UNITED STATES
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 quarter ended June 27, 1998
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 0-22053
GENERAL BEARING CORPORATION
---------------------------
(Exact name of registrant as specified in its charter)
Delaware 13-2796245
-------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
44 High Street, West Nyack, New York 10994
- ------------------------------------ -----
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (914) 358-6000
Securities registered pursuant to Section 12(b) of the Act: NONE
Securities registered pursuant to Section 12(g) of the Act:
Common Stock $.01 par value per share
-------------------------------------
(Title of class)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
|X| Yes |_| No
<PAGE>
At August 1, 1998, the Registrant had issued and outstanding 3,918,950 shares of
common stock, $.01 par value per share.
<PAGE>
CAUTIONARY STATEMENT RELEVANT TO FORWARD-LOOKING INFORMATION
FOR THE PURPOSE OF "SAFE HARBOR" PROVISIONS OF THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995.
The Private Securities Litigation Reform Act of 1995 provides a
"safe harbor" for forward-looking statements, which are statements other than
those of historical fact, including, without limitation, ones identified by the
use of the words "anticipates,: "estimates," "expects," "intends," "plans,"
"predicts," and similar expressions. In this Quarterly Report such statements
may relate, among other things, to the recoverability of deferred taxes, likely
industry trends, the continued availability of credit lines, the suitability of
facilities, access to suppliers and implementation of joint ventures and
marketing programs. Such forward looking statements involve important risks and
uncertainties that could cause actual results to differ materially from those
expected by the Company, and such statements should be read along with the
cautionary statements accompanying them and mindful of the following additional
risks and uncertainties possibly affecting the Company: the possibility of a
general economic downturn, which is likely to have an important impact on
historically cyclical industries such as manufacturing; significant price,
quality, quantity or marketing efforts from domestic or overseas competitors;
the loss of, or substantial reduction in orders from, a major customer; the loss
of, or failure to attain additional quality certifications; changes in U.S. or
foreign government regulations and policies, including the imposition of
antidumping orders on the Company or any of its suppliers; a significant
judgment or order against the Company in a legal or administrative proceeding;
potential delays in implementing planned sales and marketing expansion efforts
and the failure of their effectiveness upon implementation; and various adverse
effects of the "Year 2000" problem.
<PAGE>
GENERAL BEARING CORPORATION
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTER ENDED JUNE 27, 1998
TABLE OF CONTENTS
Page No.
--------
PART I
Item 1. Financial Statements ..................................... 2 - 5
Item 2. Management's Discussion and Analysis of Financial
Condition and Result of Operations.................... 6 - 8
PART II
Item 1. Legal Proceedings......................................... 9 - 10
Item 5. Other Information......................................... 10
Item 6. Exhibits and Reports on Form 8-K.......................... 10
Signature ...................................................... 11
1
<PAGE>
FINANCIAL STATEMENTS OF
GENERAL BEARING CORPORATION
AND SUBSIDIARIES
Item 1. CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
June 27, December 27,
1998 1997
------------ ------------
ASSETS (Unaudited)
<S> <C> <C>
Current:
Cash $ 114,805 $ 117,941
Accounts receivable - trade, less allowance for doubtful
accounts of $235,000 and $235,000 5,771,091 5,473,096
Inventories 14,229,084 11,747,009
Prepaid expenses and other current assets 733,051 878,745
Advances to parent and affiliates 1,343,362 2,178,261
