<PAGE> 1
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-1004
-------------
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended June 30, 1997
Commission File Number 1-10515
JMAR INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
Delaware 68-0131180
------------------------------ ----------------------
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
3956 Sorrento Valley Blvd.
San Diego, CA 92121
(619) 535-1706
-----------------------------------------------------------
(Address, including zip code and telephone number including
area code of registrant's principal executive office)
Indicate by check mark whether the registrant 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, and has been subject to the filing requirements for at
least the past 90 days.
Yes X No
----- -----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practical date (August 4, 1997).
Common Stock, $.01 par value: 17,059,919 shares
================================================================================
<PAGE> 2
JMAR INDUSTRIES, INC.
INDEX
<TABLE>
<CAPTION>
PAGE #
------
<S> <C> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets - December 31, 1996 and
June 30, 1997 2
Consolidated Statements of Operations - Three months ended
June 30, 1997 and 1996 and six months ended June 30, 1997 and 1996 3
Consolidated Statements of Cash Flows - Six months ended
June 30, 1997 and 1996 4
Notes to Consolidated Financial Statements 5
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 8
PART II. OTHER INFORMATION
Item 1. N/A
Item 2. Changes in Securities 11
Item 3. N/A
Item 4. Submission of Matters to a Vote of Security Holders 11
Item 5. N/A
Item 6. Reports on Form 8-K 11
</TABLE>
1
<PAGE> 3
JMAR INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
AS OF JUNE 30, 1997 AND DECEMBER 31, 1996
<TABLE>
<CAPTION>
==============================================================================================================
June 30, 1997 December 31, 1996
-------------- -----------------
(Unaudited)
<S> <C> <C>
ASSETS
------
Current Assets:
Cash and cash equivalents ............................................ $ 2,243,568 $ 2,629,286
Accounts receivable, net ............................................. 3,449,570 2,994,762
Notes and other receivable ........................................... 13,003 902,005
Inventories (Note 2) ................................................. 4,629,401 3,855,312
Prepaid expenses and other ........................................... 1,056,454 721,685
------------ ------------
Total current assets ............................................. 11,391,996 11,103,050
Notes receivable .......................................................... 54,667 54,667
Receivable from employees (Note 6) ........................................ 126,377 73,824
Property and equipment, net (Note 3) ...................................... 2,881,735 2,704,460
Other assets, net ......................................................... 490,230 347,627
Goodwill, net (Note 6) .................................................... 1,095,952 1,111,890
------------ ------------
TOTAL ASSETS ..................................................... $ 16,040,957 $ 15,395,518
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable ..................................................... $ 1,534,706 $ 914,272
Accrued liabilities .................................................. 889,465 535,885
Accrued payroll and related costs .................................... 718,501 849,072
Customer deposits .................................................... 17,888 742,213
Convertible notes payable ............................................ 596,568 589,631
Notes payable and capital lease obligations .......................... 1,535,818 1,728,230
------------ ------------
Total current liabilities ........................................ 5,292,946 5,359,303
------------ ------------
Notes payable and capital lease obligations, net of current portion ....... 626,748 667,310
------------ ------------
Stockholders' equity (Notes 5 and 6):
Preferred stock, $.01 par value;
5,000,000 shares authorized; None issued and outstanding
as of June 30, 1997 and December 31, 1996 ....................... -- --
Common stock, $.01 par value; 40,000,000 shares authorized; Issued and
outstanding 16,981,169 shares as of June 30, 1997 and
16,760,269 shares as of December 31, 1996 ....................... 169,812 167,603
Additional-paid in capital ........................................... 35,638,629 35,274,959
Accumulated deficit .................................................. (25,687,178) (26,073,657)
------------ ------------
Total stockholders' equity ...................................... 10,121,263 9,368,905
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ....................... $ 16,040,957 $ 15,395,518
============ ============
==============================================================================================================
</TABLE>
2
<PAGE> 4
JMAR INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 1997 AND 1996 AND SIX MONTHS ENDED
JUNE 30, 1997 AND 1996
(UNAUDITED)
<TABLE>
<CAPTION>
================================================================================================================================
Three Months Ended Six Months Ended
-------------------------------- --------------------------------
June 30, 1997 June 30, 1996 June 30, 1997 June 30, 1996
