SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q/A - NO. 1
(Mark one)
/x/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Quarterly Period Ended: DECEMBER 31, 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 0-11274
PHARMACEUTICAL FORMULATIONS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 22-2367644
- -------- ----------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
460 PLAINFIELD AVENUE, EDISON, NJ 08818
- --------------------------------- -----
(Address of principal executive offices) (Zip code)
(Registrant's telephone number, including area code) (732) 985-7100
--------------
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.
/ / Yes /x/ No
The number of shares outstanding of common stock, $.08 par value, as of January
31, 1999 was 30,253,320.
<PAGE>
PHARMACEUTICAL FORMULATIONS, INC. AND SUBSIDIARIES
ITEMS 1 AND 2 OF PART I OF THE FORM 10-Q AND EXHIBIT 27 TO THE FORM 10-Q ARE
AMENDED TO READ AS FOLLOWS:
PART I. FINANCIAL INFORMATION
<TABLE>
<CAPTION>
ITEM 1: FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEETS
ASSETS December 31, June 30, 1998
1998 (Note 1)
(Unaudited)
As Restated
(Note 6)
------------ ------------
CURRENT ASSETS
<S> <C> <C>
Cash $ 64,000 $ 608,000
Accounts receivable - net of allowance for doubtful
accounts of $313,000 and $238,000 14,799,000 14,861,000
Inventories 21,476,000 20,096,000
Prepaid expenses and other current assets 599,000 793,000
Deferred tax asset 700,000 300,000
------- -------
Total current assets 37,638,000 36,658,000
PROPERTY, PLANT AND EQUIPMENT
Net of accumulated depreciation and amortization of
$18,457,000 and $17,083,000 20,336,000 21,441,000
OTHER ASSETS
Deferred tax asset 3,200,000 1,231,000
Other assets 717,000 534,000
------- -------
$ 61,891,000 $ 59,864,000
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
CURRENT LIABILITIES
Current portion of long-term debt $ 440,000 $ 482,000
Current portion of capital lease obligations 2,712,000 2,898,000
Accounts payable 18,844,000 20,951,000
Income taxes payable 10,000 227,000
Accrued expenses 4,105,000 1,394,000
Total current liabilities 26,111,000 25,952,000
---------- ----------
LONG-TERM DEBT 29,373,000 22,983,000
---------- ----------
LONG-TERM CAPITAL LEASE OBLIGATIONS 8,389,000 7,553,000
--------- ---------
DEFERRED GAIN ON SALE/LEASEBACK 295,000 321,000
------- -------
STOCKHOLDERS' EQUITY (DEFICIENCY)
Preferred stock - par value $1.00 per share;
10,000,000 shares authorized; 2,500,000 shares
issued and outstanding 2,500,000 2,500,000
Common stock - par value $.08 per share; authorized
- 40,000,000 shares; issued and outstanding -
30,253,320 shares 2,421,000 2,421,000
Capital in excess of par value 37,493,000 37,493,000
Accumulated deficit (44,691,000) (39,359,000)
----------- -----------
Total stockholders' equity (deficIency) (2,277,000) 3,055,000
---------- ---------
$ 61,891,000 $ 59,864,000
============ ============
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF OPERATIONS
Six Months Ended Three Months Ended
December 31, December 31,
------------------------------ ---------------------------------
1998 1997 1998 1997
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
As Restated As Restated
(Note 6) (Note 6)
-------------- -------------- --------------- ----------------
REVENUES
<S> <C> <C> <C> <C>
Gross sales $43,956,000 $41,694,000 $24,516,000 $22,649,000
Less: Sales discounts and allowance 4,402,000 1,773,000 2,387,000 882,000
---------- ---------- ---------- ----------
NET SALES 39,554,000 39,921,000 22,129,000 21,767,000
---------- ---------- ---------- ----------
COST AND EXPENSES
Cost of goods sold 36,201,000 29,981,000 19,955,000 16,388,000
Selling, general and administrative 7,542,000 5,852,000 3,888,000 3,105,000
Research and development 382,000 513,000 148,000 232,000
