<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, 1999
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 _____
9,099,000 shares of common stock of the Registrant were outstanding at June
30, 1999.
<PAGE>
CHANNELL COMMERCIAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME AND
COMPREHENSIVE INCOME (UNAUDITED)
(amounts in thousands, except per share data)
<TABLE>
<CAPTION>
Six months ended Three months ended
June 30, June 30,
---------------- ------------------
1999 1998 1999 1998
------ ------ -------- --------
<S> <C> <C> <C> <C>
Net sales $56,013 $38,812 $31,315 $23,108
Cost of goods sold 34,078 22,777 18,974 13,487
------- ------- ------- -------
Gross profit 21,935 16,035 12,341 9,621
Commission income 5 102 -- 22
------- ------- ------- -------
21,940 16,137 12,341 9,643
------- ------- ------- -------
Operating expenses
Selling 7,022 4,898 3,687 2,679
General and administrative 4,855 3,671 2,602 2,267
Research and development 1,315 895 688 517
------- ------- ------- -------
13,192 9,464 6,977 5,463
------- ------- ------- -------
Income from operations 8,748 6,673 5,364 4,180
Interest income (expense), net (1,123) (175) (586) (328)
------- ------- ------- -------
Income before income taxes 7,625 6,498 4,778 3,852
Income taxes 3,197 2,657 2,060 1,559
------- ------- ------- -------
Net income $ 4,428 $ 3,841 $ 2,718 $ 2,293
======= ======= ======= =======
Net income per share (basic and diluted) $ 0.49 $ 0.42 $ 0.30 $ 0.25
======= ======= ======= =======
Weighted average shares outstanding 9,099 9,237 9,099 9,237
======= ======= ======= =======
Net income $ 4,428 $ 3,841 $ 2,718 $ 2,293
Other comprehensive income, net of tax
Foreign currency translation adjustments 80 -- 75 --
------- ------- ------- -------
Comprehensive net income $ 4,508 $ 3,841 $ 2,793 $ 2,293
======= ======= ======= =======
</TABLE>
Page 1 of 12
<PAGE>
CHANNELL COMMERCIAL CORPORATION
CONSOLIDATED BALANCE SHEETS (Unaudited)
(amounts in thousands)
<TABLE>
<CAPTION>
June 30, Dec. 31,
1999 1998
-------- --------
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents $ 1,841 $ 5,828
Accounts receivable (net) 19,829 17,890
Inventories 17,203 14,992
Deferred income taxes 535 630
Prepaid expenses 1,707 1,165
-------- -------
Total current assets 41,115 40,505
Property and equipment at cost, net 44,902 42,081
Deferred income taxes -- --
Intangible assets, net 14,677 15,100
Other assets 480 756
-------- -------
Total assets $101,174 $98,442
======== =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $ 6,956 $ 6,504
Short-term debt 4,965 8,862
Current maturities of capital lease obligations 1,919 2,009
Accrued expenses 3,710 2,537
Income taxes payable 862 625
-------- -------
Total current liabilities 18,412 20,537
-------- -------
Long-term obligations 20,411 20,855
-------- -------
Capital lease obligations 5,071 4,185
-------- -------
Deferred income tax 192 285
-------- -------
Stockholders' equity
Preferred stock -- --
Common stock, par value $.01 per share, authorized--
19,000 shares; issued - 9,237 shares;
9,099 outstanding - 92 92
Additional paid-in capital 27,991 27,991
Treasury stock - 138 shares in 1998 (1,175) (1,175)
Retained earnings 30,346 25,918
Accumulated other comprehensive income -
Foreign currency translation (166) (246)
-------- -------
Total stockholders' equity 57,088 52,580
-------- -------
Total liabilities and stockholders' equity $101,174 $98,442
======== =======
</TABLE>
Page 2 of 12
<PAGE>
CHANNELL COMMERCIAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(amounts in thousands)
<TABLE>
<CAPTION>
Six months ended
June 30,
----------------
1999 1998
------ ------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 4,428 $ 3,841
Depreciation and amortization 3,281 1,414
Deferred income taxes 2 1
Change in assets and liabilities net of
effects from purchase of company:
Accounts receivable (1,939) (2,559)
Inventories (2,211) (3,179)
Prepaid expenses (542) 36
Other 276 (1,384)
Increase (decrease) in liabilities:
Accounts payable 452 1,331
Accrued expenses (2,756) 1,053
Income taxes payable 237 (95)
------- --------
