<PAGE>
FORM 10-Q SB
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
United States
Securities and Exchange Commission
Washington, DC 20549
Form 10-Q SB
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934.
For the period ended March 31, 1996.
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: 0-18880
ATRIX INTERNATIONAL, INC.
-------------------------
(Exact Name of registrant as specified in its charter)
Minnesota 41-1591075
--------- ----------
(State or Other Jurisdiction of (IRS Employer Identification No.)
Incorporation or Organization)
14301 Ewing Avenue South, Burnsville, MN 55306
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
(612) 894-6154
(Registrant's telephone number, including area code)
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
--- ---
As of March 31, 1996 the following securities of the registrant were
outstanding: 5,653,644 shares of Common Stock, $.01 per value per share.
<PAGE>
PART I.
ITEM 1. FINANCIAL STATEMENTS
This report includes the financial position of Atrix International, Inc.,
("Atrix" or the "Company") as of March 31, 1996 and June 30, 1995, the results
of operations for the three and nine months ended March 31, 1996 and 1995, and
the cash flows for the nine months ended March 31, 1996 and 1995.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
NET SALES. For the three months ended March 31, 1996, the Company reported a 12%
net sales increase to $1,610,685 from $1,438,198 for the same period in the
prior year. Net sales for the nine months ended March 31, 1996 were $4,555,565
compared to $4,251,858 for the same period in 1995. For the nine months ended
March 31, 1996 and 1995 the company recognized non-recurring royalty revenues of
$6,439 and $263,558 respectively. Accordingly, the Company's product sales
increased 14% for the nine month period ended March 31, 1996 compared to the
same period in 1995.
The increase in revenues is due to improved sales of the R3 Copy Control
products, distribution products and the Company's new special (Ulti Vac) product
line, which more than offset decreases in royalty and manufacturing revenues.
Atrix has shipped $311,542 of the new R3 Copy Control product line compared to
$56,498 for the nine month periods ending March 31, 1996 and 1995, respectively.
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
March 31, March 31,
1996 1995 1996 1995
---------------- ----------------
<S> <C> <C> <C> <C>
Product Line
Vacuums and Supplies $ 499,968 $ 372,411 $1,230,292 $1,111,562
ESD Equipment 42,564 86,967 170,928 206,366
Circuit Board Cases 0 11,902 36,836 25,806
Special Assemblies 68,063 46,875 158,986 380,730
---------- ---------- ---------- ----------
Total Manufacturing 610,595 518,155 1,597,042 1,724,464
Loose Tools 638,600 492,641 1,776,339 1,397,979
Tool Kits 100,940 85,238 281,276 273,722
Instrumentation 203,046 218,879 582,927 535,120
---------- ---------- ---------- ----------
Total Distribution 942,586 796,758 2,640,542 2,206,821
R3 Copy Control Products 57,487 29,117 311,542 56,498
Royalty Revenue 17 94,168 6,439 263,558
Other 0 0 0 517
---------- ---------- ---------- ----------
Total Revenue $1,610,685 $1,438,198 $4,555,565 $4,251,858
</TABLE>
Manufacturing sales for the three months ended March 31, 1996 were $610,595 as
compared to $518,155 for the same period in 1995. For the nine months ended
March 31, 1996 manufacturing sales were $1,597,042 as compared to $1,724,464 for
the same period last year. The primary reason for the decrease is that the
Company recognized $242,932 in shipments of special assemblies in 1995 that were
non-reoccurring.
Form 10-Q SB March 31, 1996 Page 2
<PAGE>
Distribution sales for the three months ended March 31, 1996 were $942,586 as
compared to $796,758 for the same period in 1995. For the nine month period
ended March 31, 1996 sales increased by 20% to $2,640,542 from $2,206,821 for
the same period in the prior year. This increase is due to a wider acceptance of
the Company's distribution products by one major customer and the addition of
several new customers.
R3 Copy Control product sales for the three months ended March 31, 1996 were
$57,487 as compared to $29,117 for the same period in 1995. For the nine months
ended March 31, 1996 the R3 Copy Control product sales increased by 451% to
$311,542 from $56,498 for the nine month period in the prior year. The reason
for the increase is due to the acceptance of the R3 Copy Control product by the
Company's major OEM customer and the installation of R3 systems by several other
customers.
