_________________________________________________________________________
_
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_________________________________________________________________________
_
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED JUNE 28, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____ to _____
Commission file number 0-16473
SSE TELECOM, INC.
(Exact name of registrant as specified in its charter)
Delaware 52-1466297
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
8230 Leesburg Pike, Suite 710
Vienna, Virginia 22182
(Address of principal
executive office)
Registrant's telephone number, including area code:
(703) 442-4503
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 ____
As of August 8, 1997, the following number of shares of each of the
issuer's classes of common stock were outstanding:
Common Stock 5,955,187
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION
Item 1.
Financial Statements
Page
Consolidated Statements of Operations for the
three months and nine months ended June 28, 1997
and June 29, 1996 (unaudited) 3
Consolidated Balance Sheets as of June 28, 1997 (unaudited)
and September 28, 1996 4
Consolidated Statements of Cash Flows
for the nine months ended June 28, 1997
and June 29, 1996 (unaudited) 5
Notes to Consolidated Financial Statements 6-7
Item 2.
Management's Discussion and Analysis of Financial Condition and
Results of Operations 8-11
PART II - OTHER INFORMATION
Item 6.
Exhibits and Reports on Form 8-K 12-15
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
SSE Telecom, Inc.
Condensed Consolidated Statements of Operations (Unaudited)
For The Three Months and Nine Months Ended June 28, 1997 and June 29,
1996
(dollars and shares in thousands, except per share data)
Three Months Nine Months
Ended Ended
6/28/97 6/29/96 6/28/97 6/29/96
Revenue $9,790 $12,606 $33,252 $34,557
Cost of revenue 10,096 9,592 27,250 24,804
Gross margin (306) 3,014 6,002 9,753
Expense
Research and development 1,358 1,238 3,859 2,858
Marketing, general and 3,376 2,243 7,491 5,589
administrative
Amortization - intangible 49 48 129 78
Write off of acquired in- -- -- -- 1,404
process R&D
Acquisition-related asset -- -- -- 1,104
write-off
Restructuring charges 850 -- 850 --
Operating loss (5,939) (515) (6,327) (1,280)
Net interest expense 112 139 373 278
Gain on sale of investment, -- -- (2,642) --
net
Other expense income 9 58 (32) 34
Loss before income taxes (6,060) (712) (4,026) (1,592)
Benefit for income taxes (2,121) (214) (1,409) (503)
Net loss $(3,939 $(498) $(2,617) $(1,089)
Primary loss per share $(0.67) $(0.09) $(0.45) $(0.20)
Shares used in computing 5,918 5,515 5,831 5,406
primary loss per share
The Notes to Consolidated Financial Statements are an integral part
of these statements.
SSE Telecom, Inc.
Condensed Consolidated Balance Sheets
(dollars in thousands)
June 28, 1997 September 28,
1996
Assets (unaudited)
Current Assets
Cash and cash equivalents $1,611 $1,241
Accounts receivable, net 9,021 11,041
Inventories 10,863 12,024
Other current assets 2,702 3,314
Total current assets 24,197 27,620
Net property, equipment and 4,311 3,501
leasehold improvements
Long-term investments 12,150 22,376
Intangible assets 490 611
Other assets 95 1,155
Total assets $41,243 $55,263
Liabilities and Stockholders'
Equity
Current Liabilities
Accounts payable $4,318 $4,275
Short-term debt 4,595 3,342
Accrued salaries and employee 1,503 1,447
benefits
Other liabilities 970 1,830
Total current liabilities 11,386 10,894
Deferred tax liabilities 3,562 8,310
Convertible notes payable 4,159 4,771
Long-term debt 979 --
Stockholders' Equity
Common stock $.01 par value 60 59
Additional paid in capital 12,473 12,276
Retained earnings 4,108 6,725
Net unrealized gain on available 12,730
for sale 6,297
investments
Treasury stock (1,781) (502)
Total stockholders' equity 21,157 31,288
Total liabilities &
stockholders' equity $41,243 $55,263
The Notes to Consolidated Financial Statements are an
integral part of these statements.
SSE Telecom, Inc.
