SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
__X__ Quarterly report pursuant to Section 13 of 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended June 30, 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: 0-27166
XATA Corporation
- --------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in its Charter)
Minnesota 41-1641815
- --------------------------------------------------------------------------------
(State or Other Jurisdiction of (I.R.S. Employer Identification Number)
Incorporation or Organization)
151 E. Cliff Road, Suite 10, Burnsville, Minnesota 55337
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (612) 894-3680
- --------------------------------------------------------------------------------
(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 _____
APPLICABLE ONLY TO CORPORATE ISSUERS:
As of August 12, 1997, the following securities of the Registrant were
outstanding: 4,394,401 shares of Common Stock, $.01 par value per share.
<PAGE>
XATA Corporation
INDEX
PART I. FINANCIAL INFORMATION Page No.
--------
Item 1. Financial Statements:
Balance Sheets as of
June 30, 1997 and September 30, 1996 3
Statement of Operations for the Three and Nine
Months Ended June 30, 1997 and 1996 5
Statement of Cash Flows for the Nine
Months Ended June 30, 1997 and 1996 6
Notes to Financial Statements 7
Item 2. Management's Discussion and Analysis or Plan of
Operation 8
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. Item 1. Financial Information
XATA Corporation
BALANCE SHEETS
June 30, 1997 and September 30, 1996
<TABLE>
<CAPTION>
June 30, September 30,
ASSETS: 1997 1996
------------ ------------
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 978,337 $ 740,085
Available-for-sale securities 2,792,383 3,026,520
Accounts receivable 2,810,279 3,363,763
Inventories 589,786 373,891
Prepaid expenses 134,366 76,300
Deferred taxes 265,000 265,000
------------ ------------
Total current assets 7,570,151 7,845,559
Equipment and leasehold improvements, at cost:
Engineering and manufacturing equipment 526,570 469,725
Office furniture and equipment 1,356,192 868,298
Leasehold improvements 99,061 72,747
------------ ------------
1,981,823 1,410,770
Less accumulated depreciation and amortization (789,637) (513,089)
------------ ------------
Net equipment and leasehold improvements 1,192,186 897,681
------------ ------------
Other Assets:
Capitalized software development costs, less accumulated amortization
of $1,285,866 at June 30, 1997, and $850,888 at September 30, 1996 1,010,716 555,678
Purchased software, less accumulated amortization
of $250,000 at June 30, 1997, and $25,000 at September 30, 1996 1,150,000 1,175,000
Goodwill, less accumulated amortization
of $178,465 at June 30, 1997, and $15,942 at September 30, 1996 1,360,638 1,323,161
Other 54,913 55,029
------------ ------------
Total other assets 3,576,267 3,108,868
Total assets $ 12,338,604 $ 11,852,108
============ ============
</TABLE>
<PAGE>
XATA Corporation
BALANCE SHEETS
June 30, 1997 and September 30, 1996
<TABLE>
<CAPTION>
June 30, September 30,
LIABILITIES AND STOCKHOLDERS' EQUITY: 1997 1996
----------- -----------
<S> <C> <C>
Current Liabilities:
Accounts payable $ 755,450 $ 996,033
Accrued expenses 498,306 690,154
Deferred revenue 971,617 591,044
Income taxes payable 37,751 25,012
----------- -----------
Total current liabilities 2,263,124 2,302,243
Long-term Liabilities:
Long-term debt 152,906 142,855
Deferred taxes 195,000 195,000
----------- -----------
Total long-term liabilities 347,906 337,855
Stockholders' Equity:
Commonstock, par value $.01 per share, authorized 8,333,333 shares;
issued 4,392,734 at June 30, 1997 and 4,342,481 at
September 30, 1996 43,927 43,425
Additional paid-in capital 9,145,507 8,701,956
Common stock to be issued 407,812 407,812
Retained earnings 130,328 58,817
----------- -----------
Total stockholders' equity 9,727,574 9,212,010
----------- -----------
Total liabilities and stockholders' equity $12,338,604 $11,852,108
=========== ===========
</TABLE>
<PAGE>
XATA Corporation
STATEMENT OF OPERATIONS
For the Three and Nine Months ended June 30, 1997 and 1996
<TABLE>
<CAPTION>
