SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10 Q/A
(Mark One)
/XX/QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES
-- EXCHANGE ACT OF 1934
For the quarterly period ended June 27, 1999
/ /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: 0-19717
WPI GROUP, INC.
---------------
(Exact name of registrant as specified in its charter)
NEW HAMPSHIRE 02-0218767
------------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification
Number)
1155 Elm Street, Manchester, New Hampshire 03101
- ------------------------------------------ -----
(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code: (603) 627-3500
--------------
- ------------------------------------------------------------------
- -----
(Former name, former address, and former fiscal year, if changed
since last report)
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
--- ---
Applicable only to issuers involved in bankruptcy proceedings
during the preceding five years:
Indicate by check mark whether the registrant filed all documents
and reports required to be filed by Section 12, 13 or 15(d) of
the Securities Exchange Act of 1934 subsequent to the
distribution of securities under a plan confirmed by the court.
Yes No
--- ---
Applicable only to corporate issuers:
Indicate the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date:
Class Outstanding as of July 31, 1999
----- -------------------------------
Common Stock, par value $.01 6,049,958 shares
<PAGE>
The Registrant submits its first amendment to its Form 10-Q for
the
period ended June 26, 1999 to correct its Financial Data Schedule
WPI GROUP, INC.
INDEX
-----
Page No.
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PART I - FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
Consolidated Balance Sheets 3
- June 27,1999 and September 27,1998
Consolidated Statements of Operations 4
- Three months ended June 27,1999 and June
28,1998
- Nine months ended June 27,1999 and June
28,1998
Consolidated Statements of Cash Flows 5
- Nine months ended June 27,1999 and June
28,1998
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of 7
Financial Condition and Results of Operations
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 11
SIGNATURES 12
-2-
<PAGE>
<TABLE>
WPI GROUP, INC.
CONSOLIDATED BALANCE SHEETS
<CAPTION>
September 27, June 27,
1998 1999
------------- ------------
(unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 159,518 $ 50,948
Accounts receivable - net of
allowance for doubtful
accounts of $1,283,000 and
$898,000, respectively 21,123,792 15,792,925
Accounts receivable - other 270,611 317,344
Inventories 14,188,286 16,764,656
Prepaid expenses and other
current assets 1,562,048 2,389,543
Prepaid income taxes 2,551,616 2,551,459
Refundable income taxes 620,578 209,480
------------- ------------
Total current assets 40,476,449 38,076,355
PROPERTY, PLANT AND EQUIPMENT
at cost, less accumulated depreciation 15,514,291 15,195,186
OTHER ASSETS 54,132,417 52,802,425
------------- ------------
$ 110,123,157 $106,073,966
============= ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Bank credit facility $ - $ 67,000,000
Current portion of long-term debt 3,715,748 495,372
Accounts payable 7,776,470 8,008,348
Accrued expenses 5,985,304 5,601,062
Accrued income taxes 1,672,166 1,121,588
------------- ------------
Total current liabilities 19,149,688 82,226,370
------------- ------------
LONG-TERM DEBT 62,638,964 1,423,800
------------- ------------
DEFERRED INCOME TAXES 3,091,995 3,095,604
------------- ------------
COMMITMENTS
STOCKHOLDERS' EQUITY:
Common stock, $.01 par value;
authorized 20,000,000 shares,
issued and outstanding 6,028,204
and 6,049,958, respectively. 60,282 60,499
Additional paid-in capital 14,169,771 14,234,931
Retained earnings 10,418,044 5,660,687
Cumulative foreign currency
translation adjustments 594,413 (627,925)
------------- ------------
Total stockholders' equity 25,242,510 19,328,192
------------- ------------
$ 110,123,157 $106,073,966
============= ============
</TABLE>
See notes to financial statements
- 3 -
<PAGE>
<TABLE>
WPI GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
<CAPTION>
Three Months Ended Nine Months Ended
June 28, June 27, June 28, June 27,
1998 1999 1998 1999
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
NET SALES $24,397,485 $21,201,209 $69,494,757 $68,153,904
COST OF GOODS SOLD 13,874,966 12,905,474 40,511,951 40,030,909
----------- ----------- ----------- -----------
GROSS PROFIT 10,522,519 8,295,735 28,982,806 28,122,995
----------- ----------- ----------- -----------
OPERATING EXPENSES:
Research and new
product development 1,323,517 1,465,118 3,983,448 4,435,651
Selling, general and
administration 6,426,139 7,312,248 17,670,970 21,772,999
Restructuring costs - - - 1,750,000
----------- ----------- ----------- -----------
Total operating expense 7,749,656 8,777,366 21,654,418 27,958,650
----------- ----------- ----------- -----------
OPERATING INCOME (LOSS) 2,772,863 (481,631) 7,328,388 164,345
----------- ----------- ----------- -----------
OTHER INCOME (EXPENSE):
Interest expense (771,792) (1,791,732) (2,445,588) (5,196,901)
Foreign currency exchange
gain (loss) (26,162) 19,208 (54,422) 252,590
Other, net 56,408 8,685 72,173 22,609
----------- ----------- ---------- -----------
(741,546) (1,763,839) (2,427,837) (4,921,702)
----------- ----------- ----------- -----------
INCOME (LOSS)BEFORE PROVISION
FOR INCOME TAXES 2,031,317 (2,245,470) 4,900,551 (4,757,357)
PROVISION FOR INCOME
TAXES 663,000 904,000 1,568,000 0
----------- ----------- ----------- -----------
NET INCOME (LOSS) $ 1,368,317 $(3,149,470) $ 3,332,551 $(4,757,357)
=========== =========== =========== ===========
BASIC EARNINGS (LOSS)
PER SHARE: $ 0.23 $ (0.52) $ 0.55 $ (0.79)
=========== =========== =========== ===========
DILUTED EARNINGS (LOSS)
PER SHARE: $ 0.22 $ (0.52) $ 0.54 $ (0.79)
=========== =========== =========== ===========
Weighted Average Common
Shares 6,018,419 6,048,977 6,011,864 6,041,515
Effect of Dilutive
Options 172,258 - 200,164 -
----------- ----------- ----------- -----------
Adjusted Weighted Average
Common Shares 6,190,677 6,048,977 6,212,028 6,041,515
=========== =========== =========== ===========
</TABLE>
See notes to financial statements
- 4 -
<PAGE>
<TABLE>
WPI GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
<CAPTION>
Nine Months Ended
June 28, June 27,
1998 1999
------------ -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 3,332,551 $(4,757,357)
------------ -----------
Adjustments to reconcile net income to
net cash provided by operating
activities:
Depreciation and amortization 4,073,770 4,730,186
Deferred income taxes 21,135 9,292
Changes in current assets and
liabilities net of effects
of acquisition:
Accounts receivable (5,252,176) 4,618,742
Accounts receivable - other (54,793) (52,531)
Inventories 515,345 (3,061,493)
Prepaid expenses and other current
assets 353,425 (507,582)
Accounts payable (395,206) 583,320
Accrued expenses 1,070 208,043
Accrued income taxes 1,211,818 (426,613)
------------ -----------
Total adjustments 474,388 6,101,364
------------ -----------
Net cash provided by operating
activities 3,806,939 1,344,007
------------ -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase (Decrease) in notes payable (2,000,000) 2,564,460
Proceeds from issuance of common stock 50,878 35,958
Proceeds from exercise of stock options 79,469 28,519
Tax benefit on exercise of non-
statutory options 22,000 900
------------ -----------
Net cash provided by (used in)
financial activities (1,847,653) 2,629,837
------------ -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property, plant and
equipment (950,889) (2,150,774)
Proceeds from sales of property, plant
and equipment 1,492,738 -
Increase in other assets (1,646,877) (1,504,180)
Payment of accrued acquisition costs (133,328) (397,453)
------------ -----------
Net cash (used in) investing
activities (1,238,356) (4,052,407)
------------ -----------
EFFECT OF FOREIGN CURRENCY
TRANSLATION ON CASH 24,502 (30,007)
------------ -----------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 745,432 (108,570)
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 678,799 159,518
------------ -----------
CASH AND CASH EQUIVALENTS,
END OF PERIOD $ 1,424,231 $ 50,948
============ ===========
SUPPLEMENTAL DISCLOSURE OF CASH
INFORMATION:
Income taxes paid (refunded) $ (337,684) $ 70,246
Interest paid 2,423,138 3,940,396
</TABLE>
See notes to financial statements
- 5 -
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The financial statements for the three months and nine months
ended June 27,1999 and June 28, 1998 are unaudited and include
all adjustments which, in the opinion of management, are
necessary to present fairly the results of operations for the
periods then ended. All such adjustments are of a normal
recurring nature. These financial statements should be read
in conjunction with the financial statements and notes thereto
included in the Company's Form 10-K filed with the Securities
and Exchange Commission (File No. 0-19717), which included
financial statements for the years ended September 27,1998 and
September 28,1997.
