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 quarterly period ended March 31, 1998
--------------
OR
|_| TRANSISTION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ______________ to ______________
Commission file number 000-22017
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NACT TELECOMMUNICATIONS, INC.
- --------------------------------------------------------------------------------
(Exact name of Registrant as Specified in its Charter)
Delaware 87-0378662
- ---------------------------------- ------------------------------------
(State or Other Jurisdiction (IRS Employer Identification Number)
of Incorporation or Organization)
191 West 5200 North, Provo, Utah 84604
- ---------------------------------------- ----------
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code: (801) 802-3000
--------------
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: At May 15, 1998,
there were outstanding 8,133,830 shares of Common Stock, $.01 par value per
share, of the Registrant.
<PAGE>
NACT TELECOMMUNICATIONS, INC.
INDEX
PART I. FINANCIAL INFORMATION
Page Number
-----------
Item 1. Financial Statements:
Balance Sheets
March 31, 1998 and December 31, 1997 . . . . . . . . . . . 3
Statements of Income
Three Months Ended March 31, 1998 and 1997. . . . . . . . . 4
Statements of Cash Flows
Three Months Ended March 31, 1998 and 1997. . . . . . . . . 5
Notes to Financial Statements . . . . . . . . . . . . . . . . 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations . . . . . . . . . . . . . . . . . 8
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . 12
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements:
NACT TELECOMMUNICATIONS, INC.
Balance Sheets
(In thousands)
<TABLE>
<CAPTION>
Mar. 31, 1998 Dec. 31, 1997
(Unaudited) (Unaudited)
------------------------------------------------
ASSETS
Current Assets:
<S> <C> <C>
Cash $9,620 $5,252
Marketable securities 3,500 7,246
Accounts receivable, less allowance for doubtful
accounts of $524 in Mar. and $631 in Dec. 10,264 9,496
Notes receivable, less allowance for doubtful
accounts of $306 in Mar. and $295 in Dec. 4,858 4,055
Inventories 2,540 2,814
Prepaid expenses and other assets 415 216
Deferred tax asset - current 699 817
------------------------------------------------
Total current assets $31,896 $29,896
Fixed Assets:
Property, plant, and equipment $7,116 $6,577
Less: Accumulated depreciation (857) (698)
------------------------------------------------
Net fixed assets $6,259 $5,879
Notes receivable-long term $344 $785
Inventory-long term $225 $225
Intangibles $5,431 $5,598
Other Assets $154 $164
------------------------------------------------
Total Assets $44,309 $42,547
================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $3,015 $1,889
Accrued expenses 2,473 1,206
Current corporate tax liability 973 1,073
Deferred Revenue 873 790
Inter company payable 21 1,743
------------------------------------------------
Total current liabilities $7,355 $6,701
Long Term Liabilities:
Deferred compensation liability $138 $158
Deferred tax liability 1,175 1,252
------------------------------------------------
Total long-term liabilities $1,313 $1,410
Stockholders' Equity:
Common stock, $.01 par value $81 $81
Additional paid-in-capital 28,274 28,271
Retained earnings 7,284 6,055
Unrealized appreciation on marketable securities 2 29
------------------------------------------------
Total stockholders' equity $35,641 $34,436
================================================
Total liabilities and stockholders' equity $44,309 $42,547
================================================
</TABLE>
See accompanying notes to financial statements.
3
<PAGE>
NACT TELECOMMUNICATIONS, INC.
Statements of Income
(In thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended
(Unaudited)
-----------------------------------------------
Mar 31, 1998 Mar 31, 1997
-----------------------------------------------
<S> <C> <C>
Revenues:
Product sales $7,323 $5,073
Network carrier sales 1,705 1,213
-----------------------------------------------
Total revenues $9,028 $6,286
Cost of goods sold:
Products $2,440 $1,772
Network carrier usage 1,542 1,153
Amortization of acquired intangibles 170 90
-----------------------------------------------
Total cost of goods sold $4,152 $3,015
-----------------------------------------------
Gross profit $4,876 $3,271
Operating expenses:
Research and development $739 $616
Sales and marketing 845 567
General and administrative 1,252 737
Amortization of acquired intangibles 143 143
-----------------------------------------------
Total operating expenses $2,979 $2,063
-----------------------------------------------
Income from operations $1,897 $1,208
Other Income, net $150 $122
-----------------------------------------------
Income before income taxes $2,047 $1,330
Income taxes $819 $532
-----------------------------------------------
Net income after taxes $1,228 $798
===============================================
Weighted average common and common equivalent shares outstanding:
Basic 8,129 6,847
Diluted 8,401 6,847
Earnings per share:
Basic $0.15 $0.12
Diluted $0.15 $0.12
</TABLE>
See accompanying notes to financial statements.
