<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 June 30, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _______________ to ______________
Commission File No. 0-28582
-------
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 June
30, 1998.
<PAGE>
CHANNELL COMMERCIAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(amounts in thousands, except per share data)
<TABLE>
<CAPTION>
Six months ended Three months ended
June 30, June 30,
-------------------- --------------------
1998 1997 1998 1997
------- ------- ------- -------
<S> <C> <C> <C> <C>
Net sales $38,812 $28,468 $23,108 $15,664
Cost of goods sold 22,777 16,320 13,487 8,659
------- ------- ------- -------
Gross profit 16,035 12,148 9,621 7,005
Commission income 102 336 22 188
------- ------- ------- -------
16,137 12,484 9,643 7,193
Operating expenses
Selling 4,898 3,571 2,679 1,818
General and administrative 3,671 2,248 2,267 1,038
Research and development 895 473 517 238
------- ------- ------- -------
9,464 6,292 5,463 3,094
------- ------- ------- -------
Income from operations 6,673 6,192 4,180 4,099
Interest income (175) 501 (328) 202
------- ------- ------- -------
Income before income taxes 6,498 6,693 3,852 4,301
Income taxes 2,657 2,744 1,559 1,763
------- ------- ------- -------
Net income $ 3,841 $ 3,949 $ 2,293 $ 2,538
======= ======= ======= =======
Net income per share (basic and diluted) $ 0.42 $ 0.43 $ 0.25 $ 0.28
======= ======= ======= =======
Weighted average shares outstanding 9,237 9,237 9,237 9,237
======= ======= ======= =======
</TABLE>
<PAGE>
CHANNELL COMMERCIAL CORPORATION
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(amounts in thousands)
<TABLE>
<CAPTION>
June 30, Dec. 31,
1998 1997
------------ ------------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and $ 4,663 $ 3,840
cash
equivalents
Investments 940 11,651
Accounts 16,971 9,191
receivable(net)
Inventories 15,315 7,253
Deferred income taxes 868 688
Prepaid expenses 577 613
------------ ------------
Total current assets 39,334 33,236
PROPERTY AND EQUIPMENT AT COST, NET 26,111 14,758
DEFERRED INCOME TAXES 483 664
INTANGIBLE ASSETS, NET 20,300 1,649
OTHER ASSETS 1,839 302
------------ ------------
TOTAL ASSETS $88,067 $50,609
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Bank overdraft $ 9,297 --
Accounts payable 7,804 $ 2,606
Notes payable current 133 --
Current maturities of capital lease obligations 458 226
Accrued expenses 1,844 791
Income taxes payable 647 390
------------ ------------
Total current liabilities 20,183 4,013
LONG-TERM OBLIGATIONS 17,128 400
CAPITAL LEASE OBLIGATIONS 192 320
DEFERRED INCOME TAX 847 ---
STOCKHOLDERS' EQUITY
Preferred stock
Common stock, par value $.01 per share, authorized --
19,000 shares; issued and outstanding --
9,237 shares 92 92
Additional paid-in capital 27,991 27,991
Retained earnings 21,634 17,793
------------ ------------
TOTAL STOCKHOLDERS' EQUITY 49,717 45,876
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $88,067 $50,609
============ ============
</TABLE>
Page 2 0f 13
<PAGE>
CHANNELL COMMERCIAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(amounts in thousands)
<TABLE>
<CAPTION> Six months ended
June 30,
--------------------------------
1998 1997
--------------------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 3,841 $ 3,949
Depreciation and amortization 1,414 1,007
Deferred income taxes 1 (1)
Change in assets and liabilities net of
effects from purchase of companies:
Accounts receivable (2,559) (1,443)
Inventories (3,179) (1,343)
Prepaid expenses 36 303
Other (1,384) (106)
Increase (decrease) in liabilities:
Accounts payable 1,331 (294)
Accrued expenses 1,053 (347)
Income taxes payable (95) (1,399)
--------------------------------
Net cash provided by operating activities 459 326
--------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property and equipment (3,208) (998)
Payment for purchased companies, net
of cash acquired (23,733) (2,085)
Purchases of investments (2,133)
Maturities of investments 15,773
--------------------------------
Net cash used in investing activities (13,301) (3,083)
--------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Acquisition of long term debt 16,745 --
Repayment of obligations under capital lease (151) (71)
--------------------------------
Net cash provided by (used in) financing activities 16,594 (71)
--------------------------------
Increase (decrease) in cash and cash equivalents 3,752 (2,828)
Cash and cash equivalents, beginning of period 911 9,190
--------------------------------
Cash and cash equivalents, end of period $ 4,663 $ 6,362
================================
CASH PAID DURING THE PERIOD FOR:
Interest $ 298 $ 63
================================
Income taxes $ 2,694 $ 4,241
================================
</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 consolidated results of operations for the
six-months ended June 30, 1998 and 1997, (b) the consolidated financial
position at June 30, 1998, and (c) the consolidated statements of cash
flows for the six-month periods ended June 30, 1998 and 1997 have been
made. The results for the six-month period ended June 30, 1998, are not
necessarily indicative of the results for the entire year.
