<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended Commission File Number: 1-10432
September 30, 1996
ROBERTS PHARMACEUTICAL CORPORATION
(Exact name of registrant as specified in its charter)
NEW JERSEY 22-2429994
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
MERIDIAN CENTER II
4 INDUSTRIAL WAY WEST
EATONTOWN, NEW JERSEY 07724
(Address of principal executive offices) (Zip Code)
(Registrant's telephone number, including area code:
(908) 389-1182
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
--- ---
Class Outstanding Shares at
August 13, 1996
Common Stock 19,207,401
-----------------
<PAGE>
ROBERTS PHARMACEUTICAL CORPORATION
INDEX
Page
Part I
Item 1 - Financial Statements 2
Item 2 - Management's Discussion and Analysis 9
Part II
Item 1 - Legal Proceedings 12
Item 6 - Exhibits and Reports on Form 8-K 13
Signatures 15
Certain information included in this report and other Registrant filings
(collectively, "SEC filings") under the Securities Act of 1933, as amended, and
the Securities Exchange Act of 1934, as amended (as well as information
communicated orally or in writing between the dates of such SEC filings)
contains or may contain forward-looking information that is (i) based upon
assumptions which, if changed, could product significantly different results; or
(ii) subject to certain risks, trends and uncertainties that could cause actual
results to differ materially from expected results. Among these risks, trends
and uncertainties are matters related to national and local economic conditions,
the effect of certain governmental regulations and programs on the Registrant
and competitive conditions in the marketplace in which the Registrant operates.
See "Management's Discussion and analysis of Financial Condition and Results of
Operations."
<PAGE>
ROBERTS PHARMACEUTICAL CORPORATION
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
September 30, 1996 December 31, 1995
------------------ -----------------
<S> <C> <C>
ASSETS:
Current assets:
Cash and cash equivalents $ 91,983 $ 16,357
Marketable securities 12,171 13,649
Accounts receivable, net 19,054 26,318
Accounts receivable from
shareholder 0 600
Inventory 20,063 20,785
Deferred tax assets 10,419 10,419
Net assets held for sale 4,300 4,300
Other current assets 2,452 1,342
-------- --------
Total current assets 160,442 93,770
Fixed assets, net 15,340 15,681
Intangible assets 225,993 230,681
Other assets 166 158
-------- --------
Total assets $401,941 $340,290
======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
- 2 -
<PAGE>
ROBERTS PHARMACEUTICAL CORPORATION
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
September 30, 1996 December 31, 1995
------------------ -----------------
<S> <C> <C>
LIABILITIES AND
SHAREHOLDERS' EQUITY
Current liabilities:
Current installments of
long-term debt $ 6,642 $ 34,809
Accounts payable 11,734 14,737
Dividends payable 475 0
Income taxes payable 4,499 3,708
Other current liabilities 21,744 28,528
-------- --------
Total current liabilities 45,094 81,782
Long-term debt, excluding
current debt installments 10,639 16,183
Deferred taxes payable 6,311 6,311
Other liabilities 490 547
Shareholders' equity:
Class B preferred stock,
$.10 par 10,000,000 shares
authorized, 4,200,000 issued 420 ---
Common stock, $.01 par,
50,000,000 shares authorized,
19,581,855 and 18,646,636
outstanding 196 189
Additional paid-in capital 365,404 256,296
Cumulative translation adjustments (286) (296)
Retained earnings (deficit) (26,090) (20,485)
Treasury stock, 387,594 shares
of common stock, at cost (237) (237)
-------- --------
Total shareholders' equity 339,407 235,467
-------- --------
Total liabilities and
shareholders' equity $401,941 $340,290
======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
- 3 -
<PAGE>
ROBERTS PHARMACEUTICAL CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
For the nine months For the three months
ended September 30, ended September 30,
1996 1995 1996 1995
---------- --------- ---------- ----------
