<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Quarterly Report under Section 13
of the Securities Exchange Act of 1934
For the Quarter Ended September 30, 1998 Commission File No. 1-4290
K2 INC.
(exact name of registrant as specified in its charter)
DELAWARE 95-2077125
(State of Incorporation) (I.R.S. Employer Identification No.)
4900 South Eastern Avenue
Los Angeles, California 90040
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (323) 724-2800
Former name, former address and former fiscal year, if changed since last
report:
Not applicable
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, and (2) has been subject to such
filing requirements for the past 90 days.
Yes X
---
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of October 31, 1998.
Common Stock, par value $1 16,566,893 Shares
<PAGE>
FORM 10-Q QUARTERLY REPORT
PART - 1 FINANCIAL INFORMATION
Item 1. Financial Statements
STATEMENTS OF CONSOLIDATED INCOME (condensed)
(Dollars in thousands, except per share figures)
<TABLE>
<CAPTION>
THREE MONTHS NINE MONTHS
ENDED SEPTEMBER 30 ENDED SEPTEMBER 30
---------------------------------------------
1998 1997 1998 1997
(Unaudited)
<S> <C> <C> <C> <C>
Net sales $133,884 $121,255 $441,716 $417,509
Cost of products sold 101,657 83,028 320,371 289,920
-------- -------- -------- --------
Gross profit 32,227 38,227 121,345 127,589
Selling expenses 21,498 17,590 64,085 59,331
General and administrative expenses 20,181 13,846 45,439 38,048
-------- -------- -------- --------
Operating income (loss) (9,452) 6,791 11,821 30,210
Interest expense 2,833 2,574 9,147 7,772
Other expense (income), net (68) 120 (208) (106)
-------- -------- -------- --------
Income (loss) before income taxes (12,217) 4,097 2,882 22,544
Provision (credit) for income taxes (4,308) 1,170 643 6,779
-------- -------- -------- --------
Income (loss) from continuing operations (7,909) 2,927 2,239 15,765
Discontinued operations, net of taxes (449) 140 627 1,851
-------- -------- -------- --------
Net income (loss) $ (8,358) $ 3,067 $ 2,866 $ 17,616
-------- -------- -------- --------
-------- -------- -------- --------
Basic earnings per share:
Continuing operations $ (0.48) $ 0.18 $ 0.13 $ 0.95
Discontinued operations (0.03) 0.01 0.04 0.11
-------- -------- -------- --------
Net income (loss) (0.51) 0.19 0.17 1.06
-------- -------- -------- --------
-------- -------- -------- --------
Diluted earnings per share:
Continuing operations $ (0.48) $ 0.17 $ 0.13 $ 0.94
Discontinued operations (0.03) 0.01 0.04 0.11
-------- -------- -------- --------
Net income (loss) (0.51) 0.18 0.17 1.05
-------- -------- -------- --------
-------- -------- -------- --------
Basic shares outstanding 16,547 16,545 16,551 16,543
Diluted shares outstanding 16,547 16,720 16,629 16,713
Cash dividend $ 0.11 $ 0.11 $ 0.33 $ 0.33
</TABLE>
See notes to consolidated condensed financial statements.
1
'<PAGE>
CONSOLIDATED BALANCE SHEETS (condensed)
(Dollars in thousands)
<TABLE>
<CAPTION>
SEPTEMBER 30 DECEMBER 31
1998 1997
------------ -----------
(Unaudited)
ASSETS
<S> <C> <C>
Current Assets
Cash and cash equivalents $ 4,972 $ 5,706
Accounts receivable, net 120,916 110,091
Inventories
Finished goods 136,679 132,482
Work in process 10,089 18,872
Raw materials 32,535 27,727
------------ -----------
179,303 179,081
Less LIFO reserve 3,414 3,795
------------ -----------
175,889 175,286
Deferred taxes 9,255 9,236
Prepaid expenses and other current assets 5,817 6,081
------------ -----------
Total current assets 316,849 306,400
Property, Plant and Equipment 151,365 136,420
Less allowance for depreciation and
amortization 83,031 74,336
------------ -----------
68,334 62,084
Intangibles, principally goodwill 19,345 17,235
Net assets of discontinued operations 29,696 32,731
Other 3,912 3,152
------------ -----------
Total Assets $ 438,136 $ 421,602
------------ -----------
------------ -----------
</TABLE>
See notes to consolidated condensed financial statements.
