<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For Quarter Ended
September 30, 1999
[ ] 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
1-11916
WIRELESS TELECOM GROUP, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
New Jersey 22-2582295
- --------------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
East 64 Midland Avenue
Paramus, New Jersey 07652
- --------------------------------------- -------------------
(Address of principal executive offices) (Zip Code)
</TABLE>
(201) 261-8797
--------------------------------------------------
Registrant's telephone number, including area code
- -------------------------------------------------------------------------------
(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
-- --
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the most recent practicable date.
<TABLE>
<S> <C>
Common Stock - Par Value $.01 17,139,998
- ------------------------------ -------------------
Class Outstanding Shares
At November 8, 1999
</TABLE>
<PAGE>
WIRELESS TELECOM GROUP, INC.
Table of Contents
<TABLE>
<CAPTION>
Page(s)
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1 -- Consolidated Financial Statements:
Condensed Balance Sheets as of September 30, 1999
(unaudited) and December 31, 1998 3
Condensed Statements of Operations for the Three and Nine
Months Ended September 30, 1999 and 1998 (unaudited) 4
Condensed Statements of Cash Flows for the Nine
Months Ended September 30, 1999 and 1998 (unaudited) 5
Notes to Interim Condensed Financial Statements (unaudited) 6-7
Item 2 -- Management's Discussion and Analysis of Financial
Condition and Results of Operations 7-10
PART II. OTHER INFORMATION
Item 1 -- Legal Proceedings 10
Item 2 -- Changes in Securities 10
Item 3 -- Defaults upon Senior Securities 10
Item 4 -- Submission of Matters to a Vote of Security Holders 10
Item 5 -- Other Information 10
Item 6 -- Exhibits and Reports on Form 8-K 11
Signatures 12
Exhibit 11.1 13
Exhibit 27 14
</TABLE>
2
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1 - Financial Statements
WIRELESS TELECOM GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
-ASSETS-
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1999 1998
------------ ------------
(UNAUDITED)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents (Note 1) $ 23,623,799 $ 9,031,724
Accounts receivable -- net of allowance for
doubtful accounts of $78,837 and $134,013, respectively 935,520 2,611,953
Inventories 1,383,240 7,862,143
Prepaid expenses and other current assets 108,780 1,109,495
------------ -------------
TOTAL CURRENT ASSETS 26,051,339 20,615,315
PROPERTY, PLANT AND EQUIPMENT - NET 643,787 2,875,426
OTHER ASSETS 3,959,640 631,458
------------ -------------
$ 30,654,766 $ 24,122,199
============ =============
-LIABILITIES AND SHAREHOLDERS' EQUITY-
CURRENT LIABILITIES
Accounts payable $ 559,511 $ 780,410
Accrued expenses and other current liabilities 1,715,039 195,784
Income tax payable 603,745 -
------------ ------------
TOTAL CURRENT LIABILITIES 2,878,295 976,194
------------ ------------
DEFERRED INCOME TAXES 306,610 306,610
------------ ------------
OTHER L/T LIABILITIES 161,108 -
------------ ------------
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY (NOTE 4):
Preferred stock, $.01 par value, 2,000,000
shares authorized, none issued - -
Common stock, $.01 par value, 30,000,000 shares
authorized, 17,702,298 issued 177,023 177,023
Additional paid-in-capital 6,631,061 6,631,061
Retained earnings 21,724,824 16,299,120
Treasury stock at cost, 562,300 and 145,000 shares,
respectively (1,224,155) (267,809)
------------ ------------
27,308,753 22,839,395
------------ ------------
$ 30,654,766 $ 24,122,199
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
WIRELESS TELECOM GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
----------------------- ------------------------
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
NET SALES $ 1,793,879 $ 1,383,343 $ 5,103,298 $ 5,455,067
----------- ----------- ----------- ------------
COSTS AND EXPENSES
Cost of sales 526,070 659,855 1,479,787 2,197,062
