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 January 31, 1997
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 January 31, 1997
- -------------------------- -------------------------------
Common Stock, $1 par value 1.02 billion shares
<PAGE>
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
INDEX
-----
Page No.
________
Part I. Financial Information
Item 1. Financial Statements.
Consolidated Condensed Balance Sheet
January 31, 1997 (Unaudited) and October 31, 1996 2
Consolidated Condensed Statement of Earnings (Unaudited)
Three months ended January 31, 1997 and 1996 3
Consolidated Condensed Statement of Cash Flows (Unaudited)
Three months ended January 31, 1997 and 1996 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 4. Submission of Matters to a Vote of Security Holders 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>
January 31 October 31
1997 1996
---------- ----------
Assets (Unaudited)
------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 2,789 $ 2,885
Short-term investments 70 442
Accounts and notes receivable 6,841 7,126
Inventories:
Finished goods 3,958 3,956
Purchased parts and fabricated assemblies 2,274 2,445
Other current assets 1,254 1,137
------- -------
Total current assets 17,186 17,991
------- -------
Property, plant and equipment (less accumulated
depreciation: January 31, 1997 - $4,831;
October 31, 1996 - $4,662) 5,634 5,536
Long-term investments and other assets 4,336 4,172
------- -------
$27,156 $27,699
======= =======
Liabilities and Shareholders' Equity
------------------------------------
Current liabilities:
Notes payable and short-term borrowings $ 380 $ 2,125
Accounts payable 2,223 2,375
Employee compensation and benefits 1,563 1,675
Taxes on earnings 2,050 1,514
Deferred revenues 1,100 951
Other accrued liabilities 2,082 1,983
------- -------
Total current liabilities 9,398 10,623
------- -------
Long-term debt 2,584 2,579
Other liabilities 1,062 1,059
Shareholders' equity:
Preferred stock, $1 par value; 300,000,000
shares authorized; none issued
Common stock and capital in excess of $1 par
value; 2,400,000,000 shares authorized;
1,016,182,000 and 1,014,123,000 shares issued
and outstanding at January 31, 1997 and October
31, 1996, respectively 1,020 1,014
Retained earnings 13,092 12,424
------- -------
Total shareholders' equity 14,112 13,438
------- -------
$27,156 $27,699
======= =======
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
January 31
------------------
<CAPTION>
1997 1996
---- ----
<S> <C> <C>
Net revenue:
Products $ 8,825 $ 8,040
Services 1,470 1,248
------- -------
10,295 9,288
------- -------
Costs and expenses:
Cost of products sold and
services 6,694 5,988
Research and development 699 612
Selling, general and
administrative 1,621 1,493
------- -------
9,014 8,093
------- -------
Earnings from operations 1,281 1,195
Interest income and other, net 76 37
Interest expense 54 70
------- -------
Earnings before taxes 1,303 1,162
Provision for taxes 391 372
------- -------
Net earnings $ 912 $ 790
======= =======
Net earnings per share* $ .87 $ .75
======= =======
Cash dividends declared per share* $ .24 $ .20
======= =======
Average shares and equivalents
used in computing net earnings
per share* 1,047 1,052
======= =======
The accompanying notes are an integral part of these consolidated condensed
financial statements.
* 1996 amounts have been restated to reflect the retroactive effect of the
July 1996 2-for-1 stock split. See Note 5 for a discussion of the stock
split.
</TABLE>
3
<TABLE>
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
----------------------------------------------
(Unaudited)
(Millions)
<CAPTION>
Three months ended
January 31
------------------
1997 1996
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 912 $ 790
Adjustments to reconcile net earnings to net cash
provided by (used in) operating activities:
Depreciation and amortization 335 289
Deferred taxes on earnings (195) (55)
Change in assets and liabilities:
Accounts and notes receivable 314 263
Inventories 169 (743)
Accounts payable (152) (270)
Taxes on earnings 509 198
Other current assets and liabilities (102) 73
Other, net 20 73
------ ------
Net cash provided by operating activities 1,810 618
------ ------
Cash flows from investing activities:
Investment in property, plant and equipment (513) (429)
Disposition of property, plant and equipment 146 138
Purchases of short-term investments (412) (1,959)
Maturities of short-term investments 784 1,824
Other, net 18 (6)
------ ------
Net cash provided by (used in) investing 23 (432)
activities ------ ------
Cash flows from financing activities:
Change in notes payable and short-term borrowings (1,760) 186
Issuance of long-term debt 34 441
Payment of current maturities of long-term debt (14) (2)
Issuance of common stock under employee stock plans 106 86
Repurchase of common stock (172) (309)
Dividends (122) (103)
Other, net (1) -
------ ------
Net cash (used in) provided by financing (1,929) 299
activities ------ ------
(Decrease) Increase in cash and cash equivalents (96) 485
Cash and cash equivalents at beginning of period 2,885 1,973
------ ------
Cash and cash equivalents at end of period $2,789 $2,458
====== ======
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 January 31, 1997 and
October 31, 1996, the results of operations for the three months
ended January 31, 1997 and 1996, and the cash flows for the three
months ended January 31, 1997 and 1996.
