SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark one)
___
| X | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
---
OF THE SECURITIES EXCHANGE ACT OF 1934.
For the quarterly period ended April 30, 1996
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: 1-4423
HEWLETT-PACKARD COMPANY
----------------------------------------------------
(Exact name of registrant as specified in its charter)
California 94-1081436
- ------------------------------- ------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
3000 Hanover Street, Palo Alto, California 94304
- ------------------------------------------ ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (415) 857-1501
--------------
__________________________________________________________________________
(Former name, former address and former fiscal year, if changed since last
report)
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
----- -----
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Class Outstanding at April 30, 1996
- ------------------- -----------------------------
Common Stock, $1 par value 511.2 million shares
<PAGE>
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
INDEX
-----
Page No.
________
Part I. Financial Information
Item 1. Financial Statements.
Consolidated Condensed Balance Sheet
April 30, 1996 (Unaudited) and October 31, 1995 2
Consolidated Condensed Statement of Earnings (Unaudited)
Three months and six months ended April 30, 1996 and 1995 3
Consolidated Condensed Statement of Cash Flows (Unaudited)
Six months ended April 30, 1996 and 1995 4
Notes to Consolidated Condensed Financial Statements
(Unaudited) 5
Item 2. Management's Discussion and Analysis of Financial Condition,
Results of Operations and Factors That May Affect Future
Results (Unaudited). 6-10
Part II. Other Information
Item 5. Other Information. 11
Item 6. Exhibits and Reports on Form 8-K. 11
Signature 12
Exhibit Index 13
1<PAGE>
<TABLE>
Item 1. Financial Statements.
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEET
------------------------------------
(Millions except par value and number of shares)
<CAPTION>
April 30 October 31
1996 1995
---------- ----------
Assets (Unaudited)
------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 1,901 $ 1,973
Short-term investments 1,387 643
Accounts and notes receivable 7,025 6,735
Inventories:
Finished goods 3,991 3,368
Purchased parts and fabricated assemblies 2,744 2,645
Other current assets 1,056 875
------- -------
Total current assets 18,104 16,239
------- -------
Property, plant and equipment (less accumulated
depreciation: April 30, 1996 - $4,388;
October 31, 1995 - $4,036) 5,017 4,711
Long-term investments and other assets 3,797 3,477
------- -------
$26,918 $24,427
======= =======
Liabilities and Shareholders' Equity
------------------------------------
Current liabilities:
Notes payable and short-term borrowings $ 3,500 $ 3,214
Accounts payable 2,181 2,422
Employee compensation and benefits 1,750 1,568
Taxes on earnings 1,543 1,494
Deferred revenues 961 782
Other accrued liabilities 1,776 1,464
------- -------
Total current liabilities 11,711 10,944
------- -------
Long-term debt 1,193 663
Other liabilities 1,012 981
Shareholders' equity:
Preferred stock, $1 par value; 300,000,000
shares authorized; none issued
Common stock and capital in excess of $1 par
value; 1,200,000,000 shares authorized;
511,214,000 and 509,955,000 shares issued and
outstanding at April 30, 1996 and October 31,
1995, respectively (proforma for 2-for-1 stock
split [see note 5]: 2,400,000,000 shares
authorized; 1,022,428,000 shares issued and
outstanding at April 30, 1996) 888 871
Retained earnings 12,114 10,968
------- -------
Total shareholders' equity 13,002 11,839
------- -------
$26,918 $24,427
======= =======
The accompanying notes are an integral part of these consolidated condensed
financial statements.
