<PAGE>
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended April 30, 1999
Commission File Number 0-26670
-----------------
NORTH AMERICAN SCIENTIFIC, INC.
(Exact name of registrant as specified in its charter)
Delaware 51-0366422
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
20200 Sunburst Street, Chatsworth, CA 91311
(Address of principal executive offices)
(818) 734-8600
(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.
[X] Yes [ ] No
The number of shares of Registrant's Common Stock, $.01 par value,
outstanding as of May 18, 1999 was 6,804,137 shares.
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<PAGE>
NORTH AMERICAN SCIENTIFIC, INC.
INDEX
<TABLE>
<CAPTION>
PAGE
----
PART I - FINANCIAL INFORMATION
<S> <C>
ITEM 1. FINANCIAL STATEMENTS
Consolidated Balance Sheets as of April 30, 1999 and October 31, 1998............... 3
Consolidated Statements of Income for the three months and six months
ended April 30, 1999 and 1998 ................................................... 4
Consolidated Statements of Cash Flows for the six months
ended April 30, 1999 and 1998 .................................................... 5
Condensed Notes to Consolidated Financial Statements ............................... 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS ..................................................... 8
PART II - OTHER INFORMATION
ITEM 4. SUBMISSIONS OF MATTERS TO A VOTE OF SECURITY HOLDERS....................... 12
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
Exhibits ........................................................................... 12
Reports on Form 8-K ................................................................ 12
</TABLE>
<PAGE>
NORTH AMERICAN SCIENTIFIC, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
APRIL 30, OCTOBER 31,
1999 1998
----------- -------------
(UNAUDITED)
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents ..................................................... $ 1,456,000 $ 2,119,000
Marketable securities ......................................................... 8,100,000 9,101,000
Accounts receivable, net ...................................................... 1,346,000 1,323,000
Inventories ................................................................... 658,000 731,000
Prepaid expenses and other current assets...................................... 262,000 196,000
------------ ------------
Total current assets ........................................................ 11,822,000 13,470,000
Notes receivable.................................................................. 2,373,000 1,163,000
Equipment and leasehold improvements, net ........................................ 3,153,000 1,587,000
Advances on construction of equipment ............................................ 2,744,000 2,289,000
Deposits and other assets ........................................................ 481,000 394,000
------------ ------------
Total assets .............................................................. $ 20,573,000 $ 18,903,000
------------ ------------
------------ ------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable .............................................................. $ 423,000 $ 338,000
Accrued expenses .............................................................. 357,000 202,000
Income taxes payable .......................................................... 564,000 376,000
------------ ------------
Total current liabilities ................................................... 1,344,000 916,000
------------ ------------
Stockholders' equity
Preferred stock, $.01 par value, 2,000,000 shares authorized;
no shares issued............................................................. - -
Common stock, $.01 par value, 40,000,000 shares authorized; 6,804,137
and 6,787,975 shares issued and outstanding as of April 30, 1999 and
October 31, 1998, respectively............................................... 68,000 68,000
Additional paid-in capital .................................................... 17,177,000 17,162,000
Retained earnings ............................................................. 1,984,000 757,000
------------ ------------
Total stockholders' equity .................................................. 19,229,000 17,987,000
------------ ------------
Total liabilities and stockholders' equity .................................. $ 20,573,000 $ 18,903,000
------------ ------------
------------ ------------
</TABLE>
See notes to the consolidated financial statements.
<PAGE>
NORTH AMERICAN SCIENTIFIC, INC.
