<PAGE>
U.S. 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 March 31, 1996
-----------------
[ ]TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF
THE EXCHANGE ACT
For the transition period from ________ to _________
Commission file number 0-14068
-------
Memry Corporation
-----------------------------------------
(Exact name of small business issuer as
specified in its charter)
Delaware 06-1084424
- ------------------------------------- --------------------------------------
(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or organization)
57 Commerce Drive, Brookfield, Connecticut 06804
----------------------------------------------------
(Address of principal executive offices)
(203) 740-7311
---------------------------------
(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 [ ]
State the number of shares outstanding of each of the issuer's classes of common
equity as of the latest practicable date. As of March 31, 1996, 8,536,641
shares of the registrant's common stock, par value $.01 per share, were issued
and outstanding.
<PAGE>
INDEX
PART I - FINANCIAL INFORMATION
ITEM 1. Financial Statements
Consolidated Balance Sheet as of
March 31, 1996 and June 30, 1995
Consolidated Statement of Operations for
the three months and nine months
ended March 31, 1996 and 1995
Consolidated Statement of Cash Flows for
the nine months ended March 31,
1996 and 1995
Notes to the Consolidated Financial Statements
ITEM 2. Management's Discussion and Analysis or Plan
of Operation
PART II - OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K
Signatures
<PAGE>
MEMRY CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEET (UNAUDITED)
<TABLE>
<CAPTION>
March 31, June 30,
1996 1995
-------------- --------------
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents $60,000 $1,145,000
Accounts receivable less
allowances of $67,000 and $53,000 527,000 691,000
Inventories, net 880,000 849,000
Prepaid expenses and other 14,000 24,000
-------------- --------------
Total current assets 1,481,000 2,709,000
Property, Plant and Equipment, net 1,189,000 1,233,000
Other Assets
Patents, at cost, net of
amortization of $61,000 and $57,000 3,000 5,000
Deposits and sundry 33,000 32,000
-------------- --------------
Total other assets 36,000 37,000
-------------- --------------
Total assets $2,706,000 3,979,000
============== ==============
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities
Accounts payable and accrued expenses $1,005,000 2,189,000
Notes payable 1,132,000 1,163,000
Mortgage loan payable 486,000 910,000
Revolving loan 543,000 570,000
Term note payable 97,000 167,000
Current portion of capital lease obligations 4,000 4,000
-------------- --------------
Total current liabilities 3,267,000 5,003,000
Capital lease obligations, less current portion 7,000 7,000
Stockholders' deficit
Preferred stock, $100 par value, authorized
100,000 shares of Series G, 424 shares issued
and outstanding 42,000 19,000
Common stock, $.01 par value; 25,000,000 authorized
shares-8,536,641 shares issued and outstanding 85,000 80,000
Additional paid-in capital 31,688,000 29,874,000
Accumulated deficit (32,383,000) (31,004,000)
-------------- --------------
Total stockholders' deficit (568,000) (1,031,000)
-------------- --------------
Total liabilities and stockholders' deficit $ 2,706,000 $ 3,979,000
============== ==============
</TABLE>
See notes to consolidated financial statements
3
<PAGE>
MEMRY CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
<TABLE>
<CAPTION>
For Three Months Ended March 31,
1996 1995
-------------- --------------
<S> <C> <C>
Product Sales $752,000 $1,211 ,000
-------------- --------------
Cost of sales
Manufacturing 676,000 967,000
Research and development 71,000 101,000
-------------- --------------
Gross profit 5,000 143,000
Operating expenses
General, selling and administration 544,000 527,000
Depreciation and amortization 24,000 71,000
-------------- --------------
568,000 598,000
-------------- --------------
Operating loss (563,000) (455,000)
============== ==============
Interest expense 45,000 84,000
-------------- --------------