2. Inventories: Inventories stated at the lower of cost or market (first-in,
first-out method) are summarized as follows:
<TABLE>
<CAPTION>
June 30,
1998
-----------------
<S> <C>
Raw materials $ 3,878
Work-in process 2,008
Finished goods 9,429
-------
$15,315
=============
</TABLE>
3. 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 are therefore
recorded at fair value with any differences between fair value and cost recorded
as a separate component of stockholders' equity. At June 30, 1998, there were no
material differences between the fair value and cost of these marketable
securities.
4. Acquisition: On May 1, 1998, the Company acquired 100% of the outstanding
common stock of A.C. Egerton (Holdings) PLC ("Egerton"), a public limited
company incorporated in England and Wales. The purchase price, paid in cash,
amounted to $27,836, including $1,275 of estimated costs of acquisition. The
excess of the fair value of assets acquired in excess of liabilities assumed
amounted to $8,646 which resulted in goodwill in the amount of $19,190.
Goodwill is being amortized on the straight-line basis over twenty years.
Results of operations of the acquired company are included in the accompanying
consolidated statements of income commencing on May 1, 1998.
Page 4 of 13
<PAGE>
Pro forma consolidated results of operations as though the acquisition had
occurred at the beginning of each of the respective periods is as follows:
<TABLE>
<CAPTION>
Six months ended June 30,
1998 1997
--------------- ----------------
<S> <C> <C>
Net sales $47,739 $49,853
Net income $ 2,697 $ 4,562
Net income per share:
Basic $ 0.29 $ 0.49
Diluted $ 0.29 $ 0.49
</TABLE>
5. Supplemental Disclosure of Non-Cash Investing Activities: The Company
purchased all of the capital stock of Egerton for $27,836. In conjunction
with this acquisition, liabilities were assumed as follows:
<TABLE>
<S> <C>
Fair value of assets acquired $42,570
Cash paid for capital stock 27,836
-------
Liabilities assumed $14,734
=======
</TABLE>
6. Long-Term Debt: In conjunction with the acquisition of Egerton on May 1,
1998, the Company entered into a new Senior Revolving Loan Agreement
("Revolving Facility") with a bank to provide funds for the Egerton
acquisition as well as for working capital and equipment acquisition
purposes. The Revolving Facility is in the amount of $25,000 of which
$16,681 had been drawn down as of June 30, 1998. The outstanding balance
bears interest at a variable rate based on either the bank's base rate or
the applicable LIBOR rate depending on the nature of the borrowings. The
rate at June 30, 1998 was 8.5%. The loan is secured by substantially all
of the Company's tangible and intangible assets and up to 65% of the
capital stock of the Company's subsidiaries and is due April 30, 2003.
<TABLE>
<S> <C>
Loan payable - bank $16,861
Loan payable individual with interest at
the bank prime rate due January, 2001
400
-------
17,261
Current portion 133
-------
$17,128
=======
</TABLE>
The Revolving Facility contains various financial and operating covenants
which, among other things, imposes limitations on the Company's ability to
incur additional indebtedness, merge or consolidate, sell assets except in
the ordinary course of business, make certain investments, enter into
leases and pay dividends. The Company is also required to comply with
covenants related to minimum net worth and other financial ratios.
Page 5 of 13
<PAGE>
7. In 1997, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial Accounting Standards No. 130 ("SFAS 130"), reporting
comprehensive income, which prescribes standards for reporting
comprehensive income and its components. Comprehensive income consists of
net income or loss for the current period and other comprehensive income
(income, expenses, gains and losses that currently bypass the income
statement and are reported directly in a separate component of equity).
SFAS 130 requires that components of comprehensive income be reported in a
financial statement that is displayed with the same prominence as other
financial statements. SFAS 130 is effective for financial statements
issued for periods beginning after December 15, 1997. There are no
components of income, other than as reflected on the Consolidated
Statements of Income, for the periods presented in these statements.
