<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1995
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 0-7428
CALIFORNIA MICROWAVE, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 94-1668412
(State or other jurisdiction of Incorporation) (I.R.S. Employer
Identification Number)
555 TWIN DOLPHIN DRIVE, REDWOOD CITY, CALIFORNIA 94065
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (415) 596-9000
65O NORTH MARY AVENUE, SUNNYVALE, CALIFORNIA 94086 Former
name, former address, and former fiscal year, if changed since last report.
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
--- ---
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Classes Outstanding at January 31, 1996
Common Stock $.10 Par Value 15,963,266
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<PAGE> 2
Part I. Financial Information
Item 1. Financial Statements
CALIFORNIA MICROWAVE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In Thousands, Except Per Share Amounts)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
December 31 December 31
-------------------------- --------------------------
1995 1994* 1995 1994*
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Sales $ 116,289 $ 119,063 $ 232,052 $ 234,202
Cost of products sold 82,159 83,112 163,149 165,503
--------- --------- --------- ---------
Gross margin 34,130 35,951 68,903 68,699
--------- --------- --------- ---------
Expenses:
Research and development 7,532 7,154 14,698 13,513
Marketing and administration 19,255 17,581 37,293 34,309
Amortization of intangible assets 547 634 1,094 1,268
--------- --------- --------- ---------
Total expenses 27,334 25,369 53,085 49,090
--------- --------- --------- ---------
Operating income 6,796 10,582 15,818 19,609
Interest expense (1,125) (1,236) (2,169) (2,352)
Interest income 31 3 32 180
--------- --------- --------- ---------
Income before income taxes 5,702 9,349 13,681 17,437
Provision for income taxes 2,054 3,406 4,926 6,317
--------- --------- --------- ---------
Net income $ 3,648 $ 5,943 $ 8,755 $ 11,120
========= ========= ========= =========
Net income per share:
Primary $ .23 $ .37 $ .54 $ .69
========= ========= ========= =========
Fully diluted $ .23 $ .35 $ .54 $ .66
========= ========= ========= =========
Average shares and
equivalents outstanding:
Primary 16,129 16,273 16,230 16,105
Fully diluted 18,351 18,651 18,452 18,473
</TABLE>
* Restated to include the results of Microwave Networks Incorporated which
was acquired in a pooling of interests transaction in May 1995.
See accompanying notes.
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<PAGE> 3
CALIFORNIA MICROWAVE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
(Unaudited, See Note A)
<TABLE>
<CAPTION>
December 31 June 30
1995 1995
--------- ---------
<S> <C> <C>
Assets
- ------
Current assets:
Cash and cash equivalents $ 6,296 $ 1,983
Short-term investments 1,126 613
Accounts receivable 108,479 106,635
Inventories 91,056 100,431
Deferred tax assets 11,494 11,494
Prepaid expenses 2,373 1,898
--------- ---------
Total current assets 220,824 223,054
--------- ---------
Net property, plant and equipment 45,227 40,268
Deferred tax assets 5,467 5,467
Intangible and other assets 56,874 57,823
--------- ---------
$ 328,392 $ 326,612
========= =========
Liabilities and Stockholders' Equity
- ------------------------------------
Current liabilities:
Current portion of long-term debt $ 201 $ 301
Accounts payable 36,239 38,637
Accrued income taxes 4,929 2,892
Other accrued liabilities 46,785 55,403
--------- ---------
Total current liabilities 88,154 97,233
--------- ---------
Long-term liabilities 75,289 75,667
Stockholders' equity:
Common stock 1,586 1,572
Capital in excess of par value 86,384 84,034
Retained earnings 77,475 68,720
Unamortized restricted stock plan expense (312) (462)
Cumulative translation adjustment (184) (152)
--------- ---------
Total stockholders' equity 164,949 153,712
--------- ---------
$ 328,392 $ 326,612
========= =========
</TABLE>
A- The balance sheet at June 30, 1995 has been derived from the audited
financial statements at that date, but does not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements.
See accompanying notes.
