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 quarterly period ended March 31, 2000
Commission File Number: 0-24312
VIRBAC CORPORATION
State of Incorporation: Delaware I.R.S. Employer I.D. 43-1648680
3200 Meacham Boulevard
Fort Worth, TX 76137
(817) 831-5030
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 twelve months (or for such shorter periods that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past ninety days.
Yes X No
The number of shares of common stock outstanding at May 9, 2000 is 21,222,227
shares.
<PAGE>
VIRBAC CORPORATION
Index
Page
Financial information
Financial Statements
Consolidated Balance Sheets -
March 31, 2000 (unaudited) and December 31, 1999 3
Consolidated Statements of Operations -
Three months ended March 31, 2000 and 1999 (unaudited) 4
Consolidated Statements of Cash Flows -
Three months ended March 31, 2000 and 1999 (unaudited) 5
Consolidated Statement of Shareholders' Equity -
Three months ended March 31, 2000 (unaudited) 6
Notes to Consolidated Financial Statements 7
Management's Discussion and Analysis of Financial
Condition and Results of Operations 11
Other information
Item 6. Exhibits and Reports on Form 8-K 14
Signature 14
<PAGE>
Part I - Financial Statements
Consolidated Balance Sheets
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
(unaudited)
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 427,273 $ 231,297
Accounts receivable 9,847,558 5,555,363
Accounts receivable - Virbac SA 263,084 424,931
Inventories 12,802,490 13,773,605
Prepaid expenses and other assets 913,240 919,112
-------------------- --------------------
24,253,645 20,904,308
Property, plant and equipment, net 12,571,725 12,765,120
Goodwill and other intangibles, net 9,647,842 9,953,120
Other assets 68,659 10,470
-------------------- --------------------
Total Assets $ 46,451,871 $ 43,633,018
==================== ====================
Liabilities and Shareholders' Equity
Current liabilities:
Bank overdraft $ 1,499,633 $ 1,059,584
Current portion of long-term debt and notes payable 2,731,184 1,564,080
Accounts payable
Trade 4,217,011 2,520,238
Virbac SA 30,019 776,586
Accrued expenses 1,889,487 2,723,588
-------------------- --------------------
10,367,334 8,644,076
Long-term debt and notes payable 9,197,991 9,347,993
Commitments and contingencies (Note 6)
Shareholders' equity:
Common stock ($.01 par value; 38,000,000 shares authorized;
20,975,747 issued) 212,312 209,757
Additional paid-in capital 34,326,357 33,998,794
Treasury stock at cost (8,949 and 42,949 shares, respectively)
Accumulated deficit (7,539,273) (8,470,021)
-------------------- --------------------
26,976,546 25,640,949
Total Liabilities and Shareholders' Equity $ 46,541,871 $ 43,633,018
==================== ====================
</TABLE>
Consolidated Statements of Operations (unaudited)
<TABLE>
<CAPTION>
For the three months
Ended March 31,
2000 1999
<S> <C> <C>
Net revenues $ 13,354,284 $ 7,719,983
Cost of goods sold 7,725,542 3,829,869
-------------------- --------------------
Gross profit 5,628,742 3,890,114
Operation expenses:
Selling, general and administrative 3,691,345 3,103,998
Research and development 343,210 215,503
Warehouse and distribution 689,082 453,740
-------------------- --------------------
Income from operations 905,105 116,873
Interest expense (233,266) (116,644)
Other income (expense) 258,907 11,785
-------------------- --------------------
Income before income tax benefit 930,746 12,014
Income tax benefit -- --
-------------------- --------------------
Net income $ 930,746 $ 12,014
==================== ====================
Basic and diluted income per share $ 0.04 $ --
==================== ====================
Basic and diluted shares outstanding 21,090,346 15,295,064
==================== ====================
</TABLE>
<PAGE>
Consolidated Statements of Cash Flows (unaudited)
<TABLE>
<CAPTION>
For Three Months
Ended March 31,
2000 1999
<S> <C> <C>
Net income $ 930,746 $ 12,014
Adjustments to reconcile net loss to net cash (used in) provided
by operating activities:
Depreciation and amortization 323,928 238,858
Changes in operating assets and liabilities:
(Increase) in accounts receivable (4,333,255) (1,625,782)
(Increase) decrease in inventories 622,361 (97,416)
(Increase) decrease in prepaid expenses and other (2,904) 363,982
Increase in accounts payable 1,700,742 355,689
Increase (decrease) in accrued expense (677,353) 30,014
------------------- ------------------
Net cash used in operating activities (1,435,735) (722,641)
