<PAGE> 1
U.S. 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 June 30, 1999 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 Number 000-21465
TALX CORPORATION
(Exact name of registrant as specified in its charter)
MISSOURI 43-0988805
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1850 BORMAN COURT, ST. LOUIS, MO 63146
(Address of principal executive offices) (Zip Code)
(314) 214-7000
(Registrants 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. [x] Yes [ ]No
As of July 15, 1999 there were 5,540,983 shares of the Registrant's Common Stock
outstanding.
Exhibit Index is on page 13.
<PAGE> 2
TALX CORPORATION AND SUBSIDIARIES
<TABLE>
<CAPTION>
FINANCIAL INFORMATION
PAGE NO.
--------
<S> <C> <C>
Item 1. Financial Statements
Consolidated Balance Sheets as of June 30, 1999 and March 31, 1999 3
Consolidated Statements of Operations for the Three Months Ended
June 30, 1999 and 1998 4
Consolidated Statements of Cash Flows for the Three Months Ended
June 30, 1999 and 1998 5
Notes to Consolidated Financial Statements 6
Item 2. Managements Discussion and Analysis of
Financial Condition and Results of Operations 7-10
Item 3. Quantitative and Qualitative Disclosures About Market Risk 11
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 11
Item 2. Changes in Securities and Use of Proceeds 11
Item 3. Defaults Upon Senior Securities 11
Item 4. Submission of Matters to a Vote of Securities Holders 11
Item 5. Other Information 11
Item 6. Exhibits and Reports on Form 8-K 11
Signatures 12
</TABLE>
2
<PAGE> 3
TALX CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
<TABLE>
<CAPTION>
June 30, March 31,
1999 1999
---------------- -----------------
(unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 202 $ 267
Trade receivables, net 6,974 6,552
Inventories 1,091 1,262
Work in progress, less progress billings 4,057 3,170
Prepaid expenses and other current assets 1,154 1,299
Deferred tax assets, net 235 235
---------------- -----------------
Total current assets 13,713 12,785
Property and equipment, net 5,576 5,856
Capitalized software development costs, net 3,554 3,822
Net assets of business held for sale 1,019 859
Deferred tax asset, net 711 1,021
Other assets 241 221
---------------- -----------------
$ 24,814 $ 24,564
================ =================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Note payable $ 114 $ -
Accounts payable 977 1,075
Accrued expenses and other liabilities 1,071 1,681
Progress billings in excess of work in progress 1,058 588
Deferred maintenance revenue 1,041 1,125
---------------- -----------------
Total current liabilities 4,261 4,469
---------------- -----------------
Commitments and contingencies
Stockholders' equity:
Preferred stock, $.01 par value; authorized 5,000,000 shares and
no shares issued or outstanding at June 30, 1999 and March 31, 1999 - -
Common stock, $.01 par value; authorized 30,000,000 shares,
issued and outstanding 5,540,983 shares at June 30, 1999
and 5,505,017 shares at March 31, 1999 55 55
Additional paid-in capital 23,562 23,478
Accumulated deficit (3,064) (3,432)
Treasury stock - (6)
---------------- -----------------
Total stockholders' equity 20,553 20,095
---------------- -----------------
$ 24,814 $ 24,564
================ =================
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE> 4
TALX CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars in thousands, except share information)
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended June 30,
-------------------------------------
1999 1998
---------------- -----------------
<S> <C> <C>
Revenues:
The Work Number $ 2,635 $ 1,719
Outsourced services 1,155 952
Customer premises systems 3,151 2,806
Maintenance and support 1,262 1,274
---------------- -----------------
Total revenues 8,203 6,751
---------------- -----------------
Cost of revenues:
The Work Number 905 664
Outsourced services 722 613
Customer premises systems 2,179 1,726
Maintenance and support 337 426
---------------- -----------------
Total cost of revenues 4,143 3,429
---------------- -----------------
Gross margin 4,060 3,322
---------------- -----------------
Operating expenses:
Selling and marketing 1,883 2,224
General and administrative 1,384 1,052
---------------- -----------------
Total operating expenses 3,267 3,276
---------------- -----------------
Operating income 793 46
---------------- -----------------
Other income (expense), net:
Interest income 4 24
Interest expense (1) -
---------------- -----------------
Total other income (expense), net 3 24
---------------- -----------------
Earnings before income tax expense 796 70
Income tax expense 310 26
---------------- -----------------
Net earnings $ 486 $ 44
================ =================
---------------- -----------------
Basic and diluted earnings per share $ 0.09 $ 0.01
================ =================
