SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For Quarterly Period Ended August 31, 1996
[ ] 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 1-8381
WELDOTRON CORPORATION
______________________________________________________________________
(Exact name of Registrant as specified in its charter)
NEW JERSEY 22-1602728
(State or other jurisdiction (I.R.S. Employer
incorporation or organization) Identification No.)
1532 South Washington Avenue
Piscataway, New Jersey 08855
(Address of Principal Exec. Offices) (Zip Code)
Registrant's Telephone Number, Including
Area Code (908) 752-6700
_______________
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, and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
___
2,300,173 Shares of Common Stock were outstanding as of October 9, 1996.
<PAGE>
WELDOTRON CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
($000'S OMITTED EXCEPT SHARE DATA)
<TABLE>
Three Months Ended August 31,
1996 1995
______________________________________
(Unaudited) (Unaudited)
<S> <C> <C>
NET SALES $ 2,770 $ 5,255
COST AND EXPENSES:
Cost of Sales 2,087 3,424
Selling, General & Administrative Expenses 1,336 1,928
Depreciation and Amortization 103 124
_________ _______
3,526 5,476
_________ _______
LOSS FROM OPERATIONS (756) (221)
OTHER INCOME/(EXPENSES):
Foreign Currency Translation Gain (Loss) 10 (9)
Other Income 180 165
Interest Expense (175) (170)
_______ _______
15 (14)
LOSS FROM OPERATIONS BEFORE
TAXES AND MINORITY INTEREST $ (741) $ (235)
INCOME TAX PROVISION $ -- $ (91)
MINORITY INTEREST: SHARE OF (INCOME) LOSS $ 40 $ (52)
________ ___________
NET LOSS $ (701) $ (378)
________ ___________
NET LOSS PER COMMON SHARE: $ (.30) $ (.16)
________ ___________
DIVIDEND PER SHARE NONE NONE
WEIGHTED AVERAGE OF
COMMON SHARES OUTSTANDING 2,300,173 2,300,173
See Notes to Condensed Consolidated Financial Statements.
</TABLE>
<PAGE>
WELDOTRON CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
($000'S OMITTED EXCEPT SHARE DATA)
<TABLE>
Six Months Ended August 31,
1996 1995
_______________ ________________
(Unaudited) (Unaudited)
<S> <C> <C>
NET SALES $ 6,731 $9,528
COST AND EXPENSES:
Cost of Sales 4,909 5,977
Selling, General & Administrative Expenses 2,793 3,627
Depreciation and Amortization 203 247
________ ______
7,965 9,851
________ _____
LOSS FROM OPERATIONS (1,234) (323)
OTHER INCOME/(EXPENSES):
Foreign Currency Translation Gain (Loss) 35 29
Other Income 296 300
Interest Expense (329) (339)
_________ _____
2 (10)
_________ ______
LOSS FROM OPERATIONS BEFORE
TAXES AND MINORITY INTEREST $ (1,232) $ (333)
INCOME TAX PROVISION $ -- $ (96)
MINORITY INTEREST: SHARE OF (INCOME) LOSS $ 35 $ (125)
_________ _________
NET LOSS $ (1,197) $ (554)
________ _________
NET LOSS PER COMMON SHARE: $ (.52) $ (.24)
_________ _________
DIVIDEND PER SHARE NONE NONE
WEIGHTED AVERAGE OF
COMMON SHARES OUTSTANDING 2,300,173 2,300,173
See Notes to Condensed Consolidated Financial Statements.
