UNITED STATES SECURITIES AND EXCHANGE COMMISSIONS
WASHINGTON D.C. 20549
FORM 10-QSB
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended: MARCH 31, 1998
Commission File Number: 2-92949-S
ELECTRONIC SYSTEMS TECHNOLOGY, INC.
(A Washington Corporation)
I.R.S. Employer Identification no. 91-1238077
415 N. Quay St., #4
Kennewick WA 99336
(509) 735-9092
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 [ ].
The number of shares outstanding of common stock as of March 31, 1998
was 4,953,667.
<PAGE>
PART I
FINANCIAL INFORMATION
Item 1. Financial Statements.
<TABLE>
<CAPTION>
ELECTRONIC SYSTEMS TECHNOLOGY, INC.
SELECTED FINANCIAL DATA
(as prepared by Management)
(Unaudited)
Three Months Ended Mar. 31, 1998 Mar. 31, 1997
------------- -------------
<S> <C> <C>
Sales $ 409,214 $ 316,027
Other Revenues (Gross) $ 32,623 $ 26,182
Gross Profit $ 236,185 $ 194,264
Net Income Before Taxes $ 88,883 $ 29,835
Net Income After Taxes $ 58,662 $ 19,691
Earnings Per Share Before Taxes
Basic $ 0.016 $ 0.005
Diluted $ 0.016 $ 0.005
Earnings Per Share After Taxes
Basic $ 0.01 $ 0.003
Diluted $ 0.01 $ 0.003
Weighted Average Shares
Outstanding (Basic)
Primary 5,547,557 5,480,905
Diluted 5,547,557 5,480,905
Total Assets $ 2,289,599 $ 2,104,253
Long-Term Debt and Capital Lease
Obligations $ 0 $ 0
Shareholders' Equity $ 2,187,260 $ 2,031,625
Shareholders' Equity Per Share $ 0.44 $ 0.41
Working Capital $ 2,048,749 $ 1,876,003
Current Ratio 21:1 27:1
Equity To Total Assets 96 % 96 %
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ELECTRONIC SYSTEMS TECHNOLOGY, INC.
BALANCE SHEET
(as prepared by Management)
(Unaudited)
Mar. 31, 1998 Dec. 31, 1997
------------- -------------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 1,566,908 $ 1,466,760
Accounts Receivable, net of
allowance for uncollectibles 277,990 268,980
Inventory 292,162 319,127
Accrued Interest 7,226 7,439
Prepaid Expenses 6,802 3,173
------------- -------------
Total Current Assets $ 2,151,088 $ 2,065,479
PROPERTY & EQUIPMENT, net of
depreciation of $222,261 at
Mar. 31, 1998 and $214,491
at Dec. 31, 1997 131,747 132,924
OTHER ASSETS 6,764 7,408
------------- -------------
TOTAL ASSETS $ 2,289,599 $ 2,205,811
============= =============
LIABILITIES & STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts Payable $ 50,201 $ 29,931
Federal Income Taxes Payable 30,221 24,793
Accrued Liabilities 21,917 22,489
------------- -------------
Total Current Liabilities $ 102,339 $ 77,213
------------- -------------
STOCKHOLDERS' EQUITY
Common Stock, $.001 Par Value
50,000,000 Shares Authorized,
4,953,667 Shares Issued
And Outstanding $ 4,954 $ 4,954
Additional Paid-in Capital 894,129 894,129
Retained Earnings 1,288,177 1,229,515
------------- -------------
$ 2,187,260 $ 2,128,598
------------- -------------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 2,289,599 $ 2,205,811
============= =============
</TABLE>
(See "Notes To Financial Statements")
<PAGE>
<TABLE>
<CAPTION>
ELECTRONIC SYSTEMS TECHNOLOGY, INC.
