<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED MARCH 31, 1998
Commission file number 0-16182
AXSYS TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
Delaware 11-1962029
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
910 Sylvan Avenue
Englewood Cliffs, New Jersey 07632
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (201) 871-1500
----------
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
---- ----
4,122,767 shares of Common Stock, $.01 par value, were outstanding as of May 5,
1998.
<PAGE>
AXSYS TECHNOLOGIES, INC.
INDEX
Page
----
PART I. FINANCIAL INFORMATION
- ------------------------------
Item 1. Financial Statements (Unaudited):
Condensed Consolidated Statements of Operations--
Three Months Ended March 31, 1998 and 1997 3
Condensed Consolidated Balance Sheets--
March 31, 1998 and December 31, 1997 4
Condensed Consolidated Statements of Cash Flows--
Three Months Ended March 31, 1998 and 1997 5
Notes to Condensed Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 10
Item 3. Quantitative and Qualitative Disclosures
about Market Risk 12
PART II. OTHER INFORMATION
- ---------------------------
Item 6. Exhibits and Reports on Form 8-K 13
SIGNATURES 13
- ----------
2
<PAGE>
AXSYS TECHNOLOGIES, INC.
Condensed Consolidated Statements of Operations
(Unaudited, dollars in thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended March 31,
-----------------------------
1998 1997
---------- ----------
<S> <C> <C>
NET SALES $ 33,595 27,602
---------- ----------
Cost of sales 24,320 20,402
Selling, general and administrative expenses 6,293 4,899
Amortization of intangible assets 119 52
---------- ----------
OPERATING INCOME 2,863 2,249
Interest expense 258 655
Other expense 5 11
---------- ----------
INCOME BEFORE TAXES 2,600 1,583
Provision for income taxes 1,063 638
---------- ----------
NET INCOME 1,537 945
Preferred stock dividends -- 60
---------- ----------
NET INCOME APPLICABLE TO COMMON SHAREHOLDERS $ 1,537 $ 885
---------- ----------
---------- ----------
BASIC EARNINGS PER SHARE $ 0.36 $ 0.30
---------- ----------
---------- ----------
Weighted average common shares outstanding 4,215,976 2,982,653
---------- ----------
---------- ----------
DILUTED EARNINGS PER SHARE $ 0.36 $ 0.27
---------- ----------
---------- ----------
Weighted average common shares outstanding 4,262,698 3,240,221
---------- ----------
---------- ----------
</TABLE>
See accompanying notes to condensed consolidated financial statements.
3
<PAGE>
AXSYS TECHNOLOGIES, INC.
Condensed Consolidated Balance Sheets
(Dollars in thousands, except per share data)
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
------------ ------------
(Unaudited)
ASSETS
<S> <C> <C>
CURRENT ASSETS:
Cash $ 288 $ 575
Accounts receivable--net 19,653 18,643
Inventories--net 30,954 29,324
Other current assets 1,266 1,011
------- -------
TOTAL CURRENT ASSETS 52,161 49,553
PROPERTY, PLANT AND EQUIPMENT--net 16,066 15,074
EXCESS OF COST OVER NET ASSETS ACQUIRED--net 13,823 13,942
OTHER ASSETS 334 430
------- -------
TOTAL ASSETS $82,384 $78,999
------- -------
------- -------
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $10,065 $ 9,631
Accrued expenses and other liabilities 10,006 9,979
Current portion of long-term debt and capital lease obligations 900 904
------- -------
TOTAL CURRENT LIABILITIES 20,971 20,514
LONG-TERM DEBT & CAPITAL LEASES, less current portion 9,885 8,629
OTHER LONG-TERM LIABILITIES 2,375 2,284
DEFERRED INCOME 222 255
SHAREHOLDERS' EQUITY:
Preferred Stock, none issued and outstanding at March 31, 1998
and December 31, 1997 -- --
Common Stock, issued and outstanding 4,118,767 shares at
March 31, 1998 and 4,113,190 shares at December 31, 1997 41 41
Capital in Excess of Par 40,486 40,409
Retained Earnings 8,404 6,867
------- -------
TOTAL SHAREHOLDERS' EQUITY 48,931 47,317
------- -------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $82,384 $78,999
------- -------
------- -------
</TABLE>
See accompanying notes to condensed consolidated financial statements.
