<PAGE> 1
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 APRIL 30, 1996
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER: 0-22974
CMC INDUSTRIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 62-1434910
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OF ORGANIZATION) IDENTIFICATION NO.)
4950 PATRICK HENRY DRIVE, SANTA CLARA, CA 95054
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
-------------------------------
(408) 982-9999
(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 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 [ ]
INDICATE THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE ISSUER'S CLASSES OF
COMMON STOCK, AS OF THE LAST PRACTICABLE DATE.
COMMON STOCK, $.01 PAR VALUE - 6,660,251 SHARES
OUTSTANDING AS OF MAY 31, 1996
<PAGE> 2
INDEX
PART I - FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements (Unaudited):
Balance Sheets 3
Statements of Income 4
Statements of Cash Flows 5
Notes to Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 7-12
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 13
Item 6. Exhibits and Reports on Form 8-K 13
Signatures 14
<PAGE> 3
CMC Industries, Inc.
Condensed Consolidated Balance Sheets
(In thousands)
UNAUDITED
<TABLE>
<CAPTION>
April 30, 1996 July 31, 1995
------------------ ------------------
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents $ 248 $ 89
Accounts receivable, net 17,786 10,235
Accounts and notes receivable from affiliate 10,083 13,924
Inventories 23,908 26,006
Other current assets 751 1,712
---------------- --------------
Total current assets 52,776 51,966
Plant and equipment, net 9,280 7,042
Investment in preferred stock of affiliate 5,884 5,884
Other assets 1,094 1,072
---------------- --------------
$ 69,034 $ 65,964
================ ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Notes payable under lines of credit $ 9,593 $ 10,303
Current portion of long-term debt 1,508 1,607
Accounts payable 18,212 13,291
Other current liabilities 5,603 5,026
---------------- --------------
Total current liabilities 34,916 30,227
Long-term debt 5,247 6,341
Other liabilities 887 1,058
---------------- --------------
Total liabilities 41,050 37,626
Stockholders' equity
Common stock 61 61
Additional paid-in capital 27,320 27,299
Retained earnings 1,536 1,911
Equity adjustment for pension liability (933) (933)
---------------- --------------
Total stockholders' equity 27,984 28,338
---------------- --------------
$ 69,034 $ 65,964
================ ==============
</TABLE>
See notes to condensed consolidated financial statements.
3
<PAGE> 4
CMC Industries, Inc..
Condensed Consolidated Statements of Income
(In thousands, except per share data)
UNAUDITED
<TABLE>
<CAPTION>
Three months ended Nine months ended
April 30, April 30,
-------------------------------- ------------------------------
1996 1995 1996 1995
--------- --------- -------- ---------
<S> <C> <C> <C> <C>
Net sales $ 42,944 $ 33,511 $ 123,334 $ 110,699
Cost of sales 40,155 33,945 115,966 104,549
------------- ------------- ------------ ------------
Gross Profit 2,789 (434) 7,368 6,150
Selling, general and administrative expenses 1,899 2,000 6,765 5,316
------------- ------------- ------------ ------------
Operating Income (Loss) 890 (2,434) 603 834
Interest expense, net 403 453 1,178 1,222
------------- ------------- ------------ ------------
Income (Loss) Before Income Taxes 487 (2,887) (575) (388)
Provision (Benefit) for income taxes 187 (1,769) (200) (821)
------------- ------------- ------------ ------------
Net income (loss) $ 300 $ (1,118) $ (375) $ 433
============= ============= ============ ============
Net income (loss) per common share $ 0.05 $ (0.18) $ (0.06) $ 0.07
Weighted average shares outstanding 6,377 6,258 6,313 6,255
============= ============= ============ ============
</TABLE>
See notes to condensed consolidated financial statements.
4
<PAGE> 5
CMC Industries, Inc.
Condensed Consolidated Statements of Cash Flows
(In thousands)
UNAUDITED
<TABLE>
<CAPTION>
Nine Months Ended April 30,
---------------------------------
1996 1995
---------- ----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (375) $ 433
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization 1,391 1,188
Loss on disposal of assets 0 49
Change in assets and liabilities:
Receivables (3,710) (3,213)
Inventories 2,098 2,567
Accounts payable 4,921 (3,725)
Other assets and liabilities 1,300 (1,684)
------------ -------------
Net cash provided by (used in) operating activities 5,625 (4,385)
------------ -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (3,584) (850)
Proceeds from disposition of assets 0 115
------------ -------------
Net cash used in investing activities (3,584) (735)
------------ -------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under lines of credit, net (710) 6,091
Principal payments on long-term debt (1,193) (1,256)
Proceeds from issuance of stock 21 18
------------ -------------
Net cash provided by (used in) financing activities (1,882) 4,853
------------ -------------
Net increase (decrease) in cash and cash equivalents 159 (267)
Cash and cash equivalents at beginning of period 89 286
------------ -------------
Cash and cash equivalents at end of period $ 248 $ 19
============ =============
</TABLE>
See notes to condensed consolidated financial statements.