STATEMENT OF OPERATIONS
(as prepared by Management)
(Unaudited)
Three Months Ended Mar. 31, 1998 Mar. 31, 1997
------------- -------------
<S> <C> <C>
SALES $ 409,214 $ 316,027
------------- -------------
COST OF SALES
Beginning Inventory 319,127 401,305
Purchases and Allocated Costs 146,064 116,840
------------- -------------
$ 465,191 $ 518,145
Ending Inventory 292,162 396,382
------------- -------------
Total Cost of Sales $ 173,029 $ 121,763
------------- -------------
Gross Profit $ 236,185 $ 194,264
------------- -------------
OPERATING EXPENSES
Finance/Administration $ 69,059 $ 68,424
Research & Development 35,357 40,057
Marketing 44,389 54,634
Customer Service 16,532 16,710
------------- -------------
Total Operating Expense $ 165,337 $ 179,825
------------- -------------
OPERATING INCOME $ 70,848 $ 14,439
Other Income (expenses)
Interest Income $ 17,069 $ 14,586
Engineering Services 15,554 11,596
Engineering Support (14,588) (10,786)
------------- -------------
Net Other Income (expense) $ 18,035 $ 15,396
------------- -------------
NET INCOME BEFORE INCOME TAX $ 88,883 $ 29,835
Provision For Income Tax 30,221 10,144
------------- -------------
NET INCOME $ 58,662 $ 19,691
============= =============
Basic Earnings Per Share
Before Tax $ 0.016 $ 0.005
Basic Earnings Per Share
After Tax $ 0.01 $ 0.003
Diluted Earnings Per Share
Before Tax $ 0.016 $ 0.005
Diluted Earnings Per Share
After Tax $ 0.01 $ 0.003
</TABLE>
(See "Notes To Financial Statements")
<PAGE>
<TABLE>
<CAPTION>
ELECTRONIC SYSTEMS TECHNOLOGY, INC.
STATEMENT OF CASH FLOWS
(as prepared by Management)
(Unaudited)
Three Months Ended Mar. 31, 1998 Mar. 31, 1997
------------- -------------
<S> <C> <C>
CASH FLOWS PROVIDED (USED)
IN OPERATING ACTIVITIES:
Net Income $ 58,662 $ 19,691
Noncash items included in income:
Depreciation 7,770 7,917
Amortization 644 644
DECREASE (INCREASE) IN CURRENT ASSETS:
Accounts Receivable, Net ( 9,010) ( 100,822)
Inventory 26,965 4,923
Prepaid Expenses ( 3,629) 6,665
Accrued Interest 213 ( 3,510)
Prepaid Income Taxes 0 10,144
INCREASE (DECREASE) IN CURRENT LIABILITIES:
Accounts Payable, Accrued Expenses And
Other Current Liabilities 19,698 41,853
Accrued Federal Income Taxes 5,428 0
------------- ------------
$ 106,741 $( 12,495)
------------- ------------
CASH FLOWS PROVIDED (USED) IN
INVESTING ACTIVITIES:
Additions To Property And Equipment $( 6,593) $( 12,986)
Capitalized Software 0 ( 790)
------------- ------------
$( 6,593) $ 13,776
------------- ------------
NET INCREASE IN CASH AND CASH EQUIVALENTS $ 100,148 $( 26,271)
Cash And Cash Equivalents
At Beginning Of Period 1,466,760 1,413,182
------------- ------------
Cash And Cash Equivalents At Ending of Period $ 1,566,908 $ 1,386,911
============= ============
SUPPLEMENTAL DISCLOSURES OF CASH
FLOWS INFORMATION:
Cash Paid Year To Date:
Interest 0 0
Federal Income Taxes $ 45,093 $ 0
============= ============
Cash And Cash Equivalents:
Cash $ 6,140 $ 5,720
Money Market Accounts 493,550 453,198
Certificates Of Deposit 445,218 327,993
Commercial Paper 622,000 600,000
------------- ------------
$ 1,566,908 $ 1,386,911
============= ============
</TABLE>
(See "Notes To Financial Statements")
<PAGE>
ELECTRONIC SYSTEMS TECHNOLOGY, INC.
NOTES TO FINANCIAL STATEMENTS
(as prepared by Management)
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION
The condensed financial statements of Electronic Systems Technology, Inc. (the
"Company"), presented in this Form 10Q are unaudited and reflect, in the
opinion of Management, a fair presentation of operations for the three month
periods ended March 31, 1998 and March 31, 1997. Certain information and
footnote disclosure normally included in financial statements prepared in
accordance with generally accepted accounting principals have been condensed
or omitted pursuant to the applicable rules and regulations of the Securities
and Exchange Commission. In preparation of the financial statements, certain
amounts and balances have been restated from previously filed reports
to conform with the condensed format of this quarterly presentation. These
condensed financial statements should be read in conjunction with the audited
financial statements and notes thereto included in the Company's Form 10K for
the year ended December 31, 1997 as filed with Securities and Exchange
Commission.
