<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 31, 1999
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 6,932,285
- ---------------------------- ---------
Class Outstanding at February 28, 1999
<PAGE>
ALPHA TECHNOLOGIES GROUP, INC.
FORM 10-Q
JANUARY 31, 1999
TABLE OF CONTENTS
Page No.
PART I FINANCIAL INFORMATION........................................ 3
CONSOLIDATED BALANCE SHEETS - OCTOBER 25, 1998 AND JANUARY 31, 1999..... 3
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE QUARTERS ENDED JANUARY 25, 1998 AND JANUARY 31, 1999............ 4
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED JANUARY 25, 1998 AND JANUARY 31, 1999....... 5
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.............................. 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS..................................... 9
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 25, 1998 AND JANUARY 31, 1999
(In Thousands, Except Share and Per Share Data)
<TABLE>
<CAPTION>
October 25, January 31,
1998 1999
------------ ------------
(Unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash $ 1,387 $ 1,200
Accounts receivable, net 8,671 8,453
Inventories, net 9,546 8,211
Prepaid expenses 623 644
------------ ------------
Total current assets 20,227 18,508
PROPERTY AND EQUIPMENT, at cost 21,360 21,368
Less - Accumulated depreciation and amortization 8,005 8,637
------------ ------------
Property and equipment, net 13,355 12,731
GOODWILL, net 2,714 2,722
OTHER ASSETS, net 2,379 2,372
------------ ------------
$ 38,675 $ 36,333
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable, trade $ 5,808 $ 4,007
Accrued compensation and related benefits 1,777 1,492
Other accrued liabilities 2,582 2,241
Revolving credit facility -- 7,385
Current portion of long-term debt 961 3,804
------------ ------------
Total current liabilities 11,128 18,929
REVOLVING CREDIT FACILITY 8,180 --
LONG-TERM DEBT 2,833 285
OTHER LONG-TERM LIABILITIES 217 202
STOCKHOLDERS' EQUITY:
Preferred stock, $100 par value; shares authorized 180,000 -- --
Common stock, $.03 par value; shares authorized 17,000,000; issued
7,940,838 at October 25, 1998 and at January 31, 1999 238 238
Additional paid - in capital 43,781 43,804
Retained deficit (23,893) (23,389)
Cumulative translation adjustment, net of income taxes (91) (18)
Treasury stock, at cost (1,008,553 common shares at October 25, 1998 and
January 31, 1999) (3,718) (3,718)
------------ ------------
16,317 16,917
------------ ------------
$ 38,675 $ 36,333
============ ============
</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 ENDED JANUARY 25, 1998 AND JANUARY 31, 1999
(Unaudited)
(In Thousands, Except Per Share Data)
<TABLE>
<CAPTION>
January 25, January 31,
1998 1999
------------ -----------
<S> <C> <C>
SALES $20,400 $16,311
COST OF SALES 16,396 12,402
------------ -----------
Gross profit 4,004 3,909
OPERATING EXPENSES
Research and development 408 198
Selling, general and administrative 3,116 2,918
Restructuring -- --
------------ -----------
Total operating expenses 3,524 3,116
------------ -----------
OPERATING INCOME 480 793
INTEREST AND OTHER INCOME (EXPENSE), net (83) (289)
------------ -----------
INCOME BEFORE TAXES 397 504
PROVISION FOR INCOME TAXES -- --
------------ -----------
NET INCOME $ 397 $ 504
============ ===========
BASIC AND DILUTED NET INCOME PER SHARE:
Basic $ 0.06 $ 0.07
============ ===========
Diluted $ 0.06 $ 0.07
============ ===========
SHARES USED IN COMPUTING NET INCOME PER SHARE COMMON
Basic 6,693 6,932
============ ===========
Diluted 6,825 6,934
============ ===========
</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 THREE MONTHS ENDED JANUARY 25, 1998 AND JANUARY 31, 1999
(Unaudited)
(In Thousands)
<TABLE>
<CAPTION>
January 25, January 31,
1998 1999
------------ ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 397 $ 504
Adjustments to reconcile net income to net cash (used in)
