SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 28, 1997
Commission file number 1-8048
TII INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
State of incorporation: Delaware IRS Employer Identification No: 66-0328885
1385 Akron Street, Copiague, New York 11726
----------------------------------------------------
(Address and zip code of principal executive office)
(516) 789-5000
----------------------------------------------------
(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 [_]
The number of shares of the registrant's Common Stock, $.01 par value,
outstanding as of April 30, 1997 was 7,430,836.
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
TII INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
March 28, June 28,
-------- --------
1997 1996
ASSETS (unaudited)
Current Assets
Cash and cash equivalents $ 1,206 $ 2,883
Marketable securities available for sale 3,787 5,999
Receivables 7,044 7,084
Inventories 16,008 14,032
Prepaid expenses 649 388
-------- --------
Total current assets 28,694 30,386
-------- --------
Fixed Assets
Property, plant and equipment 36,378 33,018
Less: Accumulated depreciation and amortization (23,320) (22,029)
-------- --------
Net fixed assets 13,058 10,989
-------- --------
Other Assets 1,541 1,448
-------- --------
TOTAL ASSETS $ 43,293 $ 42,823
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Current portion of long-term debt and obligations
under capital leases $ 536 $ 363
Accounts payable 5,728 5,185
Accrued liabilities 1,341 1,037
-------- --------
Total current liabilities 7,605 6,585
-------- --------
Long-Term Debt 843 853
Long-Term Obligations Under Capital Leases 1,612 1,523
-------- --------
Shareholders' Equity
Preferred Stock, par value $1.00 per share;
1,000,000 authorized and issuable in series;
none issued --
Common Stock, par value $.01 per share;
30,000,000 shares authorized; 7,448,473 and
7,446,975 shares issued at March 28, 1997
and June 28, 1996, respectively 75 75
Warrants outstanding 159 120
Capital in excess of par value 29,052 29,046
Retained earnings 4,187 4,855
Valuation adjustment to record marketable
securities available for sale at fair value 41 47
-------- --------
33,514 34,143
Less - Treasury stock, at cost; 17,637 common shares (281) (281)
-------- --------
Total shareholders' equity 33,233 33,862
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 43,293 $ 42,823
======== ========
See notes to consolidated financial statements
-2-
<PAGE>
TII INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
(Dollars in Thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
March March
28, 1997 29, 1996 28, 1997 29, 1996
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net sales $ 12,535 $ 12,136 $ 37,532 $ 32,977
Cost of sales 12,178 7,946 30,638 23,110
-------- -------- -------- --------
Gross profit 357 4,190 6,894 9,867
-------- -------- -------- --------
Operating expenses
Selling, general and administrative 1,906 1,568 5,261 4,455
Research and development 842 770 2,362 2,157
-------- -------- -------- --------
Total operating expenses 2,748 2,338 7,623 6,612
Operating (loss) income (2,391) 1,852 (729) 3,255
Interest expense (60) (112) (229) (293)
Interest income 54 53 324 152
Other income (expense) 41 (12) 41 1
-------- -------- -------- --------
(Loss) income before provision for
income taxes (2,356) 1,781 (593) 3,115
Provision for income taxes (31) -- 75 --
-------- -------- -------- --------
Net (loss) income $ (2,325) $ 1,781 $ (668) $ 3,115
======== ======== ======== ========
Net (loss) income per share - primary $ (.31) $ .23 $ (.09) $ .40
======== ======== ======== ========
Weighted average number of common and
common equivalent shares outstanding 7,431 7,893 7,430 7,861
======== ======== ======== ========
Net (loss) income per share - fully diluted $ (.31) $ .22 $ (.09) $ .39
======== ======== ======== ========
Weighted average number of common
and common equivalent shares outstanding 7,431 8,193 7,430 8,197
======== ======== ======== ========
</TABLE>
See notes to consolidated financial statements
-3-
<PAGE>
TII INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