Operating expenses 694,259 667,026 1,738,035 1,992,799
Interest, dividend and other income (350,140) (112,337) (867,855) (303,734)
---------- ---------- ---------- ------------
TOTAL COSTS AND EXPENSES 870,189 1,214,544 2,349,967 3,886,127
---------- ---------- ---------- ------------
INCOME FROM CONTINUING
OPERATIONS BEFORE INCOME TAX 923,690 168,799 2,753,331 1,568,940
PROVISION FOR INCOME TAXES 255,094 61,591 906,364 563,438
---------- ---------- ---------- ------------
INCOME FROM CONTINUING OPERATIONS 668,596 107,208 1,846,967 1,005,502
DISCONTINUED OPERATIONS (NOTE 1):
Income (Loss) from discontinued
operations - net of income taxes 333 (242,397) 8,353 (313,827)
Gain (Loss) on sale of test equipment
business - net of income taxes (17,267) - 3,570,384 -
---------- ---------- ----------- ------------
NET INCOME (LOSS) $ 651,662 $ (135,189) $ 5,425,704 $ 691,675
========== ========== =========== ============
NET INCOME (LOSS) PER COMMON
SHARE (NOTE 2):
BASIC
Continuing Operations $ .04 $ .00 $ .11 $ .06
Discontinued Operations .00 (.01) .20 (.02)
---------- ---------- ----------- ------------
$ .04 $ (.01) $ .31 $ .04
========== ========== =========== ============
DILUTED
Continuing Operations $ .04 $ .00 $ .11 $ .06
Discontinued Operations .00 (.01) .20 (.02)
---------- ---------- ----------- ------------
$ .04 $ (.01) $ .31 $ .04
========== ========== =========== ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
WIRELESS TELECOM GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
For the Nine Months
Ended September 30,
----------------------
1999 1998
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $ 5,425,704 $ 691,675
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 322,715 335,423
Deferred income taxes - 19,970
Other Income (38,892) -
Provision for losses on accounts receivable 410,914 25,672
Gain on sale of discontinued division (5,571,467) -
Changes in assets and liabilities:
Decrease in accounts receivable 1,265,518 1,168,927
(Increase) decrease in inventories (181,949) 1,155,100
(Increase) decrease in prepaid expenses and other assets 889,083 (727,407)
(Decrease) in accounts payable and accrued expenses (400,309) (280,199)
Increase in income taxes payable 603,745 -
--------- ---------
NET CASH PROVIDED BY OPERATING ACTIVITIES 2,725,062 2,389,161
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (178,477) (949,506)
Officer's life insurance 24,159 -
Proceeds from sale of discontinued division 17,230,730 -
Proceeds from covenant not to compete 200,000 -
Purchase of Noise Product line (2,500,000) -
Expenses related to disposal (1,953,052) -
---------- ---------
NET CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES 12,823,360 (949,506)
---------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Dividends paid - (877,545)
Proceeds from exercise of stock options - 208,978
Acquisition of treasury stock (956,347) -
---------- ---------
NET CASH (USED FOR) FINANCING ACTIVITIES (956,347) (668,567)
---------- ---------
NET INCREASE IN CASH AND CASH EQUIVALENTS 14,592,075 771,088
Cash and cash equivalents, at beginning of year 9,031,724 7,546,625
----------- ----------
CASH AND CASH EQUIVALENTS, AT END OF PERIOD $23,623,799 $8,317,713
=========== ==========
SUPPLEMENTAL INFORMATION:
Cash paid during the period for:
Taxes $ 2,068,780 $1,038,000
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
WIRELESS TELECOM GROUP, INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES AND POLICIES
The condensed consolidated balance sheet as of September 30,
1999 and the condensed consolidated statements of operations
for the three and nine month periods ended September 30, 1999
and 1998 and the condensed consolidated statements of cash
flows for the nine month periods ended September 30, 1999 and
1998 have been prepared by the Company without audit. The
consolidated financial statements include the accounts of
Wireless Telecom Group, Inc. and its wholly-owned subsidiary
WTG Foreign Sales Corporation. WTG Foreign Sales Corporation
began operations as a subsidiary of the Company in February
1996.
