<PAGE>
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 period ended March 31, 1997
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: 0-9247
AUTO-TROL TECHNOLOGY CORPORATION
(Exact name of registrant as specified in its charter)
Colorado 84-0515221
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
12500 North Washington Street, Denver, Colorado 80241-2400
(Address of principal executive offices)
(303) 452-4919
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. [X] Yes [_] No
Number of shares outstanding as of May 9, 1997: 9,314,347
<PAGE>
AUTO-TROL TECHNOLOGY CORPORATION
--------------------------------
REPORT TO SECURITIES AND EXCHANGE COMMISSION ON FORM 10-Q
---------------------------------------------------------
FOR THE SIX MONTHS ENDED MARCH 31, 1997
---------------------------------------
Page
Number
Part I. Financial Information
Item 1. Financial Statements
Consolidated Statements of Operations (unaudited) three
and six months ended March 31, 1997 and 1996 1
Consolidated Balance Sheets (unaudited) March 31, 1997
and September 30, 1996 2
Consolidated Statements of Cash Flow (unaudited) six
months ended March 31, 1997 and 1996 3
Notes to Consolidated Statements 4
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 5-8
Part II. Other Information, Item 5 and Item 6(b) Reports on
Form 8-k 9
Signatures 10
<PAGE>
AUTO-TROL TECHNOLOGY CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands except per share amounts)
(unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
MARCH 31, MARCH 31,
1997 1996 1997 1996
------------------ -----------------
<S> <C> <C> <C> <C>
Revenues:
Sales...................................... $ 1,703 $ 2,111 $ 3,915 $ 4,206
Service.................................... 2,777 2,987 6,070 6,085
------------------ -----------------
$ 4,480 $ 5,098 $ 9,985 $10,291
Costs and expenses:
Cost of sales.............................. 876 824 1,560 1,504
Cost of service............................ 1,283 1,473 2,772 2,990
Research and product development........... 1,563 2,441 3,228 4,595
Marketing, general and administrative...... 3,386 3,449 6,698 6,959
------------------ -----------------
$ 7,108 $ 8,187 $14,258 $16,048
Loss from operations......................... (2,628) (3,089) (4,273) (5,757)
Interest income............................ 9 14 35 86
Interest expense........................... 151 125 260 325
------------------ -----------------
Loss before income taxes..................... (2,770) (3,200) (4,498) (5,996)
Income tax (benefit)......................... 7 (18) 18 (20)
------------------ -----------------
Net loss before.............................. $(2,777) $(3,182) $(4,516) $(5,976)
================== =================
Loss per share............................... $ (.35) $ (.77) $ (.58) $ (1.48)
Weighted average number of shares outstanding 7,913 4,145 7,816 4,027
</TABLE>
See Notes to Consolidated Financial Statements
1
<PAGE>
AUTO-TROL TECHNOLOGY CORPORATION
--------------------------------
CONSOLIDATED BALANCE SHEETS
(in thousands except per share amounts)
<TABLE>
<CAPTION>
MARCH 31, SEPTEMBER 30,
1997 1996
(UNAUDITED)
-------- --------
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents............. $ 1,569 $ 2,173
Receivables net of allowance of $171
and $173............................. 2,426 2,846
Inventories........................... 123 304
Service parts and prepaid expenses.... 660 522
-------- --------
Total current assets............... $ 4,778 $ 5,845
-------- --------
Property, facilities and equipment:
Land.................................. 356 356
Building and improvements............. 8,204 8,204
Machinery and equipment............... 8,152 9,560
Furniture, fixtures and leasehold
improvements......................... 1,016 906
-------- --------
17,728 19,026
Less accumulated depreciation and
amortization......................... (11,419) (12,572)
-------- --------
6,309 6,454
Purchased software, net of accumulated
amortization of $1,258 and $1,123...... 359 461
Other assets............................ 88 90
-------- --------
Total assets....................... $ 11,534 $ 12,850
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Current portion of long-term debt..... $ 240 $ 240
Current portion of capital lease
obligations.......................... 63 128
Accounts payable...................... 1,010 1,195
Interest payable, related-party
portion $190 and $490................ 205 516
Unearned service revenue and customer
deposits............................. 1,650 1,590
Accrued compensation and related taxes 374 673
