<PAGE>
U. S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended April 30, 1995
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from to
---------------- ----------------
Commission File Number 0-14365
ALPHA TECHNOLOGIES GROUP, INC.
----------------------------------
(Exact name of small business issuer as specified in its charter)
Delaware 76-0079338
- ------------------------------- ---------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
333 Cypress Run, Suite 360, Houston, Texas 77094
-------------------------------------------------
(Address of principal executive offices)
(713)-647-9941
--------------
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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
--- ---
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date.
Common Stock, $.03 par value 5,851,941
------------------------------ ---------
Class Outstanding at May 31, 1995
Transitional Small Business Disclosure Format (Check one): Yes No X
--- ---
<PAGE>
ALPHA TECHNOLOGIES GROUP, INC.
FORM 10-QSB
APRIL 30, 1995
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
PART I FINANCIAL INFORMATION.............................. 3
CONSOLIDATED BALANCE SHEET - APRIL 30, 1995................ 3
CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE QUARTERS AND
SIX MONTHS ENDED APRIL 30, 1995 AND 1994.................. 4
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED APRIL 30, 1995 AND 1994.......... 5
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS................. 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS....................... 8
PART II - OTHER INFORMATION................................ 12
</TABLE>
2
<PAGE>
PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ALPHA TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET - UNAUDITED
APRIL 30, 1995
(In Thousands, Except Share and per Share Data)
<TABLE>
<S> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 5,769
Marketable securities 778
Accounts receivable, net 9,714
Inventories,net 8,146
Prepaid expenses 986
--------
Total current assets 25,393
PROPERTY AND EQUIPMENT, at cost 6,066
Less -- Accumulated depreciation and amortization 725
--------
Property and equipment, net 5,341
GOODWILL, net 2,258
OTHER ASSETS, net 1,656
--------
$ 34,648
========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable, trade $ 4,864
Accrued compensation and related benefits 1,664
Other accrued liabilities 1,742
Current portion of long-term debt 419
Current portion of other long-term liabilities 893
--------
Total current liabilities 9,582
LONG-TERM DEBT 6,392
OTHER LONG-TERM LIABILITIES 1,394
MINORITY INTEREST IN CONSOLIDATED SUBSIDIARY 1,480
STOCKHOLDERS' EQUITY:
Preferred stock, $100 par value; shares authorized 180,000 --
Common stock, $.03 par value; shares authorized 17,000,000;
issued 6,787,345 at April 30, 1995 and 6,727,345 at
October 31, 1994 204
Additional paid-in capital 38,804
Retained earnings (deficit) (20,355)
Unrealized gain on marketable securities, net of income
taxes 146
Treasury stock, at cost (918,404 common shares at April 30,
1995 and 544,249 common shares at October 31, 1994) (2,999)
--------
15,800
--------
$ 34,648
========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
STATEMENTS.
3
<PAGE>
ALPHA TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE QUARTERS AND SIX MONTHS ENDED APRIL 30, 1995 AND 1994
(Unaudited)
(In Thousands, Except per Share Data)
<TABLE>
<CAPTION>
Quarter Ended Six Months Ended
April 30, April 30,
------------------------- ---------------------------
1995 1994 1995 1994
------------ ----------- ------------ -----------
<S> <C> <C> <C> <C>
SALES $15,953 $4,873 $27,161 $9,583
COST OF SALES 11,726 3,481 19,934 7,002
------- ------ ------- ------
Gross profit 4,227 1,392 7,227 2,581
OPERATING EXPENSES:
Research and development 302 145 545 295
Sales, general and administrative 2,806 1,188 5,364 2,280
------- ------ ------- ------
Total operating expenses 3,108 1,333 5,909 2,575
------- ------ ------- ------
INCOME FROM CONTINUING OPERATIONS 1,119 59 1,318 6
INTEREST, INVESTMENT AND OTHER INCOME, net 141 55 226 99
INTEREST EXPENSE (180) -- (318) --
------- ------ ------- ------
INCOME FROM CONTINUING OPERATIONS BEFORE PROVISION FOR INCOME
TAXES AND MINORITY INTEREST 1,080 114 1,226 105
PROVISION FOR INCOME TAXES--
CONTINUING OPERATIONS 227 71 278 94
INCOME FROM CONTINUING OPERATIONS BEFORE MINORITY INTEREST 853 43 948 11
MINORITY INTEREST (102) -- (96) --
INCOME (LOSS) FROM DISCONTINUED OPERATIONS, net of income tax
effect -- (132) -- 499
------- ------ ------- ------
NET INCOME (LOSS) 751 (89) 852 510
======= ====== ======= ======
NET INCOME (LOSS) PER COMMON AND COMMON EQUIVALENT SHARE:
Continuing operations $0.17 $0.01 $0.20 --
Interest, investment and other income $0.02 -- $0.03 $0.02
Interest expense ($0.03) -- ($0.05) --
Provision for income taxes--continuing operations ($0.03) ($0.01) ($0.04) ($0.02)
Minority interest ($0.02) -- ($0.01) --
Discontinued operations -- ($0.02) -- $0.08
------- ------ ------- ------
Net income (loss) $0.11 ($0.02) $0.13 $0.08
======= ====== ======= ======
SHARES USED IN COMPUTING NET INCOME (LOSS) PER SHARE 6,415 5,885 6,504 6,238
======= ====== ======= ======
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
STATEMENTS.
