SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 29, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to ________
Commission File No. 0-22780
FEI COMPANY
(Exact name of registrant as specified in its charter)
Oregon 93-0621989
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) Number)
7451 NW Evergreen Parkway
Hillsboro, Oregon 97124-5830
(Address of principal executive offices) (Zip Code)
(503) 640-7500
(Registrant's telephone number, including area code)
Not applicable
(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 [ ]
The number of shares of Common Stock outstanding as of May 11, 1998 was
18,079,683.
<PAGE>
INDEX TO FORM 10-Q
Page
Part I - Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets - March 29, 1998 (unaudited) and
December 31, 1997................................................. 1
Consolidated Statements of Operations - Thirteen Weeks Ended
March 29, 1998 and March 30, 1997 (unaudited)..................... 2
Condensed Consolidated Statements of Cash Flows - Thirteen
Weeks Ended March 29, 1998 and March 30, 1997 (unaudited)......... 3
Notes to Consolidated Financial Statements (unaudited)............ 4
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations............................... 7
Part II - Other Information
Item 2. Changes in Securities............................................10
Item 6. Exhibits and Reports on Form 8-K.................................10
Signatures....................................................................11
i
<PAGE>
PART I - Financial Information
Item 1. Financial Statements
<TABLE>
<CAPTION>
FEI Company and Subsidiaries
Consolidated Balance Sheets
(In thousands, except share data)
December 31, March 29,
1997 1998
----------- -----------
ASSETS (Unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 16,394 $ 17,129
Receivables 56,168 52,467
Inventories (Note 3) 37,807 40,647
Deferred income taxes 2,484 2,890
Other 2,497 1,080
----------- -----------
Total current assets 115,350 114,213
EQUIPMENT 19,246 20,355
LEASE AND NOTE RECEIVABLES 946 825
OTHER ASSETS 47,480 45,662
----------- -----------
TOTAL $ 183,022 $ 181,055
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 15,984 $ 13,927
Current accounts with Philips (Note 4) 9,074 12,862
Accrued payroll liabilities 3,248 2,684
Accrued expenses & deferred income 18,206 19,016
Other current liabilities 5,742 5,484
----------- -----------
Total current liabilities 52,254 53,973
LINE OF CREDIT 17,844 12,801
LONG-TERM PROVISIONS 491 835
DEFERRED INCOME TAXES 7,544 7,957
SHAREHOLDERS' EQUITY:
Preferred stock - 500,000 shares authorized;
None issued and outstanding -- --
Common stock - 30,000,000 shares authorized; 149,149 149,151
18,077,793 and 18,078,337 shares issued and outstanding
at December 31, 1997 and March 29, 1998, respectively
Retained earnings (36,602) (36,000)
Cumulative foreign currency translation adjustment (7,658) (7,662)
----------- -----------
Total shareholders' equity 104,889 105,489
----------- -----------
TOTAL $ 183,022 $ 181,055
=========== ===========
See notes to consolidated financial statements.
</TABLE>
1
<PAGE>
<TABLE>
<CAPTION>
FEI Company and Subsidiaries
Consolidated Statements of Operations
(In thousands except per share data)
(Unaudited)
Thirteen Weeks Ended
March 30, March 29,
1997 1998
----------- -----------
<S> <C> <C>
NET SALES $ 32,067 $ 35,954
COST OF SALES 23,267 21,858
----------- -----------
Gross profit 8,800 14,096
OPERATING EXPENSES:
Research and development costs 4,383 3,459
Selling, general and administrative costs 10,398 8,859
Amortization of intangibles 256 634
Purchased in-process research and development (Note 2) 38,046 --
Restructuring and reorganization costs (Note 5) 2,478 --
----------- -----------
Total operating expenses 55,561 12,952
OPERATING INCOME (LOSS) (46,761) 1,144
OTHER EXPENSE, NET 197 216
----------- -----------
INCOME (LOSS) BEFORE TAXES (46,958) 928
TAX EXPENSE (BENEFIT) (1,827) 326
----------- -----------
NET INCOME (LOSS) $ (45,131) $ 602
=========== ===========
PER SHARE DATA:
Net income (loss) per share, basic $ (3.46) $ 0.03
=========== ===========
Net income (loss) per share, diluted $ (3.46) $ 0.03
=========== ===========
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic 13,037 18,078
=========== ===========
Diluted 13,037 18,590
=========== ===========
See notes to consolidated financial statements.
