<PAGE>
FORM 10-Q
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1997
------------------------------------------------
Commission file number 2-66564
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
---------------- ----------------
SPINNAKER INDUSTRIES, INC.
- -------------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
DELAWARE 06-0544125
- ------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
600 N. PEARL ST., #2160, L.B. 100, DALLAS, TX 75201
- -------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(214) 855-0322
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(Registrant's telephone number, including area code)
N/A
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(Former name, former address and former fiscal year,
if changed since last report.)
Indicate 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
--- ---
Indicate the number of shares outstanding of each of the Registrant's classes
of Common Stock, as of the latest practicable date.
COMMON STOCK, NO PAR VALUE 3,347,181 SHARES
- ---------------------------------- -----------------------------------
Class Outstanding at September 30, 1997
CLASS A COMMON STOCK, NO PAR VALUE 3,337,568 SHARES
- ---------------------------------- -----------------------------------
Class Outstanding at September 30, 1997
Page 1 of 15
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SPINNAKER INDUSTRIES, INC.
INDEX
- --------------------------------------------------------------------------------
PAGE
NUMBER
------
PART I FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
Condensed Consolidated Balance Sheets as of
September 30, 1997 and December 31, 1996 3
Condensed Consolidated Statements of Operations
for the Three Months and Nine Months Ended
September 30, 1997 and 1996 4
Condensed Consolidated Statements of Cash Flows
for the Nine Months Ended September 30, 1997 and 1996 5
Notes to Condensed Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
PART II OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 12
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Page 2 of 15
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PART I. - FINANCIAL INFORMATION
Item 1. - CONSOLIDATED FINANCIAL STATEMENTS
SPINNAKER INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
September 30, December 31,
1997 1996
------------- ------------
(Unaudited) (Note)
(In thousands)
ASSETS
Current assets:
Cash and cash equivalents $ 6,584 $ 9,699
Accounts receivable, net 26,085 21,995
Inventories, net 31,551 32,638
Prepaid expenses and other 2,278 2,266
Deferred income taxes 1,590 1,590
-------- ---------
Total current assets 68,088 68,188
Property plant and equipment:
Land 583 583
Buildings and improvements 13,210 12,606
Machinery and equipment 58,595 53,261
Accumulated depreciation (13,314) (9,155)
-------- ---------
59,074 57,295
Goodwill, net 24,250 25,062
Other assets 6,308 6,631
-------- ---------
TOTAL ASSETS $157,720 $157,176
-------- ---------
-------- ---------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 13,092 $ 13,356
Accrued liabilities 6,093 7,524
Current portion of long term debt 831 1,049
Working capital revolver 333 686
Other current liabilities 5,829 2,301
-------- ---------
Total current liabilities 26,178 24,916
Long term debt, less current portion 115,117 115,113
Deferred income taxes 5,911 5,911
Stockholders' equity:
Common stock 3,124 3,124
Additional paid in capital 11,333 10,631
Retained earnings (deficit) (3,551) (2,127)
Minimum pension liability (280) (280)
Less: treasury stock (112) (112)
-------- ---------
Total stockholders' equity 10,514 11,236
-------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $157,720 $157,176
-------- ---------
-------- ---------
NOTE: The balance sheet at December 31, 1996 has been derived from the
audited financial statements at that date but does not include all
of the information and footnotes required by generally accepted
accounting principles for complete financial statements.
See accompanying notes to condensed consolidated financial statements which are
an integral part of these financial statements.