Provided by operating activities:
Depreciation and amortization 730 810
Gain on sale of equipment (70) --
Cumulative translation adjustment 23 (2)
Changes in assets and liabilities:
(Increase) decrease in accounts receivable (1,041) 218
(Increase) decrease in inventory (881) 1,335
(Increase) decrease in prepaid expenses 86 (21)
(Decrease) in accounts payable (341) (1,801)
(Decrease) in accrued compensation and related benefits (560) (285)
Increase (decrease) in other liabilities 280 (356)
------------ ------------
Total adjustments (1,774) (79)
Net cash provided by (used in) operating activities (1,377) 425
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of equipment 88 81
Purchase of property and equipment, net (1,205) (190)
(Increase) decrease in other assets, net 60 (3)
------------ ------------
Net cash (used in) provided by investing activities (1,057) (112)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock 4 --
Proceeds from revolving credit lines 19,341 10,135
Payments on revolving credit lines (17,002) (10,930)
Proceeds from term debt -- 435
Payments on term debt (184) (140)
------------ ------------
Net cash provided by (used in) financing activities 2,159 (500)
NET (DECREASE) IN CASH (275) (187)
------------ ------------
CASH, beginning of year 1,707 1,387
------------ ------------
CASH, end of period $ 1,432 $ 1,200
============ ============
</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
Alpha Technologies Group, Inc. ("Alpha" or the "Company") manufactures
thermal management products, electronic connectors, and custom designed
subsystems.
Thermal management products, principally 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. As
systems become increasingly more powerful and packaging becomes smaller, the
need to dissipate heat becomes more important to the reliability and
functionality of electronic systems. The Company's thermal management products
serve the microprocessor, computer, consumer electronics, telecommunication,
transportation, automotive, industrial controls, factory automation, power
supply, aerospace and defense 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 Company's
connector products include sub-miniature, micro-miniature and ultra-miniature
connectors and cable and/or wire harness connector assemblies, the majority of
which are custom manufactured to meet rigid specifications. The Company's
connector products serve the aerospace, communications, defense, factory
automation, industrial controls, medical electronics, scientific/process
instrumentation and test/measurement industries.
Custom designed subsystems are operational sub-units integrated into major
networks for data transmission, retrieval and transfer. The Company designs,
fabricates and tests custom designed subsystems for the defense industry, the
telecommunications industry and certain commercial markets.
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. Since October
1993, the Company has grown through a combination of acquisitions and internal
growth. In September of 1994, the Company sold the remaining aspects of its
software and related services business. In April 1995, it changed its name to
Alpha Technologies Group, Inc.
6
<PAGE>
(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.
Certain prior year amounts have been reclassified to conform to fiscal 1999
presentation.
In June 1997, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") Number 130 ("SFAS 130")
"Reporting Comprehensive Income"; and in February 1998, FASB issued SFAS 132
"Employers' Disclosures about Pensions and Other Post Retirement Benefits". The
Company has adopted these standards for its fiscal year 1999, however the
adoption of SFAS 130 and SFAS 132 in fiscal 1999 did not have a material effect
on the preparation of and results of the Company's consolidated financial
statements.
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.