On March 11, 1999 the Company consummated the sale of all of
its Wireless Test Equipment Business to Telecom Analysis
Systems, Inc., a New Jersey corporation ("TAS"), for a
purchase price of approximately $19 million ($1.5 million
which is held in escrow to secure certain obligations of the
Company under the Asset Purchase Agreement) pursuant to an
Asset Purchase Agreement, dated January 7, 1999, between the
Company and TAS (the "Asset Purchase Agreement"). Also,
pursuant to the Asset Purchase Agreement, the Company
purchased TAS' products relating to single-function noise
generation (the "Noise Assets") for a purchase price of
approximately $2.5 million, and the Company and TAS entered
into non-competition agreements with the business associated
with the respective products purchased by each.
In the opinion of management, the accompanying condensed
consolidated financial statements referred to above contain
all necessary adjustments, consisting of normal accruals and
recurring entries only, which are necessary to present fairly
the Company's results for the interim periods being presented.
The accounting policies followed by the Company are set forth
in Note 1 to the Company's financial statements included in
its annual report on Form 10-K for the year ended December 31,
1998, which is incorporated herein by reference. Specific
reference is made to this report for a description of the
Company's securities and the notes to financial statements
included therein.
The results of operations for the three and nine month periods
ended September 30, 1999 and 1998 are not necessarily
indicative of the results to be expected for the full year.
NOTE 2 - INCOME PER COMMON SHARE
Income per common share is computed by dividing the net income
by the weighted average number of common shares and common
equivalent shares outstanding during each period. The Company
has adopted SFAS 128 "Earnings Per Share" ("SFAS 128"), which
has changed the method for calculating earnings per share.
SFAS 128 requires the presentation of "basic" and "diluted"
earnings per share on the face of the income statement.
6
<PAGE>
NOTE 3 - REVOLVING CREDIT LINE
The Company had an agreement with its bank which provided for
an unsecured line of credit in the amount of $7,000,000 with
interest at the bank's prime rate. This agreement expired on
September 30, 1998 and was not renewed.
NOTE 4 - DIVIDENDS
The Company paid cash dividends aggregating $.05 per share of
Common Stock, for the year ending December 31, 1998.
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
INTRODUCTION
Wireless Telecom Group, Inc., a New Jersey corporation (the "Company")
develops, manufactures and markets a wide variety of electronic noise
sources, and in addition, until March 11, 1999 test instruments for the
wireless telecommunications industry. The Company's products have
historically been primarily used to test the performance and capability
of cellular/PCS and satellite communications systems. Other
applications include radio, radar, wireless local area network (WLAN)
and digital television. On March 11, 1999, the Company consummated the
sale of all its Wireless Test Equipment Business to Telecom Analysis
Systems, Inc., a New Jersey corporation ("TAS"), for a purchase price
of approximately $19 million ($1.5 million of which is held in escrow
to secure certain obligations of the Company under the Asset Purchase
Agreement) pursuant to an Asset Purchase Agreement, dated January 7,
1999, between the Company and TAS (the "Asset Purchase Agreement").
Also, pursuant to the Asset Purchase Agreement, the Company purchased
TAS' products relating to the single-function noise generation business
(the "Noise Assets") for a purchase price of approximately $2.5
million, and the Company and TAS entered into non-competition
agreements with the businesses associated with the respective products
purchased by each.
The financial information as regards continuing operations presented
herein includes:
(i) Condensed consolidated balance sheets as of September 30, 1999 and
as of December 31, 1998 (ii) Condensed consolidated statements of
operations for the three and nine month periods ended September 30,
1999 and 1998 and (iii) Condensed consolidated statements of cash flows
for the nine month periods ended September 30, 1999 and 1998.
