SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC. 20549
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended Commission File No. 0-23866
September 30, 1996
VARI-L COMPANY, INC.
(Exact name of Registrant as specified in its charter.)
Colorado 06-0679347
(State of Incorporation) (I.R.S. Employer identification No.)
11101 E. 51st Avenue
Denver, Colorado 80239
(Address of principal executive offices)
(303) 371-1560
(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 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.
Yes----X---- No--------
The number of shares outstanding of each of the issuer's classes of
common stock, as of September 30, 1996:
Class of Securities Outstanding Securities
$0.01 par value 3,805,838 shares
Common shares
<PAGE>
PART I--FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
VARI-L COMPANY, INC.
BALANCE SHEETS
SEPTEMBER 30, 1996 AND DECEMBER 31, 1995
<TABLE>
<CAPTION>
9/30/96 12/31/95
ASSETS (UNAUDITED) (AUDITED)
- ------ ----------- ---------
<S> <C> <C>
Current Assets:
Cash and cash equivalents $1,655,877 $5,868,210
Receivables:
Trade, less $10,000 allowance
for doubtful accounts 2,133,433 2,292,168
Lease acquisition costs advanced 656,485 0
Inventories 8,102,999 5,580,984
Prepaid expenses and other 1,205,583 737,083
---------- ----------
Total Current Assets 13,754,377 14,478,445
---------- ----------
Property and Equipment:
Machinery and equipment 11,354,317 7,053,052
Furniture and fixtures 1,002,821 857,644
Leasehold improvements 2,269,098 1,366,977
---------- ----------
14,626,236 9,277,673
Less accumulated depreciation
and amortization 2,536,611 2,229,593
---------- ----------
Net Property and Equipment 12,089,625 7,048,080
---------- ----------
Other Assets:
Long-term inventories 307,000 307,000
Covenant not to compete 38,276 114,656
Other 545,373 292,253
---------- -----------
Total Other Assets 890,649 713,909
---------- -----------
TOTAL ASSETS $26,734,651 $22,240,434
- ------------ =========== ===========
</TABLE>
(Continued)
See Accompanying Notes to Financial Statements.
<PAGE>
VARI-L COMPANY, INC.
BALANCE SHEETS, CONTINUED
SEPTEMBER 30, 1996 AND DECEMBER 31, 1995
<TABLE>
<CAPTION>
9/30/96 12/31/95
LIABILITIES AND STOCKHOLDERS' EQUITY (UNAUDITED) (AUDITED)
- ------------------------------------ ----------- ---------
<S> <C> <C>
Current Liabilities:
Bank line of credit $ 1,695,409 $1,847,302
Current installments of:
Long-term debt 554,894 480,253
Obligations under capital leases 20,193 20,193
Subordinated debentures 0 112,500
Financed insurance premiums 71,343 0
Trade accounts payable 1,927,488 1,212,942
Accrued expenses 205,562 389,129
Income taxes payable 261,469 0
---------- ----------
Total Current Liabilities 4,736,358 4,062,319
Long-term debt 4,327,079 1,730,275
Obligations under capital leases 4,309 22,563
Deferred income taxes 0 183,823
---------- ----------
Total Liabilities 9,067,746 5,998,980
---------- ----------
Stockholders' Equity:
Common stock, $.01 par value,
50,000,000 and 10,000,000 shares
authorized; 3,805,838 and 3,624,977
shares outstanding, respectively 40,288 38,479
Paid-in capital 12,631,239 11,845,327
Retained earnings 5,014,078 4,376,348
Less:
Loans for purchase of stock (18,700) (18,700)
---------- ----------
Total Stockholders' Equity 17,666,905 16,241,454
---------- ----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $26,734,651 $22,240,434
- ---------------------- =========== ===========
</TABLE>
See Accompanying Notes To Financial Statements.
<PAGE>
VARI-L COMPANY, INC.
