<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended April 30, 1996 Commission File No. 0-21084
------------------------------
CHAMPION INDUSTRIES, INC.
(Exact name of Registrant as specified in its charter)
West Virginia 55-0717455
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2450 First Avenue, P. O. Box 2968
Huntington, West Virginia 25728
(Address of principal executives offices)
(Zip Code)
(304) 528-2791
(Registrant's telephone number,
including area code)
------------------------------
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 .
----- -----
6,417,260 shares of common stock of the Registrant were outstanding at April 30,
1996.
<PAGE>
CHAMPION INDUSTRIES, INC.
INDEX
PAGE NO.
Part I. Financial Information
Item 1. Financial Statements
Consolidated Income Statements . . . . . . . . . . . . . . . . . 2
Consolidated Balance Sheets. . . . . . . . . . . . . . . . . . . 3
Consolidated Statements of Cash Flows. . . . . . . . . . . . . . 5
Notes to the Consolidated Financial Statements . . . . . . . . . 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . . . . . . 8
Part II. Other Information
Item 4. Submission of Matters to a Vote of Security Holders . . . . 10
Item 6. Exhibits and Reports on Form 8-K. . . . . . . . . . . . . . 11
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Exhibit 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
1
<PAGE>
CHAMPION INDUSTRIES, INC. AND SUBSIDIARIES
Consolidated Income Statements
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
APRIL 30, APRIL 30,
1996 1995 1996 1995
---------------------------------- ----------------------------------
<S> <C> <C> <C> <C>
Revenues:
Printing $10,818,151 $7,218,630 $20,728,022 $14,214,883
Office products and office furniture 3,791,901 3,459,572 7,981,566 6,779,991
---------------------------------- ----------------------------------
Total revenues 14,610,052 10,678,202 28,709,588 20,994,874
Cost of sales:
Printing 7,155,575 4,407,846 14,088,054 8,923,800
Office products and office furniture 2,360,795 2,200,176 5,203,852 4,405,954
---------------------------------- ----------------------------------
Total cost of sales 9,516,370 6,608,022 19,291,906 13,329,754
Selling, general and administrative
expenses 3,490,007 2,689,791 6,687,873 5,378,389
---------------------------------- ----------------------------------
Income from operations 1,603,675 1,380,389 2,729,809 2,286,731
Other income (expense):
Interest income 1,651 2,992 2,949 8,773
Interest expense (83,545) (39,660) (144,321) (68,588)
Other 3,900 13,308 16,646 66,498
---------------------------------- ----------------------------------
(77,994) (23,360) (124,726) 6,683
---------------------------------- ----------------------------------
Income before income taxes 1,525,681 1,357,029 2,605,083 2,293,414
Income taxes (625,000) (557,000) (1,068,000) (940,000)
---------------------------------- ----------------------------------
Net income $ 900,681 $ 800,029 $ 1,537,083 $ 1,353,414
---------------------------------- ----------------------------------
---------------------------------- ----------------------------------
Earnings per share $.14 $.13 $.24 $.22
---------------------------------- ----------------------------------
---------------------------------- ----------------------------------
Weighted average shares outstanding 6,441,324 6,290,178 6,436,359 6,290,225
---------------------------------- ----------------------------------
---------------------------------- ----------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
2
<PAGE>
CHAMPION INDUSTRIES, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(Unaudited)
ASSETS
<TABLE>
<CAPTION>
APRIL OCTOBER
30, 31,
1996 1995
----------------------------------------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 1,535,341 $ 1,350,806
Accounts receivable, net of allowance of $308,000 and $399,000 9,237,433 7,727,176
Inventories 6,034,149 5,339,592
Other current assets 320,218 162,850
Deferred tax assets 272,657 272,657
----------------------------------------
Total current assets 17,399,798 14,853,081
Property and equipment, at cost:
Land 647,340 347,340
Buildings and improvements 3,033,824 2,290,002
Machinery and equipment 11,932,163 10,029,560
Equipment under a capital lease 1,698,990 1,161,590
Furniture and fixtures 1,207,539 992,568
Vehicles 758,698 467,774
----------------------------------------
19,278,554 15,288,924
Less accumulated depreciation (8,043,955) (7,353,794)
----------------------------------------
11,234,599 7,935,130
Cash surrender value of officer's life insurance 436,307 447,407
Goodwill, net of accumulated amortization 1,622,884 1,689,780
Other assets 160,011 94,678
----------------------------------------
