<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15 (d)
of the Securities Exchange Act of 1934
For the quarterly period ended: March 31, 1999 Commission File Number: 0-7916
-------------- ------
HARMON INDUSTRIES, INC.
-----------------------
(Exact name of registrant as specified in its charter)
Missouri 44-0657800
-------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1600 NE Coronado Drive, Blue Springs, Missouri 64014
---------------------------------------------- -----
(Address of principal executive offices) (Zip Code)
816-229-3345
------------
(Registrant's telephone number, including area code)
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 of Registrant's common stock outstanding as of March 31, 1999:
10,895,219
- ----------
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The Consolidated Statements of Earnings, Consolidated Balance Sheets,
Consolidated Statements of Cash Flows and Consolidated Statements of
Stockholders' Equity are unaudited, but reflect, in the opinion of
management, all adjustments necessary, all of which are considered normal and
recurring, to present fairly the financial position of the Company at March
31, 1999 and December 31, 1998 as well as the results of its operations for
the interim periods ended March 31, 1999 and March 31, 1998. The Consolidated
Balance Sheet as of December 31, 1998 is derived from the audited
Consolidated Balance Sheet as of that date.
2
<PAGE>
HARMON INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
FOR PERIODS ENDED MARCH 31, 1999 AND 1998
AMOUNTS IN THOUSANDS (EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
Three months ended March 31,
--------------------------------------------
1999 1998
------------------- -------------------
<S> <C> <C>
Net sales $58,953 $60,558
Cost of sales 45,034 46,014
Research and development expenditures 1,937 2,107
------------------- -------------------
Gross profit 11,982 12,437
Selling, general and administrative expenses 9,170 7,540
Amortization of cost in excess of fair value of net assets acquired 409 217
Miscellaneous (income) expense-net (118) 10
------------------- -------------------
Operating income 2,521 4,670
Interest expense (563) (304)
Investment income 63 36
------------------- -------------------
Earnings before income taxes 2,021 4,402
Income tax expense 818 1,590
------------------- -------------------
Net earnings $1,203 $2,812
------------------- -------------------
------------------- -------------------
Net earnings per common share:
Basic $0.11 $0.27
Diluted $0.11 $0.27
Shares used for computation:
Basic 10,732 10,481
Diluted 10,864 10,608
</TABLE>
3
<PAGE>
HARMON INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
IN THOUSANDS OF DOLLARS
<TABLE>
<CAPTION>
MARCH 31,
1999 DECEMBER 31,
(UNAUDITED) 1998
--------------------- -------------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $4,237 $1,669
Trade receivables, less allowance for doubtful accounts
of $326 in 1999 and $351 in 1998 58,322 52,229
Costs and estimated earnings in excess of billings on
uncompleted contracts 10,973 9,649
Inventories:
Work in process 5,410 6,372
Raw materials and supplies 40,712 36,640
--------------------- -------------------
46,122 43,012
Income tax receivable 261 597
Deferred tax asset 587 587
Prepaid expenses and other current assets 2,590 1,301
--------------------- -------------------
Total current assets 123,092 109,044
--------------------- -------------------
Property, plant and equipment, at cost:
Land 465 465
Buildings 11,729 11,671
Machinery and equipment 20,092 18,830
Office furniture and equipment 28,167 25,246
Transportation equipment 2,308 1,709
Leasehold improvements 4,155 3,938
--------------------- -------------------
66,916 61,859
Less accumulated depreciation and amortization 37,685 35,284
--------------------- -------------------
Net property, plant and equipment 29,231 26,575
Deferred tax asset 5,246 654
Cost in excess of fair value of net assets acquired, net of accumulated
amortization of $4,621 in 1999 and $4,212 in 1998 31,020 17,327
Deferred compensation asset 7,825 6,839
Other assets 2,828 2,414
--------------------- -------------------
$199,242 $162,853
--------------------- -------------------
--------------------- -------------------
<CAPTION>
MARCH 31,
1999 DECEMBER 31,
(UNAUDITED) 1998
-------------------- -------------------
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current debt installments $405 $280
Accounts payable 13,136 16,415
Accrued payroll, bonus and employee benefit plan contributions 7,236 13,342