------------------- ------------------
Investing activities
Purchase of property, plant and equipment (86,262) --
Other (144,027) (31,329)
Merger with Agri-Nutrition Group Limited (see Note 1) -- (643,979)
------------------- ------------------
Net cash used in investing activities (230,289) (675,308)
------------------- ------------------
Financing activities
Proceeds from long-term debt and notes payable 1,580,978 --
Repayment of long-term debt and notes payable (563,876) (12,772,811)
Increase in bank overdraft 440,049 --
Cash infusion by Parent in connection with the Merger
Repurchase of treasury shares (98,900)
Reissuance of treasury shares 101,250 --
Issuance of common stock 402,499 8,493
------------------- ------------------
Net cash provided by financing activities 1,862,000 985,571
------------------- ------------------
Increase (decrease) in cash and cash equivalents 195,976 (412,378)
Cash and cash equivalents, beginning of period 231,297 412,378
------------------- ------------------
Cash and cash equivalents, end of period $ 427,273 $ --
=================== ==================
</TABLE>
Consolidated Statement of Shareholders' Equity (unaudited)
<TABLE>
<CAPTION>
Common Stock Treasury Stock
Additional Number
Number Par Paid In of Shares Accumulated
of Shares Value Capital Amount Deficit Total
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, 20,975,747 $ 209,757 $ 33,998,794 42,949 $ (97,581) $ (8,470,021) $ 25,640,949
December 31, 1999
Issuance of shares to
satisfy stock compen-sation
plans 255,429 2,555 399,944 402,499
Purchase of treasury 34,000 (98,900) (98,900)
Shares
Issuance of shares to
satisfy stock compensation
plans 173,631 101,250
Net income 930,746 930,746
------------- ---------- ------------- ----------- ------------ -------------- ------------
Balance,
March 31, 2000 21,231,176 $ 212,312 $ 34,326,357 8,949 $ (22,850) $ (7,539,275) $ 26,976,544
============= ========== ============= ============ ============ ============== =============
</TABLE>
<PAGE>
Notes to Consolidated Financial Statements (unaudited)
1. Nature of Operations and Basis of Presentation
Virbac Corporation (the "Company" or "Virbac") manufactures and distributes a
wide variety of health, grooming, dental and parasiticidal products for pets and
other companion animals under the C.E.T., Allerderm, St. JON, Zema, and
Francodex brand names.
The Company is the result of the March 5, 1999 merger of Virbac, Inc.,
a subsidiary of Virbac SA, a French veterinary pharmaceutical manufacturer
("VBSA"), and Agri-Nutrition Group Limited ("AGNU"), a publicly held company.
Pursuant to the merger agreement dated October 16, 1998, the merger was
completed by the following series of transactions: (i) VBSA contributed a total
of $15.7 million to Virbac, Inc. consisting of $13.7 million in cash and $2
million in intercompany debt recapitalized as equity; (ii) AGNU issued
12,580,918 shares of AGNU stock to VBSA; and (iii) Virbac, Inc. merged with AGNU
with AGNU being the surviving entity with VBSA its majority stockholder. The
name of the surviving entity was then changed to Virbac Corporation.
For financial statement reporting purposes, the merger is considered a
purchase of AGNU by Virbac, Inc. Accordingly, the accompanying unaudited
consolidated financial statements are the historical financial statements of
Virbac, Inc., which reflect its acquisition of AGNU as of March 5, 1999.
The accompanying unaudited consolidated financial statements have been
prepared in accordance with the instructions to Form 10-Q and do not include all
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, these
statements include all adjustments (which consist of normal, recurring
adjustments) necessary to present fairly the financial position, results of
operations and cash flows at and for periods ending March 31, 2000 and 1999. The
accompanying consolidated statements of operations reflect the historic
operations of Virbac, Inc. and include the operations of AGNU since the date of
the Merger. The results of operations for the three months ending March 31, 2000
and 1999 are not necessarily indicative of the operating results for the full
year. This interim report should be read in conjunction with the Virbac
Corporation consolidated financial statements and notes related thereto included
in the 1999 Form 10-K as filed with the Securities and Exchange Commission. The
Company's independent accountants have not reviewed these unaudited consolidated
financial statements.
