FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark One) Quarterly Report Pursuant To Section 13 Or 15 (d) of
[ X ] The Securities Exchange Act of 1934
For The Quarterly Period Ended March 31, 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 1-13648
BALCHEM CORPORATION
(Exact name of registrant as specified in its charter)
Maryland 13-2578432
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
P.O. Box 175 Slate Hill, New York 10973
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
914-355-5300
Registrant's telephone number, including area code:
Indicate by a 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
filing requirements for the past 90 days.
Yes [ X ] No [ ]
As of April 28, 1999, the registrant had 4,885,477 shares of its Common Stock,
$.06 2/3 par value, outstanding.
<PAGE>
Part I Financial Information
Item 1. Financial Statements
<TABLE>
<CAPTION>
BALCHEM CORPORATION
Condensed Consolidated Balance Sheets
(In thousands, except share and per share data)
Unaudited
Assets March 31, 1999 December 31, 1998
------ -------------- -----------------
Current assets:
<S> <C> <C>
Cash and cash equivalents ..................................... $ 1,689 $ 1,348
Trade accounts receivable, less allowance for doubtful accounts 3,416 3,283
Inventories ................................................... 2,921 2,875
Prepaid expenses .............................................. 329 476
Deferred income taxes ......................................... 220 219
Other current assets .......................................... -- 198
------- -------
Total current assets .......................................... 8,575 8,399
------- -------
Property, plant and equipment, net of accumulated depreciation 8,009 8,103
Intangible assets, net of accumulated amortization ............ 5,863 6,139
Other assets .................................................. 1 7
======= =======
Total assets .................................................. $22,448 $22,648
======= =======
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BALCHEM CORPORATION
Condensed Consolidated Balance Sheets
(In thousands, except share and per share data)
Unaudited
Liabilities and Stockholders' Equity March 31, 1999 December 31, 1998
------------------------------------ -------------- ------------------
<S> <C> <C>
Current liabilities:
Accounts payable and accrued expenses ............................ $ 1,696 $ 1,478
Accrued compensation and other benefits .......................... 367 601
Dividends payable ................................................ -- 160
Income taxes payable ............................................. 235 --
Current portion of long-term debt ............................... 600 1,200
Current portion of other long-term obligations ................... 40 43
---------- ----------
Total current liabilities ........................................ 2,938 3,482
---------- ----------
Long-term debt ................................................... 2,150 2,550
Deferred income taxes ............................................ 488 525
Deferred compensation ........................................... 120 135
Other long-term obligations ...................................... 171 181
---------- ----------
2,929 3,391
---------- ----------
---------- ----------
Total liabilities ................................................ 5,867 6,873
---------- ----------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BALCHEM CORPORATION
Condensed Consolidated Balance Sheets
(In thousands, except share and per share data)
Unaudited
March 31, 1999 December 31, 1998
-------------- ------------------
<S> <C> <C>
Stockholders' equity:
Preferred stock, $25 par value. Authorized 2,000,000
shares; none issued and outstanding Common stock,
$.06 2/3 par value. Authorized 10,000,000 shares;
issued and outstanding 4,885,477 shares at
March 31, 1999 and 4,875,914 shares at December 31, 1998 ......... 326 325
Additional paid-in capital ....................................... 2,838 2,783
Retained earnings ................................................ 13,417 12,667
---------- ----------
Total stockholders' equity ....................................... 16,581 15,775
---------- ----------
========== ==========
Total liabilities & stockholders' equity ......................... $ 22,448 $ 22,648
========== ==========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
BALCHEM CORPORATION
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
Unaudited
Three Months Ended
March 31,
1999 1998
------- ------
<S> <C> <C>
Net sales .......................................... $7,047 $7,735