Net cash provided by operating activities 1,228 459
------- --------
Cash flows from investing activities:
Acquisition of property and equipment (5,679) (3,208)
Payment for purchased companies, net
of cash acquired -- (23,733)
Purchases of investments -- (2,133)
Maturities of investments -- 15,773
------- --------
Net cash used in investing activities (5,679) (13,301)
------- --------
Cash flows from financing activities:
Acquisition of long term debt -- 16,745
Repayment of debt (412) --
Acquisition (repayment) of capital lease obligations 796 (151)
------- --------
Net cash provided by (used in) financing activities 384 16,594
------- --------
Effect of exchange rates on cash 80 --
------- --------
Increase (decrease) in cash and cash equivalents (3,987) 3,752
Cash and cash equivalents, beginning of period 5,828 911
------- --------
Cash and cash equivalents, end of period $ 1,841 $ 4,663
======= ========
Cash paid during the period for:
Interest $ 902 298
======= ========
Income taxes $ 2,881 $ 2,694
======= ========
</TABLE>
Page 3 of 12
<PAGE>
CHANNELL COMMERCIAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
June 30, 1999 and 1998
(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, 1999 and 1998, (b) the consolidated financial
position at June 30, 1999, and (c) the consolidated statements of cash
flows for the six-month periods ended June 30, 1999 and 1998 have been
made. The results for the six-month period ended June 30, 1999, are not
necessarily indicative of the results for the entire year.
2. The Company operates in one industry segment as a manufacturer and supplier
of telecommunications equipment. Currently, the Company is organized into
four geographic regions: the United States, Europe/Middle East, Canada and
Australia/Asia. The following tables summarize segment information for the
six-month periods ended June 30, 1999 and 1998.
<TABLE>
<CAPTION>
Six Months Ended
June 30,
----------------
Revenues from unrelated entities: 1999 1998
------ ------
<S> <C> <C>
United States $37,397 $30,123
Europe/Middle East 7,518 5,085
Canada 2,660 2,338
Australia/Asia 8,438 1,266
------- -------
$56,013 $38,812
======= =======
Income from operations:
United States $ 7,527 $ 6,094
Europe/Middle East (1,210) 357
Canada 542 128
Australia/Asia 1,889 94
------- -------
$ 8,748 $ 6,673
======= ======
</TABLE>
There has not been any significant changes in the total assets of each
reportable segment from the amounts disclosed in the Audited Financial
Statements and Notes thereto for the year ended December 31, 1998.
Page 4 of 12
<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, 1999 With the Six Months Ended June
30, 1998
Net Sales. Net sales increased $17.2 million or 44.3% from $38.8 million
in the first six months of 1998 to $56.0 million in the first six months of
1999, as a result of increased sales of telecommunication enclosure and
component products (including $9.6 million of A.C. Egerton (Holdings) Plc
("Egerton") products). The Egerton sales in 1998 and 1999 are for two months
and six months, respectively.
Domestic net sales increased $8.1 million or 27.7% from $29.3 million in
the first six months of 1998 to $37.4 million in the first six months of 1999,
primarily due to continued growth in both upgrade and rebuild construction to
facilitate enhanced voice, data and video requirements in addition to industry
consolidation and convergence. International net sales increased $9.1 million
or 95.8% from $9.5 million in the first six months of 1998 to $18.6 million in
the first six months of 1999 as a result of $9.6 million in sales of Egerton
products including a large network upgrade in Australia.
Gross Profit. Gross profit increased $5.9 million or 36.9% from $16.0
million in the first six months of 1998 to $21.9 million in the first six months
of 1999. $2.5 million is due to increased telecommunications enclosure and
component products sales volume and $2.4 million from Egerton component sales.
Gross margin decreased from 41.3% to 39.2% during the comparable periods due to
only a 25.8% margin contribution from the sale of Egerton products.
