<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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 July 2, 1999
Commission File Number 1-14182
TB WOOD'S CORPORATION
- --------------------------------------------------------------------------------
(Exact Name of registrant as specified in its charter)
DELAWARE 25-1771145
- --------------------------------------------------------------------------------
(State or other Jurisdiction of (IRS Employer Identification Number)
Incorporation of Organization)
440 North Fifth Avenue, Chambersburg, PA 17201
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(717) 264-7161
- --------------------------------------------------------------------------------
(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.
Yes X No
----- -----
Number of shares outstanding of the issuer's Common Stock:
Class Outstanding at July 2, 1999
----- ---------------------------
Common Stock, $.01 par value 5,880,922
- --------------------------------------------------------------------------------
<PAGE>
Table of Contents
Part I. - Financial Information Page No.
- ------------------------------- --------
Condensed Consolidated Balance Sheets -
July 2, 1999 and January 1, 1999 3
Condensed Consolidated Statements of Operations -
For the Second Quarter and Year to Date Ended
July 2, 1999 and July 3, 1998 4
Condensed Consolidated Statements of Cash Flows -
For Year to Date Ended
July 2, 1999 and July 3, 1998 5
Notes to Condensed Consolidated Financial Statements 6
Management's Discussion and Analysis of
Financial Condition and Results of Operations 8
Part II. - Other information 11
- ----------------------------
2
<PAGE>
Part I.-Financial Information
Item 1. Financial Statements
TB Wood's Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
<TABLE>
<CAPTION>
Unaudited January 1,
(in thousands, except per share and share amounts) July 2, 1999 1999
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents ..................................................... $2,613 $2,521
Accounts receivable, less allowances for doubtful accounts, discounts,
and claims of $420 at July 2, 1999 and $414 at January 1, 1999 ................ 18,376 17,428
Inventories.................................................................... 27,853 29,855
Other current assets .......................................................... 4,000 2,705
------- -------
Total current assets ..................................................... 52,841 52,509
------- -------
Property, plant, and equipment ................................................ 60,360 55,249
Less accumulated depreciation ................................................. 30,606 27,553
------- -------
Net property, plant and equipment ......................................... 29,754 27,696
------- -------
Other Assets:
Deferred income taxes ......................................................... 3,631 3,570
Goodwill, net of accumulated amortization of $1,529 at
July 2, 1999 and $1,418 at January 1, 1999 ............................... 9,828 10,059
Other.......................................................................... 2,159 2,191
------- -------
Total other assets ....................................................... 15,618 15,820
------- -------
TOTAL ASSETS .................................................................. $98,213 $96,025
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Current maturities of long-term debt........................................... $291 $378
Accounts payable .............................................................. 7,765 6,332
Checks outstanding ............................................................ 1,176 1,705
Accrued expenses .............................................................. 9,013 9,012
Deferred income taxes ......................................................... 1,589 1,589
------- -------
Total current liabilities ................................................ 19,834 19,016
------- -------
Long-term debt, less current maturities ....................................... 33,175 32,091
------- -------
Postretirement benefit obligation, less current portion ....................... 15,870 16,403
------- -------
Shareholders' Equity:
Preferred stock, $.01 par value; 5,000,000 shares authorized,
no shares issued or outstanding........................................... -- --
Common stock, $.01 par value; 40,000,000 shares authorized, 5,887,698 shares
issued and 5,880,922 and 5,877,580 shares outstanding at July 2, 1999 and
January 1, 1999, respectively.............................................. 59 59
Treasury Stock, at cost ....................................................... (65) (158)
Additional paid-in capital .................................................... 30,367 28,821
Retained Earnings.............................................................. 415 1,136
Other comprehensive income .................................................... (1,442) (1,343)
------- -------
Total shareholders' equity ............................................... 29,334 28,515
------- -------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY .................................. $98,213 $96,025
======= =======
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
3
<PAGE>
TB Wood's Corporation and Subsidiaries
Condensed Consolidated Statements of Operations
<TABLE>
<CAPTION>
Unaudited Unaudited
Second Quarter Ended Year to Date
July 2 July 3 July 2 July 3
(in thousands, except share and per share amounts) 1999 1998 1999 1998
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net sales....................................................... $30,723 $34,161 $60,781 $70,212
