SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
(Mark one)
(X) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1998 OR
( ) TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE EXCHANGE ACT FOR THE
TRANSITION PERIOD FROM TO
--------- ---------
Commission file number 0-439
AMERICAN LOCKER GROUP INCORPORATED
- --------------------------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
DELAWARE 16-0338330
(State of other (IRS Employer Identification Number)
jurisdiction of incorporation
or organization)
608 ALLEN STREET, JAMESTOWN, NY 14701
(Address of principal executive offices)
(716) 664-9600
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year, if
changed since last report)
Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act during the past 12 months (or
for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements.
Yes / X / No / /
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS:
Check whether the registrant filed all documents and reports required to
be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution
of securities under a plan confirmed by a court.
Yes / / No / / Not Applicable
APPLICABLE ONLY TO CORPORATE ISSUERS:
State the number of shares outstanding of each of the issuer's class of common
stock equity as of the latest practicable date: October 29, 1998
Common Stock $1.00 par value - 2,422,772
Transitional Small Business Disclosure (check one) Yes / / No / X /
1
<PAGE>
Part I - Financial Information
Item 1 - Financial Statements
American Locker Group Incorporated and Subsidiaries
Consolidated Balance Sheets
<TABLE>
<CAPTION>
September 30, December 31,
1998 1997
---- ----
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 3,514,026 $ 1,154,045
Accounts and notes receivable, less allowance for
doubtful accounts (1998 $65,584;
1997 $423,733) 6,331,008 4,519,710
Inventories 3,214,334 3,636,528
Prepaid expenses 220,420 89,656
Prepaid federal, state and foreign income taxes 0 32,515
Deferred income taxes 576,861 576,861
----------- -----------
Total current assets 13,856,649 10,009,315
Property, plant and equipment:
Land 500 500
Buildings 389,179 511,649
Machinery and equipment 8,272,802 8,004,338
----------- -----------
8,662,481 8,516,487
Less allowances for depreciation and
amortization 7,573,729 7,267,199
----------- -----------
1,088,752 1,249,288
Deferred income taxes 145,122 5,122
----------- -----------
Total assets $15,090,523 $11,263,725
=========== ===========
</TABLE>
2
<PAGE>
American Locker Group Incorporated and Subsidiaries
Consolidated Balance Sheets
<TABLE>
<CAPTION>
September 30, December 31,
1998 1997
---- ----
<S> <C> <C>
Liabilities and stockholders' equity
Current liabilities:
Demand note payable $ 0 $ 850,000
Accounts payable:
Trade 1,279,265 737,467
Related party 237,323 434,565
----------- -----------
1,516,588 1,172,032
Commissions, salaries, wages and taxes thereon 174,501 330,956
Other accrued expenses 1,635,087 435,232
Current portion of long-term debt 663,000 663,000
----------- -----------
Total current liabilities 3,989,176 3,451,220
Long-term obligations:
Long-term debt 1,933,750 2,431,000
Pension benefits 660,021 322,521
Postretirement benefits 139,839 139,839
----------- -----------
2,733,610 2,893,360
Stockholders' equity:
Common stock, $1 par value:
Authorized shares --- 4,000,000
Issued and outstanding shares --- 2,422,772
in 1998 and 2,405,780 in 1997 2,422,772 2,405,780
Other capital 84,617 0
Retained earnings 6,062,511 2,662,445
Foreign currency translation adjustment (202,163) (149,080)
----------- -----------
Total stockholders' equity 8,367,737 4,919,145
----------- -----------
Total liabilities and stockholders' equity $15,090,523 $11,263,725
=========== ===========
See accompanying notes.