------------ ------------
Total current assets 22,191,393 20,395,052
------------ ------------
Fixed assets, net 2,992,380 2,387,062
------------ ------------
Investments and advances:
Investments in affiliates 1,712,717 712,717
Advances to affiliate 398,037 398,037
------------ ------------
2,110,754 1,110,754
------------ ------------
Deferred tax asset, net 2,064,000 2,880,000
------------ ------------
Other assets 27,064 28,954
------------ ------------
Total Assets $ 29,385,591 $ 26,801,822
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current:
Note payable - bank $ 7,428,832 $ 5,439,707
Accounts payable:
Trade 1,688,912 1,313,851
Affiliate -- 263,163
Parent -- 251,750
Accrued expenses and other current liabilities 1,334,472 1,938,654
Current maturities of long-term debt 1,472,982 2,253,042
------------ ------------
Total current liabilities 11,925,199 11,460,164
------------ ------------
Long-term debt, less current maturities:
Bank 668,640 --
Affiliate 931,336 909,973
------------ ------------
Total long-term liabilities 1,599,976 909,973
------------ ------------
Commitments and contingencies
Stockholders' equity:
Preferred stock par value $.01 per share - shares
authorized 1,000,000 none issued and outstanding -- --
Common stock par value $.01 per share - shares
authorized 19,000,000, issued and outstanding 3,918,950
and 3,900,000 shares 39,190 39,000
Additional paid-in capital 28,724,850 28,592,387
Deficit (12,903,624) (14,199,702)
------------ ------------
Total stockholders' equity 15,860,416 14,431,685
------------ ------------
Total liabilities and stockholder's equity $ 29,385,591 $ 26,801,822
============ ============
</TABLE>
See accompanying notes to condensed consolidated financial statements
2
<PAGE>
FINANCIAL STATEMENTS OF
GENERAL BEARING CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
Twenty-six weeks ended Thirteen weeks ended
---------------------------- ---------------------------
June 27, June 28, June 27, June 28,
1998 1997 1998 1997
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Sales $ 21,347,744 $ 21,068,844 $ 11,011,341 $ 11,476,284
Cost of sales 14,490,111 14,578,573 7,183,466 7,843,694
------------ ------------ ------------ ------------
Gross profit 6,857,633 6,490,271 3,827,875 3,632,590
Selling, general and administrative expenses 4,651,036 4,429,121 2,493,967 2,330,695
------------ ------------ ------------ ------------
Operating income 2,206,597 2,061,150 1,333,908 1,301,895
Interest, net, including $7,135, $11,353,
$5,682, and $5,639 to parent 353,759 497,506 196,395 215,910
Gain on Sale of Equipment (295,240) -- -- --
------------ ------------ ------------ ------------
Income before income taxes 2,148,078 1,563,644 1,137,513 1,085,985
Income tax (Benefit) 852,000 (756,000) 468,000 (367,000)
------------ ------------ ------------ ------------
Net income $ 1,296,078 $ 2,319,644 $ 669,513 $ 1,452,985
============ ============ ============ ============
Net income per common share:
Basic $ 0.33 $ 0.63 $ 0.17 $ 0.37
------------ ------------ ------------ ------------
Diluted $ 0.32 $ 0.63 $ 0.17 $ 0.37
------------ ------------ ------------ ------------
Weighted average number of common shares
Basic 3,910,589 3,697,252 3,917,521 3,900,000
------------ ------------ ------------ ------------
Diluted 4,029,731 3,697,252 3,988,050 3,900,000
------------ ------------ ------------ ------------
</TABLE>
See accompanying notes to condensed consolidated financial statements
3
<PAGE>
FINANCIAL STATEMENTS OF
GENERAL BEARING CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Twenty-six weeks ended
----------------------------
June 27, June 28,
1998 1997
------------ ------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 1,296,078 $ 2,319,644
Add (deduct) noncash items charged (credited) to income:
Deferred income taxes 816,000 (790,000)
Depreciation and amortization 259,693 301,326
Gain on sale of assets (295,240) --
Add (deduct) changes in operating assets and liabilities:
Accounts receivable (297,995) (1,179,039)
