<PAGE>
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 quarter ended March 31, 1999
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _________ to _________
Commission File No. 0-14439
ERC INDUSTRIES, INC.
- ------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 76-0382879
(State or other jurisdiction of (I.R.S. Employer I.D. No.)
incorporation or organization)
1441 Park Ten Boulevard, Houston, Texas 77084
- ------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(281) 398-8901
- ------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the Registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes x No
----- -----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at May 13, 1999
----------------------------- ----------------------------
Common stock, $0.01 par value 27,498,272 shares
<PAGE>
ERC INDUSTRIES, INC.
INDEX
PAGE
PART I
Financial Information:
Condensed Consolidated Balance Sheet -
March 31, 1999 and December 31, 1998........................... 2
Condensed Consolidated Statement of Operations
Three Months Ended March 31, 1999 and 1998..................... 3
Condensed Consolidated Statement of Shareholders' Equity
Three Months Ended March 31, 1999.............................. 4
Condensed Consolidated Statement of Comprehensive Income (Loss)
Three Months Ended March 31, 1999 and 1998..................... 5
Condensed Consolidated Statement of Cash Flows
Three Months Ended March 31, 1999 and 1998..................... 6
Notes to Condensed Consolidated Financial Statements.............. 7
Management's Discussion and Analysis.............................. 8
PART II
Other Information.................................................. 12
Signature Page................................................... 13
<PAGE>
PART I. FINANCIAL INFORMATION
ERC INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
(IN THOUSANDS, EXCEPT FOR SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
March 31, December 31,
1999 1998
---------- -----------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 1,493 $ 2,019
Trade accounts receivable, net of allowance for
doubtful accounts of $821 and $773, respectively 17,951 20,198
Inventory 27,173 29,959
Prepaid expenses and other current assets 2,553 2,370
Deferred tax asset 3,814 3,814
---------- -----------
Total current assets 52,984 58,360
Property, plant and equipment, net 8,624 8,914
Excess cost over net assets acquired, net 4,011 4,159
---------- -----------
Total assets $ 65,619 $ 71,433
========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Line of credit from banks $ 2,953 $ 2,052
Line of credit from parent 16,008 18,828
Current portion of long-term debt 1,013 1,237
Accounts payable 6,488 8,995
Other accrued liabilities 4,980 5,236
---------- -----------
Total current liabilities 31,442 36,348
Long-term debt 2,555 2,710
---------- -----------
TOTAL LIABILITIES 33,997 39,058
---------- -----------
Commitments and contingencies - -
Shareholders' equity:
Preferred stock, par value $1; authorized and
unissued - 10,000,000 shares - -
Common stock, par value $0.01; authorized - 30,000,000 shares;
27,498,272 issued and outstanding 275 275
Additional paid-in capital 26,532 26,532
Retained earnings 4,823 5,545
Accumulated other comprehensive income (8) 23
---------- -----------
Total Shareholders' Equity 31,622 32,375
---------- -----------
Total liabilities and stockholders' equity $ 65,619 $ 71,433
========== ===========
The accompanying notes are an integral part of the condensed consolidated financial statements.
</TABLE>
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<PAGE>
ERC INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands, except per share data)
(unaudited)
<TABLE>
<CAPTION>
Three Months
Ended
March 31,
--------------------
1999 1998
--------- ---------
<S> <C> <C>
Revenues $20,401 $27,626
Cost of goods sold 15,661 20,306
------- -------
Gross profit 4,740 7,320
Selling, general and administrative expenses 5,203 5,086
------- -------
Operating (loss) income (463) 2,334
------- -------
Other (income) expense:
Interest expense 426 341
Other, net - (74)
------- -------
426 267
------- -------
(Loss) income before provision for income taxes (889) 1,967
(Benefit from) provision for income taxes (167) 767
------- -------
Net (loss) income $ (722) $ 1,200
======= =======
Basic income per share $ (0.03) $ 0.04
======= =======
Weighted average number of shares
outstanding 27,498 27,242
======= =======
</TABLE>
The accompanying notes are an integral part of the condensed consolidated
financial statements.
- 3 -
<PAGE>
ERC INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS'EQUITY
(in thousands)
(unaudited)
<TABLE>
<CAPTION>
ADDITIONAL ACCUMULATED OTHER
PAID-IN RETAINED COMPREHENSIVE
COMMON STOCK CAPITAL EARNINGS INCOME
-------------------------- ------------ ----------- ------------------
SHARES AMOUNT
-------- ---------
<S> <C> <C> <C> <C> <C>
Balance as of December 31, 1998 27,498 275 26,532 5,545 23
Net loss - - - (722) -
Other comprehensive income - - - - (31)
-----------------------------------------------------------------------------------
Balance as of March 31, 1999 27,498 $ 275 $ 26,532 $ 4,823 $ (8)
===================================================================================
The accompanying notes are an integral part of the condensed consolidated financial statements.
