_________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED SEPTEMBER 27, 1996
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 1-9800
INCSTAR CORPORATION
(Exact name of Registrant as specified in its charter)
Minnesota 41-1254731
(State or other jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
1990 Industrial Boulevard
Stillwater, Minnesota 55082
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (612) 439-9710
N/A
Former name, former address and former fiscal year,
if changed since last report.
Indicate by check mark whether the Registrant (1) has filed 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 .
The number of shares of the Registrant's Common Stock (par value $.01)
outstanding on November 11, 1996 was 16,503,457.
______________________________________________________________________________
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
INCSTAR CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Quarter Ended Nine Months Ended
Sept. 27, Sept. 29, Sept. 27, Sept. 29,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Net sales $ 10,604,000 $ 11,664,000 $ 33,414,000 $ 33,822,000
Cost of goods sold 5,125,000 5,791,000 16,339,000 17,501,000
Gross profit 5,479,000 5,873,000 17,075,000 16,321,000
Operating expenses:
Selling, general and 3,195,000 3,189,000 9,812,000 9,304,000
administrative
Research and developnment 1,003,000 974,000 3,010,000 2,762,000
Total operating expenses 4,198,000 4,163,000 12,822,000 12,066,000
expenses
Operating income 1,281,000 1,710,000 4,253,000 4,255,000
Interest expense (2,000) (41,000) (15,000) (181,000)
Other income 18,000 3,000 57,000 13,000
INCOME BEFORE INCOME 1,297,000 1,672,000 4,295,000 4,087,000
TAXES
Provision for income 311,000 580,000 1,031,000 1,369,000
taxes
NET INCOME $ 986,000 $ 1,092,000 $ 3,264,000 $ 2,718,000
INCOME PER SHARE:
Net income per share $ 0.06 $ 0.07 $ 0.20 $ 0.17
Weighted average shares 16,655,336 16,570,043 16,671,044 16,465,806
and equivalents
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
<PAGE>
INCSTAR CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
Sept. 27, December 31,
1996 1995
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 2,154,000 $ 460,000
Restricted cash 251,000 251,000
Accounts receivable, net of allowance for
doubtful accounts of $104,000 and 7,416,000 7,575,000
$107,000, respectively
Other receivables 26,000 24,000
Inventories 14,291,000 13,445,000
Other current assets 418,000 294,000
TOTAL CURRENT ASSETS 24,556,000 22,049,000
PROPERTY AND EQUIPMENT:
Land and land improvements 1,573,000 1,573,000
Buildings and improvements 13,340,000 13,252,000
Equipment and furniture 19,511,000 18,170,000
Construction in progress 100,000 6,000
34,524,000 33,001,000
Less allowance for depreciation and (19,713,000) (18,387,000)
amortization
14,811,000 14,614,000
INTANGIBLE ASSETS 927,000 1,105,000
OTHER ASSETS 1,077,000 993,000
$ 41,371,000 $ 38,761,000
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt $ 4,000 $ 76,000
Accounts payable 2,340,000 1,914,000
Accrued compensation 1,057,000 1,972,000
Accrued expenses 2,465,000 2,928,000
Income taxes payable 438,000 212,000
TOTAL CURRENT LIABILITIES 6,304,000 7,102,000
LONG-TERM DEBT 3,000 3,000
OTHER NON-CURRENT LIABILITIES 3,033,000 3,272,000
SHAREHOLDERS' EQUITY:
Undesignated stock, authorized 5,000,000 shares - - - - - -
Common stock, par value $.01, authorized
25,000,000 shares; issued and outstanding
16,503,457 and 16,363,477 shares, respectively 165,000 164,000
Additional paid-in capital 18,315,000 17,940,000
Foreign currency translation adjustment (144,000) (151,000)
Retained earnings 13,695,000 10,431,000
TOTAL SHAREHOLDERS' EQUITY 32,031,000 28,384,000
$ 41,371,000 $ 38,761,000
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
<PAGE>
INCSTAR CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
Sept. 27, Sept. 29,
1996 1995
<S> <C> <C>
OPERATING ACTIVITIES:
Net income $ 3,264,000 $ 2,718,000
