SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 10-QSB
QUARTERLY REPORT UNDER SECTION 13
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended June 30, 1999 Commission File Number 0-12575
Arizona Instrument Corporation
(Exact name of registrant as specified in its charter)
Delaware 86-0410138
(State of Incorporation) (I.R.S. Employer identification number)
4114 East Wood Street, Phoenix Arizona 85040-1941
(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code: (602) 470-1414
Indicate by check mark whether the registrant (1) has filled all reports
required to be filed by Section 13 or 15(d) of the Securities and 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 requirements for the past 90 days.
Yes [X] No [ ]
Transitional Small Business Disclosure Format (check one):
Yes [ ] No [X]
As of August 7, 1999 1,362,971 shares of Common Stock ($0.01 par value) were
issued and outstanding.
<PAGE>
ARIZONA INSTRUMENT CORPORATION
TABLE OF CONTENTS
PART 1. FINANCIAL INFORMATION
Item 1 Financial Statements
Consolidated Balance Sheets
June 30, 1999 and December 31, 1998 1
Consolidated Statements of Operations Three and
six months ended June 30, 1999 and June 30, 1998 2
Consolidated Statements of Cash Flows Six months ended
June 30, 1999 and June 30, 1998 3
Notes to Consolidated Financial Statements 4
Item 2 Management's Discussion and Analysis of
Financial Condition and Results of Operations 5
PART II. OTHER INFORMATION
Item 1 Legal Proceedings 9
Item 4 Submission of Matters to a Vote of Security Holders 9
Item 5 Other Information 9
Item 6 Exhibits and Reports on Form 8-K 10
i
<PAGE>
ARIZONA INSTRUMENT CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
June 30, 1999 December 31, 1998
------------- -----------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 3,009,507 $ 1,098,846
Receivables, net 1,290,908 2,912,630
Inventories 1,000,040 1,646,804
Deferred Income Tax 625,000 625,000
Prepaid expenses and other current assets 49,874 37,182
----------- -----------
Total current assets 5,975,329 6,320,462
PROPERTY, PLANT AND EQUIPMENT, net 768,437 861,808
GOODWILL, net of accumulated amortization 1,400,110 1,493,494
DEFERRED INCOME TAXES 465,000 465,000
OTHER ASSETS 336,745 638,191
----------- -----------
TOTAL ASSETS $ 8,945,621 $ 9,778,955
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Lines of credit $ -- $ 300,000
Accounts payable 341,510 277,743
Current portion of long-term debt and
capital lease obligations 12,940 12,940
Other accrued expenses 1,040,821 1,683,875
----------- -----------
Total current liabilities 1,395,271 2,274,558
----------- -----------
LONG-TERM DEBT AND CAPITAL LEASE
OBLIGATIONS - less current portions 5,587 11,956
SHAREHOLDERS' EQUITY Common stock,
.01 par value per share:
Authorized, 10,000,000 shares;
Issued, 1,382,670 and 1,372,504 shares 69,135 68,625
Preferred stock, $.01 par value per share:
Authorized, 1,000,000 shares
Additional paid-in capital 9,921,624 9,890,416
Deficit (2,211,214) (2,231,818)
----------- -----------
7,779,545 7,727,223
Less treasury stock, 19,699 shares at cost (234,782) (234,782)
----------- -----------
Total shareholders' equity 7,544,763 7,492,441
----------- -----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 8,945,621 $ 9,778,955
=========== ===========
See Notes to Consolidated Financial Statements
1
<PAGE>
ARIZONA INSTRUMENT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Three Months Ended June 30, Six Months Ended June 30,
---------------------------- ----------------------------
1999 1998 1999 1998
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
NET SALES $ 2,176,542 $ 2,118,541 $ 4,027,374 $ 4,157,348
COST OF GOODS SOLD 767,618 792,245 1,439,104 1,589,665
----------- ----------- ----------- -----------
Gross margin 1,408,924 1,326,296 2,588,270 2,567,683