Consolidated Statements of Cash Flows (unaudited)
For the nine months ended June 28, 1997, and June 29, 1996
(dollars in thousands)
June 28, June 29,
1997 1996
Cash provided by operating activities:
Net (loss) $(2,617) $(1,089)
Adjustments to reconcile net (loss) to net
cash (used) by operating activities:
Depreciation and amortization 1,147 813
Non-cash portion of consolidation charge 2,100 --
Non-cash portion of special warranty reserve 1,350 --
Acquisition related charges -- 2,509
Gain on sale of Echostar stock (2,642) --
Deferred interest expense 176 454
Changes in operating assets and liabilities:
Accounts receivable 1,670 (3,174)
Inventories 260 (3,208)
Other current assets 612 (608)
Accounts payable 43 303
Other accrued liabilities (2,486) 91
Net cash (used) by operating activities (387) (3,909)
Cash provided (used) by investing activities:
Purchases of equipment (2,346) (1,398)
Proceeds from sale of Echostar stock 2,835
--
Purchases of short-term investments -- (8,826)
Proceeds from sales of short-term investments -- 13,145
Acquisition of net assets of Fairchild Data -- (4,400)
Purchase of equity interest in Media4 (95) --
Other assets -- 3
Net cash provided (used) by investing 394 (1,476)
activities
Cash provided by financing activities:
Net borrowings under operating lines of credit 1,625 3,280
Net borrowings under equipment note 607 -
Net payments on convertible notes payable (675) -
Proceeds from issuance of common stock 197 191
Treasury stock purchases (1,279) (825)
Payments of deferred interest (112) ( 28)
Net cash provided by financing activities 363 2,618
Net increase (decrease) in cash and cash 370 (2,767)
equivalents
Cash and cash equivalents beginning of period 1,241 3,548
Cash and cash equivalents end of period $ 1,611 $ 781
Non-cash transactions:
Acquisition of net assets of Fairchild Data by -- $1,109
issuance of common stock and warrants
Conversion of Media4, Inc. convertible 175 --
debenture into equity
Conversion of capital line of credit to a term $1,036 --
loan
The Notes to Consolidated Financial Statements are an integral part of
these statements.
SSE TELECOM, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. CONSOLIDATED FINANCIAL STATEMENTS
The financial information at June 28, 1997, and for the three and nine
month periods ended June 28, 1997 and June 29, 1996, is unaudited. In
the opinion of management, all adjustments necessary to present fairly
the financial position, results of operations and changes in cash flows
for the interim periods have been made.
Certain information and footnote disclosures normally included in the
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. It is suggested
that these consolidated financial statements be read in conjunction with
the financial statements and notes thereto included in the Company's
September 28, 1996 Form 10-K. The results of operations for the three
and nine month periods ended June 28, 1997 are not necessarily indicative
of the operating results for the full year.
2. CONSOLIDATION AND OTHER CHARGES
The Company approved a plan to consolidate its manufacturing operation
and transfer its satellite modem manufacturing operation from its
facility in Scottsdale, Arizona to the Company's Fremont, California
facility. A charge of $2.1 million before tax for this consolidation is
reflected in the results of operations for the three and nine month
period ended June 28, 1997 and reflected as: $900,000 in cost of revenue,
$350,000 in marketing, general and administrative, and $850,000 as
restructuring charges. The restructuring amount includes $193,000 for
employee severance of which the balance is expected to be paid in early
fiscal year 1998, $40,000 for the facility lease in Scottsdale, $100,000
reserve for certain liabilities, $100,000 for a write off on leasehold
improvements and capital assets, and $417,000 write down of intangibles
associated with the acquisition of Fairchild Data. The costs associated
with this consolidation are estimates and actual amounts may differ.
3. CONTINGENT LIABILITIES
A special warranty cost of $1.8 million before tax is reflected in the
results of operations for the quarter ended June 28, 1997. This charge,
of which $1.35 million remains accrued as of June 28, 1997, reflects
costs incurred and estimated to be incurred for retrofitting certain of
the Company's satellite transceiver products. The problem stems from the
recent identification by one of the Company's vendors that a component
sold to the Company and used in many of the transceivers produced in the
past year was found to be defective in certain cases. The warranty cost
accrued is an estimate, actual results could differ materially.
