<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1997
-------------------------------------------------
or
[ ] 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: 1-8988
---------------------------------------------------------
ECC International Corp.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 23-1714658
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
175 Strafford Avenue, Suite 116, Wayne, PA 19087-3377
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(610) 687-2600
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
Not Applicable
- --------------------------------------------------------------------------------
(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 twelve 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 at least the past 90 days. [X] Yes [ ] No
As of March 31, 1997, there were 7,973,384 shares of the Registrant's
Common Stock, $.10 par value per share, issued and outstanding.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
ECC INTERNATIONAL CORP. AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENTS
NINE MONTHS ENDED MARCH 31, 1997 AND 1996
(In Thousands Except Share and Per Share Data)
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Nine Months
Ended Ended
3/31/97 3/31/96
---------- ----------
<S> <C> <C>
Net Sales $ 63,796 $ 85,976
Cost of Sales 55,603 69,724
---------- ----------
Gross Profit 8,193 16,252
---------- ----------
Expenses:
Selling, General & Administrative 10,710 10,588
Systems Development 656 251
---------- ----------
Total Expenses 11,366 10,839
---------- ----------
Operating (Loss)/Income (3,173) 5,413
---------- ----------
Other Income (Expense):
Interest Income 407 190
Interest Expense (1,371) (1,188)
Other - Net (73) (74)
---------- ----------
Total Other Expense (1,037) (1,072)
---------- ----------
(Loss)/Income Before Income Taxes (4,210) 4,341
(Benefit)/Provision for Income Taxes (824) 1,493
---------- ----------
Net (Loss)/Income $ (3,386) $ 2,848
========== ==========
(Loss)/Earnings Per Common Share and
Common Share Equivalents $ (0.42) $ 0.36
========== ==========
Weighted Average Number of Common and
Common Share Equivalents Outstanding 8,021,577 7,908,764
</TABLE>
See accompanying notes to the consolidated financial statements.
<PAGE> 3
ECC INTERNATIONAL CORP. AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENTS
THREE MONTHS ENDED MARCH 31, 1997 AND 1996
(In Thousands Except Share and Per Share Data)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Three Months
Ended Ended
3/31/97 3/31/96
---------- ----------
<S> <C> <C>
Net Sales $ 15,757 $ 27,305
Cost of Sales 14,780 23,817
---------- ----------
Gross Profit 977 3,488
---------- ----------
Expenses:
Selling, General & Administrative 3,251 3,825
Systems Development 241 67
---------- ----------
Total Expenses 3,492 3,892
---------- ----------
Operating Loss (2,515) (404)
---------- ----------
Other Income (Expense):
Interest Income 299 77
Interest Expense (471) (337)
Other - Net (82) 56
---------- ----------
Total Other Expense (254) (204)
---------- ----------
Loss Before Income Taxes (2,769) (608)
Benefit for Income Taxes (817) (210)
---------- ----------
Net Loss $ (1,952) $ (398)
========== ==========
Loss Per Common Share and
Common Share Equivalents $ (0.24) $ (0.05)
========== ==========
Weighted Average Number of Common and
Common Share Equivalents Outstanding 8,033,389 7,777,082
</TABLE>
See accompanying notes to the consolidated financial statements.
<PAGE> 4
ECC INTERNATIONAL CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In Thousands)
<TABLE>
<CAPTION>
(Unaudited) (Audited)
3/31/97 6/30/96
------- -------
<S> <C> <C>
ASSETS
Current Assets:
Cash $ 3,232 $ 5,057
Accounts Receivable, Net 8,601 11,136
Costs and Estimated Earnings in Excess
of Billings on Uncompleted Contracts 28,391 35,251
Inventories
Raw Material 6,781 8,027
Work in Process 4,704 3,069
Finished Goods 2,564 1,888
Prepaid Expenses and Other 2,259 2,190
------- -------
Total Current Assets 56,532 66,618
Property, Plant and Equipment - Net 26,277 26,686
Other Assets 2,006 2,093
------- -------
Total Assets $84,815 $95,397
======= =======
</TABLE>
Continued...