----------- ----------- ----------- -----------
EXPENSES
Marketing 542,692 568,096 1,043,332 1,021,068
General & administrative 395,931 419,721 787,465 995,086
Research & development 187,741 210,035 386,377 434,231
Amortization & depreciation 114,899 164,738 254,106 335,835
----------- ----------- ----------- -----------
Total Expenses 1,241,263 1,362,590 2,471,280 2,786,220
----------- ----------- ----------- -----------
OPERATING INCOME(LOSS) 167,661 (36,294) 116,990 (218,537)
----------- ----------- ----------- -----------
OTHER REVENUE (EXPENSE)
Interest income 18,826 -- 18,826 --
Interest expense (17,563) (38,360) (27,395) (70,087)
Other 18,753 53,032 23,017 58,011
----------- ----------- ----------- -----------
Total other (expense) 20,016 14,672 14,448 (12,076)
----------- ----------- ----------- -----------
INCOME (LOSS) BEFORE INCOME TAX FROM
CONTINUING OPERATIONS 187,677 (21,622) 131,438 (230,613)
INCOME TAXES (BENEFIT) 49,552 (8,606) 49,552 (86,941)
----------- ----------- ----------- -----------
INCOME (LOSS) FROM CONTINUING OPERATIONS 138,125 (13,016) 81,886 (143,672)
INCOME (LOSS) FROM DISCONTINUED
OPERATIONS, NET 7,800 199,413 (61,282) 463,139
----------- ----------- ----------- -----------
NET INCOME $ 145,925 $ 186,397 $ 20,604 $ 319,467
=========== =========== =========== ===========
NET INCOME (LOSS) PER SHARE -BASIC:
FROM CONTINUING OPERATIONS $ 0.10 $ (0.01) $ 0.06 $ (0.11)
=========== =========== =========== ===========
NET INCOME (LOSS) INCOME PER SHARE - BASIC:
FROM DISCONTINUED OPERATIONS $ 0.01 $ 0.15 $ (0.04) $ 0.34
=========== =========== =========== ===========
NET INCOME (LOSS) INCOME PER SHARE - BASIC $ 0.11 $ 0.14 $ 0.02 $ 0.24
=========== =========== =========== ===========
NET INCOME (LOSS) PER SHARE - DILUTED:
FROM CONTINUING OPERATIONS $ 0.10 $ (0.01) $ 0.06 $ (0.11)
=========== =========== =========== ===========
NET INCOME (LOSS) INCOME PER SHARE - DILUTED: $ 0.01 $ 0.15 $ (0.04) $ 0.34
FROM DISCONTINUED OPERATIONS =========== =========== =========== ===========
NET INCOME(LOSS) PER SHARE - DILUTED $ 0.11 $ 0.14 $ 0.02 $ 0.23
=========== =========== =========== ===========
BASIC SHARES OUTSTANDING (WEIGHTED AVERAGE) 1,362,998 1,346,683 1,362,153 1,344,914
EQUIVALENT SHARES - STOCK OPTIONS 8,018 18,872 8,018 18,872
----------- ----------- ----------- -----------
DILUTED SHARES OUTSTANDING 1,371,016 1,365,555 1,370,171 1,363,786
=========== =========== =========== ===========
</TABLE>
See Notes to Consolidated Financial Statements
2
<PAGE>
Arizona Instrument Corporation and Subsidiaries
Consolidated Statement of Cash Flows
Six Months Ended
-----------------------------
June 30, 1999 June 30, 1998
------------- -------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 20,604 $ 319,467
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 273,935 352,384
Decrease in receivables 1,621,722 1,042,113
(Increase) decrease in inventories (230,008) 578,110
(Increase) decrease in prepaid expenses
and other current assets (20,842) 7,596
Decrease (increase) in other assets 155,442 (9,521)
Decrease in deferred income taxes -- 193,321
Decrease in accounts payable and other
accrued expenses (579,287) (872,410)
Gain on sale of assets (22,503) --
----------- ----------
NET CASH PROVIDED BY OPERATING ACTIVITIES 1,219,063 1,611,060
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of Soil Sentry/Encompass
product line 1,061,531 --
Purchases of capital equipment (95,282) (162,217)
----------- -----------
NET CASH PROVIDED (USED IN) BY INVESTING
ACTIVITIES 966,249 (162,217)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net payments under line of credit (300,000) (266,000)
Issuance of common stock pursuant to stock
purchase plan 31,718 29,819
Purchase of treasury stock -- (12,331)
Payments of long-term debt and capital leases (6,369) (323,468)
----------- -----------
