 31,
1997 1996
----------- ----------
<S> <C> <C>
ASSETS
Current assets
Cash $ 6,948 $ 9,190
Investments 11,800 11,406
Accounts receivable (net) 9,035 6,685
Inventories 6,020 2,908
Deferred income taxes 363 321
Prepaid expenses 574 764
----------- ----------
Total current assets 34,740 31,274
Property and equipment at cost, net 10,896 10,608
Deferred income taxes 519 559
Goodwill 1,991 --
Other assets 239 217
----------- ----------
Total assets $ 48,385 $ 42,658
========== =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $ 2,398 $ 2,048
Current maturities of capital lease obligations 161 135
Accrued expenses 1,092 1,167
Income taxes payable 158 1,548
----------- ----------
Total current liabilities 3,809 4,898
----------- ----------
Note Payable 700 --
----------- ----------
Capital Lease Obligations 214 338
----------- ----------
Commitments --
Stockholders' equity
Preferred stock --
Common stock, par value $.01 per share, authorized --
19,000,000 shares; issued and outstanding --
9,237,000 shares 92 92
Additional paid-in capital 27,991 27,991
Retained earnings 15,579 9,339
----------- ----------
Total stockholders' equity 43,662 37,422
----------- ----------
Total liabilities and stockholders' equity $ 48,385 $ 42,658
========== =========
</TABLE>
Page 2 of 13
<PAGE>
CHANNELL COMMERCIAL CORPORATION
STATEMENTS OF CASH FLOWS (Unaudited)
(amounts in thousands)
<TABLE>
<CAPTION>
Nine months ended
September 30
----------------
1997 1996
------ ------
<S> <C> <C>
OPERATING ACTIVITIES:
Net income $6,238 $9,295
Non-cash items included in net income:
Depreciation and amortization 1,514 1,143
Accrued license fees --- 531
(Increase) decrease in assets:
Accounts receivable (969) (2,503)
Inventories (1,498) (232)
Prepaid expenses 217 (331)
Deferred income taxes (1) (1,063)
Other (22) (315)
Increase (decrease) in liabilities
Accounts payable (923) 729
Accrued expenses (421) 247
Accrued license fees --- (471)
Income taxes payable (1,405) (6)
------ ------
Net cash provided by operating activities 2,730 7,024
------ ------
INVESTING ACTIVITIES:
Acquisition of property and equipment (1,679) (1,391)
Acquisition of marketable securities (400) (11,489)
Acquisition of RMS Electronics, Inc. (2,085) ---
Acquisition of Standby Electronics Corporation (479) ---
Other --- 308
------ ------
Net cash used in investing activities (4,643) (12,572)
------ ------
FINANCING ACTIVITIES:
Repayment of debt (194) (3,179)
Repayment of obligations under capital lease (135) ---
Dividends paid --- (14,841)
Proceeds from issuance of long-term debt --- 66
Proceeds from issuance of common stock
(net) --- 30,565
Distribution to shareholders (patents) --- (3,100)
------ ------
Net cash (used in) provided by financing activities (329) 9,511
------ ------
Increase in cash (2,242) 3,963
Cash, beginning of period 9,190 1,375
------ ------
Cash, end of period $6,948 $5,338
====== ======
Cash paid during the period for:
Interest $101 $137
====== ======
Income taxes $5,758 $1,361
====== ======
Noncash investing and financing activities:
Notes payable issued for acquisition
of subsidiaries $700
======
</TABLE>
page 3 of 13
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(Amounts in thousands except per share data)
1. Unaudited financial statements: In the opinion of management, all
adjustments, consisting only of normal recurring adjustments necessary for
a fair presentation of (a) the results of operations for the three- and
nine-month periods ended September 30, 1997 and 1996, (b) the financial
position at September 30, 1997, and (c) the statements of cash flows for
the nine-month periods ended September 30, 1997 and 1996 have been made.
The results for the three- and nine-month periods ended September 30, 1997,
are not necessarily indicative of the results for the entire year 1997.