Weighed average number of shares outstanding - basic 5,528,707 5,325,076
================ =================
Weighed average number of shares outstanding - diluted 5,607,278 5,506,767
================ =================
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE> 5
TALX CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in thousands)
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended June 30,
-------------------------------
1999 1998
------------ -------------
<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 486 $ 44
Adjustments to reconcile net earnings to net
cash provided by operating activities:
Depreciation and amortization 975 654
Net assets of business held for sale (160) (158)
Deferred taxes 310 26
Change in assets and liabilities:
Trade receivables (422) 1,513
Inventories 171 446
Work in progress in excess of progress billings (887) (1,708)
Prepaid expenses and other current assets 145 89
Other assets (20) (7)
Accounts payable (98) 78
Accrued expenses and other liabilities (610) (548)
Progress billings in excess of work in progress, net 470 204
Deferred maintenance revenue (84) (175)
------------ -------------
Net cash provided by operating activities 276 458
------------ -------------
Cash flows from investing activities:
Additions to property and equipment (142) (1,018)
Capitalized software development costs (285) (477)
------------ -------------
Net cash used in investing activities (427) (1,495)
------------ -------------
Cash flows from financing activities:
Issuance of common stock 245 55
Purchases of treasury stock (273) -
Borrowings under note payable 114 -
------------ -------------
Net cash provided by financing activities 86 55
------------ -------------
Net decrease in cash and cash equivalents (65) (982)
Cash and cash equivalents at beginning of period 267 2,879
------------ -------------
Cash and cash equivalents at end of period $ 202 $ 1,897
============ =============
</TABLE>
See accompanying notes to consolidated financial statements.
5
<PAGE> 6
TALX Corporation and Subsidiaries
Notes to Consolidated Financial Statements
1. BASIS OF PRESENTATION
The consolidated balance sheet of TALX Corporation ("TALX" or the
"Company") at March 31, 1999 was obtained from the Companys audited
balance sheet as of that date. All other financial statements contained
herein are unaudited and, in the opinion of management, contain all
adjustments (consisting of normal recurring accruals) considered necessary
for a fair presentation. Operating results for the three months ended June
30, 1999 are not necessarily indicative of the results that may be expected
for the year ending March 31, 2000. The Companys accounting policies and
certain other disclosures are set forth in the notes to the Companys
audited consolidated financial statements as of and for the year ended
March 31, 1999.
2. EARNINGS PER SHARE
Basic earnings per share is computed using the weighted average number of
common shares outstanding during the period. Diluted earnings per share
reflects the incremental increase in common shares outstanding assuming the
exercise of all employee stock options and warrants that would have had a
dilutive effect on earnings per share. The weighted average number of
shares is based on common stock outstanding for basic earnings per share
and common stock outstanding and common stock options and warrants for
diluted earnings per share in periods when such common stock options and
warrants are not antidilutive. The weighted average number of shares used
in computing basic and diluted earnings per share was 5,528,707 and
5,607,278, respectively.
3. RECLASSIFICATIONS
Certain balances as of March 31, 1999 have been reclassified to conform
with the current period presentation.
6
<PAGE> 7
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
The Company's revenues are derived from interactive Web, interactive voice
response (IVR), computer telephony integration (CTI) software and services,
which consist of The Work Number, outsourced services, the sale of customer
premises systems, and maintenance and support services related to those systems.
Revenues derived from The Work Number include fees charged to mortgage lenders
and other verifiers for verification of employment history, including the past
three years of salary history of participating employers' current and former
employees, ongoing maintenance fees charged to employers and one-time conversion
fees from new employers.
The Company's customer premises systems business provides interactive Web, IVR,
CTI software and services that enable an organization's users to access, input
and update information without human assistance. Revenues from customer premises
systems are derived from the license or sale of software, custom applications,
and related hardware and are generally recognized upon shipment of the system.
