UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM 10-Q
(MARK ONE)
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED DECEMBER 31, 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 NUMBER 0-23227
---------------
CVC, INC.
(Exact name of registrant as specified in its charter)
---------------
DELAWARE 16-1383279
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
525 LEE ROAD
ROCHESTER, NEW YORK 14626
(Address of principal executive offices, zip code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (716) 458-2550
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 NO |X|
The number of shares outstanding of the registrant's common stock was 11,604,819
as of February 1, 2000.
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<CAPTION>
CVC, INC.
INDEX
PAGE
<S> <C>
Part I. Financial Information
Item 1. Condensed Consolidated Financial Statements:
Condensed Consolidated Balance Sheets as of December 31, 1999
(unaudited) and September 30, 1999 ................................... 3
Condensed Consolidated Statements of Operations for the Three Months
Ended December 31, 1999 and 1998 (unaudited) ......................... 4
Condensed Consolidated Statements of Cash Flows for the Three Months
Ended December 31, 1999 and 1998 (unaudited) ......................... 5
Notes to Condensed Consolidated Financial Statements for the Three
Months Ended December 31, 1999 (unaudited) ........................... 6
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations ................................................. 8
Part II. Other Information
Item 1. Legal Proceedings ..................................................... 12
Item 2. Change in Securities and Use of Proceeds .............................. 12
Item 3. Defaults upon Senior Securities ....................................... 12
Item 4. Submission of Matters to a Vote of Security Holders ................... 12
Item 5. Other Information ..................................................... 12
Item 6. Exhibits and Reports on Form 8-K ...................................... 12
Signatures ..................................................................... 13
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2
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PART I. FINANCIAL INFORMATION
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
CVC, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
AT DECEMBER 31, AT SEPTEMBER 30,
1999 1999
---- ----
(UNAUDITED)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents ................................. $ 4,171 $ 434
Accounts receivable-trade, less allowance for doubtful
accounts of $1,471 and $887, respectively ................. 18,870 21,559
Inventories ............................................... 30,255 29,187
Other current assets ...................................... 3,836 4,215
-------- --------
Total current assets ................................... 57,132 55,395
Property, plant and equipment, net ........................ 19,089 19,374
Other assets, net ......................................... 1,057 1,148
-------- --------
Total assets ........................................... $ 77,278 $ 75,917
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term borrowings and current portion of long-term debt $ 1,040 $ 13,217
Accounts payable .......................................... 9,866 11,279
Advances from customers ................................... 1,652 1,483
Other current liabilities ................................. 5,685 7,312
-------- --------
Total current liabilities .............................. 18,243 33,291
Long-term debt ............................................ 7,346 8,493
Other liabilities ......................................... 2,575 2,540
-------- --------
Total liabilities ...................................... 28,164 44,324
Stockholders' equity:
Preferred stock ........................................... -- 19,895
Common stock .............................................. 116 24
Additional paid-in capital ................................ 46,073 9,305
Warrant ................................................... -- 14
Unamortized deferred compensation ......................... (110) (135)
Retained earnings ......................................... 3,329 2,784
Minimum pension liability ................................. (294) (294)
-------- --------
Total stockholders' equity ............................. 49,114 31,593
-------- --------
Total liabilities & stockholders' equity ............... $ 77,278 $ 75,917
======== ========
See the notes to these condensed financial statements.
</TABLE>
3
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<TABLE>
<CAPTION>
CVC, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
THREE MONTHS ENDED DECEMBER 31,
-------------------------------
1999 1998
---- ----
(UNAUDITED)
<S> <C> <C>
Revenues .................................................. $25,216 $14,655
Cost of goods sold ........................................ 15,505 8,249
------- -------
Gross margin .............................................. 9,711 6,406
Operating expenses
Research and development ................................ 3,983 2,439
Sales and marketing ..................................... 2,972 1,930
General and administrative .............................. 1,539 812
------- -------
Total operating expenses ............................. 8,494 5,181
Income from operations .................................... 1,217 1,225
Interest and other expense, net ........................... 277 326
------- -------
Income before income taxes ................................ 940 899
Income taxes .............................................. 395 419
------- -------
Net income ................................................ $ 545 $ 480
======= =======
Net income per share:
Basic .......................... $ 0.07 $ 0.45
======= =======
Diluted ........................ $ 0.05 $ 0.07
======= =======
Weighted average shares:
Basic ......................... 7,346 1,058
Diluted ........................ 11,903 7,318
See the notes to these condensed financial statements.
