SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
Quarterly report pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934 for the quarterly period ended July 31, 1996
Transition report pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934 for the transition period from _________ to
_________.
Commission File No. 0-9143
HURCO COMPANIES, INC.
(Exact name of registrant as specified in its charter)
INDIANA 35-1150732
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
ONE TECHNOLOGY WAY
INDIANAPOLIS, INDIANA 46268
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code (317) 293-5309
--------------
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months, and (2) has been subject to the filing
requirements for the past 90 days:
Yes X No
The number of shares of the Registrant's common stock outstanding as of August
31, 1996 was 6,514,471.
<PAGE>
HURCO COMPANIES, INC.
July 1996 Form 10-Q Quarterly Report
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION
Item 1. Condensed Financial Statements
Consolidated Statement of Operations -
three and nine months ended July 31, 1996 and 1995
Consolidated Balance Sheet
as of July 31, 1996 and October 31, 1995
Consolidated Statement of Cash Flows -
three and nine months ended July 31, 1996 and 1995
Notes to Consolidated Financial Statements
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Item 4. Submission of Matters to a Vote of Security Holders
Item 6. Exhibits and Reports on Form 8-K
Signatures
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
HURCO COMPANIES, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except per-share data)
Three Months Ended Nine Months Ended
July 31, July 31,
----------------------- -------------
1996 1995 1996 1995
- --------------------------------------------------------------------------------
(unaudited)
SALES AND SERVICE FEES.............$ 23,039 $ 22,764 $ 72,358 $ 62,323
Cost of sales and service........... 16,051 16,778 51,664 46,290
--------- --------- --------- --------
GROSS PROFIT................... 6,988 5,986 20,694 16,033
Selling, general and
administrative expenses............. 5,223 4,558 15,635 13,420
--------- --------- --------- --------
OPERATING INCOME .............. 1,765 1,428 5,059 2,613
Interest expense.................... 712 980 2,631 2,858
Other, net.......................... 46 20 (209) 39
--------- --------- --------- --------
Income (loss) before income taxes 1,007 428 2,637 (284)
Income tax expense ................. 50 -- 83 --
---------- ---------- ---------- --------
NET INCOME (LOSS)................... $ 957 $ 428 $ 2,554 $ (284)
========= ========== ========== =========
EARNINGS (LOSS)
PER COMMON SHARE............... $ .16 $ .08 $ .45 $ (.05)
========= ========== ========== =========
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING............. 5,920 5,518 5,679 5,417
========= ======= ========== =========
The accompanying notes are an integral part of the consolidated financial
statements.
<PAGE>
HURCO COMPANIES, INC.
CONSOLIDATED BALANCE SHEET
(Dollars in thousands)
July 31, October 31,
1996 1995
(unaudited) (audited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents....................... $ 1,410 $ 2,072
Accounts receivable............................. 14,884 17,809
Inventories..................................... 25,829 25,238
Other........................................... 855 1,237
---------- ---------
Total current assets........................ 42,978 46,356
---------- ---------
PROPERTY AND EQUIPMENT............................... 9,892 10,629
SOFTWARE DEVELOPMENT COSTS, LESS AMORTIZATION........ 3,774 3,513
OTHER ASSETS ........................................ 1,217 923
---------- ---------
$ 57,861 $ 61,421
========== =========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable................................. $ 10,646 $ 10,570
Accrued expenses................................. 8,304 9,552
Current portion of long-term debt................ 3,050 6,357
---------- ---------
Total current liabilities.................... 22,000 26,479
---------- ---------
NON-CURRENT LIABILITIES
Long-term debt .................................. 20,609 27,242
Other long-term obligations...................... 623 217
---------- ---------
21,232 27,459
---------- ---------
SHAREHOLDERS' EQUITY:
Preferred stock: $100 par value per share; 40,000
shares authorized; no shares issued............. -- --
Common stock: no par value; $.10 stated value per
share; 7,500,000 shares authorized; 6,514,471
and 5,425,302 shares issued, respectively....... 652 543
Additional paid-in capital........................ 50,286 45,573
Accumulated deficit............................... (31,889) (34,472)
Foreign currency translation adjustment........... (4,420) (4,161)
---------- ---------
Total shareholders' equity.................... 14,629 7,483
---------- ---------
$ 57,861 $ 61,421
========== =========
The accompanying notes are an integral part of the consolidated financial
statements.