The results of the Company's operations for any interim period
are not necessarily indicative of the results of the Company's
operations for any other interim period or for a full fiscal
year.
<TABLE>
2. INVENTORIES
<CAPTION>
Inventory consists of: September 27, June 27,
1998 1999
------------- -----------
<S> <C> <C>
Raw Materials $ 7,684,405 $ 9,467,918
Work in Process 4,758,535 5,110,955
Finished Goods 1,745,346 2,185,783
------------- -----------
Total $ 14,188,286 $16,764,656
============= ===========
</TABLE>
3. BANK CREDIT FACILITY
The Company has a $75 million credit facility with a syndication
of banks, consisting of a $20 million revolving line of credit
which expires on September 30, 2003, and term notes totaling $55
million payable in varying quarterly installments commencing on
December 31, 1998, and through September 30, 2004. The agreement
contains certain restrictive covenants, including financial covenants,
one of which the Company was not in compliance with at September 27, 1998.
In December 1998, the Company reached an agreement with the banks
to waive the event of non-compliance and amend certain terms of the
agreement.
As of March 28, 1999 and June 27, 1999, the Company was not in
compliance with two of the financial covenants contained in the credit
agreement. The Company reached agreement with the banks to waive the event
of non- compliance as of March 28, 1999 and June 27, 1999 up to and
until October 1, 1999 and to amend certain terms of the agreement. In
relevant part, the terms of the amendment increases the interest accrued
on all borrowings by 2% per annum and limits the revolving credit
borrowings to $14.8 million, the amount of the Company's current revolving
credit borrowings. In addition to the payment of a fee to amend the
agreement, the Company has agreed to issue to the banks warrants to
purchase 124,000 shares of the Company's common stock at $2.75 per share.
The warrants are exercisable after one year for a period of ten years.
The Company believes that its cash flow from operations and
current availability under the credit facility sufficient to support
working capital needs for the forseeable future. While the
Company has received waivers of compliance with certain financial covenants
through the
- 6 -
<PAGE>
end of its fiscal year ending September 26, 1999, the Company
anticipates the need to negotiate with its banks on an amendment
to its credit facility, negotiate with the banks on further waiver
on certain covenants and other terms, or refinance its credit facility.
There is no assurance that the Company will obtain an amendment or
waiver or be able to refinance its credit facility. If the Company
is unable to obtain an amendment or waiver or is unable to refinance
the credit facility, the Company could be in non-compliance with the
terms of the credit agreement. Such non-compliance would permit the
banks to accelerate the maturity of all outstanding borrowings under
the credit facility and would have a material adverse effect
on the Company's liquidity and capital reserves and cash flows.
Accordingly, debt related to the credit facility has been classified as
current in the balance sheet in the third fiscal quarter of 1999.
- 7 -
<PAGE>
ITEM 2.
