<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended February 27, 1998
-----------------
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 0-18815
OUTLOOK GROUP CORP.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Wisconsin 39-1278569
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1180 American Drive
Neenah, Wisconsin 54956
- --------------------------------------------------------------------------------
(Address of principal executive offices, including zip code)
(920) 722-2333
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
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 twelve 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
-- -----
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable date.
4,667,132 shares of common stock, $.01 par value, were outstanding at April
2, 1998.
<PAGE> 2
OUTLOOK GROUP CORP. AND SUBSIDIARIES
-------------------------------------
INDEX
-----
<TABLE>
<CAPTION>
Page
Number
------
<S> <C>
PART I. FINANCIAL INFORMATION:
- -------------------------------
Item 1. Financial Statements 1
Condensed Consolidated Balance Sheets 2
As of February 27, 1998 and May 31, 1997 (Unaudited)
Condensed Consolidated Statements of Operations For the 3
three months and nine months ended February 27, 1998 and
February 28, 1997 (Unaudited)
Condensed Consolidated Statements of Cash Flows 4
For the nine months ended February 27, 1998 and
February 28, 1997 (Unaudited)
Notes to Condensed Consolidated Financial Statements 5
(Unaudited)
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Item 3. Quantitative and Qualitative Disclosures about Market Risk 6
PART II. OTHER INFORMATION
- ---------------------------
Item 6. Exhibits and Reports on Form 8-K 8
Exhibits
Reports on Form 8-K
</TABLE>
<PAGE> 3
PART I - FINANCIAL INFORMATION
------------------------------
Item 1. Financial Statements.
The condensed consolidated financial statements included herein have been
included by the Company 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 such rules and regulations, although the
Company believes that the disclosures are adequate to make the information
presented not misleading. This information is unaudited but includes all
adjustments (consisting only of normal recurring accruals) which, in the
opinion of Company management, are necessary for a fair presentation of the
Company's financial position and results of operations for such periods.
The results of operations for interim periods are not necessarily
indicative of the results of operations for the entire year.
It is suggested that these condensed financial statements be read in
conjunction with the financial statements and the notes thereto included in
the Company's 1997 Form 10-K. The May 31, 1997 Condensed Consolidated
Balance Sheet Data was derived from audited financial statements, but does
not include all disclosures required by the Generally Accepted Accounting
Principles.
-1-
<PAGE> 4
OUTLOOK GROUP CORP. AND SUBSIDIARIES
---------------------------------------
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
--------------------------------------
(in thousands)
<TABLE>
<CAPTION>
February 27, MAY 31,
ASSETS 1998 1997
- ------ ---------- --------
<S> <C> <C>
CURRENT ASSETS:
Cash .............................................. $ 0 $ 0
Accounts receivable,less allowance for doubtful
accounts of $1,369 and $1,124 respectively ...... 12,894 12,640
Inventories ....................................... 9,508 9,857
Deferred income taxes.............................. 708 708
Income taxes refundable............................ 1,186 725
Other ............................................. 864 2,120
-------- -------
Total current assets............................ 25,160 25,050
PROPERTY, PLANT AND EQUIPMENT:
Land .............................................. 753 1,051
Buildings ......................................... 12,206 15,128
Machinery and equipment ........................... 42,302 43,759
-------- ------
55,261 59,938
Less accumulated depreciation ........................ (25,869) (23,326)
-------- --------
Net Property, Plant & Equipment....................... 29,392 36,612
-------- --------
Other Assets .......................................... 5,235 4,958
-------- --------
Total assets....................................... $ 59,787 $ 67,620
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
- -------------------------------------
CURRENT LIABILITIES:
Short-term borrowings ............................. $ 1,996 $ 4,916
Current maturities of long-term debt .............. 1,476 1,758
Accounts payable .................................. 4,117 4,081
Cash overdraft liability .......................... 1,252 1,605
Accrued liabilities:
Salaries and wages .............................. 1,579 1,482
Other ........................................... 1,092 840
-------- --------
Total current liabilities. ............................ 11,512 14,682