</TABLE>
-4-
<PAGE>
ERC INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS)
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended March 31,
------------------------------------------------
1999 1998
-------------------- --------------------
<S> <C> <C>
Net (loss) income $ (722) $ 1,200
Other comprehensive (loss) income (31) 29
-------------------- --------------------
Total comprehensive (loss) income $ (753) $ 1,229
==================== ====================
</TABLE>
The accompanying notes are an integral part of the condensed consolidated
financial statements.
- 5 -
<PAGE>
ERC INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended March 31,
---------------------------------------------
1999 1998
---------------- -------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash provided by (used in) operating activities $ 1,733 $ (5,301)
---------------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisitions, net of cash acquired - (2,520)
Purchases of property, plant and equipment (221) (674)
Proceeds from sale of property, plant and equipment 36 -
---------------- -------------
Net cash used in investing activities (185) (3,194)
---------------- -------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Line of credit borrowings from parent company, net (2,820) -
Line of credit borrowings from banks, net 901 9,138
Principal payments on long-term debt and capital
lease obligations (155) (481)
---------------- -------------
Net cash (used in) provided by financing
activities (2,074) 8,657
---------------- -------------
Effect of exchange rate changes on cash - 32
---------------- -------------
Net increase (decrease) in cash and cash equivalents (526) 194
Cash and cash equivalents, beginning of period 2,019 -
---------------- -------------
Cash and cash equivalents, end of period $ 1,493 $ 194
================ =============
</TABLE>
The accompanying notes are an integral part of the condensed consolidated
financial statements.
- 6 -
<PAGE>
ERC INDUSTRIES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(1) The information contained herein with respect to March 31, 1999 and the
three months ended March 31, 1999 and 1998, has not been audited but was
prepared in conformity with the accounting principles and policies
described in the ERC Industries, Inc. (the "Company") annual report (Form
10-K) for the year ended December 31, 1998. Included are all adjustments
(consisting of normal recurring adjustments) which, in the opinion of
management, are necessary for a fair presentation of the financial
information for the three months ended March 31, 1999 and 1998. The
results of interim periods are not necessarily indicative of results to be
expected for the year.
(2) Acquisitions:
On February 2, 1998, the Company entered into a definitive purchase
agreement for the acquisition of Bompet, a Venezuelan company. In
connection with the transaction, the Company paid the sole Bompet
stockholder; Inversiones Western C.A., a purchase price of $2.6 million.
In addition, the Company will pay up to a maximum of $3.4 million in the
event that Bompet's earnings exceed certain thresholds during 1998, 1999
and 2000. No amount has been accrued or paid in respect of this commitment
as of March 31, 1999.
The acquisition of Bompet was accounted for under the purchase method of
accounting and the purchase price was allocated as follows (in thousands):
Cash $ 80
Accounts Receivable 2,556
Inventory 1,784
Property, Plant and Equipment 556
Other Assets 15
Excess Cost Over Net Assets Acquired 1,213
Accounts Payable (1,438)
Accrued Expenses (1,298)
Long-Term Debt-Current and Non-Current (868)
-------
$2,600
=======
The pro-forma impact of the Bompet acquisition on the Company's 1998
results of operations is not material. During the fourth quarter of 1998,
Bompet was advised that it had lost its contract with its major customer.
As a result of the loss of this contract, the Company determined that its
investment in Bompet was impaired and accordingly wrote off the goodwill
arising from the acquisition of Bompet.
(3) Segment and Related Information
The Company has adopted SFAS No. 131, Disclosures About Segments of an
Enterprise and Related Information.
Summarized financial information of the Company's reportable segments for
the quarters ended March 31, 1999 and 1998 is shown in the following table:
<TABLE>
<CAPTION>
U.S. Eastern
Operations Hemisphere Other Total
---------- ---------- ------ ---------
<S> <C> <C> <C> <C>
1999
----
Revenues from external customers $14,002 $ 5,484 $ 915 $20,401
EBIT (1) (622) 251 (92) (463)
Total Assets $48,020 $11,993 $5,606 $65,619
1998
----
Revenues from external customers $21,390 $ 3,835 $2,401 $27,626
EBIT (1) 1,359 491 484 2,334
</TABLE>
-7-
<PAGE>
(1) EBIT represents earnings before other (income) expense and taxes.
