UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One) |X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT of 1934
For the quarterly period ended September 30,1999
|_| TRANSITION REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from July 1, 1999 to September 30, 1999
Commission file number: 0-10372
UNIDYNE CORPORATION
(Exact name of small business issuer
as specified in its charter)
DELAWARE 23-2154902
(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or organization)
118 PICKERING WAY, SUITE 104, EXTON, PA 19341
(Address of principal executive offices)
(610) 363-8237
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes |X| No |_|
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by court. Yes |_| No |_|
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity , as of latest practicable date: 10,255,352 as of September 30, 1999.
Transitional Small Business Disclosure Format (check one ): Yes |X| No |_|
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<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS.
UNIDYNE CORPORATION CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
Sept. 30, December 31,
ASSETS 1999 1998
-------- --------
<S> <C> <C>
Current assets:
Cash 76 $ 126
Accounts receivable, less allowance of $257 2,309 3,032
Inventory 6,168 7,429
Prepaid expenses 63 135
Deferred and other refundable taxes 190 190
Other current assets 68 33
-------- --------
Total current assets 8,874 10,945
Property, plant and equipment
Land 160 160
Leasehold improvements 323 323
Buildings 3,639 3,639
Machinery and equipment 9,893 9,589
-------- --------
Total property, plant and equipment 14,016 13,712
Accumulated depreciation (6,619) (5,269)
-------- --------
Property, plant and equipment, net 7,397 8,444
Deferred income taxes 899 986
Patents 1,183 1,341
Other assets 1,341 3,632
-------- --------
3,423 5,959
-------- --------
TOTAL ASSETS $ 19,695 $ 25,348
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable 3,828 $ 5,262
Current portion of long-term debt 463 565
Short-term debt 3,097 3,625
Accrued compensation 144 75
Income taxes payable 87
Deferred revenue 572 392
Other accrued liabilities 1,770 1,558
-------- --------
Total current liabilities 9,874 11,564
-------- --------
Long-term debt 3,762 3,797
Post-retirement benefits 4,891 4,491
Preferred dividends payable 573 700
-------- --------
8,782 8,988
-------- --------
Stockholders' equity:
Common Stock $.001, par value, 50,000,000 shares
authorized, 9,755,352 shares issued and outstanding 10 9
Preferred Stock, $10 per share liquidation value, $10 par value,
20,000,000 shares authorized 5,000
Additional paid-in capital 18,496 13.127
Treasury stock (7) (7)
Retained deficit (17,906) (13,333)
-------- --------
Total Stockholders' Equity 593 4,796
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 19,695 $ 25,348
======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
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<PAGE>
UNIDYNE CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30
1999 1998 1999 1998
---- ---- ---- ----
(in thousands, except per share data)
<S> <C> <C> <C> <C>
Net sales 3,569 4,331 13,262 13,490
Cost of sales 2,543 3,302 8,385 9,085
---------- ---------- ---------- ----------
Gross income 1,026 1,029 4,877 4,405
Selling and administrative expense 4,020 1,350 7,343 4,676
Research and development expense 67 67 204 189
---------- ---------- ---------- ----------
Loss from continuing operations (3,061) (388) (2,670) (460)
Interest expense 196 176 525 503
---------- ---------- ---------- ----------
Loss from continuing operations before
income taxes (3,257) (564) (3,195) (963)
Provision (benefit) for income taxes -- (224) -- (385)
---------- ---------- ---------- ----------
Loss from continuing operations (3,257) (340) (3,195) (578)
Discontinued operations: (Note 4):
Loss from operations of
discontinued operation (1,087) (30) (1,203) 65
---------- ---------- ---------- ----------
Net loss (4,324) (370) (4,398) (513)
Preferred dividends -- (87) (175) (262)
---------- ---------- ---------- ----------
Loss applicable to common stockholders (4,324) (457) (4,573) (775)
Basic and diluted loss per share from
continuing operations ($0.33) ($0.05) ($0.33) ($0.09)
Basic and diluted earnings net loss per
share ($0.43) ($0.05) ($0.47) ($0.08)
Weighted average number shares of common
Stock outstanding 9,993,852 9,335,352 9,795,352 9,335,352
</TABLE>
The accompanying notes are an integral part of these financial statements.