LONG-TERM DEBT ........................................ 10,360 16,156
DEFERRED GAIN-FULFILLMENT ............................. 550 --
DEFERRED INCOME TAXES ................................. 3,311 3,311
SHAREHOLDERS' EQUITY:
Common stock ...................................... 51 51
Paid-in capital ................................... 18,476 18,415
Retained earnings ................................. 20,003 19,454
Treasury Stock .................................... (4,476) (4,449)
Total shareholders' equity ........................ 34,054 33,471
------- --------
Total liabilities and shareholders' equity......... $ 59,787 $ 67,620
======== =========
</TABLE>
(see accompanying notes)
-2-
<PAGE> 5
OUTLOOK GROUP CORP. AND SUBSIDIARIES
-------------------------------------------
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
---------------------------------------------
(in thousands, except share and per share amounts)
<TABLE>
<CAPTION>
Three-Month Period Ended Nine-Month Period Ended
Feb. 27, Feb. 28, Feb. 27, Feb. 28,
1998 1997 1998 1997
----------- ----------- ---------- -----------
<S> <C> <C> <C> <C>
Net sales ......................................................... $ 15,700 $ 17,656 $ 49,101 $ 55,201
Cost of sales ..................................................... 12,763 15,345 39,447 47,742
----------- ----------- ----------- -----------
Gross profit ...................................................... 2,937 2,311 9,654 7,459
Selling, general and
administrative
expenses ......................................................... 2,671 2,297 7,871 7,030
----------- ----------- ----------- -----------
Operating profit .................................................. 266 14 1,783 429
Other income (expense):
Interest expense ................................................. (451) (712) (1,508) (2,160)
Buy out related expense .......................................... (18) -- (162) --
Interest and other
income .......................................................... 302 252 836 628
----------- ----------- ----------- -----------
Total other income
(expense) ......................................................... (167) (460) (834) (1,532)
----------- ----------- ----------- -----------
Earnings (loss) from
continuing operations
before income taxes ............................................... 99 (446) 949 (1,103)
Provision (benefit)for
income taxes ...................................................... 38 (156) 367 (341)
----------- ----------- ----------- -----------
Earnings (loss) from
continuing operations ............................................. 61 (290) 582 (762)
Discontinued Operations:
Loss from discontinued
operations before income
taxes ............................................................. (68) (75) (51) (1,478)
Income tax benefits ............................................... (25) (24) (18) (501)
----------- ----------- ----------- -----------
Loss from discontinued
operations ........................................................ (43) (51) (33) (977)
----------- ----------- ----------- -----------
Net earnings(loss) ................................................ $ 18 $ (341) $ 549 $ (1,739)
=========== =========== =========== ===========
Net earnings (loss)
per share-Basic
- continuing ..................................................... $ .01 $ (.06) $ .13 $ (.16)
- discontinued ................................................... (.01) (.01) (.01) (.21)
----------- ----------- ----------- -----------
- Total .......................................................... $ .00 $ (.07) $ .12 $ (.37)
=========== =========== =========== ===========
Net earnings (loss)
per share-Diluted
- continuing ..................................................... $ .01 $ (.06) $ .12 $ (.16)
- discontinued ................................................... (.01) (.01) (.01) (.21)
----------- ----------- ----------- -----------
- Total .......................................................... $ .00 $ (.07) $ .11 $ (.37)
=========== =========== =========== ===========
Weighted average
number of shares
outstanding
Basic .................................................... 4,656,338 4,649,382 4,654,487 4,649,382
=========== =========== =========== ===========
Diluted .................................................. 4,689,980 4,696,772 4,687,165 4,689,231
=========== =========== =========== ===========
see accompanying notes)
</TABLE>
- 3 -
<PAGE> 6
OUTLOOK GROUP CORP. AND SUBSIDIARIES
-------------------------------------
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
-----------------------------------------------
(in thousands)
<TABLE>
<CAPTION>
Nine-Month Period Ended
February 27, February 28,
1998 1997
---------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net earnings (loss) ............................... $ 549 $(1,739)
Adjustments to reconcile net earnings (loss) to
net cash provided by operating activities:
