UNITED STATES
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 January 29, 1995
Commission File Number 0-5411
HERLEY INDUSTRIES, INC.
-----------------------------------------------------
(Exact Name of Registrant as specified in its Charter)
DELAWARE #23-2413500
- -------------------------------- ------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
10 Industry Drive, Lancaster, Pennsylvania 17603
- ------------------------------------------- ---------------
(Address of Principal Executive Offices) (Zip Code)
(717) 397-2777
- -----------------------------------------------------------------
(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.
[X] Yes [ ] No
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
March 13, 1995 3,615,815
- --------------------------- -------------------
(Date) (Number of Shares)
<PAGE> 2
HERLEY INDUSTRIES, INC
AND SUBSIDIARIES
INDEX TO FORM 10-Q
--------------------------
For the Quarter Ended January 29, 1995
PART I - FINANCIAL INFORMATION PAGE
Item 1 - Financial Statements:
Consolidated Balance Sheets -
January 29, 1995 and January 30, 1994 3-4
Consolidated Statements of Operations -
For the thirteen and twenty-six weeks ended
January 29, 1995 and January 30, 1994 5-6
Consolidated Statements of Cash Flows -
For the thirteen and twenty-six weeks ended
January 29, 1995 and January 30, 1994 7-8
Notes to Consolidated Financial Statements 9
Item 2 - Management's Discussion and Analysis of
Financial Condition and Results of Operations 12
PART II - OTHER INFORMATION 14
Signatures 16
Computation of per share earnings 17
<PAGE> 3
HERLEY INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
January 29, 1995 July 31, 1994
(Unaudited) (Audited)
----------- ---------
ASSETS
Current Assets:
Cash and cash equivalents $ 368,946 $ 539,729
Accounts receivable 3,190,392 4,940,304
Other receivables 155,582 300,037
Inventories 8,910,562 9,938,190
Prepaid expenses and other 363,860 252,666
---------- ----------
Total Current Assets 12,989,342 15,970,926
Property, Plant and Equipment, net 14,700,021 15,542,245
Intangibles, net of amortization 4,988,386 5,124,436
Available-for-sale Securities 5,583,758 11,895,084
Other Investments 3,727,506 3,727,506
Note Receivable - 1,000,000
Deferred Income Taxes 1,209,091 860,211
Other Assets 472,329 492,257
---------- ----------
$ 43,670,433 $ 54,612,665
========== ==========
The accompanying notes are an integral part of these financial statements.
<PAGE> 4
HERLEY INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (CONTINUED)
January 29, 1995 July 31, 1994
(Unaudited) (Audited)
----------- ---------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Current portion of long-term debt $ 390,997 $ 552,311
Accounts payable and accrued expenses 4,707,184 6,489,039
Reserve for contract losses 325,000 500,000
Advance payments on contracts 1,517,601 2,513,705
Income taxes payable 63,787 162,543
---------- ----------
Total Current Liabilities 7,004,569 10,217,598
Long-term Debt 9,482,867 14,822,834
Deferred Income Taxes 1,384,928 1,291,095
---------- ----------
17,872,364 26,331,527
---------- ----------
Commitments and Contingencies
Shareholders' Equity:
Common stock, $.10 par value; authorized
10,000,000 shares; issued 3,615,815 at
January 29, 1995 and 4,278,189 at
July 31 1994. 361,582 427,819
Additional paid-in capital 15,301,806 17,989,374
Retained earnings 10,213,209 10,510,682
---------- ----------
25,876,597 28,927,875
Less:
Unrealized loss on available-for-sale
securities 78,528 201,117
Treasury stock at cost - 445,620
---------- ----------
Total Shareholders' Equity 25,798,069 28,281,138
---------- ----------
$ 43,670,433 $ 54,612,665
========== ==========
The accompanying notes are an integral part of these financial statements.
