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 July 3, 1999
Commission File No. 0-25390
SMC CORPORATION
(Exact name of Registrant as specified in its charter)
Oregon 93-0939076
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
20545 Murray Road
Bend, Oregon 97701
(Address of principal executive (Zip Code)
offices)
(541) 995-8214
(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 report), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X] No [ ]
The number of outstanding shares of Common Stock at August 6, 1999: 5,780,708
<PAGE>
SMC CORPORATION
INDEX TO FORM 10-Q
Page
Part I - Financial Information
Item 1. Financial Statements
Consolidated Balance Sheet - December 31, 1998 and
July 3, 1999..................................................... 3
Consolidated Statement of Operations - Three Months
Ended June 30, 1998 and July 3, 1999............................. 4
Consolidated Statement of Operations - Six Months
Ended June 30, 1998 and July 3, 1999............................. 5
Consolidated Statement of Changes in Shareholders'
Equity - Year Ended December 31, 1998 and Six
Months Ended July 3, 1999........................................ 6
Consolidated Statement of Cash Flows - Six Months
Ended June 30, 1998 and July 3, 1999............................. 7
Notes to Consolidated Financial Statements....................... 8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations..............................10
Part II - Other Information
Item 4. Submission of Matters to a Vote of Security Holders..............14
Item 5. Other Information................................................15
Item 6. Exhibits and Reports on Form 8-K.................................16
Signatures....................................................................17
Exhibit Index.................................................................18
2
<PAGE>
Part I - Financial Information
Item 1. Financial Statements
<TABLE>
<CAPTION>
SMC Corporation
Consolidated Balance Sheet
(in thousands)
- ----------------------------------------------------------------------------------------------------
December 31, July 3,
1998 1999
----------- -----------
(unaudited)
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 1,310 $ 107
Accounts receivable, net 12,857 11,049
Inventories (Note 2) 26,715 39,233
Prepaid expenses and other 530 305
Prepaid taxes 897 375
Deferred tax asset 3,144 3,144
----------- -----------
Total current assets 45,453 54,213
Property, plant and equipment, net 20,551 18,024
Intangible assets, net 1,942 1,849
Other assets 74 57
----------- -----------
Total assets $ 68,020 $ 74,143
=========== ===========
Liabilities and shareholders' equity Current liabilities:
Notes payable $ -- $ 6,489
Current portion of long-term debt 953 1,280
Accounts payable 24,789 20,119
Product warranty liabilities 3,766 3,776
Current portion of capital lease obligation 19 19
Accrued liabilities 6,965 9,185
----------- -----------
Total current liabilities 36,492 40,868
Long-term debt, net of current portion 7,353 9,721
Capital lease obligation, less current portion 38 29
Deferred income taxes 928 928
----------- -----------
Total liabilities 44,811 51,546
Shareholders' equity:
Preferred stock, 5,000 shares authorized,
none issued or outstanding -- --
Common stock, 30,000 shares authorized,
5,890 and 5,780 shares issued and outstanding 9,604 9,033
Additional paid-in capital 1,472 1,472
Retained earnings 12,133 12,092
----------- -----------
Total shareholders' equity 23,209 22,597
Total liabilities and shareholders' equity $ 68,020 $ 74,143
=========== ===========
The accompanying notes are an integral part of this financial statement.
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
SMC Corporation
Consolidated Statement of Operations
(in thousands, except per share amounts)
- ----------------------------------------------------------------------------------------------------
Three Months Ended
June 30, July 3,
1998 1999
----------- -----------
(unaudited)
<S> <C> <C>
Sales $ 52,324 $ 53,794
Cost of sales 46,455 49,651
Gross profit 5,869 4,143
Selling, general and administrative expenses 3,975 3,861
Litigation and settlement costs 308 405
----------- -----------
Income (loss) from operations 1,586 (123)
Interest expense 216 334
Other income (loss), net 7 (209)
----------- -----------
Income (loss) before provision for taxes 1,363 (248)
Income tax expense (benefit) 525 (99)
----------- -----------
Net income (loss) $ 838 $ (149)
=========== ===========
Net income (loss) per share - basic $ 0.13 $ (0.03)
=========== ===========
Net income (loss) per share - diluted $ 0.13 $ (0.03)
=========== ===========
Weighted average number of shares - basic 6,545 5,845
=========== ===========
Weighted average number of shares - diluted 6,550 5,846
=========== ===========
The accompanying notes are an integral part of this financial statement.