STATEMENTS OF INCOME
FOR THE THREE MONTH PERIODS ENDED
SEPTEMBER 30, 1996 AND SEPTEMBER 30, 1995
AND
FOR THE NINE MONTH PERIODS ENDED
SEPTEMBER 30, 1996 AND SEPTEMBER 30, 1995
<TABLE>
<CAPTION>
THREE MONTHS THREE MONTHS NINE MONTHS NINE MONTHS
9/30/96 9/30/95 9/30/96 9/30/95
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Net sales $2,601,196 $2,232,336 $7,782,662 $6,479,756
Cost of
products sold 1,316,680 1,090,088 3,904,934 3,157,970
---------- ---------- ---------- ----------
Gross profit 1,284,516 1,142,248 3,877,728 3,321,786
---------- ---------- ---------- ----------
Other costs and expenses:
General and
administrative 307,057 271,586 891,356 782,786
Engineering 149,641 143,048 470,932 404,605
Selling 340,602 338,493 1,035,047 927,579
Interest expense 127,110 108,148 335,451 245,860
Interest income (30,962) (93,424) (129,830) (135,331)
Other 59,710 68,855 175,238 204,686
---------- ---------- ---------- ----------
953,158 836,706 2,778,194 2,430,185
---------- ---------- ---------- ----------
Income before taxes 331,358 305,542 1,099,534 891,601
Income taxes 139,170 128,328 461,804 374,473
---------- ---------- ---------- ----------
NET INCOME $ 192,188 $ 177,214 $ 637,730 $ 517,128
- ---------- ========== ========== ========== ==========
Primary and fully-
diluted earnings
per common share
and common share
equivalents $ 0.05 $ 0.05 $ .16 $ $ 0.17
========== ========== ========== =========
Weighted average
shares outstanding 3,829,771 3,705,866 3,884,011 3,104,933
========== ========== ========= =========
</TABLE>
See Accompanying Notes to Financial Statements.
<PAGE>
VARI-L COMPANY, INC.
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTH PERIODS ENDED
SEPTEMBER 30, 1996 AND SEPTEMBER 30, 1995
<TABLE>
<CAPTION>
NINE MONTHS NINE MONTHS
ENDED ENDED
9/30/96 9/30/95
(UNAUDITED) (UNAUDITED)
----------- -----------
<S> <C> <C>
Net cash used in operating
activities (Note 6) $(1,070,989) $(1,126,141)
----------- -----------
Cash flows from investing activities:
Net purchases of property and equipment (5,348,563) (1,733,759)
----------- -----------
Net cash used in investing activities (5,348,563) (1,733,759)
----------- -----------
Cash flows from financing activities:
Lease acquisition costs advanced (656,485) 0
Net increase in long-term debt 2,671,445 862,842
Net repayments of capital lease
obligations (18,254) (222,541)
Repayments of subordinated debentures (112,500) (12,500)
Net (repayments) borrowings under
bank line of credit (151,893) 740,148
Net proceeds under insurance financing 71,343 44,240
Proceeds from stock issuances, net of
income tax benefit and offering costs. 403,563 6,856,574
----------- -----------
Net cash provided by
financing activities 2,207,219 8,268,763
----------- -----------
Net (decrease) increase in cash (4,212,333) 5,408,863
Beginning cash 5,868,210 1,459,208
----------- ----------
ENDING CASH $1,655,877 $6,868,071
=========== ==========
Supplemental disclosure of cash flows
information:
Cash paid for interest $ 293,877 $ 239,136
=========== ==========
Cash paid for income taxes $ 0 $ 25,743
=========== ==========
</TABLE>
See Accompanying Notes to Financial Statements.
<PAGE>
VARI-L COMPANY, INC.
NOTES TO FINANCIAL STATEMENTS
Vari-L Company, Inc. (the Company), was founded in 1953 and is a
manufacturer of electronic components used in commercial and military
communications systems where electrical processing of radio frequency
signals is required.
NOTE 1 - FINANCIAL PRESENTATION
These financial statements should be read in conjunction with the audited
financial statements for the year ended December 31, 1995 and notes
thereto.
