UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
OR
__ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission file number 0-12117
VENTURIAN CORP.
(Exact name of registrant as specified in its charter)
Minnesota 41-1460782
(State or other jurisdication of IRS Employer ID Number
incorporation or organization)
1600 Second Street South, Hopkins, MN 55343
(Address of principal executive offices) (Zip code)
Registrant's telephone number,
including area code (612) 931-2500
Indicate by check mark whether the registrant (1) has filed all reports to be
filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the
preceding twelve months and (2) has been subject to the filing requirements for
at least the past 90 days.
Yes __X__ No ____
Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practical date:
Outstanding at August 7, 1996
$1.00 par value common shares 747,789
VENTURIAN CORP. AND SUBSIDIARIES
FORM 10-Q
INDEX
PART I. Financial Information
Item 1.
Consolidated Condensed Balance Sheets
June 30, 1996 and December 31, 1995 3
Consolidated Condensed Statements of Operations
Three and six months ended June 30, 1996 and 1995 4
Consolidated Condensed Statements of Cash Flows
Six months ended June 30, 1996 and 1995 5
Notes to Consolidated Condensed Financial
Statements 6
Item 2.
Management's Discussion and Analysis of
the Results of Operations and Financial Condition 10
PART II. Other information
Item 6. Exhibits and Reports on Form 8-K 15
Venturian Corp. and Subsidiaries
Consolidated Condensed Balance Sheets
(Dollars in thousands)
(Unaudited)
June 30, December 31,
1996 1995
--------- ------------
Current assets
Cash and cash equivalents $ 563 $ 910
Accounts receivable, less allowance
for doubtful accounts of $123 in June
1996 and $165 in December 1995 5,740 6,666
Inventories 3,971 3,977
Restricted cash 133 658
Rental real estate held for sale 2,577 2,592
Prepaid expenses 140 243
-------- --------
Total current assets 13,124 15,046
Property and equipment - at cost
Buildings and improvements 1,741 1,741
Equipment 5,541 5,311
-------- --------
7,282 7,052
Less accumulated depreciation and amortization 5,710 5,528
-------- --------
1,572 1,524
Land 529 529
-------- --------
2,101 2,053
Other assets 4,076 3,217
-------- --------
$ 19,301 $ 20,316
======== ========
Liabilities and Stockholders' Equity
Current liabilities
Bank overdraft $ $654 $ $395
Current maturities of long-term debt 169 147
Accounts payable 2,339 3,243
Advances from customers 126 400
Accrued liabilities 1,233 1,484
Rental real estate mortgage and related costs 1,574 1,640
-------- --------
Total current liabilities 6,095 7,309
Long-term debt, less current maturities 266 271
Deferred compensation and postretirement benefits 2,424 2,448
Commitments and contingencies -- --
Stockholders' equity
Common stock - $1 par value 748 748
Additional contributed capital 14,661 14,661
Accumulated deficit (4,893) (5,121)
-------- --------
10,516 10,288
-------- --------
$ 19,301 $ 20,316
======== ========
The accompanying notes are an integral part of these statements.
<TABLE>
<CAPTION>
Venturian Corp. and Subsidiaries
Consolidated Condensed Statements of Operations
(Dollars in thousands)
(Unaudited)
Three months ended Six months ended
June 30, June 30,
--------------------- ---------------------
1996 1995 1996 1995
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net sales $ 7,752 $ 5,470 $ 14,535 $ 11,288
Cost of products sold 5,727 3,926 10,420 7,822
-------- -------- -------- --------
Gross profit 2,025 1,544 4,115 3,466
Operating expenses
Sales and marketing 715 682 1,368 1,275
Administrative 950 639 1,678 1,270
Warehousing 400 371 852 733
-------- -------- -------- --------
Total operating expenses 2,065 1,692 3,898 3,278
-------- -------- -------- --------
Operating profit (loss) (40) (148) 217 188
Other income
Investment income 7 24 28 53
Interest expense (80) (75) (174) (170)
Rental income 81 103 153 194
Other (12) 64 11 67
-------- -------- -------- --------
Total (4) 116 18 144
-------- -------- -------- --------
Earnings (loss) from continuing
operations before income taxes (44) (32) 235 332
Income taxes -- -- 7 50
-------- -------- -------- --------
Earnings (loss) from
continuing operations (44) (32) 228 282
Discontinued operations
Loss from discontinued operations,
net of $50,000 tax benefit -- (1,520) -- (1,768)
-------- -------- -------- --------
Net earnings (loss) $ (44) $ (1,552) $ 228 $ (1,486)
======== ======== ======== ========
Net earnings (loss) per share - primary
Continuing operations $ (.06) $ (.04) $ .29 $ .38
Loss from discontinued operations -- (2.03) -- (2.37)
-------- -------- -------- --------
$ (.06) $ (2.07) $ .29 $ (1.99)
======== ======== ======== ========
Net earnings (loss) per share -
fully diluted
Continuing operations $ (.06) $ (.04) $ .28 $ .38
Loss from discontinued operations -- (2.03) -- (2.37)
-------- -------- -------- --------
$ (.06) $ (2.07) $ .28 $ (1.99)
======== ======== ======== ========
The accompanying notes are an integral part of these statements.