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 2,143,000 2,183,000
Payment for unusual items (475,000) (975,000)
Provision for retirement plans 206,000 204,000
Provision for deferred taxes (426,000) ---
Changes in operating assets and liabilities:
Accounts receivable 159,000 (1,221,000)
Other receivables (2,000) 113,000
Inventories (846,000) (722,000)
Other current assets 28,000 94,000
Accounts payable 426,000 480,000
Accrued compensation (915,000) 124,000
Accrued expenses (159,000) 714,000
Income tax payable 345,000 514,000
Other, net 7,000 (21,000)
Net cash provided by operating activities 3,755,000 4,205,000
INVESTING ACTIVITIES:
Additions to property and equipment, net (1,762,000) (835,000)
Payments for intellectual property and (394,000) (51,000)
purchased technology
(Increase) decrease in other assets (89,000) 54,000
Net cash used in investing activities (2,245,000) (832,000)
FINANCING ACTIVITIES:
Net decrease in cash overdraft --- (534,000)
Payments on long-term debt (72,000) (3,044,000)
Issuance of common stock 256,000 60,000
Net cash provided by (used in) financing 184,000 (3,518,000)
activities
NET INCREASE (DECREASE) IN CASH AND CASH 1,694,000 (145,000)
EQUIVALENTS
Cash and cash equivalents at beginning of 460,000 153,000
period
Cash and cash equivalents at end of period $ 2,154,000 $ 8,000
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
<PAGE>
INCSTAR CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 _ SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The consolidated balance sheet as of September 27, 1996 and the related
consolidated statements of income and cash flows for the nine month periods
ended September 27, 1996 and September 29, 1995 are unaudited. In the opinion
of management, all adjustments necessary for a fair presentation of such
financial statements have been included. Such adjustments consisted only of
normal recurring items. The consolidated financial statements and notes should
be read in conjunction with the consolidated financial statements and notes
included in the Company's 1995 Form 10K.
NOTE 2 _ INVENTORIES
<TABLE>
Inventories consist of the following:
<CAPTION>
Sept. 27, December 31,
1996 1995
<S> <C> <C>
Raw materials $ 2,199,000 $ 2,281,000
Work in progress 9,703,000 9,421,000
Finished goods 2,389,000 1,743,000
$ 14,291,000 $ 13,445,000
</TABLE>
NOTE 3 _ INTANGIBLE ASSETS
<TABLE>
Intangible assets consist of the following:
<CAPTION>
Sept. 27, December 31,
1996 1995
<S> <C> <C>
Patents $ 717,000 $ 717,000
Trademarks 17,000 17,000
Goodwill 619,000 619,000
Intellectual property and purchased technology 1,128,000 734,000
Product distribution rights 2,700,000 2,700,000
5,181,000 4,787,000
Less accumulated amortization (4,254,000) (3,682,000)
$ 927,000 $ 1,105,000
</TABLE>
NOTE 4_ UNUSUAL ITEMS AND INVENTORY VALUATION ADJUSTMENTS
In December, 1994 the Company recorded a $750,000 charge related to the
write down of excess inventories and a $2,450,000 unusual charge related to the
termination of certain distribution and supply agreements ($540,000) as well as
severance and other costs related to senior management changes ($1,910,000).
The amount remaining to be paid at September 27, 1996, exclusive of amounts
included in Note 6, Executive Retirement Plans, is $174,000 and is included in
Accrued expenses.
NOTE 5 _ LONG-TERM DEBT, LEASE AND ROYALTY COMMITMENTS
<TABLE>
Long-term debt consists of the following:
<CAPTION>
Sept. 27, December 31,
1996 1995
<S> <C> <C>
Capitalized lease obligations, 8.0%, due $ - - - $ 72,000
through 1996
Other 7,000 7,000
7,000 79,000
Less current portion (4,000) (76,000)
Total long-term debt $ 3,000 $ 3,000
</TABLE>
The Company has a revolving line of credit from a bank which provides for
maximum borrowings of $1,000,000 through January 31, 1997 at the prime interest
rate or LIBOR plus 2.50% and is secured by accounts receivable. In addition,
the Company has a $4,500,000 revolving line of credit with Fiat Finance U.S.A.,
Inc. through April 29, 1997.
