LUXTEC CORPORATION
326 CLARK STREET
WORCESTER, MA. 01606
JUNE 14,1999
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
GENTLEMEN:
Pursuant to the rtequirements of the Securities Exchange Act of 1934, we are
transmitting herewith the attached Form 10-q.
Sincerely,
LUXTEC CORPORATION
Samuel M. Stein
Samuel M. Stein, Chief Financial Officer
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended April 30, 1999
OR
[ ] 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: 0-14961B
LUXTEC CORPORATION
(Exact name of registrant as specified in its charter)
Massachusetts 04-2741310
(State or other jurisdiction (I.R.S.Employer
incorporation or organization) Identification No.)
326 Clark Street, Worcester, Massachusetts 01606
(Address of principal executive offices) (Zip code)
(Registrant's telephone number, including area code)
(508) 856-9454
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 _____
Indicate the number of shares outstanding for each of the issuer's classes
of Common Stock, as of the latest practicable date.
The number of shares outstanding of registrant's common stock, par value
$.01 per share, at June 9, 1999, was 2,872,149.
<PAGE>
LUXTEC CORPORATION
TABLE OF CONTENTS
Page No.
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Condensed Balance Sheets -
April 30, 1999 and October 31, 1998 3
Consolidated Condensed Statements of Operations -
Six months ended April 30, 1999 and April 30, 1998 4
Consolidated Condensed Statements of Cash Flows -
Six months ended April 30, 1999 and April 30, 1998 5
Notes to Consolidated Condensed Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 8
Part II. OTHER INFORMATION
Item 1. Legal Proceedings 10
Item 4. Submission of matters to a vote of security holders 10
Item 5. Other Information 10
Item 6. Exhibits and Reports on Form 8-K 12
Signatures 13
<PAGE>
LUXTEC CORPORATION
<TABLE>
CONSOLIDATED CONDENSED BALANCE SHEETS
Unaudited
Assets April 30, October 31,
<S> <C> <C>
1999 1998
Current Assets:
Cash $ 40,366 $ 43,698
Accounts receivable 2,062,278 2,571,230
Inventories 3,021,749 2,549,244
Prepaid expenses and other current assets 115,982 55,068
Total current assets 5,240,375 5,219,240
Property and Equipment, at cost 2,647,960 2,570,501
Accumulated Depreciation and Amortization (2,142,787) (2,075,345)
Property and equipment, net 505,173 495,156
Other Assets, net of accumulated amortization 224,732 244,754
Total assets $ 5,970,280 $ 5,959,150
Liabilities and Stockholders' Equity
Current Liabilities:
Revolving line of credit $ 2,171,825 $ 2,186,052
Current portion of equipment facility loan 88,726
88,726
Accounts payable and accrued expenses 1,247,040 1,209,725
Total current liabilities 3,507,591 3,484,503
Term Note 469,250 469,250
Equipment Facility Loan, net of current portion 48,863 88,726
Minority Interest
51,386 51,386
Redeemable Preferred Stock, $1.00 par value:
Series A Preferred Stock-
Authorized-500,000 shares
Issued and outstanding-10,000 shares (at liquidation value) 1,239,766 1,199,768
Stockholders' Equity:
Common stock, $.01 par value-
Authorized-10,000,000 shares
Issued and outstanding-2,872,149 shares in 1999 and 2,867,592 in 1998 28,721 28,676
Additional paid-in capital 8,232,211 8,263,018
Accumulated deficit (7,607,508) (7,626,177)
Total stockholders' equity 653,424 665,517
Total liabilities and stockholders' equity $ 5,970,280 $ 5,959,150
See Notes to Consolidated Condensed Financial Statements.