Inventories (2,482,075) 513,332
Prepaid expenses and other assets 146,298 661,643
Due to (from) affiliates 381,387 (1,755,246)
Accounts payable and accrued expenses 66,120 (790,229)
------------ ------------
Net cash provided by (used in) operating activities (109,734) (718,569)
------------ ------------
Cash flows from investing activities:
Investment in Joint Venture (1,000,000) --
Equipment purchases (863,725) (247,618)
Sale of Equipment 604,000 --
------------ ------------
Net cash used in investing activities: (1,259,725) (247,618)
------------ ------------
Cash flows from financing activities:
Sale of common stock, net 132,653 4,946,867
Repayment of long-term debt - bank (111,420) (111,420)
Increase /(Decrease) in note payable - bank 1,989,125 (3,254,941)
Due to/from Parent (644,035) 1,008,642
Repayment of long-term debt - Parent -- (1,500,000)
------------ ------------
Net cash provided by (used in) financing activities 1,366,323 1,089,148
------------ ------------
Net (decrease) increase in cash (3,136) 122,961
Cash, beginning of period 117,941 12,969
------------ ------------
Cash, end of period 114,805 $ 135,930
============ ============
Cash paid during the period for:
Interest $ 374,000 $ 599,000
============ ============
Income Taxes $ 36,000 $ 34,000
============ ============
</TABLE>
See accompanying notes to condensed consolidated financial statements
4
<PAGE>
FINANCIAL STATEMENTS OF
GENERAL BEARING CORPORATION
AND SUBSIDIARIES
1. Basis of The accompanying unaudited condensed consolidated
Presentation financial statements have been prepared in accordance
with generally accepted accounting principles for
interim financial information and with the instructions
to Form 10-Q and Regulation S-X. Accordingly, they do
not include all of the information and footnotes
required by generally accepted accounting principles for
complete financial statements. In the opinion of
management, all adjustments (consisting solely of normal
recurring accruals) considered necessary for a fair
presentation have been included. Operating results for
the twenty-six weeks ended June 27, 1998 are not
necessarily indicative of the results that may be
expected for the year ending December 26, 1998. For
further information, refer to the consolidated financial
statements and footnotes thereto included in the
Company's annual report on Form 10-K for the year ended
December 27, 1997.
2. Litigation There has been no material change in litigation
from the quarter ended March 28, 1998, except as
specified in Part II, Item 1.
3. Stockholder's The change in stockholder's equity is comprised as
Equity follows:
Common Paid - in Deficit Total
Stock Capital Stockholder's
Equity
------------ ------------ ------------ -------------
Balance
December 27, 1997 $ 39,000 $ 28,592,387 ($14,199,702) $ 14,431,685
Proceeds from
Exercise of 18,950
Stock Options 190 132,463 132,650
Net Income 1,296,078
------------ ------------ ------------ ------------
Balance
June 27, 1998
$ 39,190 $ 28,724,850 ($12,903,624) $ 15,860,416
============ ============ ============ ============
In April, 1998, the Company granted to officers
and key employees of the Company 82,000 non-qualified
stock options with an exercise price of $12.88 pursuant
to the 1996 Stock Option and Performance Award Plan.
See accompanying notes to condensed consolidated financial statements
5
<PAGE>
Item 2. Management's Discussion and Analysis of Results of Operations and
Financial Condition
Results of Operations
Sales. Sales for the second fiscal quarter of 1998 were $11,011,341, a
decrease of $464,943 or 4.1% as compared to the same period in 1997. On a
year-to-date basis, sales were $21,347,744, an increase of $278,900 or 1.3% as
compared to the same period in 1997. Sales volume increases in tapered roller
bearings, tapered journal bearings, "special" ball bearings, and ball transfers
were offset by decreased sales of certain standard ball bearings and mounted
units. Mounted units was a product line eliminated by the Company as of December
31, 1997.
