<PAGE>
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 October 31, 1999
___ 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: 33-9464
LOWRANCE ELECTRONICS, INC.
-------------------------------------
(Exact Name of Registrant as Specified in its Charter)
Delaware 44-0624411
- ---------------------- -------------------------
State of Incorporation IRS Identification Number
12000 East Skelly Drive
Tulsa, Oklahoma 74128
---------------------------------------
(Address of Principal Executive Offices)
Registrant's telephone number, including area code: (918) 437-6881
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 _____
-----
At October 31, 1999, there were 3,768,796 shares of Registrant's $0.10 par value
Common Stock outstanding.
<PAGE>
LOWRANCE ELECTRONICS, INC.
--------------------------
FORM 10-Q
---------
INDEX
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<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PART I. FINANCIAL INFORMATION
ITEM 1. Condensed Consolidated Balance Sheets -
October 31, 1999, 1998, and July 31, 1999............... 3
Condensed Consolidated Statements of Operations -
Three Months Ended October 31, 1999 and 1998............ 4
Condensed Consolidated Statements of Cash Flows -
Three Months Ended October 31, 1999 and 1998............ 5
Notes to Condensed Consolidated Financial Statements....... 6-8
ITEM 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations........... 9-11
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings.......................................... 11
ITEM 2. Changes in Securities...................................... 11
ITEM 3. Defaults Upon Senior Securities............................ 11
ITEM 4. Submission of Matters to a Vote of Security Holders........ 11
ITEM 5. Other Information.......................................... 11
ITEM 6. Exhibits and Reports on Form 8-K........................... 11
SIGNATURES .......................................................... 12
</TABLE>
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<PAGE>
LOWRANCE ELECTRONICS, INC.
--------------------------
CONDENSED CONSOLIDATED BALANCE SHEETS
-------------------------------------
(Unaudited)
<TABLE>
<CAPTION>
Oct. 31, Oct. 31, July 31,
1999 1998 1999
----------- ---------- -----------
(in thousands)
ASSETS
------
<S> <C> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 801 $ 423 $ 457
Accounts receivable, less allowances 7,708 13,015 11,464
Inventories (Note 2) 13,386 21,632 13,348
Prepaid expenses 411 492 544
Current deferred income taxes 1,214 1,457 1,214
------- ------- -------
Total current assets $ 23,520 $ 37,019 $ 27,027
PROPERTY, PLANT, AND EQUIPMENT, net (Note 2) 7,846 9,367 8,008
OTHER ASSETS 209 209 208
DEFERRED INCOME TAXES 1,553 1,221 751
------- ------- -------
$ 33,128 $ 47,816 $ 35,994
======= ======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
Current maturities of long-term debt (Note 3) $ 2,589 $ 3,186 $ 2,107
Accounts payable 3,383 11,799 3,321
Accrued liabilities 4,209 3,884 3,969
------- ------- -------
Total current liabilities $ 10,181 $ 18,869 $ 9,397
LONG-TERM DEBT, less current
maturities (Note 3) 14,696 22,938 17,103
Series "A" Redeemable Preferred Stock, $.50 par
value, 70,000 shares authorized and issued - - -
STOCKHOLDERS' EQUITY:
Preferred stock, 230,000 authorized, none issued - - -
Common stock, $.10 par value,
10,000,000 shares authorized and 3,768,796 shares
issued. $ 377 $ 377 $ 377
Paid-in capital 7,073 7,073 7,073
Retained earnings 1,048 (1,089) 2,328
Foreign currency translation adjustment (247) (352) (284)
------- ------- -------
Total stockholders' equity $ 8,251 $ 6,009 $ 9,494
------- ------- -------
$ 33,128 $ 47,816 $ 35,994
======= ======= =======
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
balance sheets.
-3-
<PAGE>
LOWRANCE ELECTRONICS, INC.
