<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------
FORM 10-Q
[ X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31, 1998
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period From _____ to _____
------------------------
Commission File Number 000-22973
CTB INTERNATIONAL CORP.
(Exact name of registrant as specified in the charter)
Delaware 35-1970751
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
State Road 15 North, P.O. Box 2000, Milford, IN 46542-2000
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (219)-658-4191
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 [ ]
At March 31, 1998, approximately 12,782,490 shares, par value $.01 per share, of
common stock of the Registrant were outstanding.
<PAGE> 2
CTB INTERNATIONAL CORP. AND SUBSIDIARIES
INDEX
<TABLE>
<CAPTION>
Page
<S> <C>
Part I
Financial Information
Item 1. Financial Statements
Condensed Consolidated Balance Sheets at December 31, 1997 and
March 31, 1998 1
Condensed Consolidated Income Statements for the Three Months
Ended March 31, 1997 and 1998 2
Pro Forma Condensed Consolidated Income Statements for the Three
Months Ended March 31, 1997 and 1998 3
Condensed Consolidated Statements of Cash Flows for the Three
Months Ended March 31, 1997 and 1998 4
Notes to Condensed Consolidated Financial Statements 5
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations 9
Part II
Other Information
Item 1. II-1
Item 4. II-1
Item 5. II-1
Item 6. II-1
Signature II-2
</TABLE>
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CTB International Corp. and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands, except share data)
(Unaudited)
<TABLE>
<CAPTION>
December 31, March 31,
1997 1998
--------- ---------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 1,161 $ 1,119
Accounts receivable - Net 23,875 24,819
Construction costs and estimated earnings in excess of billings -- 1,436
Inventories 25,352 26,688
Deferred income taxes 1,912 1,912
Prepaid expenses and other current assets 3,222 1,301
--------- ---------
Total current assets 55,522 57,275
PROPERTY, PLANT AND EQUIPMENT - Net 46,407 46,231
INTANGIBLES - Net 65,328 64,487
OTHER ASSETS 384 417
--------- ---------
TOTAL ASSETS $ 167,641 $ 168,410
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 10,598 $ 9,871
Current portion of long-term debt 1,245 1,195
Current portion of accrued Earn-Out 1,688 3,375
Accrued liabilities 11,810 13,562
Deferred revenue 3,863 3,825
--------- ---------
Total current liabilities 29,204 31,828
LONG-TERM DEBT 47,919 48,617
DEFERRED INCOME TAXES 9,369 9,365
ACCRUED POSTRETIREMENT BENEFIT COST 2,435 2,543
ACCRUED EARN-OUT 5,062 3,375
COMMITMENTS AND CONTINGENCIES (See Note 8)
MINORITY INTEREST 106 113
STOCKHOLDERS' EQUITY:
Common stock, $.01 par value; 40,000,000 shares authorized; 12,924,990
shares issued 129 129
Preferred stock - 6% cumulative, $.01 par value; 4,000,000
shares authorized; 0 shares issued and outstanding -- --
Treasury stock, at cost; 1997-0 shares, 1998-142,500 shares -- (1,877)
Additional paid-in capital 78,440 78,440
Reduction for carryover of predecessor cost basis (26,871) (26,871)
Retained earnings 22,401 23,788
Accumulated other comprehensive income: (See Note 10)
Cumulative translation adjustment (553) (1,040)
--------- ---------
Total stockholders' equity 73,546 72,569
--------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 167,641 $ 168,410
========= =========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
1
<PAGE> 4
CTB International Corp. and Subsidiaries
Condensed Consolidated Income Statements
(In thousands, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
For the Three Months Ended
March 31,
------------------------
1997 1998
<S> <C> <C>
NET SALES $ 31,520 $ 46,778
COST OF SALES 23,916 35,733
-------- --------
Gross profit 7,604 11,045
OTHER OPERATING EXPENSE:
Selling, general, and 4,549 7,506
administrative expenses
Amortization of goodwill 240 444
-------- --------
OPERATING INCOME 2,815 3,095
OTHER INCOME (EXPENSE) - Net (1,292) (845)
-------- --------
INCOME BEFORE INCOME TAXES 1,523 2,250
INCOME TAXES 605 863
-------- --------
NET INCOME $ 918 $ 1,387
======== ========
EARNINGS PER SHARE:
Basic: Earnings per common share $ 0.13 $ 0.11
======== ========
Weighted average common shares outstanding (1) 7,256 12,837
======== ========
Diluted: Earnings per common share $ 0.12 $ 0.11
======== ========
Weighted average common shares outstanding (1) 7,636 13,208
======== ========
</TABLE>
(1) Average number of common shares outstanding varies between periods
presented principally due to five million shares issued in the
Company's initial public offering, the exchange of all outstanding
preferred stock for 648 thousand shares of common stock on August 21,
1997 and 143 thousand shares repurchased by the Company during the
first quarter of 1998.
See accompanying notes to condensed consolidated financial statements.
2
<PAGE> 5
CTB International Corp. and Subsidiaries
Pro Forma Condensed Consolidated Income Statements (1)
(In thousands, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
For the Three Months Ended
March 31,
--------------------------
1997 1998
<S> <C> <C>
NET SALES $ 45,069 $ 46,778
COST OF SALES 32,942 35,733
-------- --------
Gross profit 12,127 11,045
OTHER OPERATING EXPENSE:
Selling, general, and 7,387 7,506
administrative expenses
Amortization of goodwill 449 444
-------- --------
Operating income 4,291 3,095
OTHER INCOME (EXPENSE) - Net (855) (845)
-------- --------
INCOME BEFORE INCOME TAXES 3,436 2,250
INCOME TAXES 1,359 863
-------- --------
NET INCOME $ 2,077 $ 1,387
======== ========
EARNINGS PER SHARE:
Basic: Earnings per common share $ 0.16 $ 0.11
======== ========
Weighted average common shares outstanding 12,925 12,837
======== ========
Diluted: Earnings per common share (2) $ 0.16 $ 0.11
======== ========
Weighted average common shares outstanding (2) 13,339 13,208
======== ========
</TABLE>
(1) The pro forma income statements give effect to the following
transactions as if they had been completed on January 1, 1997: (i) the
Kansas City Grain Systems Division Acquisition, (ii) the Fancom
Acquisition, (iii) the repayment of all amounts outstanding under the
Old Credit Agreement with the proceeds of borrowings under the New
Credit Agreement and a portion of the net proceeds of the Offering,
(iv) the Stock Split, (v) the Preferred Stock Exchange, (vi) the
Preferred Stock Redemption and (vii) the Offering. The pro forma data
do not purport to be indicative of the Company's actual results of
operations that would have been reported had such events actually
occurred on the dates specified.
