<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[ 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 1-13260
SILVERADO FOODS, INC.
(Exact name of registrant as specified in its charter)
OKLAHOMA 73-1369218
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6846 SOUTH CANTON, SUITE 110, TULSA, OKLAHOMA 74136
(Address of principal executive offices)
(918) 496-2400
(Registrants telephone number, including area code)
NOT APPLICABLE
(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 field such reports), and (2) has been subject to such filing
requirements of the past 90 days.
Yes [ X ] NO [ ]
Indicate the number of shares outstanding of each of the registrants classes of
common stock, as of the latest practicable date.
Class Outstanding at August 12, 1996
----- ------------------------------
Common Stock, $.01 Par Value 6,191,663
<PAGE>
PART I
FINANCIAL
INFORMATION
<PAGE>
SILVERADO FOODS, INC. AND SUBSIDIARIES
--------------------------------------
CONSOLIDATED BALANCE SHEETS
---------------------------
<TABLE>
<CAPTION>
June 30, December 31,
1996 1996
------------ ------------
(Unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash $ 143,141 $ 128,401
Accounts receivable, net of allowance 3,840,537 3,173,138
Inventories, net (Note 2) 5,922,051 5,005,431
Prepaid expenses and other 568,734 750,077
Deferred tax assets 16,663 16,663
------------ ------------
Total current assets $ 10,491,126 $ 9,073,710
------------ ------------
NOTE RECEIVABLE (NOTE 4) 1,361,034 -
PROPERTY, PLANT AND EQUIPMENT, net 6,754,192 2,716,635
GOODWILL AND OTHER INTANGIBLES, net 11,275,698 10,846,661
------------ ------------
Total Assets $ 29,882,050 $ 22,637,006
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
Current maturities of long-term debt $ 5,307,675 $ 1,449,716
Trade accounts payable 7,577,959 5,916,024
Accrued liabilities 1,437,077 1,534,760
Other liabilities 63,288 113,538
------------ ------------
Total current liabilities 14,385,999 9,014,038
------------ ------------
LONG-TERM DEBT, less current maturities 12,079,831 8,293,992
------------ ------------
DEFERRED TAX LIABILITIES 16,663 16,663
------------ ------------
OTHER 43,570 94,025
------------ ------------
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY
Common stock, $.01 par value, 20,000,000 62,528 59,831
shares authorized
Treasury Stock (64,652) (64,652)
Warrants 46,549 77,408
Additional paid-in-capital 16,118,871 15,459,850
Deficit (12,807,309) (10,314,149)
------------ ------------
Total shareholders' equity 3,355,987 5,218,288
------------ ------------
Total liabilities and
shareholders' equity $ 29,882,050 $ 22,637,006
============ ============
</TABLE>
See notes to unaudited consolidated financial statements.
<PAGE>
SILVERADO FOODS, INC. AND SUBSIDIARIES
--------------------------------------
CONSOLIDATED STATEMENTS OF OPERATIONS
-------------------------------------
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
---------------------------- ----------------------------
1996 1995 1996 1995
------------- ------------- ------------ --------------
<S> <C> <C> <C> <C>
NET SALES $ 11,624,044 $ 9,996,578 $ 21,738,045 $ 20,055,206
COST OF SALES 7,594,046 6,327,671 14,215,295 12,916,316
------------ ------------ ------------ --------------
Gross Profit 4,029,998 3,668,907 7,522,750 7,138,890
------------ ------------ ------------ --------------
OPERATING EXPENSES:
General and administrative 1,850,955 1,530,444 3,716,907 3,031,929
Selling and marketing 2,511,636 2,005,254 4,693,278 4,191,802
Depreciation 67,703 63,390 151,839 112,095
Amortization of goodwill and other intangibles 342,204 220,069 647,030 407,543
------------ ------------ ------------ --------------
4,772,498 3,819,157 9,209,054 7,743,369
------------ ------------ ------------ --------------
OPERATING LOSS (742,500) (150,250) (1,686,304) (604,479)
OTHER INCOME (EXPENSE):
Interest (325,064) (195,971) (631,540) (327,626)
Other, net (16,354) 6,487 (44,066) 13,905
------------ ------------ ------------ --------------
(341,418) (189,484) (675,606) (313,721)
------------ ------------ ------------ --------------
LOSS BEFORE INCOME TAXES (1,083,918) (339,734) (2,361,910) (918,200)
PROVISION FOR INCOME TAXES - - - -
------------ ------------ ------------ --------------
NET LOSS (1,083,918) (339,734) (2,361,910) (918,200)
Accretion of common stock subject to price
guarantee or put option - - (131,250) -
------------ ------------ ------------ --------------
LOSS APPLICABLE TO COMMON SHAREHOLDERS $ (1,083,918) $ (339,734) $ (2,493,160) $ (918,200)
============ ============ ============ ==============
LOSS PER COMMON AND
COMMON EQUIVALENT SHARE (SEE NOTE 3) $ (0.17) $ (0.06) $ (0.40) $ (0.16)
============ ============ ============ ==============
See notes to unaudited consolidated financial statements.
