<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1997
or
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file No. 0-12641
[LOGO]
IMAGING TECHNOLOGIES CORPORATION
(Exact name of small business issuer as specified in its charter)
DELAWARE 33-0021693
(State or other jurisdiction of (IRS Employer ID No.)
incorporation or organization)
11031 VIA FRONTERA
SAN DIEGO, CALIFORNIA 92127
(Address of principal executive offices)
Issuer's Telephone Number, Including Area Code: (619) 613-1300
Check whether the issuer (1) has 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 stock, as of the latest practicable date.
Outstanding at November 12, 1997:
Class: Common Stock, $0.005 par 10,047,145 Shares
- ------------------------------- ---------------------------------
Transitional Small Business Disclosure Format (Check one):
Yes No X
--- ---
<PAGE>
IMAGING TECHNOLOGIES CORPORATION
AND SUBSIDIARIES
- -------------------------------------------------------------------------------
INDEX
- -------------------------------------------------------------------------------
PAGE
NO.
Part I. Financial Information:
Consolidated Condensed Balance Sheet, September 30, 1997 1
Consolidated Condensed Statement of Operations
Three Months ended September 30, 1997 and 1996 2
Consolidated Condensed Statement of Cash Flows
Three Months ended September 30, 1997 and 1996 3
Notes to Consolidated Condensed Financial Statements 4
Management's Discussion and Analysis or Plan of Operations 5
Part II. Other Information 9
- -------------------------------------------------------------------------------
<PAGE>
IMAGING TECHNOLOGIES CORPORATION
AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEET
(UNAUDITED)
SEPTEMBER 30, 1997
- -------------------------------------------------------------------------------
ASSETS
- -------------------------------------------------------------------------------
Current assets:
Cash $ 3,602,000
Accounts receivable, net 8,868,000
Inventories 2,704,000
Other current assets 821,000
-------------
Total current assets 15,995,000
Capitalized software, net 1,109,000
Prepaid licenses, net 941,000
Property and equipment, net 1,506,000
Other 372,000
-------------
$ 19,923,000
-------------
-------------
- -------------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
- -------------------------------------------------------------------------------
Current liabilities:
Accounts payable $ 2,103,000
Accrued expenses 815,000
Deferred revenues 155,000
Notes payable and capital leases 1,880,000
-------------
Total current liabilities 4,953,000
-------------
Shareholders' equity:
5% convertible preferred stock
$1,000 PAR VALUE, 7,500 SHARES AUTHORIZED,
420.5 ISSUED AND OUTSTANDING 420,000
Series C redeemable convertible preferred stock
$1,000 PAR VALUE, $10,000 LIQUIDATION VALUE,
1,200 SHARES AUTHORIZED, 500 ISSUED AND OUTSTANDING 5,000,000
Preferred stock
$1,000 PAR VALUE, 1,183 AUTHORIZED, NO SHARES
ISSUED AND OUTSTANDING
Common stock
$.005 PAR VALUE, 100,000,000 SHARES AUTHORIZED,
9,977,145 SHARES ISSUED AND OUTSTANDING 49,000
Paid-in capital 31,973,000
Shareholder loans (140,000)
Accumulated deficit (22,332,000)
-------------
Total shareholders' equity 14,970,000
-------------
$ 19,923,000
-------------
-------------
- -------------------------------------------------------------------------------
SEE ACCOMPANYING NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS.
1
<PAGE>
IMAGING TECHNOLOGIES CORPORATION
AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
THREE MONTHS ENDED SEPTEMBER 30,
1997 1996
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
Revenues:
Sales of products $ 5,668,000 $ 5,893,000
Engineering fees 1,516,000 1,318,000
License fees and royalties 275,000
------------ -------------
7,184,000 7,486,000
------------ -------------
Costs and expenses:
Cost of products sold 3,939,000 3,975,000
Selling, general and administrative 1,803,000 3,105,000
Cost of engineering fees and research and development 597,000 756,000
Purchased research and development 780,000
------------ -------------
6,339,000 8,616,000
------------ -------------
Income (loss) from operations 845,000 (1,130,000)
Other income (expense):
Interest, net (26,000)
------------ -------------
Net income (loss) before provision
for income taxes 819,000 (1,130,000)
Provision for taxes 4,000 4,000
------------ -------------
Net income (loss) $ 815,000 $ (1,134,000)
------------ -------------
------------ -------------
Primary and fully diluted income (loss) per common share $ 0.07 $ (0.13)
------------ -------------
------------ -------------
Average shares outstanding 12,517,000 8,919,000
- ---------------------------------------------------------------------------------------------
SEE ACCOMPANYING NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS.