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<PAGE>
UNIDYNE CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Nine Months Ended
September 30
1999 1998
---- ----
(in thousands)
Cash flows from operating activities:
Net income (loss) (4,397) (513)
Adjustments to reconcile net income to
cash flows provided by (used for)
operating activities
Depreciation and amortization 3,885 1,046
Deferred taxes (1,139)
Changes in:
Accounts receivable, net 723 (7)
Inventories 1,260 (357)
Prepaid expenses and other assets 38 77
Accounts payable (1,433) (458)
Accrued compensation 69 (131)
Accrued expenses 339 453
Other liabilities 403 320
------ ------
Net cash provided by (used for) operating
activities 887 (709)
------ ------
Cash flows for investing activities:
(Purchase) of property, plant and equipment (239) (418)
------ ------
Cash flows from financing activities:
Repayments on revolving loans (50) 1,826
New borrowings 650
Principal payments on long-term debt (996) (1,115)
------
Dividends paid (302)
------
Net cash provided by (used for) financing
activities (698) 711
------
Net increase (decrease) in cash (50) (416)
Cash, beginning of period 126 928
------ ------
Cash, end of period 76 511
====== ======
Cash paid for:
Interest 512 527
====== ======
Income taxes 0 0
====== ======
The accompanying notes are an integral part of these financial statements.
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<PAGE>
UNIDYNE CORPORATION
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
(all $ amounts in 000's)
These Notes to Financial Statements reflect events subsequent to May 14, 1999,
the date of the most recent Report of Independent Public Accountants, through
the date of this Quarterly Report on Form 10-QSB for the quarter ended September
30, 1999. These Notes to Financial Statements should be read in conjunction with
Financial Information and Other Information required to be furnished as part of
this Report, in particular (1) Management's Discussion and Analysis of Financial
Condition and Results of Operations for the nine months ended September 30,
1999, respecting the Corporation's capital requirements and liquidity, (2) Part
II, Item 6, Reports on Form 8-K and (3) the Corporation's quarterly reports on
Form 10-QSB for the quarters ended March 31, 1999 and June 30, 1999 and in
conjunction with the Corporation's Annual Report on Form 10-KSB for the year
ended December 31, 1998, incorporated herein by reference.
NOTE 1 - BASIS OF PRESENTATION The financial statements furnished are unaudited.
In the opinion of the management of the Corporation, the accompanying
consolidated financial statements include all adjustments, consisting only of
normally recurring accruals, necessary for a fair presentation of the
Corporation's results of operation and changes in financial position for the
interim periods presented. Operating results for these interim periods are not
necessarily indicative of results to be expected for the entire year, due to
seasonal, operating, and other factors.
NOTE 2 - PROVISION FOR INCOME TAXES
Because of the losses incurred by the Corporation's operations in current and
prior periods, the utilization of tax benefits related to those losses may not
be realized in future periods. Accordingly, the Corporation has not recognized
any tax benefit for those losses in the three and nine month periods herein
presented.
NOTE 3 - EARNINGS PER SHARE
Earnings per share calculations were computed by dividing net earnings by the
corresponding weighted average number of common shares outstanding for the
period. The loss from continuing operations applicable to common stockholders
has been calculated on an after-tax basis in the same manner, after giving
effect to dividends to preferred stockholders for periods prior to June 30,
1999. Because the exercise of options would be anti-dilutive, the basic and
diluted earnings per share amounts are identical.