</TABLE>
<PAGE>
<TABLE>
LUXTEC CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
Unaudited
<S> <C> <C> <C> <C>
THREE MONTHS ENDED SIX MONTHS ENDED
April 30 April 30 April 30 April 30
1999 1998 1999 1998
- -----------------------------------------------------------------------------------------------------------------
NET SALES $ 2,519,214 $ 2,893,960 $ 4,879,870 $ 5,601,485
COST OF SALES 1,457,826 1,598,455 2,813,881 3,217,733
---------------
- ------------------------------------------------------------------------------------------------
GROSS PROFIT 1,061,388 1,295,505 2,065,988 2,383,752
- -----------------------------------------------------------------------------------------------------------------
OPERATING EXPENSES:
Selling 491,371 535,852 958,697 1,070,630
Research and development 149,602 132,781 258,670 237,632
General and administrative 368,896 504,059 726,692 881,793
- -----------------------------------------------------------------------------------------------------------------
TOTAL OPERATING EXPENSES 1,009,869 1,172,692 1,944,058 2,190,055
- -----------------------------------------------------------------------------------------------------------------
INCOME FROM OPERATIONS
51,519 122,813 121,930 193,697
OTHER EXPENSES, NET (49,147) (70,657) (103,261) (132,948)
- -----------------------------------------------------------------------------------------------------------------
NET INCOME 2,372 52,156 18,669 60,748
PREFERRED STOCK DIVIDENDS 20,000 22,534 40,000 45,369
- -----------------------------------------------------------------------------------------------------------------
NET INCOME/(LOSS) APPLICABLE TO COMMON
STOCKHOLDERS
$ (17,628) $ 29,622 $ (21,331) $ 15,379
=================================================================================================================
==================================================================================================================
BASIC NET INCOME/(LOSS) PER SHARE
$ $ $ (0.01) $ 0.01
(0.01) 0.01
==================================================================================================================
DILUTED NET INCOME/(LOSS) PER SHARE
$ $ $ (0.01) $ 0.01
(0.01) 0.01
==================================================================================================================
==================================================================================================================
BASIC WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING 2,872,149 2,858,998 2,872,149 2,858,998
===================================================================================================================
DILUTED WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING 2,872,149 2,915,914 2,872,149 2,900,786
===================================================================================================================
See Notes to Consolidated Condensed Financial Statements.
</TABLE>
<PAGE>
<TABLE>
LUXTEC CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
Unaudited
<S> <C> <C>
SIX MONTHS ENDED
April 30, April 30,
1999 1998
- --------------------------------------------------------------------------------------------------------------
Cash Flows from Operating Activities:
Net income 18,669 60,748
Adjustments to reconcile net income to
net cash used in operating activities -
Depreciation and amortization 67,442 102,633
Provision for uncollectible accounts receivable 30,000 12,000
Changes in current assets and liabilities:
Accounts receivable 478,952 165,802
Inventories (445,724)
(472,505)
Prepaid expenses and other current assets (60,914) 21,899
Accounts payable and accrued expenses 37,315 9,563
- --------------------------------------------------------------------------------------------------------------
NET CASH PROVIDED BY/(USED IN) OPERATING ACTIVITIES 98,959 (133,827)
- --------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (77,459) (41,703)
Change in other assets 20,022 (19,626)
- --------------------------------------------------------------------------------------------------------------
NET CASH USED IN INVESTING ACTIVITIES (57,437) (61,329)
- --------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net (repayments of)/borrowings of revolving line of 126,413
Repayments on equipment facility loan (39,863) (39,863)
Proceeds from common stock sold under employee stock purchase plan 9,236 6,146
- --------------------------------------------------------------------------------------------------------------
NET CASH (USED IN)/PROVIDED BY FINANCING ACTIVITIES (44,854) 92,696
- --------------------------------------------------------------------------------------------------------------
NET DECREASE IN CASH (3,332) (41,712)
CASH, BEGINNING OF PERIOD 43,698 41,712
--------------- --------------
CASH, END OF PERIOD $ -
40,366
==============================================================================================================
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING
ACTIVITIES:
ACCRETION OF SERIES A PREFERRED STOCK 40,000 $ 45,369
=============================================================================================================
See Notes to Consolidated Condensed Financial Statements.
</TABLE>
<PAGE>
LUXTEC CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
Unaudited
1) Basis of Presentation of Consolidated Financial Statements
The accompanying consolidated condensed financial statements have been
prepared in conformity with generally accepted accounting principles for interim
financial information. 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 necessary
for a fair presentation have been made which comprise only normal recurring
adjustments. Operating results for the six months ended April 30, 1999, are not
necessarily indicative of the results that may be expected for the entire year.
2) Inventories
Inventories are stated at the lower of cost or market. Cost is determined
using the first in, first out (FIFO) method and includes materials, labor and
manufacturing overhead. Inventories are as follows:
<TABLE>
<S> <C> <C>
April 30, 1999 October 31, 1998
Raw material $ 2,151,624 $ 1,580,002
Work in process 382,984 352,464
Finished goods 487,141 616,778
Total $ 3,021,749 $ 2,549,244
</TABLE>
3) Debt
The Company has a $2,500,000 revolving line-of-credit agreement with a
bank. The maximum amount available to borrow under the line is limited to the
lesser of the total line committed or certain percentages of accounts receivable
and inventory, as defined. Borrowings bear interest at the bank's prime rate
(7.75% at April 30, 1999) plus .5%. Unused portions of the revolving line of
credit accrue a fee at an annual rate of .25%. Borrowings are secured by
substantially all assets of the Company. The agreement contains covenants,
including the maintenance of certain financial ratios, as defined. The Company
was in compliance with all covenants for the period ended April 30, 1999. At
April 30, 1999, availability under the line of credit was approximately
$328,200. On May 22, 1999 the bank renewed the $2,500,000 line-of-credit
agreement at a reduced interest rate - the bank's prime rate. The revolving
credit agreement expires on March 31, 2001.
