<PAGE> 1
- --------------------------------------------------------------------------------
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 March 31, 1997 Commission File No. 0-27338
----------
GT INTERACTIVE SOFTWARE CORP.
(Exact name of registrant as specified in its charter)
DELAWARE 13-3689915
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
16 EAST 40TH STREET, NEW YORK, NY 10016
(Address of principal executive offices) (Zip code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (212) 726-6500
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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
--- ---
As of May 1, 1997, there were 66,398,458 shares of the registrant's Common
Stock outstanding.
Page of
Exhibit index begins on page
<PAGE> 2
GT INTERACTIVE SOFTWARE CORP.
1997 QUARTERLY REPORT ON FORM 10-Q
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION
<TABLE>
<CAPTION>
Page
<S> <C>
Item 1. Financial Statements (Unaudited):
Consolidated Balance Sheets as of December 31, 1996 and March 31, 1997 3
Consolidated Statements of Income for the three months ended March 31, 1996 and
1997 4
Consolidated Statements of Cash Flows for the three months ended March 31, 1996
and 1997 5
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 6. Exhibits and Reports on Form 8-K 13
Signatures 14
</TABLE>
<PAGE> 3
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
GT INTERACTIVE SOFTWARE CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
December 31, March 31,
1996 1997
----------- --------
(audited) (unaudited)
(in thousands)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 71,867 $ 16,640
Short-term investments 4,717 105
Receivables, net 95,941 115,254
Inventories, net 60,457 67,475
Royalty advances 69,202 70,344
Deferred income taxes 15,283 20,678
Prepaid expenses and other current assets 6,510 9,503
-------- --------
Total current assets 323,977 299,999
Property and equipment, net 10,082 11,290
Goodwill, net 21,003 21,924
Investments 9,829 9,759
Other assets 2,220 1,635
-------- --------
Total assets $367,111 $344,607
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $107,842 $ 87,832
Accrued liabilities 52,812 48,461
Royalties payable 33,378 29,934
Deferred income 4,783 6,963
Income taxes payable 9,575 13,658
Current portion of long-term liabilities 1,334 87
Due to related party 601 1,028
-------- --------
Total current liabilities 210,325 187,963
Other long-term liabilities 4,648 1,158
-------- --------
Total liabilities 214,973 189,121
-------- --------
Commitments and contingencies
Stockholders' equity:
Common stock, $.01 par, 150,000,000 shares authorized,
66,398,458 shares issued and outstanding 664 664
Cumulative translation adjustment 813 (223)
Additional paid-in capital 118,220 118,221
Retained earnings 32,441 36,824
-------- --------
Total stockholders' equity 152,138 155,486
-------- --------
Total liabilities and stockholders' equity $367,111 $344,607
======== ========
</TABLE>
The accompanying footnotes are an integral part of these financial statements.
Page 3
<PAGE> 4
GT INTERACTIVE SOFTWARE CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATION
(UNAUDITED)
<TABLE>
<CAPTION>
For The Three Months
Ended March 31,
----------------------
1996 1997
------- -------
(in thousands, except per
share data)
<S> <C> <C>
Net sales $70,757 $93,381
Cost of goods sold 41,071 57,883
Selling and distribution expenses 15,132 17,265
General and administrative expenses 7,070 10,391
Merger and other costs -- 185
Amortization of goodwill 273 347
------- -------
Operating income 7,211 7,310
Interest and other income, net 1,368 247
------- -------
Income before income taxes 8,579 7,557
Provision for income taxes 4,186 3,103
------- -------
Net income $ 4,393 $ 4,454
======= =======
Net income per share $ 0.07 $ 0.07
Weighted average number of shares outstanding 66,145 66,395
</TABLE>
The accompanying footnotes are an integral part of these financial statements.
