<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30,
1999.
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE EXCHANGE ACT
FOR THE TRANSITION PERIOD FROM _________ TO _________
Commission File Number: 0-12697
Dynatronics Corporation
----------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
Utah 87-0398434
---------------------------- ------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
7030 Park Centre Drive, Salt Lake City, UT 84121
------------------------------------------------
(Address of principal executive offices) (Zip Code)
(801) 568-7000
--------------
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or
for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the
past 90 days.
Yes X No __
The number of shares outstanding of the issuer's common stock, no par
value, as of November 9, 1999 is 8,783,622 shares.
Transitional Small Business Disclosure Format
(Check One):
Yes __ No X
<PAGE>
DYNATRONICS CORPORATION
TABLE OF CONTENTS
Page Number
-----------
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Unaudited Condensed Balance Sheet September 30, 1999 1
Unaudited Condensed Statements of Income
Three Months Ended September 30, 1999 and 1998 2
Unaudited Condensed Statements of Cash Flows
Three Months Ended September 30, 1999 and 1998 3
Notes to Unaudited Condensed Financial Statements 4
Item 2. Management's Discussion and Analysis or Plan of Operation 7
Part II. OTHER INFORMATION 13
<PAGE>
DYNATRONICS CORPORATION
Condensed Balance Sheet
(Unaudited)
[CAPTION]
<TABLE> September 30
ASSETS 1999
-------------
<S> <C>
Current assets:
Cash and cash equivalents $ 117,508
Trade accounts receivable, less allowance for doubtful
accounts of $122,935 3,143,263
Related party and other receivables 71,662
Inventories 4,381,374
Prepaid expenses 181,361
Prepaid income taxes 168,247
Deferred tax asset-current 174,039
--------------
Total current assets 8,237,454
Net property and equipment 3,486,141
Excess of cost over book value, net of accumulated amortization
of $426,991 1,037,182
Deferred tax asset-noncurrent 155,606
Other assets 684,692
--------------
$ 13,601,075
==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current installments of long-term debt $ 247,820
Line of credit 2,784,902
Accounts payable 592,014
Accrued expenses 295,558
--------------
Total current liabilities 3,920,294
Long-term debt, excluding current installments 2,302,322
Deferred compensation 649,256
--------------
Total long-term liabilities, excluding current installments 2,951,578
--------------
Total liabilities 6,871,872
Stockholders' equity:
Common stock, no par value. Authorized 50,000,000
shares; issued and outstanding 8,739,178 shares 2,433,741
Treasury stock, 35,584 shares (120,096)
Retained earnings 4,415,558
--------------
Total stockholders' equity 6,729,203
--------------
$ 13,601,075
==============
See accompanying notes to condensed financial statements.
</TABLE>
1
<PAGE>
DYNATRONICS CORPORATION
Condensed Statements Of Income
(Unaudited)
[CAPTION]
<TABLE>
Three Months Ended
September 30
1999 1998
-------------- --------------
<S> <C> <C>
Net sales $ 3,451,996 4,911,225
Cost of sales 2,104,478 2,658,097
-------------- --------------
Gross profit 1,347,518 2,253,128
Selling, general, and administrative expenses 1,061,300 1,319,304
Research and development expenses 188,340 165,383
-------------- --------------
Operating income 97,878 768,441
Other income (expense):
Interest income 800 5,125
Interest expense (98,223) (83,435)
Other income, net 6,246 4,677
-------------- --------------
Total other income (expense) (91,177) (73,633)
Income before income taxes 6,701 694,808
Income tax expense 2,546 277,156
-------------- --------------
Net income $ 4,155 417,652
============== ==============
Basic and diluted net income per common share $ 0.00 0.05
============== ==============
Weighted average basic and diluted common shares
outstanding (note 2)
Basic 8,714,994 8,648,897
Diluted 8,735,106 9,122,760
</TABLE>
See accompanying notes to condensed financial statements.