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
FEI Company and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Thirteen Weeks Ended
March 30, March 29,
1997 1998
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (45,131) $ 602
Adjustments to reconcile net income (loss) to net cash
used in operating activities:
Depreciation and amortization 920 1,736
Purchased in-process research and development 38,046 --
Other 8,538 8,940
----------- -----------
Net cash provided by operating activities 2,373 11,278
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of equipment (1,072) (2,547)
Investment in software development (416) (361)
Net change in leases receivable 102 120
----------- -----------
Net cash used in financing activities (1,386) (2,788)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings on line of credit 1,542 (5,043)
Proceeds from exercise of stock options 3 2
Net cash received from Philips 8,000 --
Repayment of note to Philips -- (2,718)
----------- -----------
Net cash provided by (used in) financing activities 9,545 (7,759)
FOREIGN CURRENCY TRANSLATION ADJUSTMENT 46 4
----------- -----------
NET INCREASE IN CASH AND CASH EQUIVALENTS 10,578 735
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD -- 16,394
----------- -----------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 10,578 $ 17,129
=========== ===========
See notes to consolidated financial statements.
</TABLE>
3
<PAGE>
FEI COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share data)
(Unaudited)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Business - FEI Company and its wholly owned subsidiaries (the
"Company") design, manufacture and market focused ion beam ("FIB") workstations,
transmission electron microscopes ("TEMs"), scanning electron microscopes
("SEMs") and components of these products. The Company has manufacturing
operations in Hillsboro, Oregon; Eindhoven, The Netherlands; and Brno, Czech
Republic. Sales and service operations are conducted in the United States and
eight other countries, constituting a majority of the worldwide market for the
Company's products. In addition, the Company's products are sold through
distribution agreements with affiliates of Philips Electronics N.V. ("Philips")
located in approximately 20 additional countries.
The Company's FIB workstations are sold primarily to semiconductor manufacturers
and are used in the design, manufacture and testing of integrated circuits. The
Company's electron microscope products are sold primarily to life science and
materials science research institutes, universities and industrial customers, as
well as to semiconductor manufacturers.
Basis of Presentation - On February 21, 1997, FEI Company ("Pre-Combination
FEI") acquired substantially all of the assets and liabilities of the electron
optics business (the "PEO Operations") of Philips Industrial Electronics
International B.V. ("PIE"), a wholly owned subsidiary of Philips (the
"Combination"). The financial statements for periods prior to the Combination
are presented as if the PEO Operations had existed as an entity separate from
Philips during the periods presented and include the historical assets,
liabilities, sales and expenses that are directly related to the PEO Operations.
Because the PEO Operations transferred were historically part of the Philips
group, certain allocations of liabilities and expenses have been included in the
financial statements. These liabilities and expenses were allocated using
various methods depending upon the nature of the liability or expense. In the
opinion of management, the methods used to allocate these liabilities and
expenses to the PEO Operations are reasonable. The financial statements for the
periods prior to the Combination are not necessarily indicative of the financial
position and results of operations that would have occurred had the PEO
Operations been a separate entity.
The accompanying unaudited consolidated financial statements have been prepared
in accordance with the instructions to Form 10-Q and Article 2 of Regulation
S-X. Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete financial
statements. In the opinion of management, all adjustments considered necessary
for fair presentation have been included. In addition to the adjustments for
normal recurring accruals, the Company recorded charges in the first quarter of
1997 of $38,046 associated with the purchase of in-process research and
development, as a result of the Company's combination with PEO Operations. The
Company also recorded a $2,478 restructuring and reorganization charge primarily
associated with the relocation of the Company's Wilmington, Massachusetts
manufacturing operations.
