================================================================================
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 January 31, 1998
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 13(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
FOR THE TRANSITION PERIOD FROM ________________________ TO _____________________
COMMISSION FILE NUMBER 33-73406.
---------
IVC INDUSTRIES, INC.
--------------------
(exact name of Registrant as specified in its charter)
DELAWARE 22-1567481
- ------------------------------------- ----------------------
(state or other jurisdiction of (I.R.S. Employer
incorporation or organization) identification no.)
500 HALLS MILL ROAD, FREEHOLD, NEW JERSEY 07728
- ------------------------------------------- ----------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (732) 308-3000
--------------
NOT APPLICABLE
--------------
(former name, address and 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 Exchange Act during the past 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 |_|
Registrant had 17,127,392 shares of common stock outstanding as of March 9,
1998.
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<PAGE>
IVC INDUSTRIES, INC.
Table of Contents
Page No.
--------
Part I. Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets as at
January 31, 1998 and July 31, 1997...................................3
Consolidated Statements of Income
For the Three and Six Months Ended January 31, 1998 and 1997.........4
Consolidated Statements of Cash Flows
For the Six Months Ended January 31, 1998 and 1997...................5
Notes to Consolidated Financial Statements...........................6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations........................8
Part II. Other Information...................................................11
Signature Page................................................................13
<PAGE>
Item 1. Financial Statements.
IVC INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS AT JANUARY 31, 1998 AND JULY 31, 1997
(Dollars in Thousands, Except Per Share Information)
--------------------------
January 31, July 31,
1998 1997
---------- --------
(unaudited)
ASSETS
Current Assets:
Cash and cash equivalents $ 1,228 $ 179
Accounts receivable 16,683 9,567
Inventories 26,473 31,185
Deferred taxes 2,353 2,353
Prepaid expenses and other current assets 2,814 2,347
-------- --------
Total Current Assets 49,551 45,631
Property and Equipment - Net 17,644 17,999
Notes Receivable - Related Parties 568 568
Goodwill - Net 1,841 1,867
Other Assets 3,025 3,326
-------- --------
Total Assets $ 72,629 $ 69,391
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Current portion of long-term debt $ 1,459 $ 1,434
Accounts payable and accrued expenses 22,357 19,841
-------- --------
Total Current Liabilities 23,816 21,275
Long-Term Debt 31,253 31,430
Deferred Taxes 170 170
Other Liabilities 99 99
-------- --------
Total Liabilities 55,338 52,974
-------- --------
Shareholders' Equity:
Preferred stock, no par value, 2,000,000 shares
authorized, none issued -- --
Common stock, $.01 par value, 25,000,000 shares
authorized; 17,127,392 issued and outstanding 171 171
Additional paid-in capital 11,446 11,446
Foreign currency translation adjustment (165) (116)
Retained earnings 5,839 4,970
Less: Common stock in treasury at cost; 0 and
32,000 shares at January 31, 1998 and July 31,
1997, respectively -- (54)
-------- --------
Total Shareholders' Equity 17,291 16,417
-------- --------
Total Liabilities and Shareholders' Equity $ 72,629 $ 69,391
======== ========
See accompanying notes to consolidated financial statements.