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4
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<TABLE>
<CAPTION>
CVC, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
THREE MONTHS ENDED
DECEMBER 31,
------------
1999 1998
---- ----
(UNAUDITED)
<S> <C> <C>
Cash flows from operating activities:
Net income .............................................................. $ 545 $ 480
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization ................................................ 1,311 788
Changes in operating assets and liabilities -
Accounts receivable ....................................................... 2,689 2,851
Inventories ............................................................... (1,451) 1,035
Other assets .............................................................. 379 413
Accounts payable .......................................................... (1,413) (2,875)
Advances from customers ................................................... 169 (98)
Other liabilities ......................................................... (1,591) (1,072)
-------- --------
Total adjustments ....................................................... 93 1,042
-------- --------
Net cash provided by operating activities ............................... 638 1,522
-------- --------
Cash flows from investing activities:
Capital expenditures ......................................................... (528) (851)
-------- --------
Net cash used by investing activities ................................... (528) (851)
-------- --------
Cash flows from financing activities:
Net payments on line of credit ............................................... (10,679) (4,139)
Payments on notes payable .................................................... (891) (71)
Payments on long-term debt and capital lease obligations ..................... (1,754) (309)
Net proceeds from issuance of preferred stock and warrant .................... -- 9,844
Redemption of preferred stock ................................................ (10,000) --
Net proceeds from issuance of common stock ................................... 26,951 --
-------- --------
Net cash provided by financing activities ............................... 3,627 5,325
-------- --------
Net increase in cash and cash equivalents ....................................... 3,737 5,996
Cash and cash equivalents, beginning of period .................................. 434 106
-------- --------
Cash and cash equivalents, end of period ........................................ $ 4,171 $ 6,102
======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Non-cash investing transaction:
Equipment capitalized from inventory ......................................... $ 383 $ 1,631
Conversion of preferred stock to common stock ................................ $ 9,834 $ --
Cash paid during the quarter for:
Interest ..................................................................... $ 238 $ 283
Income taxes ................................................................. $ 647 $ 3
See the notes to these condensed financial statements.
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5
<PAGE>
CVC, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 - BASIS OF PRESENTATION
The unaudited Condensed Consolidated Financial Statements of CVC, Inc. (the
"Company") 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 of the Securities and Exchange Commission.
Accordingly, the Condensed Consolidated Financial Statements 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 considered necessary for a fair presentation (consisting of normal
recurring adjustments) have been included. The results for the interim periods
are not necessarily indicative of the results to be expected for the year. The
accompanying Condensed Consolidated Financial Statements should be read in
conjunction with the audited consolidated financial statements of the Company as
of and for year ended September 30, 1999, as reported in its Annual Report on
Form 10-K filed with the Securities and Exchange Commission.
NOTE 2 - INITIAL PUBLIC OFFERING
On November 12, 1999, the Company completed an initial public offering pursuant
to which 3,000,000 shares of Common Stock, par value $0.01 per share (the
"Common Stock"), were issued and sold for $10.00 per share, less underwriting
discounts and commissions of $0.70 per share. In addition, as part of the
initial public offering, certain stockholders of the Company sold 500,000 shares
of Common Stock. An additional 525,000 shares were sold by these stockholders as
part of the exercise of the underwriters' overallotment option. The Company did
not receive any of the proceeds from the sale of shares by the selling
stockholders.