Sales are effected through a direct sales force and in conjunction with
strategic marketing alliances. The Company provides maintenance and support
services with respect to installed customer premises systems. These services
include a 24-hour per day, 7-day a week toll-free customer service line.
Revenues from maintenance and support are recognized ratably over the term of
the maintenance agreement.
The Company's outsourced services business provides interactive Web and
interactive voice response services to organizations that choose not to purchase
a customer premises system. The Company maintains a system on its premises that
contains a customer database and receives incoming requests for access to the
information. Revenues from outsourced services include fees derived from
establishment of the service and transaction-based fees.
In addition to providing software and services, the Company has historically
provided database and document services. Database services include sales leads
and pre-press services for directory publishers, and document services include
the preparation and mailing of invoices, statements and confirmation letters for
organizations with high volume requirements. Revenues from database and document
services are recognized as the services are performed through progress billings.
These customers' contracts cover periods generally from one to six months and
progress billings are made in accordance with individual customer contract
terms. In August 1996, the Company determined to pursue the divestiture of the
database and document services businesses and, accordingly, has reflected the
results of operations of such businesses as discontinued operations. In January
1997, the document services business was sold. The Company is actively marketing
its database services business.
This Form 10-Q contains certain statements regarding future results,
performance, expectations, or intentions that may be considered forward looking
statements ("forward looking statements") within the meaning of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended, including, without limitation, statements
regarding possible Year 2000 effects. All statements other than statements of
historical facts included herein are forward looking statements. Although the
Company believes that the expectations reflected in such forward looking
statements are reasonable, it can give no assurance that such expectations will
prove to be correct. Actual results could differ materially from those projected
in the forward looking statements as a result of risks facing the Company. Such
risks include, but are not limited to, (1) the Company's ability to successfully
market and expand The Work Number for Everyone and its other products and
services, (2) the successful divestiture of the remaining assets of the
discontinued operations, (3) intense competition in the interactive web and
interactive voice response industry, (4) dependence on certain strategic
marketing alliances, (5) risks associated with rapid technological change, (6)
Year 2000 compliance and (7) risks associated with a lengthy sales cycle. See
the a complete descriptions of risk factors in Item 1 of the Companys Annual
Report on Form 10-K filed with the Securities and Exchange Commission.
7
<PAGE> 8
RESULTS OF OPERATIONS
The following table sets forth, for the periods indicated, certain items from
the Company's consolidated statements of operations, expressed as a percentage
of total revenues, and the percentage change in the dollar amount of such items
compared to the prior comparable period.
<TABLE>
<CAPTION>
Percentage
Increase
Three Months Three Months
Ended June 30, Ended June 30,
---------------------- 1999 over
1999 1998 1998
---- ---- ----
<S> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues
The Work Number 32.1% 25.4% 53.3%
Outsourced services 14.1 14.1 21.3
Customer premises systems 38.4 41.6 12.3
Maintenance and support 15.4 18.9 (0.9)
------ ------
Total revenues 100.0 100.0 21.5
----- -----
Cost of revenues
The Work Number 11.0 9.8 36.3
Outsourced services 8.8 9.1 17.8
Customer premises systems 26.6 25.6 26.2
Maintenance and support 4.1 6.3 (20.9)
------ ------
Total cost of revenues 50.5 50.8 20.8
----- -----
Gross margin 49.5 49.2 22.2
----- -----
Operating expenses
Selling and marketing 23.0 32.9 (15.3)
General and administrative 16.8 15.6 31.6
----- -----
Total operating expenses 39.8 48.5 (0.3)
----- -----
Operating income 9.7 0.7 1,623.9
------
Other income (expense), net 0.0 0.4 (87.5)
------ ------
Earnings from continuing operations
before income tax expense 9.7 1.1 1,037.1
Income tax expense 3.8 0.4 1,092.3
------ ------
Net earnings from continuing operations 5.9% 0.7% 1,004.5
====== ======
</TABLE>
THREE MONTHS ENDED JUNE 30, 1998 AND 1999
REVENUES. Total revenues increased by 21.5%, from $6.8 million for the three
months ended June 30, 1998 to $8.2 million for the three months ended June 30,
1999. Revenues from The Work Number increased 53.3% from $1.7 million for the
three months ended June 30, 1998 to $2.6 million for the three months ended June
30, 1999, due to the continued expansion of marketing to employers and verifiers
on a nationwide basis and an increase in the number of employment records, and
related transaction volume, on the system. Revenues from outsourced services
increased 21.3% from $1.0 million for the three months ended June 30, 1998 to
$1.2 million for the three months ended June 30, 1999, due to the Company
capitalizing on the trend of some corporations to outsource their non-core
functions. Revenues from customer premises systems increased 12.3% from $2.8
million for the three months ended June 30, 1998 to $3.2 million for the three
months ended June 30, 1999. Management believes that the revenue increase is due
principally to the Company responding better to web-based opportunities in the
marketplace. Revenues from maintenance and support related to the customer
premises systems were consistent at $1.3 million for the three months ended June
30, 1998 and 1999, reflecting support provided to an increased installed base of
customer premises systems, offset by the cancellation of discontinued products.