</TABLE>
3
<PAGE>
American Locker Group Incorporated and Subsidiaries
Consolidated Statements of Income
<TABLE>
<CAPTION>
Three Months Ended September 30,
1998 1997
---- ----
<S> <C> <C>
Net sales $15,422,935 $ 6,906,402
Cost of products sold 11,317,491 4,862,030
----------- -----------
4,105,444 2,044,372
Selling, administrative and general expenses 2,113,731 1,303,113
----------- -----------
1,991,713 741,259
Interest income 24,667 16,856
Other income--net 104,600 26,210
Interest expense (62,016) (42,367)
----------- -----------
Income before income taxes 2,058,964 741,958
Income taxes 825,457 318,071
----------- -----------
Net Income $ 1,233,507 $ 423,887
=========== ===========
Earnings per share of common stock:
Basic $ 0.51 $ 0.15
==== ====
Diluted 0.48 0.14
==== ====
Dividends per share of common stock: $ 0.00 $ 0.00
==== ====
See accompanying notes.
</TABLE>
4
<PAGE>
American Locker Group Incorporated and Subsidiaries
Consolidated Statements of Income
<TABLE>
<CAPTION>
Nine Months Ended September 30,
1998 1997
---- ----
<S> <C> <C>
Net sales $36,817,468 $19,912,975
Cost of products sold 26,019,296 13,916,937
----------- -----------
10,798,172 5,996,038
Selling, administrative and general expenses 5,284,536 3,923,655
----------- -----------
5,513,636 2,072,383
Interest income 60,798 32,202
Other income--net 236,483 100,607
Interest expense (192,739) (103,154)
----------- -----------
Income before income taxes 5,618,178 2,102,038
Income taxes 2,208,367 900,372
----------- -----------
Net Income $ 3,409,811 $ 1,201,666
=========== ===========
Earnings per share of common stock:
Basic $ 1.41 $ 0.39
====== ======
Diluted 1.34 0.38
====== ======
Dividends per share of common stock: $ 0.00 $ 0.00
====== ======
See accompanying notes.
</TABLE>
5
<PAGE>
American Locker Group Incorporated and Subsidiaries
Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
Nine Months Ended September 30,
1998 1997
---- ----
<S> <C> <C>
Operating activities
Net $ 3,409,811 $ 1,201,666
income
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 518,785 446,740
Loss (gain) on disposition of property,
plant and equipment 0 490
Deferred income taxes (credits) (140,000) 0
Pension benefits 337,500 0
Change in assets and liabilities:
Accounts and notes receivable (1,811,298) (558,025)
Inventories 422,194 (396,901)
Prepaid expenses (130,764) 52,859
Accounts payable and accrued expenses 1,387,956 795,032
Prepaid income taxes 32,515 0
----------- -----------
Net cash provided by operating activities 4,026,699 1,541,861
Investing activities
Purchase of property, plant and equipment (367,896) (154,033)
Proceeds from sale of property, plant and 0 3,913
equipment ----------- -----------
Net cash used in investing activities (367,896) (150,120)
Financing activities
Payment under long-term debt agreement (850,000) (405,250)
Additional long-term borrowing 0 2,365,000
Net repayment under line of credit (497,250) (1,125,000)
Common stock purchased and retired (98) (2,509,845)
Stock options exercised 101,609 0
----------- -----------
New cash used in financing activities (1,245,739) (1,675,095)
Effect of exchange rate changes on cash (53,083) (6,369)
----------- -----------
Net increase (decrease) in cash 2,359,981 (289,723)
Cash and cash equivalents at beginning of period 1,154,045 1,229,222
----------- -----------
Cash and cash equivalents at end of period $ 3,514,026 $ 939,499
=========== ===========
Supplemental cash flow information:
Cash paid during the period for:
Interest $ 192,739 $ 103,154
=========== ===========
Income Taxes $ 2,068,604 $ 641,938
=========== ===========
See accompanying notes.
</TABLE>
6
<PAGE>
Notes to Consolidated Financial Statements
American Locker Group Incorporated and Subsidiaries
1. The accompanying unaudited consolidated condensed financial statements have
been prepared in accordance with instructions to Form 10-QSB and, in the
opinion of the Company, include all adjustments, consisting of normal
recurring ccruals, considered necessary for a fair presentation of such
condensed financial statements. The condensed financial statements do not
include all information and footnotes normally associated with statements of
results of operations, financial condition, and cash flows prepared in
conformity with generally accepted accounting principles.
2. Provision for income taxes is based upon the estimated annual effective tax
rate.
