UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT UNDER SECTION 13 OR 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 1-4433.
ARMATRON INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
Massachusetts 04-1052250
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Two Main Street
Melrose, Massachusetts 02176
(Address of principal executive offices) (Zip Code)
(617) 321-2300
(Registrant's telephone number, including area code)
N/A
(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 ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
The number of shares of Common Stock (par value $1) outstanding at July 31,
1997 is 2,459,749 shares.
<PAGE>
ARMATRON INTERNATIONAL, INC.
File No. 1-4433
-------------------
PAGE(S)
-------
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
Consolidated Condensed Balance Sheets - June 30, 1997
and 1996, and September 30, 1996 3 - 4
Consolidated Condensed Statements of Operations for the
three and nine months ended June 30, 1997 and 1996 5
Consolidated Condensed Statements of Cash Flows for the
nine months ended June 30, 1997 and 1996 6
Notes to Consolidated Condensed Financial Statements 7 - 11
Item 2
Management's Discussion and Analysis of Financial
Condition and Results of Operations 12 - 15
PART II - OTHER INFORMATION
Item 6(b) Reports on Form 8-K 16
SIGNATURE 17
<PAGE> 2
ARMATRON INTERNATIONAL, INC.
Consolidated Condensed Balance Sheets
June 30, 1997 and 1996, and September 30, 1996
(Dollars in Thousands)
<TABLE>
<CAPTION>
(Unaudited) (Audited)
June 30, September 30,
1997 1996 1996
------- ------- -------------
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 679 $ 230 $ 1,849
Trade accounts receivable,net 3,530 4,618 2,121
Inventories 3,282 2,196 2,349
Deferred taxes 130 165 130
Prepaids & other current assets 235 203 187
--------------------------------
Total Current Assets 7,856 7,412 6,636
PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET 592 711 637
OTHER ASSETS 107 108 202
--------------------------------
Total Assets $ 8,555 $ 8,231 $ 7,475
================================
</TABLE>
The accompanying notes are an integral part
of the consolidated condensed financial statements.
<PAGE> 3
ARMATRON INTERNATIONAL, INC.
Consolidated Condensed Balance Sheets
June 30, 1997 and 1996, and September 30, 1996
(Dollars in Thousands)
<TABLE>
<CAPTION>
(Unaudited) (Audited)
June 30, September 30,
1997 1996 1996
------- ------- -------------
<S> <C> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 1,977 $ 1,811 $ 1,171
Accrued liabilities 1,757 1,335 1,285
Current portion under capital lease obligation 17 - -
--------------------------------
Total Current Liabilities 3,751 3,146 2,456
LONG-TERM DEBT 4,715 4,715 4,715
LONG-TERM CAPITAL LEASE OBLIGATIONS, NET OF CURRENT
PORTION 35 - -
DEFERRED RENT 42 - 75
STOCKHOLDERS' EQUITY:
Common stock, par value $1 per share, 6,000,000
shares authorized; shares issued at June 30, 1997
and 1996, and September 30, 1996, 2,606,481 shares 2,606 2,606 2,606
Paid-in capital 6,770 6,770 6,770
Accumulated deficit (8,978) (8,620) (8,761)
--------------------------------
398 756 615
Less:
Treasury stock at cost - 146,732 at June 30, 1997
and 1996, and September 30, 1996 386 386 386
--------------------------------
Total Stockholders' Equity 12 370 229
--------------------------------
Total Liabilities & Stockholders' Equity $ 8,555 $ 8,231 $ 7,475
================================
</TABLE>
The accompanying notes are an integral part
of the consolidated condensed financial statements.
<PAGE> 4
ARMATRON INTERNATIONAL, INC.
