<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
---------------
FORM 10-Q
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 27, 1998
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 0-9653
XICOR, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
California 94-2526781
(State or other jurisdiction of (I.R.S.Employer
incorporation or organization) Identification No.)
1511 Buckeye Drive, Milpitas, California 95035
(Address of principal executive offices) (Zip Code)
</TABLE>
Registrant's telephone number, including area code: (408) 432-8888
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
--- ---
NUMBER OF SHARES OUTSTANDING AT SEPTEMBER 27, 1998
19,123,477
<PAGE> 2
XICOR, INC.
FORM 10-Q
QUARTER ENDED SEPTEMBER 27, 1998
INDEX
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PART I: FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Consolidated Balance Sheets at September 27, 1998 1
and December 31, 1997
Consolidated Statements of Operations for the three and 2
nine months ended September 27, 1998 and September 28, 1997
Consolidated Statements of Cash Flows for the nine 3
months ended September 27, 1998 and September 28, 1997
Notes to Consolidated Financial Information 4
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL 5
CONDITION AND RESULTS OF OPERATIONS
PART II: OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. 10
SIGNATURES 10
</TABLE>
-i-
<PAGE> 3
PART I: FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
XICOR, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
September 27, December 31,
1998 1997
---- ----
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 16,263,000 $ 21,106,000
Short-term investments 1,978,000 11,372,000
Accounts receivable 8,943,000 11,003,000
Inventories 16,607,000 23,933,000
Prepaid expenses and other current assets 1,056,000 1,013,000
------------ ------------
Total current assets 44,847,000 68,427,000
Property, plant and equipment,
at cost less accumulated depreciation 42,231,000 46,628,000
Other assets 283,000 206,000
------------ ------------
$ 87,361,000 $115,261,000
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 8,761,000 $ 11,596,000
Accrued expenses 8,701,000 8,133,000
Deferred income on shipments to distributors 11,271,000 13,913,000
Current portion of long-term obligations 7,210,000 6,537,000
------------ ------------
Total current liabilities 35,943,000 40,179,000
------------ ------------
Long-term obligations 14,845,000 18,974,000
------------ ------------
Shareholders' equity:
Preferred stock; 5,000,000 shares authorized - -
Common stock; 75,000,000 shares authorized;
19,123,477 and 19,091,727 shares outstanding 124,245,000 124,204,000
Accumulated deficit (87,672,000) (68,096,000)
------------ ------------
36,573,000 56,108,000
------------ ------------
$ 87,361,000 $115,261,000
============ ============
</TABLE>
See accompanying notes to consolidated financial information
-1-
<PAGE> 4
XICOR, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
------------------------------- -------------------------------
September 27, September 28, September 27, September 28,
1998 1997 1998 1997
---- ----- ---- ----
<S> <C> <C> <C> <C>
Net sales $ 24,695,000 $ 29,566,000 $ 79,228,000 $ 91,049,000
Cost of sales 21,479,000 18,935,000 66,892,000 56,480,000
-------------- ------------- ------------- -------------
Gross profit 3,216,000 10,631,000 12,336,000 34,569,000
-------------- ------------- ------------- -------------
Operating expenses:
Research and development 4,304,000 4,425,000 13,498,000 13,636,000
Selling, general and
administrative 5,448,000 5,252,000 16,566,000 15,811,000
Restructuring charge 1,267,000 - 1,267,000 -
-------------- ------------- ------------- -------------
11,019,000 9,677,000 31,331,000 29,447,000
-------------- ------------- ------------- -------------
Income (loss) from operations (7,803,000) 954,000 (18,995,000) 5,122,000
Interest expense (463,000) (475,000) (1,444,000) (1,342,000)
Interest income 228,000 488,000 863,000 1,478,000
-------------- ------------- ------------- -------------
