<PAGE>
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 quarterly period ended May 31, 1996
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number 0-19779
INTERNATIONAL JENSEN INCORPORATED
(Exact Name of Registrant as Specified in its Charter)
Delaware 13-3346656
--------- ----------
(State of Incorporation) (I.R.S. Employer Identification No.)
25 Tri-State International Office Center
Suite 400
Lincolnshire, Illinois 60069
---------------------- -------
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code:
(847) 317-3700
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[ ]
On July 12, 1996, 5,738,132 common shares of International
Jensen Incorporated were outstanding.
<PAGE>
International Jensen Incorporated
Condensed Consolidated Balance Sheets
(Dollars in thousands)
<TABLE>
<CAPTION>
May 31, February 29,
1996 1996
(Unaudited)
ASSETS
<S> <C> <C>
Current assets:
Cash $3,635 $4,416
Accounts receivable, net of allowance
for doubtful accounts of $2,319 and
$2,387, respectively 60,988 50,251
Inventories 39,390 39,615
Deferred income taxes 3,715 3,715
Other current assets 4,381 4,342
-------- --------
Total current assets 112,109 102,339
Property, plant and equipment 37,717 36,804
Accumulated depreciation (20,212) (18,996)
-------- --------
Net fixed assets 17,505 17,808
Noncurrent deferred income taxes 4,272 4,272
Other noncurrent assets 8,001 8,215
-------- --------
Total assets $141,887 $132,634
======== ========
See accompanying notes.
</TABLE>
<PAGE>
International Jensen Incorporated
Condensed Consolidated Balance Sheets
(Dollars in thousands)
<TABLE>
<CAPTION>
May 31, February 29,
1996 1996
(Unaudited)
LIABILITIES
<C> <C> <C>
Current liabilities:
Short-term borrowings $33,287 $27,391
Accounts payable 13,125 12,027
Current maturities of long-term debt 38 49
Long-term debt reclassified as current 15,000 15,000
Accrued taxes 2,357 2,211
Accrued liabilities 17,887 15,540
-------- --------
Total current liabilities 81,694 72,218
Long-term debt 825 859
Other noncurrent liabilities 429 408
Excess of fair value of acquired assets
over cost, net 4,047 4,434
-------- --------
Total liabilities 86,995 77,919
STOCKHOLDERS' EQUITY
Total stockholders' equity 54,892 54,715
-------- --------
Total liabilities and
stockholders' equity $141,887 $132,634
======== ========
See accompanying notes.
</TABLE>
<PAGE>
International Jensen Incorporated
Condensed Consolidated Statements of Operations
(Dollars in thousands except per share data)
(Unaudited)
<TABLE>
<CAPTION>
Three Months
Ended May 31,
1996 1995
<S> <C> <C>
Net sales $62,796 $65,284
Cost of goods sold 45,022 47,433
------- -------
Gross profit 17,774 17,851
Operating expenses:
Selling, marketing and
administration expenses 15,675 15,797
------- -------
Operating income 2,099 2,054
Other (income) expense:
Interest (income) (46) (67)
Interest expense 942 1,053
Other (income) expense 11 (149)
------- -------
Income before provision
for income taxes 1,192 1,217
Provision for income taxes 441 450
------- -------
Net income $751 $767
======= =======
Average shares outstanding 5,800 5,764
======= =======
Net income per common share $0.13 $0.13
======= =======
See accompanying notes.
</TABLE>
<PAGE>
International Jensen Incorporated
Condensed Consolidated Statements of Cash Flows
(Dollars in thousands)
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended
May 31,
1996 1995
<S> <C> <C>
Cash flows from operating activities:
Net income $751 $767
Adjustments to reconcile net income to
net cash used in operating activities:
Depreciation 1,211 1,216
Amortization (234) (249)
Provision for doubtful accounts 161 254
Changes in assets and liabilities:
Accounts receivable (11,002) (5,495)
Inventories 85 (2,107)
Other current assets -- 677
Accounts payable 1,177 (553)
Other liabilities 2,657 (3,118)
------ ------
Total adjustments (5,945) (9,375)
------ ------
Net cash used in operating activities (5,194) (8,608)
------ ------
Cash flows from investing activities:
Capital expenditures (934) (1,372)
Other (106) 52
------ ------
Net cash used in investing activities (1,040) (1,320)
------ ------
Cash flows from financing activities:
Principal payments on long-term debt (11) (34)
Proceeds under the revolving
credit arrangement, net 5,864 10,798
Proceeds from exercised stock options 21 9
------ ------
Net cash provided
by financing activities 5,874 10,773
------ ------
Effect of exchange rate changes on cash (421) 1,236
------ ------
Net increase (decrease) in cash (781) 2,081
Cash and cash equivalents
at beginning of period 4,416 5,456
------ ------
Cash and Cash
equivalents at end of period $3,635 $7,537
====== ======
Supplemental disclosures of cash flow information:
Cash paid(received) during the period for:
Interest $453 $640
Income taxes $(17) $757
See accompanying notes.
