<PAGE> 1
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UNITED STATES
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 31, 2000.
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 Number: 0-23686
PC SERVICE SOURCE, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>
DELAWARE 52-1703687
-------- ----------
<S> <C>
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
</TABLE>
2350 VALLEY VIEW LANE, DALLAS, TEXAS 75234
---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
(972) 481-4000
(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
----- -----
As of May 1, 2000, there were 5,315,788 shares of the registrant's common stock
outstanding.
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<PAGE> 2
PC SERVICE SOURCE, INC. AND SUBSIDIARIES
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
Number
------
<S> <C> <C> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets (Unaudited)
March 31, 2000 and December 31, 1999 ................................. 1
Condensed Consolidated Statements of Operations (Unaudited)
Three Months Ended March 31, 2000 and 1999 ........................... 2
Condensed Consolidated Statements of Cash Flows (Unaudited)
Three Months Ended March 31, 2000 and 1999 ........................... 3
Notes to Condensed Consolidated Financial Statements
(Unaudited)........................................................... 4
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations ........................ 7
Item 3. Quantitative and Qualitative Disclosures About Market Risk............ 9
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K...................................... 10
SIGNATURES............................................................................... 11
</TABLE>
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
PC SERVICE SOURCE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
--------- ------------
<S> <C> <C>
ASSETS
Current assets:
Cash ................................................................ $ 1,639 $ 1,138
Accounts receivable, net ............................................ 15,624 15,259
Inventories, net .................................................... 37,393 35,019
Other current assets ................................................ 1,820 2,097
--------- ------------
Total current assets ......................................... $ 56,476 $ 53,513
Property and equipment, net ........................................... 14,298 14,695
Other assets, net ..................................................... 2,215 2,278
--------- ------------
Total assets ....................................................... $ 72,989 $ 70,486
========= ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable .................................................... $ 21,708 $ 18,827
Accrued liabilities ................................................. 6,203 8,290
Current installments of obligations under capital leases ............ 1,224 1,244
--------- ------------
Total current liabilities ............................................. 29,135 28,361
Revolving line of credit .............................................. 22,613 20,180
Obligations under capital leases ...................................... 1,141 1,433
Deferred income taxes ................................................. 741 741
Stockholders' equity .................................................. 19,359 19,771
--------- ------------
Total liabilities and stockholders' equity .......................... $ 72,989 $ 70,486
========= ============
</TABLE>
See accompanying notes to condensed consolidated financial statements.
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<PAGE> 4
PC SERVICE SOURCE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
------------------------
2000 1999
---------- ----------
<S> <C> <C>
Net revenues ................................... $ 38,173 $ 40,420
Cost of revenues ............................... 29,713 30,083
---------- ----------
Gross margin ................................. 8,460 10,337
---------- ----------
Operating expenses:
Selling, general and administrative .......... 6,934 7,588
Depreciation and amortization ................ 1,457 1,207
---------- ----------
Total operating expenses ................... 8,391 8,795
---------- ----------
Earnings from operations ................... 69 1,542
Interest expense, net .......................... 544 430
---------- ----------
Earnings (loss) before income taxes ........ (475) 1,112
Income taxes ................................... -- --
---------- ----------
Net earnings (loss) ........................ $ (475) $ 1,112
========== ==========
Earnings (loss) per share:
Basic ...................................... ($ 0.09) $ 0.19
========== ==========
Diluted .................................... ($ 0.09) $ 0.19
========== ==========
Weighted average common shares outstanding:
Basic ...................................... 5,296 5,774
========== ==========
Diluted .................................... 5,296 5,810
========== ==========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
-2-
<PAGE> 5
PC SERVICE SOURCE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
