UNITED STATES
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: June 30, 1998
or
|_| Transition Report Pursuance to Section 13 or 15(d) of the Securities
Exchange Act of 1934.
For the transition period from to
-------------------- ----------------------
Commission File Number: 000-23039
------------------------
ORALABS HOLDING CORP.
---------------------
(Exact name of small business issuer as specified in its charter)
Colorado 14-1623047
------------------------------- ------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2901 South Tejon, Englewood, Colorado 80110
- ------------------------------------- -----
(Address of principal executive offices) Zip Code
(303) 783-9499
--------------
(Issuer's telephone number)
- --------------------------------------------------------------------------------
(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.
|X| Yes |_| No
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS:
Check whether the issuer filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 after
the distribution of securities under a plan confirmed by a court.
|_| Yes |_| No
APPLICABLE ONLY TO CORPORATE ISSUERS:
As of June 30 , 1998 Issuer had 9,123,555 shares of common stock, $.001 Par
Value, outstanding.
Transitional Small Business Disclosure Format (check one)
|_| Yes |X| No
<PAGE>
INDEX
-----
Page
Number
------
Part I. Financial Information
Item I. Financial Statements
Consolidated Balance Sheets as of June 30,
1998 (Unaudited) and December 31, 1997 2
Consolidated Statements of Income Three
Months Ended June 30, 1998 and
June 30, 1997 (Unaudited) 3
Consolidated Statements of Income Six
Months Ended June 30, 1998 and
June 30, 1997 (Unaudited) 4
Consolidated Statement of Changes in Stock-
holders' Equity from December 31, 1997
through June 30, 1998 (Unaudited) 5
Consolidated Statements of Cash Flows,
Three Months Ended June 30, 1998 and
June 30, 1997 (Unaudited) 6
Consolidated Statements of Cash Flows,
Six Months Ended June 30, 1998 and
June 30, 1997 (Unaudited) 7
Notes to Consolidated Financial Statements 8
Item 2. Management's Discussion and Analysis of
Financial Conditions and Results of
Operations 11
Part II. Other Information 14
Exhibit Index 15
1
<PAGE>
ORALABS HOLDING CORP. AND CONSOLIDATED SUBSIDIARIES
---------------------------------------------------
BALANCE SHEETS
(Unaudited)
June 30, December 31,
1998 1997
---------- ------------
Current Assets
Cash in bank $ 610,841 $1,023,598
Inventory 1,339,811 599,270
Accounts receivable, net of allowance
for doubtful accounts 655,475 686,668
Other current assets 146,646 159,679
---------- ----------
Total Current Assets 2,752,773 2,469,215
Property and equipment, net of accumulated
depreciation 290,130 214,732
---------- ----------
Total Assets $3,042,903 $2,683,947
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current Liabilities
Accounts payable and accrued expenses $ 503,531 $ 556,865
Income taxes payable 49,862 119,586
---------- ----------
Total Current Liabilities 553,393 676,451
---------- ----------
Stockholders' Equity:
Preferred stock - $.01 par value
1,000,000 shares authorized
none issued and outstanding -- --
Common stock - $.001 par value,
25,000,000 shares authorized;
9,123,555 shares issued and
outstanding 9,124 9,124
Additional paid-in capital 1,134,427 1,134,427
Retained earnings 1,345,959 863,945
---------- ----------
Total Stockholders' Equity 2,489,510 2,007,496
---------- ----------
Total Liabilities and Stockholders' Equity $3,042,903 $2,683,947
========== ==========
The accompanying notes are an integral part of the financial statements.
