<PAGE>
United States
Securities and Exchange Commission
Washington, D.C. 20549
Form 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Quarter Ended September 30, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
Commission File Number 0-27517
GAIAM, INC.
(Exact name of registrant as specified in its charter)
COLORADO 84-1113527
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
360 INTERLOCKEN BLVD., SUITE 300
BROOMFIELD, CO 80021
(Address of principal executive offices)
(303) 464-3600
(Registrant's telephone number, including area code)
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 NO X
--- ---
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:
Class Shares outstanding as of October 31, 1999
- ------------------------ -----------------------------------------
Class A Common Stock 3,496,429
($.0001 par value)
Class B Common Stock 7,035,000
($.0001 par value)
1
<PAGE>
INDEX TO FORM 10-Q
PART I. FINANCIAL INFORMATION Page 2
Item 1. Consolidated Financial Statements (Unaudited) 2
Consolidated Balance Sheets at September 30, 1999
and December 31, 1998 3
Consolidated Statements of Income for the three
and nine month periods ended September 30, 1999
and September 30, 1998 4
Consolidated Statements of Cash Flows for the nine
month periods ended September 30, 1999 and 1998 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 6
Item 3. Quantitative and Qualitative Disclosures About
Market Risk 10
PART II. OTHER INFORMATION 10
Item 1. Legal Proceedings 10
Item 2. Changes in Securities and Use of Proceeds 10
Item 3. Defaults Upon Senior Securities 11
Item 4. Submission of Matters to a Vote of Security Holders 11
Item 5. Other Information 11
Item 6. Exhibits and Reports on Form 8-K 11
This report may contain forward-looking statements that involve risks and
uncertainties. When used in this discussion, the words "anticipate," "believe,"
"estimate," "expect," and similar expressions as they relate to the Company or
its management are intended to identify such forward-looking statements. The
Company's actual results could differ materially from the results anticipated in
these forward-looking statements as a result of certain factors set forth under
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," " Market Risk" and elsewhere in this report. Risks and
uncertainties that could cause actual results to differ include, without
limitation, competition, pricing, brand reputation, acquisitions, our shift in
emphasis to Internet sales, security and information systems, consumer trends,
customer interest in our products, general economic conditions, and the effect
of government regulation. We caution you that no forward-looking statement is a
guarantee of future performance, and you should not place undue reliance on
these forward-looking statements which reflect our management's view only as of
the date of this report. We undertake no obligation to update any
forward-looking information.
2
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Gaiam Inc.
Consolidated Balance Sheets
(In thousands, except for share data)
<TABLE>
<CAPTION>
September 30, December 31,
1999 1998
------------- -------------
Assets (Unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 1,553 $ 1,410
Securities available-for-sale 1,082 1,634
Accounts receivable, net 2,334 2,603
Inventory, less allowances 4,985 3,394
Deferred advertising costs 2,686 1,758
Prepaid and other current assets 988 284
------------- -------------
Total current assets 13,628 11,083
Property and equipment, net 1,223 1,080
Capitalized production costs, net 1,151 672
Video library, net 3,363 3,544
Other assets 499 298
------------- -------------
Total assets $19,864 $16,677
============= =============
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $ 6,406 $ 6,901
Accrued liabilities 1,384 2,261
Convertible debentures 1,975 550
Income taxes payable 408 242
Deferred tax liability 447 593
Loans payable, current 36 617
------------- -------------
Total current liabilities 10,656 11,164
Deferred tax liability - 60
Loans payable, long-term portion 2,274 299
Minority interest 1,419 1,493
Stockholders' equity:
Class A common stock, $.0001 par value,
150,000,000 shares authorized, 1,165,000
and 1,496,429 outstanding at December 31, 1998 and
September 30, 1999, respectively
Class B common stock, $.0001 par value,
50,000,000 shares authorized, 7,035,000
outstanding at December 31, 1998 and
September 30, 1999 1 1
Additional paid-in capital 1,828 378
Accumulated other comprehensive income 657 983
Retained earnings 3,029 2,299
------------- -------------
Total stockholders' equity 5,515 3,661
------------- -------------
Total liabilities and stockholders' equity $19,864 $16,677
============= =============
</TABLE>
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Gaiam Inc.