3
<PAGE>
IVC INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS AND SIX MONTHS ENDED JANUARY 31, 1998 AND 1997
(Dollars in Thousands, Except Per Share Information)
(unaudited)
--------------------------
<TABLE>
<CAPTION>
Three Months Six Months
Ended January 31, Ended January 31,
------------------------ ------------------------
1998 1997 1998 1997
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net sales $ 29,253 $ 27,267 $ 56,962 $ 58,830
Cost of sales 21,215 20,965 42,123 44,433
----------- ----------- ----------- -----------
Gross profit 8,038 6,302 14,839 14,397
Selling, general and administrative expenses 6,637 5,253 12,416 11,465
----------- ----------- ----------- -----------
Income from operations 1,401 1,049 2,423 2,932
Other expenses - net 613 398 1,160 829
----------- ----------- ----------- -----------
Income before income taxes 788 651 1,263 2,103
Income tax provision 252 260 394 840
----------- ----------- ----------- -----------
Net income $ 536 $ 391 $ 869 $ 1,263
=========== =========== =========== ===========
Basic earnings per share $ .03 $ .02 $ .05 $ .07
=========== =========== =========== ===========
Diluted earnings per share $ .03 $ .02 $ .05 $ .07
=========== =========== =========== ===========
Weighted average common shares:
Basic 17,127,392 17,094,742 17,124,957 17,094,742
=========== =========== =========== ===========
Diluted 17,196,917 17,097,675 17,182,172 17,135,072
=========== =========== =========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE>
IVC INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JANUARY 31, 1998 AND 1997
(Dollars in Thousands)
(unaudited)
--------------------------
1998 1997
------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 869 $ 1,263
------- --------
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 1,131 1,040
Stock Distributed to employee savings plan 54 --
Changes in assets - (increase) decrease:
Accounts receivable (7,116) 1,622
Inventories 4,712 1,984
Prepaid expenses and other current assets (467) (809)
Other assets 261 (1,058)
Changes in liabilities - increase:
Accounts payable and accrued expenses 2,516 771
Other -- 78
------- --------
Total adjustments 1,091 3,628
------- --------
Net Cash Provided By Operating Activities 1,960 4,891
------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property and equipment (710) (885)
------- --------
Net Cash Provided By (Used In) Investment Activities (710) (885)
------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on long term debt (3,483) (18,711)
Proceeds from long term debt 3,331 14,904
------- --------
Net Cash Provided By (Used In) Financing Activities (152) (3,807)
------- --------
Foreign currency translation adjustment (49) (11)
------- --------
NET INCREASE IN CASH 1,049 188
CASH AND CASH EQUIVALENTS - BEGINNING 179 420
------- --------
CASH AND CASH EQUIVALENTS - ENDING $ 1,228 $ 608
======= ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the period for:
Interest $ 896 $ 986
======= ========
Taxes $ 258 $ 811
======= ========
See accompanying notes to consolidated financial statements.
5
<PAGE>
IVC INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
--------------------------
Note 1 - Basis of Presentation and Other Matters:
The accompanying unaudited consolidated financial statements, which are
for interim periods, do not include all disclosures provided in the annual
consolidated financial statements. These unaudited consolidated financial
statements should be read in conjunction with the consolidated financial
statements and the footnotes thereto contained in the IVC Industries, Inc. (the
"Company") Annual Report on Form 10-K for the year ended July 31, 1997, as filed
with the Securities and Exchange Commission.
In the opinion of the Company, the accompanying unaudited consolidated
financial statements contain all adjustments (which are of a normal recurring
nature) necessary for a fair presentation of the financial statements. The
results of operations for the interim periods are not necessarily indicative of
the results to be expected for the full year.
Certain amounts have been reclassified to conform with the current period
presentation. These reclassifications had no effect on net income.
Note 2 - Inventories:
Inventories consist of the following:
January 31, July 31,
1998 1997
---------- --------
(dollars in thousands)
Finished Goods $ 9,465 $16,697
Bulk and Work in Process 9,499 9,155
Raw Materials and Packaging Components 7,509 5,333
------- -------
Total Inventory $26,473 $31,185
======= =======
See accompanying notes to consolidated financial statements.