2
<PAGE>
CONSOLIDATED BALANCE SHEETS (condensed)
(Dollars in thousands)
<TABLE>
<CAPTION>
SEPTEMBER 30 DECEMBER 31
1998 1997
------------ -----------
(Unaudited)
LIABILITIES AND SHAREHOLDERS' EQUITY
<S> <C> <C>
Current Liabilities
Bank loans $ 37,140 $ 48,967
Accounts payable 25,796 24,373
Accrued payroll and related 15,148 16,868
Other accruals 30,797 20,574
Current portion of long-term debt 4,444 4,445
------------ -----------
Total current liabilities 113,325 115,227
Long-Term Debt 111,668 88,668
Deferred Taxes 11,376 14,822
Shareholders' Equity
Preferred Stock $1 par value, authorized
12,500,000 shares, none issued
Common Stock, $1 par value, authorized
40,000,000 shares, issued shares -
17,190,652 in 1998 and 17,160,080 in
1997 17,191 17,160
Additional paid-in capital 132,488 132,086
Retained earnings 67,072 69,668
Employee Stock Ownership Plan and
stock option loans (2,092) (3,006)
Treasury shares at cost, 623,759 shares
in 1998 and in 1997 (8,106) (8,106)
Cumulative translation adjustments (4,786) (4,917)
------------ -----------
Total Shareholders' Equity 201,767 202,885
Total Liabilities and Shareholders'
Equity $ 438,136 $ 421,602
------------ -----------
------------ -----------
</TABLE>
See notes to consolidated condensed financial statements.
3
<PAGE>
STATEMENTS OF CONSOLIDATED CASH FLOWS (condensed)
(In thousands)
<TABLE>
<CAPTION>
NINE MONTHS
ENDED SEPTEMBER 30
----------------------
1998 1997
----------------------
(unaudited)
<S> <C> <C>
Operating Activities
Income from continuing operations $ 2,239 $ 15,765
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization 10,368 8,063
Deferred taxes (3,700) (802)
Changes in operating assets and liabilities:
Accounts receivable (9,502) (6,057)
Inventories 7,106 (23,509)
Prepaid expenses and other current assets 658 (1,891)
Accounts payable (10,431) (5,169)
Payrolls and other accruals 7,576 10,063
-------- --------
Net cash provided by (used in) operating activities 4,314 (3,537)
Investing Activities
Property, plant & equipment expenditures (15,751) (12,857)
Disposals of property, plant & equipment 313 441
Sale of investments 6,408
Other items, net 18 (3,789)
-------- --------
Net cash used in investing activities (15,420) (9,797)
Financing Activities
Borrowings under long-term debt 40,500 24,667
Payments of long-term debt (18,201) (28,086)
Net (decrease) increase in short-term bank loans (11,827) 24,211
Proceeds from (repurchase of) accounts receivable
facility 700 (5,225)
Dividends paid (5,462) (5,460)
Repayment of loans by ESOP 1,000 3,000
-------- --------
Net cash provided by financing activities 6,710 13,107
-------- --------
Net decrease in cash and cash equivalents from
continuing operations (4,396) (227)
Discontinued operations
Income from discontinued operations 627 1,851
Adjustments to reconcile income to net cash provided
by (used in) discontinued operations:
Depreciation and amortization 2,270 2,213
Capital expenditures (3,067) (3,966)
Other items, net 3,832 (3,748)
-------- --------
Cash provided by (used in) discontinued operations 3,662 (3,650)
Net decrease in cash and cash equivalents (734) (3,877)
Cash and cash equivalents at beginning of year 5,706 10,554
-------- --------
Cash and cash equivalents at end of period $ 4,972 $ 6,677
-------- --------
-------- --------
Supplemental disclosure of cash flow information:
Interest paid $ 8,567 6,597
Income taxes paid 3,247 8,577
</TABLE>
See notes to consolidated condensed financial statements.
