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SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-KSB
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended MARCH 31, 1997
Commission file number 1-4530
ASTREX, INC.
(Exact name of small business issuer as specified in its charter)
DELAWARE 13-1930803
(State of incorporation) (I.R.S. Employer Identification No.)
205 EXPRESS STREET, PLAINVIEW, NEW YORK 11803
(Address of principal executive offices) (Zip Code)
516 - 433-1700
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12 (b) of the Act: None
SECURITIES REGISTERED PURSUANT TO 12 (G) OF THE ACT:
COMMON STOCK, $.01 PAR VALUE
(Title of class)
Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12
months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to each filing requirements for the past 90
days. YES X No.
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [X]
State issuer's revenues for its most recent fiscal year. $14,384,930.
State the aggregate market value of the voting stock held by non-affiliates
computed by reference to the price at which the stock was sold, or the average
bid and asked prices of such stock, as of a specified date within the past 60
days. $767,541 AS OF JUNE 30, 1997 (SEE ITEM 5).
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date. 5,375,363 SHARES OF COMMON STOCK AS
OF JUNE 30, 1997.
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ASTREX, INC.
CROSS REFERENCE SHEET
ITEM REQUIRED BY FORM 10-KSB LOCATION OF ITEM
Item 1. - Description of Business Item 1. Business
Item 2. - Description of Property Item 2. Description of Property
Item 3. - Legal Proceedings Item 3. Legal Proceedings
Item 4. - Submission of Matters to a Item 4. Submission of Matter to a
Vote of Securityholders vote of Securityholders
Item 5. - Market for Common Equity Item 5. Market for Registrants's
And Related Stockholder Common Equity and Related
Matters Stockholder Matters
Item 6. - Management's Discussion and Item 6. Management's Discussion and
Analysis or Plan of Operation Analysis of Financial
Condition and Results of
Operation
Item 7. - Financial Statements Item 13. Exhibits, Financial
Statements and Reports On
Form 8-K
Item 8. - Changes In and Disagreements Item 8. Changes in and
With Accountants on Accounting Disagreements with
And Financial Disclosure Accountants on Accounting
And Financial Disclosure
Item 9. - Directors, Executive Officers, Item 9. Directors and Executive
Promoters and Control Persons; Officers of the Company;
Compliance with Section 16(a) Compliance with Section
Of the Exchange Act 16(a) Of the Exchange Act
Item 10.- Executive Compensation Item 10. Executive Compensation
Item 11.- Security Ownership of Certain Item 11. Security Ownership of
Beneficial Owners and Certain Beneficial Owners
Management and Management
Item 12.- Certain Relationships and Item 12. Certain Relationships and
Related Transactions Related Transactions
Item 13 - Exhibits and Reports on Item 13. Exhibits, Financial
Form 8-K Statements and Reports on
Form 8-K
<PAGE>
PART I
Item 1. BUSINESS.
GENERAL
Astrex, Inc., a Delaware corporation (the "Company" or "Astrex"), is a
value-added distributor of electronic components used to connect, control,
regulate or store electricity in equipment. The principal products assembled and
sold by Astrex are "connectors." "Connectors" link a wire or group of wires to
another wire or group of wires. Other products sold include relays, switches,
and LED's.
The Company (including its wholly owned subsidiaries T.F. Cushing, Inc.
and AVest, Inc.) has 53 employees, principally at facilities in Plainview, New
York and West Springfield, Massachusetts and carries in inventory over 25,000
different electronic parts from approximately 20 manufacturers, including
Amphenol Corporation, Hirose Electric (U.S.A.), Inc., ITT Cannon, ITW Switches,
Litton Winchester Electronics, Micro Switch (division of Honeywell, Inc.),
Packard Hughes Interconnect, and WPI Salem Division (Wire Pro). While the
Company sells a portion of this inventory without any further value
enhancements, a significant portion of its sales consists of components
assembled to customer specifications. The Company's sales are worldwide with a
concentration in the Northeast and Mid-Atlantic States where the Company serves
more than 3,200 customers representing a broad range of electronics users from
major original equipment manufacturers such as IBM Corporation, Lockheed Martin,
Raymond Corporation, and Raytheon Company to engineering firms and research and
educational institutions. The Company's largest industry markets include the
defense, aerospace, industrial equipment, and computer industries.
The Company's principal credit facility is a line of credit ("Line")
measured by its inventory and receivables and secured by substantially all of
the Company's assets including a negative pledge of (i.e. that the Company will
not mortgage to any other person) its Plainview office/warehouse facility. On
March 31, 1997 the Company owed approximately $1,226,000 on the Line, and as of
June 30, 1997 approximately $891,000 was outstanding. On July 9, 1997, the
Company changed its secured lender. The terms of the new secured lending
arrangement (expiring in July 1999) are substantially the same as the previous
arrangement except that (i) the lender is a commercial bank, and (ii) the
interest rate is appreciably lower. The Company's relationship with its new and
previous secured lenders is and was satisfactory. The change in secured lenders
was voluntarily made by the Company in order to obtain a lower interest rate.
The Company believes that the new secured lending arrangement will be adequate
for the foreseeable future.
Approximately 84% of the products sold by the Company are connectors. A
connector links electronic components together and generally consists of a
shell, insert, contacts and adaptive hardware. Each of these four parts has many
variations and can be assembled together in almost unlimited combinations.
Connectors range in price, depending on design, complexity, use, and
availability from $0.25 to $2,500 a connector. The Company has traditionally
emphasized the sale of connectors which meet a higher standard of reliability
and performance including those meeting United States military specifications.
Most of the connectors sold by the Company range in price from $5 to $70 each.
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The Company has the capacity to both assemble and test connectors to
customer's specifications, which is a capability that some of its competitors do
not have. The assembly capability also enables the Company to inventory fewer
finished parts and to deliver a wider variety of finished connectors,
substantially enhancing service to its customers. During the fiscal year ending
March 31, 1997 approximately 42% of the Company's sales represented assembled
connectors, approximately 36% of the Company's sales represented connectors not
requiring further assembly by the Company and approximately 6% of the Company's
sales represented unassembled connector parts.
