<PAGE> 1
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FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For quarterly period ended : September 30, 1995
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: 0-8358
Micro General Corporation
(Exact name of registrant as specified in its charter)
Delaware 95-2621545
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
1740 Wilshire Ave. Santa Ana, California 92705
(Address of principal executive offices) (Zip Code)
(714) 667-0557
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
periods 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 Common Stock, $.05 Par Value -
1,948,166 shares as of November 13, 1995.
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<PAGE> 2
MICRO GENERAL CORPORATION
FORM 10-Q - QUARTER ENDED SEPTEMBER 30, 1995
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
Balance Sheets -- September 30, 1995 and December 31, 1994
Statements of Operations -- Three months ended September 30,
1995 and September 30, 1994.
Statements of Operations -- Nine months ended September 30,
1995 and September 30, 1994
Statements of Cash Flows -- Nine months ended September 30,
1995 and September 30, 1994.
Notes to Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
PART II. OTHER INFORMATION
Item 4. Other Information
Item 6. Exhibits and Reports on Form 8-K.
SIGNATURES
All other schedules are omitted as the required information is
inapplicable or the information is presented in the financial statements
or notes thereto.
<PAGE> 3
FINANCIAL STATEMENTS
MICRO GENERAL CORPORATION
Balance Sheets
September 30, 1995 and December 31, 1994
<TABLE>
<CAPTION>
September 30,
1995 December 31,
(unaudited) 1994
------------ ------------
<S> <C> <C>
Assets
Current assets:
Cash $ 314,173 $ 152,848
Accounts and notes receivable, less
allowance for doubtful receivables
and sales returns of $ 51,936 at
9/30/95 and $81,749 at 12/31/94 461,682 618,434
Income tax refund receivable 7,000 7,000
Inventories (note 2) 1,069,735 1,140,183
Prepaid expenses and accrued interest 151,760 277,432
---------- ----------
Total current assets 2,004,350 2,195,897
Equipment and improvements, net (note 3) 210,426 179,206
Other assets, net (note 4) 28,601 44,688
---------- ----------
$ 2,243,377 $ 2,419,791
========== ==========
Liabilities and Stockholders' Equity:
Current liabilities:
Note payable to bank (note 6) $ 0 $ 0
Accounts payable 73,890 296,071
Accrued expenses 192,205 228,072
Deferred revenue 83,282 159,853
---------- ----------
Total current liabilities 349,377 683,996
Stockholders' equity:
Preferred stock, $.05 par value;
1,000,000 shares authorized no shares issued
and outstanding at 9/30/95 and 12/31/94. -- --
Common stock, $.05 par value; 4,000,000
shares authorized 1,948,166 shares issued at
9/30/95 and 1,888,166 shares at 12/31/94
(note 1) 97,408 94,408
Additional paid-in capital 4,174,508 4,111,883
Accumulated deficits (2,377,916) (2,470,496)
----------- -----------
Total stockholders' equity 1,894,000 1,735,795
----------- ----------
$ 2,243,377 $ 2,419,791
=========== ==========
<FN>
See accompanying notes to financial statements.
</TABLE>
<PAGE> 4
MICRO GENERAL CORPORATION
Statements of Operations
For the Three Months Ended September 30, 1995 and September 30, 1994
(Unaudited)
<TABLE>
<CAPTION>
September 30, September 30,
1995 1994
------------ ------------
<S> <C> <C>
Revenues:
Product sales, net of returns of $84,144
in 1995 and $122,810 in 1994 $ 424,778 $ 650,390
Service and rate revenues (note 7) 322,385 182,930
----------- ----------
Total revenues 747,163 833,320
Cost of sales:
Net product sales 361,663 514,300
Service and rate revenues 107,802 69,252
------------ ----------
Total cost of sales 469,465 583,552
------------ ----------
Gross profit 277,698 249,768
Operating expenses:
Selling, general and administrative 403,624 345,914
Engineering and development 122,104 90,241
Provision for doubtful receivables (42,000) (9,000)
------------ -----------
Total operating expenses 483,728 427,155
------------ -----------
Operating loss (206,030) (177,387)
Interest income, net 6,100 1,904
------------ -----------
Loss before income taxes (199,930) (175,483)
Income taxes (note 5) 0 0
------------ -----------
Net loss $ (199,930) $ (175,483)
============ ===========
Net loss per common and common
equivalent share (note 1) $ (0.10) $ (0.09)
============ ===========
Weighted average shares
outstanding (note 1) 1,948,166 1,885,103
============ ===========
<FN>
See accompanying notes to financial statements.
