<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1999
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE EXCHANGE ACT
For the transition period from ____________ to ________________
Commission file number
D.G. JEWELRY INC.
(Exact name of Small Business Issuer as Specified in Its Charter)
Ontario N/A
- ------- ---
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1001 Petrolia Road M3J2X7
North York Ontario ------
- ------------------ (Zip Code)
(Address of principal executive offices)
(416) 665-8844 (Issuer's telephone number, including area code)
Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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 / /
The number of shares outstanding of the registrant's Common Stock,
$.0002 Par Value, on November 12, 1999 was 6,363,530 shares.
Transitional Small Business Disclosure Format (check one):
Yes X No
----- -----
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D.G JEWELLERY OF CANADA LTD.
JUNE 30, 1999 QUARTERLY REPORT ON FORM 10-QSB
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION
<TABLE>
<CAPTION>
Number Page
<S> <C> <C>
Item 1. Financial Statements ...........................................................................2
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations......................................................................8
PART II - OTHER INFORMATION
Item 1. Legal Proceedings..............................................................................20
Item 4. Submission of Matters to a Vote of Security Holders............................................20
Item 6. Exhibits and Reports on Form 8-K...............................................................20
</TABLE>
2
<PAGE>
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-QSB contains forward-looking statements as
defined by the Private Securities Litigation Reform Act of 1995. Forward-looking
statements include statements concerning plans, objectives, goals, strategies,
future events or performance and underlying assumptions and other statements,
which are other than statements of historical facts. These statements are
subject to uncertainties and risks including, but not limited to, product and
service demand and acceptance, changes in technology, economic conditions, the
impact of competition and pricing, government regulation, and other risks
defined in this document and in statements filed from time to time with the
Securities and Exchange Commission. All such forward-looking statements are
expressly qualified by these cautionary statements and any other cautionary
statements that may accompany the forward-looking statements. In addition, D.G.
Jewelry Inc. disclaims any obligations to update any forward-looking statements
to reflect events or circumstances after the date hereof.
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
<TABLE>
<S> <C>
Consolidated Balance Sheets as of September 30, 1999 and December 31, 1998 .....................1
Consolidated Income Statements for the nine and
three months ended September 30, 1999 and 1998.............................................2
Consolidated Statements of Cash Flows
for the nine months ended September 30, 1999 and 1998..................................... 3
Interim Consolidated Statements of Stockholders' Equity
for the nine months ended September 30, 1999 and 1998......................................4
Notes to Consolidated Financial Statements....................................................5-8
</TABLE>
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
D.G.Jewelry Inc.
<PAGE>
Interim Consolidated Balance Sheets As of September 30, 1999 and December 31,
1998 (Amounts expressed in US dollars) (Unaudited)
<TABLE>
<CAPTION>
September 30, December 31,
1999 1998
$ $
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash 67,823 305,784
Accounts receivable 21,418,741 17,647,428
Other accounts receivable - related parties (Note 2) 1,430,029 0
Inventory 20,463,849 20,887,122
Cash surrender of life insurance (Note 3) 58,445 57,232
Prepaid expenses and sundry assets 68,882 25,845
---------- ----------
43,507,769 38,923,411
PROPERTY, PLANT AND EQUIPMENT 2,233,127 1,974,300
OTHER ASSETS (Note 4) 1,148,775 1,327,315
INVESTMENT IN NETJEWELS.COM 500,821 0
GOODWILL 1,168,631 1,278,879
---------- ----------
48,559,123 43,503,905
---------- ----------
LIABILITIES
CURRENT LIABILITIES
Bank indebtedness (Note 5) 19,504,472 18,855,201
Accounts payable and accrued expenses 4,160,797 5,016,172
Income taxes payable 1,970,669 2,209,470
Current portion of loans payable 446,678 434,788
---------- ----------
26,082,616 26,515,631
<PAGE>
LOANS PAYABLE 1,691,348 2,695,835
---------- ----------
27,773,964 29,211,466
SHAREHOLDERS' EQUITY
CAPITAL STOCK (Note 6) 10,632,316 6,704,986
ACCUMULATED OTHER COMPREHENSIVE INCOME(LOSS) (Note 7) 32,054 55,501
RETAINED EARNINGS 10,120,789 7,531,952
---------- ----------
20,785,159 14,292,439
---------- ----------
48,559,123 43,503,905
---------- ----------
</TABLE>
<PAGE>
D.G.Jewelry Inc.