The other products sold by the Company are devices that control or
regulate the flow of electricity to or within components, including relays and
switches which control current by opening or closing an electric circuit. These
products represented approximately 16% of sales.
Assembly of military specification connectors, a significant part of
the Company's business, usually requires government approval. The Company has
such approvals as are necessary for the military specification connectors it
assembles and does not perceive any future problems with respect to such
approvals. The nature of the Company's business does not require significant
expenditures for product research and development and the Company's expenditures
in that regard over the past two years have been nominal.
The Company markets the products of approximately 20 manufacturers. Its
four largest suppliers, Amphenol Corporation, ITT Cannon, ITW Switches and
Packard Hughes Interconnect accounted for approximately 41% of fiscal year
ending March 31, 1997 purchases.
The Company has satisfactory relations with its suppliers, most of
which have done business with the Company for over 15 years. The Company
believes that most of the products it presently sells are available from other
sources at competitive prices. Most of the products sold by the Company are
purchased pursuant to franchise agreements that are typically cancelable by
either party at any time.
As of March 31, 1997 the Company's net inventory aggregated
approximately $3,313,000 of which approximately 85% consisted of connectors.
While manufacturers generally do not give distributors, such as the Company, the
absolute right to return unsold inventory, it is the policy of many
manufacturers to protect or partially protect franchised distributors, such as
the Company, against the potential write-down of inventories due to
technological change or manufacturer's price reductions. Similarly, a
manufacturer who elects to terminate a franchise may be required to purchase
from the distributor a substantial, if not the total, amount of its product
carried in inventory. No assurance can be given however, that these industry
practices will continue.
The Company serves more than 3,200 customers representing a broad
spectrum of electronic users ranging from major original equipment manufacturers
to engineering firms and research and educational institutions. Such customers
include manufacturers in the aerospace, industrial, defense and computer
industries, such as IBM Corporation, Lockheed Martin, Raymond Corporation and
Raytheon Company. No single customer accounted for more the 10% of sales.
Many of the Company's customers require delivery schedules which are
generally not available on direct purchase from manufacturers. The Company
offers its customers the convenience of diverse and extensive local inventories
and rapid deliveries. In addition, because of its expertise in connectors, the
Company can offer its customers technical advice and support, and innovative
solutions to customer problems. The Company believes that its good long-term
relationships with its customers extending, in
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some cases, over a period of 20 years, give it a strong competitive position
throughout the United States, and especially the Northeast.
For the fiscal year ended March 31, 1997, 75% of the Company's sales were
in the Northeast and Middle Atlantic States, 22% of sales were to other parts of
the country and 3% of sales were for export.
Sales are generated by the Company's outside sales force which covers
specific geographic territories and customers; by the Company's inside telephone
sales force; by independent sales representatives; and by the use of space
advertising in industry publications. Sales are managed and coordinated by
regional sales managers and by product managers located in the Company's
Plainview, New York or West Springfield, Massachusetts facilities.
COMPETITION
The Company operates in a highly competitive environment. The sale and
distribution of products sold by the electronics distribution industry is
extremely competitive, particularly with regard to price and product
availability. The Company competes with numerous local, regional, and national
distributors, many of which have greater financial resources and sales than the
Company. To a certain extent, the Company also competes with manufacturers of
electronic parts and components, including some of its suppliers, which are
involved in the direct sales of their products.
BACKLOG
At April 1, 1997, the Company's total backlog of confirmed, unfilled orders
was approximately $3,176,000, an increase of 11% over the April 1, 1996 backlog
of $2,859,000. The Company expects almost all of the backlog to be shipped
before the end of fiscal 1998. The backlog at year-end is not necessarily
indicative of sales for any specific subsequent period.
COMPLIANCE WITH ENVIRONMENTAL LAWS
In the fiscal years ending March 31, 1997 and 1996 the Company expended
less than one thousand dollars in order to comply with environmental laws with
respect to the Plainview building. The Company has had no other expenditures
with respect to such laws in that time period.
EMPLOYEES
As of March 31, 1997 the Company had 53 employees. The Company has senior
operating personnel at both its Plainview, New York and West Springfield,
Massachusetts facilities, some of whom have been with the Company or a
subsidiary for more than 15 years. Management believes that its relations with
its employees are satisfactory.
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Item 2. PROPERTIES.
Through its wholly owned subsidiary, AVest, Inc., the Company owns a 22,000
square foot building at 205 Express Street, Plainview, New York. The Company's
principal executive offices occupy approximately 750 square feet of that
building with the balance of the building space constituting office, warehouse
and assembly facilities for the Company. The property is adequately covered by
insurance and there are at present no significant renovation, improvement or
development plans with respect to the facility. Prior to July 1997, the 205
Express Street property was mortgaged to secure the Company's principal credit
facility. In July 1997, the Company entered into a new credit facility with a
new lender, and in conjunction therewith, the 205 Express Street property was
made subject to a negative pledge, i.e. that the property would not be made
subject to any mortgage or lien, except under certain circumstances to the
lender. The Company's T.F. Cushing, Inc. subsidiary occupies 3,500 square feet
in West Springfield, Massachusetts at an annual rent of $19,560 under a lease
that expires August 31, 1997. In addition the Company presently maintains sales
offices in Endwell, New York (1,500 square feet, $15,000 annual rent, under a
lease that expires 12/31/97), Willow Grove, Pennsylvania (1,323 square feet,
$18,052 annual rent, month-to-month occupancy under a lease which expired
12/19/92) and Woburn, Massachusetts (1,058 square feet, $17,933 annual rent,
under a lease that expires 11/30/99). All of the Company's premises are adequate
for the Company's current and foreseeable requirements. The Company has no
present plans to significantly renovate or improve any of its leased properties.
Item 3. LEGAL PROCEEDINGS.
As of March 31, 1997 and the date hereof there was no litigation believed
to be material pending against or on behalf of the Company or its properties.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
NONE
PART II
Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS.
