___________________________________________________________________________
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 QUARTER ENDED JUNE 30, 1995
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 1-9800
INCSTAR CORPORATION
(Exact name of Registrant as specified in its charter)
Minnesota 41-1254731
(State or other jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
1990 Industrial Boulevard
Stillwater, Minnesota 55082
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (612) 439-9710
N/A
Former name, former address and former fiscal year,
if changed since last report.
Indicate by check mark whether the Registrant (1) has filed 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 number of shares of the Registrant's Common Stock (par value $.01)
outstanding on August 10, 1995 was 16,363,059.
<PAGE>
___________________________________________________________________________
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
INCSTAR CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Quarter Ended Six Months Ended
June 30, July 1, June 30, July 1,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Net sales $ 11,041,000 $ 11,188,000 $ 22,158,000 $ 21,845,000
Cost of goods sold 5,722,000 5,754,000 11,710,000 11,375,000
Gross profit 5,319,000 5,434,000 10,448,000 10,470,000
Operating expenses:
Selling, general and 3,155,000 3,154,000 6,115,000 6,254,000
administrative
Research and development 875,000 1,258,000 1,788,000 2,963,000
Unusual items -- 3,300,000 -- 3,300,000
Total operating expenses 4,030,000 7,712,000 7,903,000 12,517,000
Operating income (loss) 1,289,000 (2,278,000) 2,545,000 (2,047,000)
Interest expense (53,000) (104,000) (141,000) (203,000)
Other income 17,000 -- 12,000 3,000
INCOME (LOSS) BEFORE 1,253,000 (2,382,000) 2,416,000 (2,247,000)
INCOME TAXES
Provision for income 426,000 61,000 790,000 92,000
taxes
NET INCOME (LOSS) $ 827,000 $ (2,443,000) $ 1,626,000 $ (2,339,000)
INCOME (LOSS) PER SHARE:
Net income (loss) per $ 0.05 $ (0.15) $ 0.10 $ (0.14)
share
Weighted average shares 16,447,448 16,322,081 16,413,688 16,370,666
and equivalents
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
<PAGE>
INCSTAR CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
June 30, December 31,
1995 1994
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 6,000 $ 153,000
Restricted cash 251,000 251,000
Accounts receivable, net of allowance for
doubtful accounts of $106,000 and 7,218,000 6,759,000
$113,000, respectively
Other receivables 4,000 119,000
Inventories 12,541,000 12,368,000
Other current assets 529,000 562,000
TOTAL CURRENT ASSETS 20,549,000 20,212,000
PROPERTY AND EQUIPMENT:
Land and land improvements 1,573,000 1,573,000
Buildings and improvements 13,169,000 13,103,000
Equipment and furniture 17,032,000 16,924,000
Construction in progress 4,000 114,000
31,778,000 31,714,000
Less allowance for depreciation and (17,420,000) (16,482,000)
amortization
14,358,000 15,232,000
INTANGIBLE ASSETS 1,391,000 1,744,000
OTHER ASSETS 971,000 966,000
$ 37,269,000 $ 38,154,000
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt $ 164,000 $ 278,000
Accounts payable and cash overdraft 2,116,000 2,262,000
Accrued compensation 1,390,000 1,418,000
Accrued expenses 1,972,000 2,286,000
Income taxes payable 254,000 95,000
TOTAL CURRENT LIABILITIES 5,896,000 6,339,000
LONG-TERM DEBT 2,015,000 4,143,000
OTHER NON-CURRENT LIABILITIES 3,591,000 3,783,000
SHAREHOLDERS' EQUITY:
Undesignated stock, authorized 5,000,000 - - - - - -
shares
Common stock, par value $.01, authorized
25,000,000 shares; issued and
outstanding 16,363,059 and 16,322,521 164,000 163,000
shares, respectively
Additional paid-in capital 17,937,000 17,676,000
Foreign currency translation adjustment (128,000) (118,000)
Retained earnings 7,794,000 6,168,000
TOTAL SHAREHOLDERS' EQUITY 25,767,000 23,889,000
$ 37,269,000 $ 38,154,000
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
<PAGE>