NOTE 4 - SUBSEQUENT EVENTS
In November, 1999, the Corporation negotiated an out-of-court settlement in an
action filed by former stockholders of Sabina Industries, Inc. on December 31,
1997, in the United States District Court for the Central District of
California. On September 30, 1997, UNIDYNE acquired Sabina in a stock for stock
transaction. UNIDYNE exchanged 500,000 shares of its common stock for all the
issued and outstanding shares of Sabina Industries, Inc., which included all the
assets and liabilities of Sabina as well as trade names and technology. In
December, 1997, the former stockholders of Sabina filed suit alleging
misrepresentation, failure to release them from personal guarantees, and
undisclosed liabilities of
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UNIDYNE and sought recission of the acquisition agreement. UNIDYNE denied all
allegations and contested the recission.
The settlement became effective November 10, 1999. UNIDYNE will retain the
company known as Sabina Industries, Inc. The Sabina name, along with its
associated trade names and the rights, title, and interests to Sabina's
technology, along with Sabina inventory located at Anaheim, California will be
transferred to the former stockholders of Sabina. The agreement further calls
for a) return to UNIDYNE of the 500,000 shares of UNIDYNE Common Stock, b) a
sales type lease transfer of machinery and equipment to the former Sabina
stockholders over a three year period with a total lease value of $310,788, c)
Sabina to enter three-year service contracts for technical consulting and for
warranty service with a total value of $361,188, d) cancellation of the real
property leases with a remaining value of approximately $1,000,000 for Sabina's
Anaheim operations, e) a payment to UNIDYNE of $150,000 less amounts due and
owing under the real estate leases, f) dismissal of all actions brought against
UNIDYNE. Mutual releases and covenants not to sue were exchanged among the
parties.
In November, 1999, the Corporation received notification from the Internal
Revenue Service as a result of the audit of the Corporation's returns for 1995
and 1996 that carryback to tax year 1995 of the Corporation's tax loss of
$768,732 for tax year 1996 was disallowed. The Corporation believes its position
on the carryback is justified and intends to vigorously pursue an appeal. While
there can be no assurance that the Corporation's position will prevail, the
Corporation has been advised that there are substantial grounds for reversing
the Service's position. The Corporation's returns for tax years 1996 are being
audited by a state taxing authority, but the Corporation has no reason to
believe a material adjustments would result of that audit.
NOTE 5 - REPORTABLE SEGMENTS
During the first quarter of 1999, the Corporation consolidated its operations in
the area of electric motors and variable speed drives. As a result, the
Corporation's operations are now classified into two principal reportable
segments that provide different products or services. The electric motors and
variable speed drives segment produces proprietary, specialized electric motors
and variable speed drives utilizing either the Eddy Current drive or adjustable
frequency operating principles for sale to customers in the automotive,
transportation, manufacturing, and processing systems industries. The
dynamometers and testing systems segment produces engine and chassis
dynamometers and emissions test stands for the heavy-duty truck, bus, and
automobile manufacturers and for the automotive testing and repair markets.
Separate management of each segment is required because each business unit is
subject to different marketing, production, and technology strategies.
The Corporation evaluates the performance of its operating segments based on
sales, earnings before interest and taxes, and net operating profit after tax.
Expenses related to restructuring and other non-recurring charges are not
allocated to the reportable segments.