The Company's common stock ("Astrex Common Stock") trades on the
over-the-counter market under the symbol "ASXI". The following table sets forth
the high and low closing bids for Astrex Common Stock. These over-the-counter
market quotations reflect inter-dealer prices without retail mark-up, mark-down
or commission, are approximate and may not necessarily represent actual
transactions.
5
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CALENDAR YEAR
& QUARTER HIGH CLOSING BID LOW CLOSING BID
----------------------------- ----------------------- -----------------------
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1995 Third Quarter 3/8 3/32
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Fourth Quarter 5/16 1/4
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1996 First Quarter 5/16 1/4
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Second Quarter 5/16 1/4
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Third Quarter 1/4 1/4
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Fourth Quarter 1/4 1/4
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1997 First Quarter 9/32 1/4
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Second Quarter 9/32 1/4
----------------------------- ----------------------- -----------------------
For purposes of the disclosure of the aggregate market value of the voting
stock held by non-affiliates as set forth on page 1 of this Report, the Company
has used the price of 28.65 cents per share, which is the average of the
reported closing bid and ask prices on June 30, 1997.
No dividends have been paid on common stock since April 1978 and the
Company does not anticipate paying dividends with respect to common stock in the
foreseeable future.
In March 1996, the Company determined to make available for purchase by all
interested employees, on a pro rata basis, up to a total of 150,000 unregistered
shares of the Company's common stock at thirty one cents a share, a price
substantially reflective of the then trading price for registered shares.
Pursuant thereto, 17 employees purchased a total of 150,000 unregistered shares
in the fiscal year ended March 31, 1997.
As of June 30, 1997 there were 5,375,363 shares of the Company's common
stock outstanding and held by 374 holders of record.
Item 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION.
RESULTS OF OPERATIONS
Fiscal year 1997 saw a 51% improvement in net income over fiscal year 1996.
The improvement in income was, as detailed below, principally the result of
higher sales and lower interest expense.
Fiscal year 1997 saw a 6.4% improvement in sales. Net sales for the fiscal
year ended March 31, 1997 were approximately $14.4 million, up from $13.5
million for the fiscal year ended March 31, 1996. The $867,000, 6.4% increase in
sales for fiscal 1997 versus fiscal 1996 was due in significant part to the
Company's improved marketing efforts and continued strong commercial and
industrial markets. Sales to commercial and industrial accounts were up 9% for
fiscal 1997 versus 1996. Sales to military accounts increased 5% for the same
periods.
6
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At April 1, 1997, the Company's total backlog of confirmed, unfilled orders
was approximately $3.2 million, an increase of 11% over the April 1, 1996
backlog of $2.9 million.
Despite price pressure in all connector markets, the Company was able to
maintain stable gross profit margins (before inventory write-downs of $66,000 in
fiscal 1996). Margins went to 24.82% in fiscal 1997 from 24.78% in fiscal 1996.
Selling, general and administrative expenses increased approximately
$218,000, or 7.7%, for the fiscal year ended March 31, 1997, to $3,051,710 up
from $2,833,240 for the fiscal year ended March 31, 1996. This increase is
primarily due to the increase in salaries, commissions and other costs needed to
generate and support the higher sales volume.
Interest expense decreased to $181,622 in fiscal 1997 from $230,702 in
fiscal 1996. This was due to decreases in both average loan balances and average
interest rates for the two periods. The latter decrease was a result of a
restructuring of the Company's principal lending agreement in the early part of
fiscal 1997, which provided a 0.25 percentage point reduction in the Company's
effective borrowing rate.
LIQUIDITY AND CAPITAL RESOURCES
The Company generated $547,000 in cash from its operating activities, and
$47,000 in proceeds from the issuance of restricted common stock to employees.
The Company used this cash primarily to partially paydown the outstanding loan
payable balance and for capital expenditures. At March 31, 1997, the Company had
working capital of $3,573,000 and its stockholders' equity was $3,062,000. The
Company believes that its present working capital, cash generated from
operations and amounts available under the new loan agreement will be sufficient
to meet its cash needs during the next year. The Company's principal credit
facility is a line of credit ("Line") measured by its inventory and receivables
and secured by substantially all of the Company's assets including a negative
pledge of (i.e. that the Company will not otherwise mortgage to any other
person) its Plainview office/warehouse facility. On March 31, 1997 the Company
owed approximately $1,226,000 on the Line, and as of June 30, 1997 approximately
$891,000 was outstanding. On July 9, 1997, the Company changed its secured
lender. The terms of the new secured lending arrangement (expiring in July 1999)
are substantially the same as the previous arrangement except that (i) the
lender is a commercial bank, and (ii) the interest rate is appreciably lower.
The Company's relationship with its new and previous secured lenders is and was
satisfactory. The change in secured lenders was voluntarily made by the Company
in order to obtain a lower interest rate. The Company believes that the new
secured lending arrangement will be adequate for the foreseeable future.
In February 1997, the Financial Accounting Standards Board issued Statement
No. 128, "Earnings per Share." Statement 128 establishes new standards for
computing and presenting earnings per share. It replaces the presentation of
primary EPS with a presentation of basic EPS, which excludes the effects of
dilution, and diluted EPS. Management does not expect that the adoption of
Statement 128 in fiscal 1998 will have a significant impact on the Company's
earnings per share calculations.
The Company entered into a capital lease for a new computer hardware and
software system for approximately $160,000. The lease is effective January 1,
1997 and will be repaid over a term of 4 years. The Company has no other plans
for major comittments for capital expenditures.
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For a discussion of the Company's credit facilities see
ITEM 1. BUSINESS - GENERAL.
Item 7. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
Pages F-1 et. seq. of this Form 10-KSB are by this reference
incorporated herein.
Item 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
NOT APPLICABLE
PART III
Item 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY; COMPLIANCE WITH
SECTION 16(A) OF THE EXCHANGE ACT.
