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FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
-- OR --
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarter period ended September 30, 1996
Commission file number 0-14328
ZING TECHNOLOGIES, INC.
(Exact Name of registrant as specified in its charter)
NEW YORK 13-2650621
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
115 Stevens Avenue, Valhalla, New York 10595
(Address of principal executive offices)
(Zip Code)
(914) 747-7474
(Registrant's telephone number, including area code)
No Change
(Former name, former address and former fiscal year,
if changed since last report)
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 periods 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 of common stock, $.01 par value, outstanding as of
September 30,1996 was 2,494,199.
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Page 1 of 13
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INDEX
ZING TECHNOLOGIES, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION PAGE
<S> <C> <C>
Item 1. Financial Statements (Unaudited)
Condensed consolidated balance sheets - September 30, 1996 and
June 30, 1996.............................................................3
Condensed consolidated statements of income - three months ended
September 30, 1996 and 1995...............................................4
Condensed consolidated statements of cash flows - three months ended
September 30, 1996 and 1995...............................................5
Notes to condensed consolidated financial statements -
September 30, 1996........................................................6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations...............................................7-8
PART II. OTHER INFORMATION
Item 5. Other Information......................................................8-11
Item 6. Exhibits and Reports on Form 8-K.........................................11
Signatures...............................................................12
Exhibit 11 - Computation of earnings per share - three months
ended September 30, 1996 and 1995........................................13
</TABLE>
Page 2 of 13
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ZING TECHNOLOGIES, INC. AND SUBSIDIARIES
PART I . FINANCIAL INFORMATION
CONDENSED CONSOLIDATED BALANCE SHEETS
A S S E T S
<TABLE>
<CAPTION>
SEPTEMBER 30 JUNE 30
1996 1996
------------------------------
(UNAUDITED) (NOTE)
(000'S OMITTED)
<S> <C> <C>
Current Assets
Cash and cash equivalents.......................................... $ 680 $ 727
Marketable securities.............................................. 20,795 19,927
Accounts receivable, less reserves of
$141 and $135, respectively..................................... 2,559 2,352
Inventories........................................................ 4,573 4,290
Prepaid expenses................................................... 142 145
Other current assets............................................... 402 341
------- -------
Total Current Assets................................................... 29,151 27,782
Property, Plant and Equipment.......................................... 10,402 10,002
Less accumulated depreciation and amortization..................... 5,363 5,181
----- -----
5,039 4,821
----- -----
Deferred Income Taxes, net of valuation allowance...................... 1,095 1,095
Excess of Cost Over Assets Acquired, net of amortization
amortization of $1,058 and $1,021, respectively.................... 1,477 1,515
Other Assets........................................................... 36 38
----- -----
TOTAL ASSETS....................................................... $ 36,798 $ 35,251
======== ========
L I A B I L I T I E S A N D S T O C K H O L D E R S' E Q U I T Y
Current Liabilities
Accounts payable................................................... $ 1,420 $ 1,495
Accrued expenses & taxes payable................................... 1,466 1,698
Accrued compensation expense....................................... 445 666
Loan payable - bank................................................ 4,975 5,831
Due to broker...................................................... 5,343 2,229
Short position in marketable equity securities..................... 277 1,026
Current portion of long-term obligations........................... 338 39
----- ------
Total Current Liabilities.............................................. 14,264 12,984
Long-Term Obligations, less current portion............................ 2,612 1,445
Deferred Income - non-complete agreement............................... 950 1,100
----- -----
Stockholders' Equity
Common Stock, par value $.01 per share: authorized 12,000,000
shares; issued 2,877,617 shares as of September 30, 1996 and
2,874,117 shares as of June 30, 1996............................ 28 28
Additional paid-in capital......................................... 13,895 13,860
Note receivable from stockholder................................... (170) (170)
Net unrealized gain on marketable securities....................... 154 220
Retained earnings.................................................. 7,345 6,767
Less: treasury shares at cost (383,418 shares at
September 30,1996 and 255,018 shares at June 30, 1996)......... (2,280) (983)
------- -----
Total Stockholders' Equity............................................. 18,972 19,722
------ ------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY......................... $ 36,798 $ 35,251
======== ========
</TABLE>
Note: The balance sheet at June 30, 1996 has been derived from the audited
consolidated financial statements at that time.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
Page 3 of 13
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ZING TECHNOLOGIES, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
THREE MONTHS ENDED
SEPTEMBER 30,
1996 1995
------------------------------------------
(000'S OMITTED, EXCEPT PER SHARE DATA)
<S> <C> <C>
Net Sales................................................... $ 5,096 $ 9,287
Cost of goods sold.......................................... 2,872 4,632
----- -----
Gross Profit................................................ 2,224 4,655
Selling, general and administrative expenses................ 1,794 2,009
Provision for doubtful accounts ............................ 6 6
Depreciation and amortization of property, plant, equipment.