<S> <C> <C> <C> <C>
Sales and Revenue:
Sales $ 65,683 $80,824 $21,676 $34,309
Other revenue 36 35 12 12
-------- ------- ------- -------
Total sales and revenue 65,719 80,859 21,688 34,321
-------- ------- ------- -------
Operating costs and expenses:
Cost of sales 32,739 37,652 10,346 18,379
Research & development 2,941 5,329 945 1,729
Marketing 25,930 17,213 9,162 6,773
Distribution 2,130 2,395 683 891
Administration 13,495 13,243 4,074 4,698
-------- ------- ------- -------
Total operating costs &
expenses 77,235 75,832 25,210 32,470
-------- ------- ------- -------
Operating (loss) income (11,516) 5,027 (3,522) 1,851
-------- ------- ------- -------
Other income (expense):
Interest income 1,180 1,518 374 537
Interest expense (1,597) (2,463) (426) (846)
Foreign currency gain(loss) (11) (8) 2 12
Other income(expense), net 0 49 1 30
-------- ------- ------- -------
Total other income(expense) (428) (904) (49) (267)
-------- ------- ------- -------
(Loss) income from continuing
operations before income
taxes (11,944) 4,123 (3,571) 1,584
(Benefit) provision for income
taxes (2,845) 1,625 (438) 635
-------- ------- ------- -------
(Loss) income from continuing
operations (9,099) 2,498 (3,133) 949
Discontinued operations
Loss from operations of
Discontinued Divisions,
net of tax benefits of
$1,228 and $875,
respectively. --- (3,002) --- (618)
Gain (loss) on disposal of
Discontinued Operations,
net of tax provision
(benefit) of $2,044
and ($995), respectively. 3,969 (10,992) --- ---
------- ------- ------- -------
Net (loss) income $(5,130) $(11,496) $(3,133) $ 331
======= ======== ======= =======
</TABLE>
- 4 -
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
Per share of common stock,
primary and fully diluted:
(Loss) income from continuing
operations $ (.46) $ 0.13 $ (.16) $ 0.05
Net Loss (income) from
discontinued operations .20 (0.75) 0 (0.03)
-------- ------- ------- --------
Net (loss) income $ (.26) $ (0.62) $ (.16) $ 0.02
======== ======== ======= ========
Weighted average number
of common shares
outstanding, primary
and fully diluted: 19,581,855 18,646,636 19,581,855 18,604,968
</TABLE>
The accompanying notes are an integral part of these financial statements.
- 5 -
<PAGE>
ROBERTS PHARMACEUTICAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
For the nine months
ended September 30,
1996 1995
---- ----
<S> <C> <C>
Cash flows from operating activities: $ 500 $ 14,566
-------- --------
Cash flows from investing activities:
Redemption of marketable securities 1,478 5,666
Purchases of intangible assets (80) (2,802)
Purchases of fixed assets (101) (299)
Impact of discontinued operations 0 (136)
-------- --------
Net cash provided by
investing activities 1,297 2,429
-------- --------
Cash flows from financing activities:
Payments on long term debt (36,191) (16,631)
Net proceeds from issuance of
common stock and preferred stock 109,534 690
Proceeds from sale of product rights 500 0
Impact of discontinued operations 0 (7)
-------- --------
Net cash provided by (used in)
financing activities 73,843 (15,948)
-------- --------
Exchange rate changes on cash and
cash equivalents (14) 47
-------- --------
Change in cash and cash equivalents 75,626 1,094
Beginning cash and cash equivalents 16,357 9,819
-------- --------
Ending cash and cash equivalents $ 91,983 $ 10,913
======== ========
Supplemental cash flow information:
Interest paid $ 2,363 $ 2,364
Income taxes (refunded) paid (267) 2,624
Dividends payable, 5% Preferred Stock 475 0
</TABLE>
The accompanying notes are an integral part of these financial statements.
- 6 -
<PAGE>
1. Summary of Significant Accounting Policies
------------------------------------------
Basis of Presentation
- ---------------------
In the opinion of management, the accompanying consolidated financial statements
include all necessary adjustments, consisting of normal adjustments, necessary
for a fair presentation of results for the period reported. All dollar amounts
are presented in thousands, except per share data.
