FORM 10-QSB
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark one)
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the Quarter Ended December 31, 1996
| | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _________________ to ____________
Commission file number: 0-15967
EFI ELECTRONICS CORPORATION
(Exact name of small business issuer as specified in its charter)
Delaware 75-2072203
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
2415 South 2300 West, Salt Lake City, Utah 84119
(Address of principal executive offices)
Registrant's telephone number, including area code: (801) 977-9009
|X| Check 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 past twelve 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.
Number of shares of the registrant's common stock outstanding at February
13,1997: 4,213,674
<PAGE>
INDEX TO FORM 10-QSB
PART I FINANCIAL INFORMATION PAGE
Item 1. Financial Statements
Balance Sheets as of December 31, 1996 (Unaudited) and
March 31, 1996 .............................................. 3
Statements of Operations for the three months ended
December 31, 1996 (Unaudited) and December 31, 1995
(Unaudited).................................................. 4
Statements of Operations for the nine months ended
December 31, 1996 (Unaudited) and December 31, 1995
(Unaudited).................................................. 5
Statements of Cash Flows for the nine months ended
December 31, 1996 (Unaudited) and December 31, 1995
(Unaudited).................................................. 6
Notes to Financial Statements (Unaudited).................... 7-8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations.................................................. 9-11
PART II OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K....................... 12
<PAGE>
<TABLE>
<CAPTION>
BALANCE SHEETS
December 31, 1996 and March 31, 1996 DECEMBER 31 MARCH 31
- -----------------------------------------------------------------------------------------------------------------------------
(Unaudited)
ASSETS
Current assets:
<S> <C> <C>
Cash and cash equivalents $ 11,155 $ 8,518
Receivables 2,802,346 2,653,371
Inventories 2,650,400 2,307,704
Prepaid expenses 87,559 35,452
- ---------------------------------------------------------------------------------------------------------------------------
Total current assets 5,551,460 5,005,045
Property - net 1,689,952 1,896,458
Investment in joint venture 195,330 117,705
Other assets 202,538 285,113
- ---------------------------------------------------------------------------------------------------------------------------
Total assets $ 7,639,280 $ 7,304,321
===========================================================================================================================
LIABILITIES
Current liabilities:
Current installments of notes payable $ 236,100 $ 194,300
Accounts payable 1,553,053 1,503,860
Reserve for customer warranty 286,338 392,829
Revolving line of credit 2,930,744 2,797,590
Accrued liabilities 429,680 389,608
- ---------------------------------------------------------------------------------------------------------------------------
Total current liabilities 5,435,915 5,278,187
Notes Payable, less current installments 896,000 1,540,000
- ---------------------------------------------------------------------------------------------------------------------------
Total liabilities 6,331,915 6,818,187
- ---------------------------------------------------------------------------------------------------------------------------
STOCKHOLDERS' EQUITY
Common stock 421 354
Additional paid-in capital 924,275 816,546
Retained earnings 592,669 791,772
- ---------------------------------------------------------------------------------------------------------------------------
Total 1,517,365 1,608,672
Less:
Stock subscriptions and note
receivable from officer (210,000) (150,000)
Treasury stock, at cost - 362,156 shares at March 31 -0- (972,538)
- ---------------------------------------------------------------------------------------------------------------------------
Total stockholders' equity 1,307,365 486,134
- ---------------------------------------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity $ 7,639,280 $ 7,304,321
===========================================================================================================================
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF OPERATIONS (Unaudited)
For the three months ended December 31, 1996 1995
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net sales $ 3,613,694 $ 2,799,738
Cost of sales 2,508,439 1,912,227
- ---------------------------------------------------------------------------------------------------------------------------
Gross profit 1,105,255 887,511
- ---------------------------------------------------------------------------------------------------------------------------
Operating expenses:
Selling, general and
administrative expenses 883,408 1,104,563
Research and development 130,850 133,692
- ---------------------------------------------------------------------------------------------------------------------------
Total operating expenses 1,014,258 1,238,255
- ---------------------------------------------------------------------------------------------------------------------------