Interim Consolidated Statements of Operations
For the three and nine months ended September, 1999 and 1998 (Amounts expressed
in US dollars) (Unaudited)
<TABLE>
<CAPTION>
For the period ended September 30,
three months nine months
1999 1998 1999 1,998
$ $ $ $
- - - -
<S> <C> <C> <C> <C>
SALES 6,974,520 11,613,903 23,118,091 26,517,727
Cost of Sales 4,519,246 9,238,851 15,421,779 19,789,691
GROSS PROFIT 2,455,274 2,375,052 7,696,312 6,728,036
--------- --------- --------- ---------
Other Income 12,444 1,003,005 12,507 1,003,005
Gross earnings 2,467,718 3,378,057 7,708,819 7,731,041
--------- --------- --------- ---------
EXPENSES
Selling 353,868 835,676 1,454,568 1,907,167
General and administrative 443,612 508,501 883,280 1,178,904
--------- --------- --------- ---------
797,480 1,344,177 2,337,848 3,086,071
--------- --------- --------- ---------
Operating income 1,670,238 2,033,880 5,370,971 4,644,970
--------- --------- --------- ---------
Interest expenses 506,207 252,948 1,105,527 1,105,081
Other expenses 76,558 1,063,137 336,381 330,818
Loss on investment - NETJEWELS 500,822 0 500,822 0
--------- --------- --------- ---------
1,083,587 1,316,085 1,942,730 1,435,899
--------- --------- --------- ---------
<PAGE>
Income before income taxes 586,651 717,795 3,428,241 3,209,071
Provision for income taxes 350,024 88,453 862,850 584,111
--------- --------- --------- ---------
Net income 236,627 629,342 2,565,391 2,624,960
Earnings per common share (Note 8) 0.04 0.12 0.43 0.51
--------- --------- --------- ---------
Earnings per common share assuming dilution (Note 8) 0.04 0.11 0.41 0.46
--------- --------- --------- ---------
Average weighted number of shares
Basic 6,374,197 5,165,000 6,027,419 5,165,000
--------- --------- --------- ---------
Diluted 6,498,773 5,565,000 6,244,624 5,665,000
--------- --------- --------- ---------
</TABLE>
<PAGE>
D.G.Jewelry Inc.
Interim Consolidated Statements of Cash Flows for the nine months ended
September 30, 1999 and September 30, 1998 (Amounts expressed in US dollars)
(Unaudited)
<TABLE>
<CAPTION>
September 30, September 30,
1999 1998
$ $
<S> <C> <C>
Cash flow from operating activities:
Net income 2,565,391 2,624,960
Adjustments to reconcile net income to net cash used in operating activities:
Amortization 395,477 280,652
Decrease (increase) in accounts receivable (5,201,342) (4,209,827)
Decrease (increase) in inventory 423,273 (766,562)
Decrease (increase) in cash surrender value of life insurance (1,213) 391,345
Decrease (increase) in prepaid expenses and sundry assets (43,037) (53,773)
Increase (decrease) in accounts payable and accrued expenses (855,375) (357,506)
Increase (decrease) in income taxes (238,801) (420,543)
---------- ----------
Total adjustments (5,521,018) (5,136,214)
---------- ----------
Net cash used in operating activities (2,955,627) (2,511,254)
---------- ----------
Cash flows from investing activities:
Purchases of property, plant and equipment (365,516) (107,702)
Purchase of goodwill 0 0
Investment in NETJEWELS.COM (500,821) 0
---------- ----------
Net cash used in investing activities (866,337) (107,702)
---------- ----------
Cash flows from financing activities:
Proceeds from bank indebtedness 649,271 6,059,736
Proceeds from/(repayment of) loans payable (1,004,487) (3,477,496)
<PAGE>
Issuance of capital stock 3,927,330 (58,571)
---------- ----------
Net cash provided by financing activities 3,572,114 2,523,669
---------- ----------
Effect of foreign currency exchange rate changes 11,889 (214,949)
---------- ----------
Net increase (decrease) in cash and cash equivalents (237,961) (310,236)
Cash and cash equivalents
Beginning of period 305,784 361,347
---------- ----------
End of period 67,823 51,111
---------- ----------
Interest paid 1,105,527 1,105,081
---------- ----------
Income taxes paid 227,423 50,000
---------- ----------
</TABLE>
<PAGE>
D.G.Jewelry Inc.