Cost of sales................................................... 20,206 21,909 39,184 44,584
-----------------------------------------------------
Gross profit.................................................. 10,517 12,252 21,597 25,628
Selling, general and administrative expenses.................... 8,065 8,015 16,039 16,729
-----------------------------------------------------
Operating income............................................. 2,452 4,237 5,558 8,899
-----------------------------------------------------
Other expense:
Interest expense and other finance charges................... (372) (507) (971) (1,077)
Other, net................................................... 49 35 (497) (86)
-----------------------------------------------------
Other expense, net........................................ (323) (472) (1,468) (1,163)
-----------------------------------------------------
Income before provision for income taxes........................ 2,129 3,765 4,090 7,736
-----------------------------------------------------
Provision for income taxes...................................... 842 1,506 1,627 3,094
-----------------------------------------------------
Net income...................................................... $1,287 $2,259 $2,463 $4,642
=====================================================
Per share of common stock:
Basic net income per common share............................... $0.22 $0.38 $0.42 $0.79
=====================================================
Weighted average shares of common stock......................... 5,893 5,888 5,904 5,873
=====================================================
Diluted net income per common share............................. $0.22 $0.38 $0.42 $0.78
=====================================================
Diluted weighted average shares of common stock
and equivalents outstanding.................................. 5,909 5,942 5,920 5,943
=====================================================
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
4
<PAGE>
TB Wood's Corporation and Subsidiaries
Condensed Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
Unaudited
Year to Date
July 2, July 3,
(in thousands) 1999 1998
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Cash Flows from Operating Activities:
Net income ..................................................................... $2,463 $4,642
------------------------------
Adjustments to reconcile net income to net cash provided by (used in)
operating activities:
Depreciation and amortization.............................................. 2,119 2,506
Change in deferred income taxes, net....................................... (61) 47
Stock option compensation expense.......................................... 0 21
Profit sharing compensation expense........................................ 230 240
Minority interest.......................................................... 0 8
Net gain on sale of assets................................................. 0 (17)
Changes in working capital:
Accounts receivable, net ............................................. (948) 408
Inventories, net ..................................................... 2,002 (3,152)
Prepaid expenses and other current assets............................. (1,295) (480)
Accounts payable ..................................................... 1,433 (318)
Accrued and other liabilities ........................................ (1,323) (2,070)
------------------------------
Total adjustments ............................................... 2,157 (2,807)
------------------------------
Net cash provided by (used in) operating activities.............. 4,620 1,835
------------------------------
Cash Flows from Investing Activities:
Capital expenditures ........................................................... (4,464) (2,535)
Proceeds from sale of fixed assets.............................................. 741 246
Other, net ..................................................................... (292) (861)
------------------------------
Net cash used in investing activities...................................... (4,015) (3,150)
------------------------------
Cash Flows from Financing Activities:
Change in checks outstanding.................................................... (529) (984)
(Repayments)/proceeds of other long-term debt, net.............................. 2,920 (349)
Proceeds from new revolving credit facility..................................... 19,200 22,900
Repayments of new revolving credit facility..................................... (20,800) (19,213)
Payment of dividends ........................................................... (1,060) (996)
Treasury Stock ................................................................. (93) (345)
Other........................................................................... (52) (497)
------------------------------
Net cash provided by (used in) financing activities........................ (414) 516
------------------------------
Effect of changes in foreign exchange rates..................................... (99) (211)
------------------------------
Net (decrease) increase in cash and cash equivalents............................ 92 (1,010)
Cash and cash equivalents at beginning of period................................ 2,521 2,552
------------------------------
Cash and cash equivalents at end of period...................................... $2,613 $1,542
==============================
</TABLE>
The accompanying notes are an integral part of these consolidated statements.