<PAGE> 5
HERLEY INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
Thirteen weeks ended
--------------------
January 29, 1995 January 30, 1994
---------------- ----------------
Net sales $ 5,505,361 $ 7,638,727
---------- ----------
Cost and expenses:
Cost of products sold 4,325,642 4,513,317
Selling and administrative expenses 1,557,201 2,246,325
---------- ----------
5,882,843 6,759,642
---------- ----------
Operating income (loss) (377,482) 879,085
---------- ----------
Other income (expense):
Gain (loss)on sale of marketable
securities (339,098) 37,087
Dividend and interest income 230,600 209,635
Other income - 66,394
Interest expense (236,576) (314,709)
---------- ----------
(345,074) (1,593)
---------- ----------
Income (loss) before income taxes (722,556) 877,492
Provision for income taxes (241,000) 230,000
---------- ----------
Net income (loss) $ (481,556) $ 647,492
========== ==========
Earnings (loss) per common and common
equivalent share $(0.12) $ 0.15
===== =====
Weighted average number of common and
common equivalent shares outstanding 3,886,040 4,333,574
========= =========
The accompanying notes are an integral part of these financial statements.
<PAGE> 6
HERLEY INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
Twenty-six weeks ended
----------------------
January 29, 1995 January 30, 1994
---------------- ----------------
Net sales $ 11,803,970 $ 15,441,885
---------- ----------
Cost and expenses:
Cost of products sold 8,967,330 9,899,646
Selling and administrative expenses 2,785,295 3,899,187
---------- ----------
11,752,625 13,798,833
---------- ----------
Operating income 51,345 1,643,052
---------- ----------
Other income (expense):
Gain (loss) on sale of marketable
securities (529,726) 116,091
Dividend and interest income 468,334 415,251
Other income - 139,641
Interest expense (523,426) (626,258)
---------- ----------
(584,818) 44,725
---------- ----------
Income (loss) before income taxes (533,473) 1,687,777
Provision for income taxes (236,000) 404,000
---------- ----------
Net income (loss) $ (297,473) $ 1,283,777
========== ===========
Earnings (loss) per common and common
equivalent share $(0.07) $ 0.30
===== =====
Weighted average number of common and
common equivalent shares outstanding 4,030,864 4,338,607
========= =========
The accompanying notes are an integral part of these financial statements.
<PAGE> 7
HERLEY INDUSTRIES INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Twenty-six weeks ended
----------------------
January 29, 1995 January 30, 1994
---------------- ----------------
Cash flows from operating activities:
Net income (loss) $ (297,473) $ 1,283,777
---------- ---------
Adjustments to reconcile net income
(loss) to net cash provided by
(used in) operating activities:
Depreciation and amortization 1,050,418 1,156,833
(Gain)loss on sale of marketable
securities 601,448 (116,091)
Decrease (increase) in deferred tax assets (348,880) 27,131
Increase (decrease) in deferred
tax liabilities 93,833 (33,342)
Recovery of unrealized loss on securities 122,589 60,610
Changes in operating assets and
liabilities:
Decrease (increase) in accounts
receivable 1,749,912 (1,345,286)
Decrease in notes receivable 1,000,000 -
Decrease in other receivables 144,455 148,628
Decrease (increase) in inventories 1,027,628 (37,633)
Decrease (increase) in prepaid expenses (111,194) 819,317
(Decrease) in accounts payable and
accrued expenses (1,679,042) (1,885,640)
(Decrease) in losses on contracts (175,000) (1,183,159)
(Decrease) in advance payments on
contracts (996,104) (16,388)
Increase (decrease) in income taxes
payable (98,756) 106,813
Other, net 3,385 13,170
--------- ---------
Total adjustments 2,384,692 (2,285,037)
--------- ---------
Net cash provided by (used in)
operating activities 2,087,219 (1,001,260)
--------- ---------
The accompanying notes are an integral part of these financial statements.