2
<PAGE>
IMAGING TECHNOLOGIES CORPORATION
AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
(UNAUDITED)
- ------------------------------------------------------------------------------------------------------
THREE MONTHS ENDED SEPTEMBER 30,
1997 1996
- ------------------------------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 815,000 $ (1,134,000)
ADJUSTMENTS TO RECONCILE NET INCOME (LOSS) TO CASH USED
BY OPERATING ACTIVITIES:
Depreciation and amortization of property and equipment 143,000 125,000
Purchased research and development 780,000
Changes in assets and liabilities:
Accounts receivable (1,432,000) (734,000)
Inventories (365,000) 787,000
Other current assets (276,000) (376,000)
Accounts payable and accrued expenses (762,000) 236,000
Deferred revenues (201,000) (53,000)
------------ ------------
NET CASH USED BY OPERATING ACTIVITIES (2,078,000) (369,000)
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Prepaid licenses and royalties (244,000) (112,000)
Capitalized software development costs (560,000)
Purchase of net assets by NewGen (86,000)
Capital expenditures (10,000) (149,000)
------------ ------------
NET CASH USED BY INVESTING ACTIVITIES (814,000) (347,000)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from sale of preferred stock 5,000,000
Net proceeds from exercise of stock options and warrants 695,000 11,000
Net increase line-of-credit - NewGen 633,000 174,000
Principal payments under capital lease obligations (3,000)
Capital contributions - NewGen 1,002,000
Repayment of notes payable (24,000) (141,000)
------------ ------------
NET CASH USED BY FINANCING ACTIVITIES 6,301,000 1,046,000
------------ ------------
Net increase in cash 3,409,000 330,000
Cash at the beginning of the period 193,000 4,390,000
------------ ------------
Cash at the end of the period $ 3,602,000 $ 4,720,000
------------ ------------
------------ ------------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for interest $ 10,000 $ 5,000
------------ ------------
------------ ------------
Cash paid during the period for income taxes
- ------------------------------------------------------------------------------------------------------
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
3
<PAGE>
IMAGING TECHNOLOGIES CORPORATION
AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 - PRINCIPLES OF CONSOLIDATION
The accompanying consolidated condensed financial statements of Imaging
Technologies Corporation and Subsidiaries (the "Company" or "ITEC") have not
been audited. These financial statements reflect all adjustments (consisting
only of normal recurring adjustments) which are, in the opinion of
management, necessary for a fair presentation of the financial position,
results of operations and cash flows for the periods presented. These
financial statements should be read in conjunction with the Company's audited
financial statements which are included in the Company's annual report on
Form 10-KSB for the year ended June 30, 1997 filed with the Securities and
Exchange Commission. Interim operating results are not necessarily indicative
of operating results for the full year.
NOTE 2 - INVENTORIES
Inventories at September 30, 1997 consisted of the following:
Raw materials and supplies $ 1,081,000
Work in process 146,000
Finished goods 1,477,000
------------
$ 2,704,000
------------
------------
NOTE 3 - SERIES C REDEEMABLE CONVERTIBLE PREFERRED STOCK
On August 21, 1997, the Company closed a private placement of its newly
designated Series C Redeemable Convertible Preferred Stock ("Series C
Shares") in reliance upon the exemption from securities registration afforded
by Rule 506 of Regulation D ("Regulation D") as promulgated by the United
States Securities and Exchange Commission (the "SEC") under the Securities
Act of 1933, as amended (the "1933 Act").
In the initial closing of $5,000,000, ITEC issued 500 Series C Shares and
warrants to purchase up to 200,000 shares of the Company's common stock.
After satisfying certain holding periods, each of the newly issued Series C
Shares is convertible, at the option of its holder, into shares of Common
Stock of the Company based upon a conversion price equal to $9.00 or if
lower, the lowest closing market price of the Company's Common Stock during
the 7 trading days prior to the conversion date. The warrants have an
exercise price of $7.50 per share.
Subject to certain additional conditions, the Company has the right to call
for a second round of financing up to an aggregate amount of $5,000,000,
beginning on and including January 1, 1998 and ending June 30, 1998. This
additional round of financing would involve the issuance of up to an
additional 500 Series C Shares and warrants for the purchase of up to 200,000
shares of Common Stock.
Additionally, purchasers of the Series C Shares are entitled to purchase
additional Series C Shares up to 40% of the number of Series C Shares held by
each investor on December 31, 1997.