(2) Pro forma diluted earnings per share is calculated by dividing net
income by the pro forma weighted average common and common equivalent
shares outstanding, after giving effect to the following transactions
as if they had been completed on January 1, 1997: (i) the Stock Split,
(ii) the Preferred Stock Exchange, (iii) the Preferred Stock Redemption
and (iv) the Offering.
See accompanying notes to condensed consolidated financial statements.
3
<PAGE> 6
CTB International Corp. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
For the Three Months Ended
March 31,
--------------------------
1997 1998
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 918 $ 1,387
Adjustments to reconcile net income to net cash flows
from operating activities:
Depreciation 1,135 1,506
Amortization 312 585
Gain on sale of assets (24) (241)
Changes in operating assets and liabilities:
Accounts receivable (2,610) (944)
Construction costs and estimated earnings in excess of billings -- (1,436)
Inventories (833) (1,336)
Prepaid expenses and other assets 313 1,628
Accounts payable, accruals and other liabilities 2,357 1,102
------- -------
Net cash flows from operating activities 1,568 2,251
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property, plant and equipment (897) (1,455)
Proceeds from sale of assets 37 504
------- -------
Net cash flows from investing activities (860) (951)
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Purchase of treasury stock -- (1,877)
Proceeds from long-term debt 5,425 8,398
Payments on long-term debt (6,200) (7,700)
------- -------
Net cash flows from financing activities (775) (1,179)
------- -------
NET INCREASE IN CASH AND CASH EQUIVALENTS (67) 121
NET EFFECT OF TRANSLATION ADJUSTMENT -- (163)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 258 1,161
------- -------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 191 $ 1,119
======= =======
</TABLE>
See accompanying notes to condensed consolidated financial statements.
4
<PAGE> 7
CTB INTERNATIONAL CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and Article
10 of Regulation S-X. 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 accruals) considered necessary for a fair presentation have
been included. Operating results for the three month period ended March 31,
1998, are not necessarily indicative of the results that may be expected for the
year ending December 31, 1998. For further information, refer to the Company's
Form 10-K for the fiscal year ended December 31, 1997 which includes the
Company's annual audited financial statements.
NOTE 2. INVENTORIES
Inventories consist of the following (in thousands):
<TABLE>
<CAPTION>
December 31, March 31,
1997 1998
---- ----
<S> <C> <C>
Raw material $ 7,878 $ 7,349
Work in process 3,872 3,487
Finished goods 13,602 15,852
------- -------
25,352 26,688
LIFO valuation allowance -- --
------- -------
Total $25,352 $26,688
======= =======
</TABLE>
NOTE 3. CONTRACTS IN PROCESS
Construction contracts in process consist of the following (in thousands):
<TABLE>
<CAPTION>
December 31, March 31,
1997 1998
<S> <C> <C>
Costs incurred on uncompleted contracts $3,486 $6,244
Estimated earnings 148 150
------ ------
3,634 6,394
Less: Billings to date 3,634 4,958
------ ------
Costs and estimated earnings in excess
of billings on uncompleted contracts $ -- $1,436
====== ======
</TABLE>
5
<PAGE> 8
NOTE 4. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment consist of the following (in thousands):
<TABLE>
<CAPTION>
December 31, March 31,
1997 1998
---- ----
<S> <C> <C>
Land and improvements $ 2,576 $ 2,576
Buildings and improvements 18,853 18,484
Machinery and equipment 31,322 34,242
Construction in progress 2,405 1,101
-------- --------
55,156 56,403
Less accumulated depreciation (8,749) (10,172)
-------- --------
Total $ 46,407 $ 46,231
======== ========
</TABLE>
NOTE 5. INTANGIBLES
Intangibles consist of the following (in thousands):
<TABLE>
<CAPTION>
December 31, March 31,
1997 1998
---- ----
<S> <C> <C>
Goodwill $ 66,099 $ 65,844
Accumulated amortization (2,251) (2,786)
-------- --------
Goodwill - Net 63,848 63,058
-------- --------
Deferred finance costs 2,105 2,105
Accumulated amortization (625) (676)
-------- --------
Deferred finance costs - Net 1,480 1,429
-------- --------
Total $ 65,328 $ 64,487
======== ========
</TABLE>
NOTE 6. GAIN ON SALE OF VINYL DIVISION
On May 29, 1997 the Company sold substantially all assets (other than
accounts receivable) relating to its PVC deck, dock and fence business for
approximately $8.2 million to a subsidiary of Royal Group Technologies Limited.
The sale resulted in an approximate $3.6 million pre-tax gain with a related tax
expense of approximately $2.5 million. In conjunction with the sale, the Company
entered into a joint venture with the acquirer to produce certain extruded PVC
agricultural equipment component parts for the Company for a period of five
years.
NOTE 7. BUSINESS COMBINATIONS
On May 1, 1997, the Company acquired all the capital stock of Fancom Holding
B.V. ("Fancom Acquisition"). Based in The Netherlands, Fancom is a manufacturer
and marketer of climate control systems and software applications for the
agricultural equipment industry. The purchase price of $12.6 million, net of
cash acquired and including expenses, was financed through borrowings.