Depreciation and amortization ................... 3,777 4,388
Gain on sale of assets .......................... (636) --
Change in assets and liabilities:
Accounts receivable ........................... 305 (517)
Inventories ................................... 410 834
Prepaid expenses
and other current assets .................... 1,438 (1,070)
Accounts payable .............................. 36 3,360
Accrued liabilities ........................... 351 (142)
Deferred gain on sale of Oshkosh facility ..... 550 --
Income taxes ............................... (461) 1,188
------- -------
Net cash provided by operating activities .......... 6,319 6,302
Cash flows from investing activities:
Proceeds from sale of fixed assets ................ 4,805 1,710
Proceeds from sale of operating unit .............. -- (4,140)
Purchase of net business assets ................... (1,249) --
Acquisition of property, plant and equipment ...... (558) --
Other ............................................. -- 267
------- -------
Net cash provided by (used in) investing
activities ........................................ 2,998 (2,163)
Cash flows from financing activities:
Net decrease in revolving credit
arrangement borrowings ......................... (2,920) (3,873)
Proceeds from long-term borrowings ................ -- 4,870
Payments on long-term borrowings .................. (6,078) (5,397)
Decrease in cash overdraft ........................ (353) --
Sale of common stock through stock option exercises 34 --
------- -------
Net cash used by financing activities ....... (9,317) (4,400)
Net increase (decrease) in cash ..................... -- (261)
Cash at beginning of period ......................... -- 298
------- -------
Cash at end of period ............................... $ -- $ 37
======= =======
(see accompanying notes)
</TABLE>
- 4 -
<PAGE> 7
OUTLOOK GROUP CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
February 27, 1998
1. Net Earnings (Loss) Per Common Share:
During the quarter, the Company adopted the provisions of Statement of
Financial Accounting Standards (SFAS) No. 128, AEarnings Per Share,@
which was issued by the Financial Accounting Standards Baord (FASB) in
February 1997. Under this new pronouncement, the dilutive effect of
stock options is excluded from the calculation of primary earnings per
share, now called basic earnings per share. Earnings per share
information for all prior periods presented has been restated to
conform with the new calculation under SFAS 128. The reconciliation
between basic and diluted earnings per share are as follows:
<TABLE>
<CAPTION>
Three-Month Period Ended Nine-Month Period Ended
February 27, February 28, February 27, Februay 28,
1998 1997 1998 1997
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Basic:
Weighted average
shares outstanding .................. 4,656,338 4,649,382 4,654,487 4,649,382
Net effect of dilutive
options based on the treasury
stock method using average
market price ......................... 33,642 47,390 32,678 39,849
------------- ------------- ------------- -------------
Diluted:
Weighted average
shares outstanding .................. 4,689,980 4,696,772 4,687,165 4,689,231
============= ============= ============= =============
Net earnings(loss)from continuing
operations ........................... $ 61,000 $ (290,000) $ 582,000 $ (762,000)
Net earnings (loss)
from discontinued
operations ........................... (43,000) (51,000) (33,000) (977,000)
------------- ------------- ------------- -------------
Net earnings (loss) .................. $ 18,000 $ (341,000) $ 549,000 $ (1,739,000)
============= ============= ============= =============
Net earnings (loss) per share-Basic:
- continuing ....................... $ 0.01 $ (0.06) $ 0.13 $ (0.16)
- discontinued ..................... (0.01) (0.01) (0.01) (0.21)
------------- ------------- ------------- -------------
Total: ...................... $ 0.00 $ (0.07) $ 0.12 $ (0.37)
============= ============= ============= =============
Net earnings (loss) per share-Diluted:
- continuing ....................... $ 0.01 $ (0.06) $ 0.12 $ (0.16)
- discontinued ..................... (0.01) (0.01) (0.01) (0.21)
------------- ------------- ------------- -------------
Total: ...................... $ 0.00 $ (0.07) $ 0.11 $ (0.37)
============= ============= ============= =============
</TABLE>
2. Inventories:
Inventories consist of the following (in thousands):
<TABLE>
<CAPTION>
February 27, 1998 May 31, 1997
----------------- ------------
<S> <C> <C>
Raw materials $4,130 $4,523
Work in process 1,346 1,666
Finished goods 4,032 3,668
------ ------
$9,508 $9,857
====== ======
</TABLE>
3. Income Taxes:
The effective income tax rate used to calculate the income tax expense
(benefit) for the nine-month periods ended February 27, 1998 and
February 28, 1997, is based on the anticipated income tax rate for the
entire fiscal year.
