<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the Quarter Ended June 30, 1996
Commission file number: 0-23156
CONSEP, INC.
(Exact name of registrant as specified in its charter)
Oregon 93-0874480
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
213 S.W. Columbia Street, Bend, OR 97702
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (541) 388-3688
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
[X] Yes [ ] No
Number of shares of common stock outstanding as of
July 30, 1996:
7,652,032 shares, $.01 par value per share
<PAGE> 2
<TABLE>
<CAPTION>
CONSEP, INC.
INDEX
PAGE NO.
PART I. FINANCIAL INFORMATION
<S> <C> <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 months ended June 30, 1996 and 1995 4
Consolidated Statements of Operations for the
six months ended June 30, 1996 and 1995 5
Consolidated Statements of Cash Flows for the
six months ended June 30, 1996 and 1995 6
Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 9
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 13
Signatures 14
</TABLE>
2
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONSEP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1996 1995
------------ --------------
(UNAUDITED)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 574,506 $ 2,069,595
Short-term investments 103,317 136,501
Accounts receivable, net 8,295,905 3,797,425
Inventories, net (note 2) 8,397,312 8,012,430
Prepaid expenses and other 640,502 416,717
------------ ------------
Total current assets 18,011,542 14,432,668
Property, plant and equipment, net 3,810,920 3,215,841
Intangible assets, net 1,624,547 1,526,602
Goodwill, net 2,249,219 2,311,673
Notes receivable and other assets 241,483 71,790
------------ ------------
Total assets $ 25,937,711 $ 21,558,574
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Bank lines 2,718,706 1,710,997
Accounts payable 4,903,346 2,458,120
Current portion of notes and leases payable 421,876 444,425
Accrued liabilities 1,023,063 584,179
Customer deposits 48,241 451,226
------------ ------------
Total current liabilities 9,115,232 5,648,947
Notes and leases payable, excluding current maturities 1,234,599 931,005
Mandatory stock warrant obligation 19,500 19,500
Deferred gain on sale of property 257,859 277,642
------------ ------------
Total liabilities 10,627,190 6,877,094
Shareholders' equity:
Common stock 76,520 75,695
Additional paid-in capital 39,634,604 39,467,701
Foreign currency translation adjustment 11,621 10,797
Accumulated deficit (24,412,224) (24,872,713)
------------ ------------
Total shareholders' equity 15,310,521 14,681,480
------------ ------------
Total liabilities and shareholders' equity $ 25,937,711 $ 21,558,574
============ ============
</TABLE>
See accompanying notes to consolidated financial statements
3
<PAGE> 4
CONSEP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
THREE MONTHS ENDED
--------------------------------------
JUNE 30, JUNE 30,
1996 1995
-------------------- ----------------
(UNAUDITED)
<S> <C> <C>
REVENUES
Proprietary products $ 3,722,565 $ 3,366,687
Distribution products 7,961,130 7,378,505
------------ ------------
Total revenues 11,683,695 10,745,192
------------ ------------
COST OF REVENUES
Proprietary products 2,216,924 1,940,602
Distribution products 6,527,117 6,149,490
------------ ------------
Total cost of revenues 8,744,041 8,090,092
------------ ------------
Gross margin 2,939,654 2,655,100
------------ ------------
OPERATING EXPENSES (note 3)
Research and development 359,880 257,525
Selling, general and administrative 1,528,808 1,272,791
Distribution 860,783 846,473
------------ ------------
Total operating expenses 2,749,471 2,376,789
------------ ------------
Operating income 190,183 278,311
------------ ------------
OTHER INCOME (EXPENSE)
Interest income 32,891 53,833
Interest expense (96,549) (102,189)
Other, net (20,534) 45,014
------------ ------------
Net other income (expense) (84,192) (3,342)
------------ ------------
Net income $ 105,991 $ 274,969
============ ============
Net income per common and common
equivalent share (note 4) $ 0.01 $ 0.04
============ ============
Weighted average number of common
and common equivalent shares
outstanding (note 4) 7,832,489 6,670,032
============ ============
</TABLE>
See accompanying notes to consolidated financial statements
4
<PAGE> 5
CONSEP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
----------------------------------