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
SMC Corporation
Consolidated Statement of Operations
(in thousands, except per share amounts)
- ---------------------------------------------------------------------------------------------
Six Months Ended
June 30, July 3,
1998 1999
----------- -----------
(unaudited)
<S> <C> <C>
Sales $ 100,129 $ 110,616
Cost of sales 88,254 100,264
----------- -----------
Gross profit 11,875 10,352
Selling, general and administrative expenses 8,226 8,796
Litigation and settlement costs 655 1,276
----------- -----------
Income from operations 2,994 280
Interest expense 356 644
Other income (loss), net (169) (295)
----------- -----------
Income (loss) before provision for taxes 2,807 (69)
Income tax expense (benefit) 1,053 (28)
----------- -----------
Net income (loss) $ 1,754 $ (41)
=========== ===========
Net income (loss) per share - basic $ 0.27 $ (0.01)
=========== ===========
Net income (loss) per share - diluted $ 0.27 $ (0.01)
=========== ===========
Weighted average number of shares - basic 6,493 5,868
=========== ===========
Weighted average number of shares - diluted 6,529 5,868
=========== ===========
The accompanying notes are an integral part of this financial statement.
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
SMC Corporation
Consolidated Statement of Changes in Shareholders' Equity (unaudited)
(in thousands)
- --------------------------------------------------------------------------------------------------------
Common Stock Additional
--------------------- paid-in Retained
Shares Amount capital earnings Total
-------- -------- ---------- -------- --------
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1997 6,343 $ 10,810 $ 1,488 $ 11,995 $ 24,293
Net income -- -- -- 409 409
Common stock issued upon exercise
of common stock options 252 1,954 -- -- 1,954
Stock repurchase (705) (3,160) (16) (271) (3,447)
-------- -------- ---------- -------- --------
Balance, December 31, 1998 5,890 9,604 1,472 12,133 23,209
-------- -------- ---------- -------- --------
Net loss -- -- -- (41) (41)
Stock repurchase (110) (571) -- -- (571)
-------- -------- ---------- -------- --------
Balance, July 3, 1999 $ 5,780 $ 9,033 $ 1,472 $ 12,092 $ 22,597
======== ======== ========== ======== ========
The accompanying notes are an integral part of this financial statement.
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
SMC Corporation
Consolidated Statement of Cash Flows
(in thousands)
- ----------------------------------------------------------------------------------------------------------
Six Months Ended
June 30, July 3,
1998 1999
----------- -----------
(unaudited)
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ 1,754 $ (41)
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Gain on asset disposition -- (184)
Depreciation and amortization 1,011 1,124
Changes in current assets and liabilities:
Accounts receivable (1,422) 1,808
Inventories (3,106) (12,518)
Prepaid expenses and other (416) 747
Other assets 12 17
Accounts payable 462 (4,670)
Income taxes payable (405) --
Accrued liabilities and other obligations 2,173 2,230
----------- -----------
Net cash provided by (used in) operating activities 63 (11,487)
----------- -----------
Cash flows from investing activities:
Capital expenditures (509) (548)
Lease abatement -- 1,104
Proceeds from sale of equipment -- 1,124
----------- -----------
Net cash (used in) provided by investing activities (509) 1,680
Cash flows from financing activities:
Net (repayments) borrowings on notes payable (562) 6,489
(Repayments of) proceeds from long-term debt (632) 2,695
Principal payments on capital lease obligation (7) (9)
Proceeds from issuance of common stock 1,954 --
Repurchase of common stock (300) (571)
----------- -----------
Net cash provided by financing activities 453 8,604
----------- -----------
Net increase (decrease) in cash and cash equivalents 7 (1,203)
Cash and cash equivalents, beginning of period 103 1,310
----------- -----------
Cash and cash equivalents, end of period $ 110 $ 107
=========== ===========
The accompanying notes are an integral part of this financial statement.