</TABLE>
<TABLE>
<CAPTION>
Venturian Corp. and Subsidiaries
Consolidated Condensed Statements of Cash Flows
(Dollars in thousands)
(Unaudited)
Six months ended
June 30,
1996 1995
------ -------
<S> <C> <C>
Cash flows from operating activities:
Net earnings (loss) $ 228 $(1,486)
Adjustments to reconcile net earnings to net cash
provided by (used in) operating activities:
Depreciation and amortization 285 286
Gain on sale of real estate - (64)
Discontinued operations - 715
Change in assets and liabilities:
Accounts receivable 926 (1,260)
Inventories 6 822
Restricted cash 525 1,448
Prepaid expenses 103 53
Other assets 30 -
Bank overdraft 259 52
Accounts payable (904) (319)
Advances from customers (274) 39
Accrued liabilities (251) (35)
Deferred compensation and
postretirement benefits 128 66
Payments on deferred compensation
and postretirement benefits (152) (79)
------ -------
Total adjustments 681 1,724
------ -------
Net cash provided by operating activities 909 238
Cash flows from investing activities:
Purchase of property and equipment (277) (77)
Purchase of other assets (187) (161)
Proceeds from sale of real estate - 102
Payments received on notes receivable 7 7
------ -------
Net cash used in investing activities (457) (129)
Cash flows from financing activities
Payments on long-term debt and
rental real estate mortgage and related costs (164) (207)
Payments on insurance policy loans (750)
Proceeds from long-term debt 115
Proceeds from life insurance loan - 117
------ -------
Net cash used in financing activities (799) (90)
------ -------
Net increase (decrease) in cash and cash equivalents (347) 19
Beginning cash and cash equivalents 910 825
------ -------
Ending cash and cash equivalents $ 563 $ $844
====== =======
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest $ 148 $ 112
Income taxes 9 8
The accompanying notes are an integral part of these statements.
</TABLE>
VENTURIAN CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared in accordance
with the instructions in Regulation S-X pursuant to the rules and regulations of
the Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations, although management believes that the
disclosures are adequate to make the information presented not misleading.
In the opinion of management, the unaudited condensed financial statements
reflect all adjustments, which consist of only normal recurring accruals,
necessary to present a fair statement of the results of operations and financial
position for the periods presented. Results of operations for the interim
periods are not necessarily indicative of results for the full year.
On July 31, 1995, the company announced that it had discontinued operations of
PC Express, Inc. The accompanying financial statements and notes have been
restated for all periods to reflect the effects of discontinued operations.
NOTE B - INVENTORIES
Inventories are stated at the lower of cost or market, principally using the
specific identification method for Napco. A portion of Napco's inventory is
acquired on a speculative basis when it becomes available for purchase. Napco's
sales of this inventory may vary from the current period to several years. It is
the company's practice to classify this inventory, which totaled $1,808,000, net
of reserves, at June 30, 1996, with current assets. The company's obsolescence
policy requires that purchases of this inventory be written off if not sold
after four years. The four year period was selected after a review of customers'
historical buying patterns and is reviewed annually to determine whether the
period continues to be appropriate. The company had a reserve for obsolescence
and lower of cost or market valuation of $1,368,000 at June 30, 1996.
