<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED OCTOBER 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period to
------ ------
Commission file number 1-4987
SL INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
NEW JERSEY 21-0682685
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer
Identification No.)
520 FELLOWSHIP ROAD, SUITE A114, MT. LAUREL, NJ 08054
(Address of principal executive offices) (Zip Code)
</TABLE>
Registrant's telephone number, including area code: 609-727-1500
Securities registered pursuant to Section 12(b) of the Act:
<TABLE>
<S> <C>
Title of each class Name of each exchange on which registered
Common stock, $.20 par value New York Stock Exchange
Philadelphia Stock Exchange
</TABLE>
Securities registered pursuant to Section 12(g) of the Act: None
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
--- ---
The number of shares of common stock outstanding as of December 4, 1998, was
5,660,740.
<PAGE> 2
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
SL INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
October 31, July 31,
1998 1998
------------ ------------
(Unaudited) *
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents................................................... $ 51,000 $ -
Receivables, less allowances of
$2,248,000 and $2,045,000, respectively.................................... 18,170,000 18,886,000
Inventories (Note 2)........................................................ 19,214,000 18,538,000
Prepaid expenses............................................................ 924,000 972,000
Deferred income taxes....................................................... 2,665,000 3,014,000
------------ ------------
Total current assets.................................................... 41,024,000 41,410,000
------------ ------------
Property, plant and equipment, less accumulated depreciation
of $18,676,000 and $12,569,000, respectively................................. 15,285,000 14,890,000
Long-term notes receivable..................................................... 2,193,000 2,201,000
Deferred income taxes.......................................................... 1,817,000 1,865,000
Cash surrender value of life insurance policies................................ 8,444,000 8,657,000
Intangible assets, less accumulated amortization
of $2,896,000 and $2,692,000, respectively................................... 10,555,000 10,705,000
Other assets................................................................... 1,665,000 1,187,000
------------ ------------
Total assets........................................................... $ 80,983,000 $ 80,915,000
============ ============
LIABILITIES
Current liabilities:
Short-term bank debt........................................................ $ 371,000 $ -
Long-term debt due within one year.......................................... 261,000 727,000
Accounts payable............................................................ 7,520,000 5,982,000
Accrued income taxes........................................................ 2,161,000 2,105,000
Accrued liabilities:
Payroll and related costs................................................. 3,667,000 4,851,000
Other..................................................................... 5,079,000 6,401,000
------------ ------------
Total current liabilities.............................................. 19,059,000 20,066,000
------------ ------------
Long-term debt less portion due within one year................................ 13,181,000 13,283,000
Deferred compensation and supplemental retirement benefits..................... 4,864,000 4,667,000
Other liabilities.............................................................. 4,094,000 4,554,000
------------ ------------
Total liabilities...................................................... $ 41,198,000 $ 42,570,000
------------ ------------
Commitments and contingencies
SHAREHOLDERS' EQUITY
Preferred stock, no par value; authorized, 6,000,000 shares; none issued....... $ - $ -
Common stock, $.20 par value; authorized, 25,000,000 shares;
issued, 8,166,000 and 8,153,000 shares, respectively......................... 1,633,000 1,631,000
Capital in excess of par value................................................. 36,267,000 36,061,000
Retained earnings.............................................................. 15,463,000 14,476,000
Translation adjustment......................................................... 198,000 80,000
Treasury stock at cost, 2,522,000 and 2,546,000 shares, respectively........... (13,776,000) (13,903,000)
------------ ------------
Total shareholders' equity............................................. 39,785,000 38,345,000
------------ ------------
Total liabilities and shareholders' equity............................. $ 80,983,000 $ 80,915,000
============ ============
</TABLE>
* Condensed from audited financial statements.
See accompanying notes to consolidated financial statements.