<PAGE> 8
HERLEY INDUSTRIES INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(CONTINUED)
Twenty-six weeks ended
----------------------
January 29, 1995 January 30, 1994
---------------- ----------------
Cash flows from investing activities:
Purchase of available-for-sale
securities (17,502,419) (16,680,447)
Proceeds from sale of available-for-sale
securities 23,212,297 16,242,391
Capital expenditures (55,601) (240,186)
---------- ----------
Net cash provided by (used in)
investing activities 5,654,277 (678,242)
---------- ----------
Cash flows from financing activities:
Borrowing under bank line of credit 1,813,392 3,458,579
Proceeds from exercise of stock options - 92,820
Payments under lines of credit (7,314,673) (1,581,444)
Purchase of treasury stock (2,410,998) -
---------- ----------
Net cash provided by (used in)
financing activities (7,912,279) 1,969,955
--------- ----------
Net increase (decrease) in cash
and cash equivalents (170,783) 290,453
Cash and cash equivalents at beginning
of period 539,729 595,715
--------- ----------
Cash and cash equivalents at end
of period $ 368,946 $ 886,168
========== ==========
The accompanying notes are an integral part of these financial statements.
<PAGE> 9
HERLEY INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (UNAUDITED)
- --------------------------------------------------------
Note 1.
The consolidated financial statements include the accounts of Herley
Industries, Inc. and its subsidiaries, all of which are wholly-owned. All
significant intercompany accounts and transactions have been eliminated in
consolidation.
In the opinion of the Company, the accompanying consolidated financial
statements reflect all adjustments (which include only normal recurring
adjustments) necessary to present fairly the results of operations and cash
flows for the periods presented. These financial statements (except for the
balance sheet presented at July 31, 1994) are unaudited and have not been
reported on by independent public accountants.
Results of operations for interim periods are not necessarily indicative
of the results of operations for a full year due to external factors which
are beyond the control of the Company.
Note 2.
Inventories at January 29, 1995 and July 31, 1994 are summarized as
follows:
January 29, 1995 July 31, 1994
---------------- --------------
Purchased parts and raw materials $ 4,721,628 $ 5,412,767
Work in process 4,123,770 4,324,393
Finished products 65,164 201,030
---------- ---------
$ 8,910,562 $ 9,938,190
========== =========
Note 3.
In May 1993 the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 115, "Accounting for certain Investments
in Debt and Equity Securities." The Company adopted the provisions of the
new standard for investments held as of or acquired after August 1, 1994.
Adoption of this statement did not have a material effect on the financial
statements of the Company.
Management determines the appropriate classification of debt securities
at the time of purchase and reevaluates such designation as of each balance
sheet date. Debt securities are classified as held-to-maturity when the
Company has the positive intent and ability to hold the securities to
maturity. Marketable equity securities and debt securities not classified as
held-to-maturity are classified as available-for-sale. Available-for-sale
<PAGE> 10
securities are carried at fair value, with the unrealized gains and losses,
net of tax, reported as a separate component of shareholders' equity.
Realized gains and losses and declines in value judged to be other-than-
temporary are included in other income (expense). The cost of securities
sold is based on the specific identification method. Interest and dividends
on securities are included in other income (expense).
The following is a summary of available-for-sale securities:
Available-for-Sale Securities
------------------------------------------------
Gross Gross Estimated
Unrealized Unrealized Fair
Cost Gains Losses Value
---------- ---------- ---------- ------------
January 29, 1995
----------------
Government bonds $ 4,519,287 $ 6,926 $ 124,068 $ 4,402,145
Municipal bonds 24,512 - 1,840 22,672
Other 1,154,849 - - 1,154,849
---------- ------ ------- ----------
Total debt
securities 5,698,648 6,926 125,908 5,579,666
Equity securities 4,092 - - 4,092
---------- ------ ------- ----------
$ 5,702,740 $ 6,926 $ 125,908 $ 5,583,758
========== ====== ======= ==========
July 31, 1994
-------------
Government bonds $ 6,086,532 $ 20,384 $ 68,528 $ 6,038,388
Municipal bonds 4,646,008 - 247,943 4,398,065
Other 1,327,978 - - 1,327,978
---------- ------ ------- ----------
Total debt
securities 12,060,518 20,384 316,471 11,764,431
Equity securities 107,404 23,249 - 130,653
---------- ------ ------- ----------
$ 12,167,922 $ 43,633 $ 316,471 $ 11,895,084
========== ====== ======= ==========
In December 1994, the Company decided to liquidate $6,000,000 of its
long-term investments and used the proceeds to pay down a portion of its
long-term bank debt.