Income (loss) before income taxes (8,038,000) 967,000 (19,576,000) 5,258,000
Provision for income taxes - 48,000 - 262,000
-------------- ------------- ------------- -------------
Net income (loss) $ (8,038,000) $ 919,000 $(19,576,000) $ 4,996,000
============== ============= ============= =============
Net income (loss) per common share:
Basic $ (0.42) $ 0.05 $ (1.02) $ 0.26
============== ============= ============= =============
Diluted $ (0.42) $ 0.05 $ (1.02) $ 0.25
============== ============= ============= =============
Shares used in per share calculations:
Basic $ 19,123,000 $ 18,985,000 $ 19,108,000 $ 18,928,000
============== ============= ============ =============
Diluted $ 19,123,000 $ 19,731,000 $ 19,108,000 $ 19,644,000
============== ============= ============ =============
</TABLE>
See accompanying notes to consolidated financial information
-2-
<PAGE> 5
XICOR, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
-----------------------------------------
September 27, 1998 September 28, 1997
------------------ ------------------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $(19,576,000) $ 4,996,000
Adjustments to reconcile net income to
cash provided by operating activities:
Depreciation and amortization 9,024,000 8,175,000
Changes in assets and liabilities:
Accounts receivable 2,060,000 660,000
Inventories 7,326,000 (8,851,000)
Prepaid expenses and other current assets (43,000) (518,000)
Other assets (77,000) 54,000
Accounts payable and accrued expenses (2,267,000) 1,496,000
Deferred income on shipments to distributors (2,642,000) 47,000
-------------- -------------
Net cash provided by (used for) operating activities (6,195,000) 6,059,000
-------------- -------------
Cash flows from investing activities:
Investments in plant and equipment, net (3,530,000) (9,042,000)
Purchases of short-term investments (4,335,000) (20,925,000)
Maturities of short-term investments 13,729,000 27,473,000
-------------- -------------
Net cash provided by (used for) investing activities 5,864,000 (2,494,000)
-------------- -------------
Cash flows from financing activities:
Repayments of long-term obligations (4,553,000) (4,712,000)
Proceeds from sale of common stock to employees 41,000 619,000
-------------- -------------
Net cash used for financing activities (4,512,000) (4,093,000)
-------------- -------------
Decrease in cash and cash equivalents (4,843,000) (528,000)
Cash and cash equivalents at beginning of year 21,106,000 20,414,000
------------- -------------
Cash and cash equivalents at end of quarter $ 16,263,000 $ 19,886,000
============= =============
Supplemental information:
Cash paid (refunded) for:
Interest expense $ 1,444,000 $ 1,342,000
Income taxes (93,000) 269,000
Equipment acquired pursuant to long-term obligations 1,097,000 9,547,000
</TABLE>
See accompanying notes to consolidated financial information
-3-
<PAGE> 6
XICOR, INC.
NOTES TO CONSOLIDATED FINANCIAL INFORMATION
(Unaudited)
NOTE 1 - THE COMPANY:
In the opinion of management, all adjustments necessary for a fair
statement of the results of the interim periods presented (consisting only of
normal recurring adjustments) have been included. These financial statements,
notes and analyses should be read in conjunction with Xicor's Annual Report on
Form 10-K for the year ended December 31, 1997 filed with the Securities and
Exchange Commission.
NOTE 2 - NET INCOME (LOSS) PER SHARE:
Basic net income (loss) per share is computed using the weighted average
number of common shares outstanding. Diluted net income (loss) per share is
computed using the weighted average number of common shares and all dilutive
potential common shares outstanding. Options to purchase 2,488,300 shares of
common stock were outstanding at September 27, 1998, but were excluded from the
earnings per share (EPS) computation as they were antidilutive. Common stock
equivalents were the only reconciling item between the number of shares used to
calculate Basic EPS and Diluted EPS for the three and nine months ended
September 28, 1997.