Management's Discussion and Analysis of Financial Condition
and Results of Operations
This Management's Discussion and Analysis of Financial Condition
and Results of Operations should be read in conjunction with the
financial statements and footnotes contained in the Company's
Form 10-Q for the period ending June 27, 1999 and the Form 10-K for
the year ended September 27, 1998, filed with the Securities and
Exchange Commission. In addition to historical information,
this report contains forward looking statements that involve risks
and uncertainties that could cause actual results to differ
materially. Factors that might cause or contribute to such differences
include, but are not limited to, those discussed in this section. Readers
should carefully review the risks described in other documents
the Company files from time to time with the Securities and Exchange
Commission, including the Company's Annual Report on Form 10-K
where the fiscal year ended September 27, 1998. Readers are cautioned
not to place undue reliance on the forward looking statements, which
speak only as of the date of this report. The Company undertakes
no obligation to publicly release any revisions to the forward
looking statements or reflect events or circumstances after the
date of this document.
RESULTS OF OPERATIONS
Net sales of $21.2 million for the third quarter of
fiscal 1999 decreased 13% from sales of $24.4 million for
the third quarter of fiscal 1998. For the first nine months of
fiscal 1999, the Company reported net sales of $68.2
million, 2% lower than the sales of $69.5 million for the first
nine months of fiscal 1998. The Company's net sales for the
quarter and nine months ended June 27, 1999 include WPI Instruments,
Inc. as a result of its acquisition in August 1998. The Company's
fiscal 1999 sales were negatively impacted by lower sales in the
Company's power conversion systems, electronic ballasts and handheld
terminal product lines.
Cost of sales of $12.9 million for the third quarter of
fiscal 1999 resulted in a gross profit of 39%, compared to a
gross profit of 43% for the same period of fiscal 1998. Cost
of sales of $40.0 million for the first nine months of
fiscal 1999 resulted in a gross profit of 41%, compared to a
gross profit of 42% for the same period of fiscal 1998. The
decrease in the Company's gross profit percentage in fiscal
1999 was primarily attributable to a change in the mix of
products sold.
Research and new product development expenses were 7% and 7 % of
sales for the quarter and for the nine months ended
June 27,1999, respectively, compared to 5% and 6% of sales for
the same three and nine month periods in fiscal 1998. The
increase in research and new product development expenses as a
percentage of net sales was due primarily to the decrease in sales
and the acquisition of WPI Instruments.
As a percentage of sales, selling, general and administrative
expenditures were 34% and 26% for the quarters and 32% and
25% of the nine month periods ended June 27, 1999 and June 28,
1998, respectively. The increase in selling, general and
administrative expenses as a percentage of sales in fiscal
1999 was primarily attributable to the decrease in sales, the
acquisition of WPI Instruments and higher expenses incurred
prior to the implementation of the Company's consolidation and
restructuring initiatives.
The Company's operating loss of the third quarter of fiscal 1999
is $.5 million compared to operating income of $2.8 million in
the third quarter of fiscal 1998. For the nine months ended June
27, 1999 and June 28, 1998, the Company's operating income was $.2
million and $7.3 million, respectively. The decrease in operating
income was primarily due to the increase in selling, general and
administration expenses discussed above and the restructuring
costs incurred to date in connection with the Company's reorganization
of its Information Solutions and Industrial Technology Groups.
- 8 -
<PAGE>
For the three months ended June 27, 1999, the Company's loss
before provision for income taxes is $2.2 million compared to income of
$2.0 million for the three months ended June 28, 1998. For the
nine months ended June 27, 1999, the Company's loss before provision
for income taxes is $4.8 million compared to income of $4.9 million
for the nine months ended June 28, 1998. The decrease for the three
and nine month periods was primarily due to weaker sales and the
Company's reorganization discussed above.
The provision for income taxes of $904,000 for the three months
ended June 27, 1999 represents the reversal of the tax benefits
recognized in the first and second quarter of fiscal 1999. The
Company had recognized the tax benefit because it expected to
generate sufficient U.S. and U.K. income to realize the benefits
of the loss during fiscal 1999. The tax benefits were reversed
because the Company does not believe it is more likely than not
that it will generate sufficient taxable income in fiscal 1999
to offset the loss incurred to debt. Any unutilized net operating
loss will be available for carry forward to reduce the Company's
future taxable income.