Three Month Periods Nine Month Periods
Ended June 30, Ended June 30,
1997 1996 1997 1996
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net sales $ 2,843,493 $ 2,436,236 $ 7,955,943 $ 7,154,922
Cost of sales 1,471,748 1,275,841 4,075,510 3,900,423
----------- ----------- ----------- -----------
Gross profit 1,371,745 1,160,395 3,880,433 3,254,499
Operating expenses 1,370,366 895,681 3,867,589 2,413,709
----------- ----------- ----------- -----------
Operating income 1,379 264,714 12,844 840,790
Non-operating (expense) income:
Interest (expense) (4,560) (3,063) (11,259) (9,189)
Interest income 40,352 70,858 117,596 151,759
----------- ----------- ----------- -----------
35,792 67,795 106,337 142,570
----------- ----------- ----------- -----------
Net income before income taxes 37,171 332,509 119,181 983,360
----------- ----------- ----------- -----------
Income tax provision (14,930) -- (47,670) --
----------- ----------- ----------- -----------
Net income $ 22,241 $ 332,509 $ 71,511 $ 983,360
=========== =========== =========== ===========
Net income per share $ 0.01 $ 0.07 $ 0.02 $ 0.24
=========== =========== =========== ===========
Weighted average common and common
equivalent shares outstanding 4,426,484 4,488,843 4,477,311 4,182,688
=========== =========== =========== ===========
</TABLE>
<PAGE>
XATA Corporation
STATEMENT OF CASH FLOWS
For the Nine Months Ended June 30, 1997 and 1996
<TABLE>
<CAPTION>
Nine Month Periods
Ended June 30,
1997 1996
----------- ------------
<S> <C> <C>
Cash Flows from Operating Activities
Net income $ 71,511 $ 983,360
Adjustments to reconcile net income (loss) to net cash
(used in) operating activities:
Depreciation and amortization 1,099,166 350,114
(Increase) decrease in accrued income in available-for-sale securities 24,527 (68,389)
(Gain) or loss on sale of available-for-sale securities 0 725
Amortization of discount on note payable 10,051 9,189
Change in assets and liabilities:
(Increase) decrease in accounts receivable 553,484 (639,557)
(Increase) decrease in inventories (215,895) 172,819
(Increase) decrease in prepaid expenses (21,347) (9,700)
Increase (decrease) in accounts payable (240,583) 472,967
Increase (decrease) in accrued expenses and deferred revenue 201,464 175,722
----------- ------------
Net cash provided by (used in) operating activities 1,482,378 1,447,250
----------- ------------
Cash Flows from Investing Activities
Purchase of available-for-sale securities (4,233,477) (10,310,956)
Proceeds from sale and maturity of available-for-sale securities 4,443,087 5,370,969
Purchase of equipment (571,053) (289,850)
Additions to software development costs (890,017) (461,096)
----------- ------------
Net cash provided by (used in) investing activities (1,251,460) (5,690,933)
----------- ------------
Cash Flows from Financing Activities
Net increase (decrease) in line of credit 0 0
Proceeds from long-term debt 0 0
Repayment of long-term debt 0 0
Proceeds from options and warrants exercised 7,334 2,602
Proceeds from public stock offering 0 4,937,850
----------- ------------
Net cash provided by (used in) financing activities 7,334 4,940,452
----------- ------------
Increase (decrease) in cash and cash equivalents 238,252 696,769
Cash and Cash Equivalents
Beginning 740,085 519,715
----------- ------------
Ending $ 978,337 $ 1,216,484
=========== ============
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
NOTE 1. MANAGEMENT STATEMENT
In the opinion of management of the Company, the accompanying unaudited
financial statements contain all adjustments (consisting of only normal,
recurring accruals) necessary to present fairly the financial position of the
Company as of June 30, 1997 and the results of operations and cash flows for the
three and nine month periods ended June 30, 1997 and 1996. The results of
operations for any interim period are not necessarily indicative of the results
for the fiscal year ending September 30, 1997. These interim financial
statements should be read in conjunction with the Company's annual financial
statements and related notes thereto included in the Company's Form 10-KSB and
Annual Report to shareholders for the fiscal year ended September 30, 1996.