<PAGE>
<TABLE>
HURCO COMPANIES, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(Dollars in thousands)
<CAPTION>
Three Months Ended Nine Months Ended
July 31, July 31,
------------------------ ------------------
1996 1995 1996 1995
(unaudited)
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss).......................................... $ 957 $ 428 $ 2,554 $ (284)
Adjustments to reconcile net income (loss) to net
cash provided by (used for) operating activities:
Depreciation and amortization............................ 517 586 2,075 1,900
(Increase) decrease in accounts receivable............... 1,617 (326) 2,683 (1,129)
(Increase) decrease in inventories....................... (1,174) 442 (745) 365
Increase (decrease) in accounts payable.................. 1,144 563 99 506
Increase (decrease) in accrued expenses.................. 116 273 (1,129) (676)
Other.................................................... (231) 172 216 526
---------- ---------- --------- ---------
NET CASH PROVIDED BY (USED FOR)
OPERATING ACTIVITIES................................... 2,946 2,138 5,753 1,208
--------- --------- -------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of equipment............................ 1 35 33 35
Purchase of property and equipment......................... (138) (210) (391) (442)
Software development costs................................. (397) (545) (1,065) (1,029)
Other...................................................... (8) 107 66 (34)
------------ ------ ---------- -------------
NET CASH PROVIDED BY (USED FOR)
INVESTING ACTIVITIES..................................... (542) (613) (1,357) (1,470)
--------- ---------- -------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Advances on bank credit facilities......................... 7,820 10,864 37,885 49,136
Repayments on bank credit facilities ...................... (11,482) (12,055) (42,632) (48,441)
Repayments of term debt ................................... (3,140) (78) (5,090) (242)
Proceeds from issuance of common stock
and common stock under options............................. 4,830 -- 4,830 11
---------- --------- -------- ---------
NET CASH PROVIDED BY (USED FOR)
FINANCING ACTIVITIES..................................... (1,972) (1,269) (5,007) 464
---------- --------- -------- ---------
EFFECT OF EXCHANGE RATE CHANGES ON CASH....................... 26 (30) (51) (148)
--------- ---------- -------- ----------
NET INCREASE (DECREASE) IN CASH............................... 458 226 (662) 54
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD.............. 952 929 2,072 1,101
--------- --------- -------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD.................... $ 1,410 $ 1,155 $ 1,410 $ 1,155
========= ========== ========= =========
</TABLE>
The accompanying notes are an integral part of the consolidated
financial statements.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. GENERAL
The condensed financial statements as of July 31, 1996 and 1995 and for the
three-month and nine-month periods then ended are unaudited but include all
adjustments which the Company considers necessary for a fair presentation of
financial position at those dates and its results of operations and cash flows
for those periods. Those condensed financial statements should be read in
conjunction with the consolidated financial statements and the notes thereto
included in the Company's Annual Report on Form 10-K for the year ended October
31, 1995.
2. HEDGING
The U.S. dollar equivalent notional amount of the Company's outstanding foreign
currency forward exchange contracts, which are entered into solely for risk
hedging purposes, was approximately $8.4 million, as of July 31, 1996 and $18.9
million as of October 31, 1995. Deferred gains and losses related to hedging
activities were not significant as of July 31, 1996. Contracts outstanding at
July 31, 1996 mature at various times through November 26, 1996.
3. EARNINGS PER SHARE
Earnings per share of common stock are based on the weighted average number of
common shares outstanding, which includes, under the treasury method,
outstanding stock options and warrants. Such common stock equivalents totaled
161,000 and 141,000 shares for the three and nine months ended July 31, 1996.
Fully diluted earnings per share are the same as primary earnings per share for
these periods. No effect has been given to options outstanding under the
Company's Stock Option Plan for the comparable periods ended July 31, 1995 as no
dilution would result from their exercise.