The results of operation for the three month periods ended March 31, 1998 and
March 31, 1997, are not necessarily indicative of the results expected for the
full fiscal year or for any other fiscal period.
NOTE 2 - INVENTORIES
Inventories are stated at lower of cost or market with cost determined using
the FIFO (first in, first out) method. Inventories consist of the following:
March 31 1998 December 31 1997
------------- ----------------
Parts $ 191,849 $ 218,263
Work in progress 6,461 26,582
Finished goods 93,852 74,282
------------- ----------------
$ 292,162 $ 319,127
============= ================
NOTE 3 - EARNINGS PER SHARE (EPS)
Basic EPS excludes dilution and is computed by dividing income available to
common stockholders by the weighted-average number of common shares
outstanding for the period. Diluted EPS reflects potential dilution
occurring if securities or other contracts to issue common stock were
exercised or converted into common stock or resulted in the issuance of common
stock that then shared in the earnings of the Company. The primary weighted
average number of common shares outstanding was 5,547,557 and 5,480,905 for
the quarters ended March 31, 1998 and 1997 respectively.
<PAGE>
ELECTRONIC SYSTEMS TECHNOLOGY, INC.
NOTES TO FINANCIAL STATEMENTS
(as prepared by Management)
(Unaudited)
NOTE 3 - EARNINGS PER SHARE (EPS) (continued)
For the Quarter Ended March 31, 1998
-----------------------------------------------
Income Shares Per-Share
(Numerator) (Denominator) Amount
-----------------------------------------------
Basic EPS
Income available to
common stockholders $58,662 5,547,557 $0.01
======== ========= ==========
Diluted EPS
Income available to
commonstockholders +
assumed conversions $58,662 5,583,667 $0.01
======== ========= ==========
NOTE 4 - STOCK OPTIONS
As of March 31, 1998, the Company had outstanding stock options which have been
granted periodically to individual employees and directors with no less than
three years of continuous tenure with Company. On February 6, 1998, additional
stock options to purchase shares of the Company's common stock were granted to
individual employees and directors with no less than three years continuous
tenure. The options granted on February 6, 1998 totaled 215,000 shares under
option and have an exercise price of $0.28 per share. The options granted on
February 6, 1998 may be exercised any time during the period from February 6,
1998 through February 5, 2001. The Company's Form 8-K dated February 6, 1998,
as filed with the Securities and Exchange Commission is included herein by
reference. All outstanding stock options must be exercised within 90 days
after termination of employment.
During the 12 month period from March 31, 1997 to March 31, 1998, 175,000
shares under option expired, no shares under option were exercised, and
215,000 shares under option were granted. At March 31, 1998 there were 630,000
shares under option reserved for future exercises.
The Company has adopted the disclosure-only provisions of Statement of
Financial Accounting Standards (SFAS) No. 123, "Accounting for Stock-Based
Compensation." The Company undertakes to make disclosures and calculations
pursuant to SFAS 123 on an annual basis coinciding with the issuance of the
Company's Annual Financial Statements. Accordingly, no compensation cost has
been recognized for the stock option plan.
NOTE 5 - RELATED PARTY TRANSACTIONS
For the quarter ended March 31, 1998, services in the amount of $14,893 were
contracted with Manufacturing Services, Inc., of which the owner/president is
a member of the Board of Directors of EST.
<PAGE>
ITEM II
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION
Management's discussion and analysis is intended to be read in conjunction with
the Company's unaudited financial statements and the integral notes thereto for
the quarter ending March 31, 1998. The following statements may be forward
looking in nature and actual results may differ materially.
A. RESULTS OF OPERATIONS
REVENUES: Total revenues from the sale of EST products and services increased
to $424,768 for the first quarter of 1998 as compared to $327,623 in the first
quarter of 1997, reflecting a 30% increase. Gross revenues increased to
$441,837 for the quarter ending March 31, 1997, a 29% increase from $342,209
for the same quarter of 1997. Management believes sales carried forward from
year end 1997 backlog, specifically in U.S. Government sales, as well as
strengthening of domestic sales, particularly the size of projects in which
the Company's products are included, is responsible for the comparative
increase in revenues for the quarter ended March 31, 1998 as compared with
the same quarter of 1997.
