<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] Quarterly Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the quarterly period ended March 31, 1997 or
[ ] Transition Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Commission File Number 000-21755
MASTECH CORPORATION
(Exact name of registrant as specified in its charter)
PENNSYLVANIA 25-1802235
------------ ----------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
1004 McKee Road
Oakdale, Pennsylvania 15071
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (412) 787-2100
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 Act of 1934 during the
preceding 12 months, 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, par value $.01 per share,
outstanding as of April 11, 1997 was 21,654,950 shares.
<PAGE>
MASTECH CORPORATION
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTER ENDED MARCH 31, 1997
TABLE OF CONTENTS
PAGE
----
PART I. FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS:
CONSOLIDATED INCOME STATEMENTS FOR THE
QUARTERS ENDED MARCH 31, 1997 AND MARCH 31, 1996 3
CONSOLIDATED BALANCE SHEETS AS OF MARCH 31, 1997 AND
DECEMBER 31, 1996 4
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE QUARTERS ENDED MARCH 31, 1997
AND MARCH 31, 1996 5
Report of Independent Public Accountants 6
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS 7
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE
ABOUT MARKET RISK SENSITIVE INSTRUMENTS 9
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS 10
ITEM 2. CHANGES IN SECURITIES 10
ITEM 3. DEFAULTS UPON SENIOR SECURITIES 10
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF
SECURITY HOLDERS 10
ITEM 5. OTHER INFORMATION 10
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 10
SIGNATURES 11
EXHIBIT INDEX 12
2
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS:
MASTECH CORPORATION
CONSOLIDATED INCOME STATEMENTS
(Dollars in Thousands Except Per Share Data)
(Unaudited)
<TABLE>
<CAPTION>
Quarter Ended
March 31, 1997 March 31, 1996
-------------- --------------
<S> <C> <C>
Revenues......................................... $37,531 $28,595
Cost of revenues................................. 26,732 20,488
------- -------
Gross profit..................................... 10,799 8,107
Selling, general and administrative.............. 7,415 4,702
Income from operations........................... 3,384 3,405
Interest income (expense), net................... 464 24
------- -------
Income before income taxes....................... 3,848 3,429
Provision for income taxes...................... 1,539 --
------- -------
Net income....................................... $ 2,309 $ 3,429
======= =======
Net income per common share (1).................. $0.11
=======
Pro Forma
Information
-----------
Net income before income taxes................... $ 3,429
Pro forma income taxes........................... 1,370
-------
Pro forma net income............................. $ 2,059
=======
Pro forma net income per common share (2)........ $0.11
=======
</TABLE>
(1) The number of shares outstanding is 21,654,600.
(2) The March 31, 1996 income per common share includes a 72.8-for-1 stock
split of the common stock effective December 16, 1996.
The accompanying notes are an integral part of these consolidated financial
statements.
3
<PAGE>
MASTECH CORPORATION
CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
<TABLE>
<CAPTION>
March 31, 1997 December 31, 1996
--------------- ------------------
(Unaudited) (Audited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents................................. $43,375 $45,997
Accounts receivable, net.................................. 30,228 23,160
Unbilled receivables...................................... 2,114 1,410
Employee and related party advances....................... 1,503 2,591
Prepaid and other assets.................................. 658 601
------- -------
Total current assets................................... 77,878 73,759
------- -------
Net equipment and leasehold improvements.................. 5,220 3,750
------- -------
Total assets................................................ $83,098 $77,509
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Revolving credit facility................................. $ 2,724 $ 2,077
Accounts payable.......................................... 3,550 3,934
Accrued payroll and related costs......................... 10,917 8,898
Accrued income taxes...................................... 1,578 253
Other accrued liabilities................................. 705 1,089
S corporation dividend payable........................... 6,500 6,500
Deferred revenue.......................................... 35 116
Deferred income taxes..................................... 1,200 1,200
------- -------
Total current liabilities.............................. 27,209 24,067
------- -------
Deferred income taxes....................................... 2,633 2,683
Shareholders' equity:
Preferred stock, without par value: 20,000,000 shares
authorized, no shares outstanding....................... -- --
Common stock, par value $0.01 per share:
100,000,000 shares authorized, 21,654,600 shares
issued and outstanding 217 217
Additional paid-in capital................................ 51,168 51,168
Retained earnings......................................... 2,506 197