Page 4
<PAGE> 5
GT INTERACTIVE SOFTWARE CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-----------------------
1996 1997
------- --------
(in thousands)
<S> <C> <C>
OPERATING ACTIVITIES:
Net income $ 4,393 $ 4,454
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation and amortization 648 955
Deferred income taxes (3,021) (5,395)
Deferred income 1,584 (1,672)
Changes in operating assets and liabilities:
Receivables, net 9,392 (18,189)
Inventories, net 2,153 (6,528)
Royalty advances (5,429) (1,142)
Due to related party, net (1,359) 428
Prepaid expenses and other current assets (1,442) (2,798)
Accounts payable (13,909) (21,696)
Accrued liabilities 3,955 (4,351)
Royalties payable (626) (3,444)
Income taxes payable 5,715 4,051
Other (1,054) (92)
------- --------
Net cash provided by (used in) operating activities 1,000 (55,419)
------- --------
INVESTING ACTIVITIES:
Purchase of One Stop -- (846)
Purchase of property and equipment (1,381) (1,659)
Purchases of investments -- 70
Purchases (sales) of short-term investments, net (140) 4,612
------- --------
Net cash provided by (used in) investing activities (1,521) 2,177
------- --------
FINANCING ACTIVITIES:
Proceeds from exercise of stock options -- 1
Long-term liabilities (240) (950)
------- --------
Net cash used in financing activities (240) (949)
------- --------
Effect of exchange rates on cash and cash equivalents (88) (1,036)
Net decrease in cash and cash equivalents (849) (55,227)
Cash and cash equivalents - beginning of year 84,069 71,867
------- --------
Cash and cash equivalents - end of period $83,220 $ 16,640
======= ========
</TABLE>
The accompanying footnotes are an integral part of these financial statements.
Page 5
<PAGE> 6
GT INTERACTIVE SOFTWARE CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE -1 - SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying interim consolidated financial statements of GT
Interactive Software Corp. and Subsidiaries (the "Company") are unaudited but in
the opinion of management reflect all adjustments, consisting of normal
recurring accruals, necessary for a fair presentation of the results for the
interim period in accordance with instructions for Form 10-Q. Accordingly, they
do not include all information and footnotes required by generally accepted
accounting principles for complete financial statements. These interim
consolidated financial statements should be read in conjunction with the
consolidated financial statements and footnotes thereto included in the
Company's Annual Report on Form 10-K for the year ended December 31, 1996.
Net Income Per Share
Net income per share is computed by dividing net income by the weighted
average number of common and common equivalent shares outstanding during the
period. Common equivalent shares are shares issuable upon the exercise of stock
options and warrants, net of shares assumed to have been purchased using the
treasury stock method.
NOTE 2 - ACQUISITIONS
On June 24, 1996, the Company acquired all of the outstanding common
stock of WizardWorks Group, Inc. ("WizardWorks"), a developer and publisher of
consumer software, in exchange for 2,350,000 shares of the Company's common
stock.
On June 28, 1996, the Company acquired all of the outstanding common
stock of Candel Inc., the parent company of FormGen Corp. ("FormGen"), a
publisher of multimedia consumer software, in exchange for 1,032,777 shares of
the Company's common stock.
On July 9, 1996, the Company acquired all of the outstanding common
stock of Humongous Entertainment, Inc., ("Humongous") a premier developer and
publisher of quality children's software, in exchange for 3,458,375 shares of
the Company's common stock.
WizardWorks, FormGen and Humongous (collectively the "Acquired
Companies") have been accounted for as pooling of interests and accordingly are
included in the Company's Consolidated Financial Statements as if the
acquisitions had occurred as of the beginning of the periods presented.
In November 1996, the Company acquired the business of Warner
Interactive Europe for approximately $6.3 million in cash, including acquisition
costs. Warner's financial results have been included in the Company's
Consolidated Financial Statements on a purchase basis for the period since the
acquisition.
On January 13, 1997, the Company acquired all of the outstanding
capital stock of Premier Promotion Limited, the parent company of One Stop
Direct Limited, a leading European value software publisher, for approximately
$.8 million in cash. One Stop's financial results have been included in the
Company's Consolidated Financial Statements on a purchase basis for the period
since the acquisition.
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GT INTERACTIVE SOFTWARE CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
NOTE 3 - INVENTORIES, NET
Inventories consist of the following:
<TABLE>
<CAPTION>
December 31, March 31,
1996 1997
------------ ---------
(in thousands)
<S> <C> <C>
Finished goods $58,464 $64,571
Raw materials 1,993 2,904
------- -------
$60,457 $67,475
======= =======
</TABLE>
NOTE 4 - COMMITMENTS AND CONTINGENCIES
On January 21, 1997, the Company entered into a Revolving Credit
Agreement (the "Credit Agreement") with banks expiring on December 31, 1998. The
Credit Agreement provides for a maximum of $40,000,000 to be used for borrowings
and letters of credit. The borrowings under this agreement bear interest at
either the banks reference rate (which is generally equivalent to the published
prime rate) or the LIBOR rate plus 1 1/4%. The Company pays a commitment fee of
1/4% based on the unused portion of the line. The Credit Agreement requires
maintenance of certain financial ratios and net income levels.
The Company had outstanding letters of credit at March 31, 1997
amounting to approximately $2,505,000.
