UNITED STATES
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 three month period ended December 31, 1999
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission file number 0-16172
COMPUTONE CORPORATION
(Exact name of small business issuer as specified in its charter)
Delaware 23-2472952
- ------------------------------- ---------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
1060 Windward Ridge Parkway, Suite 100, Alpharetta, GA 30005
------------------------------------------------------------
(Address of principal executive offices)
Issuer's telephone number, including area code: (770) 625-0000
N/A
---
(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act 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 [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 9,897,793 shares of common stock on
February 8, 2000.
Transitional Small Business Disclosure Format (check one): Yes [ ] No [X]
<PAGE>
COMPUTONE CORPORATION AND SUBSIDIARIES
INDEX
PART I - FINANCIAL INFORMATION
ITEM 1. Financial Statements:
Consolidated Balance Sheets as of December 31, 1999 and
April 2, 1999 3
Consolidated Statements of Operations for the three
months ended December 31, 1999 and January 1, 1999 4
Consolidated Statements of Operations for the nine
months ended December 31, 1999 and January 1, 1999 5
Consolidated Statements of Cash Flows for the nine
months ended December 31, 1999 and January 1, 1999 6
Notes to Consolidated Financial Statements 7
ITEM 2. Management's Discussion and Analysis or Plan of
Operations for the three and nine months ended December
31, 1999 compared to three and nine months ended
January 1, 1999 9
PART II - OTHER INFORMATION
ITEM 1. Legal Proceedings 12
ITEM 2. Changes in Securities 12
ITEM 3. Defaults Upon Senior Securities 12
ITEM 4. Submission of Matters to a Vote of Security Holders 12
ITEM 5. Other Information 12
ITEM 6. Exhibits and Reports on Form 8-K 12
SIGNATURES 13
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
Computone Corporation and Subsidiaries
Consolidated Balance Sheets
(in thousands)
<TABLE>
<CAPTION>
December 31, 1999 April 2, 1999
----------------- -------------
(unaudited)
ASSETS
Current assets:
<S> <C> <C>
Cash and cash equivalents $ 80 $ 18
Receivables, net of allowance for doubtful accounts
of $284 at December 31, 1999 and $489 at April 2, 1999 1,671 1,963
Inventories, net 2,105 2,197
Prepaid expenses and other 49 63
---------- ----------
Total current assets 3,905 4,241
Property, equipment and improvements, net 624 591
Intangible assets, net 393 438
Other 27 38
---------- ----------
TOTAL ASSETS $ 4,949 $ 5,308
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable, trade $ 843 $ 2,143
Accrued liabilities:
Payroll 82 83
Deferred sales 315 229
Interest 236 199
Other 526 430
Line of credit 810 1,049
Notes payable to stockholders 590 590
Current maturities of long-term debt 151 132
---------- ----------
Total current liabilities 3,553 4,855
Long-term debt, less current maturities 233 347
---------- ----------
Total liabilities 3,786 5,202
---------- ----------
Stockholders' equity:
Convertible redeemable preferred stock, $.01 par value;
10,000,000 shares authorized; no shares issued -- --
Common stock, $.01 par value; 25,000,000 shares
authorized; 9,439,922 and 8,321,674 shares outstanding 94 83
Additional paid-in capital 48,729 47,369
Accumulated deficit (47,660) (47,346)
---------- ----------
Total stockholders' equity 1,163 106
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 4,949 $ 5,308
========== ==========
</TABLE>
See accompanying notes to the consolidated financial statements.
3
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
Computone Corporation and Subsidiaries
Consolidated Statements of Operations
(in thousands, except per share data)
Three Months Ended
----------------------------------
December 31, 1999 January 1, 1999
----------------- ---------------
(unaudited)
Revenues:
Product sales $ 2,378 $ 1,922
---------- ----------
Expenses:
Cost of products sold 1,451 1,212
Selling, general and administrative 836 1,109
Product development 437 518
---------- ----------
2,724 2,839
---------- ----------
Operating loss (346) (917)
Other income (expense):
Interest expense - affiliates (19) (23)
Interest expense - other (27) (37)
---------- ----------
Loss before income taxes (392) (977)
Provision for income taxes -- --
---------- ----------
Net loss $ (392) $ (977)
========== ==========
Loss per common share:
Basic $ (0.05) $ (0.13)
========== ==========
Diluted $ (0.05) $ (0.13)
========== ==========
See accompanying notes to the consolidated financial statements.
