<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarterly Period Ended June 30, 1996 Commission File Number 0-21068
------------- -------
SIGHT RESOURCE CORPORATION
- --------------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Delaware 04-3181524
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
67 South Bedford Street
Burlington, MA 01803
- --------------------------------------------------------------------------------
(Address of principal executive offices)
617-229-1100
- --------------------------------------------------------------------------------
(Issuer's telephone number)
The name of Registrant was formerly NewVision Technology, Inc.
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since the
last report)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or
for such shorter period that the issuer was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days.
Yes X No
----- -----
APPLICABLE ONLY TO CORPORATE ISSUERS:
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:
On July 24,1996, 8,046,715 shares of common stock, par value $0.01 per share,
were outstanding.
TOTAL PAGES 14
EXHIBIT INDEX AT PAGE 12
<PAGE> 2
<TABLE>
SIGHT RESOURCE CORPORATION
INDEX
<CAPTION>
PART I. FINANCIAL INFORMATION PAGE
----
<S> <C>
Item 1 Financial Statements
Consolidated Balance Sheets as of June 30, 1996, and
December 31, 1995 3
Consolidated Statements of Operations for the Three and Six
Months Ended June 30, 1996 and 1995 4
Consolidated Statements of Cash Flows for the Six
Months Ended June 30, 1996 and 1995 5
Notes to Consolidated Financial Statements 6
Item 2 Management's Discussion and Analysis of Financial Condition and
Results of Operations 9
PART II. OTHER INFORMATION
Item 1 Legal Proceedings 12
Item 2 Changes in Securities 12
Item 3 Defaults Upon Senior Securities 12
Item 4 Submission of Matters to a Vote of Security Holders 12
Item 5 Other Information 12
Item 6 Exhibits and Reports on Form 8-K 12
Signatures 14
</TABLE>
2
<PAGE> 3
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
SIGHT RESOURCE CORPORATION
<TABLE>
Consolidated Balance Sheets
(In thousands, except share and per share data)
<CAPTION>
June 30, December 31,
1996 1995
-------- ------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 15,662 $ 8,035
Accounts receivable, net of allowance
of $289 and $277, respectively 955 662
Inventories 1,891 1,865
Prepaid expenses and other current assets 432 171
-------- -------
Total current assets 18,940 10,733
-------- -------
Property and equipment 8,090 8,258
Less accumulated depreciation (2,893) (2,480)
-------- -------
Net property and equipment 5,197 5,778
-------- -------
Other assets:
Intangible assets 6,724 6,908
Other assets 141 135
-------- -------
Total other assets 6,865 7,043
-------- -------
$ 31,002 $23,554
======== =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Revolving note payable $ 475 $ 475
Current portion of long term debt 400 400
Accounts payable 1,393 1,727
Accrued expenses 2,521 2,804
-------- -------
Total current liabilities 4,789 5,406
-------- -------
Non-current liabilities:
Long term debt, less current maturities 800 1,000
Other liabilities 713 703
-------- -------
Total non-current liabilities 1,513 1,703
-------- -------
Commitments and contingencies (note 3)
Stockholders' equity:
Preferred Stock, $.01 par value. Authorized 5,000,000
shares; no shares issued and outstanding -- --
Common Stock, $.01 par value. Authorized 20,000,000
shares; issued and outstanding 8,046,715 and 6,346,615
shares at June 30, 1996 and December 31, 1995,
respectively 80 63
Additional paid-in capital 35,377 25,794
Accumulated deficit (10,757) (9,412)
-------- -------
Total stockholders' equity 24,700 16,445
-------- -------
$ 31,002 $23,554
======== =======
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE> 4
SIGHT RESOURCE CORPORATION
<TABLE>
Consolidated Statements of Operations
(In thousands, except per share data)
<CAPTION>
Three Months Ended Three Months Ended Six Months Ended Six Months Ended
June 30,1996 June 30,1995 June 30,1996 June 30,1995
------------------ ------------------ ---------------- ----------------