Consolidated Condensed Statements of Operations
for the Three and Nine Month Periods Ended June 30, 1997 and 1996
(Dollars in Thousands Except Per Share Data)
<TABLE>
<CAPTION>
(Unaudited)
Three Months Nine Months
Ended June 30, Ended June 30,
1997 1996 1997 1996
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net sales $ 5,267 $ 6,717 $ 10,350 $ 10,909
Cost of products sold 3,792 4,785 8,251 8,563
Selling, general and administrative expenses 760 1,055 1,937 2,339
Interest expense-related parties 121 119 359 359
Interest expense-third parties 38 28 57 37
Other (income) expense - net (2) (4) (37) (37)
------------------------------------------------
Net income (loss) $ 558 $ 734 $ (217) $ (352)
================================================
Per share:
Net income (loss) $ .23 $ .30 $ (.09) $ (.14)
================================================
Weighted average number of common shares outstanding 2,459,749 2,459,749 2,459,749 2,459,749
================================================
</TABLE>
The accompanying notes are an integral part
of the consolidated condensed financial statements.
<PAGE> 5
ARMATRON INTERNATIONAL, INC.
Consolidated Condensed Statements of Cash Flows
for the Nine Months Ended June 30, 1997 and 1996
(Dollars in Thousands)
<TABLE>
<CAPTION>
(Unaudited)
Nine Months Ended
June 30,
1997 1996
-------- --------
<S> <C> <C>
OPERATING ACTIVITIES
Net loss $ (217) $ (352)
Adjustments to reconcile net loss to net cash
flows from operating activities:
Depreciation and amortization 241 286
Loss (gain) on sale or disposal of equipment - (1)
Change in operating assets and liabilities (995) (980)
-------------------
Net cash flow used for operating activities (971) (1,047)
-------------------
INVESTING ACTIVITIES
Proceeds from sales of equipment 2 -
Payments for machinery and equipment (196) (45)
-------------------
Net cash flow used for investing activities (194) (45)
-------------------
FINANCING ACTIVITIES
Payments on capital lease obligations (5) -
-------------------
Net cash flow used for financing activities (5) -
-------------------
NET DECREASE IN CASH AND CASH EQUIVALENTS (1,170) (1,092)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 1,849 1,322
-------------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 679 $ 230
===================
</TABLE>
The accompanying notes are an integral part
of the consolidated condensed financial statements.
<PAGE> 6
ARMATRON INTERNATIONAL, INC.
Notes to Consolidated Condensed Financial Statements
1. NATURE OF BUSINESS
The Company operates principally in two segments, the Consumer Products
segment and the Industrial Products segment. Operations in the Consumer
Products segment involve the manufacture and distribution of Flowtron
leaf-eaters, bugkillers, yard carts and storage sheds which comprised 99%
and 94% of the Company's sales during the nine months ended June 30, 1997
and the year ended September 30, 1996, respectively. The Company
distributes its consumer products primarily to major retailers throughout
the United States, with some products distributed under customer labels.
Substantially all of this segment's sales and accounts receivable related
to business activities with such retailers. The Industrial Products
segment markets electronic obstacle avoidance systems for transportation
and automotive applications. Production of these systems began in fiscal
1996. There are no intercompany sales between segments.
2. OPINION OF MANAGEMENT
In the opinion of management, the accompanying unaudited consolidated
condensed financial statements contain all adjustments (including normal
recurring adjustments) necessary to present fairly the consolidated
financial position as of June 30, 1997 and 1996, and September 30, 1996,
and the consolidated statements of operations for the three and nine
months ended June 30, 1997 and 1996 and the consolidated statements of
cash flows for the nine months ended June 30, 1997. These financial
statements should be read in conjunction with the financial statements
and notes thereto included in the Company's Annual Report on Form 10-K
for the year ended September 30, 1996. Certain information and footnote
disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been
condensed or omitted. The year end balance sheet data was derived from
audited financial statements, but does not include disclosures required
by generally accepted accounting principles. The accompanying unaudited,
consolidated condensed financial statements are not necessarily
indicative of future trends or the Company's operations for the entire
year.
3. USE OF ESTIMATES
The presentation 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.
<PAGE> 7
ARMATRON INTERNATIONAL, INC.