<PAGE> 5
ECC INTERNATIONAL CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (Continued)
(In Thousands)
<TABLE>
<CAPTION>
(Unaudited) (Audited)
3/31/97 6/30/96
------- -------
<S> <C> <C>
LIABILITIES & STOCKHOLDERS' EQUITY
Current Liabilities:
Current Portion of Long-Term Debt $ 3,000 $ 4,272
Accounts Payable 5,185 10,967
Accrued Compensation 2,736 3,878
Advances on Long-Term Contracts 2,579 856
Accrued Profit Sharing 137 --
Other Accrued Expenses 636 2,409
------- -------
Total Current Liabilities 14,273 22,382
------- -------
Deferred Income Taxes 1,434 1,434
------- -------
Long-Term Debt 18,932 18,706
------- -------
Commitments and Contingencies
Stockholders' Equity:
Common stock, $.10 par; authorized
20,000,000 shares at 3/31/97 and
6/30/96; reserved for stock options
and other obligations to issue stock,
1,475,589 shares at 3/31/97 and
1,190,499 shares at 6/30/96; issued
and outstanding 7,973,384 shares
at 3/31/97 and 7,833,143 at 6/30/96 797 782
Preferred stock, $.10 par; authorized
1,000,000 shares at 3/31/97 and at
6/30/96; none issued and outstanding
at 3/31/97 and 6/30/96 -- --
Capital in Excess of Par 23,391 22,831
Cumulative Translation Adjustment 90 (22)
Retained Earnings 25,898 29,284
------- -------
Total Stockholders' Equity 50,176 52,875
------- -------
Total Liabilities & Stockholders' Equity $84,815 $95,397
======= =======
</TABLE>
See accompanying notes to the consolidated financial statements.
<PAGE> 6
ECC INTERNATIONAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED
MARCH 31, 1997 AND 1996
(In Thousands)
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Nine Months
Ended Ended
3/31/97 3/31/96
------- -------
<S> <C> <C>
Cash Flows From Operating Activities:
Net (Loss)/Income $(3,386) $ 2,848
Items Not Requiring Cash:
Depreciation 2,904 2,795
Provision for Doubtful Accounts 2 63
Changes in Certain Assets and Liabilities:
Accounts Receivable 2,533 (1,776)
Cost and Estimated Earnings in Excess
of Billings on Uncompleted Contracts 6,860 9,272
Inventories (1,065) (5,293)
Prepaid Expenses and Other (69) 170
Accounts Payable (5,782) 1,846
Advances on Long-Term Contracts 1,723 1,423
Accrued Expenses (2,778) (2,528)
------- -------
Net Cash Provided By Operating Activities 942 8,820
------- -------
Cash Flows From Investing Activities:
Additions to Property, Plant and Equipment (2,495) (4,000)
Other 199 (290)
------- -------
Net Cash Used In Investing Activities (2,296) (4,290)
------- -------
Cash Flows From Financing Activities:
Proceeds From Issuance of Common Stock, Options
Exercised and Warrants, Including Related Tax Benefit 575 788
Repayments under Term Loan (2,250) (2,250)
New Borrowings under Revolving Credit Facility, Net 1,204 (3,231)
------- -------
Net Cash Used In Financing Activities (471) (4,693)
------- -------
Net Decrease in Cash (1,825) (163)
Cash at Beginning of the Period 5,057 3,535
------- -------
Cash at End of the Period 3,232 3,372
======= =======
</TABLE>
Continued...
<PAGE> 7
ECC INTERNATIONAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED
MARCH 31, 1997 AND 1996 (Continued)
(In Thousands)
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Nine Months
Ended Ended
3/31/97 3/31/96
------- -------
<S> <C> <C>
Supplemental Disclosure of Cash Flow Information:
Cash Paid During the Year For:
Interest $1,422 $ 1,287
Income Taxes $ 922 $ 2,766
</TABLE>
See accompanying notes to the consolidated financial statements.
