<PAGE> 1
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
SEPTEMBER 30, 1996 COMMISSION FILE NUMBER 0-26778
APPLIED MICROSYSTEMS CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
WASHINGTON 91-1074996
(STATE OF INCORPORATION) (I.R.S. EMPLOYER IDENTIFICATION NUMBER)
5020 148TH AVENUE N.E. 98052
REDMOND, WASHINGTON (ZIP CODE)
(ADDRESS OF PRINCIPAL EXECUTIVE
OFFICES)
(206) 882-2000
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, Par Value $.01 Per Share
(TITLE OF CLASS)
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
--- ---
The number of shares of the registrant's Common Stock outstanding as of
November 1, 1996, was 6,585,257.
This report including exhibits consists of 15 pages. The exhibit index
appears on page 14.
<PAGE> 2
APPLIED MICROSYSTEMS CORPORATION
INDEX TO FORM 10-Q
<TABLE>
<CAPTION>
PAGE
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements:
Consolidated Statements of Income for the quarter and nine months ended September 30, 1996 and
<S> <C>
1995.................................................................................................3
Consolidated Balance Sheets as of September 30, 1996 and December 31, 1995............................4
Consolidated Statements of Cash Flows for the nine months ended September 30, 1996 and 1995...........5
Notes to Consolidated Financial Statements............................................................6
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.................... 7
Part II OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.........................................................................12
Signatures...........................................................................................13
Exhibit Index........................................................................................14
Exhibit 11...........................................................................................15
</TABLE>
2
<PAGE> 3
APPLIED MICROSYSTEMS CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
THREE MONTHS ENDED SEPTEMBER 30 NINE MONTHS ENDED SEPTEMBER 30
------------------------------- ------------------------------
1996 1995 1996 1995
-------- -------- -------- --------
(IN THOUSANDS , EXCEPT PER SHARE AMOUNT)
(UNAUDITED)
<S> <C> <C> <C> <C>
Net Sales ............................ $ 9,711 $ 7,828 $ 28,166 $ 22,725
Cost of sales ........................ 2,610 2,384 7,974 7,017
-------- -------- -------- --------
Gross Profit ......................... 7,101 5,444 20,192 15,708
Operating expenses:
Sales, general and administrative 3,794 3,366 10,957 9,900
Research and development ........ 2,056 1,548 5,863 4,582
-------- -------- -------- --------
Total operating expenses ............. 5,850 4,914 16,820 14,482
-------- -------- -------- --------
Income from operations ............... 1,251 530 3,372 1,226
Interest income and other ............ 151 3 444 (20)
Interest expense ..................... (9) (41) (36) (197)
-------- -------- -------- --------
Income before income taxes ........... 1,393 492 3,780 1,009
Income taxes ......................... 426 40 1,115 165
======== ======== ======== ========
Net Income ........................... $ 967 $ 452 $ 2,665 $ 844
======== ======== ======== ========
Net Income per share ................. $ 0.14 $ 0.08 $ 0.38 $ 0.15
Shares used in per share calculation . 7,128 5,578 7,097 5,507
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
3
<PAGE> 4
APPLIED MICROSYSTEMS CORPORATION
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1996 1995
-------- --------
(UNAUDITED)
ASSETS
Current Assets:
<S> <C> <C>
Cash and cash equivalents ............................. $ 7,053 $ 12,771
Short Term Investments ................................ 5,943 --
Accounts receivable ................................... 8,882 7,510
Inventories ........................................... 3,013 3,145
Prepaid and other current assets ...................... 932 454
-------- --------
Total current assets .............................. 25,823 23,880
Property and equipment, net ................................ 2,456 2,212
Other assets ............................................... 712 754
======== ========
Total assets ...................................... $ 28,991 $ 26,846
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable ...................................... $ 2,339 $ 3,442
Accrued payroll ....................................... 1,865 1,698
Other accrued expenses ................................ 958 1,083
Deferred revenue ...................................... 2,435 1,834
Current portion of long-term obligations .............. 52 67
-------- --------
Total current liabilities ......................... 7,649 8,124
Long-term obligations, less current portion ................ 29 68
Shareholders' equity:
Preferred stock, par value $.01
Authorized - 5,000,000 shares
Common stock, par value $.01
Authorized - 25,000,000 shares
Issued - 6,577,000 and 6,468,000 shares at
September 30, 1996 and December 31, 1995,
respectively ...................................... 25,789 25,655
Cumulative translation adjustment ..................... (296) (156)