NOTE 3 - BALANCE SHEET DETAIL:
<TABLE>
<CAPTION>
September 27, December 31,
1998 1997
---- ----
<S> <C> <C>
Inventories:
Raw materials and supplies $ 2,505,000 $ 4,229,000
Work in process 9,986,000 13,012,000
Finished goods 4,116,000 6,692,000
------------- --------------
$ 16,607,000 $ 23,933,000
============= ==============
Property, plant and equipment:
Leasehold improvements $ 17,843,000 $ 17,518,000
Equipment 122,953,000 116,349,000
Furniture and fixtures 1,877,000 1,817,000
Construction in progress 4,256,000 8,104,000
------------- --------------
146,929,000 143,788,000
Less accumulated depreciation (104,698,000) (97,160,000)
------------- --------------
$ 42,231,000 $ 46,628,000
============= =============
Accrued expenses:
Accrued wages and employee benefits $ 4,407,000 $ 3,984,000
Other accrued expenses 4,294,000 4,149,000
------------- -------------
$ 8,701,000 $ 8,133,000
============= =============
</TABLE>
Accounts receivable:
Accounts receivable at September 27, 1998 and December 31, 1997 are
presented net of an allowance for doubtful accounts of $500,000.
-4-
<PAGE> 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the
accompanying Quarterly Financial Information and Notes thereto and Xicor's
Annual Report on Form 10-K for the year ended December 31, 1997 and is qualified
in its entirety by the foregoing. The results of operations for the three and
nine months ended September 27, 1998 are not necessarily indicative of results
to be expected in future periods.
RESULTS OF OPERATIONS
Sales for the third quarter of 1998 were $24.7 million, a decrease from
third quarter 1997 sales of $29.6 million and second quarter 1998 sales of $26.8
million. Sales for the nine months ended September 27, 1998 were $79.2 million,
down from $91.0 million for the comparable prior year period. Global pricing
pressures due to excess global production capacity, lower demand and the
economic difficulties in Asia are posing major challenges for Xicor. For the
three and nine months ended September 27, 1998, Xicor's business in Japan and
domestic sales decreased compared to the comparable prior year period.
Gross profit as a percentage of sales was 13% and 16% for the three and
nine months ended September 27, 1998 compared to 36% and 38% for the comparable
1997 periods. The decline in the 1998 gross profit percentage was primarily due
to lower average selling prices as a result of competitive price pressures and
Xicor's increased manufacturing cost level associated with increased production
capacity and upgrading of the wafer fabrication operations during 1996 and 1997
and decreased factory utilization. During 1998 Xicor substantially reduced the
production volume in its factory in response to ongoing weak business
conditions. Unfavorable overhead variances that result from the fixed nature of
certain manufacturing costs and the smaller number of units in production were
expensed. Unless factory utilization increases, the significant negative impact
of unfavorable overhead variances on Xicor's results of operations will
continue. Additionally, in the second quarter of 1998, Xicor wrote down
inventories by $2.2 million to cover declining sales prices and inventories of
certain devices that are being discontinued as Xicor streamlines its product
portfolio.
Although research and development expenses were higher as a percentage of
sales in the quarter and nine months ended September 27, 1998 compared to the
corresponding periods of 1997 due to the lower 1998 sales, they were relatively
level in terms of absolute dollars. Research and development activities require
an increasing degree of complexity of design and manufacturing process
technology and consequently a similar amount of funds is expected to be invested
in research and development during the fourth quarter of 1998.
Selling, general and administrative expenses increased from 18% and 17% of
sales for the third quarter and nine months ended September 28, 1997 to 22% and
21%, for the respective 1998 periods primarily due to the lower sales level,
increased selling expenses due to intensified sales and marketing activities,
second quarter 1998 costs associated with restructuring one sales office and a
$162,000 bad debt write-off in the first quarter of 1998 related to the
bankruptcy of an Asian customer.
Interest expense decreased in the third quarter of 1998 compared to the
1997 quarter due to normal principal payments of outstanding lease debt.
Interest expense in the nine months ended
-5-
<PAGE> 8
September 28, 1998 was higher than the comparable prior year period due to the
financing of additional capital equipment acquisitions during 1997.
