<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended JUNE 30, 1995
---------------------------------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
--------------------- ---------------------
Commission file number 0-16752
---------
CYTOCARE, INC.
- -----------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 66-0439440
- -----------------------------------------------------------------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
100 COLUMBIA, SUITE 100, ALISO VIEJO, CALIFORNIA 92718
- -----------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (714) 448-7700
------------------------
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
--- ---
The number of shares of the Common Stock of the registrant outstanding as of
August 4, 1995 was 5,197,355.
<PAGE> 2
CYTOCARE, INC.
INDEX TO FORM 10-Q
PART I. FINANCIAL INFORMATION
------------------------------
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
Item 1. Financial Statements:
Condensed Consolidated Balance Sheets
June 30, 1995 (Unaudited) 3
and December 31, 1994
Condensed Consolidated Statements of Operations (Unaudited)
Three and Six Months Ended June 30, 1995 and 1994 4
Condensed Consolidated Statement of Stockholders' Equity (Unaudited)
Six Months Ended June 30, 1995 5
Condensed Consolidated Statements of Cash Flows (Unaudited)
Six Months ended June 30, 1995 and 1994 6
Notes to Unaudited Condensed Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 9
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>
<PAGE> 3
CYTOCARE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
------
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1995 1994
----------- ------------
(Unaudited)
<S> <C> <C>
Current assets:
Cash and equivalents . . . . . . . . . . . . . . . . . . . $ 1,806,724 $ 1,261,596
Short term investments . . . . . . . . . . . . . . . . . . 14,475,840 13,148,586
Accounts receivable, less allowance for doubtful
accounts of $265,000 and $257,000 at June
30, 1995 and December 31, 1994, respectively . . . . . . . 1,564,295 1,825,150
Inventories . . . . . . . . . . . . . . . . . . . . . . . . 1,647,445 1,607,090
Deferred tax assets . . . . . . . . . . . . . . . . . . . . 1,005,000 1,005,000
Prepaid expenses and other current assets . . . . . . . . . 488,024 394,595
----------- -----------
Total current assets . . . . . . . . . . . . . . . . . . 20,987,328 19,242,017
Property and equipment, at cost . . . . . . . . . . . . . . . . . 6,180,870 6,722,721
Less accumulated depreciation and amortization . . . . . . . (3,463,218) (3,727,123)
----------- -----------
Net property and equipment . . . . . . . . . . . . . . . 2,717,652 2,995,598
Other assets, net . . . . . . . . . . . . . . . . . . . . . . . . 172,500 22,500
----------- -----------
$23,877,480 $22,260,115
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities:
Accounts payable . . . . . . . . . . . . . . . . . . . . . . $ 461,923 $ 521,496
Accrued expenses . . . . . . . . . . . . . . . . . . . . . . 172,459 368,942
Accrued income taxes . . . . . . . . . . . . . . . . . . . . 433,784 601,776
Accrued payroll expenses . . . . . . . . . . . . . . . . . . 244,724 408,884
Deferred revenue . . . . . . . . . . . . . . . . . . . . . . 551,941 642,551
Customer deposits . . . . . . . . . . . . . . . . . . . . . . --- 40,000
----------- -----------
Total current liabilities . . . . . . . . . . . . . . . . 1,864,831 2,583,649
Deferred tax liabilities . . . . . . . . . . . . . . . . . . . . 225,000 225,000
Commitments and contingencies
Stockholders' equity:
Common stock - $.004 par value, 20,000,000
shares authorized, 5,177,133 and 4,944,603
shares issued and outstanding at June 30,
1995 and December 31, 1994, respectively . . . . . . . . . 20,789 19,778
Additional paid-in capital . . . . . . . . . . . . . . . . . 17,937,634 17,675,642
Unrealized gain/(loss) on short-term investments . . . . . . 17,613 (46,279)
Accumulated earnings . . . . . . . . . . . . . . . . . . . . 3,811,613 1,802,325
----------- -----------
Total stockholders' equity . . . . . . . . . . . . . . . 21,787,649 19,451,466
----------- -----------
$23,877,480 $22,260,115
=========== ===========
</TABLE>
See accompanying notes.
