<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM 10-Q
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
----------------------
For Quarter Ended Commission File No.
July 31, 1995 0-13608
MMI MEDICAL, INC.
California 95-3619990
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
1611 Pomona Road, Corona, California 91720
(Address of principal executive offices)
Registrant's telephone number including area code (909) 736-4570.
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
requirements for the past 90 days.
X
----
YES NO
Shares of Registrant's common stock, $.01 par value,
outstanding at September 11, 1995 - 5,035,833
<PAGE>
MMI MEDICAL, INC.
FORM 10-Q
JULY 31, 1995
TABLE OF CONTENTS
PAGE
----
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets 3
Condensed Consolidated Statements of Operations 4
Consolidated Statements of Cash Flow 5
Notes to the Condensed Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 11
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders 13
Item 6. Exhibits and Report on Form 8K 13
Exhibit Index 15
Exhibit 11.1 Computation of Per Share Earnings 16
2
<PAGE>
MMI MEDICAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
($000's)
<TABLE>
<CAPTION>
JULY 31, 1995 APRIL 30,1995
------------- -------------
(RECLASSIFIED)
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents $ 922 $ 1,827
Receivables 6,445 7,284
Inventory 9,977 9,199
Prepaid expenses 841 532
Deferred income taxes 1,211 1,192
------------------------------
Total current assets 19,396 20,034
Equipment, net 5,851 6,056
Deferred income taxes 2,155 2,155
Goodwill, net 3,659 3,698
Other assets 1,487 1,310
------------------------------
$ 32,548 $33,253
------------------------------
------------------------------
LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities
Accounts payable $ 4,018 $ 2,916
Accrued liabilities 4,144 4,258
Deferred revenues 5,735 5,521
Current portion of long-term debt 1,545 3,262
------------------------------
Total current liabilities 15,442 15,957
Long-term debt 64 141
Shareholders' equity
Common stock, $.01 par value
10,000,000 shares authorized
5,035,833 shares issued and
outstanding at July 31, 1995
(5,035,833 at April 30, 1995) 51 51
Paid-in capital 17,303 17,303
Retained earnings (312) (199)
------------------------------
Total shareholder's equity 17,042 17,155
------------------------------
$ 32,548 $33,253
------------------------------
------------------------------
</TABLE>
See accompanying Notes to Condensed Consolidated Financial Statements.
3
<PAGE>
MMI MEDICAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
($000's)
<TABLE>
<CAPTION>
Three Months Ended
-------------------------------
July 31, 1995 July 29, 1994
------------- -------------
<S> <C> <C>
Revenues $ 11,968 $ 8,662
Costs and expenses
Cost of operations 9,466 7,722
Depreciation 485 492
Selling and administrative 2,156 1,490
Interest expense (income) 49 (9)
-------------------------------
Total costs and expenses 12,156 9,695
-------------------------------
Loss before income taxes (188) (1,033)
Benefit for income taxes (75) (413)
-------------------------------
Net loss $ (113) $ (620)
-------------------------------
-------------------------------
Earnings per share:
Net loss $ (.02) $ (.20)
-------------------------------
-------------------------------
</TABLE>
See accompanying Notes to Condensed Consolidated Financial Statements.
4
<PAGE>
MMI MEDICAL, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
($000's)
<TABLE>
<CAPTION>
Three Months Ended
------------------------------
July 31, 1995 July 29, 1994
------------- -------------
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C>
Net loss $ (113) $ (620)
Adjustments to reconcile net loss
to net cash flows from operations:
Depreciation and amortization 485 492
Deferred income taxes (19) 3
Changes in assets and liabilities:
Receivables 839 545
Inventory (778) 314
Prepaid expenses (309) 34
Accounts payable 1,102 (399)
Accrued liabilities (114) (329)
Other assets (177) --
Deferred revenues 214 (21)
------------------------------
Net cash provided by operating activities 1,130 19
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of business operations -- 208
Net book value of equipment sold 80 --
Purchase of equipment (321) (82)
------------------------------
Net cash provided by (used in) investing activities (241) 126
CASH FLOWS FROM FINANCING ACTIVITIES
Principal payments of long-term debt (1,794) --
Exercise of stock options -- 96
Payment of dividends -- (118)
------------------------------
Net cash used in financing activities (1,794) (22)
------------------------------
Increase (decrease) in cash (905) 123
Cash at beginning of period 1,827 1,341
------------------------------
Cash at end of period $ 922 $ 1,464
------------------------------
------------------------------
</TABLE>
See accompanying Notes to Condensed Consolidated Financial Statements.