and excess of costs over assets acquired................ 57 124
Interest expense............................................ 251 30
Interest and other (income) loss - net...................... (607) (516)
----- -----
Income before income taxes.................................. 723 3,002
Provision for income taxes.................................. 145 1,152
------ -------
Net income.................................................. $ 578 $ 1,850
====== =======
Net Income per Common and Common Equivalent Share........... $ 0.23 $ 0.69
======= ======
Number of shares used in computation........................ 2,537,504 2,686,845
</TABLE>
See notes to condensed consolidated financial statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Page 4 of 13
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ZING TECHNOLOGIES, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
THREE MONTHS ENDED
SEPTEMBER 30,
1996 1995
------------------------------
(000'S OMITTED)
OPERATING ACTIVITIES
<S> <C> <C>
Net income ........................................................ $ 578 $ 1,850
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization.................................. 220 204
Amortization of non-complete agreement......................... (150) (150)
Provision for losses on accounts receivable.................... 6 6
Provision for deferred income taxes............................
Changes in operating assets and liabilities:
Accounts receivable........................................ (213) 1,369
Inventories................................................ (283) (326)
Prepaid expenses and other current assets.................. (57) 98
Accounts payable and accrued expenses...................... (528) 652
Other - net.................................................... 31 ---
Unrealized losses (gains) on marketable securities.................... (66) 131
----- ----
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES....................... (462) 3,834
------- -----
INVESTING ACTIVITIES
Purchases of property and equipment................................... (400) (130)
Net increases in marketable securities................................ (868) (2,433)
------ -------
NET CASH USED IN INVESTING ACTIVITIES..................................... (1,268) (2,563)
------- -------
FINANCING ACTIVITIES
Proceeds from borrowings.............................................. 3,855 ---
Reduction of notes payable and long-term debt......................... (880) (58)
Exercise of stock warrants............................................ 5 ---
Repurchase of common stock for treasury............................... (1,297) ---
Repayment of loan receivable shareholder.............................. --- 80
------- ------
NET CASH PROVIDED BY FINANCING ACTIVITIES................................. 1,683 22
------- ------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS...................... (47) 1,293
Cash and cash equivalents at beginning of period...................... 727 1,366
---- -----
CASH AND CASH EQUIVALENTS AT END OF PERIOD................................ $ 680 $ 2,659
===== ========
</TABLE>
See notes to condensed consolidated financial statements.
Page 5 of 13
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ZING TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
SEPTEMBER 30, 1996
NOTE A -- BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principals for
interim financial information and with the instructions to Form 10-Q and Rule
10-01 of Regulation S-X. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three-month period ended September 30,
1996 are not necessarily indicative of the results that may be expected for the
year ending June 30, 1997.
Certain reclassifications have been made to the quarterly information to
conform to the current presentation.
NOTE B -- INVENTORIES
Inventories are stated at the lower of cost (first in, first out method) or
market.