4
<PAGE>
K2 INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 1998
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of management,
all adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. Operating results for
the three and nine month periods ended September 30, 1998, are not
necessarily indicative of the results that may be expected for the year ended
December 31, 1998. For further information, refer to the Consolidated
Financial Statements and Notes to Financial Statements included in the
Company's Annual Report on Form 10-K for the year ended December 31, 1997.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ACCOUNTS RECEIVABLE AND ALLOWANCES
Accounts receivable are net of allowances for doubtful accounts of $5,831,000 at
September 30, 1998 and $6,590,000 at December 31, 1997.
RECLASSIFICATIONS
Certain prior year amounts have been reclassified to conform with the current
year presentation.
NOTE 3 - BORROWINGS AND OTHER FINANCIAL INSTRUMENTS
Covenants contained in the Company's $100 million credit line and accounts
receivable financing arrangement, among other things, restrict amounts
available for payment of cash dividends and stock repurchases by the Company.
As of September 30, 1998, $8.6 million of retained earnings were free of
such restrictions.
At September 30, 1998, $49.3 million of accounts receivable were sold under
the existing $50 million accounts receivable purchase facility.
NOTE 4 - DISCONTINUED OPERATIONS
On September 10, 1998, the Company adopted a plan to dispose of its Simplex
building products division ("Division"). Accordingly, the Company reported
the net operating results and net assets of the Division as a discontinued
operation in the accompanying consolidated condensed financial statements.
5
<PAGE>
K2 INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 1998
NOTE 4 - DISCONTINUED OPERATIONS (CONTINUED)
Net assets of discontinued operations have been segregated in the
accompanying consolidated condensed balance sheets and consist primarily of
accounts receivable, inventories and fixed assets offset by accounts payable,
accrued payroll and related items and other accruals. Net sales of $20.2
million and $66.4 million for the three and nine month periods ended
September 30, 1998, respectively, and net sales of $21.1 million and $67.9
million for the three and nine month periods ended September 30, 1997,
respectively, were excluded from consolidated net sales in the accompanying
condensed statements of consolidated income.
NOTE 5 - CHARGE FOR RESERVES
The Company recorded a charge for reserves in the third quarter of $14.5
million ($9.4 million after tax or $.57 per diluted share), which was
included in earnings from continuing operations, to cover the cost of
several actions to enhance sales, streamline operations and reduce costs and
to write down related assets. Approximately $7.7 million of the reserves
relates to a write-down of certain bike and other sporting goods inventories.
The balance of the reserve relates to implementing planned cost reduction
programs at the winter sports and apparel operations and other non-cash
items. These initiatives are expected to begin to benefit operations in early
1999.
NOTE 6 - ACQUISITION OF BUSINESS
On August 19, 1998, the Company purchased K2 Japan Corporation, a distributor
of K2 branded products located in Japan. The purchase price of the
acquisition was not material. The transaction was accounted for using the
purchase method of accounting and the results of operations from this
business have been included in the consolidated condensed statements of
income from the date of acquisition.
NOTE 7 - COMPREHENSIVE INCOME
As of January 1, 1998, the Company adopted Statement of Financial Accounting
Standards ("SFAS") No. 130, "Reporting Comprehensive Income". SFAS No. 130
establishes new rules for the reporting and display of comprehensive income
and its components; however, the adoption of this Statement had no impact on
the Company's net income or shareholders' equity. SFAS No. 130 requires
foreign currency translation adjustments, which prior to adoption were
reported separately in shareholders' equity, to be included in other
comprehensive income.
During the three and nine months ended September 30, 1998, total
comprehensive income (loss) amounted to ($7.7) million and $3.0 million,
respectively. For the three and nine months ended September 30, 1997, total
comprehensive income amounted to $2.6 million and $15.3 million, respectively.