6
<PAGE>
Note 3 - Earnings Per Share:
Basic earnings per share are based on the weighted average number of
common shares outstanding during the three-month and six-month periods ended
January 31, 1998 and 1997. Diluted earnings per share include the effect of
outstanding stock options if exercised. The following is a reconciliation
between the basic and diluted earnings per share:
<TABLE>
<CAPTION>
(Dollars in Thousands, Except Per Share Information)
Three Months Six Months
Ended January 31, Ended January 31,
----------------- -----------------
1998 1997 1998 1997
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Numerator:
Numerator for basic earnings per share -
Income available to common stockholders $ 536 $ 391 $ 869 $ 1,263
Numerator for diluted earnings per share -
Income available to common stockholders $ 536 $ 391 $ 869 $ 1,263
----------- ----------- ----------- -----------
Denominator:
Denominator for basic earnings per share -
Weighted average shares 17,127,392 17,094,742 17,124,957 17,094,742
Effect of dilutive securities:
Stock Options 69,525 2,933 57,215 40,330
Denominator for diluted earnings per share -
Weighted average shares 17,196,917 17,097,675 17,182,172 17,135,072
----------- ----------- ----------- -----------
Basic earnings per share $ 0.03 $ 0.02 $ 0.05 $ 0.07
----------- ----------- ----------- -----------
Diluted earnings per share $ 0.03 $ 0.02 $ 0.05 $ 0.07
----------- ----------- ----------- -----------
</TABLE>
Options to purchase 516,984 shares of common stock at prices ranging from
$2.34 - $4.50 per share and 566,984 shares of common stock at prices ranging
from $1.93 - $4.50 were outstanding at January 31, 1998 and 1997, respectively.
These options were not included in the computation of diluted earnings per share
due to the options' exercise price being greater than the average market price
of the common shares.
See accompanying notes to consolidated financial statements.
7
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
Three Months Ended January 31, 1998 Compared to the Three Months Ended January
31, 1997
Net Sales. Net sales for the three months ended January 31, 1998 were
$29.3 million, an increase of $2.0 million or approximately 7% over the three
months ended January 31, 1997. The increase was primarily attributable to higher
sales levels recorded by Intergel, the Company's soft gelatin encapsulation
division, the inclusion of the Vitamin Specialties operations, which were
acquired in June 1997, and increased sales levels at the Company's West Coast
and Canadian operations. Partially offsetting these factors was the reduction in
sales of a line of products to a significant customer, reflecting the
termination of the supply agreement relative to the customer's store brand,
during the year ago quarter. The Company's core business products are
distributed through leading chain drug, supermarket and mass merchandising
retailers. The current consolidation trend amongst these retailers poses
additional opportunities, as well as challenges, in the future. The Company
believes that, based on its relationships with its retail customers, it is well
positioned to participate in the industry's future growth. However, there can be
no assurance that the Company's current growth rates will continue, nor what
effect, if any, continued consolidation amongst the Company's retail customers
will have on the Company.
Cost and Expenses. Cost of sales for the three months ended January 31,
1998 were $21.2 million, an increase of $0.3 million or approximately 1% over
the three months ended January 31, 1997. Cost of sales decreased 4.3% as a
percentage of net sales over the comparative period in the prior year, as a
result of the shift in the sales mix toward the Company's higher margined
branded products, improved operating efficiencies at Intergel resulting from
increased levels of manufacturing activities and the inclusion of the Company's
Vitamin Specialties operations.
Selling, general and administrative expenses. Selling, general and
administrative expenses for the three months ended January 31, 1998 were $6.6
million, an increase of $1.4 million or approximately 26.3% over the prior
year's comparable period. This increase was primarily attributable to: (i)
increased levels of advertising and promotional activities, (ii) the expansion
of the Company's sales and marketing department, (iii) the inclusion of the
Vitamin Specialties operations, and (iv) distribution costs associated with
Intergel's higher level of shipments.
Other Expenses, Net. Other expenses, net, for the three months ended
January 31, 1998, principally represent interest expense of $623,000, rental and
interest income of $87,000, and miscellaneous expenses, including foreign
exchange gains/losses and equipment and other asset dispositions, of $76,000.
Other expenses, net, for the three months ended January 31, 1997, principally
represent interest expense of $663,000, rental and interest income of $86,000,
and miscellaneous income, including foreign exchange gains/losses and equipment
and other asset dispositions, of $179,000.
See accompanying notes to consolidated financial statements.
8
<PAGE>
Income Taxes. Income taxes generally reflect the effect of statutory
federal and state income tax rates and certain non-deductible expenses.