2. Inventories
Inventories consist of the following:
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
<S> <C> <C>
Raw materials $ 5,200,139 $ 6,340,906
Packaging 2,990,725 2,276,927
Finished goods 5,460,677 6,069,769
------------------- -------------------
13,651,541 14,687,602
Less: reserve for excess and obsolete inventories (849,051) (913,997)
------------------- -------------------
$ 12,802,490 $ 13,773,605
=================== ===================
</TABLE>
4. Financing
The Company has a revolving credit facility of $11.8 million at March
31, 2000. Long-term debt and notes payable consist of the following:
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
<S> <C> <C>
Revolving credit facility with a financial institution up to $11.8
million based upon specified percentages of qualified accounts
receivable and inventory, collateralized by accounts receivable,
inventory, equipment, intangibles, and certain real estate, with
interest varying based upon financial
performance (8.5%, as of March 31,2000). $ 11,633,192 $10,616,090
Note payable dated September 25, 1997, interest at prime, due 195,983 195,983
in annual installments of $97,991, plus accrued interest,
maturity September 25, 2001.
Notes payable dated September 25, 1997, due in September 100,000 100,000
2000, with $49,000 payable in cash, plus interest at prime,
and $51,000 in shares of the Company's Common Stock.
----------------- ----------------
11,929,175 10,912,073
Less- Current maturities (2,731,184) (1,564,080)
----------------- ----------------
$ 9,197,991 $ 9,347,993
----------------- ----------------
</TABLE>
Of the $11.8 million available facility, a $2.1 million segment is to
be repaid in installments through July 2000 and the availability of another $2.7
million segment is to be reduced by $150,000 per quarter.
The revolving credit facility contains financial covenants, including
but not limited to, tangible net worth and interest coverage ratios, and
restricts the payment of dividends. At March 31, 2000, the Company was not in
compliance with these covenants. However, the Company has received a waiver from
the bank related to such non-compliance. In addition, the bank has agreed to
amend the debt covenants and the Company would have been in compliance with such
amended covenants at March 31, 2000.
5. Stock Options and Common Stock Transactions
During the three months ended March 31, 2000, options to purchase
56,000 shares of the Company's Common Stock were granted to employees. The
exercise price of $2.75 was determined based upon the fair value of the shares
on the date of grant. These options vest ratably over three years from the dates
of grant and will expire ten years from the grant date. Options to purchase an
additional 38,000 shares of the Company's Common Stock at an exercise price of
$2.75 were contingently granted, with the final granting of the stock
conditional upon the Company's performance in 2000. During the same period,
non-qualified options to purchase 302,076 shares of the Company's Common Stock
were exercised. Of the options exercised, 234,076 shares were issued from
previously unissued shares and 68,000 shares were issued from treasury shares
During the three months ended March 31, 2000, the Company purchased on
the open market 34,000 shares of its Common Stock. During the same period,
68,000 shares of treasury stock were reissued and 234,076 of authorized but
previously unissued shares were issued to satisfy distributions under stock
compensation plans. In addition, 21,353 shares of authorized but previously
unissued shares were issued to outside directors of the Company.
6. Contingencies
The Company is subject to certain litigation and claims arising out of
the conduct of its business. While the final outcome of any litigation or claim
cannot be determined with certainty, management believes that the final outcome
of any current litigation or claim will not have a material adverse effect on
the Company's financial position, cash flows or results of operations.
Pursuant to the merger agreement between Virbac, Inc. and AGNU, if,
during the period ending on the second anniversary of the merger, the closing
price of the Company's Common Stock has not reached $3.00 per share for 40
consecutive trading days, the Company will conduct another public tender offer
to purchase up to 1,395,000 shares of the Company's outstanding Common Stock at
a price of $3.00 per share. Pursuant to the merger agreement, such tender offer
will be funded by VBSA's direct purchase from the Company of 1,395,000 shares of
unissued Common Stock at a price of $3.00 per share.