Note 4.
The Company has a revolving credit facility with a bank, secured by its
portfolio of marketable securities, that provides for the extension of credit
in the aggregate principal amount of $12,000,000. The facility requires the
payment of interest only on a monthly basis and payment of the outstanding
<PAGE> 11
principal balance on January 31, 1997. Interest is set daily at 1% over the
bank s earliest daily rate quoted for Federal Funds applied to outstanding
balances up to 80% of the net equity value of certain investments and at the
bank's National Commercial Rate for outstanding balances in excess of this
limit. In addition, the agreement provides for a fee of 1/8 of 1% of the
unused availability under the facility payable quarterly. Borrowing of
$5,650,000 were outstanding at January 29, 1995. Interest at the Federal
Funds rate plus 1% (6.5%) was applied to $4,458,000 of the outstanding
balance, and at the National Commercial Rate of 8.5% on the excess.
The agreement contains various financial covenants, including, among
other matters, the maintenance of working capital, tangible net worth and
restrictions on cash dividends.
The Company also maintains a letter of credit facility with this bank
that provides for the issuance of stand-by letters of credit in the aggregate
of $2,000,000. The facility requires the payment of a fee of 1.25% per annum
of the amounts outstanding under the facility. The facility expires January,
1996. At January 29, 1995 stand-by letters of credit aggregating $526,011
were outstanding under this facility.
Note 5.
In December 1994, under the terms of an agreement in 1993 to acquire
Carlton Industries, Inc. and its wholly owned subsidiary Vega Precision
Laboratories, Inc., certain selling stockholders exercised their option to
sell back to the Company a total of 309,074 shares of common stock of the
Company at a price of $5.00 per share. Of the proceeds, $1,000,000 was used
to pay back the note receivable from the selling stockholders which was
secured by the pledge of 200,000 of the shares of common stock sold back to
the Company.
Note 6.
Supplemental cash flow information is as follows:
January 29, 1995 January 30, 1994
---------------- ----------------
Cash paid during the period for:
Interest $ 416,783 $ 544,994
Income Taxes 37,325 54,710
======= =======
<PAGE> 12
Item 2: Management's Discussion and Analysis of Financial Condition and
Results of Operations
LIQUIDITY AND CAPITAL RESOURCES
As of January 29, 1995 and July 31, 1994, working capital was
approximately $5,985,000 and $5,753,000, respectively, and the ratio of
current assets to current liabilities was 1.85 to 1 and 1.56 to 1,
respectively.
As is customary in the defense industry, inventory is partially financed
by progress payments. The unliquidated balance of these advanced payments
was approximately $1,518,000, a decrease of $996,000 from July 31, 1994. As
receivables are collected from shipments on contracts subject to progress
payments, these advanced payments are liquidated. The reduction in accounts
receivable of approximately $1,750,000 is consistent with the decline in
sales volume.
Net cash provided by investing activities results from the Company's
decision to liquidate $6,000,000 of its long-term investments, net of the
reinvestment of earnings on its portfolio, and the investment in capital
equipment. The proceeds from the sale of investments were used to reduce
long-term bank debt.
The Company maintains a revolving credit facility with a bank, secured
by certain marketable securities, for an aggregate of $12,000,000 which
expires January, 1997. As of January 29, 1995 and July 31, 1994, the Company
had borrowing outstanding of $5,650,000 and $11,000,000 respectively. Net
cash used in financing activities during the quarter is principally
attributable to net payments of the credit facility, and the purchase of
treasury stock.
At January 29, 1995, the Company owned high grade investment securities
having a market value of approximately $5,600,000, and cash and cash
equivalents of approximately $369,000.
The Company believes that presently anticipated future cash requirements
will be provided by internally generated funds and existing credit
facilities.
RESULTS OF OPERATIONS
Thirteen weeks ended January 29, 1995 and January 30, 1994
- ----------------------------------------------------------
Net sales for the thirteen weeks ended January 29, 1995 decreased by
approximately $2,133,000 or 28% from the comparable period of the prior year
due to decreases in flight instrumentation products of approximately
$1,764,000 and decreases in microwave components of approximately $369,000.
