<PAGE>
United States
Securities and Exchange Commission
Washington, D.C. 20549-1004
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 July 3, 1999
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 333-24519
Pen-Tab Industries, Inc.
(Exact name of registrant as specified in its charter)
Delaware 54-1833398
(State or other jurisdiction (I.R.S. Employer
Incorporation or organization) Identification Number)
167 Kelley Drive
Front Royal, VA 22630
Telephone: (540) 622-2000
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
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 periods 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 registrant's classes of
common stock, as of the latest practicable date. As of July 3, 1999, there were
outstanding 100 shares of common stock, $0.01 par value, all of which are
privately owned and are not traded on a public market.
<PAGE>
PEN-TAB INDUSTRIES, INC.
FORM 10-Q
FOR THE QUARTER ENDED JULY 3, 1999
INDEX
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited) Page
----
a) Condensed Consolidated Balance Sheets as of July 3, 1999
and January 2, 1999 1
b) Condensed Consolidated Statements of Operations for the
quarters and six months ended July 3, 1999
and July 4, 1998 2
c) Condensed Consolidated Statements of Cash Flows for the
six months ended July 3, 1999 and July 4, 1998 3
d) Notes to Condensed Consolidated Financial Statements 4
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
Item 3. Quantitative and Qualitative Disclosures About Market Risk 11
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 12
Item 2. Changes in Securities 12
Item 3. Defaults upon Senior Securities 12
Item 4. Submission of Matters to a Vote of Security Holders 12
Item 5. Other Information 12
Item 6. Exhibits and Reports on Form 8-K 12
SIGNATURE 13
<PAGE>
Pen-Tab Industries, Inc.
Condensed Consolidated Balance Sheets
(Dollars in Thousands)
<TABLE>
<CAPTION>
July 3, January 2,
1999 1999
-------------- ---------------
(Unaudited)
<S> <C> <C>
Assets
Currents assets:
Cash and cash equivalents $ -- $ 20
Accounts receivable, net
of allowances of $4,954 and $2,325, respectively 51,988 15,770
Inventories, net 54,586 41,801
Prepaid expenses and other current assets 1,045 611
Deferred income taxes 1,384 1,384
------------- --------------
Total Current Assets 109,003 59,586
Property, plant and equipment, net of accumulated
depreciation of $19,165 and $16,222 respectively 44,375 45,538
Debt issuance costs, net 3,899 4,339
Goodwill, net 74,745 72,480
------------- --------------
Total assets $ 232,022 $ 181,943
============= ==============
Liabilities and stockholder's equity:
Current liabilities:
Accounts payable and bank overdraft $ 8,269 $ 5,804
Accrued expenses and other current liabilities 11,870 8,224
Due to Newell Co. -- 18,546
Accrued interest on subordinated notes 3,168 3,324
Current portion of long term debt 6,440 5,810
------------- --------------
Total current liabilities 29,747 41,708
Long-term debt 178,626 119,339
Capitalized lease obligation 6,543 7,311
Deferred income taxes 3,068 3,068
Stockholder's equity 14,038 10,517
------------- --------------
Total liabilities and stockholder's equity $ 232,022 $ 181,943
============= ==============
</TABLE>
See accompanying notes to unaudited condensed consolidated interim
financial statements
1
<PAGE>
Pen-Tab Industries, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
(Dollars in Thousands)
<TABLE>
<CAPTION>
Quarter Ended Six Months Ended
----------------------------------- -----------------------------------
July 3, July 4, July 3, July 4,
1999 1998 1999 1998
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Net sales $ 58,878 $ 37,221 $ 86,907 $ 55,440
Cost of goods sold 37,038 27,004 57,785 41,015
-------------- -------------- -------------- --------------
Gross profit 21,840 10,217 29,122 14,425
Expenses:
Selling, general and
administrative 7,588 5,289 13,907 9,022
Amortization of goodwill 469 -- 937 --
Interest expense, net 4,520 2,320 8,270 4,261
-------------- -------------- -------------- --------------
Total expenses 12,577 7,609 23,114 13,283
-------------- -------------- -------------- --------------
Income before income taxes 9,263 2,608 6,008 1,142
Income tax provision 3,724 1,046 2,487 542
-------------- -------------- -------------- --------------
Net Income $ 5,539 $ 1,562 $ 3,521 $ 600
============== ============== ============== ==============
</TABLE>
See accompanying notes to unaudited condensed consolidated
interim financial statements
2
<PAGE>
Pen-Tab Industries, Inc.
