<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For period ended March 31, 1996
[ ] 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 0-15638
NORTH STAR UNIVERSAL, INC.
(Exact name of registrant as specified in its charter)
MINNESOTA 41-0498850
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
610 Park National Bank Building
5353 Wayzata Boulevard
Minneapolis, Minnesota 55416
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code: (612) 546-7500
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
------- --------
At April 30, 1996, 9,913,000 shares of common stock of the registrant were
outstanding.
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
North Star Universal, Inc. and Subsidiaries
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, in thousands, except share data)
<TABLE>
<CAPTION>
March 31, December 31,
1996 1995
-----------------------------------
<S> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents $ 11,152 $ 3,369
Accounts receivable, net 8,756 8,784
Inventories 6,723 6,631
Prepaid expenses and other current assets 332 274
Net assets held for sale 1,135 1,032
----------------------------------
Total current assets 28,098 20,090
Property and equipment, net 1,481 1,453
Investment in unconsolidated subsidiaries 81,609 83,542
Goodwill, net 4,920 4,960
Other assets 162 189
----------------------------------
$ 116,270 $ 110,234
==================================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Notes payable to bank $ 1,213 $ 937
Current portion of long-term debt 13,395 13,161
Accounts payable and accrued expenses 9,737 10,401
----------------------------------
Total current liabilities 24,345 24,499
Long-term debt, net of current maturities 26,513 29,319
Deferred income taxes 25,473 21,935
Shareholders' Equity
Common stock, $.25 par value
100,000,000 shares authorized,
issued and outstanding 9,688,000
shares in 1996 and 9,448,000 in 1995 2,422 2,362
Additional paid-in-capital 31,283 31,105
Retained earnings 6,234 1,014
----------------------------------
Total shareholders' equity 39,939 34,481
----------------------------------
$ 116,270 $ 110,234
==================================
</TABLE>
See accompanying notes to condensed consolidated financial statements.
<PAGE>
North Star Universal, Inc. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
---------------------------------
1996 1995
---------------------------------
<S> <C> <C>
Revenues $ 15,362 $ 12,557
Operating and product costs 11,200 8,781
---------------------------------
Gross profit 4,162 3,776
Selling, general,
and administrative expenses 3,954 3,505
---------------------------------
Operating income 208 271
Interest expense, net (922) (1,062)
Investment income 7,713 -
---------------------------------
Income (loss) before income taxes
and equity in earnings of
unconsolidated subsidiaries 6,999 (791)
Income tax provision (benefit) 2,830 (210)
---------------------------------
Income (loss) before equity in
earnings of unconsolidated
subsidiaries 4,169 (581)
Equity in earnings of
unconsolidated subsidiaries 1,051 1,207
---------------------------------
Income from continuing
operations 5,220 626
---------------------------------
Discontinued operations
Loss from operations, net of
income tax benefit - (689)
---------------------------------
- (689)
---------------------------------
Net income (loss) $ 5,220 $ (63)
=================================
Income (loss) per share
Continuing operations $ 0.53 $ 0.06
Discontinued operations - (0.07)
---------------------------------
Income (loss) per share $ 0.53 $ (0.01)
=================================
Weighted average shares
outstanding 9,886,600 9,438,000
=================================
</TABLE>
See accompanying notes to condensed consolidated financial statements.
<PAGE>
North Star Universal, Inc. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended March 31, (Unaudited)
(In thousands)
<TABLE>
<CAPTION>
1996 1995
----------------------------------
<S> <C> <C>
Net cash used in operating activities $ (1,298) $ (328)
Cash flows from investing activities
Capital expenditures (210) (119)
Proceeds from sale of CorVel stock 11,052 -
Other (58) (117)
----------------------------------
Net cash provided by (used in)
investing activities 10,784 (236)
----------------------------------
Cash flow from financing activities
Proceeds from long-term debt 479 1,946
Payments on long-term debt (2,940) (1,840)
Proceeds from notes payable 16,192 11,064
Payments on notes payable (16,027) (12,614)
Cash dividends received from Michael Foods 368 368
Exercise of stock options 225 -
----------------------------------
Net cash used in financing activities (1,703) (1,076)
----------------------------------
Net increase (decrease) in cash and
cash equivalents 7,783 (1,640)
Cash and cash equivalents
at beginning of period 3,369 5,102
----------------------------------
Cash and cash equivalents
at end of period $ 11,152 $ 3,462
==================================
</TABLE>
See accompanying notes to condensed consolidated financial statements.
