SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
=================================================================
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Quarter Ended: Commission File number:
March 31, 1996 0-11412
- ---------------------- -----------------------
AMTECH SYSTEMS, INC.
------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Arizona 86-0411215
- ------------------------------- ----------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
131 South Clark Drive Tempe, Arizona 85281
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
(602) 967-5146
-------------------------------
(Registrant's telephone number,
including area code)
N/A
--------------------------------------
Former name, former address and former
fiscal year, if changed since last report
Indicate by check mark whether the Registrant (i) has filed all reports
required 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 (ii) has been subject to such filing
requirements for the past 90 days.
Yes X No
----- -----
Indicate the number of shares outstanding of each of the issuer's classes
of common stock as of the close of the period covered by this report.
4,109,668 Shares
----------------
<PAGE>
PART I. FINANCIAL INFORMATION
AMTECH SYSTEMS, INC.
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS - ASSETS
March 31, September 30,
1996 1995
---------- -------------
(Unaudited)
CURRENT ASSETS:
Cash and cash equivalents $ 1,185,212 $ 833,820
Short-term investments 3,083,139 3,671,569
Accounts receivable - net 1,315,359 2,286,743
Inventories 928,636 524,071
Deferred income taxes 203,000 165,000
Prepaid expenses 26,076 45,392
------------- -------------
Total current assets 6,741,422 7,526,595
------------- -------------
PROPERTY AND EQUIPMENT,
AT COST:
Leasehold improvements 161,724 162,404
Machinery and equipment 409,747 333,971
Furniture and fixtures 592,641 652,607
------------- -------------
1,164,112 1,148,982
------------- -------------
Less: accumulated
depreciation and
amortization (522,730) (499,184)
------------- -------------
Property and equipment - net 641,382 649,798
------------- -------------
PURCHASE PRICE IN EXCESS
OF NET ASSETS ACQUIRED -- 85,315
------------- -------------
OTHER ASSETS 352,852 103,811
------------- -------------
$ 7,735,656 $ 8,365,519
============= =============
See accompanying Notes to Condensed Financial Statements.
<PAGE>
AMTECH SYSTEMS, INC.
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' INVESTMENT
March 31, September 30,
1996 1995
---------- -------------
(Unaudited)
CURRENT LIABILITIES:
Accounts payable $ 753,791 $ 528,322
Accrued liabilities:
Compensation and related taxes 302,698 373,383
Warranty and installation expenses 111,571 116,347
Other accrued liabilities 142,827 120,239
Income taxes payable 123,000 225,000
------------- -------------
Total current liabilities 1,433,887 1,363,291
------------- -------------
STOCKHOLDERS' INVESTMENT:
Preferred stock, no specified
terms; 100,000,000 shares
authorized; none issued -- --
Common stock, $.01 par value;
100,000,000 shares authorized;
4,109,668 shares outstanding at
March 31, 1996 and 4,305,702
shares at September 30, 1995 20,549 21,529
Additional paid-in capital 7,064,351 7,872,010
Cumulative foreign currency
translation adjustment (13,641) 29,459
Accumulated deficit (769,490) (920,770)
------------- -------------
Total stockholders' investment 6,301,769 7,002,228
------------- -------------
$ 7,735,656 $ 8,365,519
============= =============
See accompanying Notes to Condensed Financial Statements.
