<PAGE> 1
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: January 31, 1996
----------------
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: 0-11552
TELEVIDEO SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 94-2383795
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2345 Harris Way, P.O.Box 49048, San Jose, California 95131
(Address of principal executive offices)
(Zip Code)
(408) 954-8333
(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.
YES X NO
----- -----
The number of shares outstanding of registrant's Common Stock, as of
March 12, 1996 is: 45,369,370 .
------------
(Consisting of 16 pages.)
<PAGE> 2
TELEVIDEO SYSTEMS, INC.
FORM 10-Q
FOR THE QUARTER ENDED JANUARY 31, 1996
INDEX
<TABLE>
<CAPTION>
PAGE NO.
<S> <C> <C>
PART I. Financial Information 3
ITEM 1. FINANCIAL STATEMENTS
Condensed Consolidated Financial Statements
Condensed Consolidated Balance Sheets -
January 31, 1996 and October 31, 1995 4
Condensed Consolidated Statements of
Operations - Three Months Ended January 31,
1996, and January 31, 1995 5
Condensed Consolidated Statements of Cash
Flows - Three Months Ended January 31, 1996,
and January 31, 1995 6
Notes to Condensed Consolidated Financial
Statements - January 31, 1996 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF
OPERATIONS 12
PART II. Other Information 15
ITEM 1. LEGAL PROCEEDINGS 15
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 15
SIGNATURES 16
</TABLE>
2
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
TELEVIDEO SYSTEMS, INC.
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1996 AND 1995 QUARTERLY DATA
The condensed consolidated financial statements included herein have
been prepared by the management of TeleVideo Systems, Inc. (the "Company"),
without audit, pursuant to the rules and regulations of the Securities and
Exchange Commission. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted, pursuant to such rules and
regulations, although the Company believes the disclosures which are made are
adequate to make the information presented not misleading. Further, the
condensed consolidated financial statements reflect, in the opinion of
management, all adjustments (which included only normal recurring adjustments)
necessary to present fairly the financial position and results of operations as
of and for the periods indicated.
It is suggested that these condensed consolidated financial statements
be read in conjunction with the financial statements and the notes thereto
included in the Company's Report on Form 10-K for the fiscal year ended October
31, 1995.
The results of operations for the three-month period ended January 31,
1996, are not necessarily indicative of the results to be expected for the
entire fiscal year ending October 31, 1996.
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3
<PAGE> 4
TELEVIDEO SYSTEMS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
<TABLE>
<CAPTION>
January 31, October 31,
1996 1995
----------- -----------
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 3,206 $ 5,145
(including restricted cash of
$2,500 in 1996 and $3,500 in 1995)
Marketable securities 41 40
Accounts receivable, net 4,729 3,593
Receivables from related parties, net 92 1,441
Inventories 5,204 5,735
Prepayments and other 6,510 336
-------- --------
Total current assets 19,782 16,290
-------- --------
Property, plant and equipment:
Property, plant and equipment 5,977 5,961
Less accumulated depreciation (2,776) (2,705)
-------- --------
Net property, plant and equipment 3,201 3,256
-------- --------
Investment in affiliates (Note 2) 199 54
Other assets - 5,000
-------- --------
Total assets $ 23,182 $ 24,600
======== ========
LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 553 $ 1,662
Accrued liabilities 964 982
Income taxes 611 611
-------- --------
Total current liabilities 2,128 3,255
-------- --------
Stockholders' equity:
Common stock 452 451
Additional paid in capital 95,577 95,560
Unrealized loss on marketable securities (39) (39)
Accumulated deficit (74,936) (74,627)
-------- --------
Total stockholders' equity 21,054 21,345
-------- --------
Total liabilities & stockholders' equity $ 23,182 $ 24,600
======== ========
</TABLE>
4
<PAGE> 5
TELEVIDEO SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JANUARY 31, 1996 AND JANUARY 31, 1995
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
1996 1995
----------- ----------
<S> <C> <C>
Net sales $ 5,199 $ 2,599
Cost of sales 4,505 1,879
------- -------
Gross profit 694 720
------- -------
Operating expenses:
Sales and marketing 886 663
Research and development 370 433
General and administrative 292 257
------- -------
Total operating expenses 1,548 1,353
------- -------
Loss from operations (854) (633)
------- -------
Interest income 123 128
Other income (*) 425 1,281
------- -------
Net gain (loss) before income tax (306) 776
Income taxes (2) (1)
------- -------
Net gain (loss) after income tax $ (308) $ 775
======= =======
Net gain (loss) per share $ (0.01) $ 0.02
======= =======
Average shares outstanding 45,171 44,641
======= =======
</TABLE>
(*) Including:
(1) $232,000 from sales tax refund and a gain of $187,000 from
the sale of InterTerminal in January 1996;
(2) a gain of $1.3 million from the sale of the building
in fiscal 1995.
