<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1997
-------------------------------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to ___________
Commission file number O-11365
-------------------
THT Inc.
--------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 73-1284563
- --------------------------------- ------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
33 Riverside Avenue, Westport, CT 06880
- ----------------------------------------- ------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (203) 226-6408
--------------
N/A
- ----------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report.)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirement for the past 90 days. Yes x No
------- -------
As of April 30, 1997, the Registrant had 3,982,605 shares of Common Stock,
par value $.01 per share, outstanding.
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
THT Inc.
Condensed Consolidated Balance Sheet
<TABLE>
<CAPTION>
March 31, 1997 September 30, 1996
-------------- ------------------
(Unaudited)
<S> <C> <C>
Assets:
Current Assets:
Cash and Cash Equivalents $ 885,437 $ 914,325
Trade Accounts Receivable (net of reserves
of $25,000 at March 31, 1997 and
September 30, 1996) 1,249,069 1,236,254
Inventories 2,165,757 1,897,701
Deferred Income Taxes 315,000 315,000
Other Current Assets 61,132 128,786
----------- -----------
Total Current Assets 4,676,395 4,492,066
Property, Plant & Equipment, net 3,267,512 3,073,464
Intangible Assets, net 3,449,869 3,203,744
Other Assets 341,059 264,867
----------- -----------
Total Assets $11,734,835 $11,034,141
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-2-
<PAGE>
THT Inc.
Condensed Consolidated Balance Sheet (continued)
<TABLE>
<CAPTION>
September 30,
March 31, 1997 1996
--------------- -----------------
(Unaudited)
<S> <C> <C>
Liabilities and Stockholders' Equity
- ------------------------------------
Current Liabilities:
Accounts Payable & Accrued Liabilities $ 1,445,336 $ 1,840,333
Long-Term Debt due within one year - Bank 400,000
Due to Former Shareholders - Current 8,821
Income Taxes Payable 81,361 17,981
----------- -----------
Total Current Liabilities 1,926,697 1,867,135
Long-Term Liabilities
Long-Term Debt due after one year - Bank 1,600,000
Due to Former Shareholders - Jackburn 604,000
Notes to Related Party 430,012
Deferred Income Taxes 329,000 323,000
Other Long-Term Liabilities 441,935 393,738
----------- -----------
Total Liabilities 4,297,632 3,617,885
Stockholders' Equity:
Cumulative 14% nonvoting Preferred Stock,
$.01 par value; 5,000 shares authorized,
1,000 and 2,000 shares outstanding at March 31, 1997
and September 30, 1996, respectively 1,000,000 2,000,000
Common Stock, $.01 par value; 25,000,000 shares
authorized, 3,982,605 shares issued at
March 31, 1997, and September 30, 1996 39,826 39,826
Additional Paid-In Capital 13,055,280 13,055,280
Accumulated Deficit (6,657,903) (7,678,850)
----------- -----------
Total Stockholders' Equity 7,437,203 7,416,256
----------- -----------
Total Liabilities & Stockholders' Equity $11,734,835 $11,034,141
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-3-
<PAGE>
THT Inc.
Condensed Consolidated Statement of Operations
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
March 31, March 31,
1997 1996 1997 1996
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net Sales $ 4,827,261 $ 5,059,075 $ 8,621,078 $ 9,300,324
Cost and Expenses
Cost of Sales 3,243,934 3,430,836 5,747,733 6,466,157
Selling, General & Administrative Expenses 716,168 810,933 1,472,127 1,461,258
----------- ----------- ----------- -----------
3,960,102 4,241,769 7,219,860 7,927,415
----------- ----------- ----------- -----------
Income from Operations 867,159 817,306 1,401,218 1,372,909
Other income (expense):
Interest Expense (24,854) (76,673) (49,463) (165,073)
Interest Income 7,361 4,377 16,148 14,678
Other (27,550) (17,860) (37,956) (39,405)
----------- ----------- ----------- -----------
Income Before Income Taxes 822,116 727,150 1,329,947 1,183,109
Income Taxes:
Federal (54,000) (25,000) (75,000) (34,000)
State (57,000) (70,000) (94,000) (114,000)
----------- ----------- ----------- -----------
(111,000) (95,000) (169,000) (148,000)
----------- ----------- ----------- -----------
Net Income 711,116 632,150 1,160,947 1,035,109
Dividend on Preferred Stock (70,000) (70,000) (140,000) (140,000)
----------- ----------- ----------- -----------
Net Income Available to
Common Stockholders $ 641,116 $ 562,150 $ 1,020,947 $ 895,109
=========== =========== =========== ===========
Accumulated Deficit - Beginning of Period (7,299,019) (9,118,727) (7,678,850) (9,451,686)
Accumulated Deficit - End of Period $(6,657,903) $(8,556,577) $(6,657,903) $(8,556,577)
Net Income per Common Share $.16 $.14 $.26 $.22
=========== =========== =========== ===========
(After Preferred Stock Dividend)
Primary weighted average number
of shares outstanding 3,982,605 3,982,605 3,982,605 3,982,605
=========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-4-
<PAGE>
THT Inc.