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Sales .............................................. $ 5,568,606 $ 4,034,111 $ 10,814,107 $ 6,491,506
Costs of sales ..................................... 3,340,723 2,484,279 6,557,717 3,903,307
------------ ------------ ------------ ------------
Gross profit .................................. 2,227,883 1,549,832 4,256,390 2,588,199
------------ ------------ ------------ ------------
Operating expenses:
Selling, general and
administrative ................................. 1,587,436 1,138,494 3,048,529 2,122,225
Research, development and
engineering .................................... 436,348 259,517 880,513 533,377
------------ ------------ ------------ ------------
Total operating expenses ......................... 2,023,784 1,398,011 3,929,042 2,655,602
------------ ------------ ------------ ------------
Income (loss) from operations ...................... 204,099 151,821 327,348 (67,403)
Interest and other income (expense), net ........... 26,221 22,095 59,019 (40,593)
Interest expense ................................... (44,858) (80,463) (99,888) (154,664)
------------ ------------ ------------ ------------
Income (loss) before income taxes .................. 185,462 93,453 286,479 (262,660)
Income tax benefit ................................. 100,000 -- 100,000 --
------------ ------------ ------------ ------------
Net income (loss) .................................. $ 285,462 $ 93,453 $ 386,479 $ (262,660)
============ ============ ============ ============
Primary and fully diluted net income (loss) per
common and common equivalent share (Note 4): ..... $ .02 $ .01 $ .02 $ (.02)
============ ============ ============ ============
Weighted average common and common equivalent shares
outstanding:
Primary ....................................... 18,344,301 16,369,990 18,298,809 14,846,177
============ ============ ============ ============
Fully diluted ................................. 18,813,060 16,632,965 18,767,568 14,846,177
============ ============ ============ ============
===============================================================================================================================
</TABLE>
3
<PAGE> 5
JMAR INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND 1996
(UNAUDITED)
<TABLE>
<CAPTION>
=================================================================================================================
Six Months Ended
-------------------------------
June 30, 1997 June 30, 1996
------------- -------------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) ...................................................... $ 386,479 $ (262,660)
Adjustments to reconcile net income (loss) to net cash used in operating
activities:
Depreciation and amortization .......................................... 470,948 230,705
Change in assets and liabilities net of effects from acquisition:
Increase in:
Accounts receivable .................................................. (454,808) (933,393)
Inventories .......................................................... (774,089) (877,489)
Prepaid expenses and other ........................................... (356,923) (63,765)
Other assets ......................................................... (176,752) (76,002)
Increase (decrease) in:
Customer deposits .................................................... (724,325) 774,056
Accounts payable and accrued liabilities ............................. 743,443 638,796
----------- -----------
Net cash used in operating activities .................................. (886,027) (569,752)
----------- -----------
Cash flows from investing activities:
Capital expenditures ................................................... (442,158) (89,342)
Increase in notes receivable ........................................... (52,553) (7,506)
Payments received on notes receivable .................................. 889,002 930,501
Acquisition costs, net of cash acquired ................................ -- (79,984)
Patent costs ........................................................... (16,003) (6,802)
----------- -----------
Net cash provided by investing activities ......................... 378,288 746,867
----------- -----------
Cash flows from financing activities:
Net payments of short-term debt ........................................ (225,800) (527,783)
Payments of notes payable .............................................. (7,174) --
Net proceeds from the issuance of common stock ......................... -- 156,000
Net proceeds from the exercise of warrants ............................ 354,995 573,982
----------- -----------
Net cash provided by financing activities .......................... 122,021 202,199
----------- -----------
Net increase (decrease) in cash and cash equivalents ........................ (385,718) 379,314
Cash and cash equivalents, beginning of period .............................. 2,629,286 1,837,647
----------- -----------
Cash and cash equivalents, end of period .................................... $ 2,243,568 $ 2,216,961
=========== ===========
=================================================================================================================
</TABLE>
4
<PAGE> 6
JMAR INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(1) BASIS OF PRESENTATION
The accompanying consolidated financial statements include the accounts
of JMAR Industries, Inc. (the "Company") and its subsidiaries. All significant
intercompany balances and transactions have been eliminated in consolidation.
