<PAGE>
UNITED STATES
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 25, 1998
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 0-14365
ALPHA TECHNOLOGIES GROUP, INC.
------------------------------
(Exact name of registrant as specified in its charter)
Delaware 76-0079338
- ------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
9465 Wilshire Blvd., Suite 980 Beverly Hills, CA 90212
------------------------------------------------------
(Address of principal executive offices)
(310) 385-1494
--------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [_]
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Common Stock, $.03 par value 6,695,180
---------------------------- ---------
Class Outstanding at February 28, 1998
<PAGE>
ALPHA TECHNOLOGIES GROUP, INC.
FORM 10-Q
JANUARY 25, 1998
TABLE OF CONTENTS
Page No.
--------
PART I FINANCIAL INFORMATION............................................... 3
CONSOLIDATED BALANCE SHEETS - OCTOBER 26, 1997 AND JANUARY 25, 1998........... 3
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE QUARTERS ENDED JANUARY 26, 1997 AND JANUARY 25, 1998.................. 4
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED JANUARY 26, 1997 AND JANUARY 25, 1998............. 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...................................................13
2
<PAGE>
PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ALPHA TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS - OCTOBER 26, 1997 AND JANUARY 25, 1998
(In Thousands, Except Share and Per Share Data)
<TABLE>
<CAPTION>
October 26, January 25,
1997 1998
----------- -----------
(Unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash $ 1,707 $ 1,432
Accounts receivable, net 11,766 12,807
Inventories, net 9,781 10,662
Prepaid expenses 1,140 1,054
-------- --------
Total current assets 24,394 25,955
PROPERTY AND EQUIPMENT, at cost 17,341 18,528
Less - Accumulated depreciation and amortization 5,656 6,309
-------- --------
Property and equipment, net 11,685 12,219
GOODWILL, net 2,878 2,811
OTHER ASSETS, net 2,421 2,351
-------- --------
$ 41,378 $ 43,336
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
CURRENT LIABILITIES:
Accounts payable, trade $ 6,179 $ 5,838
Accrued compensation and related benefits 1,810 1,250
Other accrued liabilities 4,580 4,917
Current portion of long-term debt 1,494 1,489
-------- --------
Total current liabilities 14,063 13,494
REVOLVING CREDIT FACILITY 5,198 7,537
LONG-TERM DEBT 2,865 2,686
OTHER LONG-TERM LIABILITIES 451 394
STOCKHOLDERS' EQUITY:
Preferred stock, $100 par value; shares authorized 180,000 - -
Common stock, $.03 par value; shares authorized 17,000,000; issued
7,700,733 at October 26, 1997 and 7,702,233 at January 25, 1998 231 231
Additional paid - in capital 43,523 43,527
Retained deficit (21,110) (20,713)
Cumulative translation adjustment, net of income taxes (125) (102)
Treasury stock, at cost (1,008,553 common shares at October 26, 1997 and
January 25, 1998) (3,718) (3,718)
-------- --------
18,801 19,225
-------- --------
$ 41,378 $ 43,336
======== ========
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
3
<PAGE>
ALPHA TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE QUARTERS ENDED JANUARY 26, 1997 AND JANUARY 25, 1998
(Unaudited)
(In Thousands, Except Per Share Data)
<TABLE>
<CAPTION>
January 26, January 25,
1997 1998
----------- -----------
<S> <C> <C>
SALES $ 17,153 $ 20,400
COST OF SALES 14,765 16,314
-------- --------
Gross profit 2,388 4,086
OPERATING EXPENSES
Research and development 371 490
Selling, general and administrative 3,229 3,116
Restructuring 214 0
-------- --------
Total operating expenses 3,814 3,606
-------- --------
OPERATING INCOME (LOSS) (1,426 ) 480
INTEREST AND OTHER INCOME (EXPENSE), net (253 ) (83)
-------- --------
INCOME (LOSS) BEFORE TAXES (1,679) 397
PROVISION FOR INCOME TAXES - -
-------- --------
INCOME (LOSS) BEFORE DISCONTINUED OPERATION (1,679) 397
INCOME FROM DISCONTINUED OPERATION, net of
Income tax effect 27 -
-------- --------
NET INCOME (LOSS) $ (1,652) $ 397
======== ========
BASIC AND DILUTED NET INCOME (LOSS) PER SHARE:
Income (loss) before discontinued operation $ (0.25) $ 0.06
Discontinued operation -- -
======== ========
Net income $ (0.25) $ 0.06
======== ========
SHARES USED IN COMPUTING NET INCOME (LOSS) PER SHARE COMMON
Basic 6,675 6,693
======== ========
Diluted 6,675 6,825
======== ========
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
4
<PAGE>
ALPHA TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED JANUARY 26, 1997 AND JANUARY 25, 1998
(Unaudited)
(In Thousands)
<TABLE>
<CAPTION>
January 26, January 25,
1997 1998
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (1,652) $ 397
Adjustments to reconcile net income to net cash (used)
By operating activities:
Depreciation and amortization 685 730
Gain on sale of equipment - (70)
Income from operation sold (27)
Cumulative translation adjustment (18) 23
Changes in assets and liabilities:
(Increase) decrease in accounts receivable 1,062 (1,041)
(Increase) decrease in inventory 934 (881)
