FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(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 29, 1997
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: 0-17919
SURGICAL LASER TECHNOLOGIES, INC.
---------------------------------
(Exact name of registrant as specified in its charter)
Delaware 31-1093148
-------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
147 Keystone Drive
Montgomeryville, PA 18936
----------------------------------------
(Address of principal executive offices)
(Zip Code)
(215) 619-3600
--------------
(Registrant's telephone number, including area code)
---------------------------------------------------------------
(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 ( )
On August 8, 1997 the registrant had outstanding 9,886,279
shares of Common Stock, $.0l par value.
<PAGE>
SURGICAL LASER TECHNOLOGIES, INC.
AND SUBSIDIARIES
INDEX
PART I. FINANCIAL INFORMATION: PAGE
----
ITEM 1. Financial Statements:
a. Condensed Consolidated Balance Sheets,
June 29, 1997 (unaudited) and December 29, 1996 3
b. Condensed Consolidated Statements of Operations
(unaudited) for the quarters ended
June 29, 1997 and June 30, 1996 4
c. Condensed Consolidated Statements of Operations
(unaudited) for the six months ended
June 29, 1997 and June 30, 1996 5
d. Condensed Consolidated Statements of Cash Flows
(unaudited) for the six months ended
June 29, 1997 and June 30, 1996 6
e. Notes to Condensed Consolidated Financial Statements
(unaudited) 7
ITEM 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8
PART II. OTHER INFORMATION:
ITEM 1. Legal Proceedings 11
ITEM 6. Exhibits and Reports on Form 8-K 11
SIGNATURES 12
EXHIBITS:
EXHIBIT 11 - Computation of Earnings Per Share 13
EXHIBIT 27 - Financial Data Schedule 14
2
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
SURGICAL LASER TECHNOLOGIES, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except par value)
<TABLE>
<CAPTION>
June 29, 1997 Dec. 29, 1996
<S> <C> <C>
ASSETS (Unaudited)
Current Assets:
Cash and cash equivalents (including restricted amount of $100) $ 3,092 $ 2,795
Short-term investments 3,034 3,325
Accounts receivable, net of allowance for doubtful accounts of $116 2,827 2,899
Inventories 2,745 3,534
Other 124 134
-------- --------
Total current assets 11,822 12,687
Property and equipment, net 1,951 2,325
Property held for sale, net 5,514 5,636
Patents and licensed technology, net 582 610
Other assets 222 232
-------- --------
Total Assets $ 20,091 $ 21,490
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 491 $ 468
Accounts payable 675 777
Accrued liabilities 1,699 2,306
-------- --------
Total current liabilities 2,865 3,551
-------- --------
Long-term debt 6,388 6,631
Stockholders' equity:
Common stock, $.01 par value, 30,000 shares authorized, 9,884 and
9,882 shares issued and outstanding 99 99
Additional paid-in capital 32,723 32,714
Accumulated deficit (21,984) (21,505)
-------- --------
Total stockholders' equity 10,838 11,308
-------- --------
Total Liabilities and Stockholders' Equity $ 20,091 $ 21,490
======== ========
</TABLE>
The accompanying notes are an integral part of these statements.
3
<PAGE>
SURGICAL LASER TECHNOLOGIES, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(In thousands, except per share data)
For the Quarter Ended:
June 29, 1997 June 30, 1996
Net sales $ 2,904 $ 2,784
Cost of sales 1,273 929
------- -------
Gross profit 1,631 1,855
------- -------
Operating expenses:
Selling, general and administrative 1,707 2,321
Product development 218 374
------- -------
1,925 2,695
------- -------
Operating loss (294) (840)
Interest expense 161 140
Interest income (74) (85)
Other income (99) (15)
Equity in loss of joint venture -- 61
------- -------
Loss before income taxes (282) (941)
Provision for income taxes -- --
------- -------
Net loss $ (282) $ (941)
======= =======
Net loss per share $ (0.03) $ (0.10)
======= =======
Shares used in calculating net loss per share 9,883 9,855
======= =======
The accompanying notes are an integral part of these statements.