4
<PAGE>
ALPHA TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED APRIL 30, 1995 AND 1994
(Unaudited)
(In Thousands)
<TABLE>
<CAPTION>
Six Months Ended
April 30,
--------------------
1995 1994
------- -------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 852 $ 510
Adjustments to reconcile net income to net cash provided (used) by
operating activities:
Net (income) from discontinued operations -- (499)
Deferred income taxes 86 --
Gain on sale of marketable securities--available-for-sale (55) --
Depreciation and amortization 541 144
Minority interest in earnings of subsidiary 96 --
Changes in assets and liabilities:
(Increase) in marketable securities--trading securities (14) (194)
(Increase) in accounts receivable (2,322) (141)
Decrease in notes receivable 2,000 --
(Increase) in prepaid expenses (244) --
(Increase) decrease in inventories (2,315) 98
(Increase) in goodwill (662) --
Increase in accounts payable 1,443 65
Increase (decrease) in accrued compensation and related benefits 262 (209)
(Decrease) in other accrued liabilities (480) (99)
(Decrease) in other long-term liabilities (527) --
-------- ------
Total adjustments (2,191) (835)
-------- ------
Net cash (used) by continuing operations (1,339) (325)
Net cash provided by discontinued operations -- 747
-------- ------
Net cash provided (used) by operating activities (1,339) 422
-------- ------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale and maturity of short-term investment -- 3,516
Purchase of marketable securities--available-for-sale (175) (948)
Proceeds from sale of marketable securities--available-for-sale 687 --
Purchase of property and equipment, net (1,793) (191)
(Increase) in other assets, net (46) --
-------- ------
Net cash provided (used) by investing activities (1,327) 2,377
-------- ------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock 136 129
Payments to repurchase common stock (2,016) --
Proceeds from debt 19,156 --
Payments on debt (16,247) --
-------- ------
Net cash provided by financing activities 1,029 129
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (1,637) 2,928
-------- ------
CASH AND CASH EQUIVALENTS, beginning of year 7,406 1,932
-------- ------
CASH AND CASH EQUIVALENTS, end of period $ 5,769 $4,860
======== ======
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
STATEMENTS.
5
<PAGE>
ALPHA TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) ORGANIZATION
The consolidated financial statements include the accounts of Alpha Technologies
Group, Inc. ("Alpha" or the "Company") and its wholly- and majority-owned
subsidiaries. The Company designs, manufactures and sells electronic
components. Wakefield Engineering, Inc. ("Wakefield"), a wholly-owned
subsidiary of the Company, is a designer and manufacturer of thermal management
products. Uni-Star Industries, Inc. ("Uni-Star"), an 80% owned subsidiary of
the Company, is a manufacturer and assembler of connectors, back-panels, cables
and cable assemblies for the aircraft, military and aerospace markets.
In fiscal 1994, the Company sold its Information Solutions Segment ("ISS").
Accordingly, the ISS financial results for fiscal 1994 are presented as
discontinued operations.
The Company was incorporated in Delaware in 1983 and is a successor to a Texas
corporation incorporated in 1969. The shareholders, at the Annual Meeting of
the Company on April 19, 1995, approved a name change of the corporation to
Alpha Technologies Group, Inc. Prior to this change, the name of the
corporation was Synercom Technology, Inc.
(2) CONSOLIDATED FINANCIAL STATEMENTS
The accompanying unaudited consolidated financial statements have been prepared
pursuant to the rules and regulations of the Securities and Exchange Commission.
In the opinion of the Company, the accompanying interim unaudited consolidated
financial statements contain all material adjustments, consisting only of normal
recurring adjustments necessary to present fairly the financial condition, the
results of operations and the changes in cash flows of Alpha Technologies
Group, Inc. and subsidiaries for interim periods. The results for such interim
periods are not necessarily indicative of results for a full year.
Users of financial information produced for interim periods are encouraged to
refer to the footnotes contained in the Annual Report to Stockholders when
reviewing interim financial results.
6
<PAGE>
ALPHA TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(3) INVENTORIES
<TABLE>
<CAPTION>
Inventories consisted of the following as of (in thousands): April 30,
1995
---------
<S> <C>
Raw materials and components $5,427
Work in process 1,908
Finished goods 1,027
------
8,362
Valuation reserve (216)
------
$8,146
------
</TABLE>
(4) SUBSEQUENT EVENT
In May of 1995, Wakefield amended its Loan and Security Agreement ("Loan
Agreement"), originally entered into in June of 1994, to increase the revolving
credit facility from $4,000,000 to $7,000,000 and extended the term of such
facility to May 5, 1997. In addition, Wakefield entered into an equipment term
note in the amount of $265,000, payable in 47 monthly installments including
principal of $5,520.83 with a final installment equal to all unpaid principal on
May 1, 1999, in each instance, with interest thereon to the date of payment.
Interest on the revolving credit facility and equipment term loans accrues at
the bank's corporate base rate plus three quarters of one percent. Wakefield's
obligations under the Loan Agreement are secured by a first lien on, and
assignment of, all of Wakefield's assets, including without limitation, all
accounts receivable, inventory, equipment and general intangibles. The Loan
Agreement includes various financial convenants with which, as of April 30,
1995, Wakefield was in compliance. On April 30, 1995, Wakefield had $5,119,000
drawn on the revolving credit facility.
7
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
Quarter to Quarter Comparison
The Company reported net income for the quarter ended April 30, 1995 of $751,000
or $.11 per share compared to $43,000 net income from continuing operations for
the quarter ended April 30, 1994. This increase was attributable to the
acquisition of profitable businesses and growth in Wakefield's thermal
management business.
Revenues for the quarter ended April 30, 1995 were $15,953,000 compared to
revenues from continuing operations for the quarter ended April 30, 1994 of
$4,873,000. Revenues from continuing operations for the quarter ended April 30,
1994 were derived solely from Wakefield Engineering, Inc. ("Wakefield"), a
wholly owned subsidiary of Alpha. Revenues for the quarter ended April 30, 1995
were derived from Wakefield and Uni-Star Industries, Inc. ("Uni-Star"), an 80%
owned subsidiary which was acquired in June of 1994. Revenues from Wakefield
for the second quarter of fiscal 1995, compared to the comparable period of
fiscal 1994, increased due to internal growth and the August 31, 1994
acquisition of the assets and business of Aham Tor, Inc., a designer and
manufacturer of heat sinks and related devices.
The Company's gross profit for the quarter ended April 30, 1995 was 26.5% of
total revenues versus 28.6% for the quarter ended April 30, 1994. The decrease
in gross profit as a percentage of total revenues for the quarter ended April
30, 1995 compared to the quarter ended April 30, 1994 was primarily attributable
to increases in direct labor and material costs as a percentage of revenue for
the Wakefield business. These increases were offset to an extent by a decrease
in manufacturing overhead as a percentage of revenue due to an increase in the
sales volume.