3
<PAGE> 4
CYTOCARE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
1995 1994 1995 1994
---------- ---------- ---------- ----------
<S> <C> <C> <C>
Revenues:
Net equipment sales . . . . . . . . . . . $ 997,500 $ 751,095 $2,392,665 $2,286,095
Procedures fees, maintenance
and laser catheters . . . . . . . . . . 3,023,613 2,936,441 6,212,059 5,773,730
Interest. . . . . . . . . . . . . . . . . 246,530 140,363 476,771 259,763
---------- ---------- ---------- ----------
Total revenues . . . . . . . . . . . 4,267,643 3,827,899 9,081,495 8,319,588
Costs and expenses:
Cost of equipment sales . . . . . . . . . 454,659 288,326 1,041,476 965,692
Costs related to procedures and
maintenance fees and laser catheters . 1,251,481 1,071,937 2,594,873 2,074,877
Research and development . . . . . . . . 273,614 284,720 489,528 672,484
Selling and marketing . . . . . . . . . . 452,794 836,170 969,717 1,492,964
General and administrative . . . . . . . 425,875 532,129 883,008 1,145,276
Other expense . . . . . . . . . . . . . . 12,609 2,668 13,605 20,502
---------- ---------- ---------- ----------
Total costs and expenses . . . . . . 2,871,032 3,015,950 5,992,207 6,371,795
---------- ---------- ---------- ----------
Income (loss) before provision
for (benefit from) income taxes . . . . 1,396,611 811,949 3,089,288 1,947,793
Provision for (benefit from) income taxes 480,000 160,000 1,080,000 331,000
---------- ---------- ---------- ----------
Net income (loss). . . . . . . . . . . . . . $ 916,611 $ 651,949 $2,009,288 $1,616,793
========== ========== ========== ==========
Earnings per share:
Primary . . . . . . . . . . . . . . . . . $ .17 $ .12 $ .36 $ .30
========== ========== ========== ==========
Fully diluted . . . . . . . . . . . . . . $ .17 $ .12 $ .36 $ .30
========== ========== ========== ==========
Number of shares used in the computation of
income per share:
Primary . . . . . . . . . . . . . . . . . 5,502,009 5,304,003 5,516,663 5,327,883
========== ========== ========== ==========
Fully diluted . . . . . . . . . . . . . . 5,535,073 5,304,003 5,572,763 5,327,883
========== ========== ========== ==========
</TABLE>
See accompanying notes.
4
<PAGE> 5
CYTOCARE, INC.
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
SIX MONTHS ENDED JUNE 30, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
COMMON STOCK
--------------------- ADDITIONAL UNREALIZED LOSS
NUMBER OF PAID-IN ACCUMULATED ON SHORT-TERM
SHARES AMOUNT CAPITAL (DEFICIT) INVESTMENTS TOTAL
--------- ------- ----------- ----------- ---------------- -----------
<S> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1994 . . . . . . 4,944,603 $19,778 $17,675,642 $1,802,325 $(46,279) $19,451,466
Common Stock options exercised . . . . . 252,752 1,011 261,992 --- --- 263,003
Unrealized loss on short-term
investments . . . . . . . . . . . . . --- --- --- --- 63,892 63,892
Net income . . . . . . . . . . . . . . . --- --- --- 2,009,288 2,009,288
--------- ------- ----------- ---------- -------- -----------
Balance at June 30, 1995 . . . . . . . . 5,197,355 $20,789 $17,937,634 $3,811,613 $ 17,613 $21,787,649
========= ======= =========== ========== ======== ===========
</TABLE>
See accompanying notes.