6
<PAGE>
ITEM 2 - Management's Discussion and Analysis of Financial Condition
and Results of Operations
In September 1998, the Company adopted a plan to dispose of its Simplex
building products division ("Division"). Accordingly, the Company reported
the net operating results and net assets of the Division as a discontinued
operation, and prior years' operations were similarly reclassified. (See
Note 4 of Notes to Consolidated Condensed Financial Statements.) The
discussion which follows focuses on the continuing operations of the Company.
A. COMPARATIVE THIRD QUARTER RESULTS OF OPERATIONS
Net sales from continuing operations for the three months ended September 30,
1998 increased to $133.9 million from $121.3 million in the year-earlier
period. Income from continuing operations and prior to a $14.5 million ($9.4
million after tax or $.57 per diluted share) charge for reserves was $1.5
million, or $.09 per diluted share. This compares with income from
continuing operations in the same quarter of the prior year of $4.5 million,
or $.27 per diluted share, before a $2.4 million ($1.6 million after tax or
$.09 per diluted share) restructuring charge. After the charge for reserves,
there was a loss from continuing operations of $7.9 million, or $.48 per
diluted share, and a net loss, including the discontinued operations of the
Division, of $8.4 million, or $.51 per diluted share for the current year
quarter. This compares with income from continuing operations of $2.9
million, or $.17 per diluted share, and net income of $3.1 million, or $.18
per diluted share, in the prior year quarter.
NET SALES. In the sporting goods and other recreational products group, net
sales increased 11.5% to $105.6 million from $94.7 million in the
year-earlier period. This growth was primarily the result of an increase in
worldwide skate sales. Sales also benefited from double-digit growth of new
Shakespeare fishing tackle products recently introduced and from continued
demand for its core products. Hilton active apparel reported an improvement
in sales to the advertising specialty market. K2's lifestyles companies
continued to progress, particularly due to sales of skateboard shoes.
Shipments of snowboard products and Stearns sports equipment were comparable
to the prior year. Offsetting these gains was a sales decline in the bicycle
business. The decline in the high-end of the full-suspension bike market
resulted in a 70% reduction in overall shipments as compared to the
comparable prior year quarter. Ski shipments were impacted by cautious
retail buying after a disappointing retail ski season which has resulted in
an industry-wide decline in preseason orders. Sales of recreational products
to the Japanese market also declined reflecting economic conditions in Asia.
Net sales of the remaining two industrial products group, Shakespeare
composites and electronics and Shakespeare monofilaments and specialty
resins, rose 6.4% to $28.3 million from $26.6 million in the prior year's
quarter. The increase reflects strong improvement in shipments of worldwide
paperweaving monofilaments, an increase in specialty resin sales and higher
cutting line business.
7
<PAGE>
GROSS PROFIT. Gross profit for the third quarter of 1998 declined to $32.2
million, or 24.1% of net sales as compared with $38.2 million, or 31.5% of
net sales in the year ago quarter. Excluding the effect of the charge for
reserves, gross profit for the 1998 quarter was $39.9 million, or 29.8% of
net sales. The decline in the gross profit percentage was due to shipments of
closeout bikes at no margin and lower margin from sales at reduced prices of
certain skate models.
COSTS AND EXPENSES. In the third quarter of 1998, selling expenses increased
to $21.5 million, or 16.1% of net sales from $17.6 million, or 14.5% of net
sales in the prior year's quarter. The increase was due to expanded
marketing of the various brands and products throughout the Company. General
and administrative expenses, before the $6.8 million relating to the charge
for reserves, increased to $13.4 million, or 10.0% of net sales, from $11.4
million, or 9.4% of net sales, before the restructuring charge of $2.4
million, included in the year-earlier period. The dollar increase is
attributable to continued investment in new product development and other
items related to timing. After the charges, general and administrative
expenses in the third quarter of 1998 increased to $20.2 million, or 15.1% of
net sales from $13.8 million, or 11.4% of net sales in the same 1997 quarter.
OPERATING INCOME. Operating income for the third quarter before the charge
for reserves declined to $5.0 million, or 3.7% of net sales, as compared to
operating income of $9.2 million before the restructuring charge, or 7.6% of
net sales, a year ago. The decline is mainly due to the lower gross profit
margin from closeout sales and higher selling, general and administrative
expenses. The operating loss after the charge for reserves was $9.5 million,
or 7.1% of net sales, versus operating income, after the restructuring
charge, of $6.8 million, or 5.6% of net sales, a year ago.
