- --------------------------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended JUNE 30, 1998
------------------------------------------
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number: 0-10355
COMMUNICATIONS SYSTEMS, INC.
................................................................................
(Exact name of registrant as specified in its charter)
MINNESOTA 41-0957999
................................................................................
(State or other jurisdiction of (Federal Employer
incorporation or organization) Identification No.)
213 South Main Street, Hector, MN 55342
................................................................................
(Address of principal executive offices) (Zip Code)
(320) 848-6231
................................................................................
Registrant's telephone number, including area code
................................................................................
(Former name, address, and fiscal year, if changed since last report)
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
--- ---
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13, or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. YES ___ NO ___
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
CLASS Outstanding at August 7, 1998
Common Stock, par value 9,080,321
$.05 per share
Total Pages (11) Exhibit Index at (NO EXHIBITS)
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<PAGE>
COMMUNICATIONS SYSTEMS, INC. AND SUBSIDIARIES
INDEX
Page No.
Part I. Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets 3
Consolidated Statements of Income 4
Consolidated Statements of Stockholders' Equity 5
Consolidated Statements of Cash Flows 6
Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8
Part II. Other Information 11
2
<PAGE>
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION
COMMUNICATIONS SYSTEMS, INC. AND SUBSIDIARIES
Item 1. Financial Statements
CONSOLIDATED BALANCE SHEETS
(unaudited)
June 30 December 31
Assets: 1998 1997
------------ ------------
Current assets:
<S> <C> <C>
Cash $ 19,680,673 $ 17,942,315
Investments in U.S. Treasury securities 5,249,314
Marketable securities 23,850 802,045
Receivables, net 12,398,119 12,571,511
Inventories - Note 2 20,491,809 18,438,531
Prepaid expenses 217,359 684,221
Deferred income taxes 1,080,000 1,080,000
------------ ------------
Total current assets 53,891,810 56,767,937
Property, plant and equipment 28,780,692 26,682,575
less accumulated depreciation (18,126,829) (17,007,714)
------------ ------------
Net property, plant and equipment 10,653,863 9,674,861
Other assets:
Excess of cost over net assets acquired 2,699,132 2,881,544
Investments in mortgage backed and other securities 2,531,401 3,356,568
Deferred income taxes 114,047 114,047
Notes receivable from sale of assets of
discontinued operations 4,357,767 4,557,767
Other assets 647,199 165,204
------------ ------------
Total other assets 10,349,546 11,075,130
------------ ------------
Total Assets $ 74,895,219 $ 77,517,928
============ ============
Liabilities and Stockholders' Equity:
Current liabilities:
Accounts payable $ 3,041,895 $ 2,770,628
Accrued expenses 3,966,655 3,030,736
Dividends payable 913,463 839,399
Income taxes payable 1,723,459 1,613,469
------------ ------------
Total current liabilities 9,645,472 8,254,232
Stockholders' Equity 65,249,747 69,263,696
------------ ------------
Total Liabilities and Stockholders' Equity $ 74,895,219 $ 77,517,928
============ ============
See notes to consolidated financial statements.
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
COMMUNICATIONS SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
Three Months Ended June 30 Six Months Ended June 30
------------------------------ ------------------------------
1998 1997 1998 1997
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Sales $ 16,969,774 $ 20,181,244 $ 34,455,837 $ 36,997,263
Costs and expenses:
Cost of sales 11,619,503 13,834,378 23,861,597 25,659,409
Selling, general and
administrative expenses 2,635,334 2,987,631 5,593,711 5,611,137
------------ ------------ ------------ ------------
Total costs and expenses 14,254,837 16,822,009 29,455,308 31,270,546
------------ ------------ ------------ ------------
Operating income 2,714,937 3,359,235 5,000,529 5,726,717
Other income and (expenses):
Investment income 328,342 399,159 788,234 775,246
Interest expense (1,264) (2,525)
------------ ------------ ------------ ------------
Other income, net 327,078 399,159 785,709 775,246
Income before income taxes 3,042,015 3,758,394 5,786,238 6,501,963
Income taxes (Note 3) 600,000 875,000 1,150,000 1,450,000
------------ ------------ ------------ ------------
Net income $ 2,442,015 $ 2,883,394 $ 4,636,238 $ 5,051,963
============ ============ ============ ============
Basic net income per share $ .27 $ .31 $ .50 $ .55
============ ============ ============ ============
Diluted net income per share $ .27 $ .31 $ .50 $ .55
============ ============ ============ ============
Average shares outstanding:
Weighted average number of common
shares outstanding 9,111,450 9,201,213 9,215,611 9,173,291
Dilutive effect of stock options
outstanding after application of
treasury stock method 103,482 58,015 98,411 60,290
------------ ------------ ------------ ------------
9,214,932 9,259,228 9,314,022 9,233,581
============ ============ ============ ============
See notes to consolidated financial
statements.
