<PAGE> 1
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
(X) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended JUNE 30, 1995
------------------------------------------
or
( ) TRANSITION REPORT UNDER SECTION 13 or 15(d) OF THE EXCHANGE ACT
For the transition period from to
----------------- ---------------------
Commission file number 0-17893
-------------------------------------------------------
TELTRONICS, INC.
-------------------------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
Delaware 59-2937938
------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2150 Whitfield Industrial Way, Sarasota, FL 34243-4046
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(Address or principal executive offices)
Issuer's telephone number (813) 753-5000
------------------------------------------------------
Not Applicable
-------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last year)
Check whether the issuer: (1) filed all reports required to be filed
by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for
such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days.
Yes X No
----- -----
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date: 2,550,168
--------------
<PAGE> 2
PART I - FINANCIAL INFORMATION
TELTRONICS, INC.
BALANCE SHEET
ASSETS
<TABLE>
<CAPTION>
June 30, 1995 December 31, 1994
----------------- -----------------
(Unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 25,120 $ 19,824
Accounts receivable, net of allowance for
doubtful accounts of $65,843 at
June 30, 1995 and $135,607 at
December 31, 1994 2,583,346 2,355,047
Inventories 2,258,532 1,753,848
Income taxes receivable 240,242 668,780
Prepaid expenses and other current assets 357,580 288,410
---------------- ----------------
Total current assets 5,464,820 5,085,909
---------------- ----------------
PROPERTY AND EQUIPMENT, NET 1,091,594 1,207,196
---------------- ----------------
OTHER ASSETS:
Prepaid lease guarantee, net 284,682 298,680
Software development costs, net 111,822 156,822
Software licensing rights, net 886,755 886,755
Other 62,399 62,999
---------------- ----------------
Total other assets 1,345,658 1,405,256
---------------- ----------------
TOTAL ASSETS $ 7,902,072 $ 7,698,361
================ ================
</TABLE>
See accompanying notes
2
<PAGE> 3
TELTRONICS, INC.
BALANCE SHEET
(Continued)
LIABILITIES AND SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
June 30, 1995 December 31, 1994
---------------- -----------------
(Unaudited)
<S> <C> <C>
CURRENT LIABILITIES:
Current portion of long term debt $ 2,750,153 $ 2,491,679
Current portion of capital lease obligations 184,027 185,480
Accounts payable 877,311 960,421
Accrued liabilities 744,117 763,959
Deferred income 121,860 146,982
Other current liabilities 78,580 65,195
---------------- ----------------
Total current liabilities 4,756,048 4,613,716
---------------- ----------------
LONG-TERM LIABILITIES:
Capital lease obligations, less current portion 175,684 271,898
Long term debt, less current portion 704,926 1,267,454
---------------- ----------------
Total long-term liabilities 880,610 1,539,352
---------------- ----------------
SHAREHOLDERS' EQUITY:
Common stock, $.001 par, 50,000,000
shares authorized, 2,550,168 issued
and outstanding at June 30, 1995 and
982,440 shares at December 31, 1994 2,551 983
Additional paid-in capital 10,790,778 10,293,223
Accumulated deficit (8,527,915) (8,748,913)
---------------- ----------------
Total shareholders' equity 2,265,414 1,545,293
---------------- ----------------
TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY $ 7,902,072 $ 7,698,361
================ ================
</TABLE>
See accompanying notes
3
<PAGE> 4
TELTRONICS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
3 MONTHS ENDED 6 MONTHS ENDED
-------------------------------- --------------------------------
JUNE 30, JUNE 30,
1995 1994 1995 1994
------------- ------------- ------------ -------------