</TABLE>
<PAGE>
SILVERADO FOODS, INC. AND SUBSIDIARIES
--------------------------------------
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
-----------------------------------------------
<TABLE>
<CAPTION>
COMMON STOCK TREASURY STOCK
-------------------- -------------------- ADDITIONAL
NUMBER NUMBER PAID-IN ACCUMULATED
OF SHARES AMOUNT OF SHARES AMOUNT WARRANTS CAPITAL DEFICIT TOTAL
--------- ------- --------- --------- --------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE, DECEMBER 31, 1995 5,983,009 $59,831 (26,995) $ (64,652) $ 77,408 $15,459,850 $(10,314,149) $5,218,288
Accretion of common stock
subject to price guarantee - - - - - - (131,250) (131,250)
Exercise of warrants 69,774 697 - - (30,859) 61,021 - 30,859
Issuance of stock in
connection with
acquisition 200,000 2,000 - - - 598,000 - 600,000
Net loss (unaudited) - - - - - - (2,361,910) (2,361,910)
--------- ------- -------- -------- -------- ----------- ------------ -----------
BALANCE, JUNE 30, 1996 6,252,783 $62,528 (26,995) $(64,652) $ 46,549 $16,118,871 $(12,807,309) $ 3,355,987
========= ======= ======== ======== ======== =========== ============ ===========
See noted to unaudited consolidated financial statements.
</TABLE>
<PAGE>
SILVERADO FOODS, INC. AND SUBSIDIARIES
--------------------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS
-------------------------------------
(Unaudited)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JUNE 30,
--------------
1996 1995
------------ -----------
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C>
Net Loss $(2,361,910) $ (918,200)
------------ -----------
Adjustments to reconcile net loss to cash used in operating activities--
Depreciation and amortization 937,401 640,524
Change in assets and liabilities, net of effect of acquisitions
Decrease in accounts receivable (523,399) 539,537
Decrease in inventory (823,474) 29,486
Increase in prepaid expenses and other 181,343 161,624
Decrease in accounts payable and accrued liabilities 1,571,970 (694,024)
Increase in other intangibles (100,705) (381,031)
----------- -----------
Total adjustments 1,243,136 296,116
----------- -----------
Cash used in operating activities (1,118,774) (622,084)
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (1,007,523) (307,390)
Payments for acquisitions (1,530,104) (1,169,790)
----------- -----------
Cash used in investing activities (2,537,627) (1,477,180)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of options and warrants 49,609 92,086
Borrowings from long-term debt 3,424,986 5,495,125
Principal payments on long-term debt 196,546 (3,723,297)
Payments on notes payable - (350,000)
Borrowings on note payable - 350,000
----------- ------------
Cash provided by financing activities 3,671,141 1,863,914
----------- ------------
NET INCREASE (DECREASE) IN CASH 14,740 (235,350)
CASH, beginning of period 128,401 558,210
----------- ------------
CASH, end of period $ 143,141 $ 322,860
=========== ============
NON-CASH FINANCING ACTIVITIES:
Issuance of stock for acquisition $ 600,000 $ -
Capitalized lease obligations 3,589,293 -
SUPPLEMENTAL CASH FLOWS INFORMATION:
Cash paid for-
Interest $ 440,754 $ 340,581
Income taxes - -
</TABLE>
See notes to unaudited consolidated financial statements.
