<PAGE>
<PAGE>
(CONFORMED COPY)
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 March 28, 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 0-3704
NAI TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
New York 11-1798773
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
282 New York Avenue, Huntington, NY 11743
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (516) 271-5685
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
--- ---
As of May 7, 1998, 9,155,427 shares of NAI Technologies, Inc.'s $.10 par value
Common Stock were outstanding.
Page 1 of 14 Pages
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Page 2
NAI TECHNOLOGIES, INC.
INDEX
<TABLE>
<CAPTION>
<S> <C>
Facing Sheet 1
Index 2
PART I. Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets - 3
March 28, 1998 and December 31, 1997
Consolidated Statements of Earnings - 4
Three months ended March 28, 1998 and
March 29, 1997
Consolidated Statements of Comprehensive Income - 5
Three months ended March 28, 1998 and
March 29, 1997
Consolidated Statements of Cash Flows - 6
Three months ended March 28, 1998 and
March 29, 1997
Notes to Financial Statements 7
Item 2. Management's Discussion and Analysis of 9-12
Financial Condition and Results of Operations
PART II. Other Information
Item 5. Other Information 13
Item 6. Exhibits and Reports on Form 8-K 13
Signatures 14
</TABLE>
<PAGE>
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Page 3
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
NAI TECHNOLOGIES, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(in thousands)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
March 28, Dec. 31,
1998 1997
(Audited)
- --------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 745 $ 585
Accounts receivable, net 12,285 11,742
Inventories, net 9,251 9,320
Deferred tax asset 150 148
Other current assets 644 497
- --------------------------------------------------------------------------------
Total current assets 23,075 22,292
- --------------------------------------------------------------------------------
Property, plant and equipment, net 2,858 2,986
Excess of cost over fair value of net assets acquired,net 8,915 9,073
Other assets 1,244 1,330
- --------------------------------------------------------------------------------
Total assets $36,092 $35,681
================================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 6,899 $ 7,465
Notes payable - 571
Current installments of long-term debt 6,614 311
Accrued payroll and commissions 112 302
Other accrued expenses 2,134 2,116
Income taxes payable 761 597
- --------------------------------------------------------------------------------
Total current liabilities 16,520 11,362
- --------------------------------------------------------------------------------
Long-term debt 4,754 9,747
Other accrued expenses 770 783
Deferred income taxes 41 41
- --------------------------------------------------------------------------------
Total liabilities 22,085 21,933
- --------------------------------------------------------------------------------
SHAREHOLDERS' EQUITY:
Capital Stock:
Preferred stock, no par value, 2,000,000
shares authorized and unissued - -
Common stock, $.10 par value, 25,000,000
shares authorized; 9,155,427 shares issued 916 916
Capital in excess of par value 19,457 19,457
Accumulated other comprehensive income 281 196
Accumulated deficit (6,647) (6,821)
- --------------------------------------------------------------------------------
Total shareholders' equity 14,007 13,748
- --------------------------------------------------------------------------------
Total liabilities and shareholders' equity $36,092 $35,681
================================================================================
</TABLE>
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Page 4
NAI TECHNOLOGIES, INC. AND SUBSIDIARIES
Consolidated Statements of Earnings
(in thousands except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
For the Three Months Ended
----------------------------
March 28, March 29,
1998 1997
- --------------------------------------------------------------------------------
<S> <C> <C>
Net sales $13,722 $13,062
- --------------------------------------------------------------------------------
Cost of sales 10,450 9,413
- --------------------------------------------------------------------------------
Gross margin 3,272 3,649
- --------------------------------------------------------------------------------
Selling expense 876 1,010
General and administrative expense 1,222 1,070
Research and development 212 424
Other 184 128
- --------------------------------------------------------------------------------
Total expenses 2,494 2,632
- --------------------------------------------------------------------------------
Operating income 778 1,017
- --------------------------------------------------------------------------------
Non-operating income (expense):
Interest income 7 14
Amortization of deferred debt costs (81) (104)
Interest expense (364) (401)
- --------------------------------------------------------------------------------
(438) (491)