NET CASH USED IN FINANCING ACTIVITIES (274,651) (571,980)
----------- -----------
NET INCREASE IN CASH AND CASH EQUIVALENTS 1,910,661 876,863
CASH AND CASH EQUIVALENTS, beginning of period 1,098,846 143,173
----------- -----------
CASH AND CASH EQUIVALENTS, end of period $ 3,009,507 $ 1,020,036
=========== ===========
Supplemental cash flow information:
Interest expense 27,395 70,087
See Notes to Consolidated Financial Statements
3
<PAGE>
ARIZONA INSTRUMENT CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
1. CONSOLIDATED FINANCIAL STATEMENTS
The consolidated balance sheet as of June 30, 1999, the consolidated statements
of operations and cash flows for the three-month and six-month periods ended
June 30, 1999 and 1998 have been prepared by the Company without audit. In the
opinion of management, all adjustments (which include only normal recurring
adjustments) necessary to present fairly the financial position at June 30, 1999
and the results of operations and cash flows for the three-month and six-month
periods ended June 30, 1999 and June 30, 1998 have been made.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted. These consolidated financial statements should
be read in conjunction with the financial statements and notes thereto included
in the Company's Report on Form 10-KSB for the fiscal year ended December 31,
1998. The results of operations for the interim periods are not necessarily
indicative of the results to be obtained for the entire year.
The Financial Accounting Standards Board recently issued SFAS No. 130 on
"Reporting Comprehensive Income" and SFAS No. 131 on "Disclosures about Segments
of an Enterprise and Related Information." The "Reporting Comprehensive Income"
standard is effective for fiscal years beginning after December 15, 1997. This
standard changes the reporting of certain items currently reported in the common
stock equity section of the balance sheet. The "Disclosure about Segments of an
Enterprise and Related Information" standards is also effective for the fiscal
years beginning after December 15, 1997. This standard requires that public
companies report certain information about operating segments in their financial
statements. It also establishes related disclosures about products and services,
geographic areas, and major customers.
4
<PAGE>
2. INVENTORIES
Inventories consist of the following
June 30, 1999 December 31,1998
------------- ----------------
Finished Goods $ 630,753 $ 480,515
Components 369,287 1,166,289
---------- ----------
$1,000,040 $1,646,804
========== ==========
3. NEW ACCOUNTING PRONOUNCEMENTS
The Company adopted Statement of Financial Accounting Standard No. 130,
"Reporting Comprehensive Income", in the quarter ended March 31, 1998.
Comprehensive income is the same as net income for the quarter.
The following discussion should be read in conjunction with, and is qualified in
its entirety by, the Company's Consolidated Financial Statements and Notes
thereto appearing elsewhere herein. Historical results are not necessarily
indicative of trends in operating results for any future period.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
RESULTS OF OPERATIONS
Six months ended June 30, 1999 and June 30, 1998.
Net sales for the six months ended June 30, 1999 were $4,027,374, a decrease of
$129,974 or 3.13% from the $4,157,348 generated for the same period of 1998.
This decrease was due to decreased international sales and a decrease of
non-recurring sales of miscellaneous tank testing revenue.
Cost of goods sold for the six months ended June 30, 1999 was $1,439,104, a
decrease of $150,561 or 9.47% from the $1,589,665 incurred for the same period
of 1998. The decrease in cost of goods sold was due to improved manufacturing
efficiencies and, to a lesser extent, the cost of goods associated with
decreased sales.