<S> <C> <C> <C> <C>
SALES $ 5,679,789 $ 3,637,895 $ 11,350,494 $ 7,623,263
COST OF GOODS SOLD 3,639,637 1,796,880 7,497,039 3,841,530
------------- ------------- ------------ -------------
GROSS PROFIT 2,040,152 1,841,015 3,853,455 3,781,733
------------- ------------- ------------ -------------
OPERATING EXPENSES
General and administrative 393,579 695,524 769,168 1,273,817
Research and development 379,657 232,714 798,561 587,592
Selling and marketing expenses 918,839 804,083 1,818,326 1,649,415
------------- ------------- ------------ -------------
1,692,075 1,732,321 3,386,055 3,510,824
------------- ------------- ------------ -------------
OPERATING INCOME (LOSS) 348,077 108,694 467,400 270,909
OTHER INCOME (EXPENSES)
Interest (91,075) (73,204) (178,288) (106,086)
Miscellaneous (5,207) 3,896 (2,614) 6,795
Financing expenses (65,500) --- (65,500) ---
------------- ------------- ------------ -------------
INCOME (LOSS) BEFORE
INCOME TAXES 186,295 39,386 220,998 171,618
PROVISION FOR INCOME TAXES --- --- --- ---
------------- ------------- ------------ -------------
NET PROFIT (LOSS) $ 186,295 $ 39,386 $ 220,998 $ 171,618
============= ============= ============ =============
NET PROFIT (LOSS) PER SHARE $ 0.12 $ 0.07 $ 0.15 $ 0.30
============= ============= ============ =============
AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING 1,547,069 573,760 1,428,115 573,760
============= ============= ============ =============
</TABLE>
See accompanying notes
4
<PAGE> 5
TELTRONICS, INC.
STATEMENT OF SHAREHOLDERS' EQUITY (UNAUDITED)
<TABLE>
<CAPTION>
Retained
COMMON STOCK Additional Earnings
-------------------------- Paid-In (Accumulated
Shares Amount Capital Deficit) Total
------------ --------- ------------- --------------- -------------
<S> <C> <C> <C> <C> <C>
BALANCE AT,
December 31, 1994 982,440 $ 983 $ 10,293,223 $ (8,748,913) $ 1,545,293
Stock issued for conversion 167,728 168 344,955 --- 345,123
of notes
Stock issued pursuant to
conversion rights
extended to W&D 1,400,000 1,400 152,600 --- 154,000
Net Profit --- --- 220,998 220,998
------------ --------- ------------- -------------- -------------
BALANCE AT,
June 30, 1995 2,550,168 $ 2,551 $ 10,790,778 $ (8,527,915) $ 2,265,414
</TABLE>
See accompanying notes
5
<PAGE> 6
TELTRONICS, INC.
STATEMENTS OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
6 MONTHS ENDED
-------------------------------------------
JUNE 30,
1995 1994
---------------- ----------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 220,998 $ 171,618
Adjustments to reconcile net income
to net cash:
Depreciation and amortization 273,880 659,020
Cost of conversion rights 65,500 ---
Changes in assets and liabilities:
Accounts receivable and other assets (296,869) (242,496)
Inventories (504,684) (892,162)
Due from affiliates --- 209,363
Income taxes receivable 428,538 ---
Accounts payable and accrued liabilities (89,566) 501,716
Deferred income (25,122) ---
---------------- ----------------
Net cash flows from operating activities 72,675 407,059
---------------- ----------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (99,280) (27,482)
Capitalized software development costs --- (500,000)
---------------- ----------------
Net cash flows from investing activities (99,280) (527,482)
---------------- ----------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from line of credit 11,593,747 7,074,300
Repayment on line of credit (11,139,488) (7,026,624)
Repayment of notes payable and
other long-term debt (436,358) (48,137)
Advance from related party 14,000 125,000
---------------- ----------------
Net cash flows from financing activities 31,901 124,539
---------------- ----------------
Net increase (decrease) in cash 5,296 4,116
Cash and cash equivalents, beginning of year 19,824 10,332
---------------- ----------------
Cash and cash equivalents, end of year $ 25,120 $ 14,448
================ ================
</TABLE>
See accompanying notes
6
<PAGE> 7
TELTRONICS, INC.
