SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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 Quarter Ended September 27, 1997.
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934.
Commission File Number 1-12745
THERMEDICS DETECTION INC.
(Exact name of Registrant as specified in its charter)
Massachusetts 04-3106698
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
220 Mill Road
Chelmsford, Massachusetts 01824-4178
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (617) 622-1000
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 [ ]
Indicate the number of shares outstanding of each of the
issuer's classes of Common Stock, as of the latest practicable
date.
Class Outstanding at September 27, 1997
---------------------------- ---------------------------------
Common Stock, $.10 par value 13,355,459
PAGE
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
THERMEDICS DETECTION INC.
Consolidated Balance Sheet
(Unaudited)
Assets
September 27, December 28,
(In thousands) 1997 1996
------------------------------------------------------------------------
Current Assets:
Cash and cash equivalents $ 43,429 $ 13,484
Accounts receivable, less allowances
of $793 and $1,215 9,611 9,387
Inventories:
Raw materials 7,028 6,135
Work in process and finished goods 4,825 2,965
Prepaid and refundable income taxes 2,257 2,173
Prepaid expenses 817 547
-------- --------
67,967 34,691
-------- --------
Property, Plant, and Equipment, at Cost 6,101 5,683
Less: Accumulated depreciation and
amortization 4,615 3,899
-------- --------
1,486 1,784
-------- --------
Cost in Excess of Net Assets of Acquired
Companies 15,649 16,694
-------- --------
Other Assets 301 314
-------- --------
$ 85,403 $ 53,483
======== ========
2PAGE
<PAGE>
THERMEDICS DETECTION INC.
Consolidated Balance Sheet (continued)
(Unaudited)
Liabilities and Shareholders' Investment
September 27, December 28,
(In thousands except share amounts) 1997 1996
----------------------------------------------------------------------
Current Liabilities:
Promissory note to parent company $ 21,200 $ -
Accounts payable 2,236 3,030
Accrued payroll and employee benefits 1,269 1,375
Accrued installation and warranty expenses 941 1,413
Deferred revenue 1,867 1,281
Customer deposits 680 637
Accrued income taxes 2,078 334
Other accrued expenses 2,228 3,102
Due to parent company and Thermo Electron
Corporation 700 161
-------- --------
33,199 11,333
-------- --------
Deferred Income Taxes 40 40
-------- --------
Promissory Note to Parent Company - 21,200
-------- --------
Shareholders' Investment (Note 2):
Common stock, $.10 par value, 50,000,000
shares authorized; 13,355,459 and
10,683,500 shares issued and outstanding 1,336 1,068
Capital in excess of par value 40,990 13,130
Retained earnings 11,261 7,136
Cumulative translation adjustment (1,423) (424)
-------- --------
52,164 20,910
-------- --------
$ 85,403 $ 53,483
======== ========
The accompanying notes are an integral part of these consolidated
financial statements.
3PAGE
<PAGE>
THERMEDICS DETECTION INC.
Consolidated Statement of Operations
(Unaudited)
Three Months Ended
----------------------------
September 27, September 28,
(In thousands except per share amounts) 1997 1996
-----------------------------------------------------------------------
Revenues:
Product revenues $ 9,606 $ 8,057
Service revenues 3,026 3,060
------- -------
12,632 11,117
------- -------
Costs and Operating Expenses:
Cost of product revenues 4,128 3,742
Cost of service revenues 1,854 1,828
Selling, general, and administrative
expenses 2,850 2,746
Research and development expenses 1,297 1,275
------- -------
10,129 9,591
------- -------
Operating Income 2,503 1,526
Interest Income 602 61
Interest Expense, Related Party (311) (345)
Other Income (Expense), Net 16 (95)
------- -------
Income Before Income Taxes 2,810 1,147
Income Tax Provision 1,124 442
------- -------
Net Income $ 1,686 $ 705
======= =======
Earnings per Share $ .13 $ .07
======= =======
Weighted Average Shares 13,355 10,342
======= =======
The accompanying notes are an integral part of these consolidated
financial statements.
4PAGE
<PAGE>
THERMEDICS DETECTION INC.
