UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Quarter
Ended June 27, 1999 Commission File Number 0-13433
- ------------------- ------------------------------
MILTOPE GROUP INC
- -------------------------------------------------------------------------
(Exact Name of Registrant as Specified in its Charter)
Delaware 11-2693062
- --------------------------------- --------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
500 Richardson Road South
Hope Hull, AL 36043
- ------------------------- --------------------
(Address of principal (Zip Code)
executive offices)
Registrant's telephone number, including area code (334) 284-8665
Not Applicable
- -----------------------------------------------------------------------
Former name, former address and former fiscal year, if changed since
last report
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
----- -----
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the close of the period covered by this
report. Outstanding at August 11, 1999: 5,871,523 shares of Common
Stock, $.01 par value.
<PAGE>
<TABLE>
PART I - FINANCIAL INFORMATION
MILTOPE GROUP INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
June 27, December 31,
ASSETS 1999 1998
CURRENT ASSETS: ----------- ------------
<S> <C> <C>
Cash $ 746,000 $ 57,000
Accounts receivable 4,974,000 6,792,000
Inventories 18,329,000 17,867,000
Deferred income taxes 829,000 829,000
Other current assets 183,000 278,000
----------- -----------
Total current assets 25,061,000 25,823,000
----------- -----------
PROPERTY AND EQUIPMENT - at cost:
Machinery and equipment 7,808,000 7,689,000
Furniture and fixtures 1,575,000 1,594,000
Land, building and improvements 8,157,000 8,101,000
Construction in progress 66,000 -
----------- -----------
Total property and equipment 17,606,000 17,384,000
Less accumulated depreciation 9,210,000 8,549,000
----------- -----------
Property and equipment - net 8,396,000 8,835,000
----------- -----------
DEFERRED INCOME TAXES 3,335,000 3,335,000
OTHER ASSETS 785,000 945,000
----------- -----------
TOTAL $37,577,000 $38,938,000
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 3,632,000 $ 4,462,000
Accrued expenses 1,442,000 1,012,000
Current maturities of long-term debt 4,325,000 4,310,000
----------- -----------
Total current liabilities 9,399,000 9,784,000
LONG-TERM DEBT 12,585,000 11,035,000
----------- -----------
Total liabilities 21,984,000 20,819,000
----------- -----------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock - $.01 par value;
20,000,000 shares authorized;
6,811,112 shares outstanding at 68,000 68,000
June 27, 1999 and December 31, 1998.
Capital in excess of par value 20,264,000 20,264,000
Retained earnings 9,507,000 12,033,000
----------- -----------
29,839,000 32,365,000
Less treasury stock at cost 14,246,000 14,246,000
----------- -----------
Total stockholders' equity 15,593,000 18,119,000
----------- -----------
TOTAL $37,577,000 $38,938,000
=========== ===========
</TABLE>
See Notes To Condensed Consolidated Financial Statements
<PAGE>
MILTOPE GROUP INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
<TABLE>
Twenty-Six Weeks Ended
------------------------------
June 27, June 28,
1999 1998
----------- -----------
<S> <C> <C>
NET SALES $14,623,000 $13,383,000
----------- -----------
COSTS AND EXPENSES:
Cost of sales 12,626,000 10,389,000
Selling, general and administrative 3,444,000 3,548,000
Engineering, research and development 487,000 1,143,000
----------- -----------
Total 16,557,000 15,080,000
----------- -----------
LOSS FROM OPERATIONS (1,934,000) (1,697,000)
INTEREST EXPENSE - net 590,000 346,000
----------- -----------
LOSS BEFORE INCOME TAXES (2,524,000) (2,043,000)
INCOME TAX BENEFIT - 747,000
----------- -----------
NET LOSS $(2,524,000) $(1,296,000)
=========== ===========
BASIC AND DILUTED
NET LOSS PER SHARE $ (0.43) $ (0.22)
WEIGHTED AVERAGE NUMBER OF =========== ===========
SHARES OUTSTANDING 5,871,523 5,871,523
=========== ===========
</TABLE>
See Notes To Condensed Consolidated Financial Statements
<PAGE>
MILTOPE GROUP INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
<TABLE>
Thirteen Weeks Ended
June 27, June 28,
1999 1998
----------- -----------
<S> <C> <C>
NET SALES $ 7,242,000 $ 5,939,000
----------- -----------
COSTS AND EXPENSES:
Cost of sales 6,789,000 4,883,000
Selling, general and administrative 2,093,000 2,172,000
