<PAGE> 1
U. S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 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: 0-18921
---------------------------------------------------------
RINGER CORPORATION
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Minnesota 41-0848688
- --------------------------------------------------------------------------------
(State of incorporation or organization) (I.R.S. Employer Identification No.)
9959 Valley View Road, Eden Prairie, Minnesota 55344-3585
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(612) 941-4180
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 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. [X] Yes [ ] No
The number of shares outstanding of each of the registrant's classes of
capital stock, as of July 20, 1996 was:
Common Stock, $.01 par value, 10,921,930 shares
Transitional Small Business Issuer Format: [ ] Yes [X] No
<PAGE> 2
PART I - FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS.
RINGER CORPORATION
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
June 30, September 30,
1996 1995
ASSETS
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 2,381,362 $ 2,756,377
Accounts receivable 2,900,550 1,200,352
Inventories 1,784,950 2,026,981
Prepaid assets 130,289 132,607
------------- -----------
Total current assets 7,197,151 6,116,317
Property and equipment (net) 244,944 299,374
Intangible assets (net) 5,362,723 5,582,957
------------- -----------
Total assets $ 12,804,818 $ 11,998,648
============= ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 877,480 $ 847,733
Accrued expenses 858,628 630,609
------------- -----------
Total current liabilities 1,736,108 1,478,342
Shareholders' Equity:
Common Stock, par value
$.01 per share, authorized
25,000,000 shares, issued
and outstanding 10,921,930 shares 109,219 109,219
Additional paid-in capital 32,036,675 32,036,675
Accumulated deficit (20,939,834) (21,499,157)
Cumulative translation adjustment (137,350) (126,431)
------------- -----------
Total shareholders' equity 11,068,710 10,520,306
------------- -----------
Total liabilities and
shareholders' equity $ 12,804,818 $ 11,998,648
============= ===========
</TABLE>
See notes to consolidated financial statements.
2
<PAGE> 3
RINGER CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
June 30, June 30,
------------------------ --------------------------
1996 1995 1996 1995
---------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
NET SALES $ 4,005,524 $ 3,915,000 $ 13,254,257 $ 12,679,076
COST OF SALES 2,296,689 1,981,833 6,817,465 6,096,657
---------- ---------- ---------- -----------
Gross Profit 1,708,835 1,933,167 6,436,792 6,582,419
OPERATING EXPENSES:
Distribution 306,685 503,898 1,317,184 1,596,729
Sales & Marketing 781,204 1,373,008 2,705,452 3,795,936
General & Administrative 304,255 370,195 1,008,840 1,167,288
Research & Development 125,023 150,508 589,279 793,006
Amortization of Intangibles 100,951 89,830 301,752 268,876
---------- ---------- ---------- -----------
1,618,118 2,487,439 5,922,507 7,621,835
---------- ---------- ---------- -----------
INCOME (LOSS) BEFORE
OTHER INCOME (EXPENSE) 90,717 (554,272) 514,285 (1,039,416)
OTHER INCOME
(EXPENSE), NET 14,090 (10,888) 45,038 87,204
---------- ---------- ---------- -----------
INCOME (LOSS) BEFORE
INCOME TAXES 104,807 (565,160) 559,323 (952,212)
INCOME TAX EXPENSE -- -- -- --
---------- ---------- ---------- -----------
NET INCOME (LOSS) $ 104,807 $ (565,160) $ 559,323 $ (952,212)
========== ========== ========== ===========
Earnings (loss) per common
and common equivalent share $ .01 $ (.05) $ .05 $ (.09)
========== ========== ========== ===========
Weighted average common
and common equivalent
shares outstanding 10,930,627 10,921,870 10,925,191 10,892,099
========== ========== ========== ===========
</TABLE>
See notes to consolidated financial statements.
