SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
EXCEL TECHNOLOGY, INC.
(Exact name of Registrant as specified in its Charter)
For the quarter ended September 30, 1998 Commission File Number 0-19306
Delaware 11-2780242
(State or other jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
41 Research Way (516) 273-6900
E. Setauket NY 11733 (Registrant's Telephone Number)
(Address of Principal
Executive Offices)
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 [ ]
The number of shares of the Registrant's common stock outstanding as
of November 9, 1998 was: 11,020,520.
CONTENTS
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements: Page
..................................
Balance Sheets as of September 30, 1998 and
December 31, 1997 3
Statements of Earnings and Retained Earnings
for the Three Months Ended September 30, 1998 and 1997 4
Statements of Earnings and Retained Earnings (Accumulated
Deficit) for the Nine months Ended
September 30, 1998 and 1997 5
Statements of Cash Flows for the Nine months Ended
September 30, 1998 and 1997 6
Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial
.................................................
Condition and Results of Operations 10
...................................
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 13
.................
Item 2. Changes in Securities and Use of Proceeds 13
.........................................
Item 3. Defaults Upon Senior Securities 13
...............................
Item 4. Submission of Matters to a Vote of
..................................
Security-Holders 13
................
Item 5. Other Information 13
.................
Item 6. Exhibits and Reports on Form 8-K 13
................................
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements:
.................................
CONSOLIDATED BALANCE SHEETS
Sept. 30, 1998 Dec. 31, 1997
.............. .............
(unaudited) (audited)
Assets
Current assets:
Cash and cash equivalents $ 5,321,846 $ 6,331,159
Investments 241,973 14,209,854
Accounts receivable, less allowance for
doubtful accounts of $470,000 and
$279,000 in 1998 and 1997, respectively 14,664,393 11,522,041
Inventories 15,452,772 12,143,140
Deferred income taxes 645,100 692,500
Other current assets 581,248 584,840
............ ............
Total current assets 36,907,332 45,483,534
............ ............
Property, plant and equipment, net 10,967,255 5,392,955
Other assets 525,221 545,725
Deferred income taxes 1,722,000 1,674,600
Excess of cost over fair value of net assets
of businesses acquired, net of accumulated
amortization of $2,268,610 in 1998 and
$1,849,332 in 1997, respectively. 22,620,091 6,122,867
............ ............
Total assets $ 72,741,899 $ 59,219,681
............ ............
............ ............
Liabilities and Stockholders' Equity
....................................
Current liabilities:
Note payable $ 125,380 $ 182,888
Accounts payable 3,011,880 2,235,109
Accrued expenses and other current
liabilities 8,798,947 5,898,577
............ ............
Total current liabilities 11,936,207 8,316,574
............ ............
Long-term debt 6,500,000 0
............ ............
Stockholders' equity:
Common stock, par value $.001 per share:
20,000,000 shares authorized, 11,769,247
and 11,714,471 issued in 1998 and 1997,
respectively. 11,769 11,714
Additional paid-in capital 48,988,523 48,726,078
Retained earnings 11,042,383 5,760,370
Treasury stock, 631,525 shares in 1998
and 375,000 shares in 1997 (5,760,778) (3,339,375)
Foreign currency translation adjustment 23,795 (255,680)
............ ............
54,305,692 50,903,107
............ ............
Total liabilities and shareholders' equity $ 72,741,899 $ 59,219,681
............ ............
............ ............
CONSOLIDATED STATEMENTS OF EARNINGS
AND RETAINED EARNINGS
...................................
(Unaudited)
Three Months Ended
September 30
1998 1997
............ ............
Net sales and services $ 17,512,016 $ 16,504,828
Cost of sales and services 8,880,054 8,079,912
............ ............
Gross profit 8,631,962 8,424,916
Operating expenses:
Selling and marketing 2,423,757 2,624,745
General and administrative 1,468,915 1,198,263
Research and development 1,552,216 1,238,113
Amortization of excess of cost over fair
value of net assets of business acquired 234,426 92,426
............ ............
Earnings from operations 2,952,648 3,271,369
Non operating expenses (income):
Interest expense 68,940 6,690
Interest income (169,513) (239,726)
Other (income), net (14,778) (60,655)
............ ............
Earnings before provision for income taxes 3,067,999 3,565,060
Provision for income taxes 1,073,800 1,246,816
............ ............
