FORM 10-Q
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
For the quarterly period ended March 31, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
For the transition period from to .
Commission file number 0-15374
PENTECH INTERNATIONAL INC.
(Exact name of registrant as specified in its charter)
Delaware 23-2259391
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
195 Carter Drive, Edison, New Jersey 08817
(Address of principal executive offices)
(Zip Code)
(732) 287-6640
(Registrant's telephone number, including area code)
(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 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 each of the issuer's
classes of common stock, as of May 12, 2000, was 12,571,258 shares
of common stock, par value $.01 per share.
Exhibit Index is located on Page 21.
Page 1 of 21
<PAGE>
INDEX
Part I. Financial Information:
Item 1. Financial Statements (Unaudited). Page
Consolidated Balance Sheets as of
March 31, 2000 and September 30, 1999 3-4
Consolidated Statements of Operations for the
three and six months ended March 31, 2000 and 1999 5
Consolidated Statements of Cash Flows
for the six months ended March 31,
2000 and 1999 6-7
Notes to Consolidated Financial Statements 8-15
Item 2. Management's Discussion and
Analysis of Financial Condition
and Results of Operations. 16-18
Item 3. Quantitative and Qualitative Disclosure
About Market Risk. 18
Part II. Other Information:
Item 5. Other Information 19
Item 6. Exhibits and Reports on Form 8-K. 19
Signatures 20
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
PENTECH INTERNATIONAL INC.
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
(000's omitted)
(Substantially all pledged or assigned)
March 31, 2000 September 30, 1999
(unaudited)
Current Assets:
Accounts receivable, net of
allowance for doubtful accounts
of $83 at March 31, 2000 and
$36 at September 30, 1999 $10,099 $15,301
Inventories (Notes 1 and 2) 14,132 15,415
Prepaid expenses and other 2,169 1,633
Joint venture receivable (Note 8) 1,328 -
Available for-sale security (Note 7) 10 181
Total current assets 27,738 32,530
Equipment and furniture (Note 1) 8,402 9,472
Less accumulated depreciation (6,028) (6,318)
2,374 3,154
Other assets:
Trademarks, net of accumulated amort-
ization of $811 at March 31, 2000
and $762 at September 30, 1999
(Note 1) 233 236
Due from officer 174 174
407 410
$30,519 $36,094
See notes to consolidated financial statements.
PENTECH INTERNATIONAL INC.
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (Cont.)
LIABILITIES AND SHAREHOLDERS' EQUITY
(000's omitted)
March 31, 2000 September 30, 1999
(unaudited)
Current liabilities:
Notes payable, bank
(Note 3) $11,695 $13,882
Accounts payable 3,588 3,322
Accrued expenses 1,820 3,056
Settlement note payable 300 300
Deferred revenue from joint
venture (Note 8) 449 -
Total current liabilities 17,852 20,560
Other liabilities:
Royalty payable, long-term 50 50
Settlement note payable,
long-term 1,400 1,500
1,450 1,550
Commitments and contingencies
(Note 4)
Shareholders' equity:
Preferred stock, par value $.10
per share; authorized 500,000
shares; issued and outstanding
none
Common stock, par value $.01
per share; authorized 20,000,000
shares; 12,571,258 shares issued
and outstanding at March 31, 2000
and September 30, 1999, respectively 125 125
Capital in excess of par 6,839 6,839
Retained earnings 4,243 6,839
Accumulated other comprehensive
income 10 181
11,217 13,984
$30,519 $36,094
See notes to consolidated financial statements.
PENTECH INTERNATIONAL INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(000's omitted except for per share amounts)
(unaudited)
Three Months Ended Six Months Ended
March 31, March 31,
2000 1999 2000 1999
Net sales $10,497 $ 9,187 $20,781 $19,755
Cost of sales 7,069 6,088 14,129 13,385
Gross profit 3,428 3,099 6,652 6,370
Selling, general and
administrative expenses 4,140 3,603 7,875 7,141
Plant relocation costs 574 - 787 -
(Loss) from operations (1,286) (504) (2,010) (771)
Interest expense 290 324 586 700
Other (income) - (15) - (17)
Net (loss) $(1,576) $ (813) $(2,596) $(1,454)
Net (loss) per share $ (.13) $ (.06) $ (.21) $ (.12)
basic and diluted
(Note 1)
See notes to consolidated financial statements.
