<PAGE> 1
FORM 10--Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
-------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
------------------- ---------------------
Commission file number 0-8527
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DIALYSIS CORPORATION OF AMERICA
-----------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Florida 59-1757642
- --------------------------------------------- -----------------------
(State or other jurisdiction of incorporation (I.R.S. Employer
or organization) Identification No.)
2337 West 76th Street, Hialeah, Florida 33016
- --------------------------------------- ------------
(Address of principal executive offices) (Zip Code)
(305) 364-1308
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(Registrant's telephone number, including area code)
NOT APPLICABLE
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(Former name, former address and former fiscal year, if changed
since last report)
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 or No
--- ---
Common Stock Outstanding
Common Stock, $.01 par value --3,582,844 shares as of July 31, 1996.
<PAGE> 2
DIALYSIS CORPORATION OF AMERICA AND SUBSIDIARIES
INDEX
PART I -- FINANCIAL INFORMATION
The Consolidated Condensed Statements of Operations (Unaudited) for
the three months and six months ended June 30, 1996 and June 30, 1995 include
the accounts of the Registrant and its subsidiaries.
Item 1. Financial Statements
1) Consolidated Condensed Statements of Operations for the three
months and six months ended June 30, 1996 and June 30, 1995.
2) Consolidated Condensed Balance Sheets as of June 30, 1996 and
December 31, 1995.
3) Consolidated Condensed Statements of Cash Flows for the six months
ended June 30, 1996 and June 30, 1995.
4) Notes to Consolidated Condensed Financial Statements as of June
30, 1996.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
PART II -- OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
<PAGE> 3
PART I -- FINANCIAL INFORMATION
Item 1. Financial Statements
DIALYSIS CORPORATION OF AMERICA AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
1996 1995 1996 1995
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Revenues:
Medical service revenue $ 977,946 $ 455,910 $1,871,025 $ 897,199
Interest and other income 68,673 101,629 106,495 223,867
---------- ---------- ---------- ----------
1,046,619 557,539 1,977,520 1,121,066
Cost and expenses:
Cost of medical services 604,586 332,518 1,233,500 588,060
Selling, general and administrative expenses 376,553 246,515 749,641 477,900
Interest expense 23,162 15,657 41,855 31,318
---------- ---------- ---------- ----------
1,004,301 594,690 2,024,996 1,097,278
---------- ---------- ---------- ----------
(Loss) income before income taxes
and minority interest 42,318 (37,151) (47,476) 23,788
Income tax provision 10,000 10,000
---------- ---------- ---------- ----------
(Loss) income before minority interest 32,318 (37,151) (57,476) 23,788
Minority interest in loss (income) of
consolidated subsidiary (2,734) 8,716 2,411 13,236
---------- ---------- ---------- ----------
Net (loss) income $ 29,584 $ (28,435) $ (55,065) $ 37,024
========== ========== ========== ==========
Net (loss) income per common share $ .01 $ (.01) $ (.02) $ .02
========== ========== ========== ==========
Weighted average shares 3,334,493 2,432,844 2,883,668 2,432,844
========== ========== ========== ==========
</TABLE>
See notes to consolidated condensed financial statements.
<PAGE> 4
DIALYSIS CORPORATION OF AMERICA AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995(A)
---------- ------------
(Unaudited)
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $4,632,527 $1,061,351
Restricted cash 134,893 131,889
Accounts receivable, less allowances of $97,000 at June 526,197 503,584
30, 1996 and $128,000 at December 31, 1995
Inventories 111,544 88,323
Prepaid expenses and other current assets 78,086 21,021
---------- ----------
Total current assets 5,483,247 1,806,168
Property and Equipment:
Land 168,358 168,358
Buildings and improvements 1,159,640 1,158,591
Machinery and equipment 1,066,146 1,041,264
Leasehold improvements 265,556 264,301
---------- ----------
2,659,700 2,632,514
Less accumulated depreciation 733,578 637,971
---------- ----------
1,926,122 1,994,543
Deferred expenses and other assets 38,037 171,156
---------- ----------
$7,447,406 $3,971,867
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 160,711 $ 326,165
Accrued expenses 170,768 219,952
Current portion of long-term debt 575,000 609,000
Income taxes payable 10,000
---------- ----------
Total current liabilities 916,479 1,155,117
Long-term debt, less current portion 133,891 151,942
Advances from parent company 344,546
Minority interest in subsidiary 93,556 95,967
Commitments and Contingencies
Stockholder's Equity
Common stock, $.01 par value, authorized 20,000,000
shares; issued and outstanding 3,582,844 shares at
June 30, 1996 and 2,432,844 shares at December 31,
1995 35,828 24,328
Capital in excess of par value 3,739,655 305,997
Retained earnings 2,183,451 2,238,516
---------- ----------
Total stockholders' equity 5,958,934 2,568,841
---------- ----------
$7,447,406 $3,971,867
========== ==========
</TABLE>
(A) Reference is made to the Company's Registration Statement on Form SB-2
declared effective by the Securities and Exchange Commission in April 1996
which includes audited financial statements for the year ended December 31,
1995.