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
NOTE A - GENERAL
The financial statements as of June 30, 1995 and for the six month period then
ended are unaudited and, in the opinion of the Company, reflect all adjustments
necessary for a fair presentation of such data and have been prepared on a
basis consistent with the December 31, 1994 Audited Financial Statements. All
such adjustments were of a normal recurring nature. The unaudited results of
operations for the interim periods reported are not necessarily indicative of
results to be expected for the year.
The year-end condensed balance sheet data included in the condensed financial
statements was derived from audited financial statements, but does not include
all disclosures required by generally accepted accounting principles. The
statements therefore should be read in conjunction with the financial
statements and related notes included in the Company's Form 10-KSB for the year
ended December 31, 1994.
NOTE B - COMMON STOCK
On April 12, 1995 convertible promissory notes in the amount of $279,623 were
cancelled by issuance of 102,228 restricted shares of the Company's common
stock. In addition, these noteholders also received warrants entitling them to
purchase an aggregate of 51,114 shares of the Company's common stock at a price
of $3.00 per share. The subject matter set forth on page F-15 of the Company's
Form 10-KSB for the year ended December 31, 1994 under Financial Note 6 (a) is
hereby incorporated by reference.
Pursuant to determinations made in November 1994, on May 11, 1995, W&D
Consultants, Inc., ("W&D") acquired 1,400,000 restricted shares of common stock
from the Company upon exercise by W&D of a conditional right to convert a
$140,000 advance made by W&D in order for the Company to close its $3,500,000
line of credit with The CIT Group/Credit Finance ("CIT") in October, 1994. The
shares were issued to W&D after performance by W&D of certain conditions
including: (a) cancellation of the $140,000 advance; (b) payment of $14,000 to
the Company; (c) delivery of a termination by H&N of the management consulting
and acquisition consulting agreements between the Company and H&N; (d) delivery
by W&D of a guarantee of H&N's obligations under the H&N termination; and (e)
other conditions necessary for conversion. The Company charged $2,058,000 to
operations in 1994.
On May 23, 1995 previous noteholders of $350,000 of the Company's convertible
promissory notes were issued 65,500 restricted shares of the company's common
stock under the terms of the conversion agreement dated October 25, 1994 which
provided for registration rights. Accordingly, $65,500 representing the fair
market value of the shares was charged to financing costs in May 1995. The
subject matter set forth on Page F-15 of the Company's Form 10-KSB for the year
ended December 31, 1994 under Financial Note 6 (b) is hereby incorporated by
reference.
7
<PAGE> 8
TELTRONICS, INC.
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
CONTINUED
On August 8, 1995, the stockholders of the Company ratified the Company's 1995
Incentive Stock Option Plan (the "Plan"). The Plan authorizes the Board of
Directors to grant incentive stock options under the Internal Revenue Code of
1986, as amended, to key employees of the Company or its subsidiaries. At the
date of this Report there are approximately 15 employees eligible to
participate in the Plan, of which the Company has granted options to 14 of the
eligible employees for an aggregate of 210,000 shares. The aggregate number of
shares of the Company's Common Stock that may be issued or transferred to
grantees under the Plan shall not exceed 250,000 shares, subject to adjustment
for any stock split, stock dividend or other relevant change. The term of an
option shall be fixed by the Board and the option price shall not be less than
the fair market value of the Company's Common Stock on the date of grant,
unless the grantee is the holder of more than 10% of the voting power of all
classes of stock of the Company, in which case the option price shall not be
less than 110% of the fair market value of the stock on the date of grant.
NOTE C - COMMITMENTS AND CONTINGENCIES
The subject matter set forth on Page F-16 of the Company's Form 10-KSB for the
year ended December 31, 1994, under Financial Note 8 is hereby incorporated by
reference and there has been no significant change to such subject matter.