--------------------------
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
-----------------------------------------------
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
--------------------------
Oct. 31, Oct. 31,
1999 1998
--------- ---------
(in thousands)
<S> <C> <C>
NET SALES $13,438 $16,208
COST OF SALES 8,866 11,275
------- -------
Gross profit 4,572 4,933
OPERATING EXPENSES:
Selling and administrative 4,523 4,859
Severance and Merger Costs 669 527
Research and development 700 617
------- -------
Total operating expenses 5,892 6,003
------- -------
Operating loss (1,320) (1,070)
------- -------
OTHER EXPENSES:
Interest expense 490 742
Other, net 222 264
------- -------
Total other expenses 712 1,006
------- -------
LOSS BEFORE
INCOME TAXES (2,032) (2,076)
BENEFIT FOR
INCOME TAXES (752) (768)
------- -------
NET LOSS $(1,280) $(1,308)
======= =======
LOSS PER BASIC AND DILUTED COMMON SHARE:
NET LOSS PER BASIC AND DILUTED SHARE $ (.34) $ (.35)
======= =======
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING (BASIC AND DILUTED) 3,768 3,768
======= =======
DIVIDENDS NONE NONE
======= =======
OTHER COMPREHENSIVE INCOME
(Loss) Net of Tax:
NET INCOME (LOSS) $(1,280) $(1,308)
FOREIGN CURRENCY TRANSLATION ADJUSTMENT 37 145
------- -------
COMPREHENSIVE INCOME (LOSS) $(1,243) $(1,163)
======= =======
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
statements.
-4-
<PAGE>
LOWRANCE ELECTRONICS, INC.
--------------------------
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
----------------------------------------------
(Unaudited) (Note 5)
<TABLE>
<CAPTION>
Three Months Ended
---------------------------------
October 31, October 31,
1999 1998
------------ -------------
(in thousands)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss $ (1,280) $ (1,308)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Depreciation and amortization 595 747
Loss on retirement of fixed assets - 12
Foreign currency translation loss 37 -
Changes in operating assets and liabilities:
Decrease in accounts receivable 3,756 727
Decrease (increase) in inventories (38) 3,592
Decrease (increase) in prepaids, deferred
income taxes, and other assets (670) (694)
Decrease (increase) in liabilities and other 302 (2,711)
-------- --------
Net cash (used in) provided by operating activities 2,702 365
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (433) (167)
-------- --------
Net cash used in investing activities (433) (167)
CASH FLOWS FROM FINANCING ACTIVITIES (Note 3):
Borrowings under lines of credit 15,581 16,702
Repayments of borrowings under lines of credit (16,998) (16,538)
Principal payments on term loans and capital
lease obligations (508) (576)
-------- --------
Net cash (used in) provided by financing activities (1,925) (412)
-------- --------
Net (decrease) increase in cash and cash equivalents 344 (214)
CASH AND CASH EQUIVALENTS - beginning of period 457 637
-------- --------
CASH AND CASH EQUIVALENTS - end of period $ 801 $ 423
========= ========
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
statements.
-5-
<PAGE>
LOWRANCE ELECTRONICS, INC.
--------------------------
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------------
(Unaudited)
(1) PRINCIPLES OF PREPARATION
The financial statements included herein have been prepared by the Company,
without audit, pursuant to the rules and regulations of the Securities and
Exchange Commission. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted pursuant to
such rules and regulations, although the Company believes that the
disclosures contained herein are adequate to make the information presented
not misleading. Accounting policies for the three months ended October 31,
1999, are the same as those outlined in the Annual Report on Form 10-K
filed relative to the year ended July 31, 1999. In the opinion of
management, all adjustments necessary for a fair presentation of interim
results of operations have been made to the interim statements. All such
adjustments were of a normal, recurring nature. The condensed consolidated
financial statements should be read in conjunction with the consolidated
financial statements and the notes thereto included in the Company's Annual
Report filed with the Securities and Exchange Commission on Form 10-K.