Research and development expenses for the second quarter of fiscal 1995 were
$302,000 compared to $145,000 for the second quarter of fiscal 1994. This
increase was primarily due to payroll, related benefit expenses and other costs
related to an increase in staff.
8
<PAGE>
Selling, general and administrative expenses for the quarter ended April 30,
1995 were $2,806,000 or 17.6% of sales compared to $1,188,000 or 24.4% of sales
for the quarter ended April 30, 1994. The decrease in selling, general and
administrative expenses as a percentage of sales was primarily attributable to
increased sales without a proportional increase in selling, general and
administrative expenses. Expenses related to corporate overhead decreased 9%
between the two quarters.
Interest, investment and other income totaled $141,000 for the quarter ended
April 30, 1995 compared to $55,000 for the quarter ended April 30, 1994. This
increase was due to an increase in interest rates and an increase in the average
cash balance invested.
The Company incurred interest expense of $180,000 for the quarter ended
April 30, 1995 primarily due to the revolving credit facility, equipment term
loans and equipment credit facility related to a Loan and Security Agreement
("Loan Agreement") entered into by Wakefield in June of 1994. Interest accrues
at the bank's corporate base rate plus three quarters of one percent.
Because the Company was able to utilize net operating loss carryforwards, the
effective federal income tax rate for the quarter ended April 30, 1995 was 9%.
Because of the acquisition of profitable businesses and the sale of ISS, the
Company reversed a portion of the valuation allowance for the deferred tax
assets in the fourth quarter of fiscal 1994 based on Management's current
estimate of the probable utilization of the tax benefit derived from net
operating loss carryforwards. For the second quarter of fiscal 1995, an
additional $270,000 of the valuation allowance was reversed due to operating
results. In addition to federal income taxes, the income tax provision for the
second quarter of fiscal 1995 includes $129,000 related to state income taxes.
Six Months to Six Months Comparison
The Company reported net income for the six months ended April 30, 1995 of
$852,000 or $.13 per share compared to $11,000 net income from continuing
operations for the six months ended April 30, 1994. Improvement in net income
for the six months ended April 30, 1995 versus results from continuing
operations for the six months ended April 30, 1994 was attributable to the
acquisition of profitable businesses.
Revenues for the six months ended April 30, 1995 were $27,161,000 compared to
revenues from continuing operations for the six months ended April 30, 1994 of
$9,583,000. Revenues from continuing operations for the six months ended April
30, 1994 were derived solely from Wakefield. Revenues for the six months ended
April 30, 1995 were derived from Wakefield and Uni-Star. Revenues from
Wakefield for the first six months of fiscal 1995, compared to the comparable
period of fiscal 1994, increased due to internal growth and the acquisition of
the assets and business of Aham Tor, Inc.
9
<PAGE>
Research and development expenses for the six months ended April 30, 1995 were
$545,000 compared to $295,000 for the first six months of fiscal 1994. This
increase was primarily due to payroll, related benefit expenses and other costs
related to an increase in staff.
Selling, general and administrative expenses for the six months ended April 30,
1995 were $5,364,000 or 19.7% of sales compared to $2,280,000 or 23.8% of sales
for the six months ended April 30, 1994. The decrease in selling, general and
administrative expenses as a percentage of sales was primarily attributable to
increased sales without a proportional increase in selling, general and
administrative expenses. Expenses related to corporate overhead decreased 18%
between the two six month periods.
Interest, investment and other income totaled $226,000 for the six months ended
April 30, 1995 compared to $99,000 for the six months ended April 30, 1994.
This increase was due to an increase in interest rates and an increase in the
average cash balance invested.
The Company incurred interest expense of $318,000 for the six months ended April
30, 1995 primarily due to the revolving credit facility, equipment term loans
and equipment credit facility related to a Loan and Security Agreement ("Loan
Agreement") entered into by Wakefield in June of 1994. Interest accrues at the
bank's corporate base rate plus three quarters of one percent.
Because the Company was able to utilize net operating loss carryforwards, the
effective federal income tax rate for the six months ended April 30, 1995 was
9%. Because of the acquisition of profitable businesses and the sale of ISS,
the Company reversed a portion of the valuation allowance for the deferred tax
assets in the fourth quarter of fiscal 1994 based on Management's current
estimate of the probable utilization of the tax benefit derived from net
operating loss carryforwards. For the first six months of fiscal 1995, an
additional $306,000 of the valuation allowance was reversed due to operating
results. In addition to federal income taxes, the income tax provision for the
first six months of fiscal 1995 includes $167,000 related to state income taxes.
10
<PAGE>
Liquidity and Capital Resources
On April 30, 1995, cash and cash equivalents of the Company totaled
approximately $5,769,000. In addition, on April 30, 1995, the Company had
marketable securities with a market value of approximately $778,000.
The Company believes that its currently available cash and cash equivalents,
together with its anticipated future cash flow from operations and available
credit, should be sufficient to meet its cash requirements.
In May of 1995, Wakefield amended its Loan and Security Agreement ("Loan
Agreement") to increase the revolving credit facility from $4,000,000 to
$7,000,000 and extended the term of such facility to May 5, 1997. In addition,
Wakefield entered into an equipment term note in the amount of $265,000.
Interest on the revolving credit facility and equipment term loans accrues at
the bank's corporate base rate plus three quarters of one percent. On April 30,
1995, the interest on the bank debt was 9 3/4% per annum. Wakefield's
obligations under the Loan Agreement are secured by a first lien on and
assignment of all Wakefield's assets. The Loan Agreement includes various
financial convenants with which, as of April 30, 1995, Wakefield was in
compliance. On April 30, 1995, Wakefield had $5,119,000 drawn on the revolving
credit facility.
In addition, Uni-Star may obtain debt financing secured by its respective
assets. The Company may utilize these funds along with existing funds for
internal growth and possible investment opportunities, including business
acquisitions and short-term investments in the securities market.
In September of 1994, the Company announced its intention to spend up to
$2,500,000 to repurchase shares of its common stock. Through May 24, 1995,
the Company purchased 474,155 shares of its common stock at an aggregate price
of $2,492,000, an average price of $5.26 per share.