Page 3 of 15
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SPINNAKER INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED RESULTS OF OPERATIONS - UNAUDITED
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ -----------------
1997 1996 1997 1996
--------- -------- --------- ---------
Net sales $55,359 $62,114 $172,755 $184,358
Cost of sales 48,138 54,310 148,560 159,163
------- ------- -------- --------
Gross margin 7,221 7,804 24,195 25,195
Selling, general and administrative expense 5,357 5,526 16,465 16,643
------- ------- -------- --------
Income from operations 1,864 2,278 7,730 8,552
Interest expense 3,238 2,363 9,715 7,020
Guarantee fee - - - 375
Other income (expense) - net (42) (13) (104) (52)
------- ------- -------- --------
Income (loss) before income taxes
and minority interest (1,416) (98) (2,089) 1,105
Income tax provision (benefit) (387) (40) (665) 453
Minority interest expense - 109 - 299
------- ------- -------- --------
Net income (loss) $(1,029) $ (167) $ (1,424) $ 353
------- ------- -------- --------
------- ------- -------- --------
Weighted average shares and
common stock equivalents outstanding 6,290 6,149 6,211 6,959
Net income (loss) per share $ (0.16) $ (0.03) $ (0.23) $ 0.05
See accompanying notes to condensed consolidated financial statements which
are an integral part of these financial statements.
Page 4 of 15
<PAGE>
SPINNAKER INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED
Nine Months Ended
September 30,
--------------------
(In thousands) 1997 1996
------- ------
Operating activities
Net income (loss) $(1,424) $ 353
Adjustments to reconcile net income
to net cash provided by (used in) operating activities:
Depreciation 4,170 3,165
Amortization of goodwill and deferred financing costs 1,404 1,066
Minority interest - 299
Accrued interest on notes payable to related parties - 154
Changes in operating assets and liabilities
Accounts receivable (4,090) (1,682)
Inventories 1,087 (7,142)
Prepaid expenses and other assets (12) (366)
Accounts payable, accrued liabilities, and
other current liabilities 1,833 3,563
------- -------
Net cash provided by (used in) operating activities 2,968 (590)
------- -------
Investing activities:
Purchase of property, plant and equipment (5,965) (7,260)
Other (221) 56
------- -------
Net cash used in investing activities (6,186) (7,204)
------- -------
Financing activities:
Proceeds (payments) on working capital revolvers, net (353) 8,892
Issuance of long-term debt - 8,500
Principal payments on long term debt and leases (246) (8,252)
Issuance of common stock 702 500
Deferred financing costs - (1,731)
------- -------
Net cash provided by financing activities 103 7,909
------- -------
Decrease in cash and cash equivalents (3,115) 115
Cash and cash equivalents at beginning of period 9,699 3,048
------- -------
Cash and cash equivalents at end of period $ 6,584 $ 3,163
------- -------
------- -------
See accompanying notes to condensed consolidated financial statements which are
an integral part of these financial statements.
Page 5 of 15
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SPINNAKER INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. The accompanying condensed consolidated financial statements include
Spinnaker Industries, Inc. and its wholly-owned subsidiaries, Central
Products Company, Brown-Bridge Industries, Inc. and Entoleter, Inc.
(collectively the "Company"). All significant intercompany accounts and
transactions have been eliminated in consolidation.
2. 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 (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included. Operating
results for the period ended September 30, 1997 are not necessarily
indicative of the results that may be expected for the year ended December
31, 1997. For further information, refer to the consolidated financial
statements and footnotes thereto included in the Company's annual report on
Form 10-K for the year ended December 31, 1996.
3. In October 1996, the Company acquired all of the approximately 25% minority
interest in its Brown-Bridge Industries, Inc. subsidiary held by such
subsidiary's other shareholders. The terms of the acquisition involved a
cash payment of approximately $2.3 million and the issuance of 9,613 shares
of Spinnaker's Common Stock. As additional consideration for the shares of
capital stock of Brown-Bridge, the minority shareholders received the right
to a contingent payment, which is exerciseable at any time during the
period beginning October 1, 1998 and ending September 30, 2000.