</TABLE>
<PAGE>
WELDOTRON CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
($000'S OMITTED)
<TABLE>
August 31, Feb. 29,
1996 1996
_____________ ___________
(Unaudited) (Audited)
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and Cash Equivalents $ 83 $ 344
Accounts Receivable (Net) 1,376 2,000
Inventories (Note B) 6,048 6,653
Prepaid Expenses and Other Current Assets 351 563
Investment in Real Estate Held for Sale 377 377
________ ______
TOTAL CURRENT ASSETS 8,235 9,937
________ ______
Property and Equipment at Cost 11,486 11,603
Less Accumulated Depreciation & Amort. (9,561) (9,497)
_______ _______
Net Property and Equipment 1,925 2,106
Other Assets 181 174
________ _______
TOTAL ASSETS $ 10,341 $12,217
________ ________
LIABILITIES & STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Short Term Borrowings (Note C) $ 1,072 $ 835
Short Term Borrowings: Related Party (Note C) 1,350 150
Accounts Payable 2,502 2,431
Other Current Liabilities 2,146 2,532
________ _________
TOTAL CURRENT LIABILITIES 7,070 5,948
________ _________
Long-Term Debt-Net of Current Maturities
(Note C) -- 750
Long Term Debt: Related Party (Note C) -- 1,000
Deferred Compensation 1,183 1,201
Minority Interests in Subsidiary 641 715
Other Long Term Liabilities 202 161
Stockholders' Equity 1,245 2,442
________ _________
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $10,341 $12,217
________ _________
</TABLE>
<PAGE>
The Balance Sheet at February 29, 1996, has been taken from the audited
financial statements at that date, condensed and reclassified.
See Notes to Condensed Consolidated Financial Statements.
WELDOTRON CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
($000'S OMITTED)
<TABLE>
Six Months Ended
August 31,
1996 1995
___________ ___________
(Unaudited) (Unaudited)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(1,197) $ (554)
Adjustments to reconcile net loss to
net cash flows provided by (used in)
operating activities:
Depreciation and amortization 204 247
Foreign currency translation gain (35) (29)
Bad debt provision 13 13
Deferred compensation expense 57 68
Minority interest in subsidiary net income (35) 125
Gain on sale of property, plant and equipment (103) (11)
Changes in operating assets and liabilities
(Increase) decrease in assets
Accounts receivable 612 12
Inventories 721 (273)
Prepaid expenses and other current assets 172 (189)
Other assets (6) 4
Increase (decrease) in current liabilities (309) 535
Increase in other long-term liabilities (41) (84)
________ ________
Total adjustments 1,250 418
________ ________
Net cash provided by (used in)
operating activities 53 (136)
________ _________
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment (139) (202)
Proceeds from the sales of
<PAGE>
property, plant and equipment 103 11
________ _______
Net cash used in investing activities (36) (191)
________ _______
CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds (repayments) under short-term
borrowings 239 182
Proceeds from short-term debt - Related Party 200 500
Principal payments under capital lease obligations (2) --
Reduction of long term debt (750) (750)
Net cash provided used in
financing activities (313) (68)
________ ________
EFFECT OF EXCHANGE RATE CHANGES ON CASH
AND CASH EQUIVALENTS 35 29
________ _________
NET DECREASE IN CASH AND CASH EQUIVALENTS (261) (366)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 344 438
________ _________
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 83 $ 72
________ _________
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
WELDOTRON CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note A: Basis of Preparation
The unaudited, condensed Consolidated Financial Statements as of August 31,
1996, and for the three and six month period ended August 31, 1996 and 1995,
included herein, have been prepared in accordance with generally accepted
accounting principles for interim financial information and with the
instructions to Form 10-Q and Rule 10-01. The information reflects all
adjustments which are of a normal recurring nature and which are, in the opinion
of management, necessary to a fair statement of the results for the period.
Certain financial information and footnote disclosures normally included in
financial statements prepared in accordance with the generally accepted
accounting principles have been condensed or omitted. The reader is referred to
the consolidated financial statements and notes thereto included in the
Registrant's annual report on Form 10-K for the year ended February 29, 1996.
Results of operations for the interim period are not necessarily indicative
of the operating results for the full year.