2
<PAGE>
ORALABS HOLDING CORP. AND CONSOLIDATED SUBSIDIARIES
---------------------------------------------------
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Three Months
Ended June 30, Ended June 30,
1998 1997
-------------- --------------
Revenue:
Sales $1,778,319 $1,213,095
Cost of sales 810,348 540,689
---------- ----------
Gross Profit 967,971 672,406
---------- ----------
Operating Expenses
Salaries 194,039 144,725
Stock issued for services -- 85,000
Bad debts 8,511 6,065
Rent 34,500 16,500
Commissions 54,422 50,835
Research and development 3,968 3,757
Depreciation 16,499 11,193
Other operating expenses 300,501 188,331
---------- ----------
Total Operating Expenses 612,440 506,406
---------- ----------
Net Operating Income 355,531 166,000
---------- ----------
Other Income
Interest and other income 9,263 7,329
---------- ----------
Total Other Income 9,263 7,329
---------- ----------
Net Income before taxes 364,794 173,329
Provision for Income taxes 124,030 123,576
---------- ----------
Net Income $ 240,764 $ 49,753
========== ==========
Basic Income per Common Share $ .03 $ .01
========== ==========
Weighted Average Shares Outstanding 9,123,555 8,379,835
========== ==========
Diluted Income per Share $ .03 $ .01
========== ==========
Diluted Weighted Average Shares
Outstanding 9,519,374 8,379,835
========== ==========
The accompanying notes are an integral part of the financial statements.
3
<PAGE>
ORALABS HOLDING CORP. AND CONSOLIDATED SUBSIDIARIES
---------------------------------------------------
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Six Months Six Months
Ended Ended
June 30, 1998 June 30, 1997
------------- -------------
Revenue:
Sales $3,586,962 $2,932,357
Cost of sales 1,745,352 1,212,141
---------- ----------
Gross Profit 1,841,610 1,720,216
---------- ----------
Operating Expenses
Salaries 372,722 261,869
Stock issued for services -- 340,000
Bad debts 17,554 14,662
Rent 63,250 33,000
Commissions 94,918 123,506
Research and development 42,170 5,685
Depreciation 32,164 21,683
Other operating expenses 512,242 348,761
---------- ----------
Total Operating Expenses 1,135,020 1,149,166
---------- ----------
Net Operating Income 706,590 571,050
---------- ----------
Other Income
Interest and other income 23,778 12,113
---------- ----------
Total Other Income 23,778 12,113
---------- ----------
Net Income before taxes 730,368 583,163
Provision for Income taxes 248,354 123,576
---------- ----------
Net Income $ 482,014 $ 459,587
========== ==========
Basic Income per Common Share $ .05 $ .06
========== ==========
Weighted Average Shares Outstanding 9,123,555 8,130,777
========== ==========
Diluted Income per Share $ .05 $ .06
========== ==========
Diluted Weighted Average Shares
Outstanding 9,519,374 8,130,777
========== ==========
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
<TABLE>
<CAPTION>
ORALABS HOLDING CORP. AND CONSOLIDATED SUBSIDIARIES
---------------------------------------------------
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
From December 31, 1997 through June 30, 1998
(Unaudited)
Additional
Preferred Stock Common Stock Paid-in Retained
No./Shares Amount No./Shares Amount Capital Earnings Total
---------- ------ ---------- ------ ------- -------- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1997 - $ - 9,123,555 $ 9,124 $1,134,427 $ 863,945 $2,007,496
Net income for the Six month
period ended June 30, 1998 - - - - - 482,014 482,014
Balance at March 31, 1998 - $ - 9,123,555 $ 9,124 $1,134,427 $1,345,959 $2,489,510
======== ======= ========== ========== ==========
The accompanying notes are an integral part of the financial statements.
