<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OR THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 27, 1997
Commission File Number 1-4289
GTI CORPORATION
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 05-0278990
- ------------------------------- ----------------------------------
(State or other jurisdiction of I.R.S. Employer Identification No.
incorporation or organization)
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 [ ]
As of November 7, 1997, the Registrant had one class of Common Stock, at a par
value of $.04 per share, with 8,973,475 shares outstanding.
This Report on From 10-Q contains 13 pages.
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INDEX
GTI CORPORATION
<TABLE>
<CAPTION>
Page
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<S> <C>
PART I - FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS (UNAUDITED)
Condensed consolidated statements of operations for the three and nine
months ended September 27, 1997 and for the three and nine months 3
ended September 28, 1996
Condensed consolidated balance sheets as of September 27, 1997 and December 4
31, 1996
Condensed consolidated statements of cash flows for the nine months ended
September 27, 1997 and September 28, 1996 5
Notes to condensed consolidated financial statements 6
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 8
PART II - OTHER INFORMATION
ITEM 4: SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS 12
ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K 12
SIGNATURE 13
</TABLE>
2
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GTI CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
For the three months ended For the nine months ended
---------------------------------------- ---------------------------------------
September 27, 1997 September 28, 1996 September 27, 1997 September 28, 1996
------------------ ------------------ ------------------ ------------------
<S> <C> <C> <C> <C>
Sales $ 19,130 $ 20,560 $ 64,534 $ 70,195
Cost of sales 15,285 17,932 48,302 57,949
-------- -------- -------- --------
Gross profit 3,845 2,628 16,232 12,246
Operating expenses 5,450 6,883 16,817 20,202
-------- -------- -------- --------
Operating profit (loss) (1,605) (4,255) (585) (7,956)
Loss on sale of securities -- -- 672 --
Other expenses 167 36 339 125
-------- -------- -------- --------
Income (loss) from continuing operations
before income taxes (1,772) (4,291) (1,596) (8,081)
Provision (benefit) for income taxes (277) (100) -- (1,050)
-------- -------- -------- --------
Loss from continuing operations (1,495) (4,191) (1,596) (7,031)
Loss from discontinued operations,
net of income taxes -- (936) -- (2,499)
-------- -------- -------- --------
Net loss $ (1,495) $ (5,127) $ (1,596) $ (9,530)
======== ======== ======== ========
Net loss per share of common stock
and common stock equivalents:
Continuing operations $ (0.17) $ (0.47) $ (0.20) $ (0.81)
Discontinued operations -- (0.11) -- (0.28)
-------- -------- -------- --------
Net loss $ (0.17) $ (0.58) $ (0.20) $ (1.09)
======== ======== ======== ========
Weighted average number of common shares
and common stock equivalents 8,973 8,973 8,973 8,973
======== ======== ======== ========
</TABLE>
The accompanying notes are an integral part of these condensed
consolidated financial statements.