<PAGE>
Notes to Condensed Consolidated Financial Statements
Dollars in thousands
(unaudited)
NOTE 1 - FINANCIAL INFORMATION
The consolidated financial statements included herein have been prepared
pursuant to the rules and regulations of the Securities and Exchange
Commission. Certain information and footnote disclosures normally included
in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to or
as permitted by such rules and regulations, although the Company believes
that the disclosures are adequate to make the information presented not
misleading. These financial statements should be read in conjunction
with the consolidated financial statements and footnotes thereto contained
in the Company's Annual Report on Form 10-K for the year ended February 29,
1996.
The financial information included herein at May 31, 1996 and for the three
month periods ended May 31, 1996 and May 31, 1995 is unaudited and, in the
opinion of the Company, reflects all adjustments (which include normal
recurring adjustments) necessary for the fair presentation of financial
position as of that date and the results of operations for those periods.
The information in the condensed consolidated balance sheet as of
February 29, 1996 was derived from the Company's audited financial statements
for fiscal 1996.
NOTE 2 - INVENTORIES
Inventories consist of the following:
May 31, February 29,
1996 1996
Raw material and
fabricated parts $10,564 $11,894
Work in process 2,048 2,133
Finished goods 29,289 27,818
------- -------
41,901 41,845
Less allowance to reduce
to LIFO basis (2,511) (2,230)
------- -------
$39,390 $39,615
======= =======
The allowance to reduce to LIFO basis approximates the excess of
replacement cost over LIFO value.
<PAGE>
NOTE 3 - INDEBTEDNESS AND LINES OF CREDIT
At May 31, 1996, the Company was not in compliance with the interest and
rent coverage ratio and current ratio requirement in its multi-currency
revolving credit facility or the fixed charge coverage ratio contained
in the note agreement relating to its $15.0 million senior note. The
Company has received waivers as of May 31, 1996 (but not after), relating
to the interest and rent coverage ratio and current ratio in the revolving
credit facility and the fixed charge coverage ratio in the note agreement.
Based on current projections, however, it does not appear that the
Company will be in compliance with these covenants during fiscal 1997,
and as such the Company continues to classify the $15.0 million senior
note as current. In the event of future non-compliance with specified
ratios, the Company will be required to obtain waivers to avoid debt payment
acceleration. The lenders under the revolving credit facility have stated
that if a sale of the Company does not appear to be imminent within 45 days
following July 10, 1996, it is their intent to restructure and secure such
credit facilities.
NOTE 4 - MERGER/SUBSEQUENT EVENTS
On January 3, 1996, the Company and Recoton Corporation ("Recoton")jointly
announced that Recoton had agreed to acquire the Company pursuant to an
Agreement and Plan of Merger dated January 3, 1996 (the "Merger Agreement").
On January 30, 1996, May 1, 1996, May 10, 1996 and June 23, 1996,
respectively, the Merger Agreement was amended and restated (as so amended
and restated, the "Fourth Amended and Restated Merger Agreement").
The Fourth Amended and Restated Merger Agreement provides for the
acquisition of the Company by Recoton in a merger transaction pursuant to
which Recoton would pay $11.00 per share in cash to the Company's
stockholders other the Robert G. Shaw, President and Chief Executive Officer
of the Company, and William Blair Leveraged Capital Fund, L.P., who would
receive $8.90 per share in cash.
