<PAGE> 1
Page 1 of 16
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the nine months ended June 30, 1996 Commission file no. 0-11527
MPSI SYSTEMS INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 73-1064024
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
8282 South Memorial Drive, Tulsa Oklahoma 74133
- --------------------------------------------------------------------------------
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code (918) 250-9611
-----------------------------
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
------ ------
Number of shares of common stock outstanding at June 30, 1996- 2,793,187
------------------
<PAGE> 2
INDEX
Part I. FINANCIAL INFORMATION:
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
Financial Statements:
Consolidated Balance Sheets - June 30, 1996 and September 30, 1995 .. 3
Consolidated Statements of Operations - Three Months and Nine Months
Ended June 30, 1996 and 1995 ..................................... 5
Consolidated Statement of Stockholders' Equity - Nine Months
Ended June 30, 1996 .............................................. 6
Consolidated Statements of Cash Flow -
Nine Months Ended June 30, 1996 and 1995 ......................... 7
Notes To Consolidated Financial Statements .......................... 8
Management's Discussion and Analysis of Financial Condition and
Quarterly Results of Operations ..................................... 9
Part II. OTHER INFORMATION (Including Index to Exhibits) .................. 12
SIGNATURES ................................................................. 14
</TABLE>
2
<PAGE> 3
MPSI SYSTEMS INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
ASSETS
- ----------------------------------------------------------------------------------
JUNE 30, SEPTEMBER 30,
1996 1995
- ----------------------------------------------------------------------------------
(UNAUDITED)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 596,000 $ 1,270,000
Short-term investments, at cost 41,000 41,000
Receivables:
Trade 4,980,000 4,522,000
Current portion of long-term receivables 1,524,000 1,893,000
Inventories 582,000 304,000
Prepayments 136,000 175,000
- ------------------------------------------------- ----------- -----------
Total current assets 7,859,000 8,205,000
Property and equipment, net 1,355,000 1,191,000
Long-term receivables, net of current portion
and unamortized discount 2,112,000 2,421,000
Software products, net 897,000 673,000
Other assets 394,000 434,000
- ------------------------------------------------- ----------- -----------
Total assets $12,617,000 $12,924,000
================================================= =========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE> 4
MPSI SYSTEMS INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (CONT'D)
<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
- --------------------------------------------------------------------------------------------------
JUNE 30, SEPTEMBER 30,
1996 1995
- --------------------------------------------------------------------------------------------------
(unaudited)
<S> <C> <C>
Current liabilities:
Accounts payable $1,335,000 $905,000
Accrued liabilities 1,079,000 1,738,000
Deferred revenue 4,523,000 3,614,000
- ----------------------------------------------------------------- ----------- -------------
Total current liabilities 6,937,000 6,257,000
Noncurrent deferred revenue 1,516,000 1,961,000
Other noncurrent liabilities 192,000 220,000
- ----------------------------------------------------------------- ----------- -------------
Total liabilities 8,645,000 8,438,000
- ----------------------------------------------------------------- ----------- -------------
Commitments and contingencies - -
Stockholders' Equity:
Preferred Stock, $.10 par value, 1,000,000 shares
authorized, none issued or outstanding - -
Common Stock, $.05 par value, 20,000,000 shares authorized,
2,793,000 and 2,733,000 shares issued and outstanding at
June 30, 1996 and September 30, 1995, respectively 140,000 137,000
Junior Common Stock, $.05 par value, 500,000 shares
authorized, none issued or outstanding - -
Additional paid-in capital 12,934,000 12,751,000
Deficit (10,031,000) (9,340,000)
Foreign currency translation adjustment 929,000 938,000
- ----------------------------------------------------------------- ----------- -------------
Total stockholders' equity 3,972,000 4,486,000
- ----------------------------------------------------------------- ----------- -------------
Total liabilities and stockholders' equity $12,617,000 $12,924,000
================================================================= =========== =============
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE> 5
MPSI SYSTEMS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
THREE MONTHS ENDED JUNE 30, NINE MONTHS ENDED JUNE 30,
- ------------------------------------------------------------------------------------------------------------------------
1996 1995 1996 1995
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues:
Software maintenance/information services $4,889,000 $5,792,000 $15,387,000 $15,506,000