<S> <C> <C> <C> <C>
Net revenue $5,918 $ 4,164 $11,578 $ 8,364
Cost of revenue 2,282 1,823 4,544 3,695
------ ------- ------- -------
Gross margin 3,636 2,341 7,034 4,669
Selling, general and administrative expenses 4,364 3,534 8,446 7,052
------ ------- ------- -------
Loss from operations (728) (1,193) (1,412) (2,383)
------ ------- ------- -------
Other income (expense)
Interest income 86 91 180 210
Interest expense (55) (50) (113) (107)
------ ------- ------- -------
Total other income (expense) 31 41 67 103
Net loss ($ 697) ($ 1,152) ($ 1,345) ($ 2,280)
====== ======= ======= =======
Net loss per common share ($ 0.11) ($ 0.22) ($ 0.21) ($ 0.44)
------ ------- ------- -------
Weighted average number of common
shares outstanding 6,458 5,244 6,402 5,219
====== ======= ======= =======
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE> 5
SIGHT RESOURCE CORPORATION
<TABLE>
Consolidated Statements of Cash Flows
(In thousands)
<CAPTION>
Six Months Ended Six Months Ended
June 30,1996 June 30,1995
---------------- ----------------
<S> <C> <C>
Operating activities:
Net loss $(1,345) $(2,280)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 869 744
Changes in operating assets and liabilities:
Accounts receivable (293) (103)
Inventories (26) 367
Prepaid expenses and other current assets (261) (19)
Accounts payable and accrued expenses (617) 540
------- -------
Net cash used in operating activities (1,673) (751)
------- -------
Investing activities:
Purchases of property and equipment (480) (1,519)
Sale of assets 376 0
Acquisition of subsidiaries 0 (1,421)
Other assets (6) 39
------- -------
Net cash used in investing activities (110) (2,901)
------- -------
Financing activities:
Principal payments on long term debt (200) (200)
Net proceeds from issuance of common stock 9,600 0
Other liabilities 10 0
------- -------
Net cash provided by (used in) financing activities 9,410 (200)
------- -------
Effect of exchange rate changes on cash 0 3
------- -------
Net increase (decrease) in cash and cash equivalents 7,627 (3,849)
Cash and cash equivalents, beginning of period 8,035 10,194
Cash and cash equivalents, end of period $15,662 $ 6,345
======= =======
------- -------
Supplemental Disclosure:
Interest paid $ 41 $ 54
======= =======
Issuance of stock for equipment $ 0 $ 128
======= =======
Aquisition:
Assets acquired $ 0 $ 4,435
Net liabilities assumed 0 (1,600)
Common stock issued 0 (1,145)
------- -------
Cash paid 0 1,690
Less cash acquired 0 (269)
------- -------
Net cash paid for acquisition $ 0 $ 1,421
======= =======
</TABLE>
See accompanying notes to consolidated financial statements.
5
<PAGE> 6
SIGHT RESOURCE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
(1) THE COMPANY
(a) Nature of Business
The business of Sight Resource Corporation is to participate in the
delivery of a complete range of eye care products and services through
integrated networks of opticians, optometrists and ophthalmologists.
Effective October 31, 1995, the Company changed its name to Sight
Resource Corporation from NewVision Technology, Inc. to better reflect
its expanded corporate mission.
(b) US Acquisitions
Effective January 1, 1995, the Company purchased substantially all the
assets of Cambridge Eye Associates, Inc. ("Cambridge Eye") for $1,690 in
cash, 424,000 shares of common stock and the assumption of approximately
$1,600 of net liabilities. The transaction was accounted for using the
purchase method of accounting. Cambridge Eye operates 22 eye care
centers throughout New England which provide comprehensive vision care
products and services to residents of this region.
Effective July 1, 1995, the Company purchased certain assets and
liabilities of Douglas Vision World, Inc. ("Vision World") for
approximately $970 in cash, 131,525 shares of common stock, $660 payable
over a 3 year period and $250 payable over 18 months. The transaction
was accounted for using the purchase method of accounting. Vision World
operates eight eye care centers located throughout Rhode Island which
provide comprehensive vision care services to residents of this state.