</TABLE>
<PAGE> 5
MICRO GENERAL CORPORATION
Statements of Operations
For the Nine Months Ended September 30, 1995 and September 30, 1994
(Unaudited)
<TABLE>
<CAPTION>
September 30, September 30,
1995 1994
------------ ------------
<S> <C> <C>
Revenues:
Product sales, net of returns of
$381,291 in 1995 and $258,750 in 1994) $ 1,389,666 $ 2,146,964
Service and rate revenues (note 7) 2,196,181 1,532,651
------------ ------------
Total revenues 3,585,847 3,679,615
Cost of sales:
Net product sales 1,156,587 1,687,759
Service and rate revenues 587,855 428,700
------------ ------------
Total cost of sales 1,744,442 2,116,459
Gross profit 1,841,405 1,563,156
Operating expenses:
Selling, general and administrative 1,299,486 1,255,222
Engineering and development 489,276 297,399
Provision for doubtful receivables (29,000) 17,000
------------ ------------
Total operating expenses 1,759,762 1,569,621
------------ ------------
Operating profit (loss) 81,643 (6,465)
Interest income, net 10,937 6,702
------------ ------------
Earnings before income taxes 92,580 237
Income taxes (note 5) 0 0
------------ -----------
Net earnings $ 92,580 $ 237
============ ===========
Net earnings per common and common
equivalent share (note 1) $ 0.05 $ 0.00
============ ===========
Weighted average shares outstanding
(note 1) 1,939,595 1,883,205
============ ===========
<FN>
See accompanying notes to financial statements.
</TABLE>
<PAGE> 6
MICRO GENERAL CORPORATION
Statements of Cash Flows
For the Nine Months Ended September 30, 1995 and September 30, 1994
(Unaudited)
<TABLE>
<CAPTION>
September 30, September 30,
1995 1994
------------- -------------
<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 92,580 $ 237
Adjustments to reconcile net earnings
to net cash provided by operating activities:
Depreciation and amortization 76,613 77,857
Provision for losses on
accounts receivable and sales
returns, net of write-offs (29,814) 6,326
Change in assets and liabilities:
Decrease in accounts receivable 186,566 236,590
(Increase) decrease in inventories 70,448 (86,648)
Decrease in prepaid expenses 125,672 40,170
Decrease in accounts payable (222,181) (35,063)
Increase (decrease) in deferred revenue (76,571) 53,167
Decrease in accrued expenses (35,867) (61,238)
------------ -----------
Total adjustments 94,866 231,161
------------ -----------
Net cash provided by operating
activities 187,446 231,398
Cash flows used in investing activities
--capital expenditures (91,746) (61,678)
Cash flows from financing activities:
Common stock proceeds, net 65,625 4,689
Repayment of note payable to bank 0 (100,000)
------------ -----------
Net cash used by financing activities 65,625 (95,311)
------------ -----------
Net increase in cash 161,325 74,409
Cash - beginning of year 152,848 85,513
------------ -----------
Cash - end of period $ 314,173 $ 159,922
============ ===========
Supplemental disclosures of cash flow
information:
Cash paid during the period for:
Interest $ 0 $ 0
============ ===========
Income taxes $ 0 $ 0
============ ===========
<FN>
See accompanying notes to financial statements
</TABLE>
<PAGE> 7
MICRO GENERAL CORPORATION
FORM 10-Q -- QUARTER ENDED SEPTEMBER 30, 1995
NOTES TO FINANCIAL STATEMENTS
Note 1. Summary of Significant Accounting Policies
General
The operations of Micro General Corporation (the "Company") consist of
the design, manufacture and sale of computerized parcel shipping
systems, postal scales and piece-count scales.
The financial statements presented include, in the opinion of
management, all adjustments (consisting only of normal recurring
adjustments) necessary for fair presentation of the results of
operations for the periods presented.
The results of operations for the nine months ended September 30, 1995,
are not necessarily indicative of results that may be expected for any
other interim period or for the full year ending December 31, 1995.