4. Debt:
As of February 27, 1998 the Company had drawn $2.0 million of the
$10.0 million available for working capital under terms of the
revolving credit agreement.
- 5 -
<PAGE> 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
The following section presents a discussion and analysis of the Company's
results and operations during the third quarters, and first nine months, of
fiscal 1998 and 1997, and its financial condition at quarter end of February 27,
1998. Statements that are not historical facts (such as statements in the future
tense or using terms such as "believe", "expect" or "anticipate") are
forward-looking statements that involve risks and uncertainties. The Company's
actual future results could materially differ from those discussed. Factors that
could cause or contribute to such differences include, but are not limited to,
those discussed in the following sections, particularly immediately below and
under "General Factors."
In September 1996, the Company announced that it intended to divest its food
processing operations. As a consequence, beginning in the second quarter of
fiscal 1997, the Company began accounting for the food processing segment as a
discontinued operation. Information prior to that time has been restated to
reflect this change in accounting, unless specifically indicated otherwise.
The Company previously announced the execution of separate letters of intent
providing for the acquisitions of the Company and for the sale of assets of its
food processing segment. Both transactions remain subject to continuing due
diligence reviews, execution of definitive agreements (which have not yet
occurred) and other customary conditions. Therefore, consummation of either of
the transactions cannot be assured. The Company does not intend to make any
further announcements concerning the status of negotiations as to definitive
agreements until they have been reached, which cannot be assured, or
negotiations have terminated. On November 24, 1997 the Company sold the real
estate and equipment at its Oshkosh, Wisconsin fulfillment facility (the
AOshkosh Facility@). The sale transaction was reflected in the second quarter of
fiscal 1998 including a deferral of a portion of the gain. In addition, as of
November 25, 1997, the Company purchased certain operating assets of General
Converting, a flexible packaging company. The Company intends to operate the
acquired business from the Company=s existing facilities. Because the
acquisition is being accounted for using the purchase method of accounting, the
results of the acquired operations will only be reflected from the date of the
acquisition and therefore have not had a material impact on the reported
periods.
Period to period comparisons are also affected by the Company's May 1997 sale of
the stock of its former subsidiary, Barrier Films Corporation ("Barrier"). While
operations and results of Barrier were included in the first three quarters of
fiscal 1997, the operations were divested prior to the commencement of the first
quarter of fiscal 1998.
RESULTS OF OPERATIONS
In the third quarter of fiscal 1998, net sales were $15.7 million as compared to
$17.7 million for the same period in the prior year. For the first nine months
of fiscal 1998, sales of $49.1 million were down from sales of $55.2 million
through nine months of fiscal 1997. Comparative sales by principal lines of
business are shown below:
Net Sales in Millions
<TABLE>
<CAPTION>
Fiscal Third Quarter Fiscal Year To Date
-------------------- --------------------
1998 1997 % Change 1998 1997 % Change
---- ---- -------- ---- ---- --------
<S> <C> <C> <C> <C> <C> <C>
Graphic Services
Specialty Printing $13.0 $12.1 7.4% $41.4 $38.4 7.8%
Converting & Packaging 1.5 1.8 (16.7)% 4.0 5.0 (20.0)%
Other 1.2 3.8 (68.4)% 3.7 11.8 (68.6)%
----- ----- ------ ----- ----- ------
Total $15.7 $17.7 (11.3)% $49.1 $55.2 (11.1)%
</TABLE>
Sales for the Company's ASpecialty Printing@ line increased over the prior
year's sales for both the third quarter and year-to-date. ASpecialty Printing@
includes folding cartons, commercial printing, distribution and flexible
packaging. Converting and packaging sales decreased in the third quarter of
fiscal 1998 by $300,000 compared to the prior year and year-to-date remain $1.0
million behind last year. Converting and packaging includes services related to
paperboard packaging, and packaging and converting of other promotional and
specialty items. The biggest principal line decline in sales for both the third
quarter and year-to-
6
<PAGE> 9
date occurred in the Company's "Other" line of business which includes direct
mailing, fulfillment and in fiscal 1997 films manufacturing. $5.2 million of
this year-to-date change and $1.7 million of the quarter to quarter change
resulted from the sale of Barrier prior to the beginning of the current fiscal
year. The company also experienced declining revenue from its fulfillment
business. In November 1997, the Company sold the Oshkosh Facility at which
fulfillment operations have been conducted in order to reallocate these
resources from an underutilized facility, although certain fullfillment services
continue to be condiucted. Management continues to focus its sales efforts at
market opportunities utilizing its Acore@ operational competencies and
developing special niches for improved overall profitability.