5
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CMC Industries, Inc.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements
reflect all normal recurring adjustments which are, in the opinion of
management, necessary to present fairly the financial position and results of
operations and cash flows in conformity with generally accepted accounting
principles. The results of operations for the interim periods presented are
not necessarily indicative of the results to be expected for the full year.
For further information, refer to the financial statements included in the
Company's Annual Report on Form 10-K for the fiscal year ended July 31, 1995.
Net income per common and common equivalent share has been computed on the
basis of the weighted average number of common shares outstanding and dilutive
common stock equivalent shares outstanding during the respective periods.
Common equivalent shares consist of stock options included in the computation
of net income per share using the treasury stock method.
Certain amounts previously reported have been reclassified to conform to
current period classification.
NOTE 2 - INVENTORIES
The components of inventories were as follows (in thousands):
<TABLE>
<CAPTION>
April 30, July 31,
1996 1995
--------- --------
<S> <C> <C>
Raw materials and purchased components $ 17,007 $ 18,755
Work-in-process 6,642 6,921
Finished goods 259 330
-------- --------
$ 23,908 $ 26,006
======== ========
</TABLE>
NOTE 3 - SUBSEQUENT EVENT
In May 1996, the Company completed a private offering of an aggregate of
436,037 shares of the Company's Common Stock and Warrants to purchase an
aggregate of 168,963 shares of the Company's Common Stock. After deducting
expenses of the private offering payable by the Company currently estimated to
be approximately $100,000, the net proceeds of the private offering were
$2,407,000.
6
<PAGE> 7
CMC INDUSTRIES, INC.
Item 2
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
GENERAL
CMC Industries, Inc. ("CMC" or the "Company") was incorporated in 1990 to
acquire from Alcatel Network Systems, Inc. ("Alcatel"), certain businesses
operated from 1960 to 1987 by ITT and from 1987 to 1990 by Alcatel, n.v., a
joint venture between ITT and Compagnie Generale d'Electricite. In August 1993,
the Company transferred certain assets and related liabilities associated with
its telecommunications business to Cortelco Systems Holding Corp. ("Cortelco"),
a newly-formed company owned by certain of the Company's existing stockholders,
in exchange for 1,000,000 shares of Preferred Stock of Cortelco. These
transactions effectively transferred to Cortelco all of the Company's assets
and liabilities not related to its contract manufacturing business. This
restructuring allows CMC to focus on contract manufacturing services while
Cortelco pursues the development and distribution of telephones and
telecommunications products.
Set forth below are analyses of the Company's results of operations for
the three months and nine months ended April 30, 1996.
RESULTS OF OPERATIONS
Net sales for the third quarter of fiscal year 1996 increased by
approximately 28% to $42.9 million from $33.5 million for the corresponding
quarter of the prior year. Net sales for the nine months ended April 30, 1996
were $123.3 million, an 11% increase over net sales of $110.7 million for the
same period of the prior year. The increases were accomplished as sales to new
customers offset a decline in sales to the Company's historical customer base.
Sales to new customers accounted for approximately 38% of the Company's total
revenues in the third quarter of fiscal 1996.
Gross profit (loss) for the third quarter of fiscal 1996 was $2.8 million
or 6.5% of net sales, as compared to $(0.4) million or (1.3)% of net sales for
the third quarter of fiscal 1995. Gross profit for the first nine months of
fiscal 1996 was $7.4 million or 6.0% of sales, as compared to $6.2 million or
5.6% of net sales in the same period of the prior year. The gross margin
improvement on a year-to-year basis principally resulted from improved
operating efficiency related to higher volume and a stronger mix of higher
margin new business.
Selling, general and administrative expenses were $1.9 million or 4.4% of
net sales in the third quarter of fiscal 1996, as compared to $2.0 million or
6.0% of net sales for the third quarter of fiscal 1995. Such expenses were $6.8
million or 5.5% of sales in the first nine months of fiscal 1996, as compared
to $5.3 million or 4.8% of sales for the corresponding period of the prior
year. The increase in expenses in fiscal 1996 was primarily due to additions to
the Company's management team and sales force, increases in expenses incurred
to improve program
7
<PAGE> 8
management and customer service in an effort to increase profitability in
future periods and non-recurring charges of $792,000 (recorded in the first
quarter of fiscal 1996) related to restructuring of the Company's business.