-3-
<PAGE> 4
CALIFORNIA MICROWAVE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in Thousands)
<TABLE>
<CAPTION>
For The Six Months Ended
December 31
------------------------
1995 1994*
-------- --------
<S> <C> <C>
Operating activities:
Net income $ 8,755 $ 11,120
Adjustments to reconcile net income to net
cash provided by (used in) operating activities:
Depreciation and amortization 5,743 5,400
Amortization of intangible assets 1,094 1,268
Other -- (47)
Debt issuance costs paid 105 --
Net effect of changes in:
Accounts receivable (1,844) (18,522)
Inventories 9,375 (3,113)
Prepaid expenses (475) (539)
Accounts payable (2,398) (2,352)
Accrued income taxes 2,515 646
Other accrued liabilities (8,618) (2,739)
-------- --------
Net cash provided by (used in) operating activities 14,252 (8,878)
-------- --------
Investing activities:
Capital expenditures (10,552) (7,108)
Acquisition of MRC -- (9,600)
Other (1,155) 254
-------- --------
Net cash provided by (used in) investing activities (11,707) (16,454)
-------- --------
Financing activities:
Proceeds from (payments on) debt (111) 1,413
Proceeds from issuance of common stock 1,879 3,707
Proceeds from short-term borrowings -- 11,190
-------- --------
Net cash provided by (used in) financing activities 1,768 16,310
-------- --------
Net increase (decrease) in cash and cash equivalents 4,313 (9,022)
Cash and cash equivalents at beginning of year 1,983 13,949
-------- --------
Cash and cash equivalents at end of period $ 6,296 $ 4,927
======== ========
Cash paid during the period for:
Interest $ 1,855 $ 2,012
Income taxes 2,647 5,667
</TABLE>
* Restated to include the results of Microwave Networks Incorporated which was
acquired in a pooling of interests transaction in May 1995.
See accompanying notes.
-4-
<PAGE> 5
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
Note 1 - Basis of Presentation
The information at December 31, 1995, and for the three- and
six-month periods ended December 31, 1995 and 1994, is
unaudited, but includes all adjustments (consisting only of
normal recurring adjustments) which the management of
California Microwave, Inc. believes are necessary for a fair
presentation of the results for the periods presented. Interim
results are not necessarily indicative of results for a full
year. The consolidated interim financial statements should be
read in conjunction with the audited consolidated financial
statements for the year ended June 30, 1995 included in the
California Microwave, Inc. 1995 Annual Report to Stockholders.
Note 2 - Fiscal Periods
The Company's three and six month and fiscal year periods end
on the Saturday closest to December 31 and June 30,
respectively. For clarity of presentation, all fiscal periods
are reported as ending on a calendar month end.
Note 3 - Reclassifications
Certain fiscal year 1995 amounts have been reclassified to
conform to the fiscal year 1996 presentation.
<TABLE>
<CAPTION>
Note 4 - Inventories (in thousands)
December 31 June 30
1995 1995
-------- ----------
<S> <C> <C>
Projects in process $ 26,659 $ 35,062
Less progress billings 10,552 13,358
-------- ----------
16,107 21,704
Work-in-process and finished goods 28,906 38,179
Raw materials and parts 46,043 40,548
-------- ----------
$ 91,056 $ 100,431
======== ==========
</TABLE>
Note 5 - Unbilled Accounts Receivable
Included in accounts receivable at December 31, 1995 and June
30, 1995 is approximately $10.7 million and $12.7 million,
respectively, of unbilled receivables principally due to
provisions contained in certain export contracts and to a
lessor degree the billing provisions of government contracts.
At December 31, 1995, approximately $8 million was due the
Company from a foreign customer, of which approximately 50% was
unbilled. In January 1996, the customer applied for protection
from its creditors under its local law. The Company believes
that any portion of the amounts due it from the customer that
are not realized through future cash collections or from the
disposition of any equipment returned to the Company pursuant
to the local bankruptcy law will not exceed reserves
established at June 30, 1995 in connection with this customer.
The remaining amount of unbilled receivables at December 31,
1995 is expected to be billed and collected within one year.
Note 6 - Stockholders' Equity
The change in capital in excess of par value for the six months
ended December 31, 1995 consists principally of common stock
issuances and tax benefit of options exercised.
-5-
<PAGE> 6
Item 2. Management Discussion and Analysis of Financial Condition and Results
of Operations
The following table sets forth for the periods indicated (i) certain income and
expense items expressed as a percentage of the Company's total sales and (ii)
the percentage change of such items for the three and six months ended December
31, 1995 compared to the three and six months ended December 31, 1994. See
Condensed Consolidated Statements of Income.
