<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1999 Commission File Number 0-21917
--------------------
VDI MULTIMEDIA
(Exact name of registrant as specified in its charter)
California 95-4272619
(State of or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
7083 Hollywood Boulevard, Suite 200 90028
Hollywood, California (Zip Code)
(Address of principal
executive offices)
Registrant's telephone number, including area code (323) 957-7990
Securities registered pursuant to Section 12(b) of the Act
None.
Securities registered pursuant to Section 12(g) of the Act
Common Stock, no par value.
--------------
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 [ ]
As of November 12, 1999 there were 9,208,394 shares of Common Stock
outstanding.
<PAGE>
VDI MULTIMEDIA
CONSOLIDATED BALANCE SHEET
ASSETS
<TABLE>
<CAPTION>
December 31, September 30,
1998 1999
----------------- --------------------
(Unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 2,048,000 $ 508,000
Accounts receivable, net of allowances for doubtful
accounts of $878,000 and $950,000, respectively 17,329,000 18,342,000
Inventories 734,000 911,000
Prepaid expenses and other current assets 976,000 2,475,000
Deferred income taxes 917,000 1,083,000
----------------- --------------------
Total current assets 22,004,000 23,319,000
Property and equipment, net 17,655,000 20,987,000
Other assets, net 406,000 430,000
Goodwill and other intangibles, net 24,784,000 25,353,000
----------------- --------------------
Total assets $ 64,849,000 $ 70,089,000
================= ====================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 4,480,000 $ 5,100,000
Accrued expenses 1,528,000 2,397,000
Income taxes payable 548,000 -
Borrowings under revolving credit agreement 233,000 5,888,000
Current portion of notes payable 5,827,000 5,809,000
Current portion of capital lease obligations 525,000 230,000
----------------- --------------------
Total current liabilities 13,141,000 19,424,000
----------------- --------------------
Deferred income taxes 350,000 1,544,000
Notes payable, less current portion 22,234,000 17,883,000
Capital lease obligations, less current portion 214,000 78,000
Shareholders' equity:
Preferred stock; no par value; 5,000,000 authorized;
none outstanding - -
Common stock; no par value; 50,000,000 authorized; 9,776,094
and 9,208,394 shares, respectively, issued and outstanding 20,948,000 17,919,000
Retained earnings 7,962,000 13,241,000
----------------- --------------------
Total shareholders' equity 28,910,000 31,160,000
----------------- --------------------
$ 64,849,000 $ 70,089,000
================= ====================
</TABLE>
See accompanying notes to consolidated financial statements
<PAGE>
VDI MULTIMEDIA
CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------------------ ------------------------------------
1998 1999 1998 1999
----------------- ------------------ ----------------- -----------------
<S> <C> <C> <C> <C>
Revenues $ 16,419,000 $ 20,366,000 $ 42,312,000 $ 58,808,000
Cost of goods sold 9,886,000 12,551,000 25,578,000 34,967,000
----------------- ------------------ ----------------- -----------------
Gross profit 6,533,000 7,815,000 16,734,000 23,841,000
Selling, general and administrative expense 3,457,000 4,116,000 8,953,000 13,271,000
----------------- ------------------ ----------------- -----------------
Operating income 3,076,000 3,699,000 7,781,000 10,570,000
Interest expense 342,000 560,000 583,000 1,626,000
Interest income 3,000 - 19,000 3,000
----------------- ------------------ ----------------- -----------------
Income before income taxes 2,737,000 3,139,000 7,217,000 8,947,000
Provision for income taxes 1,122,000 1,287,000 2,959,000 3,668,000
----------------- ------------------ ----------------- -----------------
Net income $ 1,615,000 $ 1,852,000 $ 4,258,000 $ 5,279,000
================= ================== ================= =================
Earnings per share:
Basic:
Net income per share $ 0.17 $ 0.20 $ 0.44 $ 0.56
Weighted average number of shares 9,769,904 9,205,785 9,725,144 9,360,384
Diluted:
Net income per share $ 0.16 $ 0.19 $ 0.43 $ 0.55
Weighted average number of shares including
the dilutive effect of stock options 9,817,243 9,540,863 9,827,240 9,543,127
</TABLE>
See accompanying notes to consolidated financial statements
<PAGE>
VDI MULTIMEDIA
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended September 30,