In connection with the merger transaction, on January 3, 1996, the Company
and IJI Acquisition Corp. ("IJI Acquisition"), a company controlled by
Mr. Shaw, entered into an Agreement for Purchase and Sale of the OEM
Business (the "OEM Agreement") relating to the original equipment
manufacturing business of the Company (the "OEM Business"). The OEM
Agreement was subsequently amended and restated on May 1, 1996, May 10, 1996
and June 23, 1996 (as so amended and restated, the "Third Amended and
Restated OEM Agreement"). The Third Amended and Restated OEM Agreement
provides for the purchase of the OEM Business by IJI Acquisition for
$18,405,000, subject to certain adjustments or modifications which may
increase or decrease the purchase price.
On January 3, 1996, the Company and Recoton entered into an agreement
(the "AR Agreement"), pursuant to which Recoton acquired from the Company
an exclusive world-wide license to and option to purchase all rights to the
"Acoustic Research" and "AR" trademarks (collectively, the "AR Marks"), and
the Company acquired an option to sell the AR Marks to Recoton under certain
circumstances. Such agreement was amended, and a related escrow agreement
was entered into, on or about May 9, 1996. On June 23, 1996, Recoton and
the Company further amended and restated the AR Agreement to extend the
license term until December 31, 2000, and to change the license fee,
effective January 1, 1997, to the greater of $10,000 per month or four
percent (4%) of net shipments.
<PAGE>
Consummation of the merger transaction with Recoton, which has been approved
by the boards of directors of the Company and Recoton, is subject to a
number of conditions, including approval by the Company's stockholders and
the simultaneous closing of the sale of the OEM Business. The Company
intends to mail a definitive proxy statement to stockholders in connection
with a special meeting currently expected to be held near the end of the
second quarter of fiscal 1997 to approve the merger.
Subsequent to the announcement of the merger with Recoton in January 1996,
the Company received unsolicited acquisition proposals from Emerson Radio
Corp. ("Emerson"). A Special Committee of the Board of Directors of the
Company was formed to negotiate with respect to the Emerson and Recoton
proposals. The Board of Directors of the Company, based upon the
recommendation of the Special Committee, rejected the Emerson proposals
and determined to proceed with the Recoton transaction as set forth in the
Fourth Amended and Restated Merger Agreement. Emerson has indicated that
it intends to solicit proxies for the purpose of opposing the merger
transaction with Recoton.
On May 9, 1996 and May 22, 1996, respectively, separate stockholder actions
were filed in Delaware state court against the Company and its affiliates
and others seeking, among other things, to enjoin the merger on various
grounds. The cases have been consolidated into one action. The Company
believes that the complaints are without merit and intends to vigorously
defend against this action.
On May 10, 1996, the Company filed an action in Federal District Court in
Chicago, Illinois against Emerson and its President for violations of proxy
solicitation rules and for breach of a Confidentiality Agreement with the
Company. On May 14, 1996, the court entered a temporary restraining
order against Emerson and its President, enjoining them from (i) further
solicitation of the Company's stockholders or their representatives until
Emerson has filed a proxy statement with the Securities and Exchange
Commission which complies with the provision of Regulation 14A of the
Securities Exchange Act of 1934; (ii) making further solicitation containing
false or misleading statements of material fact or material omissions; and
(iii) disclosing confidential information in violation of the Confidentiality
Agreement. On May 20, 1996, Emerson filed a counterclaim in this action
alleging that the Company and Mr. Shaw fraudulently induced Emerson to enter
into the Confidentiality Agreement and failed to negotiate with Emerson in
good faith. Emerson requested recission of the Confidentiality Agreement
and such other equitable or damage relief as the court finds proper and an
award of attorneys' fees and expenses. On May 23, 1996, the Federal District
Court and the parties agreed to proceed with the bidding process and Emerson
agreed that the terms of the temporary restraining order would continue and
the Company and Emerson agreed to suspend the prosecution of the litigation
until the Company's Board had an opportunity to consider both the
Emerson and Recoton proposals. The temporary restraining order entered by
the Federal District Court has lapsed.
On July 2, 1996 Emerson filed an amended counterclaim and third party
complaint in the Chicago Federal District Court making allegations similar
to those in its original counterclaim and additional claims that Jensen
and Mr. Shaw continued to mislead Emerson and negotiate in bad faith,
with Recoton and WBLCF added as alleged co-conspirators with respect to such
continuing conduct. The Company intends to vigorously pursue its claim
against Emerson and to vigorously oppose the counterclaim.