<PAGE>
North Star Universal, Inc. and Subsidiaries
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation --
The accompanying unaudited condensed consolidated financial statements have
been prepared by North Star Universal, Inc. ("North Star" or the "Company"),
without audit, pursuant to the rules and regulations of the Securities and
Exchange Commission. The information furnished in the condensed consolidated
financial statements includes normal recurring adjustments which are, in the
opinion of management, necessary for a fair presentation of such financial
statements. Certain information and footnote disclosure normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules and
regulations. Although the Company believes that the disclosures are adequate to
make the information presented not misleading, it is suggested that these
condensed consolidated financial statements be read in conjunction with the
financial statements and the notes thereto included in the Company's latest
annual report on Form 10-K.
Results for the three months ended March 31 may not necessarily be
indicative of the results to be expected for the full year.
2. Reorganization Agreement --
On December 21, 1995, the Company entered into a reorganization agreement
with Michael Foods. The effect of this agreement is to distribute the shares of
Michael Foods common stock owned by North Star directly to shareholders of North
Star and reposition North Star's continuing operations and investments into a
new holding company, ENStar Inc. ("ENStar"). Prior to the reorganization, the
Company will transfer to ENStar, its wholly owned subsidiary Americable, which
owns Transition, and its equity investment in CorVel. The shares of ENStar will
be declared payable in a tax free dividend to North Star's shareholders of
record prior to the effective date of the reorganization and be distributed
immediately following the reorganization.
Under the terms of the agreement, North Star will transfer indebtedness,
net of cash and cash equivalents, in the range of $25 million to $29 million to
Michael Foods, together with Michael Foods shares approximately equal to the
debt transferred. The actual number of Michael Foods shares in the exchange
will be based on an average market price for a period of time prior to the
closing date, less a discount ranging from 8% to 9% depending on the actual
amount of debt transferred. At the effective time of the reorganization, North
Star will effect a reverse stock split which reduces its shares outstanding to
the same number of shares it owns in Michael Foods reduced by the shares
redeemed in the transfer of the indebtedness. In the reorganization, each
outstanding share of Michael Foods common stock will be exchanged for one share
of North Star common stock. Following the reorganization, North Star will be
renamed Michael Foods, Inc.
The reorganization is subject to the receipt of a favorable ruling from the
Internal Revenue Service that the distributions are tax free to the shareholders
of Michael Foods and the Company, the approval of both companies shareholders
and other closing conditions. The agreement can be terminated by either party
under various circumstances including if Michael Foods' stock price is outside a
predetermined price range. The transaction is expected to close in 1996.