- --------------------------------------------------------------------------------
Earnings before income taxes 340 526
Provision for income taxes 166 147
- --------------------------------------------------------------------------------
Net earnings $ 174 $ 379
================================================================================
Earnings per common share - basic $ 0.02 $ 0.04
================================================================================
Average shares outstanding - basic 9,155 9,028
================================================================================
Earnings per common share - diluted $ 0.02 $ 0.04
================================================================================
Average shares outstanding - diluted 9,157 10,199
================================================================================
</TABLE>
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Page 5
NAI TECHNOLOGIES, INC. AND SUBSIDIARIES
Consolidated Statements of Comprehensive Income
(in thousands)
(Unaudited)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
For the Three Months Ended
----------------------------
March 28, March 29,
1998 1997
- --------------------------------------------------------------------------------
<S> <C> <C>
Net Earnings $ 174 $ 379
- --------------------------------------------------------------------------------
Other comprehensive income, net of tax:
Foreign currency translation adjustment 85 (138)
- ------------------------------------------------------------------------------
Other comprehensive income 85 (138)
- ------------------------------------------------------------------------------
Comprehensive income $ 259 241
==============================================================================
</TABLE>
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Page 6
NAI TECHNOLOGIES, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
For the Three Months Ended
----------------------------
March 28, March 29,
1998 1997
-------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $ 174 $ 379
Adjustments to reconcile net earnings
to cash provided by operating activities:
Depreciation and amortization 419 538
Gain on disposal of property, plant and equipment - (7)
Provision for inventory obsolescence 45 13
Change in operating assets and liabilities,
excluding effects from acquisitions, dispositions
and foreign currency adjustments:
Accounts receivable (543) 2,656
Inventories 24 212
Accounts payable and other accrued expenses (751) (3,042)
Income taxes 162 145
Other, net (142) 51
- --------------------------------------------------------------------------------
Net cash flow (used in) provided by operating activities (612) 945
- --------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, plant and equipment (16) (94)
Proceeds from sale of property, plant and equipment - 17
- --------------------------------------------------------------------------------
Net cash used in investing activities (16) (77)
- --------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuances of notes payable 158 -
Payments of notes payable (729) -
Payments of debt (522) (1,621)
Proceeds from borrowings under revolving
credit agreement 1,800 -
Proceeds from exercise of stock options
and stock purchase plan - 78
- --------------------------------------------------------------------------------
Net cash provided by (used in) financing activities 707 (1,543)
- --------------------------------------------------------------------------------
Effect of foreign currency exchange rates on cash 81 (126)
- --------------------------------------------------------------------------------
Net increase (decrease) in cash and cash equivalents 160 (801)
Cash and cash equivalents at beginning of year 585 2,727
- --------------------------------------------------------------------------------
Cash and cash equivalents at end of period $ 745 $1,926
============================================================================
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for (refunded):
Interest $ 388 $ 347
Income taxes $ 13 $ -
Conversion of 12% Notes into common stock $ - $ 12
============================================================================
</TABLE>
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Page 7
NOTES TO FINANCIAL STATEMENTS
UNAUDITED FINANCIAL STATEMENTS
The accompanying unaudited consolidated financial statements have been prepared
by the Company pursuant to the rules and regulations of the Securities and
Exchange Commission ("SEC") and, in the opinion of management, include all
adjustments (consisting of normal recurring accruals) necessary for a fair
presentation of financial position, results of operations and cash flows for the
interim periods. Certain information and footnote disclosures normally included
in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to the rules and
regulations of the SEC. The Company believes that the disclosures contained
herein are adequate to make the information presented not misleading. The
consolidated statements of earnings for the three months ended March 28, 1998
are not necessarily indicative of the results to be expected for the full year.