There were 11,604,819 shares and 2,360,767 shares issued and outstanding at
December 31, 1999 and September 30, 1999, respectively, of the Common Stock. As
part of the initial public offerinG, 162,177 shares of preferred stock were
automatically converted into 6,131,940 shares of Common Stock. During the three
months ended December 31, 1999, 112,136 common shares were issued upon the
exercise of stock options.
NOTE 3 - INVENTORIES
Inventories are recorded at the lower of cost, determined by the first-in,
first-out method, or market value. The Company provides inventory reserves for
excess, obsolete or slow-moving inventory based on changes in customer demand,
technology developments, and other economic factors. Inventories consisted of
the following at December 31, 1999 and September 30, 1999 (in thousands):
<TABLE>
DECEMBER 31, SEPTEMBER 30,
1999 1999
---- ----
<S> <C> <C>
Component parts ................................ $ 17,422 $ 15,421
Work-in-process ................................ 11,816 11,674
Finished goods ................................. 2,392 4,117
-------- --------
31,630 31,212
Less - reserve for obsolescence .............. (1,375) (2,025)
-------- --------
$ 30,255 $ 29,187
======== ========
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6
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CVC, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
NOTE 4 - COMPREHENSIVE INCOME
Total comprehensive income was $545,000 and $480,000 for the three months ended
December 31, 1999 and 1998, respectively. Total comprehensive income is
comprised of minimum pension liability adjustments, net of taxes. As the minimum
pension liability is adjusted annually based on actuarial computations, other
comprehensive income is consistent with net income on an interim basis.
NOTE 5 - EARNINGS PER SHARE
The following table illustrates the calculation of both basic and diluted
earnings per share for the three months ended December 31, 1999 and 1998 (in
thousands):
<TABLE>
1999 1998
---- ----
<S> <C> <C>
BASIC EARNINGS PER SHARE
Net income available to common shareholders ..................................... $ 545 $ 480
Weighted average number of common shares ........................................ 7,346 1,058
------- -------
Basic earnings per share ........................................................ $ 0.07 $ 0.45
======= =======
DILUTED EARNINGS PER SHARE
Net income available to common shareholders ..................................... $ 545 $ 480
======= =======
Weighted average number of common shares ........................................ 7,346 1,058
Common equivalent shares related to stock options and convertible preferred stock 4,557 6,260
------- -------
Weighted average common and common equivalent shares ............................ 11,903 7,318
======= =======
Diluted earnings per share ...................................................... $ 0.05 $ 0.07
======= =======
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7
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
FORWARD-LOOKING STATEMENTS AND RISK FACTORS
This Quarterly Report on Form 10-Q may be deemed to contain forward-looking
information. Any forward-looking statements are made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements, including statements as to industry trends, future
economic performance, anticipated revenues and expenses, and products or service
line growth, may be significantly and materially impacted by certain risks and
uncertainties, including, but not limited to, failure to meet operating
objectives or to execute the operating plan of the Company; competition; the
cyclical nature of the data storage and semiconductor industries; risks
associated with the acceptance of new products by individual customers and by
the marketplace; risks associated with dependence on major customers; the impact
of economic downturns in foreign markets; integration of acquired companies;
attraction and retention of key employees; and other risks referenced from time
to time in the Company's filings with the Securities and Exchange Commission,
including, but not limited to, its Annual Report on Form 10-K for the year ended
September 30, 1999 and the Company's prospectus, dated November 12, 1999, as
filed with the SEC.
OVERVIEW
CVC is a worldwide supplier of process equipment used in the manufacture of
magnetic recording heads for tape and disk drives, optical components for
telecommunications and advanced semiconductor devices for computers. CVC's
principal product is the CONNEXION Cluster Tool system, which provides
integrated deposition and etch equipment based on a central substrate handling
platform and a series of interchangeable thin film deposition and etch
processing modules. CVC also derives revenue from the sale of spare parts,
enhancements, and field service contracts. In order to expand its technology and
broaden its offering of process modules, CVC acquired Commonwealth Scientific
Corporation in May 1999. Commonwealth's primary products are ion beam etch, ion
beam deposition and diamond-like carbon process modules for the data storage
industry and ion beam sources principally used by suppliers of optical
equipment.