Inventories consist of the following:
<TABLE>
<CAPTION>
SEPTEMBER 30, JUNE 30,
1996 1996
---------------------------
<S> <C> <C>
Raw materials...................................................... $ 2,782 $ 2,472
Work in process.................................................... 1,260 1,294
Finished goods..................................................... 531 524
------- ------
$ 4,573 $ 4,290
======= =======
</TABLE>
NOTE C -- NET INCOME PER COMMON AND COMMON EQUIVALENT SHARE
Net income per common and common equivalent share is based on the weighted
average number of shares of Common Stock outstanding during each period,
including common stock equivalents of dilutive stock warrants.
NOTE D -- INCOME TAXES
As of July 1, 1993, the Company adopted FASB Statement No. 109,"Accounting
for Income Taxes" . Under Statement 109, the liability method is used in
accounting for income taxes. Under this method, deferred tax assets and
liabilities are determined based on differences between financial reporting and
tax bases of assets and liabilities and are measured using the enacted tax rates
and laws that will be in effect when the differences are expected to reverse.
Deferred tax expense was based on items of income and expenses that were
reported in different years in the financial statements and tax returns and were
measured at the tax rate in effect in the year the difference originated.
ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
Page 6 of 13
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ZING TECHNOLOGIES, INC. AND SUBSIDIARIES
FINANCIAL CONDITION AND RESULTS OF OPERATION
The following table sets forth for the periods indicated the percentage
relationship to net sales of certain items from the consolidated statement of
operations:
<TABLE>
<CAPTION>
PERCENT OF NET SALES
THREE MONTHS ENDED SEPTEMBER 30,
1996 1995
-----------------------------------------
<S> <C> <C>
Net sales ................................................... 100.0% 100.0%
Cost of goods sold............................................ 56.4 49.9
Gross profit.................................................. 43.6 50.1
Selling, general and administrative expenses.................. 35.2 21.6
Provision for doubtful accounts............................... 0.1 0.1
Depreciation and amortization of property and equipment
and excess of costs over assets acquired.................. 1.1 1.3
Interest expense ............................................. 4.9 0.3
Interest and other income - net............................... (11.9) (5.5)
Income before income taxes.................................... 14.2 32.3
Provision for income taxes.................................... 2.9 12.4
Net income.................................................. 11.3 19.9
</TABLE>
THREE MONTHS ENDED SEPTEMBER 30, 1996 COMPARED TO THREE MONTHS ENDED
SEPTEMBER 30, 1995
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The Company reported income of $578,000 or $.23 per share for the quarter
ended September 30, 1996, a decrease of 69% over the comparable 1995 quarter of
reported income of $1,850,000 or $.69 per share. As the Company's material
operating subsidiary, Omnirel Corporation's contributions to the total
consolidated operating profit represented 41% during the current reporting
period as compared to 90% for the comparable 1995 quarter.
Revenues for the three months ended September 30, 1996 were $5,096,000
comprised of net sales of TACTech of $527,000 and Omnirel of $4,569,000. Net
sales for the three months ended September 30, 1995 were $9,287,000 comprised of
net sales of TACTech of $377,000 and net sales of Omnirel of $8,910,000.
Included in Omnirel's sales are revenues generated by the continued
fulfillment of a series of orders placed by General Electric for multi-chip
power modules containing power hybrid components. During the quarter ended
September 30, 1996 these revenues declined to approximately $1,100,000 or 24% of
total sales from approximately $6,800,000 or 73% of total sales in the prior
comparable quarter. Revenues from other product segments increased by 62% during
the recently ended fiscal quarter.
Net sales for TACTech increased 40% for the three months ended September 30,
1996 compared to the comparable 1995 quarter due principally to an increase of
approximately 30% in the subscription base.
Omnirel and TACTech represent 76% and 24% respectively of the Company's
consolidated gross profit, which decreased $2,431,000 during the quarter ended
September 30, 1996 from $4,655,000 for the quarter ended September 30, 1995. The
reduction was due largely to the decline in Omnirel sales volume, which
decreased the absorption of labor and overhead, thereby increasing its cost of
goods sold expressed as a percentage of revenues approximately 10% over the
prior comparable quarter.