4
<PAGE>
AXSYS TECHNOLOGIES, INC.
Condensed Consolidated Statements of Cash Flows
(Unaudited, dollars in thousands)
<TABLE>
<CAPTION>
Three Months
Ended March 31,
--------------------
1998 1997
-------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 1,537 $ 945
Adjustments to reconcile net income to cash provided by
(used in) operating activities:
Realization of net operating loss carryforward 58 542
Depreciation and amortization 989 751
Increase in current assets, other than cash (2,895) (3,146)
Increase in current liabilities 461 1,619
Other--net 154 53
------- -------
NET CASH PROVIDED BY OPERATING ACTIVITIES 304 764
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (1,787) (462)
------- -------
NET CASH USED IN INVESTING ACTIVITIES (1,787) (462)
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from borrowings 1,400 --
Net repayment of borrowings (223) (2,447)
Other 19 --
------- -------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 1,196 (2,447)
------- -------
NET DECREASE IN CASH (287) (2,145)
CASH AT BEGINNING OF PERIOD 575 2,691
------- -------
CASH AT END OF PERIOD $ 288 $ 546
------- -------
------- -------
Supplemental Cash Flow Information:
Cash paid (refunded) for:
Interest $ 161 $ 484
Income Tax 194 (16)
Non-Cash Investing and Financing Activities:
Equipment acquired under capital lease $ 75 $ 598
</TABLE>
See accompanying notes to condensed consolidated financial statements.
5
<PAGE>
AXSYS TECHNOLOGIES, INC.
Notes to Condensed Consolidated Financial Statements (Unaudited)
(Dollars in thousands, except per share data)
Note 1 - Basis of Presentation
- ------------------------------
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments considered
necessary for a fair presentation (consisting of normal recurring accruals) have
been included. Operating results for the three month period ended March 31, 1998
are not indicative of the results that may be expected for the year ending
December 31, 1998. For further information, refer to the financial statements
and footnotes thereto included in the Company's Annual Report on Form 10-K for
the year ended December 31, 1997.
Certain reclassifications have been made to previously reported financial
statements to conform to current classifications.
Note 2 - Earnings per Share
- ---------------------------
Effective December 31, 1997, the Company adopted Statement of Financial
Accounting Standards ("SFAS") No. 128 "Earnings per Share" which requires a dual
presentation of basic and diluted earnings per share. Basic earnings per share
has been computed by dividing Net Income Applicable to Common Shareholders by
the weighted average number of common shares outstanding. Diluted earnings per
share has been computed by dividing Net Income Applicable to Common Shareholders
by the weighted average number of common shares outstanding including the
dilutive effects of warrants and stock options. Diluted earnings per share for
1997, as calculated under SFAS No. 128, is the same as previously reported fully
diluted earnings per share.
Note 3 - Acquisitions and Divestiture
- -------------------------------------
On May 30, 1997, the Company acquired Teletrac, Inc. ("Teletrac") for $9,926,
including the issuance of 153,000 shares of Axsys Common Stock, 53,000 of which
shares were issued at closing and 100,000 of which shares will be issued
pursuant to a Stockholder Agreement entered into as of May 30, 1997 with certain
selling shareholders and employees of Teletrac. Teletrac designs and
manufactures laser-based precision measurement systems and state-of-the-art
precision linear and rotary positioning servo systems for use in the electronics
capital equipment market.
The acquisition of Teletrac was accounted for under the purchase method of
accounting and, accordingly, the results of operations of Teletrac have been
included in the accompanying consolidated financial statements since the date of
its acquisition. The cost of the acquisition was allocated on the basis of the
fair market value of the assets acquired and liabilities assumed. The purchase
price allocations for Teletrac have been completed on a preliminary basis.
Management does not believe that changes in the allocation will be material.