4. Of inventory values at September 30, 1997 and December 31, 1996,
approximately 49% and 47%, respectively, are valued using the last in,
first out method (LIFO), 46% and 48%, respectively, are valued using a
specific identification method with the remaining inventories valued using
the first-in, first-out method (FIFO). Inventories consist of the
following at September 30, 1997, and December 31, 1996:
1997 1996
---- ----
(in thousands)
Finished goods $ 8,773 $10,351
Work-in-process 3,789 3,518
Raw materials and supplies 18,989 18,769
------- -------
TOTAL $31,551 $32,638
------- -------
------- -------
Page 6 of 15
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5. On October 23, 1996, the Company issued $115,000,000 of 10 3/4% Senior
Secured Notes ("Notes") due 2006. The Notes were issued in a private
placement under Rule 144A, and were subsequently exchanged for notes with
similar terms that were registered under the Securities Act of 1933 in
February 1997. The proceeds from the private placement of the Notes were
used to retire the Company's outstanding term and revolver obligations,
except the mortgage note at Entoleter, Inc. and various capital lease
obligations.
Following is a summary of long term debt of the Company at September
30, 1997, and December 31, 1996:
1997 1996
---- ----
(in thousands)
10 3/4% Senior Secured Notes, due 2006 with
interest payable semi-annually each April 15
and October 15 . . . . . . . . . . . . . . . . $115,000 $115,000
9 1/4% mortgage note from bank, payable on
demand. Secured by certain property of
Entoleter. . . . . . . . . . . . . . . . . . . 788 969
Capital lease obligations. . . . . . . . . . . 160 193
-------- --------
115,948 116,162
Less current maturities . . . . . . . . . . . . (831) (1,049)
-------- --------
$115,117 $115,113
-------- --------
-------- --------
6. In September 1997, Boyle Fleming & Company ("BF") exercised Class "A"
warrants pursuant to which the Company has issued to BF an aggregate
262,970 shares of common stock and 262,970 shares of Class A common stock.
Richard J. Boyle and Ned N. Fleming, III, the Company's Chairman and Chief
Executive Officer, and President and Chief Operating Officer, respectively,
are shareholders, directors and officers of BF.
In February 1997, the Financial Accounting Standards Board issued Statement
No. 128, EARNINGS PER SHARE, which is required to be adopted on December
31, 1997. At that time, the Company will be required to change the method
currently used to compute earnings per share and to restate all prior
periods. Under the new requirements for calculating basic earnings per
share, the dilutive effect of stock options will be excluded. The impact
of Statement No. 128 on the calculation of earnings per share for the three
months and nine months ended September 30, 1997 and 1996 is not expected to
be material.
7. The Company has identified possible environmental issues related to
portions of its land in Hamden, Connecticut. The appropriate regulatory
agencies have been notified, but to date no action has been required by any
regulatory agency.
8. Certain reclassifications have been made to conform prior period data to
the current year's presentation.
Page 7 of 15
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ITEM-2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 1997, COMPARED TO THREE MONTHS ENDED SEPTEMBER
30, 1996
NET SALES
The Company's net sales for the quarter ended September 30, 1997 were $55.4
million, compared to $62.1 million in the corresponding 1996 period. In the
Company's core business markets, adhesive-backed label stock and pressure
sensitive tape markets, net sales during the third quarter of 1997 reflect a
marginal increase in unit sales comparable to the corresponding 1996 period
and lower average selling prices resulting from changes in product mix and
selected market competition from the 1996 period. On a consolidated basis,
net sales also reflect higher freight and discount costs, a decline of $1.6
million in sales of industrial equipment, and the Company's decision to
terminate a relationship with an existing customer of the Company's
reinforced and box tape products, which also reduced period to period net
sales by $1.5 million.
The Company's September 1997 net sales however, reflect increased unit sales
from the corresponding period in 1996. The third quarter, and more
specifically July, is historically impacted by the annual one-week shutdown
of the Company's Menasha, Wisconsin facility for scheduled maintenance and
specific capital projects. Further, certain key consumer and converter
product customers of the adhesive-backed label stock business also follow
similar procedures and were shutdown during the July and August periods,
resulting in subsequent inventory adjustments.
GROSS MARGIN
Gross margin, as a percentage of net sales, increased to 13.0% in the quarter
ended September 30, 1997 from 12.6% in the comparable 1996 period. These
improvements were primarily due to improved manufacturing variances and lower
average unit manufacturing costs of adhesive-backed material products,
partially offset by a $0.4 million decrease in gross margins in the
industrial equipment business.