In 1997, the FASB issued Statement of Financial Accounting Standards No.
131 ("SFAS 131"), Disclosures About Segments of an Enterprise and Related
Information, which applies only to publicly held business entities. A
reportable segment, referred to as an operating segment, is a component of
an entity about which separate financial information is produced
internally, that is evaluated by the chief operating decision-maker to
assess performance and allocate resources. SFAS 131 is effective for
financial statements issued for periods beginning after December 15, 1997.
The Company operates in a one-industry segment as supplier of
telecommunications equipment. While the Company offers a wide range of
items for sale, many of them are marketed by a common sales force.
Page 6 of 13
<PAGE>
Part I Financial Information
Item 2 - Management's Discussion and Analysis of Results of Operations and
Financial Condition
RESULTS OF OPERATIONS
COMPARISON OF THE SIX MONTHS ENDED JUNE 30, 1998 WITH THE SIX MONTHS ENDED JUNE
30, 1997
Net Sales. Net sales increased $10.3 million or 36.1% from $28.5 million
in the first six months of 1997 to $38.8 million in the first six months of
1998, as a result of increased sales of telecommunication enclosure and
component products of $9.7 million (including $5.2 million of Egerton products),
RF passive electronic devices of $0.4 million and $0.2 million of other related
equipment.
Domestic net sales increased $5.0 million or 20.6% from $24.3 million in
the first six months of 1997 to $29.3 million in the first six months of 1998,
primarily due to accelerated growth in both upgrade and rebuild construction to
facilitate increased broadband requirements. International net sales increased
$5.3 million or 126.2% from $4.2 million in the first six months of 1997 to $9.5
million in the first six months of 1998, primarily as a result of the Egerton
acquisition.
Gross Profit. Gross profit increased $3.9 million or 32.2% from $12.1
million in the first six months of 1997 to $16.0 million in the first six months
of 1998. $2.0 million of this increase is due to increased telecommunication
enclosure product sales volume, and $1.9 million from Egerton component sales.
Gross margin decreased from 42.5% to 41.2% during the comparable periods due to
a 36.5% margin contribution from the sale of Egerton products.
Commission Income. Commission income decreased $0.2 million or 66.7% from
$0.3 million in the first six months of 1997 to $0.1 million in the first six
months of 1998. The decrease is a result of the termination of a marketing
agreement for the sale of cable-in-conduit products.
Selling. Selling expense increased $1.3 million or 36.1% from $3.6 million
in the first six months of 1997 to $4.9 million in the first six months of 1998,
primarily as a result of increased sales and marketing expenses of $0.6 million
related to Standby Electronics expenses, $0.4 million related to Egerton
expenses and $0.2 million of increased freight expense. As a percentage of net
sales, selling expense was 12.6% in both comparable periods.
Page 7 of 13
<PAGE>
General and Administrative. General and administrative expenses increased
$1.5 million or 68.2% from $2.2 million in the first six months of 1997 to $3.7
million in the first six months of 1998, primarily as a result of $0.9 million
related to Egerton expenses, and increased payroll and benefits expenses of $0.2
million related to increased staffing. Employee related expenses increased $0.1
million as a result of recruiting and rent/lease equipment. As a percentage of
net sales, general and administrative expense increased from 7.7% in the 1997
period to 9.5% in the 1998 period.
Research and Development. Research and development expenses increased $0.4
million or 80.0% from $0.5 million in the first six months of 1997 to $0.9
million in the first six months of 1998 primarily due to increased payroll and
expenses in the amount of $0.3 million associated with increased staffing and
$0.1 million related to Egerton expenses. As a percentage of net sales,
research and development increased from 1.8% in the 1997 period to 2.3% in the
1998 period.
Income from Operations. As a result of the items discussed above, income
from operations increased $0.5 million or 8.1% from $6.2 million in the first
six months of 1997 to $6.7 million in the first six months of 1998, while
operating margin decreased from 21.8% to 17.3%.
Income Taxes. Income taxes were $2.7 million in the first six months of
1997 and 1998.
Page 8 of 13
<PAGE>
COMPARISON OF THE THREE MONTHS ENDED JUNE 30, 1998 WITH THE THREE MONTHS ENDED
JUNE 30, 1997
Net Sales. Net sales increased $7.4 million or 47.1% from $15.7 million in
the second quarter of 1997 to $23.1 million in the second quarter of 1998, as a
result of increased telecommunication enclosure and component products,
including $5.2 million of Egerton products.