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
COMMUNICATIONS SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(unaudited)
Common Stock Additional Cumulative Stock Option
-------------------- Paid in Retained Translation Notes
Shares Amount Capital Earnings Adjustment Receivable Total
--------- --------- ------------ ------------ ----------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE at December 31, 1996 9,107,309 $ 455,365 $ 21,454,353 $ 36,856,285 $ 249,475 $ - $ 59,015,478
Net income 10,936,873 10,936,873
Shareholder dividends (3,240,303) (3,240,303)
Issuance of common stock under
Employee Stock Purchase Plan 16,622 831 182,843 183,674
Issuance of common stock to
Employee Stock Ownership Plan 20,870 1,044 298,956 300,000
Issuance of common stock under
Employee Stock Option Plan 181,851 9,093 2,045,715 2,054,808
Tax benefit from non qualified
employee stock options 150,904 150,904
Cumulative translation adjustment (137,738) (137,738)
--------- --------- ------------ ------------ ----------- ------------- --------------
BALANCE at December 31, 1997 9,326,652 466,333 24,132,771 44,552,855 111,737 - 69,263,696
Net income 4,636,238 4,636,238
Shareholder dividends (1,750,882) (1,750,882)
Issuance of common stock under
Employee Stock Option Plan 82,834 4,141 910,953 915,094
Issuance of notes receivable
for stock options (288,225) (288,225)
Purchase of Communications
Systems, Inc. common stock (444,300) (22,015) (1,169,301) (6,405,933) (7,597,249)
Cumulative translation adjustment 71,075 71,075
--------- --------- ------------ ------------ ----------- ------------- --------------
BALANCE at June 30, 1998 8,969,186 $ 448,459 $ 23,874,423 $ 41,032,278 $ 182,812 $ (288,225) $ 65,249,747
========= ========= ============ ============ =========== ============= ==============
</TABLE>
See notes to consolidated financial statements.
5
<PAGE>
<TABLE>
<CAPTION>
COMMUNICATIONS SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
Six Months Ended June 30
------------------------------
1998 1997
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net income $ 4,636,238 $ 5,051,963
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation and amortization 1,355,908 1,246,477
Adjustment to marketable securities reserve (41,871) (24,684)
Changes in assets and liabilities:
Decrease in marketable securities 820,066 128,141
Decrease (increase) in accounts receivable 192,239 (1,250,215)
Increase in inventory (2,030,678) (2,236,126)
Decrease in prepaid expenses 467,670 184,692
Increase in deferred income taxes (606) (269,643)
Increase in accounts payable 253,009 431,064
Increase in accrued expenses 933,581 594,946
Increase in income taxes payable 107,093 426,952
------------ ------------
Net cash provided by operating activities 6,692,649 4,283,567
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (2,131,338) (1,601,178)
Decrease in mortgage backed and other investment securities 825,167 582,566
Increase in other assets (481,478) (458,039)
Changes in assets and liabilities of discontinued operations 536,679
Collection of notes receivable 200,000 201,207
Proceeds from maturities of U.S. Treasury securities 5,249,314
Payment for purchase of Austin Taylor Communications, Ltd. (79,947)
------------ ------------
Net cash provided by (used in) investing activities 3,661,665 (818,712)
CASH FLOWS FROM FINANCING ACTIVITIES:
Dividends paid (1,676,818) (1,463,882)
Proceeds from issuance of common stock 626,869 969,309
Purchases of Communications Systems, Inc. common stock (7,597,249)
------------ ------------
Net cash used in financing activities (8,647,198) (494,573)
------------ ------------
EFFECT OF FOREIGN EXCHANGE RATE CHANGES ON CASH 31,242 (54,002)
------------ ------------
NET INCREASE IN CASH AND CASH EQUIVALENTS 1,738,358 2,916,280
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 17,942,315 17,799,398
------------ ------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 19,680,673 $ 20,715,678
============ ============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Income taxes paid $ 1,040,010 $ 1,010,076
Interest paid 2,525 -
See notes to consolidated financial
statements.