4
<PAGE>
NACT TELECOMMUNICATIONS, INC.
Statements of Cash Flows
(In thousands)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1998 1997
(Unaudited) (Unaudited)
---------------- -----------------
<S> <C> <C>
Cash flows from operating activities:
Net income $1,228 $798
Adjustments to reconcile net income to net cash
Provided by (used in) operating activities:
Depreciation and amortization 535 358
Provision for loss on accounts and notes receivable 178 (213)
Provision for loss on inventory 228 0
Deferred taxes 41 0
Decrease (increase) in operating assets:
Trade accounts and notes receivable (1,596) 299
Inventories 46 (184)
Prepaid expenses and other assets (190) 119
Increase (decrease) in operating liabilities:
Accounts payable 1,126 (351)
Accrued expenses 1,267 432
Income taxes payable (100) 24
Inter company payable (1,722) 2,027
Deferred revenue and deferred compensation 64 (170)
------------------ ------------------
Net cash provided by (used in)
operating activities 1,105 3,139
------------------ ------------------
Cash flows from investing activities:
Purchase of land, property, plant and equipment (251) (3,182)
Proceeds from sale of marketable securities 6,219 0
Purchase of marketable securities (2,500) (2,000)
Capitalization of software development costs (208) (417)
------------------ ------------------
Net cash provided by (used in)
Investing activities 3,260 (5,599)
Cash flows from financing activities:
Proceeds from issuance of common stock 3 18,684
Principle payments of capital lease obligations 0 (5)
------------------ ------------------
Net cash provided by (used in)
Financing activities 3 18,679
------------------ ------------------
Net (decrease) increase in cash 4,368 16,219
Cash at beginning of period 5,252 552
================== ==================
Cash at end of period $9,620 16,771
================== ==================
Supplementaldisclosures of cash flow information Cash paid
during the period for:
Interest $0 $2
Income taxes 872 80
</TABLE>
See accompanying notes to financial statements.
<PAGE>
NACT TELECOMMUNICATIONS, INC.
Notes to financial statements
1. Basis of Presentation
The interim financial statements included herein have been prepared by NACT
Telecommunications, Inc. ("NACT" or the "Company") without audit, pursuant to
the rules and regulations of the Securities and Exchange Commission (the "SEC").
Certain information and footnote disclosures, normally included in financial
statements prepared in accordance with generally accepted accounting principles,
have been condensed or omitted pursuant to such SEC rules and regulations. These
condensed financial statements should be read in conjunction with the financial
statements and notes thereto included in the Company's September 30, 1997
audited financial statements filed as part of the Company's Annual Report on
Form 10K with the SEC in December 1997. In the opinion of management, the
condensed financial statements included herein reflect all adjustments necessary
to present fairly the financial position of the Company as of March 31, 1998 and
December 31, 1997, and the results of its operations and cash flows for the
three month periods ended March 31, 1998 and 1997. The results of operations for
the interim periods are not necessarily indicative of the results of operations
for the full year.
2. Earnings Per Share
In February 1997, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No., 128, Earnings per Share (SFAS
128). SFAS 128 became effective for financial statements with interim and annual
periods ending after December 15, 1997. Accordingly, the Company adopted SFAS
128 for the quarter ended December 31, 1997. SFAS 128 establishes a different
method of computing earnings per common share than was previously required under
the provisions of Accounting Principles Board Opinion No. 15. SFAS 128 requires
the presentation of basic and diluted earnings per common share. Basic earnings
per common share is the amount of earnings for the period available to each
share of common stock outstanding during the reporting period. Diluted earnings
per common share is the amount of earnings for the period available to each
share of common stock outstanding during the reporting period and to each share
that would have been outstanding assuming the issuance of common shares for all
dilutive potential common shares outstanding during the period. The earnings per
common share as previously reported has been restated for all years presented to
adopt the provisions of SFAS 128.
Basic earnings per share is computed based on the weighted average number of
common shares outstanding during the three month periods ended March 31, 1998
and 1997. Diluted earnings per share for the three months periods ended March
31, 1998 and 1997 is computed considering the dilutive effect of stock options,
and is not materially different from the basic earnings per share calculations.