Software licensing 87,000 322,000 264,000 799,000
- ------------------------------------------- ---------- ---------- ----------- -----------
Total revenues 4,976,000 6,114,000 15,651,000 16,305,000
- ------------------------------------------- ---------- ---------- ----------- -----------
Cost of Sales:
Software maintenance/information services 2,670,000 2,773,000 7,595,000 6,663,000
Software licensing 145,000 113,000 402,000 192,000
- ------------------------------------------- ---------- ---------- ----------- -----------
Total cost of sales 2,815,000 2,886,000 7,997,000 6,855,000
- ------------------------------------------- ---------- ---------- ----------- -----------
Gross profit 2,161,000 3,228,000 7,654,000 9,450,000
Operating expenses:
General and administrative 770,000 658,000 2,219,000 1,949,000
Marketing 1,762,000 1,882,000 5,131,000 5,286,000
Research and development 347,000 304,000 988,000 1,454,000
- ------------------------------------------- ---------- ---------- ----------- -----------
Total operating expenses 2,879,000 2,844,000 8,338,000 8,689,000
- ------------------------------------------- ---------- ---------- ----------- -----------
Operating income (loss) (718,000) 384,000 (684,000) 761,000
Other income (expense):
Interest income 49,000 60,000 150,000 132,000
Interest expense (4,000) (1,000) (11,000) (6,000)
Foreign exchange 86,000 196,000 203,000 408,000
Other, net (6,000) 29,000 5,000 10,000
- ------------------------------------------- ---------- ---------- ----------- -----------
Income (loss) before income taxes (593,000) 668,000 (337,000) 1,305,000
Provision for income taxes (130,000) (75,000) (354,000) (154,000)
- ------------------------------------------- ---------- ---------- ----------- -----------
Net income (loss) $ (723,000) $ 593,000 $ (691,000) $ 1,151,000
=========================================== ========== ========== =========== ===========
Income (loss) per share $ (.26) $ .21 $ (.24) $ .42
=========================================== ========== ========== =========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
5
<PAGE> 6
MPSI SYSTEMS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
NINE MONTHS ENDED JUNE 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
FOREIGN
ADDITIONAL CURRENCY
COMMON STOCK PAID-IN TRANSLATION NET CAPITAL
--------------------
SHARES AMOUNT CAPITAL DEFICIT ADJUSTMENT DEFICIENCY
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Balance,
September 30,
1995 2,733,000 $137,000 $12,751,000 $(9,340,000) $938,000 $4,486,000
Net income (loss) - - - (691,000) - (691,000)
Exercised
stock options 19,000 1,000 52,000 - - 53,000
Common stock issued
to 401(k) Plan 41,000 2,000 131,000 - - 133,000
Foreign currency
translation
adjustment - - - - (9,000) (9,000)
- ------------------- ---------- -------- ----------- ------------ ----------- -----------
Balance,
June 30, 1996 2,793,000 $140,000 $12,934,000 $(10,031,000) $ 929,000 $ 3,972,000
=================== ========== ======== =========== ============ =========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
6
<PAGE> 7
MPSI SYSTEMS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW (NOTE 2)
(UNAUDITED)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------
NINE MONTHS ENDED JUNE 30,
--------------------------
1996 1995
- -----------------------------------------------------------------------------
<S> <C> <C>
Net income (loss) $(691,000) $1,151,000
Adjustments to reconcile net income (loss)
to cash provided by operations:
Depreciation 331,000 301,000
Amortization 370,000 188,000
Loss on sale or abandonment of equipment 3,000 6,000
Write-off of software development costs - 29,000
Changes in assets and liabilities:
Decrease (increase) in assets:
Receivables 204,000 (1,435,000)
Inventories (278,000) (159,000)
Other assets 79,000 7,000
Increase (decrease) in liabilities:
Trade payables and accruals 306,000 (285,000)
Taxes payable (417,000) 28,000
Deferred revenue 500,000 1,236,000
- ------------------------------------------------ ---------- ----------
Net cash provided by operating activities 407,000 1,067,000
- ------------------------------------------------ ---------- ----------
Cash flows from investing activities:
Decrease in short-term investment - (47,000)
Proceeds from asset dispositions 22,000 8,000
Purchase equipment (509,000) (477,000)
Software development (594,000) (325,000)
- ------------------------------------------------ ---------- ----------
Net cash used by investing activities (1,081,000) (841,000)
- ------------------------------------------------ ---------- ----------
Net cash used by financing activities - -
- ------------------------------------------------ ---------- ----------
Increase in cash and cash equivalents (674,000) 226,000
Cash and cash equivalents at beginning of period 1,270,000 635,000
- ------------------------------------------------ ---------- ----------
Cash and cash equivalents at end of period $596,000 $861,000
================================================ ========== ==========
</TABLE>
See accompanying notes to consolidated financial statements.