In the opinion of management, the accompanying interim, unaudited
financial statements contain all the adjustments necessary to present
fairly the financial position of the Company as of September 30, 1996, the
results of its operations for the three-month and nine-month periods ended
September 30, 1996 and September 30, 1995 and its cash flows for the nine-
month periods ended September 30, 1996 and September 30, 1995. All
adjustments made are of a normal recurring nature.
NOTE 2 - INVENTORIES
Inventories consist of the following:
<TABLE>
<CAPTION>
9/30/96 12/31/95
(Unaudited) (Audited)
------------ ----------
<S> <C> <C>
Finished goods $ 1,580,567 $ 963,556
Work in process 2,992,654 2,397,774
Raw materials 3,326,366 2,016,600
Gold bullion 203,412 203,054
------------ -----------
$ 8,102,999 $ 5,580,984
=========== ===========
Long-term inventories $ 307,000 $ 307,000
============ ===========
</TABLE>
NOTE 3 - INCOME TAXES
Income tax expense reflects effective tax rates of 42%.
NOTE 4 - COMMON STOCK
Stock Grant Plan
In their annual meeting held on June 26, 1996, the stockholders approved
and ratified the Stock Grant Plan that was adopted by the Company in June
1995. Pursuant to the plan, selected persons will receive awards of
shares of the Company's common stock. The plan is administered by the
Company's Compensation Committee ("the Committee") and a maximum of
100,000 shares may be issued under the plan. Each Committee member is
entitled to receive an automatic grant of 50 shares per month on the
first day of each month. Pursuant to the plan, 1,650 shares of stock have
been issued to the Committee members as of September 30, 1996.
Authorized Number of Shares
In their annual meeting held on June 26, 1996, the stockholders approved
an amendment to the Company's Articles of Incorporation increasing the
authorized number of the Company's $.01 par value Common Stock to 50
million shares.
VARI-L COMPANY, INC.
NOTES TO FINANCIAL STATEMENTS, CONTINUED
NOTE 5 - CREDIT FACILITY
The Company has a new Term Loan and Credit Agreement (The "Credit
Agreement") with a bank (the "Bank") consisting of a line of credit and a
term loan.
The new Agreement is dated May 17, 1996 and increases the total credit
facility to $8,500,000 from $5,000,000. The line of credit now provides
for borrowings up to $3,500,000, up from $2,500,000 million, and interest
is payable monthly, calculated at prime. The line matures April 30,
1997. At September 30, 1996 the balance due to the Bank under the line of
credit was $1,695,409. The term loan portion of the facility was
increased to $5,000,000 from approximately $2,029,000, the combined
balance of the former two term loans. Interest accrues on the outstanding
principal balance at 8.75% and monthly principal and interest payments of
$79,812 are required. The term loan matures on May 17, 1999. Proceeds
from the term loan were used to pay down the former line of credit and two
term loans and to purchase $1,069,000 in U.S. Government securities. At
September 30, 1996, the balance due to the Bank under the term loan was
$4,827,728.
NOTE 6 - RECONCILIATION OF NET INCOME TO NET CASH USED IN OPERATING
ACTIVITIES
The reconciliation of net income to net cash used in operating activities
for the nine-month periods ended September 30, 1996 and September 30, 1995
is as follows:
<TABLE>
<CAPTION>
NINE MONTHS NINE MONTHS
ENDED ENDED
9/30/96 9/30/95
(UNAUDITED) (UNAUDITED)
----------- -----------
<S> <C> <C>
Net Income $ 637,730 $ 517,128
----------- ----------
Adjustments to reconcile net
income to net cash used in
operating activities:
Depreciation and amortization 307,018 119,488
Amortization of covenant
not to compete 76,380 76,380
Changes in assets and liabilities:
Decrease (increase) in accounts
receivable 158,735 (678,385)
(Increase)in inventories (2,522,015) (1,280,162)
(Increase)in prepaid expenses
and other (468,500) (388,716)
(Increase) decrease in
other assets (253,120) 27,116
Increase in accounts
payable 714,546 91,255
(Decrease)increase in accrued
expenses (183,567) 41,025
Increase in income
taxes payable 461,804 348,730
----------- -----------
Total adjustments (1,708,719) (1,643,269)
----------- -----------
NET CASH USED IN
OPERATING ACTIVITIES $(1,070,989) (1,126,141)
=========== ===========
</TABLE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
OVERVIEW
The following discussion should be read in conjunction with the Company's
financial statements and notes thereto included herein.