These unaudited financial statements should be read in conjunction with the
audited financial statements and accompanying notes included in the Company's
1997 Annual Report on Form 10-K for the year ended December 31, 1997.
INVENTORIES
Inventories are summarized by major classification as follows:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
March 28, Dec. 31,
1998 1997
(Audited)
- --------------------------------------------------------------------------------
(In thousands of dollars)
<S> <C> <C>
Raw materials and components $8,983 $ 9,360
Work-in-process 2,859 3,086
Finished goods 1,345 1,426
Allowance for obsolescence (3,936) (4,033)
Unliquidated progress payments -- (519)
- --------------------------------------------------------------------------------
Inventories, net $9,251 $ 9,320
================================================================================
</TABLE>
SIGNIFICANT EVENTS
On April 8, 1998, NAI Technologies, Inc. announced that it has signed a Letter
of Intent with DRS Technologies, Inc. for NAI to merge with DRS. NAI
shareholders will receive one quarter of a share of DRS common stock for each
share of NAI common stock held. NAI's 12% Convertible Subordinated Promissory
Notes and Warrants to purchase NAI common stock will be converted into or
exercisable for DRS common stock at the same one quarter to one exchange ratio.
The closing is subject to negotiation of a definitive merger agreement,
completion of due diligence, approval by the respective shareholders and certain
other conditions. The Letter of Intent provides for the payment of a termination
fee by NAI in the amount of $1.5 million in the event that NAI accepts an offer
from a third party to acquire NAI. Each company intends to send a joint proxy
statement to its shareholders and to hold a special meeting for approval of the
transaction. The transaction is expected to close during the third quarter of
1998.
<PAGE>
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Page 8
NAI Technologies, Inc. and Subsidiaries
Information by industrial segment
<TABLE>
<CAPTION>
As of or Three Months Ended
---------------------------
Mar 28, Mar 29,
1998 1997
----------------------
<S> <C> <C>
Sales to unaffiliated customers:
Rugged Systems $9,567 $7,740
System Integration 3,253 4,278
Telecommunications 902 1,044
----------------------
Total $13,722 $13,062
======================
Intersegment sales:
Rugged Systems $32 $253
System Integration 356 103
----------------------
Total $388 $356
======================
Total sales
Rugged Systems $9,599 $7,993
System Integration 3,609 4,381
Telecommunications 902 1,044
Eliminations (388) (356)
----------------------
Total $13,722 $13,062
======================
Operating Earnings (Loss):
Rugged Systems $949 $766
System Integration 453 723
Telecommunications (106) (117)
----------------------
Subtotal 1,296 1,372
Corporate expenses & other (518) (355)
----------------------
Total operating earnings 778 1,017
Net interest expense & other (438) (491)
----------------------
Earnings before income taxes $340 $526
======================
Identifiable Assets:
Rugged Systems $23,304 $23,816
System Integration 5,633 3,332
Telecommunications 5,409 6,213
----------------------
Subtotal 34,346 33,361
Corporate and other 1,746 3,843
----------------------
Total $36,092 $37,204
======================
</TABLE>
<PAGE>
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Page 9
Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
First Quarter 1998 Compared with First Quarter 1997
The nature of the Company's business is such that year to year changes in sales
levels are predominantly due to changes in shipping volume or product mix rather
than changing sales prices. Net sales for the first quarter of 1998 were $13.7
million, a 5% increase when compared with $13.1 million for the same period in
1997.
The following chart provides the sales breakdown by subsidiary:
<TABLE>
<CAPTION>
In thousands of dollars 1998 1997 % Change
- -----------------------------------------------------------------------------
<S> <C> <C> <C>
RUGGED SYSTEMS SEGMENT
Codar Technology, Inc. $4,318 $ 3,933 10%
Lynwood Rugged Systems Ltd. 5,281 4,060 30%
Inter-company (32) (253)
-----------------------------------
Total Rugged Systems Segment 9,567 7,740 24%
SYSTEMS INTEGRATION SEGMENT
NAI Systems Division 3,609 4,381 (18%)
Inter-company (356) (103)
-----------------------------------
Total Systems Integration Segment 3,253 4,278 (24%)
TELECOMMUNICATIONS SEGMENT
Wilcom, Inc. 902 1,044 (14%)
-----------------------------------
Total Telecommunications Segment 902 1,044 (14%)
TOTAL $13,722 $13,062 5%
===================================
</TABLE>
Sales in the Rugged Systems segment (net of intercompany eliminations) increased
24% to $9.6 million from $7.7 million for the same period in 1997. The increased
sales were attributable to 10% sales growth at Codar and 30% sales growth at
Lynwood.