Consolidated Statements of Income
(In thousands, except for share data)
<TABLE>
<CAPTION>
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
1999 1998 1999 1998
----------- ------------ ----------- ------------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Net revenue $ 10,288 $ 5,987 $ 27,851 $ 16,462
Cost of goods sold 4,066 2,449 11,141 6,863
----------- ------------ ----------- ------------
Gross profit 6,222 3,538 16,710 9,599
----------- ------------ ----------- ------------
Expenses:
Selling and operating expenses 4,781 2,928 13,658 8,177
Corporate, general and administrative 1,048 410 2,842 1,046
----------- ------------ ----------- ------------
Total expenses 5,827 3,338 16,500 9,223
----------- ------------ ----------- ------------
Income (loss) from operations 395 200 210 376
----------- ------------ ----------- ------------
Other income (expense):
Realized gain on sale of securities and other 715 448 1,125 423
Interest expense (83) (36) (291) (125)
----------- ------------ ----------- ------------
Total other income (expense), net 632 412 834 298
----------- ------------ ----------- ------------
Income before income taxes and minority interest 1,027 612 1,044 674
Provision for income taxes 382 150 388 173
Minority interest in net income (loss)
of consolidated subsidiary, net of tax 93 67 (74) 67
----------- ------------ ----------- ------------
Net income $ 552 $ 395 $ 730 $ 434
=========== ============ =========== ============
Net income per share:
Basic $ 0.06 $ 0.05 $ 0.09 $ 0.05
Diluted $ 0.06 $ 0.05 $ 0.08 $ 0.05
Shares used in computing net income per share:
Basic 8,531,429 8,041,333 8,371,302 8,040,004
Diluted 8,826,429 8,042,444 8,732,969 8,040,375
</TABLE>
<PAGE>
Gaiam Inc.
Consolidated Statement of Cash Flows
(Unaudited)
(In Thousands)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
1999 1998
--------- ---------
<S> <C> <C>
Operating activities:
Net income $ 730 $ 434
Adjustments to reconcile net income to net
cash provided by (used in) operating activities:
Depreciation 231 170
Amortization 410 0
Interest expense added to principal of margin loan 16 75
Minority interest in consolidated subsidiary (74) 67
Deferred tax expense (205) (280)
Changes in operating assets and
liabilities, net
of effects from acquisitions:
Accounts receivable 385 (536)
Inventory (1,591) (195)
Deferred advertising costs (928) (921)
Capitalized production costs (708) 0
Prepaid assets (841) (13)
Other assets (65) (54)
Accounts payable (495) 1,303
Accrued liabilities (877) (148)
Income taxes payable 166 (139)
--------- ---------
Net cash provided by (used in) operating activities (3,846) (237)
--------- ---------
Investing activities:
Purchase of property, equipment and other assets (375) (85)
Proceeds from sale of property and equipment 0 32
Proceeds from sale of securities available-for-sale 226 284
Payments for acquisitions, net of cash acquired 0 (1,657)
Payments (borrowings) on notes receivable (115) (286)
--------- ---------
Net cash provided by (used in) investing activities (264) (1,712)
--------- ---------
Financing activities:
Principal payments on capital leases (8) (37)
Proceeds from sale of stock 1,450 525
Net proceeds from (payments on) convertible debt 1,152 500
Net proceeds from (payments on) borrowings, net 1,659 606
--------- ---------
Net cash provided by (used in ) financing activities 4,253 1,594
--------- ---------
Net change in cash and cash equivalents 143 (355)
Cash and cash equivalents at beginning of year 1,410 1,612
--------- ---------
Cash and cash equivalents at end of period $ 1,553 $ 1,257
========= =========
Supplemental cash flow information:
Interest paid $ 209 $ 4
Income taxes paid 222 312
</TABLE>
<PAGE>
Gaiam, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
For the Nine Months Ended September 30, 1998 and 1999
Note 1 - Basis of Presentation
The accompanying unaudited condensed financial statements have been
prepared from the records of the Company and, in the opinion of
management, include all adjustments (consisting of only normal
recurring accruals) necessary to present fairly the financial position
as of September 30, 1999 and the interim results of operations and
cash flows for the nine months ended September 30, 1998 and 1999. The
balance sheet as of December 31, 1998 was derived from the Company's
audited consolidated financial statements included in the Company's
registration statement on Form S-1.