2. Pro forma financial information: Prior to the Company's Initial Public
Offering of common stock in July 1996 (the "IPO"), it was an S Corporation
for federal and state income tax purposes. The pro forma income statement
presentation reflects a provision for income taxes as if the Company had
always been a C Corporation using an assumed effective tax rate of
approximately 41%.
Pro forma net income per share has been computed by dividing pro forma net
income by the pro forma weighted average shares outstanding. Pro forma
weighted average shares outstanding of 8,125 for the nine months ended
September 30, 1996 includes 1,558 shares assumed to have been sold by the
Company at a price of $11.00 per share, the net proceeds of which were used
to fund the distributions to stockholders.
3. Income Taxes: In July 1996, the Company terminated its election to be
taxed as an S Corporation. As a result of this termination, the Company
became liable for income taxes. Accordingly, as required by generally
accepted accounting principles, the Company recorded deferred tax assets
and liabilities on temporary differences between the income tax basis and
book basis of certain assets and liabilities. The effect of recording
these net deferred tax assets upon the results of operations was $1.063
million; $0.12 per share, for the quarter ended September 30, 1996 and
$0.13 per share for the nine months ended September 30, 1996.
4. Exclusive licensing agreements: The exclusive licensing agreements
relating to the Channell Patents were terminated in April 1996 and,
accordingly, no license fees expense has been reflected in the accompanying
statements of income since the three-month period ended March 31, 1996.
Page 4 of 13
<PAGE>
5. Inventories: Inventories stated at the lower of cost or market (first-in,
first-out method) are summarized as follows:
September 30,
1997
---------------
Raw materials $ 1,360
Work-in process 1,057
Finished goods 3,603
---------------
$ 6,020
===============
6. Marketable Securities: The Company has invested in certain U.S. Government
issued debt instruments and other taxable securities. These investments
are classified as "available for sale" as defined by Statement of Financial
Accounting Standards No. 115. The investment in these securities is
therefore recorded at fair value with any differences between fair value
and cost recorded as a separate component of stockholders' equity. At
September 30, 1997, there were no material differences between the fair
value and cost of these marketable securities.
7. Effective January 3, 1997, the Company acquired the assets of RMS
Electronics, Inc. Since this date, the Company has prepared consolidated
financial statements with its wholly owned subsidiary, RMS U.K.
8. In February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 128 (SFAS No. 128), Earnings Per
Share. SFAS No. 128 establishes standards for computing and presenting
earnings per share (EPS) and applies to entities with publicly held common
stock. SFAS No. 128 simplifies the standards for computing earnings per
share previously found in APB Opinion No. 15 and makes them comparable to
international EPS standards. It replaces the presentation of primary EPS
with a presentation of basic EPS. It also requires dual presentation of
basic and diluted EPS on the face of the statement of earnings for all
entities with complex capital structures and requires a reconciliation of
the numerator and denominator of the basic EPS computation to the numerator
and denominator of the diluted EPS computation.
SFAS No. 128 is effective for financial statements issued for periods
ending after December 15, 1997, and earlier application is not permitted.
The pro forma basic and diluted EPS calculated under SFAS No. 128 would
equal the primary earnings per share for the periods ended September 30,
1997 and 1996.
9. On July 1, 1997, the Company formed and capitalized a new wholly owned
Canadian subsidiary, which in turn purchased 100% of the shares of Standby
Electronics Corp., a privately held Canadian corporation. Since this date,
the Company has prepared consolidated financial statements with these new
subsidiaries.
Page 5 of 13
<PAGE>
10. The Company has guaranteed a shareholder loan secured by land and building
which is leased to the Company. The facility is subject to a ten year
lease with two five year renewable options.
11. On October 30, 1997, the Company purchased a 92,000 square foot building
located in Temecula, California at a cost of $3,750,000.