Accumulated deficit ................................... (4,180) (6,845)
-------- --------
Total shareholders' equity ........................ 21,313 18,654
======== ========
Total liabilities and shareholders' equity ........ $ 28,991 $ 26,846
======== ========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
4
<PAGE> 5
APPLIED MICROSYSTEMS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30,
1996 1995
-------- --------
(IN THOUSANDS)
(UNAUDITED)
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net income ................................................ $ 2,665 $ 844
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization ........................ 852 844
Changes in operating assets and liabilities:
Accounts receivable .................................. (1,372) (482)
Inventories .......................................... 132 368
Prepaid expenses ..................................... (478) 16
Other assets ......................................... 12 (129)
Deferred revenue ..................................... 601 343
Accounts payable and accrued expenses................. (1,061) 884
-------- --------
Net cash provided by operating activities......... 1,351 2,688
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of short-term investments ................... (5,943) --
Property and equipment additions ..................... (1,065) (696)
-------- --------
Net cash used in investing activities............. (7,008) (696)
CASH FLOWS FROM FINANCING ACTIVITIES:
Stock options exercised .............................. 134 29
Proceeds from long-term obligations .................. -- 918
Repayment of long-term obligations ................... (54) (671)
Proceeds from notes payable to banks ................. -- 14,000
Repayment of notes payable to banks .................. -- (15,874)
-------- --------
Net cash used in financing activities ............ 80 (1,598)
Effects of foreign exchange rate changes on cash .......... (141) 269
-------- --------
Increase (decrease) in cash and cash equivalents .......... (5,718) 125
Cash and cash equivalents at beginning of period .......... 12,771 2,072
======== ========
Cash and cash equivalents at end of period ................ $ 7,053 $ 2,197
======== ========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
5
<PAGE> 6
APPLIED MICROSYSTEMS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The consolidated financial statements for the three month and the
nine month periods ended September 30, 1996 and 1995 and the related footnote
information are unaudited and have been prepared on a basis substantially
consistent with the 1995 audited consolidated financial statements. In the
opinion of management, the financial statements include all adjustments
(consisting of only normal recurring adjustments) necessary for fair
presentation of the results of this interim period. These statements should be
read in conjunction with the consolidated financial statements and related notes
included in the Company's 1995 Annual Report to Shareholders. The results of
operations for the three months and nine month periods ended September 30, 1996
and 1995 are not necessarily indicative of the results to be expected for the
entire year.
Certain prior year amounts have been reclassified to conform to the
current year presentation. Such reclassifications have no effect on previously
reported results of operations.
2. COMPUTATION OF EARNINGS PER SHARE
Net income per share is based on the weighted average number of
common and common equivalent shares outstanding during each period. Common
equivalent shares include the effect of all outstanding convertible preferred
stock and outstanding stock options and warrants. Common equivalent shares are
not included in the per share calculations where the effect of their inclusion
would be antidilutive, except that, in accordance with Securities and Exchange
Commission requirements, common and common equivalent shares issued during the
12-month period prior to its filing of the initial public offering have been
included in the calculation as if they were outstanding for all periods through
November 1995 (the closing of its initial public offering), using the treasury
stock method and the initial public offering price.
3. INVENTORIES
Inventories consist of:
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1996 1995
------ ------
(IN THOUSANDS)
<S> <C> <C>
Finished goods $1,041 $1,275
Work in process 137 155
Purchased parts 1,835 1,715
====== ======
$3,013 $3,145
====== ======
</TABLE>
6
<PAGE> 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Management's Discussion and Analysis of Financial Conditions and Results of
Operations should be read in conjunction with the accompanying financial
statements for the periods specified and the associated notes. Further reference
should be made to the Company's 1995 Annual Report to Shareholders.
RESULTS OF OPERATIONS
The following table sets forth for the period indicated the percentage of total
revenue represented by each line item in the Company's condensed consolidated
statements of income and the percentage change from comparative prior period in
each line item.