5
<PAGE>
TB Wood's Corporation and Subsidiaries
Notes To Condensed Consolidated Financial Statements
(in thousands, except per share amounts)
1. In the opinion of management, the accompanying unaudited condensed
consolidated financial statements contain all adjustments necessary to
present fairly the financial position of TB Wood's Corporation and
Subsidiaries (the "Company") as of July 2, 1999 and January 1, 1999, and
the results of operations and cash flows for the Second Quarter and year
to date ended July 2, 1999 and July 3, 1998. Operating results for the
interim periods presented are not necessarily indicative of the results
that may be expected for the fiscal year ending December 31, 1999.
2. The major classes of inventories at July 2, 1999 and January 1, 1999
consisted of the following:
Unaudited
------------------------------
July 2, January 1,
1999 1999
--------------------------------------------------------------------
Raw materials and supplies ........... $5,326 $5,982
Work in process ...................... 7,714 8,370
Finished goods........................ 20,743 21,433
-----------------------------
Total at FIFO cost.................... 33,783 35,785
Excess of FIFO cost over LIFO cost.... (5,930) (5,930)
-----------------------------
Total at LIFO cost .................. $27,853 $29,855
=============================
3. On July 2, 1999, the Board of Directors declared a quarterly cash
dividend of $0.09 per share payable on July 30, 1999 to stockholders of
record on July 16, 1999.
4. In 1996, the Board of Directors authorized, subject to certain business
and market conditions, the Company to purchase up to 200,000 of the
Company's common shares. Through July 2, 1999 the number of shares
purchased under this authorization was 120,525. During the second
quarter of 1999, the number of treasury shares issued to employees under
employee option and stock purchase plans was 6,137 and the number of
shares issued for the Retirement Savings and Investment plan was 7,289.
As of July 2, 1999, 6,776 shares were held in treasury, at cost.
5. Effective January 3, 1998, the Company adopted Statement of Financial
Accounting Standards No. 130, "Reporting Comprehensive Income," which
requires companies to disclose components of comprehensive income,
defined as the total of net income and all other non-owner changes in
equity.
Total comprehensive income for the year to date periods ended July 2,
1999 and July 3, 1998 was as follows:
Unaudited Unaudited
---------------------------
July 2, 1999 July 3, 1998
------------------------------------------------------------------------
Net Income .................................... $2,463 $4,642
Other comprehensive income, net of tax:
Foreign currency translation adjustments.. (99) (211)
-----------------------
Total comprehensive income .................... $2,364 $4,431
=======================
6
<PAGE>
6. Basic EPS is computed by dividing reported earnings available to common
shareholders by weighted average shares outstanding. No dilution for any
potentially dilutive securities is included in basic EPS. Diluted EPS is
computed by dividing reported earnings available to common shareholders
by weighted average shares and common equivalent shares outstanding. The
computation of weighted average shares outstanding and net income per
share are as follows:
<TABLE>
<CAPTION>
Second Quarter Year to date
July 2 July 3 July 2 July 3
(in thousands, except per share amounts) 1999 1998 1999 1998
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Weighted average number of common shares
outstanding ........................................... 5,893 5,888 5,904 5,873
Shares issued upon assumed exercise of
outstanding stock options.............................. 16 54 16 70
----------------------------------------------------
Weighted average number of common and
common equivalent shares outstanding................... 5,909 5,942 5,920 5,943
====================================================
Net Income............................................. $1,287 $2,259 $2,463 $4,642
====================================================
Basic net income per common share...................... $0.22 $0.38 $0.42 $0.79
====================================================
Diluted net income per common share.................... $0.22 $0.38 $0.42 $0.78
====================================================
</TABLE>
7. Segment Reporting
The following table summarizes revenues, operating income, total assets
and expenditures for long-lived assets by business segment as of July 2,
1999.