Inventories
Inventories are stated at the lower of cost (first-in, first-out) or
market (net realizable value).
Equipment and Improvements
Equipment and improvements are stated at cost. Depreciation and
amortization are provided using the straight-line method over the
estimated useful life of the equipment and improvements.
Net Earnings (Per Common Share)
Net Earnings per common share is computed based on the weighted average
of common shares outstanding. The potential exercise of stock options
is included in the computation of net earnings per common share and
common share equivalents.
Income Taxes
In February 1992, the Financial Accounting Standards Board issued
Statement 109, "Accounting for Income Taxes" ("SFAS 109"). The Company
currently accounts for income taxes under Statement of Financial
Accounting Standard No. 96, "Accounting for Income Taxes" ("SFAS 96").
Under this method, the Company provides for deferred income taxes using
an asset and liability approach for transactions which affect pretax
earnings (loss) for financial and income tax reporting purposes in
different periods. The current and deferred tax consequences are
measured by applying the provisions and rates of enacted tax laws.
SFAS 109 also uses the asset and liability method. The objective of
the asset and liability method under SFAS 109 is to establish deferred
<PAGE> 8
MICRO GENERAL CORPORATION
FORM 10-Q -- QUARTER ENDED SEPTEMBER 30, 1995
NOTES TO FINANCIAL STATEMENTS
tax assets and liabilities for the temporary differences between the
financial reporting basis and the tax basis of the Company's assets and
liabilities at enacted tax rates expected to be in effect when such
amounts are realized or settled.
SFAS was first adopted in the period ended December 31, 1994 and no net
material impact was recognized for that period or the nine months ended
September 30, 1995.
Warranties
The Company's products are sold with a ninety-day warranty on materials
and workmanship. Estimated warranty costs based on historical
experience are accrued as an expense at the time the products are sold.
Intangible Assets
Intangible assets are classified under other assets and are amortized
on a straight-line basis over periods ranging from 10 to 15 years (see
note 4).
Deferred Revenue
The Company collects fees from its customers in anticipation of future
rate changes. Customers prepaying future rate changes receive memory
chips with the new tariffs without paying an additional charge. Rate
change fees are recorded as revenue on a pro rata basis over the
prepaid period.
Revenue Recognition
Product sales are recorded by the Company when products are shipped to
dealers and customers. Rate change revenues are recorded by the
Company at the time memory chips are reprogrammed with new tariffs and
shipped to the customer.
Sales Returns
The majority of the Company's product sales are to its authorized
dealers who resell the Company's products. The Company's policy is
that all sales are final, but dealers may, at the Company's sole
discretion and subject to a restocking fee, return certain out-of-warranty
products in exchange for products of comparable sales value.
Additionally, dealers may, at the Company's sole discretion, be
permitted to return their unopened inventory in the event they or the
Company terminate their dealership agreement, again subject to a
restocking fee. Upon acceptance of returned goods, the Company
reconditions the goods, at a nominal cost, and restocks them in
inventory to be sold at a later date. The Company provides an
allowance for such returns equal to the estimated gross profit on the
portion of sales estimated to be returned. This specific allowance is
<PAGE> 9
MICRO GENERAL CORPORATION
FORM 10-Q -- QUARTER ENDED SEPTEMBER 30, 1995
NOTES TO FINANCIAL STATEMENTS
a component of the Company's allowance for doubtful receivables and
sales returns.
Post Retirement Benefits
The Company does not have any postretirement benefits falling within
the scope of Statement of Financial Accounting Standards No. 106,
"Employers' Accounting for Postretirement Benefits Other Than
Pensions."
