<PAGE>
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 September 30, 1996
OR
[ ] Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Commission File Number 0-21872
ALDILA, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 13-3645590
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
15822 BERNARDO CENTER DRIVE, SAN DIEGO, CALIFORNIA
92127
(Address of principal executive offices)
(619) 592-0404
(Registrant's Telephone No.)
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
----- -----
As of November 8, 1996 there were 16,096,952 shares of the Registrant's
common stock, par value $0.01 per share, outstanding.
_______________________________________________________________________________
_______________________________________________________________________________
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ALDILA, INC.
TABLE OF CONTENTS
FORM 10-Q FOR THE QUARTERLY PERIOD
ENDED SEPTEMBER 30, 1996
PAGE
----
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets at
September 30, 1996 and December 31, 1995 3
Consolidated Statements of Income for the
three months ended September 30, 1996
and 1995, and the nine months ended
September 30, 1996 and 1995 4
Consolidated Statements of Cash Flows for
the nine months ended September 30, 1996
and 1995 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 7
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 15
Item 2. Changes in Securities 15
Item 3. Defaults Upon Senior Securities 15
Item 4. Submission of Matters to a Vote of Security Holders 15
Item 5. Other Information 15
Item 6. Exhibits and Reports on Form 8-K 15
Signatures 16
Exhibit Index 17
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PART 1 - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ALDILA, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS - UNAUDITED
(In thousands, except share data)
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1996 1995
------------- ------------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 21,211 $ 19,345
Accounts receivable 3,561 3,168
Income taxes receivable 88
Inventories 6,740 6,074
Deferred tax assets 2,808 2,808
Prepaid expenses and other current assets 503 742
------------- ------------
Total current assets 34,823 32,225
PROPERTY AND EQUIPMENT 14,403 13,545
TRADEMARKS AND PATENTS 15,248 15,579
GOODWILL 49,410 50,319
DEFERRED FINANCING FEES 156 185
------------- ------------
TOTAL ASSETS $114,040 $111,853
------------- ------------
------------- ------------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 3,344 $ 4,230
Accrued expenses 2,689 3,225
Income taxes payable 1,374
------------- ------------
Total current liabilities 7,407 7,455
LONG-TERM LIABILITIES:
Long-term debt 20,000 20,000
Deferred tax liabilities 7,847 8,040
Deferred rent liabilities 792 877
------------- ------------
Total liabilities 36,046 36,372
------------- ------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred stock, $.01 par value; authorized 5,000,000
shares; no shares issued
Common stock, $.01 par value; authorized 30,000,000
shares; issued and outstanding 16,205,952 shares 162 166
Additional paid-in capital 46,338 47,863
Retained earnings 31,494 27,452
------------- ------------
Total stockholders' equity 77,994 75,481
------------- ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $114,040 $111,853
------------- ------------
------------- ------------
</TABLE>
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<PAGE>
ALDILA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
(In thousands, except per share data)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------ -----------------
1996 1995 1996 1995
-------- -------- -------- -------
<S> <C> <C> <C> <C>
NET SALES $16,735 $ 9,546 $43,913 $45,860
COST OF SALES 10,434 5,884 28,018 25,985
-------- -------- -------- -------
Gross profit 6,301 3,662 15,895 19,875
-------- -------- -------- -------
SELLING, GENERAL AND ADMINISTRATIVE 2,489 2,373 7,191 8,734
AMORTIZATION OF GOODWILL 357 349 1,059 1,048
-------- -------- -------- -------
Operating income 3,455 940 7,645 10,093
-------- -------- -------- -------
OTHER:
Interest expense 317 316 949 974
Other (income), net (200) (250) (522) (653)
-------- -------- -------- -------
INCOME BEFORE INCOME TAXES 3,338 874 7,218 9,772
PROVISION FOR INCOME TAXES 1,469 376 3,176 4,202
-------- -------- -------- -------
NET INCOME $ 1,869 $ 498 $ 4,042 $ 5,570
-------- -------- -------- -------
-------- -------- -------- -------
EARNINGS PER COMMON SHARE:
Net income $0.11 $0.03 $0.24 $0.33
-------- -------- -------- -------
-------- -------- -------- -------
Weighted average shares outstanding 16,437 16,803 16,544 16,792
-------- -------- -------- -------
-------- -------- -------- -------
</TABLE>
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<PAGE>
ALDILA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED
(In thousands)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, 1996
--------------------
1996 1995
-------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 4,042 $ 5,570
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 3,544 2,951
Changes in assets and liabilities:
Accounts receivable (393) 2,546
Inventories (666) 1,818
Prepaid expenses and other current assets 239 93
Accounts payable (886) (2,594)
Accrued expenses (536) (2,135)
Income taxes payable/receivable 1,462 (392)
Deferred tax liabilities (193) (165)
Deferred rent liabilities (85) (39)
-------- --------
Net cash provided by operating activities 6,528 7,653
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (3,016) (2,273)
Other (118)
-------- --------
Net cash used for investing activities (3,134) (2,273)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock 227
