<PAGE>
U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-QSB
[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1999
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________ to ___________
Commission file number 0-27354
Global Pharmaceutical Corporation
---------------------------------------------------------------
(Name of small business issuer in its charter)
Delaware 65-0403311
--------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Castor & Kensington Aves., Philadelphia, PA 19124-5694
---------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Issuer's telephone number (215) 289-2220
Not Applicable
------------------------------------------------------
(Former name, former address, and former fiscal year,
if changed since last report.)
Check whether the issuer (1) 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
----- -----
As of April 30, 1999, the number of shares outstanding of each of the
issuer's classes of common equity was 7,254,053 shares of common stock ($0.01
par value).
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM I. FINANCIAL STATEMENTS
GLOBAL PHARMACEUTICAL CORPORATION
BALANCE SHEET
(unaudited)
(in thousands, except share and per share data)
<TABLE>
<CAPTION>
March 31, December 31,
1999 1998
---- ----
ASSETS
Current assets:
<S> <C> <C>
Cash and cash equivalents .................................... $ 1,859 $ 1,304
Short term investments ....................................... 982 0
Accounts receivable .......................................... 1,983 1,088
Inventories .................................................. 1,040 763
Prepaid expenses and other ................................... 120 51
-------- --------
Total current assets .................................... 5,984 3,206
Property, plant and equipment, net ............................... 3,940 4,054
Intangible assets, net of accumulated amortization
of $353 and $294 ............................................. 824 883
Deferred financing costs, net ..................................... 25 26
Investments ....................................................... 684 684
-------- --------
Total assets ............................................ $11,457 $ 8,853
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Current portion of long-term debt ............................ $ 168 $ 161
Notes payable ................................................ 1,254 804
Accounts payable ............................................. 722 927
Accrued expenses ............................................. 1,496 1,019
-------- --------
Total current liabilities ............................... 3,640 2,911
Long-term debt .................................................... 1,918 1,967
-------- --------
5,558 4,878
-------- --------
Mandatorily redeemable preferred stock:
Series A mandatorily redeemable convertible Preferred Stock,
0 and 11,280 shares outstanding at March 31, 1999 and
December 31, 1998, respectively; $.01 par value,
redeemable at $100 per share ................................. 0 1,128
Series B mandatorily redeemable convertible Preferred Stock,
0 and 43,255 shares outstanding at March 31, 1999 and
December 31, 1998, respectively; $.01 par value, redeemable at
$100 per share ............................................... 0 4,326
Series C mandatorily redeemable convertible Preferred Stock,
9,000 shares outstanding at March 31, 1999 and
December 31, 1998, respectively; $.01 par value, redeemable at
$100 per share ............................................... 900 900
Series D mandatorily redeemable convertible Preferred Stock,
30,000 and 0 shares outstanding at March 31, 1999 and
December 31, 1998, respectively; $.01 par value, redeemable at
$100 per share ............................................... 3,000 0
-------- --------
3,900 6,354
======== ========
Stockholders' equity (deficit): Preferred stock, $.01 par
value, 2,000,000 authorized 102,350 shares issued and 39,000
outstanding at March 31, 1999 and 72,350 shares issued and
63,535 shares outstanding at December 31, 1998,
respectively.................................................. -- --
Common stock, $.01 par value, 10,000,000 authorized and
7,254,053 shares issued and outstanding at March 31, 1999 and
4,656,097 shares issued and outstanding at December 31, 1998,
respectively.................................................. 73 47
Additional paid-in capital.................................... 25,338 20,165
Accumulated deficit........................................... (23,412) (22,591)
-------- --------
Total stockholders' equity (deficit) ................... 1,999 (2,379)
-------- --------
Total liabilities and stockholders' equity (deficit).......... $ 11,457 $ 8,857
======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
2
<PAGE>
GLOBAL PHARMACEUTICAL CORPORATION
STATEMENT OF OPERATIONS
(unaudited)
(dollars in thousands, except share and per share data)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1999 1998
---- ----
<S> <C> <C>
Net sales .......................................... $ 1,827 $ 898
Cost of sales ...................................... 1,335 1,157
----------- -----------
Gross margin (loss)................................. 492 (259)
Research and development ........................... 547 592
Selling expenses ................................... 313 131
General and administrative ......................... 429 389
Interest expense ................................... 48 22
Interest income .................................... (24) (62)
Other income ....................................... -- (404)
Other expense ...................................... -- 62
----------- -----------
Net loss ........................................... $ (821) $ (989)
=========== ===========
Less: Imputed dividend on preferred stock ......... $ (603) $ --
=========== ===========
Net loss applicable to common stock ................ $ (1,424) $ (989)
=========== ===========
Net Loss per share (basic) ......................... $ (.21) $ (.23)
=========== ===========
Net Loss per share (diluted) ....................... $ (.21) $ (.23)
=========== ===========
Weighted average common shares outstanding ......... 6,708,742 4,288,184
=========== ===========
</TABLE>
* The net loss per share for the three months ended March 31, 1999
includes a preferred stock dividend of $322,500 to reflect the Series D
Preferred Stock at its liquidation value and of $281,000 representing
the difference between the conversion price of $2.00 per share and the
market value of the Common Stock on the date of the issuance of the
Preferred Stock.