Gross Profit. Gross profit was $3,827,875 in the second fiscal quarter
compared to $3,632,590 in the second fiscal quarter in 1997. On a year-to-date
basis, gross profit was $6,857,633 in 1998 compared to $6,490,271 in 1997. As a
percentage of sales, gross profit was 34.8% in the second fiscal quarter of 1998
as compared to 31.7% in the second fiscal quarter of 1997. On a year-to-date
basis, gross profit as a percentage of sales increased to 32.1% in 1998 as
compared to 30.8% in 1997. This increase resulted in part from the
implementation of a program to increase efficiency in plant operations. This
program entailed the consolidation of operations at the Company's West Nyack,
New York facility which resulted in a significant reduction of plant personnel
and simplification of tooling and quality control functions. The increase in
gross profit as a percentage of sales also reflects a 5% price increase in the
Distributor Bearing Division, as well as the Company's strategy to de-emphasize
sales of low margin commodity bearings. Additionally, the Company increased
sourcing from joint ventures, and believes that the improvement in gross profit
as a pecentage of sales reflects, in part, savings associated with this lower
cost sourcing method.
Selling, General and Administrative Expenses. Selling, general and
administrative expenses as a percentage of sales were 22.6% in the second fiscal
quarter of 1998 as compared to 20.3% in the second fiscal quarter in 1997. On a
year-to-date basis, selling, general and administrative expenses were 21.8% in
1998 as compared to 21.0% in 1997. Such percentage increases on a year-to-date
basis reflect a $221,915 increase of expenditures including increases in
professional fees ($135,592), salaries ($104,087), commissions ($101,396),
travel and entertainment ($79,030), and advertising ($40,250); partially offset
by reductions in move/closing expenses relating to the New Jersey plant
consolidation into New York ($220,000) and personnel expense ($28,996).
Interest Expense. Interest expense as a percentage of sales was 1.8% in
the second fiscal quarter of 1998 as compared to 1.9% in the same period in
1997. On a year-to-date basis, interest expense decreased to 1.7% as compared to
2.4% in 1997. This decrease in interest expense is primarily due to a reduction
in bank debt achieved through continued earnings and the public offering of the
Company's stock in 1997.
Income Tax (Benefit). For the second fiscal quarter of 1998, the Company
had a tax expense of $468,000 compared to a tax benefit of ($401,000) for the
second quarter of 1997. The tax benefit in 1997 related to the anticipated use
of net operating loss carryforwards, while the $468,000 tax expense reflects a
normal rate of taxation. On a year-to-date basis, the Company has set up a
provision for taxes totaling $852,000.
Net Income. Net income for the second fiscal quarter of 1998 decreased to
$669,513, or $0.17 per common share, from $1,452,985, or $0.37 per common share
a year ago, principally as a result of the accrual for income taxes in 1998 as
compared to the tax benefit recorded in 1997. On a year-to-date basis, net
income
6
<PAGE>
decreased to $1,296,078 or $0.33 per common share in 1998 from $2,319,644 or
$0.63 per common share in 1997.
Financial Condition, Liquidity and Capital Resources
The Company's primary sources of capital have been net cash provided by
operating activities, a term loan, sale of common stock and financing from
affiliates. Working capital requirements also have been financed through
borrowings under a Revolving Credit Facility. The primary demands on the
Company's capital resources have been the need to fund inventory and receivables
growth created in normal business expansion. During April, 1998, the Company
requested and obtained an extension of both the amortization of the Term Loan
and the termination of the Revolving Credit Facility to April 7, 2000.
Cash used in operating activities during the first six months of 1998 was
$109,734. Cash provided from net income and deferred income taxes was offset by
increased inventory. The primary reasons for the inventory increase are to
support future increased revenues in automotive ball bearings and truck size
tapered roller bearings.
Investment in Affiliates increased by $1,000,000 due to the Company's one
third ownership of a new joint venture, "Ningbo General Bearing Co. Ltd."
(NGBC). The Company anticipates that NGBC will supply competitively priced, high
quality bearings to the Company for resale. Additional cash used in investing
activities of $863,725 for capital expenditures was offset by receipt of
$604,000 for equipment sold to an affiliate.
At June 27, 1998, the Company had outstanding borrowings of $7,917,443
under its Revolving Credit Facility and had further availability of
approximately $2.7 million.
