<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 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: 33-18521-NY
CREATIVE MASTER INTERNATIONAL, INC.
(Exact name of small business issuer in its charter)
Delaware 11-2854355
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Casey Ind. Bldg., 8th Floor N/A
18 Bedford Rd., Taikoktsui (Zip Code)
Kowloon, Hong Kong
(Address of principal executive offices)
Issuer's Telephone Number: 011-852-2396-0147
Check whether the issuer (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 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 [_]
There were 4,999,322 shares of the Company's common stock outstanding on May 7,
1999.
Transitional Small Business Disclosure Format (check one): YES [_] NO [X]
<PAGE>
TABLE OF CONTENTS
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<TABLE>
<CAPTION>
PAGE
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<S> <C>
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
Consolidated Condensed Statements of Operations - for each of the
three-month periods ended March 31, 1998 and 1998 (unaudited) 1
Consolidated Condensed Balance Sheets - as of December 31, 1998
(audited) and March 31, 1999 (unaudited) 2
Consolidated Condensed Statements of Cash Flows - for each of the
three-month periods ended March 31, 1998 and 1999 (unaudited) 3
Notes to Consolidated Condensed Financial Statements 4
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS 5-8
PART II - OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS 9
ITEM 2 - CHANGES IN SECURITIES AND USE OF PROCEEDS 9
ITEM 3 - DEFAULTS UPON SENIOR SECURITIES 9
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 9
ITEM 5 - OTHER INFORMATION 9
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K 9
</TABLE>
<PAGE>
CREATIVE MASTER INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1999 (UNAUDITED)
(AMOUNTS EXPRESSED IN UNITED STATES DOLLARS)
<TABLE>
<CAPTION>
Three months ended March 31,
1 9 9 8 1 9 9 9
$'000 $'000
(UNAUDITED) (UNAUDITED)
<S> <C> <C>
Net sales 5,596 9,838
Cost of goods sold (3,822) (7,221)
--------- ---------
Gross profit 1,774 2,617
--------- ---------
Selling, general and administrative expenses (852) (1,411)
Interest expense net (70) (16)
Other income, net 12 25
Amortization of goodwill (27) (24)
--------- ---------
Income before income taxes and minority interests 837 1,191
--------- ---------
Provision for income taxes (99) (107)
--------- ---------
Income before minority interests 738 1,084
--------- ---------
Cumulative effect of Accounting Change
- write-off of deferred expenditures, net of tax 0 (201)
Minority interests (131) (56)
--------- ---------
Net income 607 827
========= =========
Earnings per common share
-Basic $0.16 $0.17
-Diluted $0.16 $0.17
Shares outstanding
-Basic 3,749,322 4,999,322
-Diluted 3,749,322 5,000,080
</TABLE>
The accompanying notes are an integral part of these financial statements.
1
<PAGE>
CREATIVE MASTER INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
AS OF DECEMBER 31, 1998 (AUDITED) AND MARCH 31, 1999 (UNAUDITED)
(AMOUNTS EXPRESSED IN UNITED STATES DOLLARS)
<TABLE>
<CAPTION>
31-Dec-98 31-Mar-99
$'000 $'000
ASSETS (Unaudited)
<S> <C> <C>
Current assets:
Cash and bank deposits 5,055 2,198
Accounts receivable, net 4,343 4,973
Deposits and prepayments 661 566
Inventories, net 3,787 3,813
------------- -------------
Total current assets 13,866 11,550
Machinery, equipment and capital leases, net 5,663 7,442
Long-term investment 1 1
Deferred expenditures 221 0
Goodwill 716 692
------------- -------------
Total assets 20,467 19,685
============= =============
LIABILITIES, MINORITY INTERESTS AND
STOCKHOLDERS' EQUITY
Current liabilities:
Short-term bank borrowings 1,062 893
Capital lease obligations, current portion 173 186
Accounts payable 3,965 2,525
Deposits from customers 136 670
Accrued liabilities 2,914 2,455
Loans from directors, current portion 222 187
Taxation payable 133 124
------------- -------------
Total current liabilities 8,605 7,040
Capital lease obligations, non-current portion 288 252
Loans from directors, non-current portion 444 360
Deferred taxation 220 260
------------- -------------
Total liabilities 9,557 7,932
------------- -------------
Minority interests 618 634
------------- -------------
Stockholders' equity:
Common stock, par value $0.0001:
Authorized - 25,000,000 shares
Outstanding and fully paid - 4,999,322 shares 1 1
Preferred stock, par value $0.0001:
Authorized - 5,000,000 shares
Outstanding - nil 0 0
Additional paid-in capital 5,898 5,898
Retained earnings 4,393 5,220
------------- -------------
Total stockholders' equity 10,292 11,119
------------- -------------
Total liabilities, minority interests and stockholders' equity 20,467 19,685
============= =============
</TABLE>
The accompanying notes are an integral part of these financial statements.