Mechanical Electronics
Business Business Total
---------------------------------------------
Revenues from external customers $35,776 $25,005 $60,781
Year to Date Operating Profit 4,157 1,401 5,558
Depreciation 738 792 1,530
Segment Assets 47,787 26,192 73,979
Expenditures for long-lived assets 3,917 547 4,464
7
<PAGE>
The following table reconciles segment profit to consolidated income
before income taxes and extraordinary item as of July 2, 1999.
Total operating profit for reportable
segments $5,558
Interest, net (971)
Other unallocated amounts (497)
-----
Income before income taxes
and extraordinary items $4,090
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
--------------------------------------------------
RESULTS OF OPERATIONS (in thousands, except per share amounts)
TB Wood's Corporation and Subsidiaries (the "Company") posted net sales
for the second quarter 1999 of $30,723, compared to $34,161 for the second
quarter 1998, a decrease of 10.1%. Year to date sales for 1999 were $60,781,
$9,431 lower than sales of $70,212 for the same period 1998. Mechanical Business
net sales for the second quarter of $18,014 were $1,761 lower than sales of
$19,775 in comparable 1998. However, Mechanical Business sales were up 1.4% over
the first quarter 1999. Electronics Business net sales were $12,709, a $1,677
decrease from sales of $14,386 in the second quarter of 1998. Second quarter
Electronics Business sales were up 3.4% from first quarter revenues. The
decrease in the Electronics Business is primarily due to lower system sales.
Company cost of sales ("COS") in the second quarter 1999 were $20,206
compared to $21,909 for the same period last year, a decrease of 7.8%. COS of
65.8% for the second quarter 1999 increased 1.7% from 1998's second quarter of
64.1%. Year to date 1999 COS were $39,184, $5,400 lower than COS of $44,584 for
1998. Mechanical Business COS of $12,517 was $1,111 lower than COS of $13,628 in
the second quarter 1998. As a percent of sales, Mechanical Business reported COS
of 69.5%, up 0.6% from 68.9% in the prior the year. Electronics Business COS was
$7,689, a $592 decrease from COS of $8,281 in comparable 1998. As a percent of
sales, Electronics Business COS increased 2.9% from 57.6% in comparable 1998 to
60.5% for the second quarter 1999. Decreased demand lead to decreased absorption
of both Mechanical and Electronics Business fixed costs.
Selling, general and administrative ("SG&A") expenses for the second
quarter 1999 were $8,065, compared to $8,015 for the second quarter 1998, an
increase of $50, or 0.6%. SG&A, as a percent of sales, increased to 26.3% in the
second quarter 1999 from 23.5% in the second quarter 1998. Year to date 1999
SG&A expenses were $16,039 compared to $16,729 for 1998.
Income from operations for the Company was $2,452 for the second
quarter 1999, or 8.0% as a percent of sales, and $1,785 lower than second
quarter 1998 income from operations of $4,237, which was 12.4% of sales. Income
from operations year to date 1999 was $5,558, $3,341 lower than the $8,899
reported for 1998.
8
<PAGE>
Other expense for the second quarter 1999 was $323, compared to other
expense of $472 for the same period last year. Interest expense, a component of
other expense, for the Company was $372 in the second quarter of 1999, a $135
decrease from $507 of interest expense in the second quarter of 1998. Year to
date other expense was $1,468, $305 higher than $1,163 for 1998. The year to
date increase was primarily the result of expenses related to a potential
acquisition.
Net income in the second quarter 1999 was $1,287, or $0.22 per diluted
share, $972 lower than the $2,259, or $0.38 per diluted share, a year ago. The
decrease in earnings was due primarily to lower net sales in the second quarter
of 1999. Year to date net income for 1999 was $2,463 compared to $4,642 for
comparable 1998.