</TABLE>
7
<PAGE>
SMC Corporation
Form 10-Q
For the Second Quarter Ended July 3, 1999 (unaudited)
Notes to Consolidated Financial Statements
- --------------------------------------------------------------------------------
1. Basis of Presentation of Interim Period Statements
The accompanying financial statements are unaudited and have been prepared
by SMC Corporation (the "Company") pursuant to the rules and regulations of
the Securities and Exchange Commission. Certain information and footnote
disclosures typically included in financial statements prepared in
accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations. In the opinion
of management, the financial statements include all adjustments, consisting
only of normal recurring adjustments, necessary for a fair presentation of
the results for the interim periods reported. The financial statements
should be read in conjunction with the audited financial statements and
notes thereto included in the 1998 Annual Report on Form 10-K filed with
the Securities and Exchange Commission. The results of operations for an
interim period are not necessarily indicative of the results of operations
for a full year.
2. Inventories
Inventories by major classification are as follows (in thousands):
<TABLE>
<CAPTION>
December 31, July 3,
1998 1999
----------- -----------
<S> <C> <C>
Raw materials $ 14,982 $ 15,233
Work-in-progress 8,527 10,438
Finished goods 3,206 13,562
----------- -----------
Total $ 26,715 $ 39,233
=========== ===========
</TABLE>
3. Earnings Per Share
The Company adopted FASB Statement 128, "Earnings Per Share," in the fourth
quarter of 1997. FASB 128 requires dual presentation of basic and diluted
EPS. Previously, the Company had presented primary EPS. Diluted EPS is
calculated by dividing net income by the total of the weighted average
actual shares outstanding for each period plus the number of shares
calculated as having dilutive impact, if any, related to the stock options
under the Company's Stock Incentive Plan, and the warrants issued in
conjunction with the Company's initial public offering. Previously reported
amounts for primary EPS are the same as the diluted EPS amounts now
reported. Basic EPS is computed by dividing the net income by the weighted
average actual shares outstanding for each period presented with no
8
<PAGE>
consideration as to the dilutive impact of the Company's outstanding stock
options or warrants.
4. Related Party Transactions
During the three month and six month periods ended July 3, 1999 the Company
purchased electronic parts for a total amount of $238,000 and $467,000
respectively, from a supplier company that is owned by a principal related
to an officer of the Company.
5. Comprehensive Income
In June 1997, Financial Accounting Standards Board ("FASB") issued
Statements of Financial Accounting Standards, No. 130, "Reporting
Comprehensive Income." The Company has adopted the standard as of January
1, 1998. Total comprehensive income for the three-month and six-month
periods ended June 30, 1998 and July 3, 1999 was net income of $838,000 and
$1.8 million and net losses of $149,000 and $41,000, respectively.
9
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Results of Operations
The following table sets forth, for the periods indicated, selected
consolidated statement of income data, expressed as a percentage of sales, and
the percentage change in such data from the comparable prior period.
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30, July 3, Percentage change June 30, July 3, Percentage change
1998 1999 in dollar amounts 1998 1999 in dollar amounts
--------- --------- ------------------ --------- --------- ------------------
<S> <C> <C> <C> <C> <C> <C>
Sales 100.0% 100.0% 2.8% 100.0% 100.0% 10.5%
Cost of sales 88.8 92.3 6.9 88.1 90.6 13.6
--------- --------- --------- --------
Gross profit 11.2 7.7 (29.4) 11.9 9.4 (12.8)
Selling, general and
administrative expenses 7.6 7.2 (2.9) 8.2 8.0 6.9
Litigation and
settlement costs 0.6 0.8 31.5 .7 1.2 94.8
--------- --------- --------- --------
Income (loss)from operations 3.0 (.3) (107.8) 3.0 .2 (90.6)
Interest expense .4 .6 54.6 .4 .6 80.9
Other expense (income) -- (.4) (3085.7) (.2) (.3) 74.6
--------- --------- --------- --------
Pretax income (loss) 2.6 (.5) (118.2) 2.8 (.1) (102.5)
Income tax expense (benefit) 1.0 (.2) (118.9) 1.0 0 (102.7)
--------- --------- --------- --------
Net income 1.6% (.3)% (117.8)% 1.8% (.1)% (102.3)%
========= ========= ========= ========
</TABLE>
Sales increased 2.8% to $53.8 million for the second quarter of 1999 from
$52.3 million for the comparable period in 1998. For the six months ended July
3, 1999, sales increased 10.5% to $110.6 million from $100.1 million for the
comparable period in 1998. Sales increases were recorded for both the Beaver and
Harney coach models in the three month comparisons. These increases were offset
by decreases in the Safari line for the same period.