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
APRIL 30, APRIL 30,
------------------------ ------------------------
1999 1998 1999 1998
------------------------ ------------------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Net sales................................................... $ 3,007,000 $ 1,353,000 $ 5,434,000 $ 2,172,000
Cost of goods sold.......................................... 1,095,000 587,000 2,004,000 1,103,000
----------- ----------- ----------- -----------
Gross profit .......................................... 1,912,000 766,000 3,430,000 1,069,000
----------- ----------- ----------- -----------
Selling, general and administrative expenses ............... 765,000 453,000 1,463,000 811,000
Research and development.................................... 112,000 26,000 204,000 67,000
----------- ----------- ----------- -----------
Income from operations ..................................... 1,035,000 287,000 1,763,000 191,000
Interest and other income................................... 129,000 143,000 251,000 309,000
----------- ----------- ----------- -----------
Income before provision for income taxes ................... 1,164,000 430,000 2,014,000 500,000
Provision for income taxes ................................. 447,000 151,000 787,000 179,000
----------- ----------- ----------- -----------
Net income ................................................. $ 717,000 $ 279,000 $ 1,227,000 $ 321,000
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Earnings per share
Basic ................................................... $ .11 $ .04 $ .18 $ .05
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Diluted.................................................. $ .10 $ .04 $ .17 $.05
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Weighted average number of common and
common equivalent shares outstanding
Basic .................................................. 6,794,806 6,408,264 6,791,351 6,292,283
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Diluted ................................................. 7,140,065 7,159,203 7,156,634 7,052,716
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements
<PAGE>
NORTH AMERICAN SCIENTIFIC, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
APRIL 30,
-----------------------------
1999 1998
------------- ------------
(UNAUDITED)
<S> <C> <C>
Cash flows from operating activities:
Net income.................................................................. $ 1,227,000 $ 321,000
Adjustments to reconcile net income to net cash
provided by operating activities
Depreciation and amortization .......................................... 159,000 85,000
Changes in assets and liabilities
Accounts receivable .................................................. (23,000) (382,000)
Inventories .......................................................... 73,000 (75,000)
Income taxes receivable............................................... - 106,000
Prepaid expenses and other assets .................................... (168,000) (266,000)
Accounts payable ..................................................... 85,000 368,000
Accrued expenses ..................................................... 155,000 39,000
Income taxes payable ................................................. 188,000 106,000
------------- ------------
Net cash provided by operating activities..................... 1,696,000 302,000
------------- ------------
Cash flows from investing activities:
Advances on construction of equipment....................................... (455,000) (1,531,000)
Net sales of marketable securities ......................................... 1,001,000 -
Notes receivable............................................................ (1,210,000) -
Capital expenditures ....................................................... (1,710,000) (892,000)
------------- ------------
Net cash used in investing activities ........................ (2,374,000) (2,423,000)
------------- ------------
Cash flows from financing activities:
Net proceeds from issuance of common stock.................................. 15,000 13,301,000
------------- ------------
Net cash provided by financing activities .................... 15,000 13,301,000
------------- ------------
Net (decrease) increase in cash and cash equivalents ........................... (663,000) 11,180,000
Cash and cash equivalents at beginning of period ............................... 2,119,000 1,596,000
------------- ------------
Cash and cash equivalents at end of period ..................................... $ 1,456,000 $ 12,776,000
------------- ------------
------------- ------------
Supplemental disclosure of cash flow information:
Income taxes paid........................................................... $ 598,000 $ -
------------- ------------
------------- ------------
</TABLE>
See notes to the consolidated financial statements.
<PAGE>
NORTH AMERICAN SCIENTIFIC, INC.
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 - CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial information as of April 30, 1999 and for the three
months and six months then ended is unaudited. In the opinion of the Company,
the unaudited financial information is presented on a basis consistent with the
audited financial statements and contains all adjustments, consisting only of
normal recurring adjustments, necessary for a fair statement of the results for
such interim periods. The results of operations for interim periods are not
necessarily indicative of results of operations for the full year. The interim
financial statements should be read in conjunction with the audited financial
statements and notes thereto included in the Company's Annual Report on Form
10-KSB for the fiscal year ended October 31, 1998.
NOTE 2 - MARKETABLE SECURITIES
The Company considers its marketable securities available-for-sale as defined in
Statement of Financial Accounting Standards ("SFAS") No. 115. There were no
material realized or unrealized gains or losses nor any material differences
between estimated fair values, based upon quoted market prices, and the costs of
securities as of April 30, 1999.
NOTE 3 - INVENTORIES
Inventories are stated at the lower of cost or market. Cost is determined in a
manner which approximates the first-in, first-out method. Inventories are shown
net of applicable reserves and allowances. Inventories consist of the following:
<TABLE>
<CAPTION>
April 30, October 31,
1999 1998
---- ----
<S> <C> <C>
Raw materials $ 440,000 $ 606,000
Work in process 66,000 16,000
Finished goods 152,000 109,000
--------- ---------
$ 658,000 $ 731,000
--------- ---------
--------- ---------
</TABLE>
<PAGE>
NOTE 4 - NET INCOME PER SHARE
Basic earnings per share is computed by dividing the net income by the weighted
average number of shares outstanding for the period. Diluted earnings per share
is computed by dividing the net income by the sum of the weighted average number
of common shares outstanding for the period plus the assumed exercise of all
dilutive securities by applying the treasury stock method. The following table
sets forth the computation of basic and diluted earnings per share:
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
APRIL 30, APRIL 30,
------------------------------ ------------------------------
1999 1998 1999 1998
---------- ---------- ---------- -----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Net income $ 717,000 $ 279,000 $1,227,000 $ 321,000
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Weighted average shares outstanding (basic) 6,794,806 6,408,264 6,791,351 6,292,283
Dilutive effect of stock options and warrants 345,259 750,939 365,283 760,433
Diluted shares outstanding 7,140,065 7,159,203 7,156,634 7,052,716
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Basic earnings per share $ .11 $ .04 $ .18 $ .05
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Diluted earnings per share $ .10 $ .04 $ .17 $ .05
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
</TABLE>
-7-
<PAGE>
NORTH AMERICAN SCIENTIFIC, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following discussion and analysis should be read in conjunction with the
Consolidated Financial Statements contained herein and the notes thereto.