4
<PAGE>
SURGICAL LASER TECHNOLOGIES, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(In thousands, except per share data)
For the Six Months Ended:
June 29, 1997 June 30, 1996
Net sales $ 5,977 $ 5,549
Cost of sales 2,618 1,979
------- -------
Gross profit 3,359 3,570
------- -------
Operating expenses:
Selling, general and administrative 3,427 4,339
Product development 449 810
------- -------
3,876 5,149
------- -------
Operating loss (517) (1,579)
Interest expense 333 284
Interest income (199) (191)
Other income (172) (15)
Equity in loss of joint venture -- 104
------- -------
Loss before income taxes $ (479) $(1,761)
Provision for income taxes -- --
------- -------
Net loss $ (479) $(1,761)
======= =======
Net loss per share $ (0.05) $ (0.18)
======= =======
Shares used in calculating net loss per share 9,883 9,854
======= =======
The accompanying notes are an integral part of these statements.
5
<PAGE>
SURGICAL LASER TECHNOLOGIES, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(In thousands)
For the Six Months Ended:
June 29, 1997 June 30, 1996
Cash Flows From Operating Activities:
Net loss $ (479) $(1,761)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Equity in loss of joint venture -- 104
Depreciation and amortization 527 466
Imputed interest (6) (9)
(Increase) decrease in assets:
Accounts receivable 72 621
Inventories 924 431
Other current assets 10 (79)
Other assets (25) 6
Increase (decrease) in liabilities:
Accounts payable (102) 241
Accrued liabilities (601) 4
------- -------
Net cash provided by operating activities 320 24
------- -------
Cash Flows From Investing Activities:
Sale of short-term investments, net 291 3,244
Investment in joint venture -- (200)
Additions to property and equipment (136) (66)
Patent costs 32 (44)
------- -------
Net cash provided by investing activities 187 2,934
------- -------
Cash Flows From Financing Activities:
Payments on long-term debt (210) (105)
------- -------
Net cash used in financing activities (210) (105)
------- -------
Net increase in cash and cash equivalents 297 2,853
Cash and Cash Equivalents, Beginning of Period 2,795 4,903
------- -------
Cash and Cash Equivalents, End of Period $ 3,092 $ 7,756
======= =======
The accompanying notes are an integral part of these statements.
6
<PAGE>
SURGICAL LASER TECHNOLOGIES, INC.
AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. Summary Financial Information and Results of Operations:
In the opinion of Surgical Laser Technologies, Inc. and Subsidiaries (the
"Company"), the accompanying unaudited condensed consolidated financial
statements have been prepared in accordance with generally accepted accounting
principles and with the regulations of the Securities and Exchange Commission
and contain all adjustments (consisting of only normal recurring adjustments)
necessary to present fairly the financial position as of June 29, 1997 and the
results of operations and cash flows for the quarters and six months ended June
29, 1997 and June 30, 1996.
Interim Financial Information:
While the Company believes that the disclosures presented are adequate to
prevent misleading information, it is suggested that the unaudited condensed
consolidated financial statements be read in conjunction with the audited
consolidated financial statements and notes included in the Company's Form 10-K
report for the fiscal year ended December 29, 1996, as filed with the Securities
and Exchange Commission. Interim results for the quarter and six months ended
June 29, 1997 are not necessarily indicative of the results to be expected for
the full year.
2. Supplemental Cash Flow Information:
Income taxes paid for the six months ended June 29, 1997 were $9,000. Income
taxes paid for the six months ended June 30, 1996 were $15,200, primarily
representing federal alternative minimum taxes. Interest paid for the six months
ended June 29, 1997 and June 30, 1996 was $333,000 and $283,000, respectively.
The following noncash investing and financing activities took place:
For the six months ended June 29, 1997 and June 30, 1996, $10,000 and $13,000,
respectively, of the 8% convertible subordinated notes were converted at the
request of the noteholders into common stock at a conversion price of $4.50 per
share.