Interim Consolidated Statements of Stockholders' Equity
For the Nine Months Ended September 30, 1999 (Amounts
expressed in US dollars) (Unaudited)
<TABLE>
<CAPTION>
Cumulative
Common Retained Translation
Stock Earnings Adjustments Total
$ $ $ $
<S> <C> <C> <C> <C>
Balance as of December 31, 1996 84 3,208,026 (44,711) 3,163,399
Common Stock Issued 6,700,743 6,700,743
Foreign Currency Translation (314,723) (314,723)
Net income for the year 1,045,234 1,045,234
---------- ---------- ------ ----------
Balance as at December 31, 1997 6,700,827 4,253,260 (359,434) 10,594,653
Common stock issued 4,159 4,159
Foreign Currency Translation 414,935 414,935
Net income for the year 3,278,692 3,278,692
---------- ---------- ------ ----------
Balance as at December 31, 1998 6,704,986 7,531,952 55,501 14,292,439
Common stock issued 3,927,330 3,927,330
Foreign Currency Translation (23,447) (23,447)
Net income for the period 2,588,838 2,588,838
---------- ---------- ------ ----------
10,632,316 10,120,790 32,054 20,785,160
---------- ---------- ------ ----------
---------- ---------- ------ ----------
</TABLE>
<PAGE>
a) Basis of Consolidated Financial Statements Presentation
These Interim Consolidated Financial Statements have been prepared in accordance
with Form 10-QSB specifications and, therefore, do not include all information
and footnotes normally shown in full annual Interim Financial Statements.
These financial statements consolidate, using the purchase method, the accounts
of the company and its two wholly-owned subsidiaries, Diamonair, Inc. and Aviv,
Inc. All material intercompany accounts have been eliminated. The investment in
NETJEWELS.COM is accounted for based on the equity method.
b) Principal Activities
The company was incorporated in Canada on October 18, 1979. The company is
principally engaged in the production and trading of jewelry in Canada and the
United States of America.
c) Cash and Bank Indebtedness
Cash and bank indebtedness includes cash in bank, amounts due to banks, and any
other highly liquid investments purchased with a maturity of three months or
less. The carrying amount approximates fair value because of the short maturity
of those instruments.
d) Other Financial Instruments
The carrying amount of the company's accounts receivable approximates fair value
because of the short maturity of these instruments.
e) Long-term Financial Instruments
The fair value of each of the company's long-term financial assets and debt
instruments is based on the amount of future cash flows associated with each
instrument discounted using an estimate of what the company's current borrowing
rate for similar instruments of comparable maturity would be.
f) Inventory
Raw materials and work-in-process are valued at the lower of cost (first-in,
first-out basis) or market.
<PAGE>
Finished goods are valued at the lower of cost or market. Cost is calculated
using selling price less normal gross margin.
g) Property, Plant and Equipment
Property, plant and equipment are recorded at cost and are mainly depreciated on
the declining balance basis over their estimated useful lives.
Leasehold improvements are amortized on the straight-line basis over the terms
of the lease.
h) Goodwill
<PAGE>
Goodwill is the excess of cost over the value of tangible assets acquired. It
is amortized on the straight-line basis over 25 to 40 years.
i) Sales
Sales represent the invoiced value of goods supplied to customers. Sales are
recognized upon delivery of goods and passage of title to customers.
j) Foreign Currency Translation
The translation of the Interim Financial Statements from Canadian dollars
("CDN$") INTO United States dollars is performed for the convenience of the
reader. Balance Sheet accounts are translated using closing exchange rates in
effect at the Balance Sheet date and income and expense accounts are translated
using an average exchange rate prevailing during each reporting period. No
representation is made that the Canadian dollar amounts could have been, or
could be, converted into United States dollars at the rates on the respective
dates and or at any other certain rates. Adjustments resulting from the
translation are included in the cumulative translation adjustments in
stockholders' equity.
k) Use of Estimates
The preparation of Interim Financial Statements requires management to make
estimates and assumptions that affect certain reported amounts of assets and
liabilities and disclosures of contingent assets and liabilities at the date of
the Interim Financial Statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.
2. OTHER ACCOUNTS RECEIVABLE - RELATED PARTIES
The amount represents accounts receivable from NETJEWELS.COM, INC. in which
the Company has a 50% ownership.
3. CASH SURRENDER VALUE OF LIFE INSURANCE
The cash surrender value of life insurance represents the value of life
insurance policies of
<PAGE>
former directors of Aviv, Inc.
4. OTHER ASSETS
Other assets represent the value of a six year contract of a supplier and it is
depreciated over the life of the contract.
5. BANK INDEBTEDNESS
The bank indebtedness bears interest at the bank's prime lending rate plus 3/4%
per annum. As security, the company has provided a general assignment of
accounts receivable, a general security agreement constituting a first charge
over all present and future personal property of the company and an assignment
of key man life insurance of a director payable to the bank. The facility
contains covenants specifying minimum and maximum financial ratios. The
agreement contains restrictions on changes in ownership and line of business, on
further encumbrances of assets and on the guarantees and other contingent
liabilities.
