<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934
For the quarterly period ended: June 30, 1996
---------------
Commission File Number: 0-26756
---------
GEOGRAPHICS, INC.
(Exact name of registrant as specified in its charter)
Wyoming 87-0305614
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1555 Odell Road, P.O. Box 1750, Blaine, WA 98231
- --------------------------------------------------------------------------------
(Address of principal executive office and zip code)
(360) 332-6711
- --------------------------------------------------------------------------------
(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
-------- --------
The registrant had 9,382,877 shares of common stock outstanding as of August 9,
1996.
Page 1
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GEOGRAPHICS, INC.
INDEX
PAGE
----
Part I. FINANCIAL INFORMATION
ITEM 1 Financial Statements
Consolidated Statements of Income
for the Three Months Ended
June 30, 1996 and June 30, 1995 3
Consolidated Balance Sheets as of
June 30, 1996 and March 31, 1996 4
Consolidated Statements of Cash Flows
for the Three Months Ended June 30, 1996
and June 30, 1995 5
Notes to Consolidated Financial Statements 6 - 7
ITEM 2 Management's Discussion and Analysis of
Financial Condition and Results of
Operations 8 - 10
Part II. OTHER INFORMATION 11-12
SIGNATURE 13
Exhibit 11 - Computation of Earnings per Share 14
Exhibit 27 - Financial Data Schedule 15
Page 2
<PAGE>
GEOGRAPHICS, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended
- ----------------------------------------------------------------------------
June 30 June 30
1996 1995
- ----------------------------------------------------------------------------
SALES $6,171,067 $4,935,708
COST OF SALES 3,726,301 3,027,556
---------- ----------
GROSS MARGIN 2,444,766 1,908,152
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES 2,034,005 1,290,738
AMORTIZATION OF GOODWILL 0 159,767
---------- ----------
INCOME FROM OPERATIONS 410,761 457,647
OTHER INCOME (EXPENSES)
Interest Expense (190,771) (163,106)
Other (3,776) 21,417
---------- ----------
(194,547) (141,689)
---------- ----------
INCOME BEFORE PROVISION
FOR INCOME TAXES 216,214 315,958
INCOME TAX PROVISION 70,037 107,426
---------- ----------
NET INCOME $ 146,177 $ 208,532
---------- ----------
---------- ----------
EARNINGS PER COMMON
AND COMMON EQUIVALENT SHARE
Primary $0.02 $0.04
Assuming full dilution $0.02 $0.03
SHARES USED IN COMPUTING EARNINGS PER
COMMON AND COMMON EQUIVALENT SHARES:
Primary 8,965,795 5,568,266
Assuming full dilution 8,968,244 6,726,993
SEE ACCOMPANYING NOTES TO THESE CONSOLIDATED FINANCIAL STATEMENTS
Page 3
<PAGE>
GEOGRAPHICS, INC.
CONSOLIDATED BALANCE SHEETS
June 30, 1996 March 31, 1996
(Unaudited) (Audited)
ASSETS
Current Assets
Cash $ 32,596 $ 50,028
Accounts receivable, net 4,389,313 4,974,156
Related party receivables 0 899,422
Other receivables 193,584 62,572
Inventories 11,910,351 9,139,273
Deposits 870,896 597,693
Prepaid expenses 707,962 99,204
Deferred income tax 979,865 970,000
Other 109,577 96,512
----------- -----------
Total current assets 19,194,144 16,888,860
Property, plant & equipment, net 8,782,483 7,286,694
Deferred income tax 192,000 192,000
Investment in partnerships (59,710) (34,484)
Other assets 403,054 404,971
----------- -----------
TOTAL ASSETS $28,511,971 $24,738,041
----------- -----------
----------- -----------
LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities
Cash overdraft $ 835,117 $ 0
Note payable to bank 782,953 5,322,939
Accounts payable 2,287,920 2,634,598
Accrued liabilities 1,390,474 1,033,905
Income tax payable 0 145,278
Notes payable to officers & directors 1,143,039 1,264,711
Current portion of long-term debt 782,302 656,398
----------- -----------
Total current liabilities 7,221,805 11,057,829
Long-term debt 4,649,362 3,690,360
----------- -----------
Total liabilities 11,871,167 14,748,189
----------- -----------
STOCKHOLDERS' EQUITY
Common stock, without par value; 10,000,000