2
<PAGE>
CREATIVE MASTER INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1999 (UNAUDITED)
(AMOUNTS EXPRESSED IN UNITED STATES DOLLARS)
<TABLE>
<CAPTION>
Three months ended March 31,
1 9 9 8 1 9 9 9
$'000 $'000
(unaudited) (unaudited)
<S> <C> <C>
Cash flows from operating activities:
Net income 607 827
Depreciation of machinery and equipment 126 449
Amortization of goodwill 27 24
Minority interests 131 56
Deferred Expenses written off 0 221
Deferred Income taxes 0 60
(Increase) Decrease in operating assets-
Accounts receivable, net (369) (630)
Deposits and prepayments (93) 115
Inventories, net (182) (26)
Increase (Decrease) in operating liabilities-
Accounts payable 398 (1,440)
Deposits from customers (312) 534
Accrued liabilities 25 (459)
Due to parent company (9) 0
Taxation payable 101 (9)
--------- ---------
Net cash provided by (used in) operating activities 450 (278)
--------- ---------
Cash flows from investing activities:
Acquisition of machinery and equipment (94) (2,228)
--------- ---------
Net cash used in investing activities (94) (2,228)
--------- ---------
Cash flows from financing activities:
Increase in short-term bank loans and overdraft 420 9
Decrease in import trust receipts banks loans (43) (178)
Repayment of capital element of capital lease obligations (239) (23)
Decrease in loans from directors (137) (119)
Dividend paid to minority interests of a subsidiary (58) (40)
--------- ---------
Net cash used in financing activities (57) (351)
--------- ---------
Net increase (decrease) in cash and bank deposits 299 (2,857)
Cash and bank deposits, as of beginning of period 471 5,055
--------- ---------
Cash and bank deposits, as of end of period 770 2,198
========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
CREATIVE MASTER INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Amounts expressed in United States dollars unless otherwise stated)
1. BASIS OF PRESENTATION
- --------------------------
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim
financial reporting. Certain information and footnote disclosures required
by generally accepted accounting principles for complete financial
statements have been condensed or omitted.
In the opinion of management, all adjustments (which include only normal
recurring adjustments) necessary to present fairly the financial position,
results of operations, and cash flows for the periods presented have been
made. The results of operations for the three-month period ended March 31,
1999 are not necessarily indicative of the operating results that may be
expected for the entire year ending December 31, 1999. These financial
statements should be read in conjunction with the Company's Form 10-KSB for
the fiscal year ended December 31, 1998.
The preparation of financial statements in conformity with generally
accepted accounting principles in the United States of America requires
management to make estimates and assumptions that affect certain reported
amounts and disclosures. Accordingly, actual results could differ from
those estimates.
2. RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS
- -----------------------------------------------
Deferred expenditures reported at December 31, 1998 represent pre-operating
costs incurred for new production facilities. These costs were previously
deferred and amortized on a straight-line basis over three years in
accordance with generally accepted accounting princiles
Effective from January 1, 1999, we have adopted the newly effected
Statement of Position 98-5 (Reporting on the Costs of Start-Up Activities),
issued by the Accounting Standards Executive Committee of the American
Institute of Certified Public Accountants, which requires that entities
expense start-up costs as they are incurred. Accordingly, previously
capitalized expenses of $201,000, net of tax, were written off during the
first quarter of 1999 as an "accumulative effect of accounting change."
Costs of approximately $120,000 incurred during the period that would have
been capitalized in the past have been charged to cost of goods sold for
the period.
3. SUBSEQUENT EVENT
- ---------------------
Long-term investment represented a 9.6% interest in Target Vision Inc. (a
company incorporated in the State of Delaware, United States of America),
which is principally engaged in the trading of communication systems.
Subsequent to the end of the period, the company disposed of this
investment for a consideration of in excess the book value.
4
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ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
PRELIMINARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
The statements contained in this Form 10-QSB that are not purely historical
are forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended and Section 21E of the Securities Exchange
Act of 1934, as amended. These include statements about the Company's
expectations, beliefs, intentions or strategies for the future, which are
indicated by words or phrases such as "anticipate," "expect," "intend," "plan,"
"will," "the Company believes," "management believes" and similar words or
phrases. The forward-looking statements are based on the Company's current
expectations and are subject to certain risks, uncertainties and assumptions.
The Company's actual results could differ materially from results anticipated in
these forward-looking statements. All forward-looking statements included in
this document are based on information available to the Company on the date
hereof, and the Company assumes no obligation to update any such forward-looking
statements.
OVERVIEW
The Company is a leading independent manufacturer of collectible-quality,
die-cast replicas of cars, trucks, buses and other items. Die-cast collectibles
are distinguishable from die-cast toys by their authentic design, exacting
engineering and attention to detail, including abundant use of identifiable
brand names, logos and other licensed marks. The die-cast products the Company
manufactures are 1/9th to 1/64th scale and include as many as 450 parts,
including numerous moveable parts. They are marketed and distributed by the
Company's customers primarily to collectors, hobbyists and enthusiasts at retail
prices ranging from $20 to $200 or more. The Company's customers are leading
U.S. and European marketers and distributors of vehicle replicas and other
collectibles, including Danbury Mint, Mattel, Hallmark Cards, Action
Performance, Corgi Classics, First Gear and Road Champs.
The Company's mission is to provide the highest level of product quality and
customer service among independent manufacturers of die-cast collectibles. The
Company offers its customers turnkey product development and manufacturing
capabilities that are customized to meet their specific needs. The Company's
vertically integrated process affords complete sourcing of raw materials,
engineering, assembly, quality control and final packaging of die-cast products
in commercial quantities. Depending on the customer's needs, the Company
provides a self-contained production area within one of its factories with
tooling and other production functions dedicated to manufacturing the customer's
products according to its particular design, engineering and quality
requirements. This approach permits customers to closely supervise and control
all aspects of the production process and to protect the confidentiality of
their product design and engineering. The Company's turnkey process enables its
customers to shorten the lead time from conceptual design to product delivery
and to minimize production costs while maintaining high quality and reliability.
All of the Company's manufacturing operations are conducted through CML, the
Company's wholly-owned Hong Kong subsidiary, and CML's subsidiaries. CML was
co-founded in 1986 by Carl Ka-Wing Tong and Leo Sheck-Pui Kwok. The Company's
manufacturing facilities are located in the Dongguan region of Guangdong
Province, China, approximately 60 miles northwest of Hong Kong. The Dongguan
facilities contain an aggregate of approximately 540,000 square feet of
manufacturing space and related housing for up to approximately 6,000 workers.
THREE MONTHS ENDED MARCH 31, 1999 COMPARED TO THREE MONTHS ENDED MARCH 31, 1998
Net Sales. Net sales for the three months ended March 31, 1999 were $9,838,000,
an increase of $4,242,000, or 76%, from $5,596,000 for the three months ended
March 31, 1998. This increase was due primarily to an increase in sales volume
of the Company's products to existing and new customers and a direct result of
the increase in capacity.
