<PAGE>
================================================================================
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1997
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission File No. 1-11642
LASER TECHNOLOGY, INC.
(Exact name of registrant as specified in its charter)
IDAHO 84-0970494
- ------------------------------ ------------------------------
(State or other jurisdiction of (I.R.S. employer identification number)
incorporation or organization)
7070 SOUTH TUCSON WAY, ENGLEWOOD, COLORADO 80112
-------------------------------------------------
(Address of principal executive offices)
(303) 649-1000
--------------
(Registrant's telephone number including area code)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 of 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 .
--- ---
At May 12, 1997, 4,999,433 shares of common stock of the Registrant were
outstanding.
================================================================================
<PAGE>
INDEX
-----
PART I: FINANCIAL INFORMATION
PAGE
----
Item 1. FINANCIAL STATEMENTS...................................... 1
Consolidated Balance Sheets............................. 1
Consolidated Statements of Income....................... 3
Consolidated Statements of Cash Flows................... 4
Notes to Consolidated Financial Statements.............. 5
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS....................... 6
Results of Operations................................... 6
Liquidity and Capital Resources......................... 8
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
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
LASER TECHNOLOGY, INC.
CONSOLIDATED BALANCE SHEETS
ASSETS
MARCH 31, SEPTEMBER 30,
1997 1996
------------- -------------
(Unaudited)
CURRENT ASSETS
Cash and cash equivalents $ 2,199,301 $ 2,247,239
Investments 1,200,000 600,000
Trade accounts receivable, less allowance
of $10,000 for doubtful accounts 1,968,396 2,764,325
Inventories 2,613,134 2,577,635
Deferred income tax benefit 43,000 52,000
Prepaids and other current assets 553,244 428,079
----------- -----------
Total Current Assets 8,577,075 8,669,278
----------- -----------
PROPERTY AND EQUIPMENT, net of accumulated
depreciation and amortization 1,232,854 1,113,274
----------- -----------
LONG-TERM INVESTMENTS 606,040 611,273
----------- -----------
OTHER ASSETS 293,699 269,634
----------- -----------
TOTAL ASSETS $10,709,668 $10,663,459
=========== ===========
See accompanying notes to the consolidated financial statements
1
<PAGE>
LASER TECHNOLOGY, INC.
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' EQUITY
MARCH 31, SEPTEMBER 30,
1997 1996
------------- -------------
(Unaudited)
CURRENT LIABILITIES
Accounts payable $ 681,102 $ 723,178
Accrued expenses 115,904 247,426
----------- -----------
Total Current Liabilities 797,006 970,604
----------- -----------
STOCKHOLDERS' EQUITY
Common stock, $.01 par value-shares
authorized 25,000,000; shares issued 5,088,201 50,882 50,882
Additional paid-in capital 9,623,980 9,623,980
Treasury stock at cost, 88,768 shares (17,535) (17,535)
Retained earnings 255,335 35,528
----------- -----------
Total Stockholders' Equity 9,912,662 9,692,855
----------- -----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $10,709,668 $10,663,459
=========== ===========
See accompanying notes to the consolidated financial statements
2
<PAGE>
LASER TECHNOLOGY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED
MARCH 31, 1997 AND 1996
(Unaudited)
<TABLE>
<CAPTION>
SIX MONTHS ENDED THREE MONTHS ENDED
MARCH 31, MARCH 31,
----------------------- -----------------------
1997 1996 1997 1996
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
NET SALES $4,338,274 $4,750,848 $2,334,918 $2,512,475
LESS COST OF GOODS SOLD 1,930,618 2,041,375 1,057,205 1,007,142
---------- ---------- ---------- ----------
Gross Profit 2,407,656 2,709,473 1,277,713 1,505,333
ROYALTY AND LICENSING INCOME 262,057 112,075 81,397 84,171
---------- ---------- ---------- ----------
TOTAL OPERATING INCOME 2,669,713 2,821,548 1,359,110 1,589,504
OPERATING EXPENSES 2,410,859 1,956,023 1,230,334 1,064,118
---------- ---------- ---------- ----------
INCOME FROM OPERATIONS 258,854 865,525 128,776 525,386
INTEREST INCOME, NET 81,953 118,622 43,407 66,764
---------- ---------- ---------- ----------
INCOME BEFORE TAXES ON INCOME 340,807 984,147 172,183 592,150
TAXES ON INCOME 121,000 380,000 62,000 231,000
---------- ---------- ---------- ----------
NET INCOME $ 219,807 $ 604,147 $ 110,183 $ 361,150
========== ========== ========== ==========
INCOME PER COMMON SHARE $.04 $.12 $.02 $.07
========== ========== ========== ==========