<PAGE>
The Company anticipates that the foregoing litigation matters will continue
and that other similar claims may or could be brought in the future relating
to the Recoton transaction and Emerson proposals. No assurance can be
given as to the outcome or effect of any of the foregoing or any possible
future litigation on the Company or the merger.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS AS OF MAY 31,1996
---------------------------------------------------------
Sales for the quarter ended May 31, 1996 decreased 3.8% versus the
comparable fiscal 1996 quarter to $62.8 million from $65.3 million, due
mainly to lower sales of certain Jensen/Advent car electronics products to
mass merchandisers.
Consolidated gross profit as a percentage of sales was 28.3% for the first
quarter of the year versus 27.3% for the prior year's comparable quarter.
Domestically, gross profit percentage increased to 24.3% from 23.8% as a
result of improved margins on sales to automotive manufacturers due to
favorable product mix changes and favorable manufacturing variances
partially due to cost reductions. The gross margin percentage of the
Company's European subsidiaries increased to 41.3% from 39.1% in the
comparable prior year quarter primarily due to favorable product mix changes.
Consolidated selling, marketing, and administrative expenses decreased
$100,000 over the prior year's comparable quarter to $15.7 million. Included
in administrative expense for the first quarter of fiscal 1997 were
approximately $500,000 of charges for incremental professional and legal
fees relating to merger activities of the Company. See further discussion
of merger activities below (See Note 4 of the Notes to Condensed
Consolidated Financial Statements). These charges were substantially offset
by lower warranty costs related to programs previously implemented by the
Company.
Consolidated interest expense for the quarter decreased approximately
$100,000 as a result of lower average debt levels.
Net income per share for the quarter was $0.13 per share versus $0.13 per
share for the prior year.
Liquidity and Capital Resources
- -------------------------------
Net working capital at May 31, 1996 increased $0.3 million to $30.4 million
over the prior year end (at February 29, 1996). Accounts receivable
increased by $10.7 million primarily reflecting higher sales for the three
month period ended May 31, 1996 as compared to the three month period
ended February 29, 1996. Short term debt increased $5.9 million, primarily
to support higher receivable levels. Accrued liabilities increased by
$2.3 million due mainly to higher than anticipated health insurance claims
and increased accruals related to profit sharing and bonuses.
Borrowings under the multi-currency revolving credit facility were $19.9
million with remaining credit availability of $5.7 million as of May 31,
1996. The Company also maintains various short-term lines of credit through
its European subsidiaries. Borrowings under these lines totaled $11.4
million at May 31, 1996.
<PAGE>
At May 31, 1996, the Company was not in compliance with the interest and
rent coverage ratio and current ratio requirement in its multi-currency
revolving credit facility or the fixed charge coverage ratio contained in
the note agreement relating to its $15.0 million senior note. The
Company has received waivers as of May 31, 1996 (but not after), relating to
the interest and rent coverage ratio and current ratio in the revolving
credit facility and the fixed charge coverage ratio in the note agreement.
Based on current projections, however, it does not appear that the
Company will be in compliance with these covenants during fiscal 1997, and
as such the Company continues to classify the $15.0 million senior note as
current. In the event of future non-compliance with specified ratios, the
Company will be required to obtain waivers to avoid debt payment
acceleration. The lenders under the revolving credit facility have stated
that if a sale of the Company does not appear to be imminent within 45 days
following July 10, 1996, it is their intent to restructure and secure such
credit facilities.
The Company believes that cash generated from operations and available
borrowings under its credit agreements will be sufficient in fiscal 1997 for
working capital and capital spending needs.
Merger Activities
- -----------------
The Company has entered into a definitive merger agreement with Recoton
Corporation pursuant to which Recoton will acquire the Company in an all
cash merger transaction for $11.00 per share, except that Robert G. Shaw,
President and Chief Executive Officer of the Company, and William Blair
Leveraged Capital Fund, L.P. will receive $8.90 per share. The merger is
subject to various conditions, including stockholder approval and the sale
of the Company's original equipment manufacturing business to a company
controlled by Mr. Shaw. (See Note 4 of the Notes to Condensed Consolidated
Financial Statements).
<PAGE>
PART II
Item 1. Legal Proceedings
--------------------------
On May 9, 1996, a stockholder of the Company filed an action in the Court
of Chancery of the State of Delaware against its directors, Recoton,
RC Acquisition Sub, a company controlled by Recoton, IJI Acquisition Corp.,
William Blair & Company and William Blair Leveraged Capital Fund, L.P.