5
<PAGE> 6
TELEVIDEO SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED JANUARY 31, 1996 AND JANUARY 31, 1995
(In thousands)
<TABLE>
<CAPTION>
1996 1995
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (308) $ 775
Charges (credits) to operations not
affecting cash:
Depreciation 70 87
Changes in certain current assets
and liabilities:
Accounts receivable (1,136) 387
Inventories 531 302
Prepayments and other (1,175) (102)
Accounts payable (1,109) (899)
Accrued liabilities (18) (150)
Income taxes 0 0
------- -------
Net cash provided by (used in)
operating activities (3,145) 400
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Net retirements of (additions to) property,
plant & equipment (16) 7,144
Decrease (increase) in other assets 0 (5,010)
Investment in marketable securities (1) 10
Investment in affiliate (145) 0
Loan to affiliate 1,350 (95)
------- -------
Net cash provided by (used in) investing
activities 1,188 2,049
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock 17 0
------- -------
Net cash provided by financing activities 17 0
------- -------
Increase (decrease) in cash
and cash equivalents (1,940) 2,449
------- -------
Cash and cash equivalents at the
beginning of the period 5,145 2,131
------- -------
Cash and cash equivalents at the
end of the period $ 3,205 $ 4,580
======= =======
</TABLE>
6
<PAGE> 7
TELEVIDEO SYSTEMS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
January 31, 1996
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Consolidation
The condensed consolidated financial statements include the accounts of
the Company and its majority owned subsidiaries, after elimination of
intercompany accounts and transactions.
Translation
The Company applies Statement of Financial Accounting Standards No. 52
for purposes of translating foreign currency financial statements of its foreign
subsidiaries. Translation gains and losses resulting from the translation of
foreign currency financial statements are deferred and classified as adjustments
to stockholders' equity.
Cash and Cash Equivalents
For purposes of the condensed consolidated statements of cash flows,
the Company considers all highly liquid investments with a maturity of three
months or less to be cash equivalents. Approximately $2.5 million, invested in
short term certificates of deposit, are pledged as security under a letter of
credit agreement.
Marketable Securities
Marketable securities are carried at the lower of aggregate cost or
quoted market value. The aggregate cost of marketable securities at January 31,
1996 was $80,020, while the quoted market value was $41,037. Unrealized losses
through January 31, 1996 were $38,983.
Inventories
Inventories are stated at the lower of cost or market. Costs are
computed on a currently adjusted standard basis (which approximates average
cost) for both finished goods and work-in-progress and includes material, labor
and manufacturing overhead costs. The
7
<PAGE> 8
components of inventory consist of the following: (in thousands)
<TABLE>
<CAPTION>
January 31, October 31,
1996 1995
----------- -----------
<S> <C> <C>
Purchased parts $2,154 $3,390
Work-in-process 1,759 1,170
Finished goods 1,291 1,175
------ ------
$5,204 $5,735
====== ======
</TABLE>
Property, Plant & Equipment
Depreciation and amortization are provided over the estimated useful
lives of the assets using both straight-line and accelerated methods.