LIQUIDITY AND CAPITAL RESOURCES (in thousands, except per share amounts)
Working Capital at July 2, 1999 was $33,007, 1.5% below $33,493 at
January 1, 1999. The decrease was due primarily to decreased inventories.
Current ratio decreased slightly to 2.7:1 at July 2, 1999 from 2.8:1 at year-end
1998.
Outstanding long-term debt increased $1,084 to $33,175 at July 2, 1999
compared to $32,091 at year-end 1998. Debt was comprised of $5,550 in tax-exempt
revenue bonds with virtually all of the remaining $27,625 in debt under the
Company's $47,500 unsecured revolving credit facility (the "Facility"). At July
2, 1999, including $6,691 of outstanding standby letters of credit, the Company
had approximately $14,400 of available borrowing capacity under the Facility.
The Company paid an annual interest rate of approximately 5.9% on its
outstanding debt at July 2, 1999.
The Company's cash flows from operations in year to date 1999 were
$4,620, a $2,785 increase from comparable 1998. The Company believes that the
combination of cash generated by operations, available borrowing capacity and
the Company's ability to obtain additional long-term indebtedness is adequate to
finance the Company's operations for the foreseeable future.
YEAR 2000
The inability of computers, software and other equipment utilizing
microprocessors to recognize and properly process data fields containing a
two-digit year is commonly referred to as the Year 2000 compliance issue. As the
Year 2000 approaches and thereafter, such systems may be unable to accurately
process certain date-based information. This could result in system failures or
miscalculations causing disruptions of operations including, among other things,
a temporary inability to process transactions or engage in a variety of business
activities. The Company is undertaking a five-step process to evaluate the
impact of the Year 2000 compliance issue. These steps involve an inventory of
Company systems, an evaluation and analysis of systems regarding the Year 2000
compliance impact, implementation of modifications to specified systems, unit
testing, and finally systems or integration testing to validate compliance. The
Company relies upon third party vendors which supply goods and services to the
Company and, although the Company has consulted with various vendors in order to
minimize the risk of the Year 2000 compliance issue, such third parties may be
affected by the Year 2000 compliance issue. While the Company believes its
actions shall have the effect of ameliorating year 2000 risk, there can be no
assurance that the Company's internal systems or equipment or those of third
parties on which the Company relies will be Year 2000 compliant in a timely
manner or that the Company's or third parties' contingency plans will mitigate
the effects of noncompliance. The failure of the systems or equipment of the
Company or third parties could result in the reduction or suspension of the
Company's operations and could have a material adverse effect on the Company.
Subject to the final results of the evaluation and analysis of the Year 2000
compliance issue, the Company believes that its Year 2000 compliance costs will
not be material to its operations, liquidity or capital resources. There is
still uncertainty regarding the scope of the Year 2000 compliance issue and, at
this time, the Company is unable to quantify the impact of potential Year 2000
compliance failures. The Company's Year 2000 compliance program and possible
contingency plans are still being developed and assessed in order to attempt to
minimize the effect of failures within the Company's reasonable control.
9
<PAGE>
EURO CURRENCY
The Company has recognized that effective January 1, 1999 eleven of the
fifteen countries of the European Union will begin the transition to the single
monetary unit, the "Euro". The Company has both operating divisions and
customers located in countries that are a part of the European Union. The
Company does not believe that there will be any material cost involved in order
to comply with these requirements of such operating divisions and customers
operating under the Euro.
IMPACT OF ACCOUNTING STANDARDS
In June 1998, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 133 "Accounting for Derivative Instruments
and Hedging Activities" (SFAS No. 133), effective for fiscal years beginning
after June 15, 1999. SFAS No. 133 requires derivatives to be recorded on the
balance sheet as assets or liabilities, measured at fair value. Gains or losses
resulting from changes in values of derivatives would be accounted for depending
on the use of the derivative and whether it qualifies for hedge accounting. The
Company is completing an analysis of SFAS No. 133, which is not expected to have
a material impact on the Company's results of operations or financial position.