Accounting policies followed by the Company are described in Note 1 to
the audited financial statements for the fiscal year ended December
31, 1998 included in the Company's registration statement on Form S-1.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted for purposes of
the condensed financial statements. The condensed consolidated
financial statements should be read in conjunction with the audited
financial statements, including notes thereto, for the year ended
December 31, 1998.
The results from operations for the nine month period herein presented
are not necessarily indicative of the results to be expected for the
full year.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Three months ended September 30, 1999 compared to three months ended September
- ------------------------------------------------------------------------------
30, 1998
- --------
Revenues increased 71.9% to $10.3 million for the three months ended September
30, 1999 from $6.0 million during the three months ended September 30, 1998.
Seventy-five percent of this growth was revenues acquired in the Living Arts and
InnerBalance acquisitions, and 25% was internal growth rate driven by additional
purchases by current customers and growth in our customer base.
Gross profit, which consists of revenues less cost of sales (primarily
merchandise acquisition costs and in-bound freight) increased 75.9% to $6.2
million for the three months ended September 30, 1999 from $3.5 million during
the three months ended September 30, 1998. As
<PAGE>
a percentage of revenues, gross profit increased to 60.5% from 59.1%. This was
primarily attributable to increases in sales of private branded products, on
which we have better margins than other products, and better pricing from
vendors due to increased volume.
Selling and operating expenses, which consist primarily of sales and marketing
costs, commissions, and fulfillment expenses increased 63.3% to $4.8 million in
the three months ended September 30, 1999 from $2.9 million during the same
period in 1998 primarily due to increased revenues. As a percentage of revenues,
selling and operating expenses decreased to 46.5% in 1999 from 48.9% in 1998.
This decrease is primarily attributable to fulfillment efficiencies gained
through operational improvements and volume growth.
Corporate, general and administrative expenses increased to $1.0 million in the
three months ended September 30, 1999 from $409,904 for the same period in 1998.
As a percentage of revenues, general and administrative expenses increased to
10.2% from 6.8%, primarily attributable to expenses associated with the
acquisition of Living Arts and InnerBalance.
Other income, comprised primarily of gains on sales of marketable securities
reduced by interest expense, increased to $631,869 in 1999 from $412,157 in
1998. This change was primarily due to an increase in the number of marketable
securities sold during 1999, and was partially offset by higher interest expense
due to borrowings used to fund acquisitions.
Minority interest in net income increased to $92,738 for the three months ended
September 30, 1999 from $66,862 for the three months ended September 30, 1998.
This amount represents our minority partners' one-third interest in the Living
Arts' income, net of tax, for the periods.
Income tax provision represented 37.2% of our pre-tax net income for the three
months ended September 30, 1999, as compared to an income tax provision of 24.5%
of pre-tax income for the comparable period in 1998. The decrease in the
effective tax rate for 1998 was primarily due to a one-time tax benefit related
to the 1998 settlement of a Living Arts legal judgment incurred prior to Gaiam's
ownership.
Net income, as a result of the factors described above, increased to $552,207 in
the three months ended September 30, 1999 from $395,349 during the three months
ended September 30, 1998.
Nine months ended September 30, 1999 compared to nine months ended September 30,
- --------------------------------------------------------------------------------
1998
- ----
Revenues increased 69.2% to $27.9 million for the nine months ended September
30, 1999 from $16.5 million during the nine months ended September 30, 1998.