Deferred compensation..................................... (645) (776)
Currency translation adjustment........................... 10 (47)
------- -------
Total shareholders' equity............................. 53,256 50,759
------- -------
Total liabilities and shareholders' equity.................. $83,098 $77,509
======= =======
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
4
<PAGE>
MASTECH CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
Quarter Ended
CASH FLOW FROM OPERATIONS March 31, 1997 March 31, 1996
--------------- ---------------
<S> <C> <C>
Operations:
Net income.............................................. $ 2,309 $ 3,429
Adjustments to reconcile net income to cash
provided by operations:
Depreciation......................................... 207 29
Allowance for uncollectible accounts................. 75 (17)
Minority interest.................................... -- 3
Deferred income taxes, net........................... (50) --
Amortization of deferred compensation................ 131 --
Working capital items:
Accounts receivable and unbilled receivables......... (7,847) (1,493)
Advances............................................. 1,088 (119)
Prepaid and other assets............................. (57) (33)
Accounts payable..................................... (384) 1,407
Accrued and other current liabilities.............. 2,879 (202)
------- -------
Net cash flow from operations....................... (1,649) 3,004
------- -------
INVESTING ACTIVITIES:
Additions to equipment and leasehold
improvements.......................................... (1,677) (568)
------- -------
Net cash flow from investing activities............. (1,677) (568)
------- -------
FINANCING ACTIVITIES:
Borrowings under revolving credit facility 647 --
Dividends paid.......................................... -- (4,045)
------- -------
Net cash flow from financing activities............. 647 (4,045)
------- -------
Effect of currency translation on cash.................... 57 --
Net change in cash and cash equivalents................... (2,622) (1,609)
Cash and cash equivalents, beginning of period............ 45,997 3,026
------- -------
Cash and cash equivalents, end of period.................. $43,375 $ 1,417
======= =======
Supplemental disclosure:
Cash payments for taxes................................. $ 299 $ --
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
5
<PAGE>
Report of Independent Public Accountants
To the Board of Directors of Mastech Corporation:
We have reviewed the accompanying consolidated balance sheet of Mastech
Corporation and subsidiaries as of March 31, 1997, and the related consolidated
statements of operations and cash flows for the three-month period then ended.
These financial statements are the responsibility of the company's management.
We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to
financial data and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with generally accepted auditing standards, the objective of which is
the expression of an opinion regarding the financial statements taken as a
whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the accompanying consolidated financial statements for them to be in
conformity with generally accepted accounting principles.
/s/ Arthur Andersen LLP
Pittsburgh, Pennsylvania
April 25, 1997
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements included herein
have been prepared by Mastech Corporation (the "Company") in accordance with
generally accepted accounting principles for the interim financial information
and Article 10 of Regulation S-X under the Securities and Exchange Act of 1934,
as amended. The consolidated financial statements as of and for the quarter
ended March 31, 1997 should be read in conjunction with the Company's
consolidated financial statements (and notes thereto) included in the Company's
Annual Report on Form 10-K for the year ended December 31, 1996. Accordingly,
the accompanying consolidated financial statements do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of the Company's management,
all adjustments considered necessary for a fair presentation of the accompanying
consolidated financial statements have been included, and all adjustments are of
a normal and recurring nature. Operating results for the three months ended
March 31, 1997 are not necessarily indicative of the results that may be
expected for the year ending December 31, 1997.
The use of generally accepted accounted principles requires management to make
estimates and assumptions that affect reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amount of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
6
<PAGE>
2. RECENTLY ISSUED ACCOUNTING STANDARDS
In February 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 128, "Earnings per Share" (SFAS No. 128),
which establishes new standards for computing and presenting earnings per share
and applies to entities with publicly and non-publicly held common stock. SFAS
No. 128 is effective for financial statements issued for periods ending after
December 15, 1997, including interim periods. Earlier application is not
permitted. SFAS No. 128 requires restatement of all prior period earnings per
share data presented. The Company has determined that the adoption of SFAS No.