2. THE COMBINATION
On February 21, 1997, Pre-Combination FEI acquired substantially all of the
assets and liabilities of the PEO Operations. The PEO Operations were acquired
in exchange for 9,728,807 newly issued shares of the Company's Common Stock,
which constituted, when issued to PIE, 55% of the shares of Common Stock then
outstanding. Because PIE acquired control of the Company by acquiring 55% of the
outstanding voting securities of the Company, the Combination was treated as a
"reverse acquisition" for accounting and financial reporting purposes whereby
purchase accounting was applied to the financial statements of Pre-Combination
FEI. The 1997 results of operations reflect the results of the PEO operations
through February 21, 1997, and the combined results of the Company from February
22, 1997 and thereafter.
4
<PAGE>
The Company obtained an appraisal of the fair market value of the assets
acquired to serve as a basis for allocation of the total purchase price of
$122,872 to the various classes of assets. To determine the value of each of
Pre-Combination FEI's product lines, projected product revenues, net of
provision for operating expenses, income taxes and returns on requisite assets,
were discounted to a present value. This approach was applied to existing
technology as well as to research and development projects which had not been
proven technologically feasible and which had not generated revenue as of the
date of the Combination. As a result of this valuation, the fair values of
existing technology and in process research and development of Pre-Combination
FEI were determined to be $16,490 and $38,046, respectively.
The amortization periods for existing technology and goodwill have been
established at 12 years and 15 years, respectively. It is possible that
estimates of anticipated future gross revenues, the remaining estimated economic
life of products or technologies, or both, may be reduced due to competitive
pressures or other factors.
In accordance with the Company's policy to expense research and development
costs as incurred, a one-time charge of $38,046 for the write-off of acquired
in-process research and development was recorded immediately subsequent to the
closing of the Combination.
3. INVENTORIES
Inventories consisted of the following:
<TABLE>
<CAPTION>
December 31, March 29,
1997 1998
------------- -------------
<S> <C> <C>
Raw materials and assembled parts $ 24,987 $ 23,471
Work in process 12,123 14,363
Finished goods 5,998 8,329
------------- -------------
Total inventories 43,108 46,163
Reserve for obsolete inventory (5,301) (5,516)
------------- -------------
Net inventories $ 37,807 $ 40,647
============= =============
</TABLE>
4. CURRENT ACCOUNTS WITH PHILIPS
Current accounts with Philips represent accounts receivable and accounts payable
between the Company and other Philips units. Most of the current account
transactions relate to deliveries of goods.
Current accounts with Philips consisted of the following:
<TABLE>
<CAPTION>
December 31, March 29,
1997 1998
------------- -------------
<S> <C> <C>
Current accounts receivable $ 7,678 $ 1,430
Current accounts payable (16,752) (14,292)
------------- -------------
Net $ (9,074) $ (12,862)
============= =============
</TABLE>
5
<PAGE>
5. RESTRUCTURING AND REORGANIZATION
In March 1997, the Company transferred its ElectroScan manufacturing activities
to its manufacturing facility in Eindhoven, The Netherlands, and abandoned the
majority of the technology acquired. Consequently, $1.5 million of goodwill
attributable to the acquisition of the assets of ElectroScan Corporation was
written off and charged to income in the first quarter of 1997, along with
estimated severance costs for 11 ElectroScan employees, and other related costs.
6. COMPREHENSIVE INCOME
The Company adopted SFAS No. 130, Reporting Comprehensive Income, in the current
quarter. The primary component of comprehensive income not included in net
income (loss) for the Company is the effect of foreign currency translation for
the Company's foreign subsidiaries. Comprehensive income consisted of the
following:
<TABLE>
<CAPTION>
Thirteen Weeks Ended
March 30, March 29,
1997 1998
------------- -------------
<S> <C> <C>
Net income (loss) as reported $ (45,131) $ 602
Effect of foreign currency translation (3,627) (4)
------------- -------------
Comprehensive income (loss) $ (48,758) $ 598
============= =============
</TABLE>
6
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
RESULTS OF OPERATIONS
The following table sets forth certain unaudited financial data for the periods
indicated as a percentage of net sales.
