<PAGE>
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES ACT OF 1934
For the Quarterly Period
Ended December 31, 1996 Commission file number 0-14427
------------
LA-MAN CORPORATION
(Exact name of registrant as specified in its charter)
NEVADA 38-2286268
(State or other jurisdiction (I.R.S. Employer
of incorporation or other organization) Identification Number)
2180 WEST STATE ROAD 434, SUITE 6136, LONGWOOD, FLORIDA 32779 (407) 865-5995
(Address, including zip code, and telephone number, including area code,
or registrant's office)
------------
Indicate by check mark whether the registrant (1) has filed all reports to
be filed by Section 13 of 15(d) of the Securities 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. [x] Yes [ ] No
As of February 13, 1997, 3,291,187 shares of Common Stock were outstanding.
===============================================================================
<PAGE>
PART I - FINANCIAL INFORMATION
LA-MAN CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
December 31,
1996
------------
(Unaudited)
<S> <C>
ASSETS
Currents assets:
Cash $ 22,898
Accounts receivable, net 2,021,403
Inventories - trade (Note 2) 1,041,223
Prepaid expenses 259,976
Deferred tax assets 125,000
Costs and estimated earnings in excess of billings
on uncompleted contracts (Note 3) 118,096
-----------
Total current assets 3,588,596
-----------
Property, plant and equipment, net 2,698,884
-----------
Other assets
Intangibles, net 2,219,570
Deferred tax assets 150,000
Other 419,157
-----------
2,788,727
-----------
$ 9,076,207
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 847,191
Accrued expenses 683,033
Customer deposits 536,526
Deferred income 35,700
Current portion of long-term liabilities (Note 5) 573,030
-----------
Total current liabilities 2,675,480
Long-term liabilities:
Long-term debt, less current portion 1,815,508
Due for DBI purchase price adjustment (Note 5) 450,357
Deferred income 23,921
Obligations under capital leases, less current portion 26,240
-----------
Total liabilities 4,991,506
-----------
Stockholders' equity:
Common stock 3,291
Additional paid-in capital 5,770,315
Accumulated deficit (1,688,905)
-----------
Total stockholders' equity 4,084,701
-----------
$ 9,076,207
===========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
2
<PAGE>
LA-MAN CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended Three Months Ended
December 31, December 31,
----------------------- -----------------------
1996 1995 1996 1995
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Sales $7,823,279 $6,151,206 $3,609,442 $3,321,480
Cost of sales 4,180,160 2,931,939 1,902,973 1,671,739
---------- ---------- ---------- ----------
Gross profit 3,643,119 3,219,267 1,706,469 1,649,741
Operating expenses 3,265,540 2,666,539 1,627,127 1,406,764
---------- ---------- ---------- ----------
Income from operations 377,579 552,728 79,342 242,977
---------- ---------- ---------- ----------
Other income (expense):
Interest income 49,497 30,161 25,618 19,869
Interest expense (102,385) (86,272) (52,675) (67,177)
Gain on sales of assets, net 264,562 12,532 265,705 12,532
Other 659 7,475 287 1,415
---------- ---------- ---------- ----------
212,333 (36,104) 238,935 (33,361)
---------- ---------- ---------- ----------
Income from continuing operations
before income taxes 589,912 516,624 318,277 209,616
Provision (benefit) for income taxes (128,725) 15,140 (128,725) -
---------- ---------- ---------- ----------
Income from continuing operations 718,637 501,484 447,002 209,616
Discontinued operations:
Loss from operations of
discontinued operations (279,928) (179,795) (123,938) (89,079)
Provision for losses on
discontinued operations (373,015) - (373,015) -
---------- ---------- ---------- ----------
(652,943) (179,795) (496,953) (89,079)
---------- ---------- ---------- ----------
Net income (loss) $ 65,694 $ 321,689 $ (49,951) $ 120,537
========== ========== ========== ==========
Income (loss) per share:
Continuing operations $ .22 $ .19 $ .13 $ .07
Discontinued operations (.20) (.07) (.15) (.03)
---------- ---------- ---------- ----------
Net income (loss) per share $ .02 $ .12 $ (.02) $ .04
========== ========== ========== ==========
Weighted average number of shares 3,251,759 2,682,763 3,284,823 2,787,034
========== ========== ========== ==========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