5
</TABLE>
<PAGE>
ORALABS HOLDING CORP. AND CONSOLIDATED SUBSIDIARIES
---------------------------------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Three Months
Ended June 30, Ended June 30,
1998 1997
------------- --------------
Cash Flows from Operating Activities:
Net income $ 240,764 $ 49,753
Adjustments to reconcile net
loss to net cash used
in operating activities
Depreciation 16,499 11,193
Increase (decrease) in accounts
payable and accrued expenses (92,798) 89,084
(Increase) decrease in accounts
receivable (93,298) 151,635
(Increase) in inventory (559,385) (52,701)
Stock issued for services -- 85,000
Other, net (83,198) (26,244)
----------- -----------
Net Cash Provided by Operating
Activities (571,416) 307,720
----------- -----------
Cash Flows from Investing Activities:
(Acquisitions) of property and
equipment (82,226) (2,348)
----------- -----------
Net Cash Provided by (Used in)
Investing Activities (82,226) (2,348)
----------- -----------
Cash Flows from Financing Activities:
Dividend paid -- (400,000)
Common stock issued -- 514,609
----------- -----------
Net Cash Provided by Financing
Activities -- 114,609
----------- -----------
Increase in cash (653,642) 419,981
Cash, Beginning of Period 1,264,483 336,843
----------- -----------
Cash, End of Period $ 610,841 $ 756,824
=========== ===========
Interest Paid $ -- $ --
=========== ===========
Income Taxes Paid $ 117,000 $ --
=========== ===========
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
ORALABS HOLDING CORP. AND CONSOLIDATED SUBSIDIARIES
---------------------------------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Six Months
Ended Ended
June 30,1998 June 30, 1997
------------ -------------
Cash Flows from Operating Activities:
Net income $ 482,014 $ 459,587
Adjustments to reconcile net
loss to net cash used
in operating activities
Depreciation 32,164 21,683
(Decrease)in accounts
payable and accrued expenses (53,335) (4,743)
Decrease in accounts
receivable 31,194 7,015
Decrease (increase) in inventory (740,541) 68,690
Stock issued for services -- 340,000
Other, net (56,691) (33,233)
----------- -----------
Net Cash Provided by Operating
Activities (305,195) 858,999
----------- -----------
Cash Flows from Investing Activities:
(Acquisitions) of property and
equipment (107,562) (22,040)
----------- -----------
Net Cash Provided by (Used in)
Investing Activities (107,562) (22,040)
----------- -----------
Cash Flows from Financing Activities:
Dividends paid -- (715,143)
Common stock issued -- 514,609
----------- -----------
Net Cash Flows from Financing
Activities -- (200,534)
----------- -----------
Increase (Decrease) in cash (412,757) 636,425
Cash, Beginning of Period 1,023,598 120,399
----------- -----------
Cash, End of Period $ 610,841 $ 756,824
=========== ===========
Interest Paid $ -- $ --
=========== ===========
Income Taxes Paid $ 318,078 $ --
=========== ===========
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
ORALABS HOLDING CORP. AND CONSOLIDATED SUBSIDIARIES
---------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 1998 and 1997
(1) Organization
------------
Oralabs Holding Corp. (OHC) a Colorado corporation was formed during June
1997. SSI Capital Corp. (SSI) a New York corporation was incorporated on
January 30, 1981. In 1996, SSI had a November 30 yearend but in 1997 it was
changed to a December 31 yearend. Effective August 22, 1997, SSI was merged
into Oralabs Holding Corp. and the outstanding shares of SSI were converted
to shares of Oralabs Holding Corp. on a one for two basis. All references
to common stock in the Company's financial statements have been
retroactively adjusted for the merger and the one for two reduction in
shares outstanding.
Oralabs, Inc. (ORALABS), a Colorado corporation was incorporated on August
10, 1990. ORALABS is in the business of manufacturing and distributing lip
balm, fresh breath and other products. ORALABS is a wholly owned subsidiary
of OHC.
OL Sub Corp, a Colorado corporation was incorporated on October 23, 1997.
As of June 30, 1998 this corporation was inactive.
The consolidated financial statements include the accounts of ORALABS and
the accounts of SSI since the date of the reverse acquisition and the
accounts of OL Sub Corp. since inception (see Note 3). All intercompany
accounts and transactions have been eliminated.
(2) Unaudited Statements
--------------------
The balance sheet as of June 30, 1998, the statements of income and the
statements of cash flows for the three and six month periods ended June 30,
1998 and June 30, 1997 and the statement of changes in stockholders' equity
for the six month period ended June 30, 1998 have been prepared by the
Registrant without audit. In the opinion of management, all adjustments
(which include only normal recurring adjustments) necessary to present
fairly the financial position, results of operations and cash flows at June
30, 1998, and for all periods presented, have been made.