This revenue growth was primarily attributable to the acquisitions of Living
Arts and InnerBalance in September and October 1998, respectively. The Company's
internal growth rate (the percentage increase in revenues on a pro forma basis
to include nine months of revenues from these acquisitions) was 17%.
Gross profit, which consists of revenues less cost of sales (primarily
merchandise acquisition costs and in-bound freight) increased 74.1% to $16.7
million for the nine months ended September 30, 1999 from $9.6 million during
the nine months ended September 30, 1998. As a percentage of revenues, gross
profit increased to 60.0% from 58.3%. This was primarily attributable to
increases in sales of private branded products, on which we have better margins
than other products, and better pricing from vendors due to increased volume.
<PAGE>
Selling and operating expenses, which consist primarily of sales and marketing
costs, commissions, and fulfillment expenses increased 67.0% to $13.7 million in
the nine months ended September 30, 1999 from $8.2 million during the same
period in 1998 primarily due to increased revenues. As a percentage of revenues,
selling and operating expenses decreased to 49.0% from 49.7%. This decrease was
primarily attributable to efficiencies gained through operational improvements
and volume growth.
Corporate, general and administrative expenses increased to $2.8 million in the
nine months ended September 30, 1999 from $1.0 million for the same period in
1998. As a percentage of revenues, general and administrative expenses increased
to 10.2% from 6.4%, primarily attributable to expenses associated with the
acquisition of Living Arts and InnerBalance.
Other income, comprised primarily of gains on sales of marketable securities and
interest expense, increased to $833,631 in 1999 from $298,219 in 1998. This
change was primarily due to an increase in the number of marketable securities
sold during 1999, and was partially offset by higher interest expense due to
borrowings used to fund acquisitions.
Minority interest in net income decreased to a $74,084 net loss for the nine
months ended September 30, 1999 from $66,862 in net income for the nine months
ended September 30, 1998. The period of time covered by the minority interest
for 1998 was sixteen days, while the 1999 minority interest covers a nine month
period. This amount represents our minority partners' one-third interest in the
Living Arts' income and/or loss, net of tax, for the periods.
Income tax provision represented 37.2% of our pre-tax net income for the nine
months ended September 30, 1999, as compared to an income tax provision of 25.6%
of pre-tax income for the comparable period in 1998. The decrease in the
effective tax rate for 1998 was primarily due to a one-time tax benefit related
to the 1998 settlement of a Living Arts legal judgment incurred prior to Gaiam's
ownership.
Net income, as a result of the factors described above, increased to $729,837 in
the nine months ended September 30, 1999 from $434,102 during the nine months
ended September 30, 1998.
Liquidity and Capital Resources
- -------------------------------
Gaiam's capital needs arise from working capital required to fund our
operations, capital expenditures related to expansions and improvements to
Gaiam's infrastructure, development of e-commerce and funds required in
connection with the acquisition of new businesses and its anticipated future
growth. These capital requirements depend on numerous factors, including the
rate of market acceptance of Gaiam's product offerings, the ability to expand
Gaiam's customer base, the cost of ongoing upgrades to its product offerings,
the level of expenditures for sales and marketing, the level of investment in
distribution and other factors. The timing and amount of these capital
requirements cannot accurately be predicted. Additionally, Gaiam will continue
to evaluate possible investments in businesses, products and technologies, and
plans to expand its sales and marketing programs and conduct more aggressive
brand promotions.
We raised approximately $1.2 million from private placements during 1998
($575,000 for 160,000 shares and $550,000 in debentures), $150,000 during the
first quarter of 1999
<PAGE>
($75,000 for 17,143 shares and $75,000 in debentures) and $2.7 million during
the second quarter of 1999 ($1.37 million for 314,286 shares and $1.35 million
in debentures). The privately placed shares were sold at $4.375 per share. The
debentures described above bore interest at 8% per annum. In October 1999, we
repaid $500,000 of the convertible debentures plus approximately $42,000 in
accrued interest upon their maturity. The remaining aggregate $1.475 million
principal amount of debentures was converted into 295,000 shares simultaneous
with the closing of the Company's initial public offering. Gaiam's initial
public offering, consummated in October 1999, also generated $7.7 million in
proceeds from the sale of 1,705,000 shares of common stock.