Engineering, research and development 305,000 676,000
----------- -----------
Total 9,187,000 7,731,000
----------- -----------
LOSS FROM OPERATIONS (1,945,000) (1,792,000)
INTEREST EXPENSE - net 285,000 180,000
----------- -----------
LOSS BEFORE INCOME TAXES (2,230,000) (1,972,000)
INCOME TAX BENEFIT - 721,000
----------- -----------
NET LOSS $(2,230,000) $(1,251,000)
=========== ===========
BASIC AND DILUTED
NET LOSS PER SHARE $ (0.38) $ (0.21)
=========== ===========
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING 5,871,523 5,871,523
=========== ===========
</TABLE>
See Notes To Condensed Consolidated Financial Statements
<PAGE>
MILTOPE GROUP INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE TWENTY-SIX WEEKS ENDED JUNE 27, 1999 AND JUNE 28, 1998
(unaudited)
<TABLE>
June 27, June 28,
1999 1998
OPERATING ACTIVITIES: ----------- -----------
<S> <C> <C>
Net loss $(2,524,000) $(1,296,000)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 697,000 724,000
Provision for slow-moving and obsolete inventories 500,000 206,000
Provision for doubtful accounts receivable 6,000 5,000
Deferred income taxes - (746,000)
Loss on sale of Property and Equipment 3,000 -
Change in operating assets and liabilities:
Accounts receivable 1,812,000 4,831,000
Inventories (962,000) (2,668,000)
Other current assets 95,000 53,000
Other assets 147,000 (89,000)
Accounts payable and accrued expenses (401,000) (1,244,000)
----------- -----------
Cash used in operating activities ( 627,000) (224,000)
----------- -----------
INVESTING ACTIVITIES:
Purchase of property and equipment (249,000) (215,000)
----------- -----------
Cash used in investing activities (249,000) (215,000)
FINANCING ACTIVITIES:
Proceeds from revolving credit loan - net 1,720,000 567,000
Payments of other long-term debt (155,000) (135,000)
Cash provided by financing activities 1,565,000 432,000
----------- -----------
NET INCREASE (DECREASE) IN CASH 689,000 (7,000)
CASH, BEGINNING OF PERIOD 57,000 443,000
----------- -----------
CASH, END OF PERIOD $ 746,000 $ 436,000
=========== ===========
SUPPLEMENTAL DISCLOSURE:
Cash payments made for:
Income taxes $ 2,000 $ 66,835
=========== ===========
Interest $ 556,000 $ 324,000
=========== ===========
</TABLE>
See Notes To Condensed Consolidated Financial Statements
<PAGE>
MILTOPE GROUP INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
1. Financial Statements - In the opinion of management, the
accompanying unaudited condensed consolidated financial statements
contain all adjustments necessary (consisting of only normal and
recurring accruals) to present fairly the financial position of the
Company and its subsidiaries as of June 27, 1999 and December 31, 1998
and the results of operations and cash flows for the twenty-six and
thirteen weeks ended June 27, 1999 and June 28, 1998, respectively.
The results for the twenty-six weeks ended June 27, 1999 and June 28,
1998 are not necessarily indicative of the results for an entire year.
It is suggested that these consolidated financial statements be read in
conjunction with the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1998.
Reclassifications - Certain prior years amounts have been
reclassified to conform with the 1999 presentation.
2. Inventories - Net
Inventories consist of the following:
<TABLE>
June 27, 1999 December 31, 1998
------------- -----------------
<S> <C> <C>
Purchased parts and
Subassemblies $12,961,000 $12,874,000
Work-in-process 5,368,000 4,993,000
----------- -----------
Total $18,329,000 $17,867,000
=========== ===========
</TABLE>
3. Long Term Debt - The Company's $15,000,000 revolving credit
agreement with its primary lender matured on May 31, 1999. The lender
has chosen not to renew or extend the maturing line of credit and is
helping the Company in its search for a replacement line of credit
facility. The Company is currently in negotiations with several lenders
and anticipates a letter of commitment for a replacement line of credit
from one of these lenders in the third quarter. Under the current loan
agreement terms, the outstanding amount of the revolving credit facility
has been converted into a term loan payable in twelve equal quarterly
installments beginning August 31, 1999. The Company's accounts receivable,
contract rights and inventories are pledged as collateral to the agreement.