Net loss ($608,000) ($539,000)
============== ==============
Weighted average of common shares outstanding 8,261,201 5,583,801
Net loss per share ($0.07) ($0.10)
</TABLE>
<TABLE>
<CAPTION>
For Nine Months Ended March 31,
1996 1995
-------------- --------------
<S> <C> <C>
Product Sales $2,933,000 $3,632,000
-------------- --------------
Cost of sales
Manufacturing 2,254,000 2,698,000
Research and development 306,000 227,000
-------------- --------------
Gross profit 373,000 707,000
Operating expenses
General, selling and administration 1,525,000 1,706,000
Depreciation and amortization 72,000 211,000
-------------- --------------
1,597,000 1,917,000
-------------- --------------
Operating loss (1,224,000) (1,210,000)
============== ==============
Interest expense 155,000 262,000
-------------- --------------
Net loss ($1,379,000) ($1 ,472,000)
============== ==============
Weighted average of common shares outstandinq 8,173,896 5,257,142
Net loss per share ($0.17) ($0.28)
</TABLE>
See notes to the consolidated financial statements
4
<PAGE>
MEMRY CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
For nine months ended March 31,
1996 1995
------------- ------------
<S> <C> <C>
Net loss $(1,379,000) $(1,472,000)
Cash Flows From Operating Activities
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization 72,000 211,000
Change in operating assets and liabilities:
Decrease (increase) in accounts receivable 164,000 (91,000)
(Increase) decrease in inventories (31,000) 2,000
Decrease (Increase) in prepaid & other 11,000 (12,000)
(Decrease) increase in accounts payable and accrued expense (1,184,000) 53,000
----------- ----------
Cash used in operating activities ($2,347,000) ($1,309,000)
Investing Activities:
Purchases of property and equipment $70,000 ($96,000)
----------- ----------
Cash used in investing activities $70,000 ($96,000)
Financing Activities:
Proceeds from sale of Common and Preferred Stock $1,869,000 $637,0000
Common and Preferred Stock issuance costs (125,000) (24,000)
Net proceeds (payments) on revolving line (27,000) 59,000
Proceeds (payments) on notes payable (31,000) (99,000)
Principle (payments on) proceeds from short term debt (494,000) 845,000
----------- ----------
Cash Provided by financinq activities $1,192,000 $1,418,000
Increase (Decrease) in cash & cash equivalents ($1,085,000) $13,000
Cash & Cash Equivalents at the beginning of period 1,145,000 201,000
----------- ----------
Cash & cash equivalents -end of period $60,000 $214,000
=========== ==========
</TABLE>
See notes to consolidated financial statements
5
<PAGE>
MEMRY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE A. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principals for interim
financial information and with the instructions to Form 10-QSB. Accordingly,
they do not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. In the
opinion of management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included. Operating
results for the nine month period ended March 31, 1996 are not necessarily
indicative of the results that may be expected for the year ending June 30,
1996. For further information, refer to the consolidated financial statements
and footnotes thereto included in the Company's Annual Report on Form 10-KSB for
the year ended June 30, 1995.
NOTE B. SUBSEQUENT EVENTS
On May 10, 1996, the Company entered into an Asset Purchase Agreement (the
"Agreement") with Raychem Corporation ("Raychem") of Menlo Park, California.
Pursuant to the terms of the Agreement, the Company agreed to acquire from
Raychem, and Raychem agreed to sell to the Company, Raychem's shape memory
metals components business. In addition, upon the consummation of the
acquisition contemplated by the Agreement (the "Closing"), the Company would
enter into a private label/distribution agreement with Raychem's Electronics
Division, as well as a number of related agreements, pursuant to which the
Company would manufacture and sell shape memory alloy components to Raychem.
The acquisition would not include Raychem's patents and related intellectual
property relating to medical instruments.