Operating profit (loss) 90,997 (350,744)
Other income (expense):
Equity in earnings of joint venture 25,875 12,000
Interest expense (115,506) (80,418)
Other income 81 52,765
- ---------------------------------------------------------------------------------------------------------------------------
Total other income (expense), net (89,550) (15,653)
- ---------------------------------------------------------------------------------------------------------------------------
Earnings (loss) before income taxes 1,447 (366,397)
Provision for income taxes -0- -0-
- ---------------------------------------------------------------------------------------------------------------------------
Net earnings (loss) $ 1,447 $ (366,397)
===========================================================================================================================
Net earnings (loss) per common
and common equivalent share $ 0.00 $ (0.12)
===========================================================================================================================
Weighted average shares and
common equivalent shares outstanding 4,213,674 3,165,700
===========================================================================================================================
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF OPERATIONS (Unaudited)
For the nine months ended December 31, 1996 1995
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net sales $ 10,282,056 $ 8,866,691
Cost of sales 6,833,501 5,989,317
- ---------------------------------------------------------------------------------------------------------------------------
Gross profit 3,448,555 2,877,374
- ---------------------------------------------------------------------------------------------------------------------------
Operating expenses:
Selling, general and
administrative expenses 3,007,218 3,340,227
Research and development 386,367 407,705
- ---------------------------------------------------------------------------------------------------------------------------
Total operating expenses 3,393,585 3,747,932
- ---------------------------------------------------------------------------------------------------------------------------
Operating profit (loss) 54,970 (870,558)
Other income (expense):
Equity in earnings of joint venture 77,625 41,099
Interest expense (333,330) (199,541)
Other income 1,632 68,225
- ---------------------------------------------------------------------------------------------------------------------------
Total other income (expense), net (254,073) (90,217)
- ---------------------------------------------------------------------------------------------------------------------------
Loss before income taxes (199,103) (960,775)
Provision for income taxes -0- -0-
- ---------------------------------------------------------------------------------------------------------------------------
Net loss $ (199,103) $ (960,775)
===========================================================================================================================
Net loss per common
and common equivalent share $ (0.05) $ (0.31)
===========================================================================================================================
Weighted average shares and
common equivalent shares outstanding 3,684,219 3,137,315
===========================================================================================================================
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF CASH FLOWS (Unaudited)
For the nine months ended December 31 1996 1995
- ---------------------------------------------------------------------------------------------------------------------------
Cash flows provided from operating activities:
<S> <C> <C>
Net loss $ (199,103) $ (960,775)
Adjustments to reconcile net loss to net cash
provided by(used in) operating activities:
Depreciation 523,878 479,823
Amortization 75,539 33,362
Equity in earnings of joint venture (77,625) (41,099)
Increase (decrease) in cash, net of the sale of the sale of
the UPS line, due to change in:
Receivables (148,975) 748,414
Inventories (342,696) 43,505
Prepaid expenses (52,107) (16,189)
Other assets 7,036 (6,098)
Accounts payable 49,193 (243,014)
Warranty reserve (106,491) -0-
Accrued liabilities 61,906 (73,751)
- ----------------------------------------------------------------------------------------------------------------------------
Net cash provided by (used in) operating activities (209,445) (35,822)
- ----------------------------------------------------------------------------------------------------------------------------
Cash flows from investing activities:
Capital expenditures (317,372) (323,791)
Other assets -0- 12,636
Sale of fixed assets related to UPS line -0- 290,959
Proceeds from sale of UPS line -0- 342,470
- ---------------------------------------------------------------------------------------------------------------------------
Net cash provided by (used in) investing activities (317,372) 322,274
- ---------------------------------------------------------------------------------------------------------------------------
Cash flows from financing activities:
Net borrowing (repayments) under revolving credit agreement 133,154 (136,942)
Repayments on notes payable (102,200) (349,755)
Proceeds from exercise of stock options -0- 2,668