5
<PAGE> 6
CYTOCARE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 1995 AND 1994
(UNAUDITED)
<TABLE>
<CAPTION>
1995 1994
------------ ------------
<S> <C> <C>
Cash flows from operating activities:
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,009,288 $ 1,616,793
Adjustments to reconcile net income to net
cash provided by (used in) operating activities:
Depreciation and amortization . . . . . . . . . . . . . . . . 460,777 421,347
Provision for doubtful accounts . . . . . . . . . . . . . . . --- 130,000
Provision for related party loan . . . . . . . . . . . . . . 1,315 18,412
Unrealized losses (gains) on short-term
investments . . . . . . . . . . . . . . . . . . . . . . . . --- (9,513)
Changes in assets and liabilities:
Accounts receivable . . . . . . . . . . . . . . . . . . . . 256,849 32,621
Inventories . . . . . . . . . . . . . . . . . . . . . . . . (249,888) (475,734)
Prepaid expenses and other current assets . . . . . . . . . (93,429) 206,739
Accounts payable and accrued expenses . . . . . . . . . . . (420,216) 25,801
Accrued income taxes . . . . . . . . . . . . . . . . . . . (167,992) 288,501
Deferred revenue . . . . . . . . . . . . . . . . . . . . . . (90,610) 194,380
Customer deposits . . . . . . . . . . . . . . . . . . . . . (40,000) (82,417)
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . (150,000) 99,561
------------ ------------
Net cash provided by (used in) operating activities . . . . . . 1,516,094 2,466,491
------------ ------------
Cash flows from investing activities:
Purchase of marketable securities . . . . . . . . . . . . . . . (11,467,589) (14,031,043)
Sale of marketable securities . . . . . . . . . . . . . . . . . 10,210,923 12,435,555
Related party loan . . . . . . . . . . . . . . . . . . . . . . . (4,006) (18,412)
Purchase of property and equipment . . . . . . . . . . . . . . . (185,545) (771,750)
Disposals of property and equipment . . . . . . . . . . . . . . 212,248 37,571
------------ ------------
Net cash used in investing activities . . . . . . . . . . . . . (1,233,969) (2,348,079)
------------ ------------
Cash flows from financing activities:
Proceeds from issuance of common stock . . . . . . . . . . . . 263,003 53,528
------------ ------------
Net increase (decrease) in cash and equivalents . . . . . . . . . . 545,128 171,940
Cash and equivalents at beginning of period . . . . . . . . . . . 1,261,596 2,410,363
------------ ------------
Cash and equivalents at end of period . . . . . . . . . . . . . . . $ 1,806,724 $ 2,582,303
============ ============
Supplemental cash flow disclosures:
Cash paid during the period for:
Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,257,900 $ 42,499
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . $ --- $ ---
</TABLE>
See accompanying notes.
6
<PAGE> 7
CYTOCARE, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1995
A. ORGANIZATION AND OPERATIONS OF THE COMPANY
Cytocare, Inc. (the "Company" or "Cytocare"), a Delaware corporation
formed in October 1984, develops, manufactures and markets medical devices and
therapeutics to treat urological diseases. Medstone, a wholly-owned
subsidiary, manufactures, markets and maintains lithotripters, and is expanding
its Fee-for-Service Program that supplies lithotripsy equipment to providers
on a per procedure basis. Endocare, the Company's endourology subsidiary,
manufactures equipment and devices to treat urologic soft tissue diseases. A
majority of the Company's consolidated revenues come from Medstone's
lithotripsy business.
The Company, as a manufacturer of capital medical devices, has been
vertically integrating by offering its medical devices directly to providers
on a fee-per-procedure basis. Medstone currently offers mobile lithotripsy
services using mobile systems in the Western United States on a
fee-per-procedure basis. Medstone intends to expand efforts to grow this
medical service side of its business.
The Company's tentative business plan is to separate its operating business
units and revenue streams into independent operations. Management hopes that
such a restructuring will benefit shareholders by bringing about operational
advantages as well as more discriminating and favorable valuations of
Cytocare's units.