-------------------------------------
1998 1999
---------------- -----------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 4,258,000 $ 5,279,000
Adjustment to reconcile net income
to net cash provided by operating activities:
Depreciation and amortization 3,553,000 3,672,000
Change in deferred taxes (746,000) 1,028,000
Provision for doubtful accounts 6,000 600,000
Changes in assets and liabilities:
Increase in accounts receivable (491,000) (1,613,000)
Increase in inventories (4,000) (177,000)
Decrease (increase) in prepaid expenses and other current assets 95,000 (1,499,000)
Increase in other assets (215,000) (24,000)
(Decrease) increase in accounts payable (1,587,000) 620,000
(Decrease) increase in accrued expenses (1,718,000) 869,000
Decrease in income taxes payable - (548,000)
---------------- -----------------
Net cash provided by operating activities 3,151,000 8,207,000
---------------- -----------------
Cash used in investing activities:
Capital expenditures (4,576,000) (5,772,000)
Net cash paid for acquisitions (16,436,000) (1,801,000)
---------------- -----------------
Net cash used in investing activities (21,012,000) (7,573,000)
Cash flows from financing activities:
Change in revolving credit agreement 16,878,000 5,655,000
Repurchase of common stock - (3,064,000)
Proceeds from exercise of stock options 1,728,000 35,000
Repayment of notes payable (877,000) (4,369,000)
Repayment of capital lease obligations (528,000) (431,000)
---------------- -----------------
Net cash provided by (used in) financing activities 17,201,000 (2,174,000)
Net decrease in cash (660,000) (1,540,000)
Cash at beginning of period 2,921,000 2,048,000
---------------- -----------------
Cash at end of period $ 2,261,000 $ 508,000
================ =================
Supplemental disclosure of cash flow information:
Cash paid for:
Interest $ 582,000 $ 1,626,000
================ =================
Income tax $ 3,724,000 $ 4,074,000
================ =================
</TABLE>
See accompanying notes to consolidated financial statements
<PAGE>
VDI MULTIMEDIA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 1999
NOTE 1 -- THE COMPANY
VDI MultiMedia ("VDI" or the "Company") is a leading provider of video and
film asset management services to owners, producers and distributors of
entertainment and advertising content. The Company provides the services
necessary to edit, master, reformat, archive and ultimately distribute its
clients' video content.
The Company provides physical and electronic delivery of commercials,
movie trailers, electronic press kits, infomercials and syndicated programming
to thousands of broadcast outlets worldwide. The Company provides worldwide
electronic distribution, using fiber optics and satellites, through its
Broadcast One(R) network. Additionally, the Company provides a broad range of
video services, including the duplication of video in all formats, element
storage, standards conversions, closed captioning and transcription services and
video encoding for air play verification purposes. The Company also provides its
customers value-added post production and editing services.
The Company seeks to capitalize on growth in demand for the services
related to the distribution of entertainment content, without assuming the
production or ownership risk of any specific television program, feature film or
other form of content. The primary users of the Company's services are
entertainment studios and advertising agencies that generally choose to
outsource such services due to the sporadic demand of any single customer for
such services and the fixed costs of maintaining a high-volume physical plant.
Since January 1, 1997, the Company has successfully completed seven
acquisitions of companies providing similar services. The latest of these
acquisitions occurred in November 1998 when the Company acquired the assets of
Dubs, Inc. ("Dubs"), one of the Company's largest direct competitors in
Hollywood. The Company will continue to evaluate acquisition opportunities to
enhance its operations and profitability. As a result of these acquisitions, VDI
believes it is one of the largest and most diversified providers of technical
and distribution services to the entertainment industry, and is therefore able
to offer its customers a single source for such services at prices that reflect
the Company's scale economies.