(Increase) decrease in prepaid expenses (164) 86
(Decrease) in accounts payable (547) (341)
(Decrease) in accrued compensation and related benefits (47) (560)
Increase (decrease) in other liabilities (771) 280
--------- --------
Total adjustments 1,107 (1,774)
Net cash used by continuing operations (545 ) (1,377)
Net cash provided by operations sold 164 -
--------- --------
Net cash used by operating activities (381) (1,377)
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of equipment - 88
Purchase of property and equipment, net (604) (1,205)
Change in goodwill (84) -
(Increase) decrease in other assets, net (103) 60
--------- --------
Net cash (used) by investing activities (791) (1,057)
--------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock 33 4
Proceeds from revolving credit lines 15,725 19,341
Payments on revolving credit lines (17,112) (17,002)
Proceeds from term debt 2,171 -
Payments on term debt (449) (184)
--------- --------
Net cash provided by financing activities 368 2,159
NET (DECREASE) IN CASH (804) (275)
--------- --------
CASH, beginning of year 3,935 1,707
--------- --------
CASH, end of period $ 3,131 $ 1,432
========= ========
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
5
<PAGE>
ALPHA TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) ORGANIZATION
Alpha Technologies Group, Inc. ("Alpha" or the "Company") manufactures thermal
management products and electronic connectors, and assembles custom designed
subsystems.
The thermal management segment's products, principally heat sinks, serve the
microprocessor, computer, consumer electronics, transportation, power supply,
aerospace and defense industries. Heat sinks are primarily fabricated aluminum
extrusions that have high surface area to volume ratios and are engineered to
dissipate unwanted heat generated by electronic components. The connector
segment's products, the majority of which are custom manufactured to meet rigid
specifications, serve the aerospace, automotive, communications, defense,
factory automation, industrial controls, medical electronics, process
instrumentation and test/measurement industries. Connectors are electro-
mechanical devices that permit electronic subassemblies such as printed circuit
boards, power supplies and input-output wire harnesses/cable assemblies to be
coupled and separated. The subsystem business serves the military,
telecommunications and certain commercial markets. Subsystems are operational
sub-units integrated into major networks for data transmission, retrieval and
transfer.
The Company was incorporated as Synercom Technology, Inc., in Texas in 1969 and
was reincorporated in Delaware in 1983. In 1993, the Company began its
transformation from a software company to its current businesses. In September
of 1994, the Company sold the remaining aspects of its software and related
services business. Since October 1993, the Company has grown through a
combination of acquisitions and internal growth. In April 1995, the name of the
corporation was changed Alpha Technologies Group, 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. All material
intercompany transactions and balances have been eliminated.
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>
(3) INVENTORIES
Inventories consisted of the following on October 26, January 25,
(in thousands): 1997 1998
----------- -----------
Raw materials and components $ 5,537 $ 7,080
Work in process 3,785 3,018
Finished goods 2,328 2,642
------- -------
11,650 12,740
Valuation reserve (1,869) (2,078)
------- -------
$ 9,781 $10,662
======= =======
(4) BUSINESS SEGMENT INFORMATION
Summarized financial information by business segment for the quarters
ended:
January 26, January 25,
1997 1998
----------- -----------
(In thousands)
Net sales:
Thermal management products $13,212 $15,791
Connector products 2,461 3,356
Subsystems 1,480 1,253
------- -------
17,153 20,400
Operating income (loss):
Thermal management products (707) 575
Connector products (421) 122
Subsystems 21 71
Corporate (319) (288)
------- -------
(1,426) 480
Interest expense:
Thermal management products 280 216
Connector products 48 7
------- -------
328 223
Total assets:
Thermal management products 28,929 31,254
Connector products 8,188 6,393
Subsystems 2,533 2,698
Corporate 4,778 2,991
------- -------
44,428 43,336
Depreciation and amortization:
Thermal management products 532 568
Connector products 109 117
Subsystems 39 37
Corporate 5 8
------- -------
685 730
Capital Expenditures:
Thermal management products 496 1,105
Connector products 95 102
Subsystems 11 6
Corporate 2 -
------- -------
604 1,213
7
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Results of Operations
Net Income/Loss. Net income for the first quarter of fiscal 1998 was
$397,000 which included a gain of $70,000 from the sale of equipment and other
income of $59,000. This compares to a net loss from continuing operations of
$1,679,000 for the 1997 quarter which included a $214,000 restructuring charge
related to severance payments and $588,000 in additional inventory reserves.