Cost of sales ...................................... 4,207 4,514
------ ------
Gross margin ....................................... 2,840 3,221
Operating expenses:
Selling expenses ................................... 641 743
Research and development expenses .................. 289 284
General and administrative expenses ................ 704 882
------ ------
Total operating expenses ........................... 1,634 1,909
------ ------
Income from operations ............................. 1,206 1,312
Other expenses - net:
Interest expense - net ............................. 43 28
Other expense - net ................................ -- 13
------ ------
Total other expenses - net ......................... 43 41
------ ------
Earnings before income taxes ....................... 1,163 1,271
Income taxes ....................................... 413 440
------ ------
Net earnings ....................................... $ 750 $ 831
====== ======
Basic net earnings per common share (note 3) ....... $ 0.15 $ 0.17
====== ======
Diluted net earnings per common share (note 3) ..... $ 0.15 $ 0.17
====== ======
</TABLE>
See accompanying notes to condensed consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
BALCHEM CORPORATION
Condensed Consolidated Statements of Cash Flows
(In thousands)
Unaudited
---------
Three Months Ended
March 31,
1999 1998
-------- -------
<S> <C> <C>
Cash flows from operating activities:
Net earnings ......................................... $ 750 $ 831
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization ........................ 509 333
Non-employee stock compensation ...................... 22 29
Employee non-cash compensation ....................... 49 54
Provision for deferred income taxes .................. (38) (48)
Loss on sale of equipment ............................ -- 19
Changes in assets and liabilities:
Accounts receivable .................................. (133) (911)
Inventories .......................................... (46) (735)
Prepaid expenses and other ........................... 345 359
Accounts payable and accrued expenses ................ (31) 521
Income taxes payable ................................ 235 341
Deferred compensation payable ........................ (15) (8)
------- -------
Net cash flows provided by operating activities ...... 1,647 785
------- -------
Cash flows from investing activities:
Proceeds from sale of property, plant and equipment .. -- 15
Capital expenditures ................................. (137) (156)
Investments in other assets ......................... (2) (312)
------- -------
Net cash flows used in investing activities .......... (139) (453)
------- -------
Cash flows from financing activities:
Principal payments on long-term debt ................. (1,000) (350)
Stock options and warrants exercised ................. 7 22
Dividends paid ....................................... (160) (159)
Other financing activities ........................... (14) (13)
------- -------
Net cash flows used in financing activities .......... (1,167) (500)
------- -------
Increase (decrease) in cash and cash equivalents ..... 341 (168)
Cash and cash equivalents beginning of year .......... 1,348 736
------- -------
======= =======
Cash and cash equivalents end of period .............. $ 1,689 $ 568
======= =======
</TABLE>
See accompanying notes to condensed consolidated financial statements.
<PAGE>
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in thousands, except share and per share data)
NOTE 1 - CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
- ----------------------------------------------------
The condensed consolidated financial statements presented herein have been
prepared by the Company in accordance with the accounting policies described in
its December 31, 1998 Annual Report on Form 10-K and should be read in
conjunction with the notes to consolidated financial statements which appear in
that report.
In the opinion of management, the unaudited condensed consolidated financial
statements furnished in this Form 10-Q include all adjustments necessary for a
fair presentation of the financial position, results of operations and cash
flows for the interim periods presented. All such adjustments are of a normal
recurring nature. The condensed consolidated financial statements have been
prepared in accordance with the instructions to Form 10-Q and therefore do not
include some information and notes necessary to conform with annual reporting
requirements. The results of operations for the three months ended March 31,
1999 are not necessarily indicative of the operating results expected for the
full year.