Summarized below are the unaudited pro forma results of operations of the
Company as if Teletrac had been acquired on January 1, 1997:
<TABLE>
<CAPTION>
Pro Forma
Three Months Ended March 31, 1997
---------------------------------
<S> <C>
Net sales $ 29,600
Net income 975
Basic earnings per share 0.29
Diluted earnings per share 0.27
</TABLE>
6
<PAGE>
AXSYS TECHNOLOGIES, INC.
Notes to Condensed Consolidated Financial Statements (Unaudited)
(Dollars in thousands, except per share data)
The pro forma financial information presented above is not necessarily
indicative of either the results of operations that would have occurred had the
acquisition of Teletrac taken place at the beginning of 1997 or the future
operating results of the combined companies.
Note 4 - Inventories
- --------------------
Inventories have been determined generally by lower of cost (first-in, first-out
or average) or market. Inventories consist of:
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
------------ ------------
<S> <C> <C>
Raw materials $ 9,763 $ 10,799
Work-in-process 14,513 12,455
Finished goods 11,602 11,425
------------ ------------
35,878 34,679
Less reserves 4,924 5,355
------------ ------------
$ 30,954 $ 29,324
------------ ------------
------------ ------------
</TABLE>
Note 5--Shareholders' Equity
- -----------------------------
Common Stock--
On October 15, 1997, the Company amended its Certificate of Incorporation to
increase the authorized number of shares of Common Stock to 30,000,000.
On October 21, 1997, the Company completed an underwritten public offering of
1,064,809 shares of its Common Stock at a public offering price of $27.00 per
share (the "offering"). Of the approximately $26,400 of net proceeds from the
offering, approximately $6,900 was used to repurchase outstanding warrants to
purchase the Company's Common Stock and the remaining net proceeds to prepay a
portion of the Company's outstanding bank debt.
Preferred Stock--
The Company paid quarterly dividends on its $1.20 Cumulative Redeemable
Preferred Stock in additional shares at an annual rate of 15% based on the
shares outstanding from August 1991 through February 22, 1996. On February 22,
1996, the Company's right to pay dividends in additional shares of Preferred
Stock expired. From February 22, 1996 to June 4, 1997, the Company did not
declare or pay any dividends on the Preferred Stock, although they continued to
accumulate.
On February 14, 1997, the Company commenced an offer to exchange 0.75 shares of
its Common Stock for each outstanding share of its Preferred Stock. On March 17,
1997, the Exchange Offer terminated and the Company accepted for exchange all
shares of Preferred Stock validly tendered as of that time. Approximately
538,000 shares of Preferred Stock were exchanged for approximately 403,500
shares of Common Stock. Holders of shares of Preferred Stock accepted for
exchange did not receive any separate payment in respect of dividends not paid
subsequent to February 22, 1996, the last date on which dividends were paid on
the Preferred Stock.
On June 4, 1997, the Company redeemed all the remaining approximately 200,900
outstanding shares of its Preferred Stock. The redemption price was $7.70 per
share, including accrued and unpaid dividends of $1.54 per share through the
redemption date.
7
<PAGE>
AXSYS TECHNOLOGIES, INC.
Notes to Condensed Consolidated Financial Statements (Unaudited)
(Dollars in thousands, except per share data)
Note 6--Segment Data
- ---------------------
Effective January 1, 1998, the Company adopted SFAS No. 131 "Disclosure about
Segments of an Enterprise and Related Information" which requires disclosure of
information on the segments of a business based on the way management organizes
the segments of its business for making operating decisions and assessing
performance. The Company classifies its businesses under two major groups each
of which has two segments. The Precision Systems Group ("PSG") is comprised of
the Precision Systems and Sensor Systems segments, and the Industrial Components
Group ("ICG") is comprised of the Precision Ball Bearings and Electronic
Interconnect Products segments. Within the PSG, the Precision Systems segment
designs and manufactures micro-positioning and precision optical components and
systems primarily for defense, space, electronics capital equipment and digital
imaging applications. The Sensor Systems segment designs and manufactures
position sensor devices such as potentiometers, pressure transducers and
encoders primarily for defense and industrial automation applications. Within
the ICG, the Precision Ball Bearings segment distributes and services precision
miniature ball bearings. The Electronic Interconnect Products segment designs
and manufactures interconnect devices, barrier terminal blocks, and connectors.