</TABLE>
2<PAGE>
<TABLE>
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENT OF EARNINGS
--------------------------------------------
(Unaudited)
(Millions except per share amounts)
Three months ended Six months ended
April 30 April 30
------------------ ----------------
<CAPTION>
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net revenue:
Products $8,582 $6,339 $16,622 $12,624
Services 1,298 1,089 2,546 2,108
------ ------ ------- -------
9,880 7,428 19,168 14,732
------ ------ ------- -------
Costs and expenses:
Cost of products sold and
services 6,498 4,654 12,486 9,201
Research and development 691 556 1,303 1,091
Selling, general and
administrative 1,650 1,343 3,143 2,633
------ ------ ------- -------
8,839 6,553 16,932 12,925
------ ------ ------- -------
Earnings from operations 1,041 875 2,236 1,807
Interest income and other, net 62 26 99 59
Interest expense 73 47 143 93
------ ------ ------- -------
Earnings before taxes 1,030 854 2,192 1,773
Provision for taxes 307 277 679 594
------ ------ ------- -------
Net earnings $ 723 $ 577 $ 1,513 $ 1,179
====== ====== ======= =======
Net earnings per share $ 1.37 $ 1.10 $ 2.87 $ 2.25
====== ====== ======= =======
Cash dividends declared per share $ --- $ .20 $ .40 $ .50
====== ====== ======= =======
Average shares and equivalents
used in computing net earnings
per share 528 526 527 525
====== ====== ======= =======
Proforma for 2-for-1 stock split (see note 5):
Net earnings per share .69 .55 1.44 1.12
====== ====== ======= =======
Cash dividends declared per share --- .10 .20 .25
====== ====== ======= =======
Average shares and equivalents
used in computing net earnings
per share 1,055 1,052 1,054 1,050
====== ====== ======= =======
The accompanying notes are an integral part of these consolidated condensed
financial statements.
</TABLE>
3
<TABLE>
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
----------------------------------------------
(Unaudited)
(Millions)
<CAPTION>
Six months ended
April 30
-----------------
1996 1995
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net earnings $1,513 $1,179
Adjustments to reconcile net earnings to net cash
provided by (used in) operating activities:
Depreciation and amortization 590 539
Deferred taxes on earnings (97) (67)
Change in assets and liabilities:
Accounts and notes receivable (284) (413)
Inventories (690) (343)
Accounts payable (249) 316
Taxes on earnings 93 (9)
Other current assets and liabilities 392 467
Other, net 52 (78)
------ ------
Net cash provided by operating activities 1,320 1,591
------ ------
Cash flows from investing activities:
Investment in property, plant and equipment (969) (700)
Disposition of property, plant and equipment 197 179
Purchases of short-term investments (3,167) (1,637)
Maturities of short-term investments 2,542 1,698
Purchases of long-term investments (344) (100)
Other, net (1) (22)
------ ------
Net cash used in investing activities (1,742) (582)
------ ------
Cash flows from financing activities:
Change in notes payable and short-term borrowings 247 (349)
Issuance of long-term debt 551 401
Payment of current maturities of long-term debt (3) (255)
Issuance of common stock under employee stock plans 188 184
Repurchase of common stock (425) (260)
Dividends (205) (153)
Other, net (3) 2
------ ------
Net cash provided by (used in) financing
activities 350 (430)
------ ------
(Decrease)/Increase in cash and cash equivalents (72) 579
Cash and cash equivalents at beginning of period 1,973 1,357
------ ------
Cash and cash equivalents at end of period $1,901 $1,936
====== ======
Certain 1995 amounts have been reclassified to conform to the 1996
presentation.
The accompanying notes are an integral part of these consolidated
condensed financial statements.
</TABLE>
4
<PAGE>
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
----------------------------------------------------
(Unaudited)
1. In the opinion of the Company's management, the accompanying
consolidated condensed financial statements contain all adjustments
(which comprise only normal and recurring accruals) necessary to
present fairly the financial position as of April 30, 1996 and
October 31, 1995, the results of operations for the three months
and six months ended April 30, 1996 and 1995, and the cash flows
for the six months ended April 30, 1996 and 1995.
The results of operations for the three months and six months
ended April 30, 1996 are not necessarily indicative of the
results to be expected for the full year.
2. Net earnings per share are computed using the weighted-average
number of common shares and common share equivalents outstanding
during each period. Common share equivalents represent the dilutive
effect of outstanding stock options.