INCSTAR CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
June 30, July 1,
1995 1994
<S> <C> <C>
OPERATING ACTIVITIES:
Net income (loss) $ 1,626,000 $ (2,339,000)
Adjustments to reconcile net income (loss)
to net cash provided by operating
activities:
Depreciation and amortization 1,511,000 1,754,000
Provision (payment) for restructuring charge (331,000) 2,914,000
Provision for retirement plan 136,000 264,000
Changes in operating assets and liabilities:
Accounts receivable (459,000) (482,000)
Other receivables 115,000 26,000
Inventories (173,000) 250,000
Other current assets 36,000 (204,000)
Accounts payable 259,000 (437,000)
Accrued compensation (28,000) (121,000)
Accrued expenses (314,000) 49,000
Income tax payable 362,000 (109,000)
Other, net (10,000) 24,000
Net cash provided by operating activities 2,730,000 1,589,000
INVESTING ACTIVITIES:
Payments for distribution rights --- (411,000)
Additions to property and equipment, net (271,000) (472,000)
Increase in intangibles (9,000) ---
Increase in other assets (9,000) (124,000)
Net cash used in investing activities (289,000) (1,007,000)
FINANCING ACTIVITIES:
Net borrowings under lines of credit --- 805,000
Net decrease in cash overdraft (405,000) (487,000)
Payments on long-term debt (2,242,000) (1,239,000)
Issuance of common stock to employees 59,000 119,000
Net cash used in financing activities (2,588,000) (802,000)
Net decrease in cash and cash equivalents (147,000) (220,000)
Cash and cash equivalents at beginning of 153,000 225,000
period
Cash and cash equivalents at end of period $ 6,000 $ 5,000
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
<PAGE>
INCSTAR CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 _ SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The consolidated balance sheet as of June 30, 1995 and the related
consolidated statements of income and cash flows for the six month periods
ended June 30, 1995 and July 1, 1994 are unaudited. In the opinion of
management, all adjustments necessary for a fair presentation of such
financial statements have been included. Such adjustments consisted only
of normal recurring items. Certain amounts for periods prior to the six
month period ended June 30, 1995 have been reclassified to conform with the
current classifications. The consolidated financial statements and notes
should be read in conjunction with the consolidated financial statements
and notes included in the Company's 1994 Form 10K.
NOTE 2 _ INVENTORIES
Inventories consist of the following:
<TABLE>
<CAPTION>
June 30, December 31,
1995 1994
<S> <C> <C>
Raw materials $ 2,547,000 $ 2,242,000
Work in progress 8,809,000 8,521,000
Finished goods 1,185,000 1,605,000
$ 12,541,000 $ 12,368,000
</TABLE>
NOTE 3 _ INTANGIBLE ASSETS
Intangible assets consist of the following:
<TABLE>
<CAPTION>
June 30, December 31,
1995 1994
<S> <C> <C>
Patents $ 717,000 $ 717,000
Trademarks 17,000 17,000
Goodwill 619,000 619,000
Intellectual property and purchased 657,000 648,000
technology
Product distribution rights 2,700,000 2,700,000
4,710,000 4,701,000
Less accumulated amortization (3,319,000) (2,957,000)
$ 1,391,000 $ 1,744,000
</TABLE>
<PAGE>
NOTE 4 _ UNUSUAL ITEMS
In the fourth quarter of 1994, the Company recorded a $750,000 charge
related to the write down of excess inventories and a $2,450,000 unusual
charge related to the termination of certain distribution and supply
agreements ($540,000) as well as severance and other costs related to
senior management changes ($1,910,000). Amounts remaining to be paid,
pursuant to this charge, exclusive of amounts included in Note 6, Executive
Retirement Plan, are included in the following balance sheet
classifications:
<TABLE>
<CAPTION>
June 30, December 31,
1995 1994
<S> <C> <C>
Accrued expenses $ 167,000 $ 613,000
Other non-current liabilities 468,000 798,000
</TABLE>
The non-current portion due at June 30, 1995 is expected to be paid in 1996
($180,000) and 1997 ($288,000).