(3) Inventories
Inventories consisted of the following on October 25, January 31,
(in thousands): 1998 1999
----------- ----------
Raw materials and components $ 6,187 $ 5,654
Work in process 3,194 2,623
Finished goods 2,564 2,271
----------- ----------
11,945 10,548
Valuation reserve (2,399) (2,337)
----------- ----------
$ 9,546 $ 8,211
=========== ==========
7
<PAGE>
(4) Business Segment Information
Summarized financial information by business segment for the quarters
ended:
(In thousands)
January 25, January 31,
1998 1999
---- ----
Net sales:
Thermal management products $15,791 $11,699
Connector products 3,356 2,998
Subsystems 1,253 1,614
------ ------
20,400 16,311
====== ======
Operating income (loss):
Thermal management products 575 893
Connector products 122 324
Subsystems 71 102
Corporate (288) (526)
------ ------
480 793
====== ======
Interest expense:
Thermal management products 216 269
Connector products 7 5
Subsystems -- 7
Elimination -- (12)
------ ------
223 269
====== ======
Total assets:
Thermal management products 31,254 24,964
Connector products 6,393 6,948
Subsystems 2,698 3,079
Corporate 2,991 2,236
Elimination -- (894)
------ ------
43,336 36,333
====== ======
Depreciation and amortization:
Thermal management products 568 636
Connector products 117 123
Subsystems 37 45
Corporate 8 6
------ ------
730 810
====== ======
Capital Expenditures:
Thermal management products 1,105 142
Connector products 102 36
Subsystems 6 12
Corporate - -
------ ------
1,213 190
====== ======
8
<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 1999 was $504,000.
This compares to net income for the first quarter of fiscal 1998 of $397,000,
which included a gain of $70,000 from the sale of equipment and other income of
$59,000. This improvement is primarily the result of improved gross profit in
all segments and control of operating expenses. The Company's fiscal 1999
quarter includes 14 weeks of operations versus 13 weeks for the 1998 quarter.
Net income from thermal management operations for the first quarter of
fiscal 1999, before the allocation of Alpha corporate expenses ("corporate
allocation"), was $628,000 compared to net income of $356,000 for the fiscal
1998 quarter. Results from operations increased primarily due to an increase in
gross profit margin and a decrease in operating expenses which is discussed
further below.
Net income from the connector products segment for the first quarter of
fiscal 1999, before corporate allocation, was $299,000. For the first quarter
of fiscal 1998, net income from the connector products segment, before corporate
allocation, was $241,000 including $70,000 related to a gain on the sale of
certain equipment. The increase in the results of operations in the fiscal 1999
quarter compared to the fiscal 1998 quarter was primarily due to higher gross
profits and improved expense management which is discussed further below.
Net income from the Company's subsystems operation for the first quarter of
fiscal 1999, before corporate allocation, was $98,000 compared to $74,000 for
the first quarter of fiscal 1998.
Sales. The Company's sales for the first quarter of fiscal 1999 were
$16,311,000 compared to $20,400,000 for the same period of fiscal 1998. Thermal
management sales decreased 25.9% to $11,699,000 for the fiscal 1999 quarter from
$15,791,000 the first quarter of fiscal 1998. Management believes that the
decrease in sales is due to the slowdown in the electronics industry and
increased competition from Asian manufacturers for thermal management products
sold to the personal computer industry. Consequently, the Company's thermal
management segment has increased its focus on serving key extruded heat sink
customers, which represent a diverse group of industries. These customers
typically purchase highly customized products in smaller quantities.
Connector sales were $2,998,000 during the first quarter of fiscal 1999
compared to $3,356,000 during the prior fiscal year. Management believes that
the decrease during fiscal 1999 was also due to the slowdown in the electronics
industry. Subsystems sales were $1,614,000 during the first quarter of fiscal
1999 compared to $1,253,000 during the prior fiscal year.
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 1999 was
24.0% compared to 20.0% for the 1998 fiscal quarter. The thermal management
segment's gross profit percentage was 21.9% and 18.4% for fiscal 1999 and 1998
first quarters, respectively. During the fourth quarter of fiscal 1998, the
Company implemented cost reduction measures, primarily a reduction in workforce,
to bring expenses in line with current sales levels. In addition, the Company
has increased its focus on manufacturing efficiencies.
The connector products segment's gross profit percentage increased to 32.1%
for the first quarter of fiscal 1999 from 25.3% for the 1998 quarter. This
increase is attributable to better production planning and the reductions in
operating expenses, primarily workforce reductions, which primarily occurred
during the second quarter of fiscal 1998.
The gross profit percentage at the Company's subsystems operation increased to
23.9% for the first quarter of fiscal 1999 from 20.0% for the 1998 quarter
primarily due to product mix, partially offset by higher operating costs.