shares authorized; 9,376,877 and 8,004,584
issued and outstanding on June 30, 1996 and
March 31, 1996, respectively 16,121,124 9,620,068
Foreign currency translation adjustment 3,719 0
Retained earnings 515,961 369,784
----------- -----------
TOTAL STOCKHOLDERS' EQUITY 16,640,804 9,989,852
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $28,511,971 $24,738,041
----------- -----------
----------- -----------
SEE ACCOMPANYING NOTES TO THESE CONSOLIDATED FINANCIAL STATEMENTS
Page 4
<PAGE>
GEOGRAPHICS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Three Months
Ended Ended
June 30, 1996 June 30, 1995
------------- -------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 146,177 $ 208,532
ADJUSTMENTS TO RECONCILE NET INCOME TO NET
CASH FLOWS FROM OPERATING ACTIVITIES
Depreciation and amortization 367,638 370,644
Deferred income tax (9,865) 0
(Gain) loss on sale of property and equipment 1,085 (119)
Equity loss from investments in partnerships 0 4,253
CHANGES IN OPERATING ASSETS AND LIABILITIES
Cash overdraft 835,117 0
Accounts receivable 584,843 (886,960)
Related party receivables 899,422 (464,024)
Other receivables (131,012) (18,136)
Inventory (2,771,078) (1,613,702)
Deposits (273,203) (157,413)
Prepaid expenses (608,758) (6,797)
Other current assets (13,065) (17,920)
Accounts payable (346,678) 1,217,990
Accrued liabilities 356,569 452,926
Income tax payable (145,278) (80,074)
----------- ----------
Net cash flows from operating activities (1,108,086) (990,800)
----------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES
Net borrowings (repayments) on note payable
to bank (4,539,986) 1,660,830
Proceeds from long-term debt borrowings 225,000 99,874
Repayment of long-term debt (96,254) (144,546)
Repayment of debentures and notes payable to
officers and directors (121,672) 0
Proceeds from issuance of common stock 6,501,056 50,000
Foreign currency translation 3,719 0
----------- ----------
Net cash flows from financing activities 1,971,863 1,666,158
----------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of equipment (889,440) (595,850)
Proceeds from sale of equipment 1,887 16,741
Net advances from partnerships 25,226 66,273
Increase in other assets (18,882) (4,007)
----------- ----------
Net cash flows from investing activities (881,209) (516,843)
----------- ----------
NET CHANGE IN CASH (17,432) 158,515
CASH, beginning of quarter 50,028 15,348
----------- ----------
CASH, end of quarter $ 32,596 $ 173,863
----------- ----------
----------- ----------
NONCASH INVESTING AND FINANCING ACTIVITIES
Financing obtained directly from sellers
in acquisition of equipment $ 956,160 $ 242,293
----------- ----------
----------- ----------
SEE ACCOMPANYING NOTES TO THESE CONSOLIDATED FINANCIAL STATEMENTS
Page 5
<PAGE>
GEOGRAPHICS, INC.
Notes to Consolidated Financial Statements
1. The accompanying interim unaudited consolidated financial statements of
Geographics, Inc. (the "Company" or "Geographics") have been prepared in
accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10
of Regulation S-X. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for
complete financial statements. In the opinion of management, such interim
statements reflect all adjustments (consisting of normal recurring
accruals) necessary to present fairly the financial position and the
results of operations and cash flows for the interim periods presented. The
results of operations for these interim periods are not necessarily
indicative of the results to be expected for the full year. These
financial statements should be read in conjunction with the audited
consolidated financial statements and footnotes included in the Company's
consolidated financial statements and notes thereto for the fiscal year
ended March 31, 1996.
The consolidated financial statements include the accounts of Geographics,
Inc. and its wholly-owned subsidiaries; Geographics Marketing Canada Inc.,
Geographics (Europe) Limited, and Geographics Foreign Sales Corporation.