Notes to Consolidated Condensed Financial Statements
4. CONCENTRATION OF CREDIT RISK
Financial instruments, which potentially subject the Company to
concentration of credit risk, consist principally of trade account
receivables. If any of the Company's major customers fail to pay the
Company on a timely basis, it could have a material adverse effect on the
Company's business, financial condition and results of operations.
For the nine months ended June 30, 1997, two customers accounted for
approximately 43% of the Company's sales. At June 30, 1997, these
customers accounted for approximately 57% of the Company's trade accounts
receivable balance.
For the year ended September 30, 1996, a single customer accounted for
approximately 18% of the Company's sales. At September 30, 1996, this
customer accounted for approximately 33% of the Company's trade accounts
receivable balance.
For the nine months ended June 30, 1996, one customer accounted for
approximately 18% of the Company's sales. At June 30, 1996, this customer
accounted for approximately 43% of the Company's trade accounts
receivable balance.
The Company's export sales are not significant.
5. SUPPLEMENTAL CASH FLOW INFORMATION
The Company's cash payments for interest and income taxes and the
Company's non-cash investing and financing activities were as follows:
<TABLE>
<CAPTION>
(In Thousands)
Nine Months Ended
June 30,
1997 1996
----- -----
<S> <C> <C>
Operating Activities:
Interest paid - related parties $ - $ 41
Interest paid - third parties $ 58 $ 37
Income taxes paid $ - $ -
Non-cash Investing and Financing Activities:
Capital expenditures financed by capital lease $ 57 $ -
</TABLE>
<PAGE> 8
ARMATRON INTERNATIONAL, INC.
Notes to Consolidated Condensed Financial Statements
6. MAJOR SUPPLIERS
The Company currently purchases its plastic storage sheds and yard carts
from two suppliers. These suppliers manufacture the storage sheds and
yard carts in accordance with the Company's designs and specifications.
The Company believes that other suppliers could provide the required
storage sheds and yard carts although comparable terms may not be
realized. A change in suppliers could cause a delay in scheduled
deliveries of the storage sheds and yard carts to the Company's customers
and a possible loss of revenue, which would adversely affect the
Company's results of operations.
7. CASH
The Company maintains its cash in bank deposit accounts which, at times,
may exceed Federally insured limits and in deposit accounts at its
commercial finance company. The Company has not experienced any losses in
such accounts.
8. INVENTORIES
Inventories are stated on a first-in, first-out (FIFO) method at the
lower of cost or market.
Inventories consisted of the following:
<TABLE>
<CAPTION>
(In Thousands)
(Unaudited) (Audited)
June 30, September 30,
1997 1996 1996
------- ------- ------------
<S> <C> <C> <C>
Raw material, primarily purchased components $ 2,032 $ 1,796 $ 1,632
Work in process 29 80 65
Finished goods 1,221 320 652
--------------------------------
$ 3,282 $ 2,196 $ 2,349
================================
</TABLE>
<PAGE> 9
ARMATRON INTERNATIONAL, INC.
Notes to Consolidated Condensed Financial Statements
9. PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS
Property and equipment are stated at cost. Depreciation is computed based
upon the estimated useful lives of the various assets using the
straight-line method with annual rates of depreciation of 10 to 33-1/3%.
Capitalized tooling costs are amortized over three years. Leasehold
improvements are amortized over the lesser of the term of the lease or
the estimated useful life of the related assets. Tooling and molding
costs are charged to a deferred cost account as incurred, prepaid
tooling, until the tool or mold is completed. Upon completion the costs
are transferred to a property/equipment account.
Maintenance and repairs are charged to operations as incurred. Renewals
and betterments which materially extend the life of assets are
capitalized and depreciated. Upon disposal, the asset cost and related
accumulated depreciation are removed from their respective accounts. Any
resulting gain or loss is reflected in earnings.