Financial data by segment for the three and nine months ended:
Three Months Ended Nine Months Ended
September 30, September 30,
1999 1998 1999 1998
Revenues from external
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customers:
Electric motors &
variable speed drives &
controls 2,715 5,222 8,291 10,291
Dynamometers and
testing systems 851 1,411 4,952 2,878
Total from reportable
segments 3,566 6,633 13,243 13,169
Intersegment Revenues::
Electric motors &
variable speed drives &
controls 360 480 1,795 1,380
Dynamometers and
testing systems 29 56 153 81
Total from reportable
segments 389 536 1,948 1,461
Earnings:
Electric motors &
variable speed drives &
controls (964) (110) 230 1,050
Dynamometers and
testing systems (28) (806) 625 (1,030)
Total from reportable
segments (992) (916) 855 20
Elimination of
intersegment profits (395) (1,104) (20) (689)
Coporate expenses (2,474) (619) (3,545) (978)
Unallocated (186) (129) (525) (309)
Loss before income
taxes and discontinued
operations (3,257) (340) (3,195) (578)
The basis of measuring segment profit or loss has been changed since the last
annual report in removing interest expense from segment profit or loss. There
have been no material changes in the amount of assets for any operating segment
since the last annual report, other than the discontinuance of the Sabina
Anaheim operation.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
For the Nine Months Ended September 30, 1999
(All amounts used herein are in thousands)
Results of Operations
Earnings
The Corporation experienced a loss for common stockholders for the nine months
ended September 30,
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1999 of ($4,573), or ($.47) per share versus the year earlier period primarily
as a result of the writeoff of $1.9 million in goodwill from the Sabina
acquisition and $1.2 million in losses on the discontinued Anaheim operations of
Sabina, compared to the year earlier period. For the three months ended
September 30, 1999, the loss was ($4,324), or ($.33) per share. Quarterly
results felt the impact of the writeoff in goodwill, the losses on the
discontinued operations, and a decline of 17% in sales from continuing
operations.
Net Sales
Net sales from continuing operations for the nine months ended September
30, 1999 were 2% lower than the comparable period in 1998, but dropped 17% in
the three months ended September 30, 1999 versus the same quarter in 1998. Sales
declined 48% in the electric motors and variable speed drives segment versus the
same three months in 1998, and 40% in the dynamometers and testing systems
segments.
Gross Income
Gross income from continuing operations for the three months ended
September 30, 1999 was steady with the year earlier period and increased 11% to
$4,877 for the nine months ended September 30, 1999. The increase in income was
primarily attributable to improvements in the dynamometers and testing systems
segment.
Selling and Administrative Expense
Selling and administrative expense, as a percent of net sales, increased
$2,670 for the quarter and $2,667 for the nine months compared to the comparable
periods in 1998. The majority of the increase in selling and administrative
expense for the quarter and the nine months was due to the writeoff in
September, 1999 of $1,903 of unamortized goodwill from the Sabina acquisition in
September, 1997.
Research and Development Expense
Research and Development expenses were $67 in the three months ended
September 30, 1999 and 1998, and $204 in the nine months ended September 30,
1999, up 8% versus last year as a result of developmental work on digital
controls systems.
Income Taxes
No income tax benefit has been provided for the three and nine months in
1999 due to uncertainties over their utilization.
Liquidity and Capital Resources
The Corporation's primary sources of long-term and short-term liquidity
are projected cash from operations and borrowing capacity. While the Corporation
believes that these sources may be sufficient to fund the anticipated future
growth of the Corporation, the Corporation has encountered difficulties in
generating sufficient cash flow to meet its current obligations.
At September 30, 1999, the Corporation's working capital was ($1,000),
compared to working capital of ($619) at December 31, 1998. This decrease is
principally due to current liabilities not being paid as fast as inventories
were reduced and receivables were collected during the drop in sales in the
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current quarter.
The Corporation raised $650 in new borrowings during the quarter, $350 of
which was from a principal shareholder. The Corporation continues to pursue new
sources of borrowing to provide liquidity to increase its operations. During the
quarter, the Corporation learned that its anticipated borrowing with Congress
Financial Corporation would not be completed, and the Corporation began
discussions with other lenders to find additional funding opportunities. The
Corporation's lines of credit with its existing lender are proceeding under a
verbal agreement to continue funding until other funding sources can be secured.
Y2K
The Corporation has undertaken a survey of its Year 2000 problem exposure. In
undertaking this survey, the Corporation considered both Information Technology
("IT") systems and non-IT systems such as imbedded microchips. As a result of
this survey, the Corporation identified measures which needed to be taken, most
significantly, the upgrade of computer systems at all of its major locations.
Year 2000 compliant enterprise resource planning (ERP) systems have been
implemented at its Sabina subsidiary and its Dynamatic subsidiary. The
Corporation's other subsidiaries have upgraded their accounting and financial
systems to Year 2000 compliant versions of their software.