Proceeds from sale of common stock 498,500 104,273
- ---------------------------------------------------------------------------------------------------------------------------
Net cash provided by (used in) financing activities 529,454 (379,756)
- ---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in cash and cash equivalents 2,637 (93,304)
Cash and cash equivalents at beginning of period 8,518 96,259
- ---------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of period $ 11,155 $ 2,955
===========================================================================================================================
Supplemental disclosures of cash flow information: Cash paid during the nine
months for:
Income taxes $ -0- $ -0-
Interest $ 321,451 $ 119,081
===========================================================================================================================
Supplemental disclosures of non-cash investing and financing activities:
Subordinated debt of $500,000 plus accrued interest of $21,834
exchanged for 455,432 shares of common stock (See Note 6) $ 521,834 $ -0-
Note issued for sale of UPS line $ -0- $ 120,638
Common stock issued for legal settlement $ -0- $ 75,000
===========================================================================================================================
</TABLE>
See notes to financial statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Unaudited)
In the opinion of Management, the accompanying financial statements contain
adjustments, consisting of normal recurring accruals, necessary for a fair
presentation of the financial position of EFI Electronics Corporation (the
"Company") at December 31, 1996, and the results of its operations and its cash
flows for the periods ended December 31, 1996 and December 31, 1995. The results
of operations for the period ended December 31, 1996 are not necessarily
indicative of results for the full year period.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted. It is suggested that these financial statements
be read in conjunction with the Company's 1996 Form 10-KSB included in the
Annual Report to Shareholders.
1. RECEIVABLES
<TABLE>
<CAPTION>
Receivables consist of the following:
December 31, 1996 March 31, 1996
(Unaudited)
<S> <C> <C>
Trade receivables $ 2,758,071 $ 2,612,467
Receivable from joint venture 122,559 51,156
Warranty premium receivable -0- 23,553
Income tax refund receivable -0- 59,309
- ---------------------------------------------------------------------------------------------------------------------------
2,880,630 2,746,485
Allowance for doubtful accounts (78,284) (93,114)
- ---------------------------------------------------------------------------------------------------------------------------
Total Receivables $ 2,802,346 $ 2,653,371
===========================================================================================================================
2. INVENTORIES
Inventories consist of the following:
December 31, 1996 March 31, 1996
- --------------------------------------------------------------------------------------------------------------------------
(Unaudited)
Raw materials $ 1,660,651 $ 1,457,424
Work-in-process 370,953 217,262
Finished goods 618,796 633,018
- ---------------------------------------------------------------------------------------------------------------------------
Total $ 2,650,400 $ 2,307,704
===========================================================================================================================
</TABLE>
3. NET EARNINGS (LOSS) PER COMMON AND COMMON EQUIVALENT SHARE
Net earnings (loss) per common and common equivalent share is computed based on
the number of common and dilutive common stock equivalent shares outstanding and
is adjusted for the assumed conversion of shares issuable upon exercise of
options or warrants, after the assumed repurchase of common shares with the
related proceeds. The stock subscriptions receivable are treated as warrants for
purposes of this computation.
4. PROVISION FOR INCOME TAX
The Company utilizes the liability method of accounting for income taxes. Under
the liability method, deferred tax assets and liabilities are determined based
on the difference between the financial statement and tax bases of assets and
liabilities and are measured using enacted tax rates and laws that will be in
effect when the differences are expected to reverse. An allowance against
deferred tax assets is recorded when it is more likely than not that such tax
benefits will not be realized.
<PAGE>
NOTES TO FINANCIAL STATEMENTS - Continued (Unaudited)
5. NOTES PAYABLE AND REVOLVING LINE OF CREDIT:
Notes payable and revolving line of credit consist of the following:
<TABLE>
<CAPTION>
December 31, 1996 March 31, 1996
- ---------------------------------------------------------------------------------------------------------------------------
(Unaudited)
<S> <C> <C>
Revolving line of credit $ 2,930,744 $ 2,797,590
===========================================================================================================================
The revolving line of credit contains financial covenants, the most restrictive
of which require that the Company maintain not less than $800,000 of net worth
plus subordinated debt. At December 31, 1996, the Company was in compliance with
these covenants.