6. CAPITAL STOCK
a) Authorized
An unlimited number of common stock
Issued
<TABLE>
<CAPTION>
Issued September 30, December 31,
1999 1998
<S> <C> <C>
6,377,530 Common Stock 10,519,091 6,591,761
(5,168,000 in 1998)
1,265,000 Warrants 113,225 113,225
---------- ---------
10,632,316 6,704,986
</TABLE>
b) Stock Option Plan
<PAGE>
1996 Plan - 500,000 authorized (all issued)
1998 Plan - 500,000 authorized (all issued)
1999 Plan - 500,000 authorized (45,000 issued)
7. COMPREHENSIVE INCOME
The company has adopted Statement of Financial Accounting Standards No. 130
"reporting Comprehensive Income" as of January 1, 1998 which requires new
standards for reporting and display of comprehensive income and its components
in the financial statements. However, it does not affect net income or total
stockholders' equity. The components of comprehensive income are as follows:
<TABLE>
<CAPTION>
September 30, December 31,
1999 1998
<S> <C> <C>
Net Income 2,565,391 3,278,692
Other comprehensive income (loss):
Foreign currency translation adjustments (23,447) 414,935
--------- ---------
2,541,944 3,693,627
</TABLE>
The components of accumulated other comprehensive income (loss) are as follows:
<TABLE>
<S> <C>
Accumulated other comprehensive loss, December 31, 1996 (44,711)
Foreign currency translation adjustments for the year ended
December 31, 1997 (314,723)
-------
Accumulated other comprehensive loss, December 31, 1997 (359,434)
Foreign currency translation adjustments for the year ended
December 31, 1998 414,935
-------
Accumulated other comprehensive loss, December 31, 1998 55,501
Foreign currency translation adjustments for the nine months ended
September 30, 1999 (23,447)
-------
Accumulated other comprehensive loss, September 30, 1999 32,054
</TABLE>
<PAGE>
8. NET INCOME PER COMMON SHARE
Net income per common share is computed by dividing net income by the weighted
average number of common shares outstanding.
Fully diluted income per share is computed by dividing net income by the
weighted average number of shares calculated using the "treasury stock" method.
9. CHANGE OF NAME
The Company changed the name from "D.G. Jewellery of Canada Ltd." to "D.G.
Jewelry Inc." effective July 29, 1999.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
The statements contained in this filing that are not historical are forward
looking statements within the meaning of Section 27A of the Securities Act and
Section 21E of the Exchange Act, including statements regarding the Company's
expectations, liquidity, anticipated cash needs and availability and anticipated
expense levels. All forward looking statements included in this report are based
on information available to the Company on the date hereof, and the Company
assumes no obligation to update any such forward looking statement. It is
important to note that the Company's actual results could differ materially from
those in such forward looking statements.
Results of Operations
Three and Nine Months Ended September 30, 1999 Compared to the Three and Nine
Months Ended September 30, 1998.
Revenues for the three months ended September 30, 1999 were 6.9 million, or
approximately a 40% decrease over the third quarter of 1998 revenues of 11.6
million. Year to date revenue for the period ended September 30, 1999 decreased
by approximately 12% over the same
<PAGE>
period in 1998. This decrease was the result of a few factors: timing
differences in sales, a decision to opt for a more select customer base, with a
higher gross profit margin, and managements' extended efforts to launch
NETJEWELS.COM.
Gross profit for the third quarter of 1999 was 2.5 million which is an increase
of 80,000 (3.3%) over the third quarter of 1998. The year to date gross profit
increased in 1999 by approximately 1 million (14%) over the same period in
1998. This was attributed to the increase in gross profit as a percentage of
sales to a more select customer base. For the quarter ended September 30, 1999
gross profit increased from 20.45% in 1998 to 35.2% in 1999. The year to date
gross profit percentage increased from 25.37% in 1998 to 33.29% n 1999.
Selling expenses decreased in the quarter by approximately 480,000 from
835,676 in 1998 to 353,868 in 1999 (over 57%). The decrease for the nine
months ended September 30, 1999 compared to the same period last year was
approximately 450,000 or 24%.
Administrative expenses of 883,280 for the nine months ended September 30, 1999
were approximately 25% lower than the nine months ended September 30, 1998.
The increase in interest expense for the three months ended September 30, 1999
was approximately 250,000. The increase was due mainly to increases in the
operating line of credit due to larger accounts receivable and inventory levels
and payments made on accounts payable. The interest expense was approximatelly
equal for the nine months ended September 30, 1999 as compared to the same
period in the previous year.