NOTE C - LINES OF CREDIT
Napco has an agreement with a bank to provide a $4,000,000 line of credit for
international transactions and cash advances. The agreement requires that
letters of credit be collateralized 100 percent with a restricted cash balance.
The agreement allows for cash advances of up to 90 percent of the cash surrender
value of certain of the company's life insurance policies. The life insurance
policies are assigned as collateral on the line of credit. Advances on the line
bear interest at one percent over the bank's base rate. At June 30, 1996
approximately $2,000,000 was available for cash advances pursuant to this
agreement. There were no cash advances outstanding against this line of credit
at June 30, 1996.
Napco has additional lines of credit available for international transactions
such as letters of credit and bid, performance and advance payment guarantees on
a transaction basis for which restricted cash balances are required.
Letters of credit issued by financial institutions under all lines of credit
totaled $133,000 as of June 30, 1996, and were collateralized by a restricted
cash balance.
NOTE D - CONTINGENCIES
At June 30, 1996, the company had performance and advance payment guarantees
outstanding on various sales contracts totaling $425,000. These guarantees were
backed by insurance bonds, which do not require cash collateral.
The company has guaranteed certain indebtedness of Mass Merchandisers, Inc., a
former affiliate of Venturian Corp. At June 30, 1996, this indebtedness was
$509,000. This indebtedness is secured by a first mortgage lien against certain
real estate owned and operated by Mass Merchandisers, Inc., a wholly-owned
subsidiary of McKesson Corp.
The company also owns rental real estate that contains industrial contaminants
and must be remediated. In February 1995, a Phase II Investigation Report and
remedial alternatives were submitted for approval to the Minnesota Pollution
Control Agency (MPCA). In connection with the report, management retained a
consultant to prepare cost estimates with respect to remediation of the
property. Two remedial alternatives were prepared and the range of associated
costs were estimated based on each alternative. The first alternative, which
includes groundwater monitoring and soil remediation, is considered to be the
most likely alternative by the consultant. This alternative includes remediation
efforts over a period of five years and has a range of estimated costs from
$332,000 to $1,257,000. Within this range, the consultant believes approximately
$600,000 represents the most likely total cost of remediation. The second
alternative includes costs associated with groundwater extraction and treatment
along with groundwater monitoring and soil remediation. This alternative
includes remediation efforts over a period of five years and has a range of
estimated costs from $625,000 to $1,709,000. The cost estimates are contingent
upon MPCA approval of the remedial alternatives or unforeseen circumstances
which could affect the technologies implemented or the magnitude of the
remediation required.
Estimated remediation costs include capital costs associated with the remedial
activity as well as annual costs over a period of five years. Annual costs
included in the previous cost estimates were calculated using a ten percent
discount rate. Not discounted, the estimated cost of remediation has a range
from $348,000 to $1,290,000 under the first alternative and a range of $695,000
to $1,824,000 under the second alternative. The company accrued approximately
$600,000 for estimated costs of remediation at the time the property was
acquired in March 1994. At June 30, 1996, a liability of approximately $490,000
for remediation costs is included under the caption "Rental real estate mortgage
and related costs" as a current liability.
A remediation plan has been agreed to with the MPCA. Remediation commenced early
in the third quarter and is expected to be completed in 1996, with the exception
of the annual cost items.
The company is involved in an environmental investigation related to its former
office headquarters location. Management has retained a consultant to determine
what, if any, remedial action is required at this site. Based upon a 1993 study,
the consultant has recommended that no further investigation or remediation at
the site is needed. This recommendation is subject to the approval of the MPCA
property transfer unit. Management believes that the ultimate liability to be
incurred as a result of this investigation, if any, will not have a material
adverse effect on the company's financial position or results of operations.
NOTE E - RECENTLY ADOPTED ACCOUNTING STANDARDS
The company implemented Statement of Financial Accounting Standards (SFAS) 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed Of," effective January 1, 1996. SFAS 121 establishes guidance for
when to recognize and how to measure impairment losses of long-lived assets and
certain identifiable intagibles, and how to value long-lived assets to be
disposed of. The adoption of this Standard did not have a material effect on the
company's financial position.
