<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark one)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2000
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ___________ to ____________
Commission file number 1-13025
AIRNET SYSTEMS, INC.
---------------------------------------------
(Exact name of registrant as specified in its charter)
Ohio 31-1458309
- ---------------------------------------- -------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3939 International Gateway, Columbus, Ohio 43219
-------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(614) 237-9777
------------------------------------------------------------------------
(Registrant's telephone number, including area code)
NOT APPLICABLE
----------------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
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___
Common Shares, $.01 Par Value,
Outstanding as of May 10, 2000 - 10,884,862
<PAGE>
AIRNET SYSTEMS, INC.
FORM 10-Q FOR QUARTER ENDED MARCH 31, 2000
<TABLE>
<CAPTION>
PART I: FINANCIAL INFORMATION
<S> <C>
Item 1 Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets as of March 31, 2000 and
December 31, 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
Condensed Consolidated Statements of Operations for the three months
ended March 31, 2000 and 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Condensed Consolidated Statements of Cash Flows for the three months ended
March 31, 2000 and 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Notes to Condensed Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
Item 2 Management's Discussion and Analysis of Financial Condition
and Results of Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Item 3 Quantitative and Qualitative Disclosures About Market Risk . . . . . . . . . . . . . . . . . . . . . . . .10
PART II: OTHER INFORMATION
Items 1 through 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
</TABLE>
2
<PAGE>
AIRNET SYSTEMS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
In thousands, except share data MARCH 31, DECEMBER 31,
2000 1999
------------------- ------------------
ASSETS (Unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents $2,691 $1,667
Accounts receivable:
Trade, less allowances 16,705 14,919
Shareholders, affiliates, and associates 230 154
Inventory and spare parts 10,679 10,426
Taxes refundable 898 2,382
Deferred taxes 932 934
Deposits and prepaids 1,577 1,733
------------------- ------------------
Total current assets 33,712 32,215
Net property and equipment 84,738 84,733
Other assets:
Goodwill, net of accumulated amortization 7,833 7,920
Other intangibles, net of accumulated amortization 348 375
Investment in partnerships and other 2,138 2,234
------------------- ------------------
Total assets $128,769 $127,477
=================== ==================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $4,656 $5,203
Salaries and related liabilities 2,930 2,792
Accrued expenses 1,596 1,206
Deferred taxes 154 196
Current portion of notes payable 29 29
------------------- ------------------
Total current liabilities 9,365 9,426
Notes payable, less current portion 34,416 33,919
Deferred tax liability 9,939 10,381
Shareholders' equity:
Preferred shares, $.01 par value; 10,000,000 shares
authorized; and no shares issued and outstanding - -
Common shares, $.01 par value; 40,000,000 shares authorized;
and 12,753,000 shares issued at March 31, 2000
and December 31, 1999 128 128
Additional paid-in-capital 78,112 78,182
Retained earnings 16,582 15,207
Treasury shares, 1,360,000 and 1,343,000 shares held at cost
at March 31, 2000 and December 31, 1999, respectively (19,773) (19,766)
------------------- ------------------
Total shareholders' equity 75,049 73,751
------------------- ------------------
Total liabilities and shareholders' equity $128,769 $127,477
=================== ==================
</TABLE>
See notes to consolidated financial statements
3
<PAGE>
AIRNET SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - Unaudited
In thousands, except per share data
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
2000 1999
------------------ ------------------
<S> <C> <C>
NET REVENUES
Air transportation, net of excise tax
Bank Delivery $25,080 $24,430
Express Delivery 8,424 5,892
Fixed base and other operations 170 200
------------------ ------------------
Total net revenues 33,674 30,522
COSTS AND EXPENSES
Air transportation 26,509 23,003
Fixed base operations 280 255
Selling, general and administrative 3,970 3,754
------------------ ------------------
Total costs and expenses 30,759 27,012
------------------ ------------------
Income from operations 2,915 3,510
Interest expense 627 622
------------------ ------------------
Income before income taxes 2,288 2,888
Provision for income taxes 914 1,174
------------------ ------------------
Income before cumulative effect of a change in
accounting principle 1,374 1,714
Cumulative effect of writing off start-up costs, net of tax - (2,488)
------------------ ------------------
Net income $1,374 ($774)