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
GLOBAL PHARMACEUTICAL CORPORATION
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
(unaudited)
(dollars and shares in thousands)
<TABLE>
<CAPTION>
Common stock Total
------------------ Additional Stockholders'
Number of Par paid-in Accumulated equity
shares value capital deficit (deficit)
--------- ----- ---------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Balances at December 31, 1995............................ 4,039 $ 40 $17,575 $ (7,491) $ 10,124
Issuance of common stock in January 1996................. 248 3 1,832 -- 1,835
Net loss................................................. -- -- -- (4,608) (4,608)
----- ----- ------- -------- --------
Balances at December 31, 1996............................ 4,287 43 19,407 (12,099) 7,351
Issuance of Preferred Stock (Series A and B) ............ -- -- 2,547 -- 2,547
Accretion of Preferred Stock dividends (Series A
and B)................................................... -- -- (2,547) -- (2,547)
Expenses relating to issuance of Series A and Series B
Preferred Stock.......................................... -- -- (96) -- (96)
Net loss................................................. -- -- -- (5,877) (5,877)
----- ----- ------- -------- --------
Balances at December 31, 1997............................ 4,287 43 19,311 (17,976) 1,378
Expenses relating to issuance of Series B
Preferred Stock...................................... -- -- (23) -- (23)
Conversion of Series A and Series B Preferred Stock...... 369 4 877 -- 881
Issuance of Preferred Stock(Series C).................... -- -- 140 -- 140
Accretion of Preferred Stock dividend (Series C)......... -- -- (140) -- (140)
Net loss................................................. -- -- -- (4,615) (4,615)
----- ----- ------- -------- --------
Balances at December 31, 1998............................ 4,656 47 20,165 (22,591) (2,379)
Conversion of Series A and Series B Preferred Stock ..... 2,598 26 5,428 -- 5,454
Expenses relating to issuance of Series C and Series D
Preferred Stock..................................... -- -- (255) -- (255)
Issuance of Preferred Stock (Series D)................... -- -- 603 -- 603
Accretion of Preferred Stock dividends (Series D)........ -- -- (603) -- (603)
Net loss................................................. -- -- -- (821) (821)
----- ----- ------- -------- --------
Balance at March 31, 1999................................ 7,254 $ 73 $25,338 $(23,412) $ 1,999
===== ===== ======= ======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
GLOBAL PHARMACEUTICAL CORPORATION
STATEMENT OF CASH FLOWS
(unaudited)
(dollars in thousands)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1999 1998
---- ----
Cash flows from operating activities:
<S> <C> <C>
Net loss .................................................................. $ (821) $ (989)
Adjustments to reconcile net loss to net cash used by operating activities:
Depreciation and amortization ......................................... 186 177
Change in assets and liabilities:
(Increase)in accounts receivable ................................. (895) (466)
(Increase) in inventory .......................................... (277) (172)
(Increase) in prepaid expenses and other assets .................. (68) (40)
Increase (decrease) in accounts payable and accrued expenses ..... 272 37
------- -------
Net cash used for operating activities ....................... (1,603) (1,453)
------- -------
Cash flows from investing activities:
Purchases of marketed securities .......................................... (982) --
Purchases of property, plant and equipment ................................ (13) (333)
------- -------
Net cash used for investing activities ....................... (995) (333)
------- -------
Cash flows from financing activities:
Long-term debt:
Payments .............................................................. (42) (39)
Notes Payable:
Borrowings ............................................................ 450 --
Issuance of stock and warrants:
Issuance of Preferred Stock net of expense ............................ 2,745 (25)
------- -------
Net cash used for financing activities ....................... 3,153 (64)