In the second quarter of 1994, the Company discontinued its
fluorescence polarization immunoassay instrument development program
("FPIA") and incurred a one-time pre-tax charge of $3,300,000. The
majority of this charge related to the write off of tangible and intangible
assets ($1,560,000), costs incurred to terminate contracts with outside
vendors and consultants ($797,000), as well as severance and related costs
for terminated employees ($943,000). Amounts remaining to be paid at June
30, 1995 and December 31, 1994 pursuant to this charge, exclusive of
amounts included in Note 6, Executive Retirement Plan, are $190,000 and
$298,000, respectively, and are included in Accrued expenses.
NOTE 5 _ LONG-TERM DEBT, LEASE AND ROYALTY COMMITMENTS
Long-term debt consists of the following:
<TABLE>
<CAPTION>
June 30, December 31,
1995 1994
<S> <C> <C>
Revolving line of credit from bank, interest at
prime plus .25% $ --- $ ---
Revolving line of credit from affiliate, interest
at LIBOR plus 100 basis points --- ---
Long-term note from affiliate due December 1996,
interest at LIBOR plus 125 basis points 2,000,000 4,020,000
Capitalized lease obligations, interest at 5.7% to
8.0%, due through 1996 168,000 390,000
Other 11,000 11,000
2,179,000 4,421,000
Less current portion (164,000) (278,000)
Total long-term debt $2,015,000 $4,143,000
</TABLE>
<PAGE>
The Company is obligated to make royalty payments under several
distribution and licensing agreements. The majority of these agreements
call for payments based on a percentage of sales and contain no minimum
royalty clause. Royalty expense under these agreements was $368,000 and
$291,000 for the quarters ended June 30, 1995 and July 1, 1994,
respectively, and $677,000 and $627,000 for the six month periods ended
June 30, 1995 and July 1, 1994, respectively.
NOTE 6 _ EXECUTIVE RETIREMENT PLAN
The Company has individual retirement agreements with certain
executive officers which are intended to provide continued compensation to
such officers or their respective beneficiaries upon retirement from the
Company. The benefits and terms under these arrangements vary depending
upon the officer's position within the Company. In connection with this
plan, included in Other non-current liabilities at June 30, 1995 and
December 31, 1994 is $3,031,000 and $2,895,000, respectively, representing
the present value of the future liability. The Company intends to fund
this obligation through the purchase of life insurance contracts on the
individual executives. Included in Other assets at June 30, 1995 and
December 31, 1994 is $911,000 and $905,000, respectively, representing the
cash surrender value of these policies.
NOTE 7 _ INCOME TAXES
Upon the exercise of certain officer stock options during the year
ended December 31, 1990, the Company was entitled to a compensation
deduction allowable for income tax purposes. No compensation expense was
required for financial reporting purposes because the option price on the
original grant date equaled the then fair market value of the shares. Upon
realization of the benefit relating to the compensation deduction for tax
purposes, the benefit is credited to additional paid in capital. The
Company recognized a credit of $110,000 and $203,000 to Additional paid in
capital relating to these stock options for the quarter and the six month
period ended June 30, 1995, respectively.
<PAGE>
NOTE 8 _ RELATED PARTY TRANSACTIONS
As part of the ongoing operations of the Company, various transactions
were entered into with its affiliates, Sorin Biomedica S.p.A. ("Sorin") and
its subsidiaries and Fiat Finance U.S.A., Inc. The following tables
summarize these transactions and related balances.
<TABLE>
<CAPTION>
Sorin Fiat Finance U.S.A., Inc.