Certain matters discussed in this quarterly report on Form 10-Q are forward
looking as that term is defined by: (i) the Private Securities Litigation Reform
Act of 1995 (the "1995 Act") and (ii) releases issued by the SEC. These
statements are being made pursuant to the provisions of the 1995 Act and with
the intention of obtaining the benefits of the "Safe Harbor" provisions of the
1995 Act. The Company cautions investors that any forward looking statements
made by the Company are not guarantees of future performance and that actual
results may differ materially from those in such forward looking statements as a
result of various factors, including, but not limited to any risks detailed
herein or detailed from time to time in the Company's filings with the SEC,
including those factors identified under "Business-Risk Factors" in the
Company's Annual Report on Form 10-KSB for the fiscal year ended October 31,
1998. Any forward-looking statements herein speak only as of the date of this
Form 10-Q, and the Company undertakes no obligation to revise or update any
forward-looking statements, whether as a result of new information, future
results or otherwise.
RESULTS OF OPERATIONS
THREE MONTHS ENDED APRIL 30, 1999 COMPARED TO THREE MONTHS ENDED APRIL 30, 1998
NET SALES. Net sales increased $1,654,000, or 122%, to $3,007,000 for the three
months ended April 30, 1999 from $1,353,000 for the three months ended April 30,
1998. The increase in net sales was due primarily to the increase in revenues
generated from the I-125 brachytherapy product line. Sales of the Pd-103
brachytherapy product line which was introduced in April 1999 were not
significant. Sales of the non-therapeutic lines decreased approximately
$125,000.
GROSS PROFIT. Gross profit increased $1,146,000 or 150% to $1,912,000 for the
three months ended April 30, 1999 from $766,000 for the three months ended April
30, 1998. Gross profit as a percent of sales increased from 57% to 64% during
this period. The increase in gross profit as a percentage of sales was primarily
attributable to the significant proportionate increase in revenues from the
I-125 brachytherapy product line in the second quarter of fiscal 1999, which
yield greater gross margins than the Company's non-therapeutic product lines.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative ("SG&A") expenses increased $312,000, or 69%, to $765,000 for the
three months ended April 30, 1999 from $453,000 for the three months ended April
30, 1998. SG&A as a percent of net sales decreased to 25% for the three months
ended April 30, 1999 from 33% for the same period in 1998. SG&A expenses
increased primarily due to the following: (i) the Company added a significant
number of administrative personnel throughout fiscal 1998 and continuing into
fiscal 1999 to support the growth of the Company, (ii) the Company leased a new
facility in September 1998 that houses Pd-103 seed production, product
development and corporate offices and (iii) other general and administrative
expenses were increased to give effect to management's plans for the expansion
of the Company.
RESEARCH AND DEVELOPMENT. Research and development efforts continued into the
second quarter of 1999 with such expenditures totaling $112,000 during this
period compared to $26,000 in the corresponding 1998 period. The increase was
due primarily to development efforts associated with new product lines. Such
expenditures may increase in future periods.
INCOME FROM OPERATIONS. Income from operations increased $748,000 to $1,035,000
for the three months ended April 30, 1999, from $287,000 for the three months
ended April 30, 1998. This increase is a result of a combination of the factors
described above.
-8-
<PAGE>
INTEREST AND OTHER INCOME. Interest and other income decreased $14,000 to
$129,000 for the three months ended April 30, 1999 from $143,000 for the three
months ended April 30, 1998. The Company maintained a lower average cash and
investments balance for the quarter ended April 30, 1999 compared to April 30,
1998 as a result of the investment of funds to expand the brachytherapy product
lines and build out the Company's new facility.
NET INCOME. Net income increased $438,000 to $717,000 for the three months ended
April 30, 1999 from $279,000 for the three months ended April 30, 1998. The
increase is a result of the factors described above.