NOTE 4 - LINE OF CREDIT FACILITY
In August 1997, the Company entered into a $3,000,000 line of credit facility
with a commercial bank. The line of credit bears interest at the bank prime
rate of interest plus 1%, and is collateralized by substantially all of the
assets of ITEC, PCPI and Prima. As of September 30, 1997, there were no
borrowings under this line of credit.
4
<PAGE>
IMAGING TECHNOLOGIES CORPORATION
AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
RESULTS OF OPERATIONS
This Form 10-QSB contains both historical and forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended, which
reflect the Company's current judgment on those issues. While management is
optimistic about the Company's long-term prospects, the historical financial
information contained herein may not be indicative of future financial
performance. In fact, future financial performance may be materially
different from the historical financial performance. Because such statements
apply to future events, they are subject to risks and uncertainties that
could cause the actual results to differ materially. Important factors that
could cause actual results to differ materially include, but are not limited
to: business conditions and growth in the electronics industry and general
economy - both domestic and international; lower than expected customer
orders; competitive factors, including pricing pressures, technological
developments and products offered by competitors; availability of components;
technological difficulties and resource constraints encountered in developing
new products; and the timely flow of competitive new products and market
acceptance of those products. Actual results may differ materially from these
statements as a result of risk factors inherent in the Company's business,
industry, customer base, or other factors. Risk factors which are applicable
to the Company may be found in the Company's various filing with the
Securities and Exchange Commission.
Users of this Form 10-QSB are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date thereof. The
Company undertakes no obligation to publicly release updates or revisions to
these statements.
RESULTS OF OPERATIONS
The Company has been in a transition period, from older technology and
products, to becoming a leading technology-based supplier of state-of-the-art
printer controllers to OEM customers. The implementation of the strategy of
the development of the new Adobe-Registered Trademark- PostScript-Registered
Trademark- Interpreter (APSI) project, which includes the Company's color
ColorImage-TM- Series controller implementation of Adobe PostScript software
for OEM customers, and its monochrome LaserImage-TM- Series controllers which
may also include HP-based (PCL) multi-function technology continues to show
promising results.
The Company has been successful in attracting several major customers, with
substantial resources and marketing capabilities, that desire to utilize the
Company's technologies which have been developed over the past few years.
Several customers have executed contracts over the past few years to adapt
Adobe PostScript software and/or the Company's software products to
controllers that will be integrated with the printer engines of various OEM
customers. These customers include or have included, but are not limited to,
Integrated Device Technology, Inc., Matsushita Electric Company, Ltd.
(Panasonic), Minolta Company, Ltd., NEC Electronics, Inc., Canon USA, Inc.,
Apple Computer, Mita Digital Design and Xerox Corporation.
5
<PAGE>
ITEC's strategy has required the Company to alter its focus away from some of
its traditional revenue sources and to make expenditures in support of these
efforts. As a result, the Company's business continues to be in a significant
transitional phase and there are important short-term operational and
liquidity challenges. Accordingly, year-to-year financial comparisons may be
of limited usefulness now and for the next several quarters due to these
important changes in the Company's business.
Effective February 14, 1997, the Company consummated its merger with NewGen
Imaging Systems, formerly NewGen Systems Acquisition Corporation ("NewGen").
Accordingly, the consolidated results of operations for the quarter ended
September 30, 1996 includes pre-merger net sales of $3,761,000 and a net loss
after taxes of $1,559,000.
Total ITEC revenues were $7,184,000 for the quarter ended September 30, 1997
versus $7,486,000 for the quarter ended September 30, 1996. The Company,
through its PCPI Technologies subsidiary, recognized non-recurring
engineering fees ("NRE") to adapt the Company's software products to
controllers of its OEM customers of approximately $1,516,000 for the quarter
ended September 30, 1997 compared to $1,318,000 for the quarter ended
September 30, 1996, an increase of 15%. The Company had net income of
$815,000 for the quarter ended September 30, 1997 compared to a net loss of
$1,134,000 for the quarter ended September 30, 1996.
REVENUES
SALES OF PRODUCTS were $5,668,000 for the quarter ended September 30, 1997
versus $5,893,000 for the quarter ended September 30, 1996. The Company's
sales of products were derived primarily from ITEC's wholly-owned
subsidiaries Prima International ("Prima") and NewGen Imaging Systems
("NewGen").
Sales of product through Prima for the quarters ended September 30, 1997 and
1996 were $2,376,000 and $2,132,000, respectively. The majority of Prima's
sales were from distribution of PCMCIA-based memory storage products. The
increase in product sales during for the quarter ended September 30, 1997 is
attributed to an increase in Prima's distribution sales of PCMCIA-based
memory products from SanDisk Corporation and Integral Peripherals, Inc.