The Company believes that funds generated from continuing operations,
capital lease financing and borrowings under the Revolving Credit Facility will
be sufficient to finance the Company's anticipated working capital and capital
expenditure requirements for at least the next 24 months.
Year 2000 Compliance
The "Year 2000" problem refers to and arises from deficient computer
programs and related products, such as embedded chips, which do not properly
recognize or process a year that begins with "20" instead of "19". If
7
<PAGE>
not corrected, many computer applications could fail or create erroneous
results. The extent of the potential impact of the Year 2000 problem is not yet
known, and if not timely corrected, it could affect the global economy.
A. The Company's Readiness:
1. (i) Information Technology (IT) systems: The Company has conducted a
comprehensive review of its computer systems to identify those that could be
affected by the Year 2000 issue. The Company's operating system and database
system are Year 2000 compliant. The Company presently believes that with minor
modifications (conversion and testing in progress) to existing software, the
Year 2000 problem will not pose significant operational problems for the
Company's computer systems as so modified. (ii) Non IT systems: Non IT systems
are those which typically include "embedded" technology such as microcontrollers
and chips. The Company currently is in the process of evaluating the effect of
the Year 2000 problem on non IT systems. The Company believes that all necessary
modifications to software and non-IT systems, if any, will be complete by the
end of 1998.
2. Third Parties: Due to the pervasive use of computers by the Company in
its dealings with suppliers, customers, financial institutions, and other third
parties, the Year 2000 problem could have a material impact on the Company if
not timely addressed by such third parties. To assess third party readiness, the
Company has surveyed its principal suppliers and financial institutions and
received responses which indicate that all such parties have adequately
addressed the problem. While the company has not surveyed its customers, it has
received surveys from its principal customers which indicate that they are also
addressing the problem.
B. Cost: The Company has not allocated anticipated year 2000 remediation costs
among the various systems which may be affected but believes that total
remediation costs will be immaterial.
C. Risks: The Company believes that the greatest risk presented by the year 2000
problem is from third parties, such as suppliers, financial institutions,
utility providers, etc. who may not have adequately addressed the problem. A
failure of any such third party's computer or other applicable systems in
sufficient magnitude could materially and adversely affect the Company. The
Company is not presently able to quantify this risk but believes that it is
minimal based upon the surveys it has conducted.
D. Contingency Plans: While the Company has no year 2000 contingency plans, per
se, and does not intend to create one, any problems encountered will be
addressed as expeditiously and efficiently as the circumstances permit.
Additionally, the Company normally keeps written back-up of all material
transactions which should facilitate continuation of business operations and
remediation of data loss in the event of a system failure.
8
<PAGE>
PART II
Item 1. Legal Proceedings
The Timken Company vs. United States
On May 27, 1998, the Court of International Trade issued a ruling in the action*
filed by Timken challenging the United States Department of Commerce's
determinations of antidumping margins on tapered roller bearings (TRBs) from the
People's Republic of China in the 4th, 5th and 6th reviews of the antidumping
order, covering the period from June 1990 through May 1993.
In that portion of the ruling potentially applicable to the Company, the Court
affirmed the findings of the Department of Commerce (Commerce) except as
follows:
1. The Court held that Commerce's determination of indirect selling expenses was
not reasonable or supported by substantial evidence on the record and remanded
that issue to Commerce to employ a more accurate methodology for such
determination;
2. The Court granted Commerce's request for a remand to correct a clerical error
by Commerce in calculating inland freight and;
3. The Court rejected Commerce's calculation of marine insurance rates based on
the rates applicable to sulphur dyes and remanded for Commerce to determine such
rates in a manner reasonably related to the value and risk of transporting TRBs.
The remand results are due within ninety (90) days of the date of the ruling.
Any comments or responses are due within thirty (30) days thereafter. Any
rebuttal comments are due within fifteen (15) days after the date responses or
comments are due.
The Company does not believe that any of Commerce's ultimate determinations of
the issues remanded will have a significant impact on the Company but will
review such determinations and respond appropriately.