The business of the Company is the design, manufacture and marketing of a
wide range of signal processing components and devices which are used in
communications equipment and systems such as cellular telephones and base
stations, local area computer networks, and satellite communications
equipment, as well as military and aerospace applications, such as
advanced radar systems, missile guidance systems, and navigational
systems. The Company sells its products primarily to original equipment
manufacturers of communications systems.
Over the last several years, the Company has focused on manufacturing and
marketing its products for the commercial marketplace, rather than
manufacturing primarily for the military and defense-related markets.
This effort has included the introduction of new products, the redesign of
existing products, implementation of various cost containment measures and
increased advertising and marketing efforts.
The Company's first product line is a line of Discrete components which
are microwave signal processing components primarily used in military and
space applications. Among these products are power dividers and combiners
used for directing radio frequency ("RF") and microwave signals, solid
state switches used to change the direction or timing of RF and microwave
signals, transformers used to convert high-power signals to lower-powered
signals, mixers, phase detectors which are used to convert RF and
microwave signals into usable information, and data and frequency doublers
and synthesizers used as sources for RF and microwave signals. This line
currently accounts for approximately 17% of the Company's revenues.
One of the Company's major product lines is based on the patented design
of its voltage controlled oscillator ("VCO") and other components built
with VCOs by the Company. VCOs are components which provide a precise
signal source within a frequency range. They are widely used in
transmitting and receiving equipment. The Company's patented technology
enables its VCOs to operate with approximately 20% of the input power
requirements of its competitors. This unique feature, combined with its
high quality performance, allows the Company's VCOs to be utilized in
battery operated and other low-power applications with better performance
than competing products. The Company's "wide-band" VCO line currently
accounts for approximately 35% of its revenues.
The Company introduced its newest product, the narrow-band VCO, in
February 1994. This product is a very narrow band VCO which is priced at
approximately 75% less than the Company's wide-band VCOs. These VCOs are
designed to perform at high levels of efficiency while being competitively
priced. The narrow-band VCO line currently accounts for approximately 36%
of the Company's revenues.
The Company introduced its phase locked loop synthesizer ("PLL") line in
1993. The PLL is a device made up of several components, including a VCO
and an integrated circuit. PLLs are utilized in both transmitting and
receiving equipment. The PLL's function is to lock onto stable reference
signals and convert them into stable frequencies which may be detected and
utilized by communications equipment. This line currently accounts for
approximately 5% of the Company's revenues.
The PLL and the narrow-band VCO product lines, which comprise the
Company's principal commercial products, have common raw materials,
assembly and production techniques and are designed to take advantage of
the economies of high volume, high speed, automated assembly.
RESULTS OF OPERATIONS
Three months ended
September 30, 1996 and September 30, 1995
and the Nine Months ended
September 30, 1996 and September 30, 1995
TOTAL REVENUES
Sales revenues increased approximately $369,000 (17%) in the three months
ended September 30, 1996 as compared with the three months ended September
30, 1995, from $2,232,336 to $2,601,196. Sales revenues also increased
approximately $1,303,000 (20%) in the nine months ended September 30, 1996
as compared with the nine months ended September 30 1995, from $6,479,756
to $7,782,662. The increase in revenue reflects the continuing success
of the Company in expanding its product mix to include commercial sales,
in expanding its international business, and in increasing its market
share of military and aerospace business.
In the first nine months of 1996, the composition of sales revenues was
17% Discrete, 35% wide-band VCOs, 7% "Combination" sales of wide-band VCO
and Discrete products, 36% narrow-band VCOs and 5% PLLs. In the first
nine months of 1995, the sales revenues were comprised of 31% Discrete,
44% wide-band VCOs, 0% Combination" sales of Hybrid and Discrete products,
21% narrow-band VCO's, and 4% PLLs.