<PAGE>
PENTECH INTERNATIONAL INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(000's omitted)
(unaudited)
Six Months Ended
March 31,
2000 1999
Cash flows from operating activities:
Net (loss) $(2,596) $(1,454)
Adjustments to reconcile net
loss to net cash provided by
operating activities:
Depreciation and amortization 523 492
(Increase) decrease in:
Accounts receivable 5,202 4,926
Inventories 868 1,140
Prepaid expenses and other (536) (36)
Income taxes receivable - 448
Increase (decrease) in:
Accounts payable 266 (70)
Accrued expenses (1,236) (1,582)
Settlement payable (100) (250)
Total adjustments 4,987 5,068
Net cash provided by
operating activities 2,391 3,614
Cash flows from investing activities:
(Purchase) of furniture/equipment (158) (335)
(Increase) decrease in trademarks (46) 16
Net cash (used in) investing
activities (204) (319)
See notes to consolidated financial statements.
PENTECH INTERNATIONAL INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
(000's omitted)
(unaudited)
Six Months Ended
March 31,
2000 1999
Cash flows from financing activities:
Net (decrease) in notes
payable $(2,187) $(3,835)
Net cash (used in)
financing activities (2,187) (3,835)
Net (decrease) in cash and
cash equivalents - (540)
Cash and cash equivalents,
beginning of period - 759
Cash and cash equivalents, end of period $ - $ 219
Supplemental disclosures of cash flow
information:
Non-cash operating activities:
(Increase) in joint venture
receivable $(1,328) -
Increase in deferred revenue
from joint venture $ 449 -
Decrease in fixed assets due to
transfer to joint venture $ 464 -
Decrease in inventory due to transfer $ 415 -
to joint venture
Non-cash investing activities:
(Decrease) in fair value of
available-for-sale security $ (171) $ (269)
Cash paid during the period for:
Interest $ 584 $ 782
See notes to consolidated financial statements.
PENTECH INTERNATIONAL INC.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(The information for the three and six months ended
March 31, 2000 and 1999 is unaudited.)
1. Summary of Significant Accounting Policies:
Organization:
Pentech International Inc. (the "Company") was formed in
April 1984. A wholly-owned subsidiary, Sawdust Pencil
Company ("Sawdust") was formed in November 1989 and
commenced operations in January 1991. The Company and
its subsidiary are engaged in the production, design and
marketing of writing and drawing instruments. The
Company primarily operates in one business segment: the
manufacture and marketing of pens, markers, pencils and
other writing instruments and related products to major
mass market retailers located in the United States, under
the "Pentech" name or licensed trademark brand. The
Company's business is subject to certain seasonal
conditions in which sales tend to be concentrated in the
third and fourth quarters of the fiscal year. The
Company's fiscal year ends September 30.
Principles of Consolidation:
The consolidated financial statements include the
accounts of the Company and its subsidiaries. All
significant intercompany balances and transactions have
been eliminated.
Cash Overdraft:
Any bank overdrafts are included within accounts payable
in the accompanying consolidated balance sheet.
Unaudited Financial Statements:
The unaudited financial information includes adjustments
(consisting of normal recurring adjustments) which the
Company considers necessary for a fair presentation of
the financial position at March 31, 2000 and the results
of operations for the three and six month periods ended
March 31, 2000 and 1999 and cash flows for the six months
ended March 31, 2000 and 1999.
<PAGE>
PENTECH INTERNATIONAL INC.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(The information for the three and six months ended
March 31, 2000 and 1999 is unaudited.)