------- -------
Net increase (decrease) in cash and cash equivalents ........................... 555 (1,850)
------- -------
Cash and cash equivalents, beginning of period ................................. 1,304 4,719
------- -------
Cash and cash equivalents, end of period ....................................... 1,859 2,869
======= =======
Supplemental disclosure of cash flow information: .............................. $ 48 $ 21
======= =======
Cash paid for interest
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
GLOBAL PHARMACEUTICAL CORPORATION
NOTES TO FINANCIAL STATEMENTS
Three Months Ended
March 31, 1999 and March 31, 1998
Note 1: The financial statements included herein have been prepared by
the Company, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such rules and
regulations; however, the Company believes that the disclosures are adequate to
make the information presented not misleading. It is suggested that these
financial statements be read in conjunction with the financial statements and
the notes thereto included in the Company's latest annual report on Form 10-KSB.
The results of operations for the three months ended March 31, 1999, are not
necessarily indicative of the results of operations expected for the year ending
December 31, 1999.
In the opinion of management, the information contained in this report
reflects all adjustments necessary, which are of a normal recurring nature, to
present fairly the results for the interim periods presented.
ITEM II. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
When used in this discussion, the words "believes", "anticipates",
"expects", and similar expressions are intended to identify forward-looking
statements. Such statements are subject to certain risks and uncertainties which
could cause actual results to differ materially from those projected.
The Company's business and results of operations are affected by a wide
variety of factors that could materially and adversely affect the Company and
its actual results, including, but not limited to, the ability to obtain and
maintain governmental approvals on additional products, the ability to
adequately fund its operating requirements, the impact of competitive products
and pricing, product demand and market acceptance, new product development,
reliance on key strategic alliances, the availability of raw materials and the
regulatory environment. As a result of these and other factors, the Company may
experience material fluctuations in future operating results on a quarterly or
annual basis (including, to the extent appropriate governmental approvals are
not obtained, the inability to manufacture and sell products), which could
materially and adversely affect its business, financial condition, operating
results, and stock price. An investment in the Company involves various risks,
including those referred to above and those which are detailed from time-to-time
in the Company's other filings with the Securities and Exchange Commission.
These forward-looking statements speak only as of the date hereof. The
Company undertakes no obligation to publicly release the results of any
revisions to these forward-looking statements which may be made to reflect
events or circumstances after the date hereof or to reflect the occurrence of
unanticipated events.
General
During the three months ended March 31, 1999, the Company has introduced to
market the following new products: Oxycodone Hydrochloride Tablet, 5 mg, a
generic alternative to Roxane Laboratories, Roxicodone(R), a narcotic analgesic,
Pancrelipase Tablets 8000 units, a generic alternative to Paddock Laboratories,
Viokase(R), a digestive enzyme, and three Aminobenzoate Potassium products:
tablets 0.5 grams, capsules 0.5 grams and granules 2 grams; Aminobenzoate
Potassium is the generic alternative to Glenwood, Inc.'s Potaba(R), an
anti-fibrotic for the treatment of Peyronie's Disease and scleroderma.
6
<PAGE>
The Company, also, received its first ANDA approval from the Food and Drug
Administration ("FDA") to manufacture and market Minocycline HCl 50 mg and 100
mg capsules; Minocycline is the generic equivalent of Lederle's Minocin(R), an
antibiotic.
