FORM 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15 (d
OF THE SECURITIES EXCHANGE ACT OF 1934
(As last amended in Rel. No. 34-26589, eff. 4/12/89)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20459
Form 10-Q
(Mark One)
|X| Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the period ended October 31, 1999
-----------------------------------------------------
|_| 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: 0-7928
--------------------------------------------------
COMTECH TELECOMMUNICATIONS CORP.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 11-2139466
- --------------------------------------------------------------------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation /organization) Identification Number)
105 Baylis Road, Melville, New York 11747
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(516) 777-8900
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
- --------------------------------------------------------------------------------
(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.
|X| Yes |_| No
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDING DURING
THE PRECEDING FIVE YEARS
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
|_| Yes |_| No
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Common Stock, Par Value $.10 Per Share - 4,571,243 shares outstanding as of
December 13, 1999.
- --------------------------------------------------------------------------------
<PAGE>
COMTECH TELECOMMUNICATIONS CORP.
INDEX
Page
No.
---
PART I FINANCIAL INFORMATION
Consolidated Balance Sheets - 2
October 31, 1999 (unaudited) and
July 31, 1999
Consolidated Statements of Operations - 3
Three Months Ended October 31, 1999
and 1998 (unaudited)
Consolidated Statements of Cash Flows - 4
Three Months Ended October 31, 1999 and 1998
(unaudited)
Notes to Consolidated Financial Statements 5-7
Management's Discussion and Analysis of
Financial Condition and Results of Operations 8-10
PART II OTHER INFORMATION 11
Signature Page 12
1
<PAGE>
PART I
FINANCIAL INFORMATION
COMTECH TELECOMMUNICATIONS CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
October 31, 1999 July 31, 1999
---------------- -------------
(unaudited)
<S> <C> <C>
ASSETS:
Current assets:
Cash and cash equivalents $ 1,397,000 $ 5,896,000
Accounts receivable, less allowance for doubtful
accounts of $145,000 at October 31, 1999
and July 31, 1999 9,577,000 5,152,000
Inventories, net 8,166,000 7,879,000
Prepaid expenses and other current assets 328,000 138,000
Deferred tax asset-current 1,391,000 1,658,000
Net assets of discontinued operations 80,000 --
------------ ------------
Total current assets 20,939,000 20,723,000
Property, plant and equipment, net 4,202,000 4,310,000
Intangible assets, net of amortization 1,599,000 1,623,000
Other assets 258,000 274,000
Deferred tax asset-non current 2,917,000 2,917,000
------------ ------------
Total assets $ 29,915,000 $ 29,847,000
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
Current installments of long-term debt (including
payable to related party of $323,000 at October 31,
1999 and $316,000 at July 31, 1999) $ 566,000 $ 605,000
Accounts payable 5,166,000 3,763,000
Accrued expenses and other current liabilities 3,891,000 6,026,000
Net liabilities of discontinued operations -- 137,000
------------ ------------
Total current liabilities 9,623,000 10,531,000
Long-term debt, less current installments
(including payable to related party of $418,000
at October 31, 1999 and $501,000 at July 31,1999 825,000 959,000
Other long-term liabilities 448,000 --
------------ ------------
Total liabilities 10,896,000 11,490,000
------------ ------------
Stockholders' equity:
Preferred stock, par value $.10 per share; shares
authorized and unissued 2,000,000 -- --
Common stock, par value $.10 per share; authorized
15,000,000 shares; issued and outstanding 4,496,741
shares at October 31, 1999 and 4,471,368 shares
at July 31, 1999 450,000 447,000
Additional paid-in capital 23,866,000 23,801,000
Accumulated deficit (4,211,000) (4,746,000)
------------ ------------
20,105,000 19,502,000
Less:
Treasury stock (82,500 shares at October 31, 1999 and
July 31, 1999) (184,000) (184,000)
Deferred compensation expense (902,000) (961,000)
------------ ------------
19,019,000 18,357,000
Total liabilities and stockholders' equity $ 29,915,000 $ 29,847,000
============ ============
</TABLE>
See accompanying notes to consolidated financial statements
2
<PAGE>