Repurchases of common stock (1,528)
Other 164
-------- --------
Net cash provided (used) by financing activities (1,528) 391
-------- --------
NET INCREASE IN CASH AND CASH EQUIVALENTS 1,866 5,771
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 19,345 14,087
-------- --------
CASH AND CASH EQUIVALENTS, END OF PERIOD $21,211 19,858
-------- --------
-------- --------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest $ 1,226 $ 1,227
Income taxes $ 2,352 $ 4,595
</TABLE>
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<PAGE>
ALDILA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED
1. BASIS OF PRESENTATION
The consolidated balance sheet as of September 30, 1996 and the consolidated
statements of income and of cash flows for the three month and nine month
periods ended September 30, 1996 and 1995, are unaudited and reflect all
adjustments of a normal recurring nature which are, in the opinion of
management, necessary for a fair presentation of the financial position and
results of operations for the interim periods. The consolidated balance
sheet as of December 31, 1995 was derived from the Company's audited
financial statements. Operating results for the three and nine month periods
ended September 30, 1996 are not necessarily indicative of results to be
expected for the fiscal year ending December 31, 1996. These consolidated
financial statements should be read in conjunction with the Company's
December 31, 1995 consolidated financial statements and notes thereto.
2. INVENTORIES
Inventories consist of the following (in thousands):
September 30, December 31,
1996 1995
------------- ------------
Raw materials $3,028 $3,828
Work in process 2,489 1,165
Finished goods 1,223 1,081
------ ------
Inventories $6,740 $6,074
------ ------
------ ------
-6-
<PAGE>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
OVERVIEW OF RECENT AND ANTICIPATED FUTURE TRENDS
Aldila, Inc. (the "Company") is principally in the business of
designing, manufacturing and marketing graphite golf club shafts, with
approximately 85% of its net sales resulting from sales to golf club
manufacturers for inclusion in their clubs. As a result, the Company's
operating results are substantially dependent not only on demand by its
customers for the Company's shafts, but also on demand by consumers for clubs
including graphite shafts such as the Company's.
Historically, graphite shafts have principally been offered by
manufacturers of higher priced, premium golf clubs, and the Company's sales
have been predominantly of premium graphite shafts. In addition, until
recently, the United States market for graphite shafts was dominated by a
relatively small number of United States-based shaft manufacturers. Both of
these aspects of the graphite shaft market have been changing. As a high
percentage of premium clubs are already sold with graphite shafts, as
compared to a smaller percentage of value priced clubs, the Company
anticipates that growth in graphite shaft usage in the future will be greater
in the value priced segment of the market than in the premium segment,
depending on the availability in the marketplace of graphite shafts at lower
price points. Management of the Company expects sales of shafts for the
value priced club market to increase significantly over the next several
years, although management also anticipates that sales of premium shafts will
continue to represent a majority of the Company's sales measured in dollars
for the foreseeable future. In addition, the Company's net sales to its
premium shaft customers have been impacted by increasing competition from
other graphite shaft suppliers, which has made it more difficult to retain
existing customers and attract new customers. The competition has placed
increasing pressure on prices for the Company's premium shafts. While the
Company does not anticipate any lessening of competitive forces in the near
future, the Company believes that it remains the largest graphite shaft
manufacturer for the United States market.
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<PAGE>
These two overall trends in the graphite shaft marketplace have had the
effect, and are expected by management to continue to have the effect, of
decreasing the average selling price of the Company's shafts.
The Company's gross profit margins are heavily dependent on the average
selling price for its shafts, and the recent decreases in average selling
prices have had the effect of decreasing the Company's overall gross profit
margins. The most significant other factor affecting gross profit margins is
the price of carbon fiber, which is the most substantial component of total
raw material costs. For several years, prices for carbon fiber, as well as
for the graphite prepreg that is used in most graphite golf club shafts and
that is manufactured out of carbon fiber, had been relatively low due to
excess capacity in the carbon fiber industry. As a result of elimination of
that excess capacity coupled with increasing demand for carbon fiber,
including demand resulting from new applications, the Company has experienced
an increase in carbon fiber prices in 1996, and expects further increases
into 1997. To date, these price increases have not been reflected in a
decrease in gross profit margins as compared to prior comparable periods, as
they have been mitigated by the beneficial effect of the Company's conversion
from purchasing its graphite prepreg from third parties to manufacturing
graphite prepreg internally, which conversion was underway during 1995 and
substantially completed by the beginning of 1996.