Page 6 of 13
<PAGE>
Part 1 - Financial Information
Item 2 - Management's Discussion and Analysis of Results of Operations and
Financial Condition
RESULTS OF OPERATIONS
COMPARISON OF THE NINE MONTHS ENDED SEPTEMBER 30, 1997 WITH THE NINE MONTHS
ENDED SEPTEMBER 30, 1996
Net Sales. Net sales increased $8.6 million or 24.4% from $35.2 million in
the first nine months of 1996 to $43.8 million in the first nine months of 1997.
CATV net sales increased $7.8 million or 25.4% from $30.7 million in the first
nine months of 1996 to $38.5 million in the first nine months of 1997 as a
result of the sales of $6.0 million of RF passive electronics devices by RMS,
$1.4 million of moderate growth from system upgrade and new network construction
projects, and $0.4 million of Standby Electronics enclosures.
Telecommunications net sales increased $0.8 million or 17.8% from $4.5 million
in the first nine months of 1996 to $5.3 million in the first nine months of
1997 as a result of continued growth of sealed plant products.
Domestic net sales increased $5.8 million or 18.8% from $30.9 million in
the first nine months of 1996 to $36.7 million in the first nine months of 1997,
principally due to sales of $3.2 million of RF passive devices and $2.6 million
of outside plant products for network construction. International net sales
increased $2.8 million or 65.1% from $4.3 million in the 1996 period to $7.1
million in the 1997 period as a result of $2.8 million of RF passive devices
sales, $0.4 million of Standby Electronics enclosures and a decrease of $0.4
million in broadband business due to the delay of broadband network construction
projects in the Pacific Rim area.
Gross Profit. Gross profit increased $2.4 million or 14.9% from $16.1
million in the first nine months of 1996 to $18.5 million in the first nine
months of 1997. $1.7 million of this improvement is due to RF passive devices
and an increase in sales volume, which resulted in higher operating leverage and
a favorable inventory adjustment of $0.2 million in the third quarter. Gross
margin decreased from 45.6% to 42.3% during the comparable periods due to a
28.0% margin contribution from the sales of RF passive devices and a 33.8%
margin contribution from the sales of Standby Electronics enclosures.
Commission Income. Commission income decreased $0.3 million or 37.5% from
$0.8 million in the first nine months of 1996 to $0.5 million in the first nine
months of 1997. The decrease is a result of aggressive pricing by competition
and lower sales volume of cable-in-conduit products in the eastern part of the
United States due to severe winter weather conditions during the first quarter
of 1997.
Page 7 of 13
<PAGE>
Selling. Selling expense increased $0.3 million or 6.0% from $5.0 million
in the first nine months of 1996 to $5.3 million in the first nine months of
1997, primarily as a result of increased sales and marketing expenses related to
the RMS and Standby Electronics subsidiaries, offset by the salary and expenses
of an officer now classified in general and administrative expenses due to
expanded responsibility. As a percentage of net sales, selling expense
decreased from 14.2% in the 1996 period to 12.1% in the 1997 period.
General and Administrative. General and administrative expenses increased
$2.1 million or 190.9% from $1.1 million in the first nine months of 1996 to
$3.2 million in the first nine months of 1997, primarily as a result of
increased payroll and employee benefits in the amount of $0.9 million due to
increased staffing in administrative and information systems departments as a
result of the RMS and Standby Electronics subsidiaries and the salary of an
executive officer now classified in general and administrative. Travel, legal,
auditing and professional services increased $0.8 million as a result of being a
publicly traded company. Depreciation, insurance and facilities expenses
increased $0.3 million as a result of the RMS acquisition. As a percentage of
net sales, general and administrative expense increased from 3.2% in the 1996
period to 7.4% in the 1997 period.
License Fees. License fees decreased $0.5 million in 1997 as a result of
the termination of the Channell patents during 1996.
Research and Development. Research and development expenses increased $0.3
million or 75.0% from $0.4 million in the first nine months of 1996 to $0.7
million in the first nine months of 1997 primarily due to increased payroll and
expenses associated with increased staffing. As a percentage of net sales,
research and development expenses increased from 1.1% in 1996 to 1.6% in 1997.