JUNE 30, JUNE 30,
1996 1995
------------ ------------
(UNAUDITED)
<S> <C> <C>
REVENUES
Proprietary products $ 7,297,790 $ 6,652,434
Distribution products 13,595,520 12,431,430
------------ ------------
Total revenues 20,893,310 19,083,864
------------ ------------
COST OF REVENUES
Proprietary products 4,287,939 3,839,691
Distribution products 10,907,948 10,163,755
------------ ------------
Total cost of revenues 15,195,887 14,003,446
------------ ------------
Gross margin 5,697,423 5,080,418
------------ ------------
OPERATING EXPENSES (note 3)
Research and development 638,383 503,719
Selling, general and administrative 2,843,372 2,365,694
Distribution 1,658,550 1,731,600
------------ ------------
Total operating expenses 5,140,305 4,601,013
------------ ------------
Operating income 557,118 479,405
------------ ------------
OTHER INCOME (EXPENSE)
Interest income 75,890 110,021
Interest expense (154,869) (166,617)
Other, net (17,650) 12,564
------------ ------------
Net other income (expense) (96,629) (44,032)
------------ ------------
Net income $ 460,489 $ 435,373
============ ============
Net income per common and common
equivalent share (note 4) $ 0.06 $ 0.07
============ ============
Weighted average number of common
and common equivalent shares
outstanding (note 4) 7,824,322 6,626,994
============ ============
</TABLE>
See accompanying notes to consolidated financial statements
5
<PAGE> 6
CONSEP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
-------------------------------
JUNE 30, JUNE 30,
1996 1995
----------- ---------
(UNAUDITED)
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 460,489 $ 435,373
Adjustments to reconcile net income to
net cash used in operating activities:
Depreciation and amortization 512,971 423,854
Provision for bad debts (41,039) 48,949
Inventory reserve 44,115 40,470
Loss (gain) on disposal of equipment 8,667 (238)
Other non-cash items (5,098) (17,790)
Changes in assets and liabilities, net of amounts acquired:
Short-term investments 33,183 1,514,935
Accounts receivable (4,819,569) (3,884,065)
Inventories (428,765) (523,295)
Prepaid expenses and other (223,778) (17,228)
Accounts payable 2,444,478 1,870,271
Accrued liabilities 439,947 22,181
Other assets (5,000) 0
Customer deposits (402,985) (493,427)
----------- -----------
Net cash used in operating activities (1,982,384) (580,010)
----------- -----------
INVESTING ACTIVITIES
Acquisition of intangible assets (226,200) (137,377)
Acquisition of property, plant and equipment (468,560) (210,848)
Acquisition of subsidiary companies, net of cash acquired 0 (74,136)
Proceeds from sale of property, plant and equipment 1,000 11,667
Issuance of notes receivable, net of payments received 198,414 (34,051)
----------- -----------
Net cash used in investing activities (495,346) (444,745)
----------- -----------
FINANCING ACTIVITIES
Increase in bank lines 1,007,589 953,538
Proceeds from issuance of notes payable 0 141,516
Principal payments on notes payable (192,887) (269,837)
Net proceeds from issuance of common stock 167,728 53,390
----------- -----------
Net cash provided by financing activities 982,430 878,607
----------- -----------
Effect of exchange rate changes on cash
and cash equivalents 211 (1,231)
----------- -----------
Net decrease in cash and cash equivalents (1,495,089) (147,379)
Cash and cash equivalents at beginning of period 2,069,595 1,753,785
----------- -----------
Cash and cash equivalents at end of period $ 574,506 $ 1,606,406
=========== ===========
</TABLE>
See accompanying notes to consolidated financial statements
6
<PAGE> 7
CONSEP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
NOTE 1 - BASIS OF PRESENTATION
The accompanying consolidated financial statements have been prepared in
conformity with generally accepted accounting principles. However, certain
information or footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted pursuant to the rules and regulations of the Securities and
Exchange Commission. In the opinion of management, the statements include all
adjustments necessary (which are of a normal and recurring nature) for the fair
presentation of the results of the interim periods presented. These financial
statements should be read in conjunction with the Company's audited consolidated
financial statements for the year ended December 31, 1995, as included in the
Company's 1995 Annual Report to Shareholders.