4. ACCOUNTS RECEIVABLE
The allowance for doubtful accounts was $957,000 as of July 31, 1996, and
$1,070,000 as of October 31, 1995.
5. INVENTORIES
Inventories, priced at the lower of cost (first-in, first-out method) or market
are summarized below (in thousands):
July 31, 1996 October 31, 1995
------------- ----------------
Purchased parts and sub-assemblies $ 13,248 $ 15,681
Work-in-Process 2,107 3,523
Finished Goods 10,474 6,034
---------- --------
$ 25,829 $ 25,238
========== =========
<PAGE>
6. SUBSEQUENT EVENT
In August, 1996, the Company's wholly owned subsidiary, IMS Technology, Inc.
(IMS), entered into an agreement for the licensing of its interactive machining
patents. Over the term of the license, which extends through 2001, IMS will
receive approximately $1.2 million, net of legal fees and expenses, of which
$325,000 is expected to be reflected in income in the fourth quarter of fiscal
1996. The licensees were not defendants in the IMS patent infringement
litigation discussed elsewhere in this report.
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Certain statements made in this report may constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. Such forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause the actual results, performance
or achievements of the Company or the machine tool industry to be materially
different from any future results, performance or achievements expressed or
implied by such forward-looking statements. Such factors include, among others,
the following: general economic and business conditions, which will among other
things, affect demand for CNC control systems, machine tools and software
products; changes in manufacturing markets; innovations by competitors; and
governmental actions and initiatives.
RESULTS OF OPERATIONS
Three Months Ended July 31, 1996 Compared to Three Months Ended July 31, 1995
Consolidated sales in the third quarter of fiscal 1996 were only slightly higher
than in the same period of 1995. European sales increased by approximately 11%
but were offset by a decrease of approximately 5% in domestic sales.
European sales measured in local currencies increased 18% over the 1995 third
quarter, reflecting increased market penetration by the Company's new "Advantage
Series" machine tool line, which was introduced in Europe in the latter part of
fiscal 1995, and increased availability of products for shipment. The increase
was offset, however, by unfavorable foreign exchange effect when translating
sales made in European currencies to U.S. dollars for financial reporting
purposes, reducing the net increase to 11%. International sales increased to
approximately 46% of total consolidated sales for the 1996 third fiscal quarter
compared to 43% for the same period in fiscal 1995.
The decline in domestic sales was the result of a softening of demand, fewer
large models in the product mix, the effects of the Company's transition to new
product models, and expected delay in orders in anticipation of the bi-annual
International Manufacturing Technology Show (IMTS) which takes place in
September.
<PAGE>
Gross profit increased $1.0 million, or 16.7%, in the third quarter of 1996 over
the corresponding period in 1995 due primarily to an increase in the gross
profit margin. Gross profit margin, as a percentage of sales, increased to 30.3%
during the fiscal 1996 third quarter compared to 26.3% during the same period in
fiscal 1995, reflecting an increased percentage of higher-margin European sales
in the total sales mix and an increased percentage of higher-margin model sales
in the domestic sales mix.
Selling, general and administrative (SG&A) expenses for the third quarter of
fiscal 1996 increased approximately $655,000, or 14.6%, over the corresponding
1995 period, principally due to increased selling expenses associated with
increased unit volume, planned product introduction and promotion costs and
normal annual compensation adjustments.
Operating income increased $337,000, or 23.6%, over the third quarter of fiscal
1995, due to improved gross profit margin.
Interest expense for the third quarter of fiscal 1996 decreased approximately
$268,000, 27.3%, from the amount reported for the corresponding period in fiscal
1995. The decrease is due principally to a reduction of approximately $8.4
million in the average borrowings outstanding when compared to the third quarter
of fiscal 1995, along with reduced interest rates on the Company's floating rate
bank borrowings. Proceeds from the Company's rights offering, received late in
the third quarter of fiscal 1996, did not materially affect interest expense or
average borrowings outstanding for the period.