The Company has an equipment facility agreement with a bank. Borrowings
bear interest at the bank's base rate (8% at April 30, 1999) plus .5% and are
secured by substantially all assets of the Company. At April 30, 1999, the
Company had outstanding borrowings of $137,589 under this agreement. On May 22,
1999, the bank increased the amount of borrowings available to the Company to
$450,000 and reduced the interest rate to the bank's prime rate plus .25%. The
additional availability is to be used to fund the purchases of fixed assets
during the fiscal year 1999 period.
On March 31, 1997, the Company entered into a $500,000 term note agreement
with a bank. The term note bears interest at prime (7.75% at April 30, 1999)
plus 1.0%. Principal payments are payable in consecutive monthly installments
beginning in May, 1999, and continuing monthly thereafter until the entire
principal amount has been repaid. If not paid sooner, the term note is due on
the earlier of (a) March 31, 2002, (b) the date of an equity infusion or (c) the
date of a management change. At April 30, 1999, the Company had outstanding
borrowings of $469,250 under this agreement. The Company was in compliance with
all covenants at April 30, 1999.
<PAGE>
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
4) Earnings per share
Basic earnings/(loss) per share was determined by dividing net income
applicable to common stockholders by the weighted average common shares
outstanding during the period. Diluted earnings per share was determined by
dividing net income by diluted weighted average shares outstanding. Diluted
weighted average shares reflect the dilutive effect, if any, of common
equivalent shares. Common equivalent shares include common stock options to the
extent their effect is dilutive, based on the treasury stock method. The
calculation of diluted earnings per share excludes options to purchase 332,550
shares of common stock and 888,171 warrants, as the effects are antidilutive.
<TABLE>
<S> <C> <C> <C> <C>
- ----------------------------------------------------- ----------------------------- -------------------------
THREE MONTHS ENDED SIX MONTHS ENDED
- ----------------------------------------------------- ----------------------------- -------------------------
- ----------------------------------------------------- ------------ ---------------- ------------ ------------
April 30 April 30 April 30 April 30
- ----------------------------------------------------- ------------ ---------------- ------------ ------------
- ----------------------------------------------------- ------------ ---------------- ------------ ------------
1999 1998 1999 1998
- ----------------------------------------------------- ------------ ---------------- ------------ ------------
- ----------------------------------------------------- ------------ ---------------- ------------ ------------
- ----------------------------------------------------- ------------ ---------------- ------------ ------------
- ----------------------------------------------------- ------------ ---------------- ------------ ------------
Basic weighted average shares outstanding 2,872,149 2,858,998 2,872,149 2,858,998
- ----------------------------------------------------- ------------ ---------------- ------------ ------------
- ----------------------------------------------------- ------------ ---------------- ------------ ------------
Weighted average common equivalent shares - 56,916 - 41,788
- ----------------------------------------------------- ------------ ---------------- ------------ ------------
- ----------------------------------------------------- ------------ ---------------- ------------ ------------
Diluted weighted average shares outstanding 2,872,149 2,915,914 2,872,149 2,900,786
- ----------------------------------------------------- ------------ ---------------- ------------ ------------
- ----------------------------------------------------- ------------ ---------------- ------------ ------------
- ----------------------------------------------------- ------------ ---------------- ------------ ------------
</TABLE>
<PAGE>
LUXTEC CORPORATION
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This report contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. Actual results could differ materially from those
projected in the forward-looking statements as a result of the risk factors set
forth below. The industry in which the Company competes is characterized by
rapid changes in technology and frequent new product introductions. The Company
believes that its long-term growth depends largely on its ability to continue to
enhance existing products and to introduce new products and features that meet
the continually changing requirements of customers. While the Company has
invested heavily in new products and processes, there can be no assurance that
it can continue to introduce new products and features on a timely basis or that
certain of its products and processes will not be rendered noncompetitive or
obsolete by its competitors.
RESULTS OF OPERATIONS
Net revenues for the three months ended April 30, 1999 were $2,519,214 or
13.0% less than the $2,893,960 reported for the same period in fiscal 1998. For
the six months ended April 30, 1999 net revenues decreased 12.9% to $4,879,870
from $5,601,485 reported for the same period last year. The year to date sales
decrease of 12.9% was primarily the result of a distributor change in a major
market and the temporary financial difficulty of another distributor in the
domestic market.