The Corporation uses a variety of digital controls in its products. All of the
major suppliers of microprocessors to the Corporation have provided assurance
that their systems are in compliance. To the best of the Corporation's
knowledge, none of the digital controls supplied to its customers include
microprocessors or software which are not Year 2000 compliant.
The cost of acquiring, installing, converting, and testing new Year 2000
compliant software is estimated by the Corporation to be $136. Hardware costs
are estimated to be $20. As of December 31, 1998, the Corporation has incurred
substantially all of these total estimated costs for Year 2000 remediation.
These costs were funded by internally generated funds and leases. No significant
IT projects have been deferred due to Year 2000 remediation efforts.
The Corporation is developing contingency plans to deal with reasonably likely
worst case scenarios, although it now appears that few adverse effects are
reasonably expected to occur in the U.S.
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings
In July 30, 1999, the Corporation was informed that the NASDAQ Listing
Qualifications Panel had decided to release the trading halt in the
Corporation's stock effective August 3, 1999 and permit trading to resume on the
NASDAQ Small Cap Market under a conditional exception. The conditions required
that the Corporation release a written copy of the final results of the internal
investigation into the former auditors' resignation on or before September 15,
1999; on or before November 15, 1999, demonstrate a closing bid price of at
least $1.00 per share, and immediately thereafter evidence a closing bid price
of at least $1.00 per share for a minimum of ten consecutive trading days, and
file its Form 10-Q for the quarter ended September 30, 1999 on or before
November 15, 1999, evidencing continued profitability.
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The Corporation has met the first and second conditions of the exception. Due to
the loss reported for the quarter ended September 30, 1999, the Corporation has
not met the third condition of the exception.
In November, 1999, the Corporation negotiated an out-of-court settlement in an
action filed by former stockholders of Sabina Industries, Inc. on December 31,
1997, in the United States District Court for the Central District of
California. On September 30, 1997, UNIDYNE acquired Sabina in a stock for stock
transaction. UNIDYNE exchanged 500,000 shares of its common stock for all the
issued and outstanding shares of Sabina Industries, Inc., which included all the
assets and liabilities of Sabina as well as trade names and technology. In
December, 1997, the former stockholders of Sabina filed suit alleging
misrepresentation, failure to release them from personal guarantees, and
undisclosed liabilities of UNIDYNE and sought recission of the acquisition
agreement. UNIDYNE denied all allegations and contested the recission.
The settlement became effective November 10, 1999. UNIDYNE will retain the
company known as Sabina Industries, Inc. The Sabina name, along with its
associated trade names and the rights, title, and interests to Sabina's
technology, along with Sabina inventory located at Anaheim, California will be
transferred to the former stockholders of Sabina. The agreement further calls
for a) return to UNIDYNE of the 500,000 shares of UNIDYNE Common Stock, b) a
sales type lease transfer of machinery and equipment to the former Sabina
stockholders over a three year period with a total lease value of $310,788, c)
Sabina to enter three-year service contracts for technical consulting and for
warranty service with a total value of $361,188, d) cancellation of the real
property leases with a remaining value of approximately $1,000,000 for Sabina's
Anaheim operations, e) a payment to UNIDYNE of $150,000 less amounts due and
owing under the real estate leases, f) dismissal of all actions brought against
UNIDYNE. Mutual releases and covenants not to sue were exchanged among the
parties.
In November, 1999, the Corporation received notification from the Internal
Revenue Service as a result of the audit of the Corporation's returns for 1995
and 1996 that carryback to tax year 1995 of the Corporation's tax loss of
$768,732 for tax year 1996 was disallowed. The Corporation believes its position
on the carryback is justified and intends to vigorously pursue an appeal. While
there can be no assurance that the Corporation's position will prevail, the
Corporation has been advised that there are substantial grounds for reversing
the Service's position. The Corporation's returns for tax years 1996 are being
audited by a state taxing authority, but the Corporation has no reason to
believe a material adjustments would result of that audit.