The Company is obligated to make royalty payments under several
distribution and licensing agreements. The majority of these agreements call
for payments based on a percentage of sales and contain no minimum royalty
clause. Royalty expense under these agreements was $281,000 and $504,000 for
the quarters ended September 27, 1996 and September 29, 1995, respectively, and
$1,157,000 and $1,181,000 for the nine month periods ended September 27, 1996
and September 29, 1995, respectively.
NOTE 6 _ EXECUTIVE RETIREMENT PLANS
The Company has individual retirement agreements with certain executive
officers which are intended to provide continued compensation to such officers
or their respective beneficiaries upon retirement from the Company. The
benefits and terms under these arrangements vary depending upon the officer's
position within the Company. In connection with these plans, included in Other
non-current liabilities at September 27, 1996 and December 31, 1995 are
$3,273,000 and $3,136,000, respectively, representing the present value of the
future liability. Also, included in Accrued expenses at September 27, 1996 and
December 31, 1995 are $100,000 and $31,000, respectively, representing the
current portion of this liability. The Company intends to fund this obligation
through the purchase of life insurance contracts on the individual executives.
Included in Other assets at September 27, 1996 and December 31, 1995 are
$1,015,000 and $934,000, respectively, representing the cash surrender value of
these policies.
NOTE 7 _ INCOME TAXES
Upon the exercise of certain officer stock options during the year ended
December 31, 1990, the Company was entitled to a compensation deduction
allowable for income tax purposes. No compensation expense was required for
financial reporting purposes because the option price on the original grant date
equaled the then fair market value of the shares. Upon realization of the
benefit relating to the compensation deduction for tax purposes, the benefit is
credited to additional paid in capital. The Company did not recognize any
credits during the quarters ended September 27, 1996 and September 29, 1995,
however, it recognized credits of $119,000 and $203,000 to Additional paid in
capital relating to these stock options for the nine month periods ended
September 27, 1996 and September 29, 1995, respectively.
NOTE 8 _ RELATED PARTY TRANSACTIONS
<TABLE>
As part of the ongoing operations of the Company, various transactions were
entered into with its affiliates, Sorin Biomedica Diagnostics S.p.A. ("Sorin")
and its subsidiaries and Fiat Finance U.S.A., Inc. The following tables
summarize these transactions and related balances.
<CAPTION>
Sorin Fiat Finance U.S.A., Inc.
Nine Months Ended Nine Months Ended
Sept. 27, Sept. 29, Sept. 27, Sept. 29,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Product sales $6,017,000 $5,627,000 $ - - - $ - - -
Product purchases 1,817,000 1,110,000 - - - - - -
Royalty expense 381,000 334,000 - - - - - -
Interest expense - - - - - - 6,000 164,000
<CAPTION>
Sept. 27, December 31, Sept. 27, December 31,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Assets
Trade accounts $2,431,000 $1,965,000 $ - - - $ - - -
receivable
Other receivables 22,000 6,000 - - - - - -
Liabilities
Accounts payable $1,210,000 $ 675,000 $ - - - $ - - -
Accrued royalty 768,000 480,000 - - - - - -
Accrued interest - - - - - - - - - 4,000
</TABLE>
NOTE 9 _ SUPPLEMENTARY CASH FLOW INFORMATION
<TABLE>
<CAPTION>
Nine Months Ended
Sept. 27, Sept. 29,
1996 1995
<S> <C> <C>
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest $ 15,000 $ 114,000
Income taxes, net 1,111,000 688,000
</TABLE>
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
QUARTER ENDED SEPTEMBER 27, 1996 VS. QUARTER ENDED SEPTEMBER 29, 1995
Sales for the quarter ended September 27, 1996 decreased 9% from
$11,664,000 to $10,604,000 compared to the same period a year earlier. The
primary reason for the decline is due to a reduction in sales of hepatitis
products, as discussed below. In addition, sales continue to be negatively
impacted by declines in the Company's RIA oncology and routine endocrinology
product lines due to the continued shift in the diagnostic industry from
isotopic, manual testing to non-isotopic, automated and semi-automated testing.