<PAGE>
North Star Universal, Inc. and Subsidiaries
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
3. Discontinued Operations --
On May 5, 1995, the Company completed the sale of its shares in Dalworth
Holdings, Inc. and subsidiaries, including C.E. Services Inc. (collectively
"C.E. Services") to Amdahl Corporation for $2.5 million cash. The loss on
disposition was approximately $2.1 million, net of an income tax benefit of
approximately $1.3 million. The accompanying condensed consolidated statements
of operations for 1995 have been restated to reflect C.E. Services as
discontinued operations. The following are summarized results of operations for
C.E. Services for the three months ended March 31, 1995 (in thousands):
<TABLE>
<CAPTION>
<S> <C>
Revenues $ 5,100
Gross profit 1,000
Pretax loss (1,009)
Income tax benefit 320
Loss from operations (689)
</TABLE>
4. Investment in Unconsolidated Subsidiaries --
The Company's unconsolidated subsidiaries consist of its investments in
Michael Foods, Inc. ("Michael Foods") and CorVel Corporation ("CorVel"). CorVel
has a fiscal year ended March 31. The following is summarized balance sheet and
income statement information of the Company's unconsolidated subsidiaries as of,
and for the three month period ended March 31, 1996 (in thousands):
<TABLE>
<CAPTION>
Michael Foods CorVel
----------------------------------
<S> <C> <C>
Current assets $ 107,279 $ 37,632
Noncurrent assets 255,067 15,654
Current liabilities 59,202 7,481
Noncurrent liabilities 120,212 694
Revenues 143,872 28,328
Gross profit 18,913 5,143
Net income 3,278 1,919
</TABLE>
In January 1996, the Company sold 350,000 shares of CorVel for approx-
imately $11 million, resulting in a pre-tax gain of approximately $7.7 million.
<PAGE>
North Star Universal, Inc. and Subsidiaries
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
5. Inventories --
Inventories are stated at the lower of average cost (first-in, first-out)
or market. Inventories consist of the following (in thousands):
<TABLE>
<CAPTION>
March 31, December 31,
1996 1995
---------------------------------
<S> <C> <C>
Work in process and finished goods $ 4,975 $ 4,092
Purchased parts 1,748 2,539
---------------------------------
$ 6,723 $ 6,631
---------------------------------
---------------------------------
</TABLE>
6. Earnings Per Share --
Earnings per share are based on the average number of shares outstanding
during the period after giving effect to the assumed exercise of outstanding
stock options, except where the effects are antidilutive.
7. Income Taxes --
Deferred income taxes arise from temporary differences between financial
and tax reporting. To the extent the Company's financial reporting basis in its
investment in unconsolidated subsidiaries exceeds its tax basis, and is not
expected to be realized in a tax-free manner, the Company records a deferred tax
liability. At March 31, 1996, the deferred tax liability includes a cumulative
tax effect of approximately $24.2 million and $4.4 million for the differences
in the financial reporting and tax basis of the Company's investments in Michael
Foods and CorVel, respectively.
As described in Note 2, the Company has entered into a reorganization
agreement with Michael Foods under which it may realize its investment in
Michael Foods in a tax-free manner. The agreement can be terminated by either
party under various circumstances. Accordingly, the Company has continued to
carry a deferred tax liability related to its investment in Michael Foods.
8. Subsequent Event --
On April 26, 1996, the Company completed the sale of Eagle Engineering &
Manufacturing, Inc. ("Eagle") for approximately $3.7 million of cash and notes.
Eagle has been classified within net assets held for sale.
9. Reclassifications --
Certain 1995 amounts have been reclassified to conform with the financial
statement presentation used in 1996. Such reclassifications had no impact on
previously reported retained earnings or net income.
<PAGE>
North Star Universal, Inc. and Subsidiaries
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
GENERAL
North Star Universal, Inc. ("North Star" or "the Company") is a holding
company. The Company's three key holdings consist of Michael Foods, Inc.
("Michael Foods"), CorVel Corporation ("CorVel") and its computer businesses.
At March 31, 1996, the Company owned a 38% interest in Michael Foods and a 27%
ownership interest in CorVel. The common stock of each of Michael Foods and
CorVel is included on the NASDAQ National Market System under the symbols MIKL
and CRVL. The Company's investments in Michael Foods and CorVel are accounted
for as unconsolidated subsidiaries using the equity method of accounting.
The Company's continuing operations consist of Americable, Inc.
("Americable") and Transition Networks, Inc. ("Transition"). Americable is a
provider of connectivity and networking products and services. Transition
designs, manufactures and markets connectivity devices used in local area
network ("LAN") applications.