LIQUIDITY AND CAPITAL RESOURCES
The Company has a $75 million credit facility with a syndication
of banks, consisting of a $20 million revolving line of credit
which expires on September 30, 2003, and term notes totaling $55
million payable in varying quarterly installments commencing on
December 31, 1998, and through September 30, 2004. The agreement
contains certain restrictive covenants, including financial covenants,
one of which the Company was not in compliance with at September 27,
1998. In December 1998, the Company reached an agreement with the banks
to waive the event of non-compliance and amend certain terms of the
agreement.
As of March 28, 1999 and June 27, 1999, the Company was not in
compliance with two of the financial covenants contained in the credit
agreement. The Company reached agreement with the banks to waive the event
of non-compliance as of March 28, 1999 and June 27, 1999 up to and
until October 1, 1999 and to amend certain terms of the agreement. In
relevant part, the terms of the amendment increases the interest accrued
on all borrowings by 2% per annum and limits the revolving credit
borrowings to $14.8 million, the amount of the Company's current revolving
credit borrowings. In addition to the payment of a fee to amend the
agreement, the Company has agreed to issue to the banks warrants to
purchase 124,000 shares of the Company's common stock at $2.75 per share.
The warrants are exercisable after one year for a period of ten years.
The Company believes that its cash flow from operations and
current availability under the credit facility sufficient to support
working capital needs for the forseeable future. While the
Company has received waivers of compliance with certain financial covenants
through the end of its fiscal year ending September 26, 1999, the Company
anticipates the need to negotiate with its banks on an amendment to its
credit facility, negotiate with the banks on further waiver on certain
covenants and other terms, or refinance its credit facility. There is
no assurance that the Company will obtain an amendment or waiver or be able to
refinance its credit facility. If the Company is unable to obtain an
amendment or waiver or is unable to refinance the credit facility, the
Company could be in non-compliance with the terms of the credit agreement.
Such non-compliance would permit the banks to accelerate the maturity
of all outstanding borrowings under the credit facility and would have a
material adverse effect on the Company's liquidity and capital reserves
and cash flows. Accordingly, debt related to the credit facility has been
classified as current in the balance sheet in the third fiscal quarter
of 1999.
As of June 27, 1999, the Company had no material commitments
for capital expenditures.
- 9 -
<PAGE>
RESTRUCTURING COSTS
The Company has recognized one-time restructuring charges in
connection with the consolidation and restructuring of its Information
Solutions and Industrial Technology Group operations. As part of the
restructuring, the Company has integrated and consolidated the operations
and management of its handheld computer and terminal operations into one
business unit and has consolidated and integrated the operations and
management of its Industrial Technology companies into a second business
unit. In connection with the reorganization and consolidation, WPI
anticipates a net reduction of approximately 10% of its workforce,
transferring and consolidating manufacturing into three facilities and
recording a restructuring charge of $1,750,000 during fiscal 1999. The
restructuring charge and remaining obligation as of June 27, 1999 of
approximately $365,000 consists primarily of employee severance costs.
Management anticipates the cash requirements for the remaining obligation
to be relatively consistent over the next two quarters.
<TABLE>
The Company's restructuring activity as of June 27, 1999 is as
follows in thousands:
<CAPTION>
Initial Utilization of Reserve Remaining
Reserve Cash Non-Cash Reserve
<S> <C> <C> <C> <S> <C>
Severance costs $1,575 $1,210 $ - $ 365
Other costs 175 175 - -
------ ------ -------- ------
Total $1,750 $1,385 $ - $ 365
====== ====== ======== ======
</TABLE>
YEAR 2000
The information set forth under this caption is designated to be
a "Year 2000 readiness disclosure" under the Year 2000 Information
Readiness Disclosure Act, Public Law 105-271.
WPI has established its Year 2000 Project in order to evaluate
the issue of computer software and embedded computer chips that are not
able to distinguish between the year 1900 and the year 2000. WPI's Year
2000 Project is divided into three major sections: (1) IT systems
(which examine operating systems and business applications software);
(2) External agents (which examine third party suppliers and customers);
and (3) Product issues (which involve Year 2000 issues inherent in products
sold by WPI).