Sales, however, were favorably impacted in the Company's bone and mineral,
infectious disease and serum proteins product lines.
Domestic sales declined 20% to $5,029,000 for the quarter ending September
27, 1996 from $6,303,000 for the same period in the prior year. The Company
realized continued growth in its infectious disease segment by sales of the
Company's second generation tests for Epstein Barr Virus. However, this
increase was offset by a decline in the Company's hepatitis product line. One
of the Company's competitor's hepatitis products had been unavailable for sale
from July of last year through February, 1996. This situation resulted in sales
of $1.4 million for the third quarter of 1995 compared with $300,000 during the
current quarter. Domestic hepatitis sales are expected to continue to be
negatively impacted during the remainder of 1996. In addition, the Company
continues to experience sales erosion in its RIA oncology and routine
endocrinology product offerings. As these trends are expected to continue, the
Company continues to focus development efforts on automated and semi-automated
tests which are non-isotopic.
International sales increased 4% to $5,575,000 for the quarter ended
September 27, 1996 from $5,361,000 for the same period in the prior year.
International revenues continue to be favorably impacted in the infectious
disease segment by sales of the Company's second generation tests for Epstein
Barr Virus. In addition, sales were favorably impacted by increases in the
Company's autoimmune, bone and mineral and serum protein product lines. Sales
were negatively impacted by declines in the transplantation and routine
endocrinology market segments as these markets continue to shift away from
manual, isotopic testing as discussed above.
Gross margins for the third quarter of 1996 improved to 51.7% of sales
compared to 50.4% of sales for the same period in the prior year. This
improvement is due in part to a change in the mix of sales, discussed above,
compared to the same period a year earlier as well as efficiencies derived from
a restructuring of operations in 1995. Notwithstanding this improvement, the
Company's margins continue to be highly sensitive to product mix and volume
changes.
Selling, general and administrative ("SG&A") expenses increased to 30.1% of
sales for the third quarter of 1996 from 27.3% of sales for the same period in
the prior year, however, expenses remained flat for the quarter at $3,195,000
compared with $3,189,000 for the same period in the prior year. Sales and
marketing expenditures are expected to remain relatively consistent throughout
1996.
Research and development ("R&D") expenditures increased to $1,003,000, or
9.5% of sales, in the third quarter of 1996 from $974,000, or 8.4% of sales, for
the same period in the prior year. This increase is mainly due to costs
associated with new product development efforts and external costs associated
with the Company's scientific networks.
Interest expense decreased to $2,000 compared to $41,000 for the same
period in the prior year. This decrease is attributable to lower average debt
levels.
Income tax expense for the quarter was $311,000, or 24% of income before
taxes, compared with income tax expense of $580,000, or 35% of income before
taxes, in the third quarter of 1995. The decline in the effective tax rate is
due to the recognition of certain deferred tax assets. The Company expects the
effective tax rate to remain at approximately 24% during the remainder of 1996.
NINE MONTHS ENDED SEPTEMBER 27, 1996 VS. NINE MONTHS ENDED SEPTEMBER 29, 1995
Sales for the nine month period ended September 27, 1996 decreased 1% from
$33,822,000 to $33,414,000 compared to the same period a year earlier. The
Company experienced growth in its autoimmune, infectious disease and serum
protein market segments. In addition, sales were favorably impacted by sales of
the Company's hepatitis assays, as discussed below. Sales continue to be
negatively impacted by declines in the Company's RIA oncology, routine
endocrinology and transplantation market segments due to the continued shift in
the diagnostic industry from isotopic, manual testing to non-isotopic, automated
and semi-automated testing. As these trends are expected to continue, the
Company continues to focus development efforts on automated and semi-automated
tests which are non-isotopic. Future sales levels will be highly dependent
upon the success of these efforts.