<PAGE>
SILVERADO FOODS, INC. AND SUBSIDIARIES
--------------------------------------
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------------
1. GENERAL:
The accompanying consolidated financial statements have been prepared by
Silverado Foods, Inc. (the Company) without audit and should be read in
conjunction with the Company's consolidated financial statements and the notes
thereto included in the Companys annual report and Form 10-K as of December 31,
1995. The foregoing financial statements include only normal recurring accruals
and all adjustments which the Company considers necessary for a fair
presentation.
2. DETAILS TO CONSOLIDATED BALANCE SHEETS:
Inventories consist primarily of finished goods and packaging supplies which are
stated at the lower of cost (first-in, first-out basis) or market as follows:
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1996 1995
----------- ------------
<S> <C> <C>
Raw Materials $ 3,555,238 $ 2,010,577
Finished Goods 2,381,985 3,023,927
---------- ------------
5,937,223 5,034,504
Less: Allowance for excess and
obsolete inventory (15,172) (29,073)
---------- ----------
$5,922,051 $5,005,431
========== ==========
</TABLE>
3. LOSS PER SHARE:
For the three months ended June 30, 1996 and June 30, 1995, the loss per share
calculation includes the weighted average number of shares outstanding for the
period which were 6,225,788 and 5,762,122, respectively. For the six months
ended June 30, 1996 and June 30, 1995, the loss per share calculation includes
the weighted average number of shares outstanding for the period which were
6,199,487 and 5,744,497, respectively.
4. NOTE RECEIVABLE
In April 1996, the Company sold its Gift and Gourmet division in consideration
for a note receivable of $1,370,000 bearing interest at 11%. The terms of the
note receivable call for interest only for the first two years and principal and
interest over the remaining four years. No gain or loss was recognized from
this transaction.
5. SUBSEQUENT EVENT
On August 7, 1996, the Company acquired certain assets of The Bagel Place, Inc.
in Santa Ana, California for approximately $2.8 million which consisted of plant
equipment, inventory and the assumption of certain accounts payable. The
Company will close down
<PAGE>
its production facilities of The New York Bagel Factory in Carpenteria,
California and will consolidate all of its bagel and bagel-related production
into a leased facility in Santa Ana, California. The Company will file a form 8-
K reporting this acquisition.
<PAGE>
ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS
---------------------------------------------
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
------------------------------------------------
RESULTS OF OPERATIONS
The following discussion and analysis should be read in conjunction with
the Companys Consolidated Financial Statements and notes thereto. The following
table presents, as a percentage of net sales, certain selected financial data
for the Company for the periods indicated:
<TABLE>
<CAPTION>
THREE MONTHS SIX MONTHS
ENDED ENDED
JUNE 30, JUNE 30,
-------------- ---------------
1996 1995 1996 1995
------ ------ ------ ------
<S> <C> <C> <C> <C>
Net Sales 100% 100% 100% 100%
Gross Profit 35 37 35 36
General and Administrative 16 15 17 15
Selling and Marketing 22 20 22 21
Depreciation and Amortization of Intangibles 4 3 4 3
Operating Loss 6 2 8 3
Interest & Other 3 2 3 2
Net Loss 9 3 11 5
</TABLE>
PERIOD TO PERIOD COMPARISONS FOR THE THREE MONTHS ENDED JUNE 30, 1996 COMPARED
TO THE THREE MONTHS ENDED JUNE 30, 1995
Net Sales. Net sales increased 16% from $9,997,000 to $11,624,000. The
snack tray segment's net sales were $6,194,000 and accounted for 53% of total
company sales for the quarter ending June 30, 1996 compared to 46% or $4,578,000
for the same period of 1995, an increase of 35%. A portion of this increase was
due to six acquisitions in the snack tray segment occurring subsequent to June
30, 1995 which accounted for revenues of $919,000. The remaining sales increase
was in the snack tray segment which experienced a 17% internal growth rate in
the existing snack tray operations over the prior year. This increase is
attributed to enhancements to existing routes in the base snack tray business
and expansion into two cities, Los Angeles, California and Long Island, New
York. Sales in the specialty baked goods segment were flat at $5,430,000.