The Company's revenues fall into three major customer categories, Domestic,
Export and U.S. Government Sales. Domestic commercial sales increased to
$256,961 in the first quarter of 1998 as compared to $192,745 for the first
quarter of 1997. Foreign export sales for the first quarter of 1998 decreased
to $72,807 as compared to the $100,630 in foreign sales in the same quarter of
1997. The comparative decrease in export sales is a result of comparison with
unusually large sales to the Philippines and Brazil by the Company during the
first quarter of 1997. Sales to U.S. Government programs increased to $95,000
for the first quarter of 1998 as compared with first quarter 1997 levels of
$34,248. The majority of U.S. Government sales were from completion of order
backlog for United States Marine Corps material handling automation projects
undertaken late in the fourth quarter of 1997. Engineering services billed in
the first quarter of 1998 increased to $15,554 as compared with $11,596 for
the same quarter of 1997, resulting from increased size and scope of the
engineering services requested when compared with the first quarter of 1997.
During the quarter ended March 31, 1998 sales to WESCO Distribution, Inc.
consisted of 14% of the Company's sales and service revenues, and sales to
the U.S. Government and subcontractors consisted of 22% of the Company's
sales and service revenues. No other sales to a single customer comprised 10%
or more of the Company's product sales. A percentage breakdown of EST's major
customer categories of Domestic, Export and U.S. Government Sales, for the
first quarter of 1998 and 1997 are as follows:
For the first quarter of
1998 1997
------ -------
Domestic Sales 61% 59%
U.S. Government Sales 22% 10%
Export Sales 17% 31%
<PAGE>
A percentage breakdown of EST's product sales categories for the first quarter
of 1998 and 1997 are as follows:
For the first quarter of
1998 1997
------ -------
ESTeem Model 192 47% 21%
ESTeem Model 95 20% 27%
ESTeem Model 84SP/85SP 0% 1%
ESTeem Model 96 7% 29%
ESTeem Model 85 0% 0%
PEM and PEM-CPU 0% 5%
ESTeem Accessories 21% 12%
Factory Services 1% 1%
Site Support 4% 4%
Sales include foreign export sales as follows:
Three Months Ended
March 31 March 31
1998 1997
----------- ----------
Export sales $ 72,807 $ 100,630
Percent of sales 17% 31%
The geographic distribution of foreign sales for the first quarter of 1998
and 1997 is as follows:
Percent of Foreign Sales
March 31 March 31
COUNTRY 1998 1997
------- -------- --------
Taiwan 16% 0%
Columbia 15% 0%
Brazil 14% 32%
Germany 12% 0%
Peru 10% 0%
Chile 8% 0%
Ireland 8% 0%
New Zealand 7% 0%
Italy 6% 0%
Canada 3% 2%
South Korea 1% 10%
Mexico 0% 2%
Slovenia/Croatia 0% 12%
Philippines 0% 41%
Thailand 0% 1%
The Company's domestic and foreign sales for the first quarter of 1998 were
used primarily in Supervisory Control and Data Acquisition (SCADA)
applications. Management believes these applications will continue to
provide the largest portion of the Company's domestic sales revenues for the
foreseeable future. Products purchased by U.S. Government agencies or their
contractors in the first quarter of 1998 were used primarily for material
handling automation applications.
The Company's AIT subcontract with INTERMEC is a five year indefinite
delivery, indefinite quantity, fixed price contract through September 1999.
The Company did not provide material or derive any sales revenues from this
contract in the first quarter of 1998. Based on the terms of the AIT contract,
<PAGE>
and contracts of this type in general, Management does not base liquidity,
profitability, or material purchase projections on anticipated sales. The
Company's economic position allows it to respond to AIT orders on an "as needed
basis". It is Management's opinion that due to the nature of this contract,
sales or timing of orders, if any, pursuant to the contract cannot be
predicted.
Based on previous years activity, the majority of Federal government purchases
are from the Company's GSA contract. Projections regarding liquidity,
profitability, and material purchases are based on past history of annual
purchases. Historically, Federal sales average approximately 18% of annual
sales, but this level cannot be guaranteed. Due to the uncertain nature of
Federal purchasing, procurement of material and production planning is
adjusted quarterly based on demand. It is Management's opinion that the
majority of Federal purchases in 1998 will be under this contract.