In order to maintain VBSA's 60% ownership interest in the Company until
the expiration, termination or exercise of all options to purchase the Company's
Common Stock outstanding as of the date of the merger and until the Company's
last issuance of Common Stock pursuant to the "Mardel Merger Agreement", the
Company will contemporaneously, with the issuance of Common Stock upon the
exercise of pre-merger AGNU options or pursuant to the Mardel Merger Agreement,
issue to VBSA a number of additional shares of Common Stock equal to the product
of (a) the aggregate number of shares of Common Stock issued upon the exercise
of such AGNU options or pursuant to the Mardel Merger Agreement and (b) 1.5.
Each such post-Merger adjustment will dilute the voting power of current
stockholders. As of March 31, 2000, 469,924 pre-merger options were outstanding.
The Company will issue additional shares of Common Stock with an aggregate value
of $51,000 pursuant to the Mardel Merger Agreement in September 2000. No shares
will be issued to VBSA in the event that treasury shares are reissued to satisfy
these pre-merger obligations.
7. Segment and Related Information
The Company has three reportable segments. The Veterinary segment
distributes pet health care products mainly to veterinarian offices. The
over-the-counter (OTC) segment manufactures and distributes pet health products
to pet stores, farm and fleet stores, and the mass retail market. PMR
manufactures and distributes animal health and specialty chemicals under private
label brands and for third parties. There have been no material change from the
1999 Annual Report in total assets by segment, in the basis of segmentation, nor
in the basis of measuring segment profit. Summarized financial information
concerning the Company's reportable segments is shown in the following table
(dollars in thousands):
<TABLE>
<CAPTION>
Manufacturing
And Consolidated
Veterinary OTC PMR Administration Total
<S> <C> <C> <C> <C> <C>
For the quarter ended March 31, 2000
Revenues from external customers $ 6,194 $ 3,863 $ 3,294 $ 3 $ 13,356
Income (loss) from operations 1,874 426 293 (1,689) 905
Interest (expense) and other income, net 26
Net income 931
For the quarter ended March 31, 1999
Revenues from external customers $ 4,678 $ 1,837 $ 1,118 $ 87 $ 7,720
Income (loss) from operations 945 8 148 (984) 117
Interest (expense) and other income, net (105)
Net income 12
</TABLE>
8. Sale of UK Operations to VBSA
The Company has reached an agreement to sell VRx U.K., its distribution
subsidiary in the United Kingdom, to VBSA at net book value. The effective date
of this transaction is January 1, 2000. Accordingly, the accompanying
consolidated financial statements do not include the results of operations for
the three months ended March 31, 2000 nor the balance sheet at March 31, 2000
for VRx U.K.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Overview
Virbac Corporation (the "Company") manufactures and distributes
companion animal health products. The Company is a leader in dermatological and
oral hygiene products for companion animals, or pets, and provides a broad array
of health care products to its customers under the C.E.T., Allerderm, St. JON,
Zema, and Francodex brand names.
On March 5, 1999, the Company, formerly named Agri-Nutrition Group
Limited, merged with Virbac, Inc., with the Company being the surviving
corporation. Virbac SA, the parent of Virbac, Inc., received 60% of the voting
equity of the Company; therefore, Virbac, Inc. is considered to be the acquirer
for financial statement purposes. Accordingly, the merger has been accounted for
as a purchase of Agri-Nutrition Group Limited by Virbac, Inc.
The Management's Discussion and Analysis that follows contains forward
looking information made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. These forward-looking statements may
be affected by certain risks and uncertainties described in the Company's
filings with the Securities and Exchange Commission. Projections of gross margin
improvements anticipated due to the consolidation of manufacturing and
distribution facilities and of expense reductions that should result from actual
or planned headcount reductions may not be achieved if unforeseen difficulties
arise in executing the plans or if assumptions made in the plans are inaccurate.
Forward-looking statements regarding future sales may be affected by new
competitive or technological entries into the market or by lack of acceptance of
the Company's products by the market. Therefore, the Company's actual results
could differ materially from such forward-looking statements.