3. Stock Plan
In connection with entering into the a stock purchase agreement with the Company
(the"NACT Stock Purchase Agreement"), on January 2, 1998 relating to the
purchase by WAI of approximately 63% of Company's outstanding common stock
("NACT Stock Purchase"), World Access, Inc. ("WAI") entered into option exchange
agreements (the "Option Exchange Agreements") with the holders of options to
purchase an aggregate of 1,034,032 shares of NACT Common Stock (the "Exchanged
Options") representing approximately 99% of all the then-outstanding options to
acquire NACT Common Stock. Pursuant to the Option Exchange Agreements, upon
consummation of the NACT Stock Purchase, each Exchanged Option was assumed by
WAI and now constitutes an option to acquire, on the same terms and conditions
as were applicable under such Exchanged Option, a number of shares of WAI Common
Stock equal to (i) the product of the number of shares of NACT Common Stock
subject to such
6
<PAGE>
Exchanged Option (ii) multiplied by 0.8390 with an exercise price per share
equal to (i) the aggregate exercise price for such shares of NACT Common Stock
deemed to be purchasable pursuant to such option; provided, however that none of
Exchanged Options will be incentive stock options under Section 422 of the Code
and all such options are now exercisable. As a result of the consummation of the
NACT Stock Purchase Agreement on February 27, 1998, these options will become
exercisable for shares of WAI Common Stock on a one-for-one basis.
As of March 31, 1998, there were 4,734 options to purchase Common Stock
outstanding, which were all exercised in April 1998.
4. Inventories
Inventories are as follows (in thousands):
March 31, 1998 December 31, 1997
------------------------------------
Raw materials $1,508 $1,577
Work-in-process 582 587
Finished goods 217 189
Refurbished inventory held for sale 233 461
====================================
$2,540 $2,814
====================================
Inventory-long term $225 $225
====================================
5. Property and Equipment
Property and equipment are as follows (in thousands):
March 31, 1998 December 31, 1997
---------------------------------
Furniture and equipment $308 $311
Computer equipment 953 900
Switch and testing equipment 1,648 1,165
Land 563 563
Building 3,644 3,638
---------------------------------
7,116 6,577
Less accumulated depreciation and amortization 857 698
=================================
$6,259 $5,879
=================================
6. Comprehensive Income
The Company adopted Statement of Financial Accounting Standards No. 130 ("SFAS
130"), "Reporting Comprehensive Income", effective January 1, 1998. SFAS 130
establishes for reporting and display of comprehensive income and its components
in financial statements. The components of the Company's comprehensive income
are as follows:
Three months ended March 31,
1998 1997
Net income $ 1,228 $ 798
Change in unrealized gain on marketable securities (27) 0
------- -------
Comprehensive income $ 1,201 $ 798
======= =======
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
This report contains forward-looking statements that involve risks and
uncertainties. The actual future results of the Company could differ materially
from those statements. Factors that could cause or contribute to such
differences include, but are not limited to, uncertainties regarding market
acceptance of new products and product enhancements, delays in the introduction
of new products or enhancements, size and timing of individual orders,
competition and pricing in the software industry, general economic conditions in
the Company's geographic markets, seasonality of revenues, litigation involving
the Company, and the management of the Company's growth. These financial
statements should be read in conjunction with the Company's audited financial
statements for the year ended September 30, 1997, as included in the Company's
Annual Report on Form 10-K.
Results of Operations
- ---------------------
The following table sets forth certain statement of operations data presented as
a percentage of revenues, for the period indicated:
Three Months Ended
------------------------------
Mar. 31, 1998 Mar. 31, 1997
------------------------------
(Unaudited)
Revenues:
Product sales 81.1% 80.7%
Network carrier sales 18.9% 19.3%
------------------------------
Total revenues 100.0% 100.0%
Cost of goods sold:
Products 27.0% 28.2%
Network carrier usage 17.1% 18.4%
Amortization of acquired intangibles 1.9% 1.4%
------------------------------
Total cost of goods sold 46.0% 48.0%
------------------------------
Gross profit 54.0% 52.0%
Operating expenses:
Research and development 8.2% 9.8%
Sales and marketing 9.3% 9.0%
General and administrative 13.9% 11.7%
Amortization of acquired intangibles 1.6% 2.3%
------------------------------
Total operating expenses 33.0% 32.8%
------------------------------
Income (loss) from operations 21.0% 19.2%
Other Income (expense): 1.7% 2.0%
------------------------------
Income before income taxes 22.7% 21.2%
Income taxes 9.1% 8.5%
------------------------------
Net income after taxes 13.6% 12.7%
==============================
8
<PAGE>
Total Revenues. The Company's revenues increased 42.9% from $6.3 million for the
three months ended March 31, 1997 to $9.0 million in the equivalent 1998
quarter. Product sales, which includes switching application and billing
systems, software, consulting, and factory support, increased 43.1% from $5.1
million for the three months ended March 31, 1997 to $7.3 million in the
equivalent 1998 quarter primarily due to sales of STX switching and NTS billing
systems to new customers and STX application system upgrades to existing
customers. Network carrier sales increased 41.7% from $1.2 million for the three
months ended March 31, 1997 to $1.7 million in the equivalent 1998 quarter
primarily due to increased carrier usage volumes from existing network carrier
customers.