<TABLE>
<CAPTION>
Period to Period
Percent of Sales Increase (Decrease)
---------------- -------------------
Three Months Six Months Three Months Six Months
Ended Ended Ended Ended
----- ----- ----- -----
December 31 December 31 December 31 December 31
------------- ------------ ------------ ------------
1995 1994 1995 1994 1995 vs 1994 1995 vs 1994
---- ---- ---- ---- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Sales 100.0% 100.0% 100.0% 100.0% (2.3)% (0.9)%
Gross margin 29.4 30.2 29.7 29.3 (5.1) 0.3
Research and development expenses 6.5 6.0 6.3 5.8 5.3 8.8
Marketing and administration expenses 16.6 14.8 16.1 14.7 9.5 8.7
Amortization of intangible assets 0.5 0.5 0.5 0.5 (13.7) (13.7)
Operating income 5.8 8.9 6.8 8.4 (35.8) (19.3)
Interest (expense) net (0.9) (1.0) (0.9) (0.9) (11.3) (1.6)
Income before income taxes 4.9 7.9 5.9 7.5 (39.0) (21.5)
Net income 3.1 5.0 3.8 4.8 (38.6) (21.3)
</TABLE>
The following table sets forth sales by product class and by market sector for
the three and six months ended December 31, 1995 and 1994 (in thousands):
<TABLE>
<CAPTION>
Sales
-----
Three Months Six Months
Ended Ended
December 31 December 31
----------- -----------
1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
Satellite Communications $ 56,630 $ 42,523 $112,562 $ 86,476
Wireless 42,180 58,237 83,721 112,257
Intelligence 17,461 17,890 35,070 33,586
Other 18 413 699 1,883
--------- --------- -------- ---------
$116,289 $119,063 $232,052 $234,202
========= ========= ======== =========
International $ 61,024 $ 52,816 $122,660 $113,264
U.S. Commercial 30,942 38,184 61,871 68,170
U.S. Government 24,323 28,063 47,521 52,768
--------- --------- -------- ---------
$116,289 $119,063 $232,052 $234,202
========= ========= ======== =========
</TABLE>
-6-
<PAGE> 7
RESULTS OF OPERATIONS
SALES Sales were $116.3 million and $119.1 million for the three months
ended December 31, 1995 and 1994, respectively, representing a decrease of 2%.
Satellite communications sales increased 33%, offsetting a decrease of 28% in
wireless sales. The increase in satellite communications sales was due primarily
to investments in telecommunications infrastructure and expansion of existing
telecommunication capacity in foreign countries. The decrease in wireless sales
was principally due to a customer's decision during fiscal 1995 not to purchase
additional radios against a multi-year contract for which the Company had
significant sales during the second quarter of fiscal 1995, and to slowness
during the second quarter of fiscal 1996 in international cellular markets.
Additionally, regulatory and other issues have delayed at least until the second
half of fiscal 1996 the development of the Personal Communications Services
(PCS) market in the United States.
International sales increased 16%, offsetting decreases of 19% and 13% in
U.S. commercial sales and sales to the U.S. government, respectively. Products
represented 66% of total sales in the second quarter of 1996 compared to 67% in
the second quarter of 1995, with the balance represented by system sales.
Sales were $232.1 million and $234.2 million for the six months ended
December 31, 1995 and 1994, respectively, representing a decrease of 1%.
Satellite communications and intelligence systems sales increased 30% and 4%,
respectively, substantially offsetting a 25% decrease in wireless sales.
International sales increased 8% while U.S. commercial sales and sales to the
U.S. government decreased 9% and 10%, respectively.
GROSS MARGIN Gross margin was $34.1 million and $36.0 million for the three
months ended December 31, 1995 and 1994, respectively, representing a decrease
of 5%. Gross margin as a percentage of total sales was 29.4% and 30.2% for such
periods, respectively.
Gross margin was $68.9 million and $68.7 million for the six months ended
December 31, 1995 and 1994, respectively. Gross margin as a percentage of total
sales was 29.7% and 29.3% for such periods, respectively.