Condensed Consolidated Statements of Cash flows
(Dollars in Thousands)
<TABLE>
<CAPTION>
Six Months Ended
-----------------------------------
July 3, July 4,
1999 1998
-------------- --------------
(Unaudited) (Unaudited)
<S> <C> <C>
Operating activities
Net income $ 3,521 $ 600
Adjustments to reconcile net income to net cash used in
operating activities:
Depreciation and amortization 2,941 1,278
Amortization of goodwill 937
Amortization of debt issuance costs 382 230
Provision for losses on accounts receivable 580 262
Changes in operating assets and liabilities:
Accounts receivable (36,798) (22,721)
Inventories (12,784) (10,456)
Prepaid expenses, other current assets and other
assets (2,424) 515
Accounts payable and bank overdraft 4,118 2,706
Due to Newell Co. (18,546) ---
Accrued expenses and other current liabilities 1,029 1,665
Accrued interest on subordinated notes (156) (80)
Deferred income taxes 1,243 ---
-------------- --------------
Net cash used in operating activities (55,957) (26,001)
Investing activities
Purchase of equipment (1,874) (1,050)
Purchase of Stuart Hall - purchase price adjustment (1,304) ---
-------------- --------------
Net cash used in investing activities (3,178) (1,050)
Financing activities
Proceeds from revolver borrowings 79,750 ---
Repayments of revolver borrowings (17,250) ---
Principal payments on long-term debt (1,900) (13,375)
Principal payments on capitalized lease obligations (1,485) ---
-------------- --------------
Net cash provided by (used in) financing activities 59,115 (13,375)
Decrease in cash and cash equivalents (20) (13,676)
Cash and cash equivalents at beginning of period 20 13,676
-------------- --------------
Cash and cash equivalents at end of period $ -- $ --
============== ==============
</TABLE>
See accompanying notes to unaudited condensed consolidated
interim financial statements
3
<PAGE>
Pen-Tab Industries, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
July 3, 1999
(Dollars in thousands)
1. Basis of Presentation
The accompanying unaudited condensed consolidated financial statements of Pen-
Tab Industries, Inc. have been prepared in accordance with generally accepted
accounting principles applicable for interim financial information and with the
instructions to form 10-Q and Article 10 of 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 of normal recurring accruals) considered
necessary for a fair presentation have been included. Operating results for the
quarter ended July 3, 1999 are not necessarily indicative of the results that
may be expected for the year ended January 2, 2000. All references to fiscal
quarter refer to the 13 week periods ended July 3, 1999 and July 4, 1998. These
financial statements should be read in conjunction with the audited financial
statements of Pen-Tab Industries, Inc. as of January 2, 1999 and January 3, 1998
and for each of the three years in the period ended January 2, 1999, included in
the Company's form 10-K (#333-24519) as filed with the Securities and Exchange
Commission.
2. Recently Issued Pronouncements
In June 1998, the FASB issued Statement of Financial Accounting Standards No.
133, "Accounting for Derivative Instruments and Hedging Activities" (SFAS No.
133), which requires that all derivatives be recognized as either assets or
liabilities in the statement of financial position and that those instruments
shall be measured at fair value. SFAS No. 133 also prescribes the accounting
treatment for changes in the fair value of derivatives which depends on the
intended use of the derivative and the resulting designation. Designations
include hedges of the exposure to changes in the fair value of a recognized
asset or liability, hedges of the exposure to variable cash flows of a
forecasted transaction, hedges of the exposure to foreign currency translations,
and derivatives not designated as hedging instruments. SFAS No. 133 is effective
for fiscal years beginning after June 15, 2000. The Company expects to adopt
SFAS No. 133 in the first quarter of the year 2000. The financial statement
impact of adopting SFAS No. 133 has not yet been determined.