March 31
----------------------
2000 1999
--------- ---------
<S> <C> <C>
Cash flows from operating activities:
Net earnings (loss) ..................................... $ (475) $ 1,112
Adjustments to reconcile net earnings (loss) to net
cash provided by (used in) operating activities:
Depreciation and amortization ....................... 1,457 1,207
Changes in operating assets and liabilities:
Accounts receivable ................................. (365) (920)
Inventories ......................................... (2,374) (407)
Accounts payable .................................... 2,881 342
Accrued liabilities ................................. (2,087) (270)
Income taxes receivable/payable ..................... 463 --
Other, net .......................................... (186) 85
--------- ---------
Net cash provided by (used in) operating activities ..... (686) 1,149
--------- ---------
Cash flows from investing activities:
Capital expenditures .................................... (997) (272)
--------- ---------
Net cash used in investing activities .................... (997) (272)
--------- ---------
Cash flows from financing activities:
Net revolving line of credit borrowings ................. 2,433 (378)
Principal payments under capital lease obligations ...... (312) (340)
Proceeds from employee stock purchase plan .............. 63 --
--------- ---------
Net cash provided by (used in) financing activities ....... 2,184 (718)
--------- ---------
Net increase in cash ...................................... 501 159
Cash at beginning of period ............................... 1,138 940
--------- ---------
Cash at end of period ..................................... $ 1,639 $ 1,099
========= =========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
-3-
<PAGE> 6
PC SERVICE SOURCE, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS)
(UNAUDITED)
(1) BASIS OF PRESENTATION
These unaudited condensed consolidated financial statements of PC
Service Source, Inc. and its subsidiaries (collectively the "Company"),
at March 31, 2000 and for the three months ended March 31, 2000 and
1999, have been prepared in accordance with generally accepted
accounting principles for interim financial reporting. Accordingly,
they do not include all of the information and footnotes required by
generally accepted accounting principles for complete financial
statements and should be read in conjunction with the audited
consolidated financial statements and notes thereto included in the
Company's Form 10-K for the year ended December 31, 1999. All
significant intercompany balances and transactions have been eliminated
in consolidation. In the opinion of management, all adjustments,
(consisting only of normal recurring adjustments) considered necessary
for a fair presentation of the interim financial information have been
included. The results of operations for any interim period are not
necessarily indicative of the results of operations for a full year.
Certain 1999 items have been restated to conform with the 2000
presentation.
(2) EARNINGS (LOSS) PER SHARE
Basic earnings (loss) per share is computed by dividing income (loss)
available to common stockholders by the weighted average number of
common shares outstanding during the period. Diluted earnings (loss)
per share reflects the potential dilution that could occur if
securities or other contracts to issue common stock were exercised or
converted into common stock.
The following table sets forth the computation of basic and diluted
earnings (loss) per share.
<TABLE>
<CAPTION>
Three Months Ended
March 31,
---------------------------
2000 1999
--------- ---------
<S> <C> <C>
Net earnings (loss).............................. $ (475) $ 1,112
========= =========
Weighted average common shares
outstanding - basic........................... 5,296 5,774
Employee stock options and other ................ -- 36
--------- ---------
Weighted average common shares
outstanding - diluted......................... 5,296 5,810
========= =========
Earnings (loss) per share:
Basic .................................. $ (0.09) $ 0.19
Diluted ................................ $ (0.09) $ 0.19
</TABLE>
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<PAGE> 7
PC SERVICE SOURCE, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS)
(UNAUDITED)
At March 31, 2000 and 1999, 733,418 and 956,168 employee stock options
and other potentially dilutive securities, respectively, were excluded
from the weighted average common shares outstanding diluted computation
for the quarters ended March 31, 2000 and 1999, because their impact
could be anti-dilutive.
(3) COMPREHENSIVE INCOME (LOSS)
Comprehensive income is defined as the change in equity during a period
from transactions and other events and circumstances from non-ownership
sources. It includes all changes in equity during a period, except
those resulting from investments by owners and distributions to owners.
Comprehensive income (loss) is equal to net earnings (loss) as
presented on the Consolidated Statements of Operations for the quarters
ended March 31, 2000 and 1999.