Gross Profit.
Product Sales. The Company's gross profit increased 48.5% from $3.3 million for
the three months ended March 31, 1997 to $4.9 million in the equivalent 1998
quarter due to an increase in product sales resulting from sales of the higher
margin, larger port capacity STX switches and lower manufacturing costs per
unit. Gross profit on product sales as a percent of product sales was 64.7% and
67.1% for the three months ended March 31, 1997 and 1998, respectively.
Network Carrier Sales. The Company's gross profit increased 171.7% from $60,000
for the three months ended March 31, 1997 to $163,000 in the equivalent 1998
quarter primarily due to an increase in network carrier sales resulting from
higher carrier usage volumes from existing network carrier customers and a
decrease in network carrier rates paid by the Company. Gross profit on network
carrier sales as a percent of network carrier sales was 4.9% and 9.6% for the
three months ended March 31, 1997 and 1998, respectively.
Research and Development. The Company's research and development expenses
increased 20.0% from $616,000 for the three months ended March 31, 1997 to
$739,000 in the equivalent 1998 quarter primarily due to an increase in
personnel and other expenditures for planning, design, and completion of several
hardware and software research and development projects designed to enhance the
STX switching platform and upgrade the NTS billing system to a new hardware and
software platform. Capitalized software development costs were $417,000 and
$208,000 for the three months ended March 31, 1997 and 1998, respectively.
Sales and Marketing. The Company's sales and marketing expenses increased 49.0%
from $567,000 for the three months ended March 31, 1997 to $845,000 in the
equivalent 1998 quarter primarily due to the hiring of additional senior sales
personnel, international marketing and selling efforts, increased advertising
and trade show expenditures, and increased commissions paid as a result of the
increase in product sales.
General and Administrative. The Company's general and administrative expenses
increased 69.9% from $737,000 for the three months ended March 31, 1997 to
$1,252,000 in the equivalent 1998 quarter primarily due to legal, accounting,
and investment banking expenses related to the WAI Stock Purchase Agreement with
GST USA, Inc. ("GST USA") and the Merger Agreement with the Company's minority
shareholders.
Amortization of Acquired Intangibles. The Company has included amortization of
acquired intangibles as a component of both cost of sales and operating
expenses. These intangibles arose as a result of the acquisition of the Company
by GST USA through a series of purchases of newly issued shares and shares owned
by former stockholders of the Company. Such purchases occurred from September
1993 through December 1994. GST USA accounted for the acquisition using the
purchase method of accounting. The excess of the purchase price over the fair
value of the assets acquired was assigned by GST USA as product support
contracts, software development costs and goodwill, and, in accordance with
requirements of the SEC, has been included in the balance sheets of the Company
with related amortization recorded in cost of goods sold and other operating
expenses. Product support contracts and software development costs are being
amortized over a five year straight-line period and goodwill is being amortized
9
<PAGE>
over a 20 year straight-line period. In addition, the Company acquired the
customer list of its Eastern Europe network carrier customer in September 1997.
This customer list was recorded on the Company's books at the lower of fair
market value or cost as an intangible asset, and is being amortized to cost of
sales over a three year period.
Income Taxes. The Company's effective tax rate for the three months ended March
31, 1998 was 40.0%. This is higher than the respective statutory federal and
state tax rates due to amortization of goodwill. This higher effective tax rate
is expected to continue during the amortization period of the acquired goodwill
from GST USA.
Fluctuations in quarterly operating results. Operating results have in the past
and may in the future fluctuate due to factors such as the timing of new product
introductions by the Company and its competitors, delays in new product
introductions by the Company, market acceptance of new or enhanced versions of
the Company's products, changes in the product or customer mix, changes in the
level of operating expenses, competitive pricing pressures, the gain or loss of
significant customers, increased research and development and sales and
marketing expenses associated with new product introductions and economic
conditions in general and in the Company's industry. Due to the high unit price
and long lead times associated with revenues derived from equipment orders, the
Company's financial results may fluctuate significantly depending upon the time
of the actual shipment of such orders. All of the above factors are difficult
for the Company to forecast, and these or other factors can materially adversely
affect the Company's business, financial condition and results of operations for
one quarter or a series of quarters. The Company's expense levels are based in
part on its expectations regarding future sales and are fixed in the short term
to a large extent. Therefore, the Company may be unable to adjust spending in a
timely manner to compensate for any unexpected shortfall in sales. Any
significant decline in demand relative to the Company's expectations or any
material delay of customer orders could have a material adverse effect on the
Company's business, financial condition and results of operations.