5
<PAGE>
MMI MEDICAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JULY 31, 1995
(UNAUDITED)
1. GENERAL
The condensed consolidated financial statements included herein have been
prepared by the Company without audit, include all adjustments which are, in the
opinion of management, necessary for a fair presentation of the results of
operations for the three months ended July 31, 1995, and July 29, 1994, pursuant
to the rules and regulations of the Securities and Exchange Commission, and
include the accounts of the Company and its consolidated subsidiaries. All
significant intercompany accounts and transactions have been eliminated. Any and
all adjustments made are of a normal and recurring nature in accordance with
Rule 10-01(b)(8). 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 the Company believes that the disclosures in such
financial statements are adequate to make the information presented not
misleading. These condensed financial statements should be read in conjunction
with the Company's annual report on Form 10-K dated July 31, 1995, filed with
the Securities and Exchange Commission. The results of operations for the three
months ended July 31, 1995, and July 29, 1994, are not necessarily indicative of
the results for the full year.
2. RECLASSIFICATIONS
The fiscal 1996 presentation includes reclassifications from that previously
presented. Such reclassifications include advance billings, previously
classified as a reduction in receivables, which are presently classified as
deferred revenues as well as the classification of the Company's Advanced
Imaging Technologies, Inc. subsidiary ("AIT") as a continuing operation (see
Note 3).
3. DISCONTINUED OPERATION
In October 1994, the Company announced the adoption by the Company's Board of
Directors of a plan to dispose of the operations of its Advanced Imaging
Technologies, Inc. subsidiary ("AIT"). Since that date, the Company actively
marketed AIT but was unable to locate a buyer. Concurrent with the election to
dispose of AIT, the Company made certain changes in the operations of AIT, which
resulted in improved profitability. Additionally, as the Company's InnoServ
Technologies, Inc. Asset Management service program continues to grow, AIT's
capability to repair and maintain a variety of x-ray film processors enables
AIT to play a strategic role in support of such growth. As a result of both
improved profitability and the strategic capabilities of AIT, the Company's
Board of Directors has elected not to dispose of AIT which is accounted for as
a part of continuing operations in the Company's financial statements included
with this report.
6
<PAGE>
MMI MEDICAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JULY 31, 1995
(UNAUDITED)
4. NET INCOME PER SHARE
Net income per share is based on the weighted average number of common and
common share equivalents during each period, as follows:
Three Months
Ended
------------
July 31, 1995 5,038,650
July 29, 1994 3,041,375
5. INCOME TAXES
The benefits for taxes are based on the estimated annual tax rates and include
the benefit of various tax credits. The components of the benefits for taxes
for the three months ended July 31, 1995, and July 29, 1994 are as follows
($000's):
<TABLE>
<CAPTION>
Three Months Ended
--------------------------------
July 31, 1995 July 29, 1994
------------- -------------
<S> <C> <C>
Current:
Federal $ (67) $ (213)
State (27) (61)
Deferred:
Federal 46 (139)
State (27) 0
------ ------
$ (75) $ (413)
------ ------
------ ------
</TABLE>
7
<PAGE>
MMI MEDICAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JULY 31, 1995
(UNAUDITED)