NOTE 2 - INVENTORIES
Inventories, stated at the lower of cost or market, consist of:
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
----------- -----------
<S> <C> <C>
Raw materials $ 1,419,126 $ 1,760,833
Work in process 299,256 208,807
Finished goods - proprietary 3,462,012 3,329,485
Finished goods - distribution 3,412,696 2,975,188
--------- ---------
8,593,090 8,274,313
Less reserve for obsolescence 195,778 261,883
---------- ----------
$ 8,397,312 $ 8,012,430
========= ==========
</TABLE>
NOTE 3 - OPERATING EXPENSES
Research and development and selling, general and administrative expenses relate
to the Company's proprietary product operations in addition to general corporate
matters. Distribution expenses consist entirely of selling, general and
administrative costs of the Company's distribution operations.
NOTE 4 - NET INCOME PER COMMON AND COMMON EQUIVALENT SHARE
For the three and six months ended June 30, 1996 and 1995, net income per common
and common equivalent share is based upon the weighted average number of common
shares outstanding during each period plus, to the extent dilutive, the effect
of common shares contingently issuable from the exercise of stock options.
7
<PAGE> 8
NOTE 5 - SUPPLEMENTAL STATEMENTS OF CASH FLOW DISCLOSURES
Cash paid for interest and income taxes was as follows:
<TABLE>
<CAPTION>
Six Months Ended Income
June 30, Interest Taxes
---------------- ---------- --------
<S> <C> <C> <C>
1996 $ 139,359 $ 5,399
1995 $ 170,488 $ 17,279
</TABLE>
Following is a summary of non-cash investing and financing activities of the
Company for the first six months of 1996:
During the six months ended June 30, 1996, the Company purchased a
building for $396,055 and acquired vehicles for $77,858 through the
issuance of notes payable.
Also during the first six months of 1996, the Company converted
$467,959 of trade accounts receivable to notes receivable.
8
<PAGE> 9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
OVERVIEW
Consep derives its revenues from the sale of its proprietary products to the
commercial agriculture and consumer home, lawn and garden markets and from sales
by its distribution subsidiaries of products produced by other manufacturers,
including both biorational insect control products and conventional toxic
pesticides as well as fertilizers and farm supplies. The Company's primary focus
is the development of proprietary products and expansion of the markets for
those products. A significant element of the Company's strategy for the
commercialization of its proprietary commercial agriculture products has been to
acquire distribution operations in key agricultural regions and to introduce its
proprietary products through those operations.
Continued growth in revenues, together with stable gross margins during the
first six months of 1996, have contributed to a bottom line improvement of
approximately $25,000 compared to the first six months of 1995. Proprietary
product revenues grew by 9.7% in the first two quarters of 1996 compared to the
same period of 1995 while 1996 first half distribution revenues increased by
9.4% when compared to the same period in 1995.
Since its inception, Consep has funded its growth primarily through equity
financings. Funds from these financings have allowed the Company to build its
organization, develop and register proprietary products for both the commercial
agriculture and consumer home, lawn and garden markets, acquire distribution
operations for the introduction of its commercial agriculture products and
expand its sales efforts through both domestic and international channels of
distribution.
The Company has incurred annual operating losses since its inception in 1984.
The Company achieved quarterly profitability in the first two quarters of 1995
and has again achieved profitability in the first two quarters of 1996. However,
the Company expects to incur an annual operating loss for 1996. The Company
believes annual profitability will be dependent on continued growth of revenues,
maintaining or strengthening gross margins and controlling the growth of
operating expenses. There can be no assurance that the Company will become
profitable on an annual basis.
The Company's business is seasonal with its highest revenues historically being
recognized in the first and second quarters of each year and its lowest revenues
being recognized in the third and fourth quarters of each year. This seasonality
coincides with the commercial growing season in the Northern Hemisphere and, to
a lesser extent, the consumer home, lawn and garden buying season. The Company
anticipates this seasonal profile will continue with a slight shift to third and
fourth quarter revenues as sales to international markets and sales of new
non-seasonal products increase. In contrast to revenues, many of the Company's
operating expenses are largely independent of the quarterly selling cycles. As a
result, operating expenses will generally represent a higher percentage of
revenues in the third and fourth quarters as compared to the first two quarters
and the Company may experience a loss in the third and fourth quarters of an
otherwise profitable year.
