<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(MARK ONE)
/X/ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934. FOR THE QUARTERLY PERIOD
ENDED AUGUST 31, 1997.
/ / TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
EXCHANGE ACT
FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NO. 0-16401
------------------------
ADVANCED MATERIALS GROUP, INC.
(Exact name of small business issuer as specified in its charter)
NEVADA 33-0215295
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
20211 S. SUSANA ROAD, RANCHO DOMINGUEZ, CALIFORNIA 90221
(Address of principal executive offices)
(310) 537-5444
Issuer's telephone number
------------------------
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or such
shorter period that the issuer 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 class of
common equity, as of the latest practicable date:
COMMON STOCK, $.001 PAR VALUE, 8,515,619 SHARES AS OF SEPTEMBER 18, 1997.
- --------------------------------------------------------------------------------
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<PAGE>
PART I - FINANCIAL INFORMATION
ADVANCED MATERIALS GROUP, INC.
CONSOLIDATED BALANCE SHEETS
AUGUST 31, 1997 AND NOVEMBER 30, 1996
ASSETS
<TABLE>
<CAPTION>
1997 1996
------------- -------------
<S> <C> <C>
Current assets:
Cash and cash equivalents........................................................ $ 287,000 $ 2,639,000
Accounts receivable, net......................................................... 3,748,000 3,064,000
Inventories...................................................................... 2,571,000 2,110,000
Prepaid expenses and other....................................................... 602,000 506,000
------------- -------------
Total current assets........................................................... 7,208,000 8,319,000
Property and equipment, net........................................................ 2,271,000 2,279,000
Goodwill, net...................................................................... 2,383,000 2,564,000
Other assets....................................................................... 410,000 499,000
------------- -------------
$ 12,272,000 $ 13,661,000
------------- -------------
------------- -------------
</TABLE>
The accompanying notes are an integral part of this financial statement.
2
<PAGE>
ADVANCED MATERIALS GROUP, INC.
CONSOLIDATED BALANCE SHEETS
AUGUST 31, 1997 AND NOVEMBER 30, 1996
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
1997 1996
------------- -------------
<S> <C> <C>
Current liabilities:
Accounts payable................................................................. $ 2,353,000 $ 1,993,000
Current portion of long-term obligations......................................... 241,000 1,197,000
Other............................................................................ 835,000 863,000
------------- -------------
Total current liabilities...................................................... 3,429,000 4,053,000
Long-term liabilities:
Long-term debt................................................................... 3,501,000 2,888,000
Other............................................................................ 150,000 150,000
------------- -------------
Total liabilities.............................................................. 7,080,000 7,091,000
------------- -------------
Stockholders' equity:
Preferred stock - $.001 par value; 5,000,000 shares
authorized; no shares issued and outstanding................................... -- --
Common stock - $.001 par value; 25,000,000 shares
authorized; 10,500,619 and 10,458,742 shares issued and
outstanding at August 31, 1997 and November 30, 1996, respectively............. 11,000 10,000
Additional paid-in capital....................................................... 10,239,000 10,192,000
Unrealized holding gain on available-for-sale securities......................... -- 88,000
Accumulated deficit.............................................................. (1,558,000) (3,720,000)
------------- -------------
8,692,000 6,570,000
------------- -------------
Less:
Treasury stock, at cost (2,000,000 shares at August 31, 1997).................... (3,500,000) --
------------- -------------
Total stockholders' equity..................................................... 5,192,000 6,570,000
------------- -------------
$ 12,272,000 $ 13,661,000
------------- -------------
------------- -------------
</TABLE>
The accompanying notes are an integral part of this financial statement.