SIX MONTHS ENDED APRIL 30, 1999 COMPARED TO SIX MONTHS ENDED APRIL 30, 1998
NET SALES. Net sales increased $3,262,000, or 150%, to $5,434,000 for the six
months ended April 30, 1999 from $2,172,000 for the six months ended April 30,
1998. The increase in net sales was due primarily to the increase in revenues
generated from the I-125 brachytherapy product line. Sales of the Pd-103
brachytherapy product line which was introduced in April 1999 were not
significant. Sales of the non-therapeutic lines decreased approximately
$130,000.
GROSS PROFIT. Gross profit increased $2,361,000 or 221% to $3,430,000 for the
six months ended April 30, 1999 from $1,069,000 for the six months ended April
30, 1998. Gross profit as a percent of sales increased from 49% to 63% during
this period. The increase in gross profit as a percentage of sales was primarily
attributable to the significant proportionate increase in revenues from the
I-125 brachytherapy product line in the first six months of fiscal 1999, which
yield greater gross margins than the Company's non-therapeutic product lines.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative ("SG&A") expenses increased $652,000, or 80%, to $1,463,000 for
the six months ended April 30, 1999 from $811,000 for the six months ended April
30, 1998. SG&A as a percent of net sales decreased to 27% for the six months
ended April 30, 1999 from 37% for the same period in 1998. SG&A expenses
increased primarily due to the following: (i) the Company added a significant
number of administrative personnel throughout fiscal 1998 and continuing into
fiscal 1999 to support the growth of the Company, (ii) the Company leased a new
facility in September 1998 that houses Pd-103 seed production, product
development and corporate offices and (iii) other general and administrative
expenses were increased to give effect to management's plans for the expansion
of the Company.
RESEARCH AND DEVELOPMENT. Research and development efforts continued into the
first half of 1999 with such expenditures totaling $204,000 during this period
compared to $67,000 in the corresponding 1998 period. The increase was due
primarily to development efforts associated with new product lines. Such
expenditures may increase in future periods.
INCOME FROM OPERATIONS. Income from operations increased $1,572,000 to
$1,763,000 for the six months ended April 30, 1999, from $191,000 for the six
months ended April 30, 1998. This increase is a result of a combination of the
factors described above.
-9-
<PAGE>
INTEREST AND OTHER INCOME. Interest and other income decreased $58,000 to
$251,000 for the six months ended April 30, 1999 from $309,000 for the six
months ended April 30, 1998. The Company maintained a lower average cash and
investments balance for the six months ended April 30, 1999 compared to April
30, 1998 as a result of the investment of funds to expand the brachytherapy
product lines and build out the Company's new facilities.
NET INCOME. Net income increased $906,000 to $1,227,000 for the six months ended
April 30, 1999 from $321,000 for the six months ended April 30, 1998. The
increase is a result of the factors described above.
-10-
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
At April 30, 1999, the Company had cash and investments in marketable securities
aggregating approximately $9.6 million and working capital of $10.5 million. For
the six months ended April 30, 1999, net cash provided by operating activities
was approximately $1.6 million. Net cash used in investing activities primarily
for capital expenditures, convertible notes receivable and advances on
construction of equipment totaled approximately $2.3 million during the six
months ended April 30, 1999.
The Company is authorized to purchase up to $1.5 million of the Company's common
stock on the open market. No such shares have been repurchased as of April 30,
1999.
To date, the Company's short term liquidity needs have generally consisted of
operating capital to finance growth in inventories, trade accounts receivable
and new product development as well as to take advantage of strategic
investments in related businesses. The Company has satisfied these needs
primarily through a combination of private equity financings and from cash
generated by operations. The Company has no long-term debt or a current need for
a line of credit or similar arrangement with a bank. Management anticipates that
its existing cash resources will be sufficient to fund its planned expansion
over the next twelve months, although additional funding may be required to fund
the acquisition and/or the development of complementary businesses, technologies
or products.
YEAR 2000 COMPLIANCE. The Year 2000 issue arises from the fact that most
computer software programs have been written using two digits rather than four
to represent a specific year. Any computer programs that have date-sensitive
software may recognize a date using "00" as the year 1900 rather than the year
2000. This could result in a system failure or miscalculation causing disruption
of operations, including among other things, a temporary inability to process
transactions, send invoices or engage in similar normal business activities.
In an effort to address our Year 2000 exposure the Company assembled a team of
senior managers to create a program that included IT and non-IT components
(office productivity, manufacturing, product, computer, and systems). For each
component area, the team has created projects to identify and address the risks
associated with the new millennium and leap year. The projects include:
- - Strategic Customer and Supplier Evaluation;
- - Component Assessment;
- - Non-compliance Resolution;
- - Testing; and
- - Documentation.