Commission Income. Commission income decreased $0.1 million or 100.0% from
$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 $2.1 million or 42.9% from $4.9 million
in the first six months of 1998 to $7.0 million in the first six months of 1999,
primarily as a result of $1.9 million of increased selling expenses related to
the Egerton operations and $0.4 million for the development of a new corporate
identity program. As a percentage of net sales, selling expense decreased from
12.6% in the 1998 period to 12.5% in the 1999 period.
Page 5 of 12
<PAGE>
General and Administrative. General and administrative expenses increased
$1.2 million or 32.4% from $3.7 million in the first six months of 1998 to $4.9
million in the first six months of 1999, primarily as a result of the Egerton
operations, including $0.4 million of goodwill amortization. As a percentage of
net sales, general and administrative expenses decreased from 9.5% in the 1998
period to 8.7% in the 1999 period.
Research and Development. Research and development expenses increased $0.4
million or 44.4% from $0.9 million in the first six months of 1998 to $1.3
million in the first six months of 1999 as a result of domestic operations
increased research and development supplies of $0.1 million and $0.1 million of
additional facility expense, and $0.2 million related to Egerton. As a
percentage of net sales, research and development was 2.3% in both comparable
periods.
Income from Operations. As a result of the items discussed above, income
from operations increased $2.0 million or 29.9% from $6.7 million in the first
six months of 1998 to $8.7 million in the first six months of 1999, while
operating margin decreased from 17.2% to 15.6%.
Income Taxes. Income taxes increased $0.5 million or 18.5% from $2.7
million to $3.2 million in the first six months of 1999. The net effective tax
rate increased from 40.9% in 1998 to 41.9% in 1999.
Comparison of the Three Months Ended June 30, 1999 With the Three Months Ended
June 30, 1998
Net Sales. Net sales increased $8.2 million or 35.5% from $23.1 million in
the second quarter of 1998 to $31.3 million in the second quarter of 1999, as a
result of increased sales of telecommunications enclosure and component products
(including $2.4 million of Egerton products). The Egerton sales in 1998 and
1999 are for two months and three months, respectively.
Domestic net sales increased $5.3 million or 33.5% from $15.8 million in
the second quarter of 1998 to $21.1 million in the second quarter of 1999,
primarily due to continued growth in both upgrade and rebuild construction in
addition to industry consolidation and convergence. International net sales
increased $2.9 million or 39.7% from $7.3 million in the second quarter of 1998
to $10.2 million in the second quarter of 1999, primarily due to a large network
upgrade in Australia.
Gross Profit. Gross profit increased $2.7 million or 28.1% from $9.6
million in the second quarter of 1998 to $12.3 million in the second quarter of
1999. This increase is a result of increased volume of telecommunication
enclosures and component products. Gross margin decreased from 41.6% in the
second quarter of 1998 to 39.4% in the second quarter of 1999 due to only a
27.4% margin contribution from the sale of Egerton products.
Page 6 of 12
<PAGE>
Selling. Selling expenses increased $1.0 million or 37.0% from $2.7
million in the second quarter of 1998 to $3.7 million in the second quarter of
1999, primarily as a result of $0.5 million increased selling expenses related
to the Egerton operations and $0.2 million for the development of a new
corporate identity program. As a percentage of net sales, selling expense
increased from 11.6% in the 1998 period to 11.8% in the 1999 period.
General and Administrative. General and administrative expenses increased
$0.3 million or 13.0% from $2.3 million in the second quarter of 1998 to $2.6
million in the second quarter of 1999. The increase is primarily a result of
$0.2 million of goodwill amortization related to the Egerton acquisition. As a
percentage of net sales, general and administrative expenses decreased from 9.8%
in the 1998 period to 8.3% in the 1999 period.
Research and Development. Research and development expenses increased $0.2
million or 40.0% from $0.5 million in the second quarter of 1998 to $0.7 million
in the second quarter of 1999, as a result of $0.1 million in additional
facility expense and development supplies, and $0.1 million related to Egerton.
As a percentage of net sales, research and development was 2.2% in both
comparable periods.