The accompanying consolidated financial statements have been prepared
by the Company and are unaudited except for the balance sheet as of December 31,
1996. The financial statements have been prepared in accordance with generally
accepted accounting principles, pursuant to the rules and regulations of the
Securities and Exchange Commission. In the opinion of management, the
accompanying consolidated financial statements include all adjustments of a
normal recurring nature which are necessary for a fair presentation of the
results for the interim periods presented. Certain information and footnote
disclosures normally included in financial statements have been condensed or
omitted pursuant to such rules and regulations. The preparation of financial
statements in conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates. Although the Company believes that the disclosures are adequate to
make the information presented not misleading, it is suggested that these
consolidated financial statements be read in conjunction with the financial
statements and the notes thereto included in the Company's Form 10-K for the
year ended December 31, 1996. The results of operations for the three and six
months ended June 30, 1997 are not necessarily indicative of the results to be
expected for the full year.
(2) INVENTORIES
Inventories are carried at the lower of cost on the first-in, first-out
basis or market and are comprised of materials, direct labor and applicable
manufacturing overhead. Inventories consist of the following:
<TABLE>
<CAPTION>
June 30, 1997 December 31, 1996
------------- -----------------
<S> <C> <C>
Raw materials, components and sub-assemblies .... $2,351,843 $2,695,803
Work-in-process ................................. 1,767,983 913,403
Finished goods .................................. 509,575 246,106
---------- ----------
$4,629,401 $3,855,312
========== ==========
</TABLE>
(3) PROPERTY AND EQUIPMENT
As of June 30, 1997 and December 31, 1996, property and equipment
consist of the following:
5
<PAGE> 7
JMAR INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
(UNAUDITED)
<TABLE>
<CAPTION>
June 30, 1997 December 31, 1996
------------- -----------------
<S> <C> <C>
Equipment and machinery .......... $ 4,605,195 $ 4,243,555
Furniture and fixtures ........... 378,390 313,909
Leasehold improvements ........... 78,417 62,380
----------- -----------
5,062,002 4,619,844
Less-accumulated depreciation .... (2,180,267) (1,915,384)
----------- -----------
$ 2,881,735 $ 2,704,460
=========== ===========
</TABLE>
(4) INCOME (LOSS) PER SHARE
Income (loss) per common and common equivalent share is based on the
weighted average number of shares of common stock outstanding and dilutive
common equivalent shares from stock options, warrants and convertible notes
using the treasury method. Common stock equivalents are not included in the
calculation of loss per share as their effect would be antidilutive.
In March, 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards (SFAS) No. 128, "Earnings per
Share", which changes the method of calculating earnings per share. SFAS 128 is
effective for financial statements issued after December 15, 1997. The earnings
per share of the Company for the three and six months ended June 30, 1997 and
1996 would not differ materially under SFAS 128 as that presented herein.
(5) EQUITY TRANSACTIONS
During the six months ended June 30, 1997, the Company received net
proceeds of approximately $355,000 from the exercise of warrants into 213,400
shares of common stock.
(6) ACQUISITION OF CALIFORNIA ASIC, INC.
On May 23, 1996, the Company acquired (the "Acquisition") approximately
94 percent of the outstanding common stock of California ASIC Technical
Services, Inc., a Nevada corporation, (subsequently renamed California ASIC
("Cal ASIC")). The Acquisition involved a private tender offer to the
shareholders of Cal ASIC (the "Sellers"). As consideration for the Acquisition,
the Company issued to the Sellers an aggregate of 1,427,526 shares of its Common
Stock. The purchase price was negotiated at arm's length.
In addition, concurrent with the closing, the Company loaned $400,000
of its funds to Cal ASIC (in addition to $100,000 previously loaned), $500,000
was loaned in 1996, and $545,000 was loaned in the six months ended June 30,
1997, to be used by Cal ASIC for equipment purchases and working capital
purposes. In addition, the Company agreed to loan the two majority shareholders
of Cal ASIC up to $250,000, of which $50,000 was loaned in the six months ended
June 30, 1997, secured by the JMAR stock they received in the Acquisition.