FOR THE NINE MONTHS ENDED MARCH 28, 1997 (UNAUDITED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Valuation
Adjustment
to record
Marketable
Capital Securities
in excess available for
Common Warrants of par Retained sale at Treasury
Stock Outstanding value Earnings fair value Stock
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
BALANCE, June 28, 1996 $ 75 $ 120 $29,046 $ 4,855 $ 47 $ (281)
Exercise of stock options -- -- 6 -- -- --
Warrants issued for financial
advisory services -- 39 -- -- -- --
Unrealized loss on marketable
securities available for sale -- -- -- -- (6) --
Net loss for the nine months
ended March 28, 1997 -- -- -- (668) -- --
------- ------- ------- ------- ------- -------
BALANCE, March 28, 1997 $ 75 $ 159 $29,052 $ 4,187 $ 41 $ (281)
======= ======= ======= ======= ======= =======
</TABLE>
See notes to consolidated financial statements
-4-
<PAGE>
TII INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED MARCH 28, 1997 AND MARCH 29, 1996 (unaudited)
(Dollars in Thousands)
<TABLE>
<CAPTION>
1997 1996
-------- --------
<S> <C> <C>
Cash Flows from Operating Activities:
Net (loss) income $ (668) $ 3,115
Adjustments to reconcile net (loss) income to net
cash used in operating activities:
Depreciation and amortization 1,292 1,265
Provision for inventory reserve, net 2,798 --
Amortization of other assets, net 45 251
Changes in assets and liabilities
Decrease (increase) in receivables 40 (1,471)
Increase in inventories (4,774) (1,749)
(Increase) decrease in prepaid expenses and other assets (399) 67
Increase (decrease) in accounts payable and accrued
liabilities 885 (2,396)
-------- --------
Net cash used in operating activities (781) (918)
-------- --------
Cash Flows from Investing Activities:
Capital expenditures (2,827) (1,379)
Purchases of marketable securities (8,552) (3,419)
Sales and maturities of marketable securities 10,759 228
-------- --------
Net cash used in investing activities (620) (4,570)
-------- --------
Cash Flows from Financing Activities:
Proceeds from exercise of options and warrants 6 7,670
Payment of long-term debt and obligations under capital leases (282) (1,886)
Proceeds from issuance of long-term debt -- 1,840
Redemption of Preferred Stock -- (2,763)
-------- --------
Net cash (used in) provided by financing activities (276) 4,861
-------- --------
Net decrease in cash and cash equivalents (1,677) (627)
Cash and Cash Equivalents, at beginning of period 2,883 1,152
-------- --------
Cash and Cash Equivalents, at end of period $ 1,206 $ 525
======== ========
Supplemental Disclosure of Non-cash Transactions:
Capital leases entered into $ 533 $ 32
======== ========
Cash paid during the period for:
Income taxes $ 42 $ --
======== ========
Interest $ 181 $ 112
======== ========
</TABLE>
See notes to consolidated financial statements
-5-
<PAGE>
TII INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - INTERIM FINANCIAL STATEMENTS
The unaudited interim financial statements presented herein have been prepared
in accordance with generally accepted accounting principles for interim
financial statements and with the instructions to Form 10-Q and Regulation S-X
pertaining to interim financial statements. Accordingly, they do not include all
information and footnotes required by generally accepted accounting principles
for complete financial statements. The financial statements reflect all
adjustments, consisting of normal recurring adjustments and accruals which, in
the opinion of management, are considered necessary for a fair presentation of
financial position at March 28, 1997 and results of operations for the three and
nine months ended March 28, 1997 and March 29, 1996. The financial statements
should be read in conjunction with the summary of significant accounting
policies and notes to consolidated financial statements included in the
Company's Annual Report on Form 10-K for the year ended June 28, 1996. The
results of operations for the three and nine months ended March 28, 1997 are not
necessarily indicative of the results that may be expected for the full year
ending June 27, 1997.