Consolidated Statement of Operations
(Unaudited)
Nine Months Ended
----------------------------
September 27, September 28,
(In thousands except per share amounts) 1997 1996
-----------------------------------------------------------------------
Revenues:
Product revenues $27,445 $21,338
Service revenues 10,013 9,228
------- -------
37,458 30,566
------- -------
Costs and Operating Expenses:
Cost of product revenues 12,649 11,488
Cost of service revenues 5,306 5,340
Selling, general, and administrative
expenses 9,422 11,081
Research and development expenses 3,742 3,654
------- -------
31,119 31,563
------- -------
Operating Income (Loss) 6,339 (997)
Interest Income 1,461 117
Interest Expense, Related Party (934) (818)
Other Income (Expense), Net 9 (15)
------- -------
Income (Loss) Before Income Taxes 6,875 (1,713)
Income Tax (Provision) Benefit (2,750) 650
------- -------
Net Income (Loss) $ 4,125 $(1,063)
======= =======
Earnings (Loss) per Share $ .33 $ (.10)
======= =======
Weighted Average Shares 12,562 10,261
======= =======
The accompanying notes are an integral part of these consolidated
financial statements.
5PAGE
<PAGE>
THERMEDICS DETECTION INC.
Consolidated Statement of Cash Flows
(Unaudited)
Nine Months Ended
----------------------------
September 27, September 28,
(In thousands) 1997 1996
------------------------------------------------------------------------
Operating Activities:
Net income (loss) $ 4,125 $(1,063)
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation and amortization 1,132 2,034
Provision for losses on accounts
receivable 84 187
Other noncash expenses 276 1,347
Changes in current accounts, excluding
the effects of acquisitions:
Accounts receivable (546) (892)
Inventories (3,065) 1,801
Other current assets (420) (713)
Accounts payable (758) 139
Other current liabilities 1,556 2,197
------- -------
Net cash provided by operating activities 2,384 5,037
------- -------
Investing Activities:
Acquisitions, net of cash acquired - (21,975)
Purchases of property, plant, and equipment (553) (543)
Other 89 34
------- -------
Net cash used in investing activities (464) (22,484)
------- -------
Financing Activities:
Net proceeds from issuance of Company
common stock (Note 2) 28,122 3,000
Proceeds from issuance of promissory note to
parent company - 21,200
Transfers to parent company and additional
capital contributions, net - 120
Other (48) 21
------- -------
Net cash provided by financing activities 28,074 24,341
------- -------
Exchange Rate Effect on Cash (49) (87)
------- -------
Increase in Cash and Cash Equivalents 29,945 6,807
Cash and Cash Equivalents at Beginning of
Period 13,484 1,282
------- -------
Cash and Cash Equivalents at End of Period $43,429 $ 8,089
======= =======
Noncash Activities:
Fair value of assets of acquired companies $ - $24,328
Cash paid for acquired companies - (21,668)
------- -------
Liabilities assumed of acquired companies $ - $ 2,660
======= =======
The accompanying notes are an integral part of these consolidated
financial statements.
6PAGE
<PAGE>
THERMEDICS DETECTION INC.
Notes to Consolidated Financial Statements
1. General
The interim consolidated financial statements presented have been
prepared by Thermedics Detection Inc. (the Company) without audit and, in
the opinion of management, reflect all adjustments of a normal recurring
nature necessary for a fair statement of the financial position at
September 27, 1997, the results of operations for the three- and
nine-month periods ended September 27, 1997, and September 28, 1996, and
the cash flows for the nine-month periods ended September 27, 1997, and
September 28, 1996. Interim results are not necessarily indicative of
results for a full year.
The consolidated balance sheet presented as of December 28, 1996, has
been derived from the consolidated financial statements that have been
audited by the Company's independent public accountants. The consolidated
financial statements and notes are presented as permitted by Form 10-Q
and do not contain certain information included in the annual
consolidated financial statements and notes of the Company. The
consolidated financial statements and notes included herein should be
read in conjunction with the consolidated financial statements and notes
included in the Company's Registration Statement on Form S-1 (File
No. 333-31987), filed with the Securities and Exchange Commission.