4. INVENTORIES
Inventories consist of manufacturing raw materials, work-in process and
finished goods. Inventories are valued at the lower of cost or market.
Cost is based on the average cost method, which approximates actual cost
on the first-in, first-out ("FIFO") basis. At June 28, 1997 and
September 28, 1996, inventories consisted of:
(in thousands) June 28, 1997 September 28,
1996
(unaudited)
Manufacturing raw $6,876 $5,693
materials
Work-in-process 2,290 6,016
Finished goods 1,697 315
Total $10,863 $12,024
5. CONVERTIBLE NOTES PAYABLE
At June 28, 1997, the Company had an outstanding balance of $4.08 million
on its 6 1/2% convertible subordinated debentures due March 1, 2001,
payable to Echostar Communication Corporation. During the first nine
months of fiscal 1997 the Company repaid $0.5 million of the debenture
principle and $0.2 million of debenture interest.
6. NET LOSS PER SHARE
Net loss per share is computed using the weighted average number of
shares outstanding and excludes common equivalent shares outstanding as
they are anti-dilutive.
7. FINANCIAL ACCOUNTING STANDARD NO. 128
The Financial Accounting Standards Board has issued Statement of
Financial Accounting Standards No. 128, "Earnings per Share" (SFAS 128).
SFAS 128 replaces primary earnings per share ("EPS") with basic EPS,
which excludes dilutive common equivalent shares, and requires
presentation of both basic and diluted EPS on the face of the statements
of income. Diluted EPS is computed similarly to the current fully
diluted EPS. SFAS 128 is effective for financial statements issued for
periods ending after December 15, 1997, and requires restatement of all
prior-period EPS data presented. The computed basic loss per share is
not materially different to the loss per share as reported for the three
and nine month periods ended June 28, 1997 and June 29, 1996,
respectively. The computed diluted earnings per share is not expected to
differ materially from fully diluted earnings per share.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Information contained in this Form 10-Q that is not historical fact,
including any statements about expectations for the fiscal year and
beyond, involve certain risks and uncertainties. This Form 10-Q
contains "forward-looking" statements: within the meaning of the Private
Securities Litigation Reform Act of 1995, many of which can be identified
by the use of forward-looking terminology such as "may", "will",
"believe", "expect", "anticipate", "estimate", "plan", "intend", or
"continue" or the negative thereof or other variations thereon or
comparable terminology. There are a number of important factors with
respect to such forward-looking statements that could cause actual
results to differ materially from those contemplated in such forward-
looking statements. Numerous factors, such as economic and competitive
conditions, incoming order levels, timing of product shipments, product
margins, new product development, and reliance on key vendors and
consumers and international sales could cause actual results to differ
from those described in these statements and current and prospective
investors and stockholders should carefully consider these factors in
evaluating these forward-looking statements.
The following table sets forth, for the three and nine months ended on
the dates indicated, certain income and expense items expressed as an
approximate percentage of the Company's total revenues:
Three months ended Nine months ended
June June June June
28, 29, 28, 29,
1997 1996 1997 1996
Revenue 100% 100% 100% 100%
Gross margin (3%) 24% 18% 28%
Research and development expense 14% 10% 12% 8%
Marketing, general and administrative 35% 18% 23% 16%
expenses
Write off of acquired asset in - - - 4%
process R & D
Acquisition-related asset write-off - - - 4%
Restructuring charges 9% - 2% -
Operating loss (61%) (4%) (19%) (4%)
Net interest expense 1% 2% 1% 1%
Gain on sale of investments, net - - (8%) -
Loss before income taxes (62%) (6%) (12%) (5%)
Benefit for income taxes (22%) (2%) (4%) (2%)
Net loss (40%) (4%) (8%) (3%)
Overview
The results in the table above include significant items which are
discussed below. These significant items make comparison on a percentage
basis between the current and prior fiscal year difficult.
On January 28, 1996, the Company acquired the business and assets of
Fairchild Data (the Company's SSE Datacom subsidiary), a manufacturer of
satellite modems and related earth station products. Comparisons between
the nine month results of fiscal year 1997 and 1996 on an absolute and
percentage change basis are affected by the results of the Company's SSE
Datacom subsidiary.