2
<PAGE>
DYNATRONICS CORPORATION
Condensed Statements of Cash Flows
(Unaudited)
[CAPTION]
<TABLE>
Three Months Ended
September 30
1999 1998
-------------- --------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 4,155 417,652
Adjustments to reconcile net income to net cash used in
operating activities:
Depreciation and amortization of property and equipment 68,141 61,365
Other amortization 23,055 23,054
Provision for doubtful accounts 9,000 4,200
Provision for inventory obsolescence 66,999 39,000
Provision for warranty reserve 79,228 44,994
Deferred compensation 29,808 21,021
Decrease (increase) in operating assets:
Receivables (360,280) (1,617,062)
Inventories 43,901 (1,551,884)
Prepaid expenses and other assets (86,484) 125,384
Prepaid income taxes 2,546 0
Increase (decrease) in operating liabilities:
Trade accounts payable and accrued expenses (521,988) 1,016,201
Income taxes payable 0 256,481
-------------- ---------------
Net cash used in operating activities (641,919) (1,159,594)
-------------- ---------------
Cash flows from investing activities-capital expenditures (24,597) (119,503)
-------------- ---------------
Cash flows from financing activities:
Principal payments on long-term debt (59,504) (62,747)
Net change in line of credit 173,264 892,152
Proceeds from sale of common stock 41,915 101,766
-------------- ---------------
Net cash provided by financing activities 155,675 931,171
-------------- ---------------
Net decrease in cash and cash equivalents (510,841) (347,926)
Cash and cash equivalents at beginning of period 628,349 748,099
-------------- ---------------
Cash and cash equivalents at end of period $ 117,508 400,173
-------------- ---------------
Supplemental cash flow information
Cash paid for interest (net of amounts capitalized) 99,622 75,386
Cash paid for income taxes 0 23,475
Supplemental Disclosure of Non-cash Investing and Financing Activities
Treasury stock acquired in consideration for common stock issued
as a result of a cashless stock option exercise. 0 120,096
</TABLE>
See accompanying notes to condensed financial statements.
3
<PAGE>
DYNATRONICS CORPORATION
NOTES TO CONDENSED FINANCIAL STATEMENTS
September 30, 1999
(Unaudited)
NOTE 1. PRESENTATION
The financial statements as of September 30, 1999 and for the three months then
ended were prepared by the Company without audit pursuant to the rules and
regulations of the Securities and Exchange Commission (SEC). Certain
information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules and
regulations. In the opinion of management, all necessary adjustments, which
consist of normal recurring adjustments to the financial statements have been
made to present fairly the financial position and results of operations and
cash flows. The results of operations for the respective periods
presented are not necessarily indicative of the results for the respective
complete years. The Company has previously filed with the SEC an annual
report on Form 10-KSB which included audited financial statements for the
two years ended June 30, 1999. It is suggested that the financial statements
contained in this filing be read in conjunction with the statements and
notes thereto contained in the Company's 10-KSB filing.
NOTE 2. NET INCOME PER COMMON SHARE
Net income per common share is computed based on the weighted-average number
of common shares and, as appropriate, dilutive common stock equivalents
outstanding during the period. Stock options are considered to be common
stock equivalents.
Basic net income per common share is the amount of net income for the period
available to each share of common stock outstanding during the reporting
period. Diluted net income per common share is the amount of net income for
the period available to each share of common stock outstanding during the
reporting period and to each share that would have been outstanding assuming
the issuance of common shares for all dilutive potential common shares
outstanding during the period.
In calculating net income per common share, the net income was the same for
both the basic and diluted calculation. A reconciliation between the basic
<PAGE>
and diluted weighted-average number of common shares for the three months
ended September 30, 1999 and 1998 is summarized as follows:
(Unaudited)
Three Months Ended
September 30,
1999 1998
---------- ----------
Basic weighted average number
of common shares outstanding
during the period 8,714,994 8,648,897
Weighted average number of dilutive
common stock options outstanding
during the period 20,112 473,863
Diluted weighted average number _________ _________
of common and common equivalent
shares outstanding during the
period 8,735,106 9,122,760
========== ==========
Common stock equivalents of 162,516 outstanding during the three-month period
ended September 30, 1999 that could potentially dilute basic net income per
share in the future were not included in the computation of diluted net income
per share because to do so would have been antidilutive for the period.