<PAGE>
AMTECH SYSTEMS, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED MARCH 31, 1996 AND 1995
THREE MONTHS ENDED SIX MONTHS ENDED
MARCH 31, MARCH 31,
------------------------ ------------------------
1996 1995 1996 1995
----------- ----------- ----------- -----------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
SEMICONDUCTOR EQUIPMENT:
Net product sales $ 1,408,267 $ 2,325,006 $ 3,079,155 $ 3,437,344
Cost of product sales 1,004,118 1,549,881 2,167,420 2,366,199
----------- ----------- ----------- -----------
Gross margin 404,149 775,125 911,735 1,071,145
Selling and general 573,844 558,495 1,103,849 996,461
Research & development 74,462 34,757 117,273 134,396
----------- ----------- ----------- -----------
Operating profit (loss) (244,157) 181,873 (309,387) (59,712)
Interest income 62,594 64,220 128,409 77,761
Income before
income taxes (181,563) 246,093 (180,978) 18,049
Income tax provision
(benefit) (50,000) 91,000 (50,000) 13,000
----------- ----------- ----------- -----------
INCOME (LOSS) FROM
CONTINUING OPERATIONS (131,563) 155,093 (130,978) 5,049
DISCONTINUED OPERATIONS:
Income from discontinued
operations - (10,990) 51,757 41,042
Income tax provision
(benefit) - (4,000) 30,000 19,000
----------- ----------- ----------- -----------
Income (loss) from discon-
tinued operations - (6,990) 21,757 22,042
GAIN ON SALE OF ECHELON (13,195) - 260,501 -
----------- ----------- ----------- -----------
NET INCOME (LOSS) $ (144,758) $ 148,103 $ 151,280 $ 27,091
=========== =========== =========== ===========
INCOME PER SHARE:
Primary $ (.04) $ .03 $ .04 $ .01
Fully diluted $ (.04) $ .03 $ .04 $ .01
WEIGHTED AVERAGE
OUTSTANDING SHARES:
Primary 4,109,668 4,357,252 4,208,220 3,348,790
Fully diluted 4,109,668 4,364,108 4,208,220 3,354,958
See accompanying Notes to Condensed Financial Statements.
<PAGE>
AMTECH SYSTEMS, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED MARCH 31, 1996 AND 1995
Six Months Ended
March 31,
-------------------------
1996 1995
----------- -----------
(Unaudited) (Unaudited)
OPERATING ACTIVITIES:
Net income $ 151,280 $ 27,091
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation and amortization 86,797 63,857
Inventory and receivable write-downs 6,000 22,000
Less gain on disposal of assets (262,603) (426)
Deferred tax benefit (50,000) (1,000)
Changes in operating assets and liabilities:
Decrease (Increase) in accounts receivable 537,503 (24,947)
Increase in inventories and prepaid expenses (414,836) (282,244)
Decrease in other assets 4,913 181,053
Increase in accounts payable 267,530 158,526
Increase (decrease) in income taxes payable (102,000) 53,000
Increase in accrued liabilities 31,868 267,047
----------- -----------
Net cash provided by operating activities 256,452 463,957
----------- -----------
INVESTING ACTIVITIES:
Maturities (purchases) of short-term
investments - net 588,430 (2,800,972)
Investment in South Korean joint venture (285,578) --
Proceeds from asset sale 28,383 10,000
Purchase of property and equipment (110,335) (153,953)
Cash distributed in disposal of Echelon (107,596) --
----------- -----------
Net cash provided (used) by
investing activities 113,304 (2,944,925)
----------- -----------
FINANCING ACTIVITIES:
Net proceeds from secondary public offering -- 3,623,382
----------- -----------
Net cash provided by financing activities -- 3,623,382
----------- -----------
EFFECT OF EXCHANGE RATE CHANGES (18,364) 44,787
----------- -----------
INCREASE IN CASH AND CASH EQUIVALENTS 351,392 1,187,201
----------- -----------
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 833,820 736,984
----------- -----------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 1,185,212 $ 1,924,185
=========== ===========
See accompanying Notes to Condensed Financial Statements.
<PAGE>
AMTECH SYSTEMS, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED MARCH 31, 1996 AND 1995
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
1996 1995
----------- -----------
Cash paid during the period for:
Income taxes $ 130,000 $ --
SUPPLEMENTAL INFORMATION OF NONCASH INVESTING
AND FINANCING ACTIVITIES:
Value received in the form of the
Company's stock in exchange for
the net assets of Echelon Service Co. $ 808,638 $ --
See accompanying Notes to Condensed Financial Statements.
<PAGE>
AMTECH SYSTEMS, INC.
