<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For Quarter Ended February 28, 1995 Commission File
Number 0-16101
INOTEK TECHNOLOGIES CORP.
(Exact name of registrant as specified in its charter)
DELAWARE 75-1986151
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
11212 INDIAN TRAIL, DALLAS, TEXAS 75229
(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code, 214-243-7000.
NOT APPLICABLE
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes x No
----- -----
4,493,197 shares of common stock, $.01 par value (the issuer's only class of
common stock), were outstanding as of February 28, 1995.
<PAGE> 2
INOTEK TECHNOLOGIES CORP.
INDEX
<TABLE>
<CAPTION>
Page
No.
----
<S> <C>
Part I. Financial information
Item 1. Financial Statements:
Balance Sheets as of February 28, 1995 (unaudited) and May 31, 1994 . . . . . . . . . . . . . . . . . 1
Income Statements for the Three Months Ended February 28, 1995
and 1994 (unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Income statements for the Nine Months Ended February 28, 1995
and 1994 (unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Statements of Cash Flows for the Nine Months Ended February 28, 1995
and 1994 (unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Part II. Other Information
Item 1. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Item 4. Submission of Matters to a Vote of Security Holders . . . . . . . . . . . . . . . . . . . . . . . 8
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Index to Exhibits
Exhibit (20)-Report Furnished to Security Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
</TABLE>
<PAGE> 3
INOTEK TECHNOLOGIES CORP.
BALANCE SHEETS
<TABLE>
<CAPTION>
FEBRUARY 28 MAY 31
1995 1994
(UNAUDITED)
----------------------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 267,229 $ 729,037
Trade receivables, net of allowance for doubtful accounts
of $63,504 at February 28 and $71,272 at May 31 2,839,929 3,219,905
Inventories 2,127,725 3,305,491
Deferred taxes 91,753 102,000
Prepaid expenses and other assets 188,194 85,565
----------------------------
Total current assets 5,514,830 7,441,998
Property and equipment, net 468,044 509,683
Goodwill, net of accumulated amortization of $370,292 at
February 28 and $321,395 at May 31 2,271,660 2,319,574
Intangible assets, net - 20,834
Other assets 55,454 67,968
Deferred taxes 165,509 149,000
----------------------------
Total assets $ 8,475,497 $10,509,057
============================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 778,146 $ 1,678,870
Accrued expenses 688,068 669,835
Income taxes payable 25,497 318,864
Current portion of notes payable including indebtedness to
shareholders of $21,728 at February 28 and $20,103 at May 31 1,197,887 1,750,557
----------------------------
Total current liabilities 2,689,598 4,418,126
Notes payable 11,738 28,244
Redeemable common shares, $.01 par value - 139,109 at February 28
and 193,109 at May 31 437,526 606,276
Shareholders' equity:
Common shares, $.01 par value:
Authorized shares, 10,000,000
Issued shares - 4,548,197 at February 28 and 4,581,697 at May 31
Outstanding shares - 4,409,088 at February 28 and 4,388,588 at
May 31 44,091 43,886
Additional paid-in-capital 3,431,234 3,399,204
Retained earnings 1,993,548 2,107,790
Treasury shares, at cost - 55,000 at February 28 and 30,000 at May 31 (132,238) (94,469)
----------------------------
Total shareholders' equity 5,336,635 5,456,411
----------------------------
Total liabilities and shareholders' equity $ 8,475,497 $10,509,057
============================
</TABLE>
See accompanying notes
1
<PAGE> 4
INOTEK TECHNOLOGIES CORP.