NOTE 2. EARNINGS PER SHARE
The FASB has issued Statement No. 128, Earnings per Share, which supersedes APB
Opinion No. 15. Statement No. 128 requires the presentation of earnings per
share by all entities that have common stock or potential common stock, such as
options, warrants and convertible securities, outstanding that trade in a public
market. Those entities that have only common stock outstanding are required to
present basic earnings per-share amounts. All other entities are required to
present basic and diluted per-share amounts. Diluted per-share amounts assume
the conversion, exercise or issuance of all potential common stock instruments
unless the effect is to reduce a loss or increase the income per common share
from continuing operations. All entities required to present per-share amounts
must initially apply Statement No. 128 for annual and interim periods ending
after December 15, 1997. Earlier application is not permitted.
Because the Company has potential common stock outstanding (stock options and
warrants), the Company will be required to present basic and diluted earnings
per share (EPS). If the Company had applied Statement No. 128 in the
accompanying financial statements, the following per-share information would
have been reported:
Three Months Ended June 30 Nine Months Ended June 30
-------------------------- -------------------------
1997 1996 1997 1996
---- ---- ---- ----
Basic EPS $0.01 $0.08 $0.02 $0.24
Diluted EPS $0.00 $0.07 $0.02 $0.23
<PAGE>
PART I ITEM 2. Management's discussion and analysis or plan of operation. The
following discussion and analysis provides information which management believes
is relevant to an assessment and understanding of the Company's results of
operation and financial condition. This discussion should be read in conjunction
with the financial statements in Item 1 and the Company's report on Form 10-KSB
for the period ended September 30, 1996.
RESULTS OF OPERATIONS
NET SALES. XATA Corporation develops, markets, and services fully integrated,
mobile information systems for the fleet trucking segment of the transportation
industry in the United States. XATA systems utilize proprietary software,
onboard touch-screen computers, and related hardware components and accessories
to capture, analyze and communicate operating information that assists fleet
management in improving productivity and profitability. XATA's solutions provide
significant fleet savings and benefits through: increased fuel economy; improved
routing and scheduling; reduced driver, clerical and compliance paperwork;
reduced maintenance costs; improved driver performance and safety; and better
customer service.
The Company's net sales for the three months ended June 30, 1997 increased 16.7%
to $2,843,493 as compared to sales of $2,436,236 for the comparable three month
period ended June 30, 1996. Net sales for the nine months ended June 30, 1997
increased 11.2% to $7,955,943 as compared to sales of $7,154,922 for the
comparable nine months ended June 30, 1996. The increase in revenues can be
attributed to sales from the recently acquired Payne & Associates and to growth
in the Company's private fleet business. Sales to private fleet customers for
the nine months ended June 30, 1997 were more than 85% higher than the
comparable period in fiscal 1996. This growth, together with the addition of the
revenue from Payne & Associates, has been more than enough to offset an expected
temporary slowdown in deliveries to a large customer. This customer is currently
involved in a major restructuring program intended to direct additional funds
into its leading lines of business, one of which includes the division that
purchases XATA onboard computers. Deliveries to this customer accounted for more
than 45 percent of fiscal 1996 revenue, but less than 15 percent of the revenue
for the first nine months of fiscal 1997. Although XATA expects that deliveries
to this particular customer in fiscal 1997 will remain below fiscal 1996 levels,
XATA anticipates that total Company revenue for fiscal 1997 will exceed fiscal
1996 levels.