On June 23, 1997, the Company acquired substantially all of the assets of
Butler Manufacturing Company's Grain Systems Division ("Kansas City Grain
Systems Division Acquisition"). Based in Kansas City, Missouri, Kansas City
Grain Systems Division manufactures grain storage bins and markets grain
storage, conditioning and handling systems for grain producers and processors
throughout the world. The purchase price of $33.3 million, net of cash acquired
and including expenses, was financed through borrowings.
6
<PAGE> 9
Both transactions were accounted for under the purchase method of accounting.
Accordingly, the purchase prices have been allocated to the acquired assets and
liabilities based on their fair market values as of the dates of acquisition
with the remainder charged to goodwill which will be amortized on a
straight-line basis over 25 years for Fancom and over 40 years for Kansas City
Grain Systems Division. Fancom's and Kansas City Grain Systems Division's
financial statements subsequent to the acquisitions are consolidated and
included in the Company's Consolidated Balance Sheet as of December 31, 1997 and
the Consolidated Statements of Income and Consolidated Statements of Cash Flows
for the year ended December 31, 1997. The purchase prices have been allocated as
follows:
<TABLE>
<CAPTION>
(In thousands)
--------------
<S> <C>
Current assets $ 23,779
Property, plant and equipment 12,927
Intangibles and other assets 25,651
Long-term debt assumed (5,854)
Liabilities assumed (10,590)
--------
Total purchase price $ 45,913
========
</TABLE>
The unaudited pro forma income statements included in this Form 10-Q assume
that the acquisitions had occurred at the beginning of the periods presented and
the purchase price was the same. The unaudited pro forma results have been
prepared for comparative purposes only and do not purport to represent what the
results of operations would have been if the acquisitions had actually occurred
on January 1, 1997 or to project future results.
NOTE 8. COMMITMENTS AND CONTINGENCIES
There are various claims and pending legal proceedings against the Company
involving matters arising out of the ordinary conduct of business. While the
Company is unable to predict with certainty the outcome of current proceedings,
based upon the facts currently known to it, the Company does not believe that
resolution of these proceedings will have a material adverse effect on its
financial condition and results of operations.
Pursuant to the Stock Purchase Agreement, the Company has agreed to make
certain contingent payments to the Predecessor Company stockholders (the
"Earn-Out Amount") based on a calculation of cumulative Earnings Before
Interest, Taxes, Depreciation and Amortization ("EBITDA") calculated in
accordance with the Stock Purchase Agreement. The Earn-Out Amount is determined
based on cumulative EBITDA for the three-year period ended December 31, 1998.
The cumulative EBITDA target is subject to adjustment in the event of any
merger, acquisition, divestiture or other extraordinary transaction. A recent
amendment to the Stock Purchase Agreement to give effect to the Kansas City
Grain Systems Division Acquisition, the Fancom Acquisition and the Vinyl
Division Divestiture has revised the EBITDA target from $89.5 million to $103.4
million.
The Company could be liable to pay the Predecessor Company stockholders up to
a maximum amount equal to $13.5 million, which would be recorded as an
adjustment to the purchase price for the Acquisition. Fifty percent of the
maximum Earn-out Amount is to be paid at the attainment of 85% of the cumulative
EBITDA target, with payment increasing on a linear scale up to the target
amount. No payment is required unless 85% of the cumulative EBITDA target is
attained. At December 31, 1997, the Company recorded a $6.75 million liability
with the expectation of attaining, at a minimum, 85% of the cumulative EBITDA
target.
If an Earn-Out Amount is payable, the Company is obligated to pay the
Earn-Out Amount in four semi-annual installments beginning on August 31, 1998.
The first installment is equal to 25% of the estimated Earn-Out Amount, the
second installment is equal to 50% of the actual Earn-Out Amount minus the
amount of the first installment, and the third and fourth installments are each
equal to 25% of the actual
7
<PAGE> 10
Earn-Out Amount. Accrued interest from January 1, 1999 at the prime rate on the
last business day of 1998 will be payable on the third and fourth installments,
provided that interest at such interest rate on the first installment payment
from August 31, 1998 to December 31, 1998 will be credited against such amount.
NOTE 9. TREASURY STOCK
In February 1998, the Company repurchased 142,500 shares of its common stock
in accordance with an authorization by the Board of Directors to repurchase up
to 500,000 common shares. The share repurchase program was implemented to
provide stock for the exercise of stock options and to take advantage of
opportunities that may arise in the financial markets. The shares repurchased
are accounted for under the cost method and reported as "Treasury Stock" and
result in a reduction of "Stockholders' Equity." When treasury shares are
reissued, the Company uses a first-in, first-out method and the difference in
repurchase cost and the reissuance price is treated as an adjustment to
"Additional Paid-in Capital."
NOTE 10. NEW ACCOUNTING PRONOUNCEMENT
Effective January 1, 1998, the Company adopted Statement of Financial
Accounting Standards No 130, "Reporting Comprehensive Income" (SFAS 130). This
statement establishes standards for reporting and display of comprehensive
income and its components. This standard expands prior year disclosures and,
accordingly, has no impact on the company's reported financial position, results
of operations and cash flows. Comprehensive income at March 31, 1997 and 1998
was $0.9 million and $0.9 million, respectively. Net income was adjusted by the
change in the cumulative translation adjustment to arrive at comprehensive
income.
NOTE 11. SUBSEQUENT EVENT
On April 24, 1998, CTB International Corp. signed a letter of intent to
acquire Sibley Industries, Inc. of Anderson, Missouri. Sibley Industries is a
leading manufacturer of poultry brooders, units that provide warmth to enhance
the growing environment of young birds, as well as heaters and handling
equipment for livestock.
8
<PAGE> 11
ITEM 2
CTB INTERNATIONAL CORP. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This commentary should be read in conjunction with the Company's Securities
and Exchange Commission filings, including, but not limited to the Company's
Form 10-K for the fiscal year ended December 31, 1997 which includes the
Company's annual audited financial statements for a full understanding of the
Company"s financial condition and results of operations.