System sales, compared to product sales, include a relatively high
percentage of large subcontracted items to which the Company adds less value and
which therefore have lower gross margins. In addition, engineering costs in
turnkey satellite earth stations and intelligence systems are usually customer
funded and are included in cost of products sold. The Company's strategy
includes increasing the proportion of higher margin product sales.
RESEARCH AND DEVELOPMENT Research and development expenses were $7.5
million and $7.2 million for the three months ended December 31, 1995 and 1994,
respectively, representing an increase of 5%. Research and development expenses
as a percentage of total sales were 6.5% and 6.0% for such periods,
respectively. This increase was due primarily to the development of new
satellite networking software and wireless products with higher anticipated
gross margins. The Company anticipates that research and development expenses as
a percentage of sales will remain in the 6% to 7% range for the balance of
fiscal 1996.
Research and development expenses were $14.7 million and $13.5 million for
the six months ended December 31, 1995 and 1994, respectively, representing an
increase of 9%. Research and development expenses as a percentage of total sales
were 6.3% and 5.8% for such periods, respectively.
In general, as stated above, engineering expenditures for turnkey satellite
earth stations and intelligence systems are largely customer funded and are
included in cost of products sold.
MARKETING AND ADMINISTRATION Marketing and administration expenses were
$19.3 million and $17.6 million for the three months ended December 31, 1995 and
1994, respectively,
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<PAGE> 8
representing an increase of 10%. Marketing and administration expenses as a
percentage of total sales were 16.6% and 14.8% for such periods, respectively,
reflecting continued expansion of the Company's international sales/service
presence. The Company anticipates that marketing and administration expenses as
a percentage of sales will be in the 15% to 16% range for the balance of fiscal
1996.
Marketing and administration expenses were $37.3 million and $34.3 million
for the six months ended December 31, 1995 and 1994, respectively, representing
an increase of 9%. Marketing and administration expenses as a percentage of
total sales was 16.1% and 14.7% for such periods respectively.
AMORTIZATION OF INTANGIBLE ASSETS Amortization expenses associated with
intangible assets were $.5 million and $.6 million for the three months ended
December 31, 1995 and 1994, respectively, representing a decrease of 14%. This
decrease reflects the $10 million write-down of intangible assets in the fourth
quarter of fiscal 1995.
OPERATING INCOME Operating income was $6.8 million and $10.6 million for
the three months ended December 31, 1995 and 1994, respectively, representing a
36% decrease. Operating income as a percentage of total sales was 5.8% and 8.9%
for such periods.
Operating income was $15.8 million and $19.6 million for the six months
ended December 31, 1995 and 1994, respectively, representing a decrease of 19%.
Operating income as a percentage of sales was 6.8% and 8.4% for such periods,
respectively.
INTEREST EXPENSE, NET Net interest expense was $1.1 million and $1.2
million for the three months ended December 31, 1995 and 1994, respectively,
representing an 11% decrease. Net interest expense was $2.1 million and $2.2
million for the six months ended December 31, 1995 and 1994, respectively,
representing a 2% decrease. The decrease in net interest expense reflects the
improved cash flow in fiscal 1996 compared to fiscal 1995, lessening the need
for the Company to borrow against its credit lines.
PROVISION FOR INCOME TAXES The provision for income taxes was $2.1 million
and $3.4 million for the three months ended December 31, 1995 and 1994,
respectively, representing a 40% decrease. The provision for income taxes was
$4.9 million and $6.3 million for the six months ended December 31, 1995 and
1994, respectively, representing a 22% decrease. The effective tax rate was 36%
for each of such periods.
LIQUIDITY AND CAPITAL RESOURCES
At December 31, 1995, the Company had working capital of $132.7 million,
including $6.3 million of cash and cash equivalents, compared with working
capital of $125.8 million, including cash and cash equivalents of $2.0 million,
at June 30, 1995.
During the first six months of fiscal 1996 cash and cash equivalents were
provided by operating income (including depreciation and amortization) and
decreases in inventories, and were used to fund an increase in accounts
receivable and to reduce accounts payable and to pay year-end accrued
liabilities, including payments under incentive agreements and employee benefit
plans. The net result was cash and cash equivalents provided by operations of
$14.3 million. During the first six months of fiscal 1995, cash and cash
equivalents were provided by operating income (including depreciation and
amortization ) and were used to fund growth in accounts receivable and
inventories and for payment of year-end accounts payable and accrued
liabilities. The net result was an operational cash and cash equivalents outflow
of $8.9 million.