6. ACQUISITION OF MEDIQ EQUIPMENT AND MAINTENANCE SERVICES, INC.
On August 3, 1994, the Company acquired (the "Acquisition") MEDIQ Equipment and
Maintenance Services, Inc. ("MEMS"), a wholly owned subsidiary of MEDIQ
Incorporated, as a result of the merger of MMI Acquisition Subsidiary, Inc., a
wholly-owned subsidiary of the Company incorporated to effect the Acquisition,
with and into MEMS which became a wholly-owned subsidiary of the Company. All
of MEMS common stock was converted into 2,006,438 shares of the Company's common
stock and a warrant to purchase 325,000 shares thereof at an exercise price of
$6.25 per share exercisable through August 3, 1998. An additional 20,000 shares
of the Company's common stock was issued to MEDIQ in connection with a
noncompetition agreement which became effective as of the closing of the
reorganization and merger. The estimated aggregate purchase price, including
expenses of the Acquisition, was approximately $6,565,000.
Prior to the Acquisition, MEMS was a national independent service organization
specializing in providing repair and maintenance services and sale of
replacement parts for CT scanners, nuclear medicine equipment and magnetic
resonance imaging systems to hospitals, outpatient imaging centers and physician
groups. MEMS also offered a multi-vendor asset management program which
provided comprehensive on-site management for the maintenance and repair of all
diagnostic imaging equipment at hospitals.
The transaction was accounted for as a purchase and, accordingly, the purchase
price was allocated to the assets acquired based on their appraised fair values.
Costs in excess of net assets acquired related to the Acquisition of
approximately $1,637,000 is being amortized on a straight-line basis over 20
years. MEMS results of operations have been reflected in the consolidated
financial statements of the Company since the date of the Acquisition.
Unaudited pro forma results of operations of the Company and MEMS are included
in Note 8.
7. LONG-TERM DEBT
The Company's revolving credit agreement contains certain restrictive covenants
relating to tangible net worth, profitability, payment of dividends and future
borrowings. As a result of the operating loss incurred in current quarter of
fiscal 1996, the Company did not meet certain covenants required by such
agreement. The Company has requested the bank waive the Company's non-
compliance with such covenants through July 31, 1995 and has a reasonable
expectation that the bank will do so.
8
<PAGE>
MMI MEDICAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JULY 31, 1995
(UNAUDITED)
8. INTERIM PRO FORMA FINANCIAL INFORMATION
The following Pro Forma Consolidated Statements of Operations for the three
months ended July 29, 1994 give effect to the acquisition (the "Acquisition") of
MEDIQ Equipment and Maintenance Services, Inc. ("MEMS") by the Company, as
described herein, as if such transaction had occurred as of April 30, 1994. The
Acquisition has been accounted for pursuant to the purchase method of
accounting.
The Pro Forma Consolidated Statements of Operations for the three months
ended July 29, 1994 are unaudited, but in the opinion of the Company include all
adjustments, consisting of normal recurring adjustments, necessary for a fair
presentation of the results of operation and financial position for the periods
presented.
The historical data of the Company included in the pro forma financial
statements is as of the periods presented. The historical data of MEMS included
in Pro Forma Consolidated Statements of Operations is for the three months ended
August 2, 1994.
The Pro Forma Consolidated Statements of Operations for the three months
ended July 29, 1994 are not necessarily indicative of the results of operations
that actually would have taken place had the Acquisition been consummated as of
the date indicated, or that may be achieved in the future and should be read in
conjunction with the notes in such statements.