Income tax expense of $50,000 has been provided for the third quarter of fiscal
1996 related to earnings of a foreign subsidiary. The income tax liability
incurred in the United States and certain other tax jurisdictions was offset by
the reversal of valuation allowance reserves against the Company's net operating
loss carryforwards.
World-wide new order bookings were $23.9 million in the most recent fiscal
quarter, a decrease of $638,000, or 4%, from the third quarter of fiscal 1995,
and approximately the same as the preceding fiscal quarter. While international
orders increased slightly over the prior-year level, domestic orders declined.
The decline in domestic orders related to both control products and machine
tools and is attributable principally to the short-term impact of changes being
implemented in the Company's sales and distribution organization, a transition
to new product models and some normal delays in orders in anticipation of IMTS.
However, two new machine tool models, along with a new lower cost version of the
Company's Ultimax CNC control, both of which broaden the Company's market base,
were introduced late in the third fiscal quarter of 1996 resulting in a
substantial increase in domestic machine tool orders in the month of July and
the largest single order month for machine tools in the U.S. market since the
introduction of the "Advantage Series" product line in September, 1994. As a
result of the above, backlog was $10.9 million compared to $10.2 million at the
end of the preceding quarter and $16.1 million at the end of the preceding
fiscal year.
The Company manages its foreign currency exposure through the use of foreign
currency forward exchange contracts. The Company does not speculate in the
financial markets and, therefore, does not enter into those contracts for
trading purposes. The Company also moderates its currency risk related to
significant purchase commitments with certain foreign vendors through price
adjustment agreements that provide for a sharing of, or otherwise limit, the
potential adverse effect of currency fluctuations on the costs of purchased
products. These programs achieved management's objectives for the period.
<PAGE>
Nine Months Ended July 31, 1996 Compared to Nine Months Ended July 31, 1995
Consolidated sales for the first nine months of fiscal 1996 increased $10.0
million, or 16%, over the corresponding period of fiscal 1995.
European sales increased $7.5 million, or 34.3%, due principally to increased
market penetration of the "Advantage Series" machine tool line, as well as
increased availability of products for shipment.
Domestic sales increased $2.2 million, or 5.7%, due primarily to increased
shipments of machine tool products and related parts and service fees during the
first and second quarters. Increased availability of products for shipment
enabled the Company to reduce its backlog of orders in the United States and
increase its shipments of current machine tool products despite reduced domestic
order rates. Sales of CNC systems and software during the first nine months of
fiscal 1996 increased only slightly over the same period in 1995. Increased
shipments of Delta Series control systems for metal cutting machine tools,
primarily to original equipment manufacturers, were offset by decreased
shipments of Autobend products to the metal fabrication equipment market,
reflecting a decline in demand in that market.
Gross profit for the first nine months of fiscal 1996 increased $4.7 million, or
29%, over the corresponding period of fiscal 1995 due to increased sales and an
increase in gross profit margin. Gross profit margin, as a percentage of sales,
increased to 28.6% in the 1996 period from 25.7% in the 1995 period primarily
due to increased percentages of higher-margin European sales and higher-margin
"Advantage Series" machine tools in the total worldwide sales mix.
Selling, general and administration (SG&A) expenses for the first nine months of
fiscal 1996 increased $2.2 million, or 17%, over the corresponding 1995 period,
principally due to increased selling expenses associated with increased unit
volume, planned product introduction and promotion costs and normal annual
compensation adjustments.
Operating income in the first nine months of fiscal 1996 increased almost two
times to $5.1 million from the $2.6 million reported for the first nine months
of fiscal 1995, because of higher sales and the improved gross profit margin.
Interest expense for the first nine months of fiscal 1996 included a $240,000
amortization, in the first fiscal quarter, of non-recurring contingent fees to
the Company's lenders based on fiscal 1995 operating results. Excluding this
charge, interest expense for the first nine months of fiscal 1996 was $467,000
less than in the first nine months of fiscal 1995 due to reduced interest rates
and a reduction in average outstanding borrowings.
Other income for the nine months ended July 31, 1996 included $324,000 of
income, net of legal fees, related to a patent license issued in January 1996.