8
<PAGE> 9
COST OF REVENUES. Total cost of revenues increased by 20.8%, from $3.4 million
for the three months ended June 30, 1998 to $4.1 million for the three months
ended June 30, 1999. Cost of revenues from The Work Number increased 36.3% from
$664,000 for the three months ended June 30, 1998 to $905,000 for the three
months ended June 30, 1999, due principally to the growth in revenues, offset by
improved leveraging of personnel and infrastructure costs. Cost of revenues from
outsourced services increased by 17.8%, from $613,000 for the three months ended
June 30, 1998 to $722,000 for the three months ended June 30, 1999. This
increase in cost is attributable to the revenue growth described above. Cost of
revenues from customer premises systems increased by 26.2%, from $1.7 million
for the three months ended June 30, 1998 to $2.2 million for the three months
ended June 30, 1999. This increase in cost is due to the growth in revenues,
along with an increase in labor costs. Cost of revenues from maintenance and
support related to customer premises systems decreased by 20.9%, from $426,000
for the three months ended June 30, 1998 to $337,000 for the three months ended
June 30, 1999, due principally to a lower cost of hardware components.
SELLING AND MARKETING EXPENSES. Selling and marketing expenses decreased 15.3%
from $2.2 million for the three months ended June 30, 1998 to $1.9 million for
the three months ended June 30, 1999. As a percentage of revenues, such expenses
decreased from 32.9% for the three months ended June 30, 1998 to 23.0% for the
three months ended June 30, 1999. The decrease in expense reflects the impact of
the Company's restructuring efforts during the quarter ended December 31, 1998.
In conjunction with the reorganization, the Company reduced its workforce and
closed certain regional sales office.
GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses
increased 31.6% from $1.1 million for the three months ended June 30, 1998 to
$1.4 million for the three months ended June 30, 1999. As a percentage of
revenues, such expenses increased from 15.6% for the three months ended June 30,
1998 to 16.8% for the three months ended June 30, 1999. The increase in such
expenses reflects the increased infrastructure costs of a growing business.
OTHER INCOME (EXPENSE), NET. Interest income decreased 87.5% from $24,000 for
the three months ended June 30, 1998 to $3,000 for the three months ended June
30, 1999, due to a lower level of invested funds.
INCOME TAX EXPENSE. The Company's effective income tax rate was 37.1% for the
three months ended June 30, 1998 and 38.9% for the three months ended June 30,
1999.
DISCONTINUED OPERATIONS
In August 1996, the Company determined to pursue the divestiture of the database
and document services businesses and, accordingly, has reflected the results of
operations of such businesses as discontinued operations. A provision of
$350,000 was made as of June 30, 1996 to reflect the anticipated loss from
operations until the time of disposal. On January 31, 1997, the Company sold
substantially all of the assets of the document services business to Sterling
Direct, Inc., the largest customer of the division. The sales price, after
giving effect to the post-closing adjustments, was $1,241,000. Of this amount,
$200,000 was in the form of a subordinated note and the remainder was paid in
cash. The net assets related to this sale were approximately $566,000. At March
31, 1997 and 1998, the Company provided additional provisions for loss, net of
tax, in the amount of $550,000 and $374,000, respectively. The Company
anticipates disposition of the remaining operations through sale during fiscal
2000.
