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 September 26, 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 November 10, 1999: 5,871,523 shares of Common
Stock, $.01 par value.
<PAGE>
PART I - FINANCIAL INFORMATION
MILTOPE GROUP INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
<TABLE>
September 26, December 31,
------------- ------------
ASSETS 1999 1998
<S> <C> <C>
CURRENT ASSETS:
Cash $ 308,000 $ 57,000
Accounts receivable 5,133,000 6,792,000
Inventories 15,782,000 17,867,000
Deferred income taxes 829,000 829,000
Other current assets 1,406,000 278,000
----------- -----------
Total current assets 23,458,000 25,823,000
----------- -----------
PROPERTY AND EQUIPMENT - at cost:
Machinery and equipment 7,875,000 7,689,000
Furniture and fixtures 1,578,000 1,594,000
Land, building and improvements 8,157,000 8,101,000
Construction in progress 165,000 -
----------- -----------
Total property and equipment 17,775,000 17,384,000
Less accumulated depreciation 9,475,000 8,549,000
----------- -----------
Property and equipment - net 8,300,000 8,835,000
----------- -----------
DEFERRED INCOME TAXES 3,335,000 3,335,000
OTHER ASSETS 868,000 945,000
----------- -----------
TOTAL $35,961,000 $38,938,000
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 2,700,000 $ 4,462,000
Accrued expenses 2,265,000 1,012,000
Current maturities of long-term debt 4,333,000 4,310,000
----------- -----------
Total current liabilities 9,298,000 9,784,000
LONG-TERM DEBT 12,413,000 11,035,000
----------- -----------
Total liabilities 21,711,000 20,819,000
----------- -----------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock - $.01 par value;
20,000,000 shares authorized;
6,811,112 shares outstanding at
September 26, 1999 and December
31, 1998. 68,000 68,000
Capital in excess of par value 20,264,000 20,264,000
Retained earnings 8,164,000 12,033,000
----------- -----------
28,496,000 32,365,000
Less treasury stock at cost 14,246,000 14,246,000
----------- -----------
Total stockholders' equity 14,250,000 18,119,000
----------- -----------
TOTAL $35,961,000 $38,938,000
=========== ===========
</TABLE>
See Notes To Condensed Consolidated Financial Statements
<PAGE>
MILTOPE GROUP INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
<TABLE>
Thirty-Nine Weeks Ended
------------------------------
September 26, September 27,
1999 1998
------------- -------------
<S> <C> <C>
NET SALES $22,927,000 $18,792,000
----------- -----------
COSTS AND EXPENSES:
Cost of sales 19,696,000 15,072,000
Selling, general and administrative 5,206,000 5,036,000
Engineering, research and development 1,003,000 1,578,000
----------- -----------
Total 25,905,000 21,686,000
----------- -----------
LOSS FROM OPERATIONS (2,978,000) (2,894,000)
INTEREST EXPENSE - net 890,000 581,000
----------- -----------
LOSS BEFORE INCOME TAXES (3,868,000) (3,475,000)
INCOME TAX BENEFIT - 1,276,000
----------- -----------
NET LOSS $(3,868,000) $(2,199,000)
=========== ===========
BASIC AND DILUTED
NET LOSS PER SHARE $ (0.66) $ (0.37)
=========== ===========
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
-------------------------------
September 26, September 27,
1999 1998
------------ ------------
<S> <C> <C>
NET SALES $ 8,305,000 $ 5,409,000
COSTS AND EXPENSES: ----------- -----------
Cost of sales 7,070,000 4,684,000
Selling, general and administrative 1,762,000 1,489,000
Engineering, research and development 517,000 434,000
----------- -----------
Total 9,349,000 6,607,000
----------- -----------
LOSS FROM OPERATIONS (1,044,000) (1,198,000)
INTEREST EXPENSE - net 299,000 235,000
----------- -----------
LOSS BEFORE INCOME TAXES (1,343,000) (1,433,000)
INCOME TAX BENEFIT - 530,000
----------- -----------
NET LOSS $(1,343,000) $ (903,000)
BASIC AND DILUTED =========== ===========
NET LOSS PER SHARE $ (0.23) $ (0.15)
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 THIRTY-NINE WEEKS ENDED SEPTEMBER 26, 1999 AND SEPTEMBER 27, 1998
(unaudited)
<TABLE>
September 26, September 27,
1999 1998
------------ ------------
<S> <C> <C>
OPERATING ACTIVITIES:
Net loss $(3,868,000) $(2,199,000)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation and amortization 968,000 1,194,000
Provision for slow-moving and obsolete inventories 500,000 656,000
Provision for doubtful accounts receivable 9,000 5,000
Deferred income taxes - (1,276,000)
Write-down of fixed assets - (36,000)
Loss on sale of property and equipment 3,000 -
Change in operating assets and liabilities:
Accounts receivable 1,650,000 4,678,000
Inventories 1,586,000 (3,097,000)
Other current assets (1,128,000) 21,000
Other assets 58,000 (106,000)
Accounts payable and accrued expenses (105,000) (2,421,000)
----------- -----------
Cash used in operating activities (327,000) (2,581,000)
----------- -----------
INVESTING ACTIVITIES:
Purchase of property and equipment (418,000) (310,000)
----------- -----------
Cash used in investing activities (418,000) (310,000)
----------- -----------
FINANCING ACTIVITIES:
Proceeds from revolving credit loan - net 1,229,000 2,786,000
Payments of other long-term debt (233,000) (202,000)
----------- -----------
Cash provided by financing activities 996,000 2,584,000
----------- -----------
NET INCREASE (DECREASE) IN CASH 251,000 (307,000)
CASH, BEGINNING OF PERIOD 57,000 443,000
----------- -----------
CASH, END OF PERIOD $ 308,000 $ 136,000
=========== ===========
SUPPLEMENTAL DISCLOSURE:
Cash payments made for:
Income taxes $ - $ 67,000
=========== ===========
Interest $ 858,000 $ 544,000
=========== ===========
</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 September 26, 1999 and December 31,
1998 and the results of operations and cash flows for the thirty-nine
and thirteen weeks ended September 26, 1999 and September 27, 1998,
respectively.