3
<PAGE> 4
RINGER CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Nine Months Ended
June 30,
-----------------------------
1996 1995
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 559,323 $ (952,212)
Adjustments to reconcile net income (loss)
to net cash used in operating activities:
Depreciation and amortization 386,646 401,585
Loss on disposal of intangible assets 17,331
(Gain) loss on disposal of assets (15,148) 22,272
(Increase) decrease in current assets:
Trade accounts and notes receivable (1,701,088) (2,415,552)
Inventories 236,187 (1,193,473)
Prepaid expenses 2,366 56,584
Increase in current liabilities:
Accounts payable 31,668 403,431
Accrued expenses 228,855 76,288
----------- -----------
Net cash used in operating activities (253,860) (3,601,077)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (40,095) (70,620)
Proceeds from sale of equipment 24,548 23,308
Purchase of intangible assets (99,074) (51,479)
Net cash paid on acquisition of Oxygen Plus (257,660)
----------- -----------
Net cash used in investing activities (114,621) (356,451)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock 14,729
Principal payments on capital lease obligations (3,667)
----------- -----------
Net cash provided by financing activities 0 11,062
Effect of currency change on cash (6,534) (18,872)
----------- -----------
Decrease in cash and cash equivalents (375,015) (3,965,338)
CASH AND CASH EQUIVALENTS:
BEGINNING OF PERIOD 2,756,377 4,847,623
----------- -----------
END OF PERIOD $ 2,381,362 $ 882,285
=========== ===========
</TABLE>
See notes to consolidated financial statements.
4
<PAGE> 5
RINGER CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE QUARTER ENDED JUNE 30, 1996
(UNAUDITED)
Note 1. BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have
been prepared in accordance with generally accepted accounting
principles for interim financial information. They should be read
in conjunction with the annual financial statements included in the
Company's Annual Report on Form 10-KSB for the year ended September
30, 1995. In the opinion of management, the interim financial
statements include all adjustments (consisting of normal recurring
accruals) necessary for a fair presentation of the results for the
interim periods presented. Operating results through the third
quarter of fiscal 1996 are not necessarily indicative of the
operating results for the year ending September 30, 1996.
Net income per share is calculated using the weighted average common
and common equivalent shares outstanding. Common equivalents
consist of stock options and warrants. Net loss per share is
calculated using the weighted average common shares outstanding. For
the purpose of calculating net loss per share, common stock
equivalents are excluded because their effect is anti-dilutive.
Note 2. Sales of the Company's products are generally greater in the
second and third fiscal quarters due to seasonal factors.
Note 3. All comparative data reflect application of consistent
accounting principles and contain no prior period adjustments.
Note 4. Inventory consists of the following:
<TABLE>
<CAPTION>
June 30, September 30,
1996 1995
---------- ----------
<S> <C> <C>
Raw Materials $ 876,407 $1,172,967
Finished Goods 908,543 854,014
---------- ----------
$1,784,950 $2,026,981
========== ==========
</TABLE>
Note 5. Supplemental disclosure of cash flow information.
Cash paid (received) for interest during the period for:
<TABLE>
<CAPTION>
Nine Months Ended
June 30,
-------------------------
1996 1995
-------------------------
<S> <C> <C>
Interest paid $ 66,535 $ 65,381
Interest received (26,776) (65,537)
</TABLE>
Note 6. CONTINGENCIES:
The Company has a Contingency Retention Plan which provides for the
payment to certain key employees of the Company, including all of the
officers, of a lump sum termination benefit plus continuation of life
insurance, health insurance and dental benefits for a period of time
in the event the employment of such employees is terminated within
one year after a "change of control," as defined. The amount of the
lump sum termination benefit varies from the equivalent of three
months to two years of salary and bonus at the time of termination.
The period during which health and welfare benefits continue after
termination varies from three months to two years, but is terminated
if the employee obtains other employment with similar benefits. The
Retention Plan continues in effect unless terminated, prior to a
change in control, by a resolution approved by at least two-thirds of
the Board of Directors.