<PAGE> 3
SL INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
<TABLE>
<CAPTION>
Three-Months Ended
October 31,
1998 1997
------------- -------------
(Unaudited) (Unaudited)
<S> <C> <C>
Net sales........................................................... $ 30,247,000 $ 29,455,000
------------ ------------
Cost and expenses:
Cost of products sold............................................. 19,424,000 18,654,000
Engineering and product development............................... 1,917,000 1,532,000
Selling, general and administrative............................... 5,786,000 6,626,000
Depreciation and amortization..................................... 964,000 729,000
------------ ------------
Total cost and expenses............................................. 28,091,000 27,541,000
------------ ------------
Income from operations.............................................. 2,156,000 1,914,000
Other income (expense):
Interest income................................................... 76,000 54,000
Interest expense.................................................. (241,000) (75,000)
------------ ------------
Income before income taxes.......................................... 1,991,000 1,893,000
Provision for federal and state income taxes........................ 778,000 711,000
----------- -----------
Net income.......................................................... $ 1,213,000 $ 1,182,000
=========== ===========
Basic net income per common share (a)............................... $ 0.22 $ 0.21
=========== ===========
Diluted net income per common share (a)............................. $ 0.21 $ 0.20
=========== ===========
Shares used in computing basic net income
per common share (a).............................................. 5,627,000 5,643,000
Shares used in computing diluted net income
per common share (a).............................................. 5,861,000 5,953,000
</TABLE>
(a) Presentation reflects the adoption of FASB 128.
See accompanying notes to consolidated financial statements.
SL INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS
<TABLE>
<CAPTION>
Three-Months Ended
October 31,
1998 1997
------------ -------------
(Unaudited) (Unaudited)
<S> <C> <C>
Net income.......................................................... $ 1,213,000 $ 1,182,000
Other comprehensive income:
Currency translation adjustment, net of related taxes............. 198,000 -
----------- -----------
Comprehensive income................................................ $ 1,411,000 $ 1,182,000
=========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE> 4
SL INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Three-Months Ended October 31,
1998 1997
------------ -------------
(Unaudited) (Unaudited)
<S> <C> <C>
OPERATING ACTIVITIES:
Net income............................................................................. $ 1,213,000 $ 1,182,000
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation........................................................................ 656,000 499,000
Amortization........................................................................ 308,000 230,000
Provisions for losses on accounts receivable........................................ 3,000 6,000
Additions to deferred charges and other assets...................................... (226,000) (433,000)
Cash surrender value of life insurance premium...................................... (160,000) (210,000)
Deferred compensation and supplemental retirement payments.......................... 391,000 447,000
Deferred compensation and supplemental retirement benefit cash payments............ (186,000) (176,000)
Increase in deferred income taxes................................................... 460,000 (362,000)
Gain on sale of equipment............................................................ - -
Cash dividends declared, but not paid................................................ (226,000) (220,000)
Changes in operating assets and liabilities:
Accounts receivable............................................................... 948,000 1,112,000
Inventories....................................................................... (443,000) 210,000
Prepaid expenses.................................................................. 68,000 (241,000)
Accounts payable.................................................................. 913,000 (1,530,000)
Other accrued liabilities......................................................... (3,149,000) (436,000)
Income taxes...................................................................... (54,000) 942,000
----------- -----------
NET CASH PROVIDED BY OPERATING ACTIVITIES................................................ $ 516,000 $ 1,020,000
----------- -----------
INVESTING ACTIVITIES:
Disposals of property, plant and equipment............................................. - 1,000
Purchases of property, plant and equipment............................................. (886,000) (659,000)
Decrease in notes receivable........................................................... 7,000 7,000
----------- -----------
NET CASH USED IN INVESTING ACTIVITIES.................................................... $ (879,000) $ (651,000)
----------- -----------
FINANCING ACTIVITIES:
Proceeds from long-term debt........................................................... 2,910,000 5,100,000
Payments on long-term debt............................................................. (2,700,000) (1,800,000)
Proceeds from stock options exercised.................................................. 48,000 461,000
Treasury stock sold (acquired)......................................................... 287,000 (4,130,000)
----------- -----------
NET CASH USED IN FINANCING ACTIVITIES.................................................... $ 545,000 $ (369,000)
----------- -----------
Effect of exchange rate changes on cash.................................................. (131,000) -
NET CHANGE IN CASH AND CASH EQUIVALENTS.................................................. 51,000 -
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR........................................... - -
----------- -----------
CASH AND CASH EQUIVALENTS AT OCTOBER 31,................................................. $ 51,000 $ -
=========== ===========
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest............................................................................. $ 319,000 $ 79,000
Income taxes......................................................................... $ 218,000 $ 131,000
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE> 5
SL INDUSTRIES, INC.