GROSS PROFIT. The Company had a gross profit of $1,371,745 (48.2% of net sales)
for the three months ended June 30, 1997, compared to a gross profit of
$1,160,395 (47.6% of net sales) for the comparable 1996 period. The nine month
totals were $3,880,433 (48.8% of net sales) and $3,254,499 (45.5% of net sales)
respectively. The improvements in gross profit resulted primarily from changes
in the product sales mix, with sales in the current periods containing a larger
portion of high margin sales, including sales of XATA proprietary software. The
Company has also realized significant results from its program to reduce
material costs of its onboard computers. Beginning in fiscal 1994 and continuing
to the present, the Company has increasingly used outside vendors to manufacture
and assemble component parts. The Company anticipates that this change will
continue to have a number of beneficial results, including lower average
component costs, better quality, and shorter lead time for shipment of customer
orders. These improvements to gross profit were offset somewhat by significantly
increased amortization of capitalized software development costs and the
amortization of software acquired with the purchase of Payne & Associates.
OPERATING EXPENSES. Operating expenses include research and development, selling
expenses and general and administrative expenses. Total operating expenses were
$1,370,366 for the three month period ended June 30, 1997 (48.2% of net sales)
compared to $895,681 for the comparable prior year period (36.8% of
<PAGE>
net sales). The nine month totals were $3,867,589 (48.6% of net sales) and
$2,413,709 (33.7% of net sales) respectively.
Operating expenses other than research and development were $1,172,622 (41.2% of
net sales) for the three month period ended June 30, 1997 compared to $797,703
(32.7% of net sales) for the comparable prior year period. The nine month totals
were $3,315,379 (41.7% of net sales) and $2,046,996 (28.6% of net sales)
respectively. The increases of $374,919 and $1,268,383 for the three and nine
month periods ended June 30, 1997 compared to the comparable prior year periods
were primarily due to planned increases in sales, marketing and MIS personnel,
to increases in other marketing expenses associated with a higher level of
sales, to amortization of goodwill associated with the purchase of Payne &
associates, and to costs associated with the operation of Payne & Associates.
The Company will continue to develop required infrastructure to facilitate
planned increases in revenue and, accordingly, expects that operating expenses
will continue to increase during fiscal 1997 and fiscal 1998.
The Company's market position is based on its strong research capability and its
technology leadership, as evidenced by its growing customer base. The Company
has significantly increased expenditures for its combined research and
development and capitalized software development costs. Expenditures for
research and development are included in operating expenses and are charged to
operations as incurred. Research and development expenses during the three
months ended June 30, 1997 were $197,744 compared to $97,978 during the
comparable 1996 period. The nine month totals were $552,210 and $366,713
respectively. The increases over the prior year periods occurred primarily as
the result of planned increases in personnel and expenses related to new product
capabilities. Software development costs are capitalized after the establishment
of technological feasibility of new products or enhancements. Capitalized
software development costs are amortized to cost of sales over a two-year
period. Capitalized software development costs were $283,091 for the three month
period ended June 30, 1997, compared to $196,417 for the comparable three month
period of 1996. The nine month totals were $776,833 and $461,096 respectively.
The increase is due to development of enhancements and new software versions to
respond to industry requirements and customer needs. The Company anticipates
that expenditures for research and development and capitalized software
development to continue to increase during fiscal 1997 and fiscal 1998.
INTEREST INCOME AND EXPENSES. Net interest income for the three month period
ended June 30, 1997 was $35,792 compared to $67,795 in the comparable prior year
period. The nine month totals were $106,337 and $142,570 respectively. These
results reflect the investment of the approximately $4,900,000 of funds received
in December, 1995 and January, 1996, from the Company's stock offering and the
reduction of these investments during August, 1996 following the purchase of
Payne & Associates.
INCOME TAXES. Income tax expense for the three month period ended June 30, 1997,
was $14,930 and for the nine months then ended was $47,670 (40% effective tax
rate). No income tax expense was recorded for the comparable 1996 periods due to
the utilization of available net operating loss carryforwards.
NET INCOME. Net income for the three month period ended June 30, 1997, was
$22,241 compared to net income of $332,509 for the comparable 1996 period. The
nine month totals were $71,511 and $983,360 respectively. The $310,268 decrease
from the prior year three month period ($911,849 decrease for the nine month
period) is primarily the result of additional operating costs of Payne &
Associates, the amortization of costs associated with the purchase of Payne &
Associates, and planned increases in sales and marketing expenses, as well as
the other factors discussed in this section.