B. BASIS OF PRESENTATION
In the opinion of the Company's management, the accompanying unaudited
condensed consolidated financial statements include all adjustments (which
consist only of normal recurring adjustments) necessary for a fair presentation
of its consolidated financial position at June 30, 1995 and consolidated
results of operations and cash flows for the periods presented. Certain prior
period balances have been reclassified to conform with current period
presentation. Although the Company believes that the disclosures in these
financial statements are adequate to make the information presented not
misleading, certain information and disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted and should be read in conjunction with the
Company's audited financial statements included in the Company's 1994 Annual
Report on Form 10-K filed with the Securities and Exchange Commission on March
28, 1995. Results of operations for the six months ended June 30, 1995 are not
necessarily indicative of results to be expected for the full year.
7
<PAGE> 8
C. PER SHARE INFORMATION
Per share information is presented in the accompanying consolidated
statements of operations based upon the weighted average number of common and
common equivalent shares outstanding. Common equivalent shares result from the
assumed exercise of outstanding dilutive securities when applying the treasury
stock method. Fully diluted per share information is not presented for periods
in which the effect is antidilutive.
D. INVENTORIES
At June 30, 1995 and December 31, 1994, inventories consisted of the
following:
<TABLE>
<CAPTION>
June 30, 1995 December 31, 1994
------------- -----------------
<S> <C> <C>
Raw materials . . . . . . . . . . $1,328,595 $1,194,369
Work in process . . . . . . . . . 165,110 181,416
Finished goods . . . . . . . . . 153,740 231,305
---------- ----------
$1,647,445 $1,607,090
========== ==========
</TABLE>
E. INCOME TAXES
The Company adopted Financial Accounting Standards Board Statement No. 109
in 1991. The effect of the adoption was to permit the Company to reduce its
income tax expense by the utilization of the net operating loss carryforward
rather than treating the realization of the net operating loss carryforward as
an extraordinary credit.
F. SHORT-TERM INVESTMENTS
The Company adopted Financial Accounting Standards Board Statement No. 115
as of January 1, 1994. The effect of the adoption is that the Company
classifies its entire investment portfolio as available-for-sale. Accordingly,
unrealized holding gains and losses on short-term investments will be carried
as a separate component of stockholder's equity.
G. CONTINGENCIES
The Company is a defendant in two related class action junk lawsuits filed
by strike suit lawyers ostensibly on behalf of two shareholders of the Company
alleging that adverse material information was not disclosed at the time of the
initial public offering and in subsequent periods. On May 4, 1992, the
district court granted summary judgment in one of the actions in favor of the
Company on all claims. On July 9, 1992, the district court granted the
Company's motion to dismiss the second action. Plaintiffs in both cases filed
an appeal to the Ninth Circuit Court. In October 1994, the Company received
the opinion of the Ninth Circuit Court of Appeals affirming in part and
reversing in part the United States District Court's decision granting summary
judgment in favor of the Company and several officers. The complaints allege
principally that adverse material information was not disclosed at the time of
the initial public offering in June 1988. The Company has filed a Supreme
Court brief and pending a decision intends to proceed to trial on any remaining
matters. The ultimate outcome of this junk litigation cannot presently be
determined. Accordingly, no provision for any liability that may result, if
any, has been made in the financial statements.
8
<PAGE> 9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following discussion and analysis should be read in conjunction with
the Company's audited financial statements and Management's Discussion and
Analysis of Financial Condition and Results of Operations included in the
Company's Annual Report on Form 10-K filed with the Securities and Exchange
Commission on March 22, 1995.
GENERAL
As previously announced, the Company plans to reform and spin out its
business units into independent companies in hopes of achieving a fairer market
valuation for our shareholders. The Company is making progress on this
unbundling plan. To date, the Company's consolidated revenues have come
primarily from Medstone's lithotripsy business. The Company also realized
revenue from sales of its disposable laser catheters that is included with
procedures and maintenance fees.