NOTE 5 - SUPPLEMENTAL CASH FLOW INFORMATION
<TABLE>
<CAPTION>
For the Three Months
Ended March 31,
--------------------
1996 1997
------ ------
(in thousands)
<S> <C> <C>
Cash paid for income taxes $2,239 $4,192
Cash paid for interest 40 36
</TABLE>
Page 7
<PAGE> 8
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
The following Management's Discussion and Analysis of Financial
Condition and Results of Operations contains forward-looking statements which
involve risks and uncertainties. The Company's actual results or future events
could differ materially from those anticipated in these forward-looking
statements as a result of certain factors, including, but not limited to,
world-wide business and industry conditions, adoption of new hardware systems,
product delays, software development requirements and their impact on product
launches, company customer relations and other risks and factors detailed, from
time to time, in the Company's SEC filings including, but not limited to, the
factors described on pages 10-15 of the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1996.
OVERVIEW
The Company creates, publishes, merchandises and distributes
interactive entertainment, edutainment and value-priced consumer software for a
variety of platforms on a world-wide basis. Since it commenced operations in
February 1993, the Company has experienced rapid revenue growth and its product
and customer mix have changed substantially.
An important element of the Company's financial performance is its
product mix, which has varied over time as the Company has built its business.
The Company's product mix has been composed of two broad product categories:
published software and third-party software. Because each of these product
categories has different associated costs, the Company's margins have depended
and will depend, in part, on the percentage of net sales attributable to each
category. In addition, the Company's margins may vary significantly from quarter
to quarter depending on the timing of its new published product releases. To the
extent that mass merchants require greater proportions of third party software
products, some of which may yield lower margins, the Company's operating results
may be impacted accordingly.
On June 24, 1996, the Company acquired all of the outstanding stock of
WizardWorks, a leading developer and publisher of value-priced interactive
entertainment, edutainment and productivity software, in exchange for 2,350,000
newly issued shares of the Company's Common Stock. WizardWorks develops,
publishes and distributes consumer software for Windows, DOS and Macintosh
formats.
On June 28, 1996, the Company acquired all of the outstanding stock of
Candel Inc., the parent company of FormGen, a leading publisher of interactive
PC shareware and software in exchange for 1,032,777 newly issued shares of the
Company's Common Stock.
On July 9, 1996, the Company acquired all of the outstanding common
stock of Humongous, a premier developer and publisher of quality children's
software, in exchange for 3,458,375 newly issued shares of the Company's Common
Stock.
WizardWorks, FormGen and Humongous (collectively the "Acquired
Companies"), have each been accounted for as a pooling of interests.
Accordingly, the Company's historical Financial Statements have been restated to
include the results of the Acquired Companies.
In November 1996, the Company acquired the business of Warner
Interactive Europe for approximately $6.3 million in cash, including acquisition
costs. Warner's financial results have been included in the Company's
Consolidated Financial Statements on a purchase basis for the period since the
acquisition.
On January 13, 1997, the Company acquired all of the outstanding
capital stock of Premier Promotion Limited, the parent company of One Stop
Direct Limited ("One Stop"), a leading European value software distributor and
publisher, for approximately $.8 million in cash. One Stop's financial results
have been included in the Company's Consolidated Financial Statements on a
purchase basis for the period since the acquisition.
Page 8
<PAGE> 9
Sales are recorded net of expected future returns which historically
have been experienced and reserved for at approximately 30% of gross sales.
The consumer software industry is seasonal. Net sales are typically
highest during the fourth calendar quarter. This seasonality is primarily a
result of the increased demand for consumer software during the year-end holiday
buying season.
RESULTS OF OPERATIONS
The following table sets forth certain consolidated statement of
operations data as a percentage of net sales for the periods indicated:
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED
MARCH 31,
--------------------------
1996 1997
----- ----
<S> <C> <C>
Net sales 100.0% 100.0%
Cost of goods sold 58.0 62.0
Selling and distribution expenses 21.4 18.5
General and administrative expenses 10.0 11.1
Merger and other costs -- 0.2
Amortization of goodwill 0.4 0.4
----- -----
Operating income 10.2 7.8
Interest and other income, net 1.9 .3
----- -----
Income before income taxes 12.1 8.1
Provision for income taxes 5.9 3.3
----- -----
Net income 6.2% 4.8%
===== =====
</TABLE>
THREE MONTHS ENDED MARCH 31, 1997 COMPARED TO THREE MONTHS ENDED MARCH 31, 1996
Net sales for the three months ended March 31, 1997 ("1997") increased
approximately $22.6 million or 32% as compared to the three months ended March
31, 1996 ("1996"). This growth in net sales was primarily attributable to an
increase in sales from its existing mass merchant shelf space and an increase in
the number of mass merchant stores supplied and serviced by the Company.