The following table sets forth for current officers and directors, (i) that
person's name, (ii) if applicable the Director Class elected to , (iii) all
positions with the Company held by that person, (iv) that person's age, (v) that
person's principal occupation for the past five years and (vi) with respect to
directors the date on which that person first became a director of the Company.
Unless otherwise indicated, each person has held the position shown, or has been
associated with the named employer in an executive capacity, for more than five
years. The terms of the current directors expire upon the election and
qualification of their successors at the Annual Meeting. The terms of officers
expire at the pleasure of the Board of Directors.
NAME, AGE, CAL.
YEAR FIRST BECAME
A DIRECTOR OR OFFICER
& DIRECTOR CLASS
IF APPLICABLE. PRINCIPAL OCCUPATION FOR PAST FIVE YEARS
- -------------- ----------------------------------------
Howard Amster Private investor and registered representative
Director with Everen Securities, Inc., Cleveland, Ohio.
49 - since 1992 - Class III Director, Geauga Savings Bank, a northern Ohio
savings and loan; Trustee, CleveTrust Realty
Investors, a real estate company, and formerly
a director of American Savings of Florida, a
formersouth Florida savings and loan.
<PAGE>
8
John C. Loring Attorney and private investor,Chicago,Illinois.
Director and Chairman Mr. Loring is a director of Geauga Savings
52 - since 1988 - Class III Bank, a northern Ohio savings and loan, and was
formerly a director of GalVest, Inc., a Houston
oil and gas company, Weatherford International,
a Houston well servicing company, American
Savings of Florida, a former south Florida
savings and loan, Fleet Aerospace, Inc., a
Toronto manufacturer of components for the
aerospace market, and Guardian Bankcorp., Inc.,
a former Los Angeles Bank.
Michael McGuire Mr. McGuire joined the Company in 1969. Prior
Director, CEO and President to becoming CEO and President he was the
43 - since 1991 - Class I Company's General Manager and Director of
Operations.
Irene S. Marcic Prior to joining the Company in 1993, Ms.
CFO, Vice President, Marcic, a Certified Public Accountant, was
Treasurer Secretary employed with KPMG Peat and Marwick as a
29 - since 1993 Senior Accountant.
Mark Schindler Mr. Schindler is a self-employed consultant,
Director private investor, and a partner of Madison
75 - since 1960 - Class II Venture Capital Partners, New York, New York.
Mr.Schindler was formerly a director and
officer of Natural Child Care, Inc./Winners
All International, Ltd., Light Savers U.S.A.,
Inc., Servtex International Inc. and Kushi
Macrobiotics, Inc. Mr. Schindler founded
Astrex, Inc.
David S. Zlatin Chief Operating Officer of Ramat Securities,
Director Ltd., Rabbi and private investor.
45 - since 1993 - Class II
Nancy Shields Ms. Shields joined the Company in 1990. Prior
Vice President to becoming Vice President she was the
40 - since 1995 Corporate Product Manager and has worked in the
electronics distribution industry since 1977.
Kenneth Chaplar Mr. Chaplar joined the Company in 1994 as the
Vice President Director of New Business Development. Prior to
59 - since 1995 1994 Mr. Chaplar was part owner of
a manufacturers representative firm and has
worked in the electronics industry since 1960.
In addition John Loring is Chairman and Secretary of the Company's wholly
owned subsidiary AVest, and David Zlatin is President and Treasurer of AVest.
They are also AVest's two directors. The officers and directors of T.F. Cushing
are the same as for the Company.
The Company is not aware of any persons who failed to file on a timely
basis any reports relating to the Company required by Section 16(a) of the
Securities Exchange Act during the fiscal year that ended March 31, 1997.
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Item 10. EXECUTIVE COMPENSATION.
The following table shows information concerning the compensation paid or
awarded by the Company and its subsidiaries for services to its Chief Executive
Officer during fiscal years ending March 31, 1997, 1996 and 1995. Other then Mr.
McGuire there were no executive officers of the Company whose compensation was
or exceeded $100,000. The Company (i) has no retirement, pension, profit
sharing, stock option, stock appreciation rights or long term incentive plans
for the years in question, (ii) has not awarded any bonuses during or for the
years in question, except as set forth in the table below, and to one other
executive officer, and (iii) has no employment contracts or termination of
employment and change of control arrangements for any of the Company's executive
officers.
In the first quarter of fiscal year 1997, the Company awarded 135,000
unregistered lettered shares of the Company's common stock to 19 employees
(including Mr. McGuire), none of whom received more than 15,000 shares. To the
extent an employee ceases to be employed by the Company prior to March 31, 2000
(other than on account of death) the shares awarded to said employee are
forfeited to the Company.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
--------------------------
ANNUAL COMPENSATION
-------------------
NAME AND PRINCIPAL POSITION FISCAL YEAR SALARY BONUS
- --------------------------- ----------- ------ -----
<S> <C> <C> <C>
Michael McGuire 1997 $161,000 $57,360
CEO & President 1996 $150,000 $51,500
since November 1991 1995 $150,000 -
</TABLE>
The Board of Directors held four meetings during fiscal year ending March
31, 1997. Each of the directors of the Company attended each of those meetings.
Other than the Executive Committee there were no active standing committees of
the Board of Directors during that fiscal year. During that fiscal year the
board of directors meeting fees for directors who are not full time employees of
the Company were $750. Pursuant to this arrangement each of the directors, other
than Mr. McGuire, received $3,000. In addition, during the fiscal year ending
March 31, 1997 (i) Mr. Loring for services as Chairman of the Board and the
Executive committee received $25,000 and $27,000 respectively, (ii) Mr. Amster
for his services on the Executive Committee received $27,000. For the fiscal
year ending March 31, 1996 (i) Mr. Loring for services as Chairman of the Board
received 200,000 shares of unregistered and restricted Common Stock and $25,000,
and (ii) Mr. Amster received 200,000 shares of unregistered and restricted
Common Stock. The stock compensation received by Messr. Loring and Amster was
subject to the right of the Company to repurchase said shares for one cent per
share if the director who received said shares ceases to be a director of the
Company prior to January 1, 1997 other than because of his death or disability
or the dissolution of the Company. In fiscal 1996, the charge to earnings as a
consequence of Messr. Amster and Loring's stock compensation was $12,000.