(4) SUPPLEMENTAL CASH FLOW INFORMATION
Net cash flow from operating activities reflects cash payments for
interest and income taxes as follows:
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-----------------------
2000 1999
-------- --------
<S> <C> <C>
Interest paid, net .............................. $ 542 $ 371
Income taxes paid (refunded) ..................... (463) --
</TABLE>
(5) SEGMENT INFORMATION
The Company is divided into three divisions. The divisions are OEM,
Service Provider and iService. The OEM division provides service
logistics outsourcing and support functions to the Original Equipment
Manufacturer (OEM) and Original Development Manufacturers (ODM). This
includes parts logistics, materials management, rapid turnaround
desktop and notebook repair and component repair services. The Service
Provider division provides post-warranty parts services to the PC
industry which includes spare parts distribution, order logistics,
parts exchange logistics, parts lifecycle management and inventory risk
management. Our iService division will leverage the significant
investment that we have made in technology with PC Parts Net and PC
Warranty Information Network and will deliver Internet centric service
solutions. Because they are currently insignificant, the iService
results are included with the Service Provider division.
-5-
<PAGE> 8
PC SERVICE SOURCE, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
SERVICE
PROVIDER OEM TOTAL
-------- --------- ---------
<S> <C> <C> <C>
THREE MONTHS ENDED:
MARCH 31, 2000
Net revenues 24,689 13,484 38,173
Inter-company revenues -- 794 794
Billed margin (1) 7,374 6,351 13,725
MARCH 31, 1999
Net revenues 33,998 6,422 40,420
Inter-company revenues -- 1,244 1,244
Billed margin (1) 10,646 2,741 13,387
</TABLE>
(1) The Company measures billed margin as the selling price less the cost
of parts and the cost of labor on repair. The other cost of sales items
are primarily purchasing and distribution expenses, certain facility
costs, packaging materials, freight and inventory related charges.
Historically, these expenses were shared by our divisions and,
accordingly, the allocation by segment is unavailable at this time.
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<PAGE> 9
PC SERVICE SOURCE, INC. AND SUBSIDIARIES
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 2000 COMPARED TO THREE MONTHS ENDED MARCH 31, 1999
The following table displays the Company's statements of operations as a
percentage of net revenues:
<TABLE>
<CAPTION>
Three Months Ended
March 31,
------------------
2000 1999
------ ------
<S> <C> <C>
Net revenues .................................... 100.0% 100.0%
Cost of revenues ................................ 77.8 74.4
------ ------
Gross margin ................................ 22.2 25.6
------ ------
Operating expenses:
Selling, general and administrative ......... 18.2 18.8
Depreciation and amortization ............... 3.8 3.0
------ ------
Total operating expenses ............... 22.0 21.8
------ ------
Earnings from operations ............... 0.2 3.8
Interest expense, net ........................... 1.4 1.0
------ ------
Earnings (loss) before income taxes .... (1.2) 2.8
Income taxes .................................... -- --
------ ------
Net earnings (loss) .................... (1.2)% 2.8%
====== ======
</TABLE>
Our net revenues were $38.2 million for the first quarter of 2000, representing
a decrease of $2.2 million or a 5.6% decrease from the first quarter of 1999.
This decrease was mainly the result of a $9.3 million decline in revenues from
our Service Provider division. In February 1999, Vanstar (which was subsequently
acquired by InaCom), the largest customer of the Service Provider division,
notified us of its intention to terminate our exclusive contract effective as of
June 1999. As a result, our Vanstar business has materially declined since that
date. In addition to Vanstar, the decrease in revenue was also attributable to
the declining volume with many of the larger national accounts in the Service
Provider division. The decrease in revenue from our Service Provider division
was partially offset by a $7.1 million increase in revenue from our OEM
division, which includes the OEM outsourcing and repair services business. This
increase was due to increased volume from two large OEMs that were customers
throughout 1999, as well as the implementation of a new OEM outsourcing
arrangement in the third quarter of 1999.
Our gross margin as a percentage of net revenues decreased in the first quarter
of 2000 to 22.2% from 25.6% in the same period of 1999. The decrease in gross
margin was primarily attributable to two items. First, we experienced an
increase in handling costs to support the increase in business from our OEM
division. Although the OEM division generates higher margins because of its fee
based pricing structure, it also requires more handling costs due to the high
volume of warranty returns and testing required. Second, we experienced an
increase in net freight expense due in part to a higher percentage of our
business going to
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<PAGE> 10
PC SERVICE SOURCE, INC. AND SUBSIDIARIES
customers which are not billed for freight. In addition, we anticipate that the
gross margin in our Service Provider division could continue to be adversely
affected by price pressures on replacement parts created by the declining costs
of new PCs, changes in purchasing and handling costs for replacement parts, as
well as changes in our product and customer mix.