2. Inventory
---------
Inventory at September 30, 1996 consists of:
Raw Materials $ 3,298
Finished Goods 16,765
-------
Total $20,063
=======
3. Contingency
-----------
A shareholder class action suit has been instituted in the United States
District Court for the District of New Jersey against Roberts Pharmaceutical
Corporation and certain of its officers and a former officer for alleged
violations of certain federal securities laws. The Company is not able to
predict the outcome of this proceeding at this time, and management is not able
to determine the amount of the potential liability, if any. Roberts
Pharmaceutical believes that it has complied with all of its obligations under
the federal securities laws. Roberts Pharmaceutical intends to defend
vigorously against the plaintiff's allegations and considers such allegations to
be without merit.
4. Discontinued Operations
-----------------------
The Company has reassessed the estimated 1996 operating loss (reflected in the
year end 1995 financial statements) of its VRG Division. This has resulted in a
revision of the expected annual earnings from operations for the VRG Division in
the amount of $4.0 million, net of taxes; this adjustment was reflected in the
second quarter operating results.
5. Convertible Preferred Stock
---------------------------
On August 29, 1996 the Company issued 4,200,000 shares of 5% Convertible
Preferred Stock (the 5% Preferred Stock), $.10 par value, for $25.00 per share.
The 5% Preferred Stock is convertible into shares of Roberts Pharmaceutical
Corporation's Common Stock at a conversion rate, as of any date, of 90% of the
lowest trade price of the Common Stock as reported by the Nasdaq National Market
during a specified period of trading days (the "Measurement
- 7 -
<PAGE>
Period") immediately preceding such date subject to a maximum conversion price
equal to 115% of the average of the mean between the closing bid price and
closing ask price (as reported on NASDAQ) for each trading day during the 90 day
period following August 29, 1996. For the first 120 days following the original
issuance of the 5% Preferred Stock, the Measurement Period is five trading days.
The Measurement Period increases by one trading day for each 30 day period
thereafter, up to a maximum of 13 trading days.
At the Company's option, the 5% Preferred Stock may be converted into Common
Stock at any time beginning on August 29, 1997 at a Conversion Price determined
in accordance with the provisions described above, subject to certain
restrictions. On August 29, 1998, all then outstanding shares of 5% Preferred
Stock will be automatically converted into Common Stock at the Conversion Price
then in effect.
- 8 -
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Conditions and
Results of Operations
Results of Operations
Nine months ended September 30, 1996 and 1995
Corporate Revenues
- ------------------
Total revenue for the nine months and quarter ended September 30, 1996 decreased
$15.1 million and $12.6 million respectively as compared with the first nine
months and third quarter of 1995. This decrease was the result of a decrease in
product revenue.
Product Sales
- -------------
For the nine months ended September 30, 1996, product sales decreased $15.1
million from $80.8 million in 1995 to $65.7 million primarily as a result of
declining volume of older brands, distribution pattern shifts, increased generic
competition and supply difficulties caused by a change in distribution system
providers.
For the nine months ended September 30, 1996, sales of the Company's United
Kingdom subsidiary, Monmouth Pharmaceuticals, Ltd., decreased $.4 million from
$8.7 million to $8.3 million primarily as a result of foreign exchange impact.
Sales of the Company's Canadian subsidiary increased $.5 million from $7.9
million to $8.4 million.
Product sales in the third quarter decreased $12.6 million from $34.3 million in
1995 to $21.7 million. Product sales in the U.S. decreased $13.0 million from
$28.9 million to $15.9 million. Sales in the United Kingdom increased $.2
million from $2.9 million to $3.1 million. Sales of the Company's Canadian
subsidiary increased $.1 million from $2.5 million to $2.6 million.