11
<PAGE>
PART II - OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At the Company's annual meeting of stockholders held on April 19, 1995
in New York, New York, the stockholders elected the following management
nominees:
<TABLE>
<CAPTION>
Nominee Vote For Votes Withheld
- ------- --------- --------------
<S> <C> <C>
Marshall D. Butler 4,908,107 29,075
Donald K. Grierson 4,852,107 85,075
Frederic A. Heim 4,908,807 29,375
Warren G. Lichtenstein 4,907,237 29,945
Lawrence Butler 4,907,707 29,475
Kenneth D. Rind 751,010 --
</TABLE>
In addition the following items were approved:
The adoption of the Company's 1994 Stock Option Plan.
<TABLE>
<CAPTION>
For Against Abstain
--- ------- -------
<S> <C> <C>
4,341,973 355,142 85,201
</TABLE>
An amendment to the Company's certificate of incorporation changing the
Company's name to Alpha Technologies Group, Inc.
<TABLE>
<CAPTION>
For Against Abstain
--- ------- -------
<S> <C> <C>
4,780,456 144,306 12,420
</TABLE>
The designation of Arthur Andersen LLP as independent auditors of the Company
for fiscal 1995.
<TABLE>
<CAPTION>
For Against Abstain
--- ------- -------
<S> <C> <C>
4,848,661 80,351 8,170
</TABLE>
ITEM 5. OTHER INFORMATION
For fiscal 1995, Synercom adopted a 52/53 week fiscal calendar ending
on the last Sunday of October, therefore the quarters for fiscal 1995 will
end on January 29, April 30, July 30 and October 29. Prior year results do not
require restatement due to immateriality.
12
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
10.22 First Amendment to Loan Documents dated May 5, 1995.
11.1 Statement re Computation of Per Share Earnings for the quarters
and six months ended April 30, 1995 and 1994.
27 Financial Data Schedule.
(b) Reports on Form 8-K
There were no reports for Form 8-K filed by the Company during the quarter
ended April 30, 1995.
13
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Alpha Technologies Group, Inc.
(Registrant)
Date: June 13, 1995 By: /s/ Lawrence Butler
-------------------- ----------------------------
Lawrence Butler
President and Chief Executive Officer
(Principal Executive Officer)
Date: June 13, 1995 By: /s/ Johnny J. Blanchard
-------------------- ------------------------------
Johnny J. Blanchard
Chief Financial Officer
(Principal Financial and Accounting Officer)
14
<PAGE>
WAKEFIELD ENGINEERING, INC.
10 Audubon Road
Wakefield, Massachusetts 01880
May 5, 1995
Shawmut Bank, N.A.
One Federal Street
Boston, MA 02211
Re: First Amendment to Loan Documents
---------------------------------
Ladies and Gentlemen:
Reference is made to the Loan and Security Agreement, dated June 22, 1994
(the "Loan Agreement") and all other supplements, agreements, documents and
instruments entered into pursuant thereto (collectively, the "Loan Documents").
Capitalized terms used herein shall have the meanings given them in the Loan
Documents. The undersigned has requested that the Loan Agreement, the
Subordination Agreement and certain other of the Loan Documents be amended as
set forth herein. Accordingly, effective as of the date set forth above, the
Borrower and Bank agree as follows:
A. Waiver of Non-Compliance with Covenants.
---------------------------------------
Lender has previously waived Borrower's non-compliance with certain
covenants under the Loan Documents.
B. Amendments to the Loan Agreement.
--------------------------------
1. Section 1 of the Loan Agreement is amended as follows:
(a) The definition of Borrowing Base is amended by deleting Section (b) in
its entirety and substituting in lieu thereof the following:
"(b) the lesser of (i) fifty-five (55%) percent of the first-in, first-
out cost or market value, whichever is lower, of all Eligible Inventory
or (ii) $2,200,000.00;"
(b) The definition of Eligible Account is amended by deleting Section (a)
in its entirety and substituting in lieu thereof the following:
"(a) is not more than sixty (60) days from the due date on the original
invoices;"
<PAGE>
Shawmut Bank, N.A.
May 5, 1995
Page 2
(c) The definition of Eligible Account is further amended by (i) deleting
the words "ninety (90) days from the respective dates of original
invoices" on the third and fourth lines of the paragraph beginning with
the words "PROVIDED THAT" and substituting in lieu thereof the words
"sixty (60) days from the respective due dates on the original
invoices" and (ii) deleting the words "not more than ninety (90) days
from the date of original invoices" on the ninth and tenth lines of the
same paragraph and substituting in lieu thereof the words "not more
than sixty (60) days from the due date on the original invoices."
(d) The definition of Equipment Term Loan is amended by deleting the number
and letter "2(b)" contained therein and substituting in lieu thereof
the numbers and letter "2(b)I."
(e) The Definition Section is amended by adding the definition of Equipment
Term Loan B as follows:
"'Equipment Term Loan B' means the loan made pursuant to Section 2(b)II
hereof."
(f) The definition of Excess Availability is amended by deleting the number
"$4,000,000" contained therein and substituting in lieu thereof the
number "$7,000,000."
(g) The definition of Loan or Loans is amended to include Equipment Term
Loan B.
(h) The definition of Subordinated Indebtedness is amended by deleting the
number "$250,000" contained therein and substituting in lieu thereof
the number "$2,761,000".
(i) The Definition Section is amended by adding the definition of Term Note
B as follows:
"'Term Note B" means the form of note attached as Exhibit B-1 hereto,
as amended or modified, from time to time."
(j) The definition of Termination Date is amended by deleting the words and
numbers "June 22, 1996" contained therein and substituting in lieu
thereof the words and numbers "May 5, 1997."
<PAGE>
Shawmut Bank, N.A.
May 5, 1995
Page 3
(k) The Definition Section is amended by adding the definition of Alpha as
follows:
"'Alpha' means Alpha Technologies Group, Inc., a Delaware corporation,
(f/k/a Synercom Technology, Inc.) and its successors and assigns."
2. The Loan Agreement is amended by deleting all references to the name
"Synercom" and substituting in lieu thereof the name "Alpha".
3. Section 2(a)(i) of the Loan Agreement is amended by deleting the words
and number "Four Million Dollars ($4,000,000.00)" in the last sentence of the
Section and substituting in lieu thereof the words and number "Seven Million
Dollars ($7,000,000.00)."