1. Summary of significant accounting policies (Cont'd):
Inventory and Cost of Sales:
Inventory is stated at the lower of cost or market
(first-in, first-out). Interim inventories are based on
an estimated gross profit percentage by product,
calculated monthly. Cost of sales for imported products
includes the invoice cost, duty, freight in, display and
packaging costs. Cost of domestically manufactured
products includes raw materials, labor, overhead and
packaging costs.
Equipment and depreciation:
Equipment is stated at cost. Depreciation is provided by
the straight-line method over the estimated useful lives
of the assets, which range from five to ten years. Major
improvements to existing equipment are capitalized.
Expenditures for maintenance and repairs which do not
extend the life of the assets are charged to expense as
incurred.
Trademarks:
Costs related to trademarks are being amortized over a
five year period on a straight-line basis.
Revenue recognition:
Revenue is recognized upon shipment of product to the
customer.
Fair Value of Financial Instruments:
The fair value for cash and accounts receivable
approximates carrying amounts due to the short maturity
of these instruments. The fair value for notes payable
approximates carrying amounts due to the variable
interest rates.
Use of Estimates:
The preparation of financial statements in conformity
with generally accepted accounting principles requires
management to make estimates and assumptions that affect
the amounts reported in the financial statements and
PENTECH INTERNATIONAL INC.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(The information for the three and six months ended
March 31, 2000 and 1999 is unaudited.)
1. Summary of significant accounting policies (Cont'd):
accompanying notes. Actual results could differ from
those estimates.
Stock Based Compensation:
Statement of Financial Accounting Standards No. 123,
"Accounting for Stock Based Compensation," encourages,
but does not require companies to record compensation
cost for stock-based employee compensation plans at fair
value. The Company has elected to follow Accounting
Principles Board Opinion No. 25, "Accounting for Stock
Issued to Employees" (APB 25) and related interpretations
in accounting for its employee stock options. Under APB
25, because the exercise price of the Company's employee
stock options equals the market price of the underlying
stock on the date of grant, no compensation expense is
recognized.
<PAGE>
PENTECH INTERNATIONAL INC.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(The information for the three and six months ended
March 31, 2000 and 1999 is unaudited.)
1. Summary of significant accounting policies (Cont'd):
(Loss) Earnings per share:
The following table sets forth the computation of basic and diluted
earnings per share:
Three months ended Six months ended
March 31, March 31,
2000 1999 2000 1999
Numerator:
Net (loss) $(1,576,000)$ (813,000) $(2,596,000) $(1,454,000)
Denominator:
Denominator for basic
earnings per share -
weighted average
shares 12,571,258 12,570,258 12,571,258 12,570,258
Effect of dilutive
securities:
Employee stock
options - - - -
Denominator for diluted
earnings per share -
adjusted weighted
average shares and
assumed conversions: 12,571,258 12,570,258 12,571,258 12,570,258
Basic and diluted (loss)
per share $(.13) $(.06) $(.21) $(.12)
Other Recently Issued Accounting Standard:
In June 1998, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 133 "Accounting for
Derivative Instruments and Hedging Activities" which was amended by
the Statement of Financial Accounting Standards No. 137 "Accounting
for Derivative Instruments and Hedging Activities-Deferral of the
Effective Date of FASB Statement No. 133" and is effective for
years beginning after June 15, 2000. The Company has completed its
review of SFAS 133 and has concluded that the adoption of this
statement would not have any effect on the Company and its
reporting.
PENTECH INTERNATIONAL INC.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(The information for the three and six months ended
March 31, 2000 and 1999 is unaudited.)
2. Inventory
March 31, September 30,
2000 1999
Raw materials $ 3,334,000 $ 4,262,000
Work-in-process 953,000 1,748,000
Finished goods 10,742,000 10,511,000
Allowance for slow-moving
items (897,000) (1,106,000)
$14,132,000 $15,415,000
March 31, September 30,
2000 1999
3. Notes Payable, bank:
Revolving line of credit with
interest payable monthly
at prime plus .5% (9.50%
at March 31, 2000 and
8.75% at September 30, 1999) $ 695,000 $ 1,882,000
Revolving line of credit with
interest payable at maturity
at libor plus 2.5% (8.68% at
March 31, 2000 and ranging from
7.76% to 7.87% at September 30,
1999) 11,000,000 12,000,000
$11,695,000 $13,882,000
In January 1997, the Company entered into a three year
Revolving Credit Agreement with BankAmerica Business Credit, Inc.
now known as Bank of America, N.A. (BABC) (the "Credit Agreement").