Looking forward, the Company believes that revenues from manufactured vacuum
products, and the R3 Copy Control system will improve. The Company expects sales
of manufactured vacuum products to improve due to the addition of the Ulti Vac
product line in November 1995, as the Company introduces its existing vacuum
products to former Porous Media customers. The Company's ability to increase
sales of vacuum products could be adversely affected by the Company's lack of
experience in the asbestos and Hepa filtration markets, loss of major customers,
increased competition and other unforeseen events. Finally, the Company expects
sales of the R3 Copy Control system to continue to grow due to increasing sales
to the Company's major OEM customer, which completed training of approximately
50 Account Representatives in January, 1996 and the installation of the system
at additional customer sites. However, increased sales of the R3 could be
adversely affected by a loss or reduction in purchases from the Company's major
OEM customer, product offerings by competitors or economic downturns. The
Company notes that the above forward looking statements are subject to change
based on various important factors including but not limited to economic
downturns, competitive actions, disruption in shipments, loss of major
customer(s) or other unforeseen actions.
GROSS PROFIT
The gross profit margin as a percentage of sales was 28.3% and 33.5% for the
three month periods ended March 31, 1996, and 1995, respectively. For the nine
month periods ended March 31, 1996 and 1995 gross profit margins were 29.5% and
33.2% respectively. The decrease in gross profit margin is due to the decline in
royalty revenue. Royalty revenue for the nine months ended March 31, 1996 was
$6,439 as compared to $263,558 for the same period in 1995. The lower amounts of
royalty revenue reduces the gross margin as the royalty revenue carries a margin
of approximately 75%.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling, general and administrative expenses for the three months ended March
31, 1996 and 1995 decreased to $422,317 from $453,165, an improvement of
$30,848. The decrease is primarily due to patent legal expenses and patent
amortization not being incurred in the quarter ended March 31, 1996. The
majority of the legal expenses have been reported as the patent expired in April
of 1995.
Total selling expenses for the quarter ended March 31, 1996 were $142,039 as
compared to $113,742 for the same period in 1995. The primary reason for the
increase of $28,297 is due to additional sales personnel hired and related
expenses to enhance the inside sales from the catalog that was produced in
September/October 1995.
Total general and administrative expenses for the quarter ended March 31, 1996
were $280,278 compared to $339,423 for the same period in 1995. The decrease of
$59,145 can be attributed to; lower patent and litigation expenses of $9,520,
transfer of sales administration expense of $1,958 to the sales department, a
decrease in research and development expense of $52,634 due to the completion of
the R3's Copy Control software, and a decrease in NASDAQ/SEC relations costs of
$7,213. This was partially offset by increases of $10,380 for insurance,
rent/utilities, employee benefits, and office supplies.
Form 10-Q SB March 31, 1996 Page 3
<PAGE>
Selling, general and administrative expenses represented 26.2% and 31.5% of
sales for the quarters ending March 31, 1996 and 1995 respectively. The Company
expects its selling, general and administrative expenses to remain at these
lower levels for the remainder of fiscal 1996.
NET INCOME
Net income for the quarter ended March 31, 1996 decreased to $32,962 from
$179,657 for the quarter ended March 31, 1995. For the nine months ended March
31, 1996 net income decreased to $133,415 from $234,726 for the same period in
the prior year. The Company experienced a decrease in 1996 business to other
income of $158,165 that were recognized in the quarter ended March 31, 1995
related to patent infringement settlements. If comparing net income without the
other income event the Company's net income would have been $133,415 and $76,561
for the nine months ending March 31, 1996 and 1995 respectively. This reflects a
$56,854 improvement due to increased R3 sales and lower expenses.
LIQUIDITY AND CAPITAL RESOURCES
The Company's cash and restricted cash at March 31, 1996 was $1,468,978 compared
to $1,157,255 at June 30, 1995. Working capital increased to $1,620,003 at March
31, 1996 from $1,217,401 at June 30, 1995. The increases in the Company's cash
and working capital position were due primarily to operating income and a
private offering of common stock which was completed in September 1995, and
which raised net proceeds of $323,750.