3
<PAGE>
ADVANCED MATERIALS GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED
AUGUST 31, AUGUST 31,
-------------------------- ----------------------------
1997 1996 1997 1996
------------ ------------ ------------- -------------
<S> <C> <C> <C> <C>
Net sales.............................................. $ 7,474,000 $ 4,593,000 $ 21,336,000 $ 12,257,000
Cost of sales.......................................... 5,591,000 3,785,000 15,973,000 10,254,000
------------ ------------ ------------- -------------
Gross profit........................................... 1,883,000 808,000 5,363,000 2,003,000
------------ ------------ ------------- -------------
Operating expenses:
Selling, general and administrative.................. 1,008,000 667,000 2,829,000 2,067,000
Intangible asset amortization........................ 78,000 74,000 235,000 221,000
------------ ------------ ------------- -------------
Total operating expenses........................... 1,086,000 741,000 3,064,000 2,288,000
------------ ------------ ------------- -------------
Income (loss) from operations.......................... 797,000 67,000 2,299,000 (285,000)
Other income and expenses:
Interest expense..................................... (85,000) (105,000) (264,000) (510,000)
Realized gain (loss) on sale of securities........... -- (27,000) 130,000 3,715,000
Realized gain on stock rights........................ -- -- -- 572,000
Other, net........................................... (1,000) 7,000 17,000 9,000
------------ ------------ ------------- -------------
Total other income and expenses.................... (86,000) (125,000) (117,000) 3,786,000
Income (loss) before income taxes and extraordinary
item................................................. 711,000 (58,000) 2,182,000 3,501,000
Income tax provision................................... (60,000) -- 20,000 157,000
------------ ------------ ------------- -------------
Net income (loss) before extraordinary item............ 771,000 (58,000) 2,162,000 3,344,000
------------ ------------ ------------- -------------
Extraordinary income on retirement of debt, net of
income tax of $18.................................... -- 508,000 -- 508,000
------------ ------------ ------------- -------------
Net income after income taxes and extraordinary item... $ 771,000 $ 450,000 $ 2,162,000 $ 3,852,000
------------ ------------ ------------- -------------
------------ ------------ ------------- -------------
Primary earnings (loss) per common share:
Earnings (loss) before extraordinary item............ $ 0.08 $ (0.01) $ 0.20 $ 0.32
Extraordinary item................................... -- 0.05 -- 0.05
------------ ------------ ------------- -------------
Income per share................................... $ 0.08 $ 0.04 $ 0.20 $ 0.37
------------ ------------ ------------- -------------
------------ ------------ ------------- -------------
Weighted average common shares outstanding............. 10,085,390 10,450,316 10,815,213 10,350,139
------------ ------------ ------------- -------------
------------ ------------ ------------- -------------
</TABLE>
The accompanying notes are an integral part of this financial statement.
4
<PAGE>
ADVANCED MATERIALS GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
THIRTEEN WEEKS ENDED AUGUST THIRTY-NINE WEEKS ENDED
31, AUGUST 31,
---------------------------- ----------------------------
1997 1996 1997 1996
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Cash flows from operating activities:
Net income.......................................... $ 771,000 $ 450,000 $ 2,162,000 $ 3,852,000
Adjustments to reconcile net income to net cash used
in operating activities:.......................... (47,000) (472,000) (221,000) (4,690,000)
Depreciation and amortization:...................... 264,000 231,000 781,000 689,000
Changes in operating assets and liabilities......... (484,000) 2,605,000 (838,000) (1,066,000)
------------- ------------- ------------- -------------
Net cash provided (used) in operating activities...... 504,000 2,814,000 1,884,000 (1,215,000)
------------- ------------- ------------- -------------
Cash flows from investing activities:
Purchases of property and equipment................. (107,000) (82,000) (542,000) (217,000)
Proceeds from sale of available-for-sale
securities........................................ -- 1,404,000 163,000 5,093,000
Other............................................... 10,000 (1,544,000) 35,000 300,000
------------- ------------- ------------- -------------
Net cash provided (used) by investing activities...... (97,000) (222,000) (344,000) 5,176,000
------------- ------------- ------------- -------------
Cash flows from financing activities:
Proceeds from issuance of common stock, net of
offering costs.................................... 30,000 -- 47,000 700,000
Purchases of treasury stock......................... (3,500,000) -- (3,500,000) --
Net change in borrowings............................ 467,000 31,000 726,000 (1,819,000)
Payments on debt.................................... -- (933,000) (988,000) (1,053,000)
Other............................................... (49,000) (61,000) (177,000) (91,000)
------------- ------------- ------------- -------------
Net cash used in financing activities................. (3,052,000) (963,000) (3,892,000) (2,263,000)
------------- ------------- ------------- -------------
Net change in cash and cash equivalents............... (2,645,000) 1,629,000 (2,352,000) 1,698,000
Cash and cash equivalents, beginning of period........ 2,932,000 135,000 2,639,000 66,000
------------- ------------- ------------- -------------
Cash and cash equivalents, end of period.............. $ 287,000 $ 1,764,000 $ 287,000 $ 1,764,000
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest............................................ $ 49,000 $ 127,000 $ 188,000 $ 556,000
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
Income taxes........................................ $ 190,000 $ 120,000 $ 269,000 $ 125,000
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
</TABLE>
The accompanying notes are an integral part of this financial statement.