All intercompany balances and transactions have been eliminated.
Certain of the Company's locations calculated cost of sales using an
estimated gross profit method for interim periods. Cost of sales at these
locations are adjusted based on physical inventories which are performed no
less than once a year.
2. The Company has a $12,000,000 revolving credit agreement with a bank.
Interest on outstanding advances is payable monthly at the bank's prime
rate. Outstanding balances as of June 30, 1996 and March 31, 1995 were
$782,953 and $5,322,939, respectively.
The prime rate was 8.25% and 8.25% at June 30, 1996 and March 31, 1996,
respectively.
3. On May 1, 1996, the Company completed a private placement of 1,268,293
units at a price of $5.125 per unit. Total proceeds from this transaction
approximated $6,500,000. Each unit included one common share of the Company
and one warrant to purchase one additional common share of the Company at
$6.50. The warrants are exercisable upon issuance and regulatory approval,
and expire June 1, 1999.
4. On January 23, 1996, the Company placed an order for a printing press. The
cost of the press is approximately $1,200,000 which is expected to be
delivered during the second quarter of fiscal year 1997. On June 27, 1996,
the Company placed an order for a packaging machine. The cost of the
packaging machine is approximately $600,000 and is expected to be delivered
during the third quarter of fiscal year 1997. The Company has commitments
from a financial institution to provide capital lease financing for these
equipment orders.
5. Certain officers and directors have received notes from the Company in
exchange for $1,143,039. The notes are payable on demand and are classified
as current liabilities. Interest on these notes is payable monthly at the
rate of prime plus 1%.
6. On July 3, 1996, the Company signed a letter of intent to acquire the
assets and certain liabilities of Grahams Graphics PTY Limited ("Grahams"),
an Australian company. Preliminary discussions provide for the exchange of
the Company's common stock for the
Page 6
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assets and liabilities of Grahams. Total consideration included as part of
the exchange had not been determined as of the date of this filing,
however, total consideration is estimated to approximate $300,000. The
effective date of the transaction will be July 1, 1996.
The Company formed Geographics Australia PTY Limited to complete the
exchange and become the Company's distributor of Geographics products in
Australia, replacing Grahams Graphics PTY Limited as the sole Australian
distributor.
7. On April, 1, 1996, the Company formed Geographics Foreign Sales
Corporation, Inc., A Guam Corporation. Geographics Foreign Sales
Corporation, Inc. was established to facilitate the sale of Geographics,
Inc. products to foreign companies in compliance with Internal Revenue code
regulating foreign sales corporations.
8. There are various claims, lawsuits, and pending actions against the Company
incident to the operations of its business. It is the opinion of management
that the ultimate resolution of these matters will not have a material
effect on the Company's financial position, results of operations or
liquidity.
Page 7
<PAGE>
ITEM 2
Management's Discussion and Analysis of Financial Condition
and Results of Operations
for the 3 Months ended June 30, 1996 and June 30, 1995
RESULTS OF OPERATIONS
SALES.
Sales increased 25.0% to $6,171,067 in the quarter ended June 30, 1996 from
$4,935,708 in the quarter ended June 30, 1995.
Sales increased 25% for the quarter ended June 30, 1996 as compared to the
same quarter a year earlier. Sales for the quarter ended June 30, 1995
included initial Geopaper inventory shipments of approximately 600 office
product superstores, while the current quarter did not have a material
number of initial product shipments. After adjusting sales for initial
product shipments of approximately $1,500,000 in the prior year, sales
increased by 80% as compared to the same period a year ago.
Geopaper products were responsible for 67.3% of sales for the three month
period ended June 30, 1996, compared to 62.5% for the same period a year
earlier. Sales of Geopaper increased 33.9% to $4,150,000 from $3,100,000
for the periods ending June 30, 1996 and June 30, 1995, respectively.