4
<PAGE>
3. Inventories
Inventories consist of the following:
<TABLE>
<CAPTION>
July 3, January 2,
1999 1999
-------------- --------------
<S> <C> <C>
Raw materials $ 16,446 $ 17,242
Work-in-process 1,228 715
Finished goods 36,912 23,844
LIFO reserve, net - -
-------------- --------------
$ 54,586 $ 41,801
============== ==============
</TABLE>
An actual valuation of inventory under the LIFO method can be made only at the
end of each year based on the inventory levels and costs at that time. However,
Pen-Tab's current expectation is that its inventory levels will remain
consistent from year-end to year-end. Accordingly, interim LIFO calculations are
necessarily based on management's estimates of expected year-end inventory
levels and costs. Because these are subject to many forces beyond management's
control, interim results are subject to the final year-end LIFO inventory
valuation. Due to a decline in certain commodity grade paper prices, inventory
is being carried at the lower of cost or market, therefore no LIFO reserve
remains.
4. Long-Term Debt
Long-term debt consisted of the following:
<TABLE>
<CAPTION>
July 3, January 2,
1999 1999
-------------- --------------
<S> <C> <C>
Credit Facility:
Revolver $ 67,500 $ 5,000
Term Loan 32,750 34,250
Senior Subordinated Notes 75,000 75,000
Industrial development revenue bonds 6,700 7,100
Equipment notes payable 1,850 2,875
Capital lease obligations 7,809 8,235
-------------- --------------
191,609 132,460
Less: current portion 6,440 5,810
-------------- --------------
$ 185,169 $ 126,650
============== ==============
</TABLE>
In conjunction with the acquisition of Stuart Hall on August 20, 1998, the
Company repaid the outstanding obligations on a Credit Agreement with Bank of
America and entered into a new $135 million Credit Facility ("Credit Facility")
with Bank of America which expires on August 20, 2001. The Credit Facility
includes a $100 million revolver and a $35 million term loan. The $100 million
revolver portion of the Credit Facility
5
<PAGE>
4. Long-Term Debt (Continued)
provides for advances based upon a borrowing base comprised of specified
percentages of eligible accounts receivable and inventory. The interest rate per
annum applicable to the Credit Facility is the prime rate, as announced by the
Bank plus 1% or at the Company's option, the Eurodollar rate plus 2%. The
Company is required to pay a commitment fee of 0.5% on the unused portion of the
$100 million revolver. Under the terms of the Credit Facility, the Company is
required to maintain certain financial ratios relating to cash flow, annually
reduce the principal balance of the revolver to $25 million for thirty
consecutive days during the period between September 30 and November 15 of each
fiscal year and restrict the amount of dividends that can be paid during the
year. Except as noted below, all assets of the company are pledged as collateral
for balances owing under the Credit Facility.
The 10 7/8% Senior Subordinated Notes are due in 2007. The Indenture contains
certain covenants that, among other things, limits the ability of the Company to
incur additional indebtedness. During November 1997, the Company entered into a
swap agreement, which expires February, 2002, to swap its fixed rate of payment
on the $75,000 10 7/8% Senior Subordinated Notes for a floating rate payment.
The floating rate is based upon a basket of the LIBORS of three countries plus a
spread, and is capped at 12.5%. The interest rate resets every six months. The
Company can terminate the transaction at any time, at the then current fair
market value of the swap instrument.
5. Segment Information
The Company operates in two business segments consisting of school, home and
office products, and vinyl packaging products. The following table provides
certain financial data regarding these two segments.