5
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1) The accompanying unaudited interim financial statements have been prepared
pursuant to the rules and regulations for reporting on Form 10-QSB.
Accordingly, certain information and footnotes required by generally
accepted accounting principles for complete financial statements are not
included herein. The interim statements should be read in conjunction with
the financial statements and notes thereto included in the Company's latest
Annual Report on Form 10-KSB.
Interim statements are subject to possible adjustments in connection with
the annual audit of the Company's accounts for the full fiscal year 1997; in
the Company's opinion, all adjustments necessary for a fair presentation of
these interim statements have been included and are of a normal and
recurring nature.
2) In January 1997 the Company sold 50,000 shares of Innovative Technologies,
Ltd. for approximately $163,000. These securities had been accounted for as
available-for-sale securities in accordance with Statement of Financial
Accounting Standards No. 115. As a result of the transaction the Company
recorded a gain of $130,000 in the first quarter.
3) Legal proceedings to which the Company is a party are discussed in Part 1
Legal Proceedings, in the Annual Report on Form 10-KSB.
4) On July 22, 1997, the Company repurchased 2,000,000 shares of common stock,
for $3,500,000, from Trilon Dominion Partners, LLC ("Trilon"). Trilon's
remaining holdings, after the repurchase, were 1,600,807 shares of common
stock and warrants for an additional 965,000 shares of common stock. This
represented a 23.2% ownership position, on a fully diluted basis.
5) Earnings per common share equals net earnings divided by the weighted
average number of common shares outstanding, after giving effect to dilutive
stock options and warrants. Calculations for the three-month and
year-to-date periods ended August 31, 1997 include the weighted effect of
the 2,000,000 share repurchase completed on July 22, 1997. The 7 1/2%
convertible debentures were determined, at the time of issuance, to not be
common stock equivalents, and accordingly, are not included in earnings per
share calculations for either period. Primary and fully diluted earnings per
share for the three-month and year-to-date periods ended August 31, 1997 and
August 31, 1996 were approximately the same.
6) During 1995 the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 123 ("SFAS 123"), "Accounting for
Stock-Based Compensation," which defines a fair value based method of
accounting for stock-based options. However, SFAS 123 allows an entity to
continue to measure compensation cost related to stock and stock options
issued to employees using the intrinsic method of accounting prescribed by
Accounting Principles Board Opinion No. 25 ("APB 25"), "Accounting for Stock
Issued to Employees." Entities electing to remain with the accounting method
of APB 25 must make pro forma disclosures of net income and earnings per
share, as if the fair value method of accounting defined in SFAS 123 had
been applied. The Company has elected to account for its stock-based
compensation to employees under APB 25.
Pro forma information regarding net income is required by SFAS 123, and has
been determined as if the Company had accounted for its employee stock
options under the fair value method pursuant to SFAS 123, rather than the
method pursuant to APB 25 discussed above. The fair value for these options
was estimated at the date of grant using a Black-Scholes option pricing
model with the following assumptions: risk-free interest rates of 6.5%;
dividend yields of 0.0%; volatility factors of the expected market price of
the Company's common stock of 67%; and expected terms of five years.
The Black-Scholes valuation model was developed for use in estimating the
fair value of traded options, which have no vesting restrictions and are
fully transferable. In addition, option valuation models require the input
of highly subjective assumptions including the expected stock price
volatility.