7
<PAGE> 8
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. GENERAL NOTES:
Certain notes to the September 30, 1995 audited consolidated financial
statements filed with Form 10-K are applicable to the unaudited consolidated
financial statements for the nine months ended June 30, 1996. Accordingly,
reference should be made to the audited financial statements at September
30, 1995.
In the opinion of the Company, the unaudited consolidated financial
statements as of June 30, 1996 contain all adjustments (including normal
recurring accruals) necessary to fairly present the financial position and
the results of operations of the Company. The timing of market study orders
and software license agreements can significantly impact quarterly results
of operations and, accordingly, the results of operations for the nine
months ended June 30, 1996 are not necessarily indicative of the results to
be expected for the full year.
2. STATEMENT OF CASH FLOWS:
During the quarter ended June 30, 1996, the Company settled its $133,000
matching contribution liability to the 401(k) Plan for the plan year ended
December 31, 1995 by issuing approximately 41,000 previously unissued shares
to the Plan. This nonmonetary transaction reduced accrued liabilities and
increased both common stock and additional paid in capital.
3. CORPORATE RESTRUCTURING:
On June 19, 1996, the Company announced a strategic reorganization designed
to maximize client satisfaction, improve internal accountability for
achievement of corporate goals, facilitate implementation of cost reduction
and containment procedures, and focus strategic business units on specific
customer industries and/or products. The Company ultimately incurred and
accrued severance costs and other reorganizational expenses of approximately
$350,000 in July 1996. Although this general announcement preceeded the end
of the June 30, 1996, fiscal quarter end, the released personnel were not
identified or notified of termination until late July 1996. Accordiingly,
the aggregate costs associated with reorganization are not reflected in the
June 30, 1996, balance sheet or statement of operations.
8
<PAGE> 9
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND QUARTERLY RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
MPSI Systems Inc. reported a net loss for the third fiscal quarter ended
June 30, 1996, of $723,000 or $.26 per share on revenues of $5.0 million
compared with net income of $ 593,000 or $.21 per share on revenues of $6.1
million during the comparable quarter last year. These results contributed to
a net loss for the nine months ended June 30, 1996, of $691,000 or $.24 per
share on revenues of $15.7 million compared with net income of $1.2 million or
$.42 per share on revenues of $16.3 million of the same period last year.
The $1.1 million (19%) revenue decline for the quarter compared with the
same quarter last year was principally attributable to lower software and
market study revenues. Software revenues were $235,000 (73%) and $535,000
(67%) lower than in the comparable quarter and nine months last year,
respectively. Since most software license agreements are individually
substantial in amount, the timing of new licenses or renewals can significantly
impact the results of operations in a particular quarter. Management
anticipates software revenues for the entire fiscal year to be comparable with
fiscal year 1995. Revenues from software maintenance, a component of each
software license agreement, were $28,000 and $162,000 higher for the quarter
and nine months ended June 30, 1996, respectively, compared with the same
periods last year as the result of several large contracts signed late in
fiscal year 1995 for which maintenance income is reflected during all periods
of fiscal year 1996.