RESULTS OF OPERATIONS
The following table sets forth for the periods indicated the percentage of
revenues for the following items in CVC's consolidated statement of operations.
<TABLE>
THREE MONTHS ENDED DECEMBER 31,
-------------------------------
1999 1998
---- ----
<S> <C> <C>
Revenues ................................... 100.0% 100.0%
Cost of goods sold ......................... 61.5 56.3
----- -----
Gross margin ............................... 38.5 43.7
Operating expenses
Research and development ................ 15.8 16.6
Sales and marketing ..................... 11.8 13.2
General and administrative .............. 6.1 5.5
----- -----
Total ................................... 33.7 35.3
Income from operations ..................... 4.8 8.4
Interest and other, net .................... (1.1) (2.2)
----- -----
Income before income taxes ................. 3.7 6.2
Income taxes ............................... 1.5 2.9
----- -----
Net income ................................. 2.2 3.3
===== =====
</TABLE>
8
<PAGE>
THREE MONTHS ENDED DECEMBER 31, 1999 COMPARED TO THREE MONTHS ENDED DECEMBER 31,
1998
REVENUES. Revenues increased 72.1% to $25.2 million for the quarter ended
December 31, 1999 from $14.7 million for the quarter ended December 31, 1998. Of
the increase in revenue, approximately $5.4 million is attributable to
additional sales from Commonwealth Scientific Corporation which was acquired in
May 1999, as well as increased sales to data storage customers of $3.3 million
and increased sales to semiconductor customers of $2.1 million. These increased
sales were partially offset by decreased revenues due to the disposition of two
non-core product lines during fiscal 1999.
GROSS MARGIN. Gross margin decreased to 38.5% of revenues for the quarter
ended December 31, 1999 from 43.7% for the quarter ended December 31, 1998. The
lower margins are mainly a reflection of product mix. Product lines such as
spares, service and enhancements, which tend to have more favorable margins,
represented an unusually high percentage of overall revenue in the fiscal 1999
first quarter when compared to the same period in fiscal 2000.
RESEARCH AND DEVELOPMENT. Research and development expenses increased by
63.3% to $4.0 million for the first quarter of fiscal 2000 from $2.4 million for
the same period in fiscal 1999. As a percentage of revenues, research and
development expenses were 15.8% and 16.6% for the quarters ended December 31,
1999 and 1998, respectively. The increase in these expenses is mainly
attributable to $1.1 million of research personnel, related expenses associated
with the Commonwealth acquisition, $0.2 million in outside contractors utilized
to assist in the development of internal projects and $0.2 million in higher
depreciation due to additional capitalization of demonstration tools throughout
fiscal 1999.
SALES AND MARKETING. Sales and marketing expenses increased by 54.0% to
$3.0 million for the quarter ended December 31, 1999 from $1.9 million for the
quarter ended December 31, 1998. As a percentage of revenues, sales and
marketing expenses decreased to 11.8% for the December 1999 quarter from 13.2%
for the December 1998 quarter. Of the $1.1 million increase, $0.9 million is due
to the addition of personnel and their related expenses resulting from the
acquisition of Commonwealth. The remainder of the increase is attributable to
the addition of personnel and related expenses in field service to support CVC's
expanded product offering and customer base.
GENERAL AND ADMINISTRATIVE. General and administrative expenses increased
by 89.5% to $1.5 million for the first quarter of fiscal 2000 from $0.8 million
in the first quarter of fiscal 1999. As a percentage of revenues, general and
administrative expenses were 6.1% and 5.5% for the quarters ended December 31,
1999 and 1998, respectively. The increase in general and administrative expenses
reflects additional costs of $0.4 million due to the Commonwealth acquisition
and additional accruals for doubtful accounts of $0.2 million.