Net earnings 1,994,199 2,318,244
............ ............
Retained earnings, beginning of period 9,048,184 1,341,975
Retained earnings, end of period $ 11,042,383 $ 3,660,219
............ ............
............ ............
Earnings per share:
Basic earnings per common share $.018 $.021
..... .....
..... .....
Weighted average common shares outstanding 11,152,000 10,928,000
............ ............
............ ............
Diluted earnings per common share $0.18 $0.20
..... .....
..... .....
Weighted average common shares and
common share equivalents 11,253,000 11,702,000
............ ............
............ ............
See accompanying Notes to Financial Statements
CONSOLIDATED STATEMENTS OF EARNINGS
AND RETAINED EARNINGS (ACCUMULATED DEFICIT)
...........................................
(Unaudited)
Nine Months Ended
September 30
............................
1998 1997
............ ............
Net sales and services $ 46,186,661 $ 49,679,746
Cost of sales and services 23,519,433 25,101,338
............ ............
Gross profit 22,667,228 24,578,408
Operating expenses:
Selling and marketing 6,995,574 8,017,124
General and administrative 3,896,394 3,443,707
Research and development 3,818,633 3,671,665
Amortization of excess of cost over fair
value of net assets of business acquired 419,278 277,278
............ ............
Earnings from operations 7,537,349 9,168,634
Non operating expenses (income):
Interest expense 76,843 155,288
Interest income (655,107) (555,234)
Other (income) expense, net (30,011) 47,792
............ ............
Earnings before provision for income taxes 8,145,624 9,520,788
Provision for income taxes 2,863,611 3,386,242
............ ............
Net earnings 5,282,013 6,134,546
............ ............
Retained earnings (accumulated deficit),
beginning of period 5,760,370 (2,474,327)
Retained earnings, end of period $ 11,042,383 $ 3,660,219
............ ............
............ ............
Earnings per share:
Basic earnings per common share $0.47 $0.59
..... .....
..... .....
Weighted average common shares outstanding 11,238,000 10,385,000
............ ............
............ ............
Diluted earnings per common share $0.46 $0.56
..... .....
..... .....
Weighted average common shares and
common share equivalents 11,437,000 11,044,000
............ ............
............ ............
See accompanying Notes to Financial Statements
CONSOLIDATED STATEMENTS OF CASH FLOWS
.....................................
(Unaudited)
Nine Months Ended
September 30
............................
1998 1997
............ ............
Cash flows from operating activities:
Net earnings $ 5,282,013 $ 6,134,546
Adjustments to reconcile net earnings
to net cash provided by operating
activities:
Depreciation and amortization 1,452,484 962,055
Provision for bad debts 12,473 25,979
Changes in operating assets and
liabilities, net of effects from
acquisition:
(Increase) in accounts receivable (61,261) (2,396,813)
Decrease (increase) in inventories 65,491 (1,719,176)
Decrease (increase) in other current
assets 94,889 (83,250)
Decrease in other assets 3,393 106,188
(Decrease) increase in accounts
payable (579,297) 892,774
Increase in accrued expenses and
other liabilities 1,174,520 875,171
............ ............
Net cash provided by
operating activities: 7,444,705 4,797,474
............ ............
Cash flows from investing activities:
Cash paid for acquisition - Synrad (1998),
Cambridge (1997) (21,728,055) (723,150)
Purchases of property, plant and equipment (5,036,262) (1,737,563)
Redemption (purchase) of investments, net 13,967,881 (11,242,184)
............ ............
Net cash used in
investing activities: (12,796,436) (13,702,897)
............ ............
Cash flows from financing activities:
Purchase of treasury stock (2,421,403) 0
Proceeds from exercise of common stock
options and warrants 262,500 14,004,056
(Payments) of notes payable (278,154) (363,778)
Proceeds from (payments of) long-term debt
and revolving credit line 6,500,000 (1,923,024)
............ ............
Net cash provided by financing activities: 4,062,943 11,717,254
............ ............
Effect of exchange rate changes on assets and
liabilities, including cash 279,475 (91,709)
............ ............
Net (decrease) increase in cash and
cash equivalents (1,009,313) 2,720,122
............ ............
Cash and cash equivalents,
beginning of period 6,331,159 2,910,982
............ ............
Cash and cash equivalents, end of period $ 5,321,846 $ 5,631,104
............ ............