During the second quarter of fiscal 1996, the Company purchased the Ulti Vac(TM)
product line from Porous Media which was the primarily reason for the increase
in the Company's property and equipment. The purchase price will be paid in cash
over the next four to five years at approximately $25,000 quarterly.
The Company maintains a line of credit with Riverside Bank. As of March 31,
1996, the borrowing base under the line of credit was the lesser of $1,250,000
or (b) the sum of (i) 85% of eligible accounts receivable and (ii) 50% of
eligible inventory. The Company is also required to maintain tangible net worth
of $1,100,000. The line of credit is secured by the Company's assets and by a
$250,000 certificate of deposit. The interest rate is at prime. The Company is
required to pay accrued interest on a monthly basis.
In the nine months ended March 31, 1996 the Company used $89,310 from the line
of credit for the production and distribution of the direct marketing catalog,
and reducing accounts payable to take advantage of vendor discounts. As of March
31, 1996 the line of credit balance was $901,963 and the borrowing availability
under the line of credit were approximately $145,000 compared to $812,653 at
June 30, 1995.
The Company's plan of operations currently does not call for raising additional
capital. The Company plans to finance its operations for the remainder of fiscal
year ending June 30, 1996 with working capital and bank borrowings. The Company
expects to generate cash from operations for the remainder of fiscal 1996 by
continued increases in sales, gross margin improvement and controlled operating
expenses.
Form 10-Q SB March 31, 1996 Page 4
<PAGE>
ATRIX INTERNATIONAL, INC.
BALANCE SHEET
<TABLE>
<CAPTION>
March 31, June 30,
ASSETS 1996 1995
---- ----
(unaudited)
<S> <C> <C>
Current Assets:
Cash $ 1,218,978 $ 757,255
Restricted Cash 250,000 400,000
Accounts receivable less allowance for doubtful accounts
($17,000 and $17,000, respectively) 845,245 746,490
Inventories 902,424 851,671
Prepaid Expenses 76,944 33,978
----------- -----------
Total Current Assets 3,293,591 2,789,394
----------- -----------
Property and equipment, net 501,164 299,832
Intangible assets, net 84,633 14,424
Capitalized software development costs, net 220,932 276,465
----------- -----------
TOTAL ASSETS $ 4,100,320 $ 3,380,115
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 631,828 $ 661,640
Notes payable - bank 901,963 812,653
Current maturities of long-term debt 87,940 5,742
Accrued liabilities 51,857 91,958
----------- -----------
Total current liabilities 1,673,588 1,571,993
Notes payable - long term 169,550 8,106
----------- -----------
Shareholders' Equity:
Preferred stock, $.01 par value
3,000,000 shares authorized,
no shares issued
Common stock, $0.01 par value,
50,000,000 shares authorized, 5,653,644
and 5,201,978 respectively shares
issued and outstanding 56,536 52,019
Capital in excess of par value 3,276,969 2,957,736
Accumulated deficit (1,076,323) (1,209,739)
----------- -----------
Total shareholders' equity 2,257,182 1,800,016
----------- -----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 4,100,320 $ 3,380,115
=========== ===========
</TABLE>
See accompanying notes to financial statements.
Form 10-Q SB March 31, 1996 Page 5
<PAGE>
ATRIX INTERNATIONAL, INC.
STATEMENT OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
March 31, March 31,
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Product Revenue $1,610,668 $1,344,030 $4,549,126 $3,988,300
Royalty Revenue 17 94,168 6,439 263,558
---------- ---------- ---------- ----------
Net Revenue 1,610,685 1,438,198 4,555,565 4,251,858
Cost of Sales 1,155,614 957,062 3,212,594 2,840,309
---------- ---------- ---------- ----------
Gross Profit 455,071 481,136 1,342,971 1,411,549
Selling, general and
administrative expenses 422,317 453,165 1,211,922 1,313,693
---------- ---------- ---------- ----------
Income from operations 32,754 27,971 131,049 97,856
Other Income/expense, net 158,165 158,165
Interest Income/expense, net 208 (5,729) 984 (18,445)
Gain/loss on sale of equipment 2,000 2,000
---------- ---------- ---------- ----------
Net Income before
income taxes 32,962 182,407 132,033 239,576
Income tax expense/benefit 2,750 (1,382) 4,850
---------- ---------- ---------- ----------
Net Income $ 32,962 $ 179,657 $ 133,415 $ 234,726
========== ========== ========== ==========
Net income per share $.01 $.03 $.02 $.05
Weighted average number
of common stock equivalents 5,653,644 5,201,978 5,504,184 5,201,978
</TABLE>
See accompanying notes to financial statements.