INCOME STATEMENTS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
FEBRUARY 28
1995 1994
--------------------------------
<S> <C> <C>
Net Sales:
Products $ 5,936,884 $ 7,053,605
Services 561,592 615,874
Other - 171,295
-------------------------------
6,498,476 7,840,774
Cost of sales:
Products 4,281,816 5,052,035
Services 335,544 444,435
Other - 41,766
-------------------------------
4,617,360 5,538,236
-------------------------------
Gross margin 1,881,116 2,302,538
Operating expenses:
Sales and marketing 1,181,996 1,217,991
General and administrative 641,769 677,494
-------------------------------
1,823,765 1,895,485
-------------------------------
Operating income 57,351 407,053
Other expense (41,402) (30,905)
-------------------------------
Earnings before income taxes 15,949 376,148
Provision for income taxes 45,688 150,492
-------------------------------
Net earnings (loss) $ (29,739) $ 225,656
===============================
Per share:
Net earnings (loss) per share $ (.01) $ .05
===============================
Weighted average shares outstanding 4,512,897 4,790,668
===============================
</TABLE>
See accompanying notes
2
<PAGE> 5
INOTEK TECHNOLOGIES CORP.
INCOME STATEMENTS
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
FEBRUARY 28
1995 1994
-------------------------------
<S> <C> <C>
Net Sales:
Products $18,108,667 $19,541,807
Services 1,691,587 2,515,666
Other 48,722 521,245
-------------------------------
19,848,976 22,578,718
Cost of sales:
Products 13,229,345 14,236,241
Services 1,065,081 1,141,130
Other 11,171 148,007
-------------------------------
14,305,597 15,525,378
-------------------------------
Gross margin 5,543,379 7,053,340
Operating expenses:
Sales and marketing 3,686,208 3,693,882
General and administrative 1,819,064 2,125,414
-------------------------------
5,505,272 5,819,296
-------------------------------
Operating income 38,107 1,234,044
Other expense (123,661) (106,984)
-------------------------------
Earnings (loss) before income taxes and cumulative effect
of change in accounting for income taxes (85,554) 1,127,060
Provision for income taxes 28,688 475,492
-------------------------------
Earnings (loss) before cumulative effect of accounting change (114,242) 651,568
Cumulative effect as of May 31, 1993 of change in method
of accounting for income taxes - 138,000
-------------------------------
Net earnings (loss) $ (114,242) $ 789,568
===============================
Per share:
Earnings (loss) before cumulative effect of accounting change $ (.03) $ .14
Cumulative effect of accounting change - .03
-------------------------------
Net earnings (loss) per share $ (.03) $ .17
===============================
Weighted average shares outstanding 4,534,638 4,733,746
===============================
</TABLE>
See accompanying notes
3
<PAGE> 6
INOTEK TECHNOLOGIES CORP.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
FEBRUARY 28
1995 1994
-----------------------------
<S> <C> <C>
Operating Activities
Net earnings (loss) $ (114,242) $ 789,568
Adjustments to reconcile net earnings
to net cash provided by operating activities:
Depreciation and amortization 274,596 323,117
Deferred taxes (6,262) (188,180)
Net changes in operating assets and liabilities:
Accounts receivable 379,976 (1,319,121)
Inventories 1,177,766 595,916
Prepaid expenses and other assets (102,629) 51,362
Accounts payable (900,724) 310,351
Accrued expenses 18,233 11,776
Income tax payable (293,367) 137,213
-----------------------------
Net cash provided by operating activities 433,347 712,002
INVESTING ACTIVITIES
Purchase of property and equipment (121,359) (79,438)
Decrease in other assets 7,897 2,895
Decrease (increase) in capitalized service inventory (38,233) 74,238
-----------------------------
Net cash used in investing activities (151,695) (2,305)
FINANCING ACTIVITIES
Net reductions in borrowings (531,608) (110,888)
Principal payments under notes payable, including
payment to shareholders of $14,880 in 1995 and
$13,416 in 1994 (37,568) (23,759)
Purchase of redeemable common shares (168,750) (168,750)
Purchase of treasury shares (19,019) (60,003)
Option shares exercised 13,485 -
-----------------------------
Net cash used in financing activities (743,460) (363,400)
-----------------------------
Change in cash and cash equivalents (461,808) 346,297
Cash and cash equivalents, beginning of period 729,037 454,418
-----------------------------
Cash and cash equivalents, end of period $ 267,229 $ 800,715
=============================
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest $ 67,498 $ 21,380
Income taxes 328,318 88,309
SUPPLEMENTAL DISCLOSURES OF NONCASH FINANCING ACTIVITIES:
Modifications of purchase price for stock of INOTEK Corporation $ - 50,000
</TABLE>
See accompanying notes
4
<PAGE> 7
INOTEK TECHNOLOGIES CORP.