The sales increase at Lynwood was attributable to strong bookings and increased
export sales from the United Kingdom.
Sales in the Systems Integration segment (net of intercompany eliminations)
decreased 24% to $3.3 million from $4.3 million for the same period in 1997. The
decrease in sales at the Systems division is attributable to a delay in
anticipated orders from the National Security Agency. The delay in orders is
believed to be due to changes in the Agency's budget as a result of priority
modifications by the Agency. Although delayed, the Company believes the
anticipated orders will be forthcoming. However, there can be no assurance that
such orders will be received.
In recent years the Company has reduced its dependency on the United States
defense budget by expanding its non-military and export business operations.
However, the Company still expects approximately 25% of 1998 sales to be
directly to the U.S. military or through prime contractors to the U.S. military.
The Company is not aware of any programs in which it participates that are
specifically targeted for termination or curtailment. The Company's products are
utilized on many different U.S. Government programs, which reduces the adverse
impact of the cancellation of a single specific program. However, changes in
future U.S. defense spending levels could impact the Company's future sales
volume.
<PAGE>
<PAGE>
Page 10
Sales in the Telecommunications segment decreased 14% to $0.9 million as
compared to $1.0 million for the same period in 1997. The decrease in sales was
attributable to a decline in sales of the MFT analog line treatment products and
the ELPA transmission products, which are sold to the Telco's. The Company is
exploring all avenues to increase its business level and has recently added
additional sales resources and restructured its sales and engineering
departments. The Company is actively expanding its U.S. and European distributor
network to increase sales.
The gross margin percentage for the first quarter of 1998 was 23.8%, as compared
with 27.9% in the comparable quarter of 1997. The following chart provides the
gross margin percentage by subsidiary.
<TABLE>
<CAPTION>
1998 1997
- ----------------------------------------------------------------------------
<S> <C> <C>
Codar Technology, Inc. 17.6% 15.9%
NAI Systems Division 23.3% 27.6%
Lynwood Rugged Systems Ltd. 27.1% 36.8%
Wilcom, Inc. 26.4% 31.6%
</TABLE>
The improved margins at Codar are attributable to continued cost reduction
efforts at the Company, as well as an emphasis to compete for higher margin
work.
The lower gross margin percentage at NAI Systems Division is attributable to
decreased shipping volumes and a less favorable product mix. Lynwood's margins
were lower due to an unfavorable product mix and higher engineering expenditures
in cost of sales due to the change in mix between Company-sponsored research and
development (which are charged to R&D) vs. an increase in customer funded
engineering (which are charged to cost of sales).
Wilcom's gross margins continued to decline as a result of low shipping volumes
and thus poor absorption of fixed overhead costs. Wilcom's margins will not
significantly improve until the Company's sales increase.
Selling expense for the first quarter of 1998 was $0.9 million as compared with
$1.0 million for the same period in 1997. This decrease is due to lower sales
commissions at the Wilcom and Systems divisions.
General and administrative expenses for the first quarter of 1998 were $1.2
million as compared with $1.1 million in same period of 1997.
Company-sponsored research and development expenditures for the first quarter of
1998 were $0.2 million as compared with $0.4 million for the same period in
1997, which represents a decrease of 50%. The decrease is attributable to a
change in the mix between Company-sponsored research and development and
customer funded engineering. The Company expects that the level of the first
quarter 1998 internal research and development expenditures will increase for
the remainder of 1998.