<TABLE>
<CAPTION>
Thirteen Weeks Ended
March 30, March 29,
1997 1998
----------- -----------
<S> <C> <C>
Net sales............................................ 100.0% 100.0%
Cost of sales........................................ 72.6% 60.8%
----------- -----------
Gross profit....................................... 27.4% 39.2%
Research and development costs....................... 13.7% 9.6%
Selling, general and administrative costs............ 32.4% 24.6%
Amortization of intangibles.......................... 0.8% 1.9%
Purchased in-process research and
development (Note 2)............................... 118.6% --
Restructuring and reorganization costs (Note 5)...... 7.7% --
----------- -----------
Operating income (loss)............................ (145.8%) 3.2%
Other expense, net................................... 0.6% 0.6%
----------- -----------
Income (loss) before taxes........................... (146.4%) 2.6%
Tax expense (benefit)................................ (5.7%) 0.9%
----------- -----------
Net income (loss).................................... (140.7%) 1.7%
=========== ===========
</TABLE>
Net sales. Net sales for the thirteen weeks ended March 29, 1998 increased $3.9
million (12.1%) compared to the corresponding period in 1997. The increase in
sales was primarily attributable to the fact that the 1998 period includes net
sales of the combined company, while the 1997 period includes the sales of the
PEO Operations only through February 21, 1997 and the net sales of the combined
company thereafter.
Sales outside the United States accounted for 50% and 68% of sales for the 1998
period and the 1997 period, respectively. The Company expects that sales outside
the United States will continue to represent a significant percentage of its net
sales.
Gross profit. Gross profit for the thirteen weeks ended March 29, 1998 increased
$5.3 million (60.2%) compared to the corresponding period in 1997. Gross profit
as a percentage of sales for the thirteen weeks ended March 29, 1998 increased
to 39.2% from 27.4% for the corresponding period in 1997 primarily due to
favorable shifts in product mix. In addition, the 1997 gross margin was lower
due to the write-up of Pre-Combination FEI's inventory from cost to fair market
value and the resulting increase in cost of goods sold. This write-up of
Pre-Combination FEI's assets was a result of the reverse acquisition accounting
applied to the Combination.
Research and development costs. Research and development costs decreased
$924,000 (21.1%) for the thirteen weeks ended March 29, 1998 compared to the
corresponding period in 1997. As a percentage of sales, research and development
costs were 9.6% for the thirteen weeks ended March 29, 1998 compared to 13.7%
for the corresponding period in 1997. The 1997 expense includes the write-off of
$1.6 million of previously capitalized software development costs. Excluding the
effect of the 1997 capitalized software write-off, research and development
costs increased from 8.6% of sales in 1997 to 9.6% of sales in 1998.
Capitalized software development costs were $361,000 and $416,000 for the
thirteen weeks ended March 29, 1998 and March 30, 1997, respectively. The
Company is continuing to invest in internal development of software incorporated
in electron microscopes and focused ion and electron beam products.
7
<PAGE>
Selling, general and administrative costs. Selling, general and administrative
costs for the thirteen weeks ended March 29, 1998 decreased $1.5 million (14.8%)
compared to the corresponding period in 1997. Selling, general and
administrative costs as a percentage of sales were 24.6% and 32.4% for the
thirteen weeks ended March 29, 1998 and March 30, 1997, respectively. This
decrease was attributable to $1.1 million in bad debts expenses recognized in
the first quarter of 1997 and to the favorable effect of foreign currency
exchange rate fluctuations from 1997 to 1998 which resulted in lower expense
levels in the first quarter of 1998 after translation into U.S. dollars. These
decreases were partially offset by the fact that the 1998 period includes
expenses of the combined company, while the 1997 period includes the expenses of
the PEO Operations only through February 21, 1997 and of the combined company
thereafter.