NOTE 2 - INVENTORIES
- --------------------
Inventories at March 31, 1999 and December 31, 1998 consist of the following:
March 31, 1999 December 31, 1998
-------------- -----------------
Raw Materials $ 1,163 $ 1,025
Finished Goods 1,758 1,850
$ 2,921 $ 2,875
NOTE 3 - NET EARNINGS PER SHARE
- -------------------------------
Net earnings per share are calculated in accordance with SFAS No.128 "Earnings
Per Share." The following presents a reconciliation of the numerator and
denominator used in calculating basic and diluted net earnings per share:
<TABLE>
<CAPTION>
Number of
Income Shares Per Share
Three months ended March 31, 1999 (Numerator) (Denominator) Amount
- --------------------------------- ---------- ------------ ------
<S> <C> <C> <C>
Basic EPS - Net earnings and weighted average common
shares outstanding $ 750 4,880,892 $.15
Effect of dilutive securities - stock options 25,532
---------
Diluted EPS - Net earnings and weighted average
common shares outstanding and effect of stock options $ 750 4,906,424 $.15
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Number of
Income Shares Per Share
Three months ended March 31, 1998 (Numerator) (Denominator) Amount
- --------------------------------- ---------- ------------ ------
<S> <C> <C> <C>
Basic EPS - Net earnings and weighted average common
shares outstanding $ 831 4,798,180 $.17
Effect of dilutive securities - stock options 82,509
---------
Diluted EPS - Net earnings and weighted average
common shares outstanding and effect of stock options
$ 831 4,880,689 $.17
</TABLE>
NOTE 4 - SEGMENT INFORMATION
- ----------------------------
The Company's reportable segments are strategic businesses that offer different
products and services. Presently, the Company has two reportable segments,
Specialty Products and Encapsulated Products.
Business Segment Net Revenues:
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1999 1998
<S> <C> <C>
Specialty Products $ 4,837 $ 4,917
Encapsulated Products 2,210 2,818
- --------------------------------------------------------------------------------
Total $ 7,047 $ 7,735
- --------------------------------------------------------------------------------
Business Segment Profit (Loss):
<CAPTION>
- --------------------------------------------------------------------------------
Three Months Ended
March 31,
1999 1998
- --------------------------------------------------------------------------------
Specialty Products $ 1,298 $ 1,026
Encapsulated Products (92) 286
Interest expense and other income (expense) (43) (41)
- --------------------------------------------------------------------------------
Earnings before income taxes $ 1,163 $ 1,271
- --------------------------------------------------------------------------------
</TABLE>
<PAGE>
NOTE 5 - SUPPLEMENTAL CASH FLOW INFORMATION
- -------------------------------------------
Cash paid during the three months ended March 31, 1999 and 1998 for income taxes
and interest is as follows:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Three Months Ended
March 31,
1999 1998
- --------------------------------------------------------------------------------
<S> <C> <C>
Income taxes $ 18 $ 45
Interest $ 54 $ 27
- --------------------------------------------------------------------------------
</TABLE>
<PAGE>
Item 2 - Management's Discussion and Analysis of Financial Condition and
Results of Operations
This Report contains forward-looking statements, within the meaning of
Section 21E of the Securities Exchange Act of 1934, as amended, which reflect
the Company's expectation or belief concerning future events that involve risks
and uncertainties. The actions and performance of the Company could differ
materially from what is contemplated by the forward-looking statements contained
in this Report. Factors which might cause differences from the forward-looking
statements include those referred to or identified in Item 1 of the Company's
Annual Report on Form 10-K for the year ended December 31, 1998 and other
factors which may be identified elsewhere in this Report. Reference should be
made to such factors and all forward-looking statements are qualified in their
entirety by the above cautionary statements.
Balchem Corporation is engaged in the development, manufacture and
marketing of specialty performance ingredients for the food, feed and medical
sterilization industries. The Company operates in two business segments, the
micro-encapsulation of performance ingredients (the "encapsulated products"
segment) and the repackaging and marketing of high quality specialty gases (the
"specialty products" segment).
(All dollar amounts in thousands)
Results of Operations:
Three months ended March 31, 1999 as compared with three months ended March 31,
1998
- --------------------------------------------------------------------------------
Net sales for the three months ended March 31, 1999 were $7,047 as
compared to $7,735 for the three months ended March 31, 1998, a decrease of $688
or 9%. Net sales for the specialty products segment were $4,837 for the three
months ended March 31, 1999 as compared to $4,917 for the three months ended
March 31, 1998, a decrease of 2% or $80. This decline was attributable primarily
to a decrease in volumes sold of the Company's ethylene oxide product. Net sales
for the encapsulated products segment were $2,210 for the three months ended
March 31, 1999 as compared to $2,818 for the three months ended March 31, 1998 a
decrease of 22% or $608. This decrease was primarily the result of decreased
volumes sold of products in the international food markets due to purchasing
patterns and inventory level adjustments of certain larger customers.