Note 2. Inventories
Inventories are comprised of the following at September 30, 1995 and
December 31, 1994:
<TABLE>
<CAPTION>
September 30, 1995 December 31, 1994
<S> <C> <C>
Parts & Supplies $ 775,837 $ 753,456
Purchased finished goods 251,346 292,099
Consigned inventory 42,552 94,628
---------- ----------
$1,069,735 $1,140,183
========== ==========
</TABLE>
Note 3. Equipment and Improvements
Equipment and improvements are as follows at September 30, 1995
and December 31, 1994:
<TABLE>
<CAPTION>
September 30, 1995 December 31, 1994
<S> <C> <C>
Production equipment, tooling
and construction in process $ 435,732 $ 424,848
Office furniture and
equipment 556,694 484,229
Leasehold improvements 27,776 19,381
----------- ---------
1,020,202 928,458
Less accumulated depreciation
and amortization 809,776 749,252
----------- ---------
$ 210,426 $ 179,206
=========== =========
</TABLE>
<PAGE> 10
MICRO GENERAL CORPORATION
FORM 10-Q -- QUARTER ENDED SEPTEMBER 30, 1995
NOTES TO FINANCIAL STATEMENTS
Note 4. Other Assets
Other assets are as follows at September 30, 1995 and December 31, 1994:
<TABLE>
<CAPTION>
Estimated
Useful Life 1995 1994
<S> <C> <C> <C>
Excess cost of assets purchased
over fair market value 15 years $232,531 $232,531
License rights 10 years 26,382 26,382
Other intangible assets 15 years 23,388 23,388
-------- --------
$282,301 $282,301
Less accumulated amortization 253,700 237,613
-------- --------
$ 28,601 $ 44,688
======== ========
</TABLE>
Note 5. Income Taxes
The expected income tax expense(benefit) computed by multiplying
earnings (loss) before income tax expense by the statutory
Federal income tax rate of 34% differs from the actual income tax
expense as follows:
<TABLE>
<CAPTION>
September 30, September 30,
1995 1994
------------- -----------
<S> <C> <C>
Expected tax expense $ 31,477 $ 81
Utilization of net operating
loss carryforward (34,477) (3,081)
Nondeductible amortization of the
excess cost of assets purchased
over fair market value 3,000 3,000
State income taxes - -
------------- -----------
$ 0 $ 0
============= ===========
</TABLE>
At September 30, 1995 and December 31, 1994, the Company had available
net operating loss carryforwards of approximately $1,649,000 and
$228,000 for Federal and state income tax purposes, respectively. If
not used to offset future taxable income, the net operating loss
carryforwards will expire for income tax purposes at various
dates through 2009. The Company also has investment tax credit
and research and experimentation credit carryforwards aggregating
approximately $85,000 which expire during the period 1995 to
2001.
<PAGE> 11
MICRO GENERAL CORPORATION
FORM 10-Q -- QUARTER ENDED SEPTEMBER 30, 1995
NOTES TO FINANCIAL STATEMENTS
Note 6. Notes Payable
The Company had a line of credit, which expired May 1995, which
was secured by substantially all of the Company's assets and
could not exceed 70% of qualifying accounts receivable up to a
maximum credit line of $500,000. The interest rate on the line
of credit was at the bank's prime rate plus 2.0%. At December
31, 1994 the Company received a waiver on an existing default
which was subsequently cured. A credit commitment letter was
signed between the Company and a new bank on November 2, 1995, for a
new line of credit of $600,000 at Wall Street Journal Prime plus
one and three-quarters percent secured by accounts receivable and
inventory balances, as defined in the commitment letter.
Note 7. Commitments and Contingencies
Non cancelable operating lease commitments consist principally of
the lease for the Company's manufacturing and administrative
facility in California and the research and development facility in
Connecticut through 1999. At September 30, 1995, the Company is
committed to the following noncancelable operating lease
payments:
<TABLE>
<CAPTION>
Year ending December
<S> <C>
1995 $ 32,164
1996 131,267
1997 137,945
1998 122,123 Thereafter 29,478
----------
$ 452,977
==========
</TABLE>
At September 30, 1995 and December 31, 1994, the Company was
liable for approximately $180,254 and $185,475, respectively for
outstanding letters of credit to procure inventory from overseas
vendors. These transactions relate solely to transactions
denominated in U.S. dollars.
The Company has a license agreement with Pitney Bowes which
enables the Company to manufacture and sell certain products.
The license agreement expires in 2004. Annual expenses for the
license agreement are minor.