Notes to Consolidated Financial Statements
1. In the opinion of the Registrant, the accompanying unaudited consolidated
financial statements contain all adjustments (consisting of only normal
recurring accruals) and reclassifications necessary to present fairly the
financial position as of October 31, 1998, and July 31, 1998, the results of
operations and comprehensive earnings for the three-month periods ended October
31, 1998 and 1997, and the cash flows for the three-month periods ended October
31, 1998 and 1997. The Consolidated Statements of Comprehensive Earnings was
prepared in conformity with general accepted accounting principles and was not
required for fiscal 1998.
2. Inventories at October 31, 1998, and July 31, 1998, were as follows:
<TABLE>
<CAPTION>
October 31, 1998 July 31, 1998
---------------- -------------
<S> <C> <C>
Raw materials $ 9,667,000 $10,543,000
Work in process 5,116,000 3,611,000
Finished goods 4,431,000 4,384,000
----------- -----------
$19,214,000 $18,538,000
=========== ===========
</TABLE>
3. In February 1997, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 128, "Earnings per
Share", which the Registrant adopted effective December 15, 1997. This
statement establishes new standards for computing and presenting earnings per
share and requires the restatement of prior year amounts.
SFAS No. 128 simplifies the Earnings per Share ("EPS") calculation by replacing
primary EPS with basic EPS. Basic EPS is computed by dividing reported earnings
available to common shareholders by weighted average shares outstanding for the
period. Fully diluted EPS, now called diluted EPS is computed by dividing
reported earnings available to common shareholders by weighted average shares
outstanding for the period, adjusted for the dilutive effect of common stock
equivalents, which consist of stock options, using the treasury stock method.
<PAGE> 6
The table below sets forth the reconciliation of the numerators and
denominators of the basic and diluted net income per common share computations:
<TABLE>
<CAPTION>
Per Per
Share Share
Income Shares Amount Income Shares Amount
------ ------ ------ ------ ------ ------
------------------------------------------------------------------------
Three-Months Ended
------------------------------------------------------------------------
October 31, 1998 October 31, 1997
----------------------------------- ----------------------------------
<S> <C> <C> <C> <C> <C> <C>
Basic net income
per common share $1,213,000 5,627,000 $.22 $1,182,000 5,643,000 $.21
==== ====
Effect of dilutive
securities - 234,000 - 310,000
---------- --------- ---------- ---------
Diluted net income
per common share $1,213,000 5,861,000 $.21 $1,182,000 5,953,000 $.20
========== ========= ==== ========== ========= ====
</TABLE>
For fiscal 1999 and 1998, 111,767 and 846 common stock options, respectively,
were excluded from the dilutive computation because their effect would be
anti-dilutive.
4. These statements should be read in conjunction with the financial statements
and notes thereto included in the Company's Annual Report To Shareholders and
Form 10-K for the year ended July 31, 1998, along with any subsequent Form
10-Q's and Form 8-K's. The interim results of operations are not necessary
indicative of future financial results.
<PAGE> 7
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Liquidity and Capital Resources
The principal sources of cash during the first three months of fiscal 1999 of
$1,061,000 were provided by operating and financing activities, while investing
activities used cash of $879,000. The net cash provided by operating
activities resulted primarily from net income, the collection of accounts
receivable and additional accounts payable, offset, in part, primarily by cash
used to reduce accrued liabilities. The net cash provided by financing
activities resulted from the sale of 23,227 shares of the Registrant's common
stock to its Savings and Pension Plan and net debt proceeds of $210,000. The
net cash used in investing activities resulted primarily from purchases of
manufacturing equipment, computer hardware and leasehold improvements.