4
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
Computone Corporation and Subsidiaries
Consolidated Statements of Operations
(in thousands, except per share data)
Nine Months Ended
------------------------------------
December 31, 1999 January 1, 1999
----------------- ---------------
(unaudited)
Revenues:
Product sales $ 9,757 $ 7,574
---------- ----------
Expenses:
Cost of products sold 5,878 5,092
Selling, general and administrative 2,723 3,635
Product development 1,326 1,475
---------- ----------
9,927 10,202
---------- ----------
Operating loss (170) (2,628)
Other income (expense):
Other income -- 2
Interest expense - affiliates (57) (51)
Interest expense - other (87) (70)
---------- ----------
Loss before income taxes (314) (2,747)
Provision for income taxes -- --
---------- ----------
Net loss $ (314) $ (2,747)
========== ==========
Loss per common share:
Basic $ (0.04) $ (0.36)
========== ==========
Diluted $ (0.04) $ (0.36)
========== ==========
See accompanying notes to the consolidated financial statements.
5
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
Computone Corporation and Subsidiaries
Consolidated Statements of Cash Flows
(in thousands)
<TABLE>
<CAPTION>
Nine Months Ended
-----------------------------------
December 31, 1999 January 1, 1999
----------------- ---------------
(unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net loss from operations $ (314) $ (2,747)
Adjustments to reconcile loss from operations
to net cash provided by (used in) operations:
Settlement of accounts payables in exchange for common stock 691 --
Depreciation and amortization 354 336
Provision for uncollectible accounts 66 110
Provision for inventory reserve 112 70
Changes in current assets and current liabilities:
Accounts receivable 226 993
Inventories (20) 1,632
Prepaid expenses and other 14 22
Accounts payable and accrued liabilities (1,082) (275)
---------- ----------
Net cash provided by operations 47 141
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Decrease (increase) in other assets 11 (450)
Capitalization of software costs (216) (136)
Capital expenditures (126) (114)
---------- ----------
Net cash used in investing activities (331) (700)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings from affiliates -- 545
Repayment of debt - net (95) (167)
Net repayments under lines of credit (239) (820)
Exercise of common stock options and warrants 11 3
Issuance of common stock 669 905
---------- ----------
Net cash provided by financing activities 346 466
---------- ----------
Net increase (decrease) in cash and cash equivalents 62 (93)
Cash and cash equivalents, beginning of period 18 146
---------- ----------
Cash and cash equivalents, end of period $ 80 $ 53
========== ==========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the year for:
Interest $ 87 $ 70
SUPPLEMENTAL DISCLOSURES OF NON-CASH ACTIVITIES:
Common stock issued in settlement of accounts payables $ 691 $ --
</TABLE>
See accompanying notes to the consolidated financial statements.
6
<PAGE>
COMPUTONE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
All statements contained in this Form-10QSB Quarterly Report that are not
historical facts are based on current expectations. Such statements are
forward-looking (as defined in the Private Securities Litigation Reform Act of
1995) in nature and involve a number of risks and uncertainties. Actual results
could vary materially. The factors that could cause actual results to vary
materially include: the ability of the Company to obtain and maintain adequate
working capital, future supply and demand for the Company's products, changes in
business and economic conditions, availability of raw materials and parts, and
other risks that may be described from time to time in reports the Company files
with the Securities and Exchange Commission ("SEC"). Undue reliance should not
be placed on any such forward-looking statements.
1. BASIS OF PRESENTATION
---------------------
The financial statements included in this Form 10-QSB Quarterly Report have
been prepared by the Company, without audit, pursuant to the rules and
regulations of the SEC. 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. These financial statements should be read in conjunction with
the financial statements and related notes included in the Company's Annual
Report on Form 10-KSB for its fiscal year ended April 2, 1999.
The financial statements presented herein as of December 31, 1999 reflect,
in the opinion of management, all adjustments necessary for a fair presentation
of financial position and the results of operations for the periods presented.
The results of operations for any interim period are not necessarily indicative
of the results for the full year.
2. REVENUE RECOGNITION
-------------------
Product sales are generally recognized, net of an allowance for estimated
sales returns and allowances, when the related products are shipped. Revenue on
sales to customers who are not end users of the Company's products are deferred
until such time as the product has been sold through to the end user.
A warranty reserve of less than one percent of sales is accrued at the date
of shipment. The Company generally provides a warranty of five years on all of
its products sold.
3. INVENTORIES
-----------
Inventories are valued at the lower of cost or market, with cost determined
on the first-in, first-out method.
Raw materials that have no planned production life or exceed 18 months of
anticipated supply are deemed excess and are fully reserved. Reserves are also
established, as management deems appropriate, for obsolete, excess and
non-salable inventories, including finished goods inventories.