Estimated useful lives are as follows:
Buildings 40 years
Production equipment 1-10 years
Office furniture 1-10 years
Leasehold improvements Terms of lease
Net Income (Loss) Per Share
Net income and loss per share is based on the weighted average number
of shares of Common Stock outstanding during the period.
2. ACQUISITIONS AND DIVESTITURES:
Kabil Electronics Company, Ltd.
The Company owned a 35% interest in Kabil Electronics Company, Ltd. of
South Korea and the total investments were approximately $3.3 million. Since
Kabil continued to sustain losses from operations, the Company wrote off its
investments in Kabil in fiscal 1990 and fiscal 1993. In December 1994, the
Company accepted an offer to sell its 35% interest in Kabil to the majority
owners for $1.4 million, less expenses, which is to be paid in installments over
the 1995 and 1996 fiscal year. Approximately $552,848 was received in fiscal
1995. An additional $866,652 was received in January 1996.
8
<PAGE> 9
AdMOS Technologies Inc.
During fiscal 1991, the Company acquired through its wholly owned
subsidiary, Silicon Logic, Inc., a 20% equity interest in a chip engineering
firm (AdMOS Technologies Inc.) in exchange for certain assets and a nominal cash
payment, the total value of which was $145,000. The acquisition of this interest
has been accounted for on the cost method. This investment was written off in
fiscal 1992 due to the continued economic difficulties experienced by AdMOS.
In fiscal 1991 and 1992, the Company loaned AdMOS a total of $470,000,
which has been partially repaid. The outstanding balance at January 31, 1996 was
$104,000. The repayment of a portion of this loan is personally guaranteed by
the President and controlling shareholders of AdMOS. Due to the economic
difficulties AdMOS is currently experiencing, the principal and interest
balances due on this note have been fully reserved.
In February 1995, TeleVideo further loaned AdMOS $384,000 at an
interest rate of 10% per annum. Approximately $104,000 was repaid to the Company
in August 1995. In November 1995, the Company received another $100,000 from
AdMOS. The Company has fully reserved the unpaid balance of $180,000 plus
accrued interest as of January 31, 1996.
Indigo, International
During the first quarter of fiscal 1994, the Company acquired a 40%
interest in Indigo, International in exchange for a cash investment of $25,000.
The investment is carried at cost. Indigo has incurred only minor operations
through January 31, 1996. The Company is planning to sell its Indigo business in
fiscal 1996.
Three H
In fiscal 1992, the Company acquired a 50% joint venture interest in
"Three H" in exchange for the contribution of cash of approximately $16,000. In
February 1993, the Company loaned the Three H Joint Venture $1.0 million as
working capital for the purpose of conducting short term commodities trading.
The loan is unsecured. This note bears interest at 20% per annum and stipulates
a maximum term of two years. In fiscal 1994, a total amount of $800,000 was
repaid to the Company. The Company received another $170,000 from "Three H" in
November 1995. The remaining balance of $30,000 plus accrued interest of
approximately $62,000 will be repaid in fiscal 1996.
InterTerminal
The main purpose of the "InterTerminal" joint venture is the
9
<PAGE> 10
construction of a truck terminal (approximately 100,000 square feet)
approximately 25 miles outside of Moscow, and the construction was complete in
early 1995. In April 1994, the Company acquired a 51% ownership of the joint
venture in exchange for a $5,100 cash investment and a commitment to fund a
$3.65 million loan, 20% interest rate, to the venture, the proceeds of which
were to be used to fund construction of the truck terminal. TeleVideo funded the
$3.65 million loan to the venture in fiscal 1994 and 1995. TeleVideo sold its
51% ownership in May 1995. Approximately $3.5 million was repaid to the Company
in fiscal 1995. An additional $406,000 was received during the first quarter of
fiscal 1996. After offsetting $219,000 to the balance of the loan and acrued
interest, the remaining $187,000 was recognized as a gain in the first quarter
of fiscal 1996. An additional $1.1 million is expected to be received in fiscal
1996.
