<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, 1998
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)
DELAWARE 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 April 20, 1998, 4,998,351 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............................. 7
Results of Operations....................................... 7
Liquidity and Capital Resources............................. 9
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,
1998 1997
----------------- -----------
(Unaudited)
CURRENT ASSETS
Cash and cash equivalents $ 1,486,327 $ 951,945
Investments 517,853 1,023,431
Trade accounts receivable, less allowance
of $10,000 for doubtful accounts 2,656,074 3,334,479
Royalties receivable 212,898 415,648
Inventories 3,508,093 2,798,903
Deferred income tax benefit 84,000 81,000
Prepaids and other current assets 472,698 188,824
---------- ----------
Total Current Assets 8,937,943 8,794,230
---------- ----------
PROPERTY AND EQUIPMENT, net of accumulated
depreciation and amortization 1,277,575 1,291,899
---------- ----------
LONG-TERM INVESTMENTS 626,300 617,427
---------- ----------
OTHER ASSETS 481,788 441,070
---------- ----------
TOTAL ASSETS $ 11,323,606 $ 11,144,626
=========== ===========
See accompanying notes to the consolidated financial statements
1
<PAGE>
LASER TECHNOLOGY, INC.
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
MARCH 31, SEPTEMBER 30,
1998 1997
------------- -------------
(Unaudited)
<S> <C> <C>
CURRENT LIABILITIES
Accounts payable $ 595,850 $ 660,736
Accrued expenses 223,397 329,529
---------- -----------
Total Current Liabilities 819,247 990,265
---------- -----------
STOCKHOLDERS' EQUITY
Preferred stock, $.01 par value--shares authorized
2,000,000; shares issued--none -- --
Common stock, $.01 par value-shares
authorized 25,000,000; shares issued 5,208,201 52,082 52,082
Additional paid-in capital 9,622,780 9,622,780
Treasury stock at cost, 209,850 shares (141,459) (141,459)
Retained earnings 970,956 620,958
---------- -----------
Total Stockholders' Equity 10,504,359 10,154,361
---------- -----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $11,323,606 $11,144,626
=========== ===========
</TABLE>
See accompanying notes to the consolidated financial statements
2
<PAGE>
LASER TECHNOLOGY, INC.
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE AND SIX MONTHS ENDED
MARCH 31, 1998 AND 1997
(Unaudited)
<TABLE>
<CAPTION>
SIX MONTHS ENDED THREE MONTHS ENDED
MARCH 31, MARCH 31,
----------------------------- -------------------------------
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
NET SALES $ 4,817,764 $ 4,338,274 $ 2,405,413 $ 2,334,918
LESS COST OF GOODS SOLD 2,164,538 1,930,618 1,095,715 1,057,205
----------- ----------- ----------- -----------
Gross Profit 2,653,226 2,407,656 1,309,698 1,277,713
ROYALTY AND LICENSING INCOME 550,706 262,057 203,760 81,397
----------- ------------- ------------ -----------
TOTAL OPERATING INCOME 3,203,932 2,669,713 1,513,458 1,359,110
OPERATING EXPENSES 2,757,254 2,410,859 1,379,583 1,230,334
----------- ----------- ----------- -----------
INCOME FROM OPERATIONS 446,678 258,854 133,875 128,776
INTEREST INCOME, NET 88,320 81,953 45,048 43,407
----------- ----------- ----------- -----------
INCOME BEFORE TAXES ON INCOME 534,998 340,807 178,923 172,183
TAXES ON INCOME 185,000 121,000 64,000 62,000
----------- ----------- ----------- -----------
NET INCOME $ 349,998 $ 219,807 $ 114,923 $ 110,183
=========== =========== =========== ===========
BASIC EARNINGS PER COMMON SHARE $ .07 $ .04 $ .02 $ .02
============ ============ =========== ============
WEIGHTED AVERAGE SHARES
OUTSTANDING 4,998,351 4,999,433 4,998,351 4,999,433
============ =========== =========== ===========
</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, 1998
AND MARCH 31, 1997
(Unaudited)
<TABLE>
<CAPTION>
MARCH 31, MARCH 31,
1998 1997
--------------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 349,998 $ 219,807
Adjustments to reconcile net income to cash
provided by operating activities:
Depreciation and amortization 155,387 93,113
Deferred income taxes (3,000) 9,000
Changes in operating assets and liabilities:
Trade accounts receivable 678,405 795,929
Inventories (709,190) (35,499)
Other assets (81,123) (125,165)
Accounts payable and accrued expenses (171,018) (173,598)
----------- -----------
Net cash provided by operating activities 219,459 783,587
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
(Increase) decrease in investments 496,705 (594,767)
Patent costs paid (51,616) (30,178)
Purchases of property and equipment (130,166) (206,580)
----------- -----------
Net cash provided by (used in) investing activities 314,923 (831,525)
----------- -----------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 534,382 (47,938)
CASH AND CASH EQUIVALENTS AT BEGINNING
OF PERIOD 951,945 2,247,239
----------- -----------
CASH AND CASH EQUIVALENTS AT END
OF PERIOD $ 1,486,327 $ 2,199,301
=========== ===========
</TABLE>
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, 1998 is unaudited)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. 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 statements of income for the three and
six month periods ended March 31, 1998 and 1997, (b) the consolidated financial
position at March 31, 1998 and September 30, 1997, and (c) the consolidated
statement of cash flows for the six month periods ended March 31, 1998 and 1997.