Six Months Ended January 31, 1998 Compared to the Six Months Ended January 31,
1997
Net Sales. Net sales for the six months ended January 31, 1998 were $57.0
million, a decrease of $1.9 million or approximately 3% over the six months
ended January 31, 1997. The decrease was attributable to a reduction in sales of
a line of products to a significant customer reflecting the termination of the
supply agreement relative to the customer's store brand during the second
quarter in 1997. The decrease in net sales was partially offset by the higher
sales levels recorded by Intergel, the Company's soft gelatin encapsulation
division, and the inclusion of the Vitamin Specialties operations, which were
acquired in June 1997. Also contributing to the increase in net sales was the
continued growth in unit sales primarily at the Company's West Coast and
Canadian operations.
Cost and Expenses. Cost of sales for the six months ended January 31, 1998
were $42.1 million, a decrease of $2.3 million or approximately 5.2% over the
six months ended January 31, 1997. Cost of sales decreased 1.6% as a percentage
of net sales over the comparative period in the prior year. Such decrease as a
percentage of sales was due to: (i) an improvement in the overall sales mix
toward higher margined branded products, (ii) a general decrease in
manufacturing costs resulting from the improvement in manufacturing efficiencies
stemming from higher operating levels at Intergel, and (iii) the inclusion of
the Vitamin Specialties operations. Partially offsetting the decrease in cost of
sales was an increase in manufacturing and packaging costs, resulting from
decreased operating efficiencies during the first quarter, which was
attributable to lower operating levels caused by a reduction in private label
sales levels coupled with the Company's inventory reduction program.
Selling, general and administrative expenses. Selling, general and
administrative expenses for the six months ended January 31, 1998 were $12.4
million, an increase of $1.0 million or approximately 8.3% over the prior year's
comparable period. This increase was primarily attributable to: (i) increased
advertising and promotional activities, (ii) expansion of the Company's sales
and marketing department, (iii) increased distribution expenses attributable to
higher levels of shipments associated with Intergel's sales activities, and (iv)
expenses relating to the Vitamin Specialties operations.
Other Expenses, Net. Other expenses, net, for the six months ended January
31, 1998, principally represent interest expense of $1.2 million, rental and
interest income of $128,000, and miscellaneous expenses, including foreign
exchange gains/losses, of $87,000. Other expenses, net, for the six months ended
January 31, 1997, principally represent interest expense of $1.1 million, rental
and interest income of $186,000, miscellaneous income, including equipment and
other asset dispositions, foreign exchange gains/losses, and insurance proceeds
in excess of the net book value of the related assets, of $42,000.
Income Taxes. Income taxes generally reflect the effect of statutory
federal and state income tax rates and certain non-deductible expenses.
See accompanying notes to consolidated financial statements.
9
<PAGE>
Liquidity and Capital Resources
At January 31, 1998, the Company had working capital of $25.7 million, as
compared to $24.4 million at July 31, 1997, an increase of $1.4 million. Its
working capital needs, primarily related to increased accounts receivable, costs
associated with securing long-term sales agreements and new product
introductions have been satisfied principally by reduced inventory levels and
cash generated by operations.
For the six months ended January 31, 1998, cash flow from operating
activities was $2.0 million. A reduction in inventory levels provided $4.7
million, and accounts payable and accrued expenses provided $2.5 million. These
factors were offset by an increase in accounts receivable of $7.1 million, as
sales levels increased toward the end of the period.
The Company believes that its existing cash balance and internally
generated funds from operations will provide the liquidity necessary to satisfy
the Company's working capital needs and anticipated capital expenditures for the
balance of the fiscal year.
Forward Looking Statements
This report, including Management's Discussion and Analysis, contains
certain "forward-looking statements", within the meaning of Section 27A of the
Securities Act of 1933, which represent the Company's expectations or beliefs,
including, but not limited to, statements concerning industry performance, the
Company's operations, performance, financial condition, growth and acquisition
strategies, margins and growth in sales of the Company's products. For this
purpose, any statements contained in this Report that are not statements of
historical fact may be deemed to be forward-looking statements. Without limiting
the generality of the foregoing, words such as "may", "will", "expect",
"believe", "anticipate", "intend", "could", "estimate" or "continue" or the
negative or other variations thereof or comparable terminology are intended to
identify forward-looking statements. These statements by their nature involve
substantial risks and uncertainties, certain of which are beyond the Company's
control, and actual results may differ materially depending on a variety of
important factors, including beneficial or adverse trends in the domestic market
for vitamins and nutritional supplements, the gain or loss of significant
customers for the Company's products, the competitive environment in the vitamin
and nutritional supplement industry, and the enactment or promulgation of new
government legislation or regulation, as well as other risks and uncertainties
that may be detailed from time to time in the Company's reports filed with the
Securities and Exchange Commission.