Gross profit margin for the quarter ended July 3, 1999 decreased 29.4% to
$4.1 million from $5.9 million in the comparable period in 1998, and decreased
as a percentage of sales from 11.2% to 7.7%. The lower margin performance was
caused by several factors. First, the sales mix included a higher number of
lower margin product such as the Renegade. Secondly, production costs at the
Safari facility continued at high levels. The Company implemented several cost
cutting measures at the end of the quarter that are expected to generate
substantial savings in the third quarter. In addition, increased overtime at the
Beaver facility was required to prepare the new 2000 year models for the July
FMCA
10
<PAGE>
show. For the six month period comparisons, both sales mix and Safari production
cost increases contributed to the decline in gross profit from $11.9 million to
$10.3 million.
Selling, general, and administrative expenses decreased 2.9% to $3.9
million for the quarter ended July 3, 1999 from $4.0 million for the comparable
period of 1998. For the six-month period ended July 3, 1999, selling, general,
and administrative costs increased 6.9% to $8.8 million from $8.2 million for
the same period in 1998. Administrative costs have decreased in both the
quarterly and six month comparisons primarily due to lower corporate staff
costs. These decreases were offset by higher selling costs primarily associated
with promotions and commissions in both the quarterly and six month periods
ended July 3, 1999 and June 30, 1998.
Litigation and settlement costs increased 31.5% to $405,000 for the second
quarter of 1999 from $308,000 in the comparable period of 1998. Litigation and
settlement costs increased 94.8% to $1.3 million for the six month period ended
July 3, 1999 from $655,000 for a comparable period in 1998. However, these costs
have been reduced significantly from the $870,000 recorded in the first quarter
of 1999.
Given the factors affecting gross margin and selling, general and
administrative expenses, and settlement and litigation expenses, operating
results decreased to a loss of $123,000 for the second quarter of 1999 from
income of $1.6 million in the comparable period of 1998. Operating income
decreased to $280,000 for the six months ended July 3, 1999 from $3.0 million
for the comparable period in 1998.
Interest expense increased 54.6% to $334,000 for the second quarter of 1999
from $216,000 in the comparable period of 1998. Interest expense increased 80.9%
to $644,000 for the six-month period ended July 3, 1999 from $356,000 for the
comparable period in 1998. Interest expense has increased due to increased
borrowings for the Florida service center, the stock repurchase program, and the
operating credit line.
Net loss after tax for the second quarter of 1999 was $149,000, a decrease
of 117.8% from 1998's second-quarter net income of $838,000. Net loss after tax
was $41,000 for the six months ended July 3, 1999, a decrease from net income of
$1.8 million in 1998.
The Company's revenues historically have been subject to some seasonal
fluctuation. Demand for high-line motor coaches tends to increase with the
beginning of the new model year, which occurs during the Company's third quarter
ending September 30.
Liquidity and Capital Resources
During the six months ended 1999, SMC generated a negative cash flow from
operations of $11.5 million while its working capital increased from $9.0
million at December 31, 1998
11
<PAGE>
to $13.3 million at July 3, 1999 (including cash and cash equivalents of
$107,000).
The Company anticipates that its aggregate capital expenditures for 1999
will be approximately $1.0 million. The Company plans to use cash generated from
operations and borrowings under its credit arrangements to fund these
expenditures.
The Company has an operating line of credit of $10 million, a real estate
line of credit of $8.3 million and a $4.0 million equipment financing line of
credit. As of July 3, 1999, $4.5 million was available on the operating line of
credit and $600,000 was available on the real estate line of credit. An
additional $3.0 million was available on the equipment financing line of credit.