<TABLE>
<CAPTION>
School,
Home
And Vinyl
Office Packaging
Products Products Total
-------- --------- -----
<S> <C> <C> <C>
Six months ended July 3, 1999
Net sales (external customers) $ 82,706 $ 4,201 $ 86,907
Operating earnings (loss) 14,461 (183) 14,278
Interest expense, net 8,270 -- 8,270
Identifiable assets 228,208 3,814 232,022
Depreciation and amortization 2,820 121 2,941
Capital expenditures 1,596 278 1,874
Six months ended July 4, 1998
Net sales (external customers) $ 51,319 $ 4,121 $ 55,440
Operating earnings (loss)* 5,436 (33) 5,403
Interest expense, net 4,261 -- 4,261
Identifiable assets 76,296 3,282 79,578
Depreciation and amortization 1,195 83 1,278
Capital expenditures 923 127 1,050
</TABLE>
6
<PAGE>
5. Segment Information (Continued)
For the purposes of the segment information provided above, operating earnings
are defined as net sales less related cost of goods sold, selling, general and
administration expenses and amortization of goodwill. Inter-segment sales are
immaterial.
7
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS
Net sales for the quarter ended July 3, 1999 increased by $21.7 million or 58.2%
to $58.9 million from $37.2 million for the quarter ended July 4, 1998. Net
sales for the six months ended July 3, 1999 increased by $31.5 million or 56.8%
to $86.9 million from $55.4 million for the six months ended July 4, 1998. The
increase in sales is primarily due to the acquisition of Stuart Hall on August
20, 1998, and is partially offset by an approximate 11% decrease in selling
prices resulting from a decrease in the cost of paper. For the Pen-Tab segment,
which includes the Stuart Hall operations, differentiated higher margin product
sales increased by $25.4 million and core lower margin product sales increased
by $6.0 million for the six months ended July 3, 1999 as compared to the six
months ended July 4, 1998. The Vinylweld segment had relatively flat sales for
both the quarter and six month periods ended July 3, 1999 as compared to last
year.
Gross profit for the quarter ended July 3, 1999 increased $11.6 million or
113.8% to $21.8 million from $10.2 million for the quarter ended July 4, 1998.
Gross profit for the six months ended July 3, 1999 increased $14.7 million or
101.9% to $29.1 million from $14.4 million for the six months ended July 4,
1998. The gross profit as a percentage of net trade sales for the quarter ended
July 3, 1999 was 37.1% compared to 27.4% for quarter ended July 4, 1998. The
gross profit as a percentage of net trade sales for the six months ended July 3,
1999 was 33.5% compared to 26.0% for the six months ended July 4, 1998. The
increase in gross profit margin is primarily due to a more favorable product mix
in the Pen-Tab segment as a result of the acquisition of Stuart Hall. For the
six months ended July 3, 1999, differentiated higher margin product sales
represented approximately 54% of the Pen-Tab segment sales as compared to
approximately 35% for the six months ended July 4, 1998.
SG&A expenses for the quarter ended July 3, 1999 increased $2.2 million to $7.6
million or 12.9% of net sales from $5.3 million or 14.2% of net sales for the
quarter ended July 4, 1998. SG&A expenses for the six months ended July 3, 1999
increased $4.9 million to $13.9 million or 16.0% of net sales from $9.0 million
or 16.8% of net sales for the six months ended July 4, 1998. This increase is
principally due to increases in salary and fringe expenses associated with the
acquisition of Stuart Hall.
Amortization of goodwill for the quarter ended July 3, 1999 increased by $0.5
million from the quarter ended July 4, 1998. Amortization of goodwill for the
six months ended July 3, 1999 increased by $0.9 million from the six months
ended July 4, 1998. The increase is due to the amortization of goodwill
associated with the acquisition of Stuart Hall, which occurred on August 20,
1998.
Interest Expense for the quarter ended July 3, 1999 increased by $2.2 million to
$4.5 million from $2.3 million for the quarter ended July 4, 1998. Interest
Expense for the six
8
<PAGE>
RESULTS OF OPERATIONS (CONTINUED)
months ended July 3, 1999 increased by $4.0 million to $8.3 million from $4.3
million for the six months ended July 4, 1998. The increase is primarily due to
the debt incurred in conjunction with the acquisition of Stuart Hall on August
20, 1998.