================== ==================
Income per common share - basic and assuming dilution
Income before cumulative effect of a change in
accounting principle $0.12 $0.15
Cumulative effect of writing off start-up costs, net of tax - (0.22)
------------------ ------------------
Net income per common share $0.12 $0.07
================== ==================
</TABLE>
See notes to consolidated financial statements
4
<PAGE>
AIRNET SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - Unaudited
<TABLE>
<CAPTION>
THREE MONTHS ENDED
IN THOUSANDS MARCH 31,
2000 1999
--------------- --------------
<S> <C> <C>
Operating activities:
Net income (loss) $1,374 ($774)
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Cumulative effect of writing off start-up costs - 2,488
Depreciation 3,445 2,668
Amortization of intangibles 131 228
Deferred taxes (481) -
Provision for losses on accounts receivable 43 45
Loss(gain) on disposition of assets 47 (10)
Cash provided by (used in) operating assets and liabilities:
Accounts receivable (1,905) (1,369)
Inventory and spare parts (253) (3,830)
Prepaid expenses 156 (997)
Accounts payable (548) 599
Accrued expenses 390 (2,730)
Taxes payable 1,483 1,101
Salaries and related liabilities 138 887
Other, net 80 (98)
--------------- --------------
Net cash provided by (used in) operating activities 4,100 (1,792)
Investing activities:
Purchases of property and equipment (3,502) (3,049)
Payments for covenants not to compete - (121)
Proceeds from sales of property and equipment 4 75
--------------- --------------
Net cash used in investing activities (3,498) (3,095)
Financing activities:
Proceeds from Incentive Stock Plan programs 66 68
Net borrowings under the revolving credit facility 500 3,900
Repayment of long-term debt (2) (6)
Purchase of treasury shares (142) -
--------------- --------------
Net cash provided by financing activities 422 3,962
--------------- --------------
Net increase (decrease) in cash 1,024 (925)
Cash and cash equivalents at beginning of period 1,667 1,142
--------------- --------------
Cash and cash equivalents at end of period $2,691 $217
=============== ==============
</TABLE>
See notes to consolidated financial statements
5
<PAGE>
AIRNET SYSTEMS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF PRESENTATION
AirNet Systems, Inc. and its subsidiaries ("AirNet" or the "Company") operate a
fully integrated national air transportation network which provides delivery
service for time-critical shipments for customers in the U.S. banking industry
and other industries requiring the express delivery of packages. AirNet also
offers retail aviation fuel sales and related ground services for customers at
its Columbus, Ohio facility.
The accompanying unaudited condensed consolidated financial statements include
the accounts of AirNet Systems, Inc. and its subsidiaries. These financial
statements have been prepared in accordance with generally accepted accounting
principles for interim financial information and with the instructions for Form
10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all
information and footnotes required by generally accepted accounting principles
for complete financial statements. These financial statements should be read in
conjunction with the year ended December 31, 1999 consolidated financial
statements of AirNet Systems, Inc. included in Item 8 of the Annual Report on
Form 10-K for the fiscal year ended December 31, 1999 (File No. 1-13025) which
contain additional disclosures including a summary of AirNet's accounting
policies.
The financial information included herein reflects all adjustments (consisting
of normal recurring adjustments) which are, in the opinion of management,
necessary for a fair presentation of the results of interim periods. Certain
prior period balances have been reclassified to conform with the current year
presentation. Operating results for the three months ended March 31, 2000 are
not necessarily indicative of the results to be expected for the year ending
December 31, 2000.
The preparation of the condensed consolidated financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts reported in those financial
statements and accompanying notes thereto. Actual results could differ from
those estimates.
2. SEGMENT REPORTING
In 1997, the Financial Accounting Standards Board issued Statement of Financial
Accounting Standards (SFAS) No. 131, Disclosures about Segments of an Enterprise
and Related Information, which established annual and interim reporting and
disclosure standards for an enterprise's operating segments. SFAS No. 131 became
effective for fiscal years beginning after December 15, 1997. The Company has
historically not segregated costs between its Bank Delivery and Express Delivery
operations. Prior to the quarter ended March 31, 2000, AirNet did not report
segment information due to accounting system limitations. The Company modified
its accounting systems and will report segment information on a going forward
basis beginning with the quarter ended March 31, 2000, as restatement of prior
periods is impracticable.