NOTE D - RELATED PARTY TRANSACTIONS
The subject matter set forth on Page F-22 of the Company's Form 10-KSB for the
year ended December 31, 1994, under Financial Note 11 is hereby incorporated by
reference and there has been no significant change to such subject matter.
8
<PAGE> 9
TELTRONICS, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
GENERAL OVERVIEW
The first six months of 1995 reflected sales of $11,350,000 compared to
$7,623,000 for the first six months of 1994. Gross profit increased to
$3,853,000 from $3,782,000 for the same period of last year. Total operating
expenses reflected a reduction of $125,000 from the first six months of the
prior year. As a direct result of increased sales and reduced expenditures,
the first six months of 1995 reflected a net profit of $221,000 as compared to
a net profit of $172,000 for the first half of 1994.
RESULTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 1995 AND 1994
For the three months ended June 30, 1995 the Company's total sales and gross
margin percentage were $5,679,789 and 35.9% respectively, compared to
$3,637,895 and 50.6% for the same period of 1994. The three months ended June
30, 1995 reflected an improvement in gross margin over the first three months
of 1995 which produced total sales of $5,670,705 and a gross margin of 32.0%.
Total operating expenses for the three months ended June 30, 1995 were
$1,692,075, a reduction of approximately $40,000 from the same period of 1994.
Operating expenses for the first three months of 1995 were $1,693,980.
The sales increase of approximately 56% over the comparable period of 1994 in
conjunction with controlled expenditures resulted in operating income of
$348,077 for the three months ended June 30, 1995 as compared to operating
income of $108,694 for the same period of 1994.
Other income and expenses for the three months ended June 30, 1995 reflected
expenses totaling $161,782. This was approximately $92,000 above the same
period of the prior year primarily as a result of additional interest expense
of approximately $18,000 and a non-recurring financing expense charge of
$65,500 related to the issuance of 65,500 restricted shares of the Company's
common stock to previous holders of an aggregate $350,000 of the Company's
convertible promissory notes.
Net profit for the three months ended June 30, 1995 was $186,295 as compared to
$39,386 for the comparable period of 1994 and $34,703 for the first three
months of 1995.
SIX MONTHS ENDED JUNE 30, 1995 AND 1994
Total sales for the six months ended June 30, 1995 increased by 48.9% to
$11,350,494 as compared to $7,623,263 for the first six months of 1994. This
increase was primarily the result of additional sales in the Long Distance
Management ("LDM") product line.
9
<PAGE> 10
TELTRONICS, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
CONTINUED
Gross profit for the first six months increased to $3,853,455 from $3,781,733
for the same period of 1994. Gross profit reflected at 33.9% of sales for the
first six months of 1995 as compared to 49.6% for the same period of 1994. The
aggressive marketing program for the LDM product line resulted in lower margin
on those product sales.
Total operating expenses for the first six months of 1995 were $3,386,055, a
reduction of $124,769 from the same period last year.
Income and expenses reflected expenses of $246,402, an increase of
approximately $147,000 above the same period last year. This increase was
primarily the result of increased interest charges and a non-recurring
financing expense charge of $65,500.
Net profit for the first six months of 1995 was $220,998, an increase of
$49,380 above the 1995 profit of $171,618 for the first six months.
FINANCIAL CONDITION
Total assets at June 30, 1995 were $7,902,072 compared to $7,968,361 at
December 31, 1994. The Company's current ratio at June 30, 1995 was 1.15:1
compared to 1.10:1 at December 31, 1994.
LIQUIDITY AND CAPITAL RESOURCES
Cash requirements were met with cash provided by borrowings from The CIT
Group/Credit Finance ("CIT"). The CIT facility provides for borrowing up to
$3.5 million. $296,700 of this was a term loan secured by fixed assets at an
interest rate of 3% above the prime rate to be repaid monthly until fully paid
on October 28, 1999. The remaining line facility is a revolving loan secured
by inventory and receivables at an interest rate of prime plus 3%.