Sales of product through NewGen for the quarter ended September 30, 1997 were
$3,215,000 compared to $3,761,000 for the quarter ended September 30, 1996.
The decline in these sales is the result of a product transition from certain
"older technology-based" products which have been phased out. NewGen's sales
of products are derived from high resolution imaging and color digital
proofing products, which in some cases have been designed by NewGen or to
NewGen's specifications, to customers in the printing and graphic arts
industry throughout the world.
The Company has been transitioning from older technology and products, to new
technology-based printer controller products over the past few years. It is
anticipated that certain of these new technology-based products being
developed by PCPI can be distributed into NewGen's customer base.
ENGINEERING FEES during the quarters ended September 30, 1997 and 1996 were
derived through the Company's PCPI Technologies subsidiary performing work on
engineering projects that were funded by OEM customers under non-recurring
engineering contracts. NRE revenue for the quarter ended September 30, 1997
and 1996 was $1,516,000 and $1,318,000, respectively, which was recognized
during the course of development based on the percentage of completion
method.
6
<PAGE>
LICENSE FEES AND ROYALTIES through the Company's PCPI Technologies subsidiary
for the quarter ended September 30, 1996 were $275,000 and were derived
primarily from "older-technology" based products. During the quarter ended
September 30, 1997, no such revenues were recognized. In the past, license
fees and royalty revenue have shown significant period-to-period fluctuations
which may continue in future periods. PCPI Technologies has submitted several
proposals to prospective customers in order to develop Adobe PostScript-based
controllers and other controllers based upon its ImageBase-TM- technology.
While PCPI Technologies has entered into some contracts with OEM customers
for controller development, there can be no assurance that additional
contracts will be obtained for the development of such controllers, or that
the existing contracts will be completed, or that products will be shipped by
the customer which may result in the generation of future royalty and license
revenues or that these products, once generating royalties, will continue to
do so.
COST OF PRODUCTS SOLD
Cost of products sold for the quarter ended September 30, 1997 and 1996 were
$3,939,000 and $3,975,000, respectively, representing gross margins of 31%
and 33%. The decrease in the gross margin percentage is attributed to a
change in the product mix between the periods.
SELLING, GENERAL AND ADMINISTRATIVE
Selling, general and administrative expenses for the quarter ended September
30, 1997 were $1,803,000 versus $3,105,000 for the quarter ended September
30, 1996 The decrease is primarily the result of the Company's concerted
effort to reduce the general and administrative expenses of the Company over
the past year through the consolidation of various administrative functions.
These decreases are partially offset by increased selling expenses in an
attempt to stimulate technology and product sales.
COST OF ENGINEERING FEES AND RESEARCH AND DEVELOPMENT
Cost of engineering fees and research and development for the quarter ended
September 30, 1997 was $597,000 versus $756,000 for the quarter ended
September 30, 1996, representing technology sales gross margins of 61% and
43%. These expenditures consist of engineering expenses associated with the
development of controller technologies and designs for PCPI technology
customers. A significant component of the decreased cost of engineering fees
and research and development is attributed to reduced hardware production
costs during the quarters and a reduction in the amount of outside
consultants being used by PCPI Technologies.
During for the quarter ended September 30, 1997, the Company capitalized
certain qualified costs in the aggregate amount of $510,000 pursuant to
Financial Accounting Standard No. 86 ("Accounting for Costs of Computer
Software to be Sold, Leased, or Otherwise Marketed").
The consolidated statement of operations for the quarter ended September 30,
1996, includes approximately $780,000 of purchased research and development
costs associated with the July 1996 purchase of the rights to certain
products lines under development by NewGen.
Over the past year, PCPI Technologies has noticed an increase in the demand
for qualified engineers in the local market. As a result of this increased
demand, the cost of hiring and
7
<PAGE>
maintaining engineers could continue to increase and PCPI Technologies could
experience difficulty in obtaining these resources in the future. Should the
local market not be able to supply the required engineering talent, the
Company may be required to hire individuals from outside the market or
consider establishing an engineering division in an area of the country that
could more readily support PCPI Technologies engineering requirements.
OTHER INCOME AND LOSS
Net interest expense was $26,000 for the quarter ended September 30, 1997. The
Company had no net interest expense for the quarter ended September 30, 1996.
The increase is associated with the increase in the usage of the Company's line
of credit facility at NewGen which was partially offset by reductions in the
outstanding debt at ITEC and increased interest income associated with the
increased cash invested during the quarter.