2,219,202 2,231,865
----------------------------------------
Total assets $30,853,599 $25,020,076
----------------------------------------
----------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
CHAMPION INDUSTRIES, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(Unaudited)
LIABILITIES AND SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
APRIL OCTOBER
30, 31,
1996 1995
-----------------------------------
<S> <C> <C>
Current liabilities:
Notes payable $ 900,000 $ --
Accounts payable 919,227 692,319
Accrued payroll 823,001 1,278,825
Taxes accrued and withheld 269,990 369,765
Accrued income taxes 897,906 649,406
Accrued expenses 480,903 218,219
Current portion of long-term debt:
Notes payable 671,821 392,007
Capital lease obligations 343,884 208,092
-----------------------------------
Total current liabilities 5,306,732 3,808,633
Long-term debt, net of current portion:
Notes payable 1,908,725 736,198
Capital lease obligations 976,324 820,389
Deferred income tax liability 1,490,941 932,633
Deferred gain 344,703 353,703
-----------------------------------
Total liabilities 10,027,425 6,651,556
Commitments and contingencies -- --
Shareholders' equity:
Common stock, $1 par value, 10,000,000 shares authorized;
6,417,260 and 6,333,946 shares issued and outstanding 6,417,260 6,333,946
Additional paid-in capital 8,208,741 6,788,474
Retained earnings 6,200,173 5,246,100
-----------------------------------
Total shareholders' equity 20,826,174 18,368,520
-----------------------------------
Total liabilities and shareholders' equity $30,853,599 $25,020,076
-----------------------------------
-----------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
CHAMPION INDUSTRIES, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
APRIL 30,
1996 1995
---------------------------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $1,537,083 $ 1,353,414
Adjustments to reconcile net income to cash
provided by operating activities:
Depreciation, amortization and accretion 757,057 526,371
Deferred gain on sale of assets (9,000) (15,000)
Changes in assets and liabilities:
Accounts receivable (841,179) (496,494)
Inventories 465,612 (588,643)
Other current assets (141,749) (127,575)
Accounts payable (376,183) (7,207)
Accrued payroll (455,824) (316,921)
Taxes accrued and withheld (222,564) (126,475)
Accrued income taxes 248,500 (1,203,616)
Accrued expenses 99,286 98,764
---------------------------------------
Net cash (used in) provided by operations 1,061,039 (903,382)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (867,638) (1,644,754)
Business acquisitions, net of cash (648,676) --
Increase in cash surrender value of officer's life insurance 11,100 (10,800)
Other assets 768 9,542
---------------------------------------
Net cash (used in) provided by investing activities (1,504,446) (1,646,012)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings (payments) of notes payable 900,000 350,000
Proceeds from term debt and leases 1,700,000 1,108,000
Principal payments on long term debt (1,391,763) (468,218)
Dividends paid (580,296) (454,927)
---------------------------------------
Net cash (used in) provided by financing activities 627,941 534,855
---------------------------------------
Net (decrease) increase in cash 184,534 (2,014,539)
Cash and cash equivalents, beginning of period 1,350,807 3,626,321
---------------------------------------
Cash and cash equivalents, end of period $1,535,341 $1,611,782
---------------------------------------
---------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
CHAMPION INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. BUSINESS OPERATIONS AND BASIS OF PRESENTATION
The foregoing financial information is unaudited and has been prepared from the
records of Champion Industries, Inc., ("Champion" or the "Company"). In the
opinion of management, the financial information reflects all adjustments
(consisting of items of a normal recurring nature) necessary for a fair
presentation of financial position, results of operations and cash flows in
conformity with generally accepted accounting principles. These interim
financial statements should be read in conjunction with the financial statements
for the year ended October 31, 1995 and related notes thereto contained in the
Company's Form 10-K dated January 25, 1996. The accompanying unaudited financial
statements are presented in accordance with generally accepted accounting
principles and instructions to the Securities and Exchange Commission Form
10-Q. The preparation of the financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that effect the amounts reported in the financial
statements. Actual results could differ from these estimates.