Additionally, the introduction of newly published titles such as Doom and Hexen
for the Sega Saturn and Tigershark for the Sony PlayStation, continuing strong
sales of Duke Nukem 3D, Quake, Doom and Doom-related products and increased
royalty income contributed to the growth in net sales.
Cost of goods sold primarily includes costs of purchased products and
royalties paid to software developers. Cost of goods sold for 1997 increased
approximately $16.8 million or 41% as compared to 1996. Cost of goods sold as a
percentage of net sales increased to 62.0% in 1997 compared to 58.0% in 1996.
This increase was primarily due to a change in product mix toward third party
products, which increased to approximately 54% of net sales in 1997 compared to
approximately 44% in 1996.
Selling and distribution expenses primarily include shipping expenses,
sales and distribution labor expenses, advertising and promotion expenses and
distribution facilities costs. These expenses increased approximately $2.1
million or 14% during 1997 compared to 1996. This change is primarily due to an
increase in the variable costs associated with the sales growth. Selling and
distribution expenses as a percentage of net sales decreased to 18.5% for 1997
compared to 21.4% for 1996 due to the Company realizing greater economies of
scale.
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<PAGE> 10
General and administrative expenses primarily include personnel
expenses, facilities costs, professional expenses and other overhead charges.
These expenses for 1997 increased approximately $3.3 million or 47% as compared
to 1996. The increase was due primarily to additional personnel required to
support the expansion of the Company's publishing operations. General and
administrative expenses as a percentage of net sales increased to 11.1% from
10.0%.
Merger costs consist of legal, accounting and other professional fees
incurred by the Company to complete the acquisitions of Warner Interactive and
One Stop and for fees associated with registering the stock associated with the
Acquired Companies.
Operating income for 1997 increased from approximately $7.2 million to
approximately $7.3 million, while operating margins decreased from 10.2% to
7.8%. Excluding merger costs, operating income and operating margins would have
been approximately $7.5 million and 8.0% for 1997.
Interest and other income, net decreased approximately $1.1 million for
1997 as compared to 1996. This is primarily attributable to a decrease in
short-term investments and cash balances.
Net income increased from $4.4 million in 1996 to $4.5 million in 1997,
while net income as a percentage of net sales decreased from 6.2% to 4.8%.
Excluding merger costs, net income and net income as a percentage of net sales
would have been $4.6 million and 5.0% for 1997.
Page 10
<PAGE> 11
LIQUIDITY AND CAPITAL RESOURCES
Resources used to finance significant expenditures for the three months
ended March 31, 1997 and 1996 are reflected in the following table:
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
----------------------------
1996 1997
----- ------
(in millions)
<S> <C> <C>
Resources used:
Payables and accrued liabilities $(4.9) $(25.4)
Receivables, net -- (18.2)
Inventories, net -- (6.5)
Purchase of One Stop -- (.8)
Purchase of property and equipment (1.4) (1.7)
Royalty advances (5.4) (1.1)
Other, net (5.1) (6.0)
----- ------
(16.8) (59.7)
----- ------
Financed by:
Net income 4.4 4.5
Receivables, net 9.4 --
Inventories, net 2.1 --
----- ------
15.9 4.5
----- ------
Cash and cash equivalents balance decrease $ (.9) $(55.2)
===== ======
</TABLE>
As of March 31, 1997, the Company's principal sources of liquidity
included cash, cash equivalents and short-term investments of approximately
$16.7 million. Cash and cash equivalents decreased for the three months ended
March 31, 1997 by approximately $55.2 million. The primary source of cash during
1997 was net income of $4.5 million. These internally generated funds were used
to fund payables and accrued liabilities (which includes accounts payable,
royalties payable, income taxes payable and accrued liabilities) of $25.4
million, receivables of $18.2 million and inventory of $6.5 million. The
decrease in payables is primarily attributable to the payment for inventory sold
during the fourth quarter of 1996, which was partially offset by normal
replenishment and purchases for the current quarter sales. Inventory and
receivables balances increased, reflecting higher sales at the end of the
quarter and their replenishment. Additionally, inventory increased due to
normally higher seasonal returns. Royalty advances of $70.3 million as of March
31, 1997 represent advances to approximately 135 entities for various products
expected to be delivered throughout the next several years. Such advances are
amortized to cost of goods sold on a per unit basis as licensed products are
sold in accordance with the individual agreements. Working capital at March 31,
1997 was $112.0 million compared to $113.7 at December 31, 1996.
