================================================================================
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 April 30, 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 0-23624.
-------
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 17,211,540 shares of common stock outstanding as of June 10,
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
April 30, 1998 and July 31, 1997.............................3
Consolidated Statements of Income
For the Three and Nine Months Ended April 30, 1998 and 1997..4
Consolidated Statements of Cash Flows
For the Nine Months Ended April 30, 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...........................................12
Signature Page..........................................................15
<PAGE>
Item 1. Financial statements.
IVC INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS AT APRIL 30, 1998 AND JULY 31, 1997 (Dollars in
Thousands, Except Per Share Information)
--------------------------
April 30, July 31,
1998 1997
-------- --------
(unaudited)
ASSETS
Current Assets:
Cash and cash equivalents $ 839 $ 179
Accounts receivable 14,375 9,567
Inventories 29,975 31,185
Deferred taxes 2,197 2,353
Prepaid expenses and other current assets 3,190 2,347
-------- --------
Total Current Assets 50,576 45,631
Property and Equipment - Net 18,212 17,999
Notes Receivable - Related Parties 568 568
Goodwill - Net 1,805 1,867
Other Assets 2,158 3,326
-------- --------
Total Assets $ 73,319 $ 69,391
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Current portion of long-term debt $ 1,639 $ 1,434
Accounts payable and accrued expenses 24,435 19,841
-------- --------
Total Current Liabilities 26,074 21,275
Long-Term Debt 28,976 31,430
Deferred Taxes 170 170
Other Liabilities 99 99
-------- --------
Total Liabilities 55,319 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 (158) (116)
Retained earnings 6,541 4,970
Less: Common stock in treasury at cost; 0
and 32,000 shares at April 30, 1998 and July
31, 1997, respectively -- (54)
-------- --------
Total Shareholders' Equity 18,000 16,417
-------- --------
Total Liabilities and Shareholders' Equity $ 73,319 $ 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 NINE MONTHS ENDED APRIL 30, 1998 AND 1997
(Dollars in Thousands, Except Per Share Information)
(unaudited)
--------------------------
<TABLE>
<CAPTION>
Three Months Nine Months
Ended April 30, Ended April 30,
--------------- ---------------
1998 1997 1998 1997
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net sales $ 34,980 $ 25,381 $ 91,942 $ 84,211
Cost of sales 26,557 18,392 68,680 62,825
----------- ----------- ----------- -----------
Gross profit 8,423 6,989 23,262 21,386
Selling, general and administrative
expenses 6,775 5,898 19,191 17,363
----------- ----------- ----------- -----------
Income from operations 1,648 1,091 4,071 4,023
Other expenses - net 553 429 1,713 1,258
----------- ----------- ----------- -----------
Income before income taxes 1,095 662 2,358 2,765
Income tax provision 393 325 787 1,165
----------- ----------- ----------- -----------
Net income $ 702 $ 337 $ 1,571 $ 1,600
=========== =========== =========== ===========
Basic earnings per share $ .04 $ .02 $ .09 $ .09
=========== =========== =========== ===========
Diluted earnings per share $ .04 $ .02 $ .09 $ .09
=========== =========== =========== ===========
Weighted average common shares:
Basic 17,127,392 17,094,607 17,125,751 17,094,698
=========== =========== =========== ===========
Diluted 17,242,093 17,104,803 17,199,493 17,138,051
=========== =========== =========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE>
IVC INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED APRIL 30, 1998 AND 1997
(Dollars in Thousands)
(unaudited)
--------------------------
1998 1997
-------- --------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 1,571 $ 1,600
-------- --------
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 1,719 1,564
Stock Distributed to employee savings plan 54 --
Changes in assets - (increase) decrease:
Accounts receivable (4,808) 3,521
Inventories 1,210 (2,736)
Prepaid expenses and other current assets (687) (838)
Other assets 1,129 (948)
Changes in liabilities - increase:
Accounts payable and accrued expenses 4,594 1,405
Other -- 96
-------- --------
Total adjustments 3,211 2,064
-------- --------
Net Cash Provided By Operating Activities 4,782 3,664
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property and equipment (1,831) (1,174)
-------- --------
Net Cash Used In Investment Activities (1,831) (1,174)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Purchase of Treasury Stock -- (18)
Principal payments on long term debt (17,893) (28,936)
Proceeds from long term debt 15,644 27,074
-------- --------
Net Cash Provided By (Used In) Financing
Activities (2,249) (1,880)
-------- --------
Foreign currency translation adjustment (42) (9)
-------- --------
NET INCREASE IN CASH 660 601
CASH AND CASH EQUIVALENTS - BEGINNING 179 420
-------- --------
CASH AND CASH EQUIVALENTS - ENDING $ 839 $ 1,021
======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the period for:
Interest $ 1,108 $ 1,537
======== ========
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:
April 30, July 31,
1998 1997
--------- ---------
(dollars in thousands)
Finished Goods $13,803 $16,697