Research and Development Expense. Research and development expenses for
the quarter ended January 31, 1999 were $198,000, or 1.2% of sales, compared to
$408,000, or 2.0% of sales, for the prior year quarter. Research and
development expenses as a percentage of sales decreased due to the reduction in
workforce which occurred in the fourth quarter of fiscal 1998 in addition to the
Company's efforts to bring its expenses in line with current sales levels. The
Company is primarily focusing its research and development efforts on solving
customers current thermal management problems. Because of this change in focus,
the Company expects its product research and development expense to decrease in
fiscal 1999 compared with fiscal 1998.
Selling, General and Administrative Expense. Selling, general and
administrative expenses for the quarter ended January 31, 1999 were $2,918,000,
or 17.9% of sales, including $180,000 accrued for the cancellation of a
contractual obligation. This compares to $3,116,000, or 15.3% of sales, for the
prior year quarter. SG&A expenses for the first quarter of 1999, excluding this
accrual, decreased by $378,000 as compared to the 1998 quarter. As a percentage
of sales, excluding this accrual, SG&A expenses for the 1999 quarter would have
been 16.8%. SG&A expenses, as a percentage of sales, increased due to lower
sales volume in the first quarter of 1999 as compared to the prior year quarter.
Interest and Other Income (Net). Interest expense was $269,000 and $223,000
for the fiscal 1999 and 1998 quarters, respectively. This increase was due to a
higher average outstanding borrowing base and an increase in the average
interest rate paid on outstanding debt. For the 1998 quarter, the Company
recorded other income 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.
10
<PAGE>
Year 2000 The Company continues to use its existing staff to comprehensively
review existing systems and equipment that need to be updated or changed as a
result of the Year 2000. To date, the Company's staff has determined that some
computer software requires upgrading and has begun the process of making its
systems year 2000 compliant. Based on current estimates, the costs related to
these upgrades are immaterial. The Company's computerized production equipment
is also being systematically evaluated for compliance. The Company is in contact
with its vendors and customers and no major problem has been discovered to date.
In fiscal 1999, the Company will prepare a contingency plan.
Liquidity and Capital Resources
On January 31, 1999, the Company had cash of approximately $1,200,000 compared
to $1,387,000 on October 25, 1998. Existing cash and cash provided by
operations were used to purchase capital equipment and to reduce debt. For the
three months ended January 31, 1999, $425,000 was provided by operating
activities.
Wakefield, Wakefield Extrusion, Lockhart, Malco, and Uni-Star (the Company's
subsidiaries, hereinafter referred to as "Borrowers") are parties to a loan
agreement, as amended (the "Agreement") with a commercial bank which provides
for revolving loans of up to $9,000,000 and an equipment acquisition facility of
$3.2 million. The advances on the revolving loans were based on the eligible
accounts receivable and inventories of Borrowers. The advances on the equipment
acquisition facility may be used only 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. The Borrower's credit facilities mature on December 31, 1999.
However, the Borrowers are required to pay $25,000 per month for each month that
the loans are outstanding after April 30, 1999. The Company intends to replace
the Borrower's credit facilities prior to April 30, 1999.
On January 31, 1999, $7,385,000 was drawn on the revolving credit facility.
Interest on the revolving credit facility accrues at the bank's prime rate plus
1% (8.75% per annum on January 31, 1999). There is an unused line fee equal to
.5% per annum on the difference between $9,000,000 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 31, 1999, $ 1,312,500 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 31, 1999, $1,335,000 was outstanding on the $1,900,000 term note. The
equipment acquisition facility accrues interest at the banks prime rate plus 1%
(8.75% per annum on January 31, 1999) and is
11
<PAGE>
payable in 84 monthly installments of $10,952 beginning January 1999. On January
31, 1999, $920,000 was outstanding on the equipment acquisition facility. 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
$34,089,000.