The following are unaudited summarized operating results for each of the
Company's continuing operations for the three months ended March 31 (in
thousands).
<TABLE>
<CAPTION>
1996 1995
-------------------------
<S> <C> <C>
Revenues
Americable $ 12,101 $ 9,279
Transition 3,651 3,642
Eliminations (390) (364)
-------------------------
$ 15,362 $ 12,557
=========================
Gross Profit
Americable $ 2,732 $ 2,438
Transition 1,430 1,338
-------------------------
$ 4,162 $ 3,776
=========================
Selling, General and Administrative Expenses
Americable $ 2,420 $ 2,172
Transition 1,252 1,037
Corporate 282 296
-------------------------
$ 3,954 $ 3,505
=========================
Operating Income (Loss)
Americable $ 312 $ 266
Transition 178 301
Corporate (282) (296)
-------------------------
$ 208 $ 271
=========================
</TABLE>
<PAGE>
North Star Universal, Inc. and Subsidiaries
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
RESULTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1996 vs. THREE MONTHS ENDED MARCH 31, 1995
Consolidated revenues increased $2.8 million or 22.3%, to $15.4 million
from $12.6 million in 1995.
Revenues at Americable increased approximately $2.8 million, or 30.4%, to
$12.1 million. This includes increased sales of networking products of
approximately $3.3 million and approximately $300,000 of increased revenues from
installation and services, both due primarily to higher demand. Included in
these amounts is approximately $2.6 million of higher sales of networking
products to two customers, of which such increase in volume is not expected to
continue for the remainder of the year. Offsetting these increases was
approximately $390,000 of decreased sales of cable assemblies due primarily to
reduced pricing within modular assembly applications due to technological
changes. In addition, sales of cable and other connectivity products
decreased approximately $370,000 due primarily to lower mix of volume to
contractors and resellers in addition to lower demand experienced for certain
types of bulk cable due to increased market supply during the period.
As a result of increased competition and ongoing pricing pressures,
revenues at Transition were relatively unchanged between years. Sales of
Transition's advanced LAN products increased approximately 48% to $427,000,
reflecting additional revenues from new products introduced during 1995. Sales
from new product introductions and enhancements accounted for approximately
2% of net sales for the quarter ended March 31, 1996 versus $870,000 or 24% for
the comparable period in 1995. Sales of basic LAN and terminal products
decreased approximately 4% to $3.2 million. Sales to domestic customers
decreased approximately $24,000 or 1%, to $2.2 million which primarily reflects
a lower volume of new product introductions sold during the period. Sales to
international customers increased approximately $33,000 or 2%, to $1.4 million
which was primarily a result of the addition of new customers.
Consolidated gross profit, as a percent of revenues, decreased to 27.1% in
1996 as compared to 30.1% in 1995. Decreased margins at Americable are
primarily attributable to a higher volume of lower margin networking products
and lower pricing on cable due to competition and overall higher market supply
on certain types of bulk cable. The increased margins at Transition were
primarily a result of product mix between periods, and are not expected to
continue at such levels. North Star expects its gross profit margins to decline
due to expected competitive pricing pressures on products sold by both
Americable and Transition.
The Company's selling, general and administrative expenses increased
$449,000 or 12.8%, to $3.9 million from $3.5 million in 1995.
Operating expenses at Americable increased approximately $248,000 or 11%
for the period which reflects approximately $170,000 of increased selling
expenses primarily attributable to higher sales commissions and the addition of
new sales personnel and related expenses. In addition, this increase reflects
approximately $80,000 of higher engineering expense due to the addition of
technical and engineering personnel.
<PAGE>
North Star Universal, Inc. and Subsidiaries
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
Americable expects that its selling expenses, as a percentage of revenues,
may increase during the remainder of 1996 through the addition of sales and
technical personnel in new geographic locations in addition to costs associated
with a new catalog which was released in the first quarter of 1996. These
anticipated increases in operating expenses may result in lower operating
profits at Americable, if the company is unable to maintain current gross profit
margins and continued sales growth.