LIQUIDITY AND CAPITAL RESOURCES
At September 30, 1997, the Company had working capital of $11,042,000
compared to working capital of $5,203,000 as of June 30, 1997. The increase
is primarily attributed to the continued improvement of the Company's
operations and the initial $5,000,000 closing of the C Redeemable Convertible
Preferred Stock ("Series C Shares"). Under the terms of the Series C private
placement, subject to certain additional conditions, the Company has the
right to call for a second round of financing up to an aggregate amount of
$5,000,000 and the holders of the Series C Shares, subject to certain
conditions, are entitled to purchase additional Series C Shares up to
$2,000,000. In addition, the Company closed a $3,000,000 line of credit
facility with a commercial bank to help to finance the sales growth of PCPI
Technologies and Prima.
The Company's Adobe co-development projects present continuing liquidity
problems for PCPI Technologies because, in the short-term, these activities
are net users of working capital. Although the Company has improved its
liquidity, adequate working capital is necessary to continue the Company's
operations, develop its technology licensing business and to deliver the
resulting products to contract customers in an efficient and timely manner.
The increasing sales at Prima and NewGen place additional pressures on ITEC's
working capital. In addition, as noted above, while the Company has entered
into several contracts with OEM customers for controller development, there
can be no assurance that additional contracts will be obtained for the
development of such controllers, or that the existing contracts will be
completed, or that products will be shipped by the customer that will
generate future royalty and license revenues or that once these products are
being shipped by the Company's customers that they will continue to generate
royalties.
The Company's 5% convertible preferred stock (which ranks prior to the
Company's common stock), carries cumulative dividends, when and as declared,
at an annual rate of $50.00 per share. The aggregate amount of such dividends
in arrears at September 30, 1997 was approximately $476,000.
As of September 30, 1997, the Company's wholly-owned subsidiary NewGen had
$500,000 of available borrowings under its special purpose line of credit and
ITEC had $1,620,000 of available borrowings under its special purpose line of
credit.
ITEC has no material commitments for capital expenditures.
8
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
No reportable matter.
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
11.1 Computation of Earnings (loss) Per Common Share
(b) Reports on Form 8-K:
None
9
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant has
caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
IMAGING TECHNOLOGIES CORPORATION
BY: HARRY J. SAAL
-------------------------------------
DATE: November 12, 1997 Harry J. Saal
CHAIRMAN OF THE BOARD
BY: EDWARD W. SAVARESE
-------------------------------------
DATE: November 12, 1997 Edward W. Savarese
VICE CHAIRMAN OF THE BOARD, CHIEF
EXECUTIVE OFFICER
BY: RALPH R. BARRY
-------------------------------------
DATE: November 12, 1997 Ralph R. Barry
VICE PRESIDENT AND CHIEF
FINANCIAL OFFICER
10
<PAGE>
EXHIBIT 11 - COMPUTATION OF EARNINGS (LOSS) PER COMMON SHARE
QUARTER ENDED SEPTEMBER 30,
---------------------------
1997 1996
------------ ------------
PRIMARY LOSS PER COMMON SHARE:
Net income (loss) applicable to common
shareholders $ 815,000 $ (1,134,000)
------------ ------------
------------ ------------
Weighted average number of shares outstanding
Common stock 9,791,000 8,919,000
5% convertible preferred stock 24,000 --
5% Series C convertible preferred stock 805,000 --
Common stock purchase options and warrants 2,734,000 --
Convertible Notes 64,000 --
Assumed repurchase of common stock (901,000) --
------------ ------------
Weighted average number of shares outstanding 12,517,000 8,919,000
------------ ------------
------------ ------------
Primary income (loss) per common share $ 0.07 $ 0.13
------------ ------------
------------ ------------
11
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JUL-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 3,602
<SECURITIES> 0
<RECEIVABLES> 9,477
<ALLOWANCES> 609
<INVENTORY> 2,704
<CURRENT-ASSETS> 15,995
<PP&E> 2,581
<DEPRECIATION> 1,075
<TOTAL-ASSETS> 19,923
<CURRENT-LIABILITIES> 4,953
<BONDS> 0
0
5,420
<COMMON> 49
<OTHER-SE> 9,501
<TOTAL-LIABILITY-AND-EQUITY> 19,923
<SALES> 5,668
<TOTAL-REVENUES> 7,184
<CGS> 3,939
<TOTAL-COSTS> 4,536
<OTHER-EXPENSES> 0
<LOSS-PROVISION> (139)
<INTEREST-EXPENSE> 45
<INCOME-PRETAX> 819
<INCOME-TAX> 4
<INCOME-CONTINUING> 815
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 815
<EPS-PRIMARY> 0.070
<EPS-DILUTED> 0.070
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