RESULTS OF OPERATIONS
The Company manufactures and markets automated feeding, watering and
ventilation systems, feed bins, grain storage bins and integrated commercial egg
laying and handling systems for the poultry, swine, grain and egg production
industries.
THREE MONTHS ENDED MARCH 31, 1998 COMPARED WITH THREE MONTHS ENDED MARCH 31,
1997
Net sales increased 48.4% to $46.8 million for the three months ended March
31, 1998 compared to $31.5 million in the corresponding period of 1997. The
Fancom Acquisition and the Kansas City Grain Systems Division Acquisition
accounted for a large portion of the sales growth. In addition, strong growth in
the domestic poultry market and healthy sales of the Company"s ventilation and
controls products and the Charoen Pokphand project, in which the Company is
serving as turnkey provider of broiler and breeder buildings as well as complete
integrated packages of CHORE-TIME(R) feeding, watering, ventilation and control
systems. These various favorable components helped offset the revenues lost
through the Vinyl Division Divestiture, the Asian financial crisis and wet
weather in certain market areas.
Gross profit increased 45.3% to $11.0 million in the three months ended March
31, 1998 or 23.6% of net sales compared to $7.6 million in the corresponding
period of 1997 or 24.1% of net sales. The gross profit margin decrease of 0.5%
was attributable to sales increases in lower margin ventilation products, the
sale of poultry buildings under projects expected to last into the fourth
quarter of 1999 and the Asian financial crisis which has reduced our exports of
higher margin products to customers in the region offset somewhat by sales of
higher margin Fancom products.
Selling, general and administrative expenses increased 65.0% or $3.0 million
to $7.5 million in the three months ended March 31, 1998 from $4.5 million in
the corresponding period of 1997. As a percent of net sales, selling, general
and administrative expenses were 16.0% in the three months ended March 31, 1998
and 14.4% in the corresponding period of 1997. The dollar increase is primarily
attributable to the Kansas City Grain Systems Division Acquisition, the Fancom
Acquisition and targeted investments in certain key areas within the Company.
The increase as a percentage of net sales was primarily attributed to the Fancom
Acquisition which historically has a higher selling, general and administrative
costs as a percentage of sales, investments in key international markets,
additional costs of being a public company, implementation costs relating to the
conversion to our new integrated software system on February 1, 1998 and
partially offset by a $0.2 million non-recurring gain on sale of assets.
Amortization of goodwill increased to $0.4 million in the three months ended
March 31, 1998 or 85.0% from $0.2 million in the corresponding period for 1997.
The increase is attributable to the amortization of goodwill purchased in the
Fancom Acquisition, the Kansas City Grain Systems Division Acquisition offset by
the goodwill sold in the Vinyl Division Divestiture.
9
<PAGE> 12
Operating income increased 9.9% or $0.3 million to $3.1 million in the three
months ended March 31, 1998 compared to $2.8 million in the corresponding period
of 1997. Operating income margins decreased to 6.6% of net sales in the three
months ended March 31, 1998 from 8.9% of net sales in the corresponding period
of 1997. The decrease in operating income margins is due to the decline in gross
profit margins, the increase in selling, general and administrative expenses and
the increase in amortization expense.
Interest expense decreased to $0.8 million in the three months ended March
31, 1998 or 34.6% from $1.3 million in the corresponding period in 1997. The
decrease is due to reduced debt as a result of the Offering and the Vinyl
Division Divestiture offset by additional borrowings incurred to finance the
Fancom Acquisition and the Kansas City Grain Systems Division Acquisition.
Net income increased 51.1% or $0.5 million to $1.4 million in the three
months ended March 31, 1998 from $0.9 million for the corresponding period of
1997. The increase was due to higher operating income and lower interest
expense, and a lower effective tax rate due to a higher proportion of pre-tax
income coming from a subsidiary with a lower marginal tax rate.
EFFECTS OF VINYL DIVISION DIVESTITURE
The following summarizes certain operating results of the Company for the
three month period ended March 31, 1997 and 1998 on a pro forma basis giving
effect to the following transactions as if they had occurred on January 1, 1997:
(i) the Kansas City Grain Systems Division Acquisition, (ii) the Fancom
Acquisition, (iii) the Vinyl Division Divestiture, (iv) the repayment of amounts
outstanding under the Existing Credit Agreement with the proceeds of borrowings
under the New Credit Agreement and a portion of the net proceeds of the
Offering, (v) the Stock Split, (vi) the Preferred Stock Exchange, (vii) the
Preferred Stock Redemption, and (viii) the Offering.
For the three months ended March 31, 1998, net sales increased approximately
9.3% to approximately $46.8 million compared to approximately $42.8 million in
the corresponding period in 1997. Operating income decreased approximately 24.4%
to approximately $3.1 million compared to approximately $4.1 million in the
corresponding period in 1997. Net income decreased approximately 30.0% to
approximately $1.4 million compared to approximately $2.0 million in the
corresponding period in 1997.
FINANCIAL POSITION
Changes in the financial position of the Company from December 31, 1997 to
March 31, 1998 were due to operational changes.
Total assets increased from $167.6 million at December 31, 1997 to $168.4
million at March 31, 1998. Accounts receivable increase by $0.9 million from
December 31, 1997 to March 31, 1998. At March 31, 1998, construction costs in
excess of billings were $1.4 million. This balance is the result of construction
progress on the poultry broiler and breeder projects. Inventories at March 31,
1998 increased by $1.3 million from December 31, 1997. The increase was due to
higher inventory levels in anticipation of higher order levels for the spring
season. Net property, plant and equipment decreased $0.2 million from December
31, 1997 to March 31, 1998. The net decrease was due primarily to asset
additions more than offset by additional accumulated depreciation for the
period. Intangibles decreased by $0.8 million from December 31, 1997 to March
31, 1998 due to amortization of goodwill and loan costs.