Income from Operations. As a result of the items discussed above, income
from operations increased $1.2 million or 28.6% from $4.2 million in the second
quarter of 1998 to $5.4 million in the second quarter of 1999, while operating
margin decreased from 18.1% to 17.1%.
Income Taxes. Income taxes increased $0.5 million or 31.3% from $1.6
million in the second quarter of 1998 to $2.1 million in the second quarter of
1999. The net effective tax rate increased from 40.5% in 1998 to 43.1% in 1999.
Year 2000 Computer Systems Compliance
The Year 2000 problem concerns the inability of certain computers and
computer systems to process data beyond January 1, 2000. Many software programs
refer to years in terms of their final two digits only. These programs may
interpret the year 2000 as 1900 and may not recognize that the year 2000 is a
leap year. (The year 1900 was not a leap year.) If not corrected, these
programs could shut down or generate incorrect critical data.
The Company has developed a plan to deal with the Year 2000 issues that it
faces. The Company, independent of the Year 2000 issues has embarked on a
worldwide project to implement a new business information system throughout the
Company using i2 Rhythm Factory Planner, Oracle ERP software and associated
hardware. These new systems will make the Company's business information
systems
Page 7 of 12
<PAGE>
approximately 85% Year 2000 compliant and are scheduled for completion both
domestically and internationally in the third quarter of 1999. The Company is
on schedule for implementation of these new systems.
In addition to business information systems, the Company's plan calls for
the analysis, correction and testing of embedded systems which might not operate
or might not operate properly after January 1, 2000. Those Systems include, but
are not limited to, telephone and voice mail systems, manufacturing and
production equipment, freight and shipping software, office machines, elevators
and building security systems. The Company has completed 80% of the in-house
testing and/or obtaining of manufacturer's certifications for the Year 2000
compatibility of these systems. Any items that cannot be determined to be
compliant or cannot be upgraded to be compliant are being replaced if they are
deemed to be critical to the operations of the Company.
The Company's plan also includes a procedure for analyzing the Year 2000
status of key outside suppliers, service providers and customers whose failure
to comply could have an adverse affect on the Company. These procedures include
a standard Year 2000 compliance agreement as well as a survey-type questionnaire
designed to help measure the vendor's progress in dealing with the Year 2000
issues. The Company has identified its key vendors and customers and has
completed 80% of the process of mailing the questionnaire and/or obtaining the
certification agreements. This phase of the plan is on-going, but is
anticipated to be complete in the third quarter of 1999.
The Company has contingency plans to deal with the failure of the above to
meet the Year 2000 issue with regard to the systems upgrade. The contract with
the suppliers includes a guarantee that the new systems will be implemented and
tested, and that the systems will be Year 2000 compliant. In addition, in the
event that the Oracle system does not meet the project time line, the Company
will install Y2K patches for its existing Data General operating system along
with the Apollo business application software. This will ensure, on a short-
term basis, that the Company will continue in a production environment while
meeting the Year 2000-compliance situation. No contingency plan has been
established to deal with the embedded systems issue in that any critical, non-
compliant systems will be replaced or corrected as they are discovered.
Contingency plans to deal with outside suppliers and customers will be developed
as indicated by the on-going analysis of these entities. Such contingency plans
could include the building of inventories, the search for alternative suppliers,
or the request for advance payments or deposits from customers, all as the case
may indicate.
The total costs associated with becoming Year 2000 compliant are not
expected to be material to the Company's financial position or results of
operations. Total costs associated with the business information systems
project are expected to be $4.0 million, most of that attributable to the
systems upgrade that was being done
Page 8 of 12
<PAGE>
independently of the Year 2000 problems. Approximately 80% of the costs
associated with the systems upgrade have already been incurred.
Failure to anticipate and correct the Year 2000 problem could result in an
interruption in or a failure of certain normal business activities including,
but not limited to, temporary plant closings, delays in the delivery of
products, delays in receipt of supplies, invoice and collection errors, delays
in the collection of receivables and inventory obsolescence. The Company
believes that with the implementation of the new business information systems
and completion of the other procedures contained in the Year 2000 plan
(particularly the analysis of third party vendor and customer Year 2000
compliance activities), that any significant interruptions and negative impacts
from Year 2000 problems will be reduced.