9
<PAGE>
MMI MEDICAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JULY 31, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended July 29, 1994
(In $000's, except per share amounts)
-------------------------------------------------------
Pro Forma Consolidated
MMI MEMS (1) Adjustments Total
-------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues $ 8,662 $ 4,576 $13,238
Costs and expenses
Costs of operations 7,722 4,023 (606) (2) 11,139
Depreciation and amortization 492 360 (201) (3) 651
Selling and administrative 1,490 494 (166) (4) 1,818
Interest expense (income), net (9) 54 -- 45
-------------------------------------------------------
Total costs and expenses 9,695 4,931 (973) 13,653
-------------------------------------------------------
Income (loss) before taxes (1,033) (355) 973 (415)
Provision (benefit) for income taxes (413) (101) 348 (5) (166)
-------------------------------------------------------
Net income (loss) $ (620) $ (254) $ 625 $ (249)
-------------------------------------------------------
-------------------------------------------------------
Net income per share $ (.20) N/A $ (.05)
-------------------------------------------------------
-------------------------------------------------------
-----------------------------------
<FN>
NOTES:
(1) Historical data of MEMS is for the three months ended August 2, 1994.
(2) Reflects the elimination of certain duplicate positions, resulting in a
reduction in cost of operations of approximately $482,000 in salaries and
benefits for the period. Amortization of the spare parts inventory over a seven
year period, consistent with that of MMI, is expected to result in reduced
amortization expenses of $495,000, annually.
(3) As a result of purchase accounting adjustments, depreciation and
amortization expense will change. Depreciating the new basis over a five year
period will result in a reduction to such expense of $922,000 annually.
Amortization of the additional goodwill and covenant not to compete will result
in increased amortization expense of $117,000 annually.
(4) Reflects the elimination of certain duplicate positions, resulting in a
reduction in selling and administrative expense of approximately $166,000 in
salaries and benefits for the period.
(5) Consolidated provision for income taxes is calculated at 40%.
</TABLE>
10
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
GENERAL
ACQUISITION OF MEDIQ EQUIPMENT & MAINTENANCE SERVICES, INC.
On August 3, 1994, the Company acquired (the "Acquisition") MEDIQ Equipment and
Maintenance Services, Inc. ("MEMS"), a wholly-owned subsidiary of MEDIQ
Incorporated. The Acquisition was accounted for as a purchase and MEMS became a
wholly-owned subsidiary of the Company. All of MEMS common stock was converted
into 2,006,438 shares of the Company's common stock and a warrant to purchase
325,000 shares thereof at an exercise price of $6.25 per share exercisable
through August 3, 1998. An additional 20,000 shares of the Company's common
stock was issued to MEDIQ in connection with a noncompetition agreement which
became effective as of the closing of the Acquisition. The estimated aggregate
purchase price, including expenses of the Acquisition, was approximately
$6,565,000.
Prior to the Acquisition, MEMS was a national independent service organization
specializing in providing repair and maintenance services and sale of
replacement parts for CT scanners, nuclear medicine equipment and magnetic
resonance imaging systems to hospitals, outpatient imaging centers and physician
groups. MEMS also offered a multi-vendor asset management program ("Asset
Management") which provides comprehensive on-site management for the maintenance
and repair of all diagnostic imaging equipment at hospitals. Following the
Acquisition, the Company combined the operations of its R Squared subsidiary
with those of MEMS and changed the name of R Squared to InnoServ Technologies,
Inc. ("InnoServ") in September 1994. MEMS results of operations have been
reflected in the consolidated financial statements of the Company since the date
of the Acquisition.
DISCONTINUED OPERATION
In October 1994, the Company announced the adoption by the Company's Board of
Directors of a plan to dispose of the operations of its Advanced Imaging
Technologies, Inc. subsidiary ("AIT"). Since that date, the Company actively
marketed AIT but was unable to locate a buyer. Concurrent with the election to
dispose of AIT, the Company made certain changes in the operations of AIT, which
resulted in improved profitability. Additionally, as InnoServ's Asset
Management service program continues to grow, AIT's capability to repair and
maintain a variety of x-ray film processors enables AIT to play a strategic role
in support of such growth. As a result of both improved profitability and the
strategic capabilities of AIT, the Company's Board of Directors has elected not
to dispose of AIT which is accounted for as a part of continuing operations in
the Company's financial statements included with this report.