Page 7 of 13
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ZING TECHNOLOGIES, INC. AND SUBSIDIARIES
THREE MONTHS ENDED SEPTEMBER 30, 1996 COMPARED TO THREE MONTHS ENDED
SEPTEMBER 30, 1995 (continued)
- ---------------------------------------------------------------------
The backlog of Omnirel as of September 30, 1996 was $10,355,000, of which
$27,000 was attributable to orders from General Electric. In the comparable 1995
quarter, total backlog stood at approximately $13,576,000 of which approximately
43% represented orders from General Electric.
As a result of the decreased consolidated revenues, selling and general
administrative expenses increased as a percentage of revenues to 35.2% for the
three months ended September 30, 1996 compared to 21.6% of the comparable 1995
period.
Interest expense increased by $221,000 during the quarter ending September
30, 1996 compared to the comparable reporting period. This is primarily
attributable to increased borrowings utilized for additional purchase of
marketable securities and the repurchase of approximately $1,300,000 of treasury
shares during the current period.
Interest and other income for the three months ended September 30, 1996
included $405,000 of net earnings on the Company's investment portfolio,
consisting of dividend income of $458,000, net realized gains on marketable
securities of $118,000 and unrealized losses on the diminution in value of
certain marketable securities of $171,000.
The provision for income taxes decreased from $1,152,000 for the three
months ended September 30, 1995 to $145,000 for the three months ended September
30, 1996 primarily as a result of the decrease in income before income taxes for
the respective periods.
Liquidity and Capital Resources
The Company continues to employ most of its cash and cash equivalents in the
acquisition of marketable securities, primarily tradable on the New York and
other major stock exchanges. During the recently ended quarter, the Company
repurchased 128,400 shares of its common stock in open market transaction at an
acquisition cost of approximately $10.00 per share.
PART II. OTHER INFORMATION
ITEM 5. OTHER INFORMATION
When used in this Form 10-Q, and in future filings by Zing with the
Securities and Exchange Commission, in Zing's press releases and in any oral
statements made with the approval of an authorized Zing executive officer, the
words or phrases "will likely result", "are expected to", "will continue", "is
anticipated", "estimate", "project", or similar expressions are intended to
identify "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Such statements are subject to certain
risks and uncertainties, including those discussed under the caption "Risk
Factors and Cautionary Statements" below, that could cause actual results to
differ materially from historical earnings or those presently anticipated or
projected. Zing wishes to caution readers not to place undo reliance on such
"forward-looking statements", which speak only as of the date made. Zing wishes
to advise readers that factors listed below could affect Zing's financial
performance and could cause Zing's actual results for future periods to differ
materially from any opinions or statements expressed with respect to future
periods in any current statements.
Zing will NOT undertake and specifically declines any obligation to publicly
release the result of any revisions which may be made to any forward-looking
statements to reflect events or circumstances after the date of such statements
or to reflect the occurrence of anticipated or unanticipated events.
Page 8 of 13
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ZING TECHNOLOGIES, INC. AND SUBSIDIARIES
RISK FACTORS AND CAUTIONARY STATEMENTS
Sales to Significant Customer
Sales of various industrial products to General Electric represented 19%,
65%, and 58% of Omnirel's sales revenues for the fiscal year ending June 30,
1994 (each such fiscal year ending on June 30, a "Fiscal Year") Fiscal Year 1995
and Fiscal Year 1996. A single project accounted for approximately 16% of Fiscal
Year 1994 sales, 63% of Fiscal Year 1995 sales and 58% of Fiscal Year 1996
sales. Because of Omnirel's dependence on sales to one major customer in Fiscal
Years 1994, 1995 and 1996, and the continued anticipated decrease in sales to
such customer in Fiscal Year 1997, which, based on existing orders are expected
to be less than in Fiscal Year 1996, there can be no assurance that Omnirel will
be able to compensate for the loss of such sales in future Fiscal Years.