The results of operations of the two acquisitions have been included in
the consolidated financial statements from their respective dates of
acquisition. The excess of the purchase price and expenses associated
with each acquisition over the estimated fair value of the net assets
acquired has been recorded as goodwill.
(c) UK Operations
While the Company's initial efforts focused on building a laser vision
correction delivery model in the UK, the Company is now fully
concentrating its attention and resources on the growth opportunities in
the United States. As a result, the Company fully discontinued its UK
operations in the fourth quarter of 1995. Excimer lasers systems used in
the UK have been or are in the process of being retrofitted and
relocated to the US.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Basis of Presentation
The accompanying consolidated financial statements have been prepared by
the Company without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. In the opinion of the Company, these
consolidated financial statements contain all adjustments (consisting of
only normal, recurring adjustments) necessary to present fairly the
financial position of Sight Resource Corporation as of June 30, 1996 and
the results of its operations and cash flows for the three and six
months ended June 30, 1996 and 1995.
6
<PAGE> 7
SIGHT RESOURCE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
The accompanying consolidated financial statements and related notes
should be read in conjunction with the audited consolidated financial
statements which are contained in the Company's Annual Report on Form
10-K for the year ended December 31, 1995.
(b) Principles of Consolidation
The accompanying consolidated financial statements include the accounts
of the Company, its wholly-owned subsidiaries and entities in which the
Company's subsidiaries assume the financial risks and rewards of such
entities through a management contract. The Company has no direct equity
ownership in these entities. All significant intercompany balances and
transactions have been eliminated.
(c) Revenue Recognition
Under existing revenue sharing arrangements for refractive surgery where
the Company is not responsible for patient billing, the Company receives
a specified payment from the medical provider for each refractive
surgical procedure performed. Accordingly, the Company recognizes
revenue on a per procedure basis at the time procedures are performed.
Under existing revenue-sharing arrangements for refractive surgery where
the Company is responsible for the collection from the patient and
payment to the ophthalmologist and other operating costs, the total
patient charge is recorded as revenue with the corresponding expenses
recorded in cost of revenue.
Revenue and the related costs from the sale of eyewear are recognized at
the time an order is placed. Revenue is reported net of contractual
allowances.
(d) Inventories
Inventories primarily consist of the costs of eyeglass frames, contact
lenses, ophthalmic lenses, sunglasses and other optical products and are
valued at the lower of cost (using the first-in, first-out method) or
market.
(e) Property and Equipment
Property and equipment is stated at cost. The Company provides for
depreciation at the time the property and equipment is placed in
service. The straight-line method is used over the estimated useful life
of the assets.
(f) Intangible Assets
Intangible assets resulting from business acquisitions consist of
customer lists, trademarks, and the excess cost of the acquisition over
the fair value of the net assets acquired (goodwill). Certain values
assigned are based upon independent appraisals and are amortized on a
straight line basis over a period of eleven to twenty-five years. The
Company assesses the recoverability of unamortized intangible assets
on an ongoing basis by comparing anticipated operating profits and
future cash flows to net book value.
7
<PAGE> 8
SIGHT RESOURCE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
(g) Net Loss Per Share
Net loss per share of common stock is based on the weighted average
number of common shares outstanding. Common stock equivalents are not
included in the calculation because they are antidilutive.
(h) Reclassifications
Certain reclassifications were made to the 1995 Consolidated Financial
Statements to conform to the 1996 presentation.
(3) LONG TERM DEBT
<TABLE>
Long term debt is as follows:
<CAPTION>
JUNE 30, DECEMBER 31,
1996 1995
---- ----
<S> <C> <C>
Bank term loan, 8.97% interest rate at
June 30, 1996, repayable in quarterly
installments of $100 through March 1998,
followed by 4 quarterly installments of
$125; secured by all assets of one of
the Company's subsidiaries $1,200 $1,400
Less current maturities 400 400
------ ------
Long term debt, less current maturities $ 800 $1,000
====== ======
</TABLE>
The Company also has available a revolving credit facility based on
eligible accounts receivable and inventory balances which bears interest
at the bank's base rate plus 1.5% (9.75% at June 30, 1996).