Other liabilities..................... 1,133 1,235
-------- --------
Total current liabilities.......... $ 4,675 $ 5,577
Capital lease obligations............... - 8
Long-term debt, related-party portion
$1,475 AND $1,900...................... 3,155 3,580
-------- --------
Total liabilities.................. $ 7,830 $ 9,165
-------- --------
Shareholders' equity:
Common stock, $.02 par value
authorized 40,000,000 shares; issued
(including treasury shares)
9,314,347 and 7,745,929 shares....... 186 155
Additional paid-in capital............ 88,783 84,106
Cumulative currency translation
adjustments.......................... (1,153) (980)
Accumulated deficit................... (83,627) (79,111)
Treasury stock, 26,140 and 26,140
common shares at cost................ (485) (485)
-------- --------
Total shareholders' equity......... 3,704 3,685
-------- --------
$ 11,534 $ 12,850
======== ========
</TABLE>
See Notes to Consolidated Financial Statements
2
<PAGE>
AUTO-TROL TECHNOLOGY CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
MARCH 31,
1997 1996
--------- ---------
<S> <C> <C>
Cash flow from operating activities:
Net loss.............................................................................. $ (4,516) $ (5,976)
Adjustments to reconcile net loss to net cash used by operating activities:
Depreciation and amortization......................................................... 841 1,336
(Gain) loss on disposal of property, facilities and equipment......................... 32 (45)
Provision for inventory obsolescence and shrinkage.................................... - -
(Increase) decrease receivables....................................................... 292 970
Increase (decrease) inventories....................................................... 178 (81)
(Increase) decrease service parts and prepaids........................................ (83) (159)
Decrease accounts payable............................................................. (204) (214)
Decrease interest payable............................................................ (311) (177)
Increase (decrease) income tax payable................................................ 28 8
Increase (decrease) unearned service revenue and customer deposits.................... 60 (53)
Increase (decrease) other liabilities................................................. (462) (912)
-----------
Net cash used by operating activities.................................................... (4,145) (5,303)
Cash flow from investing activities:
Capital expenditures.................................................................. (685) (1,413)
Proceeds from sale of property, facilities and equipment.............................. 55 58
(Increase) decrease of non-current service parts and other assets..................... 2 (18)
Net cash used by investing activities.................................................... (628) (1,373)
Cash flow from financing activities:
Proceeds from issuance of notes payable, related party................................ 4,475 6,000
Payments on notes payable, capital lease and long-term debt........................... (273) (19)
Proceeds from issue of common stock................................................... 9 9
Capital contributions to subsidiary................................................... - -
Net cash provided by financing activities............................................... 4,211 5,990
Effect of exchange rate changes on cash.................................................. (42) (28)
---------------------
Net increase in cash and cash equivalents................................................ (604) (714)
Cash and cash equivalents at the beginning of the year.................................. 2,173 2,388
Cash and cash equivalents at the end of the period....................................... $ 1,569 $ 1,674
=====================
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest, related party portion $568,000 and $414,000................................. $ 568 $ 414
</TABLE>
See Notes to Consolidated Financial Statements
3
<PAGE>
AUTO-TROL TECHNOLOGY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED MARCH 31, 1997
(1) BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for the
interim financial information and with the instructions to Form 10-Q and Rule
10-01 of Regulation S-X. Financial information as of September 30, 1996 has
been derived from the audited consolidated financial statements of Auto-trol
Technology Corporation and subsidiaries (the Company).