AirNet divides its business into two operating segments: Bank Delivery and
Express Delivery. The Bank Delivery segment transports canceled checks and
related information for the U.S. banking industry. The Express Delivery segment
provides specialized, high priority delivery service for customers requiring
late pick-ups and early deliveries combined with prompt, on-line delivery
information.
6
<PAGE>
The accounting policies used for each segment are described in Note 1 -
Significant Accounting Policies of the Notes to Consolidated Financial
Statements included in Item 8 of the 1999 Annual Report on Form 10-K. AirNet has
no inter-segment sales. AirNet's assets are not allocated between segments due
to significant overlap in usage of the aircraft fleet, vehicles and facilities.
Management evaluates the performance of each segment based on operating income.
Summarized financial information concerning AirNet's reportable segments is
shown in the following table for the three months ended March 31, 2000. The
"Other" category includes AirNet's fixed base operations and income and expense
not allocated to the reportable segments.
<TABLE>
<CAPTION>
Bank Express
(in thousands) Delivery Delivery Other Total
---------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Revenues $25,080 $8,424 $170 $33,674
Income(loss) from operations 3,666 (593) (158) 2,915
</TABLE>
3. NET INCOME PER SHARE
The following table sets forth the computation of basic and diluted net income
(loss) per common share (in thousands, except per share data):
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-------------------------
2000 1999
----------- ------------
<S> <C> <C>
Numerator:
Income before the cumulative effect of a change
in accounting principle $1,374 $ 1,714
Net income (loss) $1,374 $ (774)
Denominator:
Basic - weighted average shares outstanding 11,410 11,383
Diluted
Stock options - associates, officers, and directors 2 -
----------- ------------
Adjusted weighted average shares outstanding 11,412 11,383
Income per common share - basic and assuming dilution:
Income before the cumulative effect of a change
in accounting principle $ .12 $ .15
Net income (loss) $ .12 $ (.07)
</TABLE>
For the three months ended March 31, 2000, 1,161,000 common shares subject to
outstanding stock options were excluded from the diluted weighted average shares
outstanding calculation, as their exercise prices exceeded the average fair
market value of the underlying common shares for the period.
7
<PAGE>
AIRNET SYSTEMS, INC.
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
SAFE HARBOR STATEMENT
Except for the historical information contained in this Form 10-Q, the matters
discussed, including, but not limited to, information regarding future economic
performance and plans and objectives of AirNet's management, are forward-looking
statements which involve risks and uncertainties. When used in this document,
the words "anticipate", "estimate", "expect", "may", "plan", "project" and
similar expressions are intended to be among statements that identify
forward-looking statements. Such statements involve risks and uncertainties
including, but not limited to, the following which could cause actual results to
differ materially from any such forward-looking statement: potential regulatory
changes by the Federal Aviation Administration ("FAA"), which could increase the
regulation of AirNet's business, or the Federal Reserve, which could change the
competitive environment of transporting canceled checks; adverse weather
conditions; the ability to attract and retain qualified pilots; technological
advances and increases in the use of electronic funds transfers; as well as
other economic, competitive and domestic and foreign governmental factors
affecting AirNet's markets, price and other facets of its operations. Should one
or more of these risks or uncertainties materialize, or should underlying
assumptions prove incorrect, actual outcomes may vary materially from those
indicated. AirNet undertakes no responsibility to update for changes related to
these or any other factors that may hereafter occur. Refer to the 1999 Annual
Report filed on Form 10-K for additional detail relating to risk factors
expressed in forward-looking statements.
RESULTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 2000 COMPARED TO THREE MONTHS ENDED MARCH 31, 1999
Net revenues were $33.7 million for the three months ended March 31, 2000, an
increase of $3.2 million, or 10.5%, over the same period of 1999. Revenues from
Bank Delivery increased $0.7 million, or 2.7%. The increase in Bank Delivery
revenues is primarily the result of one additional flying day in 2000 and rate
increases effective January 1, 2000. Express Delivery revenues increased $2.5
million, or 43.0%. This increase can be partially attributed to the
implementation of rate increases effective January 1, 2000. Within the Express
Delivery segment, revenues from premium and ground transportation services
increased $2.0 million and $0.8 million, respectively, due to the addition of
new sales contracts primarily in the just-in-time parts market and medical
industry. Revenues from Mercury Business Services ("Mercury) accounted for $0.2
million of the increase. These increases were offset by decreases in other
service revenues of $0.5 million.