Form 10-Q SB March 31, 1996 Page 6
<PAGE>
ATRIX INTERNATIONAL, INC.
STATEMENT OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Nine Months Ended March 31,
Cash Flows from operating activities: 1996 1995
---- ----
<S> <C> <C>
Net income $ 133,415 $ 234,726
Adjustments to reconcile net income to net
Cash provided (used) by operating activities:
Depreciation and amortization 166,880 292,114
Gain/loss on sale of assets (2,000)
Change in current assets and liabilities:
Accounts receivable (98,756) (77,810)
Inventories (50,753) (7,088)
Prepaid expenses (42,966) 738
Accounts payable (29,812) 19,434
Accrued liabilities (40,101) (1,065)
---------- ---------
Net cash provided (used) by operating activities 37,907 459,049
Cash flow from investing activities:
Purchase of equipment, leasehold
improvements and other assets, net (39,818) (100,771)
Acquisition net of liabilities assumed (50,000) 0
Capitalized software development costs 0 2,000
Proceeds from sale of assets 0 (189,916)
Additions intangible assets (18,068)
---------- ---------
Net cash used by investing activities (107,886) (288,687)
Cash flow from financing activities:
Proceeds (repayments) from notes payable - bank net 89,310 94,000
Repayments of notes payable - Porous Media (26,934) 0
Repayment of notes payable - shareholders 0 (65,015)
Restricted cash 150,000 0
Repayments of capital lease obligations (4,424) (2,695)
Proceeds from exercise of common stock warrants 323,750 0
---------- ---------
Net cash (used) provided by financing activities 531,702 26,290
Net increase (decrease) in cash
and cash equivalents 461,723 196,652
Cash - beginning of the period 757,255 317,678
---------- ---------
Cash - end of the period $1,218,978 $ 514,330
========== =========
</TABLE>
See accompanying notes to financial statements.
Form 10-Q SB March 31, 1996 Page 7
<PAGE>
ATRIX INTERNATIONAL, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 1. CORPORATE ORGANIZATION
Atrix International, Inc. (the Company) designs and manufactures toner vacuums,
vacuum filters and circuit board transport cases. The Company also designs the
hardware and software for R3 Remote Metering and Copy Control products. In
addition, Atrix distributes tools, meters, electrostatic discharge (ESD) and
static control products and assembles tool kits for the telecommunication,
office machine and computer industries.
On November 9, 1995 the Company purchased the Ulti Vac(TM) product line from
Porous Media. The assets acquired by the Company include production equipment,
customer lists and Ulti Vac trademark. This expands the Company's offering of
toner vacuum products to the photocopier and laser printer industries. In
addition, the product acquisition includes filtration products for the asbestos
and Hepa markets.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The accompanying financial statements, which are unaudited except for the
balance sheet as of June 30, 1995, have been prepared in accordance with
instructions to Form 10-Q SB and do not include all the information and notes
required by generally accepted accounting principles for complete financial
statements. In the opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for fair presentation have been
included. These financial statements should be read in conjunction with the
financial statements and accompanying notes included in the Company's Annual
Report on Form 10-KSB, for the year ended June 30, 1995 filed with the
Securities and Exchange Commission.
CASH AND CASH EQUIVALENTS
Cash equivalents consist of short-term, highly liquid investments generally with
original maturities of three months or less at the time of purchase which are
readily convertible to cash.
RESTRICTED CASH
Restricted cash is comprised of a 90-day certificate of deposit. Pursuant to the
line of credit agreement discussed in Note 5 below, the Company is restricted
from using the cash to the extent amounts are outstanding on the line of credit.