3
<PAGE>
LA-MAN CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
December 31,
-----------------------
1996 1995
--------- ----------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 65,694 $ 321,689
Loss from discontinued operations 652,943 179,795
Adjustments for non-cash charges 116,608 232,088
Gain on sales of assets (264,562) (12,532)
Changes in assets and liabilities,
net of effects of acquisitions and
discontinued operations (829,587) (645,216)
--------- ----------
Net cash provided by (used for) continuing operating activities (258,904) 75,824
Net cash used for discontinued operating activities (227,350) (311,690)
Cash flows from investing activities:
Capital expenditures (187,337) (56,306)
Payment for purchase of DBI, net of cash acquired of $59,820 - (300,180)
Proceeds from sales of assets 343,643 12,532
Other (20,477) (109,970)
--------- ----------
Net cash provided by (used for) for investing activities 135,829 (453,924)
--------- ----------
Cash flows from financing activities:
Proceeds from exercise of common stock warrants 18,750 -
Proceeds from line of credit 300,100 289,117
Proceeds from long-term debt - 54,715
Payments on capital lease obligations (4,949) (18,573)
Payments on long-term debt (53,305) -
--------- ----------
Net cash provided by financing activities 260,596 325,259
--------- ----------
Decrease in cash (89,829) (364,531)
Cash, beginning of period 112,727 364,531
--------- ----------
Cash, end of period $ 22,898 $ -0-
========= ==========
Supplemental non-cash investing and financing activities:
Issuance of common stock for DBI $ - $1,100,000
Issuance of 8% convertible note for DBI - 750,000
Issuance of common stock for 401(k) matching contribution 45,995 21,984
Recognition of liability for DBI purchase price adjustment
resulting in a decrease in additional paid-in capital 600,476 -
</TABLE>
See accompanying notes to condensed consolidated financial statements.
4
<PAGE>
LA-MAN CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - BASIS OF PRESENTATION
The financial information included herein is unaudited and does not
include all of the information and disclosures required by generally accepted
accounting principles; however, such information reflects all adjustments
(consisting solely of normal recurring adjustments) which are, in the opinion
of management, necessary for a fair presentation of the Company's financial
position and results of operations for the interim periods. Certain
reclassifications have been made in the 1995 financial statements to conform to
the 1996 presentation. This report should be read in conjunction with the
Consolidated Financial Statements included in the Company's Annual Report on
Form 10-KSB for the year ended June 30, 1996.
The results of operations for the six months and three months ended
December 31, 1996 are not necessarily indicative of the results to be expected
for the full year.
In September 1995, the Company completed the purchase of Don Bell
Industries, Inc. ("DBI"). The operating results of DBI are included in the
Company's consolidated results of operations from the date of acquisition.
NOTE 2 - INVENTORIES
Inventories at the end of interim periods are based on perpetual
inventory records. Inventories consist of the following at December 31, 1996:
<TABLE>
<S> <C>
Raw materials and work in progress $ 910,579
Finished goods 130,644
----------
$1,041,223
==========
</TABLE>
NOTE 3- UNCOMPLETED CONTRACTS
The costs and estimated earnings in excess of billings on uncompleted
contracts, consists of the following at December 31, 1996:
<TABLE>
<S> <C>
Costs incurred on uncompleted contracts $ 1,292,620
Estimated earnings 57,398
-----------
1,350,018
Billings to date (1,231,922)
-----------
$ 118,096
===========
</TABLE>
5
<PAGE>
NOTE 4- REVOLVING LINE OF CREDIT
The Company has a $500,000 revolving bank line of credit. Advances on
the credit line carry an interest rate of 1% over prime. The line of credit
matures December 27, 1997, and is collateralized by property, accounts
receivable and inventory. The agreement has covenants which require the
Company to maintain certain financial and operating ratios, including tangible
net worth and interest coverage ratio requirements. At December 31, 1996 the
Company had outstanding advances on this line of credit of $300,100, which are
included in the current portion of long-term liabilities.