The Environment for the Power Hybrid Module Business
The following factors can materially affect the Company's performance: the
rapidly changing environment for the power hybrid module business which might
cause market acceptance of Omnirel's existing products to decrease; the
cancellation or rescheduling of one or several material orders; general or
specific economic conditions; the ability and willingness of purchasers to
substitute other products for Omnirel products; the perceived absolute or
relative overall value of these products by the purchasers, including the
features and pricing compared to other competitive products, the level of
availability of Omnirel products and substitutes and the ability and willingness
of purchasers to acquire newer or more advanced models; and pricing, purchasing
financing, operational, advertising and promotional decisions by intermediaries
in the distribution channels, which could affect the supply of, or end user
demand for, Omnirel products.
Selling General and Administrative Expenses
Changes in the amount and rate of growth in Omnirel's selling, general and
administrative expenses, as well as the impact of unusual items resulting from
Omnirel's ongoing evaluation of its business strategies and organizational
structures can materially affect the Company's performance.
Selling Prices
Omnirel is subject to continued or increased pressure to change its selling
prices for Omnirel's products, which can effect margins.
Raw Materials
Difficulties in obtaining raw materials, supplies and other items needed for
the production of products and capacity constraints may have an effect on
Omnirel's ability to ship some products.
Development and Marketing
Omnirel is subject to difficulties or delays in the development, production,
testing and marketing of products, including, but not limited to, the failure to
ship new products and technologies when anticipated; the failure of customers to
accept these products or technologies when planned; difficulties or delays in
the design and production of custom product orders and changes in the commercial
viability of the end user products of which these products are a party; any
defects in products; the failure of a critical Omnirel vendor or supplier to
deliver materials required by Omnirel; and failures of manufacturing economies
to develop when planned.
Page 9 of 13
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ZING TECHNOLOGIES, INC. AND SUBSIDIARIES
Assets and Expenditures
Omnirel's business is also subject to the acquisition of fixed assets and
other assets, including inventories and receivables; the making or incurring of
any expenditure and expenses including, but not limited to, depreciation and
research and development expenses; and the revaluation of assets including, but
not limited to, specialized inventories or related expenses; and the amount of,
and any changes to, tax rates.
Production Losses and Rework Costs
Omnirel's business is also subject to the occurrences of production losses
and rework costs on new or custom programs in excess of those anticipated during
the pricing process.
Decline in Defense and/or Aerospace Spending
Although Omnirel's military, defense and aerospace business represents a
decreasing percentage of its overall sales in recent years (and, therefore, is
decreasing in its significance), the businesses of both Omnirel and TACTech
continue to depend to a substantial extent upon sales to military, defense and
aerospace contractors. In the event that military, defense and/or aerospace
spending were to decline significantly over the next several years, sales by
Omnirel and TACTech could suffer a corresponding or greater decline. In such
event, both companies would have to seek replacement markets in other
industries. There can be no assurance that such markets would be available or
that either company would be successful in penetrating them.
Dependence on Key Personnel
The businesses of Omnirel and TACTech are substantially dependent upon the
active participation and technical expertise of their executive officers.
Omnirel is dependent upon the services of John F. Catrambone, its Chief
Executive Officer, while TACTech is dependent upon Malcolm Baca, its Executive
Vice President and Chief Operating Officer. The Company currently maintains
key-man life insurance policies on both such executive officers in the amounts
of $1,500,000 and $1,700,000, respectively. Omnirel also maintains a key-man
life insurance policy on Mr. Catrambone in the amount of $2,500,000. Both the
Company's and Omnirel's Boards of Directors regularly re-evaluate the need for
and amount of such key-man life insurance. There can be no assurance, however,
that Zing or Omnirel can obtain executives of comparable expertise and
commitment in the event of death, or that the business of Zing would not suffer
material adverse effects as the result of the death (notwithstanding coverage by
key-man insurance), disability or voluntary departure of any such executive
officer.
Competition
Although the market for multi-chip power modules and packaged semiconductor
components is fragmented and no single company maintains a dominant position, it
is nevertheless highly competitive among the five manufacturers (including
Omnirel) who collectively account for at least 50% of sales to such market.