8
<PAGE>
ORALABS HOLDING CORP. AND CONSOLIDATED SUBSIDIARIES
---------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 1998 and 1997
(3) Business Combination
--------------------
Effective May 1, 1997 SSI and ORALABS completed a business combination
whereby ORALABS became a wholly owned subsidiary of SSI. The transaction
has been accounted for as a reverse acquisition. The net monetary assets of
SSI at the time of the reverse acquisition of approximately $161,849 have
been accounted for as issuance of stock and additional paid-in capital.
(4) Income Taxes
------------
Prior to completion of the business combination, ORALABS had elected to be
taxed under Subchapter S of the Internal Revenue Service Code. The election
was automatically terminated effective May 1, 1997. No provision for income
taxes was recorded prior to May 1, 1997 since shareholders of ORALABS
included the net income from the company on their personal returns and were
responsible for the payment of the related income taxes.
(5) Income Per Share Information
----------------------------
Basic income per share was computed using the weighted average shares
outstanding for the respective periods. Diluted income per share for the
three and six month periods ended June 30, 1998 was computed giving effect
to the 505,000 options outstanding exercisable at $1.00 per share, with an
approximate market value of $4.625 per share(as of August 4, 1998),
summarized as follows:
For the Three Month Period Ended June 30, 1998
----------------------------------------------
Income Shares Per Share
(Numerator) (Denominator) Amount
Basic Income per Share:
Income available to
Common Stockholders $240,764 9,123,555 $ .03
Effect of Dilutive
Securities:
Options - 395,819
-------- ---------
Diluted Income Per Share:
Income available to
Common Stockholders $240,764 9,519,374 $ .03
========= ========= -----
9
<PAGE>
ORALABS HOLDING CORP. AND CONSOLIDATED SUBSIDIARIES
---------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 1998 and 1997
(5) Income Per Share Information, Continued
---------------------------------------
For the Six Month Period Ended June 30, 1998
--------------------------------------------
Income Shares Per Share
(Numerator) (Denominator) Amount
----------- ------------- ------
Basic Income per Share:
Income available to
Common Stockholders $480,967 9,123,555 $ .05
Effect of Dilutive
Securities:
Options - 395,819
-------- ---------
Diluted Income Per Share:
Income available to
Common Stockholders $480,967 9,519,374 $ .05
======== ========= --------
The computation of the dilutive shares added to the denominator according
to the provisions of the Financial Accounting Standards Board Statement
#128 is summarized as follows:
Assumed approximate market value per share of $4.625(as of August 4,
1998), less exercise price of $1.00 per share, divided by $4.625 per
share times 505,000, the number of options outstanding, equals 395,819
shares.
Since the options were granted subsequent to June 30 1997, there were no
dilutive securities outstanding at June 30, 1997, and therefore, basic and
diluted income per share computations was identical.
10
<PAGE>
ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATION
The following discussion of the financial condition and results of
operations of the Company relates to the three (3) and six (6) months ended June
30, 1998 and 1997, and should be read in conjunction with the financial
statements and notes thereto included elsewhere in this Report.
Forward-Looking Statements.
- ---------------------------
Certain statements in this Report are forward-looking, and from time to
time, the Company may publish forward-looking statements relating to such
matters as anticipated financial performance, business prospects, technological
developments, new products, research and development activities and similar
matters. Actual results of future events could differ materially from
anticipated results or other expectations expressed in the Company's
forward-looking statements. Among the factors that could cause actual results
and the Company's experience to differ are the timely availability and
acceptance of new products, the impact of competitive products and pricing and
the lack of long-term contracts with distributors and purchasers.
Results of Operations.
- ----------------------
For the six months ending June 30, 1998 as compared with the six months ending
June 30, 1997.
- --------------------------------------------------------------------------------
Sales increased $654,605, 22%. We attribute this to both additional income
generated from a management service contract for the marketing and distributing
of products not manufactured in-house and growth in export sales.