LIQUIDITY AND CAPITAL RESOURCES
Net cash used in operating activities for the quarter ended July 3, 1999 is
$56.0 million as compared to net cash used in operating activities of $26.0
million for the quarter ended July 4, 1998. The increase was due to increases in
accounts receivable and inventory offset by increases in accounts payable and
a final working capital purchase price adjustment of $18.5 million paid to
Newell Co. for the purchase of Stuart Hall.
Net cash used in investing activities for the quarter ended July 3, 1999 is
$3.1 million as compared to net cash used in investing activities of $1.1
million for the quarter ended July 4, 1998. The increase is principally due to
the implementation of new business software, and the final purchase price
adjustment for the acquistion of Stuart Hall.
Net cash provided by financing activities for the quarter ended July 3, 1999 is
$59.1 million compared to net cash used in financing activities of $13.3 million
for the quarter ended July 4, 1998. The increase was due to borrowing on the
Company's revolver portion of the Credit Facility to fund the seasonal increase
in working capital.
YEAR 2000 COMPATABILITY
Until recently, computer programs were generally written using two digits rather
than four to define the applicable year. Accordingly, such programs may be
unable to distinguish between the year 1900 and the year 2000. This could result
in system failures or data corruption for the Company, its customers or
suppliers, which could cause disruptions of operations. The Company is currently
engaged in a company-wide effort to address the year 2000 compatibility issues.
The project is focused on three main areas: information technology (IT) systems;
non-IT systems imbedded in equipment; and the company's business relationships
with third parties, such as suppliers, customers, and service providers. The
thrust of the project is to address those systems and relationships which the
Company judges to be material to their operations. Based on the Company's
current project status, management feels it is unlikely there will be any
disruptions in manufacturing or distribution of products to customers, or in
their daily business processes. The Company is expecting to fund all year 2000
project costs through its operating cash flow.
The Company has recently purchased and installed new certified Year 2000
compliant software package to upgrade it's existing IT systems. The purchase of
the new software was purely for the purpose of enhancing the Company's existing
IT
9
<PAGE>
YEAR 2000 COMPATABILITY (CONTINUED)
systems; however, a side benefit of the software is its year 2000 compliance.
The cost associated with the acquisition of the new IT system are being
capitalized in accordance with SOP 98-1 "Accounting for the Costs of Computer
Software Developed or Obtained for Internal Use". The cost of the year 2000
compliance project related to IT systems is expected to be $0.2 million of which
$0.1 million has been expended.
The year 2000 compliance issue related to non-IT systems imbedded in equipment
is currently being evaluated by a company wide committee representing all
functional areas. The cost to remedy this issue is not expected to be material,
and is expected to be complete by September 30, 1999.
The Company has requested documentation from all significant customers,
suppliers, and service providers that their organizations have addressed the
year 2000 compliance issues and that their companies are ready. The cost to
ensure all significant customers, suppliers, and service providers are compliant
is not expected to be material, and will be complete by September 30, 1999.
The Company currently is developing contingency plans. The Company anticipates
that its internal systems will be Year 2000 compliant by September 30, 1999. The
Year 2000 readiness of 3rd parties with which the Company has a material
relationship and their products and services are being assessed.
While the Company cannot warrant that all business systems of its business
partners, external agents, service providers, or government agencies will be
timely with year 2000 compliance, the Company expects no business interruptions
due to non-compliance by any particular entity. The Company believes that year
2000 issues will not materially affect future financial results or operating
performances.
SEASONALITY AND KNOWN TRENDS
The Company experiences seasonality in its business operations. During the
Company's second and third quarters, net sales are higher that the first and
fourth quarters due to sales of back-to-school products.