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
At July 31, 1996, the Company had cash and cash equivalents of $1.4 million
compared to $2.1 million at October 31, 1995. Cash flow from operations for the
fiscal quarter ended July 31, 1996 was $3.1 million, compared to $2.1 million
for the same period in fiscal 1995, primarily due to increased net income and
reduced working capital requirements. Outstanding indebtedness was reduced by
$6.8 million in the quarter. For the immediately preceding six months, cash of
$2.8 million was provided by operations, resulting in net cash flow from
operations of $5.9 million for the nine months ended July 31, 1996.
Working capital was $21.0 million at July 31, 1996, compared to $19.9 million at
October 31, 1995. The ratio of current assets to current liabilities was 1.95 to
1 at July 31, 1996, compared to 1.75 to 1 at October 31, 1995. As of July 31,
1996, the Company had unutilized credit facilities of $7.6 million available for
either direct borrowings or commercial letters of credit.
Under the terms of the Company's agreements with its lenders, which were amended
and restated effective January 26, 1996, $3.1 million of term loan payments are
due and payable over the next 12 months. These installment obligations are in
addition to the $3.1 million of indebtedness prepaid in July 1996 as noted
below.
On July 3, 1996 the Company issued and sold 1,085,300 shares of common stock at
a price of $4.63 per share pursuant to a subscription rights offering. The net
proceeds of approximately $4.8 million were used to prepay $3.1 million of
installments of the Company's outstanding indebtedness to its senior lenders
that were due on July 31, 1996. Of the amount prepaid, $1.4 million consisted of
bank debt bearing interest at a variable rate and $1.7 million represented an
installment payment on the Company's 11.12% Senior Notes. The balance of the net
proceeds was used to reduce outstanding revolving credit borrowings. Since the
beginning of fiscal 1996, total indebtedness has been reduced by nearly $10.0
million, or approximately 30%.
Management believes that the cash flow from operations and available borrowings
under the Company's bank credit facilities will be sufficient to enable the
Company to meet its anticipated cash requirements, including scheduled debt
amortization payments for the next twelve months.
PART II - OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
As previously reported, IMS, a wholly-owned subsidiary of the Company is a party
to various pending legal proceedings with respect to its interactive machining
patent.
There are presently three separate actions pending in the U.S. District Court
for the Northern District of Illinois involving the patent. Two of the actions
were brought by IMS against manufacturers of CNC systems and their customers and
end-users alleging infringement of the IMS patent. The third action was
commenced by Mitsubishi Electric Corporation and Mitsubishi Electric Industrial
Controls (Mitsubishi) and seeks a declaratory judgment against IMS and the
Company that the IMS patent is invalid.
<PAGE>
On June 20, 1996, Fanuc, Ltd., (Fanuc) a supplier of CNC systems, which had
intervened in one of the IMS infringement actions, filed an answer and
counter-claim denying that it and its customers had infringed any claim of the
IMS patent.
On August 21, 1996, Mitsubishi's motions to stay and enjoin IMS from proceeding
with any infringement suits regarding the IMS patent against Mitsubishi's
customers were denied.
Pretrial proceedings in all three actions are being coordinated under local
court rules. Each of the actions remains in a preliminary stage.
<PAGE>
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At the Company's Annual Meeting of Shareholders held on May 23, 1996,
the following individuals were elected to the Board of Directors by a
plurality of the votes cast at the meeting:
Affirmative Votes Negative Votes Abstained Votes
Hendrik J. Hartong, Jr. 4,664,213 66,334
Andrew L. Lewis IV 4,664,213 66,334
Brian D. McLaughlin 4,655,986 8,227 66,334
E. Keith Moore 4,659,153 5,060 66,334
Richard T. Niner 4,664,213 66,334
O. Curtis Noel 4,656,913 7,300 66,334
Charles E. M. Rentschler 4,664,213 66,334
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits: Exhibit 11 and 27
(b) Reports on Form 8-K:
1. The Company filed a Form 8-K on May 29, 1996 reporting the Company's
press release dated May 22, 1996.