Of the amounts outstanding on these three lines of credit, $10.7 million is at
the LIBOR interest rate of 6.706% and the remaining amounts are at the prime
rate of 8.00%. These amounts are secured by all assets not specifically
identified in other financing obligations. The terms of the revolving credit and
equipment financing agreements require compliance with certain financial
covenants and other covenants. The Company does not believe any of these
covenants will have a material impact on the Company's ability to meet its cash
obligations. The Company was in compliance with all covenants and agreements at
July 3, 1999.
Most dealer purchases of motor coaches from the Company are financed under
flooring financing arrangements between the dealer and a bank or finance
company. Under these flooring arrangements, the financing institution lends the
dealer all or substantially all of the wholesale purchase price of a motor coach
and retains a security interest in the coach purchased. These financing
arrangements provide that, for a period of time after a coach is financed
(generally 12 to 18 months), if the dealer defaults on its payment or other
obligations to the lender, the Company is obligated to repurchase the dealer's
inventory for the amount then due from the dealer plus, in certain
circumstances, costs incurred by the lender in connection with repossession of
the inventory. The repurchase price may be more than the resale value of the
coach. The Company's contingent liability under its repurchase obligations
varies from time to time. As of July 3, 1999, the Company estimates its total
contingent liability under repurchase obligations was approximately $103.5
million. To date, losses incurred by the Company pursuant to repurchase
obligations have not been material. The Company cannot predict with certainty
its future losses, if any, pursuant to repurchase obligations, and these amounts
may vary materially from the expenditures historically made by the Company.
Furthermore, even in circumstances where losses in connection with repurchase
obligations are not material, a repurchase obligation can represent a
significant cash requirement for the Company.
12
<PAGE>
Year 2000 Issue
The Year 2000 Issue is the result of computer programs being written using
two digits rather than four to define the applicable year. Computer programs
that have date sensitive software may recognize a date using "00" as the year
1900 rather than the year 2000. To be in "Year 2000 compliance" a computer
program must be written using four digits to define years. As a result, in less
than two years, computer systems and/or software used by many companies may need
to be upgraded to comply with such "Year 2000" requirements.
The Company has completed its evaluation of both information technology
systems ("IT") and non-IT systems to determine Year 2000 compliance. Non-IT
systems typically include embedded technology such as microcontrollers.
For most of the Company's IT systems, Year 2000 compliance issues have been
identified and a remediation plan has been developed. Many of the Company's IT
systems have been made Year 2000-compliant or require insignificant costs to
become Year 2000 compliant. The Company estimates its costs for software and
hardware upgrades to its systems to total approximately $75,000. The Company
spent approximately $40,000 for the year ending December 31, 1998 for system
upgrades to make its primary IT system Year-2000 compliant. During the three
months ended July 3, 1999, the Company spent or committed to spend an additional
$20,000.
Additionally, the Company is evaluating the readiness of its significant
suppliers, financial institutions and customers to determine the extent to which
the Company is vulnerable to those parties failing to remediate their own Year
2000 issues. To date, the Company has not received notice of or become aware of
a material Year 2000 deficiency by a significant vendor, financial institution,
or customer.
At this time, the Company believes total costs incurred in responding to
other parties' Year 2000 computer system deficiencies, together with the cost of
any required modifications to the Company's internal systems, will not have a
material impact on the Company's results of operations or financial condition.
While the Company expects that the Year 2000 will not pose significant
operational problems, delays in the installation of the new systems or upgrades
to existing systems, or a failure of its vendors, customers or financial
institutions to become Year 2000 compliant could have a material adverse effect
on the Company's business, financial condition and results of operations. To
address this contingency, the Company is in the process of developing a risk
management plan which will be completed and tested during the third quarter of
1999.
13
<PAGE>
Part II - Other Information
Item 4. Submission of Matters to a Vote of Security Holders
On May 13, 1999 at the Company's Annual Meeting of shareholders, the
holders of the Company's outstanding Common Stock took the actions described
below. As of the record date for the Annual Meeting, 5,890,099 shares of Common
Stock were eligible to vote on the matters presented.