Interest income decreased in the third quarter and nine months ended
September 27, 1998 compared to the comparable 1997 periods due to a decrease in
the average balance invested caused primarily by funds used for 1997 and 1998
capital asset purchases, 1998 operating activities and ongoing debt repayments
and, to a lesser extent, lower interest rates. Interest income is expected to
decrease during the fourth quarter principally due to the utilization of funds
for operating activities, normal debt repayments and equipment purchases and
lower interest rates.
No taxes were provided during 1998 due to the net loss. The 1997 provision
for income taxes consisted primarily of federal and state minimum taxes, which
resulted from limitations on the use of net operating loss carryforwards, and
foreign taxes. Net deferred tax assets of $33.9 million at December 31, 1997
remain fully reserved because of the uncertainty regarding the ultimate
realization of these assets.
Xicor incurred losses of $8.0 million and $19.6 million for the third
quarter and nine months ended September 27, 1998, respectively, compared to net
income of $0.9 million and $5.0 million for the comparable prior year periods.
Third quarter 1998 results included a $1.3 million restructuring charge for
severance costs relating to work force reductions. Reduced demand, together with
severe price erosion, were the primary causes of the 1998 losses. In addition,
Xicor's manufacturing costs increased in 1998 compared to 1997 due to increased
production capacity and upgrading of the wafer fabrication operations in 1996
and 1997. Xicor has reduced the production volume in its factory in response to
ongoing weak business conditions. The resultant lower factory utilization also
negatively impacted results for the third quarter and nine months ended
September 27, 1998 relative to the prior year. Second quarter 1998 results were
also negatively impacted by inventory write downs as previously discussed.
During the third quarter of 1998, Xicor took significant steps to reduce
costs. Third quarter results include a $1.3 million restructuring charge for
severance costs relating to a 20% reduction in workforce. The headcount
reductions are primarily in manufacturing and to a lesser extent in the selling,
administrative and engineering functions. At September 27, 1998, $0.3 million of
the severance costs had been paid, with the $1.0 million balance expected to be
paid during the next two quarters. Quarterly savings after the restructuring is
completed are estimated at $2.0 million.
Xicor has a foundry agreement with Yamaha for outsourcing. During the third
quarter of 1998, Xicor qualified Yamaha's Kagoshima, Japan wafer fabrication
facility for production of one Xicor process. To date, initial production
quantities have been successfully manufactured by Yamaha. Yamaha is currently
being qualified to run additional Xicor processes. The cost of a wafer procured
from Yamaha is currently significantly lower than the cost of a wafer produced
in-house. In view of the prevailing pricing and excess supply conditions in the
semiconductor industry, Xicor is evaluating its future manufacturing and
procurement strategies including significantly increasing outsourcing of wafer
fabrication with Yamaha. In the event Xicor decides to reduce production volumes
at its Milpitas, California wafer fabrication facility in favor of outsourcing,
it may result in substantial writeoffs, primarily relating to assets.
Although Xicor has taken significant cost reduction measures in 1998,
anticipated continued weak sales, price erosion and factory underutilization are
expected to result in a sizable loss for the fourth quarter of 1998.
-6-
<PAGE> 9
LIQUIDITY AND CAPITAL RESOURCES
At September 27, 1998, Xicor had $18.2 million in cash, cash equivalents
and short-term investments compared to $32.5 million at December 31, 1997.
During the nine months ended September 27, 1998, Xicor used $6.2 million of cash
for operating activities, $3.5 million for equipment purchases and $4.6 million
to repay long-term obligations. Xicor used long-term lease financing to acquire
additional capital assets of $1.1 million during the nine months ended September
27, 1998.
Capital expenditures for the balance of 1998 are planned at less than $2.0
million, $1.4 million of which had been committed as of September 27, 1998. The
acquisitions consist principally of equipment for yield improvement and new
product production. Xicor is investigating equipment financing for a portion of
these acquisitions, but there is no assurance that such financing will be
available.