AND SUBSIDIARIES
NOTES TO CONDENSED FINANCIAL STATEMENTS
March 31, 1996
(1) BASIS OF PRESENTATION
The accompanying consolidated financial statements include the accounts of
the Company and its wholly-owned subsidiaries, Tempress Systems, Inc. for the
entire period and Echelon Service Company, the Baltimore based operation of the
technical personnel segment, through the date of disposition (see Note 3 below).
All significant intercompany accounts and transactions have been eliminated in
consolidation.
(2) INTERIM REPORTING
The accompanying consolidated financial statements are unaudited; however,
these financial statements contain all adjustments which are, in the opinion of
management, necessary for a fair presentation of the consolidated financial
position of the Company as of March 31, 1996 and September 30, 1995 and the
consolidated results of its operations for the three and six months ended March
31, 1996 and 1995, and its consolidated cash flows for the six months ended
March 31, 1996 and 1995.
The accounting policies followed by the Company are set forth in Note 2 to
the consolidated financial statements in the Company's 1995 Annual Report on
Form 10-K for the year ended September 30, 1995, which is incorporated herein by
reference.
Inventories as of March 31, 1996 and September 30, 1995 included
work-in-process of $468,148 and $181,855, respectively. The remaining inventory
primarily consists of purchased parts and completed sub-assemblies.
The consolidated results of operations for the three and six months ended
March 31, 1996 and 1995, are not necessarily indicative of the results to be
expected for the full year.
Continued on next page.....
<PAGE>
NOTES TO CONDENSED FINANCIAL STATEMENTS - continued
(3) SALE OF DISCONTINUED OPERATIONS
In October 1995, the Board of Directors approved a plan to discontinue the
technical contract personnel business represented by the operations of Echelon
Service Company, then a wholly-owned subsidiary. Effective December 31, 1995,
the Company exchanged all of its ownership in the stock of Echelon Service
Company for 196,034 shares of the Company's outstanding Common Stock previously
owned by Eugene R. Hartman, then an officer and director of the Company. The
transaction was preceded by a dividend from Echelon to the Company in order to
equalize the values. The transaction was structured to be a tax-free
reorganization and, as such, no provision was made for income taxes. As a result
of the transaction, the Company recognized a gain of $261,000.
(4) INVESTMENT IN SOUTH KOREAN JOINT VENTURE
During the first quarter of fiscal 1996, the Company entered into a joint
venture agreement pursuant to which it is to have a 45% ownership interest and a
50% voting interest in Seil Semicon, Inc., located in South Korea, in return for
a commitment to invest $500,000 in cash. The first $286,000 of that commitment
was met during the first half of fiscal 1996 and the remainder will be invested
during the third quarter of fiscal 1996. The joint venturers plan to operate a
silicon test wafer reclaiming business through Seil Semicon, Inc., which is in
the start-up phase. The ultimate success of Seil Semicon, Inc. depends on a
number of factors, including securing adequate financing, of which there can be
no assurance.
(5) STOCKHOLDERS' INVESTMENT
Effective March 29, 1996, there was a two-for-one forward stock split of
the Company's $.01 par value common stock. As a result, the number of
outstanding shares was increased by 2,054,834 to 4,109,668. All share and per
share amounts have been restated accordingly. In conjunction with the stock
split, the number of shares issuable pursuant to stock options, stock bonus
grants, and warrants and the related exercise prices were adjusted
proportionately. If all such contingent shares were exercised, the number of
outstanding shares would increase by 3,028,000 and the resulting proceeds to the
Company would be $7,869,775.
(6) RECLASSIFICATIONS
Certain reclassifications have been made to the amounts for fiscal 1995 to
conform to the presentation of the fiscal 1996 amounts.
<PAGE>
AMTECH SYSTEMS, INC.
AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Financial Condition and Working Capital. During the six months ended March
31, 1996, working capital decreased by $856,000, primarily as the result of the
$286,000 investment in Seil Semicon, Inc., a South Korean joint venture, and
$432,000 from the disposition of Echelon Service Company in exchange for Common
Stock of the Company previously owned by Eugene R. Hartman. There is no long or
short-term debt and stockholders' investment is 81% of total capitalization.