At the Closing, the Company would pay to Raychem approximately $4.3 million in
cash and issue warrants to purchase 1,250,000 shares of the Company's common
stock for nominal consideration and warrants to purchase an additional 1,250,000
shares of the Company's common stock for $2.00 per share. The Closing, which is
to be consummated by June 30, 1996, is subject to a number of contingencies,
including the Company obtaining debt and equity financing on terms acceptable to
the Company's Board of Directors and Connecticut Innovations, Incorporated, the
Company's subordinated lender, agreeing to convert its subordinated debenture
into common stock. The Company intends to obtain the funds necessary to
consummate the acquisition and provide working capital sources primarily from a
$4 to $5 million Regulation S private placement.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The following is management's discussion and analysis of certain significant
factors which have affected the Company's financial position and operating
results.
(A) LIQUIDITY AND CAPITAL RESOURCES
The Company's consolidated financial statements have been presented on a going
concern basis which contemplates the realization of assets and the satisfaction
of liabilities in the normal course of business. The Company has incurred net
losses of ($1,379,000) and ($1,472,000), and negative cash flow from operations
of ($2,347,000) and ($1,309,000), for the nine months ended March 31, 1996 and
1995, respectively. As a result, the Company has a stockholders' deficit of
$568,000 and its current liabilities exceeded its current assets by $1,786,000
as of March 31, 1996. The Company intends to solve its working capital
shortfall through (i) the raising of an additional up to $850,000 of equity
capital through Regulation S and Regulation D private placements during the
fourth quarter of fiscal 1996 ($500,000 of which has already been closed upon)
(ii) the raising of debt and equity financing in connection
<PAGE>
with the acquisition of the Raychem Corporation shape memory metals components
business as described in the Subsequent Events note to the financial statements,
and (iii) the conversion of the Company's convertible subordinated debenture in
the principal amount of $763,208 issued to Connecticut Innovations, Incorporated
(the "Debenture") into equity upon consummation of the aforesaid acquisition. In
connection with such transaction (which will require a cash payment of
approximately $4.3 million at the Closing), the Company intends to raise $4 to 5
million in a Regulation S private placement and to replace the approximately
$1,044,000 of indebtedness that the Company's Wright Machine Corporation
("Wright") subsidiary has to its bank (all of which is currently classified as
short-term debt) with a $2 million term loan and an approximately $1.25 million
working capital facility covering all of the Company's operations. There can be
no assurances, however, that the Company will be able to consummate the
acquisition, additional equity sales, the refinancing of Wright's debt or the
conversion of the Debenture into equity which therefore raises substantial doubt
about the Company's ability to continue as a going concern. If the aforesaid
acquisition does not occur, the Company would have to attempt to separately
refinance Wright's debt and seek additional equity capital.
The Company does not anticipate becoming cash flow positive during the remainder
of fiscal 1996. However, the Company expects revenues to increase substantially
(by approximately $9.0 million to $10.0 million during 1997) as a result of the
intended acquisition as described in the Subsequent Events note to the financial
statements. In addition, the Company 1) received a twenty-two month, $308,000
research and development contract in February 1996 from McDonnell Douglas
related to a motor using the shape memory alloy for a helicopter rotor trim tab,
2) announced on January 30, 1996 that it will be the exclusive supplier to
Nicklaus Golf Equipment of components to be used in a new line of wedges and a
putter named the IQ Insert and 3) expects sales of its shape memory alloy
("SMA") wire to increase as a result of a new application development for the
medical wire business. Therefore, due to the contemplated acquisition combined
with the above mentioned developments, the Company expects to be cash flow
neutral during the first quarter of fiscal 1997 and cash flow positive during
the remainder of fiscal 1997. With respect to the forward looking statements
contained in this paragraph, however, there can be no assurances that the
Company will successfully increase revenues sufficiently to become cash flow
neutral by the first quarter of fiscal 1997 and cash flow positive during the
remainder of fiscal 1997. More specifically, there can be no assurances that the
aforementioned acquisition, which is subject to various contingencies, will be
completed.