Borrowings under the Credit Agreement are subject to limitations
based upon eligible inventory and accounts receivable as defined in
the Credit Agreement. Borrowings under the Credit Agreement accrue
PENTECH INTERNATIONAL INC.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(The information for the three and six months ended March 31,
2000 and 1999 is unaudited.)
interest, at the Company's option, at either prime plus .5% or
libor plus 2.5%.
In December 1999, the Company and BABC entered into an
agreement to renew the Credit Agreement for an additional three
years (the "Renewal"). The Renewal, among other things, waives
compliance with certain financial covenants violated at September
30, 1999, modifies the financial covenants for the next three
fiscal years, increases the maximum inventory advance and allows
for a seasonal over-advance.
The Renewal is collateralized by a security interest in
substantially all of the assets of the Company. In connection with
the Renewal, the Company has agreed to the maintenance of certain
financial covenants and cannot declare a cash divided without the
consent of BABC.
4. Contingency:
At March 31, 2000, the Company was contingently liable for
outstanding letters of credit of $551,417.
5. Income Taxes:
Following is a reconciliation to income taxes at the statutory
rate:
Three months ended Six months ended
March 31, 2000 March 31, 2000
Income tax at Federal
statutory rate applied to
income before taxes $(536,000) $ (883,000)
State income taxes, net of
Federal tax benefit (93,000) (154,000)
Increase in valuation
allowance 629,000 1,037,000
$ - $ -
PENTECH INTERNATIONAL INC.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(The information for the three and six months ended March 31,
2000 and 1999 is unaudited.)
6. Paradise Settlement
In Fiscal 1997, the Company entered into a settlement
agreement with Leon Hayduchok, All-Mark Corporation and Paradise
Creations, Inc., (collectively, "Paradise") providing, among other
things, for Pentech to pay $500,000, deliver a $3,000,000
promissory note plus interest at the rate of 7% per annum (the
"Note") and enter into a five year non-exclusive license to sell
such products for a 10% royalty, with an aggregate minimum royalty
of $500,000 (the "Paradise Settlement"). The Company paid $500,000
at the date of signing in January 1997 and a required payment
against the Note of $400,000 in February 1997. In addition, the
Note required $100,000 quarterly principal payments commencing
January 1, 1998. Quarterly principal payments have been made
through April 2000. The Company also paid $400,000 against the
minimum royalty.
7. Available-for-Sale Security
The value of Fun Cosmetics, Inc. stock (based on quoted market
prices) as of March 31, 2000 was $.05 a share. However, due to the
historically low level of trading activity, the number of shares
the Company owns, the shares are unregistered and the Company has
recently became aware that Fun has discontinued active operations,
there is no assurance the Company will realize the current market
value.
Accumulated Other
Comprehensive Income
March 31, March 31,
2000 1999
Net loss $(2,596) $(1,454)
Unrealized loss on available-for-
sale security (171) (269)
Comprehensive loss $(2,767) $(1,723)
PENTECH INTERNATIONAL INC.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(The information for the three and six months
ended March 31, 2000 and 1999 is unaudited.)
8. Joint Venture
During the quarter ended December 31, 1999, the Company formed
a strategic partnership with a manufacturer in Shanghai, China with
the purpose of developing and manufacturing both existing products
and many of the Company's new products in development. The terms
of the joint venture provide for Pentech to receive cash for some
of its manufacturing equipment and obtain a 50% ownership in the
new entity being formed in China. In addition, there are costs
associated with the relocation of the Company's domestic
manufacturing facility. As of March 31, 2000, the Company has
shipped approximately $1,328,000 worth of equipment and inventory
and incurred relocating costs of approximately $787,000.