Condensed Consolidated Statement of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
March 31,
1997 1996
-------------------------
<S> <C> <C>
Cash flows from operating activities:
Net income $1,160,947 $1,035,109
---------- ----------
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 284,936 275,727
Deferred compensation 48,197 44,966
Changes in assets and liabilities:
Accounts receivable, net (12,815) (81,293)
Inventories (268,056) 98,984
Other current assets 67,654 62,326
Other assets (76,192) (34,719)
Accounts payable and accrued liabilities (394,997) (477,993)
Due to former shareholders - current (8,821) (30,004)
Income taxes payable 63,380 48,131
---------- ----------
Net cash provided by operating activities 864,233 941,234
Cash flows from investing activities:
Purchase of property and equipment (net) (423,109) (357,052)
Settlement of former shareholders' earnout (296,000)
---------- ----------
Net cash used in investing activities (719,109) (357,052)
</TABLE>
The accompanying notes are an integral part of these financial statements.
-5-
<PAGE>
THT Inc.
Condensed Consolidated Statement of Cash Flows (continued)
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
March 31,
1997 1996
----------- -----------
<S> <C> <C>
Cash flows from financing activities:
Repayment of debt (1,934,012) (702,615)
Cash dividends paid (140,000) (140,000)
Note payable 900,000
Preferred Stock repurchased (1,000,000)
Current portion of long-term debt - proceeds 400,000 36,386
Long-term debt - proceeds 1,600,000 139,479
----------- ---------
Net cash used in financing activities (174,012) (666,750)
----------- ---------
Net decrease in cash and cash equivalents (28,888) (82,568)
Cash and cash equivalents at beginning
of period 914,325 458,824
----------- ---------
Cash and cash equivalents at end of period $ 885,437 $ 376,256
=========== =========
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest $ 49,463 $ 129,222
=========== =========
Taxes $ 100,269 $ 103,085
=========== =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-6-
<PAGE>
THT Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Note 1 - General
The accompanying interim condensed consolidated financial statements
should be read in conjunction with the financial statements and notes thereto
included in the September 30, 1996 Annual Report included on Form 10-K.
The condensed consolidated financial statements for the three-month
and six-month periods ended March 31, 1997 are unaudited but, in the opinion of
Management, include all adjustments, consisting only of normal recurring
accruals, necessary for a fair statement of the results of such interim periods.
Interim results are not necessarily indicative of results for a full year.
Note 2 - Jackburn Settlement
On February 3, 1997, the Company paid the former Jackburn shareholders
$900,000. This payment was made to satisfy the balance of $604,000 due on a 9%
Mortgage Note. The balance of $296,000 was applied to any and all obligations
due for any Excess Cash Flow liability for the remaining two years ending
September 30, 1997 and 1998. See Note 3 regarding financing of this settlement.