Total liabilities increased $1.7 million from $94.1 million at December 31,
1997 to $95.8 at March 31, 1998. Accounts payable and accrued liabilities
increased $1.0 million during this period. Long-term debt increased $0.6 million
from $49.2 million at December 31, 1997 to $49.8 million at March 31, 1998 due
to revolver borrowings to support seasonal operational changes. The current
portion of the Accrued Earn-Out increased by $1.7 million while the long-term
portion of the Accrued Earn-Out decreased by the same amount as the second
installment due on February 28, 1999 was recognized as a current liability.
10
<PAGE> 13
Total stockholders' equity decreased $1.0 million due to treasury stock
purchases and changes in cumulative translation adjustment offset by net income
for the period.
LIQUIDITY AND CAPITAL RESOURCES
As of March 31, 1998, the Company had $25.4 million of working capital, a
decrease of $0.9 million from working capital as of December 31, 1997. Net cash
provided from operating activities for the three months ended March 31, 1998 was
$2.3 million. Cash flows from operations was primarily provided by net income
and decreases in working capital.
For the three months ended March 31, 1998, cash used in investing activities
was $1.0 million, which was used for acquisitions of assets offset by the sale
of assets. For the three months ended March 31, 1997, cash used in investing
activities was $0.9 million, used for acquisitions of assets.
For the three months ended March 31, 1998, net cash used by financing
activities was $1.2 million. During this period there was a net $0.8 million
increase in cash flows from revolver activity offset by a $1.9 million use of
cash for treasury stock purchases.
The Company believes that existing cash, cash flows from operations and
available borrowings under the New Credit Agreement will be sufficient to
support its working capital, capital expenditures and debt service requirements
for the foreseeable future.
SEASONALITY
Sales of agricultural equipment are seasonal, with poultry, swine and egg
producers purchasing equipment during prime construction periods in the spring,
summer and fall and farmers traditionally purchasing grain storage bins in the
summer and fall in conjunction with the harvesting season. The Company's net
sales and net income have historically been lower during the first and fourth
fiscal quarters as compared to the second and third quarters as distributors and
dealers increase inventory in anticipation of seasonal demand.
The following table presents unaudited interim operating results of the
Company. The Company believes that the following information includes all
adjustments (consisting only of normal, recurring adjustments) that the Company
considers necessary for a fair presentation for the respective periods. The
operating results for any interim period are not necessarily indicative of
results for any interim period or the entire fiscal year.
<TABLE>
<CAPTION>
(In thousands, except per share amounts) Three Months Ended
- -------------------------------------------------------------------------------------------------------------
March 31, March 31, June 30, September 30, December 31,
1998 1997 1997 1997 1997
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Sales $46,778 $31,520 $50,644 $71,740 $48,159
Gross profit 11,045 7,604 13,701 20,590 11,823
Gross margin 23.6% 24.1% 27.1% 28.7% 24.5%
Operating income $ 3,095 $ 2,815 $ 6,956 $12,186 $ 3,882
Operating income margin 6.6% 8.9% 13.7% 17.0% 8.1%
Net income $ 1,387 $ 918 $ 4,649 $ 6,375 $ 1,957
Basic earnings per share $ 0.11 $ 0.13 $ 0.64 $ 0.65 $ 0.15
Basic weighted average common
shares outstanding 12,837 7,256 7,259 9,733 12,925
Diluted earnings per share $ 0.11 $ 0.12 $ 0.61 $ 0.63 $ 0.15
Diluted weighted average common
shares outstanding 13,208 7,636 7,652 10,149 13,360
</TABLE>
11
<PAGE> 14
FORWARD LOOKING STATEMENTS
Certain statements contained herein under (i) ability to support future
working capital needs, (ii) seasonality of the Company's business, contain
certain forward-looking statements concerning the Company's operations, economic
performance and financial condition, and (iii) construction progress, timing of
completion and impact on gross margin of building construction projects. Because
such statements involve risks and uncertainties, actual results may differ
materially from those expressed or implied by such forward-looking statements.
12
<PAGE> 15
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
See Note 12 to PART I, Item 1
Item 4. Submission of Matters to a Vote of Security Holders
At the Annual Meeting of Stockholders held on May 5, 1998, the
following proposals were adopted by the margins indicated.
1. To elect a Board of Directors for a term of one (1) year.
<TABLE>
<CAPTION>
Number of Shares
-----------------------------------------
For Percent (of votes cast)
--- -----------------------
<S> <C> <C>
Caryl M. Chocola 11,439,463 99.7%
J. Christopher Chocola 11,439,463 99.7%
Michael G. Fisch 11,439,463 99.7%
Larry D. Greene 11,439,463 99.7%
Frank S. Hermance 11,439,463 99.7%
David L. Horing 11,439,463 99.7%
Charles D. Klein 11,439,463 99.7%
</TABLE>
2. To ratify the selection by the Board of Directors of Deloitte
& Touche LLP as independent auditors for the Company for the
year ending December 31, 1998.
For 11,442,662
Against 33,301
Abstain 400
Item 5. Other Information
See Note 9 to PART I, Item 1
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits
3.1 The Restated Certificate of Incorporation of the Company
filed as Exhibit 3.1 to the Company's Registration
Statement on Form S-1 (Registration No. 333-29873) (the
"Registration Statement") and incorporated herein by
reference.
3.2 The By-laws of the Company filed as Exhibit 3.2 to the
Registration Statement and incorporated herein by
reference.
4.1 Certificate of Common Stock of the Company filed as
Exhibit 4.1 to the Registration Statement and
incorporated herein by reference.
II-1
<PAGE> 16
10.1 Form of Non-Qualified Stock Option Agreement.
10.2 Credit Agreement, dated as of August 15, 1997, among
CTB, Inc. and Chore-Time Brock Holding B.V. as
borrowers, the lending institutions named therein as
Lenders and Key Bank National Association as
Administrative Agent, to be filed by amendment.
11. Computation of Earnings Per Share.
27. Financial Data Schedule.
b) Reports on Form 8-K.
No reports on Form 8-K were filed by the Company during the
quarter ended March 31, 1998.
Items 2 and 3 are not applicable and have been omitted.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CTB International Corp.