Gross profit improved in the quarter and year-to-date. Year-to-date gross profit
margins improved from 14% of sales in fiscal 1997 to 20% in fiscal 1998. Margins
improved in each of the operations due to improved controls and efficiencies as
well as cost reductions especially for payroll related expenses, rent expense
and depreciation. In addition, the Company has developed additional businesss in
some higher margin markets.
Selling, general and administrative expenses increased for the quarter and
year-to-date reflecting increases in the Company=s reserves for bad debts and
additional professional fees incurred in supporting the Company's sale and
purchase of various assets and other ongoing activities.
As a result of the above, the Company improved operating profit on a quarter to
quarter comparative basis from $14,000 to $266,000, and on a year-to-date
comparative basis from $429,000 to $1.8 million.
Interest expense was reduced for the current quarter and year-to-date compared
to the prior year. Quarter to quarter and year-to-date interest savings compared
to fiscal 1997 primarily resulted from a reduction in bank debt during the
periods.
Buy out related expense in fiscal 1998 represents the costs pertaining to the
proposed acquisition of the Company.
Other income includes recognition of the gain on the sale of the Oshkosh
facility and of certain other equipment and assets.
Income tax expense (benefit) is being accrued for the year at the rate of 38.5%
although quarter to quarter fluctuations may occur.
As a result of these factors, quarterly earnings from continuing operations
increased to $61,000 or $0.01 per dilutive share, compared to a loss of $290,000
or $0.06 per share for the same period last year. Earnings from continuing
operations were $582,000 or $0.12 per dilutive share for the first three
quarters of fiscal 1998, compared to a loss of $762,000 or $0.16 per share for
the comparable period in the prior year.
The food processing segment, now accounted for as a discontinued operation,
posted year-to-date sales of $12.6 million for fiscal 1998, an increase of
$468,000 over the same period for the prior year. In addition, year-to-date net
income from this division improved $944,000 (from a loss in fiscal 1997 of
$977,000 to a loss of $33,000). Year-to-date earnings per dilutive share from
discontinued operations improved to a loss of $0.01 in fiscal 1998 from a loss
of $0.21 in fiscal 1997.
Liquidity and Capital Resources
As shown in the Condensed Consolidated Statements of Cash Flows, the ending cash
balance did not change from the beginning of this nine month period to the end
although cash overdrafts decreased by $353,000.
Operating activities provided $6.3 million of increased cash during the first
nine months. Cash from profitable operations and depreciation generated $4.3
million of this amount. Further cash was generated from the receipt of payments
on outstanding notes. These improvements were partially offset by a $461,000
increase in the company=s income taxes refundable.
Cash flow from investing activities provided further cash primarily from the
sale of the Oshkosh facility. The Oshkosh Facility was sold for $3.6 million in
cash generating a current gain of $165,000 and an additional deferred gain of
$600,000.
7
<PAGE> 10
These proceeds were partially offset by further investment in plant and
equipment and the acquisition of General Converting=s assets. In the
transaction, the Company paid approximately $1.2 million in cash for specified
assets (including certain current assets) of General Converting.
Cash generated from operating activities and investing activities was utilized
to reduce the Company=s outstanding debts including the revolving line of
credit, $2.9 million, cash overdraft, $353,000 and term debt, $6.1 million. As
of the quarter end, the Company was in compliance with all of its loan
covenants. The Company considers its credit facilities adequate for its current
liquidity needs.
General Factors
Because of the project-oriented nature of the Company's business, the Company's
largest customers have historically tended to vary from year to year depending
on the number and size of the projects completed for these customers. The
Company is dependent upon its ability to retain and obtain new customers without
the benefit of long term contracts.
Outlook Foods, which the Company is seeking to divest, manufactures malted milk
products for Nestle under a contract which has been extended to December 1998.
In addition, Nestle purchases other products on a non-contractual basis.
However, there can be no assurances that such purchases will continue, and the
announced divestiture of Outlook Foods could adversely affect the operations of
the food segment.