9
<PAGE> 10
RESULTS OF OPERATIONS
REVENUES. Total revenues for the second quarter ended June 30, 1996 increased
8.7% to approximately $11.7 million from approximately $10.7 million in the
second quarter of 1995. For the six months ended June 30, 1996, total revenues
increased 9.5% to approximately $20.9 million from approximately $19.1 million
for the corresponding period of the previous year. Revenues from the sale of
proprietary products increased 10.6% during the second quarter of 1996 to
approximately $3.7 million from approximately $3.4 million in the second quarter
of 1995. For the six months ended June 30, 1996, revenues from the sale of
proprietary products were approximately $7.3 million, an increase of 9.7% over
proprietary product revenues of approximately $6.7 million recorded in the
comparable period of 1995. Revenues from the Company's distribution operations
increased 7.9% during the second quarter of 1996 to approximately $8.0 million
from approximately $7.4 million in the second quarter of 1995. For the six
months ended June 30, 1996, distribution revenues were approximately $13.6
million, an increase of 9.4% over distribution revenues of approximately $12.4
million for the corresponding period of 1995.
The growth in proprietary product revenues was a combination of growth in sales
of the Company's consumer products, as well as increased sales of specialty
chemicals to third parties by the Company's Farchan subsidiary. The acquisition
of Farchan occurred during February 1995, and accordingly, results from the six
months ended June 30, 1995 included only five months of Farchan's operations.
Revenues from the sale of commercial agricultural products decreased
approximately $182,000 and $334,000, or 16.1% and 13.8%, respectively, for the
quarter and six months ended June 30, 1996 as compared to the corresponding
periods of 1995. The revenue decline for the six months ended June 30, 1996 was
primarily attributable to 1) a reduction in revenues in the first quarter in
Mexico from the sale of the Company's product to control Tomato Pinworm
("CheckMate TPW"), and 2) a reduction in revenues in the second quarter in
California from the sale of the Company's product to control Codling Moth
("CheckMate CM"). The Company believes the decrease in revenues in Mexico from
the sale of CheckMate TPW was due to increased competition in Mexico and has
responded by strengthening its sales organization in that market. The Company
believes the decrease in revenues in California from the sale of CheckMate CM
was due to a delay in receiving registration of a new warm weather formulation
of CheckMate CM from the state of California which caused the Company to sell
its cooler weather formulation that did not perform adequately in this spring's
hotter weather. As a result, many growers used alternatives to the Company's
cool weather formulation of CheckMate CM. Applications of the Company's new warm
weather formulation of CheckMate CM were made after registration was received
and are performing as expected.
Revenues from the sale of consumer products from the Company's SureFire line of
products in the United States and Chemfree products in Canada increased by 26.8%
in the second quarter of 1996 compared to the same quarter of 1995. For the six
months ended June 30, 1996, consumer product revenues increased 22.1% from the
corresponding period of 1995. This growth in consumer product revenues was
generated by the Company's continued efforts to increase the number of retail
outlets through which its products are sold while also increasing the number of
products carried by the individual retail operations.
Farchan, which was acquired in February 1995, contributed approximately $20,000
and $169,000, respectively, to the growth in proprietary product revenues for
the second quarter and six months ended June 30, 1996 as compared to the
corresponding periods in 1995.
10
<PAGE> 11
The revenue increase of 7.9% and 9.4%, respectively, from the Company's
distribution operations during the second quarter and six months ended June 30,
1996, as compared to the corresponding periods of 1995, was primarily
attributable to continued growth of the Company's Pacoast subsidiary as well as
to favorable weather conditions in the Central Valley of California, the
Company's principal distribution market.
GROSS MARGIN. The consolidated gross margin for the Company increased to 25.2%
in the second quarter of 1996 from 24.7% in the corresponding period of 1995.