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles and the Securities and
Exchange Commission's rules and regulations for reporting interim financial
information. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring adjustments) considered necessary for a fair presentation
have been included. Operating results for the nine months ended September 30,
1999 are not necessarily indicative of the results that may be expected for the
year ending December 31, 1999. These financial statements should be read in
conjunction with the financial statements and related notes contained in the
Company's Form 10-K for the year ended December 31, 1998, as amended.
NOTE 2 -- STOCK REPURCHASE
In February 1999, the Company commenced a stock repurchase program. The
board of directors authorized the Company to allocate up to $4,000,000 to
purchase its common stock at suitable market prices. As of November 10, 1999,
the Company has repurchased 573,000 shares of the Company's common stock in
connection with this program.
<PAGE>
VDI MULTIMEDIA
MANAGEMENT'S DISCUSSION AND ANALYSIS
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
In connection with the "safe-harbor" provisions of the Private Securities
Litigation Reform Act of 1995, the Company, in its Annual Report on Form 10-K
for the year ended December 31, 1998, outlined cautionary statements identifying
important factors that could cause the Company's actual results to differ
materially from those projected in forward-looking statements made by, or on
behalf of, the Company. Such forward-looking statements, as made within this
Quarterly Report on Form 10-Q, should be considered in conjunction with the
information included in the Company's Annual Report on Form 10-K for the year
ended December 31, 1998, as amended, and the risk factors set forth in the
Company's Registration Statement on Form S-1 filed with the Securities and
Exchange Commission on February 19, 1997 and Registration Statement on Form S-3
filed with the Securities and Exchange Commission on June 29, 1998. Factors that
could cause future results to differ from the Company's expectations include,
but are not limited to, the following: competition, customer and industry
concentration, dependence on technological developments, risks related to
expansion and acquisition of new businesses, dependence on key personnel,
fluctuating results and seasonality and control by management.
THREE MONTHS ENDED SEPTEMBER 30, 1999 COMPARED TO THREE MONTHS ENDED SEPTEMBER
30, 1998.
REVENUES. Revenues increased by $4.0 million or 24.0% to $20.4 million for
the three month period ended September 30, 1999 compared to $16.4 million for
the three month period ended September 30, 1998. This increase in revenue was
due to increased volume resulting from (i) the acquisition of Dubs and (ii)
substantially increased marketing of the Company's services.
GROSS PROFIT. Gross profit increased $1.3 million or 19.6% to $7.8 million
for the three month period ended September 30, 1999 compared to $6.5 million for
the three month period ended September 30, 1998. As a percent of revenues, gross
profit decreased from 39.8% to 38.4%. The decrease in gross profit as a
percentage of revenues was due to increased outsourcing of the Company's
services during the consolidation of the Company's two largest facilities.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSE. Selling, general and
administrative expense increased $0.6 million, or 19.1%, to $4.1 million for the
three month period ended September 30, 1999 compared to $3.5 million for the
three month period ended September 30, 1998. As a percentage of revenues,
selling, general and administrative expense decreased to 20.2% for the three
month period ended September 30, 1999 compared to 21.1% for the three month
period ended September 30, 1998. This decrease was due to the spreading of fixed
overhead expenses over a higher revenue base in the three month period ended
September 30, 1999 compared to the same period in 1998.
OPERATING INCOME. Operating income increased $0.6 million or 20.3% to $3.7
million for the three month period ended September 30, 1999 compared to $3.1
million for the three month period ended September 30, 1998.
INTEREST EXPENSE. Interest expense increased $0.3 million, or 63.7%, to
$0.6 million for the three month period ended September 30, 1999 compared to
$0.3 million for the three month period ended September 30, 1998. This increase
was due to increased borrowings under the Company's debt agreements related to
the acquisition of Dubs.
INCOME TAXES. The Company's effective tax rate was 41% for the third
quarter of 1999 and 1998.
<PAGE>
VDI MULTIMEDIA
MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)
NET INCOME. Net income for the three month period ended September 30, 1999
increased $0.3 million or 14.7% to $1.9 million compared to $1.6 million for the
three month period ended September 30, 1998.