Gaiam is party to revolving line of credit agreements with Norwest Bank, which
extend through December 31, 2001. The credit agreements permit borrowings up to
$3 million based upon the collateral value of Gaiam's accounts receivable and
inventory held for resale. These borrowings are secured by a pledge of Gaiam's
assets. Principal repayment of amounts borrowed under these line of credit
agreements are due either when the collateral value of Gaiam's accounts
receivable and inventory drops below prescribed levels or upon maturity of the
agreements, whichever occurs first. Borrowings under the Norwest credit
agreements bear interest at the prime rate plus 1%. The Norwest credit
agreements contain various financial covenants and also prohibit Gaiam from
paying dividends to its shareholders, except that dividends by Living Arts are
permitted for 1998 taxes on minority interests. As of September 30, 1999, Mr.
Rysavy guarantees the Norwest credit agreements.
Gaiam has, from time to time, borrowed funds from Deutche Banc Alex. Brown under
a margin loan agreement against securities held for sale. Gaiam had no
outstanding indebtedness to Deutche Banc Alex. Brown as of September 30, 1999.
Borrowings under the Deutche Banc Alex. Brown margin loan agreement bears
interest at the call money rate plus 3/4%.
Gaiam's operating activities used net cash of $3.8 million and $237,657 during
the nine months ended September 30, 1999 and 1998, respectively. The use of cash
in 1999 and 1998 was primarily attributable to seasonal increases in inventories
and prepaid costs associated with the increased sales volumes.
Gaiam's investing activities used cash of $264,184 and $1.7 million for the nine
months ended September 30, 1999 and 1998, respectively. The use of cash in 1998
was primarily attributable to the Living Arts acquisition, while cash used by
investing activities during 1999 primarily arose from purchases of property and
equipment.
Gaiam's financing activities provided $4.3 million and $1.6 million for the nine
months ended September 30, 1999 and 1998, respectively. Cash was generated from
the private placement of shares and debentures, and borrowings on the Norwest
credit agreements, net of reductions in other outstanding debt.
We believe our available cash, cash expected to be generated from operations,
cash to be generated through the sale of marketable securities held by Gaiam,
and borrowings available under our bank credit agreements, will be sufficient to
fund our operations on both a short-term and long-term basis. However, our
projected cash needs may change as a result of acquisitions, unforeseen
operational difficulties or other factors.
<PAGE>
In the normal course of our business, we investigate, evaluate, and discuss
acquisition, joint venture, minority investment, strategic relationship and
other business combination opportunities in the Lohas (an acronym for Lifestyles
Of Health And Sustainablity) industry. In the event of any future investment,
acquisition or joint venture opportunities, we may consider using then-available
liquidity, issuing equity securities or incurring additional indebtedness.
Year 2000
- ---------
Reference is made to the information contained in Gaiam's Registration Statement
on Form S-1 No. 333-83283 under the caption "Year 2000," which is incorporated
by reference.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
We do not believe that any of our financial instruments have significant risk
associated with market sensitivity.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Reference is made to the information contained in Gaiam's Registration
Statement on Form S-1 No. 333-83283 under the caption "Our-Business -
Legal Proceedings," which is incorporated by reference.
Item 2. Changes in Securities and Use of Proceeds
(a) Recent Sales of Unregistered Securities
The Company's initial public offering of 1,705,000 shares of
common stock was declared effective on October 28, 1999.
Debentures totaling $1,475,000 were automatically converted into
295,000 shares of unregistered common stock in connection with
the initial public offering, resulting in a total issuance of
2,000,000 shares.