The condensed consolidated financial statements do not include all information
and notes required by generally accepted accounting principles for complete
financial statements. However, except as disclosed herein, there has been no
material change in the information disclosed in the notes to the consolidated
financial statements as of and for the year ended September 30, 1996 included in
Form 10-K previously filed with the SEC. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary for a
fair presentation have been included in the accompanying Condensed Consolidated
Financial Statements. Operating results for the three and six month periods
ending March 31, 1997 are not necessarily indicative of the results that may be
expected for the year ending September 30, 1997.
(2) LOSS PER SHARE
Loss per share is computed on the basis of the weighted average number of shares
outstanding and is adjusted, if applicable, for common stock equivalents. At
March 31, 1997 and 1996, the weighted average number of shares outstanding
includes no weighted common stock equivalent shares because their effect would
be antidilutive.
4
<PAGE>
AUTO-TROL TECHNOLOGY CORPORATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
OVERVIEW
Operating losses for the second quarter and the six months ended March 31, 1997
continued, however, they decreased as compared to the second quarter and the six
months ended March 31, 1996. New product revenue from the Product Data
Management (PDM), exploration data management and mapping solutions markets
grew in the six months ended March 31, 1997 over the same period ended March 31,
1996. The Company continues to believe that its PDM, Electronic Publishing
Solutions (EPS) and network configuration products, when complete, will present
a unique complementary combination that will differentiate the Company from its
competitors.
Due to the nature of the software industry, the future operating results of the
Company depend largely on its ability to rapidly and continuously develop and
deliver new software products that are competitively priced and offer enhanced
performance. However, the Company is unable to predict the impact of new
products or the effect that industry economic conditions will have on future
results of operations.
Three months ended March 31, 1997 compared to three months ended March 31, 1996
- -------------------------------------------------------------------------------
REVENUES - For the quarter ended March 31, 1997, total sales and service revenue
decreased $618,000, or 12%, from the quarter ended March 31, 1996. Total sales
revenue for the second quarter of fiscal 1997 decreased $408,000, or 19%, from
the quarter ended March 31, 1996. Hardware revenue for the second quarter of
fiscal 1997 declined $126,000, or 14%, as compared to fiscal 1996. The Company
continues to shift the sales and support focus from hardware to internally
developed software and systems integration. The Company will continue to sell
hardware primarily as part of a total systems solution. Total software revenue
declined $338,000, or 27%, as compared to the second quarter of fiscal 1996.
The decline can be attributed to reduced sales of the COMPANY'S Series 5000 and
related products based on that technology, as sales from the PDM, exploration
data management and mapping solutions increased.
Total service revenue for the quarter ended March 31, 1997, decreased $210,000,
or 7%, from the previous year's quarter ended March 31, 1996. Service revenue
is comprised of hardware and software maintenance, training and billable service
revenue. Hardware maintenance revenue decreased $147,000, or 43%, while
software maintenance revenue decreased $117,000, or 18% for the second quarter
of fiscal 1997 as compared to the second quarter of fiscal 1996. The Company
experienced a decline in service revenue in all geographic locations. As the
Company shifts from being a hardware and software solution provider to a
software, systems integration, and service provider, revenue from hardware and
hardware maintenance will continue to decline. The declines in software
maintenance revenue can be attributed to a decline in older products maintenance
revenue. Billable services and training revenue increased $84,000, or 10% over
the quarter ended March 31, 1996. North American service revenue, which
comprised 76% of the total worldwide service revenue, declined $122,000, or 5%,
as compared to the second quarter of fiscal 1996. European service revenue
declined $87,000, or 14%, as compared to fiscal 1996.