The Company believes that the litigation discussed in Note 12 to the Company's
financial statements set forth in its Form 10-KSB for the fiscal year ended June
30, 1995 will not have a material impact on its financial condition, future
operating results or liquidity. With respect to Connecticut Innovations,
Incorporated ("CII"), however, due to the Company's failure to effect a
registration statement covering the resale of Common Stock underlying the
Company's securities issued to CII, CII currently has the right to cause the
Company to repurchase certain securities held by CII (including the Debenture)
for an aggregate consideration of approximately $2.6 million (subject to
adjustment for various events). The Company is currently negotiating with CII
regarding an additional modification of the relevent agreements between the
Company and CII, including both a deferral of CII's put rights pending the
Company's efforts to consummate the aforesaid acquisition and an
agreement to effect a resale registration statement by January 3, 1997. If such
an agreement is not reached and/or CII decides to exercise its put right, the
Company believes that its financial condition, future operating results and
liquidity would be materially and adversely affected. However, at this time the
Company has received no indication from CII that it intends to exercise its put
right, nor does the Company anticipate the put right being exercised.
(B) RESULTS OF OPERATIONS
Nine months ended March 31, 1996 compared to nine months ended March 31, 1995
- -----------------------------------------------------------------------------
Overall Product Sales decreased to $2,933,000 in the first nine months of fiscal
1996 from $3,632,000 during the same period in fiscal 1995, a decrease of
$699,000, or 19%.
Revenues relating to the Memry Segment decreased to $784,000 during the nine
month period ending March 31, 1996 from $857,000 during the same fiscal 1995
period, a decrease of $73,000 or 9%. Product sales, exclusive of research and
development contract revenues, decreased $83,000 to $450,000 for the nine months
ended March 31, 1996 as compared with $533,000 during the same period of fiscal
1995, a decrease of 16%. This remains largely attributable to the reduction in
MEMRYSAFE(R) product sales to the Australian market. Research and development
revenues increased $10,000, or 3%, during the period ending March 31, 1996 to
$334,000 from $324,000 during the period ending March 31, 1995. Wright Machine
Segment sales decreased to $2,149,000 during the first nine months of fiscal
1996 from $2,775,000 during the same period in fiscal 1995, a decrease of
$626,000, or 23%. This reduction is due to the erosion of the Wright order
backlog resulting from the liquidity constraints which occurred during much of
fiscal 1995 and the resulting raw material shortage.
Manufacturing costs decreased to $2,254,000 in the nine months ended March 31,
1996 from $2,698,000 in the period ending March 31, 1995, a decrease of
$444,000, or 16%. The overall gross profit margin was 23% in the first nine
months of fiscal 1996, as compared to 26% in the period ending March 31, 1995.
Memry Segment manufacturing costs were $403,000 for the nine months ended March
31, 1996 compared to $412,000 for the nine months ended March 31, 1995, a
decrease of $9,000, or 2%, with margins of 10% and 23%, respectively. The
decrease in margin is attributable to the decrease in sales and the increase in
MEMRYSAFE (R) product re-engineering costs relating to redesign in order to
improve the percentage of products manufactured to standard. Such re-engineering
costs commenced in the third quarter of fiscal 1995, and peaked during the first
and second quarters of fiscal 1996. Wright's manufacturing costs for the first
nine months of fiscal 1996 were $1,851,000 as compared with $2,286,000 during
the same period in fiscal 1995, a decrease of $435,000, or 19%. The reduction is
directly attributable to the reduced revenues. Research and development costs
were $306,000 in the first nine months of fiscal 1996 compared to $227,000
during the same period in fiscal 1995. This increase of $79,000, or 35%, was due
to the increase in the research and development contract revenue and additional
development work by outside subcontractors.
General, Selling and Administrative Expenses ("GS&A") decreased $181,000, or
11%, to $1,525,000 during the nine month period ended March 31, 1996 from
$1,706,000 during the same period in fiscal 1995. The
<PAGE>
reduction includes approximately $116,000 in negotiated discounts on accounts
payable.
Depreciation and amortization expense was $72,000 in the first nine months of
fiscal 1996, as compared with $211,000 during the same period in fiscal 1995.
The $139,000, or 66%, decrease is primarily a result of assets at Wright
becoming fully depreciated, accounting for $136,000 of the reduction.