WEIGHTED AVERAGE SHARES
OUTSTANDING 4,999,433 5,221,400 4,999,433 5,179,800
========== ========== ========== ==========
</TABLE>
See accompanying notes to the consolidated financial statements
3
<PAGE>
LASER TECHNOLOGY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
FOR THE SIX MONTHS ENDED MARCH 31, 1997
AND MARCH 31, 1996
(Unaudited)
MARCH 31, MARCH 31,
1997 1996
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 219,807 $ 604,147
Adjustments to reconcile net income to cash
provided by operating activities:
Depreciation and amortization 93,113 93,373
Deferred income taxes 9,000 (7,000)
Changes in operating assets and liabilities:
Trade accounts receivable 795,929 (394,683)
Inventories (35,499) 129,183
Other assets (125,165) (58,495)
Accounts payable and accrued expenses (173,598) 429,703
---------- ----------
Net cash provided by operating activities 783,587 796,228
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES
(Increase) decrease in investments (594,767) 1,177,820
Patent costs paid (30,178) (43,493)
Purchases of property and equipment (206,580) (246,095)
---------- ----------
Net cash provided by (used in) investing activities (831,525) 888,232
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES
Exercise of stock options - 26,688
---------- ----------
Net cash provided by financing activities - 26,688
---------- ----------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (47,938) 1,711,148
CASH AND CASH EQUIVALENTS AT BEGINNING
OF PERIOD 2,247,239 1,593,521
---------- ----------
CASH AND CASH EQUIVALENTS AT END
OF PERIOD $2,199,301 $3,304,669
========== ==========
See accompanying notes to the consolidated financial statements
4
<PAGE>
LASER TECHNOLOGY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Information for the six months ended March 31, 1997 is unaudited)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The consolidated financial statements presented are those of Laser
Technology, Inc. and its wholly-owned subsidiaries; Laser Communications, Inc.,
Laser Technology, U.S.V.I., and International Measurement and Control Company.
Laser Technology, Inc. is engaged in the business of developing, manufacturing
and marketing laser based measurement instruments.
In the opinion of management, the unaudited financial statements reflect
all adjustments, consisting only of normal recurring accruals necessary for a
fair presentation of (a) the consolidated results of operations for the three
and six month periods ended March 31, 1997 and 1996, (b) the consolidated
financial position at March 31, 1997 and September 30, 1996, and (c) the
consolidated statement of cash flows for the six month periods ended March 31,
1997 and 1996. The accounting policies followed by the Company are set forth in
the Notes to the Consolidated Financial Statements of the Company for the fiscal
year ended September 30, 1996. The results of operations for interim periods
are not necessarily indicative of the results to be expected for the full year.
NOTE 2 - NEW ACCOUNTING PRONOUNCEMENTS
On March 3, 1997, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 128 "Earnings Per Share" (SFAS
No. 128). This pronouncement provides a different method of calculating
earnings per share than previously provided under Accounting Principles Board
Opinion (APB) No. 15, "Earnings Per Share. SFAS 128 provides for the
calculation of "Basic" and "Diluted" earnings per share. Basic earnings per
share includes no dilution and is computed by dividing income available to
common shareholders by the weighted average number of common shares outstanding
for the period. Diluted earnings per share reflects the potential dilution of
securities that could share in the earnings of an entity, similar to fully
diluted earnings per share. The Company will adopt SFAS No. 128 in fiscal 1998
and its implementation is not expected to have a material effect on the
consolidated financial statements.
NOTE 3 - SUBSEQUENT EVENTS
In April 1997, 120,000 shares of common stock were issued to three
employees, at $3.00 per share, under the terms of unqualified options previously
granted in April 1992. Concurrent with the exercise of these options such
shares were purchased by the Company at fair market value and recorded as
Treasury Stock.
5
<PAGE>
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDED MARCH 31, 1997 AND
MARCH 31, 1996
For the three and six month fiscal periods ended March 31, 1997 and 1996,
the following table provides the percentage relationship to net sales of
principal items in the Company's Statement of Operations. It should be noted
that percentages discussed throughout this analysis are stated on an approximate
basis.