---------- ---------- ---------- ----------
44,125,000 36,346,000 23,991,000 19,725,000
---------- ---------- ---------- ----------
INCOME (LOSS) FROM OPERATIONS (4,571,000) 3,575,000 (1,862,000) 2,042,000
---------- ---------- ---------- ----------
OTHER INCOME (EXPENSE)
Interest expense (2,174,000) (2,073,000) (1,045,000) (1,051,000)
Lawsuit settlement (1,179,000) - (1,179,000) -
Other 23,000 21,000 20,000 112,000
---------- ---------- ---------- ----------
(3,330,000) (2,052,000) (2,204,000) (939,000)
---------- ---------- ---------- ----------
INCOME (LOSS) BEFORE (7,901,000) 1,523,000 (4,066,000) 1,103,000
INCOME TAXES
INCOME TAXES (BENEFIT) (2,569,000) 367,000 (1,322,000) 225,000
---------- ---------- ---------- ----------
NET INCOME (LOSS) (5,332,000) 1,156,000 (2,744,000) 878,000
Preferred stock dividend requirement 100,000 100,000 50,000 50,000
NET INCOME (LOSS) $(5,432,000) $ 1,056,000 $(2,794,000) $ 828,000
ATTRIBUTABLE TO COMMON SHAREHOLDERS ============ ============ ============= ============
EARNINGS (LOSS) PER SHARE - $ (.18) $ .04 $ (.09) $ .03
BASIC AND DILUTED ============ ============ ============= ============
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 30,253,000 30,120,000 30,253,000 30,228,000
============ ============ =============== ============
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PHARMACEUTICAL FORMULATIONS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended
December 31,
--------------------------------------
1998 1997
(Unaudited) (Unaudited)
As Restated
(Note 6)
------------------ ------------------
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C>
Net income (loss) $(5,332,000) $ 1,156,000
Adjustments to reconcile net income (loss) to net
cash used in operating activities:
Depreciation and amortization of property, plant 1,374,000 1,238,000
and equipment
Amortization of bond discount and deferred 99,000 104,000
financing costs
Amortization of deferred gain on sale of leaseback (26,000) (26,000)
Deferred income taxes (2,369,000) -
Changes in current assets and liabilities:
(Increase) decrease in accounts receivable 62,000 (5,096,000)
(Increase) in inventories (1,380,000) (1,380,000)
(Increase) decrease in other current assets 194,000 (215,000)
Increase in accounts payable, accrued expenses
and income taxes payable 387,000 2,638,000
---------- ----------
Net cash used in operating activities (6,991,000) (1,581,000)
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES
(Increase) in other assets (183,000) (60,000)
(Increase) in property, plant and equipment, net (269,000) (1,547,000)
-------- ----------
Net cash used in investing activities (452,000) (1,607,000)
-------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in borrowings under line of credit 6,553,000 2,437,000
Principal repayments of capital lease obligations (1,350,000) (1,109,000)
Principal repayments of long term debt (304,000) (202,000)
Issuance of common stock - 75,000
Lease refinancing 2,000,000 -
--------- ---------
Net cash provided by financing activities 6,899,000 1,201,000
--------- ---------
NET DECREASE IN CASH (544,000) (1,987,000)
CASH, BEGINNING OF PERIOD 608,000 2,087,000
------- ---------
CASH, END OF PERIOD $ 64,000 $ 100,000
=========== ===========
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
</TABLE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1: INTERIM FINANCIAL REPORTING:
The consolidated balance sheet as of June 30, 1998 has been derived
from the audited consolidated balance sheet for the fiscal year then
ended and is presented for comparative purposes.
The accompanying financial statements presume that users have read the
audited financial statements for the preceding fiscal year.
Accordingly, footnotes which would substantially duplicate such
disclosure have been omitted.