NOTE 3. COMPREHENSIVE INCOME
For the periods ending September 30, 1999 and 1998, comprehensive income was
equal to the net income as presented in the accompanying condensed statements
of income.
<PAGE>
NOTE 4. INVENTORIES
Inventories consisted of the following:
September 30
1999
-------------
Raw Material $ 2,791,779
Finished Goods 1,771,593
Inventory Reserve (181,998)
-------------
$ 4,381,374
=============
NOTE 5. PROPERTY AND EQUIPMENT
Property and equipment were as follows:
September 30
1999
------------
Land $ 354,744
Buildings 2,790,434
Machinery and equipment 1,701,828
------------
4,847,006
Less accumulated depreciation
and amortization 1,360,865
------------
$ 3,486,141
============
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The following discussion and analysis of the Company's financial condition and
results of operations should be read in conjunction with the Condensed
Financial Statements (unaudited) and Notes thereto appearing elsewhere in
this Form 10-QSB.
Results of Operations
During the quarter ended September 30, 1998, Dynatronics introduced its new
Synergie line of products. Product shipments required to fill channels of
distribution, coupled with strong initial demand for the Synergie products
resulted in record sales and earnings in that quarter. This factor alone
accounts for the majority of the differences in the comparative discussion
and analysis that follows. For a complete perspective of current operations
and how they are affected by overall strategic plans, refer to the section
below entitled "Business Plan."
Sales for the quarter ended September 30, 1999 were $3,451,996, compared to
$4,911,225 for the same period last year. The decline in sales of $1,459,229
was primarily attributable to the transition from initial sales of Synergie
products required to fill channels of distribution in 1998 to more normalized
sales in the current reporting period. In addition, general market trends
were adversely affected from the implementation of new Medicare guidelines
earlier in calendar 1999. Dynatronics' sales in the quarter ended September
30, 1999 were not immune from the effects of these market trends. The new
Medicare guidelines significantly restricted reimbursement for physical
therapy services. Pending actions by Congress appear to target a modification of
those reimbursement reductions in the coming months. Management believes that
the modifications under consideration, if enacted, will improve the market
conditions for the Company's rehabilitation and other physical therapy
products. However, there can be no assurance that the legislation currently
under consideration will be enacted or that its impact on the business of the
Company will be favorable in whole or in part.
Total gross profit for the quarter ended September 30, 1999 was $1,347,518
compared to $2,253,128 in the prior year period. Additionally, gross margin
as a percentage of sales declined from 46% in the prior year period to 39% in
the current period. Margins on the Synergie product line are among the
highest of the Company's products. The reduction in sales of Synergie products
during the period in comparison to one year ago in the initial launch had a
direct effect on the reduction in gross profit and gross profit margin as a
percentage of sales. In addition, while sales growth of lower margin product
lines has positively contributed to overall sales, it has also resulted in
gross profit margins as a percentage of sales being lower.
Selling, general and administrative (SG&A) expenses for the three-month period
ended September 30, 1999, decreased to $1,061,300 compared to $1,319,304 in
the same quarter in 1998. The Company's SG&A expense for last year was higher
due to costs associated with the introduction of the new Synergie product line.
During the quarter ended September 30, 1999, cost-cutting measures were
implemented that the Company expects will result in annualized savings of
approximately $350,000. Over the long term, the savings initially realized
<PAGE>
from these cost-saving measures will diminish, because the strategic growth
plans of the Company require adding back certain expenses in the future as
improved operations warrant. In addition to the cost-saving measures, during
the quarter ended September 30, 1999 the Company consolidated its Columbia,
South Carolina rehabilitation table manufacturing operations into its
facilities in Chattanooga, Tennessee. Costs of $102,000 associated with this
consolidation were included in the SG&A expense for the quarter. The Company
believes this consolidation will generate savings in excess of $400,000 over
the next 12 months, compared to the prior 12-month period. Exclusive of the
consolidation costs, SG&A expenses as a percentage of sales were 28% in the
quarter ended September 30, 1999, which are comparable to 27% of sales in the
prior year period.