Selling, general and administrative expenses as a percentage of net revenues
decreased to 18.2% in the first quarter of 2000 compared to 18.8% in the same
period of 1999. The decrease was primarily due to lower selling expenses in the
Service Provider division due to the decline in revenues.
Depreciation and amortization increased as a percentage of net revenues to 3.8%
in the first quarter of 2000 compared to 3.0% in the same period of 1999. The
increase was due to a higher fixed asset base in 2000 resulting from significant
capital expenditures we made in 2000 and 1999.
Net interest expense as a percentage of net revenues increased to 1.4% during in
the first quarter of 2000 from 1.0% during the same period of 1999 due to a
higher average outstanding balance on our revolving line of credit during the
first quarter of 2000.
The first quarter of 1999 did not include a provision for income taxes because
the Company utilized a portion of its unused and available net operating loss
carryforwards, which were fully reserved. The first quarter of 2000 does not
include a credit for income taxes because the Company's net operating loss
carryforwards generated in the quarter are fully reserved.
LIQUIDITY AND CAPITAL RESOURCES
We maintain a $25.0 million Revolving Line of Credit and Security Agreement (the
"Line of Credit") with PNC Bank, National Association, which matures in March
2002. The Line of Credit carries a floating interest rate based on either Libor
or the PNC prime rate and is secured by substantially all of our assets. As of
April 30, 2000, we had $21.8 million outstanding under the Line of Credit and,
based on the amount of our eligible inventory and accounts receivable, we had
$1.8 million of availability under the Line of Credit. The Line of Credit
prohibits the payment of dividends to common stockholders and contains customary
covenants. We were in compliance with our covenants at March 31, 2000. There can
be no assurance, however, that we will be in compliance with its covenants in
future periods.
We have historically been a net user of cash from operations and have financed
our working capital requirements and capital expenditures from revolving credit,
capital leases and equity financing. Cash used in operating activities was $0.7
million for the first three months of 2000 compared to cash provided by
operating activities of $1.1 million for the same period in 1999. The change was
primarily the result of the $0.5 million net loss we incurred in the first
quarter of 2000 compared to net income of $1.1 million in the first quarter of
1999.
Capital expenditures totaled $1.0 million for the first quarter of 2000 compared
to $0.3 million in 1999. Expenditures in the 2000 period were primarily for
enhancements in our management information systems and iService division.
In the first quarter, we experienced some cash flow shortages due to significant
amounts of capital required
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<PAGE> 11
PC SERVICE SOURCE, INC. AND SUBSIDIARIES
for the OEM division to grow and operate effectively. Because of this, we have
engaged the investment banking firm of Raymond James and Associates to evaluate
various strategic alternatives for the Company. Raymond James will focus
primarily on alternatives that will enable the OEM division to expand its
relationships with major OEMs by locating additional sources of financing.
Until additional financing has been secured, the Company will have to properly
manage its inventory levels. To accomplish this goal, we are currently assessing
plans to reduce overstocked inventory by utilizing return for credit privileges
to vendors and other alternatives to reduce inventory levels, such as the
potential sale of selective inventory at lower than historical margins. In
addition, we will focus on the timely repair of defective parts to avoid
unnecessary purchases of new parts.
CAUTION REGARDING FORWARD-LOOKING STATEMENTS
The Company occasionally makes forward-looking statements concerning its plans,
goals, product and service offerings, and anticipated financial performance.
These forward-looking statements may generally be identified by introductions
such as "outlook" for an upcoming period of time, or words and phrases such as
"should", "expect", "hope", "plans", "projected", "believes", "forward-looking"
(or variants of those words and phrases) or similar language indicating the
expression of an opinion or view concerning the future.