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
At June 30, 1997, the Company's working capital was $5,307,027 compared to
$5,543,316 at September 30, 1996. Currently, cash and cash equivalents of
$978,337 are held primarily in a fund composed of short-term commercial paper
until such time as required by operations. Available-for-sale securities of
$2,792,383 are composed of U.S. Treasury notes, and corporate debt securities
with maturities ranging from July 1997 to December 1998. The cost of the
available-for-sale securities approximated fair market value at June 30, 1997.
Cash flows provided by operating activities during the nine months ended June
30, 1997 totaled $1,482,378, resulting primarily from depreciation and
amortization ($1,099,166) and the decrease in accounts receivable ($553,484)
offset by the decrease in accounts payable ($240,583) and the increase in
inventories ($215,895).
Cash flows used by investing activities during the nine months ended June 30,
1997 totaled $1,251,460, resulting primarily from additions to software
development costs ($890,017) and purchase of equipment ($571,053) reduced by net
selling activity of the available-for-sale securities ($209,610). This compares
to software development costs ($461,096) and capital expenditures ($289,850) and
net purchase of available-for-sale securities ($4,939,987) totaling $5,690,933
of funds used in investing activities for the comparable period in 1996. Capital
expenditures for the current fiscal year included approximately $250,000 for
cubicle walls, leasehold improvements and upgrades to the security and telephone
systems associated with the move to the new facilities in April 1997. Other
capital expenditures were primarily for internal PC equipment and office
equipment to support increases in personnel and engineering equipment used in
developing new products. Although the Company has no firm commitments for
capital expenditures, it anticipates capital expenditures of at least $90,000
during the balance of fiscal 1997.
The Company has a $150,000 term debt facility to be used for fixed asset
additions, and a $1,000,000 line of credit with Norwest Bank Minnesota, N.A.,
both expiring in March 1998. Advances under the line of credit accrue interest
at prime plus 1.5%, with an effective rate of 10.0% as of August 8, 1997. The
Company has no minimum interest requirements, but is committed to an annual
administrative fee of $1,200. At June 30, 1997 there were no balances due. The
Company anticipates renewing this line of credit in March 1998.
Cash flows from financing activities during the nine months ended June 30, 1997
totaling $7,334 resulted from the exercise of stock options by employees. During
the comparable period in 1996, cash flows provided by financing activities
included proceeds of an underwritten public offering of 700,000 shares of Common
Stock at $7.00 per share received on December 26, 1995, and proceeds from the
exercise of an over-allotment option to purchase an additional 105,000 shares at
$7.00 per share received January 18, 1996. Total proceeds from the offering, net
of underwriting discount and expenses of the offering, were approximately
$4,900,000. During fiscal year 1997, cash will be required to meet increased
working capital needs, including inventory and accounts receivable financing,
increased expenditures for marketing, sales, and customer support, continuing
research and development expenses and capital expenditures. The Company believes
its cash on hand plus its available-for-sale securities, its line of credit, and
its current vendor terms will be adequate to fund the delivery of its
anticipated revenue growth and to maintain its liquidity for a period of
approximately 18 to 24 months. The Company's future cash flows from operations,
however, may vary depending on a number of factors, including level of
competition, general economic conditions and other factors beyond the Company's
control.
<PAGE>
OUTLOOK - FOURTH QUARTER NON-CASH CHARGE
The Company is currently in the process of evaluating the recoverability of
assets (primarily purchased software and goodwill) acquired from Payne &
Associates (Payne) in August 1996. Certain recent events have caused the full
recoverability of these assets to be brought in question. The largest customer
of Payne was recently acquired by another company, resulting in the loss of this
customer's business, and a corresponding decrease in the revenue stream upon
which the software and goodwill values were based. The loss of this customer
also has required the Company to modify the acquired software before it can be
sold to others. As a result, the Company believes it will record a significant
nonrecurring, noncash charge in the fourth quarter, reflecting the downward
valuation of these assets. The assets to be revalued make up the major portions
of the "Purchased Software" and the Goodwill" categories on the Balance Sheet,
carried at a net book value at June 30, 1997 of $1,150,000 and $1,360,638
respectively. While the loss of business has adversely affected Payne's
operating results, and may continue to adversely affect operating results in the
near term, the Company believes that the products, technology and expertise
acquired from Payne have enhanced and continue to enhance the functionality and
value of all the products offered to XATA customers, thereby strengthening the
Company's competitive position and opportunities in the marketplace.