The accompanying consolidated financial statements of Champion Industries, Inc.
and Subsidiaries (the "Company") include the accounts of The Chapman Printing
Company, Inc., Bourque Printing, Inc., Dallas Printing Company, Inc., Carolina
Cut Sheets, Inc., U.S. Tag & Ticket Company, Inc., Donihe Graphics, Inc., and
Stationers, Inc.
2. INVENTORIES
Inventories are stated at the lower of first-in, first-out cost or market.
manufactured finished goods and work in process inventories include material,
direct labor and overhead based on standard costs, which approximate actual
costs. The Company utilizes an estimated gross profit method for determining
cost of sales in interim periods.
Inventories consisted of the following:
<TABLE>
<CAPTION>
APRIL 30, OCTOBER 31,
1996 1995
--------------- --------------
<S> <C> <C>
Printing:
Raw materials $1,775,809 $ 1,457,025
Work in process 1,244,947 1,021,460
Finished goods 710,637 583,067
Office products and office furniture 2,302,756 2,278,040
--------------- --------------
$6,034,149 $5,339,592
--------------- --------------
--------------- --------------
</TABLE>
3. EARNINGS PER SHARE
Earnings per share were computed based upon the weighted average shares of
Common Stock outstanding for the period, plus the shares that would be
outstanding assuming the exercise of dilutive stock options. The Company had
6,441,324, 6,290,178, 6,436,359 and 6,290,225 weighted average shares issued and
outstanding for the three and six months ended April 30, 1996 and 1995, as
adjusted for a 25% stock dividend (see Note 4).
6
<PAGE>
CHAMPION INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED), CONTINUED
4. SHAREHOLDERS' EQUITY
The Company paid a 25% stock dividend, accounted for as a 5 for 4 stock split,
on January 22, 1996 to stockholders of record on January 2, 1996. 1,266,789
shares were issued in the split of which 2,736 fractional shares were
repurchased.
The Company declared a dividend of five cents to be paid on June 28, 1996, to
stockholders of record on June 7, 1996. Dividends paid for the three and six
months ended April 30, 1996 and 1995 totalled $.05, $.04, $.09 and $.07 per
share.
5. ACQUISITION
On November 13, 1995, the Company acquired through merger Donihe Graphics,
Inc. ("Donihe"), a web printer located in Kingsport, Tennessee. The Company
issued 66,768 shares of common stock valued at $1,500,000 and $950,000 in
cash in exchange for all the issued and outstanding common stock of Donihe.
The Company obtained loans from a lending institution totalling $1.7 million
used in the Donihe and E. S. Upton Printing Company, Inc. acquisitions. The
transaction was accounted for under the purchase method. As of September 30,
1995, Donihe had total assets of $2,700,000 and total liabilities of
$1,400,000.
The following summarizes the unaudited consolidated pro forma results of
operations for the three and six months ended April 30, 1995, assuming the
acquisition had been consummated at the beginning of the periods presented.
<TABLE>
<CAPTION>
THREE SIX
MONTHS MONTHS
----------- -----------
<S> <C> <C>
Revenues $12,299,000 $24,237,000
Net income 760,000 1,274,000
Net income per share .12 .20
Common shares outstanding 6,373,639 6,373,685
</TABLE>
7
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
The following table sets forth, for the periods indicated, information derived
from the consolidated income statements as a percentage of total revenues.