3. Net Loss Per Share:
Net loss per share has been computed using the weighted average number of common
shares outstanding during each period. Common share equivalents have not been
considered as they are anti-dilutive. In February 1997, the Financial Accounting
Standards Board issued Statement of Financial Accounting Standards ("SFAS") No.
128, "Earnings Per Share," which the Company is required to adopt on December
28, 1997. The impact of SFAS No. 128 will not have any effect on net loss per
share for the quarters and six months ended June 29, 1997 and June 30, 1996.
4. Bank Borrowings:
At June 29, 1997, the Company had a $2.75 million line of credit agreement with
a bank, which included a $750,000 sub-line for letters of credit. Under its
sub-line, the Company issued a letter of credit in the amount of $515,000 in
favor of the Montgomery County Industrial Development Corporation ("MCIDC")
under the terms of the Mortgage and Security Agreement. Additionally, in 1996,
SLT issued a letter of credit for $17,510 to its
7
<PAGE>
lessor, Nappen Associates in compliance with the lease agreement. Other
than for these letters of credit and other minor trade letters of credit issued
from time to time, there were no borrowings under the line during the six months
ended or at June 29, 1997. Borrowings on the line are secured by the Company's
accounts receivable and inventories and bear interest at the bank's prime rate
plus 1/2%. The line expires on June 30, 1998. The Company's line of credit
agreement prohibits the declaration or payment of any dividends or distributions
on any of its capital stock without the prior written consent of the bank at any
time there are outstanding obligations to the bank. The line is subject to the
Company maintaining certain financial covenants, as defined, with which the
Company was in compliance at June 29, 1997.
5. Income Taxes:
No income tax provision was made for the six months ended June 29, 1997 or
for the comparable six months of 1996 due to losses incurred.
6. Segment and Geographic Data:
The Company is engaged in one business segment: the design, development,
manufacture and marketing of laser products for medical applications. The
Company's customers are primarily hospitals and medical centers. Foreign sales
represented 24% of net sales in both the first six months of 1997 and 1996.
Sales to the Company's joint venture (see Note 7) were 2% of net sales in the
first six months of 1996.
7. Investment in Mediq PRN/SLT:
On September 30, 1996 the Company acquired the remaining 50% interest in the
Mediq PRN/SLT joint venture held by Mediq PRN for the assumption of outstanding
liabilities. The joint venture company was formed in the third quarter of 1993
to provide rentals of lasers and related equipment to hospitals and other health
care providers. Prior to the acquisition, the investment in Mediq PRN/SLT was
recorded using the equity method of accounting. Sales to Mediq PRN/SLT were
recorded at an arms-length price. Under the equity method, 50% of the gross
margin from sales to the joint venture was deferred and amortized to income as
the related asset was used by the joint venture. The Company's sales to Mediq
PRN/SLT were $137,000 for the six months ended June 30, 1996. While Mediq PRN is
continuing to provide logistic services to the Company, the Company is now fully
responsible for the management, sales and operations of the business. The
business is now conducted under the trade name "Laser OnCall(TM)."
ITEM 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations
Historically, the Company has generated its net sales from positioning its
technology and products across a wide range of surgical specialties. In an
effort to attain more significant growth in sales, the Company has begun to
transition from the historical marketing approach to an emphasis which would
provide a broader array of products to a more select market segment. The change
in marketing approach is aimed at identifying and acquiring additional products
and technologies that will complement the Company's current product offerings
and serve to leverage its existing customer base and distribution organization.
While focusing its efforts on a more select market segment, the Company intends
to serve other specialty markets by entering into distribution arrangements with
companies which, by focusing their activities in those other specialties, are
closer to the customer and are therefore better suited to serving the customer's
needs.
Consistent with this new marketing approach and as previously announced, in July
1997, the Company acquired exclusive worldwide rights to certain new products
and medical devices used within minimally invasive otolaryngology and head and
neck surgery, pursuant to an agreement with MedTREK(TM) Corporation and its
President, Mr. Dom L. Gatto.