Liquidity and Capital Resources
Net cash provided by operating activities was $0.5 million and $1.2 million
for the six months ended June 30, 1998 and 1999, respectively. Net cash
provided by financing activities was $16.6 million and $0.4 million for the six
months ended June 30, 1998 and 1999, respectively. Net cash used in investing
activities was $13.3 million and $5.7 million for the periods ending June 30,
1998 and 1999, respectively.
Accounts receivable increased from $17.9 million at December 31, 1998, to
$19.8 million at June 30, 1999, as a result of increased sales in the second
quarter. Inventories increased from $15.0 million at December 31, 1998, to
$17.2 million at June 30, 1999, primarily as a result of increased work-in-
process and finished goods in anticipation of increased sales in the third
quarter.
The Company made capital expenditures of $3.2 million and $5.7 million for
the first six months of 1998 and 1999, respectively, and anticipates additional
capital spending for equipment, product tooling and test equipment for the
remainder of 1999. Capital expenditures for the second quarter of 1998 and 1999
were $1.6 million and $4.0 million, respectively.
The Company, in the second quarter of 1998, 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
$16.4 million had been drawn down as of June 30, 1999. 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 weighted
average interest rate at June 30, 1999 was 5.81%. 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.
Page 9 of 12
<PAGE>
The Revolving Facility contains various financial and operating covenants
which, among other things, impose 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 also has a credit facility available to the Egerton
subsidiaries, which includes an overdraft facility totaling approximately $5.0
million plus the combined cash balances of those subsidiaries, which were less
than $0.1 million at June 30, 1999. Also included are facilities, totaling
approximately $2.0 million, to provide financing for international letters of
credit, forward exchange contracts and other items. Outstanding borrowings (net
of cash balances) bear interest at the bank's base rate (6.25% at June 30, 1999)
plus a spread ranging from 1.25% to a maximum of 4% depending on the amount
borrowed. The facility is collateralized by the assets of the subsidiaries and
is due for renewal in August 1999.
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, Year 2000
compliance, integration of acquired businesses 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 10 of 12
<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)
Page 11 of 12
<PAGE>
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)
10.14 Lease dated September 24, 1997 between the Company and SCI North
Carolina Limited Partnership (4)
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 (5)
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)
10.23 Amendment to Employment Agreement, William H. Channell Jr., dated
December 31, 1998 (5)
11 Computation of Proforma Income per Share (2)
27 Financial Data Schedule (6)
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter ended June 30, 1999.
_______
(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-Q on May 6, 1998.
(5) Incorporated by reference to the indicated exhibits filed in connection
with the Company's Form 10-K on March 31, 1999.
(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 9, 1999 By: /s/ Gary W. Baker
--------------------------
Gary W. Baker
Chief Financial Officer
Page 12 of 12
<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, 1999 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-31-1999 DEC-31-1998
<PERIOD-START> JAN-01-1999 JAN-01-1998
<PERIOD-END> JUN-30-1999 DEC-31-1998
<CASH> 1841 5828
<SECURITIES> 0 0
<RECEIVABLES> 19829 17890
<ALLOWANCES> 0 0
<INVENTORY> 17203 14992
<CURRENT-ASSETS> 41115 40505
<PP&E> 44902 42081
<DEPRECIATION> 0 0
<TOTAL-ASSETS> 101174 98442
<CURRENT-LIABILITIES> 18412 20537
<BONDS> 0 0
0 0
0 0
<COMMON> 92 92
<OTHER-SE> 56996 52488
<TOTAL-LIABILITY-AND-EQUITY> 101174 98442
<SALES> 56013 92710
<TOTAL-REVENUES> 0 0
<CGS> 34078 56578
<TOTAL-COSTS> 0 0
<OTHER-EXPENSES> 13192 21490
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 1123 1342
<INCOME-PRETAX> 7625 13858
<INCOME-TAX> 3197 5749
<INCOME-CONTINUING> 4428 8109
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 4428 8109
<EPS-BASIC> .49 .88
<EPS-DILUTED> .49 .88
</TABLE>