The products of both the ICG segments are used in a variety of commercial and
industrial applications.
The following tables present financial data for each of the Company's segments.
<TABLE>
<CAPTION>
Three Months Ended March 31,
----------------------------
1998 1997
---------- ----------
<S> <C> <C>
Net sales:
Precision Systems .............................. $ 19,407 $ 15,024
Sensor Systems ................................. 1,862 1,693
Intersegment eliminations ...................... (165) (99)
-------- --------
Total PSG ..................................... 21,104 16,618
-------- --------
Precision Ball Bearings ....................... 7,263 6,632
Electronic Interconnect Products .............. 5,228 4,352
-------- --------
Total ICG ..................................... 12,491 10,984
-------- --------
Total sales ................................... $ 33,595 $ 27,602
-------- --------
-------- --------
Earnings before amortization, interest and taxes:
Precision Systems ............................. $ 2,074 $ 1,731
Sensor Systems ................................ (16) (139)
-------- --------
Total PSG ..................................... 2,058 1,592
-------- --------
Precision Ball Bearings ....................... 979 958
Electronic Interconnect Products .............. 938 801
-------- --------
Total ICG ..................................... 1,917 1,759
Non-allocated expenses .......................... (1,375) (1,768)
-------- --------
Income before taxes ........................... $ 2,600 $ 1,583
-------- --------
-------- --------
</TABLE>
8
<PAGE>
AXSYS TECHNOLOGIES, INC.
Notes to Condensed Consolidated Financial Statements (Unaudited)
(Dollars in thousands, except per share data)
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
------------ ------------
<S> <C> <C>
Identifiable assets:
Precision Systems ............. $39,504 $37,135
Sensor Systems ................ 6,418 6,092
------- -------
Total PSG .................... 45,922 43,227
------- -------
Precision Ball Bearings ....... 12,847 12,475
Electronic Interconnect Products 9,483 8,679
------- -------
Total ICG .................... 22,330 21,154
Non-allocated assets ........... 14,132 14,618
------- -------
Total assets ................. $82,384 $78,999
------- -------
------- -------
</TABLE>
Included in non-allocated expenses are the following: general corporate expense,
interest expense, amortization of goodwill and other income and expense.
Identifiable assets by segment consist of those assets that are used in the
segments' operations. Non-allocated assets are comprised primarily of goodwill.
Note 7--Other Information
- -------------------------
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
------- -------
<S> <C> <C>
Allowance for doubtful accounts .......... $ 374 $ 345
------- -------
------- -------
Accumulated depreciation and amortization
of property, plant and equipment ......... $11,276 $10,406
------- -------
------- -------
Accumulated amortization of excess of cost
over net assets acquired ................. $ 1,527 $ 1,408
------- -------
------- -------
</TABLE>
9
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Results of Operations
The following table sets forth certain financial data as a percentage of net
sales for the three months ended March 31, 1998 and 1997. The Company acquired
the stock of Teletrac Inc. ("Teletrac") on May 30, 1997. This acquisition, which
is part of the Precision Systems segment, has been accounted for under the
purchase method of accounting. Accordingly, the results of the continuing
operations of Teletrac have been included in the Company's Condensed
Consolidated Statements of Operations since the date of acquisition.