11
<PAGE>
RESULTS OF OPERATIONS
FIRST QUARTER FISCAL 1996 COMPARED TO FIRST QUARTER FISCAL 1995
Consolidated revenues increased approximately $3,300,000 to $11,968,000 from
$8,662,000 primarily as a result of the Acquisition. Revenues at InnoServ from
Asset Management service agreements constitute approximately $2,300,000 of this
increase. Additionally, InnoServ recorded a net increase in revenues of
approximately $900,000 from Computed Tomography ("CT") and Magnetic Resonance
Imaging ("MRI") maintenance agreements; a $240,000 increase in revenues from the
sale of equipment; and, an increase in the sale of labor, parts and x-ray tubes
of approximately $120,000. Revenues at the Company's diagnostic imaging
operation were slightly higher primarily due to increased utilization of rental
equipment. In July 1995, the diagnostic imaging operation discontinued its fee-
for-service mobile CT operations which is not expected to have a material effect
on the Company's total revenues during the remainder of the current fiscal year.
Revenues at AIT declined resulting primarily from lower sales of x-ray film,
chemistry and related accessories.
On a pro forma basis (see Note 8 to the Notes to Condensed Consolidated
Financial Statements), consolidated revenues decreased approximately $1,250,000
resulting primarily from a decline in the number of CT maintenance agreements in
effect at InnoServ in the first quarter of fiscal 1996 compared to the total of
such agreements in effect for R Squared and MEMS combined in the first quarter
of fiscal 1995. InnoServ continues to experience a decline in the number of
such agreements in effect and expects this trend to continue as a result of
customer's older CT equipment being upgraded or removed from service.
Offsetting the trend of declines in CT maintenance agreements, revenues on a pro
forma basis for Asset Management increased approximately 70% and MRI maintenance
agreements increased approximately 25% in the first quarter of fiscal 1996
compared to the same period prior fiscal year. Subsequent to the end of the
current quarter, InnoServ was selected by Intermountain Health Care, Inc.
("IHC") in Salt Lake City, Utah to provide, subject to the signing of a
definitive agreement, all of IHC's twenty-four (24) hospitals with InnoServ's
Asset Management service program. Implementation of this program is expected to
commence during the third quarter of fiscal 1996 for an initial term of five
years and will, following implementation, add substantial revenues to InnoServ
thereafter.
While the cost of operations increased approximately $1,750,000 from the same
period in the prior fiscal year, such costs declined as a percent of revenue
from 89% in the first quarter of fiscal 1995 to 79% in fiscal 1996. This
decline resulted primarily from improved labor efficiencies at InnoServ
associated with the Acquisition and elimination of personnel in the field
service infrastructure. Depreciation costs remained consistent with the prior
year. Selling and Administrative expenses increased only slightly as a percent
of revenue, from 17% to 18%, also as a result of efficiencies from the
Acquisition.
Loss before income taxes declined approximately $850,000 from $1,033,000 in
fiscal 1995 to $188,000 in fiscal 1996 primarily as a result of increased
revenues associated with the Acquisition and the associated improvement in
margins. Additionally, loss before income taxes in the first quarter of fiscal
1995 at InnoServ (then R Squared) included a special charge of approximately
$360,000 in severance expenses associated with the elimination of certain of the
Company's personnel in duplicate operational
12
<PAGE>
and sales functions in conjunction with the Acquisition and the resignation of
the Company's Chief Financial Officer in June 1994.
Interest expense increased to $49,000 in the first quarter of fiscal 1995 from
income of $9,000 in the same period of the prior year as a result of the
assumption of long-term debt associated with the Acquisition and borrowings from
the Company's line of credit. The effective tax rate remained at 40% and the
benefit for income taxes decreased $338,000 from $413,000 in the first quarter
of fiscal 1995 to $75,000 in fiscal 1996 as a result of the reduction in the
loss incurred.