COST OF SALES AND SERVICE - The result of operations for the quarter ended March
31, 1997, continued to reflect shifts in product mix from hardware to software
services. For the second quarter ended March 31, 1997, the gross profit margin
on total revenue decreased to 52% from 55% for the second quarter ended March
31, 1996. The gross profit margin on sales revenue for the second quarter
ending March 31, 1997, decreased to 51% from 61% for the second quarter ended
March 31, 1996. In the second quarter of fiscal 1997 the gross profit margin on
hardware declined, yielding a gross margin of 14%, as compared to a gross margin
of 21% in the second quarter of fiscal 1996. This decline reflects the
continued pressure on hardware pricing throughout the computer industry. In the
second quarter of fiscal 1997, the gross profit
5
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS-(CONTINUED)
margin on software sales decreased to 83%, as compared to a gross margin of 92%
in the second quarter of fiscal 1996 due to third party software costs.
Gross profit margins for total service revenue in the second quarter of fiscal
1997 decreased $14,000, yielding a gross margin of 52%, as compared to a gross
margin of 50% in fiscal 1996. The gross margin on billable services and
training in the second quarter of fiscal 1997 decreased $31,000 yielding a gross
margin of 32% as compared with a 38% gross margin during the second quarter of
fiscal 1996. Gross profit margins on hardware maintenance decreased $19,000 in
the second quarter of fiscal 1997, as compared to the second quarter of fiscal
1996, however, the gross margin increased to 24% from 19%. This reduction is
attributed to the Company's growing utilization of outside third parties for
hardware maintenance services. The software maintenance gross margin increased
in the second quarter of fiscal 1997 to 70% from 65% in the second quarter of
fiscal 1996.
RESEARCH AND PRODUCT DEVELOPMENT - Research and development expenses were
approximately 35% of revenue for the quarter ended March 31, 1997, and 48% of
revenue for the quarter ended March 31, 1996. Research and development expenses
decreased by 36% or $878,000 in the second quarter ended March 31, 1997 compared
to the previous years second quarter. This decrease in spending is a direct
result of the company ceasing development of its mozaic product due to
competitive pressures in September 1996, and the Company's focus on developing
its other proprietary software products.
MARKETING, GENERAL, AND ADMINISTRATIVE - In the second quarter ended March 31,
1997, marketing, general and administrative expenses decreased $63,000, or 2%,
from the second quarter ended MARCH 31, 1996. European marketing, general and
administrative spending increased $29,000 due to a favorable exchange rate
variance of $37,000, and an increase in spending of $66,000, as compared to the
second quarter ended March 31, 1997. In the second quarter of fiscal 1997,
north american marketing, general and administrative expenses, decreased
$94,000, or 3%, as compared to the second quarter of fiscal 1996 due primarily
to reduced personnel related expenses and occupancy costs.
INTEREST - In the quarter ended March 31, 1997, interest expense increased 21%
or $26,000 from the quarter ended March 31, 1996, as a result of increased
borrowings. Interest income decreased $5,000, or 36% as compared to the second
quarter of fiscal 1996.
Six months ended March 31, 1997 compared to six months ended March 31, 1996
- ---------------------------------------------------------------------------
REVENUES - For the six months ended March 31, 1997, total sales and service
revenue decreased $306,000, or 3%, from the same period ended March 31, 1996.
Total sales revenue for the first six months of fiscal 1997 decreased $291,000 ,
or 7%, from the six month period ended March 31, 1996. Hardware revenue for the
first half of fiscal 1997 decreased $394,000 or 24%, as compared to the same
period in fiscal 1996. Total software revenue increased $55,000, or 2%, as
compared to the first six months of fiscal 1996. The increase can be attributed
to higher sales of pdm, exploration data management and mapping solutions and
third party software. North American hardware sales revenue increased $129,000,
or 16%, while North American software sales revenue increased $240,000, or 16%
during the first six months of fiscal 1997. European sales revenue decreased
$854,000, or 51% from the same period in fiscal 1996. The European revenue
decrease was due to a decrease of 70% in hardware revenue, and a software
revenue decrease of 37%, as compared to fiscal 1996. Approximately 11% of this
decrease was due to unfavorable exchange rates and the remainder was due to
decreased sales volume.