INTEREST EXPENSE. Interest expense increased $259,000 to $2.8 million in the
third quarter of 1998 compared to $2.6 million the year-earlier period.
Higher average borrowings incurred to support the growth in sales increased
interest expense by $651,000, which was offset by a reduction of $392,000 of
interest due to lower interest rates.
B. COMPARATIVE NINE-MONTH RESULTS OF OPERATIONS
Net sales from continuing operations for the nine months ended September 30,
1998 increased to $441.7 million from $417.5 million in the corresponding
prior-year period. Income from continuing operations before the charge for
reserves was $11.7 million, or $.70 per diluted share. This compares with
earnings from continuing operations, and before the after-tax restructuring
charge of $17.3 million, or $1.03 per diluted share for the same period in
the prior year. Including the charge for reserves, earnings from continuing
operations was $2.2 million, or $.13 per diluted share and net income was
$2.9 million, or $.17 per diluted share. This compares with income from
continuing operations of $15.8 million, or $.94 per diluted share, and net
income of $17.6 million, or $1.05 per diluted share, for the year-ago period.
8
<PAGE>
NET SALES. In the sporting goods and other recreational products group, net
sales increased to $343.8 million from $330.5 million in the 1997 period.
Shakespeare fishing tackle products grew at a strong double digit rate due to
the introduction of new Shakespeare branded products and continued gains in
core fishing tackle products. Shipments of snowboard products increased due
to strong demand for performance boards and Clicker step-in bindings and
boots. Worldwide sales of in-line skates recovered in the third quarter.
Stearns sports equipment contributed to sales growth as a result of new
products as well as continued strength of core products. The new lifestyle
companies also contributed to the sales increase. Offsetting these gains
were lower shipments of full-suspension bikes due to the decline in the
high-end of the full-suspension bike market. Sales of skis also declined due
to a disappointing retail season industry-wide.
The industrial products group reported a 12.5% increase in sales, to $97.9
million from $87.0 million. The improvement was primarily due to increased
sales of paperweaving product and cutting line in the Shakespeare
monofilament business.
GROSS PROFIT. Gross profit for the first nine months of 1998 declined to
$121.3 million, or 27.5% of net sales, from $127.6 million, or 30.6% of net
sales, in the same 1997 period. Excluding the effect of the charge for
reserves, gross profit was $129.0 million, or 29.2% of net sales, in the
first nine months of 1998. The reduction in the gross profit percentage
reflects closeout sales of certain bike inventories at no margin, higher
sales of certain skate inventories at reduced margins and higher
manufacturing costs in the industrial products group.
COST AND EXPENSES. Selling expenses for the first nine months of the year
increased to $64.1 million, or 14.5% of net sales, from $59.3 million, or
14.2% of net sales, in the comparable 1997 period. The increase was due to
expanded marketing efforts of new products. General and administrative
expenses, before the charge for reserves, increased to $38.6 million from
$35.6 million, before a restructuring charge in the prior-year period. These
expenses remained comparable from year to year as a percentage of net sales.
After the charges, general and administrative expenses in the first three
quarters of 1998 increased to $45.4 million, or 10.3% of net sales, from
$38.0 million, or 9.1% of net sales, in the prior year period.
OPERATING INCOME. Operating income before the charge for reserves declined
to $26.3 million, or 6.0% of net sales, from $32.6 million, or 7.8% of net
sales, before the restructuring charge in the prior-year period. The decline
was mainly attributable to the effect of the lower gross profit percentage
and higher selling, general and administrative expenses. After the charges,
operating income was $11.8 million, or 2.7% of net sales, compared with $30.2
million, or 7.2% of net sales, in the prior year period.
INTEREST EXPENSE. Interest expense increased $1.3 million to $9.1 million in
the first nine months of 1998 compared to $7.8 million in the year-earlier
period. Higher average borrowings incurred to support the growth in sales
and new product development increased interest expense by $2.1 million, which
was offset by a reduction of $800,000 of interest due to lower interest rates.