Liquidity and Capital Resources. During the six months ended March 31,
1996, the Company's cash position, including equivalents, increased by $351,000.
The increase in cash and cash equivalents primary reflects the fact that
$588,000 of short-term investments matured and were not reinvested due to
favorable money market rates. The Company is committed to invest an additional
$250,000 in Seil Semicon, a joint venture in which the Company has a 45%
ownership interest and a 50% voting interest. Seil Semicon plans to develop and
operate a silicon test wafer reclaiming facility. The current ratio was 4.7:1 as
of March 31, 1996, down slightly from a ratio of 5.5:1 as of September 30, 1995,
and continues to reflect the Company's strong financial condition.
Management believes the Company's liquidity is sufficient for its current
operations and those planned for approximately the next two years. See the
management's discussion and analysis included in the Company's 1995 annual
report on Form 10-K for further information regarding the Company's long-term
plans for future operations.
The semiconductor equipment order backlog was approximately $7,150,000, as
of March 31, 1996, as compared to $1,894,000 as of March 31, 1995. While orders
are ordinarily filled within one to six months of receipt, the current backlog
includes approximately $2,120,000 of orders, primarily from one customer, of
which an estimated one-half is planned for shipment in each of fiscal 1997 and
fiscal 1998. The timing of these orders reflects a customer's requested delays
in deliveries from that scheduled in the original purchase orders. Also, the
Company has experienced long lead-times in purchasing components from suppliers
of quartz parts, which has and is resulting in the Company taking more than six
months to deliver equipment that contains certain quartz parts. However, much of
the increase in the backlog also results from the increase in the demand for the
Company's products.
<PAGE>
Results of Operations.
THREE MONTHS ENDED MARCH 31,
1996 vs. 1995
Semiconductor Equipment.
Revenues decreased 39%, or $917,000, to $1,408,000 in the second quarter of
fiscal 1996 from $2,325,000 in the second quarter of the fiscal 1995 year. While
the backlog was already strong and growing before the quarter began, two factors
limited the Company's shipments as compared to the comparable period in fiscal
1995. First, approximately $600,000 of the order backlog at the beginning of the
quarter could not be shipped due to long lead-times on components purchased from
suppliers of quartz parts. This resulted in the Company having to defer the
shipment of approximately $600,000 of orders until the third quarter. Second,
the Company did not benefit from increased sales from Tempress, as had been
expected, because $400,000 of system order shipments were delayed, primarily due
to customer requested delays in the schedule for delivery. The Company may be
affected by similar delays in the future. However, management expects that sales
in the third quarter will be significantly higher compared to the second quarter
of this fiscal year and will compare favorably to the third quarter of fiscal
1995.
The gross margin decreased $371,000, to $404,000, or 28% of sales, in the
second quarter of fiscal 1996 from $775,000, or 33% of sales, in the second
quarter of fiscal 1995. The decrease in gross margin is primarily due to the
decline in shipments. Spreading the fixed portion of manufacturing costs over
the lower sales volume explains the decrease in gross margins as a percentage of
sales.
The selling, general and administrative expenses for the second quarter of
fiscal 1996 were $15,000 higher than in comparable period of last fiscal year.
The increased expenses primarily result from expanded sales and marketing
activities on a world-wide basis in order to promote the entire product line,
with the greatest emphasis on the horizonal diffusion furnace developed in the
Netherlands and a low-cost furnace model to be manufactured in the United
States. Research and development costs also increased $40,000, as the Company
continues the photo-CVD ("chemical vapor deposition") research and attempts to
develop new products.
Income (Loss) From Continuing Operations.
As a result of the above, for the three months ended March 31, 1996, the
Company had an operating loss of $244,000 as compared to an operating profit of
$182,000 for the second quarter of fiscal 1995. The income (loss) from
continuing operations before income taxes includes the operating profit (loss)
of the semiconductor equipment segment, interest income, and income taxes
(benefit). During the second quarter of the current fiscal year, interest income
was $63,000, or $1,000 less than in the preceding year.