<PAGE> 8
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------------
1. The accompanying financial statements are unaudited and have been prepared
by ECC pursuant to the rules and regulations of the Securities and Exchange
Commission. The June 30, 1996 balance sheet was derived from audited
financial statements but does not include all disclosures required by
generally accepted accounting principles. In the opinion of management such
consolidated financial statements contain all adjustments, consisting of
only normal recurring adjustments, necessary to present fairly the
consolidated financial position, results of operations and cash flows for
the interim periods presented. The aforementioned consolidated financial
statements have been prepared substantially in conformity with the
accounting principles reflected in the consolidated financial statements
included in the Company's Annual Report on Form 10-K for the fiscal year
ended June 30, 1996.
2. Earnings per share for the three and nine month periods ended March 31,
1997 and 1996 are based on net income divided by the weighted average
number of common share and common share equivalents outstanding.
Common stock equivalents (stock options, warrants and options under the
Company's Employee Stock Purchase Plan) are excluded from the calculation
of per share data when their dilutive effect is not material.
3. The Company did not comply with the minimum fixed charge coverage ratio for
the first three quarters of fiscal year 1997 or the Debt to Equity Ratio at
December 31, 1996 under its Term Loan and Revolving Credit Agreement.
Accordingly, the Company has received irrevocable waivers with respect to
such covenants from its bank lender. The Company's term loan requires
quarterly principal payments of $750,000 during fiscal year 1997.
<PAGE> 9
ECC INTERNATIONAL CORP. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Overview
- --------
This Quarterly Report on Form 10-Q contains forward-looking statements. For this
purpose, any statements contained herein that are not statements of historical
fact may be deemed to be forward-looking statements. Without limiting the
foregoing, the words "believes," "anticipates," "plans," "expects," and similar
expressions are intended to identify forward-looking statements. There are a
number of factors that could cause the Company's actual results to differ
materially from those indicated by such forward-looking statements. These
factors include, without limitation, those set forth below under the caption
"Certain Factors that May Affect Future Results."
a) Material Changes in Financial Condition
---------------------------------------
During the nine-month period ended March 31, 1997, the Company's principal
sources of cash were receipts on accounts receivable, borrowings under the
revolving credit facility as well as advances on contracts in the U.K.
division. The principal uses of these and existing funds were to make
payments on the term loan and accounts payable and to finance the increase
in inventories as well as acquisitions of property, plant and equipment.
Accounts receivable and costs and estimated earnings in excess of billings
on uncompleted contracts decreased due to the completion or near completion
of several contracts.
Raw material inventory decreased primarily due to the allocation of common
parts to contracts in progress.
Work in process inventory increased primarily due to unabsorbed overhead.
Overhead is absorbed on an annualized projected rate. Management expects
that volume during the fourth quarter will support the currently budgeted
overhead rate.
Finished Goods inventory increased primarily due to the continued
production of vending machines in anticipation of future sales orders.
The decrease in accounts payable was primarily the result of a substantial
slow-down in material purchases as two of the Company's largest contracts
will be completed or substantially completed during fiscal year 1997.
Advances on long-term contracts increased as a result of payments received
in advance of work performed on contracts in the U.K. division.
Other accrued expenses decreased primarily as a result of federal income
tax payments made during the first half of fiscal year 1997 in addition to
payments relating to marketing representative agreements.
<PAGE> 10
The Company did not comply with the minimum fixed coverage ratio for the
first three quarters of fiscal year 1997 or the debt to equity ratio at
December 31, 1996 under its Term Loan and Revolving Credit Agreement.
Accordingly, the Company has received irrevocable waivers from its bank
lenders with respect to such covenants for such periods. The term loan
requires quarterly principal payments of $750,000 during fiscal year 1997.
During the remainder of fiscal year 1997, the Company anticipates spending
approximately $1.0 million for new machinery and equipment and computers
and to continue to refurbish the Orlando facility.