Cost of sales increased 1.3 percentage points as a percent of sales for
the three months ended March 31, 1999 as compared to the three months ended
March 31, 1998. The increase was primarily attributable to higher costs related
to the mix of products sold during the three months ended March 31, 1999 in the
encapsulated products segment and additional amortization expense associated
with the early purchase price buy-out option under the agreement pertaining to
the 1994 acquisition by the specialty products segment as more fully described
in Liquidity and Capital Resources below.
Operating expenses for the three months ended March 31, 1999 decreased
to $1,634 from $1,909 for the three months ended March 31, 1998, a decrease of
$275 or 14%. The decrease in operating expenses was primarily the result of a
decrease in consulting fees in the specialty products segment, decreased costs
associated with the Company's medical plan and decreases in recruiting and
relocation expenses for both of the Company's business segments.
<PAGE>
Earnings before income taxes for the specialty products segment for the
three months ended March 31, 1999 was $1,298 as compared to $1,025 for the three
months ended March 31, 1998. The increase in earnings before income taxes was
the direct result of the ongoing cost containment efforts in the selling,
general and administrative areas implemented by management in the prior year.
Earnings (loss) before income taxes for the encapsulated products segment for
the three months ended March 31, 1999 was a $92 loss as compared to a profit of
$287 for the three months ended March 31, 1998. The loss for the three months
ended March 31, 1999 can primarily be attributed to the decreased volumes sold
of products in the international food markets as described above. In addition,
during the three months ended March 31, 1999 and the three months ended March
31, 1998, the Company spent $289 and $284, respectively, on Company-sponsored
research and development programs substantially all of which pertained to the
Company's encapsulated products segment. In particular, the Company continues to
incur considerable development expenses in the gathering of data for its
encapsulated choline chloride product for animal feed from university studies,
commercial field trials and potential customers, to accelerate the marketing
effort for this product.
Income from operations for the three months ended March 31, 1999 was
$1,163 as compared to $1,271 for the three months ended March 31, 1998, a
decrease of 8% or $108.
Net earnings were $750 for the three months ended March 31, 1999 as
compared to $831 for the three months ended March 31, 1998. Net interest expense
for the three months ended March 31, 1999 totaled $43 as compared to $28 for the
three months ended March 31, 1998. The increase in interest expense was the
result of a higher average debt balance for the three months ended March 31,
1999 due to the exercise of the early purchase price buy-out option under the
agreement pertaining to the 1994 acquisition by the specialty products segment
as more fully described in Liquidity and Capital Resources below.
Liquidity and Capital Resources
Cash flow from operating activities provided approximately $1,647 for
the three months ended March 31, 1999 as compared to $785 for the three months
ended March 31, 1998. Improvements in cash flow for this period of time are
primarily the result of reductions in inventory and accounts receivable
balances.
Capital expenditures were $137 for the three months ended March 31,
1999. Capital expenditures are projected to be approximately $700 for 1999.
On June 16, 1994, the Company purchased certain tangible and intangible
assets for one of its packaged specialty ingredients for $1,500 in cash. Under
the agreement, the Company was also required to pay contingent amounts to
compensate the seller for the purchase of the seller's customer list in
accordance with a formula based on profits derived from sales of the specialty
packaged product. On June 25, 1998, the Company elected to exercise the early
payment option under the agreement resulting in a final Company payment of
$3,700 to the seller. The Company has no further purchase price obligation under
the agreement. The Company capitalized approximately $3,982 in connection with
this acquisition in 1998.
In connection with the exercise of the early payment option described
above, the Company borrowed an additional $3,000 during 1998. Long-term debt,
including the current portion, totaled $2,750 at March 31, 1999.
<PAGE>
The Company knows of no current or pending demands on or commitments
for its liquid assets that will materially affect its liquidity. The Company
currently has approval for a $2,000 line of credit from its principal bank all
of which was available at March 31, 1999.