The following table is a reconciliation of reportable segment EBIT to the
Company's consolidated totals:
1999 1998
------ ------
Total EBIT for reportable segments $ (463) $2,334
Other (expense) (426) (367)
------ ------
Total consolidated (loss) income
before taxes $ (889) $1,967
====== ======
(4) Subsequent Event
On May 14, 1999, the Company, in a privately-negotiated transaction (the
"Pressure Control Acquisition"), completed its acquisition from John Wood Group
PLC ("Wood Group") of all of the outstanding capital stock of Wood Group
Pressure Control Holdings Limited, a company incorporated in Scotland under the
Companies Act of the United Kingdom ("WGPCHL"). Prior to the Pressure Control
Acquisition, WGPCHL was a wholly-owned subsidiary of Wood Group. The sole assets
of WGPCHL consist of all of the issued and outstanding capital stock of each of
Wood Group Engineering Services (Peterhead) Limited and Wood Group Engineering
(Middle East) Limited, which in turn beneficially owns Arabian Oil Equipment
Services LLC (collectively, the "Group Companies"). The Group Companies market,
manufacture and service products used in the drilling and production segment of
the Oil and Gas Industry, primarily consisting of the repair and overhaul of
valves and wellheads.
In connection with the transaction and in exchange for all of the shares of the
capital stock of WGPCHL, the Company issued to Wood Group 1,350,000 shares of
its common stock, par value $0.01 per share (the "Common Stock"), representing
approximately 0.5% of the currently issued and outstanding shares of Common
Stock. In addition, the Company issued 1,850,000 shares of its Series A
Cumulative Convertible Preferred Stock (the "Series A Preferred Stock), which is
only convertible following approval of the conversion by the Company's
stockholders.
-8-
<PAGE>
ERC INDUSTRIES, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Cautionary Statement for Purposes of Forward-Looking Statements
This Form 10-Q includes "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended and Section 21E of the
Securities Exchange Act of 1934, as amended. The words "anticipate," "believe,"
"expect," "plan," "intend," "project," "forecasts," "could" and similar
expressions are intended to identify forward-looking statements. All statements
other than statements of historical facts included in this Form 10-Q regarding
the Company's financial position, business strategy, and plans and objectives of
management for future operations are forward-looking statements. Although the
Company believes that the expectations reflected in such forward-looking
statements are reasonable, no assurance can be given that actual results may not
differ materially from those in the forward-looking statements herein for
reasons including the effect of competition, the level of petroleum industry
exploration and production expenditures, world economic conditions, prices of,
and the demand for crude oil and natural gas, drilling activity, weather, the
legislative environment in the United States and other countries, the condition
of the capital and equity markets, and other risk factors identified herein.
Results of Operations
Industry wide, the average active domestic rig count as reported by Baker Hughes
Incorporated, a leading industry observer, was down 44.4% to 538 for the three
months ended March 31, 1999, compared with 968 for the three months ended March
31, 1998. The average actual rig count for the three months ended March 31,
1999 as compared to the three months ended December 31, 1998 declined 24.2% from
710 to 538. The average active rig count is an important indicator of activity
levels in the market in which the Company operates.
The Company's revenues decreased by $7.2 million to $20.4 million for the three
months ended March 31, 1999 from $27.6 million for the three months ended March
31, 1998. The decrease in revenues is principally due to the decline in the
number of rigs utilized which has had an adverse impact on the level of demand
for the Company's products.
The gross profit for the three months ended March 31, 1999 decreased by $2.6
million to $4.7 million from $7.3 million for the same period last year. Gross
profit as a percentage of revenues was 23.2% for the three months ended March
31, 1999 as compared with 26.5% for the three months ended March 31, 1998. The
decrease was primarily due to the need to lower margins in order to retain
business during a period of reduced rig activity.
Selling, general and administrative expenses increased by $0.1 million for the
three months ended March 31, 1999. The increase is attributable to termination
costs of $0.3 million incurred by the Quantify termination costs as it reduced
its headcount to reflect lower levels of activity. The increase in selling,
general and administrative expenses, as a percentage of sales to 25.5% in the
first three months of 1999 compared with 18.4% for the first three months of
1998, is due to reduced revenues.
-9-
<PAGE>
The Company generated an operating loss of $0.9 million for the three months
ended March 31, 1999 compared with operating income of $2.0 million for the
three months ended March 31, 1998. The decrease in operating income was due to
reduced sales volume and resulting gross profit.
Other (income) expense increased by $0.1 million for the three months ended
March 31, 1999 over the same period in 1998. This was principally due to an
increase in interest expense as a result of higher inventory and receivables
levels which required an increase in borrowing from the company's lines of
credit.