Gross profit increased $121,394, 7%. We attribute this to the additional sales.
Salaries decreased $229,147, 38%. We attribute this to a non-recurring event in
which 340,000 shares of stock, valued at $340,000, was issued on January 1, 1997
to two employees of OraLabs, Inc. for services in areas of human resources and
investor relations for the preparation for the company's entry into the public
marketplace. The aforementioned transaction was accrued exclusively in the first
and second quarters of 1997. The reduction in salaries reflected in the
comparison of the two quarters was partially offset by salaries paid for
additional staffing in sales and engineering as well as increased pay to
administration of $110,853.
Rent increased $30,250, 92%. This was the result of additional rent incurred to
lease a second warehouse facility and a one-time adjustment in the timing of the
accrual to rent owed for the headquarters facility.
Commissions decreased by $28,588, 23%. We attribute this to increased in-house
sales predominately in the first quarter of 1998.
Research & Development increased $36,484, 642%. We attribute this to marketing
research of VitaSpray(TM) predominately in the first quarter of 1998.
11
<PAGE>
Other Operating Expenses increased by $163,481, 47%. We attribute this primarily
to increased legal fees related to public compliance work, the hiring of
consultants for the marketing of nutritional supplements and travel abroad to
expand international business.
Provision for Income taxes increased $124,778, 101%. We attribute this to
OraLabs, Inc. having no corporate tax obligations until May 1, 1997 (corporate
net income was passed through to its stockholders through April 30, 1997), as it
was an S Corporation until that date.
For the three months ending June 30, 1998 as compared with the three months
ending June 30, 1997.
Sales increased $565,224, 47%. We attribute this to both additional income
generated from a management service contract for the marketing and distributing
of products not manufactured in-house and growth in export sales.
Gross profit increased $295,565, 44%. We attribute this to the aforementioned
additional sales.
Salaries decreased $35,686, 16%. We attribute this to a non-recurring event in
which 340,000 shares of stock, valued at $340,000, was issued on January 1, 1997
to two employees of OraLabs, Inc. for services in areas of human resources and
investor relations for the preparation for the company's entry into the public
marketplace. The aforementioned transaction was accrued exclusively in the first
and second quarters of 1997, with $85,000 accrued in the second quarter. The
reduction in salaries was partially offset by salaries paid for additional
staffing in sales and engineering as well as increased pay to administration for
$49,314.
Rent increased $18,000, 109%. This was the result of additional rent incurred to
lease a second warehouse facility and a one-time adjustment in the timing of the
accrual to rent owed for the headquarters facility.
Other Operating Expenses increased by $112,170, 60%. We attribute this primarily
to increased legal fees related to public compliance work, the hiring of
consultants for the marketing of nutritional supplements and travel abroad to
expand international business.
Liquidity and Capital Resources.
- --------------------------------
Balance Sheet as of June 30, 1998 compared to December 31, 1997
- ----------------------------------------------------------------
Cash decreased $412,757. We attribute this, after increased cash from earnings,
to increased inventory to support launch of a nutritional supplements line.
Inventory increased $740,541. We attribute this to increased inventory to
support launch of a nutritional supplements line and to significant returns of
cough and cold products from a new customer.
Retained earnings increased $482,014. We attribute this to increased revenue
from operations.
12
<PAGE>
Trends
- ------
OraLabs' third and fourth quarters are expected to show continued growth with
the addition of nutritional supplement sales and the company's new relationship
with the 3,500 store General Nutrition Centers, as announced in a press release
on August 4, 1998. The Company has chosen to pursue a nutritional supplement
business in place of initiating a line of spray vitamins, VitaSpray(TM), which
the company determined to be inappropriate at this time. OraLabs purchased
inventory and incurred other operating expenses in the second quarter to
initiate its line of nutritional supplements.
OraLabs' core business of breath fresheners and lip balms remains strong as the
company heads into the second half of 1998. Ice Drops(R) sour drops have proven
to be a successful product launch through the test marketing stage. Based on
this success, the company plans to expand market penetration. The company's lip
balms business continues to expand with the addition of a new major customer,
Kmart, which has added three different OraLabs' products to its stores. Also,
additional lip balm sales are being generated through a number of new private
label customers.
