UNITED STATES
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 quarterly period ended September 30, 1997
( ) 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: 0-13976
AKORN, INC.
(Exact Name of Registrant as Specified in its Charter
LOUISIANA 72-0717400
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
100 Tri-State International, Ste. 100
Lincolnshire, Illinois 60069
(Address of Principal Executive Offices) (Zip Code)
(847) 236-3800
(Issuer's telephone number)
Indicate by check mark whether the issuer (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 ____
At November 7, 1997 there were 16,620,826 shares of common stock, no
par value, outstanding.
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Page
Condensed Consolidated Balance Sheets -
September 30, 1997 and December 31, 1996 2
Condensed Consolidated Statements of Income -
Three and nine months ended September 30,
1997 and 1996 3
Condensed Consolidated Statements of Cash Flows -
Nine months ended September 30, 1997 and 1996 4
Notes to Condensed Consolidated Financial
Statements 5
Item 2. Management's Discussion and Analysis
of Financial Condition and Results
of Operations 8
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 13
Item 6. Exhibits and Reports on Form 8-K 13
The information contained in this filing, other than historical
information, consists of forward-looking statements that involve
risks and uncertainties that could cause actual results to differ
materially from those described in such statements. Such statements
regarding the timing of acquiring, developing and financing new
products, of bringing them on line and of deriving revenues and
profits from them, as well as the effect of those revenues and
profits on the company's margins and financial position, is
uncertain because many of the factors affecting the timing of those
items are beyond the company's control.
<PAGE>
AKORN, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
DOLLARS IN THOUSANDS
(UNAUDITED)
September 30, December 31,
1997 1996 *
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 696 $ 1,380
Short-term investments 384 576
Accounts receivable, net 7,734 4,625
Inventory 8,832 8,838
Prepaid expenses and other assets 1,598 1,502
TOTAL CURRENT ASSETS 19,244 16,921
PRODUCT LICENSES AND OTHER ASSETS 5,373 1,340
PROPERTY, PLANT AND EQUIPMENT, NET 12,797 12,833
TOTAL ASSETS $ 37,414 $ 31,094
LIABILITIES AND SHAREHOLDERS'
EQUITY
CURRENT LIABILITIES
Short-term borrowings $ 1,155 $ 250
Current installments of long-term
debt and capital lease obligations 885 170
Trade accounts payable 2,829 1,892
Accrued compensation 911 885
Accrued expenses and other
liabilities 7,678 5,520
TOTAL CURRENT LIABILITIES 13,458 8,717
LONG-TERM DEBT AND
CAPITAL LEASE OBLIGATIONS 5,850 5,211
OTHER LONG-TERM LIABILITIES 690 792
SHAREHOLDERS' EQUITY
Common stock 14,208 14,143
Retained earnings 3,208 2,231
TOTAL SHAREHOLDERS' EQUITY 17,416 16,374
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 37,414 $ 31,094
*Condensed from audited consolidated financial statements.
See notes to condensed consolidated financial statements.
<PAGE>
AKORN, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
(UNAUDITED)
Three Months Ended Nine Months Ended
September 30, September 30,
1997 1996 1997 1996
Net sales $ 11,058 $ 8,101 $ 30,102 $25,077
Cost of goods sold 6,313 5,132 17,013 16,632
GROSS PROFIT 4,745 2,969 13,089 8,445
Selling, general and
administrative expenses 2,993 2,433 8,797 6,706
Research and development 342 515 1,071 1,251
Acquisition and severance - - - 677
Relocation charges - - 1,451 -
3,335 2,948 11,319 8,634
OPERATING INCOME (LOSS) 1,410 21 1,770 (189)
Interest expense (115) (128) (368) (368)
Interest and other
income, net 14 164 168 302
(101) 36 (200) (66)
INCOME (LOSS) BEFORE
INCOME TAXES 1,309 57 1,570 (255)
Income taxes (benefit) 484 22 581 (283)
NET INCOME $ 825 $ 35 $ 989 $ 28
Per Share:
NET INCOME $ 0.05 $ - $ 0.06 $ -
WEIGHTED AVERAGE
SHARES OUTSTANDING 17,031 16,867 16,883 16,842
See notes to condensed consolidated financial statements.