See accompanying notes to consolidated financial statements.
10
<PAGE>
Part II. Other Information
Item 1. - Legal Proceedings
Not applicable
Item 2. - Changes in Securities and Use of Proceeds
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
Reports on Form 8-K:
None
Exhibits:
Exhibit Description of
Number Exhibit
------- -------
2.1 Merger Agreement, dated as of November 13, 1995, amended and
restated as of February 13, 1996, among International Vitamin
Corporation, Hall Laboratories, Inc., Andrew M. Pinkowski,
Rita Pinkowski, Vicki Welsh Jones and The Amelia Welsh Jones
Trust, under a Trust Agreement dated June 4, 1993 (1)
3.1 Amended Certificate of Incorporation of IVC Industries, Inc.
(2)
3.2 Amended and Restated By-laws of IVC Industries, Inc. (2)
4.1 Common Stock Specimen (3)
4.2 Warrant Specimen (3)
See accompanying notes to consolidated financial statements.
11
<PAGE>
4.3 Warrant Agreement (3)
10.1 Registration Rights Agreement (4)
10.2 Registration Rights Agreement, dated April 30, 1996, among IVC
Industries, Inc., Andrew M. Pinkowski, Rita Pinkowski, Vicki
Welsh Jones, The Amelia Welsh Jones Trust, under a Trust
Agreement dated June 4, 1993, Lawrence A. Newman, Duane
Baxter, Peter W. Schreiber, John H. Dettra, Jr. And Larry
Corbridge (2)
10.3 International Vitamin Corporation 1993 Stock Option Plan (3)
10.4 International Vitamin Corporation 1995 Stock Option Plan (1)
10.5 Credit Agreement, dated as of April 30, 1996, among IVC
Industries, Inc., the Bank's party thereto and The Chase
Manhattan Bank (National Association), as Agent (2)
10.6 Guaranty, dated as of April 30, 1996, by the Guarantor (2)
10.7 Guaranty Reimbursement Agreement, dated as of April 30, 1996,
by IVC Industries, Inc., International Vitamin Overseas Sales
Corp. and Hall Laboratories, Ltd., in favor of the Guarantor
(2)
10.8 Letter of Reimbursement Agreement, dated as of April 30, 1996,
by and between IVC Industries, Inc., International Vitamin
Overseas Sales Corp. and The Chase Manhattan Bank (National
Association) (2)
10.9 Subordination and Intercreditor Agreement, dated as of April
30, 1996, by the Guarantor, The Chase Manhattan Bank (National
Association), IVC Industries, Inc., International Vitamin
Overseas Sales Corp. and Hall Laboratories, Ltd. (2)
10.10 Security Agreement, dated as of April 30, 1996, by IVC
Industries, Inc., in favor of the Guarantor (2)
10.11 Security Agreement, dated as of April 30, 1996, by
International Vitamin Overseas Sales Corp., in favor of the
Guarantor (2)
10.12 Security Agreement, dated as of April 30, 1996, by Hall
Laboratories, Ltd., in favor of the Guarantor (2)
10.13 Trademark Collateral Assignment Agreement, dated as of April
30, 1996, by IVC Industries, Inc. (2)
See accompanying notes to consolidated financial statements.