<TABLE>
<CAPTION>
PERCENTAGE OF TOTAL REVENUES
THREE MONTHS ENDED SIX MONTHS ENDED
APRIL 30, APRIL 30,
1996 1995 1996 1995
-------------------- ---------------------
<S> <C> <C> <C> <C>
Revenues:
Printing 74.0% 67.6% 72.2% 67.7%
Office products and office furniture 26.0 32.4 27.8 32.3
-------------------- ---------------------
Total revenues 100.0 100.0 100.0 100.0
Cost of sales:
Printing 49.0 41.3 49.1 42.5
Office products and office furniture 16.1 20.6 18.1 21.0
-------------------- ---------------------
Total cost of sales 65.1 61.9 67.2 63.5
Selling, general and administrative
expenses 23.9 25.2 23.3 25.6
-------------------- ---------------------
Income from operations 11.0 12.9 9.5 10.9
Interest income 0.0 0.1 0.0 0.0
Interest (expense) (0.5) (0.4) (0.5) (0.3)
Other income 0.0 0.1 0.1 0.3
-------------------- ---------------------
Income before taxes 10.5 12.7 9.1 10.9
Income tax expense (4.3) (5.2) (3.7) (4.4)
-------------------- ---------------------
Net income 6.2% 7.5% 5.4% 6.5%
-------------------- ---------------------
-------------------- ---------------------
</TABLE>
THREE MONTHS ENDED APRIL 30, 1996 COMPARED TO THREE MONTHS ENDED APRIL 30, 1995
Total revenues increased 36.8% in the second quarter 1996 to $14.6 million from
$10.7 million in the second quarter 1995. Printing revenue increased 49.9% in
the second quarter 1996 to $10.8 million from $7.2 million in the second quarter
1995. This increase was achieved largely through acquisitions and increases in
sales at previously acquired divisions. Office products and office furniture
revenue in second quarter 1996 was $3.8 million, a 9.6% increase from $3.5
million in 1995. The increase in office products and office furniture revenue
was due to new contract data supply sales.
Total cost of sales increased 44.0% in the second quarter 1996 to $9.5 million
from $6.6 million in the second quarter 1995. Printing cost of sales increased
62.3% in the second quarter 1996 to $7.2 million from $4.4 million in the second
quarter 1995, due primarily to the increased sales volume. Office products and
office furniture cost of sales in the second quarter 1996 was $2.4 million, an
increase of 7.3% from $2.2 million in the second quarter 1995, due primarily to
increased sales volume in this business segment. Selling, general and
administrative expenses decreased as a percentage of total revenues to 23.9% in
the second quarter of 1996 from 25.2% in the second quarter 1995. This decrease
is the result of spreading of administrative overheads over increased revenues.
8
<PAGE>
Income from operations increased 16.2% in the second quarter 1996 to $1.6
million from $1.4 million in the second quarter 1995. Interest expense on a
comparative basis increased by $44,000, reflecting a small increase in average
borrowings and prime rate increases. For the second quarter 1996, net income
increased 12.6% to $901,000 from $800,000 in the second quarter 1995.
SIX MONTHS ENDED APRIL 30, 1996 COMPARED TO SIX MONTHS ENDED APRIL 30, 1995
Total revenues increased 36.8% for the first half 1996 to $28.7 million from
$21.0 million for the first half 1995. Printing revenue increased 45.8% in the
first half 1996 to $20.8 million from $14.2 million in 1995, primarily due to
revenues from recent acquisitions and the pass through of paper price increases
to customers. Office products and office furniture revenue in first half 1996
was $8.0 million, a 17.7% increase from $6.8 million in 1995. The increase in
office products and office furniture revenue was due to revenues from a recent
acquisition and improved data products and office furniture sales results.