<PAGE>
AKORN, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
DOLLARS IN THOUSANDS
(UNAUDITED)
Nine months ended September 30,
1997 1996
OPERATING ACTIVITIES
Net income $ 989 $ 28
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation and amortization 1,214 951
Building and equipment write down 400 -
Changes in operating assets and
liabilities (242) 98
NET CASH PROVIDED BY OPERATING
ACTIVITIES 2,361 1,077
INVESTING ACTIVITIES
Purchases of property, plant
and equipment (1,233) (2,475)
Product license acquisitions (4,313) (430)
Net maturities of investments 192 1,096
NET CASH USED IN INVESTING
ACTIVITIES (5,354) (1,809)
FINANCING ACTIVITIES
Repayment of long-term debt (33) (516)
Issuance of long-term debt 1,500 1,900
Proceeds from sale of stock 50 490
Dividends paid - (583)
Pre-funded development receipts - 150
Reductions in capital lease
obligations (113) (108)
Short-term borrowings, net 905 (402)
NET CASH PROVIDED BY
FINANCING ACTIVITIES 2,309 931
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (684) 199
Cash and cash equivalents at
beginning of period 1,380 482
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $ 696 $ 681
See notes to condensed consolidated financial statements.
<PAGE>
AKORN, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial
statements include the accounts of Akorn, Inc. and its wholly owned
subsidiaries (the Company). Intercompany transactions and balances
have been eliminated in consolidation. These financial statements
have been prepared in accordance with generally accepted accounting
principles for interim financial information and accordingly do not
include all the information and footnotes required by generally
accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation
have been included. Operating results for the three- and nine-month
periods ended September 30, 1997 are not necessarily indicative of
the results that may be expected for a full year. For further
information, refer to the consolidated financial statements and
footnotes for the transition period ended December 31, 1996,
included in the Company's Annual Report on Form 10-K.
NOTE B - INVENTORY
The components of inventory are as follows ( in thousands):
September 30, December 31,
1997 1996
Finished goods $ 5,891 $ 5,181
Work in process 1,038 1,375
Raw materials and supplies 1,903 2,282
$ 8,832 $ 8,838
Inventory at September 30, 1997 and December 31, 1996 is reported
net of reserves of $399,751 and $589,007, respectively, for slow-
moving, unsaleable and obsolete items.
NOTE C - RELOCATION EXPENSES
During the quarter ended March 31, 1997, the Company recorded
$1,451,000 in charges related to the relocation of the ophthalmic
division and executive offices from Abita Springs, Louisiana to the
Chicago area. The charges primarily relate to severance and
retention bonus payments as well as a write-down of the Abita
Springs facility and equipment to net realizable value.
NOTE D - PRODUCT LICENSE ACQUISITIONS
Effective April 1, 1997, the Company entered into an agreement with
Becton Dickinson and Company to acquire the rights to distribute
three products. Two of the products, ICG Cardio-Green and BAL in
Oil, are New Drug Application Products with no generic competition.
The third product, Indigo Carmine, is a grandfathered product with
several competitors in the marketplace. The acquisition transfers
<PAGE>
ownership of the NDAs and regulatory files, as well as the trade
names and trademarks for the products. In exchange for the
products, the Company paid Becton Dickinson and Company $4.0 million
plus the cost of existing product inventory. Payment consisted of
$2.7 million cash at closing, a $1.5 million promissory note secured
by an irrevocable letter of credit and a final cash payment on
August 1, 1997 for $0.3 million for the remaining inventory. The
cash payment was partly financed through a $1.5 million draw on the
Company's line of credit.
NOTE E - CHANGE IN ACCOUNTING ESTIMATES
During the quarter ended June 30, 1996, the Company revised its
estimate for recording chargeback accruals. As a result, a
reduction in net sales of $250,000 was recorded. In addition, the
Company increased its estimate for unsaleable inventory by
approximately $200,000, resulting in an increase in cost of goods
sold.