5
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Details of individual customers accounting for more than 5% of the Group's
sales are as follows:
<TABLE>
<CAPTION>
Year ended Three months ended
Dec 31, 1998 Mar 31, 1999
---------------- --------------------
(Unaudited)
<S> <C> <C>
MBI Inc. 36.7% 28.2%
Mattel Vendor Operations Asia Ltd. 24.1% 15.1%
Action Performance Co. Inc. (Incl. Brookfield Collectors
Guild Paul's Model Art GmbH) 13.9% 22.1%
Corgi Classics Limited 5.3% 11.3%
Road Champs Ltd. 5.3% 5.3%
First Gear 4.0% 8.4%
Hallmark 4.5% 8.2%
================ ====================
</TABLE>
Cost of Goods Sold. Cost of goods sold for the three months ended March 31, 1999
was $7,221,000, an increase of $3,399,000, or 89%, from $3,822,000 for the three
months ended March 31, 1998. Gross margin for the first quarter of 1999 was
26.6% compared to 31.7% for the same quarter in 1998. The decrease was primarily
due to start up costs of factory 5 and inefficiencies that are normal in the
start-up period.
Selling, General And Administrative Expenses. Selling, general and
administrative expenses totaled $1,411,000 for the three months ended March 31,
1999, an increase of $559,000, or 66%, from $852,000 for the three months ended
March 31, 1998. Selling, general and administrative expenses constituted 14% of
net sales for the three months ended March 31, 1999 and 15% of net sales for the
three months ended March 31, 1998. Selling, general and administrative expenses
increased due to an increase in administrative and personnel costs to support
the increase in sales and manufacturing capacity, including setup costs of
factory 5 which only began shipments on March 22, 1999. In addition, the
increased figure reflects the cost of additional administrative support to
comply with SEC regulations.
Interest Income. Interest income was $23,000 for the three months ended March
31, 1999, as compared to an immaterial amount in the three months ended March
31, 1998. The increase in interest reflects the income on the proceeds of the
offering.
Interest Expenses. Interest expense was $39,000, or 0.1% of net sales, for the
three months ended March 31, 1999 as compared to $70,000, or 1.3% of net sales,
for the three months ended March 31, 1998. The decrease in interest expense was
due to the reduction in debt and lease commitments.
Cumulative effect of Accounting Change - write-off of deferred expenditures,
net of tax. Deferred expenditures representing pre-operating costs incurred for
new production facilities were previously deferred and amortized on a straight-
line basis over three years. Previously capitalized expenses of $201,000, net
of tax, were written off during the first quarter of 1999 as an "accumulative
effect of accounting change". Costs of approximately $120,000 incurred during
the period that would have been capitalized in the past have been charged to
cost of goods sold for the period. Without this change, reported net income for
the three months ended March 31, 1999 would have been approximately $1,100,000
resulting in a corresponding EPS of $0.22 for the period.
Minority Interests. The Company includes in net income before minority interests
all net income of its wholly-owned and majority-owned subsidiaries. The portion
of such net income attributable to minority interests in the subsidiaries held
by others is then eliminated. Minority interests at March 31, 1999 totaled
approximately $56,000.
Provision For Income Taxes. The Company's provision for income taxes was
$107,000 for the three months ended March 31, 1999, reflecting an effective
income tax rate of 9%, for the period. The Company's provision for income taxes
was $99,000 for the three months ended March 31, 1998, reflecting an effective
income tax rate of 12%. The difference in the effective tax rate was due to
changes in contributions from subsidiaries with minority interests.
6
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
For the three months ended March 31, 1999, the Company's operations used
cash of $278,000. The Company's cash balance decreased by $2,857,000 to
$2,198,000 at March 31, 1999, as compared to $5,055,000 at December 31, 1998.