Cost of Sales
- -------------
For the nine months ended September 30, 1996, cost of sales amounted to 49.8% of
product sales, a 3.3 percentage point increase as compared to the prior year's
comparable period. For the three months ended September 30, 1996, cost of sales
amounted to 47.7% of product sales, a 5.8 percentage point decrease over the
third quarter of 1995. This decrease in cost of sales is due to an increase in
NOROXIN'S gross margin from 1995 to 1996 due to a one-time adjustment in third
quarter 1995.
Research and Development
- ------------------------
For the nine months ended September 30, 1996, Research and Development expenses
decreased $2.4 million from $5.3 million to $2.9 million. For the quarter
ended September 30, 1996, Research and Development expenses decreased $.8
million to $.9 million from $1.7 million incurred for the comparable period in
1995. Both decreases are due to a reduced level of expenditure required to
support the Company's development program for AGRELIN.
- 9 -
<PAGE>
Marketing and Administrative Expenses
- -------------------------------------
For the nine months ended September 30, 1996, Marketing and Administrative
expenses increased $8.7 million from $32.9 million to $41.6 million. Marketing
expenses increased $8.7 million as a result of promotional activities for new
products and the expansion of sales forces in the United States, United Kingdom
and Canada. Administrative expenses increased $.3 million primarily as a result
of a $1.7 million increase in amortization of intangibles related to prior
product acquisitions offset by a decrease in bad debt expense of $1.1 million
and a decrease in other corporate support of $.3 million. Distribution expenses
decreased $.3 million due to lower sales volume.
For the quarter ended September 30, 1996, Marketing and Administrative expenses
increased $1.5 million from $12.4 million to $13.9 million as marketing costs
increased to accommodate expanded promotional activities as compared to the
comparable 1995 period. For the third quarter of 1996, intangible amortization
was $1.7 million, a $.4 million increase from 1995.
The Company has, subsequent to September 30, 1996, sold the Nucofed(R) and
Quibron(R) brands. This sale, net of proceeds, will result in a one time, non-
cash write-off of product intangibles of approximately $10.0 million.
The Company has also, subsequent to September 30, 1996, sold the majority of its
non-core OTC brands. Net of proceeds, this sale will result in an additional
one time, non-cash write-off of product intangibles of approximately $1.2
million.
Interest Income and Expense
- ---------------------------
Interest income decreased $.3 million from $1.5 million to $1.2 million as a
result of a decrease in invested marketable securities. Interest expense
decreased $.9 million from $2.5 million to $1.6 million primarily as a result of
a decrease in long term debt as compared to the prior year's comparable period.
Income Taxes
- ------------
For the nine months and quarter ended September 30, 1996, the income tax benefit
is calculated using a normal statutory rate for continuing operations except for
certain taxes related to foreign operations.
The Company has recorded deferred tax assets of approximately $11.9 million.
Realization is dependent upon generating sufficient taxable income to utilize
such items. Although realization is not assured, management believes it is more
likely than not that all of the deferred tax assets will be realized. The
amount of the deferred tax assets considered realizable, however, could be
reduced at any time (including in connection with the finalization of the
Company's year end financial statements) if estimates of future taxable income
are reduced.
- 10 -
<PAGE>
Liquidity and Capital Resources
- -------------------------------
For the nine months ended September 30, 1996, the Company's cash and cash
equivalents increased $75.6 million from $16.4 million to $92 million due to the
Company's financing activities. Preferred Stock and Common Stock private
placements were completed; net proceeds from the offerings were $109.5 million.
This increase was offset by $36.2 million in long-term debt payments including a
$20 million final payment on a product acquisition debt.
Operating activities provided $.5 million in cash. The primary components of
cash provided by operating activities were a $7.9 million decrease in accounts
receivable offset by the net loss of $5.6 million, which includes $3.2 million
of non-cash charges, and increased working capital requirements of $5 million.
Investing activities provided $1.2 million, comprised of $1.4 million in
marketable securities redemptions offset by asset purchases.
The Company will use its existing cash and securities balances in addition to
cash generated from operations to fund its operating activities, capital
expenditures and debt obligations as well as to support development of the
existing pipeline and purchases of new pipeline compounds.