During the quarter ended June 30, 1996, the Company recognized
estimated costs of $677,000 related to acquisition costs and
severance expenses associated with the acquisition of Pasadena
Research Laboratories, Inc. (PRL). These estimated costs increased
the reported operating loss.
During the quarter ended March 31, 1997, the Company increased its
estimate for unsaleable inventory by $84,000 and changed the timing
of absorption of manufacturing overhead expenses, resulting in a
one-time charge of $213,000. These changes in estimates are
reported as an increase in cost of goods sold.
During the quarter ended March 31, 1996, the Company increased its
estimate for unsaleable inventory by approximately $300,000. This
change in estimate was reported as an increase in cost of goods
sold. During the same quarter, an evaluation by the Company
resulted in a change in the estimated liability related to aged
customer credits, resulting in a reduction of selling, general and
administrative expenses of $85,000. A decision to no longer pursue
Abbreviated New Drug Applications (ANDAs) for several products which
had been produced in previously-owned facilities, and for which
estimated costs of transferring such ANDAs had been accrued,
resulted in a $316,000 reduction of selling, general and
administrative expenses.
NOTE F - RECENT ACCOUNTING PRONOUNCEMENTS
In February 1997, the Financial Accounting Standards Board ("FASB")
issued Statement of Financial Accounting Standards Number 128
"Earnings per Share" ("SFAS 128") which changes the method of
calculating earnings per share ("EPS"). SFAS 128 requires the
presentation of "basic" EPS and "diluted" EPS on the face of the
statement of operations. Basic EPS is computed by dividing the net
income available to common shareholders by the weighted average
shares of outstanding common stock. The calculation of diluted EPS
is similar to basic EPS except that the denominator includes
<PAGE>
dilutive common stock equivalents such as stock options and
warrants. The statement is effective for financial statements for
periods ending after December 15, 1997. The Company will adopt SFAS
128 in the fourth quarter of 1997. The Company's current EPS
calculation significantly conforms to basic EPS. Diluted EPS is not
expected to be materially different from basic EPS since potential
common shares in the form of common stock options and warrants are
not estimated to be materially dilutive.
In June 1997, the FASB issued Statement of Financial Accounting
Standards No. 130, "Reporting Comprehensive Income" ("SFAS 130").
SFAS 130 requires that all items that are required to be recognized
under accounting standards as components of comprehensive income be
reported in a financial statement that is displayed with the same
prominence as other financial statements. Other comprehensive
income may include foreigncurrency items, minimum pension liability
adjustments and unrealized gains and losses on certain investments
in debt and equity securities. The accumulated balance of other
comprehensive income must be displayed separately from retained
earnings and additional paid-in capital in the equity section of a
statement of financial position. Reclassification of financial
statements for earlier periods is required. The Company has not
fully determined the impact that the adoption of this new accounting
standard will have on its consolidated financial statements, but
does not expect it to be material. The Company will adopt this
accounting standard January 1, 1998, as required.
In June 1997, the FASB issued Statement of Financial Accounting
Standards No. 131, "Disclures about Segments of an Enterprise and
Related Information" ("SFAS 131"), which will be effective for the
Company beginning January 1, 1998. SFAS 131 redefines how operating
segments are determined and requires disclosure of certain financial
and descriptive information about a Company's operating segments.
The Company has not yet completed its analysis, but expects to
continue reporting on ophthalmic and injectable segments.
<PAGE>
AKORN, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Three Months Ended September 30, 1997 Compared to 1996
The following table sets forth, for the periods indicated, net sales
by segment, excluding intersegment sales:
Three Months Ended
September 30,
1997 1996
(in thousands)
Ophthalmic distribution $ 6,535 $ 4,854
Contract manufacturing 1,601 1,961
Injectable distribution 2,922 1,286
Total net sales $ 11,058 $ 8,101
Consolidated net sales increased 37% in the quarter ended September
30, 1997 compared to the same period in 1996. Ophthalmic
distribution sales increased 35%, primarily due to strong
performance in the diagnostic and therapeutic product lines. The
acquisition of ICG from Becton Dickinson in April and the
introduction of the Company's generic version of Timolol Maleate
also contributed to the sales increase.