Gross Profit. Gross profit for the three months ended June 30, 1996 was
$4,030,000, a 9% increase over the comparable period in 1995 of $3,669,000.
Gross profit as a percentage of net sales decreased from 37% to 35%. Gross
profit in the snack tray segment was $2,617,000, an increase of 30% over the
prior year quarter but decreased as
<PAGE>
a percentage of net sales from 44% to 42%. The lower gross margin was a
result of higher product cost when compared to the same period of 1995. In the
specialty baked goods segment, gross profit decreased from $1,655,000 to
$1,413,000, a decrease of 15%. This decrease is primarily attributable to lower
sales volumes from the segment's vending product lines and lower sales volumes
from The New York Bagel Factory.
General and Administrative. General and administrative expenses increased
from $1,530,000 to $1,851,000, an increase of 22% and increased as a percentage
of net sales from 15% to 16%. The majority of this increase was from the snack
tray segment as general and administrative expenses increased due to the six
acquisitions occurring subsequent to March 31, 1995 and due to internal growth
in snack tray routes and expansion into Los Angeles, California and Long Island,
New York.
Selling and Marketing. Selling and marketing expenses increased from
$2,005,000 to $2,512,000, an increase of 25% over the comparable period of 1995
and increased slightly as a percentage of net sales from 20% to 22%. This
increase occurred as the snack tray segment expanded its snack tray route base
through internal growth and six new acquisitions since June 30, 1995.
Depreciation and Amortization of Intangibles. Depreciation and amortization
of goodwill and other intangibles increased from $283,000 to $410,000, an
increase of 45% over the same period of 1995. This increase was due to
depreciation and amortization for the additional snack tray segment operations
that were not included in the results of operations for the second quarter of
1995. Of the total, $68,000 and $63,000 represented depreciation for the three
months ended June 30, 1996 and 1995, respectively. In addition, there was an
additional $69,000 and $63,000 of depreciation included in cost of goods sold
for the three months ended June 30, 1996 and 1995, respectively.
Operating Loss. Operating losses increased from $150,000 to $743,000, an
increase of $593,000. This increase came from both the snack tray segment and
the specialty baked goods segment and was due to higher operating expenses from
both segments as discussed above as compared to the previous period of 1995.
Interest and Other. Interest and other expense increased from $189,000 to
$341,000, or 80%. The increase was due to increased debt outstanding due to
acquisitions and funding of working capital requirements.
Net Loss. The Companys net loss increased from $340,000 to $1,084,000, an
increase of $744,000 over the comparable period for 1995.
PERIOD TO PERIOD COMPARISONS FOR THE SIX MONTHS ENDED JUNE 30, 1996 COMPARED TO
THE SIX MONTHS ENDED JUNE 30, 1995
Net Sales. Net sales increased 8% from $20,055,000 to $21,738,000. Sales in
the snack tray segment increased by $3,380,000 or 39% while sales in the
specialty baked
<PAGE>
goods segment decreased by $1,727,000 or 15%. Acquisitions in the snack tray
segment subsequent to the second quarter of 1995 contributed $1,937,000 towards
that segments increase in sales. The decrease in the specialty baked goods
segment was due to lower sales from the segments vending product lines, the sale
of the gift and gourmet division that occurred in April 1996, and lower sales
from The New York Bagel Factory as compared to the same quarter of 1995.