See notes to consolidated condensed financial statements.
<PAGE> 5
DIALYSIS CORPORATION OF AMERICA AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
-----------------------------
1996 1995
---------- ---------
<S> <C> <C>
Operating activities:
Net (loss) income $ (55,065) $ 37,024
Adjustments to reconcile net (loss) income to net
cash used in by operating activities:
Depreciation 95,607 43,957
Amortization 4,595 4,595
Bad debt expense 66,768 28,024
Minority interest (2,411) (13,236)
Increase (decrease) relating to operating activities from:
Accounts receivable (89,381) (155,140)
Inventories (23,221) (10,733)
Prepaid expenses and other current assets (57,065) (10,420)
Accounts payable (165,454) 75,517
Accrued expenses (49,184) (26,692)
Income taxes payable 10,000
---------- ---------
Net cash used in operating activities (264,811) (27,104)
Investing activities:
Additions to property and equipment, net of minor
disposals (27,186) (174,067)
Proceeds from restricted cash 198,421 189,929
Restricted cash (201,425) (192,408)
Deferred expenses and other assets 128,524 (110,607)
Purchase portion of minority interest in subsidiary (15,000)
---------- ---------
Net cash provided by (used in) investing activities 98,334 (302,153)
Financing activities:
Net proceeds from securities offering 3,445,158
Advances from parent company 344,546 116,956
Payments on long-term debt (52,051) (36,000)
---------- ---------
Net cash provided by financing activities 3,737,653 80,956
---------- ---------
Increase (decrease) in cash and cash equivalents 3,571,176 (248,301)
Cash and cash equivalents at beginning of period 1,061,351 686,707
---------- ---------
Cash and cash equivalents at end of period $4,632,527 $ 438,406
========== =========
</TABLE>
See notes to consolidated condensed financial statements.
<PAGE> 6
DIALYSIS CORPORATION OF AMERICA AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1996
(UNAUDITED)
NOTE 1--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CONSOLIDATION
The consolidated financial statements include the accounts of Dialysis
Corporation of America ("DCA") and its subsidiaries, collectively referred to
as the "Company". All material intercompany accounts and transactions have
been eliminated in consolidation. The Company is a 67.2% owned subsidiary of
Medicore, Inc. (the "Parent"), having been 99.1% owned by the Parent until the
completion of the Company's public offering. See Notes 5 and 7.
GOVERNMENT REGULATION
Most of the Company's revenues are attributable to payments received under
Medicare, which is supplemented by Medicaid or comparable benefits in the
states in which the Company operates. Reimbursement rates under these programs
are subject to regulatory changes and governmental funding restrictions.
Although the Company is not aware of any future rate changes, significant
changes in reimbursement rates could have a material effect on the Company's
operations.
<PAGE> 7
DIALYSIS CORPORATION OF AMERICA AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)
JUNE 30, 1996
(UNAUDITED)
NOTE 1--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--CONTINUED
INTEREST AND OTHER INCOME
Interest and other income is comprised as follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------- ---------------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Rental income $24,461 $ 32,691 $ 49,007 $ 81,644
Interest income from Medicore 60,314 123,551
Other interest income 43,335 5,458 54,174 13,128
Other 877 3,166 3,314 5,544
------- -------- -------- --------
$68,673 $101,629 $106,495 $223,867
======= ======== ======== ========
</TABLE>
RECLASSIFICATIONS
Certain reclassifications have been made to the 1995 financial statements to
conform to the 1996 presentation.
LONG-LIVED ASSETS
In 1996, the Company has adopted the provision of FAS 121-Accounting for the
Impairment of Long-Lived Assets. FAS 121 requires impairment losses to be
recorded on long-lived assets when indicators of impairment are present and the
undiscounted cash flows estimated to be generated by those assets are less than
the assets' carrying amount. Based on current circumstances, the Company is
not aware of any significant impairment losses.
STOCK-BASED COMPENSATION
In 1996, the Company adopted the provisions of FAS 123-Accounting for
Stock-Based Compensation. The Company will continue to account for stock-based
compensation plans under the provisions of APB25-Accounting for Stock Issued to
Employees. The Company will disclose the pro forma information required for
stock-based compensation plans in its annual reports in accordance with FAS
123.