COMTECH TELECOMMUNICATIONS CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Three Months Ended
October 31,
(Unaudited)
-----------------------------------
1999 1998
------------ ------------
<S> <C> <C>
Net sales $ 11,747,000 $ 8,735,000
------------ ------------
Operating costs and expenses:
Cost of sales 8,406,000 6,008,000
Selling, general and administrative 1,946,000 1,640,000
Research and development 530,000 478,000
------------ ------------
Total operating costs and expenses 10,882,000 8,126,000
------------ ------------
Operating income from continuing operations 865,000 609,000
Other (expense) income:
Interest expense (37,000) (52,000)
Interest income 32,000 19,000
Other income -- 2,000
------------ ------------
Income from continuing operations
before provision for income taxes 860,000 578,000
Provision for income taxes 325,000 45,000
------------ ------------
Income from continuing operations 535,000 533,000
Loss from operations of discontinued segment -- (139,000)
------------ ------------
Net income $ 535,000 $ 394,000
============ ============
Basic income (loss) per share:
Income from continuing operations $ 0.12 $ 0.14
Loss from operations of discontinued segment -- (.04)
------------ ------------
Basic income per share $ 0.12 $ 0.10
============ ============
Diluted income (loss) per share:
Income from continuing operations $ 0.11 $ 0.12
Loss from operations of discontinued segment -- (.03)
------------ ------------
Diluted income per share $ 0.11 $ 0.09
============ ============
Weighted average number of common
shares outstanding - basic computation 4,399,000 3,926,000
Potential dilutive common shares 683,000 345,000
------------ ------------
Weighted average number of common and
common equivalent shares outstanding assuming dilution-
Diluted computation 5,082,000 4,271,000
============ ============
</TABLE>
See accompanying notes to consolidated financial statements
3
<PAGE>
COMTECH TELECOMMUNICATIONS CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Three Months Ended
October 31,
-----------
(unaudited)
1999 1998
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income $ 535,000 $ 394,000
Adjustments to reconcile net income
to net cash provided by (used in) operating activities:
Loss from discontinued operations -- 139,000
Depreciation and amortization 418,000 353,000
Deferred income tax provision 267,000 --
Changes in assets and liabilities, net of effects of acquisitions:
Accounts receivable (4,425,000) 556,000
Inventories (287,000) (36,000)
Prepaid expenses and other current assets (190,000) (74,000)
Other assets (1,000) 8,000
Accounts payable 1,403,000 (72,000)
Accrued expenses and other current liabilities (2,134,000) (278,000)
Other liabilities 448,000 --
----------- -----------
Net cash (used in) provided by continuing operations (3,966,000) 712,000
Net cash (used in) discontinued operations (218,000) (139,000)
----------- -----------
Net cash (used in) provided by operating activities (4,184,000) 851,000
----------- -----------
Cash flows from investing activities:
Purchases of property, plant and equipment (210,000) (265,000)
Payment for business acquisitions net of cash acquired -- (173,000)
----------- -----------
Net cash used in investing activities (210,000) (438,000)
----------- -----------
Cash flows from financing activities:
Principal payments on long-term debt (173,000) (212,000)
Exercise of stock options 68,000 2,000
----------- -----------
Net cash used in financing activities (105,000) (210,000)
----------- -----------
Net increase (decrease) in cash and cash equivalents (4,499,000) 203,000
Cash and cash equivalents at beginning of period 5,896,000 2,746,000
----------- -----------
Cash and cash equivalents at end of period $ 1,397,000 $ 2,949,000
=========== ===========
Supplemental cash flow disclosure:
Cash paid during the period for:
Interest $ 37,000 $ 52,000
Income taxes $ 104,000 $ 133,000
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE>
COMTECH TELECOMMUNICATIONS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) General
The accompanying consolidated financial statements for the three months
ended October 31, 1999 and 1998 are unaudited. In the opinion of management, the
information furnished reflects all adjustments, consisting only of normal
recurring adjustments, necessary for a fair presentation of the results for the
unaudited interim periods. The results of operations for the three months ended
October 31, 1999 are not necessarily indicative of the results of operations to
be expected for the full year.