Notes payable:
Collateralized promissory notes $ 1,088,000 $ 1,200,000
Uncollateralized subordinated note - director -0- 500,000
Uncollateralized note to former officer 44,100 34,300
1,132,100 1,734,300
Less current installments of notes payable (236,100) (194,300)
- ---------------------------------------------------------------------------------------------------------------------------
Total notes payable, less current installments $ 896,000 $ 1,540,000
===========================================================================================================================
</TABLE>
6. STOCKHOLDERS' EQUITY
In January 1996, a major shareholder and director of the Company loaned the
Company $500,000 in the form of a subordinated note. As of June 30, 1996, this
note plus accrued interest of $21,834 was exchanged for 455,432 shares of
restricted common stock of the Company. Of these shares, 362,156 were issued
from treasury stock; the balance represents shares issued from the Company's
authorized but unissued stock.
In September 1996, certain directors and executive officers and a supplier of
the Company purchased 584,420 shares of common stock of the Company for $498,500
in cash plus a note in the amount of $60,000. Proceeds from these investments
were used to reduce short term borrowings and accounts payable.
7. FINANCIAL STATEMENT CLASSIFICATIONS
Certain balances in the March 31, 1996 financial statements have been
reclassified to conform with the current period presentation. These changes have
no effect on the previously reported net loss, total assets, total liabilities
or stockholders' equity.
<PAGE>
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
Results of Operations:
Net Sales for the three months ended December 31, 1996, increased by $814
thousand (29%) compared to the three months ended December 31, 1995. Net sales
for the nine months ended December 31, 1996, increased by $1.4 million (16%)
over the nine months ended December 31, 1995. The major components of net sales
were:
Revenue by Product
(in thousands)
Three Months Nine months
12/31/96 12/31/95 12/31/96 12/31/95
TVSS revenue $ 3,614 $ 2,800 $ 10,282 $ 8,470
UPS revenue -0- -0- -0- 397
--------- --------- --------- ---------
Total $ 3,614 $ 2,800 $ 10,282 $ 8,867
======== ========= ========= =========
Contribution margin percentage 48% 54% 50% 53%
Gross margin percentage 31% 32% 34% 32%
Note: Contribution margin reflects only direct, unburdened materiaL
and labor costs.
TVSS (Transient Voltage Surge Suppression) revenue increased by $814 thousand
(29%) for the three months ended December 31, 1996 as compared to the three
months ended December 31, 1995. TVSS revenue increased by $1.8 million (21%) for
the nine months ended December 31, 1996 over the same period of the prior year.
TVSS revenue consists of plug-in and hardwire product sales, as follows:
Plug-in revenue increased for the three months ended December 31, 1996,
by $726 thousand (36%) over the same period of 1995. Plug-in revenue
increased by $1.2 million (20%) for the nine months ended December 31,
1996 compared to the nine months ended December 31, 1995. These
increases are the result of the Company's focus on increasing Private
Label/OEM business. These increases were partially offset by decreases
in government purchases.
Hardwire revenue increased by $88 thousand (11%) for the three month
period ended December 31, 1996 compared to the same three month period
ended December 31, 1995. Hardwire revenue increased by $578 thousand
(25%) for the nine months ended December 31, 1996 over the same period
in 1995. These increases are the result of two factors; 1) the Company
has successfully entered the new construction and bid specification
market, and 2) the Company has increased its penetration of the utility
market with its HomeGuard(R) and related products. The current
quarterly percentage increase is smaller than the year to date due to
seasonal fluctuations in this area.
UPS revenue for the current period is zero as a result of the sale of the
Company's UPS product line in September 1995. Ongoing UPS revenue ceased at that
time. Subcontract revenue on UPS products since the sale is immaterial and is
included in TVSS revenue.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations (Continued)
Gross Profit for the three months ended December 31, 1996 improved over the same
period of the prior year by $218 thousand (25%). This improvement was the result
of 1) an increase in sales of 29%, 2) a reduction in warranty claims and related
expense, and indirect manufacturing costs of $99 thousand (15%), and 3) an
offsetting decline in contribution margin of six percentage points. The
contribution margin decline was the result of a large revenue increase in
Private Label/OEM sales which are at much lower margins than other
distribution-related sales. Gross profit for the nine months ended December 31,
1996 was $571 thousand (20%) more than the nine months ended December 31, 1995.