Income tax expenses declined $141,000 because of the loss for the quarter
ended March 31, 1996. The $50,000 income tax benefit for the second quarter of
fiscal 1996 is approximately $12,000 less than would result from applying the
statutory rates to the before tax loss, because of the effects of the permanent
differences between financial and taxable income. As a result of the above,
continuing operations produced a loss of $132,000, or $287,000 lower than the
$155,000 of income earned during the same quarter of fiscal 1995.
Discontinued Operations.
As a result of the December 31, 1995 sale of the technical contract
personnel segment, there was no income from discontinued operations in the
second quarter of fiscal 1996. For the comparable period in fiscal 1995, there
was a loss from discontinued operations of $7,000, after recognizing an income
tax benefit of $4,000. Typically, the second quarter was the least profitable
for that operation because payroll taxes are higher in that quarter.
<PAGE>
Total Company.
The three months ended March 31, 1996, resulted in a net loss of $145,000,
or $.04 per share, compared to net income of $148,000, or $.03 per share, in the
second quarter of fiscal 1995. The most significant factors contributing to the
decline and loss was the $917,000 decline in sales discussed above.
SIX MONTHS ENDED MARCH 31,
1996 vs. 1995
Semiconductor Equipment.
The semiconductor equipment revenues decreased 10% to $3,079,000 during the
first six months of fiscal 1996 from $3,437,000 for the first six months of
fiscal 1995. The decrease is due the second quarter delays in certain shipments,
as discussed above.
Gross margins as a percentage of revenue decreased from 31% in the first
half of fiscal 1995 to 30% for the first six months of fiscal 1996. The decrease
in the gross margin percentage is primarily due to the effects of spreading
certain fixed manufacturing and engineering costs over fewer sales dollars.
The selling and general expenses of the semiconductor segment for the first
six months of fiscal 1996 were $107,000 higher than in the comparable period of
last fiscal year. The increased expenses primarily resulted from expanded sales
and marketing activities on a world-wide basis in order to promote the entire
product line, with the greatest emphasis on the horizonal diffusion furnace
developed in the Netherlands and a low-cost furnace model to be manufactured in
the United States. Since the Netherlands operation, Tempress, was still in the
start-up phase during the first quarter of last year, most of this increase
occurred in the first quarter of this fiscal year.
Income From Continuing Operations.
For the first six months of fiscal 1996, the semiconductor equipment
segment had an operating loss of $309,000 as compared to a loss of $60,000 for
the first two quarters of fiscal 1995. The $249,000 of additional losses is due
to the delay in shipments and the increased expenses, both explained above.
The income (loss) from continuing operations includes the operating (loss)
of the semiconductor equipment segment, discussed above, interest income, and
income taxes (benefit). Interest income increased by $51,000 during the first
half of fiscal 1996, as compared to the six months ended March 31, 1995, as the
Company had the proceeds of the public offering available for investment for the
entire fiscal 1996 period, as compared only three months of the fiscal 1995
period.
During the first half of fiscal 1996 there was an income tax benefit of
$50,000, compared to the income tax expense of $13,000 reported for the first
half of fiscal 1995. The $50,000 income tax benefit for the first two quarters
of fiscal 1996 is approximately $12,000 less than would result from applying the
statutory rates to the before tax loss, because of the effects of the permanent
differences between financial and taxable income.
<PAGE>
As a result of the above, continuing operations produced a net loss of
$131,000 in the first six months of fiscal 1996, representing a decline of
$136,000, from the income of $5,000 reported in the first half of fiscal 1995.
Discontinued Operations.
The operating profit of technical contract personnel business was $22,000
in the first halves of both fiscal 1996 and 1995. The fact that the Company did
not operate in this segment during the second quarter because of the sale of
this discontinued operation effective December 31, 1995, was offset by the fact
that in the past the second quarter was generally not a profitable quarter for
that segment.
Effective December 31, 1995, the Company exchanged all of its ownership in
the technical contract personnel business represented by the stock of Echelon
Service Company for 196,034 shares of the Company's outstanding Common Stock
previously owned by Eugene R. Hartman, then an officer and director of the
Company. The transaction was preceded by a dividend from Echelon to the Company
in order to equalize the values. The transaction was structured to be a tax-free
reorganization and, as such, no provision was made for income taxes. As a result
of the transaction, the Company recognized a gain of $261,000.