6
<PAGE> 8
Cal ASIC is engaged in the design, fabrication, assembly and testing of
application specific integrated circuits for the electronics industry and will
be operated as a division of the Company.
The Company has accounted for the acquisition as a purchase effective
June 1, 1996. The allocation of the purchase price of Cal ASIC reflected in the
accompanying financial statements has been prepared based upon an independent
appraisal of certain of the acquired assets and using management's estimate of
fair value for the remaining net assets. Through June 30, 1997, the Company
reviewed its purchase price allocation which resulted in certain adjustments
to the amount of goodwill originally recorded. Goodwill related to this
acquisition is being amortized over five years.
The following unaudited pro forma information gives effect to the
acquisition of Cal ASIC as if the acquisition occurred on January 1, 1996. These
statements do not purport to be indicative of the results of operations which
actually would have occurred had the acquisition of Cal ASIC occurred on January
1, 1996 or which may be expected to occur in the future.
<TABLE>
<CAPTION>
For the Six Months Ended June 30, 1996
--------------------------------------
Pro forma Actual
--------- ------
<S> <C> <C>
Total revenues ...................... $6,503,000 $ 6,492,000
========== ===========
Loss from continuing operations ..... $ (651,000) $ (263,000)
========== ===========
Loss per share ...................... $ (.04) $ (.02)
========== ===========
</TABLE>
7
<PAGE> 9
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
ITEM 2.
Results of Consolidated Operations
On May 23, 1996, the Company acquired approximately 94 percent of the
outstanding common stock of California ASIC ("Cal ASIC"). The Company has
accounted for the acquisition as a purchase effective June 1, 1996. JMAR's
Operating and Net Income for the six months ended June 30, 1997, $327,348 and
$386,479, respectively, include operating and net losses of $467,107 and
$486,883, respectively, generated from Cal ASIC's startup operations.
Accordingly, JMAR's operating income and net income, excluding the startup loss
from Cal ASIC, were $794,455 and $873,362, respectively, for the six months
ended June 30, 1997. The Company's outlook for the rest of fiscal year 1997 is
positive for operations that existed prior to the acquisition of Cal ASIC.
However, the Company expects a continuing adverse impact on profits in the near
term from Cal ASIC, including a non-cash charge of approximately $200,000 per
year for goodwill amortization. Furthermore, certain of the Company's revenues
are from a limited number of customers. As a result, the timing of receipt and
shipment of orders for these customers could have a material impact on quarterly
results.
Revenues for the three months ended June 30, 1997 and 1996 were
$5,568,606 and $4,034,111, respectively, and were $10,814,107 and $6,491,506 for
the six month periods ending June 30, 1997 and 1996, respectively. The increase
in 1997 for the three and six month periods is primarily attributable to the
overall increased volume of orders for computer Hard Disk Drive Head
Inspection Workstations and new products, primarily the Mirage tabletop video
measurement system.
Gross margins for the three months ended June 30, 1997 and March 31,
1997 were 40.0% and 38.7%, respectively. The higher gross margin for the three
months ended June 30, 1997 versus the three months ended March 31, 1997 is
primarily due to lower material costs due to higher volume purchases of
inventory related to certain product orders. There is no assurance that the
Company will be able to obtain such volume discounts in the future.
Selling, general and administrative ("SG&A") expenses for the three
months ended June 30, 1997 and 1996 were $1,587,436 and $1,138,494,
respectively. The increase in SG&A expenses in 1997 is due to (i) SG&A expenses
of $269,391 related to Cal ASIC in 1997 compared to $74,946 in 1996; (ii) higher
sales and marketing costs related to the Company's increased sales volume; and
(iii) higher payroll costs.