4. Segment Information - On December 31, 1998, the Company adopted
SFAS 131, Disclosure about Segments of an Enterprise and Related
Information. SFAS 131 established standards for reporting information
about segments in annual financial statements and requires selected
information about segments in interim financial reports issued to
stockholders. It also established standards for related disclosures
about products and services, and geographic areas. Segments are
defined as components of an enterprise about which separate financial
information is available that is evaluated regularly by the chief
operating decision-maker in deciding how to allocate resources and in
assessing performance.
Under this standard, the Company's reportable segments are
organized around its two main products and services segments,
Military/Rugged and Commercial. Through its military/rugged segment,
the Company is engaged in the design, manufacture and testing of
computer and computer peripheral equipment for military and other
specialized applications requiring reliable operations in severe land,
sea and airborne environments. These products are generally sold by
the Company's business development group through the federal government
bid process. The Company's commercial segment designs, develops,
manufactures and markets commercial computer related products primarily
for transportation, telecommunications and in-field maintenance
markets. These products are sold through an established network of
marketing representatives and Company employed sales people to a broad
base of customers both international and domestic. The accounting
policies of the segments are the same as those described in the summary
of significant accounting policies. The Company's determination of
segment operating profit (loss) does not reflect other income (expense)
or income taxes.
<PAGE>
<TABLE>
Thirteen Weeks Ended June 27, 1999 and June 28, 1998
- ----------------------------------------------------
<S> <C> <C> <C> <C> <C>
General
June 27, 1999 Military/Rugged Commercial Eliminations Corporate Consolidated
------------- --------------- ---------- ------------ ----------- ------------
Net sales from external customers $ 3,549,000 $3,693,000 $ - $ 7,242,000
----------- ---------- ----------- -----------
Segment operating loss $ 1,009,000 $ 936,000 $ - $ 1,945,000
----------- ---------- ----------- -----------
Identifiable assets $23,599,000 $8,100,000 $ - $ 5,878,000 $37,577,000
----------- ---------- ----------- ----------- -----------
Capital expenditures $ 104,000 $ 109,000 $ 213,000
----------- ---------- -----------
Depreciation and amortization $ 191,000 $ 106,000 $ 297,000
----------- ---------- -----------
General
June 28, 1998 Military/Rugged Commercial Eliminations Corporate Consolidated
------------- --------------- ---------- ------------ --------- ------------
Net sales from external customers $ 3,001,000 $2,938,000 $ - $ 5,939,000
----------- ---------- ----------- -----------
Segment operating loss $ 1,387,000 $ 405,000 $ - $ 1,792,000
----------- ---------- ----------- -----------
Identifiable assets $23,623,000 $7,844,000 $ - $4,874,000 $36,341,000
----------- ---------- ----------- ---------- -----------
Capital expenditures $ 35,000 $ 34,000 $ 69,000
----------- ---------- -----------
Depreciation and amortization $ 226,000 $ 130,000 $ 356,000
----------- ---------- -----------
</TABLE>
Twenty-Six Weeks Ended June 27, 1999 and June 28, 1998
- ------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C>
General
June 27, 1999 Military/Rugged Commercial Eliminations Corporate Consolidated
------------- --------------- ---------- ------------ --------- ------------
Net sales from external customers $ 7,267,000 $7,356,000 $ - $14,623,000
----------- ---------- ------------ -----------
Segment operating loss $ 1,324,000 $ 610,000 $ - $ 1,934,000
----------- ---------- ------------ -----------
Identifiable assets $23,599,000 $8,100,000 $ - $5,878,000 $37,577,000
----------- ---------- ------------ ---------- -----------
Capital expenditures $ 122,000 $ 127,000 $ 249,000
----------- ---------- -----------
Depreciation and amortization $ 447,000 $ 250,000 $ 697,000
----------- ---------- -----------
General
June 28, 1998 Military/Rugged Commercial Eliminations Corporate Consolidated
------------- --------------- ---------- ------------ --------- ------------
Net sales from external customers $ 8,010,000 $5,373,000 $ - $13,383,000
----------- --------- ------------ -----------
Segment operating loss $ 1,469,000 $ 228,000 $ - $ 1,697,000
----------- ---------- ------------ -----------
Identifiable assets $23,623,000 $7,844,000 $ - $4,874,000 $36,341,000
----------- ---------- ------------ ---------- -----------
Capital expenditures $ 133,000 $ 82,000 $ 215,000
----------- ---------- -----------
Depreciation and amortization $ 459,000 $ 265,000 $ 724,000
----------- ---------- -----------
</TABLE>
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion includes certain forward looking
statements which are affected by important factors including, but not
limited to, actions of competitors, termination of contracts at the
convenience of the United States government, customer funding
variations in connection with multi-year contracts and follow-on
options that could cause actual results to differ materially from
forward looking statements.