The provision for income taxes for the three months ended March 31, 1999 and
1998 resulted in a benefit of $167,000 and expense of $767,000, respectively.
The effective tax rate decreased from 39% in 1998 to 19% in 1999 primarily
because management believes the losses incurred by its U.K. and Venezuela
operations during the period to March 1999 may not provide future tax benefits
to the Company.
Liquidity and Capital Resources
On January 20, 1999, the Company obtained a $2 million unsecured line of credit
with a U.S. bank, which is guaranteed by the Company's principal stockholder,
John Wood Group PLC. The line of credit is used for the purpose of general
working capital requirements, and $1.3 million was available for additional
borrowings on the line of credit at March 31, 1999.
On September 2, 1998, the Company obtained a $22 million line of credit with
John Wood Group PLC. At March 31, 1999, $9.2 million was available for
additional borrowings under this line of credit.
The Company's United Kingdom subsidiary ("WGPCUK") has a line of credit with a
bank in Scotland provided as part of a group banking arrangement with John Wood
Group PLC. The line of credit is issued for the purpose of general working
capital requirements and provides overdraft and documentary credit facilities.
WGPCUK also has a loan from John Wood Group PLC amounting to $3.3 million, which
is repayable on demand. The loan is used for the purpose of general working
requirements.
The Company believes it will be able to renew the line of credit and loan with
John Wood Group PLC so as to ensure that the Company will have sufficient
financial resources to fund its working capital requirements through 2000.
Working capital at March 31, 1999 was $21.5 million compared to $22.0 million at
December 31, 1998. The Company currently anticipates incurring capital
expenditures of $0.6 million through the fiscal year ending December 31, 1999.
The Company expects to fund these expenditures from amounts available under the
line of credit facilities, cash provided by operations and/or capital lease
transactions.
-10-
<PAGE>
Year 2000 Date Conversion
A plan has been put in place to identify, quantify and correct systems,
products, services, and sources of supply, which may be adversely affected by
the Year 2000 `problem'. We are also taking advantage of this detailed review
to quantify the scale of the problem to standardize and replace aging systems.
Awareness and investigation phase began in late 1997 and, during the course of
1998, a Year 2000 Project Team, supported by high level management, was
assigned. Equipment and software inventory along with compliance and risk has
been quantified. Cost estimates for replacement and/or correction of problem
have been determined. All the main replacement financial, operating and
information systems are now either implemented or in the process of
installation. The Year 2000 plans are designed to have all business critical
elements compliant by 3rd quarter 1999, with the additional objective of
minimizing the impact in current business operations.
We expect that the current schedules will allow adequate time for testing, and
progress at all sites is monitored and reported to senior management on a
monthly basis.
To address the business risk from the third parties, we have contacted all
critical suppliers and customers, and are maintaining a database of their plans
and intentions. Alternative sources will be established for those who pose any
major risk to our business.
Naturally, we cannot be certain of avoiding a business disruption; for example a
noncompliance in our suppliers supply chain may ultimately affect our business.
Contingency plans are also being developed to minimize any risk.
The cost associated with Year 2000 compliance amounted to approximately $1
million in 1998 and it is envisaged that total expenditure will not exceed $2
million through to 2000. This project includes investment in capital cost for
new systems which are deemed necessary and which eliminate the need to test and
modify existing systems.
-11-
<PAGE>
Part II - OTHER INFORMATION
Item 1. Legal Proceedings.
The Company is involved in various claims and disputes in the normal
course of its business. Management of the Company believes the
disposition of all such claims, individually or in the aggregate, will
not have a material adverse effect on the Company's financial
condition, results of operations or cash flows.
Item 2. Changes in Securities.
None.
During the three months ended March 31, 1999, the Company made no
unregistered sales of its equity securities.
Item 3. Defaults Upon Senior Securities.
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
Item 5. Other Information.
None.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits:
10.1 Promissory Note dated January 20, 1999 with Bank One
Oklahoma, N.A.(1).
27.1 Financial Data Schedule(1).
(b) Reports on Form 8-K:
During the first quarter of the fiscal year ended December 31,
1999, the Company filed no reports on Form 8-K.
_______________________
(1) Filed herewith.
-12-
<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.
Date: May 17, 1999 ERC INDUSTRIES, INC.