The Company attributes improvements in manufacturing variances to
manufacturing efficiencies gained through reductions in manufacturing
personnel, material process and handling modifications and capital
investments made over the past twelve months. The capital investments have
been focused on improving manufacturing efficiencies by increasing output and
reducing manufacturing downtime.
The installation of a new silicone coater at the Company's adhesive-backed
label stock manufacturing facility, which became operational during the first
quarter of 1997, enabled the Company to significantly increase internal
silicone lining capacity and eliminate the need to outsource a portion of its
production requirements.
Lower average unit manufacturing costs were attributable to the foregoing
improvements, as well as variances in product mix. Product mix was impacted
by customer demands through changes in customers' product requirements and
specifications, such as application, length, width, and quantity.
In the industrial equipment business, gross margins during the third quarter
were 20.2% compared to 24.9% in the third quarter of 1996. The lower gross
margins are primarily attributable to lower sales and reduced manufacturing
overhead absorption.
INCOME FROM OPERATIONS
Income from operations for the quarter ended September 30, 1997 were $1.9
million compared to $2.3 million in the corresponding 1996 period. These
operating results reflect improved gross margin percentages and lower
selling, general and administrative ("SG&A") expenses, offset by a $0.4
million decrease in gross margins in the industrial equipment business and a
$0.2 million increase in depreciation and amortization expenses from the
comparable 1996 period.
Page 8 of 15
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INTEREST EXPENSE
Interest expense for the three months ended September 30, 1997 increased
approximately $0.9 million compared to the corresponding period for 1996.
The increase is attributable to higher average outstanding debt obligations
and related interest rates during the period and amortization of deferred
financing costs associated with the Company's 10 3/4% Senior Secured notes
issued in October 1996.
INCOME TAXES
The third quarter 1997 income tax rate for federal and state income taxes
reflects a revised annual effective tax rate of approximately 32%. In the
corresponding period of 1996 the effective income tax rate was approximately
41%.
NINE MONTHS ENDED SEPTEMBER 30, 1997, COMPARED TO NINE MONTHS ENDED SEPTEMBER
30, 1996
NET SALES
The Company's net sales for the nine months ended September 30, 1997 were
$172.8 million compared to $184.4 million in 1996. Unit sales of postage
stamp paper stock for the first nine months of 1997 increased nearly 9%
compared to 1996, and unit sales of pressure sensitive adhesive-backed label
stock and pressure sensitive tapes increased approximately 3% during this
period. These increases in unit sales were offset by lower average selling
prices resulting from variances in product mix that were attributable to
changes in customers' requirements and specifications, such as product
application, length, width, and quantity, and the Company's decision to
terminate a relationship with an existing customer of the Company's
reinforced and box tape products, which further reduced period to period net
sales approximately $4.0 million. The decrease in net sales for the nine
month period also reflects a decline of $2.1 million in sales of industrial
equipment and higher freight costs.
GROSS MARGIN
Gross margin, as a percentage of net sales increased to 14.0% in the nine
months ended September 30, 1997 from 13.7% in the comparable 1996 period.
The improved gross margin percentage was due to improved manufacturing
variances and lower average unit manufacturing costs of adhesive-backed
material products.
The tape production operations have continued to improve from those
experienced in 1996, and have shown significant improvement from the
manufacturing variances experienced as recently as the first quarter of 1997.
The Company attributes these improvements in manufacturing variances to
efficiencies gained through reductions of manufacturing personnel, material
process and handling modifications and capital investments made over the past
twelve months. The Company is continuing to focus its management efforts and
capital investments on improving manufacturing efficiencies and increasing
capacity.
The installation of a new silicone coater at the Company's adhesive-backed
label stock manufacturing facility, which became operational in January 1997,
enabled the Company to significantly increase internal silicone lining
capacity and eliminate the need to outsource a portion of its production
requirements, resulting in estimated savings of approximately $2.4 million
during the nine month period.