Billings in excess of costs and estimated earnings on
uncompleted contracts 19,118 17,493
Other accrued liabilities 7,486 5,650
-------------------- -------------------
Total current liabilities 47,381 53,180
-------------------- -------------------
Deferred compensation liability 5,876 5,175
Other long-term liabilities 1,790 -
Long-term debt 54,891 19,540
-------------------- -------------------
Total liabilities 109,938 77,895
Stockholders' equity
Common stock of $.25 par value; authorized
50,000,000 shares, issued 10,895,219 in 1999
and 10,662,400 in 1998 2,724 2,666
Additional paid-in capital 30,733 27,457
Foreign currency translation (96) 127
Unearned compensation (255) (287)
Retained earnings 56,198 54,995
-------------------- -------------------
Total stockholders' equity 89,304 84,958
-------------------- -------------------
$199,242 $162,853
-------------------- -------------------
-------------------- -------------------
</TABLE>
4
<PAGE>
HARMON INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTH PERIODS ENDED MARCH 31, 1999 AND 1998
IN THOUSANDS OF DOLLARS
(UNAUDITED)
<TABLE>
<CAPTION>
MARCH 31, MARCH 31,
1999 1998
--------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $ 1,203 $ 2,812
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Depreciation and amortization 2,002 1,765
Earned stock compensation 64 --
Changes in assets and liabilities:
Trade receivables (1,095) (548)
Inventories (2,884) (2,173)
Estimated costs, earnings and billings on contracts (1,840) (1,398)
Prepaid expenses (1,140) (1,085)
Accounts payable (4,257) (2,971)
Accrued payroll and benefits (6,803) (4,347)
Current income taxes 336 1,166
Other accrued liabilities (577) (1,397)
Deferred compensation liability 701 411
--------- ---------
Total adjustments (15,493) (10,577)
--------- ---------
Net cash provided by (used in) operating activities (14,290) (7,765)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (2,568) (2,437)
Proceeds from sale of property, plant and equipment 5 --
Deferred compensation contributions (986) (725)
Acquisition of businesses (14,620) --
Other investing activities (414) (290)
--------- ---------
Net cash used in investing activities (18,583) (3,452)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock 284 37
Borrowings under line of credit agreements 46,586 21,683
Repayments under line of credit agreements (11,150) (15,595)
Principal payments of long-term debt (56) (186)
--------- ---------
Net cash (used in) provided by financing activities 35,664 5,939
--------- ---------
--------- ---------
Foreign currency translation adjustment (223) 61
--------- ---------
Net increase (decrease) in cash and cash equivalents 2,568 (5,217)
--------- ---------
Cash and cash equivalents at beginning of period 1,669 6,748
--------- ---------
Cash and cash equivalents at end of period $ 4,237 $ 1,531
--------- ---------
--------- ---------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest $ 734 $ 522
Income taxes $ 271 $ 743
Acquisition of business financed by issuance of common stock $ 3,018 --
</TABLE>
5
<PAGE>
HARMON INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
IN THOUSANDS OF DOLLARS
(UNAUDITED)
<TABLE>
<CAPTION>
Additional Foreign Total
Common Paid-in Currency Unearned Retained Stockholders' Comprehensive
Stock Capital Translation Compensation Earnings Equity Income
--------------------------------------------------------------------------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1997 2,609 24,514 104 (224) 42,759 69,762
---------------------------------------------------------------------------
Net earnings 2,812 2,812 $2,812
Common stock issued:
Acquisition of businesses 20 1,138 1,158
Stock options and other 1 36 37
Foreign currency translation 149 149 149
--------------
Comprehensive income $2,961
--------------------------------------------------------------------------- --------------
--------------
Balance at March 31, 1998 $2,630 $25,688 $253 ($224) $45,571 $73,918
---------------------------------------------------------------------------
Net earnings 4,602 4,602 $4,602
Cash dividends paid (580) (580)
Common stock issued:
Deferred compensation 7 7
Stock options and other 5 291 296
Foreign currency translation (115) (115) (115)
--------------
Comprehensive income $4,487
--------------------------------------------------------------------------- --------------
--------------
Balance at June 30, 1998 $2,635 $25,986 $138 ($224) $49,593 $78,128
--------------------------------------------------------------------------- --------------