Total service revenue for the six months ended March 31, 1997, decreased
$15,000, or less than 1%, from the previous year's comparable period. Hardware
maintenance revenue decreased $366,000, or 41%, while software maintenance
revenue decreased $78,000, or 2% for the first six months of fiscal 1997 as
compared
6
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS-(CONTINUED)
to the same period of fiscal 1996. Billable services and training revenue
increased $477,000, or 26% for the six month period ended March 31, 1997, as
compared to the prior year's six month period. North American service revenue,
which comprised 73% of the total worldwide service revenue, decreased $110,000,
or 2%, as compared to the first six months of fiscal 1996. European service
revenue decreased 1%, as compared prior year's six month period ended March 31,
1996.
COST OF SALES AND SERVICE - For the six months ended March 31, 1997, the gross
profit margin on total revenue of 57% increased one percentage point from the
comparable period in the prior year. The gross profit margin on sales revenue
for the six months ended March 31, 1997, decreased to 61% from 64% for the six
months ended March 31, 1996. Gross profit percentages can fluctuate quarterly
based on the revenue mix of Company software, third party software, services and
hardware.
Gross profit margins for total service revenue in the first six months of fiscal
1997 increased $192,000, yielding a gross margin of 54%, as compared to a gross
margin of 51% in the first six months of fiscal 1996.
Gross profit margins on hardware maintenance declined $64,000 yielding a gross
margin of 27% in the first six months of fiscal 1997, as compared to a gross
margin of 23% in the first six months of fiscal 1996. The reduction in gross
profit margins on hardware maintenance is attributed to the Company's growing
utilization of outside third parties for hardware maintenance services. The
software maintenance gross margin improved to 71% in the first half of fiscal
1997, as compared to a gross margin of 65% in the first half of fiscal 1996.
RESEARCH AND PRODUCT DEVELOPMENT - Research and development expenses were
approximately 32% of revenue for the six months ended March 31, 1997, and 45% of
revenues for the six months ended March 31, 1996. This decrease in spending is a
direct result of the Company's focus on its software products in the PDM, EPS
and network configuration management markets.
MARKETING, GENERAL, AND ADMINISTRATIVE - In the six months ended March 31, 1997,
marketing, general and administrative expenses decreased $262,000, or 4%, from
the six months ended March 31, 1996. In the first six months of fiscal 1997,
North American marketing, and general and administrative expenses, decreased
approximately $223,000, or 4%, as compared to the first six months of fiscal
1997 due to lower personnel related expenses and occupancy costs. European
marketing, general and administrative spending declined $56,000, or 3% due to
an unfavorable exchange rate variance of $79,000 and an increase in spending of
$23,000.
INTEREST - In the six months ended March 31, 1997, interest expense decreased
20% to $260,000 from $325,000 the six months ended March 31, 1996. Interest
income also decreased $52,000, or 60% as compared to the same period in fiscal
1996.
LIQUIDITY AND CAPITAL RESOURCES
FINANCIAL CONDITION - At March 31, 1997, the Company had approximately $1.6
million in cash and cash equivalents, which was 6% lower than cash balances at
March 31, 1996. The Company's net working capital was $103,000 at March 31,
1997, as compared to $875,000 at March 31, 1996. Other than the uncertainty of
future profitability, there are no known demands, commitments, events, or
uncertainties that will result in the Company's liquidity increasing or
decreasing in any material way. However, during the second quarter of fiscal
1997, the Company has borrowed an additional $2,675,000, totaling $4,475,000 for
the six months ended March 31, 1997, with the notes bearing interest at 10% per
annum, from an affiliate of Howard B. Hillman, the Company's President, Chairman
of the Board and principal shareholder. In March 1997, the Company converted
$4,700,000 of the outstanding related-party debt into common stock. On May 2,
1989, the Company announced a program to repurchase the Company's stock in the
open market.
7
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS-(CONTINUED)
The maximum cost of the shares to be purchased was limited to $2 million. To
date, 26,140 shares have been purchased at a cost of $485,000.