The results for the thirty-nine weeks ended September 26, 1999 and
September 27, 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>
September 26, 1999 December 31, 1998
------------------ -----------------
<S> <C> <C>
Purchased parts and
Subassemblies $11,938,000 $12,874,000
Work-in-process 3,844,000 4,993,000
----------- -----------
Total $15,782,000 $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 and was
converted into a term loan payable in twelve equal quarterly
installments commencing August, 1999. 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
shortly. 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.
<TABLE>
Thirteen Weeks Ended September 26, 1999 and September 27, 1998
- --------------------------------------------------------------
General
September 26, 1999 Military/Rugged Commercial Eliminations Corporate Consolidated
- ------------------ --------------- ---------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C>
Net sales from external customers $ 4,807,000 $3,498,000 $ - $ 8,305,000
=========== =========== ============ ===========
Segment operating income (loss) $(1,151,000) $ 107,000 $ - $(1,044,000)
=========== ========== ============ ===========
Identifiable assets $21,998,000 $7,981,000 $ - $5,982,000 $35,961,000
=========== ========== ============ ========== ===========
Capital expenditures $ 98,000 $ 71,000 $ 169,000
=========== ========== ===========
Depreciation and amortization $ 174,000 $ 97,000 $ 271,000
=========== ========== ===========
</TABLE>
<TABLE> General
September 27, 1998 Military/Rugged Commercial Eliminations Corporate Consolidated
- ------------------ --------------- ----------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C>
Net sales from external customers $ 2,405,000 $ 3,004,000 $ - $ 5,409,000-
=========== =========== ============ ============
Segment operating income (loss) $ (882,000) $ (316,000) $ - $ (1,198,000)
=========== =========== ============ ============
Identifiable assets $23,735,000 $ 7,530,000 $ - $5,148,000 $ 36,413,000
=========== =========== ============ ========== ============
Capital expenditures $ 78,000 $ 97,000 $ 175,000
=========== =========== ============
Depreciation and amortization $ 298,000 $ 172,000 $ 470,000
</TABLE>
<TABLE>
Thirty-nine Weeks Ended September 26, 1999 and September 27, 1998
- -----------------------------------------------------------------
General
September 26, 1999 Military/Rugged Commercial Eliminations Corporate Consolidated
- ------------------ --------------- ----------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C>
Net sales from external customers $12,074,000 $10,853,000 $ - $ 22,927,000
=========== =========== ============ ============
Segment operating income (loss) $(2,475,000) $ (503,000) $ - $ (2,978,000)
=========== =========== ============ ============
Identifiable assets $21,998,000 $ 7,981,000 $ - $5,982,000 $ 35,961,000
=========== =========== ============ ========== ============
Capital expenditures $ 220,000 $ 198,000 $ 418,000
=========== =========== ============
Depreciation and amortization $ 621,000 $ 347,000 $ 968,000
=========== =========== ============
</TABLE>
<TABLE> General
September 27, 1998 Military/Rugged Commercial Eliminations Corporate Consolidated
- ------------------ --------------- ---------- ------------ --------- ------------
<S> <C> <C> <C> <C> <C>
Net sales from external customers $10,415,000 $8,377,000 $ - $ 18,792,000
=========== =========== ============ ============
Segment operating income (loss) $(2,350,000) $ (544,000) $ - $ (2,894,000)
=========== =========== ============ ============
Identifiable assets $23,735,000 $7,530,000 $ - $5,148,000 $ 36,413,000
=========== =========== ============ ========== ============
Capital expenditures $ 211,000 $ 179,000 $ 390,000
=========== =========== ============
Depreciation and amortization $ 757,000 $ 437,000 $ 1,194,000
=========== =========== ============
</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 thirty-nine weeks ended September 26, 1999, as compared to the
thirteen weeks and thirty-nine weeks ended September 27, 1998.
RESULTS OF OPERATIONS
- ---------------------
Thirteen weeks ended September 26, 1999 compared to thirteen weeks
ended September 27, 1998
- -----------------------------------------------------------------------
Net sales for the thirteen weeks ended September 26, 1999 (third
quarter of 1999) were $8,305,000 compared to net sales for the thirteen
weeks ended September 27, 1998 (third quarter of 1998) of $5,409,000.