<TABLE>
<CAPTION>
Percent of Period-to-Period
Net Sales Percentage Change
-------------------------------- --------------------------
Three Months Ended Three Months Ended
September 30, September 30, 1996
1996 1995 Compared to 1995
-------------- -------------- --------------------------
<S> <C> <C> <C>
Net Sales 100.0% 100.0% 24.1%
Cost of sales 26.9 30.5 9.5
-------------- --------------
Gross Profit 73.1 69.5 30.4
Operating expenses:
Sales, general and administrative 39.1 43.0 12.7
Research and development 21.2 19.8 32.8
-------------- --------------
Total operating expenses 60.3 62.8 19.0
-------------- --------------
Income from operations 12.8 6.7 136.0
Interest income and other 1.6 ---- ----
Interest expense (0.1) (0.5) (78.0)
-------------- --------------
Income before income taxes 14.3 6.2 183.1
Income taxes 4.3 0.4 965.0
============== ==============
Net Income 10.0% 5.8% 113.9%
============== ==============
</TABLE>
7
<PAGE> 8
<TABLE>
<CAPTION>
Percent of Period-to-Period
Net Sales Percentage Change
-------------------------------- --------------------------
Nine Months Ended Nine Months Ended
September 30, September 30, 1996
1996 1995 Compared to 1995
-------------- -------------- --------------------------
<S> <C> <C> <C>
Net Sales 100.0% 100.0% 23.9%
Cost of sales 28.3 30.9 13.6
-------------- --------------
Gross Profit 71.7 69.1 28.5
Operating expenses:
Sales, general and administrative 38.9 43.6 10.7
Research and development 20.8 20.2 28.0
-------------- --------------
Total operating expenses 59.7 63.8 16.1
-------------- --------------
Income from operations 12.0 5.3 175.0
Interest income and other 1.6 (0.1) ----
Interest expense (0.1) (0.9) (81.7)
-------------- --------------
Income before income taxes 13.5 4.3 274.6
Income taxes 4.0 0.6 575.8
============== ==============
Net Income 9.5% 3.7% 215.8%
============== ==============
</TABLE>
NET SALES
Net sales increased by 24.1% from $7.8 million for the quarter ended
September 30, 1995 to $9.7 million for the quarter ended September 30, 1996. For
the first nine months of 1996, revenue increased by 23.9% to $28.2 million from
$22.7 million for the same period in 1995. These increases were primarily
attributable to sales of NetROM(TM) and CodeTEST(TM) tools which were not
available in the prior year period, and to increased unit sales of Debug
products. The increases were partially offset by a decline in average selling
prices due to an increased proportion of sales represented by lower-priced tools
and to a lesser extent was unfavorably impacted by currency exchange rate
fluctuations affecting international sales. The Company's net sales are
presently derived predominantly from sales of software design, debugging and
testing tools and to a lesser extent product support revenues. Product support
revenues increased by 30.6% and 17.8% over the prior three month and nine month
period, respectively, and continues to represent approximately 8% of total
sales. The Company generally recognizes revenues from product sales upon
shipment, and recognizes product support revenues ratably over the life of each
maintenance contract, typically 12 months.
8
<PAGE> 9
International sales expressed in U.S. dollars increased by 17.8% for the
quarter ended September 30, 1996 over the comparable period of 1995, to 48.7% of
net sales as compared to 51.2% of net sales in the prior year. For the nine
months ending September 30, 1996, international sales increased 20.2% over the
same period in 1995 representing 47.8% of total sales versus 49.2% in the prior
period. The growth rate in both periods for international sales as expressed in
U.S. dollars is attributable to increased unit sales which is due primarily to
increased sales and marketing efforts. The Company's sales through its foreign
subsidiaries are generally denominated in local currencies, and as a result,
fluctuations in currency exchange rates can have a significant effect on the
Company's reported net sales. Had the exchange rates remained the same from the
prior periods, especially in Japan, sales would have increased an additional 7.8
percentage points for the quarter ended September 30, 1996 and increased an
additional 8.0 percentage points for the nine months ended September 30, 1996.
The Company is unable to predict currency exchange rate fluctuations and
anticipates that such fluctuations will continue to affect its net sales to
varying degrees in the future. The Company expects international sales,
especially in Japan, to continue to account for a significant percentage of its
net sales.
GROSS PROFIT
The Company's gross profit increased from $5.4 million, or 69.6% of net
sales, for the quarter ended September 30, 1995 to $7.1 million, or 73.1% of net
sales, for the quarter ended September 30, 1996. For the nine months ending
September 30, 1996, the company's gross profit increased from $15.7 million to
$20.2 million representing 69.1% and 71.7% of net sales respectively. The
increases in gross profit as a percentage of net sales was primarily
attributable to an increase in the percentage of net sales attributable to newer
debug and recently introduced CodeTEST products that have lower material and
labor costs, and to a lesser extent, increased leverage of fixed and
semi-variable manufacturing costs, and favorable cost reductions on certain
hardware components. These savings were partially offset by declines in sales
revenue due to unfavorable currency exchange rate fluctuations.