(4) STOCKHOLDERS' EQUITY
On June 25, 1996, the Company issued 1,700,000 shares of common stock
for net proceeds of approximately $9.6 million. The Company anticipates
using the net proceeds for working capital and other general corporate
purposes, including acquisitions.
8
<PAGE> 9
PART I:
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
"SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995
Statements contained in this document which are not historical fact are
forward-looking statements based upon management's current expectations that are
subject to risks and uncertainties that could cause actual results to differ
materially from those set forth in or implied by forward-looking statements.
These risks are described in the Company's Form 10K for the fiscal year ended
December 31, 1995 filed with the Securities and Exchange Commission.
OVERVIEW
The Company provides a complete range of eye care products and services
through integrated networks of opticians, optometrists and ophthalmologists. The
Company was formed in November 1992 with an initial mission of providing laser
vision correction ("LVC") as an alternative to conventional vision correction.
Together with a private health care provider in the United Kingdom, the Company
established a network of LVC centers in England and Wales which, utilizing the
Company's excimer laser systems, offered LVC to persons with nearsightedness.
While the Company's initial efforts focused on building a LVC delivery model in
the United Kingdom, the Company is now fully concentrating its attention and
resources on developing an integrated eye care delivery system to consumers and
third party payors in the Unites States.
In October 1995, the FDA first approved the use of one manufacturer's
excimer laser for the treatment in the United States of nearsightedness using
LVC. In March 1996, the FDA approved a second manufacturer's excimer laser for
the same treatment. The Company had commenced consolidation of its United
Kingdom operations during the third quarter of fiscal 1995, and, following the
FDA's initial approval, had fully discontinued these operations by the fourth
quarter of fiscal 1995.
The Company's discontinuation of its United Kingdom operations
permitted the Company to concentrate its efforts and resources on growth
opportunities now available in the United States. For this purpose, excimer
laser systems previously used in the United Kingdom have been or are being
retrofitted and relocated to the United States. As of June 30, 1996, eight laser
systems were in place in the United States.
During fiscal 1995, the Company acquired two New England-based eye care
centers. The first, Cambridge Eye, operates 22 eye care centers while the
second, Vision World, operates eight eye care centers. While the Company's eye
care centers continue to provide traditional eyewear and eye care services, they
now also offer patients convenient access to LVC information and pre- and
post-operative LVC services.
Cambridge Eye was acquired effective January 1, 1995. The transaction
consisted of the purchase of substantially all of the assets of Cambridge Eye,
including accounts receivable, inventory and property and equipment, for a
purchase price of $1.7 million in cash, 424,000 shares of Common Stock and the
assumption of net liabilities of approximately $1.6 million. Vision World was
acquired effective July 1, 1995. The transaction consisted of the purchase of
substantially all of the assets of Vision World, including accounts receivable,
inventory and property and equipment, for a purchase price of approximately
$970,000 in cash, 131,525 shares of Common Stock, $660,000 in cash payable over
a three-year period and $250,000 in cash payable over eighteen months. Both
acquisitions were accounted for using the purchase method of accounting.
9
<PAGE> 10
RESULTS OF OPERATIONS
THREE AND SIX MONTHS ENDED JUNE 30, 1996 AND 1995
NET REVENUE. The Company generated net revenue of approximately $5.9 million and
$11.6 million during the three and six months ended June 30, 1996, respectively,
from the operation of its 30 eye care centers and eight laser vision correction
centers in the United States as compared to net revenue of approximately $4.2
million and $8.4 million from its 21 eye care centers and its network of laser
vision correction centers in the United Kingdom for the same periods in 1995. Of
the $1.7 million, or 41%, increase in net revenue for the three months ended
June 30, 1996 as compared to the three months ended June 30, 1995, approximately
$1.4 million relates to the additional eight eye care centers acquired during
the second half of fiscal 1995. Of the $3.2 million, or 38%, increase in net
revenue for the six months ended June 30, 1996 as compared to the six months
ended June 30, 1995, approximately $2.7 million relates to the additional eight
eye care centers acquired during the second half of fiscal 1995.