Additionally, the company implemented SFAS 123, "Accounting for Stock-Based
Compensation," which established financial accounting and reporting standards
for stock-based employee compensation plans. This Statement defines and
encourages the use of a fair value based method of accounting for an employee
stock option or similar equity instrument. The Statement allows the use of the
intrinsic value based method of accounting as prescribed by current existing
accounting standards for options issued to employees. The company adopted this
Standard effective January 1, 1996, and management has elected to utilize the
intrinsic value based method of accounting for stock-based compensation.
NOTE F - NET EARNINGS (LOSS) PER SHARE
Primary earnings (loss) per common and common equivalent share and earnings per
common and common equivalent share assuming full dilution are computed using the
weighted average number of common and common equivalent shares outstanding
during the period. Common stock equivalents include dilutive stock options using
the treasury stock method.
NOTE G - RECLASSIFICATIONS
Certain reclassifications have been made to the 1995 financial statements to
conform with the 1996 presentation.
VENTURIAN CORP. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
THE RESULTS OF OPERATIONS AND FINANCIAL CONDITION
June 30, 1996
RESULTS OF OPERATIONS
Net Sales
Second quarter consolidated net sales increased approximately 42 percent to
$7,752,000 in 1996 compared with $5,470,000 for the second quarter of 1995. For
the first six months of the year, consolidated net sales totaled $14,535,000, up
approximately 29 percent from $11,288,000 for the same period last year.
Napco sales were $7,539,000 and $14,112,000 for the three and six months ended
June 30, 1996, compared with sales of $5,239,000 and $10,915,000 for the same
periods in 1995, respectively. Napco sales were up approximately 44 percent and
29 percent for the three and six months, respectively. While backlog at the
beginning of the year may have indicated sales at near the same levels as a year
ago(see Backlog), Napco received an order for approximately $3.8 million in
early 1996 which was required to be shipped substantially during the first two
quarters of the year, resulting in higher sales for both periods compared with a
year earlier.
Venturian Software sales were down 14 percent from prior year levels in the
second quarter, totaling $213,000 in 1996 compared with $247,000 a year ago.
Lower revenues from product sales, which were $29,000 in 1996 compared with
$81,000 last year, caused the decline in total revenues. However, the decline in
product revenues was minimized by an increase in consulting revenues which were
$179,000 for the second quarter of 1996, compared with $157,000 last year.
Year-to-date sales of $423,000 in 1996 are ahead of 1995 six-month sales of
$397,000, primarily due to higher consulting revenues. Consulting revenues were
$357,000 for the first six months of 1996, contributing 84 percent of total
revenues. For the same period last year, consulting revenues totaled $277,000
and comprised 70 percent of total revenues.
Costs and Expenses
Cost of products sold was 74 percent and 72 percent of net sales for three and
six months ended June 30, 1996, compared with 72 percent and 69 percent of net
sales for the same periods respectively last year.
Cost of products sold for Napco sales was 76 percent of net sales in the second
quarter of 1996, up from 74 percent of net sales a year ago. Second quarter
sales in 1996 included a larger proportion of sales for which the end customer
is the U.S. Government, contributing to the increase in cost of products sold as
these sales typically are at a lower profit margin than other sales. Cost of
products sold for Napco sales was 74 percent and 71 percent of net sales for the
six months ended June 30, 1996 and 1995, respectively.
Venturian Software cost of products sold was 9 percent of net sales in the
second quarter of 1996 compared with 21 percent for the same period last year.
Year-to-date, cost of products sold for Venturian Software sales was 9 percent
of net sales, compared with 17 percent of net sales last year. Venturian
Software cost of products sold is low because a significant portion of its
revenues are generated by consulting services, and the related expenses are
included in operating expenses as administrative expense.
Second quarter consolidated operating expenses were $2,065,000 in 1996, compared
with $1,692,000 for the second quarter of 1995. For the six months, consolidated
operating expenses were $3,898,000 and $3,278,000 in 1996 and 1995,
respectively.