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, 1997. The results of operations for interim periods are not
necessarily indicative of the results to be expected for the full year.
B. EARNINGS PER SHARE
Through December 31, 1997, the Company followed the provisions of
Accounting Principles Board Opinion ("APB") 15, "Earnings Per Share." Effective
for the quarter ended March 31, 1998, the Company implemented Statement of
Financial Accounting Standards ("SFAS") No. 128, "Earnings Per Share." SFAS No.
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 stockholders 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 that were
outstanding for the period, similar to fully diluted earnings per share. For the
three and six month periods ended March 31, 1998 and 1997, 995,333, 2,025,166,
3,008,250 and 2,949,250 dilutive common equivalent shares of common stock were
not included in the computation of diluted earnings per share because their
effect was anti-dilutive. All prior period earnings per share data has been
restated to reflect the requirements of SFAS No. 128.
C. RECENT ACCOUNTING PRONOUNCEMENTS
The Financial Accounting Standards Board ("FASB") has issued SFAS No. 130,
"Reporting Comprehensive Income" and SFAS No. 131, "Disclosures about Segments
of an Enterprise and Related Information." SFAS No. 130 establishes standards
for reporting and display of comprehensive income, its components and
accumulated balances. Comprehensive income is defined to include all changes in
equity except those resulting from investments by owners and distributions to
owners. Among other disclosures, SFAS No. 130 requires that all items that are
required to be recognized under current accounting standards as components of
comprehensive income be reported in a financial statement that displays with the
same prominence as other financial statements. SFAS No. 131 supersedes SFAS No.
14 "Financial Reporting for Segments of a Business Enterprise." SFAS No. 131
establishes standards on the way that public companies report financial
information about operating segments in annual financial statements and requires
reporting of selected information about operating segments in interim financial
statements issued to the public. It also establishes standards for disclosure
regarding products and services, geographic areas and major customers. SFAS No.
131 defines operating segments as components of a company about which separate
financial information is available that is evaluated regularly by the chief
operating decision maker in deciding how to allocate resources and in assessing
performance.
SFAS 130 and 131 are effective for financial statements for periods
beginning after December 15, 1997 and requires comparative information for
earlier years to be restated. Because of the recent issuance of these standards,
management has
5
<PAGE>
been unable to fully evaluate the impact, if any, the standards may have on
future financial statement disclosures. Results of operations and financial
position, however, will be unaffected by implementation of the standards.
In February 1998, the FASB issued SFAS No. 132, "Employers' Disclosures
about Pensions and Other Postretirement Benefits" which standardizes the
disclosure requirements for pensions and other Postretirement benefits and
requires additional information on changes in the benefit obligations and fair
values of plan assets that will facilitate financial analysis. SFAS No. 132 is
effective for years beginning after December 15, 1997 and requires comparative
information for earlier years to be restated, unless such information is not
readily available. Management believes the adoption of this statement will have
no material impact on the Company's financial statements.