............ ............
Supplemental cash flow disclosure:
..................................
Cash paid for:
Interest $ 21,243 $ 155,288
Income taxes $ 1,516,526 $ 2,487,189
See accompanying Notes to Financial Statements
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
..........................................
(unaudited)
A. CONSOLIDATED FINANCIAL STATEMENTS:
..................................
The consolidated balance sheet as of September 30, 1998, the
consolidated statement of earnings and retained earnings (accumulated
deficit) for the three month and nine month periods ended September 30,
1998 and the statement of cash flows for the nine months ended September
30, 1998 have been prepared by the Company without audit. In the
opinion of management, all adjustments (which included only normal
recurring adjustments) necessary to present fairly the financial
position, results of operations and cash flows (unaudited) at September
30, 1998 and for all periods presented have been made.
For information concerning the Company's significant accounting
policies, reference is made to the Company's Annual Report on Form 10-K
for the year ended December 31, 1997. While the Company believes that
the disclosures presented are adequate to make the information contained
herein not misleading, it is suggested that these statements be read in
conjunction with the consolidated financial statements and notes included
in the Form 10-K. Results of operations for the three and nine month
periods ended September 30, 1998 are not necessarily indicative of the
operating results to be expected for the full year.
B. EARNINGS PER SHARE
..................
In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128 (SFAS 128), Earnings
per Share, which the Company adopted during 1997. Under SFAS 128, the
Company presents two earnings per share (EPS) amounts. Basic EPS is
calculated based on income available to common shareholders and the
weighted-average number of shares outstanding during the reported period.
Diluted EPS includes additional dilution from potential common stock
including stock issuable pursuant to the exercise of dilutive stock
options and warrants outstanding. Prior year earnings per share data
have been restated to apply the provisions of SFAS 128.
C. INVENTORIES
...........
Inventories are recorded at the lower of average cost or market.
Average cost approximates actual cost on a first-in first-out basis.
Inventories consist of the following:
September 30, 1998 December 31, 1997
.................. .................
Raw Materials $ 7,047,789 $ 5,792,455
Work in Process 6,475,613 5,013,691
Finished Goods 1,313,099 619,316
Consigned Inventory 616,271 717,678
.............. ..............
$ 15,452,772 $ 12,143,140
D. LONG-TERM DEBT
..............
On July 23, 1998, the Company entered into a credit facility with
The Bank of New York (the "Bank") that provides the Company with a $15
million revolving line of credit for acquisition or working capital
requirements. The term of this agreement is for five years, maturing on
July 22, 2003. This credit facility allows for interest to be calculated
utilizing an Alternative Base Rate ("ABR") or a LIBOR rate plus a premium
ranging from 0.50% to 2.25%. The ABR is the higher rate of either the
prime rate or the Federal Funds Rate plus 0.50%. The Company has
currently chosen the LIBOR rate plus the premium, as its interest rate,
which was 7.14% at September 30, 1998. This credit facility contains
certain financial covenants and requires payment of interest on a
quarterly basis. The terms call for the repayment of the debt in full on
its maturity date. The Company can make voluntary prepayments with a
minimum of $100 thousand and in $25 thousand increments in excess
thereof. Borrowings can be made in a minimum of $500 thousand and in
increased multiples of $50 thousand for borrowings in excess thereof. On
August 14, 1998 the Company borrowed $6.5 million for the acquisition of
Synrad (see Note E). As of September 30, 1998 the Company had $8.5
million available on its line of credit.
E. ACQUISITION
...........
On August 14, 1998, the Company acquired substantially all of the
assets and properties of Synrad Inc. ("Synrad"), a company engaged in the
business of developing, manufacturing and marketing sealed CO2 lasers and
related accessories, for $21.6 million in cash, which includes
transaction costs, and the repayment of approximately $2.6 million of
Synrad's debt. In addition, the Company assumed certain liabilities
including trade payables, accrued expenses and other specified
liabilities. The Company funded the acquisition of Synrad by utilizing
its own cash and by borrowing $6.5 million on its credit facility (see
Note D).
The acquisition was accounted for as a purchase. Accordingly,
results of Synrad are included in the Consolidated Statement of Earnings,
from August 3, 1998 and acquired assets and liabilities have been
recorded at their estimated fair values at the date of acquisition. The
total cost of the acquisition was $21.6 million of which $4.8 million was
allocated to identifiable net tangible assets. The remaining balance of
$16.8 million represents the excess of the purchase price over the fair
value of the net assets acquired, which is being amortized on a straight
line basis over 20 years.