NOTE 5- SUBSEQUENT EVENTS
In connection with the acquisition of Don Bell Industries, Inc. in
September 1995 (See Note 1), the Company was contingently liable to the
sellers for additional consideration if the stock price did not attain certain
levels prior to December 31, 1996. The necessary stock price was not attained
and, on January 31, 1997 notes were issued totaling approximately $600,000. The
notes bear interest at 8% and are payable in twelve equal quarterly installments
of principal plus accrued interest beginning April 30, 1997. The amounts due
under these notes are accrued at December 31, 1996 with the portion due within
twelve months included in the current portion of long-term liabilities.
NOTE 6- LEGAL PROCEEDINGS AND DISCONTINUED OPERATIONS
In November 1996, the contracts between MCI Telecommunications, Inc.
("MCI") and Vision Trust Marketing, Inc. ("VTM") for marketing MCI long-distance
services were abruptly terminated by MCI. The contract for commercial customers
was originally executed in 1994 and was restated and extended for a new five-
year term in May 1996. This contract revision had been proposed by MCI in
September 1995 and discussed with VTM over a period of eight months. In
reliance on the new contract, VTM invested heavily in staff, facilities and
equipment in anticipation of significant commissions as a result of enhancements
in the revised contract. VTM is currently assessing its damages and has engaged
legal counsel to consider pursuing legal action against MCI for such damages.
Because VTM is no longer contracted to market MCI long distance
services, its sole line of business, the Company discontinued the operations of
VTM in December, 1996. Sales for VTM for the six months ended December 31, 1996
and 1995 amounted to $105,000 and $249,000, respectively. Included in the
Company's consolidated balance sheet at December 31, 1996 are VTM's current and
long-term assets of $52,000 and $6,000, respectively and its current liabilities
of $169,000. The current liabilities include an accrual providing for aggregate
losses on discontinued operations in the amount of $129,000. Losses totaling
$284,000 for the write-down of VTM's assets to net realizable value were
recognized in December, 1996.
In August, 1996, the Company discontinued the operations of Heritage
Packaging Services, Inc. ("Heritage"), its package wholesaling subsidiary and
recorded an accrual at June 30, 1996 providing for aggregate losses on
discontinued operations in the amount of $115,000. At December 31, 1996 all
costs associated with this discontinuance had been incurred and $39,985 that
remained accrued for aggregate losses on this discontinuance were recorded as
income and netted with VTM's discontinuance accrual.
6
<PAGE>
In summary, the provision for losses on discontinued operations for
the six months ended December 31, 1996 consists of the following:
<TABLE>
<S> <C>
Loss on write-down of VTM assets to net realizable value $284,000
Provision for additional losses on discontinuance of VTM 129,000
Reversal of provision for losses on discontinuance of Heritage (39,985)
--------
$373,015
========
</TABLE>
NOTE 7- CAPITAL STOCK
On July 12, 1996, the Company authorized a 5 percent stock dividend,
which was issued August 7, 1996 to holders of record on July 26, 1996. The
dividend resulted in the issuance of an additional 152,768 shares of the
Company's common stock. Net income per share for the six months and three
months ended December 31, 1995 has been retroactively restated to reflect the
effect of this stock dividend.
On September 27, 1996, a total of 52,521 warrants to purchase common
stock were exercised at a price of $.357 per share for cash proceeds to the
Company of $18,750. In addition, for the six months ended December 31, 1996,
27,233 shares of common stock valued at $40,995 were issued for the Company's
401(k) Plan's matching contribution.
On December 31, 1996, a purchase price adjustment was required on the
DBI acquisition resulting in a reduction in additional paid-in capital of
approximately $600,000 (see Note 5).
(THE REMAINDER OF THE PAGE INTENTIONALLY LEFT BLANK)
7
<PAGE>
LA-MAN CORPORATION AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
- ------- -------------------------------------------------
CONDITION AND RESULTS OF OPERATIONS
- -----------------------------------
The following discussion should be read in conjunction with
management's discussion and analysis of financial condition and results of
operations set forth in the Company's Annual Report on Form 10-KSB for the year
ended June 30, 1996 filed with the Securities and Exchange Commission on
September 26,1996, which discussion is incorporated herein by reference.