2. Initial Public Offering
In March 1997, the Company sold 2,671,292 shares of its common stock
in an initial public offering at $11.50 per share for net proceeds of
$28.1 million. Following the offering, Thermedics Inc. (Thermedics) owned
approximately 75% of the Company's outstanding common stock.
3. Presentation
Certain amounts in 1996 have been reclassified to conform to the 1997
financial statement presentation.
Item 2 - Management's Discussion and Analysis of Financial Condition and
Results of Operations
Forward-looking statements, within the meaning of Section 21E of the
Securities Exchange Act of 1934, are made throughout this Management's
Discussion and Analysis of Financial Condition and Results of Operations.
For this purpose, any statements contained herein that are not statements
of historical fact may be deemed to be forward-looking statements.
Without limiting the foregoing, the words "believes," "anticipates,"
"plans," "expects," "seeks," "estimates," and similar expressions are
intended to identify forward-looking statements. There are a number of
important factors that could cause the results of the Company to differ
materially from those indicated by such forward-looking statements,
including those detailed under the caption "Risk Factors" included in the
Company's Registration Statement on Form S-1 (File No. 333-31987), filed
with the Securities and Exchange Commission.
7PAGE
<PAGE>
THERMEDICS DETECTION INC.
Overview
The Company develops, manufactures, and markets high-speed detection
and measurement systems used in on-line industrial process applications,
explosives detection, and laboratory analysis. The Company's industrial
process systems use ultratrace chemical detectors, high-speed gas
chromatography, X-ray imaging, near-infrared spectroscopy, and other
technologies for quality assurance of in-process and finished products,
primarily in the food, beverage, pharmaceutical, forest products,
chemical, and other consumer products industries. The Company's
explosives-detection equipment uses simultaneous trace particle- and
vapor-detection techniques based on its proprietary chemiluminescence and
high-speed gas chromatography technologies. Customers use the Company's
explosives-detection equipment to detect plastic and other explosives at
airports and border crossings, for other high-security screening
applications, and for forensics and search applications.
Historically, the Company's principal product lines were process
detection systems, including Alexus(R) systems used to assure the quality
of refillable plastic containers, and EGIS(R) explosives detectors. The
Company expanded its product lines to include moisture analysis equipment
through its acquisition of Moisture Systems Corporation and Rutter & Co.
B.V. (collectively, Moisture Systems) in January 1996, and also
introduced its InScan(TM) high-speed X-ray imaging systems (InScan
systems) and Flash-GC(TM) gas chromatography systems (Flash-GC systems)
in 1996. The Company has also recently introduced Rampart(TM), the latest
portable trace-detection system that incorporates the advanced Flash-GC
technology in tandem with a highly sensitive chemiluminescence detector.
The Company also performs contract research and development services for
government and industry customers and earns service revenues through
long-term contracts.
A substantial portion of the Company's sales are derived from sales
of products outside the United States, through export sales and sales by
the Company's foreign subsidiaries. Although the Company seeks to charge
its customers in the same currency as its operating costs, the Company's
financial performance and competitive position can be affected by
currency exchange-rate fluctuations. The Company expects an increase in
the percentage of its revenues derived from international operations.
Results of Operations
Third Quarter 1997 Compared With Third Quarter 1996
Revenues in the third quarter of 1997 increased 14% to $12.6 million
from $11.1 million in the third quarter of 1996. Product revenues
increased 19% to $9.6 million in 1997 from $8.1 million in 1996, while
service revenues remained relatively constant at $3.0 million in 1997
and $3.1 million in 1996. Revenues from the Company's process detection
instruments and related services increased to $5.0 million in 1997 from
$4.1 million in 1996, primarily due to Alexus revenues of $1.5 million
from the continued fulfillment of a mandated product-line upgrade from
The Coca-Cola Company to its existing installed base and, to a lesser
extent, increased shipments of the Company's InScan systems, which were
introduced in 1996. This increase was offset in part by a decrease in
8PAGE
<PAGE>
THERMEDICS DETECTION INC.