These forward-looking statements are subject to risks and uncertainties based on
a number of factors and actual results or events may differ materially from
those anticipated by such forward-looking statements. These factors include, but
are not limited to: the growth rate of the Company's revenue and market share;
the consummation of new, and the non-termination of, existing OEM outsourcing
arrangements and service provider alliances; the Company's ability to
effectively manage its business functions while growing its business in a
rapidly changing environment; the Company's ability to adapt and expand its
services in such an environment; the effective and efficient purchasing of
parts, managing inventory levels and processing of sales orders; the quality of
the Company's plans and strategies; and the Company's ability to execute such
plans and strategies.
In addition, forward-looking statements concerning the Company's expected
revenue or earnings levels are subject to many additional uncertainties
applicable to competitors generally and to general economic conditions over
which the Company has no control. The Company does not plan to generally
publicly update prior forward- looking statements for unanticipated events or
otherwise and, accordingly, prior forward-looking statements should not be
considered to be "fresh" simply because the Company has not made additional
comments on those forward-looking statements.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Our earnings are affected by changes in interest rates due to the impact those
changes have on the interest expense payable by us under our variable rate debt
revolving line of credit, for which the outstanding balance was $22.6 million as
of March 31, 2000. A 1.0% change in the underlying LIBOR or prime rate would
result in a $226,000 change in the annual amount of interest based on the impact
of the hypothetical interest rates on our revolving line of credit outstanding
as of March 31, 2000.
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<PAGE> 12
PC SERVICE SOURCE, INC. AND SUBSIDIARIES
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
A. EXHIBITS
The following exhibits are filed as part of this report:
<TABLE>
<CAPTION>
Exhibit
Number Exhibit
------- -------
<S> <C>
3.1+++ Restated Certificate of Incorporation of the Company
3.2++ Amended and Restated Bylaws of the Company
4.1+ Specimen Certificate evidencing Common Stock
4.2v+ Certificate of Designations of Series A Junior Participating
Preferred Stock
10.1v+ Revolving Credit and Security Agreement by and among the
Company, its subsidiaries and PNC Bank, National Association, as
lender and as agent
10.2v+ Stock Option Plan, including form of Stock Option Agreements, as
amended
10.3v+ Rights Plan
10.4+v Director Compensation Plan
10.5v Employee Stock Purchase Plan
27.1* Financial Data Schedule
27.2* Restated Financial Data Schedule
</TABLE>
- -------------------
+ Previously filed as an exhibit to the Company's Registration Statement
on Form SB-2, Registration Number 33-76068-D, initially filed with the
Securities and Exchange Commission on March 4, 1994, and declared
effective on March 28, 1994.
++ Previously filed as an exhibit to the Company's report on Form 8-K
filed with the Securities and Exchange Commission on December 9, 1998.
+++ Previously filed as an exhibit to the Company's report on Form S-8,
Registration Number 33-98176, filed with the Securities and Exchange
Commission on October 17, 1995.
+v Previously filed as an exhibit to the Company's report on Form 10-K for
the year ended December 31, 1995, filed with the Securities and
Exchange Commission on March 31, 1996.
v Previously filed as an exhibit to the Company's Registration Statement
on Form S-1, Registration Number 333-03977, initially filed with the
Securities and Exchange Commission on May 17, 1996, and declared
effective on May 28, 1996.
v+ Previously filed as an exhibit to the Company's report on Form 10-K for
the year ended December 31, 1998, filed with the Securities and
Exchange Commission on March 31, 1999.
* Filed herewith.
B. REPORTS ON FORM 8-K
None.
-10-
<PAGE> 13
PC SERVICE SOURCE, INC. AND SUBSIDIARIES
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.
PC SERVICE SOURCE, INC.