SIX MONTHS ENDED THREE MONTHS ENDED
MARCH 31, MARCH 31,
--------------- -------------
1997 1996 1997 1996
---- ---- ---- ----
Net sales 100% 100% 100% 100%
Cost of goods sold 44 43 45 40
---- ---- ---- ----
Gross profit 56 57 55 60
Royalty and licensing income 6 2 3 3
---- ---- ---- ----
Total operating income 62 59 58 63
Operating expenses 56 41 52 42
---- ---- ---- ----
Income from operations 6 18 6 21
Interest income, net 2 3 2 3
---- ---- ---- ----
Income before taxes on income 8 21 8 24
Taxes on income 3 8 3 9
---- ---- ---- ----
Net income 5% 13% 5% 15%
==== ==== ==== ====
REVENUES
The following sales analysis provides information as to the percentage of
net sales of the Company's primary product lines. Revenues realized from sales
of the Company's less significant revenue producing product lines are classified
as "Other" for presentation purposes.
<TABLE>
<CAPTION>
SIX MONTHS ENDED THREE MONTHS ENDED
MARCH 31, MARCH 31,
----------------------------- -----------------------------
1997 1996 1997 1996
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
TRAFFIC SAFETY SYSTEMS $2,025,408 $2,357,401 $1,060,350 $ 901,781
Percentage of revenues 47% 49% 46% 36%
SURVEY AND MAPPING SYSTEMS 1,905,474 1,557,797 964,643 828,539
Percentage of revenues 44% 33% 41% 33%
DAS100 SHIP DOCKING AID SYSTEMS 252,596 763,930 243,750 710,435
Percentage of revenues 6% 16% 10% 28%
OTHER 154,796 71,720 66,175 71,720
Percentage of revenues 3% 2% 3% 3%
Total Revenues $4,338,274 $4,750,848 $2,334,918 $2,512,475
========== ========== ========== ==========
</TABLE>
6
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONTINUED)
Total revenues for the second quarter ended March 31, 1997 ("1997")
decreased 7% to $2,334,918 from $2,512,475 realized in the second quarter ended
March 31, 1996 ("1996"). Revenues for the first six months of 1997 were
$4,338,274 compared to $4,750,848 for the first six months of 1996 representing
a 9% decrease in revenues from the previous year. The decrease in sales is
primarily due to lower sales of the Company's DAS100 ship docking aid sensors.
DAS100 sales were $763,930 during the first half of fiscal 1996 compared to
$252,596 realized during the first six months of 1997. During the 1996 second
quarter the Company realized significant sales of it's DAS100 ship docking aid
systems pursuant to the completion of its contract with Lockheed Martin.
Management expects that sales of its DAS100 will greatly fluctuate between
financial periods due to the specialized application of its DAS100 systems
within the maritime industry.
Despite lower DAS100 sales, overall Traffic Safety sales during the 1997
second quarter rose to $1,060,350 from $901,781 representing an 18% increase
from the previous year due to improved distribution of the Company's Traffic
Safety products. Sales of the Company's Survey and Mapping products also rose
16% to $964,643 in the 1997 second quarter from $828,539 for the comparable 1996
period resulting from increased volume sales of the Company's second generation
Impulse surveying product line. Traffic Safety sales for the first half of 1997
were $2,025,408 compared to $2,357,401 in 1996 due to slower international sales
of the Company's hand-held Marksman during the 1997 first quarter. Survey and
Mapping sales rose 22% to $1,905,474 for the first half of 1997 compared to
$1,557,797 in 1996 due to increased sales of the Company's Impulse and Criterion
hand-held survey lasers.
International sales comprised 34% and 40% of net sales for the second
quarter and first six months of 1997 as compared to 33% and 39% for the
corresponding 1996 periods. Historically, the Company experiences quarterly
fluctuations in foreign sales due to the placement of typically large orders for
the Company's Traffic Safety products. Foreign sales of the Company's products
are expected to continue to comprise a significant portion of its revenues.
Gross profit as a percentage of net sales was 55% and 56% for the second
quarter and first six months of 1997, compared to 60% and 57% for the second
quarter and first six months of 1996. Lower gross profit margins realized
during the 1997 second quarter as compared to the previous year were due to
sales of the Company's DAS100 ship docking aid sensors realized during the 1996
second quarter at higher margins. DAS100 sales generally provide higher gross
profit margins as compared to the Company's Traffic Safety and Survey and
Mapping product lines.
Royalties related to the Company's agreement with Bushnell on sales of the
Yardage Pro laser range-finder were $81,397 in the 1997 second quarter,
increasing total royalty income earned during the 1997 first half to $262,057
compared to $112,075 realized during the first six months of 1996. Management
believes that Royalties received from Bushnell will continue to have a positive
impact on the Company's results of operations.