Transition had increased operating expenses of approximately $215,000 or
21%, which reflects increased engineering expenses of approximately $123,000 due
to the addition of engineering personnel associated with new product develop-
ment. In addition, selling expenses increased approximately $73,000 due
primarily to higher promotional expenses. In an effort to successfully develop
and launch new advance LAN products, Transition anticipates the increased levels
of spending on engineering, marketing and promotional costs to continue
throughout 1996. If such increased level of spending does not result in the
timely introduction of commercially successful products, Transition may
experience significantly reduced levels of sales growth and operating results
during the remainder of 1996.
Investment income of $7.7 million represents the pre-tax gain recognized
from the January 1996 sale of 350,000 shares of CorVel. Net interest expense
decreased $137,000 or 13% to $922,000 from $1,059,000 in 1995 due primarily to
lower interest rates and lower outstanding levels of debentures and, to a lesser
extent, lower borrowing levels at Americable and Transition between years.
The income tax provision in 1996 reflects the Company's estimated effective
annual tax rate. The income tax benefit of $210,000 in 1995 relates to the
elimination of deferred tax liabilities that will reverse as net operating
losses available for carryforward are utilized in future periods. To the extent
loss carryforwards are realized in the future, deferred taxes will be
reinstated.
Equity in earnings of unconsolidated subsidiaries decreased $156,000 to
$1,051,000 from $1,207,000 in the previous year. This includes a decrease of
$96,000 in the equity in earnings of Michael Foods which is a result of its
lower earnings for the period. The Company's equity in earnings of CorVel
were decreased by approximately $60,000 due to its reduced ownership interest
in CorVel following the January 1996 sale of stock. Further information with
respect to the results of operations of Michael Foods and CorVel is contained in
the Management's Discussion and Analysis of Financial Condition and Results of
Operations section of their respective reports on Form 10-Q and Form 10-K as
filed with the Securities and Exchange Commission.
The loss from discontinued operations for 1995 includes the operating
loss of C.E. Services which was sold May 5, 1995 (see Note 3 to the Notes to
Condensed Consolidated Financial Statements).
<PAGE>
North Star Universal, Inc. and Subsidiaries
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
CAPITAL RESOURCES AND LIQUIDITY
Historically, the Company has experienced cash flow deficits from
operations and has experienced fluctuations in its working capital which are
primarily attributable to the increase in receivables and inventories associated
with growth in sales and timing of payments on accounts payable. Cash used in
operations was $1.3 million for the three months ended March 31, 1996, as
compared to $328,000 in 1995. The Company expects operating cash flow deficits
to continue.
The Company does not have the use of cash flow generated by Michael Foods
other than proceeds from quarterly dividends. In each of the three month
periods ended March 31, 1996 and 1995, the Company received dividends of
$368,000. There can be no assurance that Michael Foods will continue to declare
such dividends. Likewise, since CorVel's initial public offering in July 1991,
the Company has not had the use of cash generated by CorVel and its
subsidiaries. Since its initial public offering, CorVel has not declared any
dividends, and has indicated that it does not anticipate doing so for the
foreseeable future.
The Company has maintained a program whereby it sells subordinated
debentures of various maturities primarily to individual investors. The
debentures have been offered on a continuous basis at interest rates that change
from time to time depending on market conditions. Historically, a substantial
portion of maturing debentures have been reinvested in new debentures. At
March 31, 1996, the Company had approximately $38.8 million principal amount of
subordinated debentures outstanding.
On November 7, 1995, in light of the negotiations with Michael Foods, the
Company ceased the sale of any new debentures under its debenture program.