The Company's working capital ratio at June 30, 1995 was 1.15:1. Net working
capital was $708,772 at June 30, 1995. Short term requirements are expected to
be met through cash flows from operations augmented by the credit line
facility.
However, the Company is investigating the possibility of other equity or debt
financing. In the event that the Company was successful in securing additional
funding, the Company should be in a position to grow its business more rapidly.
CURRENT OUTLOOK
Although the Company has achieved higher sales during the first six months of
1995 compared to the same period of 1994, these have been of a lower margin due
to the higher percentage of product being dialers which have traditionally a
lower margin than other products of the Company. During the first quarter, the
Telecommunication
10
<PAGE> 11
TELTRONICS, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
CONTINUED
Information Systems product sales ("TIS") which is responsible for sales of the
Telemanagement software and Remote Maintenance products had a slow start.
However, the second quarter did reflect improved sales of these products. The
Company enjoys higher margins on these products and feels confident that these
should contribute positively to the Company's profitability
The Company feels that it is well positioned in its current markets to continue
to grow its sales during 1995. The Company continues to focus on ways to
become more efficient in supplying its products to the market.
11
<PAGE> 12
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
ITEM 2. CHANGES IN SECURITIES - None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES - None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS - None
ITEM 5. OTHER INFORMATION - None
ITEM 6A. EXHIBITS
<TABLE>
<S> <C> <C>
10.136 Specimen of Stock Option Agreement . . . . . . . . . . . . . . . . . . . . (a)
10.137 Teltronics, Inc. 1995 Incentive Stock Option Plan . . . . . . . . . . . . (b)
27 Financial Data Schedule (for SEC use only) . . . . . . . . . . . . . . . . (a)
</TABLE>
ITEM 6B. REPORT ON FORM 8-K - None
--------------------------------
(a) Filed as an Exhibit to this Quarterly Report on Form 10-QSB for the 3
month period ended June 30, 1995.
(b) Filed as an Exhibit to Teltronics' Definitive Proxy Statement filed
July 12, 1995.
12
<PAGE> 13
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
TELTRONICS, INC.
August 11, 1995 s/Ewen Cameron
--------------------------------------
President and Chief Executive Officer
13
<PAGE> 1
EXHIBIT 10.136
STOCK OPTION AGREEMENT
TELTRONICS, INC.
1995 INCENTIVE STOCK OPTION PLAN
I. SHARES. A Stock Option for a total of ________ shares of
Common Stock, $.001 par value ("Option") of Teltronics, Inc., a Delaware
corporation (herein the "Company") is granted as of May 16, 1995 to:
_______________________ (hereinafter the "Optionee"), subject in all respects
to the terms and provisions of the Teltronics, Inc. 1995 Incentive Stock Option
Plan adopted by the Company May 16, 1995 (hereinafter referred to as the
"Plan"). A copy of the Plan is attached hereto and the terms and provisions of
which are incorporated herein by reference. If there is any inconsistency or
discrepancy between the terms and provisions of this Option and the Plan, the
terms and provisions of the Plan shall prevail. The Option and all rights of
the Optionee under this Option are subject to ratification of the Plan at a
meeting of the Company's shareholders prior to May 15, 1996. If the
shareholders do not ratify the Plan, this Option shall be null and void and
treated for all purposes as if it were not granted.
II. PRICE. The Option price as determined by the Board of
Directors of the Company is $1.625 per share which is 100% of the fair market
value of a share of the Common Stock of the Company at May 16, 1995 as
determined by its Board of Directors. The price for shares upon exercise shall
be paid in cash or certified funds.
III. NON-ASSIGNABILITY. This Option may not be transferred or
hypothecated in any manner and may be exercised only during the Optionee's
lifetime (subject to special provisions set forth in the Plan for exercise
after the Optionee's death or termination of employment for permanent
disability as determined by the Company or normal retirement with the consent
of the Company) and shall only be exercisable by such Optionee or his or her
legal representative. The terms of this Option shall be binding upon the
executors, administrators, heirs, successors, and assigns of the Optionee.