Injectable distribution sales increased 127% compared to the same
period in 1996, primarily due to penetration into the hospital
market and a continuing shortage of certain distributed products.
Management expects the shortages and resultant sales increases to
continue at least until the end of 1997. For the quarter ended
September 30, 1997, contract manufacturing sales declined 18% over
the comparable period in 1996. This decline reflects decreased
emphasis on low-margin basic contract sales. The Company has shifted
its marketing efforts in the area of contract manufacturing,
focusing on Taylor's ability to provide a full range of services
including product development, regulatory and sterile manufacturing.
Consolidated gross profit increased 60% during the quarter ended
September 30, 1997 compared to the same period in 1996, with gross
margins increasing from 37% to 43%. Margins for the ophthalmic
segment increased from 41% to 46% during the comparable periods,
primarily due to product acquisitions and a shift in sales mix to
higher-margin products. Margins on the Company's generic version of
Timolol Maleate have declined at a faster than anticipated rate, due
to the large number of competitors offering the product. Margins for
the injectable segment (including both injectable distribution and
contract manufacturing) increased from 30% to 38%, primarily due to
product acquisitions and increased sales in injectable distribution
as well as re-engineering of production processes to reduce costs of
manufacturing.
<PAGE>
Selling, general and administrative (SG&A) expenses increased 23%
during the quarter ended September 30, 1997 as compared to the same
period in 1996. This increase is primarily due to increased
marketing and promotional activities in both segments, as well as a
$137,000 provision for employee bonuses included in 1997 and
expenses associated with the new corporate office facility. The
percentage of SG&A expenses to sales decreased from 30% to 27%,
reflecting incremental sales growth.
Research and development (R&D) expense decreased 34% in the quarter
ended September 30, 1997, to $342,000 from $515,000 for the same
period in 1996. The decrease reflects concentration on piroxicam
clinical studies, which were pre-funded as part of the product
acquisition. Management expects R&D spending in 1997 to increase
over prior year levels.
Interest expense of $115,000 was lower than the prior-year quarter's
$128,000, primarily due to lower rates on lower average outstanding
debt balances. Other income of $14,000 was lower than the prior-
year quarter's $164,000 due to a one-time licensing fee received in
1996.
The Company's effective tax rate for the quarter ended September 30,
1997 was 37% compared to 39% for the prior-year period. The Company
reported net income of $825,000 or $0.05 per share for the three
months ended September 30, 1997. Net income for the comparable
prior-year period was $35,000.
Nine Months Ended September 30, 1997 Compared to 1996
The following table sets forth, for the periods indicated, net sales
by segment, excluding intersegment sales:
Nine Months Ended
September 30,
1997 1996
(in thousands)
Ophthalmic distribution $ 18,160 $ 14,568
Contract manufacturing 4,951 6,737
Injectable distribution 6,991 3,772
Total net sales $ 30,102 $ 25,077
Consolidated net sales increased 20% in the nine months ended
September 30, 1997 compared to the same period in 1996. Ophthalmic
distribution sales increased 25%, primarily due to strong
performance in the diagnostic and therapeutic product lines. The
acquisition of ICG from Becton Dickinson in April and the
introduction of the Company's generic version of Timolol Maleate
also contributed to the sales increase.
Injectable distribution sales increased 85% compared to the same
period in 1996, primarily due to penetration into the hospital
market and strong performance in rheumatology and antidote products,
including Bal in Oil, acquired from Becton Dickinson in April. The
increase also reflects sales of the injectable product line acquired
<PAGE>
from Janssen Pharmaceutica, Inc. in July 1996. Prior to the
acquisition, sales of this product line were reported as contract
manufacturing sales. Sales of the Janssen products reflected in
contract manufacturing during the nine month period were $1,156,000.