For the first quarter of 1998, the Company reported operating income of $0.8
million as compared with operating income of $1.0 million for the same period in
1997.
Interest expense and amortization of deferred debt costs, net of interest
income, was $0.4 million for the first quarter of 1998 as compared with $0.5
million for the same period in 1997.
The Company accrued an income tax expense of $0.17 million as compared with
$0.15 million in 1997, which equates to effective income tax rates of 49% and
28%, respectively. The entire tax expense in both periods pertains to the
Company's Lynwood subsidiary located in the U.K. Lynwood's earnings are taxed in
the U.K. and, while the Company has a U.S. net operating loss carry-forward, it
is required to pay taxes in the U.K. The Company is unable to recognize the
future tax benefit associated with its U.S. operating loss
<PAGE>
<PAGE>
Page 11
carry-forwards due to uncertainties as to whether or not a future benefit will
be realized.
For the first quarter of 1998 the Company recorded net earnings of $0.17 million
as compared with $0.38 million in the first quarter of 1997. Basic earnings per
share was $0.02 per share as compared with $0.04 per share for the same period
in 1997, based on a weighted average of 9.2 million and 9.0 million shares
outstanding, respectively. Diluted earnings per share was $0.02 per share as
compared with $0.04 per share for the same period in 1997, based on a weighted
average of 9.2 million and 10.2 million shares outstanding, respectively.
Liquidity and Capital Resources
Cash and cash equivalents totaled $0.7 million at March 28, 1998, as compared to
$0.6 million at December 31, 1997. Cash used by operating activities amounted to
$0.6 million in the first quarter of 1998, as compared to cash provided by
operating activities of $0.9 million in the comparable period of 1997. During
the first quarter accounts receivable increased $0.5 million and accounts
payable and other accrued expenses decreased $0.8 from December 31, 1997
respectively.
During the quarter ended March 28, 1998, the Company had borrowings of long term
debt and notes payable of $2.0 million, and had payments of long term debt and
notes payable of $1.3 million. Net borrowings of $0.7 million were used for
working capital purposes. Borrowings were required because the Company
recognized a significant amount of revenue in the last three weeks of the
quarter. The Company is trying to level out shipments to maximize cash flow.
As of March 28, 1998 the Company's outstanding borrowing under its secured
revolving credit agreement was $6.6 million. The Company has made payments
totaling $1.425 million ($675 thousand on March 31, 1998) in excess of
contractual requirements and has the right to re-borrow such amount if needed.
During 1998, the Company will lose the right to re-borrow such amounts at the
rate of $750 thousand per quarter. If no additional payments are made the
Company will be required to repay $75 thousand on June 30, 1998 and $750
thousand on both September 30, 1998 and December 31, 1998. The remaining amount
outstanding is due and payable on January 15, 1999. The Company does not believe
that it will generate adequate cash flow from operations to pay the entire
balance under its secured revolving credit agreement on January 15, 1999. The
Company intends to refinance all or a substantial portion of the amount due and
payable, either through borrowings or other capital sources and pursue all
available options in order that it meet its obligations. As of March 28, 1998
the Company was in violation of two of its debt covenants and has received
waivers from its banks.
Inflation
The Company's financial statements are prepared in accordance with historical
accounting systems, and therefore do not reflect the effect of inflation. The
impact of changing prices on the financial statements is not considered to be
significant.
Year 2000
NAI is currently in the process of evaluating its computer software and
databases to determine whether or not modifications will be required to prevent
problems related to the year 2000. These problems, which have been widely
reported in the media, could cause malfunctions in certain software and
databases with respect to dates on or after January 1, 2000, unless corrected.
<PAGE>
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Page 12
At this time, the Company does not believe that it has a significant problem in
this regard. The cost, if any, to become year 2000 compliant is not expected to
be material.