Proforma results of operations, assuming the acquisition of Synrad
had been made at the beginning of each period, is as follows, and
includes adjustments to interest expense, interest income, amortization
expense and income tax expense.
Excel Technology, Inc.
Pro Forma Statement of Earnings
Reflecting Acquisition of Synrad Inc.
Nine Months Ended Nine Months Ended
September 30, 1998 September 30, 1997
.................. ..................
Net sales and service $ 62,275,388 $ 69,962,184
Net earnings 4,799,632 6,904,319
Basic earnings per common share $0.43 $0.67
Diluted earnings per common share $0.43 $0.63
The pro forma results of operations are not necessarily indicative
of the actual results of operations that would have occurred had the
purchase been made at the beginning of the period, or the results which
may occur in the future.
F. COMPREHENSIVE INCOME
....................
In June 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 130 (SFAS 130),
"Reporting Comprehensive Income", which the Company implemented during
the first quarter of 1998. For the quarters ended September 30, 1998 and
1997, comprehensive income was $2,270,394 and $2,346,662, respectively.
For the nine months ended September 30, 1998 and 1997 comprehensive
income was $5,561,488 and $6,042,837, respectively. The components of
comprehensive income are net earnings and foreign currency translation
adjustments.
G. SEGMENT INFORMATION
...................
In June 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 131 (SFAS 131),
Disclosure about Segments of an Enterprise and Related Information.
Historically, the Company has operated in one business segment; however,
SFAS 131 redefines segments and in the future, the Company may also be
required to disclose certain financial information about operating
segments, products and services. The Company has not determined how
operating segments will be defined for disclosure purposes or which
segments will meet the quantitative requirements for disclosure. The
adoption of the standard will have no impact on the Company's future
results of operations or financial position.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations
.....................
Net sales and services for the quarter ended September 30, 1998
increased $1.0 million or 6.0% to $17.5 million from $16.5 million for
the comparable period in the prior year. The increase is primarily
attributable to the acquisition of Synrad which accounted for $3.8
million, partially offset by decreases in sales of all products. Net
sales and services for the nine months ended September 30, 1998 were
$46.2 million versus $49.7 million for the comparable period in the prior
year, a decrease of $3.5 million or 7.0 %. The decrease in the period is
primarily attributable to a decrease in sales of all products partially
offset by the acquisition of Synrad.
Gross margins as a percentage of sales decreased to 49.2% from 51.1%
for the quarter ended September 30, 1998 as compared to the comparable
period in the prior year. For the nine months ended September 30, 1998
the gross margins decreased to 49.0% from 49.5% of sales in the same
period in 1997. The decrease in gross margins is due to the product mix
sold during the quarter and the decrease in sales volume.
Selling and marketing expenses for the quarter ended September 30,
1998 decreased $200 thousand to $2.42 million from $2.63 million during
the same period in 1997. Selling and marketing expense as a percentage
of sales during the quarter decreased to 13.8% in 1998 from 15.9% in
1997. For the nine months ended September 30, 1998 selling and marketing
expenses decreased to $7.0 million from $8.0 million in 1997. Selling
and marketing expenses as a percentage of sales for the nine months were
15.1% in 1998 and 16.1% in 1997. The decrease is attributable to a
decrease in sales for the quarter and the nine months ended September 30,
1998.
General and administrative expenses for the quarter increased $270
thousand to $1.47 million in 1998 from $1.2 million in 1997. For the
nine months ended September 30, 1998 general and administrative expense
increased $450 thousand to $3.9 million from $3.4 million in 1997.
General and administrative expenses for the periods were relatively
comparable to prior periods excluding the general and administrative
expenses for Synrad.
Research and development expenses for the quarter increased $314
thousand or 25% to $1.6 million in 1998 from $1.24 million in 1997. For
the nine months ended September 30, 1998, research and development
expenses increased $147 thousand or 4% to $3.82 million from $3.67
million in 1997. The increase is primarily attributable to the
acquisition of Synrad.