</TABLE>
6
<PAGE>
COMMUNICATIONS SYSTEMS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - CONSOLIDATED FINANCIAL STATEMENTS
The balance sheet and statement of stockholders' equity as of June 30, 1998, and
the statements of income for the three and six month periods ended June 30, 1998
and 1997, and the statements of cash flows for the six month periods ended June
30, 1998 and 1997, have been prepared by the Company 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 1997 have been made.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted. It is suggested these condensed financial
statements be read in conjunction with the financial statements and notes
thereto included in the Company's December 31, 1997 Annual Report to
Shareholders. The results of operations for the periods ended June 30 are not
necessarily indicative of the operating results for the entire year.
Effective January 1, 1998, the Company has adopted the provisions of Financial
Accounting Standards Board Statement No. 130, "Reporting Comprehensive Income"
(SFAS No. 130). This statement establishes standards for reporting and
presenting comprehensive income and its components in the financial statements.
The Company's total comprehensive income for the three-month periods ended June
30, 1998 and 1997 was $2,429,830 and $2,963,733, respectively. The Company's
total comprehensive income for the six-month periods ended June 30, 1998 and
1997 was $4,707,313 and $4,892,045, respectively.
In February, 1997 the Company issued 20,870 shares of the Company's common stock
to the Employee Stock Ownership Plan in payment of its 1996 obligation. In a
noncash transaction, the Company recorded additional stockholders' equity of
$300,000 (reflecting the market value of the stock at the time of the
contribution) and reduced accrued expenses by the same amount.
NOTE 2 - INVENTORIES
Inventories summarized below are priced at the lower of first-in, first-out cost
or market:
June 30 December 31
1998 1997
Finished Goods $ 7,220,175 $ 5,237,907
Raw Materials 13,271,634 13,200,624
------------- -------------
Total $ 20,491,809 $ 18,438,531
============= =============
NOTE 3 - INCOME TAXES
Income taxes are computed based upon the estimated effective rate applicable to
operating results for the full fiscal year. For the periods ended June 30, 1998
and 1997 income taxes do not bear a normal relationship to income before income
taxes, primarily because income from Puerto Rico operations are taxed at rates
lower than the U.S. rate.
7
<PAGE>
COMMUNICATIONS SYSTEMS, INC. AND SUBSIDIARIES
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Six Months Ended June 30, 1998 Compared to
Six Months Ended June 30, 1997
Sales totaled $34,456,000, a decrease of $2,541,000 or 7% from the 1997 period.
Operating income was $5,001,000, a decrease of $726,000 or 13% from 1997. Sales
to domestic (U.S. and Puerto Rico) customers decreased $1,875,000 or 7%. Sales
to the Big 6 telephone companies (the five Regional Bell Operating Companies and
GTE) decreased $2,722,000 or 14%. The decline in sales to this market was due to
purchase pattern adjustments caused by the merger of two RBOCs and inventory
overstocks at a third RBOC. Sales to this market accounted for 60% of domestic
sales in the 1998 period. Sales to electrical distributors and original
equipment manufacturers increased $776,000 or 12%. Sales in Puerto Rico
increased $309,000 or 37%. Sales to retailers decreased $349,000 or 13%.
The sales decreases were spread over all of the Company's product groups. Sales
of the Company's CorroShield line of corrosion resistant connectors, which has
lead the Company's sales growth, were 5% lower for 1998 than in the 1997 period.
CorroShield product sales totaled $10,450,000 in the 1998 period compared to
$10,998,000 in 1997. Sales of conventional voice products declined $207,000 or
2%. The Company believes the sales decline of these products is due to customers
converting to the CorroShield product. Sales of data products decreased
$1,019,000 or 27%. Sales of fiber optic connector products decreased $386,000 or
19%.
Sales to international customers decreased $666,000 or 8%. Sales by Austin
Taylor, the Company's United Kingdom based subsidiary, decreased $380,000 or 6%
due to lower sales of metal street cabinets and cable television ("CATV")
customer premise equipment to U.K. based customers. U.S. export sales, including
sales to Canada, decreased $286,000 or 26% due to lower sales of fiber products.
Gross margin as a percentage of sales was 31%, unchanged from the 1997 period.
Margin percentages in U.S. plants were 33% in each period. Margins earned on
Austin Taylor products improved to 20% from 19% in the 1997 period.
Selling, general and administrative expenses decreased $17,000 from the 1997
period. The decrease was due to timing changes in sales and marketing programs
as the Company refocused efforts to increase sales of the Company's data
products and develop export markets for telephone station apparatus products.
Investment income, net of interest expense, increased $10,000 from the 1997
period. The Company's effective income tax rate was 20% compared to 22% in the
1997 period. The Company's tax rate is lower than the full U.S. rate due to tax
exemptions and benefits received by the Company's Puerto Rico operations. Net
income decreased $416,000, or 8%.