For the nine months ended September 30, 1997, contract manufacturing
sales declined 27% over the comparable period in 1996. This decline
reflects the transfer of the Janssen product line to the injectable
distribution segment as well as less emphasis on low-margin basic
contract sales. The Company has shifted its marketing efforts in the
area of contract manufacturing, focusing on Taylor's ability to
provide a full range of services including product development,
regulatory and sterile manufacturing.
Consolidated gross profit increased 55% during the nine months ended
September 30, 1997 compared to the same period in 1996, with gross
margins increasing from 34% to 43%. Margins for the ophthalmic
segment increased from 34% to 45% during the comparable periods,
primarily due to product acquisitions and a shift in sales mix to
higher-margin products. Margins on the Company's generic version of
Timolol Maleate have declined at a faster than anticipated rate, due
to the large number of competitors offering the product. During the
nine months ended September 30, 1996, ophthalmic sales were reduced
$250,000 by a chargeback adjustment while cost of sales was
increased by a $500,000 inventory adjustment Excluding these
adjustments, gross margins for the ophthalmic segment increased from
39% to 45%. Margins for the injectable segment (including both
injectable distribution and contract manufacturing) increased from
33% to 41%, primarily due to product acquisitions and increased
sales in injectable distribution as well as re-engineering of
production processes to reduce costs of manufacturing. During the
nine months ended September 30, 1997, injectable cost of sales was
increased by an $84,000 inventory adjustment and a $213,000 charge
for a change in the timing of overhead absorption. Excluding these
charges, margins for the injectable segment increased from 33% to
43%.
Selling, general and administrative (SG&A) expenses increased 31%
during the nine months ended September 30, 1997 as compared to the
same period in 1996. This increase is partially due to a $400,000
reduction in estimated accrued expenses reversed in 1996. Excluding
these reversals, SG&A expenses increased 24% during the nine month
period, reflecting increased marketing and promotional activities in
both segments, as well as a $387,000 provision for employee bonuses
included in 1997 and expenses associated with the new corporate
office facility. The percentage of SG&A expenses to sales, after
exclusion of the 1996 expense reversals, increased from 28% to 29%,
reflecting the increased marketing and promotional activities noted
above.
Research and development (R&D) expense declined 14% in the nine
months ended September 30, 1997, to $1,071,000 from $1,251,000 for
the same period in 1996. The decrease reflects concentration on
piroxicam clinical studies, which were pre-funded as part of the
acquisition. Management expects total R&D spending in 1997 to
increase over prior year levels.
<PAGE>
During the nine months ended September 30, 1996, the Company
recognized estimated costs of $677,000 related to acquisition costs
and severance expenses associated with the acquisition of Pasadena
Research Laboratories, Inc. (PRL). These estimated costs resulted
in a reported operating loss.
During the nine months ended September 30, 1997, the Company
recorded $1,451,000 in charges related to the relocation of the
ophthalmic division and executive offices from Abita Springs,
Louisiana to the Chicago area. The charges primarily relate to
severance and retention bonus payments as well as a write-down of
the Abita Springs facility and equipment to net realizable value.
Interest expense of $368,000 was unchanged from the prior-year
period. Other income of $168,000 was lower than the prior-year
period's $302,000 due to a one-time licensing fee recorded in 1996.
The Company's effective tax rate for the nine months ended September
30, 1997 was 37% compared to 111% (benefit) for the prior-year
period. The negative effective rate in 1996 reflects the fact that
PRL was a subchapter S corporation and not subject to corporate
income taxes. The Company reported net income of $989,000 or $0.06
per share for the nine months ended September 30, 1997. Net income
for the comparable prior-year period was $28,000.
In February 1997, the Financial Accounting Standards Board ("FASB")
issued Statement of Financial Accounting Standards Number 128
"Earnings per Share" ("SFAS 128") which changes the method of
calculating earnings per share (EPS). In June 1997, the FASB issued
Statement of Financial Accounting Standards Number 130, "Reporting
Comprehensive Income," which requires inclusion of elements of
comprehensive income in a separate financial statement, and
Statement of Financial Accounting Standards Number 131, "Disclosures
about Segments of an Enterprise and Related Information," which
redefines operating segment determination and required disclosures.