3. Income tax provisions for interim periods are based on estimated
effective annual income tax rates. The effective income tax rate
varies from the U.S. federal statutory income tax rate primarily
because of variations in the tax rates on foreign income.
4. The Company paid interest of $107 million and $79 million during
the six months ended April 30, 1996 and 1995, respectively. During
the same periods, the Company paid income taxes of $630 million and
$611 million, respectively. The effect of foreign currency exchange
rate fluctuations on cash balances held in foreign currencies was
not material.
5. On May 17, 1996, the Company's Board of Directors approved a 2-for-1
stock split of the Company's $1 par value common stock in the form
of a 100 percent distribution, to be made on or about July 15, 1996
to shareholders of record on June 21, 1996. As a result of the split,
authorized common shares will double. The par value of the Company's
common stock after the stock split will remain $1. Retained earnings
will be reduced by the par value of the additional shares issued.
The rights of the holders of these securities will not otherwise
be modified. Proforma net earnings per share and common shares
authorized, issued and outstanding which give effect to the stock
split have been disclosed in the accompanying consolidated condensed
financial statements.
In addition, the quarterly dividend on the Company's common stock
(pre-split) declared for the third quarter of fiscal 1996 reflects a
20 percent increase to 24 cents per share, compared to 20 cents per
share paid for each of the first and second quarters of the fiscal year.
After the split is effected, the adjusted dividend will be 12 cents
per share per quarter. The third quarter dividend will be paid at
the new rate to shareholders of record on June 19, 1996, and is
payable on July 10, 1996.
6. In December 1995, the Company acquired all of the outstanding shares
of common stock of Convex Computer Corporation ("Convex") in exchange
for 1,528,000 shares of the Company's common stock. Convex designs,
manufactures, markets and supports high performance computers for
engineering, scientific and technical users. The merger has been
accounted for using the pooling-of-interests method. However, the
accompanying consolidated condensed financial statements have not
been restated due to immateriality. Convex's accumulated deficit
and results of operations have been included in the Company's
consolidated condensed financial statements commencing from the
effective date of the merger.
7. In October 1995, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 123 ("FAS 123"),
"Accounting for Stock-Based Compensation." The Company is required
to adopt FAS 123 by fiscal 1997, and upon adoption will elect to
continue to measure compensation cost for its employee stock
compensation plans using the intrinsic value-based method of
accounting prescribed by Accounting Principles Board Opinion No.
25, "Accounting for Stock Issued to Employees." Pro forma
disclosure of net earnings and net earnings per share will reflect
the difference between compensation cost included in net earnings
and the related cost measured by the fair-value based method
defined in FAS 123, including tax effects, that would have been
recognized in the consolidated statement of earnings if the fair
value-based method had been used.
5
Item 2. Management's Discussion and Analysis of Financial Condition,
Results of Operations and Factors That May Affect Future Results
(Unaudited).
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
RESULTS OF OPERATIONS
- ---------------------
Net Revenue - Net revenue for the second quarter ended April 30, 1996 was
$9.9 billion, an increase of 33 percent from the same period of fiscal
1995. Product sales increased 35 percent and service revenue grew 19
percent over the corresponding period of fiscal 1995. Net revenue
grew 28 percent to $5.5 billion internationally and 39 percent to
$4.4 billion in the U.S.
Net revenue for the first six months of fiscal 1996 was $19.2 billion,
an increase of 30 percent from the same period of fiscal 1995. Product
sales increased 32 percent and service revenue grew 21 percent over the
corresponding period of fiscal 1995. Net revenue grew 31 percent to
$11.0 billion internationally and 30 percent to $8.1 billion in the U.S.
The growth in net revenue for the second quarter and first half of fiscal
1996 was principally due to strong demand for the Company's printer
products and related supplies, personal computer and PC networking
products, PC and UNIX servers, test and measurement products, and
professional services and consulting.