COST OF GOODS SOLD
Cost of goods sold, as a percent of sales revenues, was 51% in the three
months ended September 30, 1996 and 49% in the three months ended
September 30, 1995. Cost of goods sold, as a percent of sales revenues,
was 50% in the nine months ended September 30, 1996 and 49% in the nine
months ended September 30, 1995. The increases in the 3-month and 9-month
periods ended September 30, 1996 reflect additional depreciation and
amortization and related costs on the significant capital equipment
purchases and leasehold improvements made during the prior 15-month
period.
SELLING AND ENGINEERING EXPENSE
Selling expenses increased approximately $2,000, or 0.6%, for the three
months ended September 30, 1996 as compared to the three months ended
September 30, 1995. Selling expenses increased approximately $107,000, or
12%, for the nine months ended September 30, 1996 as compared to the nine
months ended September 30, 1995. Increased selling expenses primarily
reflect increased sales personnel.
Engineering expenses increased approximately $7,000, or 5%, for the three
months ended September 30, 1996 as compared to the three months ended
September 30, 1995. Engineering expenses increased approximately $66,000,
or 16%, for the nine months ended September 30, 1996 as compared to the
nine months ended September 30, 1995. These increases reflect additional
engineering staff, expenses and equipment costs to support development of
the Company's product lines, including high-volume commercial products,
military products, and space products.
GENERAL AND ADMINISTRATIVE AND OTHER EXPENSES
General and administrative expenses increased approximately $35,000 (13%)
in the three months ended September 30, 1996 as compared with the three
months ended September 30, 1995. General and administrative expenses
increased approximately $109,000 (14%) in the nine months ended September
30, 1996 as compared with the nine months ended September 30, 1995.
Increases to G & A primarily reflect increased staffing in the personnel
and accounting departments, in line with the growth of the Company.
Other expenses decreased approximately $9,000 (13%) in the three months
ended September 30, 1996 as compared with the three months ended September
30, 1995. Other expenses decreased approximately $29,000 (14%) in the
nine months ended September 30, 1996 as compared with the nine months
ended September 30, 1995 due to full amortization in 1995 of costs related
to the Company's December 1993 private offering.
INTEREST INCOME AND EXPENSE
The Company manages its credit facility and mutual fund in tandem.
Interest income is earned on the Company's short-term investments in a
U.S. government securities mutual fund. Interest income was approximately
$31,000 for the three months ended September 30, 1996 as compared to
approximately $93,000 for the three months ended September 30, 1995.
Interest income was approximately $130,000 for the nine months ended
September 30, 1996 as compared to approximately $135,000 for the nine
months ended September 30, 1995. Interest expense increased approximately
$19,000 (18%) for the three months ended September 30, 1996 as compared
with the three months ended September 30, 1995. Interest expense
increased approximately $90,000 (36%) for the nine months ended September
30, 1996 as compared with the nine months ended September 30, 1995.
Changes in the amounts of interest income and expense reflect the
underlying amounts of the mutual fund investment and debt outstanding
under the credit facility.
DEPRECIATION AND AMORTIZATION
Depreciation and amortization increased approximately $188,000 (157%) for
the nine months ended September 30, 1996 as compared with the nine months
ended September 30, 1995, reflecting depreciation on acquisitions since
September 1995 of property, equipment, and leasehold improvements,
including but not limited to the retooling and remodeling of the
commercial products manufacturing facility, test and lab setups for
engineering staffing additions, the addition of high-speed testing
equipment, new phone systems throughout the Company's three facilities,
equipment and software for the management information systems upgrade, and
the acquisition of equipment to perform machining, packaging and testing
that had formerly been purchased outside.
FINANCIAL CONDITION
LIQUIDITY
At September 30, 1996, the Company's working capital was $9.0 million
compared to $10.4 million at December 31, 1995. The Company's current
ratio was 2.9 to 1 as of September 30, 1996 and 3.6 to 1 at December 31,
1995.
CAPITAL RESOURCES
The Company has a new Term Loan and Credit Agreement (the "Credit
Agreement") with a bank (the "Bank") consisting of a line of credit and a
term loan.