The interim financial statements reflect all adjustments which are, in
the opinion of management, necessary for a fair statement of the
results for the interim periods presented. Such adjustments consist of
normal recurring accruals plus major costs incurred as a result of the
installation of a new computer system. The results of operations for
the three and six months ended December 31, 1998 are not necessarily
indicative of the results to be expected for a full year.
Note 2: CONTINGENCIES:
Other than as described below, no material proceedings to which the
Company is a party, or to which any of its properties are subject, are
pending or are known to be contemplated, and the Company knows of no
material legal proceedings, pending or threatened, or judgments
entered against any director or officer of the Company in his capacity
as such.
In July 1997, the Company received an arbitration demand from the
estate of Dr. Max Tesler, the former President of the Company who died
in December 1996. For alleged breaches of employment and other
agreements between the Company and Dr. Tesler, the Estate is seeking
an award of $5,500,000 in compensatory damages, $10,000,000 in
punitive damages, and such number of shares of common stock of the
Company as would equal 10% of the total number of shares outstanding.
For claimed tortious conduct, the Estate is seeking $20,000,000 for
intentional infliction of emotional distress and $10,000,000 for prima
facie tort. The Estate is also seeking attorney's fees and a revised
warrant agreement pursuant to claimed antidilution provisions.
The claimed breaches of contract include failure to pay (a) salary
through December 1998, (b) change of control payments on the
assumption that there was a change of control, as defined, in a 1996
annual meeting and (c) death benefits. The claim for death benefits,
however, was subsequently released by the Estate.
With respect to the claim for continuing salary, the Company has
advised the Estate of counterclaims which the Company has, which
exceed the amount of such payments. The Company maintains that as a
result of the termination of Dr. Tesler's employment in December 1995,
the Company ceased to have any liability under the change-of-control
provision of the various agreements with Dr. Tesler, as well as having
other defenses to such claims. It is also the Company's position that
certain provisions of the warrants issued to Dr. Tesler were not as
agreed and authorized. The warrants expired October 1, 1998.
The children and a former spouse of Dr. Tesler have also raised
certain claims arising out of the death of Dr. Tesler. The Company
settled these claims in December 1998. Accordingly, the Company has
recorded a lawsuit settlement expense of $1,179,000 (which includes
legal and other costs related to the settlement) as of December 31,
1998. Payments made to date were advanced by ICC on behalf of the
Company and are recorded as accounts payable to ICC.
In December 1995, the Company accrued the continuing salary due to Dr.
Tesler for the period through December 1998. It has not made
provisions for any other amounts claimed, nor has it accrued any
amounts due from the Estate. As noted above, the Company believes that
the claims are without merit and that it has valid offsetting claims.
The Company intends to vigorously defend against the arbitration claim
and to prosecute its claims against the Estate.
In May 1998, the Company brought an action against its former outside
corporate counsel seeking damages for conflict of interest, breaches
of fiduciary duty and loyalty, negligence and malpractice during its
representation of the Company.
Note 3: INVENTORIES:
Inventories consist of the following:
DECEMBER 31, 1998 JUNE 30, 1998
----------------- -------------
Raw materials $7,912,000 $6,589,000
Work in progress 1,159,000 717,000
Finished goods 12,405,000 12,790,000
---------- ----------
$21,476,000 $20,096,000
=========== ===========
Note 4: DIVIDENDS:
No dividends were declared during any period presented on common or
preferred stock. Preferred stock dividends in arrears total $550,000
at December 31, 1998.
Note 5: RELATED PARTY TRANSACTIONS:
The following transactions with ICC Industries Inc. ("ICC"), an
affiliated company, are reflected in the consolidated financial
statements as of or for the six months ended December 31, 1998 and
1997:
1998 1997
------ ------
Inventory purchases from ICC $1,951,000 $ 630,000
Interest charges from ICC 123,000 168,000
Accounts payable to ICC 1,703,000 681,000
Equipment lease obligation due ICC * 2,701,000
* The Company assumed direct liability for these leases which were
previously indirectly financed through ICC.