3
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GTI CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
September 27, 1997
(Unaudited) December 31, 1996
------------------- -----------------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 8,650 $ 3,219
Accounts receivable, net 12,019 11,502
Inventories, net 25,915 18,551
Prepaid expenses and other 2,618 6,802
Net assets of discontinued operations 200 11,637
-------- --------
Total current assets 49,402 51,711
Property, plant and equipment, net 15,816 15,974
Goodwill and other assets 22,003 23,839
-------- --------
$ 87,221 $ 91,524
======== ========
Current liabilities:
Accounts payable, accrued and other liabilities $ 15,560 $ 17,298
Short-term borrowings 2,500 4,900
Current portion of long-term debt due to affiliate 1,250 --
-------- --------
Total current liabilities 19,310 22,198
Long-term debt due to affiliate, net of current portion 625 --
Deferred income taxes and other liabilities 1,911 2,176
Stockholders' equity:
Preferred stock, $35.00 cumulative convertible,
8,110 shares issued and outstanding 8,110 8,110
Common stock, 8,973,475 shares issued and oustanding 359 359
Additional paid in capital 44,082 44,082
Retained earnings 12,835 14,644
Cumulative translation adjustment (11) (45)
-------- --------
Total stockholders' equity 65,375 67,150
-------- --------
$ 87,221 $ 91,524
======== ========
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
4
<PAGE> 5
GTI CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
For the nine months ended
--------------------------------------
September 27, 1997 September 28, 1996
------------------ ------------------
<S> <C> <C>
Cash flows from operating activities:
Loss from continuing operations $ (1,596) $ (7,031)
Adjustments:
Depreciation and amortization 4,021 3,611
Loss on sale of securities 672 --
Change in assets and liabilities:
Accounts receivable (517) 10,498
Inventories (7,364) 11,644
Prepaid expenses and other 4,184 (162)
Accounts payable, accrued and other liabilities (1,738) (10,901)
Other 880 (1,288)
-------- --------
Net cash flow provided (used) by continuing operations (1,458) 6,371
Net operating cash flow used by discontinued operations (701) (3,464)
-------- --------
Net cash provided (used) by operating activities (2,159) 2,907
-------- --------
Cash flows from investing activities:
Purchases of property, plant and equipment (3,172) (3,320)
Proceeds from sale of discontinued operations 11,466 2,412
-------- --------
Net cash provided (used) by investing activities 8,294 (908)
-------- --------
Cash flows from financing activities:
Proceeds from (repayment of) line of credit, net (2,400) (507)
Proceeds from long-term debt due to affiliate,
net of repayments 1,875 --
Preferred stock cash dividend (213) (213)
-------- --------
Net cash provided (used) by financing activities (738) (720)
-------- --------
Net change in cumulative translation adjustment 34 (82)
-------- --------
Net increase (decrease) in cash and cash equivalents 5,431 1,197
Cash and cash equivalents - beginning of period 3,219 2,553
-------- --------
Cash and cash equivalents - end of period $ 8,650 $ 3,750
======== ========
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
5
<PAGE> 6
GTI CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
NOTE 1: BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements reflect
the accounts of GTI Corporation (the "Company"), together with its
majority-owned subsidiaries. All significant intercompany transactions and
balances have been eliminated.
These unaudited condensed consolidated financial statements have been prepared
pursuant to the rules and regulations of the Securities and Exchange Commission.
Certain information and disclosures normally included in annual financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to those rules and regulations, although
the Company believes that the disclosures made are adequate to prevent the
information from being misleading. These unaudited condensed consolidated
financial statements reflect, in the opinion of management, all adjustments
(which include only normal recurring adjustments) necessary to fairly present
the results of operations and financial position as of the dates and for the
periods presented. These unaudited condensed consolidated financial statements
should be read in conjunction with the audited financial statements and related
notes included in the Company's Form 10-K filed with the Securities and Exchange
Commission for the year ended December 31, 1996. The results for the interim
periods presented are not necessarily indicative of results to be expected for a
full year.
Certain prior-year amounts have been reclassified to conform to current-year
presentation.
NOTE 2: SUPPLEMENTAL STATEMENTS OF CASH FLOWS DISCLOSURE
Supplemental cash flow information (unaudited) for the nine months ended
September 27, 1997 and September 28, 1996 are summarized as follows:
<TABLE>
<CAPTION>
For the nine months ended
--------------------------------------
September 27, 1997 September 28, 1996
------------------ ------------------
<S> <C> <C>
Interest paid $ 208 $ 251
====== ======
Income taxes paid $1,085 $2,813
====== ======
</TABLE>
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NOTE 3: INVENTORIES
Inventories, stated at the lower of cost (first in, first out) or market, are
summarized as follows:
<TABLE>
<CAPTION>
September 27, 1997
(Unaudited) December 31, 1996
------------------ ------------------
<S> <C> <C>
Raw materials $ 9,614 $ 5,891
Work in process 3,943 3,748
Finished goods 12,358 8,912
------- -------
Total inventories $25,915 $18,551
======= =======
</TABLE>
NOTE 4: DUE TO AFFILIATES
In February 1997, the Company entered into a $2.5 million Note Purchase
Agreement with Telemetrix PLC (the Company's majority shareholder) and a related
Common Stock Purchase Warrant Agreement as more fully described in the Company's
Annual Report on Form 10-K for the year ended December 31, 1996. In August 1997,
in accordance with the Agreement, the Company made the first installment payment
on the Note.