Operating Expenses for the three months ended December 31, 1996 decreased by
$224 thousand (18%), compared to the three months ended December 31, 1995.
Operating expenses decreased by $354 thousand (9%) for the nine months ended
December 31, 1996 as compared to the same period in 1995. These decreases were
primarily the result of expense savings in several areas, including telephone,
legal, audit and headcount related expenses.
Net Profit for the three months ended December 31, 1996 was $1,447, an
improvement of $368 thousand compared to the net loss for the three months ended
December 31, 1995. Net loss was also reduced by $762 thousand for the nine
months ended December 31, 1996 compared to the same period ending December 31,
1995. These improvements resulted from revenue increases coupled with reductions
in warranty claims, indirect manufacturing costs and operating expenses.
Liquidity and Capital Resources:
The Company used $209 thousand cash in operations during 1996 as compared to
using cash of $36 thousand in 1995. The major causes of this change were
significant increases in accounts receivable and inventories as compared to the
prior period. The items that influenced this increase are further described
below:
Receivables increased by $149 thousand net of bad debt allowance. This
increase is related to the 29% increase of sales in TVSS products.
Inventories increased by $343 thousand (15%). This compares to a
related increase in the total dollar amount of cost of sales of 14%.
Accounts payable increased by $49 thousand during the first nine months
of fiscal 1997. This increase is much smaller than the increase in
related accounts such as inventory. The Company has attempted to
improve its position with suppliers. The Company has maintained
adequate relationships with its suppliers and remains on "open account"
with all significant vendors.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations (Continued)
Reserve for customer warranty decreased by $106 thousand as payments
for the Company's discontinued Triple Crown Warranty program were
applied against reserves previously established. In addition, the
Company's product warranty claims for the first nine months of fiscal
1997 have decreased by 19%, relating to product improvements
implemented in prior periods.
Accrued liabilities increased $62 thousand for the nine months ended
December 31, 1996. This increase is due to increases in payroll and
fringe benefit accruals, which are affected by timing of actual
payments made.
The Company used $317 thousand in investing activities during the nine months
ended December 31, 1996 as compared to $322 thousand provided by investing
activities in 1995. The items that influenced this change are described below:
Property - Investments in new equipment of $317 thousand were made in
the nine months ended December 31, 1996. These were primarily for molds
and tooling related to new hardwire and plug-in products and the
purchase of updated computer hardware.
Proceeds from the sale of UPS line and sale of fixed assets is the
largest portion of the decrease in cash flows from investing activities
during fiscal year 1996 when compared to fiscal year 1995. There were
no comparable sales in fiscal year 1997.
Financing activities provided $529 thousand for the nine months as compared to
$380 thousand used in financing activities in 1995. The items that influenced
this increase are explained below:
Net borrowings under revolving credit agreement were $133 thousand,
which were used to fund the Company's growth. Net repayments in the
prior year resulted from payments required under credit facilities
which have been replaced.
Repayments on notes payable were $102 thousand for the nine months
ended December 31, 1996, based on scheduled repayments of loans.
Payments of $350 thousand in the prior year were the result of a prior
debt arrangement which was refinanced in March 1996.
Proceeds from sale of common stock were $499 thousand for the nine
months ended December 31, 1996. This increase is due to the sale of
common stock to a group of officers and directors and a supplier (see
Note 6 to the Financial Statements).
Factors Affecting Future Results:
The Company has recognized modest net earnings in the current quarter, improved
it's revenue and gross profit, lowered overhead costs, achieved earnings on core
TVSS business and benefited by sales of its common stock to officers and
directors. All of these have improved the Company's financial condition and
liquidity in both the three and nine months ended December 31, 1996. Based on
expected revenue, management believes it can fund its operations from internally
generated cash flow and borrowings against its line of credit. Management
believes, however, that it must explore methods to reduce its accounts payable
in order to support future growth requirements. Management is considering
several funding options to accomplish a reduction in accounts payable.