Note 6 RESTATEMENT:
Subsequent to the issuance of the Company's Quarterly Report on Form
10-Q for the six months ended December 31, 1998, and in the course of
reviewing its operations for the year ended July 3, 1999, in
preparation for its annual audit, the Company determined that certain
expenses were incorrectly stated during the first and second quarters
of fiscal 1999. The incorrect reporting on Form 10-Q was caused
primarily by the use of incomplete and inaccurate accounting records
which resulted from the Company's installation of the new computer
system.
In order to upgrade services to customers, improve operating
efficiencies and insure year 2000 compliance, the Company, during
fiscal 1999, installed and implemented a new integrated computer
system. This major system conversion caused serious disruptions in
inventory control, shipping, production and planning resulting in
reduced sales and increased cost of sales. In addition, the Company
experienced delays in billings and collections which required an
increase in borrowing levels resulting in additional interest expense.
As a result, the Company's financial statements for the three months
and the six months ended December 31, 1998, have been restated from
the amounts previously reported to reflect the timing of certain
expenses between quarters.
The effect of the restatement is as follows:
<TABLE>
<CAPTION>
At December 31, 1998 As
Previously As Restated
Reported
- -------------------------------------------- ---------------- -------------
<S> <C> <C>
Accounts receivable $16,772,000 $14,799,000
Inventories 23,288,000 21,476,000
Deferred tax asset-current 300,000 700,000
Deferred tax asset-non-current 1,431,000 3,200,000
Accrued expenses 1,888,000 4,105,000
Accumulated deficit 40,858,000 44,691,000
For the three months ended December 31, 1998
- --------------------------------------------
Sales discounts and allowances 1,575,000 2,387,000
Cost of goods sold 18,675,000 19,955,000
Selling, general and administrative 3,688,000 3,888,000
Income tax benefit 360,000 1,322,000
Net loss 1,414,000 2,744,000
Net loss attributable to common shareholders 1,464,000 2,794,000
Loss per share-basic and diluted $ .05 $ .09
For the six months ended December 31, 1998
- --------------------------------------------
Sales discounts and allowances 2,429,000 4,402,000
Cost of goods sold 32,743,000 36,201,000
Selling, general and administrative 6,971,000 7,542,000
Income tax benefit 400,000 2,569,000
Net loss 1,499,000 5,332,000
Net loss attributable to common shareholders 1,599,000 5,432,000
Loss per share - basic and diluted $ .05 $ .18
</TABLE>
<PAGE>
PHARMACEUTICAL FORMULATIONS, INC. AND SUBSIDIARIES
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS
Gross sales for the six months ended December 31, 1998 were $43,956,000 as
compared to $41,694,000 in the comparable period in the prior fiscal year. The
increase in sales is $2,262,000 or 5%. Private label (store brand) sales were
$40,691,000 as compared to $35,304,000 in the prior year period. The increase of
$5,387,000 or 15% is a result of the addition of customers, the introduction of
new products, and growth with existing customers. These increases offset the
pressure on shipment levels created by the Company's conversion to a new
computer system. The bulk/contract manufacturing sector had sales of $3,265,000
as compared to $6,390,000 in the prior year period. The decrease is due to lost
business in the bulk/contract manufacturing sector which has not been replaced
in the current fiscal year. Two customers represented 40% of sales for the six
months ended December 31, 1998. Sales to these two customers, Walgreen Company
and Costco Wholesale, were $17,642,000 or 40% of sales as compared to
$15,382,000 or 37% of sales in the comparable period in the prior fiscal year.
Gross sales for the three months ended December 31, 1998 were $24,516,000 as
compared to $22,649,000 in the comparable period in the prior fiscal year. The
increase of $1,867,000 or 8% is mainly a result of the items discussed above.
Net sales for the six months ended December 31, 1998 were $39,554,000 as
compared to $39,921,000 in the comparable period in the prior year. The increase
was due to the increase in gross sales net of the increase in sales discounts
and allowances.