Total cost of sales increased 44.7% in the first half 1996 to $19.3 million from
$13.3 million in the first half 1995. Printing cost of sales increased 57.9% in
the first half 1996 to $14.1 million from $8.9 million in the first half 1995,
due primarily to the increased sales volume. Office products and office
furniture cost of sales in the first half 1996 was $5.2 million, an increase of
18.1% from $4.4 million in the first half 1995, due primarily to increased sales
volume in this business segment. Selling, general and administrative expenses
decreased as a percentage of total revenues to 23.3% in the first half of 1996
from 25.6% in the first half 1995. This decrease is the result of spreading of
administrative overheads over increased revenues.
Income from operations increased 19.4% in the first half 1996 to $2.7 million
from $2.3 million in the first half 1995. Interest expense on a comparative
basis increased by $76,000, reflecting an increase in average borrowings and
prime rate increases. For the first half 1996, net income increased 13.6% to
$1.5 million from $1.4 million in the first half 1995.
SEASONALITY
Historically, the Company has experienced a greater portion of its annual sales
and net income in the second and fourth quarters than in the first and third
quarters. The second quarter generally reflects increased orders for printing of
corporate annual reports and proxy statements. a post-labor day increase in
demand for printing services and office products coincides with the company's
fourth quarter.
ACQUISITIONS
See Note 5 on page 7 for acquisition details.
LIQUIDITY AND CAPITAL RESOURCES
Champion's primary sources of funding for the first half 1996 were net income
and borrowings, including capital leases. Funds were used primarily to purchase
equipment, the funding of an increase in accounts payable, the payment of
accrued payroll, payroll taxes and income taxes and the payment of regular cash
dividends.
Working capital on april 30, 1996 was $12.1 million, an increase of $2.2 million
from a year ago. The Company's cash balance was $1.5 million on April 30, 1996,
a portion of which was invested in highly liquid instruments with maturities of
90 days or less.
The Company has short term credit facilities with banks permitting aggregate
borrowings of $2.5 million. On April 30, 1996, $900,000 had been drawn under
these facilities. The Company's president personally guarantees a small portion
of these credit facilities. There is no assurance that he will continue to do
so.
The Company has a leasing facility with a bank permitting aggregate financing of
$750,000 in equipment. On April 30, 1996, $332,000 had been drawn under this
facility.
9
<PAGE>
The Company expects that the combination of funds available from working
capital, borrowings available under the company's credit facilities (including
leases as required) and anticipated cash flows from operations will provide
sufficient capital resources for the foreseeable future. in the event the
company seeks to accelerate internal growth or make acquisitions beyond these
sources, additional financing would be necessary.
ENVIRONMENTAL REGULATION
The Company is subject to the environmental laws and regulations of the united
states, and the states in which it operates, concerning emissions into the air,
discharges into the waterways and the generation, handling and disposal of waste
materials. The Company's past expenditures relating to environmental compliance
have not had a material effect on the company. These laws and regulations are
constantly evolving, and it is impossible to predict accurately the effect they
may have upon the capital expenditures, earnings, and competitive position of
the company in the future. Based upon information currently available,
management believes that expenditures relating to environmental compliance will
not have a material impact on the financial position of the company.
PART II - OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At the annual meeting of shareholders held March 18, 1996, the following matter
was voted upon:
A) Fixing the number of directors at seven (7) and election of the
following nominees as directors, with voting as follows:
<TABLE>
<CAPTION>
DIRECTOR VOTES "FOR" VOTES "WITHHELD" BROKER NON-VOTES
-------------------------- ----------- ---------------- ----------------
<S> <C> <C> <C>
Robert H. Beymer 6,017,876 4,787 - 0 -
Philip E. Cline 6,018,852 3,811 - 0 -
Harley F. Mooney, Jr. 6,008,893 13,770 - 0 -
Todd L. Parchman 6,007,096 15,567 - 0 -
A. Michael Perry 6,017,876 4,787 - 0 -
Marshall T. Reynolds 6,018,852 3,811 - 0 -
Neal W. Scaggs 6,018,267 4,396 - 0 -
</TABLE>
10
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibit 11 Statement Re computation of Per Share Earning is filed
herewith on page 12.
b) Exhibit 27 Financial Data Schedule is filed herewith (Electronic version
only).
c) The following current report on Form 8-K was filed during the quarter for
which this report is filed:
1) Form 8-K dated May 15, 1996, and filed May 23, 1996, informing of the
Company's definitive Agreement of Merger with Smith & Butterfield Co.,
Inc. of Evansville, Indiana.