<PAGE>
Note B: Inventories
Inventories at August 31, 1996, and February 29, 1996, are as follows:
($000's - Omitted)
<TABLE>
Aug. 31, Feb. 29,
1996 1996
<S> <C> <C>
Finished Goods $ 2,550 $ 2,870
Work in Process 2,352 2,508
Raw Materials 1,146 1,275
________ ________
$ 6,048 $ 6,653
________ ________
</TABLE>
Note C: Long-Term Debt and Short-Term Borrowings
In June 1991, the Company entered into a credit facility (the "Credit
Facility") with Congress Financial Corporation, ("Congress") to provide a
revolving line of credit and term loan for working capital purposes. The
interest rate is 3.75% over the CoreStates floating base rate which was 8.25% at
August 31, 1996. The Credit Facility further requires that the Company pay fees
on the unused line of credit, for administration and upon early termination of
the Credit Facility. The Credit Facility was amended on June 10, 1996,
decreasing the maximum line of credit and term loan to $2,500,000, extending the
maturity date to June 25, 1997, and resetting the financial covenants as
follows: minimum domestic working capital of $1,700,000 and minimum domestic
tangible net worth of $1,050,000.
The Credit Facility is collateralized by substantially all of the assets of
the Company and its domestic subsidiaries. Borrowings under the Credit Facility
are limited to certain percentages of eligible inventory and accounts receivable
including stipulations as to the ratio of advances collateralized by receivables
compared to advances collateralized by inventory.
The Company was in default of its minimum working capital and tangible net
worth covenants of the Credit Facility as of August 31, 1996. Subsequently,
Congress Financial Corporation has notified the Company of its intention to
terminate the Credit Facility due to the default as well as the reduced size of
the outstanding loan (below $1,000,000) and has provided the Company a period of
time in which to seek alternative sources of financing. The Company is currently
negotiating with financial institutions seeking alternative sources of
financing. No assurances can be made as to the amount, terms or timing of any
alternative financing agreements.
On August 31, 1994, the Registrant borrowed $500,000 Dollars from Lyford
Corporation ("Lyford"), an affiliated company that owns 19.56% of the issued and
outstanding common stock of the Company. The Company executed and delivered to
Lyford a promissory note, a security agreement and a Common Stock Purchase
Warrant granting to Lyford the right to purchase up to 200,000 shares of the
Company's common stock at an initial exercise price of two dollars per share,
<PAGE>
the closing price for the Company's common stock on the date the warrant was
granted. The warrant expires on August 4, 2004.
On March 1, 1995, the Registrant concluded the rolling of this note into a
new note in the amount of $1,000,000. The new obligation is evidenced by a
certain Amended, Extended and Restated Promissory Note dated as of March 1, 1995
(the "Restated Note"). In consideration for the new loan, the Company executed
and delivered to Lyford the Restated Note and an additional Common Stock
Purchase Warrant. The new note was originally due and payable on or before March
31, 1996 and bears interest at 12% per annum. The note was subsequently extended
until April 1, 1997 and the interest rate was increased to 14%. The new loan is
secured by a junior lien on all of the Company's assets. The new warrant grants
to Lyford the right to purchase up to 1,000,000 shares of the Company's common
stock at an initial exercise price of One ($1.00) Dollar per share. The market
price of the Company's common stock was $.875 on the date of the warrant grant.
The new warrant expires by its terms on April 12, 2005. The Company's management
considers the note to be at fair value and has not assigned any value to the
warrants. The loan transaction closed pursuant to documents dated as of March 1,
1995 and, in the case of the new Warrant, April 13, 1995. These loan documents
were contingent on the Company's obtaining the consent of its senior lender,
which consent was obtained on May 5, 1995.
In January, 1996 the Registrant entered into a $500,000 revolving loan
agreement with Exford Corp. ("Exford"), an affiliated company of Lyford. The
Registrant borrowed $350,000 under this agreement which borrowings bear interest
at 14%, and are due on January 31, 1997. In connection with this revolving loan,
the Company has assigned to Exford its right, title and interest as tenant under
the main operating lease, together with any rents due and payable to the
Company.
WELDOTRON CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Financial Condition
The Registrant's net working capital decreased from $3,989,000 at February
29, 1996 to $1,165,000 at August 31, 1996. The current ratio decreased from 1.67
at February 29,1996 to 1.16 at August 31, 1996. The changes in net working
capital during the first half of this year were primarily related to the
following:
- - accounts receivable decreased due to 39% lower sales in the second quarter
of this year compared to the immediately preceding fourth quarter of last
year.
- - inventories decreased due to efforts to keep inventory levels in line with
<PAGE>
reduced sales.