These financial statements should be read in conjunction with the audited
consolidated financial statements of the Company for the fiscal year ended July
31, 1999 and the notes thereto contained in the Company's Annual Report on form
10-K, filed with the Securities and Exchange Commission on October 29, 1999.
(2) Reclassifications
Certain balances in the prior fiscal quarter have been reclassified to
conform to the current fiscal quarter and fiscal year end presentation.
(3) Comprehensive Income
The Company's operations did not give rise to items includible in
comprehensive income which were not already included in net income.
Accordingly, the Company's comprehensive income is the same as its net
income for all periods presented.
(4) Accounts Receivable
Accounts receivable consist of the following:
<TABLE>
<CAPTION>
October 31, 1999 July 31, 1999
---------------- -------------
<S> <C> <C>
Accounts receivable from commercial customers $5,833,000 $3,924,000
Unbilled receivables (including retainages) on 3,273,000 1,154,000
contracts-in-progress
Amounts receivable from the United States government
and its agencies 616,000 219,000
---------- ----------
9,722,000 5,297,000
Less allowance for doubtful accounts 145,000 145,000
---------- ----------
Accounts receivable, net $9,577,000 $5,152,000
========== ==========
</TABLE>
(5) Inventories
Inventories consist of the following:
October 31, 1999 July 31, 1999
---------------- -------------
Raw materials and components $ 4,495,000 $ 3,553,000
Work-in-process 5,794,000 5,798,000
----------- -----------
10,289,000 9,351,000
Less:
Progress payments 978,000 302,000
Inventory reserves 1,145,000 1,170,000
----------- -----------
Inventories - net $ 8,166,000 $ 7,879,000
=========== ===========
5
<PAGE>
(6) Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities consist of the following:
October 31, 1999 July 31, 1999
---------------- -------------
Customer advances and deposits $ 184,000 $2,798,000
Accrued wages and benefits 1,782,000 1,603,000
Accrued commissions 1,585,000 915,000
Other 253,000 710,000
---------- ----------
$3,804,000 $6,026,000
========== ==========
(7) Long-Term Debt
Long-term debt consists of the following:
October 31, 1999 July 31, 1999
---------------- -------------
Obligations under capital leases $1,391,000 $1,564,000
Less current installments 566,000 605,000
---------- ----------
$ 825,000 $ 959,000
========== ==========
(8) Income Taxes
Income taxes are accounted for under the asset and liability method.
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases and operating loss and tax credit carryforwards. Deferred tax assets and
liabilities are measured using the enacted tax rates expected to apply to
taxable income in the years in which those temporary differences are expected to
be recovered or settled. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in income in the period that includes the
enactment date.
(9) Earnings Per Share
The Company calculates earning per share ("EPS") in accordance with the
Statement of Financial Accounting Standards ("SFAS") No. 128, "Earnings per
Share". Basic EPS are computed based on the weighted average number of shares
outstanding. Diluted EPS reflects the maximum dilution from potential common
stock issuable pursuant to the exercise of stock options and warrants, if
dilutive, outstanding during each period. All share and per share amounts have
been restated to reflect a three-for-two stock split effective July 30, 1999.