Total operating expenses increased approximately 16% to $1,230,334 for the
second quarter of 1997 from $1,064,118 for the comparable 1996 period, and
approximately 23% to $2,410,859 for the first six months of 1997 compared to
$1,956,023 for the first six months of 1996. As a percentage of net sales,
total operating expenses rose from 42% for the second quarter of 1996 to 52% for
the second quarter of 1997, and from 41% for the first six months of 1996 to 56%
for the first six months of 1997. The costs associated with building a direct
sales force centered around the Company's domestic Traffic Safety business,
including increased compensation expense, and higher advertising and travel
expenses related to accelerated marketing efforts over the previous year,
comprised the majority of the increase in total operating expenses in the 1997
periods as compared to 1996. Management expects that operating expenses will
continue to increase to support the Company's continued growth.
Income from operations was $128,776 for the 1997 second quarter compared to
$525,386 for the second quarter of 1996. Royalties received from Bushnell
partially offset the decrease in sales and increased operating expenses in the
1997 period. Combined with income earned on investments, the Company realized
income before taxes on income of $172,183 for the 1997 second quarter compared
to income before taxes on income of $592,150 for the comparable 1996 period.
After taxes on income, the Company realized net income of $110,183, or $.02 per
share for the 1997 second quarter, compared to $361,150, or $.07 per share, for
the 1996 second quarter. When combined with net income from the first quarter
of 1997, the Company realized net income of $219,807 for the first six months of
1997, or $.04 per share, as compared with net income of $604,147, or $.12 per
share, for the first six months of 1996.
7
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONTINUED)
LIQUIDITY AND CAPITAL RESOURCES
At March 31, 1997, the Company had working capital of $7,780,069. The
Company's present working capital is expected to adequately meet the Company's
needs for at least the next twelve months.
For the six month period ended March 31, 1997, cash provided by operating
activities of $783,587 was primarily attributable to net income of $219,807 for
the period combined with cash of $795,929 from reduced trade accounts
receivable. Cash decreases included $209,097 which was used to decrease
accounts payable and accrued expenses and expand inventory to meet anticipated
sales demand. Cash used in investing activities of $831,525 primarily related
to the reinvestment of unused cash reserves of $594,767 into short-term
investments and $206,580 which was used for leasehold improvements and capital
expenditures related to expansion of the Company's facilities. Cash and cash
equivalents decreased $47,938 for the six months ended March 31, 1997.
For the six month period ended March 31, 1996, cash provided by operating
activities was $796,228. Net income of $604,147 combined with an increase of
$429,703 in accounts payable and accrued expenses was used to finance an
increase in accounts receivable and other assets of $453,178. Cash provided by
investing activities of $888,232 was primarily attributable to proceeds from the
sale of marketable securities of which $246,095 was used for the purchase of
property and equipment. Cash flows of $26,688, provided by financing
activities, resulted from proceeds received from the exercise of employee
options pursuant to the Company's Equity Incentive Plan. Cash and cash
equivalents increased $1,711,148 for the 1996 period.
Pursuant to the Company's rights for additional expansion space under its
current lease agreements, the Company has elected to further expand its
facilities to provide additional office and production space. In December 1996,
the Company added office space to house its wholly-owned subsidiary, Laser
Communications, Inc., adjacent to the Company's machine shop facility. In
February 1997, the Company further expanded its office and production
facilities. The Company believes that its current and planned facilities are
adequate to meet the Company's needs throughout the foreseeable future, and,
that the capital invested to expand its facilities will not have a material
impact on the Company's current working capital or results of operations.
OTHER
Management believes that the Company's business centered around its Traffic
Safety product line is not seasonal in nature. However, due to fiscal budgeting
practices of foreign and domestic law enforcement agencies, sales of the
Company's Traffic Safety products may vary between financial periods.
Historically, the Company has realized a small decline in sales of its Survey
and Mapping products in areas affected by colder weather in the winter months.
Management believes that the expansion of the Company's Survey and Mapping
product line and penetration into new markets has mitigated seasonal effects on
sales of this business segment. Additionally, due to the sophisticated nature
of the Company's DAS100 ship docking aid systems, Management expects sales of
these systems to greatly fluctuate between financial periods.
NEW ACCOUNTING PRONOUNCEMENTS
On March 3, 1997, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 128 "Earnings Per Share" (SFAS
No. 128). This pronouncement provides a different method of calculating
earnings per share than previously provided under Accounting Principles Board
Opinion (APB) No. 15, "Earnings Per Share. SFAS 128 provides for the
calculation of "Basic" and "Diluted" earnings per share. Basic earnings per
share includes no dilution and is computed by dividing income available to
common shareholders by the weighted average number of common shares outstanding
for the period. Diluted earnings per share reflects the potential dilution of
securities that could share in the earnings of an entity, similar to fully
diluted earnings per share. The Company will adopt SFAS No. 128 in fiscal 1998
and its implementation is not expected to have a material effect on the
consolidated financial statements.