Operating expenses for the six months ended June 30, 1999 were $2,471,280, a
decrease of $314,940 or 11.30% as compared to operating expenses of $2,786,220
for the same period of 1998. Marketing expenses for the six months ended June
5
<PAGE>
30, 1999 were $1,043,332, an increase of $22,264 or 2.18% as compared to
$1,021,068 for the same period in 1998. Increased marketing expenses were due to
a higher level of marketing activity required to support the Company's domestic
and international operations. General and administrative expenses for the six
months ended June 30, 1999 were $787,465, a decrease of $207,621 or 20.86% as
compared to $995,086 for the same period of 1998, due primarily to reduction in
capital leases, property maintenance, insurance costs and other miscellaneous
expenses. Research and development expenses for the six months ended June 30,
1999 were $386,377, a decrease of $47,854 or 11.02% compared to the $434,231 of
research and development expenses incurred in the comparable period of 1998.
This decrease was due primarily to a decrease in personnel related costs. As a
result, operating income for the six months ended June 30, 1999 grew to
$116,990, an increase of $335,527 or 153.53% from the operating loss of $218,537
incurred by the Company for the same period of 1998.
Other income for the first six months of 1999 were $14,448, an increase of
$26,524 from the $12,076 in expenses realized for the same period of 1998. This
was due primarily to an increase in interest income.
As a result of these changes, income before taxes from continuing operations for
the six months ended June 30, 1999 was $131,438, an increase of $362,051 from
the loss of $230,613 recorded for the same period of 1998. Provision for income
taxes increased to $49,552 for the six months ended June 30, 1999 as compared to
a tax benefit of $86,941 for the same period of 1998. The Company expects its
provision for income taxes to approximate the amount computed at the statutory
rate for 1999. As a result, net income from continuing operations for the first
six months of 1999 was $81,886, an increase of $225,558 over the net loss from
continuing operations of $143,672 incurred in the same period of 1998.
The Company sold its Soil Sentry/Encompass product line in April 1999. For the
first six months of 1999, the Company had a loss from discontinued operations of
$61,282, while the gain from discontinued operations for the first six months of
1998 was $463,139. As a result, net income for the first six months of 1999 was
$20,604, a decrease of $298,863 or 93.55% from net income of $319,467 generated
for the first six months of 1998.
Three months ended June 30, 1999 and June 30, 1998
Net sales for the three months ended June 30, 1999 were $2,176,542, an increase
of $58,001 or 2.74% from the $2,118,541 in net sales generated for the second
quarter of 1998.
Cost of goods sold for the three months ended June 30, 1999 were $767,618, a
decrease of $24,627 or 3.11% from the $792,245 incurred for the second quarter
of 1998. The decrease in cost of goods sold was due to our continued efforts to
improve manufacturing efficiencies.
6
<PAGE>
Operating expenses for the second quarter of 1999 were $1,241,263, a decrease of
$121,327 or 8.90% as compared to operating expenses of $1,362,590 for the second
quarter of 1998. Marketing expenses for the second quarter of 1999 were
$542,692, a decrease of $25,404 or 4.47% over the same period in 1998, due to
decreased trade show attendance in the second quarter. General and
administrative expenses for the second quarter of 1999 were $395,931, a decrease
of $23,790 or 5.67% as compared to $419,721 for the second quarter of 1998, due
primarily to a reduction in capital leases, insurance costs and other
miscellaneous expenses. Research and development expenses for the second quarter
of 1999 were $187,741, a decrease of $22,294 or 10.61% compared to the $210,035
of research and development expenses incurred in the second quarter of 1998.
This decrease was due primarily to a decrease in personnel related costs. As a
result, operating income for the second quarter of 1999 grew to $167,661, an
increase of $203,955 from the operating loss of $36,294 incurred by the Company
for the second quarter of 1998.
Other income for the second quarter of 1999 was $20,016, an increase of $5,344
or 36.43% from the $14,672 in income realized for the second quarter of 1998.
The increase in income was due to an increase in interest income and a decrease
in interest expense related to the Company's line of credit.