("WBLCF") seeking to enjoin the merger. The complaint alleged (i) breaches
of fiduciary duty by the Company's directors and affiliates of some of the
directors by taking various actions, including approving and continuing to
pursue the sale of the OEM Business to Mr. Shaw, refusing to pursue the
allegedly higher priced Emerson proposal and imposing allegedly
inappropriate asset lockups and termination fees; (ii) that all of the
defendants have aided and abetted the alleged breaches of fiduciary duty; and
(iii) that various agreements of the Company with Recoton and others are
invalid as a matter of Delaware law. The plaintiff requested temporary
and permanent injunctive and declaratory relief, recission of various
transactions, such other equitable or damage relief as the court finds
proper and an award of attorneys' fees and expenses. After the
Recoton transaction was enhanced on May 10, 1996, the plaintiff filed an
amended complaint on May 15, 1996, making comparable and additional claims
as to the enhanced Recoton transaction.
On May 20, 1996, a second stockholder of Jensen filed an action in the Court
of Chancery of the State of Delaware against Jensen, its directors, Recoton and
RC Acquisition, seeking to enjoin the merger. The complaint alleged (i)
breaches of fiduciary duty by the Company's directors, including allegedly
failing to act in good faith to negotiate with both Emerson and Recoton,
rejecting an allegedly higher priced all cash transaction with Emerson
and failing to act reasonably in order to obtain the best price in the sale
of the Company; and (ii) that all of the defendants have aided and abetted
the alleged breaches of fiduciary duty. The plaintiff requested that the
lawsuit be maintained as a class action on behalf of all public stockholders
and sought temporary and permanent injunctive and declaratory relief,
recission of the merger should it occur, the establishment of a stockholders'
committee to participate in the sale of the Company, the awarding of
compensatory damages against the defendants, and such other and further
relief as the court finds proper and an award of attorneys' fees and expenses.
The stockholder cases have been consolidated into a single action. On July
8, 1996, an amended consolidated stockholder complaint was filed by the
existing Delaware plaintiffs against the same defendants making claims
similar to those previously made with additional allegations charging that
the wrongful conduct continued through Jensen's acceptance of Recoton's
latest offer and rejection of Emerson's latest offer. The Company believes
the complaint is without basis in fact or law and based upon misleading
information. The Company intends to oppose the litigation vigorously.
<PAGE>
On May 10, 1996, the Company filed an action in Federal District Court
in Chicago, Illinois against Emerson and its President for violations of
proxy solicitation rules and for breach of a Confidentiality Agreement with
the Company. On May 14, 1996, the court entered a temporary restraining
order against Emerson and its President, enjoining them from (i) further
solicitation of the Company's stockholders or their representatives until
Emerson has filed a proxy statement with the Securities and Exchange
Commission which complies with the provision of Regulation 14A of the
Securities Exchange Act of 1934; (ii) making further solicitation containing
false or misleading statements of material fact or material omissions; and
(iii) disclosing confidential information in violation of the Confidentiality
Agreement. On May 20, 1996, Emerson filed a counterclaim in this action
alleging that the Company and Mr. Shaw fraudulently induced Emerson to enter
into the Confidentiality Agreement and failed to negotiate with Emerson in
good faith. Emerson requested recission of the Confidentiality Agreement
and such other equitable or damage relief as the court finds proper and an
award of attorneys' fees and expenses. On May 23, 1996, the Federal District
Court and the parties agreed to proceed with the bidding process and Emerson
agreed that the terms of the temporary restraining order would continue and
the Company and Emerson agreed to suspend the prosecution of the litigation
until the Company's Board had an opportunity to consider both the
Emerson and Recoton proposals. The temporary restraining order entered by
the Federal District Court has lapsed.
On July 2, 1996 Emerson filed an amended counterclaim and third party
complaint in the Chicago Federal District Court making allegations similar
to those in its original counterclaim and additional claims that Jensen
and Mr. Shaw continued to mislead Emerson and negotiate in bad faith,
with Recoton and WBLCF added as alleged co-conspirators with respect to such
continuing conduct. The Company intends to vigorously pursue its claim
against Emerson and to vigorously oppose the counterclaim.