6
<PAGE>
Because the Company's employee stock options have characteristics
significantly different from those of traded options, and because changes in
the subjective input assumptions can materially affect the fair value
estimate, in management's opinion, the existing models do not necessarily
provide a reliable single measure of the fair value of its employee stock
options.
For the purposes of pro forma disclosure, the estimated fair value of the
options is amortized to expenses over the options' vesting period. The
Company's pro forma information is as follows:
<TABLE>
<CAPTION>
THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED
AUGUST 31, AUGUST 31,
------------------------ --------------------------
1997 1996 1997 1996
---------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
Pro forma net income:
Net income, as reported............................... $ 771,000 $ 450,000 $ 2,162,000 $ 3,852,000
Compensation expense under SFAS 123................... 205,000 13,000 603,000 70,000
---------- ------------ ------------ ------------
Cash and cash equivalents, end of period.............. $ 566,000 $ 437,000 $ 1,559,000 $ 3,782,000
---------- ------------ ------------ ------------
---------- ------------ ------------ ------------
Pro forma net income per share........................ $ 0.06 $ 0.24 $ 0.14 $ 0.37
---------- ------------ ------------ ------------
---------- ------------ ------------ ------------
</TABLE>
Included in the thirteen and thirty-nine week periods ended August 31, 1997
are he pro rata vesting effects of 955,271 options to purchase the Company's
stock issued during fiscal 1997 and 1996, respectively. Included in the
thirteen and thirty-nine week periods ended August 31, 1996 are the pro rata
vesting effects of 225,000 options to purchase the Company's issued during
fiscal 1996. Options to purchase the Company's common stock issued to
directors and key employees generally vest from the date of grant to three
years from the date of grant.
(7) The Financial Accounting Standards Board has issued Statement of Financial
Accounting Standards No. 128, "EARNINGS PER SHARE" ("SFAS 128"). SFAS 128 is
primarily a disclosure standard which requires public companies to present
basic earnings per share (EPS) and, if applicable, diluted earnings per
share, instead of primary and fully diluted EPS. SFAS 128 is effective for
financial statements issued for periods ending after December 15, 1997. The
effect of adopting SFAS 128 has not been determined by management.
7
<PAGE>
MANAGEMENT'S ANALYSIS OF INTERIM FINANCIAL INFORMATION
RESULTS OF OPERATIONS
FY 97 CURRENT THIRTEEN WEEKS VERSUS FY96
The Company achieved record sales for the current thirteen weeks of fiscal
1997. Sales were $7,474,000 compared to $4,593,000 for the thirteen weeks of
fiscal 1996, an increase of 62.7%. The increase was driven by a volume increase
from the Company's sales of products introduced in the second and third quarters
of fiscal 1996. The two new products, sold to computer printer makers, accounted
for approximately $2,280,000 of the volume increase. Revenues from the company's
new facility in Denver, Colorado accounted for $210,000. In addition, volume
increases in the medical and aerospace product lines added approximately
$400,000.
Gross profit was favorably impacted, as a result of the volume increases.
Gross profit for 1997 increased by 133%, to $1,883,000, over the year ago
period. Volume increases created production efficiency gains as a result of
longer factory production runs.
Operating expenses were $1,008,000 in fiscal 1997 versus $667,000 in fiscal
1996. As a percent of sales, fiscal 1997 was 13.5% compared to 14.5% in fiscal
1996. Operating expenses were higher in fiscal 1997 as a result of headcount
increases in sales and engineering, higher commission expense associated with
increased sales levels and the Company's incorporation of the Denver, Colorado
acquisition into its operations.
Interest expense decreased by 19%, or $20,000, in fiscal 1997 as a result of
the Company's balance sheet restructuring in fiscal 1996 and 1997.
Net income for fiscal 1997 was $771,000, or $0.08 per share, compared to
$450,000, or $0.04 per share. Net income for fiscal 1996 included a one-time
gain of $508,000 from the retirement of debt and a $27,000 loss on sales of
securities. Excluding the one-time net gain, the Company would have posted a pro
forma net loss of $31,000, an improvement of $802,000 in year-to-year results.