Interest expense decreased in fiscal 1996 to $155,000 from $262,000 in the
periods ending March 31, 1996 and 1995, respectively. This $107,000, or 41%,
decrease is primarily due to the reduction in the mortgage and loans payable to
Wright's bank.
Net loss for the first nine month period in fiscal 1996 was ($1,379,000) as
compared to ($1,472,000) for the same period in fiscal 1995, an improvement of
$93,000, or 6%. Memry Segment's net loss for the nine months ended March 31,
1996 was ($1,217,000) as compared with fiscal 1995's nine month net loss of
($1,149,000). Wright Machine Segment's net loss for the nine months ended March
31, 1996 was ($162,000) as compared to ($323,000) for the nine months ended
March 31, 1995. Wright's $161,000 improvement is primarily the result of lower
depreciation and interest expense.
Three months ended March 31, 1996 compared to three months ended March 31, 1995
- -------------------------------------------------------------------------------
Overall revenues decreased to $752,000 in the three months ended March 31, 1996,
from $1,211,000 during the same period in fiscal 1995, a decrease of $459,000,
or 38%.
Revenues relating to the Memry Segment decreased to $209,000 during the period
ending March 31, 1996 from $247,000 during the same fiscal 1995 period, a
decrease of $38,000 or 15%. Product sales, exclusive of research and development
contract revenues, decreased $4,000 to $152,000 for the three months ended March
31, 1996 as compared with $156,000 during the same period of fiscal 1995,
remaining relatively flat. Research and development revenues decreased $34,000,
or 37%, during the quarter ending March 31, 1996 to $57,000 from $91,000 during
the quarter ending March 31, 1995. The reduction was the result of the
completion of the National Institute of Health contract in November 1995 and a
delay in the start-up of the McDonnell Douglas contract (which contract will
commence in the fourth quarter). Wright's sales decreased to $543,000 during the
third quarter of fiscal 1996 from $964,000 during the same period in fiscal
1995, a decrease of $421,000, or 44%. This reduction is due to the erosion of
the Wright order backlog resulting from the liquidity constraints which occurred
during much of fiscal 1995 and the resulting raw material shortage.
Manufacturing costs decreased to $676,000 in the three months ended March 31,
1996 from $967,000 in the quarter ending March 31, 1995, a decrease of $291,000,
or 30%. The overall gross profit margin was 10% for the three months ended March
31, 1996, the same as the comparable quarter in fiscal 1995. Memry Segment
manufacturing costs were $123,000 for the three months ended March 31, 1996
compared to $133,000 for the three months ended March 31, 1995, a decrease of
$10,000, or 8%, with margins of 19% and 15%, respectively. The increase in
margin is largely attributable to the completion of the majority of re-
engineering of the MEMRYSAFE (R) products in the second quarter. Wright's
manufacturing costs for the three months of fiscal 1996 were $553,000 as
compared with $776,000 during the same period in fiscal 1995, a decrease of
$223,000, or 29%. The reduction is primarily attributable to the reduced sales.
Research and development costs were $71,000 in the three months ending March 31,
1996 compared to $100,000 during the same quarter in fiscal 1995. This decrease
of $30,000, or 30%, was due primarily to the timing of various contracts.
General, Selling and Administrative Expenses ("GS&A") increased $17,000, or 3%,
to $544,000 during the quarter ended March 31, 1996 from $527,000 during the
same period in fiscal 1995, thus remaining relatively flat.
Depreciation and amortization expense was $24,000 in the three months ending
March 31, 1996, as compared with $71,000 during the same period in fiscal 1995.
The $47,000, or 66%, decrease is primarily a result of assets at Wright becoming
fully depreciated.
Interest expense decreased to $45,000 from $84,000 in the quarter ending March
31, 1996 and 1995, respectively. This $39,000, or 46%, decrease is primarily due
to the reduction in notes and loans payable to Wright's bank.