Research and development expenses will continue to be higher for the remainder
of 1997 as the Company implements its new product development plans.
Income from Operations. As a result of the items discussed above, income
from operations increased $0.1 million or 1.0% from $9.8 million in the first
nine months of 1996 to $9.9 million in the first nine months of 1997, while
operating margin decreased from 27.9% to 22.5%.
Income Taxes. Income taxes increased $3.7 million from $0.6 million in the
first nine months of 1996 to $4.3 million in the first nine months of 1997. The
increase is principally due to the termination of the S Corporation status, as
a result of the Initial Public Offering, at which time the Company recorded
deferred tax assets on its Balance Sheet with a corresponding credit to its
income tax expense. The effect of recording these net deferred tax assets upon
the net income for the nine months ended September 30, 1996, was $1.063 million.
If the deferred income tax assets had not been recorded, pro-forma income taxes
would have been $3.826 million for the nine months ended September 30, 1996.
Page 8 of 13
<PAGE>
COMPARISON OF THE THREE MONTHS ENDED SEPTEMBER 30, 1997 WITH THE THREE MONTHS
ENDED SEPTEMBER 30, 1996
Net Sales. Net sales increased $3.4 million or 28.3% from $12.0 million in
the third quarter of 1996 to $15.4 million in the third quarter of 1997. CATV
net sales increased $3.2 million or 31.4% from $10.2 million in the third
quarter of 1996 to $13.4 million in the third quarter of 1997 as a result of the
sales of $2.4 million of RF passive electronics devices by RMS, $0.4 million of
system upgrade projects and $0.4 million of Standby Electronics enclosure sales.
Telecommunications net sales increased $0.2 million or 11.1% from $1.8 million
in the third quarter of 1996 to $2.0 million in the third quarter of 1997 due to
increased sales of sealed plant products.
Domestic net sales increased $2.7 million or 27.8% from $9.7 million in the
third quarter of 1996 to $12.4 million in the third quarter of 1997, primarily
due to sales of $1.5 million of RF passive devices and $1.2 million of outside
plant products for network construction. International net sales increased $0.7
million or 30.4% from $2.3 million in the third quarter of 1996 to $3.0 million
in the third quarter of 1997 as a result of the sales of $1.1 million of RF
passive devices, $0.4 million of Standby Electronics enclosures and a decrease
of $0.8 million in broadband business due to delays in broadband construction
projects in the South Pacific and Asia.
Gross Profit. Gross profit increased $0.9 million or 16.4% from $5.5
million in the third quarter of 1996 to $6.4 million in the third quarter of
1997, $0.7 million of this improvement is due to RF passive devices with the
balance being a result of an inventory adjustment. Gross margin decreased from
46.1% to 41.6% during the comparable periods due to a 29.2% margin contribution
from the sales of RF passive devices.
Commission Income. Commission income decreased $0.1 million or 33.3% from
$0.3 million in the third quarter of 1996 to $0.2 million in the third quarter
of 1997, primarily as a result of aggressive pricing by competition.
Selling. Selling expenses increased $0.2 million or 13.3% from $1.5
million in the third quarter of 1996 to $1.7 million in the third quarter of
1997. No single item accounts for a significant amount of the increase. As a
percentage of net sales, selling expense decreased from 12.9% in the 1996 period
to 11.1% in the 1997 period.
General and Administrative. General and administrative expenses increased
$0.7 million or 233.3% from $0.3 million in the third quarter of 1996 to $1.0
million in the third quarter of 1997. The increase is a result of increased
payroll in the amount of $0.2 million due to increased staffing and the salary
of an executive officer now classified in general and administrative. Travel,
legal and professional services increased $0.2 million as a result of being a
publicly traded company. Depreciation, insurance and
Page 9 of 13
<PAGE>
facilities expenses increased $0.1 million as a result of the RMS and Standby
Electronics subsidiaries. As a percentage of net sales, general and
administrative expense increased from 2.7% in the 1996 period to 6.3% in the
1997 period.