TeleVideo-RUS
In January 1995, TeleVideo set up a company called "TeleVideo-RUS" in
the Commonwealth of Independent States with an initial investment of $150,000.
The main purpose of this company is to act as a liaison between TeleVideo and
the authorities in the CIS. One of the projects that the Company is anticipating
will be the construction of truck terminals similar to the "InterTerminal" joint
venture.
At the indicated dates the Company had the following investments in
affiliates and joint ventures: (in thousands)
<TABLE>
<CAPTION>
January 31, October 31,
1996 1995
----------- -----------
<S> <C> <C>
Three H Joint Venture $ 16 $ 16
Pan Asian Bank 8 8
InterTerminal 0 5
TeleVideo-RUS 150 0
Indigo 25 25
----------- -----------
Total $ 199 $ 54
----------- -----------
</TABLE>
3. RESTRICTED CASH:
The Company has a letter of credit agreement with a bank whereby the
bank will issue up to $2.5 million of standby and sight letters of credit. This
agreement is contingent upon the Company maintaining cash deposits at the bank
as collateral in an amount no less than the outstanding borrowings. These funds
are held in three-month certificates of deposits and earn interest at the rate
of approximately 5.64% per annum. At January 31, 1996, the Company had letters
of credit outstanding of approximately $1,457,380 which were secured by an
equivalent amount of cash deposits.
10
<PAGE> 11
4. INCOME TAXES:
The Company adopted, effective November 1, 1993, Statement of Financial
Accounting Standards (SFAS) No. 109, "Accounting for Income Taxes," issued in
February 1992. Under the liability method specified by SFAS 109, deferred tax
assets and liabilities are determined based on the difference between the
financial statement and tax bases of assets and liabilities as measured by the
enacted tax rates which will be in effect when these differences reverse.
Deferred tax expense is the result of changes in deferred tax assets and
liabilities. The change from the deferred method to the liability method of
accounting for income taxes had no material impact on the financial position or
results of operations of the Company for the quarter ended January 31, 1996.
As of January 31, 1996, the only tax issues pending are the
Massachusetts State Tax audit and the California Franchise Tax exposure
resulting from the previous Federal Income Tax audits. The Company believes that
a resolution of one or both of these audits could occur in fiscal 1996 and its
maximum exposure, collectively will not exceed $600,000. The Company has accrued
this full amount at January 31, 1996.
5. LITIGATION:
The Company has been named, along with dozens of other manufacturers,
designers, and distributors of computer equipment, as a defendant in several
lawsuits regarding product liability in connection with the alleged defective
design of computer terminal keyboards and the size of the computer monitor
screens. The first issue alleges that the various plaintiffs have suffered some
form of severe wrist injury from the use of said keyboards. The second issue
alleges that there was false advertising which claimed that the video screens
were 17 inches in size, when in reality they were only 15 inches. The Company's
attorneys have prepared a defense for these cases and the Company's insurance
carriers are informed of the plaintiff's claims. The Company intends to
vigorously defend against the allegations of these suits. Management believes
that the ultimate outcome of these lawsuits will not have a material adverse
effect on the Company's financial position.
11
<PAGE> 12
6. RELATED PARTY TRANSACTIONS:
The Company's outstanding receivables from related parties are
summarized below (in thousands):
<TABLE>
<CAPTION>
January 31, October 31,
Notes Receivable: 1996 1995
- ----------------- ----------- -----------
<S> <C> <C>
Three H Joint Venture $ 30 $ 200
InterTerminal 0 213
Kabil 0 866
AdMOS 104 (1) 104 (1)
AdMOS 180 (1) 280 (2)
Interest Receivable:
Three H Joint Venture 62 62
AdMOS 58 (1) 55 (1)
AdMOS 28 (1) 24 (1)
----------- -----------
Total $ 462 $ 1,804
----------- -----------
</TABLE>
- ------------------
(1) Amounts are fully reserved.