<PAGE>
Net loss for the quarter ending March 31,1996 increased $69,000 to ($608,000) as
compared to ($539,000) for the same quarter in fiscal 1995, an increase of 13%.
Memry Segment's net loss for the quarter ended March 31, 1996 was ($463,000), an
increase of $27,000, as compared with net loss of ($436,000) for the quarter
ending March 31, 1995. Wright's loss for three months ended March 31, 1996 was
($145,000) as compared to a net loss of ($103,000) for the three months ended
March 31, 1995. Wright's additional loss of $42,000, or 41%, is due to the
erosion of the Wright order backlog resulting from the liquidity constraints
which occurred during much of fiscal 1995 and the resulting raw material
shortage.
In November 1992, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standard No. 112 "Accounting for Postemployment Benefits,"
which was required to be implemented by the Company in fiscal 1995. Because the
Company generally does not provide such benefits, the adoption of this statement
was not material to the Company's fiscal 1996 financial results.
In October 1995, the Financial Accounting Standards Board issued Financial
Accounting Statement No. 123, Accounting for Stock-Based Compensation. This
statement addressed the accounting for the cost of stock-based compensation,
such as stock options. Financial Accounting Statement No. 123 permits either
expensing the cost of stock-based compensation over the vesting period or
disclosing in the financial statement footnotes what this expense would have
been. This cost could be measured at the grant date based upon estimated fair
values, using option pricing models. The Company expects to adopt the
disclosure alternative of this statement for fiscal year 1997. In addition, the
Financial Accounting Standards Board also issued Financial Accounting Statement
No. 121, Accounting for Impairment of Long-Lived Asset and Long-Lived Assets to
be Disposed Of. Since the Company does not have any such impaired assets on its
books, the adoption of this statement is not expected to be material to the
Company's fiscal 1997 financial results.
PART II- OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(A) EXHIBITS
11. Statement regarding computation of per share earnings on both a
primary and fully diluted basis. (1)
27. Financial Data Schedule (2)
_______
(1) Incorporated by reference to the Company's Annual Report on Form
10-KSB for the fiscal year ended June 30, 1995.
(2) Submitted separately, electronically.
(B) REPORTS ON FORM 8-K
N/A
<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.
Memry Corporation
-----------------
Date: May 15, 1996 /s/ James G. Binch
------------ -----------------------------
James G. Binch
President, CEO and Director
(Principal Executive Officer)
Date: May 15, 1996 /s/ Wendy A. Gavaghan
------------- -----------------------------
Wendy A. Gavaghan
Corporate Controller
(Principal Financial Officer)
<PAGE>
EXHIBIT INDEX
Exhibit
- -------
11. Statement regarding computation of per share earnings on (1)
both a primary and fully diluted basis.
27. Financial Data Schedule (2)
- --------
(1) Incorporated by reference to the Company's Annual Report on Form 10-KSB for
the fiscal year ended June 30, 1995.
(2) Submitted separately, electronically.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM MEMRY
CORPORATION'S UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE NINE
MONTHS ENDED MARCH 31, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> MAR-31-1996
<CASH> 60,000
<SECURITIES> 0
<RECEIVABLES> 594,000
<ALLOWANCES> 67,000
<INVENTORY> 880,000
<CURRENT-ASSETS> 1,481,000
<PP&E> 3,246,000
<DEPRECIATION> 2,057,000
<TOTAL-ASSETS> 2,706,000
<CURRENT-LIABILITIES> 3,267,000
<BONDS> 0
0
42,000
<COMMON> 85,000
<OTHER-SE> 31,688,000
<TOTAL-LIABILITY-AND-EQUITY> 2,706,000
<SALES> 2,933,000
<TOTAL-REVENUES> 2,933,000
<CGS> 2,254,000
<TOTAL-COSTS> 2,560,000
<OTHER-EXPENSES> 1,597,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 155,000
<INCOME-PRETAX> (1,379,000)
<INCOME-TAX> (1,379,000)
<INCOME-CONTINUING> (1,379,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,379,000)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