(2) BALANCE SHEET DETAIL
Inventories -
-----------
Inventories are priced at the lower of cost (first-in, first-out) or market
and consist of the following:
<TABLE>
<CAPTION>
Oct. 31, Oct. 31, July 31,
1999 1998 1999
-------- -------- --------
(in thousands)
<S> <C> <C> <C>
Raw materials $ 4,324 $ 5,818 $ 4,255
Work-in-process 2,147 3,278 2,579
Finished goods 8,148 14,098 7,818
Excess, obsolete, and realization reserves (1,233) (1,562) (1,304)
------- ------- -------
Total inventories $13,386 $21,632 $13,348
======= ======= =======
</TABLE>
Property, Plant, and Equipment, Net -
-----------------------------------
<TABLE>
<S> <C> <C> <C>
Land $ 557 $ 557 $ 557
Building and improvements 4,551 4,498 4,491
Machinery and equipment 25,585 24,962 25,230
Office furniture and equipment 3,568 3,500 3,549
------- ------- -------
34,261 33,517 33,827
Less - accumulated depreciation 26,415 24,150 25,819
------- ------- -------
Net property, plant, and equipment $ 7,846 $ 9,367 $ 8,008
======= ======= =======
</TABLE>
-6-
<PAGE>
(3) LONG-TERM DEBT AND REVOLVING CREDIT LINE
Long-term debt and revolving credit line are summarized below:
<TABLE>
<CAPTION>
Oct. 31, Oct. 31, July 31,
1999 1998 1999
-------- ------- -------
(in thousands)
<S> <C> <C> <C>
Revolving credit line $ 9,264 $17,568 $10,680
Term loan 5,942 5,207 6,251
Capitalized equipment lease obligations,
payable in monthly installments of approx-
imately $124,000 including interest at rates
from 7% to 11%, with final payments ranging
from January 1999 through November 2001 2,079 3,349 2,279
------- ------- -------
17,285 26,124 19,210
Less - current maturities 2,589 3,186 2,107
------- ------- -------
Total long-term debt $14,696 $22,938 $17,103
======= ======= =======
</TABLE>
Future maturities of the above debt obligations at October 31, 1999 are
$2,589,000, $14,553,000, $143,000, for the years ending October 31, 2000
through 2002 respectively.
At July 31, 1999 the Company had a $33.9 million financing package which
consisted of $7.4 million in term loans together with a $26.5 million
revolving credit line. The revolving credit line provides for borrowings up
to $26.5 million based on varying percentages of qualifying categories of
receivables and inventories and carried an interest rate of prime plus
1.5%. Borrowing against inventories is limited to $13 million in total.
During September and November 1998, the Company's financing package was
amended. Significant provisions of the amendments included changes in
certain financial covenants and an additional advance of $1.8 million on an
existing term loan. This amended term loan requires monthly principal
payments of $80,000 which began in March 1999.
The terms of the foregoing agreement include a commitment fee based on the
unused portion of the bank credit line in lieu of compensating balances.
The agreement requires, among other things, that the Company maintain a
minimum tangible net worth, limits the ratio of total liabilities to
tangible net worth and requires the Company to maintain a minimum fixed
charge ratio. Additionally, the agreement limits the level of operating
leases, and limits capital expenditures and capital leases. Violation of
any of these provisions would constitute an event of default which, if not
cured, would empower the lender to declare all amounts immediately payable.
The agreement also contains a provision that in the event of a defined
change of ownership, the agreement may be terminated. The Company was in
compliance with all debt covenants at October 31, 1999.
The Company's indebtedness is collateralized by substantially all of the
Company's assets.
(4) STOCKHOLDERS' EQUITY
During the three months ended October 31, 1999 stockholders' equity changed
for the following items: Net loss of $1,280,000 and a $37,000 decrease in
the negative Foreign Currency translation adjustment.
-7-
<PAGE>
(5) CONSOLIDATED STATEMENTS OF CASH FLOWS
During the three months ended October 31, 1999, and October 31, 1998, the
Company paid interest of approximately $490,000 and $716,000, respectively.