The Company's investing activities during the first six months of fiscal
1996 included capital expenditures of $10.6 million. Total cash used for
investing activities was $11.7 million. Net cash used for investing activities
during the first six months of fiscal 1995 was $16.4 million, which included
$7.1 million of capital expenditures and a $9.6 million payment to the former
shareholders of Microwave Radio Corporation (MRC) under the 1992 MRC acquisition
agreement.
-8-
<PAGE> 9
During the first six months of fiscal 1996, cash and cash equivalents of
$1.8 million were provided by financing activities, including sales of $1.9
million of common stock to employees under on-going stock option and purchase
plans. During the first six months of 1995, the Company borrowed $11.2 million
under its credit lines and sold $3.7 million of common stock to employees.
The above activity resulted in a net increase in cash and cash equivalents
of $4.3 million for the first six months of fiscal 1996 compared to a net
decrease in cash and cash equivalents of $9.0 million for the first six months
of fiscal 1995.
In June 1995, the Company recorded restructuring and other charges of
approximately $37 million in connection with a program to reduce costs and
improve operating efficiencies. The program included, among other things: the
integration of operations within the Company's Wireless Products Group and the
exit by California Microwave-TeleCom Transmission Systems, Inc. (TTS) from the
short-haul radio market, which included certain short-haul radio contracts and
the shifting of short-haul radio sales to MRC; the recording of certain contract
costs at STS; the elimination of excess facilities; the reduction of employees
at Satellite Transmission Systems, Inc. (STS); the write-off of excess inventory
and capital equipment; and the write down of intangible assets.
Asset writedowns represented approximately $14 million of the charges, and
future cash payments represented approximately $23 million. During the six
months ended December 31, 1995 cash payments approximated $2.3 million, reducing
the remaining liability at December 31, 1995 to approximately $20.2 million as
shown below (in thousands):
<TABLE>
<CAPTION>
Cash Outlay
-------------------------------
Less:
1995 Asset Writedowns Completed through
Provision during fiscal 1995 December 31, 1995 Future
--------- ------------------ ------------------ ------
<S> <C> <C> <C> <C>
Contract termination
and other costs $13,450 $ 750 $ 300 $12,400
Excess facilities 4,902 A 955 364 3,583
Severance costs 3,054 A -- 820 2,234
Inventory write-offs 227 227 -- --
Capital equipment write-offs 1,363 1,363 -- --
Other 3,400 600 792 2,008
Intangible asset write-down 10,000 10,000 -- --
------- ------- ------- -------
$36,396 $13,895 $ 2,276 $20,225
======= ======= ======= =======
</TABLE>
A - after reclassification of $1.8 million from excess facilities to severance
costs.
In October 1995, the Company commenced the integration of operations
within the Wireless Products Group by merging the operations of California
Microwave-Microwave Networks Incorporated and TTS. As a result of this merger
and of implementing the restructuring plans, certain amounts totaling $1.8
million originally provided for excess facilities were determined to not be
needed and were reallocated to additional severance costs. There have been no
other material changes in the restructuring plan or in estimates of the
restructuring costs. The Company expects that cash expenditures that will be
incurred to complete the restructuring will not have a material effect on the
Company's liquidity.
The Company has available two unsecured committed credit facilities,
totaling $68.5 million, $60.0 million of which expires in September 1998, and
$8.5 million of which expires in October 1996. At December 31, 1995, there
were no borrowings and $11.4 million of standby letters of credit outstanding
under these credit lines, leaving $57.1 million of available credit lines.
The Company believes that its current cash position, funds generated from
operations and funds available from its credit facilities will be adequate to
meet the Company's requirements for
-9-
<PAGE> 10
working capital, capital expenditures, debt service and external investments for
the next 12 months.
OTHER FINANCIAL INFORMATION
BOOKINGS Orders booked were $114.9 million and $159.3 million for the three
months ended December 31, 1995 and 1994, respectively, representing a decrease
of 28%. Wireless products bookings increased 2% to 42% of total bookings.