Net interest expense for the third quarter and nine months ended April 30,
1996 was $403,000 and $1,178,000, respectively, as compared to $453,000 and
$1,222,000, respectively, for the corresponding periods of the prior year.
The Company's effective tax rate for the third quarter and nine months
ended April 30, 1996 was approximately 38% and 35%, respectively. The Company's
effective tax rate was approximately 38% throughout the first nine months of
fiscal year 1995, with the exception of the recording of a non-recurring income
tax benefit resulting from recognition of prior year research and development
credits. The fluctuation from period to period in the current fiscal year
resulted from the amortization of goodwill, which was treated as an expense for
financial purposes but was not deductible for tax purposes. As income
increases, the Company expects its effective tax rate to be approximately 38%.
LIQUIDITY AND CAPITAL RESOURCES
The Company's primary bank credit facility is comprised of a revolving
credit line of $17 million and an $8 million term loan amortizing over five
years beginning in February 1995. The loan agreement contains financial
covenants related to the Company's net worth and debt service coverage and
restricts capital expenditures. At April 30, 1996, total borrowings under this
facility were $8.9 million under the revolving credit line and $6.5 million on
the term loan. The Company also has a $4.5 million revolving credit facility
with another financial institution. Outstanding borrowings under this facility
were $0.7 million at April 30, 1996.
In May 1996, the Company raised approximately $2.5 million through a
placement to private investors of an aggregate of 436,037 shares of the
Company's Common Stock and Warrants to purchase an aggregate of 168,963 shares
of the Company's Common Stock. The purpose of the private offering was
principally to provide additional financial flexibility to take advantage of
business opportunities as they arise. The proceeds have been used initially to
repay bank loans made under the Company's revolving credit lines.
The Company's operations generated cash of $5.6 million in the nine months
ended April 30, 1996. Cash was provided by net income before depreciation and
amortization of $1.1 million, an increase in accounts payable of $4.9 million,
a decrease in inventories of $2.1 million and a $1.3 million change in other
assets and liabilities. Cash was used to fund a $3.7 million increase in
receivables, largely attributable to higher sales levels and, to a lessor
degree, an overdue receivable of $0.6 million from a former customer. The
Company has filed a claim to collect the delinquent accounts receivable and
$1.3 million for inventory purchased to fill orders placed, and subsequently
canceled, by this customer. The Company believes that the claim will be
resolved without a material and adverse impact to the Company's financial
position or results of operations; however, if all or a significant portion of
this claim becomes uncollectible, the Company's operating results and cash
flows could be materially and adversely affected.
8
<PAGE> 9
The Company expended $3.6 million to acquire manufacturing equipment,
primarily surface mount, during the nine months ended April 30, 1996. During
this period, the Company also used cash of $1.2 million to repay long-term debt
and $0.7 million to reduce borrowings under the Company's bank credit lines.
The Company's future needs for financing include increases in working
capital as required to support sales growth and purchases of advanced
manufacturing equipment. The Company expects to meet its short-term liquidity
requirements generally through net cash provided by operations, vendor credit
terms and short-term borrowings under its lines-of-credit. The Company
currently believes that cash flows from operations and available credit
facilities will satisfy the Company's working capital requirements through the
next twelve months. The Company may also choose to seek additional financing
as needed to pursue growth opportunities; however, there can be no assurance
that such financing will be available on terms acceptable to the Company, if at
all.
9
<PAGE> 10
RISK FACTORS
This "Risk Factors" section contains certain forward-looking statements.
Actual results could differ materially from those projected in the
forward-looking statements as a result of certain of the risk factors set forth
below and elsewhere in this document. In addition to the other information
contained and incorporated by reference in this document, the following risk
factors should be considered carefully in evaluating the Company and its
business.
POTENTIAL FLUCTUATIONS IN OPERATING RESULTS
The Company's operating results are affected by a number of factors,
including the mix of manufacturing projects, capacity utilization, price
competition, the degree of automation that can be used in the assembly process,
the efficiencies that can be achieved by the Company in managing inventories
and fixed assets, the timing of orders from major customers, fluctuations in
demand for customer products, the timing of expenditures in anticipation of
increased sales, customer product delivery requirements, increased costs and
shortages of components or labor, and economic conditions generally. All of
these factors can cause substantial fluctuations in the Company's operating
results. The Company's expense levels are based, in part, on its expectations
as to future revenues and to a large extent are fixed in the short term.