10. ACCRUED LIABILITIES
Accrued liabilities consist of the following as of:
<TABLE>
<CAPTION>
(In thousands)
(Unaudited) (Audited)
June 30, September 30,
1997 1996 1996
------ ------ -------------
<S> <C> <C> <C>
Salaries, commissions and benefits . . . . . $ 390 $ 434 $ 365
Professional fees . . . . . . . . . . . . . . 92 68 79
Warranty costs . . . . . . . . . . . . . . . 62 40 40
Advertising costs . . . . . . . . . . . . . . 152 233 145
Interest . . . . . . . . . . . . . . . . . . 796 318 439
Other . . . . . . . . . . . . . . . . . . . . 265 242 217
-----------------------------
$1,757 $1,335 $1,285
=============================
</TABLE>
11. LONG-TERM DEBT
The Company has a $7,000,000 line of credit from a realty trust operated
for the benefit of the Company's principal shareholders. This line of
credit, with interest at 10%, requires monthly payments of interest only,
and is collateralized by all assets of the Company. In August 1997, the
Company renewed this line of credit with the realty trust under the same
terms and conditions and extended the maturity date to October 1, 1998
therefore this line of credit has been classified as long term on the
accompanying balance sheet. The Company had $4,715,000 outstanding under
this line of credit at June 30, 1997. Repayment of this line of credit is
subordinate
<PAGE> 10
ARMATRON INTERNATIONAL, INC.
Notes to Consolidated Condensed Financial Statements
to the repayment of any and all balances outstanding on the revolving
line of credit from a commercial finance company which is further
described below. At June 30, 1997, interest payments of $796,000
associated with this line were in arrears for the period November 1, 1995
to June 30, 1997.
12. NOTE PAYABLE
The Company has a $3,500,000 revolving line of credit agreement with a
commercial finance company. This credit agreement is collateralized by
all assets of the Company and expires in December 1999. The terms of this
agreement include a borrowing limit which fluctuates depending on the
levels of accounts receivable and inventory which collateralize the
borrowings. The agreement contains various convenants pertaining to
maintenance of working capital, net worth and other conditions. Interest
on amounts outstanding is payable at 1 3/4% over the commercial base
rate. The commercial base rate was 8.5% at June 30, 1997. At June 30,
1997, the Company had outstanding letters of credit amounting to $588,000
and approximately $2,307,000 was available, pursuant to the borrowing
formula, under this credit agreement.
13. CAPITAL LEASE
In February 1997, the Company financed approximately $57,000 of leasehold
improvements under a 3 year lease financing agreement with a finance
company. This lease arrangement has been accounted for as a financing
transaction. The subject leasehold improvements are recorded as an asset
for financial statement purposes and are being depreciated accordingly.
<PAGE> 11
ARMATRON INTERNATIONAL, INC.
Management's Discussion and Analysis of Financial Conditions
and Results of Operations
OVERVIEW
The Company operates principally in two segments, the Consumer Products segment
and the Industrial Products segment. Operations in the Consumer Products
segment involve the manufacture and distribution of Flowtron leaf- eaters,
bugkillers, yard carts and storage sheds which comprised 99% and 94% of the
Company's sales during the nine months ended June 30, 1997 and the year ended
September 30, 1996, respectively. The Company distributes its consumer products
primarily to major retailers throughout the United States, with some products
distributed under customer labels. Substantially all of this segment's sales
and accounts receivable related to business activities with such retailers. The
Industrial Products segment markets electronic obstacle avoidance systems for
transportation and automotive applications. Production of these systems began
in fiscal 1996. There are no intercompany sales between segments. For the nine
months ended June 30, 1997, two customers accounted for approximately 43% of
the Company's sales. At June 30, 1997, these customers accounted for
approximately 57% of the Company's trade accounts receivable balance. If any of
the Company's major customers fail to pay the Company on a timely basis, it
could have a material adverse effect on the Company's business, financial
condition and results of operations. The Company currently purchases its
plastic storage sheds and yard carts from two suppliers. These suppliers
manufacture the storage sheds and yard carts in accordance with the Company's
designs and specifications. The Company believes that other suppliers could
provide the required storage sheds and yard carts although comparable terms may
not be realized. A change in suppliers could cause a delay in scheduled
deliveries of the storage sheds and yard carts to the Company's customers and a
possible loss of revenue, which would adversely affect the Company's results of
operations.