From time to time, the United State Postal Service ("USPS") and/or
United Parcel Service ("UPS") change their rates. For a fee, the
Company provides its customers with programmable memory chips
with the new tariffs which can be inserted into the Company's
products. In some instances, customers prepay a fee to the
Company which assures they will receive new programmable memory
chips for all rate changes which occur within a predetermined
period. In other instances, customers incur a fee for each time
<PAGE> 12
MICRO GENERAL CORPORATION
FORM 10-Q -- QUARTER ENDED SEPTEMBER 30, 1995
NOTES TO FINANCIAL STATEMENTS
they decide to procure a new programmable memory chip. The Company
experienced a UPS rate change during the nine months ended September 30,
1995 and September 30, 1994, and a USPS rate change during the nine
months ending September 30, 1995. Recorded revenues from rate changes
totaled approximately $2,042,156 and $1,282,623 respectively. Gross
profit totaled $1,662,132 and $1,032,306 also for the same periods.
<PAGE>13
MICRO GENERAL CORPORATION
FORM 10-Q -- QUARTER ENDED SEPTEMBER 30, 1995
MANAGEMENT DISCUSSION AND ANALYSYS
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations
Total net product sales decreased $225,612 or 35% in three months ended
September 30, 1995 ("Q3 1995") compared to the three months ended September 30,
1994 ("Q3 1994") while service and rate change revenues increased
$139,455 or 76%. The decrease in net product sales was the main
component in the $86,157 or 10% decrease in total revenue during Q3 1995
as compared to Q3 1994. The decrease in net product sales of $757,298
or 35% for nine months ended September 30, 1995("YTD 1995") as compared to
the nine months ended September 30, 1994 ("YTD 1994") was offset by the
$663,530 or 43% increase in service and rate change revenues for the same
period. For YTD 1995 and YTD 1994, service and rate change revenues represented
approximately 61% and 42% of total revenue, respectively. The increase
in rate change revenues for YTD 1995 as compared to YTD 1994, was
primarily a result of a major USPS rate change in Q1 and a minor USPS
rate change in Q3 1995. YTD sales in the retail channel of distribution
decreased $61,611 or 12% as compared to YTD 1994, while the sales in the
historical dealer channel decreased $692,595 or 42%. This decrease is
primarily the result of United Parcel Services activities to provide free
equipment to a large portion of the Company's customer target market for
shipping room manifest systems. The decline in the Company's retail
channel sales volume described above, was due to unit price erosion as
well as product mix. The Company is continuing its efforts to add
products through outside distribution agreements as well as through its
own research and development efforts.
YTD 1995 cost of sales for product sales decreased $531,172 or 32%
as compared to the same period in 1994. The decrease is due to a change
in product mix and a decrease in overall product sales. The YTD 1995
service and rate change revenue costs increased $161,359 or 38% as
compared to the same period in 1994. The cost goods increase is due to
an increase in service and rate change revenues for the same period.
Gross margin YTD 1995 was 51% compared to 42% for the same
period the prior year. The increase in gross margin is due to higher
rate change revenue.
Operating expenses of the Company in YTD 1995 of $1,759,762 showed
an 12% increase as compared to YTD 1994. The primary reason is due to
an increase of $191,877 or 65% in engineering and development expense which
is a result of research & development work on products to increase the
Company's future product line offering. Normal operating expenses are
expected to essentially remain the same in future periods.
The increase in YTD net earnings of $92,343 as compared to the same
period in 1994, is a result of the increase in rate change revenue. Net
loss for Q3 1995 increased $24,447 or 14% as compared to Q3 1994. This
increase in the net loss is primarily due to lower net product sales which
decreased $225,612 or 35% as compared to the prior period.
Financial Condition, Liquidity and Capital Resources
The Company's ability to generate cash depends on rate change
revenue, the sale of inventory and collection of accounts receivable.
The Company's September 30, 1995 cash balance increased $161,325 or 106% from
<PAGE> 14
MICRO GENERAL CORPORATION
FORM 10-Q -- QUARTER ENDED SEPTEMBER 30, 1995
MANAGEMENT DISCUSSION AND ANALYSYS
December 31, 1994. The increase is primarily attributable to the cash
generated from prepaid rate change revenue derived from the USPS rate change
effective January 1995 and September 1995 and the UPS rate change effective
February 1995. The Company's September 30, 1995 net accounts receivable balance
decreased $156,752 or 25% from December 31, 1994 levels. This decrease
is due to a decrease in product sales for the YTD 1995 period.