Changes in the Company's project mix and timing of projects make predictability
of the Company's future results very difficult. Other than under Nestle's
agreement, customers generally purchase the Company's services under cancelable
purchase orders rather than long-term contracts, although exceptions sometimes
occur when the Company is required to purchase substantial inventories or
special machinery to meet orders. The Company believes that operating without
long-term contracts is consistent with industry practices, although it increases
the Company's vulnerability to losses of business and significant
period-to-period changes.
As do other companies, the Company has significant accounts receivable or other
amounts due from its customers. From time to time, certain of these accounts
receivable or other amounts due have become unusually large and/or overdue, and
on occasion the Company has taken significant write-offs relating to accounts
receivable. The failure of the Company's customers to pay in full amounts due to
the Company would affect future profitability.
In addition, the Company=s business requires it to maintain substantial
inventories. From time to time, changes in customer projects or Company services
can render certain inventories obsolete, and from time to time the Company has
taken substantial write-offs of obsolete inventories. The need to take such
write-offs in the future may affect future profitability and depends upon
changing customer requirements and other factors beyond the Company=s control.
In addition, in the case of Foods, the treatment of inventory, accounts
receivable, and other assets will depend upon the ultimate agreement between the
Company and a buyer of the Foods operations.
8
<PAGE> 11
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.
OUTLOOK GROUP CORP.
-------------------
(Registrant)
/s/ Richard C. Fischer
Dated: April 13, 1998 ----------------------------------------
Richard C. Fischer, Chairman and Interim
Chief Executive Officer
/s/ Thomas C. Aschenbrenner
--------------------------------------------
Thomas C. Aschenbrenner, Secretary and Chief
Financial Officer
9
<PAGE> 12
OUTLOOK GROUP CORP.
EXHIBIT INDEX
to FORM 10-Q
for the quarter ended February 27, 1998
Exhibit Filed
Number Description Herewith
- ----------------------------------------------------------------------
27 Financial Data Schedule X
10
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAY-31-1998
<PERIOD-START> JUN-01-1997
<PERIOD-END> FEB-27-1998
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 12,894
<ALLOWANCES> 1,369
<INVENTORY> 9,508
<CURRENT-ASSETS> 25,160
<PP&E> 55,261
<DEPRECIATION> 25,869
<TOTAL-ASSETS> 59,787
<CURRENT-LIABILITIES> 11,512
<BONDS> 0
0
0
<COMMON> 51
<OTHER-SE> 34,003
<TOTAL-LIABILITY-AND-EQUITY> 59,787
<SALES> 49,101
<TOTAL-REVENUES> 49,101
<CGS> 39,447
<TOTAL-COSTS> 47,318
<OTHER-EXPENSES> (674)
<LOSS-PROVISION> 490
<INTEREST-EXPENSE> 1,508
<INCOME-PRETAX> 949
<INCOME-TAX> 367
<INCOME-CONTINUING> 582
<DISCONTINUED> (33)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 549
<EPS-PRIMARY> .12
<EPS-DILUTED> .11
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAY-31-1997
<PERIOD-START> JUN-01-1996
<PERIOD-END> FEB-28-1997
<CASH> 37
<SECURITIES> 0
<RECEIVABLES> 15,302
<ALLOWANCES> 677
<INVENTORY> 11,293
<CURRENT-ASSETS> 31,923
<PP&E> 63,856
<DEPRECIATION> 22,851
<TOTAL-ASSETS> 75,263
<CURRENT-LIABILITIES> 12,105
<BONDS> 0
0
0
<COMMON> 51
<OTHER-SE> 33,154
<TOTAL-LIABILITY-AND-EQUITY> 75,263
<SALES> 55,201
<TOTAL-REVENUES> 55,201
<CGS> 47,742
<TOTAL-COSTS> 54,772
<OTHER-EXPENSES> (628)
<LOSS-PROVISION> 66
<INTEREST-EXPENSE> 2,160
<INCOME-PRETAX> (1,103)
<INCOME-TAX> (341)
<INCOME-CONTINUING> (762)
<DISCONTINUED> (977)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,739)
<EPS-PRIMARY> (.37)
<EPS-DILUTED> (.37)
</TABLE>