(10) Segment and Principal Customer Information
The Company adopted SFAS No. 131,"Disclosures about Segments of an
Enterprise and Related Information." Reportable operating segments are
determined based on the Company's management approach. The management approach,
as defined by SFAS No. 131, is based on the way that the chief operating
decision-maker organizes the segments within an enterprise for making operating
decisions and assessing performance. While the Company's results of operations
are primarily reviewed on a consolidated basis, the chief operating
decision-maker also manages the enterprise in four segments:
(I)Telecommunications Transmission, (II) RF Microwave Amplifiers, (III) Mobile
Data Communications Services and (IV) Wireless Local Loop, which is being
discontinued. Telecommunications Transmission products include modems, frequency
converters, satellite VSAT transceivers and antennas and over-the-horizon
microwave communications products and systems. RF Microwave Amplifier products
include high-power amplifier products that use the microwave and radio frequency
spectrums. Mobile Data Communications Services include two-way messaging links
between mobile platforms or remote sites and user headquarters using satellite,
terrestrial microwave or Internet links. Corporate assets consist principally of
cash, deferred tax assets and intercompany receivables. Corporate losses result
from such corporate expenses as legal, accounting and executive. Sales between
segments were negligible. Eliminations consist of intercompany balances.
6
<PAGE>
(in thousands)
Three months ended
October 31, 1999
<TABLE>
<CAPTION>
Mobile Data
Telecommunications RF Microwave Communications Corporate
Transmission Amplifiers Services and Others Eliminations Total
------------ ---------- -------- ---------- ------------ -----
<S> <C> <C> <C> <C> <C> <C>
Net sales $ 9,453 2,149 145 -- 11,747
Operating income (loss) 1,471 (60) (81) (465) 865
Interest income -- -- 32 32
Interest expense 8 28 1 -- 37
Depreciation and
amortization 154 185 79 -- 418
Expenditures for
long-lived assets 93 54 57 6 210
Total assets 12,405 8,255 3,333 9,892 (4,050) 29,835
</TABLE>
Three months ended
October 31, 1998
<TABLE>
<CAPTION>
Mobile Data
Telecommunications RF Microwave Communications Corporate
Transmission Amplifiers Services and Others Eliminations Total
------------ ---------- -------- ---------- ------------ -----
<S> <C> <C> <C> <C> <C> <C>
Net sales $4,643 4,066 26 -- 8,735
Operating income (loss) 479 594 (56) (408) 609
Interest income -- -- 19 19
Interest expense 10 42 -- -- 52
Depreciation and
amortization 87 201 -- -- 288
Expenditures for
long-lived assets 127 125 -- -- 252
Total assets 8,809 7,771 2,466 7,069 (4,027) 22,088
</TABLE>
7
<PAGE>
COMTECH TELECOMMUNICATIONS CORP. AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Forward-Looking Statements
Certain information contained in this Quarterly Report on Form 10-Q,
including, without limitation, information appearing under Part I, Item 2,
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," are believed to be forward-looking statements (within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934). Factors set forth in the Company's Annual Report on Form
10-K, filed October 29, 1999, or in the Company's other Securities and Exchange
Commission filings, could affect the Company's actual results and could cause
the Company's actual results to differ materially from those expressed in any
forward-looking statements made by, or on behalf of, the Company in this
Quarterly Report on Form 10-Q.
COMPARISON OF THE RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED OCTOBER 31,
1999 AND OCTOBER 31, 1998
Net Sales. Consolidated net sales were $11.7 million and $8.7 million for the
three months ended October 31, 1999 and 1998, respectively, representing an
increase of $3.0 million or 34.5%. This increase was primarily due to a higher
volume of sales by our telecommunications transmission segment of
over-the-horizon microwave equipment partly offset by lower sales at our RF
microwave amplifier segment.
Gross Profit. Gross profit was $3.3 million and $2.7 million for the three
months ended October 31, 1999 and 1998, respectively, representing an increase
of $614,000 or 23.0%. This increase was due primarily to the increase in sales
volume. Gross profit margins, as a percentage of net sales, was 28.4% and 31.1%
in the three month periods of 1999 and 1998, respectively. The lower gross
profit margin in the 1999 period was due primarily to the changes in the product
mix as compared to the prior year period.