Bulk and Work in Process 9,001 9,155
Raw Materials and Packaging Components 7,171 5,333
--------- ---------
Total Inventory $29,975 $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 nine-month periods ended
April 30, 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 Nine Months
Ended April 30, Ended April 30,
--------------- ---------------
1998 1997 1998 1997
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Numerator:
Numerator for basic earnings per share -
Income available to common stockholders $ 702 $ 337 $ 1,571 $ 1,600
Numerator for diluted earnings per share -
Income available to common stockholders $ 702 $ 337 $ 1,571 $ 1,600
----------- ----------- ----------- -----------
Denominator:
Denominator for basic earnings per share -
Weighted average shares 17,127,392 17,094,607 17,125,751 17,094,698
Effect of dilutive securities:
Stock Options 114,701 10,196 73,742 43,353
Denominator for diluted earnings per share -
Weighted average shares 17,242,093 17,104,803 17,199,493 17,138,051
----------- ----------- ----------- -----------
Basic earnings per share $ 0.04 $ 0.02 $ 0.09 $ 0.09
----------- ----------- ----------- -----------
Diluted earnings per share
$ 0.04 $ 0.02 $ 0.09 $ 0.09
----------- ----------- ----------- -----------
</TABLE>
Options to purchase 416,984 shares of common stock at prices ranging from
$2.34 - $3.31 per share and 556,984 shares of common stock at prices ranging
from $1.75 - $4.50 were outstanding at April 30, 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 April 30, 1998 Compared to the Three Months Ended April 30,
1997
Net Sales. Net sales for the three months ended April 30, 1998 were $35.0
million, an increase of $9.6 million or approximately 38% over the three months
ended April 30, 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 health food store and mail order
operations, which were acquired in June 1997, and increased private brand sales
levels at the Company's West Coast and Canadian operations. 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 April 30, 1998
were $26.6 million, an increase of $8.2 million or approximately 44% over the
three months ended April 30, 1997. Cost of sales increased 3.4% as a percentage
of net sales over the comparative period in the prior year. This resulted from
the shift in the sales mix toward private brand products, resulting from
increased promotional activities carried out by certain of the Company's private
brand customers. In addition, Intergel's gross profit margins during the quarter
reflected the weighting of the sales mix toward lower-margined nutritional
products, while the higher-margined over-the-counter (non-prescription drug)
products recently introduced are beginning to account for a growing share of
Intergel's sales.
Selling, general and administrative expenses. Selling, general and
administrative expenses for the three months ended April 30, 1998 were $6.8
million, an increase of $0.9 million or approximately 15% over the prior year's
comparable period. This increase was primarily attributable to: (i) increased
administrative costs, (ii) the inclusion of the Vitamin Specialties operations,
and (iii) distribution costs associated with the higher overall level of
shipments.
Other Expenses, Net. Other expenses, net, for the three months ended April
30, 1998, principally represent interest expense of $608, rental and interest
income of $31, and miscellaneous income, including foreign exchange gains/losses
and other income, of $24. Other expenses, net, for the three months ended April
30, 1997, principally represent interest expense of $452, rental and interest
income of $61, and miscellaneous expenses, net of prompt payment discounts, of
$38.
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.
8
<PAGE>
Nine Months Ended April 30, 1998 Compared to the Nine Months Ended April 30,
1997
Net Sales. Net sales for the nine months ended April 30, 1998 were $91.9
million, an increase of $7.7 million or approximately 9% over the nine months
ended April 30, 1997. The increase was attributable to 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. The
increase in net sales was partially offset by 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.
Cost and Expenses. Cost of sales for the nine months ended April 30, 1998
were $68.7 million, a increase of $5.9 million or approximately 9% over the nine
months ended April 30, 1997. Cost of sales were approximately 75% as a
percentage of net sales for the current and prior year's period. The Company
experienced a general decrease in manufacturing costs resulting from the
improvement in manufacturing efficiencies stemming from higher operating levels
at Intergel, and higher margins resulting from the inclusion of the Vitamin
Specialties operations. Offsetting the decrease in cost of sales was an increase
in manufacturing and packaging costs, resulting from decreased operating
efficiencies, which was attributable to lower operating levels caused by a
reduction in private label sales levels during the first two quarters, coupled
with the Company's inventory reduction program. In addition, there was a shift
in the overall sales mix toward private brand sales, along with the impact on
operating efficiencies caused by the renovation program in the Company's
Freehold manufacturing facility during the third quarter.