Foreign Currency Fluctuations
- -----------------------------
The Company has subsidiary operations outside the United States. As a result,
the Company is subject to fluctuations in reported revenues and costs reported
in United States dollars as a consequence of changing currency exchange rates,
especially rates for the British pound and Canadian dollar. Such fluctuations
were not material for the three or nine months ended September 30, 1996.
Subsequent Events
- -----------------
On October 8, 1996, the Company announced that the sale of Quibron(R) and
Nucofed(R) had been completed.
On October 15, 1996, the Company announced that it had agreed, in principle, to
acquire a fully equipped pharmaceutical manufacturing facility from Searle
Canada.
On November 6, 1996, the Company completed the sale of the majority of its non-
core OTC brands.
- 11 -
<PAGE>
Item 1. Legal Proceedings
The Company previously reported in its Current Reports on Form 8K dated April
10, 1995 and June 26, 1995, respectively, and its Quarterly Report on Form 10-Q
for the quarter ended June 30, 1995, that two shareholder class action suits had
been instituted against it and certain of its officers in the United States
District Court for the District of New Jersey. The second suit filed by Dieter
Zander has been voluntarily dismissed by the plaintiff. The first complaint, as
amended, was filed by Grace Cowit on behalf of all persons who purchased shares
of the Company's Common Stock between November 7, 1994 and May 31, 1995.
- 12 -
<PAGE>
Item 6 Exhibits and Reports on Form 8K
Reports on Form 8K
Date of Report Item
- -------------- ----
8/20/96 Roberts Pharmaceutical Corporation announced that it has
entered into a Letter of Intent with Monarch Pharmaceutical,
Inc. concerning Roberts intentions to sell the COMHIST(R),
NUCOFED(R) and QUIBRON(R) lines of pharmaceutical products.
Roberts intends to sell to Monarch which intends to purchase
all the U.S. rights, titles and interest in the three
product lines. The parties intend to commence negotiations
leading to a definitive asset purchase agreement as soon as
possible.
9/11/96 Roberts Pharmaceutical Corporation has announced that the
Food and Drug Administration (FDA) has cleared
ProAmatine(TM) (midodrine hydrochloride) for U.S. marketing.
The Company anticipates the U.S. launch of ProAmatine(TM)
shortly.
In an earlier press release, the Company announced receipt
of an FDA approval letter noting that "ProAmatine is
approvable under 21 CFR Subpart H - Accelerated approval of
new drugs for serious or life-threatening illnesses."
Roberts subsequently submitted labeling and promotional
material to the FDA for review as a prerequisite to
marketing. That step of the review process has now been
completed and Roberts is preparing for the near-term launch
of ProAmatine(TM).
9/13/96 Roberts Pharmaceutical Corporation announced that the
Company has concluded private placements representing $115
million in gross proceeds. The sale consisted of $105
million of 5% Convertible Preferred Stock and $9.9 million
of Common Stock. The Common Stock was sold to several funds
managed by a long-term, growth-oriented fund manager.
The Preferred Stock purchasers consist of a group of
institutional investors who have agreed to restrictions on
the resale of any Common Stock acquired on conversion.
Based upon a formula which, over time, adjusts the
conversion price to changes in the market price of the
Common Stock, the Preferred Stock is convertible into Common
Stock at a 10% discount and automatically converts on
- 13 -
<PAGE>
August 29, 1998. Roberts will hold a meeting of
shareholders in the near term to approve the full number of
shares of Common Stock issuable upon conversion of the
Preferred Stock. The Company has put aside a substantial
portion of the proceeds from the offering to redeem a
portion of the Preferred Stock should approval not be
obtained before November 28, 1996.