NOTE 5: DISCONTINUED OPERATION
In April 1997, the Company divested its interest in its Promptus subsidiary as
described more fully in the Form 8-K filed with the Securities and Exchange
Commission on May 13, 1997. In the quarter ended June 28, 1997, the Company
incurred a $672 loss on the liquidation of the VideoServer shares received in
connection with the Promptus divestiture, resulting from the decline in value of
VideoServer from the Promptus divestiture date to the date the Company was able
to liquidate the VideoServer shares. This $672 loss was recorded in continuing
operations.
NOTE 6: EARNINGS PER SHARE
Primary and fully diluted earnings per share are identical for all periods
presented.
For interim and annual periods ending after December 15, 1997, the Company will
adopt Statement of Financial Accounting Standards No. 128 ("SFAS 128"), Earnings
Per Share, which sets forth the basis for the computation of "basic" earnings
per share and "dilutive" earnings per share from the previous method of
computing both "primary" and "fully dilutive" earnings per share under
Accounting Principles Board Opinion No. 15 ("APB No. 15"), Earnings Per Share.
Early implementation of SFAS 128 is not permitted. The earnings per share
figures for the periods presented in this Form 10-Q are not materially different
from the amounts that would have been calculated using SFAS 128.
In loss periods, such as those presented in this Form 10-Q, the Company's
preferred stock is assumed not converted and the related preferred stock
dividends are added to the loss for purposes of the loss per share calculation.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
This Form 10-Q contains certain statements of a forward-looking nature relating
to future events or the future performance of the Company. Existing and
prospective investors are cautioned that such statements are only predictions
and that actual events or results may differ materially. In evaluating such
statements, such investors should specifically consider various factors,
including risks and uncertainties, identified in the Company's Annual Report on
Form 10-K for the year ended December 31, 1996 and other filings with the
Securities and Exchange Commission which could cause actual results to differ
materially from those indicated by such forward-looking statements. Risks and
uncertainties include, but are not limited to, possible declines in market
growth rates, dependence on key customers, possible failure of product
development activities, the development of alternative technologies by
competitors of the Company or its customers, price pressures and other
competitive factors, and volatility in the market for the Company's products.
Management's discussion and analysis of financial condition and results of
operations should be read in conjunction with the condensed consolidated
financial statements and notes to condensed consolidated financial statements
included elsewhere herein.
Figures are expressed in thousands, except per share amounts.
RESULTS OF OPERATIONS
Three months ended September 27, 1997 compared to three months ended September
28, 1996
Revenues declined by $1,430 or 7.0% to $19,130 in the third quarter ended
September 27, 1997 from $20,560 in the comparable quarter in 1996. This decrease
resulted from an approximate 18.6% decrease in average selling prices (including
the effects of changes in mix), offset somewhat by an approximate 14.3% increase
in unit volume. Management attributes the decrease in average selling prices to
the competitive pressures caused by downward pressures on prices in the market
for networking products for which the Company provides components. The decrease
in average selling prices also resulted from a greater current-quarter mix of
lower-priced components for telecommunications markets. The 14.3% increase in
unit volume generally resulted from growth in the overall market for networking
products, improved quality in the Company's products, and initial successes in
telecommunications markets.
In the quarter ended September 27, 1997, three of Valor's customers, each
individually accounting for more than 10% of Valor's sales, collectively
accounted for 43.9% of total sales. In the comparable quarter of the prior year,
two of Valor's customers, each individually accounting for more than 10% of
Valor's sales, collectively accounted for 31.2% of total sales. Valor's sales in
the current and prior quarter, respectively. The sales percentage from Valor's
OEM customers has historically fluctuated and may continue to vary in future
periods. Management believes that future sales concentration to these customers
is likely to continue; consequently, such concentration may adversely affect
both average selling prices and future sales growth.