Sales of Company products other than Geopaper (stick on letters, rub on
letters, stencil and LED signs) increased by 10.1% for the three months
ended June 30, 1996 compared to the three months ended June 30, 1995. The
non-Geopaper products have decreased as a percentage of total sales to
32.7% from 37.5% for the three month periods ended June 30, 1996 and 1995,
respectively. These products will continue to decrease in importance to the
Company as consumers continue to utilize personal computers to perform many
of the tasks that these non-Geopaper products were designed for. However,
the increased usage of personal computers is expected to generate new
customers for Geopaper products that are specifically designed for use with
personal computing technology.
International sales of Geographics products were $1,199,521 for the quarter
ended June 30, 1996, an increase of 156.0% over international sales of
$468,549 for the quarter ended June 30, 1995. International sales of
Geographics products represented 19.4% of total Geographics, Inc. sales for
the quarter ended June 30, 1996, compared to 9.5% of total sales for the
same period a year earlier. Sales by geographic location were as follows:
United States 80.6%
Canada 14.3%
Western Europe 2.3%
Australia 2.2%
Mexico .5%
Others .1%
-----
Total 100.0%
-----
-----
GROSS MARGIN.
Gross margin as a percentage of sales was 39.6% for the three month period
ended June 30, 1996, compared to 38.7% for the same period last year. The
Company's gross margin rate increased primarily due to lower freight rates
resulting from increased product shipments during the past year.
Page 8
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Margins are also affected by changes in the mix of product sold, raw
material costs, automation, labor costs, freight costs, production levels
(overhead absorption) and the rate of product turnover. Margins are also
affected by price increases and decreases passed on to customers. While
management endeavors to improve margins, no assurance can be given that
margins will continue to improve.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES.
Selling, General and Administrative expenses ("SG&A"), which consist of
payroll, advertising, and commissions, as well as administrative,
accounting and legal costs increased as a percentage of sales in the three
months ended June 30, 1996 to 33.0%, as compared to 26.2% during the same
period in the prior year. SG&A costs increased as a percentage of sales
primarily due to increased overhead resulting from the establishment of
Geographics (Europe) Limited and the installation and training costs
related to a new computer system at the Blaine, WA facility.
GOODWILL AMORTIZATION.
The Company recorded no goodwill amortization during the quarter ended
June 30, 1996, as compared to $159,767 for the same period a year ago.
Goodwill resulted from the acquisition of the lettering division of E.Z.
Industries in 1993. The Goodwill was fully amortized as of June 30, 1995.
INTEREST EXPENSE.
Interest expense for the three months ended June 30, 1996 totaled $190,771
compared to $163,106 for the same period in the prior year. This increase
in interest expense was primarily due to borrowings under the Company's
revolving credit facility during the current year to fund increases in
inventories and equipment deposits, as well as additional interest costs
resulting from borrowings related to equipment purchases and expansions to
the Blaine manufacturing facility.
LIQUIDITY AND CAPITAL RESOURCES.
The Company's principal capital requirements have been to fund working
capital needs, including the building of inventories in the United States
and the United Kingdom. Working capital has also been used to fund
equipment deposits, prepaid expenses, reduce accounts payable and to reduce
income tax payable.
The Company's sales are substantially on net sixty day terms, and trade
receivables are used as collateral to provide the Company with a source of
capital prior to their collection. Working capital requirements are reduced
by vendor credit terms, which allow the Company to finance a portion of its
inventory.
During the 1st quarter of fiscal year 1997, the Company improved its
collection of receivables. Net accounts receivable were $4,389,313 as of
June 30, 1996, a decrease of 25.3% from the $5,873,578 receivable balance
at March 31, 1996. Inventory increased during the quarter to $11,910,351,
an increase of 30% from the $9,139,273 inventory balance at March 31, 1996.
Increases in inventory can be attributable to management's anticipation of
seasonal Geopaper orders, inventory requirements related Geographics
(Europe) Limited's initial operational quarter and the introduction of a
new educational product line. The investment in inventories, equipment
deposits and prepaid expenses were primarily responsible for negative cash
flows from operating activities of $1,108,086 for the three months ended
June 30, 1996, compared to negative cash flows from operating activities of
$990,800 for the same period a year earlier.