LIQUIDITY AND CAPITAL RESOURCES
The Company's primary cash requirements are for operating expenses, including
labor costs, raw material purchases and funding of accounts receivable.
Historically, the Company's sources of cash have been borrowings from banks and
finance companies and notes from related parties.
During the nine months ended June 30, 1997, operating activities used $971,000
in cash primarily due to an increase in trade accounts receivable of $1,409,000
and an increase in inventories of $933,000 offset by increases in accounts
payable and accrued liabilities of $806,000 and $472,000, respectively.
The Company has a $3,500,000 revolving line of credit agreement with commercial
finance company. This credit agreement is collateralized by all all assets of
the Company and expires in December 1999. The terms of this agreement include a
borrowing limit which fluctuates depending on the levels
<PAGE> 12
of accounts receivable and inventory which collateralize the borrowings. The
agreement contains various convenants pertaining to maintenance of working
capital, net worth and other conditions. Interest on amounts outstanding is
payable at 1 3/4% over the commercial base rate. The commercial base rate was
8.5% at June 30, 1997. At June 30, 1997, the Company had outstanding letters of
credit amounting to $588,000 and approximately $2,307,000 was available,
pursuant to the borrowing formula, under this credit agreement.
The Company has a $7,000,000 line of credit from a realty trust operated for
the benefit of the Company's principal shareholders. This line of credit, with
interest at 10%, requires monthly payments of interest only, is payable in full
in October 1997, and is collateralized by all assets of the Company. The
Company had $4,715,000 outstanding under this line of credit at June 30, 1997.
Repayment of this line of credit is subordinate to the repayment of any and all
balances outstanding on the revolving line of credit from a commercial finance
company. At June 30, 1997, interest payments of $796,000 associated with this
line were in arrears for the period November 1, 1995 to June 30, 1997. In
August 1997, the Company renewed its line of credit with the Realty Trust under
terms and conditions similar to the existing terms and conditions and extended
the maturity date to October 1, 1998.
Sales terms for the Industrial Products segment are 30 days net. Following
industry trade practice, the Consumer Products segment offers extended payment
terms for delivery of seasonal product items such as the bugkillers, electric
leaf-eater, biomister, compost bin and yard carts and storage sheds, resulting
in fluctuating requirements for working capital.
During the nine months June 30, 1997, the Company made cash investments of
$196,000 in capital expenditures primarily for tooling and dies used in
production and financed approximately $57,000 of leasehold improvements. As of
July 31, 1997, the Company has commitments of approximately $20,000 for future
capital expenditures.
The Company believes that its present working capital, credit arrangements with
a commercial finance company and related party, and other sources of financing
will be sufficient to finance its seasonal borrowing needs, operations and
investment in capital expenditures in fiscal 1997.
RESULTS OF OPERATIONS
Three months ended June 30, 1997
- --------------------------------
The results of consolidated operations for the three months ended June 30, 1997
resulted in net income of $558,000, or $.23 per share, as compared with net
income of $734,000, or $.30 per share in the same period of the previous year.
Sales decreased $1,450,000, or 21.6%, to $5,267,000 for the three months ended
June 30, 1997, as compared to $6,717,000 for the corresponding period in the
previous year. The decrease in sales was primarily attributable to a
<PAGE> 13
decrease in sales of bugkillers in three months ended June 30, 1997 as compared
to the same period of the previous year due to unseasonable weather conditions.
Operating profit is the result of deducting operating expenses excluding
interest expense, general corporate expenses, and income taxes from total
revenue.
Sales and operating profit for the Consumer Products segment in the three
months end June 30, 1997 were approximately $5,184,000 and $905,000,
respectively, as compared to $6,344,000 and $996,000, respectively, in the
previous year. Sales decreased $1,160,000 primarily due to a decrease in sales
of bugkillers. Product lines within the Consumer Products segment are subject
to seasonal fluctuations, with most shipments occurring in the spring and
summer seasons.