Research and Development. Research and development expenses increased $0.1
million or 100.0% from $0.1 million in the third quarter of 1996 to $0.2 million
in the third quarter of 1997 as a result of increased staffing. As a percentage
of net sales, research and development increased from 1.1% to 1.3% during the
period.
Income from Operations. As a result of the items discussed above, income
from operations decreased $0.1 million or 2.6% from $3.8 million in the third
quarter of 1996 to $3.7 million in the third quarter of 1997, and operating
margin decreased from 31.8% to 23.8%.
Income Taxes. Income taxes increased $1.2 million from $0.4 million in the
third quarter of 1996 to $1.6 million in the third quarter of 1997. The increase
is principally due to the termination of the S Corporation status, at the time
of the Initial Public Offering, upon which the Company recorded deferred tax
assets on its Balance Sheet with a corresponding credit to its Statement of
Operations. The effect of recording these net deferred tax assets upon the net
income for the three months ended September 30, 1996, was $1.063 million.
LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operating activities was $2.7 million and $7.0 million
for the nine months ended September 30, 1997 and 1996, respectively. Net cash
used in investing activities was $4.6 million and $12.6 million for the nine
months ended September 30, 1997 and 1996, respectively. Net cash used in
financing activities was $0.3 million for the nine months ended September 30,
1997, and $9.5 million was provided from financing activities for the nine
months ended September 30, 1996.
Accounts receivable increased from $6.7 million at December 31, 1996, to
$9.0 million at September 30, 1997, as a result of increased sales during the
period and the acquisitions of RMS Electronics, Inc. and Standby Electronics
Corporation. Inventories increased from $2.9 million at December 31, 1996 to
$6.0 million at September 30, 1997, as a result of increased work-in-process and
finished goods required for the increased sales volume forecasted and the
acquisitions of RMS Electronics, Inc. and Standby Electronics Corporation.
The Company made capital expenditures of $1.7 million and $1.4 million
during the first nine months of 1997 and 1996, respectively, and anticipates
increased capital spending in the last quarter of 1997.
Page 10 of 13
<PAGE>
The Company has historically financed its operations and capital
expenditures through internally generated funds and bank borrowings. The
Company currently maintains a revolving credit facility with a $5.0 million
working capital revolving line of credit and a $5.0 million equipment revolving
line of credit, neither of which currently has any outstanding balance.
Availability of advances under the revolving credit facilities expires on May 1,
1999.
The Company believes that income from operations, coupled with borrowings
under its revolving credit facilities and proceeds from the Initial Public
Offering will be sufficient to fund the Company's capital expenditure and
working capital requirements.
Forward-looking statements contained within this form 10-Q are subject to
many uncertainties in the corporation's operations and business environments.
Examples of such uncertainties include customer demand, low material costs and
worldwide economic conditions among others. Such uncertainties are discussed
further in the Company's Annual Report and S-1 filed with the Securities and
Exchange Commission.
Page 11 of 13
<PAGE>
Part II - Other Information
Item 1. Legal Proceedings
The Company is from time to time involved in ordinary routine litigation
incidental to the conduct of its business. The Company regularly reviews all
pending litigation matters in which it is involved and establishes reserves
deemed appropriate for such litigation matters. Management believes that no
presently pending litigation matters will have a material adverse effect on the
Company's financial statements taken as a whole or on its results of operations.