- - prepaid expenses and other current assets decreased due to prepaid
insurance amortization.
- - accounts payable increased as a result of extended payment terms with
vendors.
- - short-term borrowings increased due to the reclassification of $750,000 of
the domestic bank term loan from long term to short term and increases in
short-term obligations at our Brazilian subsidiary.
- - short-term borrowings from a related party increased at August 31, 1996 due
to the reclassification of $1,000,000 from long-term to short-term.
- - other current liabilities decreased due to reduced accruals for wages and
insurance.
The Company was in default of its minimum working capital and tangible net
worth covenants of the Credit Facility as of August 31, 1996. Subsequently,
Congress Financial Corporation has notified the Company of its intention to
terminate the Credit Facility due to the default as well as the reduced size of
the outstanding loan (below $1,000,000) and has provided the Company a period of
time in which to seek alternative sources of financing. The Registrant's primary
and secondary sources of liquidity at August 31, 1996 were the notes from a
related party and the Congress Credit Facility, respectively. The Company is
currently negotiating with financial institutions seeking alternative sources of
financing. No assurances can be made as to the amount, terms or timing of any
alternative financing agreements.
At August 31, 1996 the Registrant had used approximately $913,000 of the
Congress Credit Facility (See Note C to the consolidated financial statements).
Based on the advance percentages of eligible receivables and inventories the
Registrant had unused borrowing availability of approximately $121,000 at August
31, 1996.
There can be no assurances that an extended economic recession will not
adversely impact the Registrant's future financial condition and liquidity.
The effect of exchange rate changes on cash and cash equivalents for the
six months ended August 31, 1996 and for the same period last year was $344,000
and $438,000, respectively. This is attributable to Brazil's inflationary
economy and the "remeasurement method" used for foreign currency translation to
be measured into U.S. dollars as required by SFAS No. 52.
Results of Operations for the Three Month Period Ended
August 31, 1996 and 1995
______________________________________________________________________
For the second quarter ended August 31, 1996 sales were $2,770,000 with a
net loss of $701,000 or $.30 per share. This compares to sales of $5,255,000
with a net loss of $378,000 or $.16 per share in the second quarter last year.
<PAGE>
Sales for the second quarter were 47.3% lower than the same period last
year, with declines occurring in all segments of the business. Domestic
packaging sales were $1,210,000 lower than the similar quarter last year, or
39.5%; domestic safety and automated systems sales were $331,000 lower, or
53.0%; and sales at our Brazilian subsidiary were $944,000 lower, or 60.2%. The
sales decline was fueled by rumors in the packaging community of a takeover of
Weldotron, as major distributors appeared to take a "wait and see" approach as
to the ultimate ownership of the Company, before placing further orders. To
dispel these rumors, the Company was required to issue a press release on July
11, 1996. Also during the second quarter, the Company refocused its efforts
toward the industrial packaging business and away from food packaging new
equipment sales, due to the absence of positive cash flows from food packaging
equipment sales.
Cost of sales for the second quarter this year was 75.3% of sales compared
to 65.2% for the prior year. The shift toward lower margin though higher total
cash contributing domestic industrial packaging sales this quarter, coupled with
generally higher costs as a percentage of sales in all segments caused the
increase.
Selling, general and administrative expenses decreased by $592,000 in the
second quarter of fiscal 1997 compared to the same period last year due
primarily to staff reductions made in the third quarter of fiscal 1996. The
foreign currency translation loss of $9,000 in the second quarter last year
improved to a gain of $10,000 in the second quarter this year due to a more
favorable Brazilian currency exchange rate.
Other income in the second quarter this year improved to $180,000 from
$165,000 last year due primarily to gains realized from the sale of obsolete
fixed assets.
There was no provision for income taxes in the second quarter this year
versus $91,000 in the second quarter last year. The provision last year was
based solely on taxable income from our Brazilian subsidiary of $169,000.
Interest expense increased $5,000 due to increased borrowings by our
Brazilian subsidiary, which was partially offset by lower borrowings
domestically.