FORWARD-LOOKING STATEMENTS
THIS REPORT, AND IN PARTICULAR THE PARAGRAPH TITLED "OUTLOOK - FOURTH QUARTER
NON-CASH CHARGE", CONTAINS FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF
SECTION 27A OF THE SECURITIES ACT OF 1933 AND SECTION 21E OF THE SECURITIES
EXCHANGE ACT OF 1934. ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE
PROJECTED IN THE FORWARD-LOOKING STATEMENTS AS A RESULT OF KNOWN AND UNKNOWN
RISKS, UNCERTAINTIES, AND OTHER FACTORS DESCRIBED IN THIS REPORT, INCLUDING BUT
NOT LIMITED TO COMPETITION; TIMING OF RECEIPT AND SHIPMENT OF CUSTOMER ORDERS;
THE RESULTS OF MARKETING EFFORTS; THE EXPENSE AND TIME REQUIRED TO COMPLETE
RESEARCH AND DEVELOPMENT EFFORTS; AND THE INTEGRATION OF ACQUIRED BUSINESSES.
<PAGE>
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
* On April 4, 1997, the Company moved into 20,588 square
feet of new office and warehouse space at 151 E. Cliff
Road in Burnsville, Minnesota. The Company has signed a
seven (7) year, non-cancelable operating lease for this
space, with initial rental payments of $12,010.00 per
month plus a pro rata share of the buildings operating
expenses commencing June 1, 1997. The base rent will
increase to $14,810.00 on February 1, 1999, in part due
to occupancy on March 1, 1999, of an additional 4,800
square feet of warehouse space adjacent to the Company's
current space. Base rent will increase to $16,291 on
June 1, 2002, the sixth year of the lease. The lease may
be renewed for three (3) additional terms of five (5)
years each.
* The Company renegotiated its operating lease at its
former location, 500 E. Travelers Trail, Burnsville
Minnesota. Third parties have taken over approximately
three-fourths of the space formerly occupied, (one-half
on May 1, 1997 and an additional one-fourth on June 1,
1997) and the Company's rent obligation has been
correspondingly reduced. The Company does not expect to
sub-let the remaining space before its lease expires on
August 31, 1997.
* On April 30, 1997 the Board of Directors of the Company
authorized the repurchase of shares of the Company's
common stock in market transactions from time to time,
not to exceed $1 million. Any shares which are
repurchased will retire to authorized, unissued capital
stock of the Company. As of August 8, 1997 no shares had
been repurchased.
Item 6. Exhibits and Reports on Form 8-K - Financial Data Schedule
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act, the Registrant
has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
Dated: August 12, 1997 XATA Corporation
(Registrant)
by: /s/ Robert M. Featherstone
----------------------------------------------
Robert M. Featherstone
Chief Financial Officer
(Signing as Principal Financial and Accounting
Officer and as Authorized)
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-END> JUN-30-1997
<CASH> 978,337
<SECURITIES> 2,792,383
<RECEIVABLES> 2,810,279
<ALLOWANCES> 0
<INVENTORY> 589,786
<CURRENT-ASSETS> 7,570,151
<PP&E> 1,981,823
<DEPRECIATION> 789,637
<TOTAL-ASSETS> 12,338,604
<CURRENT-LIABILITIES> 2,263,124
<BONDS> 347,906
0
0
<COMMON> 43,927
<OTHER-SE> 9,683,647
<TOTAL-LIABILITY-AND-EQUITY> 12,338,604
<SALES> 7,955,943
<TOTAL-REVENUES> 7,955,943
<CGS> 4,075,510
<TOTAL-COSTS> 3,867,589
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 11,259
<INCOME-PRETAX> 119,181
<INCOME-TAX> 47,670
<INCOME-CONTINUING> 71,511
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 71,511
<EPS-PRIMARY> 0.02
<EPS-DILUTED> 0.02
</TABLE>