Costs and Expenses - Cost of products sold and services as a percentage
of net revenue was 65.8 percent for the second quarter and 65.1 percent
for the first half of fiscal 1996, compared to 62.7 percent for the second
quarter and 62.5 percent for the first half of fiscal 1995. These
increases over the year-ago periods were the result of continued
competitive pricing pressures, an ongoing shift in the mix of products
sold towards lower-margin, high-volume product families, and transition
costs for continued introductions of new products. These factors are
likely to continue to cause the cost of sales ratio to trend upward in
the future. Specifically in the second quarter, new product introduction
delays in the workstation and disk storage businesses also contributed to
the overall increase in the cost of sales ratio over the year-ago period.
Operating expenses as a percentage of net revenue were 23.7 percent for
the second quarter and 23.2 percent for the first half of fiscal 1996,
compared to 25.6 percent for the second quarter and 25.3 percent for
the first half of fiscal 1995. These decreases from fiscal 1995
reflect ongoing efforts to achieve expense structures appropriate for
the Company's changing business and rapid expansion of the net revenue
base in fiscal 1996. Operating expenses increased 23 percent for the
second quarter and 19 percent for the first half of fiscal 1996 over the
corresponding year-ago periods. These increases resulted primarily from
increased marketing and selling expenses as a result of increased
advertising and commissions, and increased research and development
expenses, reflecting the Company's commitment to ensuring a continuing
flow of high quality products. Additionally, recent acquisitions of
Convex Computer Corporation and certain of the assets of SecureWare Inc.
contributed to the second quarter increase in operating expenses. A part
of these increases is also attributable to increased employment in selected
operating areas.
6
Provision for Taxes - The provision for taxes as a percentage of earnings
before taxes was 30 percent for the second quarter and 31 percent for the
first half of fiscal 1996, compared to 32.4 percent for the second quarter
and 33.5 percent for the first half of fiscal 1995. The lower tax rates
in fiscal 1996 resulted from changes in the geographic mix of the
Company's earnings and resolution of certain issues related to tax returns
filed in previous years.
Net Earnings - Net earnings for the second quarter of fiscal 1996 were
$723 million, or $1.37 per share on an average of 528 million shares,
compared to net earnings of $577 million or $1.10 per share on an average
of 526 million shares for the second quarter of fiscal 1995. For the
six months ended April 30, 1996, net earnings were $1,513 million, or
$2.87 per share on an average of 527 million shares, compared to net
earnings of $1,179 or $2.25 per share on an average of 525 million
shares for the first half of fiscal 1995.
FINANCIAL CONDITION
- -------------------
Liquidity and Capital Resources - The Company's financial position
remains strong, with cash and cash equivalents and short-term
investments of $3.3 billion at April 30, 1996, compared with $2.6
billion at October 31, 1995. Cash flows from operating activities were
$1.3 billion during the first six months of fiscal 1996, compared to
$1.6 billion for the corresponding period of fiscal 1995.
Despite higher net earnings, cash provided by operations declined compared
to the first half of fiscal 1995, primarily as a result of reductions in
accounts payable due to the timing of payments since October 31, 1995 and
growth in inventories, partially offset by relatively slower growth in
accounts and notes receivable.
Inventories grew 46 percent over the year-ago half versus revenue growth of
30 percent for the same period. The Company believes that the majority of
the increase in inventories was necessary to meet increased demand and
customer delivery expectations, due primarily to heavy new product
introductions in the first half of fiscal 1996 and an increasing presence
in the retail channel. Inventory management, however, continues to be an
area of focus.
7
Capital expenditures for the first six months of fiscal 1996 were
$969 million, compared to $700 million for the corresponding period
in fiscal 1995. The increase in capital expenditures was primarily
due to expansion of capacity for increased levels of business.
The changes in investment and borrowing activities during the first
half of fiscal 1996, when compared to the same period in fiscal 1995,
resulted from the Company's liquidity requirements to meet short-term
working capital needs.
Under the Company's ongoing stock repurchase program, shares have been
purchased periodically to meet employee stock plan requirements. During
each of the six months ended April 30, 1996 and 1995, the Company purchased
and retired approximately 5.0 million shares for an aggregate price of
$425 million and $260 million, respectively.