(2) Approximately $180,000 is reserved.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
Results of Operations
Operating loss for the three months ended January 31, 1996 of
approximately $854,000 was approximately 34.9% higher comparing with the same
period in fiscal 1995 which totaled approximately $633,000, primarily the
results of lower profit margin and intensive price competition on multimedia
products, coupled with the increase in the marketing and sales expenses on the
multimedia products.
The net loss for the first quarter of fiscal 1996 totaled approximately
$308,000, or $0.01 per share, compared to a net gain of $775,000, or $0.02 per
share, a year ago for the same three-month period. The net gain for the first
quarter of fiscal 1995 was primarily due to the sale of the Company's real
property which resulted in a gain of $1.3 million.
Net loss per share for the first quarter of fiscal 1996 was $0.01 based
on 45,171,000 weighted average shares outstanding, compared to a net gain of
$0.02 per share based on 44,641,000 weighted average shares outstanding in the
first quarter of fiscal 1995.
12
<PAGE> 13
Net sales for the first quarter of fiscal 1996 of approximately $5.2
million were approximately 100.0% above the same quarter a year ago which
totaled approximately $2.6 million. The increase in net sales was principally
attributable to the increase in the sales volume of the multimedia products
which accounted for approximately $2.5 million in the first quarter of fiscal
1996.
Cost of sales were approximately $4.5 million in the first quarter of
fiscal 1996, or 139.8% higher than the approximately $1.9 million reported in
the first quarter of fiscal 1995. Cost of sales in the first quarter of fiscal
1996 compared to the same period a year ago increased as a percentage of sales
from approximately 72.3% in 1995 to approximately 86.7% in 1996. The increase in
cost of sales percentage and the corresponding decrease in gross margin
percentage for the three-month period ended January 31, 1996 (a decrease from
approximately 27.7% to 13.3%) were primarily the results of the relatively
higher product cost and lower profit margin of the multimedia products.
Marketing expense decreased as a percentage of sales in the first
quarter of fiscal 1996 from approximately 25.5% in fiscal 1995 to 17.0% in
fiscal 1996 on a comparative quarter-to-quarter basis, while actual marketing
expenses increased approximately 33.6% over this same three-month period. The
increase in actual marketing expense was due primarily to the increase in
employee staffing levels.
Research and development expense decreased as a percentage of sales in
the first quarter of fiscal 1996 from approximately 16.7% in fiscal 1995 to 7.1%
in fiscal 1996, while actual research and development expense decreased
approximately 14.5% over this same three-month period. The decrease was
primarily due to the decrease in employee staffing levels.
General and administrative expense decreased as a percentage of sales
in the first quarter of fiscal 1996 from approximately 9.9% in fiscal 1995 to
5.6% in fiscal 1996, while actual expenses increased approximately 13.6% over
this same three-month period.
Interest income earned in the three months ended January 31, 1996
decreased approximately 3.9% over the same time period a year ago. This decrease
was primarily due to the lower volume of funds loaned to related parties at
significantly high interest rates and lower cash levels.
The Company sold its 51% ownership in "InterTerminal" joint venture in
fiscal 1995 for approximately $1.3 million, after netting all the selling
expenses. Approximately $187,000 was received and recognized as a gain in the
first quarter of fiscal 1996.
A refund of approximately $232,000 was received from the State Board of
Equalization resulted from the sales tax audits for the period August 1983
through March 1990.
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<PAGE> 14
No income taxes were provided for in the quarter ended January 31,
1996, as the Company believes that it has adequate net operating loss and credit
carryovers to offset any current corporate income tax liability.