Selling, general and administrative expenses. Selling, general and
administrative expenses for the nine months ended April 30, 1998 were $19.2
million, an increase of $1.8 million or approximately 11% 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 nine months ended April
30, 1998, principally represent interest expense of $1.8 million, rental and
interest income of $159, and miscellaneous expenses, including foreign exchange
gains/losses, of $72. Other expenses, net, for the nine months ended April 30,
1997, principally represent interest expense of $1.5 million, rental and
interest income of $247, 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 $5.
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 April 30, 1998, the Company had working capital of $24.5 million, as
compared to $24.4 million at April 30, 1997, an increase of $0.1 million. The
Company's 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 cash generated by
operations.
For the nine months ended April 30, 1998, cash flow from operating
activities was $4.8 million. A reduction in inventory levels provided $1.2
million, and accounts payable and accrued expenses provided $4.6 million, and
reduction in other assets provided $1.1 million. These factors were primarily
offset by an increase in accounts receivable of $4.8 million, as sales levels
increased.
On May 1, 1998, the Company entered into a new credit agreement with its
Bank. This agreement expires on March 31, 1999, but can be extended under
certain circumstances through August 31, 1999. Under the agreement, the Company
can borrow $3.5 million under Borrowing Facility C. The borrowings under
Facility C bear interest at the bank's prime rate, or at LIBOR plus .50% (6.125%
at April 30, 1998), at the Company's option. The Company is required to make
quarterly principal payments of $500,000, commencing June 1998. The borrowings
are collateralized by substantially all of the Company's assets. The agreements
with the bank require the Company to maintain certain financial ratios, minimum
tangible net worth and contain various restrictions customary in such financial
agreements, including limitations on capital expenditures and payment of
dividends.
The Company believes that its existing cash balance and internally
generated funds from operations, coupled with its increased financing facility,
which was completed on May 1, 1998, will provide the liquidity necessary to
satisfy the Company's working capital needs and anticipated capital expenditures
for the balance of the fiscal year.
See accompanying notes to consolidated financial statements.
10
<PAGE>
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.
11
<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.
12
<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.
13
<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)
27.1 Financial Data Schedule
27.2 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.
14
<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: June 15, 1998 By: E. Joseph Edell
------------------------ -------------------------------
Chairman and CEO
Dated: June 15, 1998 By: I. Alan Hirschfeld
------------------------ -------------------------------
Executive Vice President and
Chief Financial Officer
See accompanying notes to consolidated financial statements.
15
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Form 10Q and
is qualified in it's entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUL-31-1998
<PERIOD-START> FEB-01-1998
<PERIOD-END> APR-30-1998
<CASH> 839
<SECURITIES> 0
<RECEIVABLES> 14,375
<ALLOWANCES> 0
<INVENTORY> 29,975
<CURRENT-ASSETS> 50,576
<PP&E> 18,212
<DEPRECIATION> 0
<TOTAL-ASSETS> 73,319
<CURRENT-LIABILITIES> 26,074
<BONDS> 0
0
0
<COMMON> 171
<OTHER-SE> 17,829
<TOTAL-LIABILITY-AND-EQUITY> 73,319
<SALES> 34,980
<TOTAL-REVENUES> 0
<CGS> 26,557
<TOTAL-COSTS> 6,775
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 576
<INCOME-PRETAX> 1,095
<INCOME-TAX> 393
<INCOME-CONTINUING> 702
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 702
<EPS-PRIMARY> .04
<EPS-DILUTED> .04
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Form 10Q and
is qualified in it's entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUL-31-1998
<PERIOD-START> AUG-01-1997
<PERIOD-END> APR-30-1998
<CASH> 839
<SECURITIES> 0
<RECEIVABLES> 14,375
<ALLOWANCES> 0
<INVENTORY> 29,975
<CURRENT-ASSETS> 50,576
<PP&E> 18,212
<DEPRECIATION> 0
<TOTAL-ASSETS> 73,319
<CURRENT-LIABILITIES> 26,074
<BONDS> 0
0
0
<COMMON> 171
<OTHER-SE> 17,829
<TOTAL-LIABILITY-AND-EQUITY> 73,319
<SALES> 91,942
<TOTAL-REVENUES> 0
<CGS> 68,680
<TOTAL-COSTS> 19,191
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,741
<INCOME-PRETAX> 2,358
<INCOME-TAX> 787
<INCOME-CONTINUING> 1,571
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,571
<EPS-PRIMARY> .09
<EPS-DILUTED> .09
</TABLE>