The Company's working capital decreased to $4,510,000 at March 31, 1999, as
compared to $5,261,000 at December 31, 1998. Net accounts receivable increased
by $630,000, or 15%, to $4,973,000 at March 31, 1999, as compared to $4,343,000
at December 31, 1998 as result of sales volume increases. Consistent with
practices in the die-cast collectibles industry, the Company offers accounts
receivable terms to its customers. This practice has created working capital
requirements that the Company generally has financed with a combination of
internally generated cash flow and credit facilities provided by affiliates and
third parties. The Company has not experienced any significant problems with
collection of its account receivable.
The Company's accounts payable and accrued liabilities decreased by
$1,899,000, or 28%, to $4,980,000 at March 31, 1999, as compared to $6,879,000
at December 31, 1998. The decrease in accounts payable and accrued liabilities
was primarily related to payments for fixed assets purchased on terms.
The Company's inventories increased by $26,000 or 0.7% to $3,813,000 at
March 31, 1999, as compared to $3,787,000 at December 31, 1998 as a result of
increased purchasing of materials to accommodate increased sales and
manufacturing.
For the three months ended March 31, 1999, additions to property, plant and
equipment aggregated $2,228,000 as compared to $2,470,000 for the year ended
December 31, 1998. The Company anticipates that additional expenditures in
connection with the continuing expansion and improvement of production
facilities at the Dongguan facility during the remainder of 1999 will be
approximately $1,000,000, a portion of which is expected to be funded by capital
lease financing.
The Company anticipates that its operating cash flow, combined with cash on
hand, bank lines of credit and other external credit sources, and credit
facilities provided by affiliates or related parties, are adequate to satisfy
the Company's working capital requirements for the year ending of December 31,
1999. However, any additional expansion of the Dongguan facility, the
development or acquisition of additional support facilities may require the use
of debt or equity by the Company.
Inflation. The Company believes that inflation has not had a material impact on
its business in recent years.
Year 2000 Compliance
The Company is not aware of any material operational issues or costs
associated with preparing its internal systems for the year 2000. However,
there can be no assurance that there will not be a delay in, or increased costs
associated with, the Company's implementation of the necessary systems and
changes to address the year 2000 issues. If the Company is unable to implement
such systems and changes in a timely manner, it could have a material adverse
effect on the Company's business, financial condition and results of operations.
The Company also relies, directly and indirectly, on external systems of
business enterprises such as financial institutions, government agencies,
customers and suppliers for accurate exchange of data. Even if the internal
systems of the Company are not materially affected by the year 2000 issue, the
Company could be affected by disruptions in the operation of the enterprises
with which the Company interacts.
Currency Exchange Fluctuations
All of the Company's sales are denominated either in U.S. dollars or Hong
Kong dollars, while its expenses are denominated primarily in Hong Kong dollars
and renminbi, the Chinese currency, the basic unit of which is the yuan. Given
the current Asian financial crisis, there can be no assurance that the yuan-to-
U.S. dollar rate will remain stable. Although a devaluation of the Hong Kong
dollar or renminbi relative to the U.S. dollar would likely reduce the
7
<PAGE>
Company's expenses, any material increase in the value of the Hong Kong dollar
or renminbi relative to the U.S. dollar would increase the Company's expenses,
and could have a material adverse effect on the Company's business, financial
condition and results of operations. The Company has never engaged in currency
hedging operations and has no present intention to do so.
Seasonality
Each year, the Company ceases production for a two-week period due to the
Chinese New Year holiday, which occurs during late January or early February.
This holiday shutdown has typically resulted in lower revenues during the first
quarter of each year than during the other three quarters.
The Company experiences fluctuations in quarterly sales due to the timing of
receipt of orders from customers and product shipments. The Company also incurs
substantial tooling and other costs of manufacturing new products from three to
nine months in advance of obtaining the first customer orders for the new
product. This long lead time may contribute to fluctuations in the Company's
quarterly results of operations.