NOTES TO FINANCIAL STATEMENTS
NINE MONTHS ENDED FEBRUARY 28, 1995
(UNAUDITED)
1. BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Rule
10-01 of Regulation S-X. 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 (which include only normal recurring
adjustments) necessary for a fair presentation of the results for the
interim periods presented have been made. The results of operations for
such interim periods are not necessarily indicative of the results of
operations for a full year. The interim unaudited financial statements
should be read in conjunction with the financial statements and notes
thereto included in the Company's Annual Report on Form 10-K filed with
the Securities and Exchange Commission for the year ended May 31, 1994.
Certain amounts have been reclassified in the 1994 financial statements in
order to conform to the 1995 presentation.
2. INVENTORIES
Inventories consist of the following:
<TABLE>
<CAPTION>
February 28 May 31
1995 1994
-------------------------------
<S> <C> <C>
Raw materials $ 368,669 $ 554,079
Finished goods 1,759,056 2,751,412
-------------------------------
$2,127,725 $3,305,491
===============================
</TABLE>
3. LONG-TERM DEBT
On October 5, 1994, the Company completed a revolving credit agreement
with a bank providing for borrowings up to $3,000,000 with interest at the
bank's prime rate (9% at February 28, 1995) or a LIBOR-based rate, secured
by the Company's receivables and inventory. Borrowings are based on the
value of the borrowing base as defined in the agreement which expires on
September 30, 1995. The revolving credit agreement also contains
covenants requiring the Company to, among other things, maintain certain
financial ratios in addition to a minimum level of tangible net worth.
Outstanding borrowings under the Company's previous revolving credit
agreement were paid in full and the agreement terminated.
4. SALE OF ENTRONICS DIVISION
On March 16, 1995, the Company sold the inventory and equipment of its
Entronics division for approximately $958,000 in cash pursuant to the
receipt of an unsolicited offer to purchase the tangible assets of the
division. The gain on the sale of Entronics is estimated to be
approximately $200,000, net of applicable taxes. Entronics was engaged in
the manufacture, sale and repair of automated money order dispensers. The
Company and two of its officers also agreed not to compete against the
buyer for a period of five years from the date of the sale.
5
<PAGE> 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
THIRD QUARTER 1995 COMPARED TO THIRD QUARTER 1994
The Company's sales decreased 17% to $6,498,476 for the third quarter ended
February 28, 1995 from the $7,840,774 for the quarter ended February 28, 1994.
Sales for the first nine months of fiscal year 1995 decreased 12% to
$19,848,976 from $22,578,718 for the first nine months of fiscal year 1994.
The decrease in sales for the quarter was due to 1) 10% lower volume sales from
the distribution of process control, instrumentation and test equipment product
lines, 2) the closure of the Company's systems engineering and integration
services operations in July, 1994 and 3) a 61% decrease in AMOD revenue from
the effect of significant sales in the third quarter of last fiscal year to a
large convenience store company for the upgrading of money order dispensers
which did not recur to the same degree in the current quarter. On a
year-to-date basis, the decrease in sales was due to these same factors with
the addition of a 33% decline in service revenues due to the renegotiation of
the Company's service agreement with Duke Power Co. effective December 1, 1993
resulting in annual revenues at approximately half the rate experienced under
the preceding agreement. Effective gross margins for the third quarter of
fiscal years 1995 and 1994 remained the same at approximately 29%, while on a
year-to-date basis gross margins declined by three percentage points from 31%
for the first nine months of 1994 to 28% for the same period of fiscal year
1995. The three-point decline was due primarily to a decline in the margin on
service revenues from Duke Power offset somewhat by a one-point increase in
margins attributable to the Company's core distribution operations.