This improvement is primarily the result of improved gross profit in all
segments, revenue growth and control of expenses.
Net income from thermal management operations for the first quarter of
fiscal 1998, before the allocation of Alpha corporate expenses ("corporate
allocation"), was $356,000 compared to a net loss of $987,000 for the fiscal
1997 quarter. The 1997 loss included a charge for severance payments of $172,000
and additional inventory reserves of $588,000. The additional inventory reserves
recorded in the first quarter of fiscal 1997 were recognized to fully reserve
the cost of certain custom products which were built in anticipation of orders
which have not been received. Results from operations, excluding the
restructuring and inventory reserve charges, increased primarily due to an
increase in sales without a corresponding increase in operating expenses.
Net income from the connector products segment for the first quarter of
fiscal 1998, before corporate allocation, was $241,000 including $70,000 related
to a gain on the sale of certain equipment. For the first quarter of fiscal
1997, net loss from the connector products segment, before corporate allocation,
was $431,000 which included $34,000 related to severance payments. The increase
in the results of operations in the fiscal 1998 quarter compared to the fiscal
1997 quarter was primarily due to increased sales, higher gross profits and
improved expense management.
8
<PAGE>
Net income from the Company's subsystems operation for the first quarter of
fiscal 1998, before corporate allocation, was $74,000 compared to $21,000 for
the first quarter of fiscal 1997. The increase in the results of operations in
the fiscal 1998 quarter compared to the fiscal 1997 quarter was primarily due to
the effects of the restructuring of this business, which included a reduction in
headcount and the outsourcing of many components, in the third quarter of fiscal
1997. The subsystems business now designs and assembles purchased components
which has resulted in higher gross profits and lower operating expenses.
Additionally, this segment raised prices for certain products which were
previously being sold at lower than acceptable margins.
Sales. The Company's sales for the first quarter of fiscal 1998 increased
$3,247,000, or 18.9%, to $20,400,000 from $17,153,000 for same period of fiscal
1997. Thermal management sales increased 19.5% to $15,791,000 for the fiscal
1998 quarter from $13,212,000 the first quarter of fiscal 1997 due to
an increase in sales of extruded heat sinks and an increase in sales by the
Company's Lockhart subsidiary which serves the active cooling market. Sales of
extruded heat sinks increased due to better penetration of certain customer
accounts, increased capacity and growth in the market for these products.
Connector sales were $3,356,000 during the first quarter of fiscal 1998
compared to $2,461,000 during the prior fiscal year, a 36.4% increase. This
increase was primarily caused by an increase in backlog, compared to the prior
year quarter, at the South Pasadena facility. Management believes that the
backlog increase during fiscal 1997 was due to increased demand and improved
efforts (and replacement) of sales representative firms for connector products.
Despite the increase in backlog, shipments in the second quarter of fiscal 1998,
which are expected to be less than the first quarter but ahead of the second
quarter of last year, are being affected by the timing of deliveries
requested by customers. Management does not anticipate that these timing issues
will affect connector product shipments in the second half of the fiscal year.
Subsystems sales were $1,253,000 during the first quarter of fiscal 1998
compared to $1,480,000 during the prior fiscal year. The decrease in sales was
due to the loss of customers who did not accept the Company's new pricing
policies. However, the gross profits in this business improved substantially
due to the aforementioned restructuring.
9
<PAGE>
Gross Profit. The Company's overall gross profit as a percentage of total
revenues ("gross profit percentage") for the first quarter of fiscal 1998 was
20.0% compared to 13.9% (including the effect of the $588,000 inventory reserve
taken) for the 1997 fiscal quarter. The thermal management segment's gross
profit percentage was 18.4% and 18.1% (excluding the effect of the additional
inventory reserve) for fiscal 1998 and 1997 first quarters, respectively. In
the first quarter of fiscal 1998, the thermal management business's gross profit
percentage was adversely impacted (approximately 2 - 3%) by additional labor
costs incurred as a result of manufacturing inefficiencies at its Fall River, MA
manufacturing facility. These inefficiencies were partly due to the
consolidation of the Wakefield, MA facility into the Fall River, MA and
Temecula, CA facilities. Management expects the gross profit percentage
obtained from thermal management products to improve in the second quarter
compared to the first quarter of fiscal 1998 as the consolidation is completed.