FACTORS THAT MAY AFFECT FUTURE RESULTS
- --------------------------------------
HP's future operating results may be adversely affected if the Company
is unable to continue to rapidly develop, manufacture and market
innovative products and services that meet customer requirements. The
process of developing new high technology products and solutions is
complex and uncertain. It requires accurate anticipation of customers'
changing needs and emerging technological trends. The Company then
must make long-term investments and commit significant resources before
knowing whether its predictions will eventually result in products that
achieve market acceptance. After a product is developed, the Company must
quickly ramp manufacturing in sufficient volumes at acceptable costs.
This is a process that requires accurate forecasting of volumes, mix of
products and configurations. Moreover, the supply and timing of a new
product or service must match the customers' demand and timing for those
particular products or services. Given the wide variety of systems,
products and services which the Company offers, the process of planning
production and managing inventory levels becomes increasingly difficult.
The short life cycles of many of the Company's products pose a challenge
for the effective management of the transition from existing products to
new products and could adversely affect the Company's future operating
results. Product development or manufacturing delays, variations in
product costs, and delays in customer purchases of existing products in
anticipation of new product introductions are among the factors that make
a smooth transition from current products to new products difficult. In
addition, the timing of competitors' introductions of new products and
services may negatively affect the future operating results of the Company,
especially when these introductions coincide with periods leading up to
the Company's own introduction of new or enhanced products. Furthermore,
some of the Company's own new products replace or compete with others of
the Company's current products.
8
In addition, portions of the company's manufacturing operations are
dependent on the ability of suppliers to deliver components, integral
subassemblies and completed products in time to meet critical manufacturing
and distribution schedules. The Company periodically experiences
constrained supply of certain component parts in some product lines as a
result of strong demand in those product lines and in the industry as a
whole. Continued constraints may adversely affect the Company's operating
results until alternate sourcing could be developed. In order to secure
components for production and introduction of new products, the Company
frequently makes advanced payments to certain suppliers and often enters
into noncancelable purchase commitments with vendors with respect to the
purchase of components. Volatility in the prices of these component parts,
the possible inability of the Company to secure enough components at
reasonable prices to build new products in a timely manner in the quantities
and configurations demanded or, conversely, a temporary oversupply of these
parts, could adversely affect the Company's future operating results.
The Company continues to expand into third-party distribution channels
to accomodate changing industry practices and customer preferences. As
more of the Company's products are distributed through resellers, the
financial health of these resellers and the Company's continuing
relationships with them become more important to the Company's success.
Some of these companies are thinly capitalized and may be unable to
withstand changes in business conditions. The Company's financial
results could be adversely affected if the financial condition of these
resellers substantially weakens or the Company's relationship with such
resellers deteriorates.
Sales outside the United States make up more than half of the Company's
revenues. In addition, a portion of the Company's product and component
manufacturing, along with key suppliers, are located outside the United
States. Accordingly, the Company's future results could be adversely
affected by a variety of factors, including changes in foreign currency
exchange rates, changes in a specific country's or region's political or
economic conditions, trade protection measures, import or export licensing
requirements, the overlap of different tax structures, unexpected changes
in regulatory requirements and natural disasters.
As a matter of course, the Company frequently engages in discussions
with a variety of parties relating to possible acquisitions, strategic
alliances, joint ventures and divestitures. Although the consummation
of any transaction is unlikely to have a material effect on the Company's
results as a whole, the implementation or integration of the transaction
may contribute to the Company's results differing from the investment
community's expectation in a given quarter. Acquisitions and strategic
alliances may require, among other things, integration or coordination
with a different company culture, management team organization, and
business infrastructure. They may also require the development, manufacture
and marketing of product offerings with the Company's products in a way
that enhances the performance of the combined business or product line.
Depending on the size and complexity of the transaction, successful
integration or implementation depends on a variety of factors, including
the hiring and retention or coordination of key employees, management of
geographically separate facilities, and the integration or coordination of
different research and development and product manufacturing facilities.