Amortization of intangibles. Amortization of intangibles for the thirteen weeks
ended March 29, 1998 increased $378,000 (147.7%) compared to the corresponding
period in 1997. This increase reflects amortization of the intangibles resulting
from the Combination for thirteen weeks in 1998 as compared to amortization for
only five weeks in 1997.
Income tax expense. The effective income tax rate was 35% for the thirteen weeks
ended March 29, 1998. The 1998 rate differs from the U.S. federal statutory tax
rate of 34% primarily as a result of state and foreign taxes, the amortization
of intangible assets not deductible for income tax purposes, and the favorable
tax effect of the Company's use of a foreign sales corporation for exports from
the U.S. The tax benefit recognized in the thirteen weeks ended March 30, 1997
is attributable to pretax operating losses in certain tax jurisdictions, offset
by the nondeductible write-off of purchased in process research and development.
LIQUIDITY AND CAPITAL RESOURCES
At March 29, 1998, the Company had total cash and cash equivalents of $17.1
million compared to $16.4 million at December 31, 1997. Cash provided by
operating activities for the thirteen weeks ended March 29, 1998 was $11.3
million compared to $6.0 million for the thirteen weeks ended March 30, 1997.
The primary reasons for the increase in cash from operating activities during
the 1998 thirteen week period compared to the 1997 period were improved
operating results.
Investing activities used $2.8 million during the thirteen weeks ended March 29,
1998 and $1.4 million during the thirteen weeks ended March 30, 1997, primarily
due to acquisitions of equipment and investment in software development. The
Company expects to continue to invest in plant and equipment and technology
needed for future business requirements, as well as to invest in internally
developed software for its products.
Financing activities used $7.8 million for the thirteen weeks ended March 29,
1998. These cash uses were primarily for net repayments under the Company's bank
line of credit in the amount of $5.0 million as well as repayment of $2.7
million to Philips under an obligation incurred in conjunction with the
Combination. During the comparable 1997 period, financing activities produced
$9.5 million primarily resulting from net borrowings under the line of credit
and cash advanced from Philips as part of the Combination.
The Company expects to continue to use cash to fund the growth of its
operations. While the Company believes its cash and cash equivalents and
borrowings available under its $25 million line of credit will be sufficient to
fund operations during the near term, the Company intends to seek an increase in
its borrowing capacity available under its line of credit agreement.
BACKLOG
The Company's backlog consists of purchase orders it has received for products
it expects to ship within the next 12 months. The Company's backlog at March 29,
1998 was approximately $53 million. A substantial portion of the Company's
backlog relates to orders for a relatively small number of products. As a
result, the timing of the receipt of orders could have a significant impact on
the Company's backlog at any date. For this and other reasons, the amount of
backlog at any date is not necessarily determinative of revenue in future
periods.
8
<PAGE>
YEAR 2000 COMPUTER SYSTEM IMPACT
The Company has analyzed the impact of the Year 2000 issue on its information
systems and believes its enterprise management information system addresses the
Year 2000 issues on all core Company business systems. Accordingly, the Company
expects the Year 2000 issue will not have a material financial impact on the
Company. The Company has other ancillary systems, however, that may require
modification to address the Year 2000 issue, and the Company continues to
evaluate its information systems in connection with the Year 2000 issue. The
Company has not thoroughly analyzed the impact of other parties' computer system
failures, but the Company believes costs incurred in responding to other
parties' Year 2000 computer system failures, together with the cost of any
required modifications to the Company's ancillary systems, will not have a
material impact on the Company's results of operations or financial condition.