Selling and marketing expenses remained roughly the same for the first nine
months of both the current and prior years and were down slightly by 3% for the
1995 third quarter compared with the third quarter of 1994. The decrease was
due to somewhat lower compensation costs. General and administrative expenses
were down by 14% or $306,350 on a year-to-date basis through the first three
quarters of 1995 when compared with the same period of 1994 due primarily to
lower compensation costs as a result of lower headcount and lower losses from
uncollectible accounts.
Other expenses, primarily interest expense, increased by $10,497 and $16,667
for the three-month and nine-month period ended February 28, 1995 when compared
to the same periods of the previous fiscal year due to higher average
borrowings and higher interest rates. The Company's provision for income taxes
for the first nine months of fiscal year 1995 amounts to $28,688, in spite of a
loss before income taxes of $85,554 for the same period. The income tax
provision results from certain costs such as amortization of goodwill and
travel and entertainment expenses which are not deductible for income tax
purposes.
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES.
Cash and cash equivalents were $267,229 and $729,037 at February 28, 1995 and
May 31, 1994, respectively. Outstanding borrowings under the Company's
revolving credit agreement amounted to $1,176,159 and $1,707,767 at February
28, 1995 and May 31, 1994, respectively. At February 28, 1995, the maximum
available borrowing under the revolving credit facility amounted to $2,135,462.
The Company's current assets exceeded its current liabilities at February 28,
1995 and May 31, 1994 by $2,852,232 and $3,023,872, respectively. Inventories
declined by $1,177,766 or approximately 36% from a balance of $3,305,491 at May
31, 1994 to a balance of $2,127,725 at February 28, 1995 due to a concerted
effort by management to reduce inventory levels without impairing operations
and due to lower sales volumes. The balance of accounts payable decreased by
$900,724 from May 31, 1994 to February 28, 1995 or approximately 54% due to the
same factors.
6
<PAGE> 9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (CONTINUED)
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES (CONTINUED).
The Company's funding requirements during the quarter were met through cash on
hand, cash provided from operations, and borrowings against INOTEK's revolving
credit agreement. On October 5, 1994, the Company entered into an agreement
with Texas Commerce Bank, an affiliate of Chemical Bank, providing for a
revolving line of credit of up to $3 million, replacing the Company's previous
revolving credit arrangement. Borrowings under the agreement are based on the
value of the Company's receivables, bear interest at either the bank's prime
rate or a LIBOR-based rate, and are secured by INOTEK's receivables and
inventory. The revolving credit agreement contains covenants requiring the
Company to maintain a minimum tangible net worth of $2,865,000 and a ratio of
indebtedness to tangible net worth not the exceed 2:1. To date, the Company
fully complies with all requirements of the agreement including the covenants.
The agreement expires September 30, 1995. The Company has no material
commitment for capital expenditures as of February 28, 1995.
On March 16, 1995, the Company sold the inventory and equipment of its
Entronics division for approximately $958,000 in cash pursuant to the receipt
of an unsolicited offer to purchase the tangible assets of the division. The
gain on the sale of Entronics is estimated to be approximately $200,000, net of
applicable taxes. Entronics was engaged in the manufacture, sale and repair of
automated money order dispensers. The Company and two of its officers also
agreed not to compete against the buyer for a period of five years from the
date of the sale. The proceeds of the sale were used to substantially reduce
the Company's borrowings under its revolving line of credit agreement.
There are no material commitments for the acquisition of property and
equipment. Expenditures for working capital and property and equipment should
remain consistent with previous operating requirements and with the type and
size of a company in our industry. The Company anticipates that its capital
resources, primarily cash provided by operations and available under credit
agreements, will be sufficient to fund the Company's operations and its
obligations as they come due.
7
<PAGE> 10
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is involved in ongoing litigation related to various matters. In
management's opinion, the outcome of such litigation will not have a material
adverse effect on the Company's financial condition.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
1. Exhibit (19)-Report furnished to security holders.
2. Exhibit (27)-Financial Data Schedule.
(b) Reports on 8-K:
No reports on Form 8-K were filed in the quarter for which this
report is filed.