INVENTORIES
Inventories are stated at the lower of cost or market, cost being determined on
the weighted average method. Inventories are evaluated on a quarterly basis to
identify obsolete, slow-moving and non-saleable items. The Company establishes a
reserve to reduce the inventory to net realizable value when necessary.
PROPERTY AND EQUIPMENT
Property and equipment are stated at cost. Depreciation and amortization, which
includes the amortization of assets recorded under capital leases, are computed
using the straight-line method over the estimated useful lives of five to seven
years or the initial lease terms. When assets are retired or otherwise disposed
of, the cost and related accumulated depreciation are removed from the accounts,
with any resulting gain or loss reflected in income for the period. Expenditures
for replacements and betterments are capitalized,
Form 10-Q SB March 31, 1996 Page 8
<PAGE>
while maintenance and repairs are charged against income as incurred.
Accumulated depreciation was $1,166,961 and $1,208,123 at March 31, 1996 and
June 30, 1995, respectively.
RESEARCH AND DEVELOPMENT
Research and development costs are charged to expense when incurred. These costs
were approximately $43,962 and $96,596 for the three months ended March 31, 1996
and 1995, respectively. See the capitalized software development costs section
for additional discussion on development activities.
INTANGIBLE ASSETS
Intangible assets were recorded with the patent regarding R3 Copy Control
management (patent pending) and the purchase of the Ulti Vac(TM) product line
from Porous Media. The intangibles are primarily made up of customer lists,
manufacturing documentation, training, Ulti Vac trademark and goodwill. The
Company is amortizing the intangible assets on a straight-line basis over 7 to
15 years. Accumulated amortization was $2,859 at March 31, 1996.
CAPITALIZED SOFTWARE DEVELOPMENT COSTS
The Company develops software and firmware that is an integral part of a product
expected to be sold in future years. Software development costs are capitalized
only upon the establishment of technological feasibility for the related
product. Capitalized costs consist mainly of salaries and programming fees
related to the development of software and firmware. The Company commences
amortization when the related product is available for general release to
customers. The Company assesses the realizability of the capitalized software
development costs on a quarterly basis by comparing the amount of capitalized
software costs with the expected future gross revenues of the related product.
The annual amortization for these capitalized costs reflects the greater of the
proportion of the current year's product revenues to total expected product
revenues or a straight-line basis over their estimated useful life of six years.
Accumulated amortization was $292,188 and $236,655 at March 31, 1996 and June
30, 1995, respectively.
REVENUE RECOGNITION
The Company recognizes revenue upon shipment of the product.
NET INCOME PER SHARE
Net income per share computations are based on the weighted average number of
common shares equivalents outstanding during the period.
INCOME TAXES
The Company accounts for income taxes in accordance with Financial Accounting
Board Statement 109, "Accounting for Income Taxes," which uses an asset and
liability approach that requires the recognition of deferred tax assets and
liabilities for the expected future consequences of events that have been
recognized in the Company's financial statements or tax returns.
Form 10-Q SB March 31, 1996 Page 9
<PAGE>
NOTE 3. INVENTORIES
Inventories are comprised of the following at:
March 31, 1996 June 30, 1995
--------------------------------
Raw Materials $336,482 $196,624
Finished goods 565,942 655,047
-------- --------
Total $902,424 $851,671
NOTE 4. PROPERTY AND EQUIPMENT
Property and equipment, at cost, are comprised of the following at:
March 31, 1996 June 30, 1995
--------------------------------
Tooling and molds $1,076,508 $836,805
Office Furniture and
fixtures 305,829 434,034
Manufacturing equipment 147,009 103,649
Leasehold improvements 80,292 79,443
Warehouse equipment 49,627 54,024
Vehicles 8,860 0
---------- ----------
Total 1,668,125 1,507,955
Accumulated depreciation (1,166,961) (1,208,123)
---------- ----------
Net $501,164 $299,832
The primary increase in property and equipment is due to the purchase of the
Ulti Vac(TM) product line equipment.
NOTE 5. NOTES PAYABLE
BANK
The Company maintains a line of credit with Riverside Bank. As of March 31,
1996, the borrowing base under the line of credit was the lesser of $1,250,000
or (b) the sum of (i) 85% of eligible accounts receivable and (ii) 50% of
eligible inventory. The Company is also required to maintain tangible net worth
of $1,100,000. The line of credit is secured by the Company's assets and by a
$250,000 certificate of deposit. The interest rate is at prime. The Company is
required to pay accrued interest on a monthly basis.