Cost of sales for the three months ended April 30, 1999 were $1,457,826 or
57.9% of net revenues, compared with $1,598,455 or 55.2% of net revenues for the
same period in fiscal 1998. For the six month period ended April 30, 1999, cost
of sales was $2,813,881 or 57.7% of net revenues compared with $3,217,733 or
57.4% of net revenues for the same period in fiscal 1998. Cost of sales as a
percentage of net revenues were essentially the same during the first two
quarters, as compared to the same periods in fiscal 1998.
Gross profit was $1,061,388 or 42.1% of net revenues for the quarter ended
April 30,1999 compared to $1,295,505 or 44.8% of net revenues for the same
period in fiscal 1998. For the six month period ended April 30, 1999 gross
profit was $2,065,988 or 42.3% compared with $2,383,752 or 42.6% for the same
period in fiscal 1998. The margin percentage for the six month period remained
approximately the same as the previous year as product costs and the product mix
of sales did not change significantly.
Selling and marketing expenses were $491,371 for the three months ended
April 30, 1999 compared to $535,852 for the same period in fiscal 1998, a
decrease of 8.3%. For the six month period ended April 30, 1999 selling and
marketing expenses were $958,697 compared with $1,070,630 for the same period in
fiscal 1998, a decrease of 10.5%. Marketing cost reduction efforts resulted in
lower promotion costs during fiscal 1999.
Research and development expenditures were $149,602 for the three months
ended April 30, 1999 compared to $132,781 for the same period in fiscal 1998, an
increase of 12.7%. For the six month period ended April 30, 1999 research and
development expenditures were $258,670 compared with $237,632 for the same
period in fiscal 1998, an increase of 8.9%. The increase for the first half of
fiscal 1999 is the result of a continuing effort to improve existing products
and introduce new products.
General and administrative expenses were $368,896 for the three months
ended April 30, 1999, compared to $504,059 for the same period in fiscal 1998,
representing a decrease of 26.8%. For the six months ended April 30, 1999
general and administrative expenses totaled $726,692 compared to $881,793 during
the same period in fiscal 1998, a decrease of 17.6%. The decrease is primarily
the result of reduced accruals for variable compensation.
<PAGE>
LUXTEC CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
ITEM 2. (Continued)
Interest and other expenses were $49,147 for the three months ended April
30, 1999 compared to $70,657 for the same period in fiscal 1998, a decrease of
30.4%. For the six months ended April 30, 1999, interest and other expenses were
$103,261 compared to $132,948 for the same period in fiscal 1998, a decrease of
22.3%. The decreases were the result of lower bank charges in fiscal 1999
compared to fiscal 1998, mainly as a result of covenant violations during fiscal
1998 that have not recurred in fiscal 1999.
LIQUIDITY AND CAPITAL RESOURCES
At April 30, 1999, the Company had working capital of approximately
$1,732,800 compared to working capital of approximately $1,734,700 at October
31, 1998. Cash provided by operating activities was primarily used in the
repayment of loans from the bank and the purchases of property and equipment.
The Corporation anticipates that its current cash requirements will be
satisfied by cash flow from existing operations and the continuation of its
revolving credit arrangement with a bank, although the Company is considering
raising additional capital.
<PAGE>
LUXTEC CORPORATION
PART II. OTHER INFORMATION
ITEM 1. Legal proceedings
None.
ITEM 4. Submission of Matters to a Vote of Security Holders
The following matters were submitted to a vote of security holders whether
through solicitation of proxies or otherwise, during the second quarter of the
Corporation's fiscal year ended October 31, 1999.
(a) The Annual Meeting of Stockholders was held on April 22, 1999.
(b) Three Class III directors of the Corporation were elected:
<TABLE>
<S> <C> <C>
------------------------- ------------------------- -----------------------------------
FOR WITHHELD
------------------------- ------------------------- -----------------------------------
------------------------- ------------------------- -----------------------------------
James Berardo 2,179,757 39,107
------------------------- ------------------------- -----------------------------------
------------------------- ------------------------- -----------------------------------
James J. Goodman 2,179,757 39,107
------------------------- ------------------------- -----------------------------------
------------------------- ------------------------- -----------------------------------
Thomas J. VanderSalm 2,179,757 39,107
------------------------- ------------------------- -----------------------------------
</TABLE>
The Board of Directors is composed of Mr. Berardo, Mr. Goodman, and Dr.