The Company has contracts providing for most of its currently
anticipated needs for carbon fiber through the end of 1997. However, given
the current lack of excess capacity in the industry overall, the Company is
engaging in discussions with its principal supplier, and monitoring
conditions in the market generally, to assure that it will have an adequate
supply of carbon fiber for this period. If the Company's demand for carbon
fiber during this period is not satisfied through its existing contracts
because the supplier under these contracts fails to satisfy its contractual
requirements, then a continuation of the current tight supply of carbon fiber
could make it difficult for the Company to satisfy all of its customers'
orders unless an appropriate substitute for the current type of carbon fiber
can be found. In such event, the Company's net sales and profits would be
adversely affected. Even if it is able to acquire sufficient additional
carbon fiber outside the current contracts, it would likely be at a higher
price than provided under its current contracts, with a resulting adverse
impact on margins.
-8-
<PAGE>
Although continuing decreases in average selling prices or continuing
increases in carbon fiber prices would lead to further decreases in gross
profit margins, this result should be mitigated to some extent by the
on-going efforts of the Company to control costs, including increased
automation and increasing the percentage of shafts being manufactured in
countries with lower labor and overhead costs, as well as initiatives being
undertaken by the Company to reduce the risks associated with reduced
capacity in the carbon fiber industry, including the exploration of the
possibility of manufacturing all or a significant portion of the Company's
carbon fiber needs internally and a broadening of the types of carbon fiber
that could be used to manufacture the Company's shafts.
As part of the Company's exploration of the possibility of manufacturing
carbon fiber internally, the Company has retained consultants with
significant experience in carbon fiber manufacturing and has begun the
process of seeking an appropriate location for a carbon fiber manufacturing
facility. The Company currently anticipates starting production of its own
carbon fiber in the first half of 1998. The Company expects to incur
approximately $16 million in capital expenditures in 1997 in connection with
the development of a carbon fiber manufacturing facility. There can be no
assurance that the Company will ultimately go forward with its plans to start
manufacturing its own carbon fiber or that it will be able to find an
appropriate location and develop it for use as a carbon fiber manufacturing
facility on a timely or cost effective basis. In addition, the Company has
no experience in the manufacturing of carbon fiber and, although it believes
that the consultants that it has retained to assist in this process have
sufficient expertise for its current needs, there is a risk that the Company
will be unable to manufacture carbon fiber of high enough quality in
sufficient quantities at low enough costs to justify a decision to limit the
use of outside suppliers.
The company expects to be able to use its carbon fiber manufacturing
capacity to facilitate a transition away from being a single product
producer, to become a diversified manufacturer of carbon based fiber
products, either through supplying other manufacturers of sporting and
industrial equipment or by acquiring other such manufacturers. Although the
company would still be capitalizing on its existing expertise in composite
materials manufacturing, any transition into new carbon fiber applications
would require the company to develop expertise with respect to different
manufacturing and marketing issues related to such new applications.
-9-
<PAGE>
In recent years, the Company's results of operations have been
materially affected on several occasions by dramatic year-to-year changes in
its sales to an individual golf club manufacturer customer. Such changes can
result either from decisions by the customer to increase or decrease shaft
purchases from an alternative supplier or from the traditional volatility in
consumer demand for specific clubs. The Company believes that this
volatility is likely to continue in the future, particularly as club
manufacturers seek to gain competitive advantages through technological
innovation in club design. The Company's results will benefit whenever it
has an opportunity to supply the latest "hot" club and will be adversely
affected whenever sales of clubs containing Aldila shafts drop dramatically.
The Company also believes that while it will often not be possible to predict
with any certainty such shifts in advance, the Company's broad range of club
manufacturer customers should reduce to some extent the impact on the
Company's financial results.