Dated: May 15, 1998 By ___________________________________
Don J. Steinhilber
Vice President, Chief Financial Officer
II-2
<PAGE> 1
NON-QUALIFIED STOCK OPTION AGREEMENT
AGREEMENT, effective as of January 1, 1998, between CTB International
Corp., a Delaware corporation (the "Company"), and ___________________ (the
"Optionee").
W I T N E S S E T H :
WHEREAS, the Company, acting through its Board of Directors (the "Board")
has granted to the Optionee, effective as of the date of this Agreement, an
option to purchase shares of common stock, $.01 par value per share, of the
Company (the "Common Stock"), on the terms and subject to the conditions set
forth in this Agreement;
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements contained in this Agreement, the parties hereto agree as follows:
SECTION 1. Definitions. As used in this Agreement, the following terms
have the meanings set forth below:
"Affiliate" of any Person means any other Person directly or
indirectly controlled by, controlling, or under common control with
such Person.
"Board" means the Board of Directors of the Company.
"Cause" means action by the Optionee that constitutes misconduct,
dishonesty, the failure to comply with specific directions of the Board
of Directors or any senior executive officer of the Company (after
having been given a reasonably detailed written notice of, and a period
of 20 days to cure, such misconduct or failure), a deliberate and
premeditated act against the Company or its Affiliates or the
commission of a felony. Any voluntary termination of employment by the
Optionee in anticipation of an involuntary termination of the
Optionee's employment for Cause shall be deemed to be a termination for
Cause.
"Fair Market Value" of a share of Common Stock on any date shall
be, if the Common Stock is listed on a national stock exchange, the
officially quoted closing price on such stock exchange, or if the
Common Stock is listed on the NASDAQ National Market, the officially
quoted closing price on NASDAQ, or, if the Common Stock is listed on
NASDAQ but not on the National Market, the average of the closing bid
and asked prices reported by NASDAQ, in each case on the date as of
which the value is to be determined (or if such date is not a trading
day, as of the preceding trading day), or if the Common Stock is not
so listed, the fair market value determined in good faith by the
Board.
"Option" has the meaning ascribed to such term in Section 2 of
this Agreement.
"Option Shares" has the meaning ascribed to such term in Section
2 of this Agreement.
"Person" means any individual, partnership, corporation, group,
trust or other legal entity.
<PAGE> 2
Page 2
"Shares" means, collectively, the shares of Common Stock subject
to the Option, whether such shares are Option Shares or Vested Shares.
"Transaction" means (a) any consolidation or merger of the
Company in which the Company is not the surviving corporation other
than a merger solely to effect a reincorporation or a merger of the
Company as to which stockholder approval is not required pursuant to
Sections 251(f) or 253 of the Delaware General Corporation Law, or (b)
any sale, lease, exchange or other transfer (other than dividends) (in
one transaction or a series of related transactions) of all or
substantially all of the assets or earning power of the Company, or
(c) the adoption of any plan or proposal for the liquidation or
dissolution of the Company.
"Vested Shares" means the Option Shares with respect to which
the Option is exercisable at any particular time.
SECTION 2. Option; Option Price. On the terms and subject to the
conditions of this Agreement, the Optionee shall have the option (the "Option")
to purchase up to __________ shares (the "Option Shares") of Common Stock at
the price per Option Share equal to the closing price of publicly traded common
stock of the Company as listed on the NASDAQ National Market as of the close of
said market on December 31, 1997 (the "Option Price").
SECTION 3. Term. The term of the Option (the "Option Term") shall
commence on the date hereof and expire on the tenth anniversary of the date
hereof, unless the Option shall theretofore have been terminated in accordance
with the terms of this Agreement.
SECTION 4. Time of Exercise.
(a) The Option shall become vested and exercisable as to the following
portions of the Option Shares:
<TABLE>
<CAPTION>
Vesting Date Vested and Exercisable Percent of Option Shares
- ------------ -----------------------------------------------
<S> <C>
Three (3) Years Following 50%
the Date of This Agreement
Six (6) Years Following 50%
the Date of This Agreement
</TABLE>
(b) Except as otherwise provided in Section 6, the Option shall remain
exercisable as to all such Vested Shares until the expiration of the Option
Term.
SECTION 5. Procedure for Exercise.
<PAGE> 3
Page 3
(a) The Option may be exercised with respect to Vested Shares, from
time to time, in whole or in part (but for the purchase of whole shares only),
by delivery of a written notice (the "Exercise Notice") from the Optionee to the
Company, which Exercise Notice shall:
(i) state that the Optionee elects to exercise the Option;
(ii) state the number of Vested Shares with respect to which the
Optionee is exercising the Option;
(iii) include any representations of the Optionee required under Section
8 hereof;
(iv) in the event that the Option shall be exercised by the
representative of the Optionee's estate pursuant to Section 6, include
appropriate proof of the right of such Person to exercise the Option;
(v) state the date upon which the Optionee desires to consummate the
purchase of such Vested Shares (which date must be prior to the termination
of the Option); and
(vi) comply with such further provisions as the Company may reasonably
require.
(b) Payment of the Option Price for the Vested Shares to be purchased
on the exercise of the Option shall be made by certified or bank cashier's check
payable to the order of the Company, delivery of shares of Common Stock, valued
at their Fair Market Value as of the trading day immediately prior to the date
of exercise (including shares of Common Stock acquired upon exercise of this
Option) or by a combination of any of the foregoing means of payment.
(c) As a condition to the exercise of the Option and prior to the
issuance of any Vested Shares, the Optionee (or the representative of his
estate) shall be required to execute a Stockholders' Agreement (the
"Stockholders' Agreement") among the Company, the Optionee (or representative)
and the other stockholders of the Company, in the form attached hereto as Annex
I.
(d) The Company shall be entitled to require as a condition of
delivery of the Vested Shares that the Optionee agree to remit when due an
amount in cash sufficient to satisfy all current or estimated future federal,
state and local withholding and employment taxes relating thereto.