(6) SEVERANCE AND MERGER COSTS
During the three months ended October 31, 1999, and October 31, 1998, the
Company recognized $488,000 and $527,000, respectively, in severance costs
related to Tulsa workforce reductions. The efforts are aimed at reducing
costs through headcount elimination as well as the transferring of certain
production related jobs to the Company's Mexico manufacturing facility. The
total number of employees effected was sixty one. Additionally, for the
three months ended October 31, 1999, the Company incurred $181,000 in costs
associated with its pending merger with Orbital Sciences Corporation.
(7) FOOTNOTES INCORPORATED BY REFERENCE
Certain footnotes are applicable to the consolidated financial statements
but would be substantially unchanged from those presented on Form 10-K
filed with the Securities and Exchange Commission on October 26, 1999.
Accordingly, reference should be made to the Company's Annual Report filed
with the Securities and Exchange Commission on Form 10-K for the following:
Note Description
---- -------------------------------------------------------
1 Business and Summary of Significant Accounting Policies
4 Capital Leases
5 Stockholders' Equity and Related Items
6 Retirement Plans
7 Income Taxes
(8) MERGER WITH ORBITAL SCIENCES CORPORATION
On March 11, 1999, Lowrance announced an agreement to merge with
California-based Magellan Corporation, a leading satellite access company,
as part of a merger agreement between Lowrance, Magellan and Magellan's
parent company Orbital Sciences Corporation. According to the merger
agreement, Lowrance shareholders will receive between 745,000 and 1,250,000
shares of Orbital common stock, with the actual number of Orbital shares
issued to be determined by the market price of Orbital stock prior to
closing. On August 26, 1999 the Company restated and amended its agreement
whereby each share of outstanding common stock of the Company will be
converted at the time of the merger into the right to receive $7.30 for
each share of the Company's common stock. On October 12, 1999 Lowrance
shareholders approved the merger. The transaction is anticipated to close
upon receipt of the consent of Orbital's lenders. Lowrance believes that
Orbital is obligated to complete the merger, but there can be no assurance
that they will be able to do so.
-8-
<PAGE>
Part I, Item 2
- --------------
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
Results of Operations
- ---------------------
Net sales for the three months ended October 31, 1999, decreased 17%
compared to the same period the previous year. Unit sales which include sonar
units, combination sonar/GPS navigation units and stand alone GPS navigation
units decreased by approximately 7,600 units (9.8%) and the average price per
unit decreased by 8.1%
Unit sales declined due to lower sales of portable GPS products. Sales of
these products declined due to the Company's decision to discontinue its low-end
portable products for fiscal 2000. The decline in portable GPS unit sales was
partially offset by increased sales of lower priced sonar units. The decline in
the average selling price results from the decline in portable GPS units sales
(these units have a higher average selling price than sonar) and an increase in
sales of the low priced sonar units.
Gross profit as a percent of net sales increased from 30.4% for three
months ended October 31, 1998 to 34% for the three months ended October 31,
1999. The increase results from, (1) lower manufacturing costs resulting from
improved efficiencies and the continued movement of manufacturing functions from
the Company's Tulsa facility to the Company's Mexico facility, (2) declines in
low priced/low margin GPS product sales, (3) lower raw material costs and, (4)
price increases on certain products implemented during the second quarter of
fiscal 1999.
Operating expenses, excluding severance costs, as a percentage of net sales
for the three months ended October 31, 1999, were 39% compared to 34% for the
same period in fiscal 1999. Total costs decreased by $111,000. The increase as
a percentage of net sales relates to the decrease in sales as noted above.
Liquidity and Capital Resources
- -------------------------------
The Company's working capital needs increase in the fall and winter months
as the Company manufactures and stockpiles its products for the peak sales
months of January, February, March, and April. Also, the days outstanding in
the Company's accounts receivable increase in the off-season due to favorable
purchase terms offered to customers in order to stimulate sales during these
slow periods.