The Company began the year with approximately $14.4 million in cash
and marketable securities, no debt, inventories of $1.6 million, and total
assets of $22.3 million. The Company ended the quarter with approximately
$16.3 million in cash and marketable securities, no debt, inventories of $1.6
million, and total assets of $23.9 million.
Accounts receivable decreased by $261,000 from December 31, 1994 to
June 30, 1995 on sales of $9,081,000 due to the timing of equipment sales
within the periods. In the six months ended June 30, 1995, shipments occurred
with payments received within the period and a higher proportion of the
Company's revenues are from procedure fees, which have a faster payment cycle.
Inventories are stated net of reserves for excess and obsolescence.
Management periodically reviews inventories for obsolescence and, in the
current period, no inventories were written off against reserves. Management
will continue to monitor inventory and will, when necessary, adjust inventory
reserves accordingly.
RESULTS OF OPERATIONS
The Company recognized revenue of $4.3 million and $9.1 million for
the second quarter and first six months of 1995, an increase of 12% and 9%,
respectively, compared to the corresponding periods of 1994. Equipment
revenues increased by 33% in the three months ended June 30, 1995, and the six
months ended June 30, 1995 showed a 5% increase in equipment revenues. Also
increasing in the comparable time periods were the recurring revenues from
procedures, maintenance and laser catheters, which increased by 3% for the
second quarter, and 8% for the first six months.
Interest income increased by 76% in the second quarter of 1995 compared
to the second quarter of 1994 due to an increase of 65% on the average
investment yield in 1995 and an increased average invested cash balance of
$3,600,000 from period to period. For the six months ended June 30, 1995,
interest income increased by 84% from the same period of the prior year due to
an increased average yield of 76% on a $3,400,000 higher average invested
balance.
9
<PAGE> 10
Equipment cost of sales increased to 46% and 42% for the second quarter
and first six months of 1995, respectively, compared to 38% and 42% for the
corresponding periods of 1994 due to the change of product mix, with more high
content unit shipments occurring in 1995 against a lower average unit selling
price when compared to the prior year. The cost of sales related to recurring
revenue increased to 41% and 42% of revenues for the second quarter and first
six months of 1995, respectively, compared to 37% and 36% for the same periods
in the prior year due to the Company's expanded mobile route operations and the
overhead needed to service those operations.
Research and development expenses decreased by 5% and 27% during the
three and six months ended June 30, 1995, respectively, compared to the
corresponding periods of 1994, due primarily to a lower headcount and supplies
expenses.
Selling expenses decreased by 46% in the second quarter and 35% in
first six months of 1995, compared to the same periods of the prior year. The
decreases were attributable to decreases in bad debt, commission on laser
catheters and product support expenses.
General and administrative expenses decreased for the three months ended
June 30, 1995 by 20% compared to the corresponding period in the prior year due
to reductions in payroll and travel expenses. For the six months ended June
30, 1995, general and administrative expenses decreased by 23% from the same
period in 1994 due to lower legal costs.
Other expenses increased in the three months ended June 30, 1995
compared to the same periods of the prior year due to increased legal costs
incurred in connection with the class action junk lawsuit filed against the
Company. For the six months ended June 30, 1995, other expenses decreased
compared to the corresponding period of 1994 due to the facility relocation
costs incurred in 1994.
LIQUIDITY AND CAPITAL RESOURCES
At June 30, 1995, the Company had approximately $16.3 million in cash and
equivalents. These funds were generated from earnings and the initial public
offering of the Company's common stock in June 1988, although funds generated
from operations in the first six months of 1995 are not necessarily indicative
of results to be expected for the full year. The Company's short-term capital
requirements are funded by the current revenue cash flow.