International Sales
The Company sells substantially all of its products to customers in the U.S.
and Europe. In the first three months of 1999 approximately 28.5% of the
Company's net sales were attributable to sales to European customers. During the
year ended December 31, 1998, approximately 13.5% of the Company's net sales
arose from sales to European customers. The U.S. and European governments may,
from time to time, impose new quotas, duties, tariffs, or other charges or
restrictions, or adjust presently prevailing quota, duty or tariff levels, which
could adversely affect the Company's ability to continue to export products to
the U.S. and Europe at current or increased levels.
8
<PAGE>
PART II - OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS
NONE
ITEM 2 - CHANGES IN SECURITIES AND USE OF PROCEEDS
The Company's registration statement (No. 333-65929) under the Securities
Act for its initial public offering was declared effective by the SEC on
December 24, 1998. Offering proceeds, net of aggregate expenses of
approximately $1,753,000, were $4,497,000. The Company used the net proceeds of
$4,497,000 as follows: approximately $1,410,000 for the purchase or
installation of machinery and equipment; approximately $234,000 for the
construction and buildout of the Company's fifth factory and related dormitory
facilities; approximately $340,000 for the payment of capital lease obligations;
and approximately $580,000 for the repayment of short-term bank debt. The
Company intends to use the remaining proceeds, which are included within cash
and bank deposits, to pay for machinery and equipment purchased on terms for
factory 5 and as working capital.
The short-term bank debt repaid by the Company was incurred under credit
facilities with bank lenders. These facilities were secured by the personal
guarantees of Carl Ka Wing Tong (the Company's President Chief Executive
Officer, and Chairman of the Board) and Leo Sheck Pui Kwok (the Company's Chief
Operating Officer and Director), the corporate guarantee of Acma Strategic
Holdings Limited, a standby letter of credit from Acma Ltd., and a mortgage on
property owned by Mr. Tong. Otherwise, none of the net offering proceeds were
paid directly or indirectly to directors, officers, persons owning 10% or more
of any class of the Company's securities, or affiliates of the Company.
ITEM 3 - DEFAULTS UPON SENIOR SECURITIES
NONE
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
NONE
ITEM 5 - OTHER INFORMATION
NONE
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
a. The exhibits listed in the accompanying Index to Exhibits are filed as
part of this report on Form 10-QSB.
b. Reports on Form 8-K: None
9
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Exchange Act, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
CREATIVE MASTER INTERNATIONAL, INC.
Date: May 12, 1999 By: /s/ CARL KA WING TONG
--------------------------------
Carl Ka Wing Tong,
President and Chief Executive Officer
Date: May 12, 1999 By: /s/ JOHN REMPEL
--------------------------------
John Rempel
Chief Financial Officer (principal
financial officer)
Date: May 12, 1999 By: /s/ SHING KAM MING
--------------------------------
Shing Kam Ming
Controller (principal accounting officer)
10
<PAGE>
INDEX TO EXHIBITS
-----------------
Exhibit
Number Description
- ------ -----------
27 Financial Data Schedule
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE QUARTER ENDED
MARCH 31, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 2,198
<SECURITIES> 0
<RECEIVABLES> 5,602
<ALLOWANCES> 629
<INVENTORY> 3,813
<CURRENT-ASSETS> 11,550
<PP&E> 10,140
<DEPRECIATION> 2,698
<TOTAL-ASSETS> 19,685
<CURRENT-LIABILITIES> 7,040
<BONDS> 0
0
0
<COMMON> 1
<OTHER-SE> 11,118
<TOTAL-LIABILITY-AND-EQUITY> 18,995
<SALES> 9,838
<TOTAL-REVENUES> 9,838
<CGS> 7,221
<TOTAL-COSTS> 7,221
<OTHER-EXPENSES> 1,451
<LOSS-PROVISION> 44
<INTEREST-EXPENSE> 39
<INCOME-PRETAX> 1,191
<INCOME-TAX> 107
<INCOME-CONTINUING> 1,028
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> (201)
<NET-INCOME> 827
<EPS-PRIMARY> 0.17
<EPS-DILUTED> 0.17
</TABLE>