Inventories are net of a reserve for obsolete, excess and non-salable items
of $589,000 and $908,000 at December 31, 1999 and April 2, 1999, respectively.
7
<PAGE>
COMPUTONE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
(UNAUDITED)
3. INVENTORIES, CONTINUED
----------------------
Inventories, net of a reserve for obsolete, excess and non-salable items,
consisted of the following at December 31, 1999 and April 2, 1999 (in
thousands):
December 31, 1999 April 2, 1999
----------------- -------------
Finished goods $ 513 $ 165
Work in progress 489 877
Raw materials 1,103 1,155
---------- ----------
$ 2,105 $ 2,197
========== ==========
4. LOSS PER SHARE
--------------
Basic loss per share excludes dilution and is computed by dividing loss
available to common shareholders by the weighted average number of common shares
outstanding for the period. Diluted loss per share reflects the potential
dilution that could occur if securities or other contracts to issue common stock
were exercised or converted into common stock. For purposes of computing basic
and diluted loss per share, the net loss for each period presented (the
numerator) is divided by the weighted average number of common shares
outstanding (the denominator) resulting in basic and diluted loss per share of
$0.05 for the three months ended December 31, 1999 and $0.13 for the three
months ended January 1, 1999. The basic and diluted loss per share for the nine
months ended December 31, 1999 is $0.04 and $0.36 for the nine months ended
January 1, 1999. For purposes of computing diluted loss per share during the
three and nine month periods, the Company excluded the effects of outstanding
common stock options and warrants because they were anti-dilutive.
5. INCOME TAXES
------------
The Company had available net operating and capital loss carryforwards
amounting to approximately $50 million at April 2, 1999, including operating
loss carryforwards which relate to a predecessor company, which expire in 2014.
As a result of several ownership changes which have occurred since the losses
started to accumulate, statutory provisions will substantially limit the
Company's future use of the loss carryforwards.
6. DEBT
----
On November 17, 1998, the Company entered into a financing arrangement
which provides for a line of credit that is primarily collateralized by the
Company's accounts receivable and inventory. On October 1, 1999, the Company
renewed this financing agreement. The renewed agreement provides for a line of
credit up to $1,400,000 ($810,000 outstanding at December 31, 1999) and is based
on the available borrowing base, at an interest rate of prime plus 2.00%. This
financing arrangement expires in November 2000.
8
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS FOR THE
THREE AND NINE MONTHS ENDED DECEMBER 31, 1999 COMPARED TO THE THREE
AND NINE MONTHS ENDED JANUARY 1, 1999.
RESULTS OF OPERATIONS
- ---------------------
FOR THE THREE MONTHS ENDED DECEMBER 31, 1999
- --------------------------------------------
The Company reported a net loss for the three month period ended December
31, 1999 of $393,000 compared to a net loss of $977,000 for the comparable three
month period of the prior fiscal year. The Company's operating results for the
three months ended December 31, 1999 were favorably affected by increased
shipments, increased gross margins, decreased general and administrative
expenses, and decreased product development costs.
Product sales revenue for the three month period ended December 31, 1999
totaled approximately $2,378,000 compared to $1,922,000 for the comparable three
month period of the prior fiscal year, an increase of $456,000, or 24%. This
increase is attributable to the Company's continued focus on distribution
channels and a larger than normal order from an OEM customer.
Cost of products sold for the three month period ended December 31, 1999
amounted to $1,451,000, or 61% of product sales revenues, versus $1,212,000, or
63%, for the comparable three month period of the prior year. The decrease in
cost of products sold as a percentage of revenues is due to pricing
improvements, lower component costs and a change in product mix.
Selling, general and administrative expenses amounted to $836,000, or 35%
of product sales revenue, for the three months ended December 31, 1999 versus
$1,109,000, or 58%, for the comparable three months of the prior fiscal year.
The decrease in selling, general and administrative expenses during the three
month period ended December 31, 1999 versus the same period of the prior fiscal
year is attributable to decreases in compensation costs due to staff reductions,
reduced legal costs due to settlement of litigation in the prior fiscal year,
and the successful implementation of other cost reduction efforts.
Product development expenses amounted to $437,000, or 18% of product sales
revenue, for the three months ended December 31, 1999 versus $518,000, or 27%,
for the comparable three month period of the prior fiscal year. The decrease in
product development expenses during the three month period ended December 31,
1999 versus the same period of the prior fiscal year is attributable to
decreases in costs of third party engineering services, partially offset by
increases in development of prototypes and testing of new products. The Company
expects that product development expenses will continue at the current level for
the remainder of the fiscal year.