Note 3 - Bank Financing
On March 27, 1997, the Company entered into a Credit Agreement (the
"Agreement") with Fleet Bank, N.A. ("Fleet"). The Agreement provides for a
$2,000,000 term loan ("Term Loan") and for a $2,000,000 revolving line of credit
("Line of Credit") to the Company. The Term Loan is for a term of five years and
provides for quarterly principal payments of $100,000, commencing as of June 30,
1997, with interest payable monthly in arrears. The Line of Credit is for a
period of two years, and upon the expiration thereof, unless such Line of Credit
is extended, the outstanding principal amount then outstanding, if any, is due
and payable. Interest on the Line of Credit is payable monthly in arrears.
Interest on the outstanding principal amount of the Term Loan and on
the outstanding principal amount of the Line of Credit will accrue, at the
Company's option, at Fleet's prime rate, as announced from time to time, or the
London Interbank Offer Rate ("LIBOR") plus 2%. Both the Term Loan and the Line
of Credit are secured by all of the Company's assets, pursuant to the terms of
certain security agreements, dated as of March 27, 1997.
-7-
<PAGE>
On March 31, 1997, the Registrant borrowed $2,000,000 under the Term
Loan. Of such borrowing, $100,000 principal amount of the Term Loan bears
interest at 7.7734%, and $1,900,000 principal amount thereof bears interest at a
rate of 7.9375%.
The Company borrowed the aggregate principal amount under the Term
Loan to redeem 1,000 shares of its Preferred Stock owned of record by PH II
Holdings, Inc. ("PH II"), an affiliate of the Company. The redemption price of
the Preferred Stock was $1,000,000, the face value of such stock. In addition,
the loan proceeds were used by the Company to repay PH II $500,000, representing
the remaining outstanding principal balance, plus accrued interest, due such
entity under the terms of a demand note dated February 3, 1997, and which note
was in the original principal amount of $900,000, and was originally issued to
fund the satisfaction of obligations due the former shareholders of Jackburn
Mfg., Inc.; and to repay $430,012 principal amount, plus accrued interest, due
PH II under the terms of a promissory note dated June 1, 1992 and which note was
due on May 31, 2002.
The Company is required under the Agreement to adhere to certain
affirmative and negative covenants, and borrowings under the Line of Credit is
limited to 80% of eligible accounts receivables and 50% of the inventory of the
Company, as set forth in the Agreement. The Line of Credit supersedes a
$1,000,000 line of credit with Fleet which was due to expire on May 1, 1997.
Note 4 -Inventories
Inventories of Jackburn Mfg., Inc. ("Jackburn"), a wholly-owned
subsidiary of the Company, are valued at the lower of cost or market on a last-
in, first-out (LIFO) basis for generally all raw materials including the raw
material content of work in process and finished goods. Labor and manufacturing
overhead are valued at cost on a first-in, first-out (FIFO) basis. Inventories
of the Company's other wholly-owned subsidiary, Setterstix Corp. ("Setterstix"),
are stated at the lower of cost or market on a first-in, first-out (FIFO)
method.
Inventories consist of the following:
<TABLE>
<CAPTION>
<S> <C> <C>
March 31, September 30,
1997 1996
----------- -------------
(Unaudited)
Raw materials $1,051,459 $ 913,946
Work in process 150,662 228,926
Finished goods 909,399 697,984
Packaging and supplies 54,237 56,845
---------- -------------
Total inventories $2,165,757 $1,897,701
========== =============
</TABLE>
-8-
<PAGE>
Note 5 - Property, Plant and Equipment
Property, plant and equipment consist of:
<TABLE>
<CAPTION>
March 31, September 30,
1997 1996
----------- -------------
(Unaudited)
<S> <C> <C>
Land $ 114,426 $ 102,557
Buildings and improvements 1,818,665 1,816,181
Machinery and equipment 3,800,606 3,403,627
Furniture, fixtures & autos 98,938 97,171
----------- -------------
5,832,635 5,419,536
Less accumulated depreciation 2,565,123 2,346,072
----------- -------------
Total property, plant and equipment $3,267,512 $3,073,464
=========== =============
</TABLE>
Note 6 - Income Taxes
The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards Number 109 "Accounting for Income Taxes" (FAS No.
109"). The Company anticipates utilizing its deferred tax assets primarily to
the extent of its deferred tax liabilities. As of March 31, 1997, the Company
had available net operating loss carry-forwards for tax purposes of
approximately $500,000 which expire in varying amounts from 1999 through 2004.