9
<PAGE> 10
SALES, GENERAL AND ADMINISTRATIVE
Sales, general and administrative expenses were $3.4 million or 43.0% of
net sales, and $3.8 million, or 39.1% of net sales, for the quarter ended
September 30, 1995 and 1996, respectively. For the nine month period ended
September 30, 1995 and 1996, sales, general and administrative expenses were
$9.9 million or 43.6% of net sales, and $11.0 million or 38.9% of net sales,
respectively. The dollar amount increase between comparable periods was
primarily attributable to increased compensation-related expenses resulting
principally from increased sales force headcount. Sales, general and
administrative expenses declined as a percentage of net sales due to the
Company's ability to leverage certain fixed selling, general and administrative
expenses over an increased sales base. Sales, general and administrative
expenses include salaries, bonuses, commissions, benefits, depreciation, travel
and entertainment, rent, telephone, supplies and promotional costs. The Company
expects its sales and marketing expenditures to continue to increase in the
future as it introduces and markets new products, and continues to expand its
sales, general and administrative organization.
In order to mitigate certain intercompany risks associated with exchange
rate fluctuations, the Company does hedge a portion of its foreign exchange risk
in Japan as it relates to the trade debt the Company's Japanese subsidiary owes
to the Company. Although the Company generally plans to continue to engage in
exchange rate hedging activities with respect to certain exchange rate risks,
there can be no assurance that it will do so or that any such activities will
successfully protect the Company against such risks.
RESEARCH AND DEVELOPMENT
Research and development expenses were $1.5 million, or 19.8% of net
sales, and $2.1 million, or 21.2% of net sales, for the quarters ended September
30, 1995 and 1996, respectively. For the nine month period ending September 30,
1995 and September 30, 1996, research and development expenses were $4.6
million, or 20.2% of net sales, and $5.9 million, or 20.8% of net sales,
respectively. The 32.8% and 27.8% increase in the dollar amount of research and
development expenses between comparable periods was primarily attributable to
increased compensation-related expenses resulting principally from increased
engineering headcount relating to new product development. Aggregate amounts
devoted to product development, prior to offsetting such amounts with external
development funding from semiconductor manufacturers, increased from $1.7
million for the quarter ended September 30, 1995 to $2.1 million for the quarter
ended September 30, 1996 and from $4.9 million for the nine months ended
September 30, 1995 to $6.2 million for the nine months ended September 30, 1996.
Although external product development funding cannot be relied upon, the Company
intends to continue to make substantial investments in product development,
including development of software design, debugging and test tools for
additional embedded microprocessors as well as continued advanced development in
future directions. As a result, the Company anticipates that net research and
development expenses are likely to increase for the foreseeable future.
OTHER
The Company's interest (net) and other income increased by $180,000
between the comparable three month periods and $625,000 between the comparable
nine month periods due primarily to an increase in cash and marketable
securities from the initial public offering in November 1995 and reduction in
debt.
10
<PAGE> 11
LIQUIDITY AND CAPITAL RESOURCES
The Company requires capital principally for the financing of inventory,
capital equipment and accounts receivable, and for investment in product
development activities, new technologies and potential company or product line
acquisitions. The Company's net assets changed considerably as a result of the
initial public offering in November 1995 which resulted in net proceeds to the
Company of $13 million. Among other things, these proceeds were used to purchase
short-term investments and equipment, and pay off certain debts. For the nine
months ended September 30, 1995 and 1996, the Company generated $2.7 million and
$1.4 million, respectively, of cash from operations; utilized $696,000 and $7.0
million, respectively, of cash for purchases of short-term investments and
equipment; and utilized $1.6 million and $54,000, respectively, of cash for net
debt reduction. As of September 30, 1996, the Company had working capital of
$18.2 million, including $13.0 million of cash, cash equivalents and short-term
investments
The Company believes that the net proceeds from the November, 1995
initial public offering, together with funds from operations and borrowings,
will provide the Company with sufficient funds to finance its operations for at
least the next 12 months. The Company's future capital requirements will,
however, depend on a number of factors, including costs associated with product
development efforts, the success of the commercial introduction of the Company's
new products and the acquisition of complementary businesses, products or
technologies. To the extent additional capital is required, the Company may sell
additional equity, debt or convertible securities, or obtain additional credit
facilities.