8
<PAGE>
The Company is also taking actions intended to improve its international
customer relationships, consistent with a focus on a more specific surgical
segment. Additionally, as part of this transition, the Company is exploring
opportunities to expand the utilization of its proprietary technologies by
entering into private label relationships with other companies which will market
products encompassing SLT's core competencies under their product labeling.
As previously announced, in June 1997, the Company entered into a private label
supply agreement with Diomed Ltd., a U.K. based manufacturer and maker of diode
lasers and related accessories. Under the agreement, Diomed will purchase from
the Company, Diomed's requirements for contact probes and disposable fiber
delivery systems, made to its specifications and trademarks, for use with its
diode laser systems.
Net sales for the quarter ended June 29, 1997 of $2,904,000 increased $119,000
or 4% compared to the second quarter 1996 net sales of $2,784,000. For the six
months ended June 29, 1996, net sales were $5,977,000 compared to $5,549,000 in
the first six months of 1996, an increase of $428,000 or 8%. Net sales of Nd:YAG
laser systems for the quarter ended June 30, 1997 increased 40% and 47% from the
second quarter and first six months of 1996 respectively. The increases in sales
of laser systems is due primarily to efforts of the Company to reduce inventory
levels. Net sales of delivery systems declined by 15% in the second quarter and
12% in the first six months, from the comparable periods in 1996.
Gross profits of $1,631,000 for the quarter ended June 29,1997 decreased
$224,000 or 12% from the second quarter of 1996, while gross profits for the six
months ended June 29, 1997 of $3,359,000 decreased $211,000, or 6% from the
first six months of 1996. As a percentage of net sales, gross profit decreased
to 56% for the first six months of 1997 from 64% in the comparable period of
1996. The decrease in gross profit as a percentage of sales in the first six
months of 1997 as compared to the first six months of 1996 was due primarily to
two factors. The main factor was a temporary reduction in the international
selling price on certain Contact Laser Systems, enacted in an effort to reduce
inventory levels. The second factor was the inclusion in the 1997 period of the
Laser OnCall(TM) rental business which operates at a lower percentage gross
profit as compared to the sale of lasers and delivery systems. The Laser
OnCall(TM) rental business had been accounted for in the prior year period under
the equity method. (See Note 7, Investment in Mediq PRN/SLT).
Operating expenses for the second quarter of 1997 of $1,925,000 decreased by
$770,000 or 29% from the second quarter of 1997. For the first six months of
1997, operating expenses of $3,876,000 decreased $1,273,000 or 25% from the
first six months of 1996. These reductions in operating expenses were mainly due
to cost reduction actions initiated in the third quarter of 1996.
Product development expenses of $218,000 in the second quarter of 1997 and
$449,000 in the first six months of 1997 decreased by $156,000 or 42%, and
$361,000 or 45%, respectively, from the comparable periods in 1996. The decrease
was principally due to reductions in personnel and facility related expenses
resulting from cost reduction measures taken in the third quarter of 1996 which
included both manpower reductions and the consolidation of the Company's
facilities into one location. In addition, lower costs were incurred in the
first six months of 1997 as compared to the prior year for clinical study and
product development activities.
Selling, general and administrative expenses were $1,707,000 in the second
quarter of 1997, a decrease of $614,000 or 26% from the comparable prior year
period. In the first six months of 1997, selling, general and administrative
expenses were $3,427,000 compared to $4,339,000 in the first six months of 1996,
a decrease of $912,000 or 21%. Reductions in workforce and related expenses
enacted in the third quarter of 1996 accounted for the majority of the reduced
spending level.
The Company was notified in the second quarter of 1997 that one of its
sub-tenants at its leased facility in Hebron, Kentucky, had filed for protection
under Chapter 11 of the Bankruptcy Code and subsequently permitted a secured
creditor to dispose of its assets. This sub-tenant has vacated the facility and
the Company is currently seeking a replacement sub-tenant.