INTEREST AND OTHER, NET. Interest and other, net decreased by 14.9% to
$277,000 in the quarter ended December 31, 1999 from $326,000 in the quarter
ended December 31, 1998. This decrease reflects lower interest expense due to
the payment of debt with a portion of the proceeds from CVC's initial public
offering during the first quarter of fiscal 2000.
INCOME TAXES. Income tax expense was relatively consistent on a comparable
basis for the first quarter of fiscal 2000 to the first quarter of fiscal 1999.
The effective rate for the quarter ended December 31, 1999 was 42.0% compared to
the effective rate of 46.6% for the quarter ended December 31, 1998. The
decrease in the effective rate is based on an anticipated decrease in the annual
effective rate for fiscal 2000 due to a less significant impact of
non-deductible items as compared to fiscal 1999.
9
<PAGE>
IN-PROCESS RESEARCH AND DEVELOPMENT
During fiscal 1999, as part of the purchase of Commonwealth, the value
assigned to research expenditures on products in the development stage which had
not reached technological feasibility and for which there is no alternative
future use were written off in accordance with applicable accounting rules. This
write-off amounted to approximately $1.2 million, respectively.
The in-process technology acquired from Commonwealth consists of four
technology groupings: ion source products, etch modules, deposition modules, and
dielectric deposition modules, which had assigned values of $0.2 million, $0.5
million, $0.3 million and $0.2 million, respectively. Descriptions of these
groupings are as follows:
o Ion source products, including both ion sources and power supplies, are
being designed for use in applications that include etching, deposition,
surface modification, and ion assist.
o The etch modules are being designed to support the market requirements for
ion beam processing applications.
o The deposition modules are being designed to support very thin metallic
film through ion beam sputter deposition of target materials.
o The dielectric deposition modules are being designed to support very thin
dielectric film through ion beam sputter deposition of target materials.
There is a risk associated with the completion of the research and
development ("R&D") projects. CVC cannot assure that any of the projects will
achieve technological or commercial success without the successful completion of
the remaining R&D efforts on the acquired in-process technologies. Without the
successful completion of the remaining R&D efforts, CVC would not realize the
future revenues and profits attributed to the acquired R&D. CVC believes,
however, that the failure of any particular in-process R&D project would not
materially impact CVC's financial position or operating results.
At December 31, 1999, the estimated development completion costs of the
in-process R&D projects acquired from Commonwealth approximates $1.2 million,
which will be incurred in the remainder of fiscal 2000. The total estimated
completion costs and dates of completion are relatively consistent with the
estimates made at the acquisition date.
LIQUIDITY AND CAPITAL RESOURCES
On November 12, 1999, CVC received net proceeds of $27.0 million from a
public equity offering, consisting of 3,000,000 shares of Common Stock sold by
CVC and 500,000 shares of Common Stock sold by certain shareholders of CVC at an
initial public offering price of $10.00 per share. CVC used a portion of the net
proceeds from the offering to repay approximately $12.0 million of debt, $10.0
million for the redemption of Series D Redeemable Preferred Stock and the
balance for general corporate purposes. CVC did not receive any of the proceeds
from the sale of shares by the selling stockholders.
As of December 31, 1999, CVC had working capital of $38.9 million,
including cash and cash equivalents of $4.2 million, compared to working capital
of $22.1 million as of September 30, 1999.
Operating activities provided cash of $0.6 million for the first quarter of
fiscal 2000 as compared to providing cash of $1.5 million in the first quarter
of fiscal 1999. The decrease in cash provided from operating activities is
primarily attributable to changes in components of working capital.
10
<PAGE>
As of December 31, 1999, CVC had available a $15.0 million bank line of
credit and a $3.0 million equipment line of credit. Maximum borrowings under
these lines are based upon certain financial criteria and these borrowings are
at an interest rate of prime. There were no borrowings outstanding under either
of these lines as of December 31, 1999.
CVC expects to spend approximately $6.0 million on capital expenditures in
the current fiscal year, of which $0.9 million had been incurred as of December
31, 1999, including amounts capitalized from inventory. The capital expenditures
were primarily for demonstration and development system tools. CVC continues to
invest heavily in demonstration and development tools for use at its facilities
in order to demonstrate new product capabilities for its magnetic head, optical
component and semiconductor device customers.