Under the terms of the reorganization agreement, the amount of outstanding
debentures at the date of the reorganization will be effectively assumed by
Michael Foods. In January 1996, the Company sold 350,000 shares of its holdings
in CorVel for approximately $11 million cash. In addition, on April 26, 1996,
the Company completed the sale of Eagle (classified as net assets held for sale)
resulting in net cash proceeds of approximately $3.2 million. Proceeds from
these transactions will be used primarily to fund scheduled maturities of
debentures through the date of the proposed reorganization, which is expected to
be completed in 1996.
To the extent the reorganization agreement with Michael Foods is not
consummated, the Company plans to reinitiate the sale of debentures. Under
these circumstances, however, there can be no assurance that future reinvested
and newly sold debentures will equal or exceed redemptions. The Company has
been highly dependent on the continued sales of debentures under its debenture
program. In the event that, after the sales of debentures are reinitiated,
redemptions substantially exceed reinvested and newly sold debentures or the
program is interrupted for an extended period, the Company would be required to
fund maturities through its existing cash on hand and asset sales.
<PAGE>
North Star Universal, Inc. and Subsidiaries
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
Long-term debt repayments for the three months ended March 31, 1996, of
approximately $2.9 million consist of redemptions of subordinated debentures.
Proceeds from long-term debt of approximately $479,000 represents compounded
interest on debentures. The net activity under the debenture program for the
period ended March 31, 1996 resulted in net cash use to the Company of
approximately $2.5 million.
Americable and Transition maintain a revolving line of credit and term loan
facility which provides borrowings up to $5.5 million due in May 1996.
Borrowings under the revolving credit facility are based on eligible accounts
receivable and inventory with interest at prime plus 1.5%, (9.75% at March 31,
1996). At March 31, 1996, there were outstanding borrowings of $1.2 million
under the revolving line of credit and $964,000 under the term loan. Management
is currently in the process of negotiating terms of a new credit facility and
expects to obtain available borrowing levels and terms that are comparable with
its existing facility.
At April 30, 1996, North Star had approximately $13.6 million of cash and
cash equivalents, excluding cash of its operating subsidiaries. The Company
believes that its available cash and cash equivalents along with the amounts
available under the credit facilities of its operating companies, will be
adequate to meet expected cash requirements, including debenture redemptions,
capital expenditures and potential acquisitions for the remainder of the year.
<PAGE>
PART II - OTHER INFORMATION
North Star Universal, Inc. and Subsidiaries
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) No exhibits are filed with this report on Form 10-Q.
(b) No reports on Form 8-K were filed during the quarter ended
March 31, 1996.
<PAGE>
SIGNATURES
Pursuant to the requirement 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.
NORTH STAR UNIVERSAL, INC.
--------------------------
(Registrant)
Date May 14, 1996 by /s/ Jeffrey J. Michael
--------------------------- --------------------------
Jeffrey J. Michael
President and Chief Executive Officer
Date May 14, 1996 by /s/ Peter E. Flynn
--------------------------- --------------------------
Peter E. Flynn
Executive Vice President,
Chief Financial Officer
and Secretary
(Principal Financial and Accounting
Officer)
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 11,152
<SECURITIES> 0
<RECEIVABLES> 9,184
<ALLOWANCES> (428)
<INVENTORY> 6,723
<CURRENT-ASSETS> 28,098
<PP&E> 4,212
<DEPRECIATION> (2,731)
<TOTAL-ASSETS> 116,270
<CURRENT-LIABILITIES> 24,345
<BONDS> 26,513
<COMMON> 2,422
0
0
<OTHER-SE> 31,283
<TOTAL-LIABILITY-AND-EQUITY> 116,270
<SALES> 15,362
<TOTAL-REVENUES> 15,362
<CGS> 11,200
<TOTAL-COSTS> 11,200
<OTHER-EXPENSES> 3,912
<LOSS-PROVISION> 42
<INTEREST-EXPENSE> 922
<INCOME-PRETAX> 6,999
<INCOME-TAX> 2,830
<INCOME-CONTINUING> 5,220
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,220
<EPS-PRIMARY> .53
<EPS-DILUTED> .53
</TABLE>