3. Net income per common share is computed by dividing net income by the
weighted average number of shares outstanding, plus, when dilutive, the
common stock equivalents which would arise from the exercise of stock
options, during the periods.
The Company instituted a four-for-one stock distribution whereby three new
shares were distributed on June 25, 1998 for every one share outstanding on
the June 4, 1998 record date. All share and per-share amounts in the
accompanying unaudited consolidated financial statements have been
retroactively adjusted to reflect this distribution as have the total shares
now outstanding and subject to option. After accounting for the stock
distribution, basic and diluted weighted average shares outstanding were
2,419,098 (3,080,639 in 1997) and 2,549,251 (3,170,696 in 1997) for the nine
month periods ended September 30, 1998, respectively.
4. Inventories are valued at the lower of cost or market. Cost is determined by
using the last-in, first-out method for substantially all of the inventories.
<TABLE>
<CAPTION>
SEPTEMBER 30, December 31,
1998 1997
---- ----
<S> <C> <C>
Raw materials $ 1,732,707 $ 1,041,732
Work-in-process 1,709,294 1,559,037
Finished goods 606,150 1,869,576
----------- -----------
$ 4,048,151 $ 4,470,345
Less allowance to
reduce carrying
value to LIFO
basis (833,817) (833,817)
----------- -----------
$ 3,214,334 $ 3,636,528
=========== ===========
</TABLE>
7
<PAGE>
Item 2. Management Discussion and Analysis of Financial Condition and Results
of Operations
American Locker Group Incorporated and Subsidiaries
LIQUIDITY AND SOURCES OF CAPITAL
The Company continues to have adequate resources and liquidity to maintain and
expand its operations. Working capital, or the excess of current assets over
current liabilities, at September 30, 1998 was $9,867,473, up $3,309,378 over
working capital of $6,558,095 at December 31, 1997. The increased working
capital resulted primarily from profitable operations during the first nine
months of 1998. The ratio of current assets to current liabilities was 3.5 to 1
at September 30, 1998, as compared to a ratio of 2.9 to 1 at December 31, 1997.
The Company's $3,000,000 line of credit is available to assist in satisfying
future working capital needs, if required.
The Company anticipates that its requirements for funds for operations and
capital expenditures will be provided principally from cash generated from
future operations.
FIRST NINE MONTHS 1998 VS FIRST NINE MONTHS 1997
Sales for the first nine months of 1998 of $36,817,468 were up $16,904,493 or
84.9% compared to sales of $19,912,975 during the same period in 1997. Plastic
locker sales to the United States Postal Service (USPS) accounted for
$16,207,670 of increased sales and totaled $28,063,445 compared to $11,855,775
during the first nine months of 1997. Cluster Box Unit (CBUs) sales were
$26,499,711 compared to $8,780,580 during the first nine months of 1997. Sales
of Outdoor Parcel Lockers (OPLs) were $1,563,734 compared to $3,075,195 in the
first nine months of 1997, a decline of $1,511,461 or 49.2%. This decline was
anticipated and previously disclosed as all three model CBUs have parcel
compartments built in thereby reducing the demand for separate parcel lockers.
The growth in sales of CBUs, $17,719,131 or 201.8% over last year's first nine
months, is directly related to the implementation of USPS procurement policy
that limits purchase of NDCBUs (the steel predecessor to plastic or aluminum
CBUs) in relation to the new CBUs and the Company's ability to maintain its
dominant market share position. As previously reported, the USPS has extended
the Company's national contract through April 14, 1999. Terms of the contract
extension were finalized on April 14, 1998 and established prices and minimum
quantities for the period April 15, 1998 through October 15, 1998.