8
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONCLUDED)
RISK FACTORS AND CAUTIONARY STATEMENTS
Forward-looking statements in this report are made pursuant to the "safe
harbor" provisions of the Private Securities Litigation Reform Act of 1995. The
Company wishes to advise readers that actual results may differ substantially
from such forward-looking statements. Forward-looking statements involve risks
and uncertainties including but not limited to, continued acceptance of the
Company's products in the marketplace, competitive factors, potential changes in
the budgets of federal and state agencies, compliance with current and possible
future FDA or environmental regulations, and other risks detailed in the
Company's periodic report filings with the Securities and Exchange Commission.
9
<PAGE>
PART II.
ITEM 1. LEGAL PROCEEDINGS
This Item is not applicable to the Company.
ITEM 2. CHANGES IN SECURITIES
This Item is not applicable to the Company.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
This Item is not applicable to the Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On Tuesday, February 18, 1997, pursuant to proper notice to
stockholders, the Company held its Annual Meeting of Stockholders at the Denver
Mariott Southeast, Denver, Colorado. At the Meeting, the following incumbent
directors were elected by the indicated vote to serve as directors until the
next Annual Meeting of Stockholders or until their successors are elected and
qualified.
NOMINEE FOR WITHHELD
------- --------- --------
David Williams 4,468,994 12,302
Jeremy G. Dunne 4,469,124 12,172
F. James Lynch 4,466,674 14,622
William R. Carr 4,466,574 14,722
Dan N. Grothe 4,467,174 14,122
Richard B. Sayford 4,468,974 12,322
H. DeWorth Williams 4,466,744 14,552
In addition to the election of directors, the following business was
brought before and voted upon at the Annual Meeting of Stockholders:
(a) Stockholders approved the proposed plan to merge the Company with
and into Laser Technology, Inc., a newly formed Delaware corporation,
for the sole purpose of changing the corporate domicile of the Company
from the State of Idaho to Delaware. Under the plan, Laser Technology-
Delaware will be the surviving corporate entity and the Company's Idaho
corporate entity shall cease to exist. Stockholders of Laser Technology-
Delaware will be entitled to the same stockholder rights and preferences
as they currently have. Stockholders of the Company's common stock at
the effective time of the merger will be entitled to receive one share
of Laser Technology-Delaware common stock in exchange for each share of
the Company's common stock owned. The proposal to effect the merger to
change the corporate domicile to the State of Delaware was approved by a
vote of 2,630,839 for, 59,821 against, 8,525 abstaining and 1,782,111
not voted. Stockholders not voting for approval of the proposed merger
are entitled to dissenters rights as provided by the laws of the State
of Idaho.
(b) Stockholders also ratified the appointment of BDO Seidman, LLP as
independent auditors for the Company's fiscal year ending September 30,
1997 by a vote of 4,461,546 for, 5,600 against, and 14,150 abstaining.
ITEM 5. OTHER INFORMATION
This Item is not applicable to the Company.
10
<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.
LASER TECHNOLOGY, INC.
----------------------
7070 SOUTH TUCSON WAY
ENGLEWOOD, COLORADO 80112
Date: May 12, 1997 By /s/ Pamela Sevy
-------------- ----------------------
Pamela Sevy
Chief Financial Officer
Date: May 12, 1997 By /s/ David Williams
-------------- -------------------------------------
David Williams
President and Chief Executive Officer
12
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-START> OCT-01-1996
<PERIOD-END> MAR-31-1997
<CASH> 2,199,301
<SECURITIES> 1,200,000
<RECEIVABLES> 1,978,396
<ALLOWANCES> 10,000
<INVENTORY> 2,613,134
<CURRENT-ASSETS> 8,577,075
<PP&E> 2,055,722
<DEPRECIATION> 822,868
<TOTAL-ASSETS> 10,709,668
<CURRENT-LIABILITIES> 797,006
<BONDS> 0
0
0
<COMMON> 5,088,201
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 10,709,668
<SALES> 4,338,274
<TOTAL-REVENUES> 4,338,274
<CGS> 1,930,618
<TOTAL-COSTS> 3,174,162
<OTHER-EXPENSES> 763,303
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 340,807
<INCOME-TAX> 121,000
<INCOME-CONTINUING> 219,807
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 219,807
<EPS-PRIMARY> .04
<EPS-DILUTED> 0
</TABLE>