As a result of these changes, income from continuing operations before taxes for
the second quarter of 1999 was $187,677, an increase of $209,299 from the loss
of $21,622 recorded for the second quarter of 1998. Provision for income taxes
increased to $49,552 for the second quarter of 1999 as compared to a benefit of
$8,606 for the second quarter of 1998. The Company expects its provision for
income taxes to approximate the amount computed at the statutory rate for 1999.
As a result, net income from continuing operations for the second quarter was
$138,125, an increase of $151,141 over the net loss from continuing operations
of $13,016 for the second quarter of 1998.
The Company sold its Soil Sentry/Encompass product line in April 1999. For the
second quarter of 1999, the Company had income from discontinued operations of
$7,800 while income from discontinued operations for the second quarter of 1998
was $199,413. As a result, net income for the second quarter of 1999 was
$145,925, a decrease of $40,472, or 21.71% from net income of $186,397 generated
for the second quarter of 1998.
The Company has historically experienced and expects to continue to experience
quarterly fluctuations, potentially in material amounts, in its operating
results. A variety of factors influence the Company's operating results in a
particular period, including economic conditions in the industries served by the
Company, regulatory developments, the timing of significant orders, shipment
delays, specific features requested by the customers, the introduction of new
products by the Company and its competitors, market acceptance of new products
and enhancements of existing products, changes in the cost of materials,
7
<PAGE>
disruptions in the sources of supply, seasonal variations of spending by
customers, the timing of the Company's expenditures in anticipation of future
orders and other factors, many of which are beyond the Company's control.
Except for the historical information contained herein, the discussion in this
Report contains or may contain forward-looking statements that involve risks and
uncertainties. The Company's actual results could differ materially from those
discussed here. Factors that could cause or contribute to such differences
include, but are not limited to, those discussed in this Management's Discussion
and Analysis, and the Company's Report on Form 10-KSB for the year ended
December 31, 1998, as well as those factors discussed elsewhere herein.
LIQUIDITY AND CAPITAL RESOURCES
Working capital at June 30, 1999 was $4,580,058, an increase of $534,154 from
the working capital of $4,045,904 as of December 31, 1998. Working capital
increased due to an increase in cash and a decrease in the line of credit and
other accrued expenses, which more than offset a reduction in receivables and
inventories. The Company's current ratio as of June 30, 1999 increased to 4.3
from a current ratio of 2.8 as of December 31, 1998.
The Company currently has a line of credit available through a bank,
collateralized by accounts receivable. The amount available under this line is a
maximum commitment of $2,000,000 which was available through August 31, 1999. At
June 30, 1999, no funds had been borrowed under this line of credit.
The Company believes that cash generated from ongoing operations and the
borrowing arrangements described above will satisfy the anticipated cash
requirements of the Company's current operations over the next 12 months, though
there can be no assurance that this will be the case. The Company's ability to
continue funding its planned operations beyond the next 12 months is dependent
upon its ability to generate sufficient cash flow to meet its obligations on a
timely basis, or to obtain additional funds through equity or debt financing, or
from other sources of financing, as may be required.
The inability of computers, software and other equipment utilizing
microprocessors to recognize and properly process data fields containing a
2-digit year is commonly referred to as the Year 2000 problem. As the year 2000
approaches, such systems may be unable to accurately process certain date-based
information.
The Company has identified some applications that will require modification to
address the Year 2000 problem. Internal and external resources will be used to
make the required modifications and test these modifications. The Company plans
on completing the modifications and testing of these modifications by the end of
third quarter 1999. The total cost to the Company of these Year 2000
problem-related activities is not anticipated to be material. These costs and
the date on which the Company plans to complete the modifications and testing to
solve the Year 2000 problem are based upon management's estimates. However,
there can be no assurance that these estimates will be achieved and that the
costs of solving the Year 2000 problem could differ significantly from
management's estimates.