The Company's revenues have historically fluctuated from quarter to quarter due
to timing factors such as customer order placement and product shipments to
customers, as well as customer buying trends, and changes in the general
economic environment. The procurement process regarding plant and project
automation, or project development, which usually surrounds the decision to
purchase ESTeem products can be lengthy. This procurement process may
involve bid activities unrelated to the ESTeem products, such as additional
systems and subcontract work, as well as capital budget considerations on the
part of the customer. Because of the complexity of this procurement process,
forecasts in regard to the Company's revenues become difficult to predict.
BACKLOG:
The Corporation had minimal backlog at March 31, 1998. Customers generally
place orders on an "as needed basis". Shipment of orders are generally made
within 5 working days after receiving the order.
COST OF SALES:
Cost of sales percentages of gross sales for the first quarters of 1998 and
1997 were 42% and 39% of gross sales respectively. Cost of Sales variations
are attributable to the type of product sold and order size. Larger orders
grant lower sales prices because of volume discounting, reducing the margin
of profit.
OPERATING EXPENSES:
Operating expenses for the first quarter of 1998 decreased $14,488 from levels
in the first quarter of 1997. The following is a delineation of operating
expenses:
March 31 March 31 Increase
1998 1997 (Decrease)
-------- -------- ----------
Finance/Administration $ 69,059 $ 68,424 $ 635
Research/Development 35,357 40,057 ( 4,700)
Marketing 44,389 54,634 ( 10,245)
Customer Service 16,532 16,710 ( 178)
-------- -------- ----------
Total Operating Expenses $165,337 $179,825 $( 14,488)
======== ======== ==========
<PAGE>
Finance and Administration: During the first quarter of 1998 Finance and
Administration expenses increased $635 when compared with the first quarter of
1997. The increase is a result of timing differences in several miscellaneous
expense categories.
Research and Development: Research and Development expenses decreased $4,700
during the first quarter of 1998, over the same period in 1997. This decrease
is due to a reduction in subcontracted Research and Development expertise and
material supplies associated with the first quarter 1997 development activity
of the Company's ESTeem 192 product line. As a whole, Management expects
Research and Development expenditures during 1998 similar to those in 1997.
Marketing: During the first quarter of 1998, marketing expenses decreased
$10,245 when compared with the same period of 1997. The decrease is
attributable to reduced advertising by the Company in comparison to
advertising undertaken in 1997 for the release of the ESTeem 192 product
line, and timing differences attendance of tradeshows.
Customer Service: Customer service had minimal changes in expenses in
comparison between the first quarters of 1998 and 1997.
INTEREST AND DIVIDEND INCOME:
The Corporation earned $17,069 in interest and dividend income during the
quarter ending March 31, 1998. Sources of this income were savings and money
market accounts and short term investments.
ENGINEERING SUPPORT:
Engineering support costs increased to $14,588 as of March 31, 1998, as
compared to $10,786 for the same period of 1997. The increase in engineering
support costs for the first quarter of 1998, is directly resultant of increases
in the size and scope of engineering services billed by the Company during the
first quarter of 1998.
NET INCOME:
The Company had a net income of $58,662 for the first quarter of 1998 compared
to net income of $19,691 for the same quarter of 1997. The net profit increase
is attributed to increased product sales, increased interest revenue, and
decreased operating expenses for the first quarter of 1997, when compared with
the first quarter of 1997.
B. FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
The Corporation's current asset to current liabilities ratio at March 31, 1998
was 21:1 compared to 26.7:1 at December 31, 1997. The decrease in the
Company's current ratio is due to increased trade accounts payable and federal
income tax liability.
For the quarter ending March 31, 1998, the Company had cash and cash equivalent
short-term investment holdings of $1,566,908 as compared to cash and cash
equivalent holdings of $1,466,760 at December 31, 1997. The increase is
attributable primarily to the Company's net income, decreased inventory levels
and timing differences in liabilities incurred for the first quarter of 1998.