The results of operations for the three months ended January 31, 1997
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 $58 million during
the three months ended January 31, 1997 and 1996, respectively.
During the same periods, the Company paid income taxes of $47
million and $208 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 shareholders of record as of June 21,
1996. As a result of the stock split, which took effect in July
1996, authorized, outstanding, and reserved common shares doubled
and retained earnings was reduced by the par value of the additional
common shares issued. The rights of the holders of these securities
were not otherwise modified. All references in the consolidated
statement of earnings for the period ended January 31, 1996 to number
of shares and per share amounts of the Company's common stock have
been restated.
6. The Company accounts for its employee stock compensation plans using
the intrinsic value method prescribed by Accounting Principles Board
Opinion No. 25, "Accounting for Stock Issued to Employees." In October
1995, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 123 (SFAS 123), "Accounting for
Stock-Based Compensation," which is effective for fiscal year 1997.
Under SFAS 123 companies may elect, but are not required, to use a
fair value methodology to recognize compensation expense for all
stock-based awards. The Company will implement the disclosure-only
provisions of SFAS 123 effective with its annual financial statements
for fiscal year 1997.
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 first three months of fiscal 1997 was
$10.3 billion, an increase of 11 percent from the same period of fiscal
1996. Product sales increased 10 percent and service revenue grew 18
percent over the corresponding period of fiscal 1996. Net revenue grew
9 percent to $6.0 billion internationally and 14 percent to $4.3 billion
in the U.S.
The first quarter growth in net revenue was due principally to strong growth
in home and desktop PCs, PC servers, UNIX(R) systems, and service and
support. The Company's printer products groups grew moderately, with
supplies leading growth. The Company's slower revenue growth, as compared
to the same period in the prior year, is attributable to slower market
growth in some geographies, intensified competitive pricing pressures, and
declines in average selling prices for some of the Company's products.
Fluctuations in foreign currency exchange rates also unfavorably impacted
the Company's net revenue growth.
Costs and Expenses - Cost of products sold and services as a percentage
of net revenue was 65.0 percent for the first quarter of fiscal 1997,
compared to 64.5 percent for the first quarter of fiscal 1996, a .5
percentage point increase. This compares to a 2.2 percentage point
year-over-year increase experienced in the first quarter of fiscal 1996.
The decline in the rate of increase is due to a lessening in competitive
pricing pressures in the PC businesses, favorable component pricing in the
PC and printer businesses, and a favorable shift in the Company's product
sales mix to higher-gross-margin products. Improved supply-chain management
was also a key factor. Cost of sales is expected, however, to continue to
trend upward in the future as the benefit of some of the factors above is
considered temporary.
Operating expenses as a percentage of net revenue were 22.6 percent for
the first quarter of fiscal 1997 and 1996. This reflects ongoing efforts
to achieve expense structures appropriate for the Company's changing
business and expansion of the net revenue base in fiscal 1997. Operating
expenses increased 10 percent for the first quarter of fiscal 1997 over
the corresponding year-ago period. Within this category, the largest
expense growth occurred in research and development expenses, reflecting the
Company's commitment to ensuring a continuing flow of high quality products.
6
Provision for Taxes - The provision for taxes as a percentage of earnings
before taxes was 30.0 percent for the first quarter of fiscal 1997, compared
to 32.0 percent for the first quarter of fiscal 1996. The lower tax rate in
fiscal 1997 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 first quarter of fiscal 1997 were
$912 million, or 87 cents per share on an average of 1.05 billion shares,
compared to net earnings of $790 million, or 75 cents per share on an
average of 1.05 billion shares for the first quarter of fiscal 1996, as
restated to reflect the retroactive effect of the July 1996 2-for-1 stock
split.
FINANCIAL CONDITION
- -------------------
Liquidity and Capital Resources - The Company's financial position remains
strong, with cash and cash equivalents and short-term investments of $2.9
billion at January 31, 1997, compared to $3.3 billion at October 31, 1996.
In addition, other long-term investments, relatively low levels of debt
compared to assets, and a large equity base continue to demonstrate the
Company's financial flexibility.
Cash flows from operating activities were $1.8 billion during the first
three months of fiscal 1997, compared to $618 million for the corresponding
period of fiscal 1996.
The increase in cash flows from operating activities in fiscal 1997 was
attributable primarily to changes in inventory levels during fiscal 1997
and 1996. Inventory declined 8 percent on 11 percent revenue growth during
the first quarter of fiscal 1997, as compared to an increase of 54 percent
on revenue growth of 27 percent in the same period of fiscal 1996. The
decline during fiscal 1997, as well as the resulting improvement in inventory
as a percentage of net revenue, from 20.3 percent in fiscal 1996 to 15.8
percent in fiscal 1997, is attributable primarily to improved supply-chain
management, particularly of order inflows and shipments to third-party
distribution channels.