9
<PAGE>
Net interest expense was $87,000 in the second quarter of 1997 and $134,000 in
the first six months of 1997, an increase of $32,000 and $41,000, respectively,
from the comparable periods in 1996. The increase was primarily attributable to
interest payments related to the capital leases acquired in the purchase of the
Mediq PRN/SLT joint venture.
Liquidity and Capital Resources
The Company had cash, cash equivalents and short-term investments of $6,126,000
at June 29, 1997, of which $100,000 was restricted. In addition, the Company
currently has a $2.75 million credit facility with its bank. The facility
includes a sub-line for letters of credit of $750,000. Other than for the letter
of credit issued in the amount of $515,000 in favor of the Montgomery County
Industrial Development Corporation ("MCIDC") as a condition of the Mortgage and
Security Agreement with MCIDC, and one other minor letter of credit, there were
no borrowings outstanding under the line of credit. Borrowings under the line
are secured by the Company's accounts receivable and inventories. The line is
subject to the Company maintaining certain financial covenants, as defined, with
which the Company was in compliance at June 29, 1997. The facility expires on
June 30, 1998.
Net cash provided by operating activities was $320,000 in the first six months
of 1997 compared to cash provided by operating activities of $24,000 in the
comparable period in 1996. The comparable increase in cash provided by operating
activities was due mainly to the reduction in the net loss incurred.
Net cash provided by investing activities was $187,000 in the first six months
of 1997 compared to cash provided by investing activities of $2,934,000 in the
first six months of 1996. The decrease was due principally to the maturity of
certain short-term investments amounting to $3,244,000 during the first six
months of 1996.
Net cash used in financing activities, which represents payments on long-term
debt, was $210,000 and $105,000 in the first six months of 1997 and 1996,
respectively.
Management anticipates capital expenditures of approximately $200,000 in 1997,
of which $19,000 was spent in the first six months of 1997. The capital
expenditures are primarily for manufacturing and research and development
purposes. The Company is not contractually committed to spend the balance of its
estimated capital expenditures. Management believes that its current cash
position and cash provided by operations will be sufficient for these
expenditures.
Management believes that inflation has not had a material effect on operations.
Forward Looking Statements
The forward looking statements contained herein, including the statements
regarding the Company's change in marketing approach by focusing on the ENT
market, serving other specialty markets through distribution arrangements and
expanding the use of private label and OEM relationships, reflect management's
current views with respect to future events and financial performance. These
statements are subject to certain risks and uncertainties that could cause
actual results to differ materially from those in the forward looking
statements, including the risk that the Company will experience short-term
disruptions or an adverse impact on results of operations during the transition
to this new marketing approach. Moreover, no assurance can be given that the
change in marketing approach will have a long-term positive financial impact.
For a further discussion of certain risk factors that could cause actual results
to differ materially from those in the forward looking statements included
herein or made from time to time by the Company, reference is made to the
Company's Form 10-K, Item 7, "Risk Factors" for the fiscal year ended December
29, 1996.
10
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. Legal proceedings
For information regarding certain pending lawsuits, reference is made to the
Company's Form 10-K, Item 3, for the fiscal year ended December 29, 1996, which
is incorporated herein by reference.
With regard to the patent infringement action brought by Trimedyne in the United
States District Court for the Central District of California, oral argument was
held before the Court of Appeals for the Federal Circuit on May 8, 1997. It is
not known when the Court of Appeals will render its decision.
ITEM 4. Submission of Matters to a Vote of Security Holders.
The Company held its Annual Meeting of Stockholders on May 20, 1997. Sheldon M.
Bonovitz, Richard J. DePiano, Jay L. Federman, Vincenzo Morelli and W. Keith
Stoneback, the director nominees set forth in the Notice of Annual Meeting, were
elected to serve as directors. The following table gives the details of the
votes cast for each director nominee:
Votes
Nominee For Abstained
- ------- --- ---------
Sheldon M. Bonovitz 8,166,914 135,548
Richard J. DePiano 8,175,239 127,223
Jay L. Federman 8,175,439 127,023
Vicenzo Morelli 8,175,639 126,823
W. Keith Stoneback 8,179,164 123,298
Arthur Andersen LLP was ratified to serve as the Company's independent
accountants for the fiscal year ending December 28, 1997, with 8,174,992 votes
favoring ratification, 57,620 votes opposing, and 69,850 votes abstaining.