FORWARD-LOOKING STATEMENTS
From time to time the Company may issue forward-looking statements that are
subject to a number of risks and uncertainties. The statements in this report
concerning increased investment in plant and equipment and software development,
the portions of the Company's sales consisting of international sales, and
expected capital requirements constitute forward-looking statements that are
subject to risks and uncertainties. Factors that could materially decrease the
Company's investment in plant and equipment and software development include,
but are not limited to, downturns in the IC manufacturing market, lower than
expected customer orders and changes in product sales mix. Factors that could
materially reduce the portion of the Company's sales consisting of international
sales include, but are not limited to, competitive factors, including increased
international competition, new product offerings by competitors and price
pressures, fluctuations in interest and exchange rates (including changes in
relevant foreign currency exchange rates between time of sale and time of
payment), changes in trade policies, tariff regulations and business conditions
and growth in the electronics industry and general economies, both domestic and
foreign. Factors that could materially increase the Company's capital
requirements include, but are not limited to, receipt of a significant portion
of customer orders and product shipments near the end of a quarter and the other
factors listed above.
9
<PAGE>
Part II - Other Information
Item 2. Changes in Securities
On February 21, 1997 (the "Combination Closing"), the Company combined with the
electron optics business of Philips Electronics N.V. pursuant to a Combination
Agreement dated November 15, 1996. At the Combination Closing, the Company
issued 9,728,807 shares of its Common Stock to Philips Industrial Electronics
International B.V., a Netherlands corporation ("PIE"), as consideration for all
of the outstanding shares of Philips Electron Optics International B.V., a
Netherlands corporation, and Philips Electron Optics, Inc., a Delaware
corporation, both wholly owned subsidiaries of PIE immediately prior to the
Combination Closing.
The Combination Agreement provides in relevant part that at the time of issuance
by the Company of any shares of Common Stock upon the exercise of a stock option
outstanding on the date of the Combination Closing, the Company is required to
issue to PIE a number of additional shares of Common Stock such that the shares
of Common Stock issued to PIE continue to represent 55% of the Outstanding
Common Stock of the Company, as defined in the Combination Agreement. During the
13 weeks ended March 29, 1998 the Company issued 318 shares of its Common Stock
to PIE pursuant to this provision of the Combination Agreement.
The shares issued were not registered under the Securities Act of 1933, and the
issuance was made in reliance on Section 4(2) of the Securities Act as a
transaction not involving a public offering. The consideration received by the
Company for the shares issued, together with the shares issued to PIE at the
Combination Closing, was the outstanding shares of Philips Electron Optics
International B.V. and Philips Electron Optics, Inc.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
27.1 Financial Data Schedule
(b) Reports on Form 8-K
None.
10
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
FEI COMPANY
Dated: May 13, 1998 WILLIAM G. LANGLEY
-----------------------------------------
William G. Langley
Executive Vice President, Chief Financial
Officer and Secretary (Principal
Financial Officer)
MARK V. ALLRED
-----------------------------------------
Mark V. Allred
Controller (Principal Accounting Officer)
11
<PAGE>
Exhibit Index
Exhibit
No. Description
- ------- -----------
27.1 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE COMPANY'S
CONSOLIDATED FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-29-1998
<CASH> 17,129
<SECURITIES> 0
<RECEIVABLES> 54,382
<ALLOWANCES> (1,915)
<INVENTORY> 40,647
<CURRENT-ASSETS> 114,213
<PP&E> 32,794
<DEPRECIATION> (12,439)
<TOTAL-ASSETS> 181,055
<CURRENT-LIABILITIES> 53,973
<BONDS> 0
149,151
0
<COMMON> 0
<OTHER-SE> (43,662)
<TOTAL-LIABILITY-AND-EQUITY> 181,055
<SALES> 35,954
<TOTAL-REVENUES> 35,954
<CGS> 21,858
<TOTAL-COSTS> 34,810
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 426
<INCOME-PRETAX> 928
<INCOME-TAX> 326
<INCOME-CONTINUING> 602
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 602
<EPS-PRIMARY> 0.03
<EPS-DILUTED> 0.03
</TABLE>