In an effort to maximize economies of scale the Company approved a plan
to consolidate its manufacturing operation and transfer its satellite
modem manufacturing operation from its facility in Scottsdale, Arizona to
the Company's Fremont, California facility. As a result of this move the
Company recognized $2.1 million in charges for the period ended June 28,
1997. The Company remains committed to its digital product lines
including its various modem product offerings. The costs associated with
this consolidation are estimates and actual amounts may differ.
A special warranty cost of $1.8 million before tax is reflected in the
results of operations for the quarter ended June 28, 1997. This charge,
of which $1.35 million remains accrued as of June 28, 1997, reflects
costs incurred and estimated to be incurred for retrofitting certain of
the Company's satellite transceiver products. The problem stems from the
recent identification by one of the Company's vendors that provides a
component used in many of the transceivers produced in the past year that
the component was found to be defective in certain cases. The warranty
cost accrued is an estimate, actual results could differ materially. The
Company is in discussion with the vendor and believes that the Company
may be entitled to recover costs related to the retrofit program.
However, the Company is currently unable to estimate such potential
recovery, if any.
Revenue. Sales were $9.8 million for the third quarter of fiscal 1997 as
compared to $12.6 million for the same period in fiscal 1996,
representing a decrease of 22%. Sales for the first nine months of
fiscal 1997 were $33.3 million as compared to $34.6 million for the same
period in fiscal 1996, representing a decrease of 4%. The decrease in
the third quarter of 1997 reflects lower than anticipated sales largely
as a result of the component problem reserved for and a delay in
modifying a product pursuant to a customers requirement. The yields on
the products built with the defective component were affected and was a
major factor in the decrease in revenue. To a lesser degree the timing
of orders during the quarter, including certain large orders, affected
the ability of the Company to react in time to ship within the third
quarter of 1997.
Gross Margin. Gross margin was $(300,000) or (3%) of sales in the third
quarter of fiscal 1997, compared to $3.0 million or 24% of sales for the
third quarter of 1996. Gross margin for the first nine months was $6.0
million or 18% of sales in fiscal 1997 versus $9.8 million or 28% in
fiscal 1996. The decline in gross margin percentage from 1996 was due
primarily to $2.6 million of costs associated with the special warranty
cost mentioned above and the write off of certain inventory associated
with consolidating the manufacturing operations. To a lesser extent the
margin was impacted by lower volume which impacted manufacturing
efficiencies as well as by continued pricing pressures. Excluding the
special warranty and consolidation costs, the Company would have achieved
a $2.3 million gross margin or 23% of sales for the three months ended
June 28, 1997. For the nine months ended June 28, 1997 excluding the
special warranty and consolidation costs, gross margin would have been
$8.6 million or 26% of sales.
Research and Development. Research and development expenses grew by 10%
to $1.4 million or 14% of sales for the third quarter of fiscal 1997 from
$1.2 million or 10% of sales for the third quarter of fiscal 1996.
Research and development expense grew 35% to $3.9 million or 12% of sales
for the first nine months of fiscal 1997 from $2.9 million or 8% of sales
in fiscal year 1996. The increase reflects the continuing support of
large programs including support for the FAATSAT program with MCI, and
the DDT program with the U.S. Government as well as the development of
advanced modem products at SSE Datacom.
Marketing, General and Administrative. Marketing, general and
administrative expenses were $3.4 million or 35% of sales in the third
quarter of fiscal 1997 as compared to $2.2 million or 18% of sales for
the same period in fiscal 1996. For the first nine months of fiscal 1997
expenses were $7.5 million or 23% of sales as compared to $5.6 million or
16% of sales in fiscal 1996. Included in marketing, general and
administrative expenses for the quarter ended June 28, 1997 is
approximately $300,000 of management compensation charges for the
Company's former President, and $350,000 of bad debt expense for one of
the Company's representatives who is challenging the Company's right to
cancel the sales representative agreement and is withholding payment on
outstanding sales invoices.
Amortization of Intangible Assets. Amortization expense associated with
intangible assets were $49,000 and $129,000 for the three and nine months
ended June 28,1997.