FORWARD-LOOKING STATEMENTS
Written reports and oral statements made from time to time by the Company
contain "forward-looking statements." Forward looking statements can be
identified by the fact that they do not relate strictly to historical or current
facts and by their use of words such as "goals", "expects", "plans", "believes",
"estimates", "forecasts", "projects", "intends", and other words of similar
meaning. Such statements are likely to address the Company's earnings, return on
capital, capital expenditures, project implementation, production growth, sales
growth and expense reductions. They are based on management's then-current
information, assumptions, plans, expectations, estimates and
10
<PAGE>
FORWARD LOOKING STATEMENTS (CONTINUED)
projections about their industry. However, such statements are not guarantees of
future performance, and actual results and outcomes may differ materially from
what is expressed depending on a variety of factors, many of which are outside
of the Company's control.
Among the factors that could cause actual outcomes or results to differ
materially from what is expressed in these forward-looking statements are
changes in the demand for, supply of, and market price of paper, changes in
economic conditions, changes in the availability and/or price of paper,
significant changes in rates of interest, inflation, or taxes, changes in Pen-
Tab's relationship with its employees and the potential adverse effects if labor
disputes or grievances were to occur, changes in accounting principles and
timely resolution of Year 2000 compatability issues by the Company and its
customers and suppliers.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company's market risk is impacted by changes in interest rates and certain
commodity prices, namely paper. The Company does not currently hold or issue
derivative instruments for trading or hedging purposes related to commodity
price fluctuations.
The Company's primary market risk is commodity price exposure. Based upon past
experience, the Company believes it can effectively pass through to its
customers commodity price fluctuations thus assisting the Company in mitigating
exposure related to commodity price fluctuations. In addition, the Company has
market risk related to interest rate exposure on its Credit Facility and swap
agreement. Interest rate swaps may be used to adjust interest rate exposure when
appropriate.
Based on the Company's overall commodity price and interest rate exposure at
July 3, 1999, management believes that a short-term change in any of the
exposures will not have a material effect on the consolidated financial
statements of the Company.
11
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Not applicable
Item 2. Changes in Securities
Not applicable
Item 3. Defaults upon Senior Securities
Not applicable
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable
Item 5. Other Information
Not applicable
Item 6. Exhibits and Reports on Form 8-K
a.) Exhibits
Financial Data Schedule (filed only electronically with the SEC)
b.) Reports on Form 8-K
Form 8-K filed on June 3, 1999.
12
<PAGE>
Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report on Form 10-Q for the quarter ended July
3, 1999 to be signed on its behalf by the undersigned thereunto duly authorized.
Pen-Tab Industries, Inc.
(Registrant)
Date By: /s/ William Leary
- ---- ---------------------
August 18, 1999 William Leary
Vice President, Chief Financial
and Administrative Officer
(principal financial officer and
accounting officer)
13
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 3-MOS
<FISCAL-YEAR-END> JAN-02-1999 JAN-03-1998
<PERIOD-START> APR-04-1999 APR-05-1998
<PERIOD-END> JUL-03-1999 JUL-04-1998
<CASH> 0 20
<SECURITIES> 0 0
<RECEIVABLES> 56,942 18,095
<ALLOWANCES> 4,954 2,325
<INVENTORY> 54,586 41,801
<CURRENT-ASSETS> 109,003 59,586
<PP&E> 63,358 61,760
<DEPRECIATION> 19,163 16,222
<TOTAL-ASSETS> 232,022 181,943
<CURRENT-LIABILITIES> 29,747 41,708
<BONDS> 0 0
0 0
0 0
<COMMON> 0 0
<OTHER-SE> 14,038 10,517
<TOTAL-LIABILITY-AND-EQUITY> 232,022 181,943
<SALES> 58,878 37,221
<TOTAL-REVENUES> 58,878 37,221
<CGS> 37,038 27,004
<TOTAL-COSTS> 7,588 5,289
<OTHER-EXPENSES> 469 0
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 4,520 2,320
<INCOME-PRETAX> 9,263 2,608
<INCOME-TAX> 3,724 1,046
<INCOME-CONTINUING> 0 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 5,539 1,562
<EPS-BASIC> 0 0
<EPS-DILUTED> 0 0
</TABLE>