The Company's research, development and engineering program (RD&E)
consists of two types: Customer-Funded RD&E (U.S. government and other
companies) and Company-Funded RD&E. Both types of RD&E are expensed when
incurred. Customer-Funded RD&E costs incurred, included in "Costs of Sales"
expenses, totaled $361,612 and $286,915 for the three months ended June 30, 1997
and 1996, respectively and $578,585 and $553,734 for the six month periods ended
June 30, 1997 and 1996, respectively. Company-Funded RD&E costs are shown in
"Operating Expenses" and totaled $436,348 and $259,517 for the three months
ended June 30, 1997 and 1996, respectively, and $880,513 and $533,377 for the
six month periods ended June 30, 1997 and 1996, respectively. Hence, total RD&E
expenses for the three month periods were $797,960 and $546,432 for 1997 and
1996, respectively, and $1,459,098 and $1,087,111 for the six month periods in
1997 and 1996, respectively. The increase in RD&E is primarily related to the
engineering development of a new generation of disk drive inspection systems,
the development of new software for the Company's test and measurement systems,
continued development of the Microlight 1000 micromachining demonstration center
and further development of the Company's Light Knife products.
Interest expense was $44,858 and $80,463 for the three months ended
June 30, 1997 and 1996, respectively, and $99,888 and $154,664 for the six
months ended June 30, 1997 and 1996, respectively.
8
<PAGE> 10
The decrease in interest expense in 1997 versus 1996 is primarily due to the
conversion of $1,000,000 of convertible notes into JMAR common stock in October
1996.
CONSOLIDATED LIQUIDITY AND FINANCIAL CONDITION
Cash and cash equivalents at June 30, 1997 and December 31, 1996 were
$2,243,568 and $2,629,286, respectively. The decrease in cash and cash
equivalents for the six months ended June 30, 1997 was $385,718 as compared to
an increase of $379,314 for the six months ended June 30, 1996. The decrease in
cash for the six months ended June 30, 1997 resulted from cash used in
operations of $886,027, capital expenditures of $442,158 and payments of
short-term debt of $225,800 offset in part by payments received on notes and
other receivables of $889,002 and proceeds from the exercise of warrants of
$354,995. The Company anticipates that its quarterly capital expenditures for
the rest of 1997 will be less than the quarterly expenditures experienced during
the six months ended June 30, 1997. Cash from net income (loss) plus non-cash
operating items improved from a use of cash of $31,955 for the six months ended
June 30, 1996 to a provision of cash of $857,427 for the six months ended June
30, 1997.
JMAR operations will continue to require the use of working capital.
The working capital of PPL is generally funded through its $3,500,000 working
capital line (the "Line") with a bank (the "Bank") plus customer advanced
payments made at the time of order placements. The operations of JTC are
currently funded through third party contracts. As of June 30, 1997 PPL's
availability pursuant to the Line was approximately $2,960,000 of which
approximately $1,193,000 was borrowed at that time by PPL. The Line contains
several covenants relating to, among other matters, the maintenance of certain
minimum income levels and financial ratios, which if not met by the Company
could impact the availability of advances pursuant to the Line. Concurrent with
the closing of the acquisition (the "Acquisition") of Cal ASIC, the Company
loaned $400,000 of its funds to Cal ASIC (in addition to $100,000 previously
loaned) and agreed to loan an additional $1,000,000 over an eighteen month
period, of which $500,000 was loaned in 1996, and $545,000 was loaned in the six
months ended June 30, 1997, to be used by Cal ASIC for equipment purchases and
working capital purposes. In addition, the Company agreed to loan the two
majority shareholders of Cal ASIC up to $250,000, of which the first $50,000 was
loaned in the six months ended June 30, 1997, and $50,000 was loaned subsequent
to June 30, 1997, secured by the JMAR stock they received in the Acquisition.
During 1996, the Company entered into a $950,000 lease financing agreement with
Leasing Technologies International, Inc., the proceeds of which are used to
finance Cal ASIC equipment and software financing requirements. Management
believes that the Company has existing resources to adequately fund operations
and working capital requirements as well as the Cal ASIC obligations through the
end of 1997 based on the current level of operations and business conditions.
However, the working capital needs of Cal ASIC may be greater than that which
the Company has currently committed to fund. If Cal ASIC requires additional
working capital funds, the Company believes, but can give no assurance that, it
has available to it several potential sources of capital including private
offerings to individual investors and additional debt or equity sales in the
public market.