Research and development (R&D) expenses for the three months ended September 30,
1999 totaled $188,340, compared to $165,383 for the same period of the prior
year. This 14% increase in R&D expenditures is primarily related to the current
development of a new companion product to the Synergie AMS device. This new
product is scheduled for introduction in January 2000 and the Company is
currently testing prototypes of the product. R&D expenditures in the same
quarter one year ago included expenses related to the final development of
the Synergie product line. Consistent with the Company's announced strategic
plans, R&D expenditures for fiscal year 2000 are expected to match the pace
set in the first fiscal quarter.
Income before tax for the quarter ended September 30, 1999 decreased to $6,701
from $694,808 during the same period of the prior year. The introduction of
Synergie products in 1998 significantly improved profits during the quarter
ended September 30, 1998. Profits for the current reporting quarter were
eroded by several factors including the consolidation of operations, increased
research and development costs, and other costs associated with the initial
implementation of the Company's announced strategic growth plans.
Income tax expense for the three months ended September 30, 1999 was $2,546, or
38% of taxable income, compared to $277,156, or 40% of taxable income, in the
prior year period.
Net income for the period ended September 30, 1999 was $4,155, compared to
$417,652 in the same period one year ago. The decrease in net income is
directly attributable to lower sales and margins associated with the reduced
sales of Synergie products in the quarter ended September 30, 1999.
Liquidity and Capital Resources
The Company expects revenues from operations, together with amounts available
under its bank line of credit will be adequate to meet its working capital
needs related to its business and its planned capital expenditures for the
upcoming operating year.
The Company's current ratio at September 30, 1999 was 2.1 to 1. Current assets
represent 61% of total assets.
<PAGE>
Trade accounts receivable are from the Company's dealer network and are
generally considered to be within term. All accounts payable are within term
with the Company continuing its policy of taking advantage of any and all
payment discounts available.
The Company has a revolving line of credit with a commercial bank with a
maximum lending amount of $3,500,000 based on 30% of inventory (up
to a lending amount of $1 million) and up to 80% of eligible accounts
receivable. The outstanding balance on the line of credit at September 30,
1999 was $2,784,902. The line is secured by the Company's inventory and
accounts receivable and bears interest at the bank's "Prime Rate," which was
8.25% per annum at September 30, 1999. The Company may also elect to lock in
fixed rates on this agreement for 30 to 90 day periods at a rate equal to the
London Interbank Offered Rate (LIBOR) plus 2.7% per annum. This line is
subject to annual renewal and matures on November 30, 1999. Accrued interest
is payable monthly. Management anticipates no barriers to renewing the
current financing on terms at least as favorable as the bank now provides.
Inventory levels, net of reserves, at September 30, 1999 totaled $4,381,374
while net accounts receivable were $3,143,263. During the last fiscal year,
inventories and receivables increased significantly to support the Company's
introduction of the Synergie Lifestyle System. In addition, management has
made a stronger effort to reduce backorders by increasing inventory quantities.
Financing for these increases has been provided through cash flow from
operations together with the Company's line of credit facility. Levels of raw
material inventories for Synergie products exceed amounts that would normally
be kept on hand. This surplus was generated during the last year when
inventories were increased to support anticipated levels of sales that were
not subsequently achieved. The Company is confident the inventories can be
successfully reduced over the coming year as sales increase under the recently
announced strategic initiatives discussed below.
Long-term debt excluding current installments at September 30, 1999 totaled
$2,302,322 comprised primarily of the mortgage loans on the Company's office
and manufacturing facilities. The principal balance on the mortgage loans is
approximately $2.15 million with monthly principal and interest payments of
$26,900.
Business Plan
During the quarter ended September 30, 1999, management began implementing
strategic plans to reposition and diversify the Company's product lines to
guide future growth in both sales and profits. The Company's board of
directors approved the initiatives, which are designed to refocus
Dynatronics' strategy for manufacturing and distributing its popular line of
rehabilitation products. The plans also commit the necessary resources to
strengthen distribution and develop new aesthetic products targeting the
medical, spa and beauty markets.