Revenues for the quarter from market studies (information databases) are
approximately $641,000 (16%) lower than for the same quarter last year
($581,000 or 5% lower for the nine months of 1996 versus 1995). The principal
cause for the decline relates to the timing of studies for Japanese clients,
which, due to the cycle of studies, had only nominal impact on the quarter
ended June 30, 1996, but a greater impact on revenues and profitability during
the quarter ended June 30, 1995. Revenues in North America were flat for the
quarter when compared with last year but were up approximately $400,000 (10%)
for the nine months. Market study revenues in South America and Europe
exhibited little fluctuation from the comparable quarter and nine months last
year due to the delay in release of the new CAPS software versions for those
customers. The commercial release of both versions took place during late June
1996, almost nine months later than originally scheduled. Delays were the
result of resource constraints, organizational issues and added functionality.
In response to these delays, on June 19, 1996, the Company announced a
strategic reorganization designed to maximize client satisfaction, improve
internal accountability for achievement of corporate goals, facilitate
implementation of cost reduction and containment procedures, and focus
strategic business units on specific customer industries and/or products. The
Company ultimately incurred and accrued severance costs and other
reorganizational expenses of approximately $350,000 in July 1996. Although
this general announcement preceeded the end of the June 30, 1996, fiscal
quarter end, the released personnel were not identified or notified of
termination until late July 1996. Accordiingly, the aggregate costs associated
with reorganization are not reflected in the June 30, 1996, balance sheet or
statement of operations.
Profitability from software and market studies was impacted not only by
the lower revenue volumes discussed above but by lower than historical gross
margins. The gross margins from software for the quarter and nine months ended
June 30, 1996, were negative $58,000 and negative $138,000, respectively. Such
margins were $267,000 (128%) and $745,000 (122%) lower than for the comparable
quarter and nine months of last fiscal year, respectively. Software cost of
sales is primarily composed of amortization of capitalized software development
costs. Several software products, including pricing software, were amortized
during all periods this year but only during part of the year last year.
9
<PAGE> 10
Market study gross margins were $1.5 million (45%) and $6.1 million (56%)
for the quarter and nine months ended June 30, 1996, respectively, compared
with $2.4 million (61%) and $7 million (61%) for the comparable periods of
fiscal 1995. The mix of studies during the June 30, 1996, quarter did not
contain as many multi-client Japanese studies as were in process last year.
These studies are generally high margin projects because the average number of
client participants allows MPSI to leverage its market study production costs.
Management anticipates a higher number of Japanese studies from the next cycle
to begin impacting the last fiscal quarter of 1996. A second contributor to
the lower margins was that the production mix also included several partial
updates in connection with the Company's CCMS (Continuously Current Market
Studies) and Quality Partnership studies. These multi-year study commitments
by clients involve complete market updates in some years and only partial
updates in other years. The number of partial updates, which generally result
in lower average gross margins, was greater during the June 1996 quarter than
during the comparable quarter last year.
In addition to the revenues and profitability issues discussed above with
respect to MPSI's main line of products, several new product offerings in
fiscal 1996 continue to lower overall gross margins. Such products have been
offered during the entire 1996 fiscal year to date, whereas they were offered
for only the last half of fiscal year 1995. Gross margins on new data products
and consulting projects rose from 35% during the third fiscal quarter last year
to 41% during the June 1996 quarter. These margins reversed the trend earlier
in fiscal 1996 when the revenue volumes during start-up were low resulting in
significant losses. While margins on these products have improved, management
does not anticipate they will begin to produce gross margins comparable with
MPSI's historical average margins until fiscal 1997.