LIQUIDITY AND CAPITAL RESOURCES
At July 31, 1995, the Company had net working capital of $3,954,000, a decrease
of $123,000 from April 30, 1995. The Company has a $2,000,000 revolving line of
credit with a bank, of which $1,200,000 was utilized at July 31, 1995. During
the quarter, the Company utilized net cash provided by operating activities as
well as cash on hand to reduce the Company's line of credit by $1,705,000. The
outstanding balance on the Company's line of credit is classified as a current
liability.
The Company's revolving credit agreement contains certain restrictive covenants
relating to tangible net worth, profitability, payment of dividends and future
borrowings. As a result of the operating loss incurred in current quarter of
fiscal 1996, the Company did not meet certain covenants required by such
agreement. The Company has requested the bank waive the Company's non-compliance
with such covenants through July 31, 1995 and has a reasonable expectation that
the bank will do so.
The Company believes that internally generated funds and its existing credit
facility will provide sufficient capital resources to finance operations, fund
planned capital expenditures and make interest payments on outstanding
borrowings in both the short and long term.
PART II - OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None
ITEM 6. EXHIBITS AND REPORT ON FORM 8-K.
(a) Exhibit Index is included herewith at page 14.
(b) On May 25, 1995 the Company filed a Report on Form 8-K containing certain
documents received from Deloitte & Touche relating to the acquisition of MEDIQ
Equipment and Maintenance Services, Inc.
13
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant had duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
DATED: September 13, 1995
MMI MEDICAL, INC.
By: /s/ Samuel Salen, M.D.
-------------------------------------
Samuel Salen, M.D.
President and Chief Executive Officer
14
<PAGE>
EXHIBIT INDEX
EXHIBIT PAGE
11.1 Computation of Per Share Earnings 16
15
<PAGE>
EXHIBIT 11.1 - COMPUTATION OF PER SHARE EARNINGS (1)
(Amounts in thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended
----------------------------------
July 31, 1995 July 29, 1994
------------- -------------
<S> <C> <C>
Primary
Average Shares Outstanding 5,039 2,963
Net effect of dilutive stock options,
based upon the treasury stock method
using average market price -- 78
----------------------------------
Total 5,039 3,041
----------------------------------
----------------------------------
Net loss $ (113) $ (620)
----------------------------------
----------------------------------
Per share amount $ (.02) $ (.20)
----------------------------------
----------------------------------
Fully Diluted
Average Shares Outstanding 5,039 2,963
Net effect of dilutive stock options,
based upon the treasury stock method
using average market price, since
higher than year end price -- 78
----------------------------------
Total 5,039 3,041
----------------------------------
----------------------------------
Net loss $ (113) $ (620)
----------------------------------
----------------------------------
Per share amount $ (.02) $ (.20)
----------------------------------
----------------------------------
</TABLE>
16
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM UNAUDITED
FINANCIAL STATEMENTS OF THE COMPANY FOR THE THREE MONTHS ENDED JULY 31, 1995 AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> APR-30-1995
<PERIOD-START> MAY-01-1995
<PERIOD-END> JUL-31-1995
<CASH> 922
<SECURITIES> 0
<RECEIVABLES> 7,998
<ALLOWANCES> 1,553
<INVENTORY> 9,977
<CURRENT-ASSETS> 19,396
<PP&E> 28,140
<DEPRECIATION> (22,289)
<TOTAL-ASSETS> 32,548
<CURRENT-LIABILITIES> 15,442
<BONDS> 0
<COMMON> 51
0
0
<OTHER-SE> 16,991
<TOTAL-LIABILITY-AND-EQUITY> 32,548
<SALES> 2,753
<TOTAL-REVENUES> 11,968
<CGS> 2,175
<TOTAL-COSTS> 9,466
<OTHER-EXPENSES> 2,596
<LOSS-PROVISION> 45
<INTEREST-EXPENSE> 49
<INCOME-PRETAX> (188)
<INCOME-TAX> (75)
<INCOME-CONTINUING> (113)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (113)
<EPS-PRIMARY> (.02)
<EPS-DILUTED> (.02)
</TABLE>