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 third quarter of 1999 was
14.9% compared to 13.4% for the same period in 1998. The increase is
primarily attributable to a more favorable product mix in the third
quarter of 1999.
Selling, general and administrative expenses for the third quarter
of 1999 increased 18.3% from the third quarter of 1998, to $1,762,000.
These expenses as a percent of sales were 21.2% in the third quarter of
1999 compared to 27.5% for the similar period in 1998. The decrease as
a percent of sales is primarily attributable to increased sales in the
third quarter of 1999 as compared to the third quarter of 1998.
Company sponsored engineering, research and development expenses
for the third quarter of 1999 increased 19.1% from the third quarter of
1998, to $517,000. These expenses as a percent of sales were 6.2% in
the third quarter of 1999 compared to 8.0% for the similar period in
1998. The decrease as a percent of sales is primarily attributable to
increased sales in the third quarter of 1999 as compared to the third
quarter of 1998 and timing of certain research and development project
expenses that will be incurred in the fourth quarter of 1999.
Interest expense, net of interest income, was $299,000 in the
third quarter of 1999 compared to $235,000 for the similar period in
1998. The increase reflects increased debt compared to the prior year.
Net loss for the third quarter of 1999 was $1,343,000 compared to
net loss of $903,000 in the third quarter of 1998. The basic and
diluted net loss per share was $0.23 for the third quarter of 1999
compared to the basic and diluted net loss per share of $0.15 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 third quarter of 1999
and 1998. The decrease in earnings was primarily attributable to
recognition of inter-company consulting charges, increased interest
expense and no income tax benefit taken in the third quarter of 1999.
Thirty-nine weeks ended September 26, 1999 compared to thirty-nine
weeks ended September 27, 1998
- -----------------------------------------------------------------------
Net sales for the thirty-nine weeks ended September 26, 1999
(first nine months of 1999) were $22,927,000 compared to net sales for
the thirty-nine weeks ended September 27, 1998 (first nine months of
1998) of $18,792,000. 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 percent for the first nine months of 1999 was
14.1% compared to 19.8% 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 nine
months of 1999 increased 3.4% from the first nine months of 1998, to
$5,206,000. These expenses as a percent of sales were 22.7% in the
first nine months of 1999 compared to 26.8% 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 third quarter of 1998.
Company sponsored engineering, research and development expenses
for the first nine months of 1999 decreased 36.4% from the first nine
months of 1998, to $1,003,000. These expenses as a percent of sales
were 4.4% in the first nine months of 1999 compared to 8.4% 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 fourth
quarter of 1999.
Interest expense, net of interest income, was $890,000 in the
first nine months of 1999 compared to $581,000 for the similar period
in 1998. The increase reflects increased debt compared to the prior
year.
Net loss for the first nine months of 1999 was $3,868,000 compared
to net loss of $2,199,000 in the first nine months of 1998. The basic
and diluted net loss per share was $0.66 for the first nine months of
1999 as compared to the basic and diluted net loss per share of $0.37
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 first nine
months 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.
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
Working capital approximated $14,160,000 at September 26, 1999
compared to $16,039,000 at December 31, 1998. Accounts receivable
decreased approximately $1,659,000 as a result of improved collection
activities and a reclassification of inter-company receivables to other
current assets. Inventories decreased approximately $2,085,000 as a
result of improved planning and procurement processes. Other current
assets increased approximately $1,128,000 as a result of a
reclassification of inter-company receivable. Accounts payable
decreased approximately $1,762,000 reflecting normal payment terms and
lower inventory levels. Accrued expenses increased approximately
$1,253,000 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 and was converted into a term
loan payable in twelve equal quarterly installments commencing August,
1999. 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 shortly. 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 September 26, 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 September 26, 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 $99,000.
<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: /s/ Thomas Dickinson
----------------------------------------
Thomas Dickinson,
President and Chief Executive Officer
(Principal Executive Officer)
Dated: November 10, 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> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> SEP-26-1999
<CASH> 308,000
<SECURITIES> 0
<RECEIVABLES> 5,133,000
<ALLOWANCES> 0
<INVENTORY> 15,782,000
<CURRENT-ASSETS> 1,406,000
<PP&E> 17,775,000
<DEPRECIATION> 9,475,000
<TOTAL-ASSETS> 35,961,000
<CURRENT-LIABILITIES> 9,298,000
<BONDS> 0
0
0
<COMMON> 68,000
<OTHER-SE> 14,182,000
<TOTAL-LIABILITY-AND-EQUITY> 35,961,000
<SALES> 22,927,000
<TOTAL-REVENUES> 22,927,000
<CGS> 19,696,000
<TOTAL-COSTS> 25,905,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 890,000
<INCOME-PRETAX> (3,868,000)
<INCOME-TAX> 0
<INCOME-CONTINUING> (3,868,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,868,000)
<EPS-BASIC> (0.66)
<EPS-DILUTED> (0.66)
</TABLE>