128 will have no impact on reported earnings per share.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the consolidated
financial statements and notes thereto appearing elsewhere in this report.
OVERVIEW
Mastech, founded in 1986, is a worldwide provider of Information Technology
("IT") services to large organizations. Mastech provides its clients with a
single source for a broad range of applications solutions and services,
including client/server design and development, conversion/migration services,
Year 2000 services, enterprise resource package implementation services and
maintenance outsourcing. These services are provided in a variety of computing
environments and use leading technologies, including client/server
architectures, object-oriented programming, distributed databases and the latest
networking and communications technologies.
The Company's revenues are derived from fees paid by clients for professional
services. Historically, a substantial majority of the Company's projects have
been client-managed. On client-managed projects, Mastech provides professional
services as a member of the project team on a time-and-materials basis. The
Company recognizes revenues on time-and-materials projects as the services are
performed. On Mastech-managed projects, Mastech takes complete responsibility
for project management, and bills the client on a time-and-materials or fixed-
price basis. Fixed-price contracts are recognized by the percentage of
completion method.
Mastech's most significant cost is its personnel expense, which consists
primarily of salaries and benefits of the Company's billable personnel. The
number of IT professionals assigned to projects may vary depending on the size
and duration of each engagement. Moreover, project terminations and completion
and scheduling delays may result in periods when personnel are not assigned to
active projects. Mastech manages its personnel costs by closely monitoring
client needs and basing personnel increases on specific project engagements.
While the number of IT professionals may be adjusted to reflect active projects,
the Company must maintain a sufficient number of professionals to respond to
demand for the Company's services on both existing projects and
new engagements.
RESULTS OF OPERATIONS FOR THE QUARTER ENDED MARCH 31, 1997
COMPARED TO QUARTER ENDED MARCH 31, 1996
Revenues
Revenues for the first quarter of 1997 increased 31.3%, or $8.9 million to
$37.5 million from $28.6 million in the first quarter of 1996. The year over
year revenue increase was due primarily to a successful market penetration by
the Company's domestic Enterprise Package Solutions service line which posted an
increase in revenues of $4.2 million. Additionally, the Company's international
service revenues increased by $3.0 million during this same period as a result
of the successful replication of its U.S. business model in the Canadian,
European and Japanese markets.
7
<PAGE>
Contributing to the revenue growth was the Company's capability to meet the
global market's demand for its services and the ability to recruit and deploy an
additional 280 IT professionals during the three months ended March 31, 1997.
Gross Profit
Gross profit increased 33.2% to $10.8 million in the first quarter of 1997 from
$8.1 million in the first quarter of 1996. Gross profit, as a percentage of
sales, increased to 28.8% in the three months ended March 31, 1997 from 28.4% in
the three months ended March 31, 1996. The primary reason for this increase was
the revenue performance as described above. The $2.7 million increase in gross
profit was partially offset by higher than expected initial expenses associated
with the recruiting and placement of the 280 IT professionals, as mentioned
above.
Selling, General and Administrative Expense
Selling, general and administrative expense for the first quarter of 1997
increased 57.7%, or $2.7 million, to $7.4 million from $4.7 million for the
first quarter of 1996. As a percentage of revenues, selling, general and
administrative expenses increased to 19.8% in the first quarter of 1997 from
16.4% in the first quarter of 1996. The increase was due primarily to the
Company's continued sales force recruiting initiative, which resulted in an
increase in sales costs of approximately $1.3 million during the first quarter
of 1997. As a result, sales commissions also increased by approximately $0.2
million from the first quarter of 1996 to the first quarter of 1997. In
addition, the Company has incurred incremental costs subsequent to the closing
of its initial public offering on December 20, 1996 (the "IPO"). The incremental
costs associated with the Company's public status are approximately $0.4 million
for the three months ended March 31, 1997. Other incremental costs incurred
during the first quarter include approximately $0.4 million related to the
opening of its offshore software development facility in Bangalore, India.