7
Capital expenditures for the first three months of fiscal 1997 were $513
million, compared to $429 million for the corresponding period in fiscal
1996. The increase in capital expenditures was due to expansion of capacity
for increased levels of business and increased expenditures to support growth
in the Company's leasing business.
The changes in short-term investment and borrowing activities during the
first quarter continue a program of repatriation of short-term investments
from Puerto Rico that the Company began in the fourth quarter of fiscal 1996
due to changes in tax laws in that country. Cash from the liquidation of
those investments was used to pay down notes payable and short-term
borrowings.
Under the Company's ongoing stock repurchase program, shares have been
purchased to meet employee stock plan requirements. During the three months
ended January 31, 1997, the Company purchased and retired approximately
3.3 million shares for an aggregate price of $172 million. During the
three months ended January 31, 1996, the Company purchased and retired
approximately 7.4 million shares (on a restated basis) for an aggregate
price of $309 million.
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
inherently 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.
Inventory management has also become increasingly complex as the Company
continues to sell a greater mix of products, especially printers and personal
computers, through third party distribution channels. Resellers constantly
adjust their ordering patterns in response to the Company's, and its
competitors', supply into the channel and the timing of their new product
introductions and relative feature sets, as well as seasonal fluctuations
in end-user demand such as the back-to-school and holiday selling periods.
Resellers may increase orders during times of shortages, cancel orders
if the channel is filled with currently available products, or delay orders
in anticipation of the new products. Any excess supply could result in
price reductions and inventory writedowns, which in turn could adversely
affect the Company's gross margins.
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
Portions of the Company's manufacturing operations are dependent on the
ability of suppliers to deliver components, 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 the industry for
those parts. Such constraints, if persistent, 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 for such
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 customer preferences. As a result, 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. Divestitures may result in
the cancellation of orders and charges to earnings. 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 reasonably 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.
UNIX is a registered trademark in the United States and other
countries, licensed exclusively through X/Open(R) Company Limited.
X/Open is a registered trademark, and the X device is a trademark
of X/Open Company Ltd. in the U.K. and other countries.
10
PART II. OTHER INFORMATION
---------------------------
Item 4. Submission of Matters to a Vote of Security Holders
(a) The Company's Annual Meeting of Shareholders was held on
February 25, 1997.
(b) At the Annual Meeting, shareholders voted on three matters:
the election of directors, the adoption of the Company's 1997
Director Stock Plan and the appointment of Price Waterhouse LLP
as the Company's independent accountants.
The shareholders elected all members of the management slate
in an uncontested election and approved the adoption of the
1997 Director Stock Plan and the appointment of independent
accountants, by the following votes, respectively.
Directors
---------
Votes Withheld/
Director Votes For Abstentions
-------- --------- ---------------
Thomas E. Everhart 839,973,588 6,957,640
John B. Fery 840,037,495 6,893,733
Jean-Paul G. Gimon 840,129,551 6,801,677
Sam Ginn 840,150,525 6,780,703
Richard A. Hackborn 840,189,980 6,741,248
Walter B. Hewlett 840,143,171 6,788,057
George A. Keyworth II 840,183,091 6,748,137
David M. Lawrence, M.D. 840,058,118 6,873,110
Paul F. Miller, Jr. 840,137,583 6,793,645
Susan P. Orr 840,158,608 6,772,620
David W. Packard 840,060,904 6,870,324
Lewis E. Platt 840,185,891 6,745,337
Robert P. Wayman 840,167,232 6,763,996
Adoption of 1997 Director Stock Plan
------------------------------------
Votes Withheld/
Votes For Votes Against Abstentions
--------- ------------- ---------------
827,400,859 12,464,458 7,065,911
Accountants
-----------
Votes Withheld/
Votes For Votes Against Abstentions
--------- ------------- ---------------
843,735,489 1,302,557 1,893,182
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 January 31, 1997.
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: March 14, 1997 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. Amended By-Laws
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. Hewlett-Packard Company 1997 Director Stock Plan, which exhibit
is incorporated herein by reference to Form S-8 filing made on
March 7, 1997.
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> 3-MOS
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-END> JAN-31-1997
<CASH> 2,789
<SECURITIES> 70
<RECEIVABLES> 6,841
<ALLOWANCES> 0
<INVENTORY> 6,232
<CURRENT-ASSETS> 17,186
<PP&E> 10,465
<DEPRECIATION> 4,831
<TOTAL-ASSETS> 27,156
<CURRENT-LIABILITIES> 9,398
<BONDS> 2,584
<COMMON> 1,020
0
0
<OTHER-SE> 13,092
<TOTAL-LIABILITY-AND-EQUITY> 27,156
<SALES> 8,825
<TOTAL-REVENUES> 10,295
<CGS> 0
<TOTAL-COSTS> 6,694
<OTHER-EXPENSES> 699
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 54
<INCOME-PRETAX> 1,303
<INCOME-TAX> 391
<INCOME-CONTINUING> 912
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 912
<EPS-PRIMARY> .87
<EPS-DILUTED> 0
</TABLE>