Third Quarter 1997 Compared With Third Quarter 1996 (continued)
demand from The Coca-Cola Company for new Alexus installations in 1997.
Revenues from the mandated product-line upgrade are expected to continue
through the fourth quarter of 1997. Revenues from the Company's EGIS
explosives-detection systems and related services increased to
$2.8 million in 1997 from $1.7 million in 1996, primarily due to $1.5
million of shipments under a $5.8 million contract with the U.S. Federal
Aviation Administration (FAA), which was awarded to the Company in
May 1997, offset in part by a decrease in overseas demand in 1997.
Product shipments from this contract are expected to continue through the
first quarter of 1998. Revenues from the Company's Moisture Systems
subsidiary decreased 18% to $4.0 million in 1997 from $4.8 million in
1996, primarily due to a slowdown in product demand in Europe.
The gross profit margin increased to 53% in the third quarter of 1997
from 50% in the third quarter of 1996. The gross profit margin on product
revenues increased to 57% in 1997 from 54% in 1996, primarily due to a
change in product mix to higher-margin revenues from The Coca-Cola
Company's mandated product-line upgrade, offset in part by increased
distribution costs related to certain international sales of EGIS
explosives-detection systems. The gross profit margin on service revenues
decreased to 39% in 1997 from 40% in 1996, primarily due to increased
European field service costs.
Selling, general, and administrative expenses as a percentage of
revenues decreased to 23% in the third quarter of 1997 from 25% in the
third quarter of 1996, primarily due to an increase in revenues. Research
and development expenses remained unchanged at $1.3 million in the third
quarter of 1997 and 1996.
Interest income increased to $0.6 million in the third quarter of
1997 from $0.1 million in the third quarter of 1996, primarily due to
interest income earned on invested proceeds from the Company's March 1997
initial public offering (Note 2).
Interest expense, related party, of $0.3 million in the third quarter
of 1997 and 1996 reflects the issuance of a $21.2 million promissory note
to Thermedics Inc. (Thermedics) in connection with the January 1996
acquisition of Moisture Systems. This note is due March 1998, and bears
interest at the 90-day Commercial Paper Composite Rate plus 25 basis
points, set at the beginning of each quarter.
The effective tax rates were 40% and 39% in the third quarter of 1997
and 1996, respectively. The effective tax rates in both periods exceeded
the statutory federal income tax rate primarily due to the impact of
state income taxes.
9PAGE
<PAGE>
THERMEDICS DETECTION INC.
First Nine Months 1997 Compared With First Nine Months 1996
Revenues in the first nine months of 1997 increased 23% to $37.5
million from $30.6 million in the first nine months of 1996. Product
revenues increased 29% to $27.4 million in 1997 from $21.3 million in
1996, while service revenues increased 9% to $10.0 million in 1997 from
$9.2 million in 1996. Revenues from the Company's process detection
instruments and related services increased to $16.5 million in 1997 from
$10.7 million in 1996, primarily due to Alexus revenues of $5.4 million
from the continued fulfillment of a mandated product-line upgrade from
The Coca-Cola Company to its existing installed base and, to a lesser
extent, increased shipments of the Company's InScan systems, which were
introduced in 1996. Revenues from the Company's EGIS explosives-
detection systems and related services increased to $7.0 million in 1997
from $6.0 million in 1996, primarily due to $1.5 million of shipments
under the Company's contract with the FAA, offset in part by a decrease
in overseas demand in 1997. Revenues from the Company's Moisture Systems
subsidiary, acquired in January 1996, decreased to $11.6 million in 1997
from $12.1 million in 1996, primarily due to a slowdown in product demand
in Europe in 1997, offset in part by the inclusion of revenues for the
full nine months of 1997.