Six Months Ended Six Months Ended
June 30, 1995 July 1,1994 June 30, 1995 July 1,1994
<S> <C> <C> <C> <C>
Product sales $ 3,822,000 $ 3,524,000 $ - - - $ - - -
Product purchases 424,000 662,000 - - - - - -
Royalty expense 83,000 96,000 - - - - - -
Interest expense - - - - - - 128,000 174,000
</TABLE>
<TABLE>
<CAPTION>
June 30, December 31, June 30, December 31,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Assets
Trade accounts $ 1,695,000 $ 1,743,000 $ - - - $ - - -
receivable
Other receivables 6,000 5,000 - - - - - -
Liabilities
Accounts payable $ 325,000 $ 389,000 $ - - - $ - - -
Accrued royalty 35,000 47,000 - - - - - -
Accrued interest - - - - - - 90,000 3,500
Long-term debt - - - - - - 2,000,000 4,020,000
</TABLE>
NOTE 9 _ SUPPLEMENTARY CASH FLOW INFORMATION
<TABLE>
<CAPTION>
Six Months Ended
June 30, 1995 July 1, 1994
Supplemental disclosures of cash flow
information:
<S> <C> <C>
Cash paid during the period for:
Interest $ 54,000 $ 56,000
Income taxes, net 428,000 201,000
Schedule of non-cash investing and financing
activities:
Deferred payable for product distribution --- 250,000
rights
</TABLE>
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Quarter ended June 30, 1995 vs. quarter ended July 1, 1994
Sales for the quarter ended June 30, 1995 decreased 1% to $11,041,000
from $11,188,000 for the same period a year earlier. Sales continue to
be negatively impacted in the Company's endocrinology and thyroid market
segments, resulting from a shift in this market from radioimmunoassay
testing, which predominates the Company's product offerings, toward non-
isotopic automated testing such as enzyme immunoassays. This decline has
been offset by increases in the Company's autoimmunity and infectious
disease market segments. In the autoimmunity market segment, the Company
completed the technological transfer of the TheraTestTM production line to
its Stillwater facility during the second quarter of this year, which
favorably impacted sales in the second quarter. The Company acquired this
Food and Drug Administration ("FDA")-cleared ELISA-based panel of
autoimmune diagnostic assays in May, 1994 from TheraTest Laboratories, Inc.
of Chicago. In the infectious disease market segment, the international
launch of the second generation tests for the Epstein Barr Virus ("EBV"),
which took place in late 1994, continues to favorably impact sales. In
June of this year, the Company received market clearance from the FDA for
these EBV tests. Sales of these assays will commence in the U.S. during
the third quarter of 1995 and are expected to contribute positively to the
Company's infectious disease product results in the second half of this
year. Domestic sales of $5,660,000 were relatively flat as compared with
the quarter ended July 1, 1994 and international sales decreased 3% to
$5,381,000.
Gross margins for the second quarter of 1995 were 48.1% of sales
compared to 48.5% of sales for the same period in the prior year. Gross
margins improved from 46.1%, however, from the first quarter of 1995.
Lower margins in the first quarter of 1995 were attributed to lower
production volumes in the latter part of 1994, contributing to higher unit
costs.
Selling, general and administrative ("SG&A") expenses remained flat at
$3,155,000, or 28.5% of sales, compared with $3,154,000, or 28.1% of sales,
in the second quarter of 1994.
Research and development expenditures decreased 30% to $875,000 in the
second quarter of 1995 from $1,258,000 for the same period in the prior
year and decreased as a percentage of sales to 8% compared to 11% in the
prior year. This decrease is mainly attributable to the discontinuation of
the FPIA technology in 1994 as discussed in Note 4 above. The Company
intends to maintain research and development expenditures at levels
consistent with historical spending, exclusive of FPIA.
Interest expense decreased to $53,000 compared to $104,000 for the
same period in the prior year. This decrease is attributable to lower
average debt levels.