Selling, General and Administrative. Selling, general and administrative
expenses were $1.9 million and $1.6 million for the three months ended October
31, 1999 and 1998, respectively, representing an increase of $306,000 or 18.7%.
This increase was due primarily to the additional expenses required to support
the increased sales volume including additional personnel, sales commissions,
deferred compensation and other administrative expenses. As a percentage of
sales, these expenses were 16.6% and 18.8% in the 1999 and 1998 quarters,
respectively.
Research and Development. Research and development expenses were $530,000 and
$478,000 for the three month periods of 1999 and 1998, respectively,
representing an increase of $52,000 or 10.9%. This increase is due to continuing
development of new products and technologies and general product enhancement.
Operating Income. As a result of the foregoing factors, we had operating income
from continuing operations of $865,000 in the three months ended October 31,
1999 as compared to $609,000 in the prior year period.
Interest Expense. Interest expense was $37,000 and $52,000 for the three months
ended October 31, 1999 and 1998, respectively, representing a decrease of
$15,000. Interest expense for both periods was substantially due to interest
associated with the Company's capital lease obligations.
Interest Income. Interest income was $32,000 and $19,000 for the three months
ended October 31, 1999 and 1998, respectively, representing an increase of
$13,000. This increase was due primarily to the increase in the amount of cash
available to invest during this period. Interest income was primarily derived
from the cash on hand in excess of working capital requirements that is invested
in highly liquid, short-term money-market funds and commercial paper.
8
<PAGE>
Provision for Income Taxes. The provision for income taxes was $325,000 and
$45,000 for the three months ended October 31, 1999 and 1998, respectively. The
income tax provision in fiscal 2000 reflects an approximate 38% tax rate while
fiscal 1999 reflects an effective tax rate of approximately 8%. In the three
months ended October 31, 1998, the Company utilized available Federal net
operating loss carryforwards to offset taxable income which were not previously
recorded as a deferred tax asset. The deferred tax assets associated with such
carryforwards were recognized by July 31, 1999.
LIQUITY AND CAPITAL RESOURCES
For the three month period ended October 31, 1999, our cash and cash
equivalent position decreased by $4.5 million from $5.9 million at July 31, 1999
to $1.4 million at October 31, 1999. Operating activities used $4.2 million,
investing activities used $210,000 and financing activities used $105,000 .
Accounts receivable increased by $4.4 million from July 31, 1999, due
primarily to the timing of the shipments, the subsequent collection of the
related receivables and an increase of approximately $2.1 million in unbilled
receivables. The allowance for doubtful accounts of $145,000 remained the same.
The Company reviews its allowance for doubtful accounts periodically and
believes it is sufficient based on past experience and the Company's credit
standards.
Net inventories increased by $287,000, primarily due to the higher levels
of inventory required by our mobile datacommunications services segment. The
Company generally operates on a job-order cost basis, that is, costs are
incurred as work-in-process inventory for specific contracts or "jobs" and,
accordingly, inventory levels will vary as a function of the Company's order
backlog. The Company does have some product lines which require a more
competitive delivery response to customers' requirements and require the Company
to provide for a level of "off-the shelf" equipment. The only other general
inventory that the Company maintains is for basic components which are common
for most of its products. Inventory reserves are reviewed on an ongoing basis
and adjustments are made as needed.
Net intangible assets at October 31, 1999 of $1.6 million consist of
goodwill as a result of our acquisition, during fiscal 1999, of a mobile data
communications services business and entry into that business segment.
Accounts payable increased by $1.4 million primarily due to the increase
of inventory purchases. The decrease of $2.1 million in accrued expenses and
other current liabilities was primarily due to decreases in customer advances
and deposits partly offset by increases in accrued commissions. Purchases of
property plant and equipment were $210,000. Payment on long term debt was
$173,000. Other long-term liabilities are for deferred revenue related to an
extended warranty.