<TABLE>
<CAPTION>
Three Months Ended March 31,
----------------------------
1998 1997
---------- ----------
<S> <C> <C>
Net sales:
Precision Systems .................................. 57.8 % 54.4 %
Sensor Systems ..................................... 5.5 6.1
Intersegment eliminations .......................... (0.5) (0.3)
----- ------
Total PSG ........................................ 62.8 60.2
----- ------
Precision Ball Bearings ............................ 21.6 24.0
Electronic Interconnect Products ................... 15.6 15.8
----- ------
Total ICG ........................................ 37.2 39.8
----- ------
Total Company ................................... 100.0 100.0
----- ------
Cost of sales ...................................... 72.4 73.9
----- ------
Gross profit ....................................... 27.6 26.1
----- ------
Operating expenses:
Selling, general and administrative expenses ...... 18.7 17.8
Amortization of intangible assets ................. 0.4 0.2
----- ------
19.1 18.0
----- ------
Operating income ................................... 8.5 8.1
Interest expense .................................. 0.7 2.4
Other expense ..................................... -- --
----- ------
Income before taxes ................................ 7.8 5.7
Provision for income taxes ........................ 3.2 2.3
----- ------
Net income ......................................... 4.6 % 3.4 %
----- ------
----- ------
Gross profit (as a percentage of related net sales):
PSG ............................................... 25.6 % 22.5 %
ICG ............................................... 31.0 31.5
</TABLE>
10
<PAGE>
Comparison of the Three Months Ended March 31, 1998 and March 31, 1997
Net sales. Net sales increased by 21.7%, or $6.0 million, from $27.6 million in
the three months ended March 31, 1997 to $33.6 million in the same period of
1998. The PSG's sales increased by 27.0% , or $4.5 million, from $16.6 million
in 1997 to $21.1 million in 1998. Of this $4.5 million increase, approximately
$2.0 million was attributable to the acquisition of Teletrac. The remaining $2.5
million increase was the result of internal growth primarily in the defense,
electronics capital equipment and digital imaging markets. The ICG's sales
increased by 13.7%, or $1.5 million, from $11.0 million in 1997 to $12.5 million
in 1998. Sales of electronic interconnect products grew 20.1% over the prior
year as a result of the introduction and continuing acceptance of new product
offerings, market share gains as a result of strong customer service and the
timing of certain orders. Sales of precision ball bearings were up 9.5% over the
prior year, representing a broad based increase to both distribution and
original equipment manufacturers.
Gross profit. The Company's gross profit increased by 28.8%, or $2.1 million,
from $7.2 million in 1997 to $9.3 million in 1998. Gross profit margin increased
from 26.1% of net sales in 1997 to 27.6% in 1998. The gross margin for the PSG
increased from 22.5% of net sales in 1997 to 25.6% in 1998 and, for the ICG,
decreased from 31.5% of net sales in 1997 to 31.0% in 1998. Overall, the
improvement in gross margin was primarily due to the addition of higher margin
revenue from the acquisition of Teletrac and production efficiencies.
Selling, general and administrative expenses. SG&A expenses increased by 28.4% ,
or $1.4 million, from $4.9 million in 1997 to $6.3 million in 1998. As a
percentage of net sales, SG&A increased from 17.8% in 1997 to 18.7% in 1998. The
increase in SG&A expenses in absolute dollars was primarily due to the
acquisition of Teletrac. The increase in SG&A expenses as a percentage of net
sales was primarily due to higher incentive expense related to a three year
performance plan established for the former owners, and now employee managers,
of Teletrac.
Interest expense. Interest expense decreased by 60.6%, or $397,000, from
$655,000 in 1997 to $258,000 in 1998. The decrease in interest expense was
primarily due to lower average borrowings during 1998 resulting from the
Company's stock offering in late October of 1997 which generated net proceeds of
approximately $19.5 million.
Taxes. The Company's effective tax rate, increased from 40.3% in 1997 to 40.9%
in 1998, primarily due to the increase in non-deductible goodwill amortization
related to the acquisition of Teletrac.
Preferred stock dividends. Preferred Stock dividends decreased 100%, or $60,000,
to none in 1998. The decrease in Preferred Stock dividends was due to the
Company's exchange of Preferred Stock for Common Stock and subsequent redemption
of remaining Preferred Stock during 1997 (see Note 5 to the Condensed
Consolidated Financial Statements). As a result of such redemption, there is no
Preferred Stock outstanding and there are no accrued and unpaid dividends.
Backlog
A substantial portion of the Company's business is of a build-to-order nature
requiring various engineering, manufacturing, testing and other processes to be
performed prior to shipment. As a result, the Company generally has a
significant backlog of orders to be shipped. The Company's backlog of orders
increased by 0.2% or $0.1 million, from $55.4 million at December 31, 1997 to
$55.5 million at March 31, 1998. The Company believes that a substantial portion
of the backlog of orders at March 31, 1998 will be shipped over the next twelve
months.