Total Company
For the six months ended March 31, 1996 there was net income of $151,000,
or $.04 per share, as compared to net income of $27,000, or $.01 per share, for
the comparable period of fiscal 1995. The net income for the first half of
fiscal 1996 was generated entirely by the sale of the discontinued operations.
However, management expects that the semiconductor equipment business will have
improved operating results in the third quarter.
<PAGE>
PART II
Item 1. Legal Proceedings.
None.
Item 4. Submission of Matters to a Vote of Security Holders
On February 29, 1996, the Company held its annual meeting of shareholders
at which time the following persons where elected to the board of directors with
shares voted as follows:
Board Members Elected Shares Voted For Votes Withheld
Jong. S. Whang 2,049,805 7,111
Robert T. Hass 2,049,453 7,463
Donald F. Johnston 2,049,227 7,689
Alvin Katz 2,045,599 11,317
Bruce R. Thaw 2,045,812 11,104
The final total for the other proposals was as follows:
Proposal #2 - Ratification of the adoption of the Amtech Systems, Inc. Amended
and Restated 1995 Stock Option Plan, as described in the proxy statement:
Shares Voted For Voted Against Votes Withheld Not Voted
1,382,112 73,122 33,518 568,164
Proposal #3 - Ratification of the adoption of the Amtech Systems, Inc. 1995
Stock Bonus Plan, as described in the proxy statement:
Shares Voted For Voted Against Votes Withheld Not Voted
1,376,121 76,125 36,506 568,164
Proposal #4 - Ratification of the adoption of the Amtech Systems,
Inc. Non-Employee Director Stock Option Plan, as described in the
proxy statement:
Shares Voted For Voted Against Votes Withheld Not Voted
1,368,771 91,650 45,481 551,014
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits - All of the exhibits required by Item 601 of Regulation S-K
are hereby incorporated by reference to the Company's Annual Report on
Form 10-K dated January 16, 1996.
(b) Reports on Form 8-K - On February 9, 1996, the Company filed a Form
8-K to report the disposition of the formerly wholly-owned Echelon
Service Company.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
AMTECH SYSTEMS INC.
by /s/ Robert T. Hass
--------------------
Robert T. Hass, Vice-President and
Chief Financial Officer
DATED: May 21, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL
INFORMATION EXTRACTED FROM THE BALANCE SHEETS AS
OF MARCH 31, 1996 AND SEPTEMBER 30, 1995, AND THE
STATEMENTS OF OPERATION AND THE STATEMENTS OF CASH
FLOW FOR THE SIX MONTHS ENDED MARCH 31, 1996 AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER
ENDED MARCH 31, 1996.
</LEGEND>
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-START> OCT-01-1995
<PERIOD-END> MAR-31-1996
<EXCHANGE-RATE> 1
<CASH> 1,185,212
<SECURITIES> 3,083,139
<RECEIVABLES> 1,395,359
<ALLOWANCES> 80,000
<INVENTORY> 928,636
<CURRENT-ASSETS> 6,741,422
<PP&E> 1,164,112
<DEPRECIATION> 522,730
<TOTAL-ASSETS> 7,735,656
<CURRENT-LIABILITIES> 1,433,887
<BONDS> 0
0
0
<COMMON> 20,549
<OTHER-SE> 6,281,220
<TOTAL-LIABILITY-AND-EQUITY> 7,735,656
<SALES> 3,079,155
<TOTAL-REVENUES> 3,079,155
<CGS> 2,167,420
<TOTAL-COSTS> 2,167,420
<OTHER-EXPENSES> 1,221,122
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (180,978)
<INCOME-TAX> 0
<INCOME-CONTINUING> (130,978)
<DISCONTINUED> 282,258
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 151,280
<EPS-PRIMARY> $.04
<EPS-DILUTED> $.04
</TABLE>