FOR THE NINE MONTHS ENDED DECEMBER 31, 1999
- -------------------------------------------
The Company reported a net loss for the nine month period ended December
31, 1999 of $314,000 compared to $2,747,000 for the comparable nine month period
of the prior fiscal year. The Company's operating results for the nine months
ended December 31, 1999 were favorably affected by increased sales volumes,
higher gross margins, decreased general and administrative expenses, and
decreased product development costs.
Product sales revenue for the nine month period ended December 31, 1999
totaled approximately $9,757,000 compared to $7,574,000 for the comparable nine
month period of the prior fiscal year, an increase of $2,183,000 or 29%. This
increase is attributable to the Company's continued focus on distribution
channels and to project-related business from two large customers.
Cost of products sold for the nine month period ended December 31, 1999
amounted to $5,878,000, or 60% of product sales revenues versus $5,092,000, or
67%, for the comparable nine month period of the prior year. The decrease in
cost of products sold as a percentage of revenues is due to pricing
improvements, lower component costs and a change in product mix.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS FOR THE
THREE AND NINE MONTHS ENDED DECEMBER 31, 1999 COMPARED TO THE THREE
AND NINE MONTHS ENDED JANUARY 1, 1999, CONTINUED.
Selling, general and administrative expenses amounted to $2,723,000, or 28%
of product sales revenue, for the nine months ended December 31, 1999 versus
$3,635,000, or 48%, for the comparable nine months of the prior fiscal year. The
$917,000 decrease in selling, general and administrative expenses during the
nine month period ended December 31, 1999 versus the same period of the prior
fiscal year is attributable to decreases in compensation costs due to staff
reductions, reduced legal costs due to settlement of litigation in the prior
fiscal year, and the successful implementation of other cost reduction efforts.
Product development expenses amounted to $1,326,000, or 14% of product
sales revenue, for the nine months ended December 31, 1999 versus $1,475,000, or
19%, for the comparable nine month period of the prior fiscal year. The decrease
in product development costs during the nine month period ended December 31,
1999 versus the same period of the prior fiscal year is attributable to
decreases in costs of third party engineering services, partially offset by
increases in development of prototypes and testing of new products. The Company
expects that product development expenses will continue at the current level for
the remainder of the fiscal year.
LIQUIDITY
- ---------
On November 17, 1998, the Company entered into a financing arrangement
which provides for a line of credit that is primarily collateralized by the
Company's accounts receivable and inventory. On October 1, 1999, the Company
renewed this financing agreement. The renewed agreement provides for a line of
credit up to $1,400,000 ($810,000 outstanding at December 31, 1999) and is based
on the available borrowing base, at an interest rate of prime plus 2.00%. This
financing arrangement expires in November 2000. At December 31, 1999, the
borrowing availability under this line of credit was $234,000.
The Company's primary cash commitments in fiscal 2000 include payments
under non-cancelable operating leases ($293,000), short-term debt ($741,000) and
investments in research and development ($1,326,000 for the first nine months of
fiscal year 2000). With respect to notes payable and current maturities of
long-term debt, approximately $590,000 of the $741,000 is due to related
parties, the payment terms of which the Company believes can be extended as
needed.
Cash provided by operations amounted to $47,000 for the nine months ended
December 31, 1999 compared to $141,000 for the nine months ended January 1,
1999. The decrease in cash provided by operations compared to the prior year
fiscal period primarily reflects the fact that the Company reduced its accounts
payable.
Cash used in investing activities amounted to $331,000 for the nine months
ended December 31, 1999 compared with $700,000 for the nine months ended January
1, 1999. This decrease from the same period of the prior fiscal year is
attributable to the decrease in other assets. The Company does not anticipate a
significant increase in the level of capital expenditures.
Cash provided by financing activities during the nine months ended December
31, 1999 was $346,000 compared with $466,000 for the nine months ended January
1, 1999. This decrease is primarily due to a decrease in cash received from the
issuance of common stock.
The Company is endeavoring to raise $1.5 million in equity capital by the
end of the Company's fiscal year by offering for sale, to accredited investors,
shares of the Company's common stock under Regulation D of the Securities Act of
1993. As of December 31, 1999 the Company had raised $500,000 under this
offering. The funds will be used for working capital purposes and to fund
investments in research and development and marketing of new products. However,
no assurances can be given that the Company will be successful in raising
additional capital. Further, there can be no assurance, assuming the Company
successfully raises additional funds, that the Company will achieve
profitability or maintain positive cash flow.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS FOR THE
THREE AND NINE MONTHS ENDED DECEMBER 31, 1999 COMPARED TO THE THREE
AND NINE MONTHS ENDED JANUARY 1, 1999, CONTINUED.