Sales and operating loss for the Industrial Products segment for the three
months ended June 30, 1997 were $83,000 and $50,000 respectively, as compare to
sales of $373,000 and operating income of $83,000, in the previous year. The
decrease in sales was due to a customer rescheduling and delaying of shipments
of the Company's systems. The operating loss was due to the underutilization of
this segment's facilities.
Selling, general and administrative expenses decreased $295,000, or 28.0%, to
$760,000 for the three months ended June 30, 1997, as compared to the same
period of the previous year due to lower sales and the Company's cost
containment efforts.
Taxes for the three months ended June 30, 1997 were not provided in the
consolidated condensed statement of operations because the Company has net
operating losses carry forwards available to offset such provision.
Nine months ended June 30, 1997
- -------------------------------
The results of consolidated operations for the nine months ended June 30, 1997
resulted in a net loss of $217,000 or $.09 per share, as compared with a net
loss of $352,000, or $.14 per share in the same period of the previous year.
Sales decreased $559,000, or 5.2%, to $10,350,000 for the nine months ended
June 30, 1997, as compared to $10,909,000 for the corresponding period in the
previous year. The decrease in sales was primarily attributable to a decrease
in sales of industrial products in nine months ended June 30, 1997 as compared
to the same period of the previous year.
Sales and operating profits for the Consumer Products segment for the nine
months ended June 30, 1997 were approximately $10,218,000, and $874,000,
respectively, as compared to $10,319,000 and $644,000, respectively, in the
previous year. The increase in operating profit was attributable to the lower
operating expenses due to the Company's lower sales and cost containment
efforts.
Sales and operating loss for the Industrial Products segment during the nine
months ended June 30, 1997 were approximately $132,000 and $229,000,
<PAGE> 14
respectively, as compared to sales of $590,000 and operating profit of $9,000,
in the previous year. The decrease in sales was due to a customer rescheduling
and delaying of shipments of the Company's systems. The operating loss was due
to the underutilization of this segment's facilities.
Selling, general and administrative expenses decreased $402,000, or 17.2%, to
$1,937,000 for the nine months ended June 30, 1997 as compared to $2,339,000
for the same period of the previous year. The decrease was due to the Company's
cost containment efforts.
A tax benefit from the losses on operations for the nine months ended June 30,
1997 was not reflected in the consolidated condensed statement of operations
because the net operating losses could neither be carried back to previous
years and future recognition was not certain.
<PAGE> 15
ARMATRON INTERNATIONAL, INC.
PART II
Item 6b.
Reports on Form 8-K
The Company did not file any reports on Form 8-K for the quarter
ended June 30, 1997.
<PAGE> 16
ARMATRON INTERNATIONAL, INC.
File No. 1-4433
-------------------
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereto duly authorized.
ARMATRON INTERNATIONAL, INC.
(Registrant)
Date: August 7, 1997 /s/ Charles J. Housman
Charles J. Housman, President and Treasurer
Date: August 7, 1997 /s/ James Murphy
James Murphy
Controller
<PAGE> 17
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-END> JUN-30-1997
<CASH> 679
<SECURITIES> 0
<RECEIVABLES> 3,749
<ALLOWANCES> 219
<INVENTORY> 3,282
<CURRENT-ASSETS> 365
<PP&E> 6,270
<DEPRECIATION> 5,678
<TOTAL-ASSETS> 8,555
<CURRENT-LIABILITIES> 3,751
<BONDS> 4,715
0
0
<COMMON> 2,606
<OTHER-SE> (2,594)
<TOTAL-LIABILITY-AND-EQUITY> 8,555
<SALES> 10,350
<TOTAL-REVENUES> 10,350
<CGS> 8,251
<TOTAL-COSTS> 8,251
<OTHER-EXPENSES> 1,900
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 416
<INCOME-PRETAX> (217)
<INCOME-TAX> 0
<INCOME-CONTINUING> (217)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (217)
<EPS-PRIMARY> (.09)
<EPS-DILUTED> (.09)
</TABLE>