Valor's backlog at September 27, 1997, was approximately $8,300 compared to
approximately $14,600 at September 28, 1996. The Company's backlog at the
beginning of each quarterly period is not sufficient to achieve anticipated
revenues for the quarter. As a result, the Company's sales for any quarterly
period are dependent upon obtaining "turns business" (i.e., orders received in a
quarter for shipment within the same quarter). Further, current trends are
towards a greater dependence on turns business as the Company's customers demand
shorter lead times and provide fewer long-term orders. Management expects this
trend to continue. If turns business does not materialize, the Company's
operating results will be adversely
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affected. The Company's future performance on a quarter-to-quarter basis will be
heavily affected by the volume, mix and timing of orders received.
Until 1997, the Company depended almost entirely on sales to the local area
network (LAN) market. Beginning in 1997, the Company has attempted to increase
its served market through the development and sales of products for the
telecommunications market. Especially considering the intense price competition
within these markets, the Company's future success will depend heavily on its
ability to continue to develop new products for new markets, to increase sales
volumes, and to decrease costs.
Cost of sales decreased $2,647 or 14.8% from $17,932 (87.2% of revenue) in the
third quarter of 1996 to $15,285 (79.9% of revenue) in the third quarter of
1997. This decrease is primarily due to reduced manufacturing overhead costs
resulting primarily from the Company's July 1996 restructuring of its Asia
manufacturing operations. The decreased cost of sales in the current quarter
also resulted from decreased provisions for excess and obsolete inventories.
Gross profit increased $1,217 or 46.3% from $2,628 in the third quarter of 1996
to $3,845 for the comparable quarter in 1997. Gross profit as a percent of sales
increased from 12.8% to 20.1%. These improved margins resulted from the
decreased overhead and obsolescence costs and increased volume, which positive
factors more than offset the decreased average selling prices. Nevertheless,
based on Valor's current fixed-cost structure, if future volumes manufactured
are significantly less than anticipated, the actual cost per unit and gross
profit could be materially and adversely affected.
Operating expenses for the third quarter of 1997 decreased by $1,433 or 20.8%
from $6,883 (33.5% of sales) in the third quarter of 1996 to $5,450 (28.5% of
sales) for the comparable quarter of 1997. The prior-year quarter included a
$1,900 charge related to the reorganization of the Company's Asia manufacturing
operations and a $221 charge related to employee severance. Absent these
prior-quarter costs, operating expenses increased $688 or 14.4% primarily as a
result of increased sales and marketing expenditures.
Other expenses for the third quarter of 1997 increased $131 from $36 in the
comparable quarter of the prior year to $167 in the current quarter. This
increase is primarily due to increased interest expense associated with
increased borrowings.
The Company's tax provision (benefit) related to continuing operations was
($277) for the third quarter of 1997 compared to ($100) for the comparable
quarter of the prior year. These benefits are disproportionate to the related
loss from continuing operations because of potential uncertainties related to
the realization of the Company's net operating loss and capital loss
carryforwards.
The increase in gross profit and the decreases in operating expenses and other
expenses resulted in a loss from continuing operations for the third quarter of
1997 of $1,495 or $0.17 per share. This compares to a loss from continuing
operations of $4,191 or $0.47 per share in the comparable quarter of the prior
year. Including the effects of discontinued operations in the third quarter of
1996, the net loss decreased $3,632 from $5,127 or $0.58 per share in the prior
quarter to $1,495 or $0.17 per share in the current quarter.
Nine months ended September 27, 1997 compared to the nine months ended September
28, 1996
Revenues decreased $5,661 or 8.1% from $70,195 in the nine months ended
September 28, 1996 to $64,534 in the nine months ended September 27, 1997. This
decrease in sales resulted from an approximate 15.4% decrease in average selling
prices (including the effects of changes in mix), offset somewhat by an
approximate 9.3% increase in unit volume. Management attributes the decrease in
average selling prices to the competitive pressures caused by downward pressures
on prices in the market for networking products for which the Company provides
components. The decrease in average selling prices also resulted from a greater
current-period mix of lower-priced components for telecommunications markets.