This document may contain forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. These statements are based on
current plans and expectations of NAI Technologies and involve risks and
uncertainties that could cause actual future activities and results of
operations to be materially different from those set forth in the
forward-looking statements. Important factors that could cause actual results to
differ include, among others, changes in government purchasing policies and
budget constraints, competition, the continuity of booking trends, the absence
of supply interruptions, new products' market acceptance and warranty
performance.
<PAGE>
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Page 13
PART II. OTHER INFORMATION
Item 5. Other Information
On April 8, 1998, NAI Technologies, Inc. announced that it has
signed a Letter of Intent with DRS Technologies, Inc. for NAI to
merge with DRS. NAI shareholders will receive one quarter of a share
of DRS common stock for each share of NAI common stock held. NAI's
12% Convertible Subordinated Promissory Notes and Warrants to
purchase NAI common stock will be converted into or exercisable for
DRS common stock at the same one quarter to one exchange ratio. The
closing is subject to negotiation of a definitive merger agreement,
completion of due diligence, approval by the respective shareholders
and certain other conditions. The Letter of Intent provides for the
payment of a termination fee by NAI in the amount of $1.5 million in
the event that NAI accepts an offer from a third party to acquire
NAI. Each company intends to send a joint proxy statement to its
shareholders and to hold a special meeting for approval of the
transaction. The transaction is expected to close during the third
quarter of 1998.
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits
11 - Statement re: Computation of Per Share Earnings
27 - Financial Data Schedule (Edgar Filing only)
b) Reports on Form 8-K
Registrant filed a Current Report on Form 8-K dated April 15, 1998
to report that it had signed a Letter of Intent with DRS
Technologies, Inc. for NAI to merge with DRS.
<PAGE>
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Page 14
S I G N A T U R E S
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.
NAI TECHNOLOGIES, INC.
(Registrant)
DATE May 5, 1998 By: \s\ Richard A. Schneider
--------------------- ---------------------------
Richard A. Schneider
Executive Vice President
(On behalf of the registrant and as
Principal Financial Officer)
<PAGE>
<PAGE>
<PAGE>
Exhibit 11
NAI TECHNOLOGIES, INC. AND SUBSIDIARIES
(In thousands)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
Three Months Ended
March 28, March 29,
1998 1997
- --------------------------------------------------------------------------------------
<S> <C> <C>
Net Income (loss) $174 $379
Average shares of common stock outstanding during the period 9,155 9,028
-------- --------
Basic Earnings per share $0.02 $0.04
======== ========
Net Income (loss) 174 379
Interest on Convertible Debt (Net of Taxes) 0 0
Amortization of OID (Net of Taxes) 0 0
Amortization of Deferred Debt Expense (Net of Taxes) 0 0
-------- --------
Adjusted Net Income 174 379
======== ========
Average shares of common stock outstanding during the period 9,155 9,028
Incremental shares from assumed exercise of stock options, stock
warrants & employee stock purchase plan 2 1,171
Dilution from Convertible Debt 0 0
Total shares used to calculate diluted EPS 9,157 10,199
-------- -------
Diluted earnings per share $0.02 $0.04
======== =======
</TABLE>
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-29-1998
<PERIOD-END> MAR-29-1998
<CASH> 745
<SECURITIES> 0
<RECEIVABLES> 12,285
<ALLOWANCES> 0
<INVENTORY> 9,251
<CURRENT-ASSETS> 23,075
<PP&E> 10,567
<DEPRECIATION> (7,709)
<TOTAL-ASSETS> 36,092
<CURRENT-LIABILITIES> 16,520
<BONDS> 5,123
<COMMON> 916
0
0
<OTHER-SE> 13,091
<TOTAL-LIABILITY-AND-EQUITY> 36,092
<SALES> 13,722
<TOTAL-REVENUES> 13,722
<CGS> 10,450
<TOTAL-COSTS> 12,944
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 364
<INCOME-PRETAX> 340
<INCOME-TAX> 166
<INCOME-CONTINUING> 174
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 174
<EPS-PRIMARY> 0.02
<EPS-DILUTED> 0.02
</TABLE>