SECTION 6. Termination of Employment. All or any part of the Option,
to the extent unexercised, shall terminate immediately upon the Optionee's
termination of employment with the Company or any of its Affiliates, except that
the Optionee shall have until the end of the third month following the date of
such termination of employment to exercise any portion of the Option that he
could have exercised on the date of such termination of employment; provided,
however, that such exercise must be
<PAGE> 4
Page 4
accomplished prior to the expiration of the Option Term. Notwithstanding the
foregoing, if the Optionee's termination of employment is due to his retirement,
total and permanent disability (as determined by the Board), or death, the
Optionee, or the representative of the estate of the Optionee, as the case may
be, may exercise any portion of the Option which the Optionee could have
exercised on the date of such termination of employment for a period of six
months thereafter; provided, however, that such exercise must be accomplished
prior to the expiration of the Option Term. Notwithstanding the foregoing, in
the event of a termination of the Optionee's employment with the Company or any
of its Affiliates for Cause, the unexercised portion of the Option shall
terminate immediately and the Optionee shall have no right thereafter to
exercise any part of the Option.
SECTION 7. No Rights as a Stockholder. The Optionee shall not have
any rights or privileges of a stockholder with respect to any Shares until the
date of acceptance by the Company of payment for such Shares pursuant to the
exercise of the Option.
SECTION 8. Additional Provisions Related to Exercise. In the event
of the exercise of the Option at a time when there is not in effect a
registration statement under the Securities Act of 1933, as amended, relating to
the Shares, the Optionee hereby represents and warrants, and by virtue of such
exercise shall be deemed to represent and warrant, to the Company that the
Option Shares are being acquired for investment only and not with a view to the
distribution thereof, and the Optionee shall provide the Company with such
further representations and warranties as the Board may reasonably require in
order to ensure compliance with applicable federal and state securities, "blue
sky" and other laws. No Shares shall be purchased upon the exercise of the
Option unless and until the Company and/or the Optionee shall have complied with
all applicable federal or state registration, listing and/or qualification
requirements and all other requirements of law or of any regulatory agencies
having jurisdiction.
SECTION 9. Restriction on Transfer.
(a) The Option may not be transferred, pledged, assigned, hypothecated
or otherwise disposed of in any way by the Optionee and may be exercised during
the lifetime of the Optionee only by the Optionee. If the Optionee dies, the
Option shall thereafter be exercisable, during the period specified in Section
6, by the representative of his estate to the full extent to which the Option
was exercisable by the Optionee at the time of his death. The Option shall not
be subject to execution, attachment or similar process. Any attempted
assignment, transfer, pledge, hypothecation or other disposition of the Option
contrary to the provisions hereof, and the levy of any execution, attachment or
similar process upon the Option, shall be null and void and without effect.
(b) Any shares issued to the Optionee upon exercise of the Option
shall be subject to the restrictions contained in the Stockholders' Agreement
and shall be deemed Stock (as defined in the Stockholders' Agreement) for all
purposes thereunder.
<PAGE> 5
Page 5
SECTION 10. Restrictive Legend. All stock certificates representing
shares issued upon exercise of the Option shall, unless otherwise determined by
the Board, have affixed thereto a legend substantially in the following form:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). THE SHARES
HAVE BEEN ACQUIRED FOR INVESTMENT ONLY AND MAY NOT BE PLEDGED,
HYPOTHECATED, SOLD OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SHARES UNDER THE ACT OR AN OPINION OF
COUNSEL TO THE ISSUER THAT SUCH REGISTRATION IS NOT REQUIRED. IN
ADDITION, THE TRANSFER OF THE SHARES REPRESENTED BY THIS CERTIFICATE
IS RESTRICTED PURSUANT TO THE TERMS OF A STOCKHOLDERS' AGREEMENT AMONG
THE ISSUER, THE ORIGINAL HOLDER OF SUCH SHARES AND THE OTHER PARTIES
NAMED THEREIN. COPIES OF THE STOCKHOLDERS' AGREEMENT MAY BE OBTAINED
WITHOUT CHARGE FROM THE SECRETARY OF THE ISSUER."
SECTION 11. Noncompetition. In consideration for and as an express
condition of the Company's grant of the Option, Optionee hereby agrees to
execute and comply with the Noncompetition Agreement attached hereto as Annex II
and incorporated herein by reference.
SECTION 12. Optionee's Employment. Nothing in the Option shall
confer upon the Optionee any right to continue in the employ of the Company or
any of its Affiliates or interfere in any way with the right of the Company or
its Affiliates or stockholders, as the case may be, to terminate the Optionee's
employment or to increase or decrease the Optionee's compensation at any time.
SECTION 13. Adjustment.
(a) Subject to Section 9(b), if the Common Stock is changed by reason
of a stock split, reverse stock split, stock dividend or recapitalization, or
converted into or exchanged for other securities as a result of a merger,
consolidation or reorganization, the Board shall make such adjustments in the
number and class of shares of stock subject to the Option, and such adjustments
to the Option Price, as shall be equitable and appropriate in its good faith
judgment under the circumstances.
(b) The following rules shall apply in connection with the occurrence
of any Transaction:
(i) the Optionee shall be given (A) written notice of such
Transaction at least 20 days prior to its proposed effective date (as specified
in such notice) and (B) an opportunity, during the period commencing with
delivery of such notice and ending 10 days prior to such proposed effective
date, to exercise the Option in full; provided, however, that upon the
occurrence of a Transaction, the Option, to the extent not so exercised, shall
automatically terminate; and
<PAGE> 6
Page 6
(ii) notwithstanding anything contained in Section 13(b)(i),
Section 13(b)(i) shall not be applicable if provision shall be made in
connection with such Transaction for the assumption of the Option by, or the
substitution for the Option of new options covering the stock of, the surviving,
successor or purchasing corporation, or a parent or subsidiary thereof, with
appropriate adjustments as to the number, kind and Option Price of shares
subject to the Option.