5
<PAGE> 6
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
Results of Operations
The following table sets forth, for the periods indicated, information
derived from the consolidated statements of operations of the Company as a
percentage of net sales:
<TABLE>
For the Three Months For the Nine Months
Ended June 30, Ended June 30,
-------------------- -------------------
1996 1995 1996 1995
------ ------- ------ ------
<S> <C> <C> <C> <C>
Net sales 100.0% 100.0% 100.0% 100.0%
Cost of sales 57.3 50.6 51.4 48.1
------ ------- ------ ------
Gross profit 42.7 49.4 48.6 51.9
Operating Expenses:
Distribution 7.7 12.9 9.9 12.6
Sales & Marketing 19.5 35.1 20.4 29.9
General & Administrative 7.6 9.4 7.6 9.2
Research & Development 3.1 3.8 4.5 6.3
Amortization of Intangibles 2.5 2.3 2.3 2.1
------ ------- ------ ------
40.4 63.5 44.7 60.1
------ ------- ------ ------
Income (loss) before
other income 2.3 (14.1) 3.9 (8.2)
Other income (expense), net .3 (.3) .3 .7
------ ------- ------ ------
Net income (loss)
before taxes 2.6% (14.4)% 4.2% (7.5)%
====== ======= ====== ======
</TABLE>
The following table sets forth the percentage of net sales represented by each
of the Company's major product categories:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
June 30, June 30,
---------------- ----------------
1996 1995 1996 1995
------ -------- ------ --------
<S> <C> <C> <C> <C>
Pest control 72.8% 69.6% 69.4% 62.7%
Fertilizer and composting 27.2 30.4 30.6 37.3
------ -------- ------ --------
100.0% 100.0% 100.0% 100.0%
====== ======== ====== ========
</TABLE>
Changes in Estimates. During the third quarter, the Company increased
obsolete inventory provisions by $152,000 in connection with decisions to
discontinue or replace certain products for the fiscal 1997 season, decreased
co-op advertising reserves by $130,000 which remained unused from the prior
year, and decreased an expense accrual recorded in a prior year by $50,000. The
impact on third quarter operations from these adjustments was a net decrease in
costs and expenses of $28,000, with no effect on net earnings per share as
reported.
Net Sales. Net sales for the three months ended June 30, 1996 increased
2.3% to $4,005,524 compared to $3,915,000 for the same period ended June 30,
1995. Net sales for the nine months ended June 30, 1996 increased 4.5% to
$13,254,257 compared to $12,679,076 for the same period ended June 30, 1995.
The increase in net sales for each period reflects increased sales and
distribution of Safer(R) branded pest control products partially offset by
decreased sales
6
<PAGE> 7
of fertilizer and composting products due primarily to unfavorable weather
conditions which has caused lower than anticipated sales in much of the
fertilizer industry.
Gross Margins. Gross margins for the three months ended June 30, 1996
decreased to 42.7% compared to 49.4% for the same period ended June 30, 1995.
Gross margins for the nine months ended June 30, 1996 decreased to 48.6%
compared to 51.9% for the same period ended June 30, 1995. The decrease in
gross margin as a percentage of sales was caused by increased costs for raw
material ingredients and packaging, an increase in the proportion of foreign
sales which historically carry lower margins than domestic sales and an
increased provision for obsolete inventory discussed above.
Operating Expenses. Operating expenses for the three months ended June 30,
1996 decreased $869,321 or 34.9% to $1,618,118 compared to $2,487,439 for the
same period ended June 30, 1995. Operating expenses for the nine months ended
June 30, 1996 decreased $1,699,328 or 22.3% to $5,922,507 from $7,621,835 for
the same period ended June 30, 1995.