The Company and the Bank entered into a new loan agreement on May 17,
1996, increasing the size of the total credit facility to $8,500,000. The
line of credit now provides for borrowings up to $3.5 million, and
interest is payable monthly, calculated at prime. The line of credit
matures on April 30, 1997. At September 30, 1996, the balance due to the
Bank under the line of credit was $1,695,409. The term loan portion of
the credit facility was increased to $5,000,000 from a balance of
approximately $2,000,000. The term loan had a balance as of September 30,
1996 of $4,827,728. Interest accrues on the outstanding principal balance
at 8.75%, and monthly principal and interest payments of $79,812 are
required. This term loan matures on May 17, 1999. Proceeds from the term
loan were used to pay down the former line of credit and the two term
loans, and to purchase $1,069,000 of a U.S. government securities mutual
fund.
During 1993, the Company financed the acquisition of capital equipment
through capital leases having maturity dates through 1998. At September
30, 1996, the balance due under these leases was $24,502. No new capital
leases were entered into in 1995 or 1996 to date. The lease payments are
calculated using interest rates with an average of approximately 11%.
The Company finances certain of its annual insurance premiums through a
financing company. The amounts due under these loans totaled $71,343 as
of September 30, 1996 and are paid in monthly installments of $16,732 at
interest rates of approximately 7.5% and 8.81%.
The Company believes that it has sufficient financial resources available
to meet its short-term working capital needs through cash flows generated
by operating activities and through the management of its sources of
financing. The Company has been utilizing its credit facility to
significantly increase its inventories, facilities, and related fixed
assets to address an anticipated increase in its production.
BACKLOG
Total backlog of unfilled firm customer orders ("backlog") at September
30, 1996 was $12.6 million compared with $13.7 million at September 30,
1995. Backlog at December 31, 1995 was $14.1 million. Levels of bookings
of new customer orders are lower in the first nine months of 1996 as
compared to the first nine months of 1995 due to industry-wide delays in
the rollout of the domestic personal communications services (PCS) market.
Orders have begun to accelerate in the 4th quarter of 1996 with customer
announcements of wireless communications rollouts, such as that made in
early October by AT&T. The Company is hopeful that this trend will
continue and, with its products designed into many product developments
programs in the commercial, military, and space arenas, expects to
participate in many of the opportunities available to it.
Some of the statements contained in this document are forward-looking
statements. The accuracy of these statements cannot be guaranteed as they
are subject to a variety of risks including, but not limited to, future
economic conditions, competitive products and pricing, new product
development, the delivery of products under existing contracts and other
factors.
VARI-L COMPANY, INC.
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
None
ITEM 5 OTHER INFORMATION
None
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
27 Financial Data Schedule
(b) None
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Company has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
VARI-L COMPANY, INC.
Date: October 31, 1996 By:/s/ Jon L. Clark
Jon L. Clark, V.P. Finance and
Principal Accounting Officer
EXHIBIT INDEX
EXHIBIT METHOD OF FILING
- ------- ----------------
27 Financial Data Schedule Filed herewith electronically
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Vari-L's
unaudited financial statements prepared as of September 30, 1996 and for the
nine-month period then ended, included with its 3rd quarter 1996 10QSB filing
with the Securities and Exchange Commission, and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 1656
<SECURITIES> 0
<RECEIVABLES> 2790
<ALLOWANCES> 0
<INVENTORY> 8103
<CURRENT-ASSETS> 13754
<PP&E> 14626
<DEPRECIATION> 2537
<TOTAL-ASSETS> 26735
<CURRENT-LIABILITIES> 4736
<BONDS> 0
0
0
<COMMON> 40
<OTHER-SE> 17627
<TOTAL-LIABILITY-AND-EQUITY> 26735
<SALES> 7783
<TOTAL-REVENUES> 7912
<CGS> 3905
<TOTAL-COSTS> 3905
<OTHER-EXPENSES> 2573
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 335
<INCOME-PRETAX> 1100
<INCOME-TAX> 462
<INCOME-CONTINUING> 638
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 638
<EPS-PRIMARY> .16
<EPS-DILUTED> .16
</TABLE>