--------------
Net earnings 2,468 2,468 $2,468
Common stock issued:
Deferred compensation 2 176 (70) 108
Stock options and other 1 24 25
Foreign currency translation 126 126 126
--------------
Comprehensive income $2,594
--------------------------------------------------------------------------- --------------
--------------
Balance at September 30, 1998 $2,638 $26,186 $264 ($294) $52,061 $80,855
---------------------------------------------------------------------------
Net earnings 3,520 3,520 $3,520
Cash dividends paid (586) (586)
Common stock issued:
Acquisition of businesses 24 976 1,000
Deferred compensation 7 7
Stock options and other 4 295 299
Foreign currency translation (137) (137) (137)
--------------
Comprehensive income $3,383
--------------------------------------------------------------------------- --------------
--------------
Balance at December 31, 1998 $2,666 $27,457 $127 ($287) $54,995 $84,958
---------------------------------------------------------------------------
Net earnings 1,203 1,203 $1,203
Common stock issued:
Acquisition of businesses 50 2,968 3,018
Deferred compensation 32 32
Stock options and other 8 308 316
Foreign currency translation (223) (223) (223)
--------------
Comprehensive income $ 980
--------------------------------------------------------------------------- --------------
--------------
Balance at March 31, 1999 $2,724 $30,733 ($96) ($255) $56,198 $89,304
---------------------------------------------------------------------------
---------------------------------------------------------------------------
</TABLE>
6
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS: THREE MONTHS ENDED MARCH 31, 1999
Harmon Industries, Inc. (`Harmon' or `the Company') recorded net sales for
the quarter of $59.0 million, a decrease of $1.6 million, or 2.7%, from the
first quarter of 1998. The decline in net sales is the result of decreased
sales in the international segment, principally as a result of a decrease in
shipments to a major customer of the Company's subsidiary in the United
Kingdom.
Gross profit for the quarter decreased by 3.7% to $12.0 million in 1999 from
$12.4 million in 1998. This decrease in gross profit was the result of the
decrease in net sales in the international segment and the impact of lower
gross profit margins domestically. The Company's consolidated gross profit
margin decreased to 20.3% from 20.5% in the prior year quarter. The decline
in gross profit margin is primarily the result of an increase in the sales
mix toward services, systems and pass-through sales. Research and
development expenditures (R&D) for the quarter decreased to $1.9 million
from $2.1 million in the same quarter one year ago as the Company began work
on recent orders for products that were previously under development. As a
result, R&D as a percent of net sales decreased to 3.3% in the first quarter
of 1999 from 3.5% in the first quarter of 1998.
Selling, general and administrative expenses (SG&A) were $9.2 million during
the 1999 quarter compared with $7.5 million during the prior year quarter.
Much of the increase in SG&A was represented by personnel and occupancy
expenses necessary to support the revenue growth experienced in 1998 and
planned for 1999. SG&A as a percent of net sales increased from 12.5% during
the 1998 quarter to 15.6% during the 1999 quarter as a result of higher
expense combined with lower sales.
Amortization expense increased to $409 thousand from $217 thousand in the
same quarter one year ago. This increase is attributable to the increase in
goodwill resulting from acquisitions during the twelve months ended March 31,
1999. The Company expects further increases in amortization expense in
subsequent quarters as a result of acquisitions completed in the first
quarter of 1999.
Net interest expense (interest expense less investment income) for the
quarter increased to $500 thousand from $268 thousand for the prior year
quarter as a result of higher borrowings required to support increased
working capital and to fund recent acquisitions. The Company expects similar
increases in interest expense for the remainder of 1999 as a result of
acquisitions completed in the first quarter of 1999.
The effective tax rate for the quarter increased to 40.5% in 1999 from 36.1% in
1998. This increase is due to anticipated higher state income taxes resulting
from several acquisitions.
Net income decreased 57.2% to $1.2 million from $2.8 million in the prior year
quarter. Diluted earnings per common share decreased 59.3% to $0.11 from $0.27.