Other Income and Expense
Other income and expense consists primarily of interest income and interest
expense. Other income was approximately $464,000 for the quarter ended March
31, 1997 compared to other income of approximately $24,000 for the quarter ended
March 31, 1996. The increase in other income is the result of increased interest
income from the investment of approximately $45.6 million of net proceeds from
the IPO. The increase in interest income was, however, partially offset by the
increase in interest expense charged on borrowings outstanding under a revolving
credit facility. These borrowings increased the Company's interest expense by
approximately $111,000 in the first quarter of 1997 from $0 in the first quarter
of 1996. (See Liquidity and Capital Resources.)
Income Before Income Taxes
As a result of the above factors, income before income taxes increased 12.2% to
$3.8 million (on a pro forma basis) in the three months ended March 31, 1997
from $3.4 million in the three months ended March 31, 1996. As a percentage of
sales, income before income taxes decreased to 10.3% in the three months ended
March 31, 1997 from 12.0% in the three months ended March 31, 1996.
Liquidity and Capital Resources
The net proceeds generated from the IPO were approximately $45.6 million, after
deducting underwriting discounts and commissions and estimated offering expenses
paid by the Company. These monies have been temporarily invested in short-term,
investment grade, interest bearing securities. During the first quarter of
1997, the Company used the net proceeds to pay $0.3 million of corporate income
taxes. In April 1997, the Company also paid the remainder of approximately
$6.3 million of undistributed S corporation earnings from these proceeds. The
Company expects to use the remainder of the net proceeds from the offering for:
(i) expansion of existing operations, including the Company's international and
offshore software development operations, development of new service lines and
possible acquisitions of related businesses; (ii) payment of approximately $3.9
million in income taxes related to the termination of the Company's S
corporation status; and (iii) general corporate purposes including working
capital.
8
<PAGE>
Historically, the Company has generally financed its working capital
requirements through internally generated funds. The Company's management
expects this trend to continue. The Company's financial statements reflect
cash flow used by operations of approximately $1.6 million in the first quarter
of 1997, and approximately $3.0 million of cash flow provided by operations in
the first quarter of 1996. The Company's cash provided by operations prior to
the IPO does not reflect any income tax expense due to the Company's prior
status as an S corporation.
Capital expenditures for the three months ended March 31, 1997 and 1996 were
approximately $1.7 and $0.6 million, respectively. During the first quarter of
1997, the Company incurred approximately $0.8 million in connection with the
building of the infrastructure for its offshore software development facilities
in India. The Company has also spent approximately $0.5 million related to the
implementation of a new management information system during the same time
period.
The Company currently has a $15.0 million revolving credit facility (the
"Facility") with PNC Bank, Pittsburgh, Pennsylvania. The Facility bears
interest at a rate equal to LIBOR plus 1.5% or prime at the Company's option and
borrowings are unsecured. The Facility contains certain restrictive covenants
and financial ratio requirements which would limit distributions to shareholders
and additional borrowings. Historically, the Company has not used the Facility
to finance its working capital needs. As of March 31, 1997, $15.0 million
remained available for borrowing under the Facility. The Company expects to
increase this credit facility to $25.0 million on or before June 30, 1997.
As of March 31, 1997, Mascot Systems, a wholly-owned, India-based subsidiary of
the Company has borrowings of approximately $2.7 million outstanding under
revolving credit agreements with ICICI Banking Corporation Limited and IndusInd
Bank Limited, both of India. Interest rates charged on these borrowings range
from 18.75% to 19.25% per annum. These borrowings will be repaid by the
Company as soon as the Company receives Reserve Bank of India approval for the
repatriation of such loans by Mascot Systems. As of March 31, 1997, there are no
additional amounts available for borrowing under these facilities.
Cautionary Statement for Purposes of the "Safe Harbor" Provisions
of the Private Securities Litigation Reform Act of 1995
The statements contained in the section captioned Management's Discussion and
Analysis of Financial Condition and Results of Operations which are not
historical are "forward looking statements" within the meaning of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended. These forward-looking statements represent the
Company's present expectations or beliefs concerning future events. The Company
cautions that such statements are qualified by important factors that could
cause actual results to differ materially from those in the forward looking
statements including statements pertaining to future uses of the IPO proceeds,
the financing of the Company's working capital requirements and hedging of any
market risk sensitive instruments. Results actually achieved thus may differ
materially from expected results included in these statements.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK SENSITIVE
INSTRUMENTS
The Company currently does not invest excess funds in derivative financial
instruments or other market rate sensitive instruments for the purpose of
managing its foreign currency exchange rate risk or for any other purpose.