Item 2. Changes in Securities
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
Exhibit
Number Description
- ------ -----------
3.1 Restated Certificate of Incorporation of the Company (1)
3.2 Bylaws of the Company (1)
4 Form of Common Stock Certificate (1)
10.1 Tax Agreement between the Company and the Existing Stockholders (1)
10.2 Channell Commercial Corporation 1996 Incentive Stock Plan (including
form of Stock Option Agreements and Restricted Stock Agreement) (1)
10.3 Business Loan Agreement dated as of May 13, 1997 between the Company
and Bank of America National Trust and Savings Association ("Bank of
America") (3)
10.5 The Company's Profit Sharing Plan (1)
10.6 Agreement dated as of September 30, 1982 between the Company and
Integral Corporation, as amended (1)
10.7 Telephone Sales Agreement dated as of January 23, 1991 between the
Company and Integral Corporation (1)
10.8 Employment Agreement between the Company and William H. Channell, Sr.
(1)
10.9 Employment Agreement between the Company and William H. Channell, Jr.
(1)
10.10 Channell Commercial Corporation 1996 Performance-Based Annual
Incentive Compensation Plan (1)
10.11 Lease dated December 22, 1989 between the Company and William H.
Channell, Sr., as amended (1)
10.12 Lease dated May 29, 1996 between the Company and the Channell Family
Trust (1)
10.13 Lease dated May 17, 1994 between the Company and the Z. Paul Akian and
Sonia Akian Family Trust (1)
10.14 Lease dated March 1, 1994 between the Company and Allstate Life
Insurance Company (1)
Page 12 of 13
<PAGE>
10.15 Lease dated November 2, 1989 between the Company and Meadowvale Court
Property Management Ltd., as amended (1)
10.16 Lease Agreement dated as of March 1, 1996 between Winthrop Resources
Corp. and the Company (1)
10.17 Form of Indemnity Agreement (1)
10.18 Form of Agreement Regarding Intellectual Property (1)
10.19 401(k) Plan of the Company (1)
10.20 Letter Agreement regarding employment, Andrew M. Zogby (2)
10.21 Letter Agreement regarding employment, John B. Kaiser (2)
11 Computation of Proforma Income per Share (2)
27 Financial Data Schedule (4)
_______
(1) Incorporated by reference to the indicated exhibits filed in connection
with the Company's Registration Statement on Form S-1 (File No. 333-3621).
(2) Incorporated by reference to the indicated exhibits filed in connection
with the Company's Form 10-K on March 31, 1997.
(3) Incorporated by reference to the indicated exhibits filed in connection
with the Company's Form 10-Q on August 13, 1997.
(4) Filed herewith.
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.
CHANNELL COMMERCIAL CORPORATION
(Registrant)
Dated: November 11, 1997 By: /s/Gary W. Baker
___________________
Gary W. Baker
Chief Financial Officer
Page 13 of 13
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FINANCIAL
STATEMENTS AND NOTES THERETO CONTAINED IN THE COMPANY'S ANNUAL REPORT ON FORM
10-K FILED ON MARCH 31, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 9-MOS 12-MOS
<FISCAL-YEAR-END> DEC-31-1997 DEC-31-1996
<PERIOD-START> JAN-01-1997 JAN-01-1996
<PERIOD-END> SEP-30-1997 DEC-31-1996
<CASH> 6,948 9,190
<SECURITIES> 11,800 11,406
<RECEIVABLES> 9,035 6,685
<ALLOWANCES> 0 0
<INVENTORY> 6,020 2,908
<CURRENT-ASSETS> 34,740 31,274
<PP&E> 21,356 18,868
<DEPRECIATION> (10,640) (8,260)
<TOTAL-ASSETS> 48,385 42,658
<CURRENT-LIABILITIES> 3,809 4,898
<BONDS> 0 0
0 0
0 0
<COMMON> 92 92
<OTHER-SE> 43,570 37,330
<TOTAL-LIABILITY-AND-EQUITY> 48,385 42,658
<SALES> 43,821 47,282
<TOTAL-REVENUES> 44,319 48,267
<CGS> 25,274 25,447
<TOTAL-COSTS> 9,183 9,642
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 711 (291)
<INCOME-PRETAX> 10,573 13,469
<INCOME-TAX> 4,335 2,359
<INCOME-CONTINUING> 6,238 11,110
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 6,238 11,110
<EPS-PRIMARY> .68 1.06
<EPS-DILUTED> .68 1.06
</TABLE>