The Company's long-term capital expenditure requirements will depend upon
numerous factors, including the possibility of accessing the capital markets
to help fund potential acquisitions, progress of the Company's research and
development programs, the time required to obtain regulatory approvals, the
resources that the Company devotes to the development of self-funded products,
proprietary manufacturing methods and advanced technologies, the ability of the
Company to obtain additional licensing arrangements and to manufacture products
under those arrangements, and the demand for its products if and when approved
and possible acquisitions of products, technologies and companies.
The Company believes that its existing working capital and funds
anticipated to be generated from operations will be sufficient to meet the cash
needs for continuation of its present operations during 1995.
10
<PAGE> 11
CYTOCARE, INC.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
None
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 followoing exhibits are included herein:
(11.1) Statements re: Computation of Per Share Information
(27) Financial Data Schedule
(b) There were no reports on Form 8-K filed with the Commission
during the quarter ended June 30, 1995.
<PAGE> 12
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 hereunto duly authorized.
CYTOCARE, INC.
A Delaware corporation
Date: August 11, 1995 David V. Radlinski
------------------------
David V. Radlinski
Chief Financial Officer
(Principal financial and
accounting officer)
12
<PAGE> 1
EXHIBIT 11.1
CYTOCARE, INC.
COMPUTATION OF PER SHARE INFORMATION
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
--------------------------- --------------------------
1995 1994 1995 1994
------------ ---------- ------------ ----------
<S> <C> <C> <C> <C>
Earnings:
Net income (loss) . . . . . . . . . . $ 916,611 $ 651,949 $ 2,009,288 $1,616,793
============ ========== =========== ==========
Computation of primary per share
information:
Shares:
Number of shares outstanding(b) . . 5,190,532 4,893,557 5,173,758 4,890,814
Add effect of outstanding
options and warrants (a) . . . . 311,477 410,446 342,905 437,069
------------ ---------- ---------- ----------
Number of shares outstanding, as
adjusted . . . . . . . . . . . . 5,502,009 5,304,003 5,516,663 5,327,883
============ ========== ========== ==========
Primary earnings per share:
Net income (loss) . . . . . . . . . $ .17 $ .12 $ .36 $.30
============ ========== =========== ==========
Computation of fully diluted per
share information:
Shares:
Number of shares outstanding
per primary computation . . . . . 5,190,532 4,893,557 5,173,758 4,890,814
Add effect of outstanding options and
warrants (a) . . . . . . . . . . 344,541 410,446 399,005 437,069
------------ ---------- ---------- ----------
Number of shares outstanding as
adjusted . . . . . . . . . . . . 5,535,073 5,304,003 5,572,763 5,327,883
============ ========== ========== ==========
Fully diluted earnings per share:
Net income . . . . . . . . . . . . $ .17 $ .12 $ .36 $ .30
============ ========== ========== ==========
</TABLE>
- -----------
(a) As determined by the application of the treasury stock method.
(b) Weighted average number of shares outstanding.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> APR-01-1995
<PERIOD-END> JUN-30-1995
<CASH> 1,806,724
<SECURITIES> 14,475,840
<RECEIVABLES> 1,564,295
<ALLOWANCES> 265,000
<INVENTORY> 1,647,445
<CURRENT-ASSETS> 20,987,328
<PP&E> 6,180,870
<DEPRECIATION> 3,463,218
<TOTAL-ASSETS> 23,877,480
<CURRENT-LIABILITIES> 1,864,831
<BONDS> 0
<COMMON> 20,789
0
0
<OTHER-SE> 21,766,860
<TOTAL-LIABILITY-AND-EQUITY> 23,877,480
<SALES> 4,021,113
<TOTAL-REVENUES> 4,267,643
<CGS> 1,706,140
<TOTAL-COSTS> 1,152,283
<OTHER-EXPENSES> 12,609
<LOSS-PROVISION> 680
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,396,611
<INCOME-TAX> 480,000
<INCOME-CONTINUING> 916,611
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 916,611
<EPS-PRIMARY> .17
<EPS-DILUTED> .17
</TABLE>