8
<PAGE>
COMMUNICATIONS SYSTEMS, INC. AND SUBSIDIARIES
Three Months Ended June 30, 1998 Compared to
Three Months Ended June 30, 1997
Sales totaled $16,970,000, a decrease of $3,211,000 or 16% from the 1997 period.
Operating income was $2,715,000, a decrease of $644,000 or 19% from 1997. Sales
to domestic (U.S. and Puerto Rico) customers decreased $2,231,000 or 14%. Sales
to the Big 6 telephone companies decreased $2,111,000 or 20%. The decline in
sales to this market was due to purchase pattern adjustments caused by the
merger of two RBOCs and inventory overstocks at a third RBOC. Sales to this
market accounted for 59% of domestic sales in the 1998 period. Sales to
electrical distributors and original equipment manufacturers increased $324,000
or 9%. Sales in Puerto Rico increased $69,000 or 23%. Sales to retailers
decreased $334,000 or 27%.
The sales decreases were spread over all of the Company's product groups. Sales
of the Company's CorroShield line of corrosion resistant connectors, which has
lead the Company's sales growth, were 27% lower for 1998 than in the 1997
period. The Big 6 telephone companies have been the Company's principal markets
for CorroShield products. Sales of data products decreased $750,000 or 37%.
Sales of fiber optic connector products decreased $217,000 or 20%.
Sales to international customers decreased $980,000 or 21%. Sales by Austin
Taylor, the Company's United Kingdom based subsidiary, decreased $559,000 or 16%
due to lower sales of metal street cabinets and cable television ("CATV")
customer premise equipment to U.K. based customers. U.S. export sales, including
sales to Canada, decreased $421,000 or 39% due to lower sales of fiber products
and lower sales to Far East customers. The Company believes its sales in this
region are being hurt by the currency devaluations that have followed the
economic crisis in this area.
Gross margin as a percentage of sales was unchanged from the 1997 period. Margin
percentages in U.S. plants were 34% in each period. Margins earned on Austin
Taylor products were 19% in each period.
Selling, general and administrative expenses decreased $352,000, or 12%, from
the 1997 period. The decrease was due to changes in sales and marketing programs
as the Company refocused efforts to increase sales of the Company's data
products and develop export markets for telephone station apparatus products.
Investment income, net of interest expense, decreased $72,000 from the 1997
period. The Company's effective income tax rate was 20% compared to 23% in the
1997 period. The Company's tax rate is lower than the full U.S. rate due to tax
exemptions and benefits received by the Company's Puerto Rico operations. Net
income decreased $441,000, or 15%.
Liquidity and Capital Commitments
At June 30, 1998, the Company held approximately $19,681,000 of cash compared to
$17,942,000 at December 31, 1997. Working capital was $44,246,000 compared to
$48,514,000 at December 31, 1997. The Company's current ratio was 5.6 to 1
compared to 6.9 to 1 at December 31, 1997. In addition to its cash and working
capital balances, the Company also holds investments in long-term securities and
notes receivable totaling $6,889,000.
9
<PAGE>
COMMUNICATIONS SYSTEMS, INC. AND SUBSIDIARIES
Net cash provided by operating activities was $6,693,000 compared to $4,284,000
in the first six months of 1997. Cash was utilized during the period to finance
increased inventory levels, purchase new plant and equipment, pay dividends and
repurchase the Company's common stock.
The Company's Board of Directors has authorized the purchase and retirement of
up to 500,000 shares of the Company's common stock on the open market or in
privately negotiated transactions consistent with overall market and financial
conditions. At June 30, 1998, the Company had purchased and retired 440,300
shares of stock at a cost of $7,597,000. Subsequent to the end of the quarter,
the Board increased the repurchase authorization by an additional 500,000
shares. The Company received $627,000 and $969,000 from stock issuances due to
exercise of employee stock options in 1998 and 1997, respectively.
Under provisions of the Small Business Job Protection Act of 1996, the
possessions tax credit, which shelters the Company's Puerto Rico income from
U.S. income tax, was repealed for years after 1995. However, companies like CSI
which currently qualify for the credit, may continue to claim the credit until
2005, subject to certain limitations. As of July 1, 1996, the credit no longer
applied to investment income earned in Puerto Rico. The credit will continue to
apply to business income earned in Puerto Rico through 2001. For the years 2002
to 2005, the amount of Puerto Rico business income eligible for the credit will
be limited to an inflation-adjusted amount based on Puerto Rico business income
earned from 1990 to 1994. The possessions tax credit has a materially favorable
effect on the Company's income tax expense. Had the Company incurred income tax
expense on Puerto Rico operations in 1998 at the full U.S. rate, income tax
expense would have increased by approximately $1,200,000.