The Company has been broadening its product base by capitalizing on management's
research and development abilities, while utilizing existing packaging
components and manufacturing technology of the Company. This broadened product
base has given the Company more stability in the market place by making the
Company less reliant on any individual product. The broadened product base has
expanded the Company's customer base and helped to increase business with
existing customers. In addition to a broadened product base, the Company has
established new markets for its products, such as mass retailers and drugstores,
rather than being primarily focused on convenience stores. The Company expects
this trend to continue, although sales to convenience stores remain an important
part of the Company's sales strategy. The expenses have preceded our anticipated
growth. We expect our operating expenses to have little change during our new
level of anticipated sales over the next six months.
Impact of Inflation
- -------------------
The Company's financial condition has not been affected by the modest
inflation of the recent past. The Company's revenues have not been materially
effected by inflation in part because the Company's products have been primarily
very low cost, impulse items (under $0.99 cents to consumers). To the extent
that the Company's product line consists of higher priced items, the Company
does not know how inflation will affect revenues, although the Company believes
that sales of its higher priced products, to the extent such products are
considered to be nutritional, or symptom oriented products, will not be
materially affected by inflation. Inflation could increase operational cost of
the company to an extent determined by such levels of inflation.
13
<PAGE>
PART II - OTHER INFORMATION
Item No. 1. Legal Proceedings. None.
-----------------
Item No. 2. Changes in Securities. None.
---------------------
Item No. 3. Defaults Upon Senior Securities. None.
-------------------------------
Item No. 4. Submission of Matters to a Vote of Security Holders. On May
29, 1998, the annual meeting of stockholders of the Company
was held at the Company's headquarters in Englewood,
Colorado. The matters voted upon at the meeting were the
election of directors and the ratification of the
appointment of the Company's auditors. With respect to the
election of directors, all four of the incumbent directors
were re-elected by a vote of 8,104,407 shares in favor, no
votes against and 160 abstentions. There were no broker
nonvotes. With respect to the ratification of the selection
of the Company's auditors for fiscal year ending December
31, 1998, there were 8,104,246 votes in favor, 110 against
and 211 abstentions. There were no broker nonvotes.
Item No. 5. Other Information. None.
------------------
Item No. 6. Exhibits and Reports on Form 8-K.
---------------------------------
(a)
(27) Financial Data Schedule
(b) There were no reports on Form 8-K filed during the quarter reported upon in
this report.
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.
ORALABS HOLDING CORP.
By: /s/ Gary Schlatter
------------------------------------
Gary Schlatter, President
By: /s/ Emile Jordan
------------------------------------
Emile Jordan, Chief Financial Officer
DATED: August 14, 1998
14
<PAGE>
EXHIBIT INDEX
(27) Financial Data Schedule (filed herewith)
15
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF ORALABS HOLDING CORP. AND CONSOLIDATED SUBSIDIARIES
(JUNE 30, 1998) AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<CASH> 610,841
<SECURITIES> 0
<RECEIVABLES> 668,748
<ALLOWANCES> 13,273
<INVENTORY> 1,339,811
<CURRENT-ASSETS> 2,752,773
<PP&E> 492,784
<DEPRECIATION> 202,654
<TOTAL-ASSETS> 3,042,903
<CURRENT-LIABILITIES> 553,393
<BONDS> 0
0
0
<COMMON> 9,124
<OTHER-SE> 2,480,386
<TOTAL-LIABILITY-AND-EQUITY> 3,042,903
<SALES> 3,586,962
<TOTAL-REVENUES> 3,610,740
<CGS> 1,745,352
<TOTAL-COSTS> 1,745,352
<OTHER-EXPENSES> 1,135,020
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 730,368
<INCOME-TAX> 248,354
<INCOME-CONTINUING> 482,014
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 482,014
<EPS-PRIMARY> .05
<EPS-DILUTED> .05
</TABLE>