Distribution expenses for the three months ended June 30, 1996 decreased
39.1% in absolute dollars to $306,685 and decreased as a percentage of sales to
7.7% in 1996 from 12.9% for the same period in fiscal 1995. Distribution
expenses for the nine months ended June 30, 1996 decreased 17.5% in absolute
dollars to $1,317,184 and decreased as a percentage of sales to 9.9% in 1996
from 12.6% for the same period in fiscal 1995. The decrease in distribution
expenses was primarily due to reductions in outside distribution and freight
expenses resulting from cost control measures implemented in fiscal 1995 and
improvements in shipping methods. In addition, the decrease in distribution
expenses as a percentage of sales also reflects the proportional increase in
pesticide product sales which carry a lower average freight cost per dollar of
revenue than fertilizer products.
Sales and marketing expenses for the three months ended June 30, 1996
decreased 43.1% in absolute dollars to $781,204 from $1,373,008 for the same
period in fiscal 1995. Sales and marketing expenses for the nine months ended
June 30, 1996 decreased 28.7% in absolute dollars to $2,705,452 from $3,795,936
for the same period in fiscal 1995. The decreases for these periods were due
primarily to cost reduction measures implemented in fiscal 1995 and to a
favorable adjustment to estimated co-op advertising reserves discussed above.
General and administrative expenses for the three month period ended June
30, 1996 decreased $65,940 or 17.8% to $304,255 compared to $370,195 for the
same period in fiscal 1995. General and administrative expenses for the nine
months ended June 30, 1996 decreased $158,448 or 13.6% to $1,008,840 compared
to $1,167,288 for the same period in fiscal 1995. The decrease in general and
administrative expenses for the year-to-date resulted from cost reduction
measures implemented in fiscal 1995 and the a favorable adjustment to an
estimated expense accrual recorded in a prior year discussed above.
Research and development expenses for the three months ended June 30, 1996
decreased $25,485 or 16.9% to $125,023 from $150,508 for the same period in
fiscal 1995 and decreased $203,727 or 25.7% to $589,279 for the nine month
period ended June 30, 1996 from $793,006 for the same period in fiscal 1995.
The decrease was primarily due to reduced product registration costs and cost
reduction measures implemented in fiscal 1995.
Amortization of intangibles increased 12.4% for the three months ended
June 30,1996 to $100,951 from $89,830 for the same period in fiscal 1995, and
increased 12.2% for the nine months ended June 30, 1996 to $301,752 from
$268,876 for the same period in fiscal 1995. The increase was due primarily to
the amortization of intangible assets acquired with the purchase of the Oxygen
Plus product line in the first quarter of fiscal 1996.
Other Income (Expense), Net. For the three months ended June 30, 1996, the
Company incurred net other income of $14,090 compared to net other expense of
$10,888 for the same period in fiscal 1995. For the nine months ended June 30,
1996, the Company incurred net other income of $45,038 compared to a net other
income of $87,204 for the same period in fiscal 1995. The increase in net other
income for the quarter was due primarily to increased royalty income for the
quarter compared to the prior year. The decrease in year-to-date net other
income was largely the result of higher interest expense due to increased
borrowings on the Company's bank line of credit and reduced interest income
caused by lower average excess cash balances with which to invest. Net other
income consists of interest income on investments of
7
<PAGE> 8
excess cash balances, primarily during the first and fourth quarters, net of
interest expense incurred on borrowings against the Company's seasonal bank
line of credit, usually during the second and third quarters, and also includes
royalty income from international marketing agreements and royalty expense on
technologies licensed by the Company.
Liquidity and Capital Resources
The Company's operations and cash needs are highly seasonal. During the
first quarter of each year, the Company solicits early orders and plans
production, typically building its inventory of products through January of
each year for shipment during the spring selling season. Most of the shipments
for the peak retail season, and therefore most of the billings that result in
revenue recognition and in receivables, occur in February through May of each
year. Accordingly, the Company typically consumes significant cash in operating
activities during the first and second quarters of each year as it finances
increases in inventory, primarily during the first quarter, and increases in
receivables, primarily during the second and early third quarters.
Consistent with such seasonal fluctuations, cash decreased by $375,015
during the nine months ended June 30, 1996. The decrease in cash reflects the
following: cash of $253,860 consumed in operating activities, primarily to
finance increased receivables and cash of $114,621 consumed in investing
activities to purchase office equipment and intangible assets.