9
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 2. CHANGES IN SECURITIES
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
The following exhibits are being filed with this report:
Exhibit Number Description Page
- -------------- ----------- ----
11.1 Statement regarding computation of per share earnings. 13
27 Financial Data Schedule 14
(b) Reports on Form 8-K:
The Company did not file any Current Report on Form 8-K during
the quarter ended March 31, 1997.
10
<PAGE>
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.
MASTECH CORPORATION
(REGISTRANT)
Dated: May 13, 1997 /s/ Sunil Wadhwani
Co-Chairman and Chief Executive Officer
Dated: May 13, 1997 /s/ Michael J. Zugay
Vice President- Finance and Secretary
11
<PAGE>
EXHIBIT INDEX
Exhibit Number Description Page
- ---------------- ----------- ----
11.1 Statement regarding computation of per share earnings. 13
27 Financial Data Schedule 14
12
<PAGE>
EXHIBIT 11.1
MASTECH CORPORATION
CALCULATION OF PER SHARE EARNINGS
--------------------------------------
(Dollars in thousands, except per share data)
---------------------------------------------
(Unaudited)
-----------
<TABLE>
<CAPTION>
For the Quarter Ended
-------------------------------
March 31, 1997 March 31, 1996
-------------- ---------------
<S> <C> <C>
(Pro Forma
Information)
Weighted average common shares............................ 21,654,600 18,200,000
Dilutive effect of stock issued within one year of the
initial public offering.................................. --- 54,600
Dilutive effect of common stock equivalents............... 80,596 ---
Total weighted average shares............................. 21,735,196 18,254,600
=========== ===========
Net income and pro forma net income, respectively $ 2,309 $ 2,059
=========== ===========
Net income and pro forma net income per share of
common stock, respectively $ 0.11 $ 0.11
=========== ===========
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS INCLUDED IN THE FORM 10-Q AND IS QUALIFIED IN
ITS ENTIRETY TO REFERENCE TO SUCH FINANCIAL STATEMENTS
</LEGEND>
<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> 43,375
<SECURITIES> 0
<RECEIVABLES> 32,342
<ALLOWANCES> 650
<INVENTORY> 0
<CURRENT-ASSETS> 77,878
<PP&E> 6,345
<DEPRECIATION> 1,125
<TOTAL-ASSETS> 83,098
<CURRENT-LIABILITIES> 27,209
<BONDS> 0
0
0
<COMMON> 217
<OTHER-SE> 53,039
<TOTAL-LIABILITY-AND-EQUITY> 83,098
<SALES> 37,531
<TOTAL-REVENUES> 37,531
<CGS> 26,732
<TOTAL-COSTS> 34,147
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 62
<INTEREST-EXPENSE> (464)
<INCOME-PRETAX> 3,848
<INCOME-TAX> 1,539
<INCOME-CONTINUING> 2,309
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,309
<EPS-PRIMARY> 0.11
<EPS-DILUTED> 0.11
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS INCLUDED IN THE FORM 10-Q AND IS QUALIFIED IN
ITS ENTIRETY TO REFERENCE TO SUCH FINANCIAL STATEMENTS
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 1,417
<SECURITIES> 0
<RECEIVABLES> 22,089
<ALLOWANCES> 333
<INVENTORY> 0
<CURRENT-ASSETS> 24,676
<PP&E> 2,264
<DEPRECIATION> 593
<TOTAL-ASSETS> 26,347
<CURRENT-LIABILITIES> 11,235
<BONDS> 0
0
0
<COMMON> 182
<OTHER-SE> 14,873
<TOTAL-LIABILITY-AND-EQUITY> 26,347
<SALES> 28,595
<TOTAL-REVENUES> 28,595
<CGS> 20,488
<TOTAL-COSTS> 25,190
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 153
<INTEREST-EXPENSE> (24)
<INCOME-PRETAX> 3,429
<INCOME-TAX> 0
<INCOME-CONTINUING> 3,429
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