Under this contract extension, the Company extended lower prices on CBUs in
return for guaranteed minimum shipments of 15,000 CBUs. However, the contract
extension stipulated that the minimum quantity, 15,000 CBUs, be shipped by
August 1, 1998. The Company increased production rates and inventories on its
CBU product line in order to meet the contract extension stipulation. As of June
30, 1998, the Company had shipped approximately 6,800 CBUs against the 15,000
unit minimum, leaving a balance of approximately 8,200 CBUs to ship against the
minimum. The Company shipped all remaining 8,200 units during the third quarter
thereby completing the 15,000 unit stipulation. The Company also received orders
for an additional 5,700 CBUs, above and beyond the 15,000 minimum, which were
shipped by September 30, 1998. CBU shipments by quarter were 6,600, 8,600 and
13,700 for the first, second and third quarters of 1998, respectively. Third
quarter CBU shipments were positively affected by the Company's ability to
deliver the 15,000 unit minimum, plus the additional 5,700 units within the USPS
Just-In-Time (JIT) delivery requirement of 14 days.
8
<PAGE>
Contract terms for the period October 15, 1998 through April 14, 1999 have been
finalized with the USPS. The Company lowered its CBU prices approximately 1/3 of
a percent (.33%) and the contracted minimum quantity for the period is one unit.
The contract minimum is solely a legal minimum and is not indicative of USPS
requirements. For Postal Fiscal Year 1999, the Company plans to allocate its
resources and invest in CBU inventory to be in a position to continue to make
timely shipments to satisfy possible USPS requirements on a level commensurate
with past order history. Total demand is influenced by a number of factors over
which the Company has no control, including but not limited to: Postal budgets,
policies, and financial performance, domestic new housing starts, and the
weather as these units are installed outdoors. As previously reported, the CBU
is a modernization of the NDCBU and is now favored by USPS procurement policy.
Also, the centralized delivery program, of which the CBU is an integral part, is
a delivery cost reduction program for the USPS.
The Company believes that its CBU pricing is competitive and that its CBU
product line continues to represent the best value when all factors, including
quality of design and construction, long term durability and service are
considered.
All other sales, metal and electronic were $8,754,023 for the first nine months
of 1998 compared to $8,057,200 for the first nine months of 1997. This increase
of $696,823 or 8.6% relates to a general increase in demand across all markets
served by the Company.
Cost of products sold as a percentage of sales was 70.7% during the first nine
months of 1998 compared to 69.9% in the first nine months of 1997. Decreased
gross margins are directly related to product mix and CBU price concessions.
Selling, general and administrative costs for the first nine months of 1998
increased $1,360,881 over the same period in 1997 due to increased pension,
compensation, freight, interest and legal expenses. Two extraordinary items
accounted for approximately $678,000 of the $1,360,881 increase in S,G, & A
expense. On July 1, Roy J. Glosser, President and Chief Operating Officer was
granted and exercised stock appreciation rights (SAR's) which resulted in
$328,000 of additional compensation expense during the third quarter. The
Company also provided the full valuation of $350,000 for the supplemental
executive retirement program (SERP) for Harold J. Ruttenberg, Chairman and Chief
Executive Officer. Selling, general and administrative expense as a percent of
sales was 14.4% down from 19.7% during the first nine months of 1997. The
decrease as a percentage of sales relates to increased sales volume.
Other income - net of $236,483 in the first nine months of 1998 was up $135,876
from the same period in 1997.
Interest expense in the first nine months of 1998 increased $89,585 from the
same period in 1997 as a result of higher outstanding debt.
THIRD QUARTER 1998 VS THIRD QUARTER 1997
Third quarter sales were $15,422,935 up $8,516,533 or 123.3% from the same
period in 1997. Plastic locker sales of $12,990,782 were up 196.4% or $8,608,476
over 1997's third quarter sales of $4,382,306. Sales of other products, metal
and electronic lockers, were $2,432,153 during the third quarter of 1998, 3.6%
or $91,943 lower than 1997's third quarter.
Cost of products sold as a percentage of sales was 73.4% during the third
quarter of 1998 compared to 70.4% during the third quarter of 1997.
9
<PAGE>
Selling, administrative and general expenses as a percent of net sales was 13.7%
during the third quarter of 1998 compared to 18.9% in the third quarter of 1997.
Other income - net of $104,600 in the third quarter of 1998 was up from $26,210
in the third quarter 1997.
Interest expense in the third quarter of $62,016 increased from $42,367 in the
third quarter of 1997.