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Item 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table sets forth the number and percentage of shares of the
Company's Common Stock beneficially owned as of June 30, 1997 by persons who are
known by the Company to be the beneficial owners of more than 5% of the
Company's outstanding Common Stock as of that date, and the directors of the
Company and its chief executive officer, and all officers and directors of the
Company as a group. For purposes of this Report, beneficial ownership is defined
in accordance with Rule 13d-3 of the Securities and Exchange Commission (the
"Commission") to mean generally the power to vote or dispose of shares,
regardless of any economic interest therein. The persons listed have sole voting
power and sole dispositive power with respect to all shares set forth in the
table unless otherwise specified in the footnotes to the table.
<TABLE>
<CAPTION>
BENEFICIAL HOLDERS OF MORE THAN 5%
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NAME AND ADDRESS OF BENEFICIAL OWNERS SHARES HELD PERCENTAGE1
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<S> <C> <C>
Howard Amster2 1,209,311 22.50%
205 Express Street
Plainview, New York 11803
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William Costaras 336,184 6.25%
22674 Halburton Road
Beachwood, Ohio 44122
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FMR, Corp. 565,723 10.52%
82 Devonshire Street
Boston, Massachusetts 02109
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Herzog, Heine, Geduld, Inc. 590,723 10.99%
26 Broadway
New York, New York 10004
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Libra-Wilshire Partners, LP 923,586 17.18%
11766 Wilshire Boulevard
Los Angles, California 90025
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John C. Loring3 980,263 18.24%
205 Express Street
Plainview, New York 11803
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</TABLE>
<TABLE>
<CAPTION>
OFFICER AND DIRECTOR HOLDINGS
-------------------------------------------------------- ----------------------- -------------------
NAME AND ADDRESS OF BENEFICIAL OWNERS SHARES HELD PERCENTAGE1
-------------------------------------------------------- ----------------------- -------------------
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<S> <C> <C>
Howard Amster2 1,209,311 22.50%
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John C. Loring3 980,263 18.24%
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Michael McGuire4 217,975 4.06%
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Mark Schindler 1,449 *
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David S. Zlatin 10,262 *
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All Other Officers 87,058 1.62%
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All Officers and Directors as a group (8 persons) 2,506,318 46.63%
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</TABLE>
* Less than 1%.
1 Based on 5,375,363 shares outstanding.
2 Includes 73,886 shares owned by his spouse, the beneficial ownership
of which he disclaims.
3 Includes 77,170 shares owned by his spouse's IRA, the beneficial
ownership of which he disclaims
4 Includes 90,537 shares owned by his spouse's IRA, the beneficial
ownership of which he disclaims.
Item 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
See "ITEM 1. BUSINESS - GENERAL"
PART IV
Item 13. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.
(a) (1) FINANCIAL STATEMENTS PAGE NO.
-------------------- --------
Report of KPMG Peat Marwick LLP,
Certified Public Accountants F-1
Consolidated Balance Sheet as of
March 31, 1997 F-2
Consolidated Statements of Operations for the
years ended March 31, 1997 and 1996 F-3
Consolidated Statements of Shareholders' Equity F-4
for the years ended March 31, 1997 and 1996
Consolidated Statements of Cash Flows for the
years ended March 31, 1997 and 1996 F-5
Notes to Consolidated Financial Statements F-6
<PAGE>
12
(a)(3) EXHIBITS
--------
The exhibits listed on the accompanying Exhibit Index are filed as
part of this report.
PREVIOUSLY FILED AND
INCORPORATED BY REFERENCE
EXHIBIT DESCRIPTION OR FILED HEREWITH
- ------- ----------- -----------------
3 (a) Certificate of Incorporation of Astrex, Filed as Exhibit 3 (a) to
Inc. (a Delaware corporation) the Form 10-K of the
Company for year ended
March 31, 1993
3 (b) By-Laws of Astrex, Inc., as amended Filed as Exhibit 3 (b) to
the Form 10-QSB of the
Company for the period
ended September 30, 1996
4 (a) Astrex, Inc. Certificate of Filed as Exhibit 4 (a) to
Designations, Preferences the Form 10-KSB of the
and Rights of Preferred Stock - Company for year ended
Two and a Half Cent Non-Cumulative March 31, 1994
Series B Preferred Stock
10 (a) Amendment between Astrex, Inc. Filed as Exhibit 10 (b to
and Congress Financial Corporation the Form 10-K of the
dated March 31, 1992 Company for year ended
March 31, 1992
10 (b) Second Amendment between Astrex, Inc. Filed as Exhibit 10 (c)to
and Congress Financial Corporation the Form 10-KSB of the
dated June 30, 1994 Company for year ended
March 31, 1994
10 (c) Pledge and Security Agreement Filed as Exhibit 10 (d) to
between Astrex, Inc. and the Form 10-KSB of the
Congress Financial Corporation Company for year ended
dated June 30, 1994 March 31, 1994
10 (d) Second Amendment to Mortgage Filed as Exhibit 10 (e) to
between Astrex, Inc. and the Form 10-KSB of the
Congress Financial Corporation Company for year ended
dated June 30, 1994 March 31, 1994
10 (e) Mortgage, Security Agreement, Filed as Exhibit 10 (f) to
Financing Statement and Form 10-KSB of the Company
Assignment of Leases and Rents for the year ended
between AVest, Inc. and Congress March 31, 1994
Financial Corporation dated
June 30, 1994
10 (f) Limited Recourse Guarantee Filed as Exhibit 10 (g) to
between AVest, Inc. and Congress the Form 10-KSB of the
Financial Corporation dated Company for year ended
June 30, 1994 March 31, 1994
10 (g) Landlord/Mortgagee Waiver between Filed as Exhibit 10 (h) to
AVest, Inc. and Congress the Form 10-KSB of the
Financial Corporation dated Company for year ended
June 30, 1994 March 31, 1994
13
<PAGE>
10 (h) Subordination Agreement between Filed as Exhibit 10 (i) to
AVest, Inc. and Congress the Form 10-KSB of the
Financial Corporation dated Company for year ended
June 30, 1994 March 31, 1994
27 Financial Data Schedule Filed Herewith
(b) No Current Reports on Form 8-K were filed by the Company during the last
quarter of the period covered by this Report.