7
<PAGE>
Orders for the Company's products and services during the quarter ended March
31, 1999 increased to $79.2 million from $77.5 million during the 1998
quarter. The Company's order backlog was a record $188.0 million at March 31,
1999 compared with $131.8 million at December 31, 1998 and $89.4 million one
year ago. The growth in backlog from December 31, 1998 to March 31, 1999 is
the result of orders exceeding shipments during the first quarter of 1999
combined with backlog obtained from three acquisitions during the quarter.
The Company manages its operations through two business segments: domestic
and international. Each unit sells train control and train signal products as
well as services to railroads and transit authorities. The international
business segment sells the Company's products and services outside the U.S.
The Company is reporting business segment information in accordance with the
provisions of Financial Accounting Standards No. 131, Disclosures about
segments of an Enterprise and Related Information which was issued in June
1997. Prior to a series of acquisitions and establishment of new foreign
subsidiaries, which occurred between 1995 and 1998, the Company had only one
business segment. Because of the desire to market its products and services
on a global scale, the Company began to manage its operations using the
domestic and international approach in fiscal year 1997. Harmon Industries
evaluates performance based upon net operating profit. Administrative
functions such as finance, treasury and information systems are centralized.
However, where applicable portions of the administrative function expenses
are allocated between the operating segments. The operating segments do not
share manufacturing or distribution facilities. In the event any materials
and/or services are provided to one operating segment by the other, the
transaction is valued according to the company's transfer policy, which
approximates market price. The costs of operating the manufacturing plants
are captured discretely within each segment. The Company's property, plant
and equipment, inventory and accounts receivable are captured and reported
discretely within each operating segment. Summary financial information for
the segments is as follows (dollars in thousands):
<TABLE>
<CAPTION>
Three months ended Three months ended
March 31, 1999 March 31, 1998
<S> <C> <C>
USA OPERATIONS
Net Sales 56,228 56,065
Operating Income/(Loss) 2,755 3,969
Assets 193,226 133,966
Accounts Receivable 54,345 43,866
Inventory 45,612 41,109
INTERNATIONAL OPERATIONS
Net Sales 2,725 4,493
Operating Income/(Loss) (234) 701
Assets 6,016 7,002
Accounts Receivable 3,977 3,251
Inventory 510 376
</TABLE>
8
<PAGE>
<TABLE>
<S> <C> <C>
CONSOLIDATED
Net Sales 58,953 60,558
Operating Income/(Loss) 2,521 4,670
Assets 199,242 140,968
Accounts Receivable 58,322 47,117
Inventory 46,122 41,485
</TABLE>
FINANCIAL CONDITION AT MARCH 31, 1999
At March 31, 1999, the Company had $39.1 million in liquidity. This consisted
of $4.2 million in cash and cash equivalents plus $34.9 million available
under bank lines of credit. The current ratio at March 31, 1999 was 2.60 to 1
compared to 2.05 to 1 at December 31, 1998 and 2.45 to 1 at March 31, 1998.
The increase in the current ratio from December 31, 1998 to March 31, 1999 is
principally the result of increases in accounts receivable and inventories,
primarily resulting from the acquisitions discussed below, combined with
decreases in trade accounts payable and accrued payroll, bonus and benefit
plan obligations from 1998 year-end levels. Cash used in operating activities
for the three months ended March 31, 1999 was $14.3 million compared to $7.8
million for the same period one year ago.
ACQUISITIONS
During the quarter ended March 31, 1999, the Company completed three
acquisitions.
On March 12, 1999, the Company acquired all of the issued and outstanding
stock of Syseca, Inc. (`Syseca'). Syseca is a leader in the design and
installation of operations control systems for the transportation and energy
markets. Its capabilities for the rail transportation industry include train
control, centralized traffic control, train movement planning, automatic
train supervision, supervisory control and data acquisition systems, network
optimization and automatic vehicle identification systems. Syseca has
locations in Marina del Rey, CA and Carrollton, TX.
On March 18, 1999, the Company acquired the business of DJR, Inc. (`DJR') of
Glenelg, MD. DJR installs and maintains products and equipment used on
railroads and by railroad-related industries. Its customers are located
throughout the mid-Atlantic region.