The Company normally relies on bank financing to fund seasonal increases
in receivables and inventory and currently maintains a $5,000,000 bank line of
credit which will expire on October 31, 1997. At June 30, 1996, the Company
had no outstanding borrowings under the line. The Company believes that cash on
hand and the line of credit will be adequate to meet the Company's normal cash
needs for fiscal 1996.
In June 1996, the Company announced that it had entered into a letter of
intent to acquire The Chas. H. Lilliy Company, a lawn and garden company in
Portland, Oregon which markets various lines of fertilizers, pesticides, grass
seed, and packet seeds in the western and Pacific northwestern states. The
acquisition depends upon completion of due diligence, finalization of a
definitive acquisition agreement and obtaining adequate financing. The Company
plans to finance the acquisition through bank debt and the issuance of
restricted stock.
The Company believes that inflation has not had a significant impact on
the results of its operations.
8
<PAGE> 9
PART II - OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS.
The Company is not a party to any material legal proceedings.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
Exhibit
Number Description
- --------------------------------------------------------------------------------
3.1 Restated Articles of Incorporation of the Company, as amended to date
(incorporated by reference to Exhibit 3.2 of the Company's
Registration Statement on Form S-18, SEC File No. 33-36205-C).
3.2 Bylaws of the Company, as amended to date (incorporated by
reference to Exhibit 3.3 of the Company's Registration Statement on
Form S-18, SEC File No. 33-36205-C).
4.1 Specimen certificate of Common Stock, $.01 par value (incorporated
by reference to Exhibit 4.1 of the Company's Registration Statement on
Form S-18, SEC File No. 33-36205-C).
* 10.1 1986 Employee Incentive Stock Option Plan (incorporated by
reference to Exhibit 4.4 of the Company's Registration Statement on
Form S-8, SEC File No. 33-37806).
* 10.2 Stock Option Plan for Non-Employee Directors (incorporated by
reference to Exhibit 10.2 of the Company's Annual Report on Form
10-KSB for the fiscal year ended September 30, 1993, SEC File No.
0-18921).
10.3 Lease Agreement between the Company and CSM Lakeside, a
Minnesota Partnership, dated September 29, 1993 (incorporated by
reference to Exhibit 10.4 of the Company's Annual Report on Form
10-KSB for the fiscal year ended September 30, 1993, SEC File No.
0-18921).
10.4 Lease Agreement between the Company and The Northwestern Mutual
Life Insurance Company dated May 13, 1994 (incorporated by reference
to Exhibit 10.4 of the Company's Annual Report on Form 10-KSB for the
fiscal year ended September 30, 1995, SEC file no. 0-18921).
* 10.5 Employment Agreement between the Company and Stanley Goldberg dated
September 13, 1992 (incorporated by reference to Exhibit 10.6 of the
Company's Annual Report on Form 10-K for the fiscal year ended
September 30, 1992, SEC File No. 0-18921).
10.6 Credit and Security Agreement and Supplement A to Credit and
Security Agreement between the Company and FBS Business Finance
Corporation relating to the Company's line of credit (incorporated by
reference to Exhibit 10.7 of the Company's Annual Report on Form 10-K
for the fiscal year ended September 30, 1992, SEC File No. 0-18921).
10.7 Waiver and First Amendment to Credit and Security Agreement
referred to in 10.6 above (incorporated by reference to Exhibit 10.9
of the Company's Annual Report on Form 10-K for the fiscal year ended
September 30, 1993, SEC File No. 0-18921).