Other than as stated above, the Company currently has no other material
commitments for capital expenditures. Management believes that with
proceeds from the revolving credit facility and its projected cash flow the
Company will have sufficient resources to meet current and future operating
commitments.
b) Material Changes in Results of Operations
-----------------------------------------
Net sales decreased for the nine and three-month periods ended March 31,
1997 as compared to the same periods ended March 31, 1996. The decrease in
net sales is primarily the result of several training division contracts
with reduced activity as they are complete or expected to be completed
during fiscal year 1997 or the first quarter of fiscal year 1998. In
addition, the vending subsidiary has experienced considerably lower sales
volumes during the first three quarters of fiscal year 1997 in comparison
to the corresponding period in the prior fiscal year. Sales volume in the
U.K. subsidiary increased substantially over the corresponding periods in
the prior fiscal year due to continued efforts on it's two major contracts.
Gross margin as a percentage of sales decreased for the nine and
three-month periods ended March 31, 1997 versus the same periods ended
March 31, 1996. The decrease in gross margin was primarily the result of
low sales volume in the vending subsidiary which was not sufficient to
cover overhead costs for the first three quarters of fiscal year 1997. In
addition, gross margin in the U.K. subsidiary decreased as a result of
contract adjustments recorded during the second quarter of fiscal year
1997. These gross margin adjustments were taken due to a decrease in
expected future sales volume which may result in higher overhead rates than
previously anticipated. A decrease in sales volume is anticipated in the
U.K. subsidiary over the next four quarters due to a projected decline in
contracts awarded.
The training division also experienced a decrease in gross margin versus
the corresponding periods one year ago. The decrease in the training
division is largely the result of lower than anticipated sales volume due
to the completion or near completion of numerous contracts which have not
yet been replaced by new business. While cost reduction initiatives are
underway, overhead and S,G&A levels have not decreased proportionate to the
decrease in sales volume. Since fiscal year end 1996, management has
effected a 30% reduction in work force consistent with the reduction in
contract volume. However, costs associated with the reduction in work
force, including severance benefits and out-placement services, were
incurred during the second and third quarters of fiscal year 1997, thereby
minimizing the immediate impact of the reduction in work force on gross
margin.
<PAGE> 11
Selling, general and administrative expenses decreased for the three month
period ended March 31, 1997 compared to the three month period ended March
31, 1996. The decrease is primarily the result of the renegotiation of a
marketing consulting agreement as well as the reduction in certain salary
and salary related expenditures. These reductions were significantly offset
by costs associated with the resolutions proposed and approved by ECC's
stockholders at the Company's Annual Meeting of Stockholders on December 3,
1996. These proposals require the engagement of an investment banking firm
to assist the Company in seeking to obtain a purchaser on terms and
conditions that the Board deems are in the best interests of the Company.
Selling, general and administrative expenses increased for the nine month
period ended March 31, 1997 compared to the comparable period one year ago
as a result of the costs associated with the resolutions proposed and
approved by ECC stockholders.
Systems development increased for the nine and three-month periods ended
March 31, 1997 compared to the same period ended March 31, 1996. The
increase reflects efforts in the domestic training division to develop
and/or enhance technologies and processes in order to remain competitive in
the industry.
Interest income increased for the quarter and nine month period ended March
31, 1997 versus the quarter and nine month period in the previous fiscal
year. This is the result of interest due the Company based on the IRS
look-back method of accounting for long-term contracts.
Interest expense increased for the quarter and nine month period ended
March 31, 1997 versus the quarter and nine month period in the previous
fiscal year. The increase in interest expense is the result of higher
borrowings under the Company's revolving credit agreement during the
quarter and nine month period ended March 31, 1997.
Other expense increased for the quarter and nine month period ended March
31, 1997 versus the quarter and nine month period in the previous fiscal
year due to the write-down and/or disposition of certain fixed assets.
c) Certain Factors That May Affect Future Operating Results
--------------------------------------------------------
The following important factors, among others, could cause actual results
to differ materially from those indicated by forward-looking statements
made in this Quarterly Report on Form 10-Q and presented elsewhere by
management from time to time. All forward-looking statements included in
this document are based on information available to the Company on the date
hereof, and the Company assumes no obligation to update any such
forward-looking statements. It is important to note that the Company's
actual results could differ materially from those in such forward-looking
statements.