The Company anticipates that the remaining net operating loss carryforward will
run out this fiscal year. As a result, the Company has begun providing for
income taxes in 1997 at expected levels.
Note 7 - Net Income per Common Share
Net income per Common Share is calculated by dividing net income after
reduction for dividends on Preferred Stock, by the weighted average number of
shares of Common Stock outstanding during the three and six month periods ended
March 31, 1997 and 1996.
-9-
<PAGE>
Note 8 - Preferred Stock
For each of the quarters ended December 31, 1996 and March 31, 1997,
the Company has declared and paid cash dividends on its outstanding Preferred
Stock in the amount of $70,000. (See Note 3 regarding repurchase of Preferred
Stock.)
Note 9 - Employee Stock Options
The Financial Accounting Standards Board has issued Financial
Accounting Standard No. 123 ("SFAS 123"). SFAS 123 allows companies to record
compensation cost based on fair value of stock options, or to continue to record
compensation cost under APB 25, "Accounting for Stock Issued to Employees"
(compensation cost measured as the excess of fair value of the stock over the
options price). For companies using APB 25, the notes to the financial
statements must disclose pro forma net income and earnings per share as if it
had used the fair value of stock options (SFAS 123). The Company has elected to
adopt the disclosure requirements of SFAS 123.
Note 10 - New Accounting Pronouncements
In February, 1997, the Financial Accounting Standards Board has issued
Statement of Financial Accounting Standards No. 128, Earnings Per Share, which
is effective for financial statements for both interim and annual periods ending
after December 15, 1997. Early adoption of the new standard is not permitted.
The new standard eliminates primary and fully diluted earnings per share and
requires presentation of basic and diluted earnings per share, together with
disclosures of how the per-share amounts were computed. The adoption of this new
standard is not expected to have a material impact on the disclosure of earnings
per share in the financial statements.
-10-
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
Except for the historical information contained herein, the matters
discussed in this Quarterly Report on Form 10-Q are forward-looking statements
which involve risks and uncertainties, including, but not limited to, economic,
competitive, governmental and technological factors affecting the Company's
operations, markets, products, services and prices, and other factors discussed
in the Company's other filings with the Securities and Exchange Commission.
Liquidity and Capital Resources
- -------------------------------
The Company had working capital of $2,749,698 as of March 31, 1997, as
compared to working capital of $2,624,931 as of September 30, 1996. The slight
increase in the Company's working capital was due primarily to the Company's
profits, offset by investments made in property, plant and equipment, the
repayment of the long-term mortgage note to the former Jackburn shareholders, as
defined below, and the additional debt incurred to redeem certain of the
Company's Preferred Stock. The Company had cash on hand as of March 31, 1997 of
$885,437, as compared to $914,325 as of September 30, 1996.
In accordance with the terms of an agreement with the former
shareholders (the "Former Jackburn Shareholders") of Jackburn Mfg., Inc.
("Jackburn"), the Company paid the Former Jackburn Shareholders $13,177 in
January, 1997 and $30,004 in January, 1996. Such payments represented Jackburn's
excess cash flow, as defined under such agreement, for the years ended September
30, 1996 and 1995, respectively. In February, 1997, the Company accelerated
payment of a 9% Mortgage Note (the "Mortgage Note") originally issued in the
principal amount of $604,000 and due in October, 2000. All liens on the property
which secured this Mortgage Note have been released. In addition, the Company
settled the two remaining years of excess cash flow payments due to the Former
Jackburn Shareholders. On February 3, 1997, a lump-sum payment of $900,000 was
made to the Former Jackburn Shareholders as final settlement of the Mortgage
Note and the remaining excess cash flow liability.
On March 27, 1997, the Company entered into a Credit Agreement (the
"Agreement") with Fleet Bank, N.A. ("Fleet"). The Credit Agreement provides for
a $2,000,000 term loan ("Term Loan") to the Company and for a $2,000,000
revolving line of credit ("Line of Credit") to the Company. The Term Loan is for
a term of five years and provides for quarterly principal payments of $100,000,
commencing as of June 30, 1997, with interest payable monthly in arrears. The
Line of Credit is for a period of two years, and upon the expiration thereof,
unless such Line of Credit is extended, the outstanding principal amount then
outstanding, if any, is due and payable. Interest on the Line of Credit is
payable monthly in arrears.