Omnirel believes that its products and technologies can compete favorably with
the products of its principal competitors. Nevertheless a few of these
competitors have greater financial, marketing, servicing and research and
development resources than those of Omnirel. There can be no assurance that
existing or potential competitors will not develop and market products that are
superior or perceived to be superior to multi-chip power modules and other
products supplied by Omnirel.
TACTech's license agreements are cancelable on thirty (30) days' notice.
Approximately 50% of TACTech's information for its data bases comes from
numerous companies in the private sector. Accordingly, there can be no assurance
that existing arrangements with private suppliers of data will continue in
effect or, if they are canceled, that TACTech will be able to enter into
arrangements with other suppliers on terms as beneficial to TACTech as those
presently in effect. Moreover, there can be no assurance that other companies,
including existing customers of TACTech, will not avail themselves of sources of
data
Page 10 of 13
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<PAGE>
ZING TECHNOLOGIES, INC. AND SUBSIDIARIES
to develop their own software and data base services either in competition with
TACTech or to enable them to have their own sources for such services. TACTech's
software services and data bases are protected by trade secret provisions of
license agreements and by copyright laws, but because such provisions and laws
are frequently difficult or costly to enforce, there can be no assurance that
such protection will prove effective.
Technological Change and New Product Development
In the event of changes in the structure of the computer hardware systems
used by subscribers to operate TACTech's data base software, TACTech would incur
capital costs for new equipment and development costs in connection with the
reconfiguring of its software programs, which costs could be substantial and
could have an adverse effect on TACTech's profitability. In addition, TACTech
regularly incurs capital costs in connection with its new product development in
advance of their being ready for market, and there can be no assurances that
such new products will prove profitable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
The following exhibit is included herein:
(ii) Statement re: computation of earnings per share
The company did not file any report on Form 8-K during the three months ended
September 30, 1996.
Page 11 of 13
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ZING TECHNOLOGIES, INC. AND SUBSIDIARIES
SIGNATURES
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.
ZING TECHNOLOGIES, INC.
-----------------------------
(Registrant)
Date November 14, 1996 /s/Robert E. Schrader
--------------------------- -----------------------------
Robert E. Schrader, President
and Chief Executive Officer
Date November 14, 1996 /s/Martin S. Fawer
--------------------------- -----------------------------
Martin S. Fawer, Treasurer
and Chief Financial Officer
Page 12 of 13
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ZING TECHNOLOGIES, INC. AND SUBSIDIARIES
EXHIBIT 11-STATEMENT RE: COMPUTATION OF
COMMON AND COMMON EQUIVALENT PER SHARE EARNINGS
<TABLE>
<CAPTION>
THREE MONTHS ENDED SEPTEMBER 30,
1996 1995
---------------------------------
<S> <C> <C>
Average shares outstanding.................................... 2,522 2,597
Net effect of dilutive stock options and warrants - based
on the treasury stock method using average market price... 15 89
----- -----
Shares used for computation................................... 2,537 2,686
Net income.................................................... $ 578 $ 1,850
===== =======
Net Income per Common and Common Equivalent Share............. $ .23 $ .69
===== =====
</TABLE>
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<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-END> SEP-30-1996
<CASH> 680,000
<SECURITIES> 20,795,000
<RECEIVABLES> 2,700,000
<ALLOWANCES> (141,000)
<INVENTORY> 4,573,000
<CURRENT-ASSETS> 29,151,000
<PP&E> 10,402,000
<DEPRECIATION> (5,363,000)
<TOTAL-ASSETS> 36,798,000
<CURRENT-LIABILITIES> 14,264,000
<BONDS> 2,612,000
<COMMON> 28,000
0
0
<OTHER-SE> 18,944
<TOTAL-LIABILITY-AND-EQUITY> 36,798,000
<SALES> 5,096,000
<TOTAL-REVENUES> 5,096,000
<CGS> (2,872,000)
<TOTAL-COSTS> (2,872,000)
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (251,000)
<INCOME-PRETAX> 723,000
<INCOME-TAX> 145,000
<INCOME-CONTINUING> 578,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 578,000
<EPS-PRIMARY> 0.23
<EPS-DILUTED> 0
</TABLE>