On March 25, 1999, the Company acquired the business of Golden Gate
Switchgear Co., Inc. (Golden Gate') of Napa, CA. Golden Gate is a
manufacturer of AC and DC switchgear for electrified rail and commercial
applications.
These acquisitions did not have a significant impact on the Company's
operating results during the quarter ended March 31, 1999.
9
<PAGE>
SUBSEQUENT EVENTS
On April 30, 1999, the Company acquired majority control of Angiolo Siliani
S.p.A. and Siliani Elettronica ed Impianti S.p.A. (collectively, `Siliani').
With locations in Florence and Genoa, Italy, Siliani was, prior to the
acquisitions, the largest independent Italian rail supply company with
revenues in excess of $30 million. The companies will be renamed Siliani
Harmon and will continue to operate in their primary markets of train control
and train inspection products and services.
YEAR 2000 ISSUE
Year 2000 issue or Y2k refers to the practice in many existing computer
programs that uses only the last two digits when designating a year.
Therefore, these programs cannot distinguish a year that begins with 19 from
a year that begins with 20. If not corrected, many computer applications
could fail or create erroneous results beginning January 1, 2000.
BACKGROUND
In 1997, the Company's Management Information Systems Steering Team developed
a long-range plan to consolidate substantially all of its domestic operations
onto a single computer operating system. The software vendor chosen was the
one that currently supplies the largest of the Company's three primary
operating systems. The benefits of this consolidation are increased
efficiency and uniformity throughout the Company, particularly in the areas
of manufacturing, inventory management and engineering, as well as achieving
Y2k compliance.
READINESS
PROJECT MANAGEMENT: To properly manage and coordinate the Company's Y2k
efforts, the Management Information Systems Steering Team, using a formal
team structure, appointed a Director of Y2k Compliance who is accountable to
the chief executive officer and executive staff for Y2k compliance. This
person supervises various sub-teams in the following areas:
SYSTEM Y2K COMPLIANCE: To achieve Y2k compliance, the Company completed one
systems upgrade in September 1998, one systems conversion in May 1999 and
will perform another upgrade in June 1999. An inventory of workstation
hardware identified over 300 personal computers that require installation of
Y2k compliant systems boards. These boards are scheduled to be installed by
September 1999.
PRODUCT Y2K COMPLIANCE: A review by the Company of the products it sells has
thus far identified a minimal number of areas of Y2k non-compliance. One area
involves a vendor-supplied operating system. The Company is currently
awaiting a proposed solution from the manufacturer. An installed base of
fewer than ten is affected by this issue. All customers have been informed of
this problem and are being kept up-to-date with the progress. Another
potential issue involves a clock chip that the Company has been informed is
not Y2k compliant. The Company is conducting a review to determine if and
when this component may have been used in any of its products. Additional
product modifications may be necessary following completion of tests which
are in progress by certain customers. The Company believes that none of the
Y2k issues described above, if not corrected, would jeopardize the systems of
any of its customers or
10
<PAGE>
the safety of the public at large. While final action plans are not yet
complete, the Company does not believe the costs necessary to achieve Y2k
compliance for its products will be material to the Company's financial
statements on a consolidated basis.
SUPPLIER Y2K COMPLIANCE: The Company is nearing completion of a survey of all
significant vendors to determine if the Company's operations could be
materially impacted by the failure of key vendors to achieve Y2k compliance.
The next step is to determine which vendor responses require follow-up or
audit. Where necessary, alternate suppliers or other contingency plans are
scheduled to be finalized by September 1999.
FACILITY Y2K COMPLIANCE: The Company is presently testing manufacturing and
production equipment, telephone systems, security systems, and other
peripheral devices associated with the Company's facilities for Y2k
compliance.
CUSTOMER AND INVESTOR REQUESTS FOR Y2K COMPLIANCE INFORMATION: The Company
has designated two members of senior management as points of contact for Y2k
compliance information requests from external constituents; one for customers
and one for current and prospective shareholders.
COSTS
As discussed above, Y2k compliance is one of two benefits achieved by the
Company's upgrade and conversion efforts. While the Company is monitoring the
costs of these projects against established budgets, it is not possible to
allocate these costs between the two objectives; the benefits of a common
operating system and the requirement for Y2k compliance. The Company incurred
operating expenses of approximately $1.1 million in 1998 and has budgeted
operating expenses of $1.1 million in 1999. These costs will be funded by cash
flow from operations.