GENERAL
- -------
The following discussion and analysis presents certain factors
affecting the Company's results of operations for the thirteen weeks
and twenty-six weeks ended June 27, 1999, as compared to the thirteen
weeks and twenty-six weeks ended June 28, 1998.
RESULTS OF OPERATIONS
- ---------------------
Thirteen weeks ended June 27, 1999 compared to thirteen weeks ended
June 28, 1998
- -----------------------------------------------------------------------
Net sales for the thirteen weeks ended June 27, 1999 (second
quarter of 1999) were $7,242,000 compared to net sales for the thirteen
weeks ended June 28, 1998 (second quarter of 1998) of $5,939,000. The
increase in sales was primarily attributable to increased sales to
the government of SPORT units and increased sales of commercial
airborne products.
The gross margin percentage for the second quarter of 1999 was
6.3% compared to 17.8% for the same period in 1998. The decrease is
primarily attributable to additional costs related to various
government contracts closed out in 1999 and a less favorable product
mix in the second quarter of 1999.
Selling, general and administrative expenses for the second
quarter of 1999 decreased 3.7% from the second quarter of 1998, to
$2,093,000. These expenses as a percent of sales were 28.9% in the
second quarter of 1999 compared to 36.6% for the similar period in
1998. The decrease as a percent of sales is primarily attributable to
increased sales in the second quarter of 1999 and decreased expenses
related to employee severance and restructure costs in the second
quarter of 1999 as compared to the second quarter of 1998.
Company sponsored engineering, research and development expenses
for the second quarter of 1999 decreased 54.9% from the second quarter
of 1998, to $305,000. These expenses as a percent of sales were 4.2%
in the second quarter of 1999 compared to 11.4% for the similar period
in 1998. The decrease as a percent of sales is primarily attributable
to increased sales in the second quarter of 1999 and timing of certain
research and development project expenses that will be incurred in the
third and fourth quarters of 1999.
Interest expense, net of interest income, was $285,000 in the
second quarter of 1999 compared to $180,000 for the similar period in
1998. The increase reflects increased debt compared to the prior year.
Net loss for the second quarter of 1999 was $2,230,000 compared to
net loss of $1,251,000 in the second quarter of 1998. The basic and
diluted net loss per share was $0.38 for the second quarter of 1999
compared to the basic and diluted net loss per share of $0.21 for the
similar period in 1998 based on a weighted average of 5,871,523 shares
of the Company's common stock outstanding for the second quarter of
1999 and 1998. The decrease in earnings was primarily attributable to
additional losses on final closeout of various government contracts,
a less favorable product mix and no income tax benefit taken in the
second quarter of 1999.
Twenty-six weeks ended June 27, 1999 compared to twenty-six weeks
ended June 28, 1998
- -----------------------------------------------------------------------
Net sales for the twenty-six weeks ended June 27, 1999 (first half
of 1999) were $14,623,000 compared to net sales for the twenty-six
weeks ended June 28, 1998 (first half of 1998) of $13,383,000. The
increase in sales was primarily attributable to the increased sales to
the government of SPORT units and increased sales of commercial
airborne products.
The gross margin percent for the first half of 1999 was 13.7%
compared to 22.4% for the same period in 1998. The decrease in gross
margin percent was primarily attributable to additional costs related
to various government contracts closed out in 1999 and a less favorable
product mix.