The gross profit margin increased to 52% in the first nine months of
1997 from 45% in the first nine months of 1996. The gross profit margin
on product revenues increased to 54% in 1997 from 46% in 1996, primarily
due to a change in product mix to higher-margin revenues from The
Coca-Cola Company's mandated product-line upgrade, as well as the
inclusion of higher-margin revenues from Moisture Systems for the full
nine months of 1997. To a lesser extent, the increase also resulted from
the inclusion of an $0.8 million charge in the second quarter of 1996 as
a result of obsolescence created by planned product changes. The gross
profit margin on service revenues increased to 47% in 1997 from 42% in
1996, primarily due to increased field service efficiencies and, to a
lesser extent, the change in sales mix to higher-margin service revenues
from Moisture Systems for the full nine months of 1997.
Selling, general, and administrative expenses as a percentage of
revenues decreased to 25% in the first nine months of 1997 from 36% in
the first nine months of 1996. The decline was primarily due to
nonrecurring costs in the 1996 period related to a reduction in
personnel, a reduction in leased space, and other adjustments in response
to lower sales volume of process detection instruments and, to a lesser
extent, an increase in revenues in 1997. This decrease was offset in part
by increased selling expenses as the Company develops a sales force for
its InScan and Flash-GC systems. Research and development expenses
remained relatively constant at $3.7 million in the first nine months of
1997 and 1996.
Interest income increased to $1.5 million in the first nine months of
1997 from $0.1 million in the first nine months of 1996, primarily due to
the reason discussed in the results of operations for the third quarter.
10PAGE
<PAGE>
THERMEDICS DETECTION INC.
First Nine Months 1997 Compared With First Nine Months 1996 (continued)
Interest expense, related party, of $0.9 million and $0.8 million in
the first nine months of 1997 and 1996, respectively, remained relatively
unchanged. The related debt was discussed in the results of operations
for the third quarter.
The effective tax rates were 40% and 38% in the first nine months of
1997 and 1996, respectively. The effective tax rates in both periods
exceeded the statutory federal income tax rate primarily due to the
impact of state income taxes. The effective tax rate increased in 1997
due to a change in the mix of income within foreign tax jurisdictions.
Liquidity and Capital Resources
Consolidated working capital was $34.8 million at September 27, 1997,
compared with $23.4 million at December 28, 1996. Included in working
capital are cash and cash equivalents of $43.4 million at
September 27, 1997, compared with $13.5 million at December 28, 1996.
During the first nine months of 1997, $2.4 million of cash was
provided by operating activities. During this period, cash of $3.1
million was used to fund an increase in inventories primarily relating to
an order received from the FAA. This use of cash was offset in part by
$1.6 million of cash provided by an increase in other current
liabilities, including $1.7 million of accrued income taxes.
During the first nine months of 1997, the Company expended
$0.6 million on purchases of property, plant, and equipment. During the
remainder of 1997, the Company expects to make capital expenditures of
approximately $0.1 million.
In March 1997, the Company sold 2,671,292 shares of its common stock
in an initial public offering for net proceeds of $28.1 million (Note 2).
Although the Company expects to have positive cash flow from its
existing operations, the Company anticipates it will require significant
amounts of cash for the possible acquisition of complementary businesses
and technologies. While the Company currently has no agreement to make an
acquisition, it expects that it would finance any acquisition through a
combination of internal funds, additional debt or equity financing,
and/or short-term borrowings from Thermedics or Thermo Electron
Corporation, although it has no agreement with these companies to ensure
that funds will be available on acceptable terms or at all. The Company
believes that its existing resources are sufficient to meet the capital
requirements of its existing businesses for the foreseeable future.
11PAGE
<PAGE>
THERMEDICS DETECTION INC.
PART II - OTHER INFORMATION
Item 2. Changes in Securities and Use of Proceeds
(d) Use of Proceeds
The Company sold 2,671,000 shares of common stock, par value $.01
per share pursuant to a Registration Statement on Form S-1 (File
No. 333-19199), which was declared effective by the Securities and
Exchange Commission on February 21, 1997. The managing underwriters of
the offering were NatWest Securities Limited and Lehman Brothers. The
aggregate gross proceeds of the offering were $30,720,000. The Company's
total expenses in connection with the offering were $2,598,000, of which
$1,718,000 was for underwriting discounts and commissions and $880,000
was for other expenses paid to persons other than directors or officers
of the Company, persons owning more than 10 percent of any class of
equity securities of the Company or affiliates of the Company
(collectively, Affiliates). The Company's net proceeds from the offering
were $28,122,000. As of September 27, 1997, the Company expended $422,000
of such net proceeds for the purchase of property, plant, and equipment,
$2,671,000 for research and development, and $7,689,000 for working
capital needs. As of September 27, 1997, the Company had expended an
aggregate of $10,782,000 of such net proceeds. The Company invested, from
time to time, the balance of such net proceeds primarily in investment
grade interest or dividend bearing instruments. As of September 27, 1997,
$17,340,000 was invested pursuant to a repurchase agreement with Thermo
Electron Corporation. As of September 27, 1997, the Company had
$43,429,000 of cash and cash equivalents.