2. The Company filed a Form 8-K on June 6, 1996 reporting the Company's
press release dated June 6, 1996.
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.
HURCO COMPANIES, INC.
By: /s/ Roger J. Wolf
Roger J. Wolf
Senior Vice President and
Chief Financial Officer
September 11, 1996
<PAGE>
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At the Company's Annual Meeting of Shareholders held on May 23, 1996,
the following individuals were elected to the Board of Directors by a
plurality of the votes cast at the meeting:
Affirmative Votes Negative Votes Abstained Votes
Hendrik J. Hartong, Jr. 4,664,213 66,334
Andrew L. Lewis IV 4,664,213 66,334
Brian D. McLaughlin 4,655,986 8,227 66,334
E. Keith Moore 4,659,153 5,060 66,334
Richard T. Niner 4,664,213 66,334
O. Curtis Noel 4,656,913 7,300 66,334
Charles E. M. Rentschler 4,664,213 66,334
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits: Exhibit 11 and 27
(b) Reports on Form 8-K:
1. The Company filed a Form 8-K on May 29, 1996 reporting the Company's
press release dated May 22, 1996.
2. The Company filed a Form 8-K on June 6, 1996 reporting the Company's
press release dated June 6, 1996.
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.
HURCO COMPANIES, INC.
By: /s/ Roger J. Wolf
Roger J. Wolf
Senior Vice President and
Chief Financial Officer
September 11, 1996
<PAGE>
<TABLE>
EXHIBIT 11
STATEMENT RE: COMPUTATION OF
PER SHARE EARNINGS
<CAPTION>
Three Months Ended Nine Months Ended
JULY 31, July 31,
------------------------------------------------------------------------
1996 1995 1996 1995
FULLY FULLY FULLY FULLY
PRIMARY DILUTED PRIMARY DILUTED PRIMARY DILUTED PRIMARY DILUTED
------- ------- ------- ------- ------- ------- ------- -------
(in thousands, except
per share amount)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net income (loss)..... $ 957 $ 957 $ 428 $ 428 $ 2,554 $ 2,554 $ (284) $ (284)
Weighted average
shares outstanding... 5,759 5,759 5,419 5,419 5,538 5,538 5,417 5,417
Assumed issuances under
stock options plans (1) 161 161 99 99 141 141 - -
------ ------ ------ ------ ------ ------ ------ ------
5,920 5,920 5,518 5,518 5,679 5,679 5,417 5,417
====== ====== ====== ====== ====== ====== ====== ======
Earnings (loss) per
common share......... $ .16 $ .16 $ .08 $ .08 $ .45 $ .45 $ (.05) $ (.05)
====== ====== ====== ====== ====== ====== ====== ======
</TABLE>
(1) NO ASSUMMED ISSUANCES UNDER STOCK OPTION PLANS WERE MADE IN 1995, EXCEPT FOR
THE THIRD QUARTER, BECAUSE SUCH ISSUANCES WOULD HAVE BEEN ANTI-DULUTIVE.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
QUARTERLY REPORT 10-Q FOR THE PERIOD ENDED JULY 31, 1996 AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000315374
<NAME> DAWN HIATT
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-START> NOV-1-1995
<PERIOD-END> JUL-31-1996
<CASH> 1,410
<SECURITIES> 0
<RECEIVABLES> 15,841
<ALLOWANCES> 957
<INVENTORY> 25,829
<CURRENT-ASSETS> 42,978
<PP&E> 21,799
<DEPRECIATION> 11,907
<TOTAL-ASSETS> 57,861
<CURRENT-LIABILITIES> 22,000
<BONDS> 0
0
0
<COMMON> 652
<OTHER-SE> 13,977
<TOTAL-LIABILITY-AND-EQUITY> 57,861
<SALES> 72,358
<TOTAL-REVENUES> 72,358
<CGS> 51,664
<TOTAL-COSTS> 51,664
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,631
<INCOME-PRETAX> 2,637
<INCOME-TAX> 83
<INCOME-CONTINUING> 2,554
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,554
<EPS-PRIMARY> .45
<EPS-DILUTED> .45
</TABLE>