Management's expectations are subject to risks and uncertainties that include,
but are not limited to, the Company's dependence on several key customers and
its marginal liquidity and financial condition.
<PAGE>
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
A) Exhibits.
Exhibit 11 - Computation of Earnings Per Share
Exhibit 27 - Financial Data Schedule
B) Reports on Form 8-K
None.
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.
EFI ELECTRONICS CORPORATION
(Registrant)
Date: February 13, 1997
/s/ Richard D. Clasen
--------------------------------
Richard D. Clasen
Chief Executive Officer, President
and Director (Principal Executive
Officer)
/s/ David G. Bevan
-------------------------------
David G. Bevan
Chief Financial Officer, Executive
Vice President & Secretary
(Principal Financial Officer)
Weighted Average Common and Common Equivalent Shares Outstanding
Nine months ended December 31, 1996
<TABLE>
<CAPTION>
Shares Weighted Average
Outstanding Shares Outstanding
----------- ------------------
<S> <C> <C>
Common shares outstanding, March 31, 1996: 3,173,822 3,173,822
Additional shares outstanding due to:
Stock issued 1,039,852 510,397
Stock split 0 0
Stock acquired (Treasury) 0 0
Stock retired 0 0
--------- ----------
Common shares outstanding December 31, 1996: 4,213,674 3,684,219
========= =========
- -------------------------------------------------------------------------------
<CAPTION>
Weighted Average Common and Common Equivalent Shares Outstanding
"Three months ended December 31, 1996"
Shares Weighted Average
Outstanding Shares Outstanding
----------- ------------------
<S> <C> <C>
Common shares outstanding, September 30, 1996: 4,213,674 3,654,664
Additional shares outstanding due to:
Stock issued 0 559,010
Stock split 0 0
Stock acquired (Treasury) 0 0
Stock retired 0 0
--------- ----------
Common shares outstanding December 31, 1996: 4,213,674 4,213,674
========= =========
</TABLE>
<PAGE>
Weighted Average Common and Common Equivalent Shares Outstanding
Nine months ended December 31, 1995
<TABLE>
<CAPTION>
Shares Weighted Average
Outstanding Shares Outstanding
----------- ------------------
<S> <C> <C>
Common shares outstanding, March 31, 1995: 3,106,132 3,106,132
Additional shares outstanding due to:
Stock issued 59,568 31,183
Stock split 0 0
Stock acquired (Treasury) 0 0
Stock retired 0 0
--------- ----------
Common shares outstanding December 31, 1995: 3,165,700 3,137,315
- --------------------------------------------------------------------------------
<CAPTION>
Weighted Average Common and Common Equivalent Shares Outstanding
Three months ended December 31, 1995
Shares Weighted Average
Outstanding Shares Outstanding
----------- ------------------
<S> <C> <C>
Common shares outstanding, September 30, 1995: 3,165,700 3,165,052
Additional shares outstanding due to:
Stock issued 0 648
Stock split 0 0
Stock acquired (Treasury) 0 0
Stock retired 0 0
---------- ---------
Common shares outstanding December 31, 1995: 3,165,700 3,165,700
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-END> DEC-31-1996
<CASH> 11,155
<SECURITIES> 0
<RECEIVABLES> 2,758,071
<ALLOWANCES> 78,284
<INVENTORY> 2,650,400
<CURRENT-ASSETS> 5,551,460
<PP&E> 4,553,507
<DEPRECIATION> 2,863,555
<TOTAL-ASSETS> 7,639,280
<CURRENT-LIABILITIES> 5,435,915
<BONDS> 896,000
0
0
<COMMON> 421
<OTHER-SE> 1,306,944
<TOTAL-LIABILITY-AND-EQUITY> 7,639,280
<SALES> 10,282,056
<TOTAL-REVENUES> 10,361,458
<CGS> 6,833,501
<TOTAL-COSTS> 3,393,585
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 333,330
<INCOME-PRETAX> (198,958)
<INCOME-TAX> 145
<INCOME-CONTINUING> (199,103)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (199,103)
<EPS-PRIMARY> (0.05)
<EPS-DILUTED> (0.05)
</TABLE>