14
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders
Astrex, Inc.:
We have audited the accompanying consolidated balance sheet of Astrex, Inc. and
subsidiaries as of March 31, 1997 and the related consolidated statements of
operations, shareholders' equity and cash flows for each of the years in the
two-year period ended March 31, 1997. These consolidated financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these consolidated financial statements based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Astrex, Inc. and
subsidiaries as of March 31, 1997 and the results of their operations and their
cash flows for each of the years in the two-year period ended March 31, 1997, in
conformity with generally accepted accounting principles.
/s/ KPMG PEAT MARWICK LLP
KPMG PEAT MARWICK LLP
Jericho, New York
July 9, 1997
15
<PAGE>
ASTREX, INC. AND SUBSIDIARIES
Consolidated Balance Sheet
March 31, 1997
ASSETS
<TABLE>
<CAPTION>
<S> <C>
Current assets:
Cash $ 2,000
Accounts receivable (net of allowance for doubtful
accounts of $87,000) 1,584,232
Inventory 3,313,223
Prepaid expenses and other current assets 67,473
----------------
Total current assets 4,966,928
Fixed assets, net 840,569
----------------
$ 5,807,497
================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 867,840
Accrued liabilities 482,553
Current portion of capital lease obligation 43,519
----------------
Total current liabilities 1,393,912
----------------
Capital lease obligation 125,485
Loans payable, long-term 1,226,133
----------------
Total liabilities 2,745,530
----------------
Commitments
Shareholders' equity:
Preferred stock, Series A - par value $5 per share; authorized,
200,000 shares; issued, none -
Preferred stock, Series B - par value $.01 per share; authorized,
7,500,000 shares; issued, none -
Common stock - par value $.01 per share; authorized, 15,000,000 shares;
5,375,363 issued and outstanding 53,754
Additional paid-in capital 3,620,876
Accumulated deficit (590,529)
----------------
3,084,101
Less deferred compensation (22,134)
----------------
Total shareholders' equity 3,061,967
----------------
$ 5,807,497
================
</TABLE>
See accompanying notes to consolidated financial statements.
16
<PAGE>
ASTREX, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
Years ended March 31, 1997 and 1996
<TABLE>
<CAPTION>
1997 1996
---- ----
<S> <C> <C>
Net sales $ 14,384,930 13,518,149
Cost of sales 10,813,922 10,233,692
------------------ -------------
Gross profit 3,571,008 3,284,457
Selling, general and administrative expenses 3,051,710 2,833,240
------------------ -------------
Income from operations 519,298 451,217
Interest expense (181,622) (230,702)
Other income, net 346 254
------------------ -------------
Income before provision
for income taxes 338,022 220,769
Provision for income taxes 31,474 17,895
------------------ -------------
Net income $ 306,548 202,874
================== =============
Net income per share $ .06 .04
================== =============
Weighted average number of shares outstanding 5,344,788 4,957,030
================== =============
</TABLE>
See accompanying notes to consolidated financial statements.
17
<PAGE>
ASTREX, INC. AND SUBSIDIARIES
Consolidated Statements of Shareholders' Equity
Years ended March 31, 1997 and 1996
<TABLE>
<CAPTION>
Common stock Additional Accu- Deferred
par value $.01 per share paid-in mulated compen-
------------------------
Shares Amount capital deficit sation Total
------ ------ ------- ------- ------ -----
<S> <C> <C> <C> <C> <C> <C>
Balance, March 31, 1995 4,690,363 $ 46,904 3,539,931 (1,099,951) - 2,486,884
Shares granted to directors 400,000 4,000 8,000 - - 12,000
Net income - - - 202,874 - 202,874
------------ --------- ------------ ------------- ---------- ------------
Balance, March 31, 1996 5,090,363 50,904 3,547,931 (897,077) - 2,701,758
Shares granted to employees 135,000 1,350 27,945 - (29,295) -
Amortization of deferred
compensation - - - - 7,161 7,161
Shares sold to employees 150,000 1,500 45,000 - - 46,500
Net income - - - 306,548 - 306,548
------------ --------- ------------ ------------- ---------- ------------
Balance, March 31, 1997 5,375,363 $ 53,754 3,620,876 (590,529) (22,134) 3,061,967
============ ========= ============ ============= ========== ============
</TABLE>
See accompanying notes to consolidated financial statements.
18
<PAGE>
ASTREX, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Years ended March 31, 1997 and 1996
<TABLE>
<CAPTION>
1997 1996
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income $ 306,548 202,874
Adjustments to reconcile net income to net cash provided by
(used in) operating activities:
Depreciation and amortization 64,364 57,251
Stock compensation 7,161 12,000
Changes in assets and liabilities:
Decrease (increase) in accounts receivable, net 180,219 (330,127)
Decrease (increase) in inventory 620,851 (149,055)
(Increase) decrease in prepaid expenses and other
current assets (46,231) 62,848
(Decrease) increase in accounts payable (781,729) 30,552
Increase (decrease) in accrued liabilities 196,172 (74,161)
------------- -----------
Net cash provided by (used in)
operating activities 547,355 (187,818)
------------- -----------
Cash flows from investing activities:
Capital expenditures (49,452) (31,018)
------------- -----------
Net cash used in investing activities (49,452) (31,018)
------------- -----------
Cash flows from financing activities:
(Repayments) proceeds of short-term funding (555,931) 217,675
Proceeds from issuance of common stock 46,500 -
Principal payments under capital lease obligations 11,452 -
----------- -----------
Net cash (used in) provided by
financing activities (497,979) 217,675
------------- -----------
Net (decrease) increase in cash (76) (1,161)
Cash, beginning of year 2,076 3,237
------------- -----------
Cash, end of year $ 2,000 2,076
============== ===========
Supplemental disclosures of cash flow information
Cash paid during the year for:
Interest $ 185,265 230,702
============== ===========
Income taxes $ 40,188 27,933
============== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
19
<PAGE>
ASTREX, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
March 31, 1997 and 1996
(1) DESCRIPTION OF BUSINESS AND RELATED MATTERS
Astrex, Inc. and subsidiaries (the Company) sell and distribute
electronic parts and components. Approximately 84% of the Company's sales
consist of connectors that connect a wire or group of wires to another
wire or group of wires. The other products sold by the Company, which
comprise the remaining 16% of sales, are devices that control or regulate
the flow of electricity to or within components. The Company's largest
markets include the defense, aerospace, industrial and computer
industries, which sales are worldwide with a concentration in the
Northeast and Mid-Atlantic states.