IV. EXERCISE.
A. This Option may not be exercised prior to the below
dates for the shares indicated and upon and after such dates only if Optionee
continues to be employed by the Company or any Subsidiary of the Company:
<PAGE> 2
Earliest Exercise Date Number of Shares
---------------------- ----------------
June 1, 1996
June 1, 1997
June 1, 1998
June 1, 1999
June 1, 2000
B. This Option may not be exercised more than five (5)
years from the date hereof, and may be exercised during such time only in
accordance with the terms and provisions of the Plan.
C. This Option may be exercised for all or part of the
shares eligible for exercise by presenting a written notice to the Company that
this Option is exercised in strict accordance with the terms and provisions of
the Plan. The Company shall determine whether or not the Option notice
complies with the terms and provisions of the Plan. Such notice shall identify
this Option, state the number of shares as to which the Option is exercised and
be signed by the Optionee. Delivery of the price in payment for the shares to
be purchased pursuant to the exercise of this Option shall accompany the notice
of the exercise.
If the Optionee is deceased, the notice of exercise shall be signed,
and if disabled, it may be signed, by the Optionee's legal representatives or
beneficiaries, and in all instances shall be accompanied by evidence
satisfactory to the Company and its Transfer Agent of the right of such person
or persons to exercise this Option and receive the shares to be purchased
pursuant to the exercise of this Option. The Optionee shall have none of the
rights of a stockholder until the Option is exercised and the shares are issued
to the Optionee, and then only as to shares so issued and only so long as such
shares are registered in the Optionee's name.
Dated: TELTRONICS, INC.
---------------------------
By:
--------------------------------
Ewen R. Cameron, President
2 of 3
<PAGE> 3
If the following acknowledgement and acceptance is not executed within
ten (10) days of the effective date of this Option, it shall lapse and be
treated for all purposes as if it were never granted.
The Optionee acknowledges that a copy of the Plan is attached to this
Option and represents that he or she is familiar with and understands the terms
and provisions thereof. The Optionee hereby accepts this Option subject to all
the terms and provisions of this Option and the Plan. The Optionee hereby
agrees to accept as binding, conclusive, and final all decisions and
interpretations of the Board of Directors upon any questions arising under the
Plan. As a condition to the issuance of shares of Common Stock of the Company
under this Option, the Optionee authorizes the Company to withhold in
accordance with applicable law from any regular cash compensation payable to
him or her any taxes required to be withheld by the Company under Federal,
State or Local law as a result of exercise of this Option.
Dated:
---------------------------
WITNESS:
---------------------------------- -----------------------------------
OPTIONEE
3 of 3
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FINANCIAL
STATEMENTS FOR THE SIX MONTH PERIOD ENDED JUNE 30, 1995 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FORM 10QSB FOR THE PERIOD ENDED JUNE 30, 1995.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> JUN-30-1995
<CASH> 25,120
<SECURITIES> 0
<RECEIVABLES> 2,583,346
<ALLOWANCES> 0
<INVENTORY> 2,258,532
<CURRENT-ASSETS> 5,464,820
<PP&E> 2,773,926
<DEPRECIATION> 1,682,332
<TOTAL-ASSETS> 7,902,072
<CURRENT-LIABILITIES> 4,756,048
<BONDS> 0
<COMMON> 2,551
0
0
<OTHER-SE> 2,262,863
<TOTAL-LIABILITY-AND-EQUITY> 7,902,072
<SALES> 11,350,494
<TOTAL-REVENUES> 11,350,494
<CGS> 7,497,039
<TOTAL-COSTS> 3,386,055
<OTHER-EXPENSES> 68,114
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 178,288
<INCOME-PRETAX> 220,998
<INCOME-TAX> 0
<INCOME-CONTINUING> 220,998
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 220,998
<EPS-PRIMARY> .15
<EPS-DILUTED> .15
</TABLE>