Interest on the outstanding principal amount of the Term Loan and on
the outstanding principal amount of the Line of Credit will accrue, at the
Company's option, at Fleet's prime rate, as announced from time to time, or the
London Interbank Offer Rate ("LIBOR") plus 2%. Both
-11-
<PAGE>
the Term Loan and the Line of Credit are secured by all of the Company's assets,
pursuant to the terms of certain security agreements, dated as of March 27,
1997.
On March 31, 1997, the Company borrowed $2,000,000 under the Term
Loan. Of such borrowing, $100,000 principal amount of the Term Loan bears
interest at 7.7734%, and $1,900,000 principal amount thereof bears interest at a
rate of 7.9375%. To the extent the Line of Credit is not utilized by the
Company, the Company is obligated to pay an annual commitment fee of .1875% for
the average unused portion of the Line of Credit.
The Company borrowed the aggregate principal amount under the Term
Loan to redeem 1,000 shares of its Preferred Stock owned of record by PH II
Holdings, Inc. ("PH II"), an affiliate of the Company. The redemption price of
the Preferred Stock was $1,000,000, the face value of such stock. In addition,
the loan proceeds were used by the Company to repay PH II $500,000, representing
the remaining outstanding principal balance, plus accrued interest, due such
entity under the terms of a demand note dated February 3, 1997, and which note
was in the original principal amount of $900,000, and was originally issued to
fund the satisfaction of obligations due the former shareholders of Jackburn;
and to repay $430,012 principal amount, plus accrued interest, due PH II under
the terms of a promissory note dated June 1, 1992 and which note was due on May
31, 2002. The demand note bore interest at the prime rate and the promissory
note bore interest at the prime rate plus 2%.
The Company is required under the Agreement to adhere to certain
affirmative and negative covenants, and borrowings under the Line of Credit is
limited to 80% of eligible accounts receivables and 50% of the inventory of the
Company, as set forth in the Agreement. The Line of Credit supersedes a
$1,000,000 line of credit with the Bank which was due to expire on May 1, 1997.
The Company intends to fund its operations in the near term from cash
on hand and from cash flow generated from operations, and from the existing,
unused line of credit from Fleet Bank, as described above (which unused line of
credit equalled $2,000,000 at March 31, 1997). Depending upon the amount of
revenues generated from Setterstix and Jackburn, the Company may require
additional financing. Except as described herein, the Company is unaware of any
other material commitments which may adversely affect its liquidity in the near
term.
Results of Operations
- ---------------------
Six Months Ended March 31, 1997, as compared to the Six Months Ended March 31,
- ------------------------------------------------------------------------------
1996
- ----
The Company, on a consolidated basis, generated net sales of
$8,621,078 for the six- month period ended March 31, 1997, as compared to net
sales of $9,300,324 for the same period of the prior year.
-12-
<PAGE>
The overall 7.3% decrease in sales over the prior year was due to a 2%
increase in sales at the Company's Setterstix subsidiary, offset by a 18%
decrease at its Jackburn subsidiary. The increase in sales at the Setterstix
subsidiary was due mainly to volume increases which were substantially offset by
price decreases. The decrease in sales at Jackburn was due mainly to reduced
volume from two customers.
Gross profit was $2,873,345 (33% gross profit margin) for the six
months ended March 31, 1997, as compared to $2,834,167 (30% gross profit margin)
for the same period of the previous year. The increase in gross profit was due
mainly to the decrease in the overall cost of the Company's products. The
increase in gross profit margin was due to lower direct labor and material costs
and to efficiencies gained from the recent manufacturing improvements due to the
Company's investment in capital expenditures, partially offset by lower margins
at Jackburn due to lower sales volume which did not absorb fixed operating
costs.
Selling, general and administrative expenses were $1,472,127 and
$1,461,258 for the six months ended March 31, 1997 and 1996, respectively. The
change is insignificant.