--------------------------------
/s/ Alan D. Senn
--------------------------------
Alan D. Senn
President and Chief Operating Officer
/s/ James E. Klima
--------------------------------
James E. Klima
Vice President and Chief Financial
Officer
-13-
<PAGE>
PROMISSORY NOTE
(Revolver Note)
$2,000,000.00 Oklahoma City, Oklahoma
January 20, 1999
FOR VALUE RECEIVED, ERC INDUSTRIES, INC., a Delaware corporation (the
"Maker"), promises to pay to the order of BANK ONE, OKLAHOMA, N.A. (the "Bank"),
at the Bank's main Oklahoma City, Oklahoma, banking offices, the principal sum
of TWO MILLION AND NO/100 DOLLARS ($2,000,000.00), or such amount thereof as has
been advanced hereunder and remains unpaid on January 31, 2000, together with
interest thereon from the date hereof on the unpaid balances of principal from
time to time outstanding at the one month (30 days), two months (60 days), three
months (90 days) or six months (180 days) funding period for the Libor-Rate
("Libor-Rate" being the London Interbank Offered Rates category of the "Money
Rates" column published in The Wall Street Journal (Southwest Edition)) per
annum plus seventy five basis points (75) for such applicable Libor-Rate funding
period selected by Maker and payable in monthly installments of interest only
due and payable on the last day of each calendar month, commencing February 28,
1999, with all accrued and unpaid interest on the unpaid balance of principal
from time to time outstanding, and on any past due interest, due and payable at
final maturity on January 31, 2000.
The Maker may prepay all or any portion of the outstanding principal
hereof at anytime, without premium or penalty, and may reborrow the amounts so
prepaid before January 31, 2000. At any one time during the term of this Note,
only one Libor-Rate funding period may be in effect and such applicable
Libor-Rate, as selected by the Maker, shall continue in effect until expiration
of such funding period.
All parties now or hereafter liable for payment of the indebtedness
evidenced by this Note waive presentment and diligence in collection and agree
that without notice to, and without discharging the liability of any party, this
Note may be extended or renewed from time to time and for any term or terms by
agreement between the holder of this Note and any of such parties and all
parties shall remain liable on each such extension or renewal.
Unless otherwise agreed to in writing or as otherwise required by
applicable law, all payments received by the Bank on this Note shall be applied
to accrued and unpaid interest prior to the reduction of principal, and any
remaining amount to unpaid collection costs, late charges and other charges;
provided, however, upon default or delinquency, the Bank reserves the right to
apply all prepayments and all payments among principal, interest, late charges,
collection costs and other charges and expenses in such other and manner at its
sole discretion.
<PAGE>
If the principal or any installment of interest due upon this Note is
not paid within five (5) days after the same becomes due and payable (whether by
extension, acceleration or otherwise), or any party now or hereafter liable
(directly or indirectly) for payment of this Note makes an assignment for
benefit of creditors, becomes insolvent, has an order for relief under the
United States Bankruptcy Code, as amended, entered against it, or any receiver,
trustee, custodian or like officer is appointed to take custody, possession or
control of any property of any such party, the holder hereof may, without
notice, declare all of the unpaid balance hereof to be immediately due and
payable. After maturity, whether by acceleration, extension or otherwise, this
Note (including principal, interest and late charges) to the extent permitted by
applicable law (i) shall bear interest at a variable annual rate equal to
Applicable Libor-Rate plus three percentage points (3%) per annum, and (ii)
add unpaid accrued interest to principal and such sum will bear interest
therefrom until paid at the Default Rate, but in no event in excess of the
maximum permitted by applicable law.
This Note is effective immediately upon execution. Maker hereby waives
and releases any claim that the delivery or effectiveness of this Note is
conditioned in any way. This Note is executed and delivered to the order of the
Bank in Oklahoma City, Oklahoma, and shall be governed by and construed in
accordance with the laws of the State of Oklahoma.
ERC INDUSTRIES, INC.
By: _______________________________
James Klima, Chief Operating Financial Officer
"Maker"
Maturity: January 31, 2000
- 2 -
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 1,493
<SECURITIES> 0
<RECEIVABLES> 18,772
<ALLOWANCES> 821
<INVENTORY> 27,173
<CURRENT-ASSETS> 52,984
<PP&E> 26,096
<DEPRECIATION> 17,472
<TOTAL-ASSETS> 65,619
<CURRENT-LIABILITIES> 31,442
<BONDS> 0
0
0
<COMMON> 275
<OTHER-SE> 31,347
<TOTAL-LIABILITY-AND-EQUITY> 65,619
<SALES> 20,401
<TOTAL-REVENUES> 20,401
<CGS> 15,661
<TOTAL-COSTS> 5,203
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 426
<INCOME-PRETAX> (889)
<INCOME-TAX> (167)
<INCOME-CONTINUING> (722)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (722)
<EPS-PRIMARY> (.03)
<EPS-DILUTED> (.03)
</TABLE>