Total costs and expenses were $30.8 million for the three months ended March 31,
2000, an increase of $3.7 million, or 13.9%, over the same period in 1999,
resulting in income from operations of $2.9 million for the three months ended
March 31, 2000, compared to $3.5 million for the same period of 1999, or a 17.1%
decrease. Selling, general and administrative expenses increased $0.2 million,
or 5.8%, for the three month period.
Air transportation expenses were up $3.5 million, or 15.2%, for the three month
period. Approximately $1.3 million of the increase in transportation costs,
including ground courier costs, operational wages and related benefits, and
commercial air freight cost, can be directly attributed to the addition of sales
contracts entered into in the third quarter of 1999. In addition, fuel costs
increased $1.0 million but were offset by income from the fuel surcharge program
of $0.6 million. The net increase of $0.4 million, or 18.4%, over the prior year
was due to higher fuel prices and one additional flying day in the first quarter
of 2000. Maintenance costs are up $0.2 million due to
8
<PAGE>
increased labor and parts costs. Depreciation expense is up $0.8 million due to
aircraft additions and improvements which occurred late in the first quarter of
1999. Other operational costs increased as a result of the increase in Express
Delivery volumes, particularly in the SDX (shipments via the commercial
airlines) and ground categories, which operate at lower margins than the Bank
Delivery and ANX (shipments via the AirNet airline) services.
Selling, general and administrative expense increased $0.2 million, or 5.8%,
over the same period in the prior year. Of this amount, $0.3 million was due to
an incentive compensation plan introduced in January 2000 to align personnel
goals with AirNet's financial performance. In addition, AirNet has increased its
Express Delivery sales staff and its administrative staff to support new sales
initiatives. These costs were offset by the settlement of an insurance claim for
costs incurred in 1999.
Interest expense was $0.6 million for the quarter ended March 31, 2000 which is
comparable to the interest expense for the first quarter of 1999 as the notes
payable balance and interest rate did not significantly change from year to
year.
LIQUIDITY AND CAPITAL RESOURCES
CASH FLOW FROM OPERATING ACTIVITIES. Net cash provided by operating activities
was $4.1 million for the three months ended March 31, 2000, compared to net cash
used in operating activities of $1.8 million for the same period in 1999. The
increase is primarily the result of costs associated with the purchase of an
aircraft in 1999 for resale purposes and payment of Quick litigation costs in
the first quarter of 1999.
CURRENT CREDIT ARRANGEMENTS. AirNet maintains a credit agreement with a bank
that provides a $50.0 million, five-year, unsecured revolving credit facility.
The credit agreement limits the availability of funds to designated percentages
of accounts receivable, inventory and the wholesale value of aircraft and
equipment. In addition, the credit agreement requires the maintenance of minimum
net worth and cash flow levels, imposes limits on payments of dividends to 50%
of net income and restricts the amount of additional debt which may be incurred.
AirNet's outstanding balance at March 31, 2000 was $34.4 million, which is a
$0.5 million increase over the balance at December 31, 1999.
In September 1999, AirNet entered into two interest rate swap agreements with a
bank as a hedge against the interest rate risk associated with borrowings. The
swap agreements each have a notional amount of $5.0 million and effectively lock
in a portion of AirNet's variable rate revolving credit liability at fixed rates
of 6.3% and 6.5% plus a margin based on AirNet's funded debt ratio. These swap
agreements are in effect for a period of three years ending in September 2002.
The differential to be paid or received is accrued as interest rates change and
is recognized as an adjustment to interest expense in the statements of
operations. AirNet does not use derivative financial instruments for speculative
purposes.
INVESTING ACTIVITIES. Capital expenditures totaled $3.5 million for three months
ended March 31, 2000 compared to $3.0 million for the same period in 1999.
Substantially all of the 2000 expenditures were incurred for aircraft
inspections, major engine overhauls and related flight equipment. AirNet
anticipates it will have approximately $20.0 million in total capital
expenditures in 2000. AirNet anticipates it will continue to acquire aircraft
and flight equipment as necessary to maintain growth and continue offering
quality service to its customers.