Consolidation Charges. The Company recorded $2.1 million of
consolidation charges in the third quarter of fiscal year 1997, of which
$850,000 was identified as restructuring charges. The restructuring
amount consists of $193,000 for employee severance of which the balance
is expected to be paid in early fiscal year 1998, $40,000 for the
facility lease in Scottsdale, $100,000 reserve for certain liabilites,
$100,000 for the write off of leasehold improvements and capital assets,
and $417,000 write down for certain intangibles associated with the
acquisition of Fairchild Data.
Net Interest Expense. Net interest expense was $112,000 in the third
quarter of fiscal 1997. During the same period of last fiscal year, net
interest expense was $139,000. The decrease in interest expense reflects
the reduction in principal amount of the Company's 6.5% subordinated
debenture held by Echostar Communication Corporation offset partially by
increased interest expense associated with a larger short term debt
balance. The debenture principal was reduced from $8.8 million in fiscal
year 1996 to $4.1 million in fiscal year 1997.
Net (Gain) on Sale of Investments. During the first nine months of
fiscal 1997 the Company realized a gain of $2.6 million on sales of
92,937 shares of Echostar Communication Corporation (NASDAQ: DISH) common
stock. The proceeds generated from these sales were used for repayment
of convertible debentures payable to Echostar, purchase of treasury
stock, and to fund operating expenditures. As of June 28, 1997 the
Company has a total of 709,780 shares of Echostar common stock.
Provision for Income Taxes. The effective tax benefit rate was 35% for
the third quarter and first nine months of fiscal year 1997 and 35% and
32% for the third quarter and the first nine months of fiscal year 1996,
respectively.
Backlog. The Company's total backlog was $9.4 million at the end of the
third quarter of fiscal year 1997, as compared to backlog of $8.9 million
at the end of fiscal year 1996. Management expects substantially all
backlog to be delivered in fiscal 1997. Timing differences from quarter
to quarter as to the receipt of large orders and changes in factory
production make meaningful quarter to quarter comparisons of backlog
difficult.
LIQUIDITY AND CAPITAL RESOURCES
At June 28, 1997, the Company had working capital of $12.8 million,
including $1.6 million in cash and cash equivalents, compared with
working capital of $16.7 million, including cash and cash equivalents of
$1.2 million at September 28, 1996.
Net cash used by operating activities was $387,000 during the first nine
months of fiscal 1997 as compared to net cash used of $3.9 million in the
similar period of fiscal 1996. Cash used by operations was primarily due
to the net gain on sale of Echostar stock offset by the restructuring and
special warranty expense, depreciation expense and changes in operating
assets and liabilities.
The Company's investing activities provided $394,000 during the first
nine months of fiscal 1997 as compared to cash used of $1.5 million
during the same period in fiscal year 1996. During the first nine months
of fiscal 1997 $2.8 million was realized from the sale of Echostar shares
which offset capital expenditures of $2.3 million. The Company
participated in Media4's equity funding of $2.4 million by investing an
additional $100,000 during the second quarter of fiscal year 1997. In
addition, the Company converted $175,000 of Media4's 7% convertible
debentures into equity.
The Company's financing activities provided $363,000 during the first
nine months of fiscal 1997 as compared to net cash provided of $2.6
million during the first nine months of fiscal year 1996. The Company
borrowed $2.2 million from its operating line of credit, reduced
convertible debentures by $675,000, made payments of deferred debenture
interest of $112,000 and purchased 167,600 shares of treasury stock for
$1.3 million.
At June 28, 1997 the Company's principal sources of liquidity consisted
of $1.6 million in cash, and a bank line of credit. At June 28, 1997,
$4.6 million was outstanding under the operating line of credit. The
equipment line of credit was converted to a 3 year term loan with a
principal balance as of June 28, 1997 of $979,000. The lines of credit
and term loan require the Company to be in compliance with certain
financial covenants. As of June 28, 1997 the Company was not in
compliance with certain covenants and has received an extension and
waiver on the covenants of its line of credit and term loan. This
extension and waiver expires on August 31, 1997. The Company is in
negotiations with the bank on its credit facility and plans to renew this
lines of credit in fiscal year 1997. In addition, the Company has
obtained capital lease financing with a limit of up to $700,000 for
capital equipment.