FY 97 CURRENT THIRTY-NINE WEEKS VERSUS FY96
The Company achieved record sales for the thirty-nine weeks of fiscal 1997.
Sales were $21,336,000 compared to $12,257,000 in fiscal 1996, an increase of
74.1%. The increase was driven by a volume increase from the Company's sales of
products introduced in the second and third quarters of fiscal 1996. The two new
products, sold to computer printer makers, accounted for approximately
$7,760,000 of the volume increase. Revenues from the company's new facility in
Denver, Colorado accounted for $690,000. In addition, volume increases in the
medical and aerospace product lines added approximately $650,000.
Gross profit was favorably impacted, as a result of the volume increases
from the new product introductions. Gross profit for 1997 increased by 168%, to
$5,363,000, over the year ago period. Volume increases created production
efficiency gains as a result of longer factory production runs.
Operating expenses were $2,829,000 in fiscal 1997 versus $2,067,000 in
fiscal 1996. As a percent of sales, fiscal 1997 was 13.3% compared to 16.9% in
fiscal 1996. Operating expenses were higher in fiscal 1997 as a result of
headcount increases in sales and engineering, higher commission expense
associated with increased sales levels and the Company's incorporation of the
Denver, Colorado acquisition into its operations.
Interest expense decreased by 48.2%, or $246,000, in fiscal 1997 as a result
of the Company's balance sheet restructuring in fiscal 1996 and 1997.
Net income for fiscal 1997 was $2,162,000, or $0.20 per share, compared to
$3,852,000, or $0.37 per share. Fiscal 1997 results included a one-time
transaction relating to the sale of 50,000 shares of IT stock in
8
<PAGE>
January 1997. Excluding this one-time transaction the Company, would have had
pro forma net income of $2,032,000 or $0.19 per share.
Net income for fiscal 1996 included one-time gains for sales of securities
totaling $3,715,000, gain on stock rights of $572,000 and a one-time gain of
$508,000 from the retirement of debt. Excluding these one-time gains, the
Company would have posted a pro forma net loss of $943,000, or $0.09 per share.
Comparing pro forma net income for fiscal 1997, excluding one-time items,
compared to fiscal 1996, excluding one-time items, fiscal 1997 pro forma net
income was $2,032,000 versus a loss $943,000 in fiscal 1996. This was an
improvement of $2,975,000 in year-to-year results.
The Company has not received any notice of investigation, claim or
proceeding relating environmental liability nor is the Company aware of any
environmental litigation, investigation or unasserted claim involving the
Company or its subsidiaries.
LIQUIDITY AND CAPITAL RESOURCES
Company operations generated $988,000 and $2,722,000 of cash during the
current thirteen weeks and thirty-nine weeks of fiscal 1997, respectively. The
Company used cash from operations and the sales of securities to fund net
additions of $741,000 in accounts receivable and $526,000 in inventory. The
growth of accounts receivable and inventory is directly attributable to sales
volume increases.
The Company made capital purchases of $107,000 and $542,000 during the
current thirteen weeks and thirty-nine weeks of fiscal 1997, respectively. The
capital expenditures added necessary capacity for die cutting operations in
response to volume increases. At the end of the period, the Company had
commitments for capital expenditures totaling approximately $200,000.
On July 22, 1997, the Company repurchased 2,000,000 shares of common stock,
for $3,500,000, from Trilon Dominion Partners, LLC ("Trilon"). The transaction
was completed with available cash and increased borrowing from the Company's
credit line with Wells Fargo.
The Company had approximately $287,000 of cash at quarter-end, which
consisted primarily of investments in money market funds. The Company's
operating credit line with Wells Fargo has current availability, as of September
19, 1997, of $3,167,000 with $1,498,000 currently outstanding. The Company
anticipates that existing cash and cash from operations, and existing lines of
credit, will supply sufficient cash for working capital requirements, capital
expenditures and debt payments for the next twelve months.
BUSINESS OUTLOOK
The following statements are based on current expectations. These statements
are forward-looking and actual results may differ materially.