STOCK REPURCHASE PROGRAM. AirNet announced a stock repurchase program in
February 2000 allowing AirNet to purchase up to $3.0 million of its common
shares. Management and the Board of Directors believe that AirNet's common
shares represent an excellent value and an appropriate investment. Purchases of
these common shares will be made over time in the open market or through
privately negotiated transactions. In the first quarter of 2000, AirNet
repurchased 26,500
9
<PAGE>
shares for approximately $142,000. Subsequent to March 31, 2000, AirNet
repurchased an additional 508,500 shares for approximately $2.2 million.
AirNet anticipates that operating cash and capital expenditure requirements will
continue to be funded by cash flow from operations, cash on hand and bank
borrowings.
SEASONALITY AND VARIABILITY IN QUARTERLY RESULTS
AirNet's operations historically have been somewhat seasonal and somewhat
dependent on the number of banking holidays falling during the week. Because
financial institutions are currently AirNet's principal customers, AirNet's air
system is scheduled primarily around the needs of financial institution
customers. When financial institutions are closed, there is no need for AirNet
to operate a full system. AirNet's fiscal quarter ending December 31, is often
the most impacted by bank holidays (including Thanksgiving and Christmas)
recognized by its primary customers. When these holidays fall on Monday through
Thursday, AirNet's revenue and net income are adversely affected. AirNet's
annual results fluctuate as well.
Operating results are also affected by the weather. AirNet generally experiences
higher maintenance costs during its fiscal quarter ending March 31. Winter
weather often requires additional costs for de-icing, hangar rental and other
aircraft services.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
INFLATION AND INTEREST RATES
AirNet is exposed to certain market risks from transactions that are entered
into during the normal course of business. AirNet's primary market risk exposure
relates to interest rate risk. At March 31, 2000, AirNet had a balance of $34.4
million on its revolving credit facility. This facility bears interest at
AirNet's option, at a fixed rate determined by the Eurodollar rate, a negotiated
rate or a floating rate. Based on borrowings at March 31, 2000, a one hundred
basis point change in interest rates would impact net interest expense by
approximately $344,000 per year. In September 1999, AirNet entered into two
interest rate swap agreements with a bank as a hedge against the interest rate
risk associated with borrowings. The swap agreements each have a notional amount
of $5.0 million and effectively locked in a portion of the AirNet's variable
rate revolving credit liability at fixed rates of 6.3% and 6.5% plus a margin
based on AirNet's funded debt ratio. These swap agreements contain a three year
term which expires in September 2002.
10
<PAGE>
AIRNET SYSTEMS, INC.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings. Not Applicable
Item 2. Changes in Securities and Use of Proceeds. Not Applicable
Item 3. Defaults Upon Senior Securities. Not Applicable
Item 4. Submission of Matters to a Vote of Security Holders.
Not Applicable
Item 5. Other Information. Not Applicable
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits:
Exhibit No. Description
----------- ---------------------------------------
Exhibit 27 Financial Data Schedule
(b) Reports on Form 8-K:
No reports on Form 8-K were filed during the three months
ended March 31, 2000
11
<PAGE>
AIRNET SYSTEMS, INC.
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.
Dated: May 10, 2000 By: /s/ William R. Sumser
-----------------------------------
William R. Sumser,
Chief Financial Officer
(Duly Authorized Officer)
(Principal Financial Officer)
12
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AIRNET SYSTEMS, INC.
INDEX TO EXHIBITS
Exhibit No. Description
27 Financial Data Schedule. Filed herewith.
13
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM AIRNET
SYSTEM INC.'S QUARTERLY REPORT ON FORM 10-Q FOR THE THREE MONTHS ENDED MARCH 31,
2000 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 2,691
<SECURITIES> 0
<RECEIVABLES> 17,535
<ALLOWANCES> 600
<INVENTORY> 10,679
<CURRENT-ASSETS> 33,172
<PP&E> 154,533
<DEPRECIATION> 69,795
<TOTAL-ASSETS> 128,769
<CURRENT-LIABILITIES> 9,365
<BONDS> 0
0
0
<COMMON> 128
<OTHER-SE> 78,112
<TOTAL-LIABILITY-AND-EQUITY> 128,769
<SALES> 170
<TOTAL-REVENUES> 33,674
<CGS> 280
<TOTAL-COSTS> 26,789
<OTHER-EXPENSES> 3,970
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 627
<INCOME-PRETAX> 2,288
<INCOME-TAX> 914
<INCOME-CONTINUING> 1,374
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,374
<EPS-BASIC> .12
<EPS-DILUTED> .12
</TABLE>