Selling, general and administrative expenses for the first half of
1999 decreased 2.9% from the first half of 1998, to $3,444,000. These
expenses as a percent of sales were 23.6% in the first half of 1999
compared to 26.5% for the similar period in 1998. The decrease as a
percent of sales is primarily attributable to increased sales and
decreased expenses related to employee severance and restructure costs
as compared to the second quarter of 1998.
Company sponsored engineering, research and development expenses
for the first half of 1999 decreased 57.4% from the first half of 1998,
to $487,000. These expenses as a percent of sales were 3.3% in the
first half of 1999 compared to 8.5% for the similar period in 1998. The
decrease as a percent of sales is primarily attributable to increased
sales and timing of certain research and development project expenses
that will be incurred in the third and fourth quarters of 1999.
Interest expense, net of interest income, was $590,000 in the
first half of 1999 compared to $346,000 for the similar period in 1998.
The increase reflects increased debt compared to the prior year.
Net loss for the first half of 1999 was $2,524,000 compared to net
loss of $1,296,000 in the first half of 1998. The basic and diluted
net loss per share was $0.43 for the first half of 1999 as compared to
the basic and diluted net loss per share of $0.22 for the similar
period in 1998 based on a weighted average of 5,871,523 shares of the
Company's common stock outstanding for the second quarter of 1999 and
1998. The decrease in earnings was primarily attributable to additional
losses on final closeout of various government contracts, a less
favorable product mix and no income tax benefits taken in 1999 compared
to 1998.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
Working capital approximated $15,662,000 at June 27, 1999 compared
to $16,039,000 at December 31, 1998. Accounts receivable decreased
approximately $1,818,000 as a result of increased collection activities.
Inventories increased approximately $462,000 as a result of the Hanscom
contract. Accounts payable decreased approximately $830,000 reflecting
normal payment terms and lower inventory levels. Accrued expenses
increased approximately $430,000 as a result of increased reserve
levels for anticipated government contract related costs.
The Company's $15,000,000 revolving credit agreement with its primary
lender matured on May 31, 1999. The lender has chosen not to renew or
extend the maturing line of credit and is helping the Company in its
search for a replacement line of credit facility. The Company is
currently in negotiations with several lenders and anticipates a letter
of commitment for a replacement line of credit from one of these
lenders in the third quarter. Under the current loan agreement terms,
the outstanding amount of the revolving credit facility has been
converted into a term loan payable in twelve equal quarterly
installments beginning August 31, 1999. The Company's accounts
receivable, contract rights and inventories are pledged as collateral
to the agreement.
YEAR 2000 ISSUES
- ----------------
Year 2000 Compliance
As has been widely publicized, many computer and digital storage
systems express dates using only the last two digits of the year and
will thus require remediation or replacement to accommodate the year
2000 and beyond in order to avoid malfunction and resulting widespread
business disruption.
The Company has underway a Year 2000 project that identifies the
programs and infrastructure that could be affected by Year 2000 issues
and has implemented a plan to resolve those problems identified, on a
timely basis. The plan requires a considerable amount of internal
resources devoted by the Company to resolve the pertinent issues.
Additionally, the Company may have to recruit and retain external
resources to assist with the actual implementation, testing and
monitoring of the plan. As of June 27, 1999, the Company does not
expect the ongoing resource cost of the Year 2000 project to have a
material adverse effect on the Company's financial condition and
results of operations for the fiscal years ending December 31, 1999
and beyond. The Company currently estimates the total cost of its Year
2000 project will not exceed $250,000 over the life of the project.
Costs associated with employees working on the Year 2000 project will
be expensed as incurred. Hardware and software purchases related to
this project will be capitalized where appropriate. The Company does
not anticipate additional significant costs as a result of the Year
2000 issue.
The Year 2000 project includes all management information systems
which support ongoing business functions, other systems with computer
based controls such as telecommunications, building environmental and
security management and all suppliers and customers with which the
Company maintains a material business relationship.
Management of the Company believes it has an effective program in
place that will resolve the Year 2000 issues affecting it and that this
program is progressing normally and will be completed on a timely basis.