The Registrant's borrowing capacity at October 31, 1998, remained above its use
of outside financing. As of October 31, 1998, the Registrant had $13,416,704
available for use under its $25,000,000 Revolving Credit Agreement since
$983,296 was allocated to outstanding trade letters of credit and $10,600,000
utilized for the acquisition of all of the issued and outstanding shares of
Elektro-Metall Export GmbH ("EME") and working capital requirements. The
available credit facility is subject to commitment fees, but not compensating
balances. The Agreement contains limitations on borrowings and their use,
requires maintenance of specified ratios, with all of which the Registrant is
in compliance, and has a maturity date of October 31, 2001. In addition, EME
has outstanding borrowed funds of $2,720,000 under lines of credit with its
banks that aggregate $4,534,000. Under the terms of its lines of credit, the
subsidiary can borrow for any purpose at interest rates of 6.75% to 7%. No
financial covenants are required. Also, as of October 31, 1998, the Registrant
had $8,444,033 available from the cash surrender value of its life insurance
policies.
During the three-month period ended October 31, 1998, the ratio of current
assets to current liabilities increased slightly from 2.1 to 1 to 2.2 to 1.
Capital expenditures for the three-month period ended October 31, 1998,
amounted to $886,000 and were primarily for purchases of manufacturing
equipment, computer hardware and leasehold improvements. The Registrant
anticipates that future commitments for additional capital expenditures will be
funded primarily by cash generated by operations and, to the extent necessary,
the utilization of borrowings under its Revolving Credit Agreement.
The Registrant is not aware of any demands, commitments or uncertainties in the
normal course which are likely to impair its ability to generate or borrow
adequate amounts of cash to meet its future needs, which include payment of
dividends, capital expenditures and expenditures for working capital
requirements.
<PAGE> 8
Results of Operations
FISCAL 1999 COMPARED TO FISCAL 1998
Consolidated net sales for the three-month period ended October 31, 1998,
increased 3%, as compared to the net sales realized during the corresponding
period a year ago. The increase included the contribution made by
Elecktro-Metall Export GmbH ("EME"), which was acquired in July 1998. If EME's
results were excluded from the current three-month period, net sales for the
three-month period decreased 13%, as compared to last year. Increases related
to demand for sales of motion control systems were offset by decreases in sales
of power conditioning and distribution units and power supplies, primarily as a
result of a weak semiconductor market, reduced capital investment in many
sectors of the economy, including the electronics industry, and the affects of
the Asian economic crisis.
Cost of sales for the three-month period increased 4%, as compared to last
year. If EME's results were excluded from the current three-month period, cost
of sales for the three-month period decreased 14%, as compared to last year.
This decrease was primarily related to decreased volume. As a percentage of
net sales, cost of sales for the current three-month period was 64%, as
compared to 63%, a year ago. If EME's results were excluded, cost of sales, as
a percentage of net sales, was 63% for both years.
Engineering and product development expenses for the three-month period
increased 25%, as compared to the same period last year. If EME's results were
excluded from the current three-month period, engineering and product
development expenses for the three-month period increased 12%, as compared to
last year. The increases were primarily related to the continuing development
of new power supplies and motion control systems which will give the
Registrant's customers new and more advanced power and data quality solutions,
as well as improve the cost and performance of its existing products. As a
percentage of net sales, engineering and product development expenses were 6%,
as compared to 5%, a year ago. If EME's results were excluded, engineering and
product development expenses, as a percentage of net sales, were 7%, as
compared to 5% a year ago.
Selling, general and administrative expenses for the three-month period
decreased 13%, as compared to last year. If EME's results were excluded from
the current three-month period, selling, general and administrative expenses
decreased 22%, as compared to last year. As a percentage of net sales,
selling, general and administrative expenses for the three-month period were
19%, as compared to 23%, a year ago. If EME's results were excluded from the
current three-month period, selling, general and administrative expenses were
20% as a percentage of net sales. These decreases were primarily related to
the expiration of a profit sharing agreement, staff reductions and other cost
cutting measures.