6
<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, 1998 AND
MARCH 31, 1997
For the three and six month fiscal periods ended March 31, 1998 and 1997,
the following table provides the percentage relationship to net sales of
principal items in the Company's Consolidated Statements of Income. 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,
-------------- ---------------
1998 1997 1998 1997
---- ---- ---- ----
Net sales 100% 100% 100% 100%
Cost of goods sold 45 44 46 45
--- --- --- ---
Gross profit 55 56 54 55
Royalty and licensing income 11 6 8 3
--- --- --- ---
Total operating income 66 62 62 58
Operating expenses 57 56 57 52
--- --- --- ---
Income from operations 9 6 5 6
Interest income, net 2 2 2 2
--- --- --- ---
Income before taxes on income 11 8 7 8
Taxes on income 4 3 3 3
--- --- --- ---
Net income 7% 5% 4% 5%
=== === === ===
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,
---------------------------- ------------------------
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
TRAFFIC SAFETY SYSTEMS $3,007,265 $ 2,025,408 $1,590,124 $1,060,350
Percentage of revenues 62% 47% 66% 46%
SURVEY AND MAPPING SYSTEMS 1,441,684 1,905,474 717,904 964,643
Percentage of revenues 30% 44% 30% 41%
OTHER 368,815 407,392 97,385 309,925
Percentage of revenues 8% 9% 4% 13%
Total Revenues $4,817,764 $ 4,338,274 $2,405,413 $2,334,918
========== =========== =========== ==========
</TABLE>
7
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONTINUED)
Net sales for the second quarter ended March 31, 1998 ("1998") increased 3%
to $2,405,413 from $2,334,918 realized in the second quarter ended March 31,
1997 ("1997"). Revenues for the first six months of 1998 were $4,817,764
compared to $4,338,274 for the first six months of 1997 representing an 11%
increase in revenues from the previous year.
Overall Traffic Safety sales during the 1998 second quarter increased 50%
to $1,590,124 from $1,060,350 realized in the prior year period and increased
48% during the first half of 1998 to $3,007,265 compared to $2,025,408 realized
in the first half of 1997, the result of improved distribution of the Company's
Traffic Safety products domestically and internationally, the Company's
expanding Traffic Safety product line and the introduction of the Company's
second generation laser speed detection device, the UltraLyte. Sales of the
Company's Survey and Mapping products were $717,904 and $1,441,684 for the
second quarter and first six months of 1998 compared to $964,643 and $1,905,474
realized in the second quarter and first six months of 1997 representing
approximately a 25% decrease for both periods primarily attributable to
production delays related to new product introductions and production backlog.
At March 31, 1998, backorders for the Company's products were approximately
$600,000, predominately due to backorders related to the Company's newly
introduced MapStar and due to a surge in orders for the Company's Impulse line
of Survey and Mapping products received late in the 1998 second quarter.
Delivery of these backorders is scheduled to occur early in the 1998 third
quarter.
Sales of the Company's less significant revenue producing product lines
including its ship docking and industrial laser sensors were $97,385 and
$368,815 for the second quarter and first half of 1998, compared to $309,925 and
$407,392 realized in comparable 1997 periods due to slower sales of the
Company's ship docking sensors during the 1998 second quarter. Management
expects that sales of its ship docking systems will continue to fluctuate
between financial periods due to the specialized application of its laser
systems within the maritime industry.
International sales comprised 41% and 43% of net sales for the second
quarter and first six months of 1998 as compared to 34% and 40% for the
corresponding 1997 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.
Management believes that sales of the Company's Traffic Safety products to
Pacific Rim areas have not been affected by the current Asian economic crisis
but that international sales of the Company's Survey and Mapping products have
slowed due to the current Asian economic situation. However, the expansion of
the Company's Survey and Mapping distribution channels in other foreign markets
has helped to offset this decline. Management intends to continue to evaluate
the market potential of the Company's products during this economic downturn,
but believes that near term sales opportunities in this area will continue,
although there is no assurance of this.
Gross profit as a percentage of net sales was 54% and 55% for the second
quarter and first six months of 1998 and 55% and 56% for the second quarter and
first half of 1997. The change in the Company's gross margins is primarily due
to quarterly fluctuations in product mix.
Royalty and licensing income rose 150% to $203,760 from $81,397 in the 1997
second quarter. On a year to year basis, royalties have increased 110% to
$550,706 in 1998 from $262,097 in 1997. In January 1998, the Company entered
into a licensing agreement with Blount, Inc. and Bushnell Corporation whereby
the Company and Bushnell agreed to license to Blount, Inc. certain patents
related to the Yardage Pro laser range finder. Under the terms of the agreement,
the Company and Bushnell will receive running licensing fees on net sales of
Blount products. Management believes that Royalties received from its current
licensing agreements will continue to have a positive impact on the Company's
results of operations.
Total operating expenses increased approximately 12% to $1,379,583 for the
1998 second quarter from $1,230,334 for the comparable 1997 period, and 14% to
$2,757,254 for the first six months of 1998 from $2,410,859 the first six months
of 1997. As a percentage of net sales, total operating expenses rose from 52%
for the second quarter of 1997 to 57% for the second quarter of 1998, and from
56% for the first six months of 1997 to 57% for the first six months of 1998.
Increased compensation expense related to staff additions comprised the majority
of the increase in total operating expenses in the 1998 periods as compared to
1997.