COST OF REVENUE. Cost of revenue decreased as a percent of net revenue from
43.8% ($1.8 million) and 44.2% ($3.7 million) for the three and six months ended
June 30, 1995, respectively, to 38.6% ($2.3 million) and 39.2% ($4.5 million)
for the three and six months ended June 30, 1996, respectively. The decrease as
a percentage of net revenue is attributable to an increase in laser vision
correction procedures as well as manufacturing efficiencies realized at the
Company's central lab. Cost of revenue for the three and six months ended June
30, 1996 and 1995 principally consisted of (i) the cost of manufacturing,
purchasing and distributing optical products to its customers and (ii) the cost
of delivering LVC, including depreciation and maintenance on excimer lasers.
SELLING, GENERAL AND ADMINISTRATION EXPENSES. Selling, general and
administration expenses were approximately $4.4 million and $8.4 million for the
three and six months ended June 30, 1996, respectively, as compared to $3.5
million and $7.1 million for the three and six months ended June 30, 1995,
respectively. The increase primarily relates to payroll and facility costs
incurred in operating additional eye care centers in the first two quarters of
fiscal 1996 as compared to the first two quarters in fiscal 1995. Selling,
general and administrative expenses, as a percentage of net revenue, declined
from 84.9% and 84.3% for the three and six months ended June 30, 1995,
respectively, to 73.7% and 72.9% for the three and six months ended June 30,
1996, respectively. This decrease is a result of operating efficiencies which
the Company began to realize from the acquisition and expansion of multi-site
eye care centers and an increase in LVC revenue.
OTHER INCOME AND EXPENSES. Interest income totaled $86,000 and $180,000 for the
three and six months ended June 30, 1996, respectively as compared to $91,000
and $210,000 for the three and six months ended June 30, 1995, respectively.
This decrease resulted from the investment of a lower average cash balance
during the first two quarters of fiscal 1996 as compared to the same period in
fiscal 1995. Interest expense remained comparable at approximately $55,000 and
$113,000 for the three and six months ended June 30, 1996, respectively, as
compared to $50,000 and $107,000 for the three and six months ended June 30,
1995, respectively.
NET LOSS. The Company realized a net loss of $697,000 ($0.11 per share) and $1.3
million ($0.21 per share) for the three and six months ended June 30, 1996,
respectively, as compared to $1.2 million ($0.22) and $2.3 million ($0.44 per
share) for the three and six months ended June 30, 1995, respectively. The
reduction in net loss is primarily attributable to the additional eight eye care
centers acquired during the second half of fiscal year 1995.
10
<PAGE> 11
LIQUIDITY AND CAPITAL RESOURCES
At June 30, 1996, the Company had approximately $15.7 million in cash
and cash equivalents and working capital of approximately $13.9 million in
comparison to approximately $8.0 million in cash and working capital of
approximately $5.3 million as of December 31, 1995.
On June 25, 1996, the Company issued 1,700,000 shares of common stock
for net proceeds of approximately $9.6 million. The Company anticipates using
the net proceeds for working capital and other general corporate purposes,
including acquisitions.
Acquiring multi-site eye care centers is a key component of the
Company's business strategy. By acquiring multi-site eye care centers, the
Company gains critical mass of locations ensuring that potential patients and
third party payors will have convenient access to wider variety of eye care
services. It also allows the Company to deliver these services at considerable
savings by using existing corporate and operational infrastructure, which
includes store operations, MIS, manufacturing, purchasing, distribution and
training. The Company is currently evaluating potential acquisition candidates.