NINE MONTHS ENDED SEPTEMBER 30, 1999 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30,
1998.
REVENUES. Revenues increased by $16.5 million or 39.0% to $58.8 million
for the nine month period ended September 30, 1999 compared to $42.3 million for
the nine month period ended September 30, 1998. This increase in revenue was due
to increased volume resulting from (i) the acquisitions of All Post, Inc. ("All
Post"), Dubs, and The Dub House ("Dub House") and (ii) substantially increased
marketing of the Company's media services.
GROSS PROFIT. Gross profit increased $7.1 million or 42.5% to $23.8
million for the nine month period ended September 30, 1999 compared to $16.7
million for the nine month period ended September 30, 1998. As a percent of
revenues, gross profit increased from 39.5% to 40.5%. The increase in gross
profit as a percentage of revenues was due primarily to the lower cost of direct
materials resulting from scale purchasing discounts, offset by higher production
wages at Dubs.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSE. Selling, general and
administrative expense increased $4.3 million, or 48.2%, to $13.3 million for
the nine month period ended September 30, 1999 compared to $9.0 million for the
nine month period ended September 30, 1998. As a percentage of revenues,
selling, general and administrative expense increased to 22.6% for the nine
month period ended September 30, 1999 compared to 21.2% for the nine month
period ended September 30, 1998. This increase was due to increased amortization
costs associated with acquisitions and an increase in the Company's provision
for doubtful accounts.
OPERATING INCOME. Operating income increased $2.8 million or 35.8% to
$10.6 million for the nine month period ended September 30, 1999 compared to
$7.8 million for the nine month period ended September 30, 1998.
INTEREST EXPENSE. Interest expense increased $1.0 million, or 178.9%, to
$1.6 million for the nine month period ended September 30, 1999 compared to $0.6
million for the nine month period ended September 30, 1998. This increase was
due to increased borrowings under the Company's debt agreements related to the
acquisitions of the Dub House, All Post and Dubs.
INCOME TAXES. The Company's effective tax rate was 41% for the first nine
months of 1999 and 1998.
NET INCOME. Net income for the nine month period ended September 30, 1999
increased $1.0 million or 24.0% to $5.3 million compared to $4.3 million for the
nine month period ended September 30, 1998.
LIQUIDITY AND CAPITAL RESOURCES
This discussion should be read in conjunction with the notes to the
financial statements and the corresponding information more fully described in
the Company's Form 10-K, as amended, for the year ended December 31, 1998.
<PAGE>
VDI MULTIMEDIA
MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)
At September 30, 1999 the Company had $3.9 million in net working capital,
including $0.5 million in cash and cash equivalents. The Company's operating
activities provided cash of $8.2 million for the nine months ended September 30,
1999.
The Company's investing activities used cash of $7.6 million for the
nine months ended September 30, 1999. The Company spent approximately $5.8
million for the addition and replacement of capital equipment necessary to
consolidate newly acquired companies, accommodate increased customer demands
for the Company's services, and for investments in facilities and management
information systems. The Company's business is equipment intensive, requiring
periodic expenditures of cash or the incurrence of additional debt to acquire
additional fixed assets in order to increase capacity or replace existing
equipment. The Company expects to spend approximately $1.5 million on capital
expenditures during the last three months of 1999 to complete the
consolidation of newly acquired facilities, upgrade and replace equipment and
upgrade the Company's management information systems.
The Company's financing activities used cash of $2.2 million in the nine
months ended September 30, 1999. Cash flows from financing activities include a
$5.7 million increase in the Company's revolving credit agreement with Union
Bank of California (the "Bank"), used primarily to fund capital expenditures
related to the integration and consolidation of acquired companies and to
repurchase the Company's common stock in accordance with the Company's stock
repurchase program.
The Company has a $6.0 million revolving credit agreement with the Bank,
which expires on November 1, 2000. There was $5.9 million outstanding under the
credit agreement at September 30, 1999. The Company also had $23.7 million
outstanding on a term loan with the Bank at September 30, 1999.