Year 2000 Issue
The Company has conducted a comprehensive review of its operations to
identify those systems that could be affected by the "Year 2000" issue. The
review covered information systems, mainframe and personal computers, the
Company's product research and development facilities and its manufacturing
operations. The Year 2000 issue is the general term used to describe various
problems that may result from the improper processing of dates and
date-sensitive calculations by computers and other machinery, as a result of
computer programs being written using two digits rather than four to define the
applicable year. Any of the Company's computer programs or any hardware that has
date-sensitive software or embedded chips may recognize a date using "00" as the
year 1900 rather than the year 2000. This could result in a system failure or
miscalculations causing disruptions of operations, including, among other
things, production difficulties, or an inability to process transactions, send
invoices, or engage in similar normal business activities.
Management presently believes that the Company has substantially
completed its Year 2000 planning for its internal systems and facilities
utilizing both internal and external resources. The Company has implemented a
new computer network throughout the organization and is currently implementing a
Year 2000 compliant version of its core business software. It is anticipated
that Year 2000 compliance efforts will be completed by mid-1999, allowing time
for testing. The Company's information systems include sales, production,
administrative and financial applications. In the event one of these systems was
to fail, the Company's ability to capture, schedule and fulfill customer demands
might be impaired.
The cost of the Company's Year 2000 project is expected to range
between $75 and $140. Approximately $60 of this amount was incurred through
March 31, 1999. The remainder of the estimated cost of the project is expected
to be incurred throughout 1999. The foregoing costs do not include Company
internal costs, which are principally the payroll costs for those employees
working on Year 2000 related matters. Such employees are otherwise full-time
employees of the Company who have not been hired specifically for Year 2000
related matters and accordingly, such costs have not been tracked. Costs of the
Year 2000 project have been expensed as incurred.
The Company is currently reviewing its external relationships to
address potential Year 2000 issues arising from relationships with significant
suppliers, service providers and customers. The Company has mailed Year 2000
questionnaires to significant suppliers and service providers and is reviewing
responses to these questionnaires. The Company will also be contacting several
significant customers regarding such customers' readiness.
To the extent practicable, contingency plans will be put in place
during 1999 in the event that the Company determines that it is at significant
risk in regard to suppliers, customers or its own internal hardware and
software. Contingency plans may include, but will not be limited to, stockpiling
raw materials, increasing finished goods inventory levels, consideration of
alternative sources of supply, customer communication plans, manually performing
certain functions and plant and business response plans.
<PAGE>
In general, the Company's plans are intended to provide a means of
managing risk, but cannot eliminate the potential for disruption due to third
party failure. The Company believes that due to the widespread nature of the
potential Year 2000 issues, its contingency planning is an ongoing process which
will require further consideration as the Company obtains additional
information. Although not currently anticipated, the Company believes that the
most reasonably likely worst case scenario resulting from Year 2000 problems
would be a slowdown or temporary cessation of manufacturing operations at one or
both of the Company's facilities due to one or more of the Company's specialty
product vendors' inability to supply material to the Company in a timely manner
and/or the unavailability of regularly used transportation sources for both
incoming and outgoing shipments of the Company's raw materials and finished
products. Manufacturing and shipping operations could also be adversely impacted
by a disruption in utility services. The Company has not yet developed specific
contingency plans in the event of a Year 2000 failure caused by a supplier or
third party, but would attempt to do so if a specific problem is identified
through the program described above. In some cases, particularly with respect to
its utility vendors, alternative suppliers may not be available and effective
contingency plans may not be feasible.
The failure to correct a material Year 2000 problem could, of course,
result in an interruption in, or failure of, certain normal business activities
or operations. Such failures could and the scenario described in the preceding
paragraph would, materially and adversely affect the Company. Due to the general
uncertainty inherent in the Year 2000 problem, resulting largely from the
uncertainty of the Year 2000 readiness of the Company's suppliers, other
third-party providers and customers, the Company is unable to determine at this
time whether the consequences of Year 2000 failures will have a material adverse
impact on the Company.