1. The shareholders elected each of Mathew M. Perlot, Curtis W. Lawler,
Connie M. Perlot, Jim L. Traughber, and Lawrence S. Black, by the votes
indicated below, to serve on the Company's Board of Directors until the
Company's next Annual Meeting of shareholders:
<TABLE>
<CAPTION>
Shares Against
Shares in Favor or Withheld Abstentions
- ----------------- --------------- -------------- -----------
<S> <C> <C> <C>
Mathew M. Perlot 5,750,074 30,770 0
Curtis W. Lawler 5,748,494 32,350 0
Connie M. Perlot 5,749,674 31,170 0
Jim L. Traughber 5,749,694 31,150 0
Lawrence S. Black 5,750,494 30,350 0
Total Shares Eligible 5,890,099
Total Shares Present 5,780,844
</TABLE>
14
<PAGE>
Item 5. Other Information
On May 13, 1999 the Company hired Michael R. Jacque to be its President and
Chief Operating Officer. Mr. Jacque brings 20 years of experience in both dealer
sales and manufacturing of motor coaches and high line bus conversions. In
addition, at the August 4, 1999 board meeting, Mr. Jacque was elected as a
Director, to serve until the Company's next Annual Meeting of shareholders.
15
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
11 Statement of Calculation of Average Common Shares Outstanding
27 Financial Data Schedule
(b) Reports on Form 8-K
No Current Reports on Form 8-K were filed by the Registrant during the
quarter ended June 30, 1999.
16
<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.
SMC CORPORATION
Date: August 12, 1999 By: WILLIAM L. RICH
-------------------------------------
William L. Rich
Chief Financial Officer, SMC Corporation
17
<PAGE>
Exhibit Index
Exhibit
No. Description
- ------- -----------
11 Statement of Calculation of Average Common Shares Outstanding
27 Financial Data Schedule
<TABLE>
<CAPTION>
SMC CORPORATION EXHIBIT 11
STATEMENT OF CALCULATION OF AVERAGE
COMMON SHARES OUTSTANDING
Three Months Six Months
Ended Ended
July 3, 1999 July 3, 1999
------------ ------------
<S> <C> <C>
Basic Earnings Per Share: 5,845,148 5,867,800
Weighted average number of shares
Diluted Earnings Per Share:
Weighted average number of shares 5,845,148 5,867,800
Stock option plan shares to be issued at prices 823,500 823,500
ranging from $7.375 to $9.00 per share
Warrant issues at a price of $9.30 per share 125,000 125,000
Less: Assumed purchase of shares by the Company at the
average market price during the period using the
proceeds received upon the assumed exercise of
the outstanding options and warrants (947,237) (947,872)
------------ ------------
Total Diluted Shares 5,846,411 5,868,428
============ ============
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<RESTATED>
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 6-MOS
<FISCAL-YEAR-END> DEC-31-1999 DEC-31-1999
<PERIOD-START> APR-04-1999 JAN-01-1999
<PERIOD-END> JUL-03-1999 JUL-03-1999
<CASH> 107 107
<SECURITIES> 0 0
<RECEIVABLES> 11,049 11,049
<ALLOWANCES> 0 0
<INVENTORY> 39,233 39,233
<CURRENT-ASSETS> 54,213 54,213
<PP&E> 26,065 26,065
<DEPRECIATION> 8,041 8,041
<TOTAL-ASSETS> 74,143 74,143
<CURRENT-LIABILITIES> 40,868 40,868
<BONDS> 0 0
0 0
0 0
<COMMON> 9,033 9,033
<OTHER-SE> 13,564 13,564
<TOTAL-LIABILITY-AND-EQUITY> 74,143 74,143
<SALES> 53,794 110,616
<TOTAL-REVENUES> 53,794 110,616
<CGS> 49,651 100,264
<TOTAL-COSTS> 49,651 100,264
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 334 644
<INCOME-PRETAX> (248) (69)
<INCOME-TAX> (99) (28)
<INCOME-CONTINUING> (149) (41)
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (149) (41)
<EPS-BASIC> (0.03) (0.01)
<EPS-DILUTED> (0.03) (0.01)
</TABLE>