Working capital was $352,000 at December 31, 1999 versus a deficit of
$614,000 at April 2, 1999, an improvement of $965,000. The ratio of current
assets to current liabilities at December 31, 1999 was 1.10 to 1.00 compared to
.87 to 1.00 at April 2, 1999. This increase is due primarily to the settlement
of $691,000 of accounts payable through the issuance of common stock.
OUTLOOK FOR REMAINDER OF FISCAL YEAR 2000
- -----------------------------------------
Management believes that new or redesigned products will enhance the
Company's ability to increase its sales in fiscal 2000. The new "Gold" card
family of products are high performance, cost effective PCI controller products
specifically designed to meet the needs of the remote access market. Shipments
of the Gold 4 and Gold 8 products began in January 2000. The Intelliserver
RAS-2000 Powerrack is a redesign of the Powerrack family with enhanced
performance, remote access server features and configurations added. Shipments
of the RAS-2000 began in October 1999. Additionally, during January 2000, the
Company began shipping the enhanced ISA-4RJ Plus product.
During the first half of fiscal 2000, the Company's backlog decreased from
$2,573,000 at April 2, 1999 to less than $100,000 at December 31, 1999. The
backlog at April 2, 1999 was significantly higher than would normally be
expected. During the fourth quarter of fiscal year 1999, the Company resolved a
payment issue with its principal contract manufacturing supplier. However, due
to long lead times for certain components the supplier was unable to make
significant deliveries during the later portion of fiscal year 1999. During
fiscal year 2000, the Company has increased its finished goods inventory from
$165,000 at April 2, 1999 to $513,000 at December 31, 1999, and is now able to
ship most orders shortly after receipt of the order. As result, management
believes the level of the Company's backlog at December 31, 1999 is not a
reliable indicator of future sales.
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
On September 28, 1999, the SEC filed a complaint (Civil Action No.
1:99-CV-2496) in the United States District Court for the Northern
District of Georgia against the Company and five former officers of
the Company. The complaint alleges a pervasive effort by former senior
management employees to overstate the Company's income from October
1993 through October 1997. The complaint seeks permanent injunctions
against all the defendants, and seek civil money penalties against the
five former officers, and disgorgement plus prejudgement interest
against one former officer.
The Company and the SEC have reached agreement regarding the
settlement of this matter, and the settlement is in the process of
being documented. The settlement involves the Company's consent to
certain matters, but does not include any monetary penalties against
the Company.
ITEM 2. CHANGES IN SECURITIES
In November and December 1999, the Company sold 500,000 shares of
Common Stock at a price of $1.00 per share to several accredited
investors in a private placement being effected through a registered
broker dealer as placement agent. The private placement is pursuant to
Regulation D under the Securities Act of 1933. The placement agent
will receive shares of the Company's common stock as compensation. The
number of shares issued will be dependent on the amount of proceeds
received. The aggregate proceeds from such sales of Common Stock of
$500,000 were used for working capital items and to partially fund the
Company's loss from operations of $393,000 during the fiscal quarter
ended December 31, 1999.
In December 1999, the Company issued 325,000 shares of common stock in
settlement of accounts payable of $691,000.
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.
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
COMPUTONE CORPORATION
Date: February 11, 2000 By: /s/ Perry J. Pickerign
----------------------
Perry J. Pickerign
President and Chief Executive Officer
(Principal Executive Officer)
By: /s/ Keith H. Daniel
----------------------
Keith H. Daniel
Chief Financial Officer
(Principal Financial and
Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAR-31-2000
<PERIOD-START> APR-03-1999
<PERIOD-END> DEC-31-1999
<CASH> 80
<SECURITIES> 0
<RECEIVABLES> 1,955
<ALLOWANCES> 284
<INVENTORY> 2,105
<CURRENT-ASSETS> 3,905
<PP&E> 3,633
<DEPRECIATION> 3,009
<TOTAL-ASSETS> 4,949
<CURRENT-LIABILITIES> 3,553
<BONDS> 0
0
0
<COMMON> 94
<OTHER-SE> 1,069
<TOTAL-LIABILITY-AND-EQUITY> 4,949
<SALES> 9,757
<TOTAL-REVENUES> 9,757
<CGS> 5,878
<TOTAL-COSTS> 9,927
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 144
<INCOME-PRETAX> (314)
<INCOME-TAX> 0
<INCOME-CONTINUING> (314)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (314)
<EPS-BASIC> (0.04)
<EPS-DILUTED> (0.04)
</TABLE>