8
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONCLUDED)
Income from operations was $133,875 for the 1998 second quarter compared to
$128,776 for the second quarter of 1997. Increased sales and royalty income
offset the increase in total operating expenses in the 1998 second quarter.
Including income earned on investments, the Company realized income before taxes
on income of $178,923 in the 1998 second quarter compared to 1997 pre-tax income
of $172,183. After taxes on income, the Company realized net income of $114,923
in 1998 and $110,183 in 1997, or $.02 basic earnings per share for both periods.
When combined with net income from the first quarter of 1998, the Company
realized net income of $349,998 for the first six months of 1998, or $.07 basic
earnings per share, as compared with net income of $219,807, or $.04 basic
earnings per share, for the first six months of 1997.
LIQUIDITY AND CAPITAL RESOURCES
At March 31, 1998, the Company had working capital of $8,118,696. 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, 1998, cash provided by operating
activities was $219,459. Net income of $349,998 and increased cash from reduced
trade accounts receivable of $678,405 financed an increase in inventories of
$709,190, primarily related to new product introductions, and $171,018 was used
to reduce accounts payable and accrued expenses. For the period, the Company
realized net cash provided by investing activities of $496,705 due to investment
maturities of which $181,782 was used for the purchase of property and equipment
and patent related costs. For the six month period ended March 31, 1998, cash
and cash equivalents increased $534,382.
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 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.
YEAR 2000 COMPLIANT
During the year ended September 30, 1997, the Company converted its
computer systems to be year 2000 compliant (e.g., to recognize the difference
between '99 and '00 as one year instead of negative 99 years). The Company
believes that all of its computer systems are currently in compliance and does
not anticipate any additional material expenditures related to the year 2000
conversion process.
RECENT ACCOUNTING PRONOUNCEMENTS
See Note 1.c. to the Notes to the Consolidated Financial Statements for a
discussion on recent accounting pronouncements.
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 February 24, 1998, pursuant to proper notice to stockholders, the
Company held its Annual Meeting of Stockholders at the Company's corporate
offices. 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 4,504,609 65,890
Jeremy G. Dunne 4,531,409 39,090
F. James Lynch 4,528,909 41,590
William R. Carr 4,531,709 38,790
Dan N. Grothe 4,512,409 58,090
Richard B. Sayford 4,530,709 39,790
H. DeWorth Williams 4,510,109 60,390
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 a proposal to amend the Laser Technology
Equity Incentive Plan. For each fiscal year from and including the fiscal
year beginning October 1, 1997 through the fiscal year beginning October 1,
2003, a number of shares of stock equal to two percent of the total number
of issued and outstanding shares of stock as of September 30 of the fiscal
year immediately preceding such year shall become available for issuance
under the Plan. In addition, any unused portion of the shares of stock
remaining from those reserved as of September 30, 1997 and any unused
portion of the two percent limit for any fiscal year shall be added to the
aggregate number of shares of stock available for issuance in each fiscal
year under the plan. In no event, except as subject to adjustment pursuant
to certain sections of the plan, shall more than 1,000,000 shares of stock
be cumulatively available for issuance pursuant to the exercise of
Incentive Options. The proposal was approved by a vote of 2,747,210 for,
400,000 against and 24,726 abstaining.
(b) Stockholders also ratified the appointment of BDO Seidman, LLP as
independent auditors for the Company's fiscal year ending September 30,
1998 by a vote of 4,527,458 for, 27,290 against, and 16,751 abstaining.
ITEM 5. OTHER INFORMATION
This Item is not applicable to the Company.
10
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-START> OCT-01-1997
<PERIOD-END> MAR-31-1998
<CASH> 1,486,327
<SECURITIES> 517,853
<RECEIVABLES> 2,666,074
<ALLOWANCES> 10,000
<INVENTORY> 3,508,093
<CURRENT-ASSETS> 8,937,943
<PP&E> 2,376,538
<DEPRECIATION> 1,098,963
<TOTAL-ASSETS> 11,323,606
<CURRENT-LIABILITIES> 819,247
<BONDS> 0
0
0
<COMMON> 5,208,201
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 11,323,606
<SALES> 4,817,764
<TOTAL-REVENUES> 4,817,764
<CGS> 2,164,538
<TOTAL-COSTS> 3,633,917
<OTHER-EXPENSES> 1,287,875
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 534,998
<INCOME-TAX> 185,000
<INCOME-CONTINUING> 349,998
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 349,998
<EPS-PRIMARY> .07
<EPS-DILUTED> 0
</TABLE>