<TABLE>
The Company has securities outstanding which provide it with potential
sources of financing as outlined below:
<CAPTION>
SECURITIES POTENTIAL PROCEEDS
---------------------------------------------- ------------------
<S> <C> <C>
Warrants 2,472,100 $14,800,000
Class A Warrants 85,000 500,000
Unit Purchase Option 215,000 3,700,000
IPO Representative Warrants 85,000 1,300,000
-----------
$20,300,000
===========
</TABLE>
There can be no assurance that the Company will obtain any such proceeds
from the exercise of the above securities.
The Company anticipates that its working capital, cash flow from
operations, revenues from operations and interest income from cash investments,
will be adequate to fund the Company's currently proposed activities for at
least the next eighteen months. Without the exercise of a significant number of
the outstanding securities, additional financing may be needed after this
eighteen month period. The Company anticipates using financing vehicles such as
bank debt, leasing, and other sources of funding, such as additional equity
offerings, to fund its operation. There can be no assurance that the Company
will be successful in obtaining funds from any such sources. If additional funds
are raised by issuing equity securities, further dilution to the Company's
stockholders may result. If additional funds are not available, the Company may
be required to delay execution of its business plan.
The Company has approximately $10.5 million in net operating loss carryforwards
for both federal and state tax purposes at June 30, 1996 which expire through
2011 and 2001, respectively.
11
<PAGE> 12
PART II. OTHER INFORMATION
Item 1 LEGAL PROCEEDINGS
None
Item 2 CHANGES IN SECURITIES
None
Item 3 DEFAULTS UPON SENIOR SECURITIES
None
Item 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company held its Annual Meeting of Stockholders on May 29,
1996. The following represents the results of the proposals
submitted to a vote of security holders:
1. Mr. William G. McLendon and Dr. Elliot S. Weinstock were both
elected to the Board of Directors to serve as members until
the 1999 Annual Meeting of Stockholders by more than a
majority of the votes cast. There were no abstentions or
broker non-votes.
2. A proposal to ratify the appointment of KPMG Peat Marwick LLP
as the Company's independent public accountants for the
fiscal year ended December 31, 1996 was approved by more than
a majority of the votes cast.
3. A proposal to ratify an amendment of the Company's Employee,
Director and Consultant Stock Option Plan to increase by an
additional 500,000 shares the aggregate number of shares for
which stock options may be granted was approved by more than
a majority of the votes cast.
Item 5 OTHER INFORMATION
None
Item 6 EXHIBITS AND REPORTS ON FORM 8-K
None
12
<PAGE> 13
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Sight Resource Corporation
Date: July 30, 1996 /S/ WILLIAM G. MCLENDON
------------- --------------------------------------------
William G. McLendon
Chief Executive Officer and President
(principal executive officer)
Date: July 30, 1996 /S/ ALAN MACDONALD
------------- --------------------------------------------
Alan MacDonald
Vice President, Finance and Administration
(principal financial and chief accounting
officer)
14
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
CONSOLIDATED BALANCE SHEETS AS OF JUNE 30, 1996 AND CONSOLIDATED STATEMENT
OF OPERATIONS FOR THE SIX MONTH PERIOD ENDED JUNE 30, 1996 AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FORM 10-Q FOR THE QUARTERS PERIOD
ENDED JUNE 30, 1996
</LEGEND>
<MULTIPLIER> 1
<CURRENCY> US DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<EXCHANGE-RATE> 1
<CASH> 15,662
<SECURITIES> 0
<RECEIVABLES> 955
<ALLOWANCES> 289
<INVENTORY> 1,891
<CURRENT-ASSETS> 18,940
<PP&E> 8,090
<DEPRECIATION> 2,893
<TOTAL-ASSETS> 31,002
<CURRENT-LIABILITIES> 4,789
<BONDS> 0
<COMMON> 80
0
0
<OTHER-SE> 24,620
<TOTAL-LIABILITY-AND-EQUITY> 31,002
<SALES> 11,578
<TOTAL-REVENUES> 11,578
<CGS> 4,544
<TOTAL-COSTS> 8,446
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 113
<INCOME-PRETAX> (1,345)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,345)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,345)
<EPS-PRIMARY> (0.21)
<EPS-DILUTED> (0.21)
</TABLE>