<PAGE>
Item 2. Management's discussion and analysis of financial
condition and results of operations.
(1) Material Changes in Results of Operations
Net sales increased in the three and six months ended March
31, 2000 14.3% and 5.2%, respectively, from the same periods a year
ago, primarily due to an increase in its "Fireworks" line of pens
and its children's activity product line.
Gross profit as a percentage of net sales decreased for the
three and six months ended March 31, 2000 to 32.7% and 32% from
33.7% and 32.2%, respectively, as compared to the same periods a
year ago. This was due to the decline in sales of licensed
products for which the Company historically obtained higher gross
margins. In addition, there was an increase in sales from the
direct import program which generate lower gross profit margins.
Selling, general and administrative ("SG&A") expenses as a
percentage of sales for the three and six months ended March 31,
2000 increased to 39.4% and 37.9% from 39.2% and 36.1%,
respectively, as compared to the same periods a year ago. This was
primarily due to the increase in our sales force as well as an
increase in freight expenses. In addition, there was an increase
in advertising and promotional expenses.
For the three and six months ended March 31, 2000, interest
expense decreased as compared to the same periods a year ago. This
was due to a lower outstanding loan balance this year.
For the three and six months ended March 31, 2000, the net
loss was $1,576,000, or $.13 per share, and $2,596,000, or $.21 per
share, as compared to a net loss of $813,000, or $.06 per share,
and $1,454,000, or $.12 per share, respectively, for the same prior
periods a year ago. The decrease in income was primarily due to
higher SG&A expenses and the plant move expenses.
(2) Material Changes in Financial Condition
In January 1997, the Company entered into a three year
$30,000,000 (subsequently amended to $25,000,000) revolving credit
facility with BankAmerica Business Credit Inc., now known as Bank
of America, N.A. ("BABC") (the "Credit Agreement"). The amount of
drawings under the facility is subject to limitations based upon
eligible inventory and accounts receivable as described in the
Credit Agreement. The Credit Agreement is collateralized by a
security interest in substantially all of the assets of the
Company. In addition, in accordance with the Credit Agreement, the
Company has agreed, among other things, to the maintenance of
certain financial covenants.
In December 1999, the Company and BABC entered into an
agreement to renew the Credit Agreement for an additional three
years (the "Renewal"). The Renewal, among other things, waives
compliance with certain financial covenants violated at September
30, 1999, modifies the financial covenants for the next three
fiscal years, increases the maximum inventory advance and allows
for a seasonal over-advance.
The $3,000,000 note (the "Note") issued in connection with the
Paradise Settlement requires $100,000 quarterly principal payments
that commenced January 1, 1998 thru April 1, 2004. Quarterly
principal payments were made through April 2000.
During the quarter ended December 31, 1999, the Company formed
a strategic partnership with a manufacturer in Shanghai, China with
the purpose of developing and manufacturing both existing products
and many of the Company's new products in development. The terms
of the joint venture provide for Pentech to receive cash for some
of its manufacturing equipment and obtain a 50% ownership in the
new entity being formed in China. In addition, there are costs
associated with the relocation of the Company's domestic
manufacturing facility. As of March 31, 2000, the Company has
shipped approximately $1,328,000 worth of equipment and inventory
and incurred relocation costs of approximately $787,000.
The Company continued several actions to increase its
liquidity. It continued a policy of obtaining thirty to sixty day
open credit to finance a majority of its purchases that
historically have been financed pursuant to letters of credit. It
continues to reduce the number of items held in inventory and has
reduced the level of capital expenditures.
Working capital decreased $2,084,000 to $9,886,000 at March
31, 2000. As a result of the seasonal nature of the Company's
business, the Company's borrowings under the Credit Agreement
increases significantly in the months of May, June, July and August
as the Company finances its inventory and receivables, and declines
in September and October after the collections of receivables from
its sales during its seasonally high "Back to School" sales period.