SIX MONTHS ENDED DECEMBER 31, 1996 VS. DECEMBER 31, 1995
- --------------------------------------------------------
The Company's consolidated sales of $7,823,000 increased $1,672,000 or
27% over the prior period, primarily as a result of increased volume in the
sales of both custom and institutional signs as well as the inclusion of Don
Bell Industries for the full period in 1996, compared with only four months
activity in 1995.
Operating income of $378,000 represented a decline of $175,000 over
the prior period. This decline was primarily caused by cost overruns on two
major sign projects and increased operating expense in sign marketing and
manufacturing. A change order is expected to be agreed to in the third quarter,
which will reimburse the Company for a substantial portion of these overruns and
will be recorded when received. The cost overruns resulted from unforseen
weather and other difficulties in the installation of a large sign project and
as a result of costs incurred in an attempt to introduce new multi-colored lens
wedge-based technology into the market place. Research on this technology is
continuing and the company anticipates the technology to become fully
functional during fiscal 1998. The increase in operating expenses results
mainly from expansion of the institutional sign marketing staff and facilities
in anticipation of larger increases in sales in the second half of fiscal 1997.
Income from continuing operations of $719,000 increased $217,000 over the prior
period as a result of a gain on the sale of billboards and the realization of a
deferred tax asset. These gains were offset by the decrease in operating
income.
Net income for the six months ended December 31, 1996 declined by
$256,000 from the prior year to $66,000. This change was a result of the loss
incurred on the discontinuance of VTM.
Earnings per share from continuing operations of $.22 for the six
months ended December 31, 1996 increased from $.19 in the prior period. Net
income per share dropped to $.02 (after the effect of discontinued operations)
from $.12 in the prior period. A contributing factor in the decrease in
earnings per share was the increase in the weighted average number of shares
outstanding, which increased 569,000 shares or 21% ($.05 per share from
continuing operations) in the six months ended December 31, 1996 as compared to
the prior period. The higher number of shares outstanding resulted primarily
from the conversion of stock warrants in February, 1996.
8
<PAGE>
With the discontinuance of Heritage and VTM, the Company is currently
operating two segments: filtration manufacturing, and sign marketing and
manufacturing.
The filtration division's sales of $805,000 for the six months ended
December 31, 1996 was an increase of $16,000 or 2% from the same period in 1995,
with gross profit decreasing to $464,000 from $495,000 due to an increase in the
price of raw materials. Corresponding increases in sales prices will be
implemented during the third quarter. Operating expenses for this division
decreased from $225,000 in the six months ended December 31, 1995 to $219,000
for the same period of 1996. The drop in gross profit combined with the
reduction in operating expenses resulted in a decrease in operating income from
$270,000 to $245,000.
The institutional sign marketing operations' sales of $3,628,000 for
the six months ended December 31, 1996 increased $385,000 or 12% from the
same period in 1995. Gross profit increased to $2,150,000 from $1,890,000, an
increase of $260,000 or 14%, due to a price increase which became effective late
in the first quarter of 1996. Operating expenses for this division increased
$281,000 from $1,469,000 for the six months ended December 31,1995 to $1,750,000
for the same period in 1996 primarily due to expansion and additional personnel
which are expected to contribute to increased sales in the second half of fiscal
1997. The changes in gross profit and operating expenses combined to decrease
operating income from $421,000 to $400,000.
The results of operations for the six months ended December 31, 1996
include the operations of DBI, the sign manufacturing division, which was
acquired in September 1995, and accounted for as a purchase transaction. DBI's
operating results for the six months ended December 31, 1996 and the four months
ended December 31, 1995 are as follows (dollars in thousands):
<TABLE>
<CAPTION>
1996 1995
-------- --------
<S> <C> <C>
Sales $3,390 $2,119
Cost of Sales 2,360 1,284
------ ------
Gross Profit 1,030 835
Operating Expenses 859 525
------ ------
Income from Operations 171 310
Interest Income 34 18
Interest Expense (95) (78)
Gain on Sale of Assets 266 10
------ ------
Income Before Income Taxes $ 376 $ 260
====== ======
</TABLE>
The changes from 1995 to 1996 result primarily from the differing
periods covered, the reduction in gross profit caused by cost overruns on two
specific sign projects and the gain on the sale of billboards.