On March 2, 1999, the Company issued 30,000 shares of Series D Convertible
Preferred Stock and a five year warrant to purchase 375,000 shares of common
stock at an initial exercise price equal to $4.00 per share for aggregate
proceeds of $3,000,000. The agreement between the Company and the investors
provides for the issuance, prior to June 30, 1999, of an additional $2,000,000
of Series D Preferred Stock and a five year warrant to purchase 250,000 shares
of common stock at an initial exercise price equal to $4.00 per share, subject
to authorization by the Company's stockholders of additional shares of common
stock and customary closing conditions. The proceeds of this private placement
will go towards funding research and development efforts, working capital and
general corporate needs.
Results of Operations
The Company's net loss excluding non-recurring charges of $603,500 related
to imputed stock dividends on the Company's Series D Convertible Preferred Stock
for the three months ended March 31, 1999 was $821,000, as compared to a net
loss of $989,000 in the same period in 1998. The decrease in the net loss was
due primarily to increased revenues and improved product mix.
The net sales for the three months ended March 31, 1999 were $1,827,000, as
compared to $898,000 in the three months ended March 31, 1998. The increase in
net sales in 1999 was due primarily to an increase in the number of products and
customers as compared to the same period in 1998.
The cost of sales of $1,335,000 for the three months ended March 31, 1999
had associated cost of goods sold of $866,000 and an unabsorbed manufacturing
overhead of $469,000 representing the under capacity utilization of the plant
and infrastructure. For the three months ended March 31, 1998, the cost of sales
of $1,157,000 had associated cost of goods sold of $451,000 and an unabsorbed
manufacturing overhead of $706,000.
The gross margin for the three months ended March 31, 1999 was $492,000 as
compared to a gross margin loss of $259,000 in the three months ended March 31,
1998, due primarily to better absorption of manufacturing overhead by the
increased production and an improved product mix.
The research and development costs for the three months ended March 31,
1999 were $547,000 as compared to $592,000 in the three months ended March 31,
1998, which included a payment of $100,000 for development costs to Eurand
America.
The selling expenses for the three months ended March 31, 1999 were
$313,000 as compared to $131,000 for the three months ended March 31, 1998. The
increase in selling expenses in 1999 was due primarily to additional personnel,
advertising, travel and freight costs as compared to the same period in 1998.
The general and administrative expenses were $429,000 for the three months
ended March 31, 1999 as compared to $389,000 for the same period in 1998. The
increase of $40,000 over 1998 was due primarily to higher professional fees.
The interest expense of $48,000 for the three months ended March 31, 1999
was higher than the interest expense of $22,000 in the comparable period in 1998
due to borrowings from General Electric Capital Corporation ("GECC"), primarily
for working capital purposes.
The interest income was $24,000 for the three months ended March 31, 1999
as compared to $62,000 in the same period of 1998 due to a decrease in
investments in cash equivalents.
7
<PAGE>
The other income was zero for the three months ended March 31, 1999 as
compared to $404,000 for the three months ended March 31, 1998 which included
the first payment of $402,000 for the U.S. Ranitidine profit distribution from
Genpharm, Inc. ("Genpharm").
The other expense was zero for the three months ended March 31, 1999 as
compared to $62,000 for the three months ended March 31, 1998 which represented
amounts due to a sales organization for a one time non-repeating profit sharing
arrangement for the distribution of one of the Company's products.
Liquidity and Capital Resources
In December 1995, the Company completed its initial public offering ("IPO")
in which 1,650,000 shares of common stock were sold by the Company for net
proceeds of $11,489,000. An additional 247,500 shares of common stock were sold
to the underwriter of the IPO in January 1996, for net proceeds to the Company
of $1,835,000.
In July 1997, the Company received a $758,000 loan from Pennsylvania
Industrial Development Authority ("PIDA") bearing annual interest of 3.75% for
15 years and a $350,000 loan from the Delaware River Port Authority ("DRPA") via
the Philadelphia Industrial Development Corporation ("PIDC") bearing annual
interest of 5.00% for 10 years. These loans are secured by land, building and
building improvements. A portion of the loans funded capital projects, with the
remaining proceeds invested in interest bearing certificates of deposit owned by
the Company and pledged as additional collateral.