POROUS MEDIA
The Company has a three year note payable and a deferred sales royalty payable
to Porous Media for the purchase of the Ulti Vac(TM) product line.
Form 10-Q SB March 31, 1996 Page 10
<PAGE>
NOTE 6. SALE OF COMMON STOCK
On September 30, 1995, the Company completed a private sale of 451,666 shares of
Common Stock. The private offering was made to a limited number of shareholders
of the Company that held warrants to purchase shares of Common Stock. The
Company received net proceeds of $323,750 from the private offering. The purpose
of the offering was to increase the Company's capital and surplus in order to
comply with NASDAQ Small Cap Market rules that require that the Company maintain
capital and surplus of $2 million.
NOTE 7. INCOME TAXES
The Company has available net operating loss and tax credit carryforwards for
income tax purposes of approximately $1,620,000 and $83,688, respectively, on
June 30, 1995. These carryforwards expire in the years ending June 30, 2003
through 2008. Utilization of the net operating loss and tax credit carryforwards
are subject to certain limitations under Section 382 of the Internal Revenue
Code. A valuation allowance exists for the entire net tax benefit associated
with all carryforwards and temporary differences at March 31, 1996 and June 30,
1995 as their realization is not presently assured.
INVENTORY OF DEFERRED ITEMS AND NOL CARRYFORWARD
The composition of the net deferred tax are as follows:
June 30, 1995 March 31, 1996
------------------------------
Loss Carryforwards $ 647,756 $ 568,850
Research & Development
Credits 83,688 83,688
Inventory 28,473 26,610
Bad Debts 6,722 6,722
Fixed Assets 91,200 102,690
Amortization (100,586) (125,056)
Other 4,658 4,658
--------- ---------
761,911 668,162
Less: Valuation Allowance (761,911) (668,162)
--------- ---------
$ 0 $ 0
========= =========
NOTE 8. RETIREMENT SAVINGS PLAN
The Company maintains a defined contribution plan which qualifies under the
Internal Revenue Code Section 401(K). Substantially all full time employees are
eligible to participate under the plan. Company contributions are discretionary.
Form 10-Q SB March 31, 1996 Page 11
<PAGE>
SIGNATURES
Pursuant to the requirement 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.
ATRIX INTERNATIONAL, INC.
/s/ Steven D. Riedel
Date: May 7, 1996 ----------------------------------------
Steven D. Riedel
Chief Executive Officer
(Principal Executive, Financial Officer)
/s/ Denice J. Bloomer
----------------------------------------
Denice J. Bloomer
Vice President/Controller (Principal
Accounting Officer)
Form 10-Q SB March 31, 1996 Page 12
<PAGE>
ATRIX INTERNATIONAL, INC.
EXHIBIT INDEX TO ANNUAL REPORT
ON FORM 10-QSB
For The Quarter Ended March 31, 1996
ITEM NO. ITEM METHOD OF FILING
- -------- ---- ----------------
27 Financial Data Schedule Electronically Filed
Form 10-Q SB March 31, 1996 Page 13
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from
10-Q Pgs 12 and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 1,468,978
<SECURITIES> 0
<RECEIVABLES> 845,245<F1>
<ALLOWANCES> 0
<INVENTORY> 902,424
<CURRENT-ASSETS> 3,293,591
<PP&E> 501,164<F1>
<DEPRECIATION> 0
<TOTAL-ASSETS> 4,100,320
<CURRENT-LIABILITIES> 1,673,588
<BONDS> 0
<COMMON> 56,536
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 4,100,320
<SALES> 1,610,685
<TOTAL-REVENUES> 1,610,685
<CGS> 1,155,614
<TOTAL-COSTS> 1,155,614
<OTHER-EXPENSES> 422,317
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (208)
<INCOME-PRETAX> 32,754
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 32,962
<EPS-PRIMARY> .01
<EPS-DILUTED> 0
<FN>
<F1> *Interest Expense is net with Interest Income.
</FN>
</TABLE>