Corporate operating expenses remained relatively constant dropping to
$438,000 for the six months ending December 31, 1996 from $448,000 for the same
period in 1995.
9
<PAGE>
THREE MONTHS ENDED DECEMBER 31, 1996 VS. DECEMBER 31, 1995
- ----------------------------------------------------------
The Company's consolidated sales of $3,609,000 increased $288,000 or
9% over the prior period. Operating income of $79,000 represented a decline of
$164,000 from the prior period. Income from continuing operations of $447,000
increased $237,000 over the prior period. The net loss of $50,000 was a decline
of $170,000 from the prior period's income of $120,000. The major contributing
factor to the decline in net earnings from the prior period was the provision
for losses on discontinued operations recorded in December 1996.
Earnings per share from continuing operations of $.13 for the three
months ended December 31, 1996 increased from $.07 in the prior period. Net
loss per share dropped to $.02 from net income per share of $.04 in 1995 due to
the loss incurred on the discontinuance of VTM.
The filtration division's sales of $367,000 dropped from $377,000 in
the prior period, with gross margin decreasing to $200,000 from $219,000 due to
an increase in the cost of raw materials.
The institutional sign marketing operations' sales of $1,808,000
increased $291,000 or 19%. Gross margins increased to $1,062,000 from
$887,000, an increase of $175,000 or 20%, due to a price increase which became
effective late in the first quarter of 1996.
The sign manufacturing division's sales of $1,435,000 increased from
$1,427,000 in the prior period, with the gross margin decreasing to $445,000
from $544,000 in the prior period, primarily due to the cost overruns incurred
on two specific sign projects.
Operating expenses of $1,627,000 represented an increase of $220,000
or 16% as compared to the prior period. The primary reason for the increase was
higher marketing expenses at the institutional sign operations, the addition of
new support staff and salary increases.
Other income-net of $239,000 increased from a net expense of $33,000
for the prior period primarily due to a gain on a sale of billboards.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
Net cash used for continuing operating activities in the six month
period ending December 31, 1996 was $259,000, compared to providing $76,000 in
cash during the same period of 1995. The use of cash for 1996 was primarily the
result of increases in accounts receivable and inventories combined with a
reduction in accounts payable. Net cash used for the operation of discontinued
operations in 1996 was $227,000 compared to $312,000 in 1995.
Net cash provided by investing activities was $136,000 in 1996
compared to using $454,000 in the prior period. The main contributing factors
were proceeds from the sale of billboards of $344,000 and capital expenditures
of $187,000 during the six months ended December 31, 1996, compared to the
$300,000 payment for the purchase of DBI in the same period of 1995.
Net cash provided by financing activities was $261,000 for the six
months ended December 31, 1996 and $325,000 for the six months ended
December 31, 1995. In both periods the Company borrowed approximately $300,000
against its line of credit. In 1996 the Company made payments on long-term debt
of $53,000, compared to proceeds from long-term debt of $55,000 during 1995. At
February 10, 1997 the Company had an available balance of approximately $275,000
on its line of credit.
10
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
- -----------------------------
As discussed in Note 6 to the Condensed Consolidated Financial Statements
included in Part I of the Report, the Company has engaged legal counsel in a
dispute with MCI Telecommunications, Inc.
ITEM 2. CHANGES IN SECURITIES.
- ------------------------------
Pursuant to an amendment dated as of January 7, 1997 to the Warrant
Agreement dated January 6, 1994, as amended, between the Company and Continental
Stock Transfer & Trust Company, as Warrant Agent, the expiration date of the
Company's $4.762 Redeemable Common Stock Purchase Warrants was extended from
January 7, 1997 to June 30, 1997.
"(c) During the period covered by this Report, the Company issued 27,233
shares of its common stock to the La-Man Corporation 401(k) Plan as its employer
contribution (see Note 7 to the Condensed Consolidated Financial Statements
included in Part I of this Report) on the basis that such issuance did not
involve a "sale" within the meaning of the Securities Act of 1933, as amended,
and, therefore, was exempt from the registration requirements of such act."
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
- ----------------------------------------
Not applicable
ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY - HOLDERS.
- ------------------------------------------------------------
(a) The Company held its 1996 annual meeting of shareholders (the "1996
Annual Meeting") on November 18, 1996.