The Company's cash flow is also affected by financing activities, including
borrowings and repayments on revolving credit facilities, short and long
term notes payable to the
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Company's bank, proceeds from the issuance of debentures to officers and
directors, proceeds from the exercise of stock, as well as repayment of
capital leases. The majority of capital expenditures were financed by long-
term bank loans and capital leases. A private placement of 1,268,293 units
at $5.125 (see Part II, Item 5. A.), resulted in gross proceeds of
$6,500,000 to the Company which were used to repay borrowings on short-term
notes payable to the Company's bank. Financing activity resulted in net
cash flows of $1,971,863 and $1,666,158 for the three months ended June 30,
1996 and 1995, respectively.
During the three months ended June 30, 1996, the Company acquired
additional printing presses, packaging equipment and other machinery
related to the manufacture of Geopaper products. These capital expenditures
were necessary to support the continued expansion of the Geopaper product
line and the increase in Geopaper unit sales. Cash used in investing
activities (primarily capital expenditures) was $881,209 and $516,843 in
the first three months of fiscal years 1997 and 1996, respectively.
During the three months ended June 30, 1996, the Company's cash balance
decreased by $17,432 to $32,596. The cash balance is not significant and
balances held by the Company are intentionally maintained at low levels as
part of the Company's strategy to minimize balances outstanding on
revolving credit facilities, thus minimizing interest expense.
The Company's management is continually reviewing its financing options.
Although the Company has the ability to finance its planned growth and
expansion from cash generated from operations, capital lease financing and
borrowings under the Company's existing credit facilities, the Company is
also considering alternative financing options, such as the issuance of
common stock or convertible debt, in the event market conditions make such
alternatives financially attractive for funding the Company's short-term or
long-term expansion. The Company's future financing requirements will be
affected by the number of new customers obtained, the strength of reorders
by existing customers, the growth (addition of new stores) of existing
customers as well as the of success of new products introduced by the
Company into the marketplace. Additional financing might also be necessary
in the event the Company pursues further international expansion or
business acquisition opportunities.
Page 10
<PAGE>
PART II. OTHER INFORMATION
ITEMS 1-4 NOT APPLICABLE
ITEM 5 - OTHER INFORMATION
A. On May 1, 1996, the Company completed a private placement of 1,268,293
units at a price of $5.125 per unit. Total proceeds from this transaction
approximated $6,500,000. Each unit included one common share of the Company
and one warrant to purchase one additional common share of the Company at
$6.50. The warrants are exercisable upon issuance and regulatory approval,
and expire June 1, 1999.
B. The Company has adopted the following Statements of Financial Accounting
Standards ("SFAS") for the fiscal year ending March 31, 1997.
SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of," establishes accounting standards for
the impairment of long-lived assets, certain identifiable intangibles, and
goodwill related to those assets to be held and used and for long-lived
assets and certain identifiable intangibles to be disposed of. Long-lived
assets and certain identifiable intangibles to be held and used by a
company are required to be reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount of an asset may
not be recoverable. Measurement of an impairment loss for such long-lived
assets and identifiable intangibles should be based on the fair value of
the asset. Long-lived assets and certain identifiable intangibles to be
disposed of are required to be reported generally at the lower of the
carrying amount of fair value less cost to sell. The adoption of SFAS No.
121 had no material effect on the Company's financial position as of June
30, 1996 or the results of its operations for the quarter ended June 30,
1996.
SFAS No. 123, "Accounting for Stock-Based Compensation," establishes
financial accounting and reporting standards for stock-based employee
compensation plans, including stock options, stock purchase plans,
restricted stock, and stock appreciation rights. SFAS No. 123 defines and
encourages the use of the fair value method of accounting for employee
stock-based compensation. Continuing use of the intrinsic value based
method of accounting prescribed in Accounting Principles Board No. 25 ("APB
25") for measurement of employee stock-based compensation is allowed with
pro forma disclosures of net income and earnings per share as if the fair
value method of accounting had been applied. Transactions in which equity
instruments are issued in exchange for goods or services from non-employees
must be accounted for based on the fair value of the consideration received
or of the equity instrument issued, whichever is more reliably measurable.