Results of Operations
Because Agri-Nutrition operations were significantly larger than
Virbac, Inc., substantially all of the increase in each component of the
Consolidated Statements of Operations from 1999 to 2000 is due to the
acquisition of Agri-Nutrition. For the quarter ended March 31, 2000 as compared
to March 31, 1999, the acquisition accounts for approximately 92% of the
increase in revenue, approximately 87% of the increase in gross profit and all
of the increase in operating expenses.
The actual results of operations for the quarter ended March 31, 1999
as presented in the Consolidated Statements of Operations include the operations
of Virbac, Inc. plus the results of Agri-Nutrition since March 5, 1999, while
the results of operations for the period ended March 31, 2000 include both
companies for the entire period. For comparative purposes, management believes
that an analysis upon which 1999 results are presented on a basis that is
equivalent to 2000 will provide a more meaningful discussion of the results of
operations. To that end, the actual results for the period ending March 31, 1999
have been adjusted to include the results of Agri-Nutrition since January 1999
in order to be comparable with the actual results of2000. The 1999 amounts have
also been adjusted to reflect the effects of the merger, primarily adjustments
to reduce interest expense reflecting the repayment of debt in conjunction with
the merger and adjustments to depreciation and amortization related to certain
purchase accounting adjustments.
<PAGE>
For the quarter ended
(in thousands of dollars) --------------------------------
March 31,
--------------------------------
1999
2000 (as adjusted)
Net Revenues $ 13,354 $ 12,908
Gross Profit 5,629 5,335
Gross Profit % 42% 41%
Operating Expenses 4,723 5,314
Interest and other (income) (25) 139
Net income (loss) 931 $ (118)
Quarter Ended March 31, 2000 Compared to Pro Forma Quarter Ended March 31, 1999
The $446 thousand or 3% increase in sales for the quarter ended March 31
is primarily volume driven. Sales increased approximately $480 thousand or 8% in
the veterinary division and approximately $341 thousand or 12% in PMR. Sales
were flat in the OTC division and down $192 thousand in custom manufacturing. In
addition, 1999 sales include approximately $186 thousand of sales of VRx UK.
Effective January 1, 2000, VRx UK has been sold to VBSA, and none of its sales
have been included in the 2000 results of operations. See Note 8 to the
Unaudited Consolidated Financial Statements).
The gross profit percentage improved by 0.9 percentage point (42.2% in
2000, 41.3% in 1999). Approximately half of the improvement is due to favorable
product mix, as margins earned by custom manufacturing and VRx UK sales in 1999
were very low. The remainder of the improvement is due to greater manufacturing
overhead absorption in 2000 following the consolidation of the Company's
manufacturing facilities at the end of 1999.
Operating expenses have decreased 591 thousand or 11% compared to 1999.
Almost all of the reduction is due to synergies resulting from cost-cutting
efforts initiated in the second half of 1999 in the veterinary and OTC
divisions. Somewhat offsetting expense reductions in these divisions were (1)
increased marketing expense at PMR due to PMR beginning to serve the 3500 Purina
Mills distribution network on a direct basis beginning in early 1999 in return
for a higher gross margin percentage and (2) higher professional fees and
employee expense at the corporate office.
Included in other income is approximately $190 thousand in one-time
fees earned from granting a third party the use of registration data on PMR's
bromethalin rodenticide.
The Company did not record an income tax benefit in connection with its
operating loss in 2000 nor in 1999 due to the uncertainty of the realization of
the tax benefit because of the historical losses incurred by Virbac, Inc. and
Agri-Nutrition over the last several years.
The Company has reached an agreement to sell VRx U.K., its distribution
subsidiary in the United Kingdom, to VBSA at net book value. The effective date
of this transaction is January 1, 2000. Accordingly, the accompanying
consolidated financial statements do not include the results of operations for
the three months ended March 31, 2000 nor the balance sheet at March 31, 2000
for VRx U.K.
Liquidity and Capital Resources
During the quarter ended March 31, 2000, $1.4 million of cash was used
in operations. Although $ 1.3 million was generated by the Company's net income
before depreciation and amortization, working capital needs consumed $2.7
million. The increase in working capital reflects increases in accounts
receivable, which arises from the increase in sales.
Cash flows used in investing activities include cash costs related to
capital improvements at the Company's St. Louis and Fort Worth facilities.