(b) Proxies for the 1996 Annual Meeting were solicited by the Company's
management pursuant to Regulation 14A under the Exchange Act, there was no
solicitation in opposition to management's nominees for election as directors as
listed in the Company's October 18, 1996 Proxy Statement delivered in connection
with the 1996 Annual Meeting, and all of such nominees were elected.
(c) At the Annual Meeting, 10 persons were elected to serve as directors of
the Company until the next annual meeting of shareholders and until their
successors are elected and qualified, and the Company's shareholders ratified
the appointment of BDO Seidman, LLP, as independent auditors of the Company for
the June 30, 1997 fiscal year. The number of votes cast for, against or
withheld, as well as the number of abstentions (including broker non-votes), as
to each of such matters was as follows:
11
<PAGE>
<TABLE>
<CAPTION>
VOTES VOTES VOTES VOTES
FOR AGAINST WITHHELD ABSTAINING
--------- ------- -------- ----------
<S> <C> <C> <C> <C>
Gary Bell 2,956,520 0 1,264 798
J.William Brandner 2,937,620 0 20,164 798
Ithiel C. Clemmons 2,954,634 0 3,150 798
Edwin M. Freakley 2,936,715 0 21,069 798
Thomas N. Grant 2,957,435 0 349 798
Philip Howe Hoard 2,957,784 0 -0- 798
Otto J. Nicols 2,957,784 0 -0- 798
Robert M. Smither 2,957,715 0 69 798
J. Melvin Stewart 2,956,734 0 1,050 798
Max D. Tavernier 2,957,784 0 -0- 798
Ratification of
appointment of
BDO Seidman 2,829,418 20,665 N/A 110,915
</TABLE>
ITEM 5. OTHER INFORMATION.
- --------------------------
Not applicable
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
- -----------------------------------------
La-Man Corporation Current Report on Form 8-K filed with the
Securities and Exchange Commission on September 11, 1996 with respect to the
sale of assets of Heritage Packaging Services, Inc., an Indiana subsidiary of
La-Man Corporation, to Midwest Packaging Products, Inc.
12
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
LA-MAN CORPORATION
Date: February 13, 1997 By: /s/ J. William Brandner
------------------------------------
J. William Brandner, President &
Chief Executive Officer
By: /s/ Todd D. Thrasher
------------------------------------
Todd D. Thrasher, Vice President &
Treasurer, Chief Financial Officer
and Chief Accounting Officer
13
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM 10-QSB AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C> <C>
<PERIOD-TYPE> 6-MOS 3-MOS
<FISCAL-YEAR-END> JUN-30-1997 JUN-30-1997
<PERIOD-START> JUL-01-1996 OCT-01-1996
<PERIOD-END> DEC-31-1996 DEC-31-1996
<CASH> 22,898 22,898
<SECURITIES> 0 0
<RECEIVABLES> 2,144,403 2,144,403
<ALLOWANCES> 123,000 123,000
<INVENTORY> 1,041,223 1,041,223
<CURRENT-ASSETS> 3,588,596 3,588,596
<PP&E> 3,874,128 3,874,128
<DEPRECIATION> 1,175,244 1,175,244
<TOTAL-ASSETS> 9,076,207 9,076,207
<CURRENT-LIABILITIES> 2,675,480 2,675,480
<BONDS> 2,265,865 2,265,865
0 0
0 0
<COMMON> 3,291 3,291
<OTHER-SE> 4,081,410 4,081,410
<TOTAL-LIABILITY-AND-EQUITY> 9,076,207 9,076,207
<SALES> 7,823,279 3,609,442
<TOTAL-REVENUES> 7,823,279 3,609,442
<CGS> 4,180,160 1,902,973
<TOTAL-COSTS> 3,265,540 1,627,127
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 102,385 52,675
<INCOME-PRETAX> 589,912 318,277
<INCOME-TAX> (128,725) (128,725)
<INCOME-CONTINUING> 718,637 447,002
<DISCONTINUED> (652,943) (496,953)
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 65,694 (49,951)
<EPS-PRIMARY> .02 (.02)
<EPS-DILUTED> .02 (.02)
</TABLE>