RISKS
The Company's primary Y2k risks are in the timing of the conversion and upgrade
planned for 1999 and the potential for failure of key vendors to achieve Y2k
compliance. Operations of the Company's Riverside, CA location could be impacted
if the upgrade is not completed by the time it is necessary to enter dates
beyond December 31, 1999. The Company believes the impact of Y2k non-compliance
at this location would be limited to decreased productivity and the substitution
of manual processes for certain automated ordering and planning processes. The
evaluation of the Company's exposure resulting from non-compliance by key
vendors is in process and the impact, if any, is therefore not yet known.
CONTINGENCY PLANS
The Company is upgrading the operating system at its Riverside, CA location
to be Y2k compliant to minimize the chance of any disruptions in production
if the conversion of that location to the chosen common operating system is
delayed. The Company is also identifying alternative suppliers for certain
critical components.
11
<PAGE>
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
<TABLE>
<CAPTION>
Exhibit
Number Exhibit Page(s)
------- ------- -------
<S> <C> <C>
11 Computation of per share earnings 13
27 Financial Data Schedule 14
</TABLE>
(b) Reports on Form 8-K:
On March 29, 1999, the Company filed a report on Form 8-K containing Item 2,
Acquisition or Disposition of Assets, to report the acquisition of Syseca,
Inc. on March 12, 1999.
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.
HARMON INDUSTRIES, INC.
<TABLE>
<CAPTION>
<S> <C>
Date: May 17, 1999 /s/Bjorn E. Olsson
----------------------------------------
Bjorn E. Olsson,
President and Chief Executive Officer
Date: May 17, 1999 /s/Charles M. Foudree
-------------------------------------
Charles M. Foudree,
Executive Vice President-Finance
Date: May 17, 1999 /s/Stephen L. Schmitz
--------------------------------------
Stephen L. Schmitz,
Vice President-Controller
</TABLE>
12
<PAGE>
Exhibit 11
Harmon Industries, Inc.
Form 10-Q
Computation of Per Share Earnings
(in thousands, except earnings per share)
<TABLE>
<CAPTION>
Three Months ended March 31,
-------------------------------------------
1999 1998
---- ----
<S> <C> <C>
Basic:
Net earnings $ 1,203 $ 2,812
----------------- ------------------
----------------- ------------------
Weighted average shares outstanding 10,744 10,493
Shares representing unearned compensation (12) (12)
----------------- ------------------
Total 10,732 10,481
----------------- ------------------
----------------- ------------------
Basic earnings per share $ 0.11 $ 0.27
----------------- ------------------
----------------- ------------------
Diluted:
Net earnings $ 1,203 $ 2,812
----------------- ------------------
----------------- ------------------
Weighted average shares outstanding 10,744 10,493
Shares representing unearned compensation (12) (12)
Equivalent shares under option plans 132 127
----------------- ------------------
Total 10,864 10,608
----------------- ------------------
----------------- ------------------
Diluted earnings per share $ 0.11 $ 0.27
----------------- ------------------
----------------- ------------------
</TABLE>
13
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 4,237
<SECURITIES> 0
<RECEIVABLES> 58,648
<ALLOWANCES> (326)
<INVENTORY> 46,122
<CURRENT-ASSETS> 123,092
<PP&E> 66,916
<DEPRECIATION> (37,685)
<TOTAL-ASSETS> 199,242
<CURRENT-LIABILITIES> 47,381
<BONDS> 54,891
0
0
<COMMON> 2,724
<OTHER-SE> 86,580
<TOTAL-LIABILITY-AND-EQUITY> 199,242
<SALES> 58,953
<TOTAL-REVENUES> 58,953
<CGS> 46,971
<TOTAL-COSTS> 46,971
<OTHER-EXPENSES> 9,579
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 563
<INCOME-PRETAX> 2,021
<INCOME-TAX> 818
<INCOME-CONTINUING> 1,203
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,203
<EPS-PRIMARY> 0.11
<EPS-DILUTED> 0.11
</TABLE>