10.8 Second Amendment to Credit and Security Agreement referred to in
10.6 and 10.7 above (incorporated by reference to Exhibit 10.10 of the
Company's Annual Report on Form 10-KSB for the fiscal year ended
September 30, 1993, SEC File No. 0-18921)
10.9 Third Amendment to Credit and Security Agreement referred to in
10.6, 10.7 and 10.8 above (incorporated by reference to Exhibit 10.10
of the Company's Annual Report on Form 10-KSB for the fiscal year
ended September 20, 1994, SEC File No. 0-18921)
9
<PAGE> 10
10.10 Waiver and Fourth Amendment to Credit and Security Agreement
referred to in 10.6, 10.7, 10.8 and 10.9 above (incorporated by
reference to Exhibit 10.10 of the Company's Annual Report on Form
10-KSB for the fiscal year ended September 30, 1995, SEC file no.
0-18921).
10.11 Stock Subscription Warrant between the Company and Robert W.
Fischer Co., Inc. dated July 18, 1990 (incorporated by reference to
Exhibit 10.16 of the Company's Registration Statement on Form S-18,
SEC File No. 33-36205-C).
* 10.12 Ringer Corporation Contingency Retention Plan, and Amendment No.1
to Ringer Corporation Contingency Retention Plan, dated October 26,
1993 (incorporated by reference to the Company's Annual Report on Form
10-KSB for the fiscal year ended September 30, 1994, SEC File No.
0-18921).
10.13 Cross-Licensing and Joint Licensing/Sale Agreement between Ringer
Corporation and Mycogen Corporation, dated May 31, 1994 (incorporated
by reference to Exhibit 10.1 of the Company's Quarterly Report on Form
10-QSB for the fiscal quarter ended June 30, 1994, SEC File No.
0-18921).
10.14 Patent License Agreement between Ringer Corporation, Mycogen
Corporation and Monsanto Company, dated June 29, 1994 (incorporated by
reference to Exhibit 10.2 of the Company's Quarterly Report on Form
10-QSB for the fiscal quarter ended June 30, 1994, SEC File No.
0-18921).
27.1 Financial Data Schedule
* Management contract or compensation plan or arrangement.
(b) Reports on Form 8-K
No Reports on Form 8-K were filed during the quarter ended June 30,
1996.
10
<PAGE> 11
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
RINGER CORPORATION
Dated: August 1, 1996 By /S/ Stanley Goldberg
--------------------------------------------------
Stanley Goldberg
President and Chief Executive Officer
Dated: August 1, 1996 By /S/ Mark G. Eisenschenk
--------------------------------------------------
Mark G. Eisenschenk
Vice President of Finance and Chief Financial Officer
(principal financial officer)
11
<PAGE> 12
INDEX TO EXHIBITS
Exhibit
Number Description
- --------------------------------------------------------------------------------
27.1 Financial Data Schedule
12
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CONSOLIDATED
FINANCIAL STATEMENTS CONTAINED IN THE COMPANY'S QUARTERLY REPORT ON FORM 10-QSB
DATED JUNE 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FORM
10-QSB AND THE COMPANY'S ANNUAL REPORT FILED ON FORM 10-KSB DATED SEPTEMBER 30,
1995.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-START> OCT-01-1995
<PERIOD-END> JUN-30-1996
<CASH> 2,381,362
<SECURITIES> 0
<RECEIVABLES> 3,105,710
<ALLOWANCES> (205,160)
<INVENTORY> 1,784,950
<CURRENT-ASSETS> 7,197,151
<PP&E> 1,571,609
<DEPRECIATION> (1,326,665)
<TOTAL-ASSETS> 12,804,818
<CURRENT-LIABILITIES> 1,736,118
<BONDS> 0
<COMMON> 32,145,894
0
0
<OTHER-SE> (21,077,184)
<TOTAL-LIABILITY-AND-EQUITY> 12,804,818
<SALES> 13,254,257
<TOTAL-REVENUES> 13,254,257
<CGS> 6,817,465
<TOTAL-COSTS> 5,922,507
<OTHER-EXPENSES> (112,071)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 67,033
<INCOME-PRETAX> 559,323
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 559,323
<EPS-PRIMARY> .05
<EPS-DILUTED> 0
</TABLE>