Napco operating expenses totaled $1,545,000 for the second quarter of 1996,
compared with $1,367,000 for the same period last year. Napco administrative
expenses increased from $382,000 in last year's second quarter to $545,000 in
1996, primarily due to higher payroll related costs associated with staff
increases, and higher incentive accruals and insurance costs.
Year-to-date, Napco operating expenses totaled $3,012,000 and $2,715,000 for the
first six months of 1996 and 1995, respectively.
Operating expenses for Venturian Software increased significantly to $287,000 in
the second quarter of 1996 from $178,000 for the same period last year.
Venturian Software operating expenses also increased for the comparable six
month periods, totaling $512,000 in 1996 compared with $333,000 in 1995.
Administrative expenses were $172,000 and $296,000 for the second quarter and
first six months of 1996, respectively, compared with $110,000 and $212,000 for
the same periods a year ago. Sales and marketing expenses were $115,000 and
$216,000 for the quarter and six months in 1996, respectively, up from $68,000
and $121,000 for the quarter and six months last year. Expenses increased due to
the addition of programming and marketing staff and also as a result of
increased legal and marketing expenses incurred in connection with the
introduction of Venturian Software's new CybercallTM product. Cybercall is an
internet computer telephony product that brings together three key environments:
computer networks, telecommunications and the World Wide Web, to form a seamless
information structure allowing web browsers and agents to be joined by voice and
web page connections.
Corporate overhead expenses, included in administrative expense, increased to
$233,000 in the second quarter of 1996, up from $163,000 for the same period a
year earlier. Year-to-date corporate overhead also increased from $254,000 in
1995 to $374,000. Increases in corporate overhead were primarily attributable to
the hiring of a new company president in the first quarter of 1996.
Operating Profit (Loss)
Napco reported an operating profit of $287,000 for the quarter ended June 30,
1996 on sales of $7,539,000. Year-to-date, Napco reported an operating profit of
$716,000 on sales of $14,112,000. A year ago, Napco reported an operating loss
of $3,000 for the second quarter and a year-to-date operating profit of $447,000
on sales of $5,239,000 and $10,915,000, respectively.
Venturian Software reported operating losses of $94,000 and $125,000 for the
second quarter and first six months of 1996. Last year, Venturian Software
reported an operating profit of $18,000 in the second quarter and an operating
loss of $5,000 for the first half of the year. Losses in 1996 are primarily the
result of higher expenses incurred in connection with the introduction of
Cybercall.
Other Income (Expense)
In the second quarter of 1995, other income included a $64,000 gain on the sale
of real estate.
Income Taxes
The company recorded income tax expense of $7,000 and $50,000 for the six months
ended June 30, 1996 and 1995, respectively, related to continuing operations.
While the company had net operating loss carryforwards sufficient to offset
current tax expense in both years, income tax expense was attributable to
alternative minimum tax. In 1995, the tax expense was fully offset by a tax
benefit related to discontinued operations.
Discontinued Operations
On July 31, 1995, the company announced that it had discontinued operations of
PC Express, due to continued losses. Net losses from operations of PC Express
were $1,520,000 in the second quarter of 1995 and $1,768,000, net of an income
tax benefit of $50,000, for the first six months of last year. The net loss for
the second quarter of 1995 included a $1,012,000 write-off of goodwill and
non-compete agreements.
FINANCIAL CONDITION
Liquidity and Capital Resources - Current assets totaled $13,124,000 and
exceeded current liabilities by $7,029,000 at June 30, 1996. The current ratio
was 2.2 to one at the end of the second quarter, compared with 2.1 to one at
December 31, 1995.
Cash and cash equivalents of $563,000 at June 30, 1996 decreased from $910,000
at the end of 1995. Cash generated from operations for the first six months of
1996 was used to repay loans of $750,000 outstanding against life insurance
policies and to purchase equipment and other assets.
Napco has an agreement with a bank to provide a $4,000,000 line of credit for
international transactions and cash advances. The agreement requires that
letters of credit be collateralized 100 percent with a restricted cash balance.
The agreement allows for cash advances of up to 90 percent of the cash surrender
value of certain of the company's life insurance policies. The life insurance
policies are also assigned as collateral on the line of credit. Advances on the
line bear interest at one percent over the bank's base rate. At June 30, 1996,
approximately $2,000,000 was available for cash advances pursuant to this
agreement. There were no cash advances outstanding on this line of credit at
June 30, 1996.