Cash flows from financing activities reflect primarily reductions in
borrowing under a revolving credit facility. Additional cash flows from
financing activities were the purchases and subsequent reissuance of treasury
shares and the issuance of previously unissued shares in order to satisfy
distributions under stock compensation plans.
On September 7, 1999, the Company replaced all of its then-existing
credit facilities with a three-year, $10 million facility. In December 1999, the
Company obtained a temporary $2.5 million increase to its line of credit to fund
acquisition fees related to the in-licensing of a product and to fund working
capital increases related to the consolidation of the Company's production
facilities. This temporary increase is to be repaid in installments from
February to July 2000. Of the remaining $10 million, $7 million is subject to a
borrowing formula based upon eligible accounts receivable and inventory and
serves as a revolving line of credit. The availability of the remaining $3
million will be reduced by $150,000 per quarter. At March 31, 2000, $0.2 million
was available under the credit facility. The interest rate and fees vary based
upon the financial performance of the Company as measured by the ratio of EBITDA
to interest expense paid and current maturities due. Interest rates can vary
from prime plus 25 basis points to prime minus 75 basis points. At March 31,
2000, the Company is paying prime (8.50%).
The revolving credit facility contains financial covenants, including
but not limited to, tangible net worth and interest coverage ratios, and
restricts the payment of dividends. At March 31, 2000, the Company was not in
compliance with these covenants. However, the Company has received a waiver from
the bank related to such non-compliance. In addition, the bank has agreed to
amend the debt covenants and the Company would have been in compliance with such
amended covenants at March 31, 2000.
Management believes that the Company will have sufficient cash to meet
the needs of its current operations for at least the next twelve months from
cash flows from current operations, up-front fees to be realized from the
out-licensing of certain products under development, from existing financing
facilities, and, if necessary, from short-term advances from VBSA.
The Company has no current plans to significantly increase capacity of
any of its plant facilities or to expend significant capital in modifying them.
During 1999, the Company acquired the rights to manufacture and sell
products currently in development by a third party. The Company paid $1,000,000
in partial payment for those rights, and, depending upon the third party
reaching certain milestones in the registration process, is committed to paying
up to an additional $3,250,000 in 2000 and 2001.
The Company is committed to conduct a public tender offer to purchase
up to 1,395,000 of the Company's outstanding Common Stock at a price of $3.00
per share if, during the period ending on the second anniversary of the merger,
the closing sale price of the Company's Common Stock has not reached $3.00 per
share for a period of 40 consecutive trading days. Pursuant to the merger
agreement, such tender offer, if necessary, will be funded by Virbac SA's direct
purchase from the Company of 1,395,000 shares of Common Stock at $3.00 per
share.
The Company has no plans to pay dividends to stockholders in the
foreseeable future.
Part II - Other Information
Item 6. Exhibits and Reports on Form 8-K.
b. Reports of Form 8-K.
No reports on Form 8-K were filed during the three-month period ended
March 31, 2000.
Signature
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. VIRBAC CORPORATION
/s/ Henry B. Haley
Henry B. Haley
Vice President and Chief Financial Officer
May 15, 2000
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAR-31-2000
<CASH> 427,273
<SECURITIES> 0
<RECEIVABLES> 10,281,248
<ALLOWANCES> 170,606
<INVENTORY> 12,802,490
<CURRENT-ASSETS> 24,253,645
<PP&E> 16,319,864
<DEPRECIATION> 3,748,139
<TOTAL-ASSETS> 46,541,871
<CURRENT-LIABILITIES> 10,367,334
<BONDS> 0
0
0
<COMMON> 212,312
<OTHER-SE> 26,764,234
<TOTAL-LIABILITY-AND-EQUITY> 46,541,871
<SALES> 13,354,284
<TOTAL-REVENUES> 13,354,284
<CGS> 7,725,542
<TOTAL-COSTS> 12,449,179
<OTHER-EXPENSES> (258,907)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 233,266
<INCOME-PRETAX> 930,746
<INCOME-TAX> 0
<INCOME-CONTINUING> 930,746
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 930,746
<EPS-BASIC> 0.04
<EPS-DILUTED> 0.04
</TABLE>