The Company will require additional funds from its majority shareholder to
continue to fund future operating losses. The shareholder has committed, in
writing, to continue providing financial support at least through December 31,
1997. If the Company is not able to achieve profitability in the near future,
it will continue to be dependent on its majority shareholder for additional
funding and to continue as a going concern. The Company's long term viability
will be in jeopardy if it is not able to achieve financial independence through
improved results, or should support from its majority shareholder not continue
after December 31, 1997.
CURRENCY FLUCTUATIONS
The Company has four wholly owned subsidiaries and one branch operation. The
four subsidiaries are located in Germany, Sweden, Canada and the United Kingdom;
the branch is located in Australia. (See Part II. Other Information, Item 5 on
page 9 regarding events in Sweden which occurred after the reporting period.)
The Company does business in the local currencies of these countries, in
addition to other countries where the subsidiaries may have customers. These
local currency revenues and expenses are translated into dollars for U.S.
reporting purposes. A stronger U.S. dollar will decrease the level of reported
U.S. dollar revenues and expenses. Approximately $116,000 of unfavorable
exchange rate variance and a $483,000 decrease in revenue volume resulted in a
$599,000 decrease in non-U.S. revenue between the quarters ended March 31, 1997
and 1996. These effects on the Company's results of operations could become
significant if the percentage of revenues and expenses attributed to
International operations increases and/or if the dollar fluctuates significantly
against international currencies. The Company's International operations are
also subject to certain risks inherent in doing business abroad and may be
adversely affected by government policies, restrictions, or other factors.
The Company does not use foreign exchange contracts, interest rate swaps, or
options contracts. Foreign currency risk for the Company is limited to
outstanding debt owed to the Company by the subsidiaries. The Company invoices
its subsidiaries in their local currencies for products that are sold to the
subsidiaries' end customers. Upon receipt of payment from the subsidiaries, a
foreign currency gain or loss can occur. As of March 31, 1997, and 1996, the
Company had realized a gain of approximately $3,000 and a loss of $16,000,
respectively, through payments it had received from its subsidiaries.
8
<PAGE>
PART II. OTHER INFORMATION
ITEM 5
On May 1, 1997, the Company completed the transition from having a subsidiary in
Sweden to a Swedish distributor. In April 1997, the European subsidiaries in
the United Kingdom and Germany were restructured to reduce expenses and
headcount. Due to the severance and occupancy costs associated with the
reductions the European general and administrative expenses will increase in the
third quarter of fiscal 1997.
On April 30, 1997, Karen Niparko, Vice President of Operations, resigned from
the Company.
ITEM 6(b) REPORTS ON FORM 8-K:
None.
9
<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.
AUTO-TROL TECHNOLOGY CORPORATION
(Registrant)
Date: May 13,1997 /s/ HOWARD B. HILLMAN
---------------------------
Howard B. Hillman,
President
Date: May 13, 1997 /s/ Mary Lou Schwab
---------------------------
Mary Lou Schwab
Vice President, Finance
10
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-START> OCT-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 1,569
<SECURITIES> 0
<RECEIVABLES> 2,597
<ALLOWANCES> 171
<INVENTORY> 123
<CURRENT-ASSETS> 4,778
<PP&E> 6,309
<DEPRECIATION> 11,419
<TOTAL-ASSETS> 11,534
<CURRENT-LIABILITIES> 4,675
<BONDS> 3,155
0
0
<COMMON> 186
<OTHER-SE> 3,518
<TOTAL-LIABILITY-AND-EQUITY> 11,534
<SALES> 1,703
<TOTAL-REVENUES> 4,480
<CGS> 876
<TOTAL-COSTS> 2,159
<OTHER-EXPENSES> 4,949
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 151
<INCOME-PRETAX> (2,770)
<INCOME-TAX> (7)
<INCOME-CONTINUING> (2,777)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,777)
<EPS-PRIMARY> (.35)
<EPS-DILUTED> (.35)
</TABLE>