CONTINUING OPERATIONS
For the nine months ended September 30, 1999 as compared to the
corresponding period of the previous year, net sales from continuing
operations decreased to $5,103,298 from $5,455,067 a decrease of
$351,769 or 6.4%. For the quarter ended September 30, 1999 as compared
to the corresponding period of the previous year, net sales from
continuing operations increased to $1,793,879 from $1,383,343 an
increase of $410,536 or 29.7%. This decrease/increase was due to the
timing of shipments and product mix.
7
<PAGE>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
The Company's gross profit on net sales for the nine months ended
September 30, 1999 was $3,623,511 or 71.0% as compared to $3,258,005 or
59.7% for the nine months ended September 30, 1998. Gross profit on net
sales for the quarter ended September 30, 1999 was $1,267,809 or 70.7%
as compared to $723,488 or 52.3% for the three months ended September
30, 1998. The Company can experience variations in gross profit based
upon the mix of product sales as well as variations due to revenue
volume and economies of scale. The Company continues to rigidly monitor
costs associated with material acquisition, manufacturing and
production.
Operating expenses for the nine months ended September 30, 1999 were
$1,738,035 or 34.1% of net sales as compared to $1,992,799 or 36.5% of
net sales for the nine months ended September 30, 1998. Operating
expenses for the quarter ended September 30, 1999 were $694,259 or
38.7% of net sales as compared to $667,026 or 48.2% of net sales for
the quarter ended September 30, 1998.
For the nine months ended September 30, 1999 as compared to the same
period of the prior year, operating expenses decreased in dollars by
$254,764. This decrease is primarily due to controlled expenditures for
research and development, advertising and selling, and commission
expenses. For the three months ended September 30, 1999 as compared to
the same quarter in the prior year, operating expenses increased by
$27,233. This is primarily due to an increase in professional and legal
fees.
Interest, dividend and other income increased by $564,121 for the nine
months ended September 30, 1999 and by $237,803 for the quarter ended
September 30, 1999. This increase was due to a higher average
investment balance during 1999 as a result of the increase in cash from
the sale of assets described above. Additionally, interest rates have
increased in the past quarter.
Net income from continuing operations increased to $1,846,967, or $.11
per share, for the nine months ended September 30, 1999 as compared to
$1,005,502, or $.06 per share for the nine months ended September 30,
1998. The Company realized net income from continuing operations for
the quarter ended September 30, 1999 of $668,596 or $.04 per share as
compared to net income from continuing operations of $107,208 or $.00
per share for the three months ended September 30, 1998. The
explanation of these changes can be derived from the analysis given
above of operations for the three and nine month periods ending
September 30, 1999 and 1998, respectively.
LIQUIDITY AND CAPITAL RESOURCES:
The Company's working capital has increased by $3,533,923 to
$23,173,044 at September 30, 1999, from $19,639,121 at December 31,
1998. At September 30, 1999 the Company had a current ratio of 9.1 to
1, and a ratio of debt to net worth of .12 to 1. At December 31, 1998
the Company had a current ratio of 21.1 to 1, and a ratio of debt to
net worth of less than .1 to 1.
The Company realized cash provided by operations of $2,725,062 for the
nine month period ending September 30, 1999. This increase was
primarily due to cash provided by net income of $5,425,704, a reduction
of outstanding receivables of $1,265,518, a reduction of prepaid
expenses of $889,083 and an increase in income taxes payable of
$603,745 which was offset by the gain in the sale of discontinued
operations of $5,571,467.
8
<PAGE>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONTINUED)
The Company has historically been able to turn over its accounts
receivable approximately every two months. This average collection
period has been sufficient to provide the working capital and liquidity
necessary to operate the Company. The Company continues to monitor
production requirements and delivery times while maintaining manageable
levels of goods on hand.
Operating activities provided $2,389,161 in cash flow for the
comparable nine month period in 1998. Cash provided by net income of
$691,675, a reduction of outstanding receivables of $1,168,927 and a
reduction of inventory of $1,155,100 was offset by an increase in
prepaid expenses of $727,407 and a decrease in accounts payable of
$280,199.