Accordingly, the Company may be unable to adjust spending in a timely manner to
compensate for any unexpected shortfall in revenues, and any significant
shortfall of demand in relation to the Company's expectations or any material
delay of customer orders could have an almost immediate material adverse effect
on the Company's operating results. As a result, it is possible that in some
future period the Company's operating results could fail to meet the
expectations of public market analysts or investors. In such event, or in the
event that adverse conditions prevail or are perceived to prevail generally or
with respect to the Company's business, the price of the Company's Common Stock
could drop significantly.
CUSTOMER CONCENTRATION; DEPENDENCE ON INDUSTRY TRENDS
A small number of customers are currently responsible for a significant
portion of the Company's net sales. In the nine months ended April 30, 1996
and the fiscal years 1995 and 1994, the Company's four largest customers for
such periods accounted for approximately 67%, 69%, and 75%, respectively, of
consolidated net sales. Any material delay, cancellation or reduction of
orders from these or other customers could have a materially adverse effect on
the Company's results of operations.
The percentage of the Company's sales to its major customers may fluctuate
from period to period. Significant reductions in sales to any of these
customers could have a materially adverse effect on the Company's results of
operations. In addition, customer contracts can be canceled and volume levels
can be changed or delayed. The timely replacement of canceled, delayed or
reduced contracts with new business cannot be assured. These risks are
exacerbated
10
<PAGE> 11
because a majority of the Company's sales are to customers in the
communications sector of the electronics industry, which is subject to rapid
technological change and product obsolescence. The factors affecting these
industries in general, or any of the Company's major customers in particular,
could have a materially adverse effect on the Company's results of operations.
COMPETITION
The electronics manufacturing services industry is comprised of a large
number of companies, several of which have achieved substantial market share.
The Company also faces competition from current and prospective customers which
evaluate the Company's capabilities against the merits of manufacturing
products internally. The Company competes with different companies depending
on the type of service or geographic area. Certain of the Company's
competitors have broader geographic breadth. They also may have greater
manufacturing, financial, research and development and marketing resources than
the Company. The Company believes that the primary basis of competition in its
targeted markets is manufacturing technology, quality, responsiveness, the
provision of value-added services and price. To be competitive, the Company
must provide technologically advanced manufacturing services, high product
quality levels, flexible delivery schedules and reliable delivery of finished
products on a timely and price competitive basis. The Company currently may be
at a competitive disadvantage as to price when compared to manufacturers with
lower cost structures, particularly with respect to manufacturers with
established facilities where labor costs are lower.
SHORTAGES OF ELECTRONICS COMPONENTS
Most of the Company's net sales are derived from turnkey manufacturing
services in which the Company procures components from third-party suppliers
and bears the risk of component shortages. The electronics industry has been
characterized by shortages from time to time in semiconductor and other
components, which shortages have led to allocations by third-party suppliers.
The Company's inability to procure desired supplies of certain components has
in the past led, and may in the future lead, to some delays in shipments by the
Company to its customers. These delays to date have not had a material adverse
effect on the Company's results of operations. If these component shortages
persist or intensify, however, the Company may not be able to secure quantities
required to fulfill customer orders, which could result in delays in shipments,
or cancellation or delays in customer orders, each of which could have a
material adverse effect on the Company's results of operations.
MANAGEMENT OF GROWTH
There can be no assurance that the Company will successfully manage the
integration of new business. In addition, the Company may experience certain
inefficiencies as it manages geographically dispersed operations. Should the
Company increase its expenditures in anticipation of a future level of sales
which does not materialize, its profitability could be adversely affected. On
occasion, customers may require rapid increases in production which can
11
<PAGE> 12
place an excessive burden on the Company's resources. There can be no
assurance that the Company will be capable of meeting the demands placed upon
the Company's resources by these or any other customers.
ENVIRONMENTAL COMPLIANCE
The Company is subject to a variety of environmental regulations relating
to the use, storage, discharge and disposal of hazardous chemicals used during
its manufacturing process. Any failure by the Company to comply with present
and future regulations could subject it to future liabilities or the suspension
of production. In addition, such regulations could restrict the Company's
ability to expand its facilities or could require the Company to acquire costly
equipment or to incur other significant expenses to comply with environmental
regulations. In this regard, see "Legal Proceedings."
RISK OF DEFECTS
The electronics products manufactured for customers by the Company are
highly complex and may at times contain undetected design and/or manufacturing
errors or failures. Such defects have been discovered in the past, and there
can be no assurance that, despite the Company's quality control and quality
assurance efforts, such defects will not occur in the future. If such defects
occur in quantities or too frequently, the Company's business, and operating
results may be materially and adversely affected.