The connector products segment's gross profit percentage increased to 25.3%
for the first quarter of fiscal 1998 from 13.6% for the 1997 quarter. This
increase is attributable to aforementioned higher sales volume and better
production planning as a result of the improved backlog.
The gross profit percentage at the Company's subsystems operation increased
to 26.5% for the first quarter of fiscal 1998 from 17.3% for the 1997 quarter
primarily as a result of the aforementioned restructuring and increased prices.
Selling, General and Administrative Expense. Selling, general and
administrative expenses for the quarter ended January 25, 1998 were $3,116,000,
or 15.3% of sales, compared to $3,229,000, or 18.8% of sales, for the prior year
quarter. SG& A expenses as a percentage of sales decreased due to higher sales
volume without a proportionate increase in selling, general, and administrative
expenses due to improved control of expenses.
Restructuring and Other Expenses. During the fiscal 1997 quarter, the
Company incurred restructuring charges of $214,000, which related to downsizing
throughout the company. Currently, the Company has no restructuring plans which
are expected to result in a material charge.
10
<PAGE>
Interest and Other Income (Net). Interest expense was $328,000 and
$223,000 for the fiscal 1997 and 1998 quarters, respectively. This decrease was
due to a lower average outstanding borrowing base. The Company recorded other
income for the quarter of $129,000 which was primarily a result of a gain on the
sale of equipment by the connector segment's operation in South Pasadena, CA.
LIQUIDITY AND CAPITAL RESOURCES
On January 25, 1998, the Company had cash of approximately $1,432,000
compared to $1,707,000 on October 26, 1997. Existing cash and proceeds from the
Company's credit facilities were used for purchases of capital equipment and
operating activities.
For the three months ended January 25, 1998, $1,377,000 was used by
operating activities primarily due to (i) an increase in inventories and
accounts receivable and (ii) a decrease in accounts payable and accrued
compensation. Capital equipment purchases of $1,213,000 were made to improve
manufacturing capability, replace existing machinery which had reached its end
of life and to automate certain processes.
Effective January 1, 1998, Wakefield, Wakefield Extrusion, Lockhart and
Malco (hereinafter referred to as "Borrowers")became parties to a loan
agreement, as amended (the "Agreement") with a commercial bank which provides
for revolving loans of up to $9,000,000, with the ability to increase upon
request to $12,000,000, and an equipment acquisition facility of $3.2 million.
The advances on the revolving loans are based on the eligible accounts
receivable and inventories of Borrowers. The advances on the equipment
acquisition facility may be used for the purpose of funding capital equipment
purchases by the Borrowers. In addition, there are two term loans existing
under the Agreement in the original amounts of $2,250,000 and $1,900,000.
On January 25, 1998, $7,537,000 was drawn on the revolving credit facility.
Interest on $5,500,000 of the revolving credit facility accrues at the relevant
adjusted LIBOR rate plus 2.5% (8.3 % per annum on January 25, 1998), and the
remainder of the revolving credit facility accrues interest at the bank's prime
rate plus .5% (9.0% per annum on January 25, 1998). There is an unused line fee
equal to .5% per annum on the
11
<PAGE>
difference between $9,000,000 (or $12,000,000 when increased) and the average
daily outstanding principal balance of Revolving Loans during each of the
Company's fiscal quarters payable quarterly in arrears on the first day of each
fiscal quarter. The $2,250,000 term note accrues interest at 8.75% per annum and
is payable in fifty-nine (59) equal monthly installments of $37,500 beginning
December 1, 1996 and a final installment equal to all unpaid principal on
October 11, 2001, together, in each instance, with interest thereon to the date
of payment. On January 25, 1998, $ 1,725,000 was outstanding on the $2,250,000
term loan. The $1,900,000 term loan accrues interest at 8.85%, and is payable in
eighty-three (83) equal monthly installments of $22,619 beginning December 1,
1996 and a final installment equal to all unpaid principal on October 29, 2003,
together, in each instance, with interest thereon to the date of payment. On
January 25, 1998, $1,580,000 was outstanding on the $1,900,000 term note. The
obligations under the Loan Agreement are secured by a first lien on and
assignment of all of the assets of Borrowers which in aggregate total
$33,952,000. Borrowers' credit facilities will expire on December 31, 1999.