8
<PAGE> 11
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
INOTEK TECHNOLOGIES CORP.
(REGISTRANT)
Date: April 12, 1995 /s/David L. White
-------------------------------
(Officer)
David L. White
Chief Executive Officer
Date: April 12, 1995 /s/R. Lee Simpson
-------------------------------
(Officer)
R. Lee Simpson
Chief Financial Officer
9
<PAGE> 12
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------- -----------
<S> <C>
EX-19 Report furnished to Security Holders
EX-27 Financial Data Schedule
</TABLE>
<PAGE> 1
EXHIBIT (19)
INOTEK TECHNOLOGIES CORP.
REPORT FURNISHED TO SECURITY HOLDERS
TO OUR SHAREHOLDERS:
INOTEK Technologies Corp. reported a net loss of $29,739 or $.01 per share on
revenues of $6,496,476 for its third quarter ended February 28, 1995 compared
with earnings of $225,656 or $.05 per share on revenues of $7,840,774 for the
third quarter of the pervious year. For the first nine months of the year, the
Company reported a net loss of $114,242 or $.03 per share on revenues of
$19,848,976 compared with earnings of $789,568 or $.17 per share on revenues of
$22,578,718 for the first nine months of the previous year. The previous year's
year to date earnings included a non-recurring credit of $138,000 or $.03 per
share to reflect the cumulative effect of adopting a change in accounting for
income taxes required by the Financial Accounting Standards Board.
Although earnings before income taxes were positive, non-deductible expenses
resulted in higher than usual income taxes, which caused the net loss for the
quarter.
We were pleased to announce on March 16, 1995 that we completed the sale of
substantially all of the assets of our Entronics division to Fidelity Express
Money Order Company, a division of GSC Enterprises, Inc. Entronics represented
a separate line of business for us that took valuable management time from our
main focus. This transaction will allow us to sharpen our focus on our primary
business. The proceeds of approximately $1 million from the sale will
substantially reduce our bank indebtedness and greatly strengthen our balance
sheet.
Thank you for your continued support.
/s/ NEAL E. YOUNG /s/ DAVID L. WHITE
Neal E. Young David L. White
Chairman Chief Executive Officer
April 10, 1995
INOTEK TECHNOLOGIES CORP.
STATEMENTS OF OPERATIONS (UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
FEBRUARY 28 FEBRUARY 28
1995 1994 1995 1994
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NET SALES $ 6,498,476 $ 7,840,774 $ 19,848,976 $22,578,718
COST AND EXPENSES:
COST OF SALES 4,617,360 5,538,236 14,305,597 15,525,379
SALES AND MARKETING 1,181,996 1,217,991 3,686,208 3,693,882
GENERAL AND ADMINISTRATIVE 641,769 677,494 1,819,064 2,125,414
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL COST AND EXPENSES 6,441,125 7,433,721 19,810,869 21,344,675
- ---------------------------------------------------------------------------------------------------------------------------------
OPERATING INCOME 57,351 407,053 38,107 1,234,044
OTHER EXPENSE (41,402) (30,905) (123,661) (106,984)
- ---------------------------------------------------------------------------------------------------------------------------------
EARNINGS BEFORE TAXES AND ACCOUNTING CHANGE 15,949 376,148 (85,554) 1,127,060
PROVISION FOR INCOME TAXES 45,688 150,492 28,688 475,492
- ---------------------------------------------------------------------------------------------------------------------------------
EARNINGS BEFORE EFFECT OF ACCOUNTING CHANGE (29,739) 225,656 (114,242) 651,568
CUMULATIVE EFFECT OF ACCOUNTING CHANGE -- -- -- 138,000
- ---------------------------------------------------------------------------------------------------------------------------------
NET EARNINGS $ (29,739) $ 225,656 $ (114,242) $ 789,568
=================================================================================================================================
EARNINGS BEFORE EFFECT OF ACCOUNTING CHANGE $ (.01) $ .05 $ (.03) $ .14
CUMULATIVE EFFECT OF ACCOUNTING CHANGE -- -- -- .03
- ---------------------------------------------------------------------------------------------------------------------------------
NET EARNINGS PER SHARE $ (.01) $ .05 $ (.03) $ .17
=================================================================================================================================
</TABLE>
INOTEK TECHNOLOGIES CORP.