10/08/96 Roberts Pharmaceutical Corporation and Monarch
Pharmaceuticals announced that Monarch has acquired from
Roberts two separate respiratory care product lines. The
two product lines involved in the acquisition are NUCOFED(R)
and QUIBRON(R). The NUCOFED(R) family of products are for
symptomatic relief of coughing and congestion associated
with respiratory infections and related conditions. The
QUIBRON(R) family of products is indicated for symptoms of
asthma, bronchitis and emphysema. The sale by Roberts is in
keeping with Roberts plan to concentrate on pipeline
products and Monarch's strategy to grow through the
acquisition of well-established brand name products.
10/11/96 Roberts Pharmaceutical Corporation announced the election of
Dr. Zola P. Horovitz to the Board of Directors. The
election of Dr. Horovitz fills the vacancy created by the
passing of W. Robert Fowler, M.D., a long standing member of
the Roberts Board.
10/17/96 Roberts Pharmaceutical Corporation announced that the
Company has agreed in principle to acquire a fully-equipped
pharmaceutical manufacturing facility currently operated by
Searle Canada. The 100,852 square foot facility located in
Oakville, Ontario, is approved by both the U.S. Food and
Drug Administration and the Health Protection Branch of
Canada.
The facility includes manufacturing and packaging areas as
well as laboratory, warehouse and administrative space.
Searle has agreed in principle to lease back space for a
time after finalizing the purchase, expected in early 1997.
Searle has also agreed in principle to have Roberts continue
certain product packaging requirements currently being met
by the facility. Roberts may consider the possibility of
contract manufacturing for Searle or other pharmaceutical
companies. Roberts may also consider consolidation of
distribution channels into the site.
11/06/96 Roberts Pharmaceutical Corporation announced that it has
agreed in principle to license from Eli Lilly and Co. three
developmental compounds. Two of the compounds are being
developed for, and may represent potential breakthroughs
for, Functional Bowel Disorders. The third compound,
tazofelone, has just completed a phase II efficacy trial,
and will be indicated for Inflammatory Bowel Disease,
including ulcerative colitis and Crohn's disease.
Under terms of the agreement, Lilly will receive a signing
fee, milestone payments and royalties for products that
result from this licensing agreement. Lilly will license
all patent rights to these compounds to Roberts.
11/08/96 Roberts Pharmaceutical Corporation announced today that
shareholders, at a special meeting and by approximately 95%
of votes cast, approved the following proposals:
1. The issuance to the holders of the Company's 5%
Convertible Preferred Stock, $.10 par value per share of
the full number of shares of the Company's Common Stock,
$.01 par value per share to which such holders are
entitled upon conversion of the 5% Preferred Stock; and
2. An amendment to the Company's Amended and Restated
Certificate of Incorporation which increases the
authorized shares of the Company's Common Stock, from
50,000,000 shares to 100,000,000 shares.
- 14 -
<PAGE>
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Date: _________________ _____________________________
Peter M. Rogalin
Vice President and Treasurer
Date: ________________ _____________________________
Peter M. Rogalin
Chief Accounting Officer
- 15 -
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM
10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 1996 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 91,983
<SECURITIES> 12,171
<RECEIVABLES> 19,054
<ALLOWANCES> 0
<INVENTORY> 20,063<F1>
<CURRENT-ASSETS> 160,442
<PP&E> 15,340
<DEPRECIATION> 0
<TOTAL-ASSETS> 401,941
<CURRENT-LIABILITIES> 45,543
<BONDS> 10,639
0
420
<COMMON> 196
<OTHER-SE> 338,342
<TOTAL-LIABILITY-AND-EQUITY> 401,941
<SALES> 65,683
<TOTAL-REVENUES> 65,719
<CGS> 32,739
<TOTAL-COSTS> 32,739
<OTHER-EXPENSES> 2,941
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,597
<INCOME-PRETAX> (9,548)
<INCOME-TAX> (2,396)
<INCOME-CONTINUING> (9,548)
<DISCONTINUED> 3,969
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (5,579)
<EPS-PRIMARY> 0
<EPS-DILUTED> (.28)
<FN>
<F1>Includes Raw Material Inventory of $3,298
</FN>
</TABLE>