9
<PAGE>
C. FINANCIAL CONDITION
The Company's continuing operating activities provided $4.3 million of cash
during the nine months ended September 30, 1998, as compared with $3.5
million of cash used during the nine- month period a year ago. The year to
year improvement in cash was largely due to lower inventory levels in the
current period offset in part by lower income from continuing operations.
Net cash used for investing activities was $15.4 million in the current
nine-month period compared to $9.8 million in the corresponding 1997 period.
The 1997 period has been reduced by $6.4 million in connection with a
one-time sale of investments. Excluding the one-time sale, net cash used in
investing activities is consistent from year to year. There were no material
commitments for capital expenditures at September 30, 1998.
Net cash provided by financing activities was $6.7 million in the 1998
nine-month period as compared with $13.1 million in the corresponding
year-ago period. The year to year reduction of $6.4 million in cash from
financing activities was due to a net reduction in borrowings for the period.
The Company anticipates its remaining cash needs in 1998 will be provided
from operations and borrowings under existing credit lines.
D. OTHER MATTERS
The Company is currently working to resolve the potential impact of the Year
2000 on the processing of date-sensitive information by the Company's
computerized information systems. The year 2000 problem is the result of
computer programs being written using two digits (rather than four) to define
the applicable year. Any of the Company's programs that have time-sensitive
software may recognize a date using "00" as the year 1900 rather than the
year 2000, which could result in miscalculation or system failures. Based on
a preliminary study, the Company's management believes that most of the
Company's information systems are Year 2000 compliant. Those systems that
are not Year 2000 compliant will be either upgraded or replaced by the end of
1998 to ensure compliance. The total anticipated cost of compliance is not
expected to be material.
10
<PAGE>
STATEMENT REGARDING FORWARD-LOOKING DISCLOSURE
This Form 10-Q contains certain "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended, which represent the
Company's expectations or beliefs concerning future events, including, but
not limited to, the following: statements regarding sales and earnings,
market conditions, market positioning, product acceptance and demand,
restructuring efforts, market trends regarding bicycles, softboot in-line
skates and skis, inventory levels at retail and overall market trends which
involve substantial risks and uncertainties. The Company cautions that these
statements are further qualified by important factors that could cause actual
results to differ materially from those in the forward-looking statements,
including, but not limited to, economic conditions, product demand,
competitive pricing and products, and other risks described in the Company's
Annual Report on Form 10-K filing with the Securities and Exchange Commission.
11
<PAGE>
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
27 Financial Data Schedule
(b) Reports on Form 8-K filed in the third quarter ended
September 30, 1998
None
12
<PAGE>
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.
K2 INC.
(registrant)
Date: November 12, 1998 /S/ RICHARD M. RODSTEIN
Richard M. Rodstein
President and Chief Executive
Officer
Date: November 12, 1998 /S/ JOHN J. RANGEL
John J. Rangel
Senior Vice President - Finance
13
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> SEP-30-1998
<CASH> 4,972
<SECURITIES> 0
<RECEIVABLES> 126,747
<ALLOWANCES> (5,831)
<INVENTORY> 175,889
<CURRENT-ASSETS> 316,849
<PP&E> 151,365
<DEPRECIATION> (83,031)
<TOTAL-ASSETS> 438,136
<CURRENT-LIABILITIES> 113,325
<BONDS> 0
0
0
<COMMON> 17,191
<OTHER-SE> 184,576
<TOTAL-LIABILITY-AND-EQUITY> 438,136
<SALES> 441,716
<TOTAL-REVENUES> 441,924
<CGS> 320,371
<TOTAL-COSTS> 320,371
<OTHER-EXPENSES> 108,409
<LOSS-PROVISION> 1,115
<INTEREST-EXPENSE> 9,147
<INCOME-PRETAX> 2,882
<INCOME-TAX> 643
<INCOME-CONTINUING> 2,239
<DISCONTINUED> 627
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,866
<EPS-PRIMARY> .17
<EPS-DILUTED> .17
</TABLE>