Operating expenses overall were $2.9 million, up only about 1% over the
same quarter last year. Such expenses were $8.3 million for the nine months
ended June 30, 1996, which was $351,000 (4%) lower than during the nine-month
period last year. General and administrative expenses were $112,000 (17%) and
$270,000 (14%) higher for the quarter and nine months, respectively, than for
the comparable periods of fiscal year 1995. The higher costs were attributable
to (1) additional legal and accounting expenses associated with opening new
offices in South Africa and Korea, (2) trademark registration of new products,
and (3) costs associated with registration of the Company's common stock on the
NASDAQ SmallCap market (which costs were only incurred during the last two
months of fiscal year 1995). Marketing expenses were down $120,000 (6%) and
$155,000 (3%) for the quarter and nine months ended June 30, 1996,
respectively, compared with the same periods last year. The decrease is
primarily attributable to staffing in the sales and client services
departments. Research and development expenses were up $43,000 (14%) for the
quarter ended June 30, 1996, compared with last year but were down $466,000
(32%) for the nine months. The small quarterly increase was attributable to
resources being reassigned to non-capitalizable research on upcoming projects
as development of the South American and European CAPS software neared
completion. The decline over the nine months compared with last year is
attributable to the substantial capitalized costs related to CAPS, the
amortization of which did not begin until June 1996 and is reflected in Cost of
Sales.
Although MPSI continued to benefit from gains on foreign exchange
transactions (reflected in Other Income/Expense), principally billings to
Pacific Rim clients in Singapore dollars, the amounts of such gains were
$110,000 (56%) and $205,000 (50%) lower for the quarter and nine months ended
June 30, 1996, respectively, than was realized during the comparable periods of
fiscal 1995. Although management anticipates continued benefits from exchange
transactions in the near term, changes in foreign currency valuation cannot be
reliably predicted in the long term.
The level of taxable income in the U.S. has not resulted in significant
accrual of domestic income taxes during the quarter or nine months ended June
30, 1996. Amounts reflected in the Provision for Income Taxes are primarily
withholdings at the source by clients in foreign jurisdictions. No significant
change in this mix of taxation is anticipated during the remainder of fiscal
year 1996.
10
<PAGE> 11
FINANCIAL CONDITION AND LIQUIDITY
Working capital declined $869,000 (49%) during the quarter ended June 30,
1996. The decline is consistent with the lower revenues and margins achieved
during the quarter as well as being attributable to internal funding of
computer equipment and software development. The cash component of working
capital declined only $160,000 (21%), but the current portion of deferred
revenues (net of the offsetting portion in receivables) increased $672,000 and
accounted for most of the decline in working capital. These deferred revenues
represent a liability for advanced billings to market study customers which
will be converted to revenues as the related projects are completed. MPSI's
new consulting business unit has several projects in process which will not be
recognized in revenue until the projects are completed and accepted. These
projects also account for the $199,000 increase in Inventory. The revenue
shortfall has resulted in lower turnover of accounts payable and thus a higher
balance therein at June 30, 1996, than at March 31, 1996. The Company
continues to meet its obligations and has a back up line of credit in the
amount of $225,000 which expires in September 1996. Management is currently
negotiating with two commercial banks for a replacement of that line of credit.
As MPSI's business relies on workstations and personal computers, both of
which are advancing rapidly in technological terms, a continuous equipment
updating policy has been adopted which will completely turn over the Company's
computers every two to three years. For the quarter and nine months,
respectively, ended June 30, 1996, MPSI acquired $124,000 and $509,000 of new
equipment, most of which was internally funded. Operating lease financing was
utilized for certain workstation equipment having an aggregate cost of
approximately $50,000. Management anticipates acquisition of approximately
$100,000 more capital equipment before the end of fiscal 1996.
As noted above, MPSI has been developing several new versions of its CAPS
software and recently released versions for Europe and South America.
Development projects continue for Australian and Asian versions targeted for
release during the first half of fiscal 1997. During the quarter and nine
months ended June 30, 1996, MPSI funded and capitalized software development
costs of $251,000 and $594,000, respectively.