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
31, 1999, 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 21, 1999 was a deficit of $421,000 compared to
$9,099,000 on October 25, 1998. The decrease in working capital is attributable
to the classification of the Company's primary credit facilities, which expire
on December 31, 1999, as short term. If the revolving credit facility and the
term notes held by the Company's primary commercial lender had not been
reclassified, the Company's working capital position would have increased to
$9,725,000 primarily due to the Company's cash flows from operations. The
Company believes that it will be able to replace its current commercial lender
prior to the credit facilities maturity date. With its currently available cash,
anticipated cash flow from operations and availability under a new credit
facility, the Company believes it will be able to fund its operations in the
near-term.
Forward Leading Statements
In conjunction with the provisions of the "Safe Harbor" section of the
Private Securities Litigation Reform Act of 1995, this quarterly report Form
10-Q may contain forward-looking statements pertaining to future anticipated
projected plans, performance and developments, as well as other statements
relating to future operations. All such forward-looking statements are
necessarily only estimates of future results and there can be no assurance that
actual results will not materially differ from expectations. Further information
on potential factors which could affect the Company, including, but not limited
to, the impact of competitive products and pricing, product demand and market
acceptance, new product development, reliance on key strategic alliances,
availability of raw materials, fluctuations in operating results, ability to
retain and attract personnel including management and other risks detailed
herein and in the Company's other filings with the Securities and Exchange
Commission.
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 25, 1998 and January 31, 1999.
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 January 31, 1999.
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 9, 1999 By: /s/ Lawrence Butler
------------------------- -------------------------------
Lawrence Butler
President and Chief Executive Officer
(Principal Executive Officer)
Date: March 9, 1999 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 25, 1998 and January 31, 1999.
27 Financial Data Schedule
15
<PAGE>
Exhibit 11.1
ALPHA TECHNOLOGIES GROUP, INC., AND SUBSIDIARIES
COMPUTATION OF NET INCOME PER SHARE
For the Quarters Ended January 25, 1998 and January 31, 1999
(Unaudited)
(In Thousands, Except per Share Data)
<TABLE>
<CAPTION>
January 25, January 31,
1998 1999
------------- -----------
<S> <C> <C>
Shares:
Weighted average common shares outstanding 6,693 6,932
Net common shares issuable on exercise of
stock options 132 2
------------- -----------
Weighted average common and common equivalent
shares outstanding 6,825 6,934
============= ===========
Net income $ 397 $ 504
============= ===========
Basic and Diluted Net Income Per Share:
Basic $ 0.06 $ 0.07
============= ===========
Diluted $ 0.06 $ 0.07
============= ===========
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CONSOLIDATED
BALANCE SHEET JANUARY 31, 1999 AND CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE
THREE MONTHS ENDED JANUARY 31, 1999 AND JANUARY 25, 1998 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<RESTATED>
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 3-MOS
<FISCAL-YEAR-END> OCT-31-1999 OCT-25-1998
<PERIOD-START> OCT-26-1998 OCT-27-1997
<PERIOD-END> JAN-31-1999 JAN-25-1998
<CASH> 1,200 0
<SECURITIES> 0 0
<RECEIVABLES> 8,453 0
<ALLOWANCES> 0 0
<INVENTORY> 8,211 0
<CURRENT-ASSETS> 18,508 0
<PP&E> 21,368 0
<DEPRECIATION> 8,637 0
<TOTAL-ASSETS> 36,333 0
<CURRENT-LIABILITIES> 18,929 0
<BONDS> 0 0
0 0
0 0
<COMMON> 238 0
<OTHER-SE> 16,679 0
<TOTAL-LIABILITY-AND-EQUITY> 36,333 0
<SALES> 16,311 20,400
<TOTAL-REVENUES> 16,311 20,400
<CGS> 12,402 16,396
<TOTAL-COSTS> 12,402 16,396
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 289 83
<INCOME-PRETAX> 504 397
<INCOME-TAX> 0 0
<INCOME-CONTINUING> 504 397
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 504 397
<EPS-PRIMARY> 0.07 0.06
<EPS-DILUTED> 0.07 0.06
</TABLE>