A principal source of capital, the value of the Company's holding of
Echostar common stock, is subject to the volatility of the stock price.
On September 29, 1997 the Company held 802,717 shares of Echostar stock
with a value of $22 million and an unrealized gain of $13 million
reported, net of tax, in stockholders' equity. On June 28, 1997 the
Company held 709,780 shares of Echostar stock with a value of $11 million
and an unrealized gain of $6 million reported, net of tax, in
stockholders' equity.
The Company's capital requirements could change in the event of factors
such as lower than anticipated demand for the Company's products, the
uncertainty of the cost associated with the special warranty expense or
unanticipated limitations on debt financing. The Company believes that
its current cash position, funds generated from operations, funds
available from its equity holdings in Echostar common stock and its lines
of credit will be adequate to meet its requirements for working capital,
capital expenditures, debt services and external investment for the
foreseeable future. Due to certain constraints on the ability to sell
Echostar shares and potential volatility of the value of the stock, there
could be a significant reduction in funding available from the
liquidation of Echostar stock. If these events occur, the Company may be
required to raise additional capital using other means to meet all of its
needs.
PART II - OTHER INFORMATION
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits included herein (numbered in accordance with Item 601 of
Regulation S-K)
Exhibit Number Description Sequential Page
Number
11 Computation of Per Share Page 13
Earnings
27 Financial Data Schedule Page 14
(b) Reports on Form 8-K
None.
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 hereunto duly authorized.
Dated: August 12, 1997 SSE TELECOM, INC.
By:/s/ Daniel E. Moore
Daniel E. Moore,
Chief Executive Officer
By:/s/ Russ D. Kinsch
Russ D. Kinsch,
Chief Financial Officer
EXHIBIT 11
Attached and Made Part of Part II
Of 10Q for the three and nine months ended June 28, 1997 and June 29, 1996
(dollars and shares in thousands, except per share)
Three Months Ended Nine Months Ended
June June June June 29,
28, 29, 28, 1996
1997 1996 1997
Primary
Weighted common average shares
outstanding 5,918 5,515 5,831 5,350
Increase in weighted average
shares due
to applying the treasury stock
method for stock options and
warrants -- -- -- --
Weighted contingent shares in
connection with the Fairchild
Data asset purchase -- -- -- 56
Primary weighted average shares 5,918 5,515 5,831 5,406
Primary net(loss) $(3,939) $(498) $(2,617) $(1,089)
Net (loss) per share $(0.67) $(0.09) $(0.45) $(0.20)
Fully diluted
Weighted common average shares
outstanding 5,918 5,515 5,831 5,350
Increase in weighted average
shares due
to applying the treasury stock
method for stock options and
warrants -- -- -- --
Weighted contingent shares in
connection with the Fairchild
Data asset purchase -- -- -- 56
Fully diluted weighted average shares 5,918 5,515 5,831 5,406
Net (loss) $ (3,939) $(498) $(2,617) $(1,089)
Total fully diluted net (loss) per $(0.67) $(0.09) $(0.45) $(0.20)
share
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<S> <C>
<FISCAL-YEAR-END> Sep-27-1997
<PERIOD-START> Sep-29-1996
<PERIOD-END> Jun-28-1997
<PERIOD-TYPE> 9-MOS
<CASH> 1,611
<SECURITIES> 0
<RECEIVABLES> 9,990
<ALLOWANCES> 969
<INVENTORY> 10,863
<CURRENT-ASSETS> 24,197
<PP&E> 13,794
<DEPRECIATION> 9,483
<TOTAL-ASSETS> 41,243
<CURRENT-LIABILITIES> 11,386
<BONDS> 4,159
0
0
<COMMON> 60
<OTHER-SE> 21,097
<TOTAL-LIABILITY-AND-EQUITY> 41,243
<SALES> 0
<TOTAL-REVENUES> 33,252
<CGS> 27,250
<TOTAL-COSTS> 12,329
<OTHER-EXPENSES> (2,642)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 373
<INCOME-PRETAX> (4,026)
<INCOME-TAX> (1,409)
<INCOME-CONTINUING> (2,617)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
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