Cost of sales as a percentage of net sales was 92% for the six months ended
December 31, 1998 as compared to 75% in the comparable period in the prior
fiscal year. Cost of sales as a percentage of net sales was 90% for the three
months ended December 31, 1998 as compared to 75% in the comparable period in
the prior fiscal year. The increase is due to the change in sales mix as
mentioned above whereby more of the Company's business is in the private label
(store brand) sector, which has a higher cost of sales percentage than the
bulk/contract manufacturing business. In addition, the Company converted to a
new computer system which resulted in disruptions in planning, production,
inventory control, and shipping leading to a reduction in expected sales and
increased cost of sales. Cost of sales was also affected by the increased cost
of packaging due to new equipment installed in fiscal 1998 which caused
production inefficiencies and higher waste due to the beginning trials of the
equipment in the current period.
Selling, general and administrative expenses were $7,542,000 or 19% of net sales
for the six months ended December 31, 1998 as compared to $5,852,000 or 15% of
net sales for the comparable period in the prior fiscal year. The increase of
$1,690,000 is mainly a result of increased sales, legal, distribution, and
hiring expenses. The increased distribution costs are related to shipping
problems impacted by the new computer system. The increased hiring costs are due
to the Company's commitment to having qualified people at all levels of the
organization. Selling, general and administrative expenses were $3,888,000 or
18% of net sales for the three months ended December 31, 1998 as compared to
$3,105,000 or 14% of net sales in the comparable period in the prior fiscal
year. The increase of $783,000 is due mainly to the reasons stated above.
Research and development costs were $382,000 for the six months ended December
31, 1998 as compared to $513,000 for the comparable period in the prior fiscal
year. Research and development costs were $148,000 for the three months ended
December 31, 1998 as compared to $232,000 in the comparable period in the prior
fiscal year.
Interest expense was $2,174,000 for the six months ended December 31, 1998 as
compared to $2,073,000 in the comparable period in the prior fiscal year.
Interest expense was $1,045,000 for the three months ended December 31, 1998 as
compared to $1,051,000 in the comparable period in the prior fiscal year. The
increase in interest expense is a result of increases in capital lease
obligations and borrowings under the revolving credit agreement to support the
additional capital expenditures and working capital requirements of increased
receivables and inventory offset by reduced interest rates on the new revolving
credit agreement.
The Company settled claims relating to the children and a former spouse of Dr.
Tesler, the former President of the Company who died in December 1996.
Accordingly, the Company has recorded a lawsuit settlement expense of $1,179,000
for the six and three months ended December 31, 1998.
The Company recorded a tax benefit of $2,569,000 for the six months ended
December 31, 1998 due to the loss for the period.
Net loss for the six and three months ended December 31, 1998 was $5,332,000 and
$2,744,000, respectively, or ($.18) and ($.09) per share as compared to net
income of $1,156,000 and $878,000, respectively, or $.04 and $.03 per share in
the prior fiscal year.
The Company continues to take steps aimed at increasing profitability. These
steps include: (a) seeking new customers and products to increase sales volume,
(b) continuing efforts to reduce material costs and (c)other cost-saving
measures. There can be no assurance that such actions will be successful in
returning the Company to profitability.
LIQUIDITY AND CAPITAL RESOURCES
At December 31, 1998, the Company had working capital of $11,527,000 as compared
to $10,706,000 at June 30, 1998. Working capital at December 31, 1998 includes
$14,799,000 of accounts receivable as compared to $14,861,000 at June 30, 1998.
The accounts receivable decrease of $62,000 is a result of increases in
discounts and allowances net of increases in sales which occurred in the last
month of the quarter. In addition, the implementation of the Company's new
computer system caused problems with cash collections from customers which also
increased the accounts receivable balance. Working capital also includes
$21,476,000 of inventory as compared to $20,096,000 at June 30, 1998. The
inventory increase of $1,380,000 is a result of higher sales and the need to
maintain inventories to support new customers and increased purchases by other
customers. In addition, the Company's new computer system caused problems in
planning and purchasing of materials which increased the inventory balance.
Working capital also includes $18,844,000 of accounts payable at December 31,
1998 as compared to $20,951,000 at June 30, 1998.