Satellite communications and intelligence systems decreased 35% and 54%,
respectively. During the second quarter of fiscal 1995, the Company booked two
significant multi-year orders, one each for satellite communications and
intelligence systems, of approximately $40 million and $25.8 million,
respectively.
BACKLOG Backlog was $215.7 million and $270.6 million at December 31, 1995
and 1994, respectively, representing a decrease of 20%. Approximately 90% of the
December 31, 1995 backlog is expected to be delivered within twelve months.
-10-
<PAGE> 11
Part II - Other Information
Item 1. Legal Proceedings
On November 9, 1995, and December 12, 1995, putative class action
lawsuits entitled Rick Fairchild v. California
Microwave, Inc. et al. and Mark E. McKinney v.
California Microwave, Inc. et al. were filed in the United
States District Court for the Northern District of California. The
plaintiffs in these two cases, which have been consolidated,
purport to represent a class of all persons who purchased common
stock of California Microwave, Inc. (the "Company") between
September 6, 1994 and June 29, 1995 (the "Class Period"). Named as
defendants are the Company and certain of its executive officers.
The complaints allege that defendants violated various federal
securities laws through material misrepresentations and omissions
during the Class Period. California Microwave, Inc. believes that
it has meritorious defenses to the claims alleged in these lawsuits
and intends to defend the actions vigorously.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit 11 - Statement re computation of per share earnings.
Exhibit 27 - Financial Data Schedule.
(b) Reports on Form 8-K.
One report on Form 8-K, dated November 9, 1995, reporting
under Item 5 information related to the legal proceedings
referred to in Item 1 above was filed for the quarter ended
December 31, 1995.
-11-
<PAGE> 12
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
CALIFORNIA MICROWAVE, INC.
February 10, 1996 BY /s/ Philip F. Otto
- ------------------------- -------------------------------------
Date Philip F. Otto
President and Chief Executive Officer
Chairman of the Board
February 10, 1996 BY /s/ George L. Spillane
- ------------------------- -------------------------------------
Date George L. Spillane
Vice President
Chief Financial Officer
-12-
<PAGE> 13
EXHIBIT INDEX
Ex. 11 Statement re computation of per share earnings.
Ex. 27 Financial Data Schedule.
<PAGE> 1
California Microwae, Inc.
Computation of Per Share Earnings
Exhibit 11
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended Three Months Ended
December 31, 1995 December 31, 1994
------------------ ------------------
<S> <C> <C>
PRIMARY - EPS:
- -------------
Net income, as reported $ 3,648 $ 5,943
======= =======
Average shares outstanding 15,852 15,473
Add - Common stock equivalents of Company's
stock options using the treasury stock method 277 800
------- -------
Average shares and equivalents - Primary 16,129 16,273
======= =======
Net income per share - Primary $ .23 $ .37
======= =======
FULLY DILUTED - EPS:
Net income, as reported $ 3,648 $ 5,943
Add back interest, net of taxes 562 554
------- -------
Net income for fully diluted $ 4,210 $ 6,497
======= =======
Average shares and equivalents - primary 16,129 16,273
Add- additional common stock equivalents of
the Company's stock options -0- 156
Add - Shares to be issued at conversion of
Convertible Debentures 2,222 2,222
------- -------
Average shares and equivalents - Fully Diluted 18,351 18,651
======= =======
Net income per share - Fully Diluted $ .23 $ .35
======= =======
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> DEC-31-1995
<CASH> 6296
<SECURITIES> 1126
<RECEIVABLES> 108479
<ALLOWANCES> 2236
<INVENTORY> 91056
<CURRENT-ASSETS> 220824
<PP&E> 98506
<DEPRECIATION> 53279
<TOTAL-ASSETS> 328392
<CURRENT-LIABILITIES> 88154
<BONDS> 67780
0
0
<COMMON> 1586
<OTHER-SE> 163363
<TOTAL-LIABILITY-AND-EQUITY> 328392
<SALES> 232052
<TOTAL-REVENUES> 232052
<CGS> 163149
<TOTAL-COSTS> 163149
<OTHER-EXPENSES> 53085
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2169
<INCOME-PRETAX> 13681
<INCOME-TAX> 4926
<INCOME-CONTINUING> 8755
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 8755
<EPS-PRIMARY> .54
<EPS-DILUTED> .54
</TABLE>