LIQUIDITY AND CAPITAL RESOURCES
The Company had a current ratio of 2.86 to 1 and 3.22 to 1 at March 31, 1999 and
June 30, 1999, respectively. The Company's working capital was $8.3 million and
$9.5 million at March 31, 1999 and June 30, 1999, respectively. Total working
capital increased during the three months ended June 30, 1999 due principally to
the Company's earnings for the quarter.
The Company's accounts receivable increased from $6.6 million at March 31, 1999
to $7.0 million at June 30, 1999. The increase is due to increased revenues in
the first quarter of fiscal 2000 compared to the fourth quarter of fiscal 1999,
offset by improved collections of accounts receivable. As a percentage of the
Company's total revenues for the respective quarter, accounts receivable
increased slightly from 83% of revenues at March 31, 1999 to 85% of revenues at
June 30, 1999.
9
<PAGE> 10
The Company's capital expenditures were $142,000 during the three months ended
June 30, 1999. At June 30, 1999, the Company had no significant capital spending
or purchase commitments other than normal purchase commitments and commitments
under facilities and operating leases.
The Company believes that its working capital, together with its anticipated
cash flows from operations, will be sufficient to meet its working capital and
capital expenditure requirements for at least the next 12 months. The Company
has a $5 million line of credit facility with a commercial bank. Outstanding
borrowings under the line of credit bear interest at LIBOR plus 2.25% and are
secured by accounts receivable and inventory.
The Company's net decrease to capitalized software development costs was
$268,000 in the first three months of fiscal 2000. The Company intends to
continue to make investments in software solutions at comparable levels in
fiscal 2000.
YEAR 2000 COMPLIANCE
Many installed computer systems used by numerous companies to run a variety of
applications are not capable of processing date sensitive information that falls
beyond the twentieth century. Unless these computer systems are replaced or
upgraded prior to the year 2000 to process such date sensitive information, the
systems may experience severe operating difficulties or system failures. Based
on a review and testing of its software products and other products, the Company
believes that its current products are century compliant. The Company's
assessment of its current products is partially dependent upon the accuracy of
representations concerning century compliance made by its suppliers, such as
Microsoft and IBM. Many of the Company's customers are, however, using earlier
versions of the Company's software products and other products that may not be
century compliant. The Company has instituted programs to warn these customers
of the risks associated with using software and other products which may not be
century compliant, and to encourage such customers to migrate to the Company's
current products. In addition, the Company's products are generally integrated
with a customer's enterprise system, which typically utilizes software products
developed by other vendors. A customer may mistakenly believe that century
compliance problems with its enterprise system are attributable to products
provided by the Company. The Company may in the future be subject to claims
based on century compliance issues related to a customer's enterprise system or
other products provided by third parties, custom modifications to the Company's
products made by third parties, or issues arising from the integration of the
Company's products with other products. The Company has not been a party to any
proceeding involving its products or services in connection with century
compliance issues; however, there is no assurance that the Company will not in
the future be required to defend its products or services in such proceedings
against claims of century compliance issues, and any resulting liability of the
Company for damages could have a material adverse effect on the Company's
business, operating results and financial condition.
During fiscal 1998, the Company initiated a program to review, replace and
upgrade its internal use information systems and non-information technology
systems to accommodate the Company's growth, improve productivity and remedy any
century compliance problems. The Company has substantially completed the
inventory, assessment and remediation, and testing phases for its hardware and
purchased software. The costs of remediation were included in the Company's
normal capital budgets, and not separately measured. The Company continues to
receive, evaluate and implement third party software year 2000 updates. To a
large extent, the Company is dependent on its suppliers and their efforts. The
Company believes that its internal use information systems will be century
compliant prior to the year 2000. However, there is no assurance that the
Company, or its suppliers and other third parties, will identify and resolve any
and all century compliance problems with its internal use information systems in
a timely manner, that the expenses associated with such remedial efforts will
not be significant, or that such problems will not have a material adverse
effect on the Company's business, operating results and financial condition. The
Company has begun the development of a contingency plan, in the event some
systems are not year 2000 compliant prior to the end of calendar 1999. However,
no assurance can be given that such a plan will be successful.