(c) The following rules shall apply in connection with Section 13(a)
and (b) above:
(i) no fractional shares shall be issued as a result of any such
adjustment, and any fractional shares resulting from the computations pursuant
to Section 13(a) or (b) shall be eliminated without consideration from the
Option;
(ii) no adjustment shall be made for the issuance to stockholders
of rights to subscribe for additional shares of Common Stock or other
securities; and
(iii) any adjustments referred to in Section 13(a) or (b) shall be
made by the Board in its sole discretion and shall be conclusive and binding on
the Optionee.
SECTION 14. Notices. All notices, claims, certificates, requests,
demands and other communications hereunder shall be in writing and shall be
deemed to have been duly given and delivered if personally delivered or if sent
by nationally recognized overnight courier, by telecopy, or by registered or
certified mail, return receipt requested and postage prepaid, addressed as
follows:
(a) if to the Company, to it at:
CTB International Corp.
P.O. Box 2000
Milford, IN 46542-2000
Attention: J. Christopher Chocola
with a copy to:
Michael J. Kissane
CTB International Corp.
P.O. Box 2000
Milford, IN 46542-2000
<PAGE> 7
Page 7
(b) if to the Optionee, to him at such Optionee's address as most
recently supplied to the Company and set forth in the Company's
records
or to such other address as the party to whom notice is to be given may have
furnished to the other party in writing in accordance herewith. Any such
notice or communication shall be deemed to have been received (i) in the case
of personal delivery, on the date of such delivery (or if such date is not a
business day, on the next business day after the date sent), (ii) in the case
of nationally-recognized overnight courier, on the next business day after the
date sent, (iii) in the case of telecopy transmission, when received (or if not
sent on a business day, on the next business day after the date sent), and (iv)
in the case of mailing, on the third business day following the date on which
the piece of mail containing such communication is posted.
SECTION 15. Waiver of Breach. The waiver by either party of a breach
of any provision of this Agreement must be in writing and shall not operate or
be construed as a waiver of any other or subsequent breach.
SECTION 16. Optionee's Undertaking. The Optionee hereby agrees to
take whatever additional actions and execute whatever additional documents the
Company may in its reasonable judgment deem necessary or advisable in order to
carry out or effect one or more of the obligations or restrictions imposed on
the Optionee pursuant to the provisions of this Agreement.
SECTION 17. Amendment. This Agreement may not be amended,
terminated, suspended or otherwise modified except in a written instrument, duly
executed by both parties.
SECTION 18. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware (without giving
effect to principles of conflicts of laws).
SECTION 19. Counterparts. This Agreement may be executed in one or
more counterparts, and each such counterpart shall be deemed to be an original,
but all such counterparts together shall constitute but one agreement.
SECTION 20. Entire Agreement. This Agreement (and the other writings
incorporated by reference herein) constitute the entire agreement between the
parties with respect to the subject matter hereof and supersede all prior
written or oral negotiations, commitments, representations and agreements with
respect thereto.
SECTION 21. Severability. In the event any one or more of the
provisions of this Agreement should be held invalid, illegal or unenforceable in
any respect in any jurisdiction, such provision or provisions shall be
automatically deemed amended, but only to the extent necessary to render such
provision or provisions valid, legal and enforceable in such jurisdiction, and
the validity, legality and enforceability of the remaining provisions of this
Agreement shall not in any way be affected or impaired thereby.
<PAGE> 8
Page 8
IN WITNESS WHEREOF, the parties hereto have executed this Non-Qualified
Stock Option Agreement as of the date first written above.
CTB International Corp.
By: ___________________________ ____________________________________
Name:
Title:
Date: _________________________ Date: ______________________________
<PAGE> 1
CTB International Corp. and Subsidiaries Exhibit 11
Diluted Net Income Per Common and Common Equivalent Share
Three Months Ended March 31, 1997 and 1998
(In thousands)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
---------
1997 1998
---- ----
<S> <C> <C>
ACTUAL
- ----------------------------------------------------
Net Income $ 918 $ 1,387
======= =======
Average number of common shares outstanding 7,256 12,837
Common equivalent shares
Stock Options 380 371
------- -------
Total average common and common
equivalent shares outstanding 7,636 13,208
======= =======
Net income per common and common equivalent share $ 0.12 $ 0.11
======= =======
</TABLE>
<TABLE>
<CAPTION>
PRO FORMA
- -----------------------------------------------------
<S> <C> <C>
Net Income $ 2,077 $ 1,387
======= =======
Pro forma average number of common shares outstanding (1) 12,925 12,837
Pro forma common equivalent shares (1)
Stock Options 414 371
------- -------
Total pro forma average common and common
equivalent shares outstanding 13,339 13,208
======= =======
Pro forma diluted net income per common and common
equivalent share (1) $ 0.16 $ 0.11
======= =======
</TABLE>
(1) Pro forma net income per common and common equivalent share is
calculated by dividing net income by the pro forma weighted average
common and common equivalent shares outstanding, after giving effect to
the following transactions as if they had been completed on January 1,
1997: (i) the Stock Split, (ii) the Preferred Stock Exchange, (iii) the
Preferred Stock Redemption and (iv) the Offering.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 1,119
<SECURITIES> 0
<RECEIVABLES> 25,351
<ALLOWANCES> 532
<INVENTORY> 26,688
<CURRENT-ASSETS> 57,275
<PP&E> 56,403
<DEPRECIATION> 10,172
<TOTAL-ASSETS> $168,410
<CURRENT-LIABILITIES> 31,828
<BONDS> 0
0
0
<COMMON> 129
<OTHER-SE> 72,440
<TOTAL-LIABILITY-AND-EQUITY> $168,410
<SALES> $46,778
<TOTAL-REVENUES> 46,778
<CGS> 35,733
<TOTAL-COSTS> 35,733
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 845
<INCOME-PRETAX> 2,250
<INCOME-TAX> 863
<INCOME-CONTINUING> 1,387
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> $1,387
<EPS-PRIMARY> $0.11
<EPS-DILUTED> $0.11
</TABLE>