DEPENDENCE ON KEY PERSONNEL AND SKILLED EMPLOYEES
The Company's continued success depends to a large extent upon the efforts
and abilities of key managerial and technical employees. The loss of services
of certain key personnel could have a material adverse effect on the Company.
The Company's business also depends upon its ability to continue to attract and
retain senior managers and skilled employees. Failure to do so could have a
material adverse effect on the Company's operations.
POSSIBLE VOLATILITY OF MARKET PRICE OF COMMON STOCK
The trading price of the Company's Common Stock is subject to significant
fluctuations in response to variations in quarterly operating results, general
conditions in the electronics manufacturing services industry as well as the
industries of the Company's customers, and other factors. In addition, the
stock market is subject to price and volume fluctuations which affect the
market price for many high technology companies in particular, and which may be
unrelated to operating performance. There can be no assurance as to the
trading price of the Company's Common Stock at any time in the future.
12
<PAGE> 13
CMC INDUSTRIES, INC. AND SUBSIDIARIES
PART II - OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS
In December 1993, the Company retained the services of an industrial
safety consultant to assist in quantifying the potential exposure to the
Company in connection with clean-up and related costs of a former manufacturing
site, commonly known as the ITT Telecommunications site in Milan, Tennessee.
The consultant initially estimated that the cost to remove the contaminated
soil and deliver it to an appropriate hazardous waste site would be
approximately $200,000. Based upon this advice, the Company subsequently
entered into a voluntary agreement to investigate the site with the Tennessee
Department of Environment and Conservation. In addition, the Company agreed to
reimburse a tenant of the site $115,000 for expenditures previously incurred to
investigate environmental conditions at the site. The Company recorded a total
provision of $320,000 based on these estimates. Information discovered and
developed by the Company's new environmental consultant investigating the site
has led that expert to estimate that a full study and short-term and long-term
remediation of the site may cost between $3 and $4 million, although there can
be no assurance as to the actual cost of such a study and remediation.
However, the Company believes that other parties that have heretofore not
participated in the site investigation effort and its expenses can and will be
brought into this matter by the State of Tennessee and that such parties may be
held statutorily liable for such remediation. The Company has not been
designated as a potentially responsible party by the State of Tennessee with
respect to the site. However, there can be no assurance that the Company will
not be so designated or that any third parties will not assert claims against
the Company relating to remediation of the site. In the event the Company is
so designated or any such claim is made, the Company believes it has numerous
defenses which it will vigorously assert. There can be no assurance that if
the Company is so designated or any claim is asserted, defense or resolution of
such matter will not have a material adverse effect on the Company's financial
position or results of operations.
In addition, the Company is involved from time to time in other litigation
incidental to its business. The Company believes that the outcome of current
other litigation will not have a material adverse effect upon the results of
operations or financial condition of the Company and will not disrupt the
normal operations of the Company.
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
27 Financial Data Schedule (for SEC use only)
(b) Reports on Form 8-K. No reports on Form 8-K were filed by the
Company during the quarter ended April 30, 1996.
13
<PAGE> 14
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.
CMC INDUSTRIES, INC.
------------------------
Registrant
Date: June 13, 1996 Matthew G. Landa /s/
------------------------
Matthew G. Landa
President and Chief Executive
Officer
Date: June 13, 1996 Andrew J. Moley /s/
------------------------
Andrew J. Moley
Chief Operating and Financial
Officer
14
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED CONSOLIDATED BALANCE SHEET AT APRIL 30, 1996 AND THE CONDENSED
CONSOLIDATED STATEMENT OF INCOME FOR THE NINE MONTHS ENDED APRIL 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> JUL-31-1996
<PERIOD-START> AUG-01-1995
<PERIOD-END> APR-30-1996
<CASH> 248
<SECURITIES> 0
<RECEIVABLES> 27,869
<ALLOWANCES> 0
<INVENTORY> 23,908
<CURRENT-ASSETS> 52,776
<PP&E> 9,280
<DEPRECIATION> 0
<TOTAL-ASSETS> 69,034
<CURRENT-LIABILITIES> 34,916
<BONDS> 5,247
0
0
<COMMON> 61
<OTHER-SE> 27,923
<TOTAL-LIABILITY-AND-EQUITY> 69,034
<SALES> 123,334
<TOTAL-REVENUES> 123,334
<CGS> 115,966
<TOTAL-COSTS> 115,966
<OTHER-EXPENSES> 6,765
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,178
<INCOME-PRETAX> (575)
<INCOME-TAX> (200)
<INCOME-CONTINUING> (375)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (375)
<EPS-PRIMARY> 0
<EPS-DILUTED> (.06)
</TABLE>