In recent years, the Company has benefited from strong sales of its
shafts to Callaway Golf Company ("Callaway") resulting from the popularity of
Callaway's clubs. During 1995, sales to Callaway were $28.0 million (or 50%
of the Company's net sales). Sales to Callaway were substantially lower in
1995 than in 1994, when they totaled $52.4 million (or 66% of the Company's
net sales). The Company's sales to Callaway were impacted beginning in the
early part of 1995 by Callaway's decision to increase its graphite shaft
purchases from other suppliers and by actions taken by Callaway to reduce
finished goods and component inventory levels. Beginning in the second half
of 1995 and continuing into 1996 the Company's sales to Callaway have also
been impacted by decreased prices that the Company has been able to charge
Callaway as well as a change in product mix to new lower priced shaft
designs. Even following the 1995 decrease, the Company's results of
operations continue to be dependent on sales to Callaway (sales to Callaway
were $19.0 million or 43% of net sales in the first nine months of 1996),
and, as a result, a further significant decrease in sales to Callaway could
have an adverse impact on the Company's future net sales and earnings. Based
in part, however, on Callaway's statements to the Company that it will
continue to be Callaway's primary supplier of graphite golf club shafts, the
Company expects that Callaway will continue to be the Company's largest
customer for the forseeable future.
-10-
<PAGE>
Another factor that could negatively impact the Company's future sales
to golf club manufacturers would be the decision by one of its customers to
manufacture all or a portion of its graphite shaft requirements. The Company
is aware, for example, that Callaway has in the past considered manufacturing
graphite shafts for its own use. Should Callaway or any other significant
customer of the Company decide in the future to meet any of its shaft
requirements internally, it could have an adverse effect on the Company.
RESULTS OF OPERATIONS
THIRD QUARTER 1996 COMPARED TO THIRD QUARTER 1995
NET SALES. Net sales increased $7.2 million, or 75.3%, to $16.7
million for the third quarter ended September 30, 1996 (the "1996 Period")
from $9.5 million for the third quarter ended September 30, 1995 (the "1995
Period"). Unit sales increased 90% in the 1996 Period as compared to the
1995 Period, which was offset by an 8% decrease in the average selling price
of shafts.
Sales to Callaway were $6.0 million in the 1996 Period (or 36% of net
sales) compared to $4.5 million (or 47% of net sales) in the 1995 Period.
See - "Overview of Recent and Anticipated Future Trends." Sales to customers
other than Callaway increased significantly in the 1996 Period.
GROSS PROFIT. Gross profit increased $2.6 million, or 72.1%, to $6.3
million for the 1996 Period from $3.7 million for the 1995 Period primarily
as a result of the increase in the Company's net sales. The Company's gross
profit margin decreased to 37.7% in the 1996 Period compared to 38.4% in the
1995 Period primarily as a result of lower average selling prices for shafts
sold.
OPERATING INCOME. Operating income increased $2.5 million, or 268%, to
$3.5 million for the 1996 Period from $0.9 million for the 1995 Period and
increased as a percentage of net sales to 20.6% in the 1996 Period compared
to 9.8% in the 1995 Period. Selling, general and administrative expense
decreased as a percentage of net sales to 14.9% for the 1996 Period as
compared to 24.9% for the 1995 Period as a result of the fixed component of
selling, general and administrative costs being spread over higher net sales
in the 1996 Period.
-11-
<PAGE>
NINE MONTH PERIOD IN 1996 COMPARED TO NINE MONTH PERIOD IN 1995
NET SALES. Net sales decreased $1.9 million, or 4.2%, to $43.9 million
for the nine month period ended September 30, 1996 from $45.9 million for the
nine month period ended September 30, 1995. The decrease in net sales was
primarily attributable to a significant decrease in the average selling price
of shafts sold due to a change in product mix. The average selling price of
shafts decreased 19% while total unit sales increased 18% for the nine month
period ended September 30, 1996 versus the comparable 1995 period.
Sales to Callaway were $19.0 million for the first nine months of 1996 (or
43% of net sales) compared to $21.8 million (or 48% of net sales) for the
first nine months of 1995. See - "Overview of Recent and Anticipated Future
Trends."
GROSS PROFIT. Gross profit decreased $4.0 million, or 20.0%, to $15.9
million for the nine month period ended September 30, 1996 from $19.9 million
for the nine month period ended September 30, 1995 primarily as a result of
the decrease in the Company's net sales. The Company's gross profit margin
decreased to 36.2% for the nine month period ended September 30, 1996 from
43.3% for the nine month period ended September 30, 1995 primarily as a
result of lower average selling prices for shafts sold.
OPERATING INCOME. Operating income decreased $2.4 million, or 24.2%, to
$7.6 million for the nine month period ended September 30, 1996 from $10.1
million for the nine month period ended September 30, 1995 and decreased as a
percentage of net sales to 17.4% from 22.0%, respectively. Selling, general
and administrative expense decreased as a percentage of net sales to 16.4%
for the nine month period ended September 30, 1996 as compared to 19.0% for
the nine month period ended September 30, 1995 as a result of a decrease in
advertising and promotional expenditures.