4. Section 2(a)(iii) of the Loan Agreement is amended to include the
Borrower's purchase of the assets of Aham Tor, Inc.
5. Section 2(a)(iv) of the Loan Agreement is amended by inserting the
punctuation and words ", the Equipment Term Loan B" after the words "Equipment
Term Loan" on the last line of the Section.
6. Section 2(b) of the Loan Agreement is amended by deleting the letter
"(b)" at the beginning of the Section and substituting in lieu thereof the
letter and number "(b) I".
7. A new Section 2(b) II is added to the Loan Agreement after Section 2(b)
I as follows:
"(b) II Equipment Term Loan B. (i) On May 5, 1995, Bank shall make the
---------------------
Equipment Term Loan B to Borrower. The amount of the Equipment Term Loan B
shall be Two Hundred Sixty Five Thousand Dollars ($265,000.00). The Equipment
Term Loan B shall be repaid in forty-seven (47) equal monthly installments of
principal each in the amount of Five Thousand Five Hundred Twenty Dollars and
83/100 ($5,520.83), payable on the 1st day of each month commencing June 1,
1995, and a forty-eighth (48th) and final installment equal to all unpaid
principal on May 1, 1999, together, in each instance, with all interest accrued
thereon (at the rate specified below) to the date of payment. The Equipment
Term Loan B shall be evidenced by a note substantially in the form of the Term
Note B. Once repaid, the Equipment Term Loan B, or any portion thereof, may not
be reborrowed."
8. Section 2(c)(i) of the Loan Agreement is amended by deleting the words
and numbers "Six Hundred Thousand Dollars ($600,000.00)" on the seventh line of
the Section and substituting in lieu thereof the words and numbers "One Million
Fifty Thousand Dollars
<PAGE>
Shawmut Bank, N.A.
May 5, 1995
Page 4
($1,050,000)", and by deleting the words and numbers "Three Hundred Thousand
Dollars ($300,000.00)" on the tenth and eleventh lines of the Section and
substituting in lieu thereof the words and numbers "Seven Hundred Fifty Thousand
Dollars ($750,000)."
9. Section 2(c)(i) of the Loan Agreement is further amended by deleting the
words and number "eighty-five percent (85%)" on the fourteenth line thereof and
substituting in lieu thereof the words and number "seventy-five percent (75%)."
10. Section 2(e)(iii) of the Loan Agreement is amended by deleting the
words and numbers "June 22, 1996" and the number "$10,000" therein and
substituting in lieu thereof the words and numbers "May 5, 1997" and the number
"$15,000", respectively.
11. Section 4(l) of the Loan Agreement is amended by deleting the last
sentence of the Section.
12. Section 4(m) of the Loan Agreement is amended by adding the following
words to the end of the section:
"and at 28715 Via Montezuma, Temecula, California."
13. Section 4(n) of the Loan Agreement is amended by deleting the number
"$250,000" from the last sentence in the Section and substituting in lieu
thereof the number "$2,761,000."
14. Section 8(a) of the Loan Agreement is amended by deleting the Section
in its entirety and substituting in lieu thereof the following:
"(a) Tangible Capital Base. Permit its Tangible Capital Base to be
---------------------
less than the following amounts at the end of the respective periods (measured
in fiscal quarters) set forth below:
<TABLE>
<CAPTION>
Minimum Tangible
Period Capital Base
- ------------------------------------ ----------------
<S> <C>
6 months ending April 30, 1995: $ 1,850,000
9 months ending July 31, 1995: $ 2,100,000
12 months ending October 31, 1995: $ 2,450,000
3 months ending January 31, 1996: $ 2,900,000
6 months ending April 30, 1996: $ 3,550,000
9 months ending July 31, 1996: $ 4,300,000
</TABLE>
<PAGE>
Shawmut Bank, N.A.
May 5, 1995
Page 5
<TABLE>
<CAPTION>
Minimum Tangible
Period Capital Base
- ------------------------------------- ----------------
<S> <C>
12 months ending October 31, 1996: $ 5,050,000
3 months ending January 31, 1997: $5,650,000"
</TABLE>
15. Section 8(b)(1) is amended by deleting the Section in its entirety and
inserting in lieu thereof the following:
"8(b) Debt Service and Unfinanced Capital Expenditures Coverage Ratio.
----------------------------------------------------------------
Permit the ratio of the aggregate of (A)(i) EBITDA minus (ii) unfinanced capital
expenditures and minus (iii) permitted payments on Subordinated Indebtedness and
any permitted Dividends to (B) the sum of (i) interest expense and (ii) CMLTD
for any fiscal quarter of the Borrower to be less than 1.00 to 1.00 at the end
of any such fiscal quarter in fiscal year 1995, 1.25 to 1.00 at the end of any
such fiscal quarter in fiscal year 1996 and 1.50 to 1.00 at the end of any such
fiscal quarter thereafter."
16. Section 8(b)(2) of the Loan Agreement is amended by deleting the
Section in its entirety.
17. Section 8(c) of the Loan Agreement is amended by deleting the Section
in its entirety and inserting in lieu thereof the following:
"(c) Leverage Ratio. Permit the ratio of its Senior Indebtedness to
--------------
Tangible Capital Base to be more than the following amounts at the end of the
respective periods (measured in fiscal quarters) set forth below:
<TABLE>
<CAPTION>
Ratio of Sr. Debt to
Period Tangible Capital Base
- ------------------------------------ ---------------------
<S> <C>
6 months ending April 30, 1995: 5.50 to 1.00
9 months ending July 31, 1995: 5.25 to 1.00
12 months ending October 31, 1995: 5.00 to 1.00
3 months ending January 31, 1996: 4.25 to 1.00
6 months ending April 30, 1996: 4.00 to 1.00
9 months ending July 31, 1996: 3.50 to 1.00
12 months ending October 31, 1996: 3.50 to 1.00
3 months ending January 31, 1997: 3.00 to 1.00"
</TABLE>
<PAGE>
Shawmut Bank, N.A.
May 5, 1995
Page 6
18. Section 8(d) of the Loan Agreement is amended by deleting the Section
in its entirety and substituting in lieu thereof the following:
" (d) intentionally deleted."