Domestic net sales increased $2.7 million or 20.6% from $13.1 million in
the second quarter of 1997 to $15.8 million in the second quarter of 1998,
primarily due to accelerated growth in both upgrade and rebuild construction to
facilitate increased broadband requirements. International net sales increased
$4.7 million or 180.8% from $2.6 million in the second quarter of 1997 to $7.3
million in the second quarter of 1998, primarily as a result of the Egerton
acquisition.
Gross Profit. Gross profit increased $2.6 million or 37.1% from $7.0
million in the second quarter of 1997 to $9.6 million in the second quarter of
1998. This increase is from increased sales volume, including $1.9 million from
Egerton products. Gross margin decreased from 44.6% in the second quarter of
1997 to 41.6% in the second quarter of 1998 as a result of product mix.
Commission Income. Commission income decreased $0.2 million or 100.0% from
$0.2 million in the second quarter of 1997 to less than $0.1 million in the
second quarter of 1998, primarily as a result of the termination of a marketing
agreement for the sale of cable-in-conduit products.
Selling. Selling expenses increased $0.9 million or 50.0% from $1.8
million in the second quarter of 1997 to $2.7 million in the second quarter of
1998, primarily as a result of increased sales and marketing expenses of $0.3
million associated with Standby Electronics expenses, and $0.4 million
associated with Egerton expenses. As a percentage of net sales, selling expense
increased from 11.5% in the 1997 period to 11.7% in the 1998 period.
General and Administrative. General and administrative expenses increased
$1.3 million or 130.0% from $1.0 million in the second quarter of 1997 to $2.3
million in the second quarter of 1998. The increase is primarily a result of
$0.9 million related to Egerton expenses, and increased payroll and expenses of
$0.3 million related to increased staffing. As a percentage of net sales,
general and administrative expense increased from 6.4% in the 1997 period to
10.0% in the 1998 period.
Research and Development. Research and development expenses increased $0.3
million or 150.0% from $0.2 million in the second quarter of 1997 to $0.5
million in the second quarter of 1998, as a result of increased staffing
amounting to $0.2 million and $0.1 million related to Egerton expenses. As a
percentage of net sales, research and development increased from 1.3% in the
1997 period to 2.2% in the 1998 period.
Page 9 of 13
<PAGE>
Income from Operations. As a result of the items discussed above, income
from operations increased $0.1 million or 2.4% from $4.1 million in the second
quarter of 1997 to $4.2 million in the second quarter of 1998, while operating
margin decreased from 26.1% to 18.2%.
Income Taxes. Income taxes decreased $0.2 million or 11.1% from $1.8
million in the second quarter of 1997 to $1.6 million in the second quarter of
1998.
LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operating activities was $0.3 million and $0.5 million
for the six months ended June 30, 1997 and 1998, respectively. Net cash used in
financing activities of less than $0.1 million was used in financing activities
for the six months ended June 30, 1997, and net cash provided from financing
activities was $16.6 million for the six months ended June 30, 1998. Net cash
used in investing activities was $3.1 million and $13.3 million for the periods
ending June 30, 1997 and 1998, respectively.
Accounts receivable increased from $9.2 million at December 31, 1997, to
$17.0 million at June 30, 1998, as a result of increased sales and $6.4 million
from the acquisition of Egerton. Inventories increased from $7.3 million at
December 31, 1997, to $15.3 million at June 30, 1998, primarily as a result of
increased finished goods in anticipation of higher sales in the second half of
1998 and $4.6 million from the acquisition of Egerton.
The Company made capital expenditures of $0.6 million and $1.6 million for
the second quarter of 1997 and 1998, respectively, and anticipates increased
capital spending for equipment, product tooling and test equipment for the
remainder of 1998.
On May 1, 1998, the Company acquired all of the stock of Egerton. Egerton
is a U.K. holding company with subsidiaries in the U.K., Australia and the U.S.,
which are involved primarily in the manufacturing and sales of telephone
equipment primarily in Europe, Asia and Australia. Purchase price of the stock
was approximately $26.9 million and was paid from the proceeds of bank borrowing
and the liquidation of short-term investments.
In conjunction with the acquisition of Egerton, the Company entered into a
new Senior Revolving Loan Agreement ("Revolving Facility") with a bank to
provide funds for the Egerton acquisition as well as for working capital and
equipment acquisition purposes. The Revolving Facility is in the amount of
$25.0 million of which $16.7 million had been drawn down as of June 30, 1998.