<PAGE> 13
Cost of products sold for the thirteen weeks ended January 29, 1995
increased as a percentage of net sales from 59% in 1994 to 79% in 1995. This
increase is attributable to a reduction in higher margin foreign sales of
approximately $1,725,000, and a decrease in absorption of fixed costs due to
the significantly lower sales volume.
Selling and administrative expenses for the thirteen weeks ended January
29, 1995 decreased approximately $689,000 from the comparable period of the
prior year, of which $678,000 is attributable to decreased representative
fees on foreign sales, and $171,000 to a reduction in personnel and related
expenses; offset by an increase in legal fees of $136,000 in connection with
various litigation (See Part II, Item 1 - Legal Proceedings ), and $24,000
in other expenses.
Other income (expense) for the thirteen weeks ended January 29, 1995
decreased $343,000 from the comparable prior year period due to losses on the
sale of certain long-term investments of $339,000 as compared to a gain of
$37,000 in 1994, and a decrease of $66,000 in other income (primarily rental
income in 1994); offset by increased dividend and interest income of $21,000,
and a decrease in interest expense of $78,000.
Twenty-six weeks ended January 29, 1995 and January 30, 1994
- ------------------------------------------------------------
Net sales for the twenty-six weeks ended January 29, 1995 decreased by
approximately $3,638,000 or 24% from the comparable period of the prior year
due to decreases in flight instrumentation products of approximately
$2,523,000 and decreases in microwave components of approximately $1,115,000.
Cost of products sold for the twenty-six weeks ended January 29, 1995
increased as a percentage of net sales from 64% in 1994 to 76% in 1995. This
increase is attributable to a reduction in higher margin foreign sales of
approximately $3,362,000, and a decrease in absorption of fixed costs due to
the significantly lower sales volume.
Selling and administrative expenses for the twenty-six weeks ended January
29, 1995 decreased approximately $1,114,000 from the comparable period of the
prior year, of which $983,000 is attributable to decreased representative
fees on foreign sales, $421,000 to a reduction in personnel and related
expenses, and $66,000 in other expenses: offset by an increase in legal fees
of $356,000 in connection with various litigation (See Part II, Item 1 -
Legal Proceedings ).
Other income (expense) for the twenty-six weeks ended January 29, 1995
decreased $630,000 from the comparable prior year period due to losses on the
sales of certain long-term investments of $530,000 as compared to a gain of
$116,000 in 1994, and a decrease of $140,000 in other income (primarily
rental income in 1994); offset by increased dividend and interest income of
$53,000, and a decrease in interest expense of $103,000.
<PAGE> 14
PART II - OTHER INFORMATION
- ---------------------------
ITEM 1 - LEGAL PROCEEDINGS:
In April 1992, Litton Systems, Inc. Electron Devices Division ("Litton")
commenced an action in the Essex Superior Court of Massachusetts against the
Company alleging, among other claims for relief, theft of trade secrets,
unfair trade practices and related common law claims in connection with the
defendants alleged misappropriation of Litton s beacon magnetron drawings.
Litton is seeking damages in the approximate sum of $1,750,000, although it
has never substantiated or justified fully its claim in that regard.
Defendants have filed an answer denying generally the plaintiff's allegations
asserting affirmatively defenses against liability and interposing
counterclaims. Since the filing of the case, the parties have engaged in
extensive discovery and motion practice. The Company continues to defend
itself vigorously against Litton s duplicative claims. A trial of the action
commenced in January, 1995 and is currently in progress.
In May and June 1994, the Company was served with two class action
complaints against the Company and certain of its officers and directors in
the United States District Court for the Eastern District of Pennsylvania.
The claims are made under Section 10(b) and 20(a) of the Securities Exchange
Act of 1934 and Rule 10b-5 thereunder. One of the claims is also based upon
alleged negligence. The claims relate to the Company's acquisition of Vega.
The Company believes it has a meritorious defense and intends to vigorously
defend against these allegations.