* referred to in the Company's 10-K for fiscal year 1997
9
<PAGE>
WMW et. al. v.s. WEMEX et. al.
On April 3, 1998, the parties reached a final settlement of all claims,
including counterclaims and third party claims in the action (previously
disclosed in the Company's S-1 effective February 7, 1997, and 10-Ks for fiscal
years 1996 & 1997) in the United States District Court for the Southern District
of New York, brought by the Company and WMW Machinery Inc. against a former East
German trade agency and its successor (collectively referred to as "WEMEX"), its
liquidator, Werner P. Muender ("Muender"), the Truehandanstalt ("Truehand") and
Bundersanstalt Fuer Vereinigungsbedingte Sonderaufgaben. Under the terms of
settlement applicable to the Company, the Company released all of its claims
against the defendants and the defendants released all claims against the
Company without the Company making or receiving payment of any kind.
Accordingly, the settlement will have no impact on the Company's financial
condition. The foregoing settlement was reported in the Company's 10-Q for the
1st quarter, 1998.
Gussack Realty Company and General Bearing Corporation vs. Xerox
There have been no material developments in this matter since the events
reported in the Company's 10-K for fiscal year 1997. Oral argument on the
"motion to withdraw the reference" referred to in such report has been adjourned
without a new date.
Item 5. Other Information
Rule 14a-4 of the Securities and Exchange Commission's proxy rules allows the
Company to use discretionary voting authority to vote on matters coming before
an annual meeting of stockholders, if the Company does not have notice of the
matter at least 45 days before the date on which the Company first mailed its
proxy materials for the prior year's annual meeting of stockholders or the date
specified by an advance notice provision in the Company's By-laws. The Company's
By-laws contain such an advance notice provision. For the Company's 1999 Annual
Meeting of Stockholders, stockholders must submit such written notice to the
Secretary of the Company no earlier than April 17, 1999 nor later than May 17,
1999.
This requirement is separate and apart from the Securities and Exchange
Commission's requirements that a stockholder must meet in order to have a
stockholder proposal included in the Company's proxy statement under Rule 14a-8.
For the Company's 1999 Annual Meeting of Stockholders, any stockholder who
wishes to submit a proposal for inclusion in the Company's proxy materials
pursuant to Rule 14a-8 must submit such proposal to the Secretary of the Company
no later than February 16, 1999.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit 27. Financial Data Schedule
(b) The Registrant has not filed any reports on Form 8-K during the
quarter ended June 27, 1998.
10
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this Quarterly Report on Form 10-Q to be signed on
its behalf by the undersigned, thereunto duly authorized.
Date: August 6, 1998.
GENERAL BEARING CORPORATION
- ---------------------------
(Registrant)
/s/ David L. Gussack
- ---------------------------
David L. Gussack
President
/s/ Barry A. Morris
- ---------------------------
Barry A. Morris
Chief Financial Officer
11
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-26-1998
<PERIOD-END> JUN-27-1998
<CASH> 115
<SECURITIES> 0
<RECEIVABLES> 5,771
<ALLOWANCES> 235
<INVENTORY> 14,229
<CURRENT-ASSETS> 22,191
<PP&E> 5,648
<DEPRECIATION> 2,655
<TOTAL-ASSETS> 29,386
<CURRENT-LIABILITIES> 11,925
<BONDS> 0
0
0
<COMMON> 39
<OTHER-SE> 15,821
<TOTAL-LIABILITY-AND-EQUITY> 29,386
<SALES> 21,348
<TOTAL-REVENUES> 21,348
<CGS> 14,490
<TOTAL-COSTS> 14,490
<OTHER-EXPENSES> 4,651
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 354
<INCOME-PRETAX> 2,148<F1>
<INCOME-TAX> 852
<INCOME-CONTINUING> 1,296
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,296
<EPS-PRIMARY> .33
<EPS-DILUTED> .32
<FN>
<F1>
Includes other income of 295,000 from gain on sale of equipment
</FN>
</TABLE>