ITEM 6. Exhibits and Reports on Form 8-K
a. Exhibits: Exhibit 3.1 - Restated Certificate of Incorporation,
incorporated by reference to Exhibit 3.1
filed with the Annual Report on Form 10-K for the
fiscal year ended December 29,
1991, filed on March 30, 1992.
Exhibit 3.2 - Bylaws, as amended, incorporated by reference
to Exhibit 3.2 filed with the Annual Report on
Form 10-K for the fiscal year ended December 30,
1990, filed on March 29, 1991.
Exhibit 11 - Computation of Earnings Per Share
Exhibit 27 - Financial Data Disclosure
b. Reports on Form 8-K: none
11
<PAGE>
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 thereunto duly authorized.
SURGICAL LASER TECHNOLOGIES, INC.
Date: August 12, 1997 By: /s/ Michael R. Stewart
-------------------------------
Michael R. Stewart
Vice President, Finance and
Chief Financial Officer
Signing on behalf of the
Registrant and as principal
financial officer.
12
<PAGE>
EXHIBIT 11
SURGICAL LASER TECHNOLOGIES, INC.
AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE (UNAUDITED)
(In thousands, except per share data)
<TABLE>
<CAPTION>
For the Quarter Ended: For the Six Months Ended:
June 29, 1997 June 30, 1996 June 29, 1997 June 30, 1996
<S> <C> <C> <C> <C>
Primary Earnings (Loss) Per Common
Share:
Net income (loss) $(282) $(941) $(479) $(1,761)
Weighted average number of shares of
Common Stock outstanding during 9,883 9,855 9,883 9,854
the period
Additional shares assuming exercise
of stock options and warrants
utilizing the treasury stock method - - - -
------ ------ ------ ------
Weighted average Common Stock and
Common Stock equivalents outstanding 9,883 9,855 9,883 9,854
------ ------ ------ ------
Primary earnings (loss) per share $(0.03) $(0.10) $(0.05) $(0.18)
====== ====== ====== ======
Fully Diluted Earnings (Loss) per
Common Share:
Net income (loss) $(282) $(941) $(479) $(1,761)
Weighted average number of shares of
Common Stock outstanding during the 9,883 9,855 9,883 9,854
period
Additional shares assuming exercise
of stock options and warrants - - - -
utilizing the treasury stock method
Additional shares assuming conversion
of convertible subordinated notes - - - -
------ ------ ------ ------
Weighted average Common Stock and
Common Stock equivalents outstanding 9,883 9,855 9,883 9,854
------ ------ ------ ------
Fully diluted earnings (loss) per $(0.03) $(0.10) $(0.05) $(0.18)
share ====== ====== ====== ======
13
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<CURRENCY> U.S. Dollar
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-28-1997
<PERIOD-END> JUN-29-1997
<EXCHANGE-RATE> 1
<CASH> 3,092
<SECURITIES> 3,034
<RECEIVABLES> 2,943
<ALLOWANCES> (116)
<INVENTORY> 2,745
<CURRENT-ASSETS> 11,822
<PP&E> 14,545
<DEPRECIATION> (7,080)
<TOTAL-ASSETS> 20,091
<CURRENT-LIABILITIES> 2,865
<BONDS> 0
0
0
<COMMON> 99
<OTHER-SE> 10,739
<TOTAL-LIABILITY-AND-EQUITY> 20,091
<SALES> 5,977
<TOTAL-REVENUES> 5,977
<CGS> 2,618
<TOTAL-COSTS> 2,618
<OTHER-EXPENSES> 3,876
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 333
<INCOME-PRETAX> (479)
<INCOME-TAX> 0
<INCOME-CONTINUING> (479)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (479)
<EPS-PRIMARY> (0.05)
<EPS-DILUTED> (0.05)
</TABLE>