Napco has additional lines of credit available for international letters of
credit and bid and performance guarantees on a transaction basis for which
restricted cash balances are required. Letters of credit issued by financial
institutions under all lines of credit totaled $133,000 at June 30, 1996 and
were collateralized by a restricted cash balance.
Management believes that its present cash reserves should be sufficient to fund
its operations and to collateralize all international transactions as required.
Management has been successful in obtaining insurance bonds with no collateral
requirements for certain of its international transactions rather than utilizing
its traditional bank lines of credit. The company has additional sources of
funds in the form of borrowing against life insurance policies or other
non-current assets.
VENTURIAN CORP. AND SUBSIDIARIES
PART II
OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits
Exhibit 11. Computation of Earnings (Loss) per Share
Exhibit 27. Financial Data Schedule (for SEC use only)
b) No report on Form 8-K was filed during the quarter for which this
report is filed.
SIGNATURE
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.
VENTURIAN CORP.
(Registrant)
By: /s/ Mary F. Jensen
-----------------------------
Mary F. Jensen
Chief Financial Officer
Date: August 7, 1996
<TABLE>
<CAPTION>
Venturian Corp. and Subsidiaries EXHIBIT 11
Computation of Earnings (Loss) Per Share
Three months ended Six months ended
June 30, June 30,
----------------------------------- --------------------------------
1996 1995 1996 1995
------------- --------------- ------------- --------------
<S> <C> <C> <C> <C>
Per consolidated condensed
statement of earnings
Net earnings (loss)
Continuing operations $ (44,000) $ (32,000) $ 228,000 $ 282,000
Discontinued operations (1,520,000) (1,768,000)
------------- ------------- ------------- -------------
$ (44,000) $ (1,552,000) $ 228,000 $ (1,486,000)
============= ============= ============= =============
Earnings (loss) per share
Weighted average of
common shares outstanding 747,789 747,789 747,789 747,789
Net earnings (loss) per share
Continuing operations $ (0.06) $ (0.04) $ 0.30 $ 0.38
Discontinued operations -- (2.03) -- (2.37)
------------- ------------- ------------- -------------
$ (0.06) $ (2.07) $ 0.30 $ (1.99)
============= ============= ============= =============
Primary earnings (loss) per share
Weighted average common shares
and common share equivalents 747,789 (1) 747,789 (1) 782,591 747,789 (1)
Continuing operations $ (0.06) $ (0.04) $ 0.29 $ 0.38
Discontinued operations -- (2.03) -- (2.37)
------------- ------------- ------------- -------------
$ (0.06) $ (2.07) $ 0.29 $ (1.99)
============= ============= ============= =============
Fully diluted earnings (loss) per share
Weighted average common shares
and common share equivalents 747,789 (1) 747,789 (1) 825,142 747,789 (1)
Continuing operations $ (0.06) $ (0.04) $ 0.28 $ 0.38
Discontinued operations -- (2.03) -- (2.37)
------------- ------------- ------------- -------------
$ (0.06) $ (2.07) $ 0.28 $ (1.99)
============= ============= ============= =============
(1) Common share equivalents were not used in the computation of Primary and
Fully diluted earnings (loss) per share since the effect of the calculation
would have been anti-dilutive.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 563
<SECURITIES> 0
<RECEIVABLES> 5,863
<ALLOWANCES> 123
<INVENTORY> 3,971
<CURRENT-ASSETS> 13,124
<PP&E> 7,811
<DEPRECIATION> 5,710
<TOTAL-ASSETS> 19,301
<CURRENT-LIABILITIES> 6,095
<BONDS> 0
0
0
<COMMON> 748
<OTHER-SE> 9,768
<TOTAL-LIABILITY-AND-EQUITY> 19,301
<SALES> 7,752
<TOTAL-REVENUES> 7,752
<CGS> 4,693
<TOTAL-COSTS> 4,693
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 80
<INCOME-PRETAX> (44)
<INCOME-TAX> 0
<INCOME-CONTINUING> (44)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (44)
<EPS-PRIMARY> (.06)
<EPS-DILUTED> 0
</TABLE>