Most of the Company's customers are located in the Northeast and Mid
Atlantic states. No single customer accounted for more than ten percent
of the Company's sales in 1997 and 1996, and no account receivable from
any customer amounted to more than 5 percent of the Company's total
stockholders' equity at March 31, 1997.
The Company markets the products of approximately 20 manufacturers. Its
four largest suppliers accounted for approximately 41% of fiscal year
ending March 31, 1997 purchases.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of the Company
and its subsidiaries, all of which are wholly-owned. All significant
intercompany accounts and transactions have been eliminated.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying value of all financial instruments approximate fair value.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities
and disclosures of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting periods. Actual amounts are not expected to differ
materially from those estimates.
REVENUE RECOGNITION
Sales revenue is recognized upon shipment of products.
INVENTORY
Inventory, consisting principally of finished goods, is stated at the
lower of cost (first-in, first-out) or market.
(Continued)
20
<PAGE>
(2), CONTINUED
LONG-LIVED ASSETS
The Company implemented the provisions of Statement of Financial
Accounting Standards No.121, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed Of", effective April 1,
1996. The Company reviews its long-lived assets (property, plant and
equipment) for impairment whenever events or circumstances indicate that
the carrying amount of an asset may not be recoverable. If the sum of the
expected cash flows, undiscounted and without interest, is less than the
carrying amount of the asset, an impairment loss is recognized as the
amount by which the carrying amount of the asset exceeds its fair value.
The adoption of Statement No.121 had no impact on the Company's financial
position or results of operations.
Depreciation of fixed assets is computed by the straight-line method at
rates adequate to allocate the cost over their expected useful lives.
Equipment held under capital leases are amortized on the straight-line
method over the shorter of the lease term or estimated useful life of the
asset.
INCOME TAXES
Income taxes are accounted for under the asset and liability method.
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective
tax bases. Deferred tax assets and liabilities are measured using enacted
tax rates expected to apply to taxable income in the years in which those
temporary differences are expected to be recovered or settled. The effect
on deferred tax assets and liabilities of a change in tax rates is
recognized in income in the period that includes the enactment date.
NET INCOME PER SHARE
Net income per share is based on net income for each year divided by the
weighted average number of shares outstanding during each year.
In February 1997, the Financial Accounting Standards Board issued
Statement No.128, "Earnings Per Share". Statement 128 establishes new
standards for comparing and presenting earnings per share (EPS). It
replaces the presentation of primary EPS with a presentation of basic
EPS, which excludes the effect of dilution, and diluted EPS. Management
does not expect that the adoption of Statement 128 in fiscal 1998 will
have a significant impact on the Company's EPS calculation.
CASH FLOWS
The Company considers temporary cash investments with maturities of three
months or less at the time of purchase to be cash equivalents. During
fiscal 1997, the Company's non-cash financing activities included capital
lease obligations of $189,925 incurred when the Company entered into
lease agreements for new equipment.
(Continued)
21
<PAGE>
(3) FIXED ASSETS
Fixed assets consist of the following:
<TABLE>
<CAPTION>
Estimated
useful life
-----------
<S> <C> <C>
Land $ 128,836 -
Building and improvements 562,099 30 years
Equipment, furniture and fixtures 399,052 5 to 10 years
---------------
1,089,987
Less accumulated depreciation 249,418
---------------
$ 840,569
===============
</TABLE>
(4) LOANS PAYABLE
Prior to July 9, 1997 the Company's principal loan agreement provided for
a line of credit equal to 85% of its eligible accounts receivable and 25%
of its eligible net inventory but not more than $2,500,000 with interest
payable monthly at the rate of 2% above the lender's prime rate (that
prime rate at March 31, 1997 was 8.25% per annum). That loan agreement
was with a non-bank lender specializing in secured lending and was
secured by substantially all of the Company's assets including a mortgage
on the Company's 205 Express Street property.
On July 9, 1997 the Company entered into a new secured lending agreement
with a commercial bank to refinance its then existing facility described
above, and provide for future working capital needs. This new facility,
which has a term ending in July 1999, provides for substantially the same
terms as the previous facility except that the 205 Express Street
property is subject to a negative pledge rather than a mortgage and, at
the Company's option, provides for short term fixed rate borrowing for
fixed amounts at LIBOR plus 2% or daily borrowing at the bank's prime
rate or a mixture of the two. Debt outstanding at March 31, 1997 has been
classified according to the repayment terms of the new credit facility
which is due in July 1999.
(5) INCOME TAXES
The provision for income tax expense for the years ended March 31, 1997
and 1996 consists principally of state and local income taxes. Federal
income tax expense in 1997 and 1996 has been offset by the utilization of
net operating loss carryforwards available to the Company.