The only changes in stockholders' equity for the quarter related to the
issuance of approximately 41,000 shares of Common Stock to the Company's
401(k) Plan in settlement of the company matching requirement (approximately
$133,000) for plan year 1995 and a small decline in the equity adjustment for
translation.
11
<PAGE> 12
PART II - OTHER INFORMATION
Item 1 -- Legal Proceedings - None.
Item 2 -- Changes in Securities - None.
Item 3 -- Defaults Upon Senior Securities - None.
Item 4 -- Submission of Matters to a Vote of Security Holders - None.
Item 5 -- Other Information - None
Item 6 -- Exhibits and Reports on Form 8-K. Page Page
----
(a) Exhibits:
11.1 Earnings per share computation 15
27.1 Financial Data Schedule 16
(b) Reports on Form 8-K - None -
12
<PAGE> 13
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed in its behalf by the
undersigned hereunto duly authorized.
MPSI SYSTEMS INC.
Date August 8, 1996 By /s/ Ronald G. Harper
------------------------------ -------------------------------
Ronald G. Harper, President
(Chief Executive Officer) and
Director
Date August 8, 1996 By /s/ James C. Auten
------------------------------ -------------------------------
James C. Auten
Vice President
(Chief Financial Officer)
13
<PAGE> 14
EXHIBIT INDEX
Exhibit
Number Description Page
------- ------------------------------ ----
11.1 Earnings Per Share Computation 15
27.1 Financial Data Schedule 16
14
<PAGE> 1
EXHIBIT 11.1
EXHIBIT 11.1 - EARNINGS PER SHARE COMPUTATION
Earnings per share calculations may be affected by the granting of stock
options under the provisions of MPSI Systems Inc. Stock Option Plans. The
granting of these options may have a dilutive effect on earnings per common and
common equivalent share. Following is a summary computation of the weighted
average number of shares outstanding and earnings per share using the
treasury-stock method. All computations give effect to a reverse stock split
effective November 16, 1993 as if the transaction had occurred retroactively.
Primary and fully diluted earnings per share are the same for each period
presented.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
Three Months Ended June 30, Nine Months Ended June 30,
------------------------------ ----------------------------
1996 1995 1996 1995
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common stock outstanding throughout the period 2,752,000 2,728,000 2,732,000 2,728,000
Incremental shares:
Exercised options - - 11,000 -
Presumed exercise of dilutive stock options 68,000 47,000 83,000 29,000
Stock issued to 401(k) Plan(1) - - - -
- ----------------------------------------------- -------------- -------------- ------------- -------------
Weighted average shares outstanding 2,820,000 2,775,000 2,826,000 2,757,000
=============================================== ============== ============== ============= =============
</TABLE>
1. Common stock issued June 1996 was not outstanding for a sufficient period to
have a material impact on the computation presented.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
(a) (b)
Weighted
Results of Average
Operations Shares Per Share (a / b)
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Three Months Ended June 30 - 1996 $ (723,000) 2,820,000 $ (.26)
- 1995 $593,000 2,775,000 $ .21
Nine Months Ended June 30 - 1996 $ (691,000) 2,826,000 $ (.24)
- 1995 $1,151,000 2,757,000 $ .42
</TABLE>
15
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1995
<PERIOD-START> APR-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 596
<SECURITIES> 41
<RECEIVABLES> 6,504
<ALLOWANCES> 0
<INVENTORY> 582
<CURRENT-ASSETS> 7,859
<PP&E> 8,869
<DEPRECIATION> 7,514
<TOTAL-ASSETS> 12,617
<CURRENT-LIABILITIES> 6,937
<BONDS> 0
0
0
<COMMON> 140
<OTHER-SE> 3,832
<TOTAL-LIABILITY-AND-EQUITY> 12,617
<SALES> 4,976
<TOTAL-REVENUES> 4,976
<CGS> 2,815
<TOTAL-COSTS> 5,694
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4
<INCOME-PRETAX> (593)
<INCOME-TAX> 130
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (723)
<EPS-PRIMARY> (.26)
<EPS-DILUTED> (.26)
</TABLE>