Included in these strategic plans is the expansion of marketing efforts into
the European community. Dynatronics received approval to begin
marketing its line of electrotherapy and ultrasound devices throughout Europe in
August 1999. The Company believes that Europe presents a promising market
<PAGE>
for these products. Management is confident that access to this vast market
will result in increased sales of the Company's therapeutic devices, which
are among its most profitable products.
The other strategic component of these new initiatives is a stronger commitment
to diversification into the aesthetics market. During fiscal year 1999, the
Company made its initial entry into this market with the introduction of its
Synergie product line. Based on the Company's experiences in this new market
during the past year, management believes that there are strong opportunities
for growth in this field.
To take full advantage of the opportunities of the broader aesthetics market,
Dynatronics has begun to establish a direct sales force for marketing its
aesthetic products. Underscoring the importance of this new initiative is the
fact that the Company's chairman, Kelvyn H. Cullimore, is personally managing
the effort to recruit and manage up to 40 new direct sales representatives over
the next two years. Having control over the channels of distribution of these
products is expected to allow the Company to more fully access the potential of
the aesthetics products market. The Company perceives this market to be both
lucrative and expanding, particularly as aging baby boomers continue to look
for ways to retain a youthful appearance and physical condition. The Company
believes, based on its research of the market and its recent experiences in
marketing the Synergie product line, that there are currently no significant
direct distribution channels for capital products available in the aesthetics
products market.
In support of this direct sales force, the Company is continuing its efforts to
develop new aesthetic products and to find applications for existing
rehabilitation products in the various disciplines of the aesthetics market.
The Company plans to introduce a major new aesthetic product in January 2000,
which will be a companion to the Synergie AMS device. Prototypes of the new
device are currently being tested. By combining the existing Synergie
products with this new device, the Company will be able to offer a broader
product line to the growing aesthetics market. The Company believes this
will increase sales and profitability in future periods.
With the new strategic initiatives underway, the Company will focus its
resources in the following areas:
- Strengthening distribution of rehabilitation products
- Re-engineering key rehabilitation product lines
- Expanding distribution of products in Europe
- Improving distribution in the aesthetic products market through the
hiring of direct sales representatives
- Introducing new aesthetic products
<PAGE>
The cost of establishing a direct sales force combined with increased research
and development expense necessary to bring new products to market will impact
short-term profitability. However, management is confident that these strategic
plans justify the investment required to achieve the Company's long-term growth
goals.
Y2K Disclosure
The Company is aware of the risks associated with the operation of information
technology and non-information technology systems as the new century
approaches. The "Year 2000" problem is pervasive and complex, with the
possibility that it will affect many technology systems, including computer
programs and imbedded microprocessor technology. The Year 2000 problem is the
result of the rollover of the two digit year value from "99" to "00". Systems
that have date-sensitive software or embedded technology may recognize a date
using "00" as the year 1900 rather than the year 2000. This could result in a
system failure or miscalculations causing disruptions of operations, including,
among other things, a temporary inability to complete manufacturing, process
transactions, send invoices, collect payments, or engage in similar normal
business activities.
The Company has carefully evaluated and assessed its state of readiness, as
well as the readiness of third parties with which the Company interacts, with
respect to the Year 2000 problem. The Company has utilized both internal and
external resources to reprogram, or replace and test its software for Year
2000 modifications as needed. The total cost relating to these activities has
not been and is not expected to be material to the Company's financial
position. The Company has been monitoring its significant suppliers to
determine the extent to which the Company is vulnerable to those third parties'
failure to remediate their own Year 2000 problems.
The Company is presently not aware of any Year 2000 issues that have been
encountered by the Company or any third party that is expected to materially
affect the Company's operations. The Company is reviewing contingency plans to
deal with temporary power, fuel or other outages caused by Year 2000
problems. However, there can be no assurance that the Company will not
experience operational difficulties as a result of Year 2000 issues, either
arising out of internal operations, or caused by third-party service providers,
which individually or collectively could have an adverse impact on business
operations or require the Company to incur unanticipated expenses to remedy any
problems.