For the six months ended June 30, 1996, the consolidated gross margin was 27.3%
compared to 26.6% in the corresponding period of 1995. The margin improvement
for the second quarter and six months ended June 30, 1996, as compared to the
corresponding period of 1995, is primarily attributable to an increase in the
gross margins generated on distribution revenues. During the second quarter the
Company changed the timing for recognition of manufacturers' rebates for
purchases of bulk chemicals. Rather than recognizing these rebates when
received, typically at year-end, the Company determined that recognition should
occur at the time the rebates are earned. This change improved distribution
margins by approximately 200 basis points in the second quarter. The gross
margin on the sale of proprietary products during the second quarter of 1996
decreased to 40.4% from the 42.4% gross margin achieved on proprietary product
revenues during the second quarter of 1995. Gross margin on proprietary products
also decreased in the six month periods ended June 30, 1996 and 1995 to 41.2%
from 42.3%, respectively.
The gross margins on agricultural proprietary product sales for the three and
six months ended June 30, 1996 decreased to 35.9% and 41.8%, respectively, from
42.2% and 45.2% in the corresponding periods of 1995. The decreases were
primarily attributable to higher than expected production and raw material costs
incurred in connection with the introduction of the Company's new warm weather
CheckMate CM formulation. The gross margins on proprietary consumer product
sales decreased slightly to 39.6% from 40.2%, respectively, in the second
quarters 1996 and 1995 and to 38.6% from 39.3%, respectively, in the six months
ended June 30, 1996 and 1995. Sales of specialty chemicals produced a gross
margin of 60.1% in the second quarter of 1996, up from the 57.1% gross margin
reported in the same quarter of 1995. For the six months ended June 30, 1996,
gross margins on specialty chemical sales increased to 55.9% from 49.5% in the
comparable period of 1995. The variances in gross margins for consumer products
and specialty chemical sales were the result of differences in the product sales
mix within those product categories for both the three months and six months
ended June 30, 1996 as compared to the same periods in 1995. The gross margins
from distribution revenues increased to 18.0% from 16.7% and to 19.8% from
18.2%, respectively, for the quarters and six months ended June 30, 1996 and
1995.
OPERATING EXPENSES. Operating expenses during the second quarter of 1996
increased 15.7% to approximately $2.7 million from approximately $2.4 million in
the second quarter of 1995. During the first six months of 1996, operating
expenses increased 11.7% to approximately $5.1 million from approximately $4.6
million in the corresponding period of 1995. The principal sources of increased
operating expenses during the first quarter of 1996 were (1) - 1996 results
included a full quarter of Farchan operations while the first quarter of 1995
included only two months of operating expense for that subsidiary acquired in
February, 1995; and (2) - Sales and marketing costs associated with both
proprietary consumer products and agricultural products increased during the
first quarter of 1996 due to increased personnel, increased commissions on
higher sales of consumer products and expanded international operations for
agricultural products. The principal sources of increased operating expenses in
the second quarter were higher product development costs in general and
additional expenses for complementary product given to growers in California who
encountered difficulties with the CheckMate CM product described above.
Offsetting a portion of the increase in operating expenses, the Company reduced
its bad debts reserve by approximately $52,000 in the first six months of 1996
as a result of improved collections.
11
<PAGE> 12
OTHER INCOME AND EXPENSE. During the three months ended June 30, 1996, the
Company recorded net other expense of approximately $84,000 compared to
approximately $3,000 during the corresponding period of 1995. For the six months
ended June 30, 1996 net other expense increased to approximately $97,000 from
$44,000 in the same period in 1995. The second quarter increase was primarily
due to 1) foreign currency exchange losses, relating to the Company's Canadian
subsidiary, compared to a gain in the same period last year, 2) reduced interest
income and 3) a reversal of an accrued contingent liability which had a positive
impact on the second quarter of 1995.