12
<PAGE>
10.14 Guaranty and Security Agreement, dated as of May 10, 1996, by
IVC Industries, Inc., in favor of the Guarantor (5)
10.15 Guaranty and Security Agreement, dated as of May 10, 1996, by
International Vitamin Overseas Sales Corp., in favor of the
Guarantor (5)
10.16 Guaranty and Security Agreement, dated as of May 10, 1996, by
Hall Laboratories, Ltd., in favor of the Guarantor (5)
10.17 Trademark Collateral Assignment Agreement, dated as of May 10,
1996, by IVC Industries, Inc. (5)
10.18 Employment Agreement with E. Joseph Edell (4)
10.19 Employment Agreement with Arthur S. Edell (3)
10.20 Employment Agreement with Andrew M. Pinkowski (2)
10.21 Employment Agreement with I. Alan Hirschfeld (4)
10.22 Loan and Security Agreement with NatWest Bank, N.A. (4)
11 Earnings Per Share Computation (6)
27 Financial Data Schedule
27.1 Financial Data Schedule
- ---------------
(1) Incorporated herein by reference from the Company's Proxy
Statement and Annual Report to Shareholders, dated March 5,
1996.
(2) Incorporated herein by reference from the Form 8-K filed on
May 14, 1996.
(3) Incorporated herein by reference from the Registration
Statement number 33-73406 filed by the Company on Form SB-2.
(4) Incorporated herein by reference from Form 10-QSB filed by the
Company for the quarterly period ended April 30, 1995.
(5) Incorporated herein by reference from Amendment 2 to the Form
8-K filed on May 14, 1996, which was filed on August 9, 1996.
(6) Incorporated herein by reference from Form 10-K filed by the
Company for the fiscal year ended July 31, 1997
See accompanying notes to consolidated financial statements.
13
<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: March 17, 1998 By: /s/ Arthur S. Edell
--------------------------------
President
Dated: March 17, 1998 By: /s/ I. Alan Hirschfeld
--------------------------------
Executive Vice President and
Chief Financial Officer
See accompanying notes to consolidated financial statements.
14
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary information extracted from Form 10-Q and is
qualified in its entireity by reference to such financial statements.
</LEGEND>
<CIK> 0000916614
<NAME> IVC INDUSTRIES, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUL-31-1998
<PERIOD-START> NOV-1-1997
<PERIOD-END> JAN-31-1998
<CASH> 1,228
<SECURITIES> 0
<RECEIVABLES> 16,683
<ALLOWANCES> 0
<INVENTORY> 26,473
<CURRENT-ASSETS> 49,551
<PP&E> 17,644
<DEPRECIATION> 0
<TOTAL-ASSETS> 72,629
<CURRENT-LIABILITIES> 23,816
<BONDS> 0
0
0
<COMMON> 171
<OTHER-SE> 17,120
<TOTAL-LIABILITY-AND-EQUITY> 72,629
<SALES> 29,253
<TOTAL-REVENUES> 0
<CGS> 21,215
<TOTAL-COSTS> 6,637
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 623
<INCOME-PRETAX> 788
<INCOME-TAX> 252
<INCOME-CONTINUING> 536
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 536
<EPS-PRIMARY> .03
<EPS-DILUTED> .03
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary information extracted from Form 10-Q and is
qualified in its entireity by reference to such financial statements.
</LEGEND>
<CIK> 0000916614
<NAME> IVC INDUSTRIES, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUL-31-1998
<PERIOD-START> AUG-1-1997
<PERIOD-END> JAN-31-1998
<CASH> 1,228
<SECURITIES> 0
<RECEIVABLES> 16,683
<ALLOWANCES> 0
<INVENTORY> 26,473
<CURRENT-ASSETS> 49,551
<PP&E> 17,644
<DEPRECIATION> 0
<TOTAL-ASSETS> 72,629
<CURRENT-LIABILITIES> 23,816
<BONDS> 0
0
0
<COMMON> 171
<OTHER-SE> 17,120
<TOTAL-LIABILITY-AND-EQUITY> 72,629
<SALES> 56,962
<TOTAL-REVENUES> 0
<CGS> 42,143
<TOTAL-COSTS> 12,416
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,201
<INCOME-PRETAX> 1,263
<INCOME-TAX> 394
<INCOME-CONTINUING> 869
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 869
<EPS-PRIMARY> .05
<EPS-DILUTED> .05
</TABLE>