19. Section 8(e) of the Loan Agreement is amended by deleting the number
"1.50" contained therein and substituting in lieu thereof the number "2.00."
20. Section 8(f) of the Loan Agreement is amended by deleting the Section
in its entirety and substituting in lieu thereof the following:
"(f) Interest Coverage Ratio. Permit the ratio of (i) Borrower's EBIT
-----------------------
for each fiscal quarter to (ii) Borrower's interest expense for each fiscal
quarter to be less than 2.50 to 1.00."
21. Section 9(l) is amended by deleting the words "(but not to exceed
$1,500 per audit prior to an Event of Default)" on the nineteenth and twentieth
lines of the Section and substituting in lieu thereof the words "(but not to
exceed $1,000 per audit, per location prior to an Event of Default)."
C. Conditions Precedent.
--------------------
Notwithstanding any other provisions of this First Amendment or any of the
other Loan Documents, and without affecting in any manner the rights of the Bank
under the other Sections of this First Amendment, this First Amendment shall not
be effective as to Bank unless and until each of the following conditions has
been and continues to be satisfied.
1. Documentation. Bank shall have received, in form and substance
-------------
satisfactory to Bank and its counsel, a duly executed copy of this First
Amendment, the First Amendment to the Revolving Credit Note, Term Note B and the
First Amendment to Subordination Agreement, together with such additional
documents, instruments and certificates as Bank and its counsel shall require in
connection therewith from time to time, all in form and substance satisfactory
to Bank and its counsel.
2. No Default. No Default or Event of Default shall exist.
----------
3. Restructure Fee. Bank shall have received a restructure fee in the
---------------
amount of $9,287.50 from Borrower.
<PAGE>
Shawmut Bank, N.A.
May 5, 1995
Page 7
4. Compliance Certificate. Bank shall have received a Compliance
----------------------
Certificate from the Borrower to the effect that the Borrower is in compliance
with all covenants under the Loan Agreement, including financial covenants as of
April 30, 1995.
5. Borrowing Base Certificate. Bank shall have received a Borrowing Base
--------------------------
Certificate in the form attached as Exhibit E to the Loan Agreement containing
Borrower's Accounts and Inventory information as of April 30, 1995.
6. Landlord Waiver. Borrower agrees that, on or before June 5, 1995, it
---------------
will deliver to Bank a landlord waiver in form and substance satisfactory to the
Bank with respect to the property located in Temecula, California.
7. Other Documents Regarding the Temecula, California Location. Borrower
-------------------------------------------------- --------
agrees that it will endeavor to obtain a Due Qualification Certificate from the
Secretary of State of California, insurance binders indicating coverage for the
Borrower with respect to the California location and such other documents
related to the California location as the Bank may reasonably request.
D. Acknowledgement of Obligations.
------------------------------
Borrower hereby (1) reaffirms and ratifies all of the promises, agreements,
covenants and obligations to Bank under or in respect of the Loan Documents as
amended hereby and (2) acknowledges that it is unconditionally liable for the
punctual and full payment of all Obligations, including, without limitation, all
charges, fees, expenses and costs (including attorneys' fees and expenses) under
the Loan Documents, as amended thereby, and that it has no defenses,
counterclaims or setoffs with respect to full, complete and timely payment and
performance of all Obligations.
E. Miscellaneous.
-------------
Except as set forth herein, the undersigned confirms that the Loan Documents
remain in full force and effect without amendment or modification of any kind.
The undersigned further confirms that no Event of Default or events which with
notice or the passage of time or both would constitute an Event of Default have
occurred and are continuing and it is unconditionally liable to you for the full
repayment of the Obligations, without defenses, counterclaims or setoffs of any
kind.
<PAGE>
Shawmut Bank, N.A.
May 5, 1995
Page 8
Executed under seal on the date set forth above.
ATTEST: WAKEFIELD ENGINEERING, INC.
By: /s/ Harry Chase
- -------------------------- --------------------------
Secretary Name: Title:
Accepted in Boston, Massachusetts
as of May 5, 1995
SHAWMUT BANK, N.A.
By: /s/ Kim S. Foster
----------------------------
Name:
Title:
<PAGE>
AMENDMENT NO. 1
TO REVOLVING CREDIT NOTE
Reference is made to the Revolving Credit Note dated June 23, 1994 issued by
the undersigned (the "Note).
FOR VALUE RECEIVED, the undersigned agrees that the Note is amended as
follows:
1. The heading of the Note is amended by deleting the number
"$4,000,000.00" and substituting in lieu thereof the number "$7,000,000.00".
2. The Note is amended by deleting the words and number "FOUR MILLION
DOLLARS ($4,000,000.00)" on the fourth line of the Note and substituting in lieu
thereof the words and number "SEVEN MILLION DOLLARS ($7,000,000.00)".
3. The Note is amended by inserting the words "as amended" after the words
"dated as of the date hereof" on the sixth and seventh lines of the Note.
4. The Note is amended by deleting the date "June 23, 1996" on the last
line of the first paragraph of the Note and substituting in lieu thereof the
date "May 5, 1997".
4. Except as set forth herein the undersigned acknowledges and confirms
that the Note remains in full force and effect without amendment or modification
of any kind.
Executed under seal on this 5th day of May, 1995.
WAKEFIELD ENGINEERING, INC.
By: /s/ Harry Chase
-----------------------
Name:
Title:
<PAGE>
TERM NOTE B
$265,000.00 Boston, Massachusetts
May 5, 1995
FOR VALUE RECEIVED, the undersigned ("Maker"), hereby promises to pay to the
order of Shawmut Bank, N.A. with a place of business at One Federal Street,
Boston, Massachusetts 02211 ("Bank"), the sum of Two Hundred Sixty Five Thousand
Dollars ($265,000.00), together with interest on the unpaid principal amount
from time to time outstanding prior to maturity at a fluctuating rate per annum
equal to the sum of the Corporate Base Rate plus three quarters of one percent
(3/4 of 1%). The principal amount hereof shall be repaid in forty-seven (47)
equal monthly installments of Five Thousand Five Hundred Twenty Dollars and
83/100 ($5,520.83), payable on the first day of each month commencing June 1,
1995, and a forty-eighth (48th) and final installment equal to all unpaid
principal on May 5, 1999, together, in each instance, with interest thereon to
the date of payment.