Results of Operations for the Six Months Ended
August 31, 1996 and 1995
______________________________________________________________________________
Sales for the first six months of this year were 29.4% lower than the same
period last year. Domestic packaging sales declined $1,000,000 or 17.9%, the
safety and automated systems division's sales declined $775,000, or 58.1%, and
our Brazilian subsidiary's sales declined $1,022,000 or 39.2%. The Company's
demonstrated ability to deliver product to its customers in a more timely manner
this year resulted in its major distributors' reduction of their inventory
positions below comparable periods, as Weldotron's delivery credibility
improved.
Cost of sales for the first six months of this year was 73.8% of sales
versus 62.7% of sales for the same period last year. The increase reflects both
a shift in mix toward lower margin, higher total cash contributing industrial
<PAGE>
packaging sales, as well as generally higher fixed costs as a percentage of
sales among all business segments due to volume declines.
Selling, general and administrative expense decreased by $834,000 in the
first six months of this year compared to the same period last year due to staff
reductions made in the third quarter of fiscal 1996, as well as lower operating
expenses.
The gain from foreign currency translation increased by $6,000 for the
first six months of this year compared to the same period last year, due to more
favorable currency exchange rates.
Other income in the first six months this year was $4,000 lower than the
first six months of last year due to fees associated with amendments to the
Credit Facility and reduced royalties.
Interest expense declined $10,000 due to reduced borrowings and lower
interest rates domestically, partially offset by increased interest expense at
our Brazilian subsidiary. There was no provision for income taxes in the first
six months this year versus $96,000 in the similar period last year. The
provision last year was due solely to taxable income from our Brazilian
subsidiary of $284,000 for the six month period.
PART II. OTHER INFORMATION
The Company is involved in various legal actions arising in the ordinary
course of business and several claims have been asserted against the Company as
of August 31, 1996. Some of the actions involve claims for compensatory,
punitive or other damages. The Company presently believes that it has valid
defenses to the claims that have been asserted and that any compensatory damage
claims are adequately covered by insurance above the Company's $100,000 per
claim self-insurance retention.
Item 2. Changes in Securities
The Company was in default of its minimum working capital and tangible net
worth covenants of the Credit Facility as of August 31, 1996. Subsequently,
Congress Financial Corporation has notified the Company of its intention to
terminate the Credit Facility due to the default as well as the reduced size of
the outstanding loan (below $1,000,000) and has provided the Company a period of
time in which to seek alternative sources of financing. The Company is currently
negotiating with financial institutions seeking alternative sources of
financing. No assurances can be made as to the amount, terms or timing of any
alternative financing agreements.
On August 31, 1994, the Registrant borrowed Five Hundred Thousand
($500,000) Dollars from Lyford Corp. ("Lyford"), a related company that owns
19.56% of the issued and outstanding common stock of the registrant. The Company
executed and delivered to Lyford a promissory note, a security agreement and a
Common Stock Purchase Warrant granting to Lyford the right to purchase up to
200,000 shares of the Company's common stock at an initial exercise price of Two
<PAGE>
($2.00) Dollars per share, the closing price for the Company's common stock on
the date the warrant was granted. The warrant expires on August 4, 2004.
On May 5, 1995, the Registrant concluded the rolling of this note into a
new note in the amount of One Million ($1,000,000) Dollars. The new obligation
is evidenced by a certain Amended, Extended and Restated Promissory Note dated
as of March 1, 1995 (the "Restated Note"). In consideration for the new loan,
the Company executed and delivered to Lyford the Restated Note and an additional
Common Stock Purchase Warrant. The new loan is secured by a junior lien on all
of the Company's assets. The new warrant grants to Lyford the right to purchase
up to 1,000,000 shares of the Company's common stock at an initial exercise
price of One ($1.00) Dollar per share. The market price of the Company's common
stock was $.875 on the date of the warrant grant. The new warrant expires by its
terms on April 12, 2005. Although an independent appraisal has not been
obtained, the Company management considered the application of APB 14 to the
value of these warrants and believes that they are of no value at this time. The
loan transaction closed pursuant to documents dated as of March 1, 1995 and in
the case of the new Warrant, April 13, 1995. These loan documents were
contingent on the Company's obtaining the consent of its senior lender, which
consent was obtained on May 5, 1995. The new note in the amount of one million
($1,000,000) dollars was due and payable on March 31, 1996. On June 10, 1996,
the Company amended, extended and restated the promissory note from Lyford, an
affiliated company. The revised note provides borrowings of $1,000,000 at an
interest rate of 14% per annum. The maturity date of this note has been extended
to April 1, 1997.