The Company anticipates that the foregoing litigation matters will continue
and that other similar claims may or could be brought in the future relating
to the Recoton transaction and Emerson proposals. No assurance can be
given as to the outcome or effect of any of the foregoing or any possible
future litigation on the Company or the merger.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
(Registrant) International Jensen Incorporated
Date: July 12, 1996 /s/ Robert G. Shaw
-----------------------------
Robert G. Shaw, President and
Chief Executive Officer
Date: July 12, 1996 /s/ Marc T. Tanenberg
________________________________
Marc T. Tanenberg, Secretary and
Vice President - Finance
(Chief Financial Officer)
<PAGE>
ITEM 6. Exhibits and Reports on Form 8-K
(A) Exhibits
2.1 Fourth Amended and Restated Agreement and Plan of Merger among
Recoton Corporation, RC Acquisition Sub, Inc. and International
Jensen Incorporated dated as of January 3, 1996.*
2.2 Third Amended and Restated Agreement for Purchase and Sale of
the Assets of the OEM Business of International Jensen
Incorporated by and to IJI Acquisition Corp. dated as of
January 3, 1996.*
2.3 Amended and Restated Exclusive World-Wide License and Option
to Sell and Option to Purchase Proprietary Rights entered into
as of January 3, 1996, but executed June 23, 1996, between
International Jensen Incorporated and Recoton Corporation. *
2.4 Amended and Restated Escrow Agreement made as of May 1, 1996,
between International Jensen Incorporated and Recoton
Corporation, but executed on May 9, 1996.**
2.5 Agreement dated as of May 9, 1996, between Recoton Corporation
and International Jensen Incorporated. **
2.6 Employment Agreement between RC Acquisition Sub, Inc., Robert
G. Shaw, International Jensen Incorporated and Recoton
Corporation.***
11.1 Statement re: computation of per share earnings (filed herewith)
27.1 Financial Data Schedule, which is submitted electronically to
the Securities and Exchange Commission for information only and
not filed.
- --------------------------
* Incorporated by reference to similarly numbered exhibit
to the Company's Current Report on Form 8-K dated June 23,
1996 and on file with the Securities and Exchange
Commission.
** Incorporated by reference to similarly numbered exhibits
to the Company's Current Report on Form 8-K dated May 9,
1996 and on file with the Securities and Exchange
Commission.
*** Incorporated by reference to Exhibit 2.8 to the
Company's report on Form 8-K dated May 1, 1996, and on file
with the Securities and Exchange Commission.
(B) Reports on Form 8-K
Reports on Form 8-K were filed on May 9, 1996, May 16, and July 8, 1996
reporting under Item 5, the agreement of Recoton Corporation to acquire
the Company and certain related matters and simultaneous transactions.
<PAGE>
</TABLE>
Exhibit 11.1
Computation of Per Share Earnings
Consolidated net income per share of the Company is based on weighted
average number of common shares and common share equivalents outstanding
during the period. Common equivalent shares include shares subject to
stock options and are calculated using the treasury stock method.
Three Months Ended
May 31, 1996 May 31, 1995
Average shares outstanding 5,736,139 5,705,029
Net additional shares assuming
dilutive stock options exercised
and proceeds used to purchase
treasury shares at average
market price. 64,134 58,966
--------- ---------
Average number of common and
common equivalent shares
outstanding. 5,800,273 5,763,995
========= =========
Net income $751,000 $767,000
========= =========
Net income per common share: $0.13 $0.13
========= =========
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> FEB-28-1997
<PERIOD-END> MAY-31-1996
<CASH> 3,635
<SECURITIES> 0
<RECEIVABLES> 63,375
<ALLOWANCES> (2,387)
<INVENTORY> 39,390
<CURRENT-ASSETS> 112,109
<PP&E> 37,717
<DEPRECIATION> (20,212)
<TOTAL-ASSETS> 141,887
<CURRENT-LIABILITIES> 81,694
<BONDS> 0
0
0
<COMMON> 59
<OTHER-SE> 54,833
<TOTAL-LIABILITY-AND-EQUITY> 141,887
<SALES> 62,796
<TOTAL-REVENUES> 62,796
<CGS> 45,022
<TOTAL-COSTS> 15,675
<OTHER-EXPENSES> 11
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 896
<INCOME-PRETAX> 1,192
<INCOME-TAX> 441
<INCOME-CONTINUING> 751
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 751
<EPS-PRIMARY> 0.13
<EPS-DILUTED> 0.13
</TABLE>