-----------------------------
(Registrant)
May 10, 2000 /s/ Robert J. Boutin
-----------------------------
Robert J. Boutin
Senior Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)
-11-
<PAGE> 14
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Exhibit
------- -------
<S> <C>
3.1+++ Restated Certificate of Incorporation of the Company
3.2++ Amended and Restated Bylaws of the Company
4.1+ Specimen Certificate evidencing Common Stock
4.2v+ Certificate of Designations of Series A Junior Participating
Preferred Stock
10.1v+ Revolving Credit and Security Agreement by and among the
Company, its subsidiaries and PNC Bank, National Association, as
lender and as agent
10.2v+ Stock Option Plan, including form of Stock Option Agreements, as
amended
10.3v+ Rights Plan
10.4+v Director Compensation Plan
10.5v Employee Stock Purchase Plan
27.1* Financial Data Schedule
27.2* Restated Financial Data Schedule
</TABLE>
- -------------------
+ Previously filed as an exhibit to the Company's Registration Statement
on Form SB-2, Registration Number 33-76068-D, initially filed with the
Securities and Exchange Commission on March 4, 1994, and declared
effective on March 28, 1994.
++ Previously filed as an exhibit to the Company's report on Form 8-K
filed with the Securities and Exchange Commission on December 9, 1998.
+++ Previously filed as an exhibit to the Company's report on Form S-8,
Registration Number 33-98176, filed with the Securities and Exchange
Commission on October 17, 1995.
+v Previously filed as an exhibit to the Company's report on Form 10-K for
the year ended December 31, 1995, filed with the Securities and
Exchange Commission on March 31, 1996.
v Previously filed as an exhibit to the Company's Registration Statement
on Form S-1, Registration Number 333-03977, initially filed with the
Securities and Exchange Commission on May 17, 1996, and declared
effective on May 28, 1996.
v+ Previously filed as an exhibit to the Company's report on Form 10-K for
the year ended December 31, 1998, filed with the Securities and
Exchange Commission on March 31, 1999.
* Filed herewith.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AT MARCH 31, 2000 (UNAUDITED) AND THE CONSOLIDATED
STATEMENT OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2000 (UNAUDITED)
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAR-31-2000
<CASH> 1,639
<SECURITIES> 0
<RECEIVABLES> 16,258
<ALLOWANCES> (684)
<INVENTORY> 37,393
<CURRENT-ASSETS> 56,476
<PP&E> 31,687
<DEPRECIATION> (17,389)
<TOTAL-ASSETS> 72,989
<CURRENT-LIABILITIES> 29,135
<BONDS> 22,613
0
0
<COMMON> 59
<OTHER-SE> 19,300
<TOTAL-LIABILITY-AND-EQUITY> 72,989
<SALES> 30,364
<TOTAL-REVENUES> 38,173
<CGS> 20,646
<TOTAL-COSTS> 29,713
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0<F1>
<INTEREST-EXPENSE> 544
<INCOME-PRETAX> (475)
<INCOME-TAX> 0
<INCOME-CONTINUING> (475)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (475)
<EPS-BASIC> (.09)
<EPS-DILUTED> (.09)
<FN>
<F1>PROVISION FOR DOUBTFUL ACCOUNTS AND INVENTORY PROVISIONS INCLUDED IN TOTAL
COSTS.
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AT MARCH 31, 2000 (UNAUDITED) AND THE CONSOLIDATED
STATEMENT OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2000 (UNAUDITED)
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<RESTATED>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> MAR-31-1999
<CASH> 1,099
<SECURITIES> 0
<RECEIVABLES> 22,101
<ALLOWANCES> (940)
<INVENTORY> 20,862
<CURRENT-ASSETS> 45,902
<PP&E> 26,641
<DEPRECIATION> (12,465)
<TOTAL-ASSETS> 62,653
<CURRENT-LIABILITIES> 24,092
<BONDS> 13,851
0
0
<COMMON> 59
<OTHER-SE> 21,193
<TOTAL-LIABILITY-AND-EQUITY> 62,653
<SALES> 36,034
<TOTAL-REVENUES> 40,420
<CGS> 24,622
<TOTAL-COSTS> 30,083
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0<F1>
<INTEREST-EXPENSE> 430
<INCOME-PRETAX> 1,112
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,112
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,112
<EPS-BASIC> .19
<EPS-DILUTED> .19
<FN>
<F1>PROVISION FOR DOUBTFUL ACCOUNTS AND INVENTORY PROVISION INCLUDED IN TOTAL
COSTS.
</FN>
</TABLE>