YEAR 2000 PROJECT UPDATE
The Year 2000 (Y2K) issue relates to the fact that many computers, computer
programs, and embedded microchips support only two digits to specify a year in
the date field. Therefore, if not corrected, these systems may fail or create
erroneous results in dealing with matters which refer to dates after December
31, 1999. The Company is aware of the issues and has actively pursued corrective
action since late 1996. Following is a project status update as of September 30,
1998.
A. Assessment
Assessment of the Company's Information Technology (IT) systems was
completed in 1997. Based on results of the assessment, the Company
determined that complete replacement of its IT system was the best course
of action.
Assessment of the Company's non-IT systems with embedded microchips
(security systems, telephones, etc.) began in the first quarter of 1998 and
is 75% complete based on labor hours expended. Assessment is scheduled for
completion by December 31, 1998.
B. Renovation
Renovation by replacement of the Company's IT system is proceeding on
schedule. New IT software that is certified Y2K compliant has been
purchased, installed, and modeled using actual Company data. The new IT
system runs on a new Novell network of personal computers that is also
certified Y2K compliant. Total project expenditures through September 3,
1998 were $120,000 for hardware, software, and implementation consulting
fees. This represents over 50% of the total projected project cost.
To date, no non-IT systems have been identified that require renovation.
C. Validation
Validation and final testing of the new IT system is scheduled to begin
with full-scale Company financial data starting December 1, 1998 and
continue through the first quarter of 1999.
D. Implementation
Final implementation of the new IT system is scheduled for the first
quarter 1999, depending on validation results. However, our current IT
system will run parallel until the new system is completely validated.
10
<PAGE>
E. Third Party Assessment
The Company surveyed its entire vendor base during the third quarter of
1998. Final results will be compiled during the fourth quarter 1998.
However, the Company has verified that its major vendors are working
towards Y2K compliance and that reasonable contingency plans are in place
to allow the Company's production of its products to continue. Also, the
Company as normal policy, maintains adequate inventory of all but the most
expensive components (those supplied by vendors noted above) to safeguard
against short term interruptions. No single customer's failure to address
the Y2K issue, other than the United States Postal Service (USPS), would
have a material effect on the Company.
RISKS
The United States Postal Service (USPS) is the only customer that independently
could have a material effect on the operations and financial condition of the
Company. However, through information available to the public on the USPS
internet home page the Company has verified that the Y2K issue is a high
priority project for the USPS and therefore risk of interruption in business
relations with the Company should be reduced. The Company believes that full
implementation of the new IT system and completion of its Y2K project as
scheduled should reduce the possibility of significant interruptions of normal
operations.
The forward looking statements contained in the Year 2000 Project Update should
be read in conjunction with the Company's disclosures under the heading "Safe
Harbor Statement under the Private Securities Litigation Reform Act of 1995."
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
Forward-looking statements in this report, including without limitation,
statements relating to the Company's plans, strategies, objectives,
expectations, intentions and adequacy of resources, are made pursuant to the
Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995.
Investors are cautioned that such forward-looking statements involve risks and
uncertainties including without limitation the following: (i) the Company's
plans, strategies, objectives, expectations, and intentions are subject to
change at any time at the discretion of the Company, (ii) the Company's plans
and results of operations will be affected by the Company's ability to manage
its growth and inventory, and (iii) other risks and uncertainties indicated from
time to time in the Company's filings with the Securities and Exchange
Commission.
Part II
Item 1. Legal Proceedings
In September 1998, the Company was named as an additional defendant in several
cases pending in state court in Massachusetts. The plaintiffs in each such case
assert that a former division of the Company manufactured and furnished to
various shipyards components containing asbestos during the period from 1948 to
1972 and that injuries resulted from exposure to such products. The assets of
this division were sold by the Company in 1973. Based upon investigations
conducted by the Company to date, the Company has discovered no evidence that
the former division manufactured or supplied any products
11
<PAGE>
containing asbestos. Defense of these cases has been assumed by the Company's
insurance carrier, subject to a customary reservation of rights.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 27.1 Financial Data Schedule dated September 30, 1998
Exhibit 27.2 Financial Data Schedule dated September 30, 1997
(b) Reports on Form 8-K
On August 15, 1998, the Company filed a Report on Form 8-K announcing
the death of Harold J. Ruttenberg, Chairman, Chief Executive Office
and Treasurer.