CERTAIN FACTORS THAT MAY AFFECT FUTURE RESULTS OF OPERATIONS
Statements in this report concerning sales, costs, expenses, adequacy of
working capital which are not historical facts, constitute forward-looking
statements which are subject to a number of risks and uncertainties which might
cause actual results to differ materially from stated expectations. Such risks
and uncertainties include delays in shipments of the Company's new products,
declining product prices and margins, uncertain market acceptance of new
products, growth in the marketplace in which the Company operates, competitive
product offerings, unfavorable foreign currency fluctuations and adverse changes
in general economic conditions in any of the countries in which the Company does
business and other risks set forth in the Company's filings with the Securities
and Exchange Commission including the annual report on form 10K. The Company's
performance may also be adversely affected by the ability of its suppliers to
provide components and assemblies. During the last twelve months, the Company's
competitors have continued to make a variety of product announcements and
offerings. The Company continues to release new versions of its product lines
and the successful acceptance of these products will play a key role in future
growth. The impact of any of these factors is difficult to predict or forecast.
The Company's future earnings and stock price may be subject to
significant volatility, particularly on a quarterly basis, due to a variety of
factors, including factors noted above. Any shortfall in revenue or earnings
from levels expected by securities analysts could have an immediate and
significant adverse effect on the trading price of the Company's common stock in
any given period. Additionally, the Company often does not learn of such
shortfalls until late in the fiscal quarter, or even after the quarter is over,
which could result in an even more immediate and adverse effect on the trading
price of the Company's common stock. The Company participates in a highly
dynamic industry, which often results in significant volatility of the company's
common stock price. Consequently, purchasing or holding of the Company's stock
involves a high degree of risk.
11
<PAGE> 12
PART II. - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(A) The following exhibits are filed as part of this report.
11 Computation of Earnings Per Share.
(B) Report on Form 8-K
The registrant did not file any reports on Form 8-K during
the quarter ended September 30, 1996.
12
<PAGE> 13
SIGNATURES
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 City of
Redmond, State of Washington, on November 8, 1996.
APPLIED MICROSYSTEMS CORPORATION
(Registrant)
By /s/ A. James Beach
--------------------------------------------
A. James Beach
Vice President, Chief Financial Officer,
Secretary and Treasurer
(Principal Financial and Accounting Officer)
13
<PAGE> 14
EXHIBIT INDEX
Exhibit No. Description Page No.
11 Computation of Earnings Per Share. 15
27 Financial Data Schedule 27
14
<PAGE> 1
Exhibit 11
APPLIED MICROSYSTEMS CORPORATION
Computation of Earnings Per Share
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SEPTEMBER 30,
1996 1995
------ ------
<S> <C> <C>
Average shares outstanding 6,523 1,101
Net effect of dilutive stock warrants and options based on the
treasury stock method using average market price 605 124
Net effect of stock options issued during 12 months prior to the
initial public offering at less than the offering price based on the treasury
stock method using $10.00 per share, treated as
outstanding for all periods presented 518
Dilutive effect of Convertible Preferred Stock 3,835
====== ======
Total 7,128 5,578
====== ======
Net Income $ 967 $ 452
====== ======
Per share amount $ .14 $ .08
====== ======
</TABLE>
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30,
1996 1995
------ ------
<S> <C> <C>
Average shares outstanding 6,468 857
Net effect of dilutive stock warrants and options based on the
treasury stock method using average market price 629 308
Net effect of stock options issued during 12 months prior to the
initial public offering at less than the offering price based on the treasury
stock method using $10.00 per share, treated as
outstanding for all periods presented 507
Dilutive effect of Convertible Preferred Stock- 3,835
====== ======
Total 7,097 5,507
====== ======
Net Income $2,665 $ 844
====== ======
Per share amount $ .38 $ .15
====== ======
</TABLE>
15
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JUL-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 7,053
<SECURITIES> 5,943
<RECEIVABLES> 8,882
<ALLOWANCES> 0
<INVENTORY> 3,013
<CURRENT-ASSETS> 25,823
<PP&E> 2,456
<DEPRECIATION> 0
<TOTAL-ASSETS> 28,991
<CURRENT-LIABILITIES> 7,649
<BONDS> 29
0
0
<COMMON> 25,789
<OTHER-SE> (4,476)
<TOTAL-LIABILITY-AND-EQUITY> 28,991
<SALES> 9,711
<TOTAL-REVENUES> 9,711
<CGS> 2,610
<TOTAL-COSTS> 5,850
<OTHER-EXPENSES> (151)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 9
<INCOME-PRETAX> 1,393
<INCOME-TAX> 426
<INCOME-CONTINUING> 967
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 967
<EPS-PRIMARY> .14
<EPS-DILUTED> .14
</TABLE>