Xicor has a line of credit agreement with a financial institution that
expires March 31, 1999, provides for borrowings of up to $7.5 million against
eligible accounts receivable and is secured by all of Xicor's assets. Interest
on borrowings is charged at the prime lending rate plus 2% and is payable
monthly. At September 27, 1998, the entire $7.5 million was available to Xicor
based on the eligible accounts receivable balances and the borrowing formulas.
To date, no amounts have been borrowed under this line of credit. Management
believes that currently available cash, expected equipment financing and the
existing line of credit facility will be adequate to support Xicor's operations
for the next twelve months.
"SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995
This quarterly report contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934, including statements regarding anticipated
continued weak sales, price erosion, factory underutilization, the level of
research and development expenditures during the fourth quarter of 1998, the
expected loss in the fourth quarter of 1998, the possibility of further
reductions in manufacturing volume at Xicor's Milpitas wafer fabrication
facility and resultant substantial charges to operations, the adequacy of cash
and financing to support Xicor's operations for the next twelve months, Xicor's
plans to have all critical Year 2000 objects that could prevent Xicor from
meeting customer commitments completed by mid-1999 and the expectation that the
incremental costs associated with Year 2000 implementation will not exceed $1.0
million. Except for historical information, the matters discussed in this
quarterly report are forward-looking statements that are subject to certain
risks and uncertainties that could cause the actual results to differ materially
from those projected.
Factors that could cause actual results to differ materially include the
following: general economic conditions and conditions specific to the
nonvolatile memory segment of the semiconductor industry, fluctuations in
customer demand, competitive factors such as pricing pressures on existing
products and the timing and market acceptance of new product introductions,
Xicor's ability to have available an appropriate amount of production capacity
in a timely manner, manufacturing efficiencies, the timely development of new
products and submicron processes, the ability of Xicor, our customers, vendors
and subcontractors to make their systems Year 2000 compliant, and the risk
factors listed from time-to-time in Xicor's SEC reports, including but not
limited to the "Factors Affecting Future Results" section below
-7-
<PAGE> 10
and Part I, Item 1. of the Form 10-K. Readers are cautioned not to place undue
reliance on these forward-looking statements, which speak only as of the date
hereof. Xicor undertakes no obligation to publicly release or otherwise disclose
the result of any revision to these forward-looking statements which may be made
as a result of events or circumstances after the date hereof or to reflect the
occurrence of unanticipated events.
FACTORS AFFECTING FUTURE RESULTS
The semiconductor industry is highly competitive and characterized by
rapidly changing technology and steadily declining product prices. The current
business climate has and will continue to result in less than optimum
utilization of Xicor's wafer fabrication factory, which will adversely affect
Xicor's business and results of operations. Xicor's results of operations are
affected by a wide variety of factors, including general economic conditions and
conditions specific to the semiconductor industry, decreases in average selling
price over the life of any particular product, the timing of new product
introductions (both by Xicor and competitors), availability of new manufacturing
technologies, the ability to secure intellectual property rights in a rapidly
evolving market and the ability to have an appropriate amount of production
capacity in a timely manner. The sales level in any specific quarter is also a
function of orders received during that quarter, as customers continue to
shorten lead times for purchase commitments. Consistent with industry practice,
customer orders are generally subject to cancellation by the customer without
penalty. Xicor may be at a disadvantage in competing with major domestic and
foreign concerns that have significant financial resources, established and
diverse product lines, worldwide vertically integrated production facilities and
extensive research and development capabilities.
The semiconductor industry is also characterized by substantial capital and
research and development investment for products and processes. The rapid rate
of technological change within the industry requires Xicor to continually
develop new and improved products and processes to maintain its competitive
position. Xicor expects to continue to invest in the research and development of
new products and manufacturing processes during the balance of 1998 and beyond,
although there can be no assurances that such research and development efforts
or new products will be successful.
Xicor uses a significant number of computer software programs and operating
systems and intelligent hardware devices in its internal operations, including
information technology (IT) systems and non-IT systems used in the design,
manufacture and marketing of company products. These items are considered to be
Year 2000 "objects" and to the extent that these objects are unable to correctly
recognize and process date dependent information beyond the year 1999, some
level of modification or replacement is necessary.