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<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
Since November 1993, the only indebtedness of the Company has been $20.0
million in 6.13% senior notes due 2001. The Company has not used borrowings
to finance its operations or provide working capital for over five years and
does not anticipate doing so for the foreseeable future. The Company could
require additional debt financing, however, if it were to engage in a
material acquisition in the future. The Company's belief that it will not
otherwise need to finance its operations with borrowings is based on
assumptions that it will continue to be profitable, with positive cash
provided by operating activities, and that changes in the pace of
technological development in shaft design and manufacturing processes will
not result in substantially higher levels of spending on capital expenditures
and research and development than the Company has recently incurred.
Cash (including cash equivalents) provided from operating activities for
the nine month period in 1996 was $6.5 million compared to $7.6 million
provided from operating activities for the nine month period in 1995. This
decrease resulted principally from the decrease in net income for the nine
month period ended September 30, 1996 compared to the nine month period ended
September 30, 1995. The Company used $3.0 million for capital expenditures
during the nine month period ended September 30, 1996. The Company currently
anticipates committing to capital expenditures of approximately $4.5 million
in 1996. The Company may from time to time consider the acquisition of
businesses complementary to the Company's business. The Company anticipates
that its cash requirements for maintaining its current level of operations
and those planned for the foreseeable future can be satisfied by cash
provided through operating activities.
SEASONALITY
Because the Company's customers have historically built inventory in
anticipation of purchases by golfers in the spring and summer, the principal
selling season for golf equipment, the Company's operating results have been
affected by seasonal demand for golf clubs, which has generally resulted in
higher sales in the second and third quarter. The success of certain
customers' products, in particular, Callaway, patterns of product
introduction, and customer acceptance thereof, coupled with a generally
increasing
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<PAGE>
overall demand for graphite shafts, has tended to mitigate the impact of
seasonality in recent years.
"SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM
ACT OF 1995
With the exception of historical information (information relating to
the Company's financial condition and results of operations at historical
dates or for historical periods), the matters discussed in this Management's
Discussion and Analysis of Financial Condition and Results of Operations are
forward-looking statements that necessarily are based on certain assumptions
and are subject to certain risks and uncertainties. These forward-looking
statements are based on management's expectations as of the date hereof, and
the Company does not undertake any responsibility to update any of these
statements in the future. Actual future performance and results could differ
from that contained in or suggested by these forward-looking statements as a
result of the factors set forth in this Management's Discussion and Analysis
of Financial Condition and Results of Operations and elsewhere in the
December 31, 1995 Annual Report and related filings with the Securities and
Exchange Commission.
-14-
<PAGE>
PART II - OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
Not applicable.
Item 2. CHANGES IN SECURITIES
Not applicable.
Item 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
Item 5. OTHER INFORMATION
Not applicable.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibit No. 27.1:
Financial Data Schedule.
(b) Reports on Form 8-K:
No reports on Form 8-K were filed by the Registrant
during the quarter ended September 30, 1996.
-15-
<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.
Dated: ALDILA, INC.
November 12, 1996 /s/ Robert J. Cierzan
-----------------------------------
Robert J. Cierzan
Vice President, Finance
Signing both in his capacity as
Vice President and as Chief
Accounting Officer of the Registrant
-16-
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S REPORT ON FORM 10-Q FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1996
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 21,211
<SECURITIES> 0
<RECEIVABLES> 3,561
<ALLOWANCES> 0
<INVENTORY> 6,740
<CURRENT-ASSETS> 34,823
<PP&E> 14,403
<DEPRECIATION> 0
<TOTAL-ASSETS> 114,040
<CURRENT-LIABILITIES> 7,407
<BONDS> 20,000
0
0
<COMMON> 162
<OTHER-SE> 77,832
<TOTAL-LIABILITY-AND-EQUITY> 114,040
<SALES> 43,913
<TOTAL-REVENUES> 43,913
<CGS> 28,018
<TOTAL-COSTS> 35,209
<OTHER-EXPENSES> 1,059 <F1>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 949
<INCOME-PRETAX> 7,218
<INCOME-TAX> 3,176
<INCOME-CONTINUING> 4,042
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,042
<EPS-PRIMARY> .24
<EPS-DILUTED> .24
<FN>
<F1> GOODWILL AMORTIZATION
</FN>
</TABLE>