Gross Profit. Gross profit increased from $7,139,000 to $7,523,000, an
increase of 5%. Gross profit as a percentage of net sales decreased from 36% to
35%. A portion of this increase in gross profit was due to acquisitions in the
snack tray segment ($737,000) and from internal growth in the base snack tray
operations through expanded routes in existing markets and entries into new
markets (Los Angeles, California and Long Island, New York). The decrease in
gross profit as a percentage of net sales was due to lower margin sales from
warehouse clubs and higher product costs in the snack tray operations.
General and Administrative. General and administrative expenses increased
from $3,032,000 to $3,717,000, an increase of 23% and increased as a percentage
of net sales from 16% to 17%. The increase was due to higher general and
administrative expenses from the snack tray segment due to acquisitions and
internal growth into new cities discussed above. The food sales segment's
general and administrative expenses decreased while corporate expenses increased
as certain functions were centralized.
Selling and Marketing. Selling and marketing expenses increased from
$4,192,000 to $4,693,000, a increase of 12% and remained flat as a percentage of
net sales at 21%. The increase in selling and marketing expenses was due to
expansion efforts in the snack tray segment as the segment experienced internal
growth of 17% by adding new accounts and additional routes.
Depreciation and Amortization of Intangibles. Amortization of goodwill and other
intangibles increased by $279,000, an increase of 54%. The majority of this
increase was in the snack tray segment where the Company made six acquisitions
subsequent to the second quarter of 1995. The remaining increase was in the base
food sales segment where the Company made one acquisition subsequent to June 30,
1995.
Operating Loss. Operating losses increased from $604,000 to $1,686,000, an
increase of $1,082,000. This increase was due to higher operating expenses in
general and administrative expenses, higher sales and marketing expenses and
higher depreciation and amortization expenses as discussed above.
Interest and Other. Interest and other expenses increased from $314,000 to
$676,000, an increase of $362,000. The increase was due to the higher interest
costs associated with the Companys debt used to finance acquisitions and working
capital needs.
Net Loss. The Companys net loss increased from $918,000 to $2,362,000, an
increase of $1,444,000.
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
Net cash used in operations was $1,119,000 for the six months ended June
30, 1996 compared to $622,000 for the six months ended June 30, 1995. Net cash
used in investing activities was $2,538,000 compared to $1,477,000 for the
comparable period as the Company acquired six additional snack tray operations
and the assets of The Marveloaf Corporation. Net cash generated from financing
activities during the first six months ended June 30, 1996 totaled $3,671,000
from net borrowings on long term debt.
The Companys revolving credit facility is a $5 million revolving credit
agreement with a bank, of which $5 million was drawn as of June 30, 1996.
Borrowings are based upon 80% of eligible accounts receivable and 50% of
eligible inventories. The term of this revolver is for a period of three years
(due April 1998) with interest at prime payable monthly and principal due at
maturity.
In addition, the Company has a $5 million acquisition line of credit from the
same bank with each funding request subject to review and approval by the
lender. At June 30, 1996, $4,808,000 was drawn on this line. The term of the
acquisition line is for a period of not greater than five years (due April 2000)
with interest at prime. Payments on this line of credit began in April 1996.
The Company is subject to various covenants associated with its revolving line
of credit and acquisition line of credit, such as limitations on payments of
dividends and on the sale of a substantial portion of assets and on future
indebtedness. Borrowings under these facilities are guaranteed as to repayment
of principal and interest by the Company's Chief Executive Officer and his
spouse.
During the first quarter of 1996, the Companys borrowings on its revolving
credit facility exceeded the borrowing base of eligible accounts receivable and
inventories and the Company obtained a waiver from the bank effective through
January 1, 1997. The Company is currently negotiating with this same bank to
amend the terms of this credit facility. Under the proposed terms of this
amended agreement, the revolving term facility would be increased to $7 million.
The term note agreement would remain at $5 million and principal payments would
be deferred until April 1, 1997.