In or about March, 1994, the principal selling shareholders of Carlton
Industries, Inc. ("Carlton") and its subsidiary, Vega Precision Laboratories,
Inc. ("Vega"), as claimants, commenced an arbitration proceeding before the
American Arbitration Association in New York City pursuant to the terms of
the Stock Purchase Agreement ("Agreement") by which the Company acquired the
stock of Carlton and Vega. The claimants principally are seeking to recover
damages for the Company's alleged failure to register timely the claimants'
shares of the Company's common stock in accordance with the provisions of the
Agreement and other breaches of the Agreement. The Company has denied and
will contest vigorously the legitimacy of the claimants' claims and has
interposed several counterclaims seeking indemnification under the Agreement
against the principal selling shareholders, for damages suffered by the
Company in an aggregate amount exceeding $1 million as a result of breaches
of contractual representations. No formal evidentiary hearings have been
held yet and the parties currently are engaging in consensual discovery
proceedings under the auspices of the arbitrators.
There is no certainty as to the outcome of these matters. However, in
the opinion of management, the ultimate liability on these matters, if any,
will not have a material adverse effect on the financial position of the
Company.
<PAGE> 15
ITEM 2 - CHANGES IN SECURITIES:
None
ITEM 3 - DEFAULTS UPON SENIOR SECURITIES:
None
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS:
None
ITEM 5 - OTHER INFORMATION:
None
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K:
(a) Exhibit 11: Computation of per share earnings.
Exhibit 27: Financial data schedule
(b) During the quarter for which this report is filed, the
Registrant filed the following reports under Form 8-K:
None
<PAGE> 16
FORM 10-Q
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.
HERLEY INDUSTRIES, INC.
------------------------------------
Registrant
BY: /S/ Myron Levy
------------------------------
Myron Levy, President
BY: /S/ Anello C. Garefino
----------------------------
Anello C. Garefino
Principal Financial Officer
DATE: March 15, 1995
<PAGE> 17
HERLEY INDUSTRIES, INC.
AND SUBSIDIARIES
-------------------------------
Exhibit 11
--------------
COMPUTATION OF PER SHARE EARNINGS
----------------------------------
Thirteen weeks ended
--------------------
January 29,1995 January 30, 1994
--------------- ----------------
Net Income (loss) $ (481,556) $ 647,492
========= ==========
Weighted average number of
common shares outstanding 3,886,040 4,333,574
========= =========
Number of shares outstanding 3,615,815 4,312,189
========= =========
Earnings per common and
common equivalent share:
Net income (loss) $(.12) $ .15
===== =====
Twenty-six weeks ended
----------------------
January 29,1995 January 30, 1994
--------------- ----------------
Net Income (loss) $ (297,473) $ 1,283,777
========= =========
Weighted average number of
common shares outstanding 4,030,864 4,338,607
========= =========
Number of shares outstanding 3,615,815 4,312,189
========= =========
Earnings per common and
common equivalent share:
Net income (loss) $(.07) $ .30
===== =====
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED JANUARY 29,
1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUL-30-1995
<PERIOD-START> AUG-01-1994
<PERIOD-END> JAN-29-1995
<CASH> 368,946
<SECURITIES> 0
<RECEIVABLES> 3,190,392
<ALLOWANCES> 0
<INVENTORY> 8,910,562
<CURRENT-ASSETS> 12,989,342
<PP&E> 23,376,315
<DEPRECIATION> 8,676,294
<TOTAL-ASSETS> 43,670,433
<CURRENT-LIABILITIES> 7,004,569
<BONDS> 9,482,867
<COMMON> 361,582
0
0
<OTHER-SE> 25,515,015
<TOTAL-LIABILITY-AND-EQUITY> 43,670,433
<SALES> 11,803,970
<TOTAL-REVENUES> 11,803,970
<CGS> 8,967,330
<TOTAL-COSTS> 11,752,625
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 523,426
<INCOME-PRETAX> ( 533,473 )
<INCOME-TAX> ( 236,000 )
<INCOME-CONTINUING> ( 297,473 )
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> ( 297,473 )
<EPS-PRIMARY> ( .07 )
<EPS-DILUTED> ( .07 )
</TABLE>