The Company completed an initial closing of approximately $1.2 million of
its Series A Convertible Preferred Stock in August 1997, and a subsequent
closing of $150,000 in September 1997. In addition, the Company completed the
closing of $5 million of its Series B Convertible Preferred Stock in December
1997. In connection with these offerings, at December 31, 1997, the Company
incurred aggregate expenses, of approximately $196,000, resulting in net
proceeds to the Company of approximately $6.1 million. The Company used the
proceeds from these offerings for working capital purposes. As of March 2, 1999,
all the shares of Series A and Series B Preferred Stock were converted to common
stock.
In July 1998, the Company entered into a revolving credit facility with
GECC, providing financing to the Company of up to $5 million based on levels of
accounts receivable and inventory. Amounts borrowed under the credit facility
bear interest, payable monthly, at the Index Rate plus 4% per annum. The Index
Rate is the latest rate for 30-day dealer placed commercial paper published in
the "Money Rates" section of The Wall Street Journal. The Company also pays a
fee of .125% per annum on the unused available portion of the credit line. At
March 31, 1999 the Company had outstanding borrowings of $1,254,000 with
additional availability of $744,000.
In November 1998, the Company issued 9,000 shares of Series C Convertible
Preferred Stock and a five year warrant to purchase 225,000 shares of common
stock at an initial exercise price equal to $4.00 per share, for proceeds of
$900,000. The proceeds were used for working capital purposes.
On March 2, 1999, the Company issued 30,000 shares of Series D
Convertible Preferred Stock and a five year warrant to purchase 375,000 shares
of common stock at an initial exercise price equal to $4.00 per share, for
aggregate proceeds of $3,000,000. The agreement between the Company and the
investors provides for the issuance, prior to June 30, 1999, of an additional
$2,000,000 of its Series D Convertible Preferred Stock and a five year warrant
to purchase 250,000 shares of common stock at an initial exercise price equal to
$4.00 per share subject to authorization by the Company's stockholders of
additional shares of common stock. The proceeds of this private placement will
go towards funding research and development efforts, working capital and general
corporate needs.
8
<PAGE>
The Year 2000 Issue
The Company's computer system and programs were designed in recent years
and concerns related to the Year 2000 issue were addressed at the time the
decision to purchase the system was made. During 1998 management initiated a
program to prepare the Company's computer systems, applications and other
equipment that may employ date sensitive embedded chips for the Year 2000. The
Company has been advised by its hardware and software vendors that all databases
used by current systems are Year 2000 compliant. The Company completed an
inventory of all computer hardware and software applications and successfully
tested their Year 2000 compliance. The Company is in the process of addressing
the Year 2000 issues with customers, suppliers, service providers and other
constituents which should be completed by June 30, 1999. The Company will review
the information received in response to these inquiries and will determine the
need and extent of contingency planning. The Company expects to complete its
contingency planning by July 31, 1999. At this time, the Company does not
believe that the Year 2000 issue indicates a material event or uncertainty or
that the cost of addressing the Year 2000 issue is material to the Company's
business, operations or financial condition.
Risk of the Company's Year 2000 Issues
Achieving Year 2000 compliance is dependent on many factors, some of which
are not completely within the Company's control. There can be no assurance that
the Company will be able to identify all aspects of its business that are
subject to Year 2000 problems of customers or suppliers that affect the
Company's business. There also can be no assurance that the Company's software
vendors are correct in their assertions that the software is Year 2000
compliant, or that the Company's estimate of the costs of systems preparation
for Year 2000 compliance will prove ultimately to be accurate. Should either the
Company's internal systems or internal systems of one or more significant
suppliers or customers fail to achieve Year 2000 compliance, or the Company's
estimate of the costs of becoming Year 2000 compliant prove to be materially
inaccurate, the Company's business and its results of operations could be
adversely affected.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings: None Applicable.