Working capital was $1,654,973 at September 30, 1995 as compared to
$1,511,901 at December 31, 1994. The Company's current ratio
at September 30, 1995 was 5.7 as compared to 3.2 at December 31, 1994.
This change is a result of higher cash balances at September 30, 1995 due
to the Q1 1995 rate changes and lower liabilities at September 30, 1995
which is due to a decrease in deferred rate change agreement revenue as
the agreements are nearing the end their one year term. These agreements
are expected to be renewed during Q4 1995.
The Company's total inventories decreased 70,448 or 6% at September
30, 1995 as compared to December 31, 1994 was due mostly to shipments of rate
change chips which had been accumulated at December 31, 1994.
The Company had no bank debt or line of credit agreement with a bank
(See note 6, of Notes to the Financial Statements). The line of credit
previously held by the Company, was based upon certain qualified accounts
receivable balances with maximum availability of $500,000. A new banking
relationship has been established which is anticipated to include various
financing arrangements and servicing of the Company's cash requirements.
A credit commitment letter was signed between the Company with the new bank
on November 2, 1995. The credit commitment is for a revolving line of credit
of $600,000 at Wall Street Journal Prime plus one and three-quarter percent
secured by accounts receivable and inventory balances, as defined in the
commitment letter.
The Company's Q3 1995, current liabilities have decreased 49%
compared to the December 31, 1994 balances. This is associated with a
decrease in the Company's accounts payable balance and deferred rate
change agreement revenue as compared to the December 31, 1994 balance.
The Company believes future liquidity requirements will be covered
from operations and financing arrangements. The Company's investment in
capital expenditures for YTD 1995 increased slightly over December 31,
1994 balances. There were no material commitments for capital
expenditures as of September 30, 1995. The Company does not anticipate
any significant capital expenditures during the remainder of 1995.
The Company does not have any material off balance sheet risks at
September 30, 1995. The Company does not engage in any off balance sheet
financing.
Inflation
The effect of inflation on operating results has, historically,
been insignificant.
<PAGE> 15
MICRO GENERAL CORPORATION
FORM 10-Q -- QUARTER ENDED SEPTEMBER 30, 1995
PART II - OTHER INFORMATION
PART II - OTHER INFORMATION
ITEM 5. OTHER INFORMATION
On July 27, 1995, Mr. Gerald Simmons was named Vice-President of
Sales and Marketing. Mr. Simmons was formerly with MOS Scale in Costa
Mesa, California.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits (listed by numbers corresponding to the Exhibit Table of
Item 601 of Regulation S-K):
11. Computation of earnings (loss) per share is not provided as
the calculation can be clearly determined from the material
contained in Item 1 of Part I.
b. The Company did not file any reports on Form 8-K during the
three months ended September 30, 1995.
<PAGE> 16
MICRO GENERAL CORPORATION
FORM 10-Q -- QUARTER ENDED SEPTEMBER 30, 1995
PART II - SIGNATURES
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.
MICRO GENERAL CORPORATION
Date: November 13, 1995 /s/ Thomas E. Pistilli
---------------------------------
Thomas E. Pistilli
President
Chief Executive Officer
Chief Financial Officer
/s/ Linda I. Morton
---------------------------------
Linda I. Morton
Controller
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> Dec-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<CASH> 314,173
<SECURITIES> 0
<RECEIVABLES> 513,618
<ALLOWANCES> 51,936
<INVENTORY> 1,069,735
<CURRENT-ASSETS> 2,004,350
<PP&E> 1,020,202
<DEPRECIATION> 809,776
<TOTAL-ASSETS> 2,243,377
<CURRENT-LIABILITIES> 349,377
<BONDS> 0
<COMMON> 97,408
0
0
<OTHER-SE> 4,174,508
<TOTAL-LIABILITY-AND-EQUITY> 2,243,377
<SALES> 3,585,847
<TOTAL-REVENUES> 3,585,847
<CGS> 1,744,442
<TOTAL-COSTS> 1,744,442
<OTHER-EXPENSES> 1,788,762
<LOSS-PROVISION> (29,000)
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 92,580
<INCOME-TAX> 0
<INCOME-CONTINUING> 92,580
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 92,580
<EPS-PRIMARY> .05
<EPS-DILUTED> .05
</TABLE>