CVC believes that existing cash balances together with cash generated from
operations and amounts available under existing lines of credit will be adequate
to fund operations for at least the next 12 months.
CVC's long-term capital requirements will be affected by many factors,
including the success of CVC's current product offerings, CVC's ability to
enhance its current products and to develop and introduce new products that keep
pace with technological developments and general trends in the data storage and
semiconductor industries. CVC plans to finance its long-term capital needs with
the net proceeds of the initial public offering, together with borrowings and
cash flow from operations. To the extent that these funds are insufficient to
finance CVC's activities, CVC will have to raise additional funds through the
issuance of additional equity or debt securities or through other means. There
can be no assurance that additional financing will be available on acceptable
terms.
YEAR 2000
CVC has not experienced any material disruptions of its computer and
microprocessor-based devices or operating difficulties of its mission critical
applications or critical devices relating to the Year 2000 issue. In addition,
CVC is not aware of any difficulties with its products at customer sites nor has
CVC experienced any material problems related to applications or devices
provided by critical external parties for use by CVC. We have no reason to
believe that Year 2000 failures will seriously affect us in the future. However,
given the proximity to January 1, 2000 and the possibility of latent Year 2000
defects, we cannot yet be sure that we will not experience Year 2000 failures or
be affected by third-party Year 2000 failures, either of which may adversely
impact our business. CVC will continue to monitor the operation of its computers
and microprocessor-based devices for any Year 2000 related problems.
11
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS - NONE.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
(D) USE OF PROCEEDS
On November 12, 1999, our registration statement on Form S-1, file number
333-38057, became effective. Proceeds were approximately $27.0 million, net of
fees and expenses. CVC has used $10.0 million for the redemption of Series D
Redeemable Preferred Stock and $12.0 million to pay-off existing debt. The
remainder of the proceeds are to be used for general corporate purposes. Pending
the use for general corporate purposes, the proceeds have been invested in
short-term, interest-bearing, investment grade securities.
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
A) EXHIBITS
27.1 Financial Data schedule of CVC, Inc. for the quarter ended December
31, 1999, filed herein.
B) REPORTS ON FORM 8-K
None.
12
<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.
Date: February 10, 2000
CVC, INC.
FEBRUARY 10, 2000 BY:/S/ CHRISTINE B. WHITMAN
------------------------
CHRISTINE B. WHITMAN
CHAIRMAN OF THE BOARD,
CHIEF EXECUTIVE OFFICER AND PRESIDENT
(PRINCIPAL EXECUTIVE OFFICER)
FEBRUARY 10, 2000 BY:/S/ EMILIO O. DICATALDO
-----------------------
EMILIO O. DICATALDO
SENIOR VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER
(PRINCIPAL ACCOUNTING AND
FINANCIAL OFFICER)
13
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 1999 OF CVC, INC.
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-2000
<PERIOD-START> OCT-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 4,171
<SECURITIES> 0
<RECEIVABLES> 20,341
<ALLOWANCES> 1,471
<INVENTORY> 30,255
<CURRENT-ASSETS> 57,132
<PP&E> 32,732
<DEPRECIATION> 13,643
<TOTAL-ASSETS> 77,278
<CURRENT-LIABILITIES> 18,243
<BONDS> 0
0
0
<COMMON> 116
<OTHER-SE> 48,998
<TOTAL-LIABILITY-AND-EQUITY> 77,278
<SALES> 25,216
<TOTAL-REVENUES> 25,216
<CGS> 15,505
<TOTAL-COSTS> 8,494
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 1,471
<INTEREST-EXPENSE> 315
<INCOME-PRETAX> 940
<INCOME-TAX> 395
<INCOME-CONTINUING> 545
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 545
<EPS-BASIC> 0.07
<EPS-DILUTED> 0.05
</TABLE>