Further, the Company has added a Year 2000 assessment and disclosure step to the
purchasing process. Hereafter, each IT and non-IT component acquisition must
include a Year 2000 product assessment.
Based upon this ongoing assessment, the Company believes that it will not be
required to modify or replace significant portions of its component inventory to
address Year 2000 issues.
In addition to risks associated with internal components, the Company has
relationships with, and is to varying degrees dependent upon, third parties that
provide us with information, goods and services. These include financial
institutions, suppliers, vendors, research partners and governmental entities,
as well as customers and distributors. External agent risks remain outside of
our control, however the Company has instituted programs to identify and assess
our external agents' Year 2000 compliance. To date, the Company has received no
indication from any material third party that they anticipate any Year 2000
compliance problems.
-11-
<PAGE>
The Company will continue to assess Year 2000 compliance on an on-going basis,
including monitoring new products and conducting surveys with third parties to
ensure Year 2000 issues are resolved in a timely manner. Additionally, the
Company is developing a contingency plan which it will put into effect in the
event of any currently unanticipated Year 2000 compliance issues.
All aspects of the Company's Year 2000 program are expected to be completed in
mid-1999. Total costs to resolve the Year 2000 issue have not been and are not
expected to be material to the Company's financial position, results of
operations or cash flows.
The foregoing is a Year 2000 readiness disclosure entitled to protection as
provided in the Year 2000 Information and Readiness Disclosure Act.
PART II - OTHER INFORMATION
The Company was not required to report any information pursuant to Items 1
through 6 of Part II of Form 10-Q except as follows:
ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On March 19, 1999, the Company held its 1999 Annual Meeting of Stockholders. The
following persons were elected as directors to hold office until the 2000 Annual
Meeting of Stockholders: Irwin J. Gruverman, L. Michael Cutrer, Dr. Allan M.
Green, Larry Berkin and Michael C. Lee. The number of shares cast for, withheld
and abstained with respect to each of the nominees were as follows:
<TABLE>
<CAPTION>
NOMINEE FOR WITHHELD ABSTAINED
<S> <C> <C> <C>
Gruverman 6,550,997 38,579 0
Cutrer 6,550,847 38,729 0
Green 6,550,847 38,729 0
Berkin 6,550,997 38,579 0
Lee 6,550,397 39,179 0
</TABLE>
The stockholders also voted to approve the ratification of the selection of
PricewaterhouseCoopers LLP as independent accountants for the Company for the
fiscal year ending October 31, 1999. A total of 6,588,121 shares were cast for
the adoption of the proposal, 30,122 shares were cast against this proposal, and
1,333 shares abstained.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits - The following Exhibits are filed herewith:
Exhibit 27 - Financial Data Schedule (EDGAR only)
b. Reports on Form 8-K - No reports on Form 8-K have been filed during the
quarter for which this report is filed.
-12-
<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.
NORTH AMERICAN SCIENTIFIC, INC.
May 20, 1999 By: /s/ L. Michael Cutrer
------------------------------------------
Name: L. Michael Cutrer
Title: President and
Chief Executive Officer
(Principal Executive Officer)
May 20, 1999 By: /s/ Alan I. Edrick
------------------------------------------
Name: Alan I. Edrick
Title: Chief Financial Officer
(Principal Financial and
Accounting Officer)
-13-
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1999
<PERIOD-START> NOV-01-1998
<PERIOD-END> APR-30-1999
<CASH> 1,456,000
<SECURITIES> 8,100,000
<RECEIVABLES> 1,367,000
<ALLOWANCES> (19,000)
<INVENTORY> 658,000
<CURRENT-ASSETS> 11,822,000
<PP&E> 3,750,000
<DEPRECIATION> (597,000)
<TOTAL-ASSETS> 20,573,000
<CURRENT-LIABILITIES> 1,344,000
<BONDS> 0
0
0
<COMMON> 68,000
<OTHER-SE> 19,161,000
<TOTAL-LIABILITY-AND-EQUITY> 20,573,000
<SALES> 3,007,000
<TOTAL-REVENUES> 3,007,000
<CGS> 1,095,000
<TOTAL-COSTS> 765,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,164,000
<INCOME-TAX> 447,000
<INCOME-CONTINUING> 717,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 717,000
<EPS-PRIMARY> 0.11
<EPS-DILUTED> 0.10
</TABLE>