Income tax expense for the quarter was $426,000, or 34% of income
before taxes compared with income tax expense of $61,000 in the second
quarter of 1994. The prior year tax relates primarily to large book over
tax deductions for various book reserves and depreciation.
Six months ended June 30, 1995 vs. six months ended July 1, 1994
Sales for the six months ended June 30, 1995 increased 1% to
$22,158,000 from $21,845,000 for the same period a year earlier. This
increase can be attributed mainly to increases in the Company's
<PAGE>
autoimmunity, infectious disease and bone & mineral market segments, which
were essentially offset by declines in the Company's endocrinology and
thyroid product offerings, discussed above. In the autoimmunity market
segment the TheraTestTM product line, discussed above, contributed to this
increase in sales. In addition, international sales have been favorably
impacted by the Company's TRAb product, which is a test used in detecting
Graves' disease. The Company's infectious disease product line is being
favorably impacted by sales of second generation tests for Epstein Barr
Virus in the international market. Domestic sales increased 1% to
$11,227,000, and international sales increased 2% to $10,931,000.
Gross margins decreased to 47.1% for the six month period ending June
30, 1995 compared to 47.9% for the same period in the prior year. This
decline is primarily due to lower production volumes during the latter part
of 1994, contributing to higher unit costs. The Company anticipates gross
margins to improve during the remainder of 1995 due to changes in product
mix and operating efficiencies resulting from internal organizational
changes.
SG&A expenses decreased to $6,115,000, or 27.5% of sales, in the sixth
months ended June 30, 1995 from $6,254,000, or 28.6% of sales, for the same
period in the prior year. This decline is attributable to cost saving
measures taken by the Company. The Company anticipates SG&A expenses to
increase slightly during the remainder of 1995 due to advertising and other
costs related to new product introductions.
Research and development expenditures decreased 39.6% to $1,788,000,
or 8.2% of sales, in the six months ended June 30, 1995 from $2,963,000, or
13.5% of sales, for the same period in the prior year. This decrease is
mainly due to the cancellation of the FPIA program in 1994 as discussed in
Note 4 above. The Company intends to maintain research and development
expenditures at levels consistent with historical spending, exclusive of
FPIA. In the first quarter of 1995, the Company entered into an agreement
with Fujisawa Pharmaceutical Co. Ltd. of Osaka, Japan to complete the
development of a Phase II FK506 ELISA-based diagnostic kit. Upon
completing development, the Company will manufacture, sell and distribute
the FK506 diagnostic kit on a worldwide basis.
Interest expense decreased to $141,000 compared to $203,000 for the
same period in the prior year. This decrease is attributable to lower
average debt levels.
Income (loss) before income taxes was $2,416,000 for the six month
period ending June 30, 1995 compared to $(2,247,000) for the six month
period ending July 1, 1994. The first six months of 1994 were impacted by
a restructuring charge of $3.3 million for the discontinuance of the FPIA
project, discussed in Note 4 above. Without consideration of this charge,
income before taxes increased 129% over the prior year.
Income tax expense for the six months ending June 30, 1995 was
$790,000, or 33% of income before taxes compared with income tax expense of
$92,000 for the same period in the prior year. The prior year tax related
primarily to temporary differences which were added back to the book loss
and resulted in taxable income. These temporary differences resulted from
large book reserves which were not deductible and certain fixed assets
depreciated over a longer life for tax purposes. The Company anticipates
this effective rate to increase slightly for the remainder of 1995.
Liquidity and Capital Resources
The Company's operating cash flow increased in the first six months of
1995 to $2,730,000 from $1,589,000 for the same period in the prior year.
Free cash flow (operating cash flow less investment activities) increased
to $2,441,000 in the first six months from $582,000 in the comparable
period of the prior year. This increase is primarily due to increased
operating income in the first six months of 1995 and the cancellation of
<PAGE>
the FPIA program as discussed above. The Company utilized this cash to
reduce its outstanding debt by $2.2 million in the six month period ending
June 30, 1995. Net working capital increased in this year's first six
months to $14,653,000 at June 30, 1995 from $13,873,000 at December 31,
1994.