The Company's balance sheet remains strong, with stockholders' equity of
$65,250,000 and no long-term debt. The Company has available a $2,000,000 bank
line of credit. Management believes, based on the Company's current financial
position and projected future expenditures, that sufficient funds are available
to meet the Company's anticipated needs.
Year 2000 Issues
At the current time, none of the Company's products contain embedded controllers
or microprocessors. None of the products are date sensitive or subject to the
Year 2000 problem.
The Company has surveyed its manufacturing and accounting systems to identify
any internal Year 2000 problems. The Company's U.S. accounting and management
control systems are Year 2000 compliant. Austin Taylor's facilities are not
currently Year 2000 compliant, and will be upgraded in the third quarter of
1998. The Company has also been in contact with its major customers and
suppliers to ensure that Year 2000 issues do not cause any unforseen electronic
data interchange or other problems. The Company does not expect Year 2000 issues
to have a material effect on the Company's operations or financial results.
- --------------------------------------------------------------------------------
Statements regarding the Company's anticipated performance in future periods are
forward looking and involve risks and uncertainties, including but not limited
to: buying patterns of the Regional Bell Operating Companies and other
customers, competitive products, and other factors.
- --------------------------------------------------------------------------------
10
<PAGE>
PART II. OTHER INFORMATION
Items 1 - 3. Not Applicable
Item 4. Submission of Matters to a Vote of Securities Holders The Annual Meeting
of the Shareholders of the Registrant was held on May, 19, 1998 in Minneapolis,
MN. The total number of shares outstanding and entitled to vote at the meeting
was 9,274,852 of which 8,635,607 were present either in person or by proxy.
Shareholders reelected board members Curtis A. Sampson, Joseph W. Parris and
Gerald D. Pint to three year terms expiring at the 2001 Annual Meeting of
Shareholders. The vote for these board members is summarized below:
In Favor Abstaining
Curtis A. Sampson 8,195,629 439,978
Joseph W. Parris 8,195,909 439,698
Gerald D. Pint 8,195,129 440,478
Board members continuing in office are Edwin C. Freeman, Luella Gross Goldberg,
John C. Ortman and Edward E. Strickland (whose terms expire at the 1999 Annual
Meeting of Shareholders) and Paul J. Anderson, Wayne E. Sampson and Frederick M.
Green (whose terms expire at the 2000 Annual Meeting of Shareholders).
Shareholders also approved amendments to increase the shares authorized to be
issued under the Company's Employee Stock Purchase Plan by 100,000 shares to
300,000 shares; and to increase the number of shares authorized to be issued
under the Company's 1992 Stock Plan by 500,000 shares to 1,400,000 shares. The
vote on these amendments is summarized below:
In Favor Against Abstaining
Employee Stock Purchase Plan Amendment 7,602,977 116,159 916,471
1992 Stock Plan Amendment 6,274,249 1,444,750 916,608
Items 5 - 6. Not Applicable.
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 thereto duly authorized.
Communications Systems, Inc.
By /s/ Paul N. Hanson
Paul N. Hanson
Vice President and
Chief Financial Officer
Date: August 14, 1998
11
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000022701
<NAME> COMMUNICATIONS SYSTEMS, INC.
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<EXCHANGE-RATE> 1
<CASH> 19,680,673
<SECURITIES> 23,850
<RECEIVABLES> 13,242,119
<ALLOWANCES> 844,000
<INVENTORY> 20,491,809
<CURRENT-ASSETS> 53,891,810
<PP&E> 28,780,692
<DEPRECIATION> 18,126,829
<TOTAL-ASSETS> 74,895,219
<CURRENT-LIABILITIES> 9,645,472
<BONDS> 0
0
0
<COMMON> 448,459
<OTHER-SE> 64,801,288
<TOTAL-LIABILITY-AND-EQUITY> 74,895,219
<SALES> 34,455,837
<TOTAL-REVENUES> 34,455,837
<CGS> 23,861,597
<TOTAL-COSTS> 23,861,597
<OTHER-EXPENSES> 5,593,711
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,525
<INCOME-PRETAX> 5,786,238
<INCOME-TAX> 1,150,000
<INCOME-CONTINUING> 4,636,238
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,636,238
<EPS-PRIMARY> 0.50
<EPS-DILUTED> 0.50
</TABLE>