NOTE 2 - NET PROFIT PER COMMON SHARE
Net profit per common and common equivalent share is calculated using the
weighted average number of common shares outstanding and the net additional
number of shares that would be issuable upon the exercise of dilutive stock
options and warrants assuming that the Company used the proceeds received to
purchase additional shares (up to 20% of shares outstanding) at market value,
retire debt and invest any remaining proceeds in U.S. government securities. The
effect on net profit of these assumed transactions is considered in the
computation. In February 1997, the Financial Accounting Standards Board ("FASB")
issued Statement of Financial Accounting Standards 128 "Earnings Per Share"
("SFAS 128"). SFAS 128 modifies the methodology of calculating earnings per
share and is effective for periods after December 15, 1997. The Company's
management does not expect SFAS 128 to have a material effect on the Company's
earnings per share.
NOTE 3 - INVENTORIES
Inventories, net of reserves, consisted of the following components:
March 28,1996 June 28, 1996
------------- -------------
Raw materials $ 5,290,000 $ 4,939,000
Work in process 5,551,000 4,879,000
Finished goods 5,167,000 4,214,000
----------- -----------
$16,008,000 $14,032,000
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS:
The following discussion and analysis should be read in conjunction with the
foregoing consolidated financial statements and notes thereto.
RESULTS OF OPERATIONS
Sales increased $1.3 million (11%) and $5.4 million (17%) in the third quarter
and first three quarters of fiscal 1997, respectively, over the comparable
periods of 1996 after eliminating $875,000 of revenue received in the third
quarter of fiscal 1996 from AT&T Corporation relating to a contract that expired
in the third quarter of fiscal 1996. The Company experienced growth in each of
its station protector, network interface device and fiber optic product lines.
-6-
<PAGE>
During the third quarter of fiscal year 1997, the Company initiated a
restructuring of its operations in order to reduce costs and enhance
profitability. This restructuring will include the reduction of personnel,
moving certain production processes to lower cost areas, outsourcing certain
manufacturing steps, realigning the sales and marketing forces and ceasing the
sale of lower margin products. This plan resulted in one time charges of $3.0
million, which consists of an inventory reserve, severance related costs,
reserves for the impaired value of property plant and equipment, and costs to
close or move production processes. Of the $3.0 million restructuring charge,
$2.9 million was charged to cost of sales. Cost of sales as a percentage of
sales increased to 97.2% (74.0% before the non-recurring charges) and 81.6%
(73.9% before the non-recurring charges) in the third quarter and the first nine
months of fiscal 1997 from 65.5% (70.6% after excluding AT&T contract revenue)
and 70.1% (72.0% after excluding AT&T contract revenue) in the third quarter and
the first nine months of 1996, respectively.
Selling, general and administrative expenses for the third quarter and the first
three quarters of fiscal 1997, increased $338,000 or 22% and $806,000 or 18%
from the prior year periods, respectively. The restructuring described above
resulted in a one time charge to selling, general and administrative expenses of
$50,000, which consisted of severance related costs, and administrative
expenditures relating to the execution of the restructuring. The additional
increase resulted primarily from costs associated with the Company's efforts to
penetrate new markets.
Research and development expenses increased 9% and 10% in the third quarter and
first nine months of fiscal 1997, respectively. $50,000 of the increase resulted
from a one time charge relating to the cost reduction program mentioned above.
The remaining increase was due to the Company's continuing development of new
products for the telecommunications industry.
Interest expense declined by $52,000 and $64,000 in the third quarter and the
first three quarters of fiscal 1997, respectively, from the respective
comparable periods in fiscal 1996. Last year's amounts included the amortization
of debt origination costs that were fully amortized as of September 1996.
Interest income increased by $1,000 over the prior year's third quarter and by
$172,000 over last year's first three quarters due to the investment of
additional funds, which arose primarily from the exercise of options and
warrants, as well as from funds generated from the Company's operations.
The Company accrued a credit for the quarter and a provision for the first nine
months of fiscal 1997 for certain state and local income taxes. Fiscal year 1996
did not contain such a provision, as the Company's net operating loss carry
forwards were then available to apply against such taxes.