A number of uncertainties exist that could affect the Company's future
operating results, including, without limitation, general economic
conditions, changes in government spending, cancellation of weapons
programs, delays in contract awards, delays in the acceptance process of
contract deliverables, the Company's continued ability to develop and
introduce products in both its training division and vending subsidiary,
the introduction of new products by competitors, pricing practices of
competitors, the cost and availability of parts and the Company's ability
to control costs.
<PAGE> 12
To date, a substantial portion of the Company's revenues have been
attributable to long-term contracts with various government agencies. As a
result, any factor adversely affecting procurement of long-term government
contracts could have a material adverse effect on the Company's financial
condition and results of operations. In addition, many of the Company's
competitors have substantially greater financial resources and generate
higher revenues than the Company.
The Company's vending subsidiary completed a large vending order to a major
customer during fiscal year 1996 and, to date, has not replaced it with
another large order. The vending subsidiary is presently in negotiations
with several potential customers and any factor adversely affecting the
Company's ability to obtain sales orders for its vending products may have
a material adverse effect on the Company's financial condition and results
of operations.
Because of these and other factors, past financial performance should not
be considered an indication of future performance. The Company's future
quarterly operating results may vary significantly, depending on factors
such as the timing of contract awards or potentially lengthy sales cycles
for the vending products. Investors should not use historical trends to
anticipate future results and should be aware that the trading price of the
Company's Common Stock may be subject to wide fluctuations in response to
quarterly variations in operating results and other factors, including
those discussed above.
<PAGE> 13
PART II. OTHER INFORMATION
ECC INTERNATIONAL CORP.
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
a. Exhibits
--------
Exhibit 11 - Schedule of Computation of Earnings Per Share
Exhibit 27 - Financial Data Schedule
b. Reports on Form 8-K
-------------------
On April 2, 1997, the Company filed a Current Report on Form 8-K,
dated March 25, 1997, to report an amendment to the Rights
Agreement dated as of August 27, 1996 between the Company and
Mellon Bank, N.A.
<PAGE> 14
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.
ECC INTERNATIONAL CORP.
Date May 14, 1997 /s/ George W. Murphy
------------------- ------------------------------------
George W. Murphy, President
Date May 14, 1997 /s/ Relland Winand
------------------- ------------------------------------
Relland Winand
Vice President, Finance
(Principal Financial and
Accounting Officer)
<PAGE> 1
Exhibit 11
SCHEDULE OF COMPUTATION OF EARNINGS PER SHARE
(In Thousands, Except Per Share Data)
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Nine Months
Ended Ended
March 31 March 31
1997 1996
<S> <C> <C>
Primary
- -------
Net (Loss)/Income $ (3,386) $ 2,848
========== ==========
Weighted Average Shares Outstanding 7,953,269 7,756,869
Incremental Shares from Assumed
Exercise of Stock Options 68,308 151,895
---------- ----------
Total Shares 8,021,577 7,908,764
========== ==========
Primary Per Share Amounts
- -------------------------
Net (Loss)/Income $ (0.42) $ 0.36
========== ==========
Fully Diluted *
- -------------
Net (Loss)/Income $ (3,386) $ 2,848
========== ==========
Weighted Average Shares Outstanding 7,953,269 7,756,869
Incremental Shares from Assumed
Exercise of Stock Options 68,308 151,895
---------- ----------
Total Shares 8,021,577 7,908,764
========== ==========
Fully Diluted Per Share Amounts
- -------------------------------
Net (Loss)/Income $ (0.42) $ 0.36
========== ==========
</TABLE>
* Fully diluted earnings per share calculation is presented in accordance
with Regulation S-K item 601(b)(11) although not required by footnote 2 to
paragraph 14 of Accounting Principles Board Opinion No. 15 because it
results in dilution of less than 3%.