After maturity (whether by acceleration or otherwise), interest shall be payable
on the unpaid principal balance from time to time outstanding at a rate per
annum equal to the interest rate otherwise applicable hereunder plus three
percent (3%), until fully paid. Any payment hereunder not paid within ten (10)
days after the date such payment is due shall be subject to a late charge equal
to five percent (5%) of the amount overdue.
Interest and fees shall be calculated on the basis of a 360-day year times the
actual number of days elapsed. At Bank's discretion, all payments will be
applied first to unpaid accrued interest, then to principal, and then any
balance to any charges, costs, expenses or late fees outstanding. "Corporate
Base Rate," as used herein, shall mean for any day the rate on such day as
designated by Bank as its corporate base rate. Any change in rate resulting
from a change in the Corporate Base Rate shall become effective as of the day on
which such change in the Corporate Base Rate becomes effective. In no event
shall interest payable hereunder exceed the highest rate permitted by applicable
law. To the extent any interest received by Bank exceeds the maximum amount
legally permitted, such payment shall be credited to principal, and any excess
remaining after full payment of principal shall be refunded to Maker. This Note
evidences the Equipment Term Loan B under that certain Loan and Security
Agreement (the "Agreement") dated as of June 22, 1994, as amended by that
certain First Amendment to Loan and Security Agreement dated as of the date
hereof between Maker and Bank and is secured by and entitled to the benefits of
the provisions of the Agreement and any other instruments or documents executed
in connection therewith. The principal of this Note is subject to prepayment in
the manner and to the extent provided in the Agreement. If an Event of Default
(as defined in the Agreement) occurs, the entire balance of principal, accrued
interest, and any and all other fees and charges payable hereunder may become
immediately due and payable in the manner and with the effect provided in the
Agreement.
As security for the payment and performance of Maker's obligations or the
obligations of any guarantor or endorser hereof to the Bank or any holder hereof
("Holder") now existing or hereaf-
1
<PAGE>
ter arising, Holder is hereby granted a lien and security interest in and to any
and all deposits or other sums at any time credited by or due from Holder to
Maker or any guarantor or endorser, whether in regular or special depository
accounts or otherwise, and all moneys, securities and other property and the
proceeds thereof, now or hereafter held or received by Holder, whether for
safekeeping, custody, pledge, collection or otherwise. Upon the failure of
Maker, or any guarantor or endorser hereof, to pay any amount hereunder when
due, in addition to and not in limitation of any and all rights and remedies of
the Holder hereunder or otherwise, all of such rights and remedies being
cumulative, Holder may set off any such deposits, other sums, moneys, securities
and other property and the proceeds thereof against any or all of the
obligations of Maker, guarantors or endorsers to Holder, without prior notice or
demand, and regardless of whether or not such obligations are secured by any
other collateral, and regardless of the adequacy of any such other collateral.
Maker agrees to pay all costs and expenses, including, without limitation,
reasonable attorneys' fees and expenses incurred, or which may be incurred, by
Holder in connection with the negotiation, documentation, administration (as
provided in the Loan Agreement), enforcement and collection of this note and any
other agreements, instruments and documents executed in connection herewith.
Maker and all guarantors and endorsers hereby waive presentment, demand, notice,
protest, and all other demands and notices in connection with the delivery,
acceptance, performance and enforcement of this note, and assent to extensions
of the time of payment or forbearance or other indulgence without notice. No
delay or omission of Holder in exercising any right or remedy hereunder shall
constitute a waiver of any such right or remedy. Acceptance by Holder of any
payment after demand shall not be deemed a waiver of such demand. A waiver on
one occasion shall not operate as a bar to or waiver of any such right or remedy
on any future occasion.
All payments required to be made hereunder shall be made to the Bank at its
office at One Federal Street, Boston, Massachusetts 02211 or such other address
as the Bank or any Holder may designate.
This instrument shall be governed by Massachusetts law.
Executed as an instrument under seal as of the date first above written.
WITNESS: WAKEFIELD ENGINEERING, INC.
By: /s/ Harry Chase
- -------------------------- --------------------------
Name:
Title:
2
<PAGE>
ALPHA TECHNOLOGIES GROUP, INC.
2500 City West Boulevard
Houston, Texas 77042
May 5, 1995
Shawmut Bank, N.A.
One Federal Street
Boston, MA 02211
Re: First Amendment to Subordination Agreement
------------------------------------------
Ladies and Gentlemen:
Reference is made to the Loan and Security Agreement (the "Loan Agreement"),
the Subordination Agreement, both dated June 22, 1994, and all other
supplements, agreements, documents and instruments entered into pursuant thereto
(collectively, the "Loan Documents"). Capitalized terms used herein shall have
the meanings given them in the Loan Documents. The Borrower has requested that
the Loan Agreement, the Subordination Agreement and certain other of the Loan
Documents be amended. Accordingly, effective as of the date set forth above, the
Subordinated Creditor and Bank agree as follows:
1. The Subordination Agreement is amended by deleting the name "Synercom
Technology, Inc." in all instances where it appears and substituting in lieu
thereof the name "Alpha Technologies Group, Inc.".
2. The Subordination Agreement is amended by deleting the number "$250,000"
in the second "WHEREAS" clause of the Agreement and substituting in lieu thereof
the number "$2,761,000".
3. Section 1.10 of the Subordination Agreement is amended by deleting the
Section in its entirety and substituting in lieu thereof the following:
"1.10 Subordinated Note. The term "Subordinated Note" shall mean the
$2,761,000 Promissory Note dated May 5, 1995 issued by Borrower to
Subordinated Creditor as such Subordinated Note may, in accordance with this
Agreement, be modified, amended, altered, changed or extended from time to
time."
<PAGE>
Shawmut Bank, N.A.