The Company utilized $6,991,000 in cash from operations in the six months ended
December 31, 1998. This utilization was financed primarily with proceeds from
the line of credit of $6,553,000.
Capital expenditures for the six months ended December 31, 1998 were $269,000.
Such expenditures related primarily to the continuing upgrade of manufacturing
equipment and plant facilities. In addition, the Company is refining and
improving its information systems to better serve its customers and meet its
continuing information system needs.
On August 7, 1998, the Company modified its line of credit and equipment term
loan with its financial institution. The maximum amount available under the line
of credit and term loan is $25,000,000. At December 31, 1998, the Company had
borrowed $24,834,000. Borrowings under the modified agreement, which expires
August 7, 2001, bear interest at the prime rate of interest less 3/4%.
The Company has outstanding 2,500,000 shares of Series A cumulative redeemable
convertible preferred stock sold to ICC. Dividends from the date of issue (April
8, 1996) through December 31, 1998 totaling $550,000 have accumulated and are in
arrears. There is no obligation or intention to pay dividends currently on the
preferred stock. Dividends will continue to accrue at the rate of $200,000 per
year until declared and paid.
The Company has a deferred tax asset of $3,900,000, net of the valuation
allowance at December 31, 1998, which consists of future tax benefits of net
operating loss carry forwards and various other temporary differences. The
benefits of net operating loss carry forwards and other temporary differences
that will take more than a few years to realize can not be reasonably determined
at this time. Accordingly, a valuation allowance of $664,000 was recorded at
December 31, 1998 to provide for this uncertainty. The realization of this asset
in future periods, if any, will improve the liquidity of the Company.
The Company continues to take steps aimed at increasing sales and reducing costs
to return to profitability. The Company intends to spend an estimated $2,000,000
on capital improvements in the fiscal year ending June 30, 1999 to increase
manufacturing capacity and reduce costs. It is anticipated that these capital
expenditures will be funded through equipment lease financing. While the Company
has in the past had no difficulty in obtaining such financing or meeting working
capital needs there can be no assurance that it will obtain the financing or
meet working capital needs in the future.
YEAR 2000 COMPLIANCE
Reference is made to item 7 of the Company's Form 10-K for the year ended June
30, 1998 for a discussion under the caption "Year 2000 Compliance"
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.
PHARMACEUTICAL FORMULATIONS, INC.
(REGISTRANT)
Date: OCTOBER 29, 1999 By: /S/ CHARLES E. LAROSA
----------------- ----------------------------------------
Charles E. LaRosa
Chief Executive Officer and President
(Principal Executive Officer)
Date: OCTOBER 29, 1999 By: /S/ CLIFFORD H. STRAUB, JR.
----------------- ----------------------------------------
Clifford H. Straub, Jr.
Chief Financial Officer and Treasurer
(Principal Financial Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUL-3-1999
<PERIOD-START> JUL-1-1998
<PERIOD-END> DEC-31-1998
<CASH> 64,000
<SECURITIES> 0
<RECEIVABLES> 15,112,000
<ALLOWANCES> 313,000
<INVENTORY> 21,476,000
<CURRENT-ASSETS> 37,638,000
<PP&E> 38,773,000
<DEPRECIATION> (18,457,000)
<TOTAL-ASSETS> 61,891,000
<CURRENT-LIABILITIES> 26,111,000
<BONDS> 5,053,000
0
2,500,000
<COMMON> 2,421,000
<OTHER-SE> 37,473,000
<TOTAL-LIABILITY-AND-EQUITY> 61,891,000
<SALES> 24,516,000
<TOTAL-REVENUES> 22,129,000
<CGS> 19,955,000
<TOTAL-COSTS> 23,991,000
<OTHER-EXPENSES> 1,159,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,045,000
<INCOME-PRETAX> (4,066,000)
<INCOME-TAX> (1,322,000)
<INCOME-CONTINUING> (2,744,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,744,000)
<EPS-BASIC> (.09)
<EPS-DILUTED> (.09)
</TABLE>