ITEM 2. Changes in Securities
None
ITEM 3. Defaults Upon Senior Securities
The revolving credit agreement with Johnson Bank of Racine, WI by the
Corporation's subsidiary Dynamatic Corporation expired on July 31, 1999.
Dynamatic continues to pay interest monthly on the outstanding principal amount
of $2,700, and to pay monthly principal and interest on the two term notes to
Johnson Bank originally due December 30, 2002. Negotiations are continuing with
Johnson Bank to extend the credit facility until new lending arrangements can be
obtained.
The Corporation has been in arrears since approximately March 31, 1997 on the
dividends to the former
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holder of its preferred stock. As previously reported, the holder of the
Corporation's preferred stock agreed to convert all of its preferred shares to
500,000 shares of UNIDYNE common stock as of June 30, 1999.
ITEM 4. Submission of Matters to a Vote of Security Holders
The Corporation held its Annual Meeting of Shareholders on August 12, 1999. The
following is a summary of the matters voted on in that meeting. There were 9,
755,352 outstanding common shares eligible to vote.
a) The shareholders elected two members of the Corporation's Board of
Directors whose terms were up for reelection, to serve through 2002. The
persons elected to the Corporation's Board of Directors, the number of
votes cast for and the number of votes withheld with respect to each of
these persons were as follows:
Director For Withheld Term
-------- --- -------- ----
David M. Barrett, Esq 7,537,800 1,217,783 2002
C. Eugene Hutcheson 7,537,651 1,217,783 2002
Juan E. Cintron 2002
Charlotte E. Doremus 2001
b) The shareholders voted to appoint Strouss, Hui & Ellis, P.C. as UNIDYNE's
independent auditors for the fiscal year ending December 31, 1999 by a
vote of 8,743,030 for, 7,351 against, and 5,202 withheld. Strouss, Hui &
Ellis, P.C. have recently advised the Corporation that they are no longer
in a position to serve as our auditors and the Corporation is actively
seeking new independent auditors. Accordingly, this 10-QSB has not been
reviewed by any independent auditors.
c) The shareholders voted to increase the number of shares covered by the
Corporation's S-8 registration statement by 1,000,000 shares by a vote of
8,754,833 for, 750 against, and none withheld.
ITEM 5. Other Information
None
ITEM 6. Exhibits and Reports
a. Exhibits
None
b. Reports on Form 8-K
No reports on Form 8-K were filed in the third quarter of 1999.
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<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
UNIDYNE CORPORATION
Date: July 29, 1999 /s/ C. Eugene Hutcheson
------------------------------
C. Eugene Hutcheson, Chairman
and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.
Date: July 29, 1999 /s/ C. Eugene Hutcheson
------------------------------
C. Eugene Hutcheson, Chairman
and Chief Executive Officer
Date: July 29, 1999 /s/ Wayne R. Lorgus
------------------------------
Wayne R. Lorgus, President
and Chief Financial Officer
Page 12
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> JUN-30-1999
<CASH> 76
<SECURITIES> 0
<RECEIVABLES> 2309
<ALLOWANCES> 257
<INVENTORY> 6168
<CURRENT-ASSETS> 8874
<PP&E> 14016
<DEPRECIATION> (6,619)
<TOTAL-ASSETS> 19695
<CURRENT-LIABILITIES> 9874
<BONDS> 0
0
0
<COMMON> 10
<OTHER-SE> 583
<TOTAL-LIABILITY-AND-EQUITY> 19695
<SALES> 3569
<TOTAL-REVENUES> 3569
<CGS> 2543
<TOTAL-COSTS> 2543
<OTHER-EXPENSES> 4087
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 196
<INCOME-PRETAX> (3257)
<INCOME-TAX> 0
<INCOME-CONTINUING> (3257)
<DISCONTINUED> (1087)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (4324)
<EPS-BASIC> (0.43)
<EPS-DILUTED> 0
</TABLE>