Domestic sales decreased 4% to $16,759,000 for the nine month period ended
September 27, 1996 from $17,506,000 for the same period in the prior year. As
discussed above, through February, 1996, the Company experienced an increase in
demand for one of its hepatitis assays due to a competitor's kit becoming
unavailable to the market in July 1995. The competitor reentered the market
place in late February. Since that time, the Company has experienced a decline
of these product sales from their levels during the second half of 1995. This
opportunity resulted in approximately $2.0 million in sales during the first
nine months of 1996 compared to $1.4 million in sales for the same period in the
prior year. In addition, the Company realized growth in its Theratest trademark
product line and infectious disease and serum protein market segments. However,
as discussed above, offsetting these increases were continuing declines in the
Company's RIA oncology, routine endocrinology and transplantation marker product
offerings.
International sales increased 2% to $16,655,000 for the nine month period
ended September 27, 1996 compared to $16,316,000 for the same period in the
prior year. International revenues continue to be favorably impacted in the
infectious disease segment by sales of the Company's second generation tests for
Epstein Barr Virus. In addition, sales were favorable impacted by sales in the
Company's autoimmune, bone and mineral and serum protein market segments. Sales
were negatively impacted, however, in the routine endocrinology and
transplantation segments.
Gross margins for the first nine months of 1996 improved to 51.1% of sales
compared to 48.3% of sales for the same period in the prior year. This
improvement is due in part to a change in the mix of sales compared to the same
period a year earlier as well as efficiencies derived from a restructuring of
operations in the second quarter of 1995. Notwithstanding this improvement, the
Company's margins continue to be highly sensitive to product mix and volume
changes.
SG&A expenses increased to $9,812,000, or 29% of sales, in the first nine
months of 1996 from $9,304,000, or 28% of sales, for the same period in the
prior year. The increase in expenditures is due to costs associated with the
introduction of new products. These expenses, as a percentage of sales, are
expected to remain relatively consistent throughout 1996.
R&D expenditures increased 9% to $3,010,000 in the first nine months of
1996 from $2,762,000 for the same period in the prior year and increased as a
percentage of sales to 9% compared to 8% in the prior year. This increase is
primarily due to increased emphasis on new product development, including the
establishment of scientific advisory panels for the Company's autoimmune and
bone and mineral metabolism segments. These panels are intended to enhance
and strengthen the Company's ties with the scientific community.
Interest expense decreased to $15,000 compared to $181,000 for the same
period in the prior year. This decrease is attributable to lower average debt
levels.
Income tax expense for the nine months ended September 27, 1996 was
$1,031,000, or 24% of income before taxes, compared with income tax expense of
$1,369,000, or 33% of income before taxes, for the same period in 1995. The
decline in the effective tax rate is due to the recognition of certain deferred
tax assets. The Company expects the effective tax rate to remain at
approximately 24% during the remainder of 1996.
LIQUIDITY AND CAPITAL RESOURCES
The Company's operating cash flow in the first nine months of 1996 was
$3,755,000 and $4,205,000 for the same period in the prior year. Free cash flow
(operating cash flow less investment activities) decreased to $1,510,000 in the
first nine months of 1996 from $3,373,000 in the comparable period of the prior
year. This decrease is attributable to increased capital spending associated
with instrumentation, manufacturing improvements and computer upgrades as well
as spending associated with the purchase of intellectual property. Net working
capital increased to $18,252,000 at September 27, 1996 from $14,947,000 at
December 31, 1995.
At September 27, 1996, the Company's primary sources of liquidity are a $1
million revolving bank credit line secured by Company assets and a $4.5 million
unsecured credit line with Fiat Finance U.S.A., Inc. At September 27, 1996, the
Company had no outstanding borrowings under these credit lines. The Company
believes that its operating cash flow and existing credit lines will provide
ample sources of liquidity for all planned capital expenditures and research and
development activities. Capital spending for the remainder of 1996 is
anticipated to be approximately $800,000, primarily for manufacturing
improvements and laboratory equipment.