Impact of Recent Accounting Standards
In June 1998, the Financial Accounting Standards Board issued Statement
No. 133 "Accounting for Derivative Instruments and Hedging Activities." It
requires that an entity recognize all derivatives as either assets or
liabilities in the statement of financial position and measure those instruments
at fair value. This statement is effective for all fiscal quarters of fiscal
years beginning after June 15, 1999. Adoption of this statement is not expected
to have a material effect on the Company's financial position or results of
operations in the year of adoption.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
In the normal course of operations, the Company is exposed to market
risks arising from adverse changes in interest rates. Market risk is defined for
these purposes as the potential change in the fair value of debt instruments
resulting from an adverse movement in interest rates. As of March 31, 1999, the
Company's only borrowings were under a bank term loan which bears interest at
LIBOR plus 1%. A 100 basis point increase in interest rates, applied to the
Company's borrowings at March 31, 1999, would result in an increase in annual
interest expense and a corresponding reduction in cash-flow of approximately
$28. The Company's short-term working capital borrowings have historically borne
interest based on the prime rate. The Company believes that its exposure to
market risk relating to interest rate risk is not material.
The Company has no derivative financial instruments or derivative
commodity instruments, nor does the Company generally have any financial
instruments entered into for trading or hedging purposes. Foreign sales are
generally billed in U.S. dollars. The Company believes that its business
operations are not exposed in any material respect to market risk relating to
foreign currency exchange risk or commodity price risk.
<PAGE>
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
10.1.1 Amendment to Incentive Stock Option Plan of the
Company, as amended (incorporated by reference to
Exhibit 4.2.1 to the Company's Registration Statement
on Form S-8, as filed on May 12, 1999).*
10.3.1 First Amendment to Balchem Corporation 401(k)/Profit
Sharing Plan, dated April 29, 1999 (incorporated by
reference to Exhibit 4.2 to Post-Effective Amendment
No. 1 to the Company's Registration Statement on Form
S-8, as filed on May 11, 1999, File No. 333-44489).
10.7 Balchem Corporation 1999 Stock Plan (incorporated by
reference to Proxy Statement, dated April 23, 1999,
for the Company's 1999 Annual Meeting of
Stockholders).*
27 Financial Data Schedule.
(b) Reports on Form 8-K
No Reports on Form 8-K were filed during the quarter ended
March 31, 1999.
- -----------------
* Each of the Exhibits noted by an asterisk is a
management compensatory plan or arrangement.
<PAGE>
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.
BALCHEM CORPORATION
By:/s/ Dino A. Rossi
--------------------
Dino A. Rossi, President,
Chief Executive Officer and
Principal Financial Officer
Date: May 14, 1999
<PAGE>
EXHIBIT INDEX
Exhibit
10.1.1 Amendment to Incentive Stock Option Plan of the Company, as amended
(incorporated by reference to Exhibit 4.2.1 to the Company's
Registration Statement on Form S-8, as filed on May 12, 1999).
10.3.1 First Amendment to Balchem Corporation 401(k)/Profit Sharing Plan,
dated April 29, 1999 (incorporated by reference to Exhibit 4.2 to
Post-Effective Amendment No. 1 to the Company's Registration Statement
on Form S-8, as filed on May 11, 1999, File No. 333-44489).
10.7 Balchem Corporation 1999 Stock Plan (incorporated by reference to Proxy
Statement, dated April 23, 1999, for the Company's 1999 Annual Meeting
of Stockholders).
27 Financial Data Schedule.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> MAR-31-1999
<CASH> 1,689
<SECURITIES> 0
<RECEIVABLES> 3,416
<ALLOWANCES> 0
<INVENTORY> 2,921
<CURRENT-ASSETS> 8,575
<PP&E> 14,276
<DEPRECIATION> 6,267
<TOTAL-ASSETS> 22,448
<CURRENT-LIABILITIES> 2,938
<BONDS> 0
0
0
<COMMON> 326
<OTHER-SE> 16,255
<TOTAL-LIABILITY-AND-EQUITY> 22,448
<SALES> 7,047
<TOTAL-REVENUES> 7,047
<CGS> 4,207
<TOTAL-COSTS> 5,841
<OTHER-EXPENSES> 43
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,163
<INCOME-TAX> 413
<INCOME-CONTINUING> 750
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 750
<EPS-PRIMARY> 0.15
<EPS-DILUTED> 0.15
</TABLE>