10
<PAGE> 11
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Not applicable.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities and Use of Proceeds
Not applicable.
Item 3. Defaults Upon Senior Securities
Not applicable.
Item 4. Submission of Matters to a Vote of Securities Holders
None.
Item 5. Other Information
Not applicable.
Item 6. Exhibits and Reports on Form 8-K
(a) See Exhibit Index.
(b) Reports on Form 8-K
There were no reports on Form 8-K filed during the quarter for
which this report is filed.
11
<PAGE> 12
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.
TALX CORPORATION
(Registrant)
Date: August 13, 1999 By /s/ William W. Canfield
--------------------------------
Chairman, President and
Chief Executive Officer
Date: August 13, 1999 By /s/ Craig N. Cohen
--------------------------------
Chief Financial Officer
12
<PAGE> 13
EXHIBIT INDEX
Exhibit
Number Description
- ------ -----------
3.1 Restated Articles of Incorporation, as amended (incorporated by
reference from Exhibit 3.1 to the Company's Form 10-K for the
fiscal year ended March 31, 1997 (File No. 000-21465))
3.3 Bylaws of the Company (incorporated by reference from Exhibit 3.3
to the Company's Registration Statement on Form S-1
(File No. 333-10969))
11 Computation of Earnings Per Share
27 Financial Data Schedule
(provided for the information of the Securities and Exchange
Commission only)
13
<PAGE> 1
Exhibit 11
TALX CORPORATION AND SUBSIDIARIES
STATEMENT REGARDING COMPUTATION OF EARNINGS PER SHARE
Three Months Ended June 30, 1999 and 1998
<TABLE>
<CAPTION>
Three Months Ended June 30,
-----------------------------------
1999 1998
----------------- ----------------
<S> <C> <C>
Basic Earnings Per Share:
Actual shares outstanding - beginning of period 5,505,017 5,316,032
Weighted average number of common shares issued (1) 23,690 9,044
----------------- ----------------
Weighted average number of common shares outstanding - end of period 5,528,707 5,325,076
================= ================
Net earnings: $ 486,000 $ 44,000
================= ================
Basic earnings per common share: $ 0.09 $ 0.01
================= ================
Diluted Earnings Per Share:
Actual shares outstanding - beginning of period 5,505,017 5,316,032
Weighted average number of common shares issued (1) 102,261 190,735
----------------- ----------------
Weighted average number of common shares outstanding - end of period 5,607,278 5,506,767
================= ================
Net earnings: $ 486,000 $ 44,000
================= ================
Diluted earnings per common share: $ 0.09 $ 0.01
================= ================
</TABLE>
(1) Basic and diluted earnings per share has been computed using the number
of shares of common stock and common stock options and warrants
outstanding. The weighted average number of shares is based on common
stock outstanding for basic earnings per share and common stock
outstanding and common stock options and warrants for diluted earnings
per share in periods when such common stock options and warrants are not
antidilutive.
14
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-2000
<PERIOD-START> APR-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 202
<SECURITIES> 0
<RECEIVABLES> 11,195
<ALLOWANCES> 164
<INVENTORY> 1,091
<CURRENT-ASSETS> 13,713
<PP&E> 10,314
<DEPRECIATION> 4,738
<TOTAL-ASSETS> 24,814
<CURRENT-LIABILITIES> 4,261
<BONDS> 0
0
0
<COMMON> 55
<OTHER-SE> 20,498
<TOTAL-LIABILITY-AND-EQUITY> 24,814
<SALES> 8,203
<TOTAL-REVENUES> 8,203
<CGS> 4,143
<TOTAL-COSTS> 4,143
<OTHER-EXPENSES> 3,267
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1
<INCOME-PRETAX> 796
<INCOME-TAX> 310
<INCOME-CONTINUING> 486
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 486
<EPS-BASIC> 0.09
<EPS-DILUTED> 0.09
</TABLE>