LIQUIDITY AND CAPITAL RESOURCES
Cash and cash equivalents totaled approximately $3.21 million at
January 31, 1996, down $1.94 million (approximately 37.7%) from fiscal 1995
year-end levels of $5.15 million. The decrease in the cash and cash equivalent
position for the three-month period ended January 31, 1996 resulted primarily
from the net cash used in operating activities of $3.15 million, but partially
offset by the loan repayments of $1.35 million from affiliates.
Cash used in operations in the first three months of fiscal 1996 of
$3.15 million resulted primarily from the excess of operating cash expenses over
cash revenues. Cash provided by investing activities of $1.19 million resulted
primarily from the decrease in note receivables of approximately $1.35 million
but partially offset by the increase in investment in affiliate of $145,000.
Approximately $2.5 million in certificates of deposit were pledged as
collateral for comparable amounts of stand-by and sight letters of credit under
a letter of credit agreement as of the end of the first quarter of 1996. At
January 31, 1996, the Company had approximately $1.5 million in outstanding
letters of credit which were secured by the pledged deposits under this
agreement.
Net accounts receivable of $4.7 million at the end of the first quarter
of fiscal 1996 were up approximately 31.6% from 1995 year-end level of $3.6
million. Days sales outstanding in accounts receivable increased in 1996 from 88
days to 91 days. Trade accounts payable of $0.6 million at the end of the first
quarter of fiscal 1996 were down approximately 66.7% from the 1995 year-end
level of $1.7 million.
Net inventories of approximately $5.2 million at the end of the first
quarter of fiscal 1996 were down approximately 9.3% from the 1995 year-end level
of $5.7 million.
Working capital at the end of the first quarter of fiscal 1996 was
$17.7 million, up approximately 35.4% from fiscal 1995 year-end level of $13.0
million.
The Company expects to generate cash of approximately $1.1 million in
fiscal 1996 from the sale of its InterTerminal venture investments and
approximately $5.0 million in December 1996 from note receivable from the sale
of its real property. At the current consumption rate, the Company's cash
balance of approximately $3.2 million (which includes $2.5 million pledged as
security for stand-by
14
<PAGE> 15
and sight letters of credit) at January 31, 1996, together with anticipated
revenues from operations and other non-operating cash receipts, are anticipated
to be adequate to fund the Company's fiscal 1996 operations at projected levels.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
See Note 5 of "Notes to Condensed Consolidated Financial Statements."
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibit(s). None.
(b) Reports on Form 8-K. None.
[The remainder of this page is intentionally left blank]
15
<PAGE> 16
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.
TELEVIDEO SYSTEMS, INC.
March 12, 1996 /s/ K. Philip Hwang
--------------------------
Dr. K. Philip Hwang,
Chairman of the Board and,
Chief Executive Officer
/s/ David Kim
--------------------------
David Kim,
Chief Financial Officer
16
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-START> NOV-01-1995
<PERIOD-END> JAN-31-1996
<CASH> 3,206
<SECURITIES> 41
<RECEIVABLES> 5,175
<ALLOWANCES> 446
<INVENTORY> 5,204
<CURRENT-ASSETS> 19,782
<PP&E> 5,977
<DEPRECIATION> 2,776
<TOTAL-ASSETS> 23,182
<CURRENT-LIABILITIES> 2,128
<BONDS> 0
0
0
<COMMON> 452
<OTHER-SE> 20,602
<TOTAL-LIABILITY-AND-EQUITY> 21,054
<SALES> 5,199
<TOTAL-REVENUES> 5,199
<CGS> 4,505
<TOTAL-COSTS> 4,505
<OTHER-EXPENSES> 1,548
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (306)
<INCOME-TAX> 2
<INCOME-CONTINUING> (308)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (308)
<EPS-PRIMARY> (0.01)
<EPS-DILUTED> (0.01)
</TABLE>