Accounts receivable increased to $277,990 as of March 31, 1998, from December
31, 1997 levels of $268,980, due to increased sales revenues in the first
quarter of 1998, and longer than expected collection timing from sales to the
<PAGE>
U.S. Government at year end 1997 and early first quarter 1998. Management
believes all of the Company's accounts receivable as of March 31, 1998 are
collectible. Inventory decreased to $292,162 at March 31, 1998, from
December 31, 1997 levels of $319,127, due to strong product sales in the first
quarter of 1998. Prepaid expenses increased from December 31, 1997 levels of
$3,173 to $6,802 as of March 31, 1998 primarily due to prepaid tradeshow fees
for tradeshows to be attended by the Company later in 1998.
The Company's fixed assets increased to $354,008 as of March 31, 1998, an
increase from December 31, 1997 levels of $347,415, resulting from capital
expenditures for engineering and computer network equipment of $6,593 for the
first quarter 1998. Management foresees additional capital expenditures as
needed in 1998 to support the production and sale of its products.
As of March 31, 1998 the Company's trade accounts payable balances were $50,201
as compared with $29,931 at December 31, 1997, this increase is the result of
increased levels of purchasing for production requirements in the first quarter
of 1998.
It is Management's opinion that the Company's cash and cash equivalent
reserves, and working capital at March 31, 1998 is sufficient to satisfy
requirements for operations, capital expenditures, and other expenditures as
may arise within 1998.
FORWARD LOOKING STATEMENTS: The above discussion may contain forward looking
statements that involve a number of risks and uncertainties. In addition to
the factors discussed above, among other factors that could cause actual
results to differ materially are the following: competitive factors such as
rival wireless architectures and price pressures; availability of third party
component products at reasonable prices; inventory risks due to shifts in
market demand and/or price erosion of purchased components; change in product
mix, and risk factors that are listed in the Company's reports and registration
statements filed with the Securities and Exchange Commission.
<PAGE>
PART II
OTHER INFORMATION
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit 27. Financial Data Schedule
(b) Reports on Form 8-K
Form 8-K dated January 23, 1998 is incorporated herein by reference.
Form 8-K dated February 6, 1998 is incorporated herein by reference.
Form 8-K dated March 26, 1998 is incorporated herein by reference.
Exhibit Index Reference Form 10-QSB
Exhibit Number Notes to Financial Statements
4. Instruments defining the Rights of Security Holders
including indentures.
Form 8-K dated February 3, 1995 is incorporated herein by reference.
Form 8-K dated February 9, 1996 is incorporated herein by reference.
Form 8-K dated February 7, 1997 is incorporated herein by reference.
Form 8-K dated February 6, 1998 is incorporated herein by reference.
11. Statement Re: computation of per share earnings. Note 3 to
Financial Statements.
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
ELECTRONIC SYSTEMS TECHNOLOGY, INC.
By: /s/ T.L. KIRCHNER
Date: May 8, 1998 Name: T.L. Kirchner
Title: Director/President
(Principal Executive Officer)
By: /s/ ROBERT SOUTHWORTH
Date: May 8, 1998 Name: Robert Southworth
Title: Director/Secretary/Treasurer
(Principal Finance Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
EXHIBIT 27 - FINANCIAL DATA SCHEDULE
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM, BALANCE
SHEET, STATEMENT OF OPERATIONS, AND STATEMENT OF CASH FLOWS AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FORM 10QSB, FOR MARCH 31, 1998.
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 1,566,908
<SECURITIES> 0
<RECEIVABLES> 279,274
<ALLOWANCES> 1,284
<INVENTORY> 292,162
<CURRENT-ASSETS> 2,151,088
<PP&E> 354,008
<DEPRECIATION> 222,261
<TOTAL-ASSETS> 2,289,599
<CURRENT-LIABILITIES> 102,339
<BONDS> 0
<COMMON> 4,954
0
0
<OTHER-SE> 2,182,306
<TOTAL-LIABILITY-AND-EQUITY> 2,187,260
<SALES> 409,214
<TOTAL-REVENUES> 441,837
<CGS> 173,029
<TOTAL-COSTS> 187,617
<OTHER-EXPENSES> 51,889
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 88,883
<INCOME-TAX> 30,221
<INCOME-CONTINUING> 58,662
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 58,662
<EPS-PRIMARY> .01
<EPS-DILUTED> .01
</TABLE>