Interest expense was $49,463 versus $165,073 for the six months ended
March 31, 1997 and 1996, respectively. The decrease is the result of reduced
debt principal levels from the prior year.
The Company generated net income of $1,160,947 for the six months
ended March 31, 1997, as compared to net income of $1,035,109 for the same
period of the prior year. The 12% increase in net income was the result of the
increase in gross profits plus the reduction in interest expense, partially
offset by higher Federal income tax expense during the period.
Three Months Ended March 31, 1997, as compared to the Three Months Ended March
- ------------------------------------------------------------------------------
31, 1996
- --------
The Company, on a consolidated basis, generated net sales of
$4,827,261 for the three-month period ended March 31, 1997, as compared to net
sales of $5,059,075 for the same period of the prior year.
The overall 4.6% decrease in sales over the prior year was due to a
2.5% increase in sales at the Company's Setterstix subsidiary, offset by a 17%
decrease at its Jackburn subsidiary. The increase in sales at the Setterstix
subsidiary was due mainly to volume increases which were substantially offset by
price decreases. The decrease in sales at Jackburn was due mainly to reduced
volume from two customers.
Gross profit was $1,583,327 (33% gross profit margin) for the three
months ended March 31, 1997, as compared to $1,628,239 (32% gross profit margin)
for the same period of the previous year. The decrease in gross profit was due
mainly to the decrease in sales, partially offset by a reduction in the overall
cost of the Company's products. The increase in gross profit margin was due to
lower direct labor and material costs and to efficiencies gained from the recent
manufacturing improvements due to the Company's investment in capital
expenditures, partially offset by lower margins at Jackburn due to lower sales
volume which did not absorb fixed operating costs.
-13-
<PAGE>
Selling, general and administrative expenses were $716,168 and
$810,933 for the three months ended March 31, 1997 and 1996, respectively. The
12% decrease was due to lower administrative expenses and lower sales
commissions due to the decrease in sales.
Interest expense was $24,854 versus $76,673 for the three months ended
March 31, 1997 and 1996, respectively. The decrease is the result of reduced
debt principal levels from the prior year.
The Company generated net income of $711,116 for the three months
ended March 31, 1997, as compared to net income of $632,150 for the same period
of the prior year. The 12.5% increase in net income was the result of the
increase in gross profit margins, plus the reduction in selling, administrative
and interest expenses during the period, partially offset by higher federal
income tax expense during the period.
-14-
<PAGE>
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
None
(b) Reports on Form 8-K.
The Company filed a Current Report on Form 8-K dated April 2, 1997 to
report a new credit arrangement with Fleet Bank, N.A.
-15-
<PAGE>
SIGNATURES
----------
Pursuant to the requirement of the Securities Act of 1934, the Registrant
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
Dated: May 2, 1997 By: /s/ Frederick A. Rossetti
---------------------------
Frederick A. Rossetti, President,
Principal Executive Officer,
and Principal Accounting Officer
-16-
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-START> OCT-01-1996
<PERIOD-END> MAR-31-1997
<CASH> 885,437
<SECURITIES> 0
<RECEIVABLES> 1,274,069
<ALLOWANCES> 25,000
<INVENTORY> 2,165,757
<CURRENT-ASSETS> 4,676,395
<PP&E> 5,832,635
<DEPRECIATION> 2,565,123
<TOTAL-ASSETS> 11,734,835
<CURRENT-LIABILITIES> 1,926,697
<BONDS> 0
0
1,000,000
<COMMON> 39,826
<OTHER-SE> 13,055,280
<TOTAL-LIABILITY-AND-EQUITY> 11,734,835
<SALES> 8,621,078
<TOTAL-REVENUES> 8,621,078
<CGS> 5,747,733
<TOTAL-COSTS> 7,219,860
<OTHER-EXPENSES> 87,419
<LOSS-PROVISION> 25,000
<INTEREST-EXPENSE> 1,983,475
<INCOME-PRETAX> 1,329,947
<INCOME-TAX> 169,000
<INCOME-CONTINUING> 1,160,947
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,160,947
<EPS-PRIMARY> .26
<EPS-DILUTED> .26
</TABLE>