Interest expense was $77 thousand and $155 thousand for the nine
months ended September 30, 1998 and 1997, respectively, and $69 thousand
and $7 thousand for the three months ended September 30, 1998 and 1997,
respectively. The increase in interest expense, for the period, is due
to the long term debt associated with the acquisition of Synrad. The
decrease for the nine months ended September 30, 1998 as compared to 1997
was due to interest paid to Gould on previously past due royalties, in
1997.
Interest income was $655 thousand and $555 thousand for the nine
months ended September 30, 1998 and 1997, respectively. For the quarter
ended September 30, 1998 and 1997, interest income was $170 thousand and
$240 thousand, respectively. The decrease in interest income, for the
period, is due to the utilization of cash for the acquisition of Synrad.
Other income/expense for the nine months ended September 30, 1998
and 1997 was income of $30 thousand and expense of $48 thousand,
respectively. For the quarter ended September 30, 1998 income was $15
thousand as compared to income of $61 thousand for the quarter ended
September 30, 1997. This decrease in other income in the period and the
increase in the nine months is primarily due to foreign exchange gains
and losses incurred by the Company's German subsidiary.
Liquidity and Capital Resources
...............................
Working capital at September 30, 1998 was $25 million compared to
$37.2 million at December 31, 1997. The decrease is primarily attributable
to the net utilization of cash and investments for the acquisition of
Synrad ($15.2 million), purchases of a new building and equipment ($5
million) and purchase of treasury stock ($2.4 million), offset by the net
current assets of the Synrad acquisition ($3.5 million) and current year
net income ($5.3 million).
On August 14, 1998, the Company acquired substantially all of the
assets and properties of Synrad Inc. a company engaged in the business of
developing, manufacturing and marketing sealed CO2 lasers and related
accessories. In accordance with the Asset Purchase Agreement, dated August
14, 1998, by and between a newly formed wholly-owned subsidiary, Excel
Purchasing Company (name changed to Synrad Inc. subsequent to the
acquisition), and Peter Laakman, the Chairman of Synrad and Trustee of the
sole shareholder of Synrad ("Peter Laakman"), Excel Purchasing Company
purchased from Peter Laakman substantially all of the net assets and
properties for consideration of approximately $21.6 million in cash, which
includes transaction costs and the repayment of approximately $2.6 million
of Synrad's debt. In addition, the Company assumed certain liabilities,
including trade payables, accrued expenses and other specified liabilities.
The Company funded the acquisition of Synrad by utilizing its own cash
and by borrowing $6.5 million on its credit facility (see Note D).
The Company estimates that its current resources and anticipated cash
flow from operations will be sufficient to meet the Company's cash
requirements for at least the next 12 months.
In fiscal 1997, the Company commenced a Year 2000 date conversion
project to address necessary changes, testing and implementation in
respect to its internal computer systems. Project completion is
scheduled for completion by June 1999. To date, the cost of this project
has not been material to the Company's results of operations and
liquidity and the Company does not anticipate that the cost of completing
the project will be material to is results of operations or liquidity in
fiscal 1999. Management anticipates that the Company's Year 2000 date
conversion project as it relates to the Company's internal systems will
be completed on a timely basis.
The Company's applicable products are Year 2000 compliant.
The Company is currently seeking information regarding Year 2000
compliance from vendors, customers and manufacturers associated with the
Company. Project completion for this phase is planned for the middle of
1999. However, given the reliance on third-party information as it
relates to their compliance programs and the difficulty of determining
potential errors on the part of the external service suppliers, no
assurance can be give that the Company's information systems or
operations will not be affected by mistakes, if any, of third parties or
third-party failures to complete the Year 2000 project on a timely basis.
There can be no assurance that the systems of other companies on which
the Company's systems rely will be timely converted or that any such
failure to covert by another company would have an adverse effect on the
Company's systems.
The cost of the Company's Year 2000 project and the date on which
the Company believes it will complete the necessary modifications are
based on the Company's estimates, which were derived utilizing numerous
assumptions of future events, including the continued availability of
resources, third party modification plans and other factors. The Company
presently believes that the Year 2000 issue will not pose significant
operational problems for its internal information systems and products.
However, if the anticipated modifications and conversions are not
completed on a timely basis, or if the systems of other companies on
which the Company's systems and operations rely are not converted on a
timely basis, the Year 2000 issue could have an adverse effect on the
Company's operations.
The Company does not currently have any contingency plans in place
to address the failure of timely conversion of its and /or third-party
systems in respect of the Year 2000 issue.