(b) Report of Offering of Securities and Use of Proceeds Therefrom
In October 28, 1999, the Company's initial public offering of
1,705,000 shares of common stock was declared effective. These
shares were registered with the Securities and Exchange
Commission pursuant to a registration statement on Form S-1 (No.
333-83283). The public offering was underwritten by Tucker
Anthony Cleary Gull and Adams, Harkness & Hill, Inc. After
deducting underwriting discounts and commissions of $852,500, we
received $7.7 million in proceeds. The underwriters of the
initial public offering have elected to exercise their option to
purchase an additional 102,861 shares from Gaiam for resale to
the public at the $5.00 offering price per share to cover over-
allotments. The closing is expected to take place on November 30,
1999, and, after deducting underwriting discounts and
commissions, will result in Gaiam receiving $462,875 in
additional proceeds.
As of November 30, 1999, Gaiam had repaid Norwest Bank $950,000
on its line of credit, and had used an additional $2,250,000 for
working capital. These uses are consistent with the use of
proceeds described in the registration statement. None of the net
proceeds of the offering were paid directly or indirectly to any
of our directors or officers, or their associates, or persons
owning 10 percent of more of any class of our equity securities.
<PAGE>
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to Vote of Security Holders
On October 24, 1999, at a special meeting of Gaiam shareholders
conducted prior to Gaiam's initial public offering, Gaiam's
shareholders approved the following matters:
1. Approval of Gaiam's Amended and Restated Articles of Incorporation
to, among other things, approve a 2.5 to 1 reverse stock split of
Gaiam's shares.
Votes for: 71,395,000 Against: 0 Abstaining: 0
2. Approval of Gaiam's 1999 Employee Stock Purchase Plan.
Votes for: 71,395,000 Against: 0 Abstaining: 0
3. Approval of amendments to Gaiam's 1999 Long-Term Incentive Plan.
Votes for: 71,395,000 Against: 0 Abstaining: 0
(All vote totals give effect to Gaiam's 2.5 to one reverse stock split
effected October 26, 1999)
Item 5. Other Information
Not applicable.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
27.1 Financial Data Schedule for the Quarter ended
September 30, 1999
(b) Reports on Form 8-K
None
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities and Exchange Act, the
registrant caused this report to be signed on its behalf, by the undersigned,
thereunto duly authorized.
Gaiam, Inc.
(Registrant)
November 30, 1999
By: /S/ Jirka Rysavy
Jirka Rysavy
Chief Executive Officer
<TABLE> <S> <C>
<PAGE>
<ARTICLE>5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CONSOLIDATED
FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 9-MOS 9-MOS
<FISCAL-YEAR-END> DEC-31-1999 DEC-31-1998
<PERIOD-START> JAN-01-1999 JAN-01-1998
<PERIOD-END> SEP-30-1999 SEP-30-1998
<CASH> 1,553 0
<SECURITIES> 1,082 0
<RECEIVABLES> 2,409 0
<ALLOWANCES> 75 0
<INVENTORY> 4,985 0
<CURRENT-ASSETS> 13,628 0
<PP&E> 2,453 0
<DEPRECIATION> 1,230 0
<TOTAL-ASSETS> 19,864 0
<CURRENT-LIABILITIES> 10,656 0
<BONDS> 0 0
0 0
0 0
<COMMON> 1 0
<OTHER-SE> 5,514 0
<TOTAL-LIABILITY-AND-EQUITY> 19,864 0
<SALES> 27,851 16,462
<TOTAL-REVENUES> 27,851 16,462
<CGS> 11,141 6,863
<TOTAL-COSTS> 16,500 9,223
<OTHER-EXPENSES> (1,125) (423)
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 291 125
<INCOME-PRETAX> 1,044 674
<INCOME-TAX> 388 173
<INCOME-CONTINUING> 0 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> (74) 67
<CHANGES> 0 0
<NET-INCOME> 730 434
<EPS-BASIC> .09 .05
<EPS-DILUTED> .08 .05
</TABLE>