As a result of the above, net loss for the third quarter and the first nine
months of fiscal year 1997 equaled $2,325,000 or $.31 per share and $668,000 or
$.09 per share (fully diluted), respectively, as compared to net income of
$1,781,000 or $.22 per share and $3,115,000 or $.39 per share (fully diluted) in
the year earlier periods. The results for both fiscal 1997 reported periods
include one time charges aggregating to $3,000,000 or $.38 per share.
LIQUIDITY AND CAPITAL RESOURCES
During the first nine months of fiscal 1997, $781,000 of cash was used in
operations, primarily to fund the net loss of $668,000. The balance of cash used
funded, principally, increases in inventories (approximately $4,774,000 or
$1,976,000 net of $2,798,000 of reserve established) and prepaid expenses and
other assets ($399,000) offset, in part, by cash provided by depreciation and
amortization ($1,292,000) and an increase in accounts payable and accrued
liabilities ($885,000).
Cash of $620,000 was used in investing activities for capital expenditures
($2,827,000) offset, in part, by $2,207,000 of matured investments in excess of
amounts reinvested. Financing activities used $276,000 of cash for the payment
of $282,000 of long term debt and obligations under capital lease, offset
slightly by proceeds from the exercise of options.
-7-
<PAGE>
As a result of the one time restructuring charges of $3 million, the Company was
not in compliance with the Debt Service Ratio covenant contained in its
Revolving Credit Agreement. Presently, there is no loan amount outstanding under
this line of credit. The Company has received a waiver of this non-compliance
and an amendment to the covenant to eliminate the effects of such charges on
compliance with such covenant in future quarters.
Funds anticipated to be generated from operations, together with available cash,
marketable securities, and borrowings available under the Company's Revolving
Credit Agreement, are considered to be adequate to finance the Company's
operational and capital needs for the foreseeable future.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
4. Fourth Amendment dated May 2, 1997 to the Revolving Credit
Agreement among TII International, Inc., TII Industries, Inc.
and Chase Manhattan Bank
11. Statement Re: Computation of Per Share Earnings
27. EDGAR financial data schedule
(b) Reports on Form 8-K
No Reports on Form 8-K were filed during the quarter ended March 28,
1997.
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.
TII INDUSTRIES, INC.
Date: May 7, 1997 /s/ Paul G. Sebetic
-------------------
Paul G. Sebetic
Vice President-Finance and Chief
Financial Officer
-8-
FOURTH AMENDMENT AND WAIVER dated as of May 2,
1997 to the Revolving Credit Loan Agreement
dated January 31, 1995, as amended by the FIRST
AMENDMENT dated as of August 3, 1995, the SECOND
AMENDMENT AND WAIVER dated as of November 10,
1995, and AMENDMENT OF REVOLVING CREDIT LOAN
AGREEMENT dated December 27, 1995 (the "Loan
Agreement") among TII INTERNATIONAL, INC., a
Delaware corporation with offices located at
1385 Akron Street Copiague, New York 11726 (the
"Borrower"), TII INDUSTRIES, INC., a Delaware
corporation with offices at 1385 Akron Street
Copiague, New York 11726 ("Industries") and THE
CHASE MANHATTAN BANK (formerly known as Chemical
Bank), a New York State banking corporation with
offices at 395 North Service Road, Suite 302,
Melville, New York 11747 (the "Bank").
WHEREAS, the Borrower and Industries have requested and the Bank has agreed,
subject to the terms and conditions of this FOURTH AMENDMENT AND WAIVER, to
amend and waive compliance with certain provisions of the Loan Agreement to
reflect the requests herein set forth;
NOW, THEREFORE, in consideration of the premises and of the mutual covenants and
agreements hereinafter set forth, the parties hereto agree as follows:
1. Waiver of Article VII. Negative Covenants. Section 7.17. Debt Service
--------------------------------------------------------------
Ratio.