In the opinion of management, inflation has not had a material effect
on the operations of the Company.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
For information concerning Legal Proceedings, reference is made
to Item 3. Legal Proceedings in the Company's Annual Report on Form 10-K
for the year ended December 31, 1997.
Item 2. Changes in Securities and Use of Proceeds
None.
Item 3. Defaults upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security-Holders
None.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
(10.1) Asset Purchase Agreement, dated as of August 14,
1998,by and among Excel Technology, Inc., Excel Purchasing Corporation,
Synrad, Inc., The Amended Revocable Living Trust of Peter Laakmann, and
Peter Laakmann (incorporated by reference to the Company's Report on Form
8-K dated August 14, 1998).
(11) Computation of net earnings per share
(b) Reports on Form 8-K
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15(d) 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.
DATED: November 12, 1998
EXCEL TECHNOLOGY, INC.
By: /s/ J. Donald Hill
...................
J. Donald Hill
Chief Executive Officer
By: /s/ Antoine Dominic
....................
Antoine Dominic
Chief Operating Officer
EXHIBIT 11 (Unaudited)
COMPUTATION OF NET EARNINGS PER SHARE
BASIC DILUTED
Three Months Ended Three Months Ended
September 30, September 30,
....................... .......................
1998 1997 1998 1997
........... ........... ........... ...........
Net earnings $ 1,994,199 $ 2,318,244 $ 1,994,199 $ 2,318,244
........... ........... ........... ...........
........... ........... ........... ...........
Weighted average common
shares outstanding 11,151,861 10,927,876 11,151,861 10,927,876
Weighted average common
share equivalents:
Options and warrants 0 0 101,165 773,787
........... ........... ........... ...........
Weighted average common
and common equivalent
shares 11,151,861 10,927,876 11,253,026 11,701,663
........... ........... ........... ...........
........... ........... ........... ...........
Net earnings per share $0.18 $0.21 $0.18 $0.20
..... ..... ..... .....
..... ..... ..... .....
BASIC DILUTED
Nine Months Ended Nine Months Ended
September 30, September 30,
....................... .......................
1998 1997 1998 1997
........... ........... ........... ...........
Net earnings $ 5,282,013 $ 6,134,546 $ 5,282,013 $ 6,134,546
........... ........... ........... ...........
........... ........... ........... ...........
Weighted average
common shares
outstanding 11,238,024 10,385,211 11,238,024 10,385,211
Weighted average common
share equivalents:
Options and warrants 0 0 198,626 658,780
........... ........... ........... ...........
Weighted average common
and common equivalent
shares 11,238,024 10,385,211 11,436,650 11,043,991
........... ........... ........... ...........
........... ........... ........... ...........
Net earnings per share $0.47 $0.59 $0.46 $0.56
..... ..... ..... .....
..... ..... ..... .....
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 9-MOS
<FISCAL-YEAR-END> DEC-31-1998 DEC-31-1998
<PERIOD-END> SEP-30-1998 SEP-30-1998
<CASH> 5,321,846 5,321,846
<SECURITIES> 241,973 241,973
<RECEIVABLES> 14,664,393 14,664,393
<ALLOWANCES> 470,000 470,000
<INVENTORY> 15,452,772 15,452,772
<CURRENT-ASSETS> 36,907,332 36,907,332
<PP&E> 10,967,255 10,967,255
<DEPRECIATION> 0 0
<TOTAL-ASSETS> 72,741,899 72,741,899
<CURRENT-LIABILITIES> 11,936,207 11,936,207
<BONDS> 0 0
0 0
0 0
<COMMON> 11,769 11,769
<OTHER-SE> 0 0
<TOTAL-LIABILITY-AND-EQUITY> 72,741,899 72,741,899
<SALES> 17,512,016 46,186,661
<TOTAL-REVENUES> 17,512,016 46,679,746
<CGS> 8,880,054 23,519,433
<TOTAL-COSTS> 8,880,054 23,519,433
<OTHER-EXPENSES> (115,351) (608,275)
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 68,940 76,843
<INCOME-PRETAX> 3,067,999 8,145,624
<INCOME-TAX> 1,073,800 2,863,611
<INCOME-CONTINUING> 1,994,199 5,282,013
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 1,994,199 5,282,013
<EPS-PRIMARY> 0.18 0.47
<EPS-DILUTED> 0.18 0.46
</TABLE>