VanderSalm as well as Mr. James W. Hobbs, Mr. Paul Epstein, Mr. Patrick G.
Phillipps, and Mr. Louis C. Wallace.
(c) A proposal to increase the number of shares authorized for issuance
under the Company's 1992 Stock Option Plan from 400,000 shares to 500,000 shares
was approved. The votes cast were 2,139,596 for the proposal, 67,863 shares were
voted against the proposal and 11,405 shares abstained from voting on the
proposal.
(d) No other matters were voted upon at the meeting.
ITEM 5. Other Information
When used in this Form 10-Q, in future filings by the Company with the
Securities and Exchange Commission, or in the Company's press releases or in
oral statements made with the approval of an authorized 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 and those presently anticipated or
projected. The Company wishes to caution readers not to place undue reliance on
any such forward-looking statements, which speak only as of the date made. The
Company wishes to advise readers that the factors listed below could cause the
Company's actual results for future periods to differ materially from any
opinions or statements expressed with respect to future periods in any current
statements.
The Company 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>
LUXTEC CORPORATION
PART II. OTHER INFORMATION
ITEM 5. (Continued)
Risk Factors and Cautionary Statements
The Company's revenues and income are derived primarily from the sale of
medical devices. The medical device industry is highly competitive. Such
competition could negatively impact the Company's market share and therefore
reduce the Company's revenues and income.
Another result of competition could be the reduction of average unit prices
paid for the Company's products. This could have the impact of reducing the
percentage of profit margin available to the Company for its product sales.
The Company's future operating results are dependent on its ability to
develop, produce and market new and innovative products and services. There are
numerous risks inherent in this complex process, including rapid technological
change and the requirement that the Company bring to market in a timely fashion
new products and services that meet customers' needs.
Historically, the Company's operating results have varied from fiscal
period to fiscal period; accordingly, the Company's financial results in any
particular fiscal period are not necessarily indicative of results for future
periods.
The Company offers a broad variety of products and services to customers
around the world. Changes in the mix of products and services comprising
revenues could cause actual operating results to vary from those expected.
The Company's success is partly dependent on its ability to successfully
predict and adjust production capacity to meet demand, which is partly dependent
upon the ability of external suppliers to deliver components at reasonable
prices and in a timely manner; capacity or supply constraints, as well as
purchase commitments, could adversely affect future operating results.
The Company operates in a highly competitive environment and in a highly
competitive industry, which includes significant competitive pricing pressures
and intense competition for skilled employees.
The Company offers its products and services directly and through indirect
distribution channels. Changes in the financial condition of, or the Company's
relationship with, distributors and other indirect channel partners, could cause
actual operating results to vary from those expected.
The Company does business worldwide in over 50 countries. Global and/or
regional economic factors and potential changes in laws and regulations
affecting the Company's business, including, without limitation, currency
exchange rate fluctuations, changes in monetary policy and tariffs, and federal,
state and international laws regulating the environment, could have a material
adverse impact on the Company's financial condition or future results of
operations.
The market price of the Company's securities could be subject to
fluctuations in response to quarter - to -quarter variations in operating
results, market conditions in the medical device industry, as well as general
economic conditions and other factors external to the Company.
<PAGE>
LUXTEC CORPORATION
PART II. OTHER INFORMATION
ITEM 6. Exhibits and reports on Form 8-K
(a) Exhibits
Exhibit Description Designation
27 Financial Data Schedule 27
(b) Reports on Form 8-K No reports on Form 8-K were required to be filed
during the quarter ended April 30, 1999.
<PAGE>
LUXTEC CORPORATION
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.
LUXTEC CORPORATION
(Registrant)
_________________ __________________________
Date Samuel M. Stein
Chief Financial Officer
(Principal Accounting Officer and Duly
Authorized Executive Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> OCT-31-1999
<PERIOD-START> FEB-01-1999
<PERIOD-END> APR-30-1999
<CASH> 40
<SECURITIES> 0
<RECEIVABLES> 2120
<ALLOWANCES> 100
<INVENTORY> 3022
<CURRENT-ASSETS> 5240
<PP&E> 2648
<DEPRECIATION> 2143
<TOTAL-ASSETS> 5970
<CURRENT-LIABILITIES> 3508
<BONDS> 0
0
1240
<COMMON> 29
<OTHER-SE> 625
<TOTAL-LIABILITY-AND-EQUITY> 5970
<SALES> 2519
<TOTAL-REVENUES> 2519
<CGS> 1458
<TOTAL-COSTS> 1010
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 49
<INCOME-PRETAX> 2
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2
<EPS-BASIC> .00
<EPS-DILUTED> .00
</TABLE>