<PAGE> 2
Exhibit 11
SCHEDULE OF COMPUTATION OF EARNINGS PER SHARE
(In Thousands, Except Per Share Data)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Three Months
Ended Ended
March 31 March 31
1997 1996
<S> <C> <C>
Primary
- -------
Net Loss $ (1,952) $ (398)
========== ==========
Weighted Average Shares Outstanding 7,976,384 7,777,082
Incremental Shares from Assumed
Exercise of Stock Options 57,005 --
---------- ----------
Total Shares 8,033,389 7,777,082
========== ==========
Primary Per Share Amounts
- -------------------------
Net Loss $ (0.24) $ (0.05)
========== ==========
Fully Diluted *
- -------------
Net Loss $ (1,952) $ (398)
========== ==========
Weighted Average Shares Outstanding 7,976,384 7,777,082
Incremental Shares from Assumed
Exercise of Stock Options 57,005 --
---------- ----------
Total Shares 8,033,389 7,777,082
========== ==========
Fully Diluted Per Share Amounts
- -------------------------------
Net Loss $ (0.24) $ (0.05)
========== ==========
</TABLE>
* Fully diluted earnings per share calculation is presented in accordance
with Regulation S-K item 601(b)(11) although not required by footnote 2 to
paragraph 14 of Accounting Principles Board Opinion No. 15 because it
results in dilution of less than 3%.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S FINANCIAL STATEMENTS INCLUDED IN THIS QUARTERLY REPORT ON FORM 10-Q
AND IS QUALIFIED IN IT'S ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> MAR-31-1997
<EXCHANGE-RATE> 1
<CASH> 3,232
<SECURITIES> 0
<RECEIVABLES> 8,703
<ALLOWANCES> 102
<INVENTORY> 14,049
<CURRENT-ASSETS> 56,532
<PP&E> 60,466
<DEPRECIATION> 34,189
<TOTAL-ASSETS> 84,815
<CURRENT-LIABILITIES> 14,273
<BONDS> 18,932
0
0
<COMMON> 797
<OTHER-SE> 49,379
<TOTAL-LIABILITY-AND-EQUITY> 84,815
<SALES> 63,796
<TOTAL-REVENUES> 63,796
<CGS> 55,603
<TOTAL-COSTS> 55,603
<OTHER-EXPENSES> 322
<LOSS-PROVISION> 2
<INTEREST-EXPENSE> (1,371)
<INCOME-PRETAX> (4,210)
<INCOME-TAX> (824)
<INCOME-CONTINUING> (3,386)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,386)
<EPS-PRIMARY> (.42)
<EPS-DILUTED> (.42)
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S FINANCIAL STATEMENTS INCLUDED IN THIS QUARTERLY REPORT ON FORM 10-Q
AND IS QUALIFIED IN IT'S ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<EXCHANGE-RATE> 1
<CASH> 3,232
<SECURITIES> 0
<RECEIVABLES> 8,703
<ALLOWANCES> 102
<INVENTORY> 14,049
<CURRENT-ASSETS> 56,532
<PP&E> 60,466
<DEPRECIATION> 34,189
<TOTAL-ASSETS> 84,815
<CURRENT-LIABILITIES> 14,273
<BONDS> 18,932
0
0
<COMMON> 797
<OTHER-SE> 49,379
<TOTAL-LIABILITY-AND-EQUITY> 84,815
<SALES> 15,757
<TOTAL-REVENUES> 15,757
<CGS> 14,780
<TOTAL-COSTS> 14,780
<OTHER-EXPENSES> (24)
<LOSS-PROVISION> 2
<INTEREST-EXPENSE> 471
<INCOME-PRETAX> (2,769)
<INCOME-TAX> (817)
<INCOME-CONTINUING> (1,952)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,952)
<EPS-PRIMARY> (.24)
<EPS-DILUTED> (.24)
</TABLE>