Item 6 - Exhibits
See Exhibit Index on the page immediately preceding exhibits.
12PAGE
<PAGE>
THERMEDICS DETECTION 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 as of the 31st day of October
1997.
THERMEDICS DETECTION INC.
Paul F. Kelleher
-------------------------
Paul F. Kelleher
Chief Accounting Officer
John N. Hatsopoulos
-------------------------
John N. Hatsopoulos
Vice President and Chief
Financial Officer
13PAGE
<PAGE>
THERMEDICS DETECTION INC.
EXHIBIT INDEX
Exhibit
Number Description of Exhibit
------------------------------------------------------------------------
11 Statement re: Computation of Earnings (Loss) per Share.
27 Financial Data Schedule.
Exhibit 11
THERMEDICS DETECTION INC.
Computation of Earnings (Loss) per Share
Three Months Ended
----------------------------
September 27, September 28,
1997 1996
-----------------------------------------------------------------------
Computation of Primary Earnings per Share:
Net Income (a) $ 1,686,000 $ 705,000
----------- -----------
Shares:
Weighted average shares outstanding 13,355,151 10,300,000
Add: Shares issuable from assumed exercise
of options (as determined by the
application of the treasury stock
method) - 42,026
----------- -----------
Weighted average shares outstanding, as
adjusted (b) 13,355,151 10,342,026
----------- -----------
Primary Earnings per Share (a) / (b) $ .13 $ .07
=========== ===========
PAGE
<PAGE>
Exhibit 11
THERMEDICS DETECTION INC.
Computation of Earnings (Loss) per Share (continued)
Nine Months Ended
----------------------------
September 27, September 28,
1997 1996
-----------------------------------------------------------------------
Computation of Primary Earnings (Loss)
per Share:
Net Income (Loss) (a) $ 4,125,000 $(1,063,000)
----------- -----------
Shares:
Weighted average shares outstanding 12,561,957 10,210,989
Add: Shares issuable from assumed exercise
of options (as determined by the
application of the treasury stock
method) - 49,980
----------- -----------
Weighted average shares outstanding, as
adjusted (b) 12,561,957 10,260,969
----------- -----------
Primary Earnings (Loss) per Share (a) / (b) $ .33 $ (.10)
=========== ===========
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THERMEDICS
DETECTION INC.'S QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER
27, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JAN-03-1998
<PERIOD-END> SEP-27-1997
<CASH> 43,429
<SECURITIES> 0
<RECEIVABLES> 10,404
<ALLOWANCES> 793
<INVENTORY> 11,853
<CURRENT-ASSETS> 67,967
<PP&E> 6,101
<DEPRECIATION> 4,615
<TOTAL-ASSETS> 85,403
<CURRENT-LIABILITIES> 33,199
<BONDS> 0
0
0
<COMMON> 1,336
<OTHER-SE> 50,828
<TOTAL-LIABILITY-AND-EQUITY> 85,403
<SALES> 27,445
<TOTAL-REVENUES> 37,458
<CGS> 12,649
<TOTAL-COSTS> 17,955
<OTHER-EXPENSES> 3,742
<LOSS-PROVISION> 84
<INTEREST-EXPENSE> 934
<INCOME-PRETAX> 6,875
<INCOME-TAX> 2,750
<INCOME-CONTINUING> 4,125
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,125
<EPS-PRIMARY> .33
<EPS-DILUTED> 0
</TABLE>