------
Compliance with Section 7.17 of the Loan Agreement is hereby waived for
the fiscal quarter ended March 28,1997 to permit the Debt Service Ratio
to be less than 1.35 to 1.0, provided, however, that Industries and its
Subsidiaries did not incur a net loss in excess of $2,326,000 for the
fiscal quarter ended March 28, 1997 and provided further that such net
loss arose as a result of a "one-time" charge in an amount not to exceed
$3,000,000 for such fiscal period (the "1996 Extraordinary Charge").
2. Amendment to Article VII. Negative Covenants. Section 7.17. Debt Service
-----------------------------------------------------------
Ratio.
------
Section 7.17 of the Loan Agreement is hereby amended by adding the
following immediately at the end of such section:
"The 1996 Extraordinary Charge in the amount up to $3,000,000 for the
fiscal quarter ended March 28, 1997 shall be excluded from the
calculation of the Debt Service Ratio for the fiscal quarters ended June
29, 1997, September 30, 1997 and December 31, 1997."
This FOURTH AMENDMENT AND WAIVER shall be construed and enforced in accordance
with the laws of the State of New York.
All capitalized terms not otherwise defined herein are used with the respective
meanings given to such terms in the Loan Agreement.
Except as expressly waived or amended hereby, the Loan Agreement shall remain in
full force and effect in accordance with the original terms thereof. This FOURTH
AMENDMENT AND WAIVER herein contained is limited specifically to the matters set
forth above and does not constitute directly or by implication
<PAGE>
-2-
a waiver or amendment of any other provision of the Loan Agreement or any
default which may occur or may have occurred under the Loan Agreement.
The Company and Industries hereby represent and warrant that, after giving
effect to this FOURTH AMENDMENT AND WAIVER, no Event of Default or default
exists under the Loan Agreement or any other related documents.
This FOURTH AMENDMENT AND WAIVER may be executed in any number of counterparts,
each of which shall constitute an original but all of which, when taken
together, shall constitute but one FOURTH AMENDMENT AND WAIVER. This FOURTH
AMENDMENT AND WAIVER shall become effective when (i) the Bank shall have
received a certificate of the chief financial officer detailing the $3,000,000
one time charge for the fiscal quarter ended March 28, 1997 and the breakdown of
accounting entries used to reflect the charge on the balance sheet and income
statement of Industries and its Subsidiaries and (ii) duly executed counterparts
hereof which, when taken together, bear the signatures of each of the parties
hereto shall have been delivered to the Bank.
IN WITNESS WHEREOF, the Borrower, Industries and the Bank caused this FOURTH
AMENDMENT AND WAIVER to be duly executed by their duly authorized officers all
as of the day and year first above written.
TII INTERNATIONAL, INC.
By: /s/ Paul Sebetic
-----------------------------
Name: Paul Sebetic
Title:
TII INDUSTRIES, INC.
By: /s/ Paul Sebetic
-----------------------------
Name: Paul Sebetic
Title:
THE CHASE MANHATTAN BANK
By: /s/ Christopher Zimmerman
-----------------------------
Name: Christopher Zimmerman
Title: Vice President
<PAGE>
-3-
CONSENT
The undersigned, as Guarantors of the obligations of TII International, Inc.
hereby consent to the execution and delivery by TII International, Inc. and TII
Industries, Inc. of this FOURTH AMENDMENT AND WAIVER and hereby confirm that
they remain fully bound by the terms of the Joint and Several Guaranty of
Payment dated January 31, 1995 to which they are a party.
TII INDUSTRIES, INC. TII CORPORATION
By: /s/ Paul Sebetic
--------------------
By: /s/ Paul Sebetic Name: Paul Sebetic
-------------------- Title: VP - Finance
Name: Paul Sebetic
Title: VP - Finance
TII INDUSTRIES NC, INC. TELECOMMUNICATIONS INDUSTRIES,
INC.