SAFE HARBOR STATEMENT
This quarterly report contains various forward-looking statements and
includes assumptions concerning the Company's operations, future results and
prospects. These forward-looking statements are based on current expectations
and are subject to risk and uncertainties. In connection with the "safe harbor"
provisions of the Private Securities Litigation Reform Act of 1995, the Company
provides the following cautionary statement identifying important economic,
political and technology factors which, among others, could cause the actual
results or events to differ materially from those set forth in or implied by the
forward-looking statements and related assumptions.
Such factors include the following: (i) changes in the current and
future business environment, including interest rates and capital and consumer
spending; (ii) competitive factors and competitor responses to the Company's
initiatives; (iii) successful development and market introductions of
anticipated new products; (iv) changes in government laws and regulations,
including taxes; and (v) favorable environment to make acquisitions, domestic
and foreign, including regulatory requirements and market value of candidates.
10
<PAGE>
Part II - OTHER INFORMATION
- ---------------------------
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
The 1999 annual meeting of stockholders was held on April 27, 1999.
Voting on the election of one director to the first class of directors was
conducted. The stockholders voted 5,613,811 shares in the affirmative and 2,040
votes were withheld to elect Thomas C. Foley to the first class of directors of
the Board of Directors. In addition to Mr. Foley, Michael L. Hurt, Jean-Pierre
L. Conte, Craig R. Stapleton, and Robert J. Dole will continue as directors
after the meeting.
Item 5. Other Information
On July 3, 1999, the Company signed a Joint Venture agreement with
Electron Corporation headquartered in Littleton, Colorado. The Joint Venture
will combine a segment of TB Wood's belted drives business with Electron's
belted drive business. Electron Corporation will be the supplier of castings to
TB Wood's. TB Wood's will manufacture castings and supply the finished product
to the Joint Venture. In addition, TB Wood's will have the responsibility for
designing, marketing, selling and distributing the products.
Item 6. Exhibits and Reports on Form 8-K
a) Exhibit 27 - Financial Data Schedule
b) Reports on Form 8-K - There were no reports on Form 8-K filed for the
quarter ended July 2, 1999.
Pursuant to the requirements of Section 13 or 15(d) 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, in the Borough of
Chambersburg and Commonwealth of Pennsylvania, on August 3, 1999.
TB WOOD'S CORPORATION
By: /s/ David H. Halleen
----------------------------------
DAVID H. HALLEEN
Vice President, Finance
(Principal Financial Officer and
Principal Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FINANCIAL
STATEMENTS FOR THE YEAR TO DATE PERIOD ENDED JULY 2, 1999 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
Amounts inapplicable or not disclosed as a separate line on the Statement
of Operations are reported as herein.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-01-1999
<PERIOD-END> JUL-02-1999
<CASH> 2,613
<SECURITIES> 0
<RECEIVABLES> 18,796
<ALLOWANCES> 420
<INVENTORY> 27,853
<CURRENT-ASSETS> 52,841
<PP&E> 60,360
<DEPRECIATION> (30,606)
<TOTAL-ASSETS> 98,213
<CURRENT-LIABILITIES> 19,834
<BONDS> 33,175
0
0
<COMMON> 59
<OTHER-SE> 29,334
<TOTAL-LIABILITY-AND-EQUITY> 98,213
<SALES> 60,781
<TOTAL-REVENUES> 60,781<F1>
<CGS> 39,184
<TOTAL-COSTS> 55,223
<OTHER-EXPENSES> (1,468)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 971
<INCOME-PRETAX> 4,090
<INCOME-TAX> 1,627
<INCOME-CONTINUING> 2,463
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,463
<EPS-BASIC> 0.42
<EPS-DILUTED> 0.42
<FN>
<F1>
Revenues are reported net of credits in the Statement of Opeartions
</FN>
</TABLE>