8
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
On June 30, 1999 the Company settled its litigation, BP OIL COMPANY V. ARIZONA
INSTRUMENT CORPORATION, with BP Oil Company relating to the sale and
installation of Encompass tank testing systems at BP Oil Company's service
stations. Under the terms of the settlement, the Company has agreed to pay BP
Oil Company $35,000 and BP Oil Company has agreed to return the Encompass
systems to the Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
a) The 1999 Annual Meeting of Stockholders of the Company (the "Meeting")
was held on July 9, 1999.
b) At the Meeting, S. Thomas Emerson was elected to a three-year term as
director of the Company. Continuing directors include Harold D.
Schwartz, Steven G. Zylstra and George G. Hays.
c) Following is a brief description of the matters voted upon at the
Meeting and the results of the voting:
(1) Election of S. Thomas Emerson to the Board of Directors:
1,205,622 votes for, 36,437 votes withheld.
(2) Amendments to the Company's Employee Stock Purchase Plan to
increase the number of shares of the Company's common stock
available for grant by 65,000 shares: 1,154,169 votes for, 57,316
votes against, 30,574 votes abstained.
(3) Ratification of the appointment of Toback, CPAs, P.C. as
independent auditors of the Company for the fiscal year ending
December 31, 1998 and 1999: 1,216,912 for, 6,833 votes against,
18,314 votes abstained.
ITEM 5. OTHER INFORMATION
a) On April 30, 1999, the Company sold certain assets related to the
Encompass Systems and Soil Sentry Systems line of products to National
Environmental Service, Co. for an adjusted aggregate purchase price of
$1,061,531. A more detailed description of this transaction was
provided in the Company Form 10-QSB filed with the Securities and
Exchange Commission on May 17, 1999 and is incorporated herein by
reference.
9
<PAGE>
b) On July 14, 1999, part of the roof of the building at Arizona
Instruments Corporation's headquarters at 4114 East Wood Street in
Tempe, Arizona collapsed during a monsoon storm. None of the Company's
employees were injured as a result of the accident. The Company has
been able to continue operations since the accident but does not
currently know what long-term effects the accident will have on the
Company.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
3.1 Composite Certificate of Incorporation of Registrant as amended through
February 16, 1999. Incorporated by reference from the Form 10-QSB filed on
May 17, 1999.
3.2 Bylaws of Registrant. Incorporated by reference from the Form 8-A filed on
June 26, 1996.
27 Financial Data Schedule *
- ----------
* Filed herewith
(b) No Form 8-K was filed by registrant during the quarter ended June 30, 1999.
10
<PAGE>
Pursuant to the requirements of the securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
August 13, 1999 /s/ George G. Hays
- ---------------- ------------------
Date George G. Hays, President, CEO
(Authorized officer)
August 13, 1999 /s/ Linda J. Shepherd
- --------------- ---------------------
Date Controller
(Principal accounting officer)
11
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS AND ITS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS
</LEGEND>
<CIK> 724904
<NAME> ARIZONA INSTRUMENT CORPORATION
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<EXCHANGE-RATE> 1
<CASH> 3,009,507
<SECURITIES> 0
<RECEIVABLES> 1,523,429
<ALLOWANCES> 232,521
<INVENTORY> 1,000,040
<CURRENT-ASSETS> 5,975,329
<PP&E> 3,413,933
<DEPRECIATION> 2,645,496
<TOTAL-ASSETS> 8,945,621
<CURRENT-LIABILITIES> 1,395,271
<BONDS> 5,587
0
0
<COMMON> 69,135
<OTHER-SE> 7,475,628
<TOTAL-LIABILITY-AND-EQUITY> 8,945,621
<SALES> 4,027,374
<TOTAL-REVENUES> 4,069,217
<CGS> 1,439,104
<TOTAL-COSTS> 2,471,280
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 27,395
<INCOME-PRETAX> 131,438
<INCOME-TAX> 49,552
<INCOME-CONTINUING> 81,886
<DISCONTINUED> (61,282)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 20,604
<EPS-BASIC> 0.06
<EPS-DILUTED> 0.06
</TABLE>