The Company's primary sources of liquidity are cash flow from operations,
an accounts receivable and inventory line of credit, lease financing as well as
financing provided by the Company's vendors. The line of credit allows the
Company to borrow up to 85% of its qualifying accounts receivable, 30% of
qualifying raw materials inventory, and 60% of qualifying finished goods
inventory. Borrowings for inventory, however, are limited to $13,000,000. A
yearly lease line of credit is usually established to finance the acquisition of
qualifying equipment and certain other assets.
Traditionally, the Company's near-term liquidity is at its lowest during
the period August through December due to limits on borrowings against
inventories, cash outlays required to purchase tooling to manufacture new
products, and extended payment terms offered to customers to stimulate sales
during the seasonally slow period. As previously described, it is during this
period that the Company begins to manufacture and build-up inventory levels in
anticipation of product demands for the peak sales months. By the end of the
second quarter, sales historically increase and the Company's sources of
liquidity begin to improve.
During fiscal 1997, the Company began relocating certain of its
manufacturing operations to its new plant in Mexico. The start-up of the new
facility in Mexico was substantially on schedule. However, record low
unemployment rates in Tulsa resulted in excessive turnover of production workers
and an inability to maintain sufficient trained staff to support the Company's
substantially increased production schedule intended to support record demand
for its GPS products. This problem was magnified by management's
-9-
<PAGE>
focus on the start-up of the new Mexico facility and production delays of the
Company's six new sonar models. These problems caused an excessive build-up of
raw material and work-in process inventories that the Company could not convert
to finished goods during the fiscal year. These factors resulted in inventories
remaining well above historical levels throughout fiscal 1997. Management
implemented controls to better manage production scheduling and inventory
levels. During fiscal 1998, first and second quarter sales exceeded 1997 levels
for the same periods, however, sales unexpectedly declined during the third and
fourth quarters. The timing of the sales decline did not allow for reductions of
shipments of raw materials from vendors based on the long lead times for certain
component parts. As a result, inventory levels during 1998 continued to be
higher than historical levels. Inventory gradually declined throughout fiscal
1999 as the Company consistently met its production and sales objectives.
Inventory levels during the first quarter of fiscal 2000 were below levels
during the first quarter of fiscal 1999, as the Company continued to achieve its
production and sales goals.
In November 1998, the Company's financing package was amended, giving the
Company additional term borrowings of $1.8 million under an existing term loan
and deferring principal payments until March 1, 1999 on an aggregate total term
loan of $4.8 million (including the additional $1.8 million borrowing). This
amended term loan requires monthly principal payments of $80,000 which began
March 1, 1999.
Cash flows of $2.7 million provided by operating activities for the first
quarter of fiscal 2000 were used to fund $.4 million of capital additions and to
reduce outstanding debt.
Management expects the sources discussed above to satisfy the Company's
current financing needs. At October 31, 1999 there were approximately $.8
million of borrowings available under the Company's revolving line of credit.
Capital expenditures were $434,000 during the first three months of fiscal
2000 compared to $167,000 for fiscal 1999.
Year 2000 Compliance
- --------------------
The Company is taking appropriate steps to ensure that its computer systems
will properly recognize date sensitive information when the year changes to 2000
or "00". Systems that do not properly recognize such information could generate
erroneous data or cause a system to fail. The Company has evaluated its
computer systems to identify those that could be effected by this issue. All
significant systems have been modified and tested. Management believes that all
significant systems are year 2000 compliant. The costs to modify the Company's
systems were not significant. The Company is also communicating with key
suppliers and vendors to coordinate year 2000 compliance.