The Company has entered into interest swap agreements as a means of
managing its interest rate exposure. The agreements effectively fixed the
interest rate on floating rate debt at a rate of 8.75% for a notional principal
amount of $2,250,000 through November 1, 2001, and at a rate of 8.85% for a
notional principal amount of $1,900,000 through October 29, 2003. On January
25, 1998, the carrying value of the related debt approximated the fair value of
the debt including the swap agreements. Net amounts paid or received are
reflected in interest expense.
Working capital on January 25, 1998 was $12,461,000 compared to $10,331,000
on October 26, 1997. The increase in working capital is attributable to an
increase in current assets funded by an increase in the Company's long term
revolving credit facility. The Company believes that its currently available
cash, anticipated cash flow from operations and availability under credit
facilities is sufficient to fund its operations, including the thermal
management consolidation, in the near-term.
12
<PAGE>
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
11.1 Statement re Computation of Per Share Earnings for the quarters
ended January 26, 1997 and January 25, 1998.
(b) Reports on Form 8-K
There were no reports for Form 8-K filed by the Company during the quarter
ended January 25, 1998.
13
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Alpha Technologies Group, Inc.
------------------------------
(Registrant)
Date: March 11, 1998 By: /s/ LAWRENCE BUTLER
------------------ ------------------------------
Lawrence Butler
President and Chief Executive Officer
(Principal Executive Officer)
Date: March 11, 1998 By: /s/ JOHNNY J. BLANCHARD
------------------ ------------------------------
Johnny J. Blanchard
Chief Financial Officer
(Principal Financial and Accounting Officer)
14
<PAGE>
EXHIBIT INDEX
Exhibit Page No.
------- --------
11.1 Statement re Computation of Per Share Earnings for the quarters
ended January 26, 1997 and January 25, 1998.
15
<PAGE>
Exhibit 11.1
ALPHA TECHNOLOGIES GROUP, INC., AND SUBSIDIARIES
COMPUTATION OF NET INCOME (LOSS) PER SHARE
For the Quarters Ended January 26, 1997 and January 25, 1998
(Unaudited)
(In Thousands, Except per Share Data)
January 26, January 25,
1997 1998
----------- -----------
Shares:
Weighted average common shares outstanding 6,675 6,693
Net common shares issuable on exercise of
stock options 132
------- ------
Weighted average common and common equivalent
shares outstanding 6,675 6,825
======= ======
Income (loss)before discontinued operation $(1,679) $ 397
Discontinued operation 27 -
------- ------
Net income (loss) $(1,652) $ 397
======= ======
Basic and Diluted Net Income (Loss) Per Share:
Income (loss)before discontinued operation $ (0.25) $ 0.06
Discontinued operation - -
------- ------
Net income (loss) $ (0.25) $ 0.06
======= ======
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM BALANCE
SHEET JANUARY 25, 1998 AND CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE
MONTHS ENDED JANUARY 25, 1998 AND JANUARY 25, 1997 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 3-MOS
<FISCAL-YEAR-END> OCT-25-1998 OCT-26-1997
<PERIOD-START> OCT-27-1997 OCT-28-1996
<PERIOD-END> JAN-25-1998 JAN-26-1997
<CASH> 1,432 0
<SECURITIES> 0 0
<RECEIVABLES> 12,807 0
<ALLOWANCES> 0 0
<INVENTORY> 10,662 0
<CURRENT-ASSETS> 25,955 0
<PP&E> 18,528 0
<DEPRECIATION> 6,309 0
<TOTAL-ASSETS> 43,336 0
<CURRENT-LIABILITIES> 13,494 0
<BONDS> 0 0
0 0
0 0
<COMMON> 231 0
<OTHER-SE> 18,994 0
<TOTAL-LIABILITY-AND-EQUITY> 43,336 0
<SALES> 20,400 17,153
<TOTAL-REVENUES> 20,400 17,153
<CGS> 16,314 14,765
<TOTAL-COSTS> 16,314 14,765
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 83 253
<INCOME-PRETAX> 397 (1,679)
<INCOME-TAX> 0 0
<INCOME-CONTINUING> 397 (1,679)
<DISCONTINUED> 0 27
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 397 (1,652)
<EPS-PRIMARY> .06 (.25)
<EPS-DILUTED> .06 (.25)
</TABLE>