BALANCE SHEETS
<TABLE>
<CAPTION>
FEBRUARY 28, MAY 31,
1995 1994
(UNAUDITED)
- ----------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
CASH AND CASH EQUIVALENTS $ 267,229 $ 729,037
TRADE RECEIVABLES, (NET OF
ALLOWANCE FOR DOUBTFUL
ACCOUNTS OF $63,504 AND $71,272) 2,839,939 3,219,905
INVENTORIES 2,127,725 3,305,491
DEFERRED TAX ASSET 91,753 102,000
PREPAID EXPENSES & OTHER ASSETS 188,194 85,565
- ----------------------------------------------------------------------------------------------------
TOTAL CURRENT ASSETS 5,514,830 7,441,998
PROPERTY AND EQUIPMENT, NET 468,044 509,683
GOODWILL, NET 2,271,660 2,319,574
INTANGIBLE ASSETS, NET -- 20,834
OTHER ASSETS 55,454 67,968
DEFERRED TAX ASSET 165,509 149,000
- ----------------------------------------------------------------------------------------------------
$ 8,475,497 $10,509,057
====================================================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
ACCOUNTS PAYABLE $ 778,146 $ 1,678,870
ACCRUED EXPENSES 688,068 669,835
INCOME TAXES PAYABLE 25,497 318,864
CURRENT PORTION OF NOTES PAYABLE 1,197,887 1,750,557
- ----------------------------------------------------------------------------------------------------
TOTAL CURRENT LIABILITIES 2,689,598 $44,418,126
NOTES PAYABLE 11,738 28,244
REDEEMABLE COMMON SHARES,
$.01 PAR VALUE, 139,109 SHARES
AT FEBRUARY 28, 1995 AND 193,109
SHARES AT MAY 31, 1994 437,526 606,276
SHAREHOLDERS' EQUITY:
COMMON SHARES, $.01 PAR VALUE;
AUTHORIZED SHARES - 10,000,000
ISSUED SHARES - 4,548,197 AT
FEBRUARY 28, 1995 AND 4,581,697
AT MAY 31, 1994
OUTSTANDING SHARES - 4,409,088
AT FEBRUARY 28, 1995 AND
4,388,588 AT MAY 31, 1994 44,091 43,886
ADDITIONAL PAID-IN CAPITAL 3,431,234 3,399,204
RETAINED EARNINGS 1,993,548 2,107,790
TREASURY SHARES AT COST (55,000
SHARES AT FEBRUARY 28, 1995 AND
30,000 SHARES AT MAY 31, 1994) (132,238) (94,469)
- ----------------------------------------------------------------------------------------------------
TOTAL SHAREHOLDERS' EQUITY 5,336,635 5,456,411
- ----------------------------------------------------------------------------------------------------
$ 8,475,497 $10,509,057
====================================================================================================
</TABLE>
10
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAY-31-1995
<PERIOD-START> JUN-01-1994
<PERIOD-END> FEB-28-1995
<CASH> 267,229
<SECURITIES> 0
<RECEIVABLES> 2,839,929
<ALLOWANCES> 63,504
<INVENTORY> 2,127,725
<CURRENT-ASSETS> 5,514,830
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 8,475,497
<CURRENT-LIABILITIES> 2,689,598
<BONDS> 11,738
<COMMON> 44,091
0
0
<OTHER-SE> 5,292,544
<TOTAL-LIABILITY-AND-EQUITY> 8,475,497
<SALES> 18,108,667
<TOTAL-REVENUES> 19,848,976
<CGS> 13,229,345
<TOTAL-COSTS> 14,305,597
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
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