Net cash provided by investing activities for the nine months ended
September 30, 1999 was $12,823,360. In 1999, the Company realized
proceeds of $17,230,730 from the sale of its Wireless Test Equipment
Business partially offset by $2,500,000 for the purchase of the Noise
Product Line from Telecom Analysis Systems, and $1,953,052 for expenses
relating to the disposal of the Wireless Test Equipment Business. For
the nine months ended September 30, 1998, net cash used for investing
activities was $949,506. In 1998, these funds were used for capital
expenditures.
Net cash used for financing activities for the nine month periods
ending September 30, 1999 and 1998 was $956,347 and $668,567,
respectively. The Company reacquired shares of its common stock in the
open market during the second and third quarters of 1999. For the nine
months ended September 30, 1998, the payment of quarterly cash
dividends was the primary use of these funds. These cash outlays were
partially offset by proceeds from the exercise of stock options.
During 1998, the Company declared quarterly cash dividends aggregating
$877,545 or $.05 per common share.
The Company believes that its financial resources from working capital
provided by operations are adequate to meet current requirements.
INFLATION AND SEASONALITY
The Company does not anticipate that inflation will significantly
impact its business nor does it believe that its business is seasonal.
IMPACT OF THE YEAR 2000 ISSUE
The Company is in the process of assessing its information technology
("IT") and non-IT computer systems and operations to identify and
determine the extent to which any such systems will be susceptible to
potential malfunctions as a result of the Year 2000 ("Y2K") problem.
The Y2K problem arose because many existing computer programs use only
the last two digits to refer to a particular year, rather than four.
Therefore, these computer programs do not properly recognize a year
that begins with "20" instead of the familiar "19". Any of the
Company's systems utilizing such last two-digit system to refer to a
particular year may not recognize the year 2000; but rather, assume the
year to be 1900. This could potentially result in major systems
failures or miscalculations, causing disruption of operations,
including, but not limited to, a temporary inability to process
transactions, billing and customer service or to engage in normal
business activities.
9
<PAGE>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONTINUED)
The Company is currently upgrading its computer systems and operations
to ensure that all such systems are, or will be prior to January 1,
2000, Y2K compliant. The Company estimates that it will incur aggregate
costs of $60,000 for such upgrade, of which the Company has incurred
$52,000 to date. Such costs will be borne out of the Company's general
working capital funds. There can be no assurance, however, the Company
will achieve full Y2K compliance before the end of 1999 or that such
costs will not increase.
In addition to assessing its own computer systems and operations, the
Company is currently conducting an external review of its vendors and
suppliers. However, the Company does not believe that its relationship
with any one vendor or supplier is material to the extent that such
party's Y2K noncompliance would have a material adverse effect on the
Company's business and operations. Notwithstanding, the Company may
experience problems to the extent that a large number of its suppliers
or vendors are not Y2K compliant, and there can be no assurance that
such problems would not have a material adverse effect on the Company.
The Company anticipates, although there can be no assurance, that its
computer systems and operations will be fully Y2K compliant by the end
of 1999, the Company does not currently have any contingency plans in
the event such systems and operations are not, and there can be no
assurance that any effective contingency plans will be developed or
implemented. A failure of the Company to effectively upgrade its
computer systems to become Y2K compliant before the end of 1999 could
have a material adverse effect on the Company's business, financial
position and results of operations. The most reasonably likely worst
case scenario would be a systems failure beyond the control of the
Company from operating its business. The Company believes that such a
failure would likely lead to lost revenues, increased operating costs,
loss of customers or other business interruptions that could be of a
material nature.
PART II - OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
See Part II - Item 1. Legal Proceedings included in
the Company's Quarterly Report on Form 10-Q for the quarter ended March
31, 1999.
Item 2. CHANGES IN SECURITIES
Not applicable.
Item 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
Item 5. OTHER INFORMATION
Not applicable.