May 5, 1995
Page 2
4. Section 2.6 of the Subordination Agreement is amended by deleting
the Section in its entirety and substituting in lieu thereof the following:
"2.6 Permitted Payments. (a) So long as no Event of Default shall have
occurred and is continuing, or will occur as a result of making such payment, or
will have occurred after giving effect to any payment or distribution which
otherwise would be permitted hereby, the Borrower may pay or cause to be paid to
the Subordinated Creditor, regularly scheduled payments of principal and
interest under the Subordinated Note not to exceed an aggregate of $500,000 per
fiscal quarter of Borrower; provided that Borrower shall not make any payments
on the Subordinated Note unless and until the Excess Availability for a period
of thirty days prior to the date of such payment and after giving effect to the
payment is not less than $250,000 ("Permitted Payments"). Permitted Payments
expressly permitted by the foregoing provisions of this Section 2.6(a) may be
retained by Subordinated Creditor, free from the subordination provisions
hereof, unless on or before the business day after the expiration of a period of
one hundred eighty (180) days following receipt by Subordinated Creditor of such
Permitted Payment the Lender shall provide notice to the Subordinated Creditor
that at the time such Permitted Payment was made, an Event of Default had
occurred and was continuing or would have occurred but for the passage of time
or giving of notice or both, or did occur after giving effect to such payment."
5. Section 16(d) of the Subordination Agreement is amended by deleting the
number "$250,000" therein and substituting in lieu thereof the number
"$2,761,000".
6. The Subordinated Creditor hereby reaffirms and ratifies all of the
promises, agreements, covenants and obligations to Bank under or in respect of
the Subordination Agreement as amended hereby.
7. Except as set forth herein, the Subordinated Creditor confirms that the
Subordination Agreement remains in full force and effect without amendment or
modification of any kind.
Executed under seal on the date set forth above.
ATTEST: ALPHA TECHNOLOGIES GROUP, INC.
/s/ Johnny J. Blanchard By: /s/ Lawrence Butler
- -------------------------- ----------------------------------
Secretary Name:
Title:
<PAGE>
Shawmut Bank, N.A.
May 5, 1995
Page 3
Accepted in Boston, Massachusetts
as of May 5, 1995
SHAWMUT BANK, N.A.
By: /s/ Kim S. Foster
--------------------------------
Name:
Title:
<PAGE>
EXHIBIT 11.1
ALPHA TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES
COMPUTATION OF NET INCOME (LOSS) PER SHARE
FOR THE QUARTERS AND SIX MONTHS ENDED APRIL 30, 1995 AND 1994
(Unaudited)
(In Thousands, Except per Share Data)
<TABLE>
<CAPTION>
Quarter Ended Six Months Ended
April 30, April 30,
------------------------- -------------------------
1995 1994 1995 1994
-------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Shares:
Weighted average common shares outstanding 5,904 5,885 6,003 5,855
Net common shares issuable on exercise of
stock options 511 -- 501 383
------ ------ ------ ------
Weighted average common and common equivalent
shares outstanding 6,415 5,885 6,504 6,238
====== ====== ====== ======
Continuing operations $1,119 $ 59 $1,318 $ 6
Interest, investment and other income 141 55 226 99
Interest expense (180) -- (318) --
Provision for income taxes--continuing operations (227) (71) (278) (94)
Minority interest (102) -- (96) --
Discontinued operations -- (132) -- 499
------ ------ ------ ------
Net income (loss) $ 751 $ (89) $ 852 $ 510
====== ====== ====== ======
Net income (loss) per common and common equivalent
share:
Continuing operations $ 0.17 $ 0.01 $ 0.20 $ 0.00
Interest, investment and other income 0.02 -- 0.03 0.02
Interest expense (0.03) -- (0.05) --
Provision for income taxes--continuing operations (0.03) (0.01) (0.04) (0.02)
Minority interest (0.02) -- (0.01) --
Discontinued operations -- (0.02) -- 0.08
------ ------ ------ ------
Net income (loss) $ 0.11 $(0.02) $ 0.13 $ 0.08
====== ====== ====== ======
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from
Consolidated Balance Sheet -- April 30, 1995 and Consolidated Statement of
Operations for the Quarters and Six Months Ended April 30, 1995 and 1994 and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C> <C> <C> <C>
<PERIOD-TYPE> 3-mos 3-mos 6-mos 6-mos
<FISCAL-YEAR-END> OCT-29-1995 OCT-31-1994 OCT-29-1995 OCT-31-1994
<PERIOD-START> JAN-30-1995 FEB-01-1994 NOV-01-1994 NOV-01-1993
<PERIOD-END> APR-30-1995 APR-30-1994 APR-30-1995 APR-30-1994
<CASH> 5,769 0 5,769 0
<SECURITIES> 778 0 778 0
<RECEIVABLES> 9,714 0 9,714 0
<ALLOWANCES> 0 0 0 0
<INVENTORY> 8,146 0 8,146 0
<CURRENT-ASSETS> 25,393 0 25,393 0
<PP&E> 6,066 0 6,066 0
<DEPRECIATION> 725 0 725 0
<TOTAL-ASSETS> 34,648 0 34,648 0
<CURRENT-LIABILITIES> 9,582 0 9,582 0
<BONDS> 6,392 0 6,392 0
<COMMON> 204 0 204 0
0 0 0 0
0 0 0 0
<OTHER-SE> 15,596 0 15,596 0
<TOTAL-LIABILITY-AND-EQUITY> 34,648 0 34,648 0
<SALES> 15,953 4,873 27,161 9,583
<TOTAL-REVENUES> 15,953 4,873 27,161 9,583
<CGS> 11,726 3,481 19,934 7,002
<TOTAL-COSTS> 11,726 3,481 19,934 7,002
<OTHER-EXPENSES> 3,108 1,333 5,909 2,575
<LOSS-PROVISION> 0 0 0 0
<INTEREST-EXPENSE> 180 0 318 0
<INCOME-PRETAX> 1,080 114 1,226 105
<INCOME-TAX> 227 71 278 94
<INCOME-CONTINUING> 853 43 948 11
<DISCONTINUED> 0 (132) 0 499
<EXTRAORDINARY> 0 0 0 0
<CHANGES> 0 0 0 0
<NET-INCOME> 751 (89) 852 510
<EPS-PRIMARY> .11 (.02) .13 .08
<EPS-DILUTED> 0 0 0 0
</TABLE>