The 9.3% increase in unit volume generally resulted from growth in the overall
market for
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networking products, improved quality in the Company's products, and initial
successes in telecommunications markets.
Cost of sales decreased $9,647 or 16.6% from $57,949 (82.6% of revenue) in the
nine month period of 1996 to $48,302 (74.8% of revenue) during the same period
of 1997. This decrease is primarily due to decreased manufacturing overhead
costs resulting from the Company's July 1996 restructuring of its Asia
manufacturing operations. The decreased cost of sales also resulted from
decreased provisions for excess and obsolete inventories and a prior-period
provision of $760 for planned process and design engineering changes.
Gross profit increased $3,986 or 32.5% from $12,246 (17.4% of revenue) in the
nine month period of 1996 to $16,232 (25.2% of revenue) in the same period in
1997. These improved margins resulted from the decreased overhead, process
change and obsolescence costs, which positive factors more than offset the
decreased average selling prices.
Operating expenses for the nine month period of 1997 decreased by $3,385 or
16.8% from $20,202 (28.8% of revenue) in the nine month period of 1996 to
$16,817 (26.1% of revenue) for the comparable period in 1997. The prior year
period included a $1,900 charge related to the restructuring of the Company's
Asia operations, a $650 charge related to a litigation matter, and an $871
charge related to employee severance. Absent these prior period costs, operating
expenses increased $36 or 0.2% primarily as a result of increased sales and
marketing expenditures.
Other expenses for the nine-month period of 1997 increased $886 from $125 to
$1,011. In the current period, the Company incurred a $672 loss on the
liquidation of the VideoServer shares received in connection with the Promptus
divestiture. The remaining increase in other expenses is primarily due to
increased interest expense associated with increased borrowings.
The Company's tax provision (benefit) related to continuing operations was $0
for the nine month period of 1997 compared to ($1,224) for the comparable period
of the prior year. These amounts are disproportionate to the related loss from
continuing operations because of potential uncertainties related to the
realization of the Company's net operating loss and capital loss carryforwards.
The increase in gross profit and the decrease in operating expenses, offset by
the loss on the VideoServer securities and the increase in other expenses,
resulted in a loss from continuing operations for the nine month period of 1997
of $1,596 or $0.20 per share. This compares to a loss from continuing operations
of $7,031 or $0.81 per share in the comparable nine month period of the prior
year. Including the effects of discontinued operations in the prior period of
1996, the net loss decreased $7,934 from $9,530 ($1.09 per share) in the prior
period to $1,596 ($0.20 per share) in the nine month period of 1997.
LIQUIDITY AND CAPITAL RESOURCES
For the nine month period ended September 27, 1997 the Company satisfied its
working capital and capital expenditure requirements through borrowings from a
related party, the proceeds from the disposal of Promptus, and internally
generated cash from operations (net income before depreciation and
amortization). The Company's primary uses of these available funds were to add
equipment, increase inventories, reduce accounts payable, and reduce line of
credit borrowings. These sources and uses of cash are detailed in the Statement
of Cash Flows included elsewhere in this Form 10-Q.
For the nine month period ended September 27, 1997, the Company's inventories
increased by about $7,400. This increase resulted, in part, from current period
sales levels being lower than anticipated in the Company's production plan. The
increase in inventory also resulted from management's strategy to increase
inventory levels in order to meet the delivery timing and safety stock levels
expected by customers. Management expects inventory to decrease in the fourth
quarter of 1997, but there can be no
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assurance that such decrease will occur, and there can be no assurance that the
Company's inventory will be sold at the prices or margins experienced in recent
periods. If orders do not materialize, and if inventory levels continue to rise,
the Company's financial position would be adversely effected.