The highest risk area for the Company related to the year 2000 issues is
noncompliance by third parties. At this time, the most reasonably likely worst
case scenario would be year 2000 noncompliance by third parties that comprised a
significant level of business conducted with the Company. Depending upon the
level of noncompliance, the Company could be adversely impacted by such things
as communication problems with third parties, including order processing,
purchase order placement and/or scheduling problems related to the manufacturing
of the Company's products. The major risk areas associated with third party
noncompliance have been identified. Based upon its assessment of third party
assurances at this time, the Company does not anticipate any material
disruptions in its business activities as a result of third party year 2000
noncompliance, although it cannot be certain that such disruptions will not
occur.
Quantitative and Qualitative Disclosure About Market Risk
- ---------------------------------------------------------
The Company is exposed to cash flow and interest rate risk due to changes
in interest rates with respect to its long-term debt. See Note 3 to the
consolidated financial statements for details on the Company's long-term debt.
-10-
<PAGE>
Outlook
- -------
Current backlog is approximately $6.8 million compared to approximately $8.4
million at the same time last year. It should be noted that fall and winter
backlog numbers are not necessarily indicative of sales trends for the year.
Also, while the backlog numbers are supported by purchase orders from customers,
cancellations and/or delays of requested delivery times can, and often do,
occur.
The Company anticipates continued profitability in fiscal 2000, primarily as the
result of continuing cost reduction efforts, continuing favorable economic and
market conditions, and lower manufacturing cost related to continuing
efficiencies from the Company's Mexico manufacturing facility. Management
currently anticipates positive cash flows from operations in fiscal 2000 based
on attaining current projections for net income and inventory levels. The
expectation for continued profitability based on the above factors constitutes
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. The Company
believes that these forecasts are based on reasonable assumptions, however, no
assurances can be given that these goals will be achieved. If the Company
experiences production delays due to raw materials shortages or unforeseen
competitive pressures, this could have a material adverse affect on current
projections. Additionally, because of the dynamic environment in which the
Company operates, any one of several factors, including but not limited to
perceived general economic conditions, weather conditions, raw material
availability and new product introductions by competitors, could rapidly
deteriorate, any one of which would have an adverse affect on expected results
for the remainder of the year.
PART II -- OTHER INFORMATION
Item 1. Legal Proceedings
-----------------
Not applicable
Item 2. Changes in Securities
---------------------
Not applicable
Item 3. Defaults upon Senior Securities
-------------------------------
Not applicable
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
Not applicable
Item 5. Other Information
-----------------
Not applicable
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
Not applicable
-11-
<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.
LOWRANCE ELECTRONICS, INC.
By: /s/ Mark C. Wilmoth
-------------------------------------
Mark C. Wilmoth
Vice President Finance &
Chief Financial Officer
Dated: December 14, 1999
---------------------------
-12-
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 3-MOS
<FISCAL-YEAR-END> OCT-31-1999 OCT-31-1998
<PERIOD-START> AUG-01-1999 AUG-01-1998
<PERIOD-END> OCT-31-1999 OCT-31-1998
<CASH> 801 423
<SECURITIES> 0 0
<RECEIVABLES> 7,708 13,015
<ALLOWANCES> 0 0
<INVENTORY> 13,386 21,632
<CURRENT-ASSETS> 23,520 37,019
<PP&E> 34,261 33,517
<DEPRECIATION> 26,415 24,150
<TOTAL-ASSETS> 33,128 47,816
<CURRENT-LIABILITIES> 10,181 18,869
<BONDS> 0 0
0 0
0 0
<COMMON> 377 377
<OTHER-SE> 7,874 5,632
<TOTAL-LIABILITY-AND-EQUITY> 33,128 47,816
<SALES> 13,438 16,208
<TOTAL-REVENUES> 13,438 16,208
<CGS> 8,866 11,275
<TOTAL-COSTS> 14,758 17,278
<OTHER-EXPENSES> 222 264
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 490 742
<INCOME-PRETAX> (2,032) (2,076)
<INCOME-TAX> (752) (768)
<INCOME-CONTINUING> 0 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (1,280) (1,308)
<EPS-BASIC> (.34) (.35)
<EPS-DILUTED> (.34) (.35)
</TABLE>