At December 31, 1996, the Company had in excess of $26 million of
Federal net operating loss carryforwards, subject to certain annual limitations.
To the extent the Company has taxable income in the future, these carryforwards
will be used by the Company to reduce its cash outlay for taxes.
"SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995
Certain statements contained in this Management's Discussion and
Analysis of Financial Condition and Results of Operations which are not related
to historical results are forward-looking statements that necessarily are based
on certain assumptions and are subject to certain risks and uncertainties that
could cause actual future performance and results to differ materially from
those stated or implied in the forward-looking statements. These risks and
uncertainties include concentration of sales to markets and customers, delays or
cancellations in orders, fluctuations in margins, timing of specific
9
<PAGE> 11
orders, customer reorganizations, demand fluctuations, timely development,
introduction and acceptance of new products, technical obsolescence of existing
products, technical problems in the development or modification of current
products or manufacturing processes, the impact of competitive products and
pricing, shifts in demand for the Company's products, the degree of success of
technology transfer (e.g., advanced lithography sources, laser blood sampler,
micromachining, etc.) to commercial products, availability of working capital to
support growth, continued government funding of advanced lithography, successful
integration of acquisitions, other competitive factors, temporary cessation of
operations at one or more of its division facilities due to acts of nature such
as floods, earthquakes and fires, and other risks detailed in the Company's Form
10-K for the year ended December 31, 1996 and in the Company's other filings
with the Securities and Exchange Commission.
10
<PAGE> 12
JMAR INDUSTRIES, INC.
PART II. OTHER INFORMATION
Item 2. Changes in Securities
(c) In April, 1997, the Company issued 7,500 shares of Common Stock to
D.N.B. Capital Management Inc. for services to be rendered in a
transaction exempt under Section 4(2) of the Securities Act of 1933, as
amended.
Item 4. Submission of Matters to a Vote of Security Holders
At the Company's Annual Meeting of Shareholders held on July 18, 1997,
the following matter was voted on:
(a) The following directors were elected: John S. Martinez (13,365,244
affirmative votes and 89,280 votes withheld); James H. Banister, Jr.
(13,364,244 affirmative votes and 87,280 votes withheld); C. Neil Beer
and Barry Ressler (13,364,788 affirmative votes and 89,736 votes
withheld); Vernon H. Blackman (13,359,788 affirmative votes and 94,736
votes withheld); and Marvin W. Sepe (13,366,844 affirmative votes and
87,680 votes withheld).
Item 6. Reports on Form 8-K
(b) Reports on Form 8-K
There were no reports filed on Form 8-K during the three months ended
June 30, 1997.
11
<PAGE> 13
SIGNATURE
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.
JMAR INDUSTRIES, INC.
August 5, 1997 By: /s/ John S. Martinez
---------------------------------------------
John S. Martinez, Chief Executive Officer
and Authorized Officer
By: /s/ Dennis E. Valentine
---------------------------------------------
Dennis E. Valentine, Chief Accounting Officer
12
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 2,243,568
<SECURITIES> 0
<RECEIVABLES> 3,466,800
<ALLOWANCES> 17,230
<INVENTORY> 4,629,401
<CURRENT-ASSETS> 11,391,996
<PP&E> 5,062,002
<DEPRECIATION> 2,180,267
<TOTAL-ASSETS> 16,040,957
<CURRENT-LIABILITIES> 5,292,946
<BONDS> 626,748
0
0
<COMMON> 169,812
<OTHER-SE> 9,951,451
<TOTAL-LIABILITY-AND-EQUITY> 16,040,957
<SALES> 10,814,107
<TOTAL-REVENUES> 10,814,107
<CGS> 6,557,717
<TOTAL-COSTS> 6,557,717
<OTHER-EXPENSES> 3,929,042
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 99,888
<INCOME-PRETAX> 286,479
<INCOME-TAX> (100,000)
<INCOME-CONTINUING> 386,479
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 386,479
<EPS-PRIMARY> 0.02
<EPS-DILUTED> 0.02
</TABLE>