By: /s/ Paul Sebetic
--------------------
Name: Paul Sebetic By: /s/ Paul Sebetic
Title: VP - Finance --------------------
Name: Paul Sebetic
Title: VP - Finance
TII DOMINICANA, INC.
By: /s/ Paul Sebetic
--------------------
Name: Paul Sebetic
Title: VP - Finance
TII ELECTRONICS, INC.
By: /s/ Paul Sebetic
--------------------
Name: Paul Sebetic
Title: VP - Finance
DITEL, INC.
By: /s/ Paul Sebetic
--------------------
Name: Paul Sebetic
Title: VP - Finance
TII INDUSTRIES, INC. AND SUBSIDIARIES
EXHIBIT 11 - COMPUTATION OF PER SHARE EARNINGS
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
March March
28, 1997 29, 1996 28, 1997 29, 1996
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
PRIMARY EARNINGS PER SHARE
Shares used in computing earnings per share:
Weighted average number of shares of
common stock outstanding 7,431,000 7,307,000 7,430,000 6,636,000
Weighted average number of shares of
class B common stock outstanding -- -- -- 370,000
Weighted average number of shares of
Series A preferred stock outstanding -- -- -- 106,000
Incremental shares attributed to common
stock equivalents - options and warrants -- 586,000 -- 749,000
----------- ----------- ----------- -----------
7,431,000 7,893,000 7,430,000 7,861,000
=========== =========== =========== ===========
Earnings:
Net (loss) income ($2,325,000) $1,781,000 ($ 668,000) $ 3,115,000
Add: Interest expense reduction -- -- -- --
----------- ----------- ----------- -----------
($2,325,000) $1,781,000 ($ 668,000) $ 3,115,000
=========== =========== =========== ===========
Earnings per common and common equivalent
share ($ 0.31) $ 0.23 ($ 0.09) $ 0.40
=========== =========== =========== ===========
FULLY DILUTED EARNINGS PER SHARE
Shares used in computing earnings per share:
Weighted average number of shares
outstanding 7,431,000 7,307,000 7,430,000 6,636,000
Weighted average number of shares of
class B common stock outstanding -- -- -- 370,000
Weighted average number of shares of
Series A preferred stock outstanding -- -- -- 106,000
Incremental shares attributed to common
stock equivalents - options and warrants -- 586,000 -- 785,000
OPIC loan -- 300,000 -- 300,000
----------- ----------- ----------- -----------
7,431,000 8,193,000 7,430,000 8,197,000
=========== =========== =========== ===========
Earnings:
Net (loss) income ($2,325,000) $1,781,000 ($ 668,000) $ 3,115,000
Add: Interest expense reduction -- 19,000 -- 57,000
----------- ----------- ----------- -----------
($2,325,000) $1,800,000 ($ 668,000) $ 3,172,000
=========== =========== =========== ===========
Earnings per common and common equivalent
share ($ 0.31) $ 0.22 ($ 0.09) $ 0.39
=========== =========== =========== ===========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000277928
<NAME> TII INDUSTRIES, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-27-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> MAR-28-1997
<CASH> 1,206
<SECURITIES> 3,787
<RECEIVABLES> 7,044
<ALLOWANCES> 55
<INVENTORY> 16,008
<CURRENT-ASSETS> 28,694
<PP&E> 36,378
<DEPRECIATION> 23,320
<TOTAL-ASSETS> 43,293
<CURRENT-LIABILITIES> 7,605
<BONDS> 0
0
0
<COMMON> 75
<OTHER-SE> 33,158
<TOTAL-LIABILITY-AND-EQUITY> 43,293
<SALES> 37,532
<TOTAL-REVENUES> 37,532
<CGS> 30,638
<TOTAL-COSTS> 7,623
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 229
<INCOME-PRETAX> (593)
<INCOME-TAX> 75
<INCOME-CONTINUING> (668)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (668)
<EPS-PRIMARY> (0.09)
<EPS-DILUTED> (0.09)
</TABLE>