Liquidity and Capital Resources
The Company funds its operations primarily from cash flow generated by
operations and, to a lesser extent, from borrowings under its credit facility
and through capital lease transactions.
11
<PAGE>
Net cash provided by operations for the three months ended March 31, 1998 and
1997 was $0.3 million and $0.8 million, respectively. Cash provided from
operations decreased in 1998 compared to 1997 primarily due to the payment of
amounts earned in 1997 under the Teletrac performance plan (see "Selling,
General and Administrative Expenses") and the timing of other incentive
payments. These decreases were partially offset by an increase in net income as
adjusted for the realization of tax loss carryforwards and non-cash amortization
and depreciation. At December 31, 1997, the Company had approximately $1.3
million of net operating losses and $0.5 million of tax credits available to
reduce future taxable income.
The Company's working capital was $31.2 million and $29.0 million on March 31,
1998 and December 31, 1997, respectively.
Net cash used in investing activities for the three months ended March 31, 1998
and 1997 was $1.8 million and $0.5 million, respectively. This $1.3 million
increase was due to higher capital expenditures primarily on machinery and
equipment to expand or improve on capabilities and to lower operating costs.
The Company had no material commitments for capital expenditures as of March 31,
1998.
The Company has an $11.0 million senior secured credit facility comprised of a
revolving debt commitment expiring on April 25, 2000 (the "Credit Facility"), of
which $6.5 million was outstanding as of March 31, 1998. The Credit Facility
contains restrictive covenants which, among other things, impose limitations
with respect to the incurrence of additional liens and indebtedness, mergers,
consolidations and specified sale of assets and requires the Company to meet
certain financial tests including minimum levels of earnings and net worth and
various other financial ratios. In addition, the Credit Facility prohibits the
payment of cash dividends. The Company believes that the remaining availability
under the Credit Facility and cash generated from operations will be sufficient
to meet its future capital expenditure and working capital requirements for at
least the next 12 months.
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable as of March 31, 1998.
12
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits:
Exhibit 27: Financial Data Schedule (For SEC use only).
b) Reports on Form 8-K
None during the quarter ended March 31, 1998.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities indicated this 13th day of May, 1998.
Date: May 13, 1998 XSYS TECHNOLOGIES, INC.
By: /s/ Stephen W. Bershad
----------------------
Stephen W. Bershad
Chairman of the Board and Chief Executive Officer
By: /s/ Raymond F. Kunzmann
----------------------
Raymond F. Kunzmann
Vice President--Finance and Chief Financial Officer
13
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET OF AXSYS TECHNOLOGIES, INC. AS OF MARCH 31, 1998 AND
THE RELATED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE THREE MONTHS ENDED
MARCH 31, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1998
<CASH> $288
<SECURITIES> 0
<RECEIVABLES> 20,027
<ALLOWANCES> 374
<INVENTORY> 30,954
<CURRENT-ASSETS> 52,161
<PP&E> 27,342
<DEPRECIATION> 11,276
<TOTAL-ASSETS> 82,384
<CURRENT-LIABILITIES> 20,971
<BONDS> 9,885
0
0
<COMMON> 41
<OTHER-SE> 48,890
<TOTAL-LIABILITY-AND-EQUITY> 82,384
<SALES> $33,595
<TOTAL-REVENUES> 33,595
<CGS> 24,320
<TOTAL-COSTS> 24,320
<OTHER-EXPENSES> 6,543
<LOSS-PROVISION> 24
<INTEREST-EXPENSE> 258
<INCOME-PRETAX> 2,600
<INCOME-TAX> 1,063
<INCOME-CONTINUING> 1,537
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,537
<EPS-PRIMARY> 0.36<F1>
<EPS-DILUTED> 0.36<F1>
<FN>
<F1>Earnings per share has been prepared in accordance with SFAS No. 128. Basic
and diluted EPS have been entered in place of primary and fully diluted,
respectively.
</TABLE>