The Company posted a loss on investment of 500,822 which reflects 50% of
NETJEWELS.COM.'s loss.
As a result of the above factors, net income for the third quarter of 1999
decreased by approximately 62% to 236,627.
Liquidity and Capital Resources
The net cash used in operating activities increased by approximately 400,000
for the nine months ended September 30, 1999 over September 30, 1998.
<PAGE>
The principal use of cash was traced to mainly to an increase in accounts
receivable and a decrease in accounts payable. This was partially offset by a
decrease in inventory levels.
The cash flow from bank financing decreased by approximately 5.5 million as at
September 30, 1999 compared to the previous period in 1998. The Company repaid
approximately 2.5 million less in loans.
The company also received proceeds from the issuance of capital stock. The main
prodeeds (approximately 3,745,000) came from the private placement in May, 1999
of 615, 385 shares. Other proceeds came from the exercise of stock options and
the conversion of approximately 325,000 in loans payable to the former
directors of Aviv Inc. through the issuance of 45,145 shares.
YEAR 2000 BUSINESS SYSTEM IMPLEMENTATION
As many computer systems and other equipment with embedded chips or processes
(collectively, "Business Systems") use only two digits to represent the year,
they may be unable to process accurately certain data before, during or after
the year 2000. As a result, business and governmental entities are at risk for
possible miscalculations or systems failures causing disruptions in their
business operations. The company has committed to and is in the process of
implementing a Y2K readiness program, with the objective of having all of their
significant Business Systems, including those that affect facilities and
manufacturing activities, functioning properly, well in advance of January 1,
2000.
PART 11 OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is not party to any material legal proceedings.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
The Company issued an aggregate of 615,385 shares in a private placement in May
1999 resulting in net proceeds of approximately 3,745,000. The Company also
issued an aggregate of 45,145 shares in consideration for the conversion of
approximately 325,000 in loans. The Company is utilizing the proceeds for
<PAGE>
working capital.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
a) On July 20, 1999, the Company held its Annual Meeting of Stockholders. At
such meeting the Company's Board of Directors for the ensuring year were
elected, the appointment of Schwartz, Levitsky, Feldman, LLP, Charter of
Accounting approved. The 1999 Stock Option Plan was ratified and the change of
the Company's name to D.G. Jewelry Ltd. was approved.
b) Proxies for the meeting were solicited pursuant to Regulation 14 under the
Act, there was no solicitation in opposition to management's nominees as listed
in the Proxy Statements and all of such nominees was elected.
c) Each director nominee received 3,816,258 votes for approval and 3,000 shares
against. The Ratification of the independent accountants was approved by
3,813,258 votes and 6,000 abstained. The 1999 Stock Option Plan was approved by
3,794,658 votes, 21,100 voted against and 3,500 abstained. The name change was
approved by 3,817,458 votes, 800 voted against and 1,000 abstained.
ITEM 5. OTHER INFORMATION
Not applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(A) Exhibits (Numbered In Accordance with Item 601 of Regulation
S-B).
EXHIBIT NUMBER DESCRIPTION OF EXHIBIT
- --------------------------------------------------------------------------------
Financial Data Schedule
(b) The Company did not file any reports on Form 8-K during the
quarter for which this report is filed.
<PAGE>
SIGNATURES
Pursuant to the requirements of section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.
Dated: November 12, 1999 D.G.Jewelry Inc.
by: /s/ Gary Davis,
Principal Accounting Officer
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AND CONSOLIDATED STATEMENTS OF OPERATIONS INCLUDED IN
THE REGISTRANT'S FORM 10-QSB FOR THE QUARTER ENDED SEPTEMBER 30, 1999 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JUL-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 305,2784
<SECURITIES> 0
<RECEIVABLES> 20,887,122
<ALLOWANCES> 0
<INVENTORY> 38,923,411
<CURRENT-ASSETS> 43,507,769
<PP&E> 1,327,315
<DEPRECIATION> 158,921
<TOTAL-ASSETS> 43,503,905
<CURRENT-LIABILITIES> 29,211,466
<BONDS> 0
0
0
<COMMON> 6,704,986
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 48,559,123
<SALES> 6,974,520
<TOTAL-REVENUES> 6,974,520
<CGS> 4,519,246
<TOTAL-COSTS> 4,519,246
<OTHER-EXPENSES> 1,083,587
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 506,207
<INCOME-PRETAX> 586,651
<INCOME-TAX> 350,024
<INCOME-CONTINUING> 236,627
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 236,627
<EPS-BASIC> 0.04
<EPS-DILUTED> 0.04
</TABLE>