See Note F of Notes to Condensed Consolidated Financial Statements.
FINANCIAL CONDITION AND LIQUIDITY
Working capital at September 30, 1997 was $5.8 million compared to
$8.2 million at December 31, 1996. The decrease is due to the
inclusion of the outstanding balance on the Company's line of credit
as a current liability at September 30, as well as to an increase in
accounts payable and accrued expenses associated with higher volume.
The Company restructured its bank credit facilities in February 1997
to lower its short-term debt service requirements and to allow for
additional financing. At September 30, 1997 the Company had $1.8
million of working capital financing available under its line of
credit in addition to $2.0 million of construction and equipment
financing. The Company borrowed $1.5 million under its line of
credit on April 1, 1997 to finance a product license purchase from
Becton Dickinson and Company, and subsequently paid down the line
with cash generated from operations. See Note D of Notes to
Condensed Consolidated Financial Statements. The third quarter draw
on the line of credit reflects the payout of severance and related
<PAGE>
benefits associated with the closing of the Abita Springs location.
Management believes that existing cash, cash flows from operations
and available bank credit are sufficient to handle the Company's
requirements for the foreseeable future.
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Certain legal proceedings in which the registrant, Akorn, Inc.
(the "Company"), is involved are described in Item 3 to the
Company's Form 10-K for the transition period ended December
31, 1996 and in Note W to the consolidated financial
statements included in that report.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
(11.1) Computation of Earnings (Loss) per Share
(27) Financial Data Schedule
(b) Reports on Form 8-K
None.
<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.
AKORN, INC.
/s/ Rita J. McConville
Rita J. McConville
Vice President, Chief Financial Officer and Secretary
(Duly Authorized and Principal Financial Officer)
Date: November 7, 1997
<PAGE>
Akorn, Inc.
Exhibit 11.1
COMPUTATION OF NET INCOME (LOSS) PER SHARE
(In Thousands, Except Per Share Data)
Three Months Ended Nine Months Ended
September 30, September 30,
1997 1996 1997 1996
Earnings:
Income
applicable to
common stock $ 825 $ 35 $ 989 $ 28
Shares:
Weighted average
number of shares
outstanding 16,606 16,576 16,599 16,493
Additional shares
assuming conversion
of options and
warrants 425 291 284 349
Pro forma shares 17,031 16,867 16,883 16,842
Net income
per share $ 0.05 $ - $ 0.06 $ -
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 9-MOS
<FISCAL-YEAR-END> DEC-31-1997 DEC-31-1997
<PERIOD-END> SEP-30-1997 SEP-30-1997
<CASH> 695,859 695,859
<SECURITIES> 384,000 384,000
<RECEIVABLES> 7,734,310 7,734,310
<ALLOWANCES> 0 0
<INVENTORY> 8,832,123 8,832,123
<CURRENT-ASSETS> 19,243,990 19,243,990
<PP&E> 22,206,606 22,206,606
<DEPRECIATION> (9,409,744) (9,409,744)
<TOTAL-ASSETS> 37,414,331 37,414,331
<CURRENT-LIABILITIES> 13,458,145 13,458,145
<BONDS> 0 0
0 0
0 0
<COMMON> 14,207,634 14,207,634
<OTHER-SE> 0 0
<TOTAL-LIABILITY-AND-EQUITY> 37,414,331 37,414,331
<SALES> 11,057,995 30,102,318
<TOTAL-REVENUES> 11,057,995 30,102,318
<CGS> 6,313,427 17,013,559
<TOTAL-COSTS> 6,313,427 17,013,559
<OTHER-EXPENSES> 3,334,579 11,318,840
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 114,580 367,790
<INCOME-PRETAX> 1,309,681 1,570,346
<INCOME-TAX> 484,585 581,031
<INCOME-CONTINUING> 825,096 989,315
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 825,096 989,315
<EPS-PRIMARY> .05 .06
<EPS-DILUTED> .05 .06
</TABLE>