The Company has determined that it will continue to use the method of
accounting prescribed in APB 25 for measurement of employee stock-based
compensation, and will begin providing the required pro forma disclosures
in its financial statements for the year ending March 31, 1997 as allowed
by SFAS No. 123.
Page 11
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EXHIBIT INDEX
Page
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ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K.
A. Exhibits.
11. Statement regarding computation of Earnings Per Share 14
27. Financial Data Schedule 15
B. Reports on Form 8-K.
No reports were filed by the Company on Form 8-K during the fiscal quarter
ended June 30, 1996.
Page 12
<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.
GEOGRAPHICS, INC.
(Registrant)
Date: August 9, 1996 By: /s/ TERRY A. FIFE
------------------------
Terry A. Fife
Vice President - Finance,
Chief Financial Officer and Secretary
Page 13
<PAGE>
<TABLE>
<CAPTION>
Exhibit 11
GEOGRAPHICS, INC.
COMPUTATION OF EARNINGS PER SHARE
(Unaudited)
Three Months Three Months
Ended Ended
June 30, 1996 June 30, 1995
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
PRIMARY EARNINGS PER COMMON SHARE:
Net income $ 146,177 $ 208,531
---------- ----------
---------- ----------
Weighted average number of shares outstanding 8,907,634 5,308,758
Add: Weighted average number of shares which
could have been issued upon exercise of
outstanding options 46,038 188,431
Add: Weighted average number of shares which
could have been issued upon exercise of
outstanding warrants 12,123 71,077
---------- ----------
Weighted average number of shares used to compute
primary earnings per share 8,965,795 5,568,266
---------- ----------
---------- ----------
Primary earnings per share $ 0.02 $ 0.04
---------- ----------
---------- ----------
FULLY DILUTED EARNINGS PER COMMON SHARE:
Net income $ 146,177 $ 208,531
Add: Interest which would not have been incurred,
net of tax, upon conversion of 8% debentures 0 12,902
Add: Interest which would not have been incurred,
net of tax, upon conversion of 10.25%
debentures 0 3,620
---------- ----------
Net income used to calculate fully diluted earnings
per share $ 146,177 $ 225,053
---------- ----------
---------- ----------
Weighted average number of shares outstanding 8,907,634 5,308,758
Add: Weighted average number of shares which
could have been issued upon exercise of
outstanding options 48,487 232,538
Add: Weighted average number of shares which
could have been issued upon exercise of
outstanding warrants 12,123 80,500
Add: Weighted average number of shares which
could have been issued upon conversion
of 8% debentures 0 886,019
Add: Weighted average number of shares which
could have been issued upon conversion
of 10.25% debentures 0 219,178
---------- ----------
Weighted average number of shares used to compute
fully diluted earnings per share 8,968,244 6,726,993
---------- ----------
---------- ----------
Fully diluted earnings per share $ 0.02 $ 0.03
---------- ----------
---------- ----------
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM (A)
FROM 10-Q FOR THE QUARTER ENDED JUNE 30, 1996 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-START> APR-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 32,596
<SECURITIES> 0
<RECEIVABLES> 4,497,346
<ALLOWANCES> (108,033)
<INVENTORY> 11,910,351
<CURRENT-ASSETS> 19,194,144
<PP&E> 12,310,615
<DEPRECIATION> (3,528,132)
<TOTAL-ASSETS> 28,511,971
<CURRENT-LIABILITIES> 7,221,805
<BONDS> 0
0
0
<COMMON> 16,121,124
<OTHER-SE> 519,680
<TOTAL-LIABILITY-AND-EQUITY> 28,511,971
<SALES> 6,171,067
<TOTAL-REVENUES> 6,171,067
<CGS> 3,726,301
<TOTAL-COSTS> 2,034,005
<OTHER-EXPENSES> 3,776
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 190,771
<INCOME-PRETAX> 216,214
<INCOME-TAX> 70,037
<INCOME-CONTINUING> 146,177
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 146,177
<EPS-PRIMARY> 0.02
<EPS-DILUTED> 0.02
</TABLE>