Advanced Materials Group has shifted its marketplace strategy to place
primary marketing emphasis on large volume and longer run products. The
Company's operations in the first half of fiscal 1997 showed strong results
based on this shift in emphasis in terms of sales mix and gross margins. Based
on existing program orders and commitments, the Company anticipates sales growth
in excess of 55%, i.e. an estimated sales range above $28.4 million for fiscal
1997. Current sales trends and projections indicate that the Company should
continue to experience strong growth in fiscal 1998, with revenue increases of
more than 20% anticipated.
The Company is proceeding with its expansion plans to the Pacific Rim and
Great Britain. This is in response to requests from some of Advanced Materials'
major customers who conduct operations in Europe and Asia and would like the
Company to establish a presence proximal to their operations. Advanced Materials
management believes the establishment of such operations would be highly
beneficial to the Company in that it would result in a greater volume of
business from the aforementioned customers
9
<PAGE>
while at the same time positioning it to take advantage of additional growth
opportunities in Southeast Asia and Europe.
Separately, ongoing testing on the waterproof, breathable coating system
that Advanced Materials Group has been developing jointly in the United Kingdom
with Innovative Technologies, plc remains inconclusive, and the Company is
planning to conduct follow-up tests in fiscal 1997.
The Private Securities Litigation Reform Act of 1995 provides for a new
"safe harbor" for forward looking statements to encourage Companies to provide
prospective information about their companies without fear of litigation so long
as those statements are identified as forward looking and are accompanied by
meaningful cautionary statements identifying important factors that could cause
actual results to differ materially from those projected in the statement. The
Act only became law in late December 1995 and, except for the Conference Report,
no official interpretations of the Act's provisions have been published.
Accordingly, the Company has identified important factors, in its recently filed
10-KSB, which could cause the Company's actual financial results to differ
materially from any such results which might be projected, forecast, estimated
or budgeted by the Company in forward looking statements.
10
<PAGE>
PART II - OTHER INFORMATION
ITEM 5. OTHER INFORMATION
On September 15, 1997, an investor group purchased all the remaining common
stock and warrants held by Trilon Dominion Partners, LLC. Dito-Caree, LP
("Caree"), a Nevada limited partnership, acquired 900,000 shares of common stock
and warrants to acquire an additional 430,096 shares. On a fully diluted basis
Caree controls 14.9%. The Lenawee Trust ("Lenawee") acquired 453,807 shares of
common stock and warrants to acquire an additional 416,867 shares. On a fully
diluted basis Lenawee controls 9.7%.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
<TABLE>
<S> <C> <C> <C>
(a) Exhibit 99.1 -- Stock Repurchase Agreement dated July 22, 1997,
between the Registrant and Trilon.
(b) Exhibit 99.2 -- Press Release dated July 23, 1997.
(c) Reports -- None
</TABLE>
11
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Dated: September 24, 1997 ADVANCED MATERIALS GROUP INC.
By: /s/ J. DOUGLAS GRAVEN
-----------------------
J. Douglas Graven
Vice President and CFO
(Principal Financial
Officer and
Principal Accounting
Officer)
12
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> NOV-30-1997
<PERIOD-START> DEC-01-1996
<PERIOD-END> AUG-31-1997
<CASH> 287
<SECURITIES> 0
<RECEIVABLES> 3,855
<ALLOWANCES> 107
<INVENTORY> 2,571
<CURRENT-ASSETS> 7,208
<PP&E> 4,652
<DEPRECIATION> 2,381
<TOTAL-ASSETS> 12,272
<CURRENT-LIABILITIES> 3,429
<BONDS> 535
0
0
<COMMON> 11
<OTHER-SE> 5,181
<TOTAL-LIABILITY-AND-EQUITY> 12,272
<SALES> 21,336
<TOTAL-REVENUES> 21,336
<CGS> 15,973
<TOTAL-COSTS> 15,973
<OTHER-EXPENSES> 2,910
<LOSS-PROVISION> 7
<INTEREST-EXPENSE> 264
<INCOME-PRETAX> 2,182
<INCOME-TAX> 20
<INCOME-CONTINUING> 2,162
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,162
<EPS-PRIMARY> 0.20
<EPS-DILUTED> 0.20
</TABLE>