Depreciation and amortization expense for the three-month period increased 32%,
as compared to last year. If EME's expenses were excluded from the current
three-month results,
<PAGE> 9
depreciation and amortization expense increased 11%, as compared to last year.
The increases were primarily related to depreciation and amortization of
computer hardware and software, respectively.
Interest income for the three-month period increased 41%, as compared to last
year. The primarily reason for the increase was the inclusion of EME's
interest income in current year results. If EME's interest income was excluded
from current year results, interest income would have decreased as compared to
last year, as a result of less cash available for investment. Interest expense
for the three-month period increased 221%, as compared to last year. The
increase resulted primarily from a higher debt balance as a result of the EME
acquisition.
The effective tax rate for the three-month period was 39%, as compared to 38% a
year ago. The increase was primarily related to taxes associated with EME's
operations.
Year 2000
The Year 2000 issue is the result of computer programs using two digits rather
than four to define the applicable year. Computer programs that have
date-sensitive software may recognize a date using "00" as the year 1900 rather
than the year 2000. This could result in system failures or miscalculations
leading to disruptions in a company's operations.
The Registrant is continuing to take actions to address and complete the work
associated with the Year 2000 issue. Executive management and information
system employees at each of its business units continue to be contacted
regarding their progress in achieving Year 2000 readiness, either through
on-site visits or intercompany correspondence. Each of its business units and
corporate headquarters have established teams to identify and correct year 2000
issues. The teams are also charged with investigating the year 2000
capabilities of suppliers, customers and other external entities, and with
developing contingency plans where necessary. The Company does not expect Year
2000 spending to materially affect consolidated profitability or liquidity.
This expectation assumes that its existing forecast of costs to be incurred
contemplates all significant actions required, and that the Registrant will not
be obligated to incur significant Year 2000 related costs on behalf of its
customers or suppliers.
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
The regular annual meeting of shareholders of the Registrant was held on
November 20, 1998. The meeting was held to elect five directors to serve for
one year, to ratify the appointment of a certified public accounting firm to
serve as the Registrant's auditors for fiscal year 1999, to vote on an
amendment to the Company's 1991 Long-Term Incentive Plan and to vote on a
shareholder proposal.
<PAGE> 10
The votes cast with respect to the election of the nominees for the Board of
Directors were as follows:
<TABLE>
<CAPTION>
Name For Withheld
---- --- --------
<S> <C> <C>
Baumgardner, J. Dwane 3,974,188 563,213
Farren, Owen 3,974,013 563,388
Hornig, George R. 3,973,944 563,457
Rickard, Walter I. 3,974,245 563,156
Sanator, Robert J. 3,975,491 561,910
</TABLE>
All of the above nominees for the Board of Directors were elected.
The votes cast with respect to the ratification of the appointment of Arthur
Andersen LLP as the Registrant's auditors for fiscal year 1999 were as follows:
<TABLE>
<S> <C> <C> <C> <C> <C>
For 4,331,772 Against 141,071 Abstain 64,558
</TABLE>
The appointment of Arthur Andersen LLP as the Registrant's auditors was
ratified, since this proposal received the required affirmative vote of a
majority of the votes cast at the annual meeting.
The votes cast with respect to the amendment of the Registrant's 1991 Long-Term
Incentive Plan were as follows:
<TABLE>
<S> <C> <C> <C> <C> <C>
For 1,588,562 Against 1,480,238 Abstain 105,731
</TABLE>
The proposal to amend the Registrant's 1991 Long-Term Incentive Plan was
approved, since this proposal received the required affirmative vote of a
majority of the votes cast at the annual meeting.
The votes cast with respect to the shareholder proposal were as follows:
<TABLE>
<S> <C> <C> <C> <C> <C>
For 735,064 Against 2,289,380 Abstain 150,447
</TABLE>
The shareholder proposal was not approved, since this proposal did not receive
the required affirmative vote of a majority of the votes cast at the annual
meeting.