Management believes that cash generated from its ongoing operations and
existing working capital will fund necessary capital expenditures and provide
adequate working capital for at least the next twelve months.
The Company, from time to time, considers the acquisition of businesses
complementary to its current operations. Consummation of any such acquisition or
other expansion of the business conducted by the Company may be subject to the
Company securing additional financing.
YEAR 2000 COMPLIANCE ISSUE
The Company is currently working to resolve the potential impact of the
Year 2000 problem on its computer systems and computerized equipment. The Year
2000 problem is a result of computer programs having been written using two
rather than four digits to identify an applicable year. Any information
technology systems that have time-sensitive software may recognize a date using
"00" as the year 1900 rather than the year 2000. The problem also extends to
non-information technology systems that rely on embedded chip systems.
The Company has divided the Year 2000 readiness task by the following
functional areas: IT infrastructure, business systems, operational systems,
facilities, and business partners. IT infrastructure includes the Company's wide
area networks, local area networks, servers, desktop computers, and telephone
systems. Business systems include mainframe and midrange computer hardware and
applications. Operational systems include equipment used for the Company's
day-to-day operations in the post-production business and editing and graphics
equipment. Facilities include fire, life, and safety equipment, elevators and
alarm systems. Business partners include suppliers and vendors, financial
<PAGE>
VDI MULTIMEDIA
MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)
institutions, benefit providers, payroll services, and customers. The Company
has appointed a task force chaired by its chief financial officer and
coordinated by its information systems director.
The Company has developed a four-phase approach to resolving the Year 2000
issues that are reasonably within its control. The four phases of the program
include inventory, assessment, remediation and testing, and implementation. The
inventory phase consists of a company wide inventory of computer hardware,
software, business applications, and operational and facilities equipment. The
inventory is then used to generate a master assessment list and identify
equipment vendors. The assessment phase consists of identifying at-risk systems
and products and ranking the products by criticality to the business. Each
product is then assigned to a task force member to determine whether the product
is in compliance and, if not, whether the system should be upgraded or replaced.
The remediation and testing phase consists of developing a project plan,
defining and implementing steps required to bring the systems or products into
compliance, defining a test plan to verify compliance, and documenting the test
results. The final phase is implementing remediation on systems and products
company wide.
The Company has been in the process of analyzing and upgrading its
information technology ("IT") systems (i.e., its IT infrastructure and business
systems) since early 1998, including upgrading all of its PC hardware, operating
systems, and office automation software. With respect to the remaining IT
systems, the Company has completed its inventory, assessment and testing phases.
With respect to non-IT systems, including operational systems and facilities
systems, the Company has completed its inventory, assessment and remediation and
testing phases and anticipates completion of the implementation phase by
November 30, 1999.
THIRD PARTIES. Like every other business, the Company is at risk from
potential Year 2000 failures on the part of its major business counterparts,
including suppliers, vendors, financial institutions, benefit providers, payroll
services, and clients, as well as potential failures in public and private
infrastructure services, including electricity, water, transportation, and
communications. The Company has initiated communications with significant third
party businesses to assess their efforts in addressing Year 2000 issues and is
in the process of determining the Company's vulnerability if these third parties
fail to remediate their Year 2000 problems. There can be no guarantee that the
systems of third parties will be timely remediated, or that such parties'
failure to remediate Year 2000 issues would not have a material adverse effect
on the Company.
COSTS. Costs incurred to date in addressing the Year 2000 issue have not
been material and are being funded through operating cash flows. The Company
anticipates that it may incur significant costs associated with replacing non-
compliant systems and equipment. In addition, the Company anticipates that it
will incur additional costs in the form of redeployment of internal resources
from other activities. The Company does not expect these redeployments to have a
material adverse effect on other ongoing business operations of the Company.
Based upon the information currently available to the Company, costs associated
with addressing the Year 2000 issue are expected to be between $350,000 and
$500,000.