At June 30, 1995, the Company's primary sources of liquidity were a $1
million revolving bank credit line secured by Company assets and a $4.5
million unsecured credit line with Fiat Finance U.S.A., Inc. At June 30,
1995, the Company had no outstanding borrowings under these credit lines.
The Company believes that its operating cash flow and existing credit lines
will provide ample sources of liquidity for all planned capital
expenditures and research and development activities. Capital spending for
the remainder of 1995 is anticipated to be approximately $700,000.
<PAGE>
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company held its Annual Meeting of Shareholders on May 9, 1995 and
solicited proxies for the purpose of electing ten directors for the ensuing
year.
The votes with respect to the election of directors were:
<TABLE>
<CAPTION>
For Withheld
<S> <C> <C>
Pierre M. Galletti 13,159,865 101,090
John J. Booth 13,168,431 92,524
Ennio Denti 13,167,120 93,835
George H. Dixon 13,168,195 92,760
Franco Fornasari 13,159,631 101,324
Ezio Garibaldi 13,159,356 101,599
D. Ross Hamilton 13,168,431 92,524
Umberto Rosa 13,159,774 101,181
Michael W. Steffes 13,168,431 92,524
Carlo Vanoli 13,158,186 102,769
</TABLE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit 11 - Computation of Net Income (Loss) per Common Share
(b) Reports on Form 8-K - There were no reports on Form 8-K filed during
the quarter ended June 30, 1995.
<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.
INCSTAR CORPORATION
(Registrant)
Date: 8/10/95
/s/John J. Booth
President (Principal Executive Officer)
Date: 8/10/95
/s/Thomas P. Maun
Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)
EXHIBIT 11
COMPUTATION OF NET INCOME (LOSS) PER COMMON SHARE
INCSTAR CORPORATION AND SUBSIDIARIES
<TABLE>
<CAPTION>
Quarter Ended Six Months Ended
June 30, July 1, June 30, July 1,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
PRIMARY EARNINGS PER
COMMON SHARE:
Average shares 16,363,059 16,322,081 16,362,772 16,322,081
outstanding
Dilutive stock options and
warrants - based on the
treasury stock method 84,388 --- 50,916 48,585
16,447,448 16,322,081 16,413,688 16,370,666
Net income (loss) $ 827,000 $ (2,443,000) $ 1,626,000 $ (2,339,000)
Net income (loss) per $ 0.05 $ (0.15) $ 0.10 $ (0.14)
share
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET FOR THE PERIOD ENDED JUNE 30, 1995 AND THE
RELATED STATEMENTS OF INCOME, CASH FLOWS AND RETAINED EARNINGS FOR THE PERIOD
ENDED JUNE 30, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 257,000
<SECURITIES> 0
<RECEIVABLES> 7,324,000
<ALLOWANCES> 106,000
<INVENTORY> 12,541,000
<CURRENT-ASSETS> 20,549,000
<PP&E> 31,778,000
<DEPRECIATION> 17,420,000
<TOTAL-ASSETS> 37,269,000
<CURRENT-LIABILITIES> 5,896,000
<BONDS> 0
<COMMON> 164,000
0
0
<OTHER-SE> 25,603,000
<TOTAL-LIABILITY-AND-EQUITY> 37,269,000
<SALES> 22,158,000
<TOTAL-REVENUES> 22,158,000
<CGS> 11,710,000
<TOTAL-COSTS> 11,710,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 5,000
<INTEREST-EXPENSE> 141,000
<INCOME-PRETAX> 2,416,000
<INCOME-TAX> 790,000
<INCOME-CONTINUING> 1,626,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,626,000
<EPS-PRIMARY> 0.10
<EPS-DILUTED> 0.10
</TABLE>