Lower average unit manufacturing costs are attributable to variances in
product mix and improved manufacturing efficiencies during the period.
Product mix was impacted by changes in customers' product requirements and
specifications, such as application, length, width, and quantity. The
manufacturing efficiencies were primarily a result of recent capital
investments to increase output and reduce manufacturing downtime.
INCOME FROM OPERATIONS
Income from operations was $7.7 million or 4.5% of net sales in the nine
months ended September 30, 1997 compared to $8.5 million or 4.6% of net sales
in the comparable 1996 period. These operating results reflect lower gross
margin dollars and $0.7 million of higher depreciation and amortization
expenses, offset by lower administrative expenses relating to personnel
reductions at the Company's operating entities as compared to the 1996 period.
Page 9 of 15
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INTEREST EXPENSE
Interest expense for the nine months ended September 30, 1997 increased
approximately $2.7 million compared to the corresponding period for 1996.
The increase is attributable to higher average outstanding debt obligations
and related interest rates during the period, and amortization of deferred
financing costs associated with the Company's 10 3/4% Senior Secured notes
issued in October 1996.
OTHER INCOME (EXPENSE) - GUARANTEE FEE
As part of the acquisition of Central Products Company, Lynch Corporation,
the Company's corporate parent, agreed to guarantee a $25.0 million note to
Alco Standard Corporation at a rate of 0.5% of the principal amount per month
($125,000 per month). This guarantee ended on March 31, 1996, upon the
completion of the refinancing of certain notes.
INCOME TAXES
The 1997 estimated annual effective income tax rate for federal and state
income taxes is approximately 32%, compared to approximately 41% in 1996.
The change in the tax rate is attributable to the impact of non-deductible
permanent tax differences on estimated earnings before tax.
FINANCIAL CONDITION
LIQUIDITY AND CAPITAL RESOURCES
The Company's cash balance at September 30, 1997 was approximately $6.6
million. The cash balance represents an increase of approximately $3.4
million from a year earlier. Additionally, the Company's current portion of
long-term debt and working capital revolver obligations are approximately
$1.2 million compared to $46.6 million at September 30, 1996. The Company's
availability under the working capital revolver is approximately $36.0
million.
The Company generated approximately $3.0 million in net cash from operating
activities for the nine months ended September 30, 1997, compared to $590,000
net cash used in the corresponding period in 1996. The difference is
attributable to changes in net operating assets and liabilities, offset by
lower net income during the nine month period ended September 30, 1997.
Net cash used in investing activities was $6.2 million in the first nine
months of 1997 compared to $7.2 million in the comparable 1996 period.
Investing activities in 1997 were primarily focused on providing increased
capacity and improved manufacturing efficiencies in the Company's tape
production facilities, while investments in 1996 included a new silicone and
adhesive coater for the Company's label stock business. In addition, in 1996
the Company acquired its tape production facility in Brighton, Colorado, and
funded financing costs associated with the Company's October 1996 issuance of
$115 million of 10 3/4% Senior-Secured Notes.
Financing activities during the nine months ended September 30, 1997
generated approximately $103,000, which includes the issuance of
approximately 526,000 shares of common stock upon the exercise of warrants
held by BF at a total price of $702,000, offset by reductions in the working
capital borrowings and payments on long-term debt and capital leases. Cash
generated from financing activities in the corresponding period in 1996
included net working capital borrowings of $8.9 million offset by $1.7
million of deferred financing costs. In addition, on April 5, 1996, the
Company issued approximately 187,000 shares of common stock upon the exercise
of warrants held by BF at a total price of approximately $500,000.
The Company's subsidiaries have unused credit facilities available for future
use, including revolving credit agreements with a maximum aggregate
availability of $40.0 million expiring October 2001. Borrowings under these
credit lines totaled approximately $0.3 million at September 30, 1997. The
Company is charged an unused credit fee every month of 0.375% per annum.
Interest on outstanding borrowings bears interest at variable rates related
to the prime interest rate or the lenders base rate. At September 30, 1997,
the interest rate in effect was 10.25%.