RISKS. System failures resulting from the Year 2000 problem could
potentially affect operations and financial results in all aspects of the
Company's business. For example, failures could affect all aspects of the
Company's videotape duplication and distribution, post production and ancillary
operations, as well as inventory records, payroll operations, security, billing,
and collections. At this time the Company believes that its most likely worst
case scenario involves potential disruption in areas in which the Company's
operations must rely on third parties whose systems may not work properly after
January 1, 2000. As a result of Year 2000 related failures of the Company's or
third parties' systems, the Company could suffer a reduction in its operations.
Such a reduction may result in a fluctuation in the price of the Company's
common stock.
<PAGE>
VDI MULTIMEDIA
MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)
CONTINGENCY PLAN. The Company has developed a comprehensive contingency plan
with respect to the Year 2000 problem. Additionally, the Company has created a
task force comprised of financial and technical employees that is prepared to
address any Year 2000 issues as they arise.
<PAGE>
PART II - OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company's Annual Meeting of Shareholders was held on July 9, 1999. At
the meeting, shareholders voted on (i) the election of directors to hold office
until the next annual meeting of shareholders of the Company or until their
successors are duly elected and qualified, (ii) an amendment to the Company's
Articles of Incorporation, (iii) an amendment to the Company's 1996 Stock
Incentive Plan and (iv) approval of the appointment of PricewaterhouseCoopers
LLP as the Company's independent public accountants for the fiscal year ending
December 31, 1999.
1. Election of Directors
<TABLE>
<CAPTION>
Name Votes For Votes Against Votes Withheld Broker Non-Votes
- -------------------- --------- ------------- -------------- ----------------
<S> <C> <C> <C> <C>
R. Luke Stefanko 6,670,404 0 156,900 0
Donald R. Stine 6,670,404 0 156,900 0
Thomas J. Ennis 6,670,404 0 156,900 0
Robert S. Feuerman 6,670,404 0 156,900 0
Fred S. Teng 6,670,404 0 156,900 0
</TABLE>
2. The amendment to the Company's Restated Articles of Incorporation to change
its name to VDI MultiMedia was approved with 6,823,854 votes for the proposal,
3,450 votes against, 0 votes abstaining and 0 broker non-votes.
3. The proposal to amend the Company's 1996 Stock Incentive Plan was approved
with 5,585,076 votes for the proposal, 1,242,028 against, 200 votes abstaining
and 0 broker non-votes.
4. The appointment by the Board of Directors of the Company of
PricewaterhouseCoopers LLP as the Company's independent auditors for the fiscal
year ending December 31, 1999 was ratified with 6,826,249 for the proposal,
1,055 against the proposal, 0 votes abstaining and 0 broker non-votes.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBIT NO. DESCRIPTION
27 Financial Data Schedule
(b) REPORTS ON FORM 8-K
None.
<PAGE>
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.
VDI MULTIMEDIA
DATE: November 12, 1999 BY: /s/ Clarke W. Brewer
--------------------- --------------------
Clarke W. Brewer
Chief Financial Officer
and Treasurer
(duly authorized officer and
principal financial officer)
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> SEP-30-1999
<CASH> 508,000
<SECURITIES> 0
<RECEIVABLES> 19,292,000
<ALLOWANCES> (950,000)
<INVENTORY> 911,000
<CURRENT-ASSETS> 23,319,000
<PP&E> 37,391,000
<DEPRECIATION> (16,404,000)
<TOTAL-ASSETS> 70,089,000
<CURRENT-LIABILITIES> 19,424,000
<BONDS> 0
0
0
<COMMON> 17,919,000
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 70,089,000
<SALES> 58,808,000
<TOTAL-REVENUES> 58,808,000
<CGS> 34,967,000
<TOTAL-COSTS> 34,967,000
<OTHER-EXPENSES> 13,271,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,626,000
<INCOME-PRETAX> 8,947,000
<INCOME-TAX> 3,668,000
<INCOME-CONTINUING> 5,279,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,279,000
<EPS-BASIC> 0.56
<EPS-DILUTED> 0.55
</TABLE>