<PAGE>
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
3.1 Restated Articles of Incorporation of INCSTAR Corporation, as amended
to date [incorporated by reference to Exhibit 4.1 to the Registrant's
Registration Statement on Form S-8 (File No. 33-84498)].
3.2 Bylaws of INCSTAR Corporation, as amended to date [incorporated by
reference to Exhibit 4.2 to the Registrant's Registration Statement on
Form S-8 (File No. 33-84498)].
4.1 Specimen Certificate representing the Registrant's Common Stock
[incorporated by reference to Exhibit 4.1 to the Registrant's
Registration Statement on Form S-3 (File No. 33-37805)].
4.2 Note Purchase Agreement, dated December 27, 1991 between the
Registrant and Fiat Finance, U.S.A. Inc. [incorporated by reference to
Exhibit 4.2 to the Registrant's Report on Form 10-K for the year ended
December 31, 1991 (File No. 1-9800)]
4.3 Form of Warrant Certificate issued by the Registrant in favor of
Bioengineering International B.V. (now BioFin Holding International
B.V.) [incorporated by reference to Exhibit 10.11 of the Registrant's
Registration Statement on Form S-4 (File No. 33-30785)].
4.4 Form of Purchase Rights Agreement between Bioengineering
International B.V. (now BioFin Holding International B.V.) and the
Registrant [incorporated by reference to Exhibit 10.12 of the
Registrant's Registration Statement on Form S-4 (File No. 33-30785)].
11 Computation of Net Income per Common Share
27 Financial Data Schedule
(b) Reports on Form 8-K - There were no reports on Form 8-K filed during the
quarter ended September 27, 1996.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
INCSTAR CORPORATION
(Registrant)
Date: 11/11/96 /S/John J. Booth
President (Principal Executive Officer)
Date: 11/11/96 /S/Thomas P. Maun
Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)
EXHIBIT 11
COMPUTATION OF NET INCOME PER COMMON SHARE
INCSTAR CORPORATION AND SUBSIDIARIES
<TABLE>
<CAPTION>
Quarter Ended Nine Months Ended
Sept. 27, Sept. 29, Sept. 27, Sept. 29,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
PRIMARY EARNINGS PER
COMMON SHARE:
Average shares outstanding 16,502,622 16,363,059 16,472,189 16,362,868
Dilutive stock options
and warrants - based on 152,714 206,984 198,855 102,938
the treasury stock method
16,655,336 16,570,043 16,671,044 16,465,806
Net income $ 986,000 $ 1,092,000 $ 3,264,000 $ 2,718,000
Net income per share $ 0.06 $ 0.07 $ 0.20 $ 0.17
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
EXHIBIT 27
FINANCIAL DATA SCHEDULE
<LEGEND>
This schedule contains summary financial information extracted from the
consolidated balance sheet for the period ended September 27, 1996 and the
related statements of income, cash flows and retained earnings for the period
ended September 27, 1996 and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-27-1996
<CASH> 2,154,000
<SECURITIES> 0
<RECEIVABLES> 7,520,000
<ALLOWANCES> 104,000
<INVENTORY> 14,291,000
<CURRENT-ASSETS> 24,556,000
<PP&E> 34,524,000
<DEPRECIATION> 19,713,000
<TOTAL-ASSETS> 41,371,000
<CURRENT-LIABILITIES> 6,304,000
<BONDS> 0
<COMMON> 165,000
0
0
<OTHER-SE> 31,866,000
<TOTAL-LIABILITY-AND-EQUITY> 41,371,000
<SALES> 33,414,000
<TOTAL-REVENUES> 33,414,000
<CGS> 16,339,000
<TOTAL-COSTS> 16,339,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 33,000
<INTEREST-EXPENSE> 15,000
<INCOME-PRETAX> 4,295,000
<INCOME-TAX> 1,031,000
<INCOME-CONTINUING> 3,264,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,264,000
<EPS-PRIMARY> 0.20
<EPS-DILUTED> 0.20
</TABLE>