Page 10 of 15
<PAGE>
Credit availability under the lines of credit is subject to certain
variables, such as inventory and receivables eligible to be included in the
borrowing base. As of November 7, 1997, aggregate availability was $36.4
million, of which, less than $0.4 million was outstanding. The operating
assets of the subsidiaries secure these lines.
Certain agreements with the Company's lenders impose restrictions on the
ability of the Company or the Company's subsidiaries to pay dividends. The
Company is required to comply with various covenants including limitations on
capital expenditures, interest coverage, and minimum levels of net worth and
current ratio, as well as various other financial covenants.
The Company continues to investigate the possibility of pursuing an offering
of equity, however, there can be no assurance that an offering will be
accomplished on terms satisfactory to the Company.
Page 11 of 15
<PAGE>
PART II - OTHER INFORMATION
Item 6 - EXHIBITS AND REPORTS ON FORM 8-K
(A) Exhibits
--------
11. Statement of Computation of Per Share Earnings
27. Financial Data Schedule
(B) REPORTS ON FORM 8-K
None
Page 12 of 15
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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.
SPINNAKER INDUSTRIES, INC.
--------------------------
(Registrant)
/s/ Craig J. Jennings
--------------------------
Vice President and Controller
Date: November 11, 1997
Page 13 of 15
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EXHIBIT INDEX
Exhibit Page No. Sequential
- ---------------- ----------
11. Statement of Computation of Per Share Earnings 15
27. Financial Data Schedule
Page 14 of 15
<PAGE>
Exhibit 11 - Computation of Per Share Earnings
(in thousands, except per share amounts)
Three Months Ended Nine Months Ended
September 30, September 30,
--------------------- ------------------
1997 1996 1997 1996
---- ---- ---- ----
Primary
Average shares outstanding 6,290 6,149 6,211 5,862
Net effect of dilutive stock options
-- based on the treasury stock
method using average market price -0- -0- -0- 1,097
------- ------ ------- ------
Total 6,290 6,149 6,211 6,959
------- ------ ------- ------
------- ------ ------- ------
Net income (loss) $(1,029) $ (167) $(1,424) $ 353
------- ------ ------- ------
------- ------ ------- ------
Per share amount $ (0.16) $(0.03) $ (0.23) $ 0.05
------- ------ ------- ------
------- ------ ------- ------
Fully diluted
Average shares outstanding 6,290 6,149 6,211 5,862
Net effect of dilutive stock options
-- based on the treasury stock
method using the period-end market
price, if higher than average
market price -0- -0- -0- 1,108
------- ------ ------- ------
Total 6,290 6,149 6,211 6,970
------- ------ ------- ------
------- ------ ------- ------
Net income (loss) $(1,029) $ (167) $(1,424) $ 353
------- ------ ------- ------
------- ------ ------- ------
Per share amount $ (0.16) $(0.03) $ (0.23) $ 0.05
------- ------ ------- ------
------- ------ ------- ------
Page 15 of 15
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JUL-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 6,584
<SECURITIES> 0
<RECEIVABLES> 27,112
<ALLOWANCES> 1,027
<INVENTORY> 31,551
<CURRENT-ASSETS> 68,088
<PP&E> 72,388
<DEPRECIATION> 13,314
<TOTAL-ASSETS> 157,720
<CURRENT-LIABILITIES> 26,178
<BONDS> 115,117
0
0
<COMMON> 3,124
<OTHER-SE> 7,390
<TOTAL-LIABILITY-AND-EQUITY> 157,720
<SALES> 55,359
<TOTAL-REVENUES> 55,359
<CGS> 48,138
<TOTAL-COSTS> 5,357
<OTHER-EXPENSES> 42
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,238
<INCOME-PRETAX> (1,416)
<INCOME-TAX> (387)
<INCOME-CONTINUING> (1,029)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,029)
<EPS-PRIMARY> (0.16)
<EPS-DILUTED> (0.16)
</TABLE>