Despite management's beliefs and the Company's progress made on the Year
2000 issues as of June 27, 1999, it is not possible to anticipate all
possible future outcomes, especially when third parties are involved. In
the event certain third parties are not able to resolve their own Year
2000 issues, there could be circumstances in which the Company would be
unable to receive customer orders, manufacture, test and ship products,
invoice customers or collect payments from those customers. As part of
its Year 2000 project, the Company will solicit written assurances from
its customers and suppliers that each will be prepared for the Year 2000
issue. The Company will perform periodic audits and tests of third party
systems throughout the life of the project for Year 2000 compliance.
However, there can be no certainty of total compliance from any or all
of the third parties the Company deals with on a daily basis.
The Company has not yet seen the need for any widespread
contingency plans to be developed for the Year 2000 issue, but this will
be monitored continuously as the Company gains more information about
the compliance programs of its suppliers and customers. Additionally,
some risks of the Year 2000 issue are beyond the control of the Company
and its suppliers and customers. The Company does not believe it can
develop a contingency plan that will totally shield the Company from an
economic ripple effect throughout the entire economy should others fail
to resolve their own Year 2000 problems.
The costs of the Company's Year 2000 project and the timeliness of
the completion of the project are based on management's best estimates,
and reflect assumptions regarding the availability and cost of personnel
trained in this area, the compliance plans of third parties and other
uncertainties. However, due to the complexity and pervasiveness of the
Year 2000 issue and in particular the uncertainty of third party
compliance programs, there can be no assurances given that these
estimates will be achieved, and actual results could differ materially
from those anticipated.
<PAGE>
PART II - OTHER INFORMATION
- ---------------------------
Item 1 - Legal Proceedings
The Company, from time to time, is a party to pending or
threatened legal proceedings and arbitrations. Based upon
information presently available, and in light of legal and other
defenses available to the Company, management does not consider
liability from any threatened or pending litigation to be
material.
Item 6 - Exhibits and Reports on Form 8-K
(a) Exhibits
27. Financial Data Schedule
(b) Reports on Form 8-K
-------------------
None
Item 7a - Quantitative and Qualitative Disclosures About Market Risk
Market risk is the risk of loss arising from adverse changes in
market prices and interest rates. The Company is exposed to interest
risk inherent in its financial instruments. The Company is not
currently subject to foreign currency or commodity price risk. The
Company manages its exposure to these market risks through its regular
operating and financing activities.
The Company has a term credit loan and an Industrial Development
Authority Bond Issue that are exposed to changes in interest rates
during the course of their maturity. Both debt instruments bear
interest at current market rates and thus approximate fair market value.
The Company manages its interest rate risk by (a) periodically retiring
and issuing debt and (b) periodically fixing the interest rate on the
London Inter Bank Offered Rate (LIBOR) portion of its revolving credit
loan for 30 to 60 days in order to minimize interest rate swings. A 10%
increase in interest rates would affect the Company's variable debt
obligations and could potentially reduce future earnings by a maximum of
approximately $118,000.
<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.
MILTOPE GROUP INC.
By:
-----------------------------------------
Thomas Dickinson,
President and Chief Executive Officer
(Principal Executive Officer)
Dated: August 11, 1999
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS, STATEMENTS OF OPERATIONS
AND STATEMENTS OF CASH FLOWS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> JUN-27-1999
<CASH> 746,000
<SECURITIES> 0
<RECEIVABLES> 4,974,000
<ALLOWANCES> 0
<INVENTORY> 18,329,000
<CURRENT-ASSETS> 25,061,000
<PP&E> 17,606,000
<DEPRECIATION> 9,210,000
<TOTAL-ASSETS> 37,577,000
<CURRENT-LIABILITIES> 9,399,000
<BONDS> 0
0
0
<COMMON> 68,000
<OTHER-SE> 15,525,000
<TOTAL-LIABILITY-AND-EQUITY> 37,577,000
<SALES> 14,623,000
<TOTAL-REVENUES> 14,623,000
<CGS> 12,626,000
<TOTAL-COSTS> 16,557,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 590,000
<INCOME-PRETAX> (2,524,000)
<INCOME-TAX> 0
<INCOME-CONTINUING> (2,524,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,524,000)
<EPS-BASIC> (.43)
<EPS-DILUTED> (.43)
</TABLE>