On September 3, 1998, the Company filed a Report on Form 8-K
announcing the appointment by the Board of Directors of Edward F.
Ruttenberg as Chairman and Chief Executive Officer, Roy J. Glosser
as Treasurer in addition to President and Chief perating Officer and
Wayne L. Nelson as Principal Accounting Officer.
12
<PAGE>
S I G N A T U R E
In accordance with the requirements of the Exchange Act, the registrant has
duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
AMERICAN LOCKER GROUP INCORPORATED
(Registrant)
/s/ Edward F. Ruttenberg
------------------------------------------
Edward F. Ruttenberg
Chairman and Chief Executive Officer
Date: OCTOBER 29, 1998
13
<PAGE>
EXHIBIT INDEX
Prior Filing
or Sequential
EXHIBIT NO. EXHIBIT INDEX Page NO. HEREIN
----------- ------------- ---------------
27.1 Financial Data Schedule dated 15
September 30, 1998
27.2 Financial Data Schedule dated 16
September 30, 1997
14
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
Exhibit 27.1
American Locker Group Incorporated
Financial Data Schedule
September 30, 1998
This schedule contains summary financial information extracted from SEC Form
10-QSB and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<CIK> 0000008855
<NAME> AMERICAN LOCKER GROUP INCORPORATED
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<EXCHANGE-RATE> 1.0000
<CASH> 3,514,026
<SECURITIES> 0
<RECEIVABLES> 6,331,008
<ALLOWANCES> 65,584
<INVENTORY> 3,214,334
<CURRENT-ASSETS> 13,856,649
<PP&E> 8,662,481
<DEPRECIATION> 7,573,729
<TOTAL-ASSETS> 15,090,523
<CURRENT-LIABILITIES> 3,989,176
<BONDS> 1,933,750
0
0
<COMMON> 2,422,772
<OTHER-SE> 5,944,965
<TOTAL-LIABILITY-AND-EQUITY> 15,090,523
<SALES> 36,817,468
<TOTAL-REVENUES> 37,114,749
<CGS> 26,019,296
<TOTAL-COSTS> 26,019,296
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 9,000
<INTEREST-EXPENSE> 192,739
<INCOME-PRETAX> 5,618,178
<INCOME-TAX> 2,208,367
<INCOME-CONTINUING> 3,409,811
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,409,811
<EPS-PRIMARY> 1.41
<EPS-DILUTED> 1.34
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
Exhibit 27.2
American Locker Group Incorporated
Financial Data Schedule
September 30, 1997 (Revised)
This schedule contains summary financial information extracted from SEC Form
10-QSB and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<CIK> 0000008855
<NAME> AMERICAN LOCKER GROUP INCORPORATED
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<EXCHANGE-RATE> 1.0000
<CASH> 939,499
<SECURITIES> 0
<RECEIVABLES> 3,921,302
<ALLOWANCES> 346,063
<INVENTORY> 3,736,569
<CURRENT-ASSETS> 9,290,510
<PP&E> 8,196,412
<DEPRECIATION> 7,151,210
<TOTAL-ASSETS> 10,335,712
<CURRENT-LIABILITIES> 3,246,463
<BONDS> 0
0
0
<COMMON> 2,407,020
<OTHER-SE> 1,757,535
<TOTAL-LIABILITY-AND-EQUITY> 10,335,712
<SALES> 19,912,975
<TOTAL-REVENUES> 20,045,784
<CGS> 13,916,937
<TOTAL-COSTS> 13,916,937
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 9,000
<INTEREST-EXPENSE> 103,154
<INCOME-PRETAX> 2,102,038
<INCOME-TAX> 900,372
<INCOME-CONTINUING> 1,201,666
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,201,666
<EPS-PRIMARY> .39
<EPS-DILUTED> .38
</TABLE>