Liquidity and Capital Resources. The Company currently finances its operations,
and normal reoccurring capital expenditures through cash flow from operations
and its current cash and short-term investment balances. For the three months
ended March 31, 1998, operating activities provided cash of $1.1 million.
As of March 31, 1998, the Company had cash, cash equivalents and marketable
securities totaling $13.1 million an increase of $0.6 million from December 31,
1997 primarily due to an increase in cash flow from operations.
The Company maintains an unsecured bank line of credit expiring in February 1998
that provides borrowings up to $1.0 million at the bank's prime rate plus one
point. There were no outstanding draws under the line of credit as of March 31,
1998.
As of March 31, 1998, the Company was contingently liable under repurchase
agreements for a maximum of approximately $6.0 million to Zions Credit
Corporation ("Zions"). Zions provides lease financing to the Company's customers
on a recourse basis. The Company maintains a $6.0 million unrestricted cash
balance in accordance with conditions of the repurchase agreement.
The Company believes that the March 31, 1998 cash and marketable securities
balances, anticipated cash flows from operations and its line of credit will
satisfy the Company's working capital and capital expenditure requirements for
at least the next twelve months. However, there can be no assurance that the
Company will not be required to seek additional capital sooner or, if so
required, that adequate capital will be available on terms acceptable to the
Company, or at all.
10
<PAGE>
Year 2000 Compliance. The Company currently sells the NTS 1000 billing system
which will require upgrading by the year 2000 due to its existing limitation of
using only two digits to identify the year in the date field. The Company is
planning release of its new billing system, the NTS 2000 in the second calendar
quarter of 1998 which overcomes the two digit limitation currently experienced
on the NTS 1000. Furthermore, the Company is in the process of modifying the NTS
1000 software to overcome the two digit limitation. This modification of the NTS
1000 software is anticipated to be completed by the first calendar quarter in
1999. The company anticipates the majority of customers will upgrade to the NTS
2000. No assurance can be made that any of the Company's customers will upgrade
to the NTS 2000 or that the modification to the NTS 1000 software will be
successful or completed on time. In the event that a significant number of the
Company's customers do not upgrade to the NTS 2000 or the NTS 1000 software
modification is not successful, the Company may incur expenses and potential
loss of ongoing service revenues.
11
<PAGE>
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 27: Financial Data Schedule
(b) Reports on Form 8-K
On January 6, 1998, the Company filed a Report on Form 8-K , the
Company announced World Access, Inc. would buy a 55% interest in the Company
from the Company's then current majority owner, GST USA, Inc.
On March 13, 1998, the Company filed a Report on Form 8-K,
announcing on February 27, 1998, World Access, Inc. purchased 5,113,712 shares
of common stock of the Company, which represents approximately 63% of the
outstanding Common Stock, from GST USA, Inc.
In addition, on March 12, 1998, the Board of Directors of the
Company elected to change the fiscal year end of the Company from September 30
to December 31.
12
<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.
Date: May 15, 1998
--------------
NACT TELECOMMUNICATIONS, INC.
(Registrant)
/S/ A. Lindsay Wallace
-------------------------------------
A. Lindsay Wallace
President and Chief Executive Officer
/S/ Eric F. Gurr
-------------------------------------
Eric F. Gurr
Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 1998 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 9,620,000
<SECURITIES> 3,500,000
<RECEIVABLES> 16,296,000
<ALLOWANCES> (830,000)
<INVENTORY> 2,765,000
<CURRENT-ASSETS> 31,896,000
<PP&E> 7,116,000
<DEPRECIATION> (857,000)
<TOTAL-ASSETS> 44,309,000
<CURRENT-LIABILITIES> 7,355,000
<BONDS> 0
<COMMON> 81,000
0
0
<OTHER-SE> 35,560,000
<TOTAL-LIABILITY-AND-EQUITY> 44,309,000
<SALES> 9,028,000
<TOTAL-REVENUES> 9,028,000
<CGS> 4,152,000
<TOTAL-COSTS> 2,979,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 277,000
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 2,047,000
<INCOME-TAX> 819,000
<INCOME-CONTINUING> 1,228,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,228,000
<EPS-PRIMARY> 0.15
<EPS-DILUTED> 0.15
</TABLE>