We have an $8.0 million secured credit facility from Republic National
Bank of New York. The line of credit, which is to be used for working capital
requirements, is for a term of one year and bears interest on borrowing of
90-day LIBOR plus 1.50% (7.75% at October 31,1999). There were no borrowings
outstanding at October 31,1999 and 1998. The credit facility expires December
31, 1999. We have renewed and received increases in this line of credit annually
since 1996.
We believe that our working capital position and available credit
facilities are sufficient to meet our cash requirements during the next year at
our current business levels. However, given the potential for receipt of large
orders under the Company's multi-year contract with the U.S. Army, or other
growth of our business beyond expected levels, we may seek additional external
financing.
Year 2000 Compliance
Management has initiated a company-wide program and has developed a formal
plan of implementation to prepare for the Year 2000. This includes taking
actions designed to ensure that our information technology systems, products and
infrastructure are Year 2000 compliant and that its customers, suppliers and
service providers have taken similar action. With respect to Year 2000 internal
issues, we have evaluated our information technology systems, products,
equipment and other facilities systems, and management believes
9
<PAGE>
that all are Year 2000 compliant. With respect to our external Year 2000 issues,
we have surveyed our customers, suppliers and service providers primarily
through written correspondence. Despite the efforts to survey customers,
suppliers and service providers, management cannot be certain as to the actual
Year 2000 readiness of these third parties. To the extent any of its suppliers
or service providers are not Year 2000 ready, we believe that we will be able to
obtain other suppliers or service providers without a significant interruption
to its business. Based upon responses to our inquiries of third parties, we
currently believe we do not have a need for a contingency plan. Certain experts
who have studied the issue have published reports indicating that the Year 2000
problem could be substantially more severe in developing economies than in the
United States. A significant amount of our sales are for customers in developing
countries.
Our management currently believes that the costs related to our compliance
with the Year 2000 issue will not have a material adverse effect on our
consolidated financial position, results of operations or cash flows.
10
<PAGE>
PART II
OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
The following exhibit is being filed as part of this Report:
Exhibition No. Description
-------------- -----------
Exhibit 27 Financial Data Schedule
11
<PAGE>
SIGNATURE
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.
COMTECH TELECOMMUNICATIONS CORP.
(Registrant)
Date: December 14, 1999 By: /s/ Fred Kornberg
-----------------------------------
Fred Kornberg
Chairman of the Board
Chief Executive Officer
and President
Date: December 14, 1999 By: /s/ J. Preston Windus, Jr.
------------------------------------
J. Preston Windus, Jr.
Senior Vice President
Chief Financial Officer
12
<PAGE>
SIGNATURE
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.
COMTECH TELECOMMUNICATIONS CORP.
(Registrant)
Date: December 14, 1999 By:
-----------------------------------
Fred Kornberg
Chairman of the Board
Chief Executive Officer
and President
Date: December 14, 1999 By:
------------------------------------
J. Preston Windus, Jr.
Senior Vice President
Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM Consolidated
Financial Statements Form 10-Q 10/31/99 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUL-31-2000
<PERIOD-START> AUG-01-1999
<PERIOD-END> OCT-31-1999
<CASH> 1,397
<SECURITIES> 0
<RECEIVABLES> 9,722
<ALLOWANCES> 145
<INVENTORY> 8,166
<CURRENT-ASSETS> 20,939
<PP&E> 18,307
<DEPRECIATION> 14,106
<TOTAL-ASSETS> 29,915
<CURRENT-LIABILITIES> 9,623
<BONDS> 0
0
0
<COMMON> 450
<OTHER-SE> 18,569
<TOTAL-LIABILITY-AND-EQUITY> 29,915
<SALES> 11,747
<TOTAL-REVENUES> 11,747
<CGS> 8,406
<TOTAL-COSTS> 10,882
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 37
<INCOME-PRETAX> 860
<INCOME-TAX> 325
<INCOME-CONTINUING> 535
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 535
<EPS-BASIC> .12
<EPS-DILUTED> .11
</TABLE>