LIQUIDITY AND CAPITAL RESOURCES
Since its inception, the Company has used funds generated from operations,
equity financings and bank borrowings to fund its research and development,
marketing, acquisition of capital equipment, acquisition of distribution
operations and working capital requirements. In October 1995, the Company
completed a secondary public stock offering which raised approximately $3.1
million net of related offering costs. Since its inception, the Company has
raised approximately $39.7 million of equity. During August 1995, a new $5
million line of credit was secured which consolidated the collateral bases of
the Company's two previous lines of credit, providing the Company greater
flexibility in funding the working capital requirements of its overall
operations. This new line of credit, which is secured by substantially all of
the Company's current assets, matured at the end of July 1996. The Company has
received a 60 day extension on the existing line of credit while it negotiates
with its bank for an increase in the size of the line to accommodate an
anticipated increase in working capital needs as a result of new product
introductions. At June 30, 1996 the Company was in compliance with, or had
obtained necessary waivers for, all covenants related to the line of credit.
In January 1996, the Company, through its subsidiary Farchan Laboratories,
Inc., acquired land and a building to facilitate expansion of its specialty
chemicals manufacturing capacity. The facility, which is located in Florida,
will be used to produce additional pheromones to be used in the Company's
proprietary agricultural products as well as to expand Farchan's capacity to
supply specialty chemicals to third party customers. This facility, which was
acquired for approximately $396,000, was financed primarily by a term loan
secured by Farchan's land and buildings, including the new facility.
At June 30, 1996, the Company had cash, cash equivalents and short-term
investments of approximately $680,000, with excess credit line borrowing
capacity of approximately $1.2 million, and working capital of approximately
$8.9 million. Borrowings under revolving lines of credit were approximately $2.7
million. The Company believes that cash and cash equivalents at June 30, 1996,
funds generated from operations and funds available from existing bank lines of
credit will be sufficient to fund the Company's operations through 1996.
Previously the Company believed these funds would be sufficient to fund the
Company through 1997, but due to unanticipated new product introductions and
lower than expected revenues for 1996, the Company now believes additional
capital will be needed during the fourth quarter of 1996 to fund 1997
operations. The Company's capital needs may increase depending upon several
factors, including future acquisitions, changes to planned research and
development activities, expanded manufacturing and commercialization programs,
additional technological, regulatory and competitive developments and the timing
of regulatory approvals for new products. As a result, the Company may need to
raise additional funds through the issuance of equity securities or other
financing instruments. There can be no assurance that additional financing will
be available and, if available, that the terms would be acceptable to the
Company.
12
<PAGE> 13
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits: None
(b) No reports were filed on Form 8-K during the quarter for
which this report is filed.
(THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK)
13
<PAGE> 14
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.
CONSEP, INC.
(REGISTRANT)
DATE: August 9, 1996 By: \s\ VOLKER G. OAKEY
-------------- --------------------
VOLKER G. OAKEY
Chairman of the Board,
President and Chief
Executive Officer
DATE: August 9, 1996 By: \s\ LARRY KATZ
-------------- ---------------
LARRY KATZ
Vice President, Finance and
Chief Financial Officer
14
<TABLE> <S> <C>
<ARTICLE> 5
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-31-1996
<PERIOD-END> JUN-30-1996
<EXCHANGE-RATE> 1
<CASH> 574,506
<SECURITIES> 103,317
<RECEIVABLES> 9,077,546
<ALLOWANCES> 781,641
<INVENTORY> 8,397,312
<CURRENT-ASSETS> 18,011,542
<PP&E> 6,537,834
<DEPRECIATION> 2,726,914
<TOTAL-ASSETS> 25,937,711
<CURRENT-LIABILITIES> 9,115,232
<BONDS> 0
0
0
<COMMON> 76,552
<OTHER-SE> 15,233,969
<TOTAL-LIABILITY-AND-EQUITY> 25,937,711
<SALES> 20,893,310
<TOTAL-REVENUES> 20,893,310
<CGS> 15,195,887
<TOTAL-COSTS> 15,195,887
<OTHER-EXPENSES> 0
<LOSS-PROVISION> (41,039)
<INTEREST-EXPENSE> 154,869
<INCOME-PRETAX> 460,489
<INCOME-TAX> 0
<INCOME-CONTINUING> 460,489
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 460,489
<EPS-PRIMARY> 0.06
<EPS-DILUTED> 0.06
</TABLE>