(Continued)
22
<PAGE>
(5), CONTINUED
Total income tax expense for fiscal 1997 and 1996 differed from the
amounts computed by applying the United States Federal income tax rate of
34% to income before income taxes as a result of the following:
<TABLE>
<CAPTION>
1997 1996
---- ----
<S> <C> <C>
Computed "expected" tax expense $ 115,000 75,000
State income taxes 31,474 17,895
Utilization of net operating loss carryforwards (115,000) (75,000)
--------------- ----------
$ 31,474 17,895
============== ==========
</TABLE>
The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets and deferred tax liabilities at March
31, 1997 are presented below:
<TABLE>
<CAPTION>
<S> <C>
Deferred tax assets:
Net operating loss carryforward $ 2,074,000
Inventory reserve and cost capitalization 833,000
Bad debts 34,000
---------------
Total gross deferred tax assets 2,941,000
Less valuation allowance 2,887,000
---------------
54,000
Deferred tax liabilities:
Depreciation 54,000
---------------
$ -
==============
</TABLE>
Primarily due to competitive pricing pressures in the Company's industry
and their potential impact on operating results, the Company does not
believe that it is more likely than not that it will utilize its deferred
tax assets. As a result, the Company established a valuation allowance
against its deferred tax assets at March 31, 1997. The amount of deferred
tax assets and corresponding valuation allowance decreased by $114,000
during the year ending March 31, 1997.
At March 31, 1997, the Company has a net operating loss carryforward
available for federal income tax purposes of approximately $6,100,000,
expiring by 2010. Pursuant to Section 382 of the Internal Revenue Code of
1986, as amended and Section 383 of the Code, utilization of net
operating loss carryforwards will be limited in future years due to a
prior year change in ownership of the Company.
(6) EMPLOYEE 401(K) PLAN
The Company established an employee 401(k) plan (the Plan) in fiscal
1996. The Plan is a defined contribution plan which is administered by
the Company. All regular, full-time
(Continued)
23
<PAGE>
(6), CONTINUED
employees are eligible for voluntary participation upon completing one
year of service and having attained the age of twenty-one. The plan
provides for growth in savings through contributions and income from
investments. It is subject to the provisions of the Employee Retirement
Income Security Act of 1974 (ERISA), as amended. Plan participants are
allowed to contribute a specified percentage of their base salary. The
Company retains the right to make optional contributions for any plan
year. The Company contributed $23,000 to the Plan for fiscal 1997 and
$15,000 for fiscal 1996.
(7) SHAREHOLDERS' EQUITY
In April 1996, the Company awarded 135,000 unregistered lettered shares
of the CompanyOs common stock to 19 employees, none of whom received more
than 15,000 shares. The employees must remain in the employ of the
Company until April 2000 to receive the shares. The fair value of the
shares granted of $29,295 is being amortized to selling, general and
administrative expenses ($7,161 in fiscal 1997) over the four year
vesting period.
Also, in the first quarter of 1997, the Company determined to make
available for purchase by all interested employees, up to a total of
150,000 unregistered shares of the Company's common stock at thirty-one
cents a share, a price substantially reflective of the then trading price
for registered shares. Pursuant thereto, 17 employees purchased a total
of 150,000 unregistered shares in the fiscal year ended March 31, 1997.
On August 1, 1995, the Company granted 400,000 shares of its common stock
to two directors. The fair value of the shares granted of $12,000 is
included in selling, general and administrative expenses for the year
ended March 31, 1996.
(8) CAPITAL LEASES
The Company finances the purchase of certain computer and telephone
equipment through capital leases. At March 31, 1997, equipment, furniture
and fixtures include $169,672 of net assets recorded under capital
leases. The Company's minimum future obligations under these capital
leases are as follows:
<TABLE>
<CAPTION>
<S> <C>
Fiscal 1998 $ 57,579
Fiscal 1999 57,579
Fiscal 2000 51,209
Fiscal 2001 32,724
---------
Total minimum lease payments 199,091
Less amount representing interest 30,087
Present value of net minimum lease
payments (including current portion
of $43,519) $ 169,004
=========
</TABLE>
(Continued)
24
<PAGE>
(9) COMMITMENTS
The Company leases certain premises and equipment under operating leases.
As of March 31, 1997, the Company has noncancellable lease commitments as
follows:
<TABLE>
<CAPTION>
Years ended March 31,:
<S> <C>
1998 $ 46,600
1999 26,700
2000 15,900
</TABLE>
Rent expense (for leased property and equipment) included in selling,
general and administrative expenses for the years ended March 31, 1997
and 1996 was $71,027 and $67,749, respectively.
25
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
ASTREX, INC.
(Registrant)
by /s/ Michael McGuire
---------------
Michael McGuire, Director,
President and Chief Executive Officer
(principal executive officer)
Dated: July 11, 1997
-------------
In accordance with the Exchange Act, this report has been signed below by
the following persons on behalf of the Registrant and in the capacities and on
the dates indicated.
/s/ John C. Loring /s/ Irene S. Marcic
-------------- ---------------
John C. Loring, Irene S. Marcic,
Chairman of the Board CFO, Vice President,
and Director Treasurer and Secretary
(principal financial
and accounting officer)
Dated: July 11, 1997
-------------
Dated: July 11, 1997
-------------
/s/ Howard Amster /s/ Mark Schindler
------------- --------------
Howard Amster, Director Mark Schindler, Director
Dated: July 11, 1997 Dated: July 11, 1997
------------- -------------
/s/ David S. Zlatin
---------------
David S. Zlatin, Director
Dated: July 11, 1997
-------------
26
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Consolidated Financial Statements at March 31, 1997 and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 2
<SECURITIES> 0
<RECEIVABLES> 1671
<ALLOWANCES> (87)
<INVENTORY> 3313
<CURRENT-ASSETS> 4967
<PP&E> 1090
<DEPRECIATION> (249)
<TOTAL-ASSETS> 5807
<CURRENT-LIABILITIES> 1394
<BONDS> 0
0
0
<COMMON> 54
<OTHER-SE> 3008
<TOTAL-LIABILITY-AND-EQUITY> 5807
<SALES> 14385
<TOTAL-REVENUES> 14385
<CGS> 10814
<TOTAL-COSTS> 10814
<OTHER-EXPENSES> 3052
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 182
<INCOME-PRETAX> 338
<INCOME-TAX> 31
<INCOME-CONTINUING> 307
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 307
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