Item 5.Other Information
On November 20, 1998, the Registrant sold the assets classified as "Assets Held
for Sale" on the July 31, 1998, consolidated balance sheet included in the
Registrant's annual report. The assets, consisting primarily of land, building
and building improvements, were sold for $990,000, less sale related expenses.
<PAGE> 11
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
The information called for by this section is listed in the Exhibit Index
of this report.
(b) Reports on Form 8-K
On September 18, 1998, the Registrant filed a report on Form 8-K/A
covering the EME acquisition.
<PAGE> 12
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.
SL INDUSTRIES, INC.
-------------------
Registrant
Dated: December 11, 1998 Owen Farren
------------------- -------------------------------
Owen Farren
President,
Chief Executive Officer
and Chairman of the Board
Dated: December 11, 1998 James E. Morris
------------------- -------------------------------
James E. Morris
Vice President,
Corporate Controller,
and Treasurer
<PAGE> 13
INDEX TO EXHIBITS
The exhibit number, description and sequential page number in the original copy
of this document where exhibits can be found follows:
<TABLE>
<CAPTION>
Exhibit Description
------- -----------
<S> <C>
27 Financial Data Schedule (Schedule is furnished for
the information of the Securities and Exchange
Commission and is not to be deemed "filed" as part
of Form 10-Q, or otherwise subject to the
liabilities of Section 18 of the Securities Exchange
Act of 1934).
27.1 Financial Data Schedule - Restated (Schedule is
furnished for the information of the Securities and
Exchange Commission and is not to be deemed "filed"
as part of Form 10-Q, or otherwise subject to the
liabilities of Section 18 of the Securities Exchange
Act of 1934).
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM STATEMENT OF
EARNINGS, CONSOLIDATED BALANCE SHEET, CONSOLIDATED STATEMENT OF CASH FLOWS AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FORM 10-Q - QUARTER ENDED
OCTOBER 31, 1998.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUL-31-1999
<PERIOD-START> AUG-01-1998
<PERIOD-END> OCT-31-1998
<CASH> 51
<SECURITIES> 0
<RECEIVABLES> 20,418
<ALLOWANCES> 2,248
<INVENTORY> 19,214
<CURRENT-ASSETS> 41,024
<PP&E> 33,961
<DEPRECIATION> 18,676
<TOTAL-ASSETS> 80,983
<CURRENT-LIABILITIES> 19,059
<BONDS> 0
0
0
<COMMON> 1,633
<OTHER-SE> 38,152
<TOTAL-LIABILITY-AND-EQUITY> 80,983
<SALES> 30,247
<TOTAL-REVENUES> 30,247
<CGS> 19,424
<TOTAL-COSTS> 28,091
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 3
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,991
<INCOME-TAX> 778
<INCOME-CONTINUING> 1,213
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,213
<EPS-PRIMARY> .22
<EPS-DILUTED> .21
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM STATEMENT
OF EARNINGS, CONSOLIDATED BALANCE SHEET, CONSOLIDATED STATEMENT OF CASH FLOWS
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FORM 10Q - QUARTER ENDED
OCTOBER 31, 1997.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUL-31-1998
<PERIOD-START> AUG-01-1997
<PERIOD-END> OCT-31-1997
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 18,351
<ALLOWANCES> 2,055
<INVENTORY> 16,296
<CURRENT-ASSETS> 37,759
<PP&E> 20,225
<DEPRECIATION> 12,812
<TOTAL-ASSETS> 66,644
<CURRENT-LIABILITIES> 20,425
<BONDS> 0
0
0
<COMMON> 1,610
<OTHER-SE> 33,785
<TOTAL-LIABILITY-AND-EQUITY> 66,644
<SALES> 29,455
<TOTAL-REVENUES> 29,455
<CGS> 18,654
<TOTAL-COSTS> 27,541
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 6
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,893
<INCOME-TAX> 711
<INCOME-CONTINUING> 1,182
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,182
<EPS-PRIMARY> .21
<EPS-DILUTED> .20
</TABLE>