In addition to the above, the Company is negotiating with investors to raise
approximately $3 million of new convertable debt financing and is negotiating
certain lease financing arrangements on equipment additions for the Tulsa plant
and the assets acquired from The Bagel Place, Inc. on August 7, 1996. Amounts
received from any new debt financing will be used to reduce a portion of
accounts payable. Funds received from new lease financing arrangements will be
used to repay debt incurred to fund these additions. If these financing
transactions do not occur, the Company's CEO has agreed to (1) fund any capital
requirement over and above the anticipated $3 million debt financing and (2)
fund any cashflows necessary to meet 1996 estimated expenditures.
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Not applicable
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
The Annual Meeting of shareholders of the Company (the "Annual
Meeting") was held on May 10, 1996, in Tulsa, Oklahoma. At the Annual
Meeting, the shareholders of the Company elected Lawrence D. Field,
Gerald E. Milton, James K. Tolbert, Joe D. Tippens, Milton D.
McKenzie, Sam L. Susser, and David A. Hentschel as directors of the
Company for one-year terms. The shareholders also considered and
approved the appointment of Arthur Andersen LLP as the independent
auditors of the Company for the fiscal year ending December 3l, 1996.
There were present at the Annual Meeting, in person or by proxy,
shareholders holding 4,231,862 shares of the common stock of the
Company, or 68.9% of the total stock outstanding and entitled to vote
at the Annual Meeting. The table below describes the results of voting
at the Annual Meeting:
<TABLE>
<CAPTION>
Votes
Against
or
1. Election of Directors: Votes For Withheld Abstentions Non-Votes
--------- -------- ----------- ----------
<S> <C> <C> <C> <C>
Lawrence D. Field 4,218,162 13,700 -0- -0-
Gerald E. Milton 4,218,162 13,700 -0- -0-
James K. Tolbert 4,218,162 13,700 -0- -0-
Joe D. Tippens 4,218,115 13,747 -0- -0-
Milton D McKenzie 4,218,162 13,700 -0- -0-
Sam L. Susser 4,218,162 13,700 -0- -0-
David A. Hentschel 4,218,162 13,700 -0- -0-
2. Ratification of Arthur 4,224,615 2,800 4,447 -0-
Andersen LLP as
independent auditors
of the Company for
fiscal 1996
</TABLE>
ITEM 5. OTHER INFORMATION
Not applicable
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
27.0 Financial Data Schedule
(b) Reports on Form 8-K
None
<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.
Silverado Foods, Inc.
---------------------
Registrant
By: /s/ DORVIN D. LIVELY
--------------------------
Dorvin D. Lively
Vice President, Chief Financial Officer
and Secretary (Duly Authorized
Officer and Principal
Accounting Officer)
Date: August 14, 1996
<PAGE>
INDEX TO EXHIBITS
The following documents are included as exhibits to this Form 10-Q.
Those exhibits below incorporated by reference herein are indicated as such by
the information supplied in the parenthetical thereafter. If no parenthetical
appears after an exhibit, such exhibit is filed herewith.
Sequentially
Numbered
Page
----
27.0 Financial Data Schedule
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 143,141
<SECURITIES> 0
<RECEIVABLES> 3,898,744
<ALLOWANCES> 58,207
<INVENTORY> 5,922,051
<CURRENT-ASSETS> 10,491,126
<PP&E> 7,691,924
<DEPRECIATION> (937,732)
<TOTAL-ASSETS> 29,882,050
<CURRENT-LIABILITIES> 14,385,999
<BONDS> 0
0
0
<COMMON> 62,528
<OTHER-SE> 3,293,459
<TOTAL-LIABILITY-AND-EQUITY> 29,882,050
<SALES> 11,624,044
<TOTAL-REVENUES> 11,624,044
<CGS> 7,594,046
<TOTAL-COSTS> 4,772,498
<OTHER-EXPENSES> 0
<LOSS-PROVISION> (742,500)
<INTEREST-EXPENSE> 341,418
<INCOME-PRETAX> (1,083,918)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,083,918)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,083,918)
<EPS-PRIMARY> (.17)
<EPS-DILUTED> (.17)
</TABLE>