The IT systems section evaluates hardware and systems software.
WPI has completed its evaluation of its main internal operating systems
and business applications software. As a result of this evaluation, WPI
has begun the process of implementing the necessary changes and
testing its internal systems to achieve Year 2000 compliance in this area.
This process is currently on schedule. WPI estimates that if this process
stays on schedule, IT systems are expected to be Year 2000 compliant by
September 1999.
The external agents section includes the process of identifying
and prioritizing critical suppliers and customers at the direct
interface level,and communicating with them about their plans
and progress in addressing the year 2000 problem. Year 2000
compliance issues at critical suppliers create
risks for WPI, since their inability to operate effectively
could impact our business. Evaluations of the most critical
third parties have been completed. WPI has receive assurances
from its critical suppliers that they are or will be Year 2000 ready.
The product issues section includes the process of identifying
any product sold by WPI which may not be Year 2000 compliant,
determining a corrective course of action and disseminating
information about Year 2000 compliance to customers. Although most
of WPI's products that have integrated software or
embedded microprocessors are Year 2000 compliant, there can be
no assurances that all of WPI's products are currently Year 2000
compliant. Detailed
- 10 -
<PAGE>
evaluations of products have been completed. These evaluations
have been followed by corrective actions and the dissemination of Year
2000 compliance information to product users, where necessary.
Total costs associated with required IT systems modifications to
become Year 2000 compliant and product issues are not expected to have
a material effect on the consolidated results of operations, cash flows or
financial position of WPI.
The failure to correct a material Year 2000 problem could result
in an interruption in, or a failure of, certain normal business
activities or operations. Due to the general uncertainty inherent in
the Year 2000 problem, resulting in part from the uncertainty of the
Year 2000 readiness of third party suppliers and customers, WPI is
unable to determine at this time, whether the consequences of Year 2000
failure will have a material impact on WPI's results of operations,
liquidity or financial condition. However, management believes that
WPI's Year 2000 Project will significantly reduce WPI's level of risk
regarding the Year 2000 problem.
- 11 -
<PAGE>
WPI GROUP, INC.
PART II - Other Information
Item 6. Exhibits and Reports on Form 8-K
A. Exhibits
27 Financial Data Schedule
B. Reports on Form 8-K
None.
- 12 -
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
behalf by the undersigned thereunto duly authorized.
WPI GROUP, INC.
(Registrant)
Date: August 23,1999 By:/s/ John R. Allard
------------------
John R. Allard
President and
Chief Operating
Officer
Date: August 23,1999 By:/s/John W. Powers
-----------------
John W. Powers
Vice President and
Chief Financial
Officer
- 13 -
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE FINANCIAL STATEMENTS OF WPI GROUP, INC. FOR THE NINE MONTHS ENDED
JUNE 27, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-26-1999
<PERIOD-END> JUN-27-1999
<CASH> 50,948
<SECURITIES> 0
<RECEIVABLES> 16,690,925
<ALLOWANCES> 898,000
<INVENTORY> 16,764,656
<CURRENT-ASSETS> 38,076,355
<PP&E> 22,457,637
<DEPRECIATION> 7,262,451
<TOTAL-ASSETS> 106,073,966
<CURRENT-LIABILITIES> 82,226,370
<BONDS> 0
0
0
<COMMON> 60,499
<OTHER-SE> 19,267,693
<TOTAL-LIABILITY-AND-EQUITY> 106,073,966
<SALES> 68,153,904
<TOTAL-REVENUES> 68,153,904
<CGS> 40,030,909
<TOTAL-COSTS> 67,989,559
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5,196,901
<INCOME-PRETAX> (4,757,357)
<INCOME-TAX> 0
<INCOME-CONTINUING> (4,757,357)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (4,757,357)
<EPS-BASIC> (0.79)
<EPS-DILUTED> (0.79)
</TABLE>