Item 2. Changes in securities:
On March 2, 1999, the Company sold, in a private placement, 30,000
shares of its Series D Convertible Preferred Stock ("Preferred Stock")
and five year warrants to purchase an aggregate of 375,000 shares of
common stock at an initial exercise price equal to $4.00 per share to
certain "accredited investors," as such term is defined in Rule 501 (a)
under the Securities Act of 1933, as amended (the "Act"), for an
aggregate consideration of $3,000,000. The agreement between the
Company and the investors provides for the issuance, prior to June 30,
1999 (the "Second Closing"), of an additional $2,000,000 of Series D
Preferred Stock and five year warrants to purchase an aggregate of
250,000 shares of common stock at an initial exercise price equal to
$4.00 per share, subject to authorization by the Company's stockholders
of additional shares of common stock and customary closing conditions.
Brean Murray and Co., Inc. served as the placement agent for the
private placement and Brean Murray and one of its officers received
warrants to purchase an aggregate of 90,000 shares of the Company's
common stock and will receive, upon the Second Closing, warrants to
9
<PAGE>
purchase an additional 60,000 shares of the Company's common stock. The
Preferred Stock is convertible at the option of each holder at any time
after the date of issuance of the Preferred Stock into such number of
fully paid and nonassessable shares of the Company's common stock as is
determined by dividing the Liquidation Value ($100.00 per share) by the
Conversion Price. The conversion Price is $2.00 per share (subject to
certain adjustments enumerated in the stock purchase agreement for the
Preferred Stock and subject to reduction to $1.20 per share in the
event that the Second Closing does not occur). The Company relied upon
the exemption afforded by Section 4(2) of, and Regulation D promulgated
under, the Act in connection with the sale of the Preferred Stock.
Item 3. Defaults Upon Senior Securities: None Applicable
Item 4. Submission of Matters to a Vote of Security Holders: None Applicable
Item 5. Other Information: None Applicable
Item 6. Exhibits and Reports on Form 8-K:
(a) Exhibits:
3.8 Certificate of the Designations of the Series D Convertible
Preferred Stock of the Company. (1).
3.9 Certificate of Amendment to Certificate of the Designations,
Powers, Preferences and Rights of the Series A Convertible
Preferred Stock and to Certificate of Designations, Powers,
Preferences and Rights of the Series B Convertible Preferred
Stock of the Company. (1).
3-10 Certificate of Amendment to Certificate of the Designations,
Powers, Preferences and Rights of Series C Convertible
Preferred Stock of the Company. (1).
(1) Previously filed with the Commission as Exhibit to, and
incorporated herein by reference from, the Registrant's
Registration Statement on Form S-3 (File No. 333-
71809).
27. Financial Data Schedule
(b) Reports on Form 8-K:
Form 8-K filed on March 3, 1999 regarding the press release
issued for the initial closing of $5 million of Series D Convertible Preferred
Stock.
<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.
GLOBAL PHARMACEUTICAL CORPORATION
By: /s/ BARRY R. EDWARDS
--------------------------------------
President and Chief Executive Officer (Principal Executive
Officer)
By: /s/ CORNEL C. SPIEGLER
--------------------------------------
Chief Financial Officer, (Principal Financial
Vice President--Administration and Accounting
Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET (UNAUDITED) AND THE CONSOLIDATED STATEMENT OF INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 1999 (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-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 1,859
<SECURITIES> 982
<RECEIVABLES> 1,983
<ALLOWANCES> 0
<INVENTORY> 1,040
<CURRENT-ASSETS> 5,984
<PP&E> 5,582
<DEPRECIATION> 1,642
<TOTAL-ASSETS> 11,457
<CURRENT-LIABILITIES> 3,640
<BONDS> 0
<COMMON> 73
3,900
0
<OTHER-SE> 1,926
<TOTAL-LIABILITY-AND-EQUITY> 11,457
<SALES> 1,827
<TOTAL-REVENUES> 1,827
<CGS> 1,335
<TOTAL-COSTS> 1,335
<OTHER-EXPENSES> 1,289
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 48
<INCOME-PRETAX> (1,424)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,424)
<EPS-PRIMARY> (.21)
<EPS-DILUTED> (.21)
</TABLE>