SIGNATURES
Pursuant to the requirement 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.
CHAMPION INDUSTRIES, INC.
Date: June 14, 1996 /s/ Marshall T. Reynolds
---------------------------------------------
Marshall T. Reynolds
President and Chief Executive Officer
Date: June 14, 1996 /s/ Joseph C. Worth, III
---------------------------------------------
Joseph C. Worth, III
Vice President and Chief Financial Officer
11
<PAGE>
CHAMPION INDUSTRIES, INC. AND SUBSIDIARIES
EXHIBIT 11
STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
APRIL 30, APRIL 30,
1996 1995 1996 1995
-----------------------------------------------------------------
<S> <C> <C> <C> <C>
Primary:
Average shares outstanding 6,417,260 6,268,468 6,411,266 6,268,468
Net effect of dilutive stock options - based on
treasury stock method using average market
price 24,064 21,710 25,093 21,757
-----------------------------------------------------------------
Totals 6,441,324 6,290,178 6,436,359 6,290,225
-----------------------------------------------------------------
-----------------------------------------------------------------
Net income $900,681 $800,029 $1,537,083 $1,353,414
-----------------------------------------------------------------
-----------------------------------------------------------------
Per share amount $0.14 $0.13 $0.24 $0.22
-----------------------------------------------------------------
-----------------------------------------------------------------
Fully diluted:
Average shares outstanding 6,417,260 6,268,468 6,411,266 6,268,468
Net effect of dilutive stock options - based on
treasury stock method using period end market
price, if greater than the average market price 27,067 21,805 26,595 21,805
-----------------------------------------------------------------
Totals 6,444,327 6,290,273 6,437,861 6,290,273
-----------------------------------------------------------------
-----------------------------------------------------------------
Net income $900,681 $800,029 $1,537,083 $1,353,414
-----------------------------------------------------------------
-----------------------------------------------------------------
Per share amount $0.14 $0.13 $0.24 $0.22
-----------------------------------------------------------------
-----------------------------------------------------------------
</TABLE>
12
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS FINANCIAL INFORMATION EXTRACTED FROM "SEE ATTACHED" AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-START> NOV-01-1995
<PERIOD-END> APR-30-1996
<CASH> 1,535,341
<SECURITIES> 0
<RECEIVABLES> 9,545,433
<ALLOWANCES> 308,000
<INVENTORY> 6,034,149
<CURRENT-ASSETS> 17,399,798
<PP&E> 19,278,554
<DEPRECIATION> 8,043,955
<TOTAL-ASSETS> 30,853,599
<CURRENT-LIABILITIES> 5,306,732
<BONDS> 0
0
0
<COMMON> 6,417,260
<OTHER-SE> 14,408,914
<TOTAL-LIABILITY-AND-EQUITY> 30,853,599
<SALES> 28,709,588
<TOTAL-REVENUES> 28,709,588
<CGS> 19,291,906
<TOTAL-COSTS> 19,291,906
<OTHER-EXPENSES> 6,594,873
<LOSS-PROVISION> 93,000
<INTEREST-EXPENSE> 144,321
<INCOME-PRETAX> 2,605,083
<INCOME-TAX> 1,068,000
<INCOME-CONTINUING> 1,537,083
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,537,083
<EPS-PRIMARY> .24
<EPS-DILUTED> .24
</TABLE>