In February 1997, the Company obtained a $2.5 million two year term note from
its majority shareholder as more fully described in the Company's 1996 Annual
Report. The first payment on this note of $625 plus interest was paid in August
1997.
In April 1997, the Company completed the divestiture of its interest in Promptus
Communications, Inc. The Company received approximately $8.2 million in cash,
net of transaction costs, and 157,795 shares of VideoServer (NASDAQ: VSVR)
common stock. Through September 1997, the Company has sold approximately 140,000
of these shares for total proceeds of about $1.5 million. The remaining shares
will be sold within the next year.
The Company has a line of credit agreement with a bank that expires on December
31, 1997. The total amount available under this line is $6,000, subject to the
balance of eligible domestic accounts receivable (as defined). As of September
27, 1997, maximum available borrowings were approximately $4,200 of which $2,500
was outstanding. This outstanding balance was repaid in full in October 1997
from the proceeds of the tax refund described below. Interest on the line of
credit accrues at prime plus one and one-quarter percent, and outstanding
borrowings are collateralized by substantially all of the Company's domestic
assets. As of September 27, 1997 the Company was in violation of certain
inventory level and profitability covenants contained in the line of credit
agreement. Management expects that these violations will be waived by the bank,
and that the line will be renewed beyond December 31, 1997. However, there can
be no assurance that the waivers or extension will be obtained. If the bank
terminates the line of credit, the Company's available liquidity would be
adversely effected.
In September 1997, the Company received a Federal tax refund of approximately
$3,500 resulting from the carryback of the 1996 U.S. operating loss and 1995
U.S. capital loss to prior profitable periods. The Company is now in a Federal
tax loss carryforward position, and no further refunds are available. The
Company's 1996 and prior years Federal tax returns are subject to audit, and
there can be no assurance that such audits will not result in adjustments to the
Company's tax position.
During the first nine months of 1997, the Company purchased capital equipment
approximating $3,200. These expenditures were primarily for production equipment
and information systems. The Company anticipates that capital expenditures will
total about $5 million per year for the foreseeable future. These capital
expenditures are anticipated to be primarily for automation equipment to further
improve quality and manufacturing labor efficiency. The Company's capital
expenditure estimates assume that future additional capacity needs, if any, are
realized through expansion in subcontractor relationships, requiring a
relatively low level of capital expenditure. The Company anticipates that most
of its capital expenditures for the foreseeable future will be funded through
cash on hand, cash generated from operations or available borrowings under its
line of credit (assuming the line is renewed or replaced).
Management believes that funds on hand, funds generated by operations, and funds
available through its line of credit (assuming the line is renewed or replaced)
will be sufficient to finance working capital needs, projected
capital-expenditure requirements and debt maturities at least through the next
twelve months.
11
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PART II - OTHER INFORMATION
ITEM 4. Submission of Matters to a Vote of Security Holders
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits
Exhibit 27 - Financial Data Schedule
b) Reports on Form 8-K
None.
12
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
GTI CORPORATION
(Registrant)
Date: November 7, 1997 By: /s/ Bruce C. Myers
--------------------
Bruce C. Myers
Vice President Finance and
Treasurer (Principal Financial
and Accounting Officer)
13
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-27-1997
<CASH> 8,650
<SECURITIES> 0
<RECEIVABLES> 12,019
<ALLOWANCES> 0
<INVENTORY> 25,915
<CURRENT-ASSETS> 49,402
<PP&E> 15,816
<DEPRECIATION> 0
<TOTAL-ASSETS> 87,221
<CURRENT-LIABILITIES> 19,310
<BONDS> 625
0
8,110
<COMMON> 359
<OTHER-SE> 56,906
<TOTAL-LIABILITY-AND-EQUITY> 87,221
<SALES> 64,534
<TOTAL-REVENUES> 64,534
<CGS> 48,302
<TOTAL-COSTS> 16,817
<OTHER-EXPENSES> 672
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 339
<INCOME-PRETAX> (1,596)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,596)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,596)
<EPS-PRIMARY> (0.20)
<EPS-DILUTED> (0.20)
</TABLE>