The outstanding balance bears interest at a variable rate based on either the
bank's base rate or the applicable LIBOR rate depending on the nature of the
borrowings.
Page 10 of 13
<PAGE>
The applicable rate at June 30, 1998 was 8.5%. The loan is secured by
substantially all the Company's tangible and intangible assets and up to 65% of
the capital stock of the Company's subsidiaries and is due April 30, 2003.
The Revolving Facility contains various financial and operating covenants
which, among other things, imposes limitations on the Company's ability to incur
additional indebtedness, merge or consolidate, sell assets except in the
ordinary course of business, make certain investments, enter into leases and pay
dividends. The Company is also required to comply with covenants related to
minimum net worth and other financial ratios.
The Company believes that income from operations, coupled with borrowing
under its revolving credit facilities will be sufficient to fund the Company's
capital expenditure and working capital requirements.
Forward-looking statements contained within this 10-Q are subject to many
uncertainties in the Company's operations and business environments. Examples
of such uncertainties include customer demand, low material costs, integration
of acquired business 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
Form 8-K, item 2, Acquisition of Assets, filed May 18, 1998
Form 8-KA, item 7, Financial Statements, filed July 17, 1998
Report of BDO Stoy Hayward, Chartered Accountants and Registered
Auditors Consolidated Profit and Loss Accounts for each of the three
years ended December 31, 1997, 1996 and 1995, and for the three
months ended March 31, 1998 and 1997 (unaudited )
Consolidated Balance Sheets as of December 31, 1997 and 1996, and
March 31, 1998 (unaudited)
Consolidated Cash Flow Statements for each of the three years
ended December 31, 1997, 1996 and 1995, and for the three months
ended March 31, 1998 and 1997 (unaudited)
Notes Forming Part of the Financial Statements for the years
ended December 31, 1997, 1996 and 1995, and for the three months
ended March 31, 1998 and 1997 (unaudited)
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 Senior Revolving Loan Agreement dated as of May 1, 1998, between the
Company and Fleet National Bank (3)
10.8 Employment Agreement between the Company and William H. Channell, Sr.
(1)
Page 12 of 13
<PAGE>
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)
10.14 Lease dated September 24, 1997 between the Company and SCI North
Carolina Limited Partnership (5)
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 (4)
10.20 Letter Agreement regarding employment, Andrew M. Zogby (2)
10.21 Letter Agreement regarding employment, John B. Kaiser (2)
10.22 A.C. Egerton (Holdings) PLC Share Purchase Agreement (3)
11 Computation of Proforma Income per Share (2)
27 Financial Data Schedule (6 )
_______
(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 8-K on May 18, 1998.
(4) Incorporated by reference to the indicated exhibits filed in connection with
the Company's Form 10-K on March 30, 1998.
(5) Incorporated by reference to the indicated exhibits filed in connection with
the Company's Form 10-Q on May 6, 1998.
(6) 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: August 12, 1998 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 AND 10-K
FILED ON MARCH 30, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 6-MOS 12-MOS
<FISCAL-YEAR-END> DEC-31-1998 DEC-31-1997
<PERIOD-START> JAN-01-1998 JAN-01-1997
<PERIOD-END> JUN-30-1998 DEC-31-1997
<CASH> 4,663 3,840
<SECURITIES> 940 11,651
<RECEIVABLES> 16,971 9,191
<ALLOWANCES> 0 0
<INVENTORY> 15,315 7,269
<CURRENT-ASSETS> 39,334 33,236
<PP&E> 38,280 24,925
<DEPRECIATION> (12,169) (10,167)
<TOTAL-ASSETS> 88,067 50,609
<CURRENT-LIABILITIES> 20,183 4,013
<BONDS> 0 0
0 0
0 0
<COMMON> 92 92
<OTHER-SE> 49,625 45,784
<TOTAL-LIABILITY-AND-EQUITY> 88,067 50,609
<SALES> 38,812 59,943
<TOTAL-REVENUES> 0 0
<CGS> 22,777 35,032
<TOTAL-COSTS> 0 0
<OTHER-EXPENSES> 9,464 12,337
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 175 (879)
<INCOME-PRETAX> 6,498 14,059
<INCOME-TAX> 2,657 5,589
<INCOME-CONTINUING> 3,841 8,470
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 3,841 8,470
<EPS-PRIMARY> .42 .92
<EPS-DILUTED> .42 .91
</TABLE>