All of these efforts require varying levels of management resources, which
may temporarily adversely impact other business operations.
9
A portion of the Company's research and development activities, its
corporate headquarters, other critical business operations and certain of its
suppliers are located near major earthquake faults. The ultimate impact on
the Company, its significant suppliers and the general infrastructure is
unknown, but operating results could be materially affected in the event of
a major earthquake. The Company is predominately self-insured for losses
and interruptions caused by earthquakes.
Operations of the Company involve the use of substances regulated under
various federal, state and international laws governing the environment.
It is the Company's policy to apply strict standards for environmental
protection to sites inside and outside the U.S., even if not subject to
regulations imposed by local governments. The liability for environmental
remediation and related costs is accrued when it is considered probable
and the costs can be estimated. Environmental costs are presently not
material to the Company's operations or financial position.
Although the Company believes that it has the product offerings and
resources needed for continuing success, future revenue and margin
trends cannot be reliably predicted and may cause the Company to adjust
its operations. The Company's stock price, like that of other
technology companies, is subject to significant volatility. The
announcement of new products, services or technological innovations by
the Company or its competitors, quarterly variations in the Company's
results of operations, changes in revenue or earnings estimates by the
investment community and speculation in the press or investment
community are among the factors affecting the Company's stock price. In
addition, the stock price may be affected by general market conditions
and domestic and international macroeconomic factors unrelated to the
Company's performance. Because of the foregoing reasons, recent trends
should not be considered reliable indicators of future stock prices or
financial results.
10
PART II. OTHER INFORMATION
---------------------------
Item 5. Other Information.
On May 17, 1996, the Company's Board of Directors approved a
2-for-1 stock split of the Company's $1 par value common stock
in the form of a 100 percent distribution to shareholders
of record on June 21, 1996. As a result of the split, authorized,
outstanding, and reserved common shares will double. Retained
earnings will be reduced by the par value of the additional common
shares issued. The rights of the holders of these securities will
not otherwise be modified.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits:
A list of exhibits is set forth in the Exhibit Index
found on page 13 of this report.
(b) Reports on Form 8-K:
There were no reports on Form 8-K filed during the
three months ended April 30, 1996.
11
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
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.
HEWLETT-PACKARD COMPANY
(Registrant)
Dated: June 13, 1996 By:ROBERT P. WAYMAN
-------------------------
Robert P. Wayman
Executive Vice President,
Finance and Administration
(Chief Financial Officer)
12
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
EXHIBIT INDEX
-------------
Exhibits:
1. Not applicable.
2. None.
3. None.
4. None.
5-9. Not applicable.
10-11. None.
12-14. Not applicable.
15. None.
16-17. Not applicable.
18-19. None.
20-21. Not applicable.
22-24. None.
25-26. Not applicable.
27. Financial Data Schedule.
28. Not applicable.
99. None.
13
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED CONDENSED BALANCE SHEET AND CONSOLIDATED CONDENSED STATEMENT
OF EARNINGS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-END> APR-30-1996
<CASH> 1,901
<SECURITIES> 1,387
<RECEIVABLES> 7,025
<ALLOWANCES> 0
<INVENTORY> 6,735
<CURRENT-ASSETS> 18,104
<PP&E> 9,405
<DEPRECIATION> 4,388
<TOTAL-ASSETS> 26,918
<CURRENT-LIABILITIES> 11,711
<BONDS> 1,193
<COMMON> 888
0
0
<OTHER-SE> 12,114
<TOTAL-LIABILITY-AND-EQUITY> 26,918
<SALES> 16,622
<TOTAL-REVENUES> 19,168
<CGS> 0
<TOTAL-COSTS> 12,486
<OTHER-EXPENSES> 1,303
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 143
<INCOME-PRETAX> 2,192
<INCOME-TAX> 679
<INCOME-CONTINUING> 1,513
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,513
<EPS-PRIMARY> 2.87
<EPS-DILUTED> 0
</TABLE>