10
<PAGE>
PART II - OTHER INFORMATION (CONTINUED)
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
11.1 Computation of per share earnings
27 Financial Data Schedule
(b) Reports on Form 8-K:
1. Form 8-K, dated September 7, 1999, reporting on
Item 5, the execution of an Agreement and Plan of
Reorganization (the "Agreement") among the Registrant,
WTT Acquisition Corp. (a wholly owned subsidiary of
the Registrant), Boonton Electronics Corp. and certain
Boonton shareholders.
2. Form 8-K, dated October 27, 1999, reporting on Item 5,
the termination of the above referenced Agreement.
11
<PAGE>
SIGNATURES
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.
WIRELESS TELECOM GROUP, INC.
-------------------------------
(Registrant)
Date: November 8, 1999 /S/Edward Garcia
-------------------------------
Edward Garcia
Chairman and Chief Executive Officer
Date: November 8, 1999 /S/Demir Richard Eden
-------------------------------
Demir Richard Eden
Acting Chief Financial Officer
12
<PAGE>
Exhibit 11.1
WIRELESS TELECOM GROUP, INC.
COMPUTATION OF PER SHARE EARNINGS
(UNAUDITED)
<TABLE>
<CAPTION>
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
---------------------- ----------------------
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
Income from continuing operations $ 668,596 $ 107,208 $1,846,967 $1,005,502
Income (Loss) from discontinued operations
and gain on sale of test equipment business (16,934) (242,397) 3,578,737 (313,827)
--------- ---------- ---------- ----------
Net Income (Loss) $ 651,662 $ (135,189) $5,425,704 $ 691,675
========= ========== ========== ==========
BASIC EARNINGS (LOSS):
Weighted average number of common shares
Outstanding 17,173,988 17,557,298 17,416,122 17,533,180
========== ========== ========== ==========
Basic earnings (loss) per common share:
Continuing operations $0.04 $ 0.00 $0.11 $ 0.06
Discontinued operations 0.00 (0.01) 0.20 (0.02)
---------- ---------- ---------- ----------
$0.04 $(0.01) $0.31 $ 0.04
========== ========== ========== ==========
DILUTED EARNINGS (LOSS):
Weighted average number of common shares
Outstanding 17,173,988 17,557,298 17,416,122 17,533,180
Stock Options 84,401 - 67,385 41,344
---------- ---------- ---------- ----------
Weighted average number of common shares
outstanding, as adjusted 17,258,389 17,557,298 17,483,507 17,574,524
========== ========== ========== ==========
Diluted earnings (loss) per common share:
Continuing operations $0.04 $ 0.00 $0.11 $ 0.06
Discontinued operations 0.00 (0.01) 0.20 (0.02)
---------- ---------- ---------- ----------
$0.04 $(0.01) $ 0.31 $ 0.04
========== ========== ========== ==========
</TABLE>
13
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The schedule contains summary financial information extracted from the
consolidated financial statements for the quarter ended September 30,
1999 and is qualified in its entirety by reference to such statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 23,623,799
<SECURITIES> 0
<RECEIVABLES> 1,014,357
<ALLOWANCES> 78,837
<INVENTORY> 1,383,240
<CURRENT-ASSETS> 26,051,339
<PP&E> 1,773,899
<DEPRECIATION> 1,130,112
<TOTAL-ASSETS> 30,654,766
<CURRENT-LIABILITIES> 2,878,295
<BONDS> 467,718
<COMMON> 177,023
0
0
<OTHER-SE> 27,131,730
<TOTAL-LIABILITY-AND-EQUITY> 30,654,766
<SALES> 5,103,298
<TOTAL-REVENUES> 5,103,298
<CGS> 1,479,787
<TOTAL-COSTS> 2,349,967
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 410,914
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 2,753,331
<INCOME-TAX> 906,364
<INCOME-CONTINUING> 1,846,967
<DISCONTINUED> 3,578,737
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,425,704
<EPS-BASIC> 0.31
<EPS-DILUTED> 0.31
</TABLE>