Item 3. Defaults Upon Senior Securities
The Company was in default of its minimum working capital and tangible net
worth covenants of the Credit Facility as of August 31, 1996. Subsequently,
Congress Financial Corporation has notified the Company of its intention to
terminate the Credit Facility due to the default as well as the reduced size of
the outstanding loan (below $1,000,000) and has provided the Company a period of
time in which to seek alternative sources of financing. The Company is currently
negotiating with financial institutions seeking alternative sources of
financing. No assurances can be made as to the amount, terms or timing of any
alternative financing agreements.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 5. Other Information
On October 7, 1996, the Company announced that it will apply to the
Securities and Exchange Commission to voluntarily withdraw from listing and
registration on American Stock Exchange and seek listing elsewhere. The
Company's decision resulted from the Amex's notification to the Company that it
determined to delist the Company because it no longer met the exchange's
continued listing requirements. While the Company initially appealed this
decision, the Company and the exchange have agreed to settle matters by having
the Company file an application for delisting with the SEC. The Company has
agreed to withdraw its appeal and the exchange has agreed to withdraw its
decision upon SEC approval of the Company's application.
Item 6. Exhibits and Reports on Form 8-K
Press Release Denying Rumors dated July 11, 1996.
<PAGE>
S I G N A T U R E
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.
WELDOTRON CORPORATION
Registrant
By: /s/Michael McKee
Michael McKee
Vice President of Finance
Date: October 15, 1996
<PAGE>
WELDOTRON CORPORATION
1532 So. Washington Avenue (at I-287) Piscataway, New Jersey 08855 (212)752-6700
NEWS RELEASE
For information, please contact:
WELDOTRON CORPORATION (AMEX: WLD)
Richard C. Hoffman, Corporate Secretary (908) 968-9640
TO: THE EDITOR
FOR: IMMEDIATE RELEASE July 11, 1996
WELDOTRON DENIES RUMORS OF ACQUISITION
Piscataway, New Jersey, July 11, 1996. . .Weldotron Corporation (AMEX:WLD)
today denied rumors that it has been or is about to be acquired. It has come to
the Company's attention that rumors have been circulating within the packaging
industry that Weldotron has been acquired or that its acquisition was imminent.
A spokesperson for the Company stated that the substance of these rumors
was incorrect. While Weldotron recently had been approached by a potential
suitor about the possibility of acquiring the Company or a potential business
combination, discussions did not go beyond the preliminary stage.
Weldotron is a leading manufacturer of packing systems for general
industrial applications as well as food packaging and "Weighwrap Systems" for
supermarkets and fresh food processors. The Company also has a Communications
and Control Group which manufactures and sells industrial safety controls.
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> FEB-29-1996
<PERIOD-END> AUG-31-1996
<CASH> 83
<SECURITIES> 0
<RECEIVABLES> 1,376
<ALLOWANCES> 0
<INVENTORY> 6,048
<CURRENT-ASSETS> 8,235
<PP&E> 11,486
<DEPRECIATION> 9,561
<TOTAL-ASSETS> 10,341
<CURRENT-LIABILITIES> 7,070
<BONDS> 0
<COMMON> 118
0
0
<OTHER-SE> 1,245
<TOTAL-LIABILITY-AND-EQUITY> 10,341
<SALES> 2,770
<TOTAL-REVENUES> 2,770
<CGS> 2,087
<TOTAL-COSTS> 3,526
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 175
<INCOME-PRETAX> (741)
<INCOME-TAX> 0
<INCOME-CONTINUING> (701)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (701)
<EPS-PRIMARY> (.30)
<EPS-DILUTED> 0
</TABLE>