Forward-Looking Statements and Risks Affecting the Company
The statements contained in this Report on Form 10-QSB that are not purely
historical are "forward-looking statements" within the meaning of Section 21E
of the Securities Exchange Act. These statements regard the Company's
expectations, hopes, beliefs, anticipations, commitments, intentions and
<PAGE>
strategies regarding the future. They may be identified by the use of words or
phrases such as "believes," "expects," "anticipates," "should," "plans,"
"estimates," "intends," and "potential," among others. Forward-looking
statements include, but are not limited to, statements contained in
Management's Discussion and Analysis or Plan of Operation regarding the
Company's financial performance, revenue and expense levels in the future and
the sufficiency of its existing assets to fund future operations and capital
spending needs. Actual results could differ materially from the anticipated
results or other expectations expressed in such forward-looking statements
for the reasons detailed in the Company's Annual Report on Form 10-KSB under
the headings "Description of Business" and "Risk Factors." The fact that some
of the risk factors may be the same or similar to the Company's past reports
filed with the Securities and Exchange Commission means only that the risks
are present in multiple periods. The Company believes that many of the
risks detailed here and in the Company's other SEC filings are part of doing
business in the industry in which the Company operates and competes and will
likely be present in all periods reported. The fact that certain risks are
endemic to the industry does not lessen their significance.
The forward-looking statements contained in this Report are made as of the date
of this Report and the Company assumes no obligation to update them or to
update the reasons why actual results could differ from those projected in such
forward-looking statements. Among others, risks and uncertainties that may
affect the business, financial condition, performance, development, and results
of operations of the Company include:
- Market acceptance of the Company's technologies, particularly the new
Synergie Lifestyle System product line and other new or re-designed
products;
- The ability to hire and retain the services of trained personnel at cost-
effective rates;
- Rigorous government scrutiny or the possibility of additional government
regulation of the industry in which the Company markets its products;
- Potential effects of adverse publicity regarding nutritional supplements;
- Reliance on key management personnel;
- Foreign government regulation of the Company's products and manufacturing
practices that may bar or significantly increase the expense of expanding
to foreign markets;
- Economic and political risks related to the Company's expansion into
international markets;
- Failure of the Company to sustain or manage growth including the failure
to continue to develop new products or to meet demand for existing products;
<PAGE>
- The Company's reliance on information technology;
- The timing and extent of research and development expenses;
- The Company's ability to keep pace with technological advances, which can
occur rapidly;
- The loss of product market share to competitors;
- Potential adverse effect of taxation;
- The ability of the Company to obtain required financing to meet changes
or other risks described above; or
- The Company's inability or failure to identify and to manage its Year
2000 risks
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
No. Description
- --- -----------
27 Financial Data Schedule
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
DYNATRONICS CORPORATION
----------------------------
Registrant
Date November 15, 1999 /s/ Kelvyn H. Cullimore, Jr.
-------------------- ----------------------------
Kelvyn H. Cullimore, Jr.
President Chief Executive Officer
and Principal Accounting Officer
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM BALANCE
SHEET AND STATEMENT OF INCOME 09-30-99 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-2000
<PERIOD-START> JUL-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 117,508
<SECURITIES> 0
<RECEIVABLES> 3,266,198
<ALLOWANCES> 122,935
<INVENTORY> 4,381,374
<CURRENT-ASSETS> 8,237,454
<PP&E> 4,847,006
<DEPRECIATION> 1,360,865
<TOTAL-ASSETS> 13,601,075
<CURRENT-LIABILITIES> 3,920,294
<BONDS> 2,302,322
0
0
<COMMON> 2,313,645
<OTHER-SE> 4,415,558
<TOTAL-LIABILITY-AND-EQUITY> 13,601,075
<SALES> 3,451,996
<TOTAL-REVENUES> 3,451,996
<CGS> 2,104,478
<TOTAL-COSTS> 2,104,478
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 9,000
<INTEREST-EXPENSE> 98,223
<INCOME-PRETAX> 6,701
<INCOME-TAX> 2,546
<INCOME-CONTINUING> 4,155
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,155
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