The change in financial position during the six months ended March
31, 2000 reflects primarily this seasonality due to the decrease in
receivables from the collection of its Back- to-School sales and a
decline in inventory.
The Company anticipates that borrowings under the Credit
Agreement together with anticipated revenues from operations, will
be sufficient to provide liquidity on both a short-term and long-term
basis to finance its future operations. The Company believes
these resources are sufficient to support its operating expenses.
(3) Safe Harbor Statement
Statements which are not historical facts, including
statements about the Company's confidence and strategies and its
expectations about new and existing products, technologies and
opportunities, market and industry segment growth, demand and
acceptance of new and existing products are forward looking
statements that involve risks and uncertainties. there include,
but are not limited to, product demand and market acceptance risks;
the impact of competitive products and pricing; the results of
financing efforts; the loss of any significant customers of any
business; the effect of the Company's accounting policies; the
effects of economic conditions and trade, legal, social, and
economic risks, such as import, licensing, and trade restrictions;
the results of the Company's business plan and the impact on the
Company of its relationship with its lenders.
Item 3. Quantitative and Qualitative Disclosure About Market Risk.
Market risk represents the risk of loss that may impact our
financial position, results of operations or cash flows due to
adverse changes in financial and commodity market prices and rates.
We are exposed to market risk in the areas of changes in United
States and international borrowing rates and changes in foreign
currency exchange rates. In addition, we are exposed to market
risk in certain geographic areas that have experienced or remain
vulnerable to an economic downturn, such as China. We purchase
substantially all of our inventory from companies in China, and
therefore, we are subject to the risk that such suppliers will be
unable to provide inventory at competitive prices. While we
believe that, if such an event were to occur we would be able to
find alternative sources of inventory at competitive prices, we
cannot assure you that we would be able to do so. These exposures
are directly related to our normal operating and funding
activities. Historically and as of September 30, 1999, we have not
used derivative instruments or engaged in hedging activities to
minimize our market risk.
<PAGE>
PART II. OTHER INFORMATION
Item 5. Other Information.
Notice is hereby given to the shareholders of the Company,
that the Company's Annual Meeting of Shareholders scheduled to be
held in April, 2000 has been postponed.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
3.1 Certificate of Incorporation of the Company, as amended,
incorporated by reference to Exhibit 3.1 to Registration
Statement No. 33-16453 (the "Registration Statement").
3.2 By-Laws of the Company incorporated by reference to
Exhibit 3.2 of the Registration Statement.
27 Financial Data Schedule.
(b) Reports on Form 8-K.
During the quarter ended March 31, 2000, the registrant did
not file any reports on Form 8-K.
<PAGE>
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.
PENTECH INTERNATIONAL INC.
Dated: May 22, 2000 By:s/William Visone
William Visone, Executive
Vice President - Strategic Planning
(Duly authorized officer and
Chief Financial Officer)
N:\RSKLAW\PTK\10Q-MAR.00
<PAGE>
EXHIBIT INDEX
Exhibit
27 Financial Data Schedule
N:\RSKLAW\PTK\10Q-MAR.00
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-2000
<PERIOD-END> MAR-31-2000
<CASH> 0
<SECURITIES> 10
<RECEIVABLES> 10,182
<ALLOWANCES> (83)
<INVENTORY> 14,132
<CURRENT-ASSETS> 27,738
<PP&E> 8,402
<DEPRECIATION> (6,028)
<TOTAL-ASSETS> 30,519
<CURRENT-LIABILITIES> 17,852
<BONDS> 0
0
0
<COMMON> 125
<OTHER-SE> 11,092
<TOTAL-LIABILITY-AND-EQUITY> 30,519
<SALES> 20,781
<TOTAL-REVENUES> 20,781
<CGS> 14,129
<TOTAL-COSTS> 14,129
<OTHER-EXPENSES> 8,662
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 586
<INCOME-PRETAX> (2,596)
<INCOME-TAX> 0
<INCOME-CONTINUING> (2,596)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,596)
<EPS-BASIC> (.21)
<EPS-DILUTED> (.21)
</TABLE>