Xicor's Year 2000 Compliance Program addresses Xicor IT and non-IT systems,
Xicor products, key suppliers and key customers. The compliance program consists
of five phases: Planning, Assessment, Renovation, Validation and Implementation.
As of the third quarter of 1998, Xicor has completed the Assessment phase with
respect to its internal operations and is entering the Renovation phase. Company
actions have and continue to include replacing certain systems, while modifying
others. Xicor plans to have all critical objects that would prevent Xicor from
meeting its customer commitments completed by mid-1999. Xicor believes its
products are Year 2000 compliant. Xicor is also actively working with key
suppliers of products and
-8-
<PAGE> 11
services to determine that the suppliers' operations and the products and
services they provide are Year 2000 compliant. Xicor also intends to develop a
contingency plan. Based on currently available information, the incremental
costs associated with these efforts are expected to be less than $1.0 million, a
portion of which relates to the purchase of software and hardware and will be
capitalized.
Year 2000 compliance issues could have a significant impact on Xicor's
operations and its financial results if modifications cannot be completed in a
timely manner; unforeseen needs or problems arise; or, if the systems operated
by Xicor's customers, vendors or subcontractors are not Year 2000 compliant.
Xicor has an investment portfolio of fixed income securities that are
classified as "held to maturity securities". These securities, like all fixed
income instruments, are subject to interest rate risk and will fall in value if
market interest rates increase. Xicor attempts to limit this exposure by
investing primarily in short-term securities.
From time-to-time Xicor makes certain capital equipment or other purchases
denominated in foreign currencies. As a result, Xicor's cash flows and earnings
are exposed to fluctuations in interest rates and foreign currency exchange
rates. Xicor attempts to limit these exposures through operational strategies
and generally has not hedged currency exposures.
Due to the foregoing and other factors, past results are a much less
reliable predictor of the future than is the case in many older, more stable and
less dynamic industries. In addition, the securities of many high technology
companies, including Xicor, have historically been subject to extensive price
and volume fluctuations that may adversely affect the market price of their
common stock.
-9-
<PAGE> 12
PART II: OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits:
27 Financial Data Schedule
(b) Reports on Form 8-K:
No reports on Form 8-K were filed with the Securities and Exchange
Commission during the quarter ended September 27, 1998.
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.
XICOR, INC., a
California Corporation
By /s/ Raphael Klein
--------------------------------------
Raphael Klein
Chief Executive Officer
(Principal Executive Officer)
By /s/ Geraldine N. Hench
--------------------------------------
Geraldine N. Hench
Vice President, Finance
(Principal Financial Officer)
Date: November 5, 1998
-10-
<PAGE> 13
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------- -----------
<S> <C>
27 Financial Data Schedule
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JAN-03-1999
<PERIOD-START> DEC-29-1997
<PERIOD-END> SEP-27-1998
<CASH> 16,263,000
<SECURITIES> 1,978,000
<RECEIVABLES> 9,443,000
<ALLOWANCES> 500,000
<INVENTORY> 16,607,000
<CURRENT-ASSETS> 44,847,000
<PP&E> 146,929,000
<DEPRECIATION> 104,698,000
<TOTAL-ASSETS> 87,361,000
<CURRENT-LIABILITIES> 35,943,000
<BONDS> 0
0
0
<COMMON> 124,245,000
<OTHER-SE> (87,672,000)
<TOTAL-LIABILITY-AND-EQUITY> 87,361,000
<SALES> 79,228,000
<TOTAL-REVENUES> 79,228,000
<CGS> 66,892,000
<TOTAL-COSTS> 66,892,000
<OTHER-EXPENSES> 14,765,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,444,000
<INCOME-PRETAX> (19,576,000)
<INCOME-TAX> 0
<INCOME-CONTINUING> (19,576,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (19,576,000)
<EPS-PRIMARY> (1.02)
<EPS-DILUTED> (1.02)
</TABLE>