On January 21, 1997, the Company entered into a revolving credit
agreement (the "Credit Agreement") with banks expiring on December 31, 1998. The
Credit Agreement provides for a maximum of $40 million for borrowings and
letters of credit. The borrowings under the Credit Agreement bear interest at
either the banks' reference rate (which is generally equivalent to the published
prime rate) or the LIBOR rate plus 1 1/4%. The Company pays a commitment fee of
1/4% based on the unused portion of the line. The Credit Agreement requires
maintenance of certain financial ratios and net income levels.
As of March 31, 1997, the Company had outstanding letters of credit
amounting to approximately $2.5 million.
The Company expects continued volatility in the use of cash due to
varying seasonable, receivable payment cycles and quarterly working capital
needs to finance its growing publishing and distribution business.
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<PAGE> 12
The Company believes that existing cash, cash equivalents and
short-term investments, together with cash expected to be generated from
operations and cash available through the Credit Agreement, will be sufficient
to fund the Company's anticipated operations for the next twelve months.
Page 12
<PAGE> 13
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
The following exhibits are filed as part of this report:
Exhibit No. Description
3.1 Amended and Restated Certificate of Incorporation (incorporated
herein by reference to the exhibit with the corresponding
number filed as part of the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1995).
3.2 Amended and Restated By-laws (incorporated herein by reference
to the exhibit with the corresponding number filed as part of
the Company's Registration Statement on Form S-1 filed on
October 18, 1996, and all amendments thereto (Registration No.
33-14441)).
10.1 Credit Agreement, dated as of January 21, 1997, by and among
the Registrant, the banks parties thereto and Republic National
Bank of New York, as Agent (incorporated herein by reference to
Exhibit number 10.31 filed as part of the Company's Annual
Report on Form 10-K for the fiscal year ended December 31,
1996).
27.1 Financial Data Schedule.
- ------------
(b) Reports on Form 8-K
A report on Form 8-K, dated February 10, 1997, was filed with the
Securities and Exchange Commission (the "Commission") on February 11, 1997
announcing the results of operations for the quarter and the year ended December
31, 1996.
Page 13
<PAGE> 14
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.
GT INTERACTIVE SOFTWARE CORP.
By: /s/ RONALD CHAIMOWITZ
----------------------------------
Ronald Chaimowitz
Chief Executive Officer and
Director
Date: May 15, 1997
By: /s/ ANDREW GREGOR
----------------------------------
Andrew Gregor
Chief Financial Officer and Senior
Vice President, Finance and
Administration
Date: May 15, 1997
Page 14
<PAGE> 15
Exhibits
Exhibit No. Description Page
3.1 Amended and Restated Certificate of
Incorporation (incorporated herein by
reference to the exhibit with the
corresponding number filed as part of the
Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1995).
3.2 Amended and Restated By-laws (incorporated
herein by reference to the exhibit with the
corresponding number filed as part of the
Company's Registration Statement on Form
S-1 filed on October 18, 1996, and all
amendments thereto (Registration No.
33-14441)).
10.1 Credit Agreement, dated as of January 21,
1997, by and among the Registrant, the
banks parties thereto and Republic National
Bank of New York, as Agent (incorporated
herein by reference to Exhibit number 10.31
filed as part of the Company's Annual
Report on Form 10-K for the fiscal year
ended December 31, 1996).
27.1 Financial Data Schedule.
- ------------
Page 15
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 16,640
<SECURITIES> 105
<RECEIVABLES> 119,099
<ALLOWANCES> 3,845
<INVENTORY> 67,475
<CURRENT-ASSETS> 299,999
<PP&E> 15,995
<DEPRECIATION> 4,705
<TOTAL-ASSETS> 344,607
<CURRENT-LIABILITIES> 187,963
<BONDS> 0
0
0
<COMMON> 664
<OTHER-SE> 155,486
<TOTAL-LIABILITY-AND-EQUITY> 344,607
<SALES> 93,381
<TOTAL-REVENUES> 93,381
<CGS> 57,883
<TOTAL-COSTS> 57,883
<OTHER-EXPENSES> 28,188
<LOSS-PROVISION> 387
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 7,557
<INCOME-TAX> 3,103
<INCOME-CONTINUING> 4,454
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,454
<EPS-PRIMARY> .07
<EPS-DILUTED> .07
</TABLE>