<PAGE> 8
DIALYSIS CORPORATION OF AMERICA AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)
JUNE 30, 1996
(UNAUDITED)
NOTE 2--INTERIM ADJUSTMENTS
The financial summaries for the three months and six months ended June 30, 1996
and June 30, 1995 are unaudited and include, in the opinion of management of
the Company, all adjustments (consisting of normal recurring accruals)
necessary to present fairly the earnings for such periods. Operating results
for the three months and six months ended June 30, 1996 are not necessarily
indicative of the results that may be expected for the entire year ending
December 31, 1996.
While the Company believes that the disclosures presented are adequate to make
the information not misleading, it is suggested that these Consolidated
Condensed Financial Statements be read in conjunction with the financial
statements and notes included in the Company's audited financial statements for
the year ended December 31, 1995.
NOTE 3--LONG TERM DEBT
In December 1988, the Company obtained a $480,000 fifteen-year mortgage through
November 2003 on its building in Lemoyne, Pennsylvania with interest at 1% over
the prime rate. The remaining principal balance under this mortgage amounted
to approximately $240,000 and $256,000 at June 30, 1996 and December 31, 1995,
respectively. In December 1988, the Company also obtained a $600,000
fifteen-year mortgage through November 2003 on its building in Easton, Maryland
with interest at 1% over the prime rate. The remaining principal balance under
this mortgage amounted to approximately $300,000 and $320,000 at June 30, 1996
and December 31, 1995, respectively. The bank has the right to demand
repayment on the outstanding balance of the borrowings under these mortgages
which have accordingly been classified as current liabilities. At December 31,
1995, the Company was in violation of certain covenants under these loans
principally relating to net worth and debt service ratio requirements. The
lender waived compliance with these covenants through December 31, 1996.
The Company has an equipment purchase agreement for kidney dialysis machines
for its new facilities in Pennsylvania. Monthly payments are $4,435
commencing September 1995, including principal and interest, through June 2000
with interest at 12%. The initial principal balance of $195,130, after a down
payment of $8,870, represents a noncash financing activity which is a
supplemental disclosure required by SFAS 95. The remaining principal balance
under this agreement amounted to approximately $169,000 and $185,000 at June
30, 1996 and December 31, 1995, respectively.
The prime rate was 8.25% as of June 30, 1996 and 8.5% as of December 31, 1995.
The carrying amount of borrowings approximate their fair value.
Interest payments on long-term above debt amounted to approximately $18,000
and $37,000 for the three months and six months ended June 30, 1996 and $16,000
and $32,000 for the same periods of the preceding year..
NOTE 4--INCOME TAXES
The Company was included in the consolidated federal and state income tax
returns of the Parent until the completion of its public offering in April
1996. The Company had a net operating loss carryforward of approximately
$567,000 at December 31, 1995, which was available to offset consolidated
taxable income. Subsequent to the completion of the Company's public offering,
the Company will file separate federal and state income tax returns with the
income tax liability reflected on a separate return basis with its available
net operating loss carryforwards having been utilized prior to completion of
its public offering.
<PAGE> 9
DIALYSIS CORPORATION OF AMERICA AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)
JUNE 30, 1996
(UNAUDITED)
NOTE 4--INCOME TAXES--CONTINUED
Deferred income taxes reflect the net tax effect of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. The Company had
deferred tax liabilities of approximately $50,000 at June 30, 1996, consisting
primarily of tax over book depreciation and amortization, and deferred tax
assets of approximately $50,000, consisting primarily of differences in book
and tax basis of receivables.
NOTE 5--TRANSACTIONS WITH PARENT
The Parent provides certain administrative services to the Company including
office space and general accounting assistance. These expenses and all other
central operating costs are charged on the basis of direct usage, when
identifiable, or on the basis of time spent. In the opinion of management,
this method of allocation is reasonable. The amount of expenses allocated by
the Parent totaled approximately $60,000 and $120,000 for the three months and
six months ended June 30, 1996, and for the same periods of the preceding year.
On October 4, 1995, the Parent repaid approximately $1,000,000 of the advances
due to the Company.
On November 10, 1995, the Company's Board of Directors authorized the
declaration of a $1.30 per share dividend (after giving effect to a 50% stock
dividend also authorized by the Board) for which the Parent's portion related
to its 99.1% ownership interest in the Company amounted to approximately
$3,134,000 which was paid via a reduction in the intercompany receivable from
the Parent. As a result of this dividend and repayments by the Parent, the
intercompany receivable from the Parent, on which the Company had been earning
interest income, was repaid. The intercompany receivable from the Parent bore
interest at the short-term Treasury bill rate commencing January 1, 1994.
Interest on these advances amounted to $60,000 and $124,000 for the three
months and six months ended June 30, 1995 and was included in the intercompany
receivable from Medicore.
As of June 30, 1996, the Company had an intercompany advance payable to the
Parent of approximately $345,000 which bears interest at the short-term
Treasury Bill rate. Interest for the six months ended June 30, 1996 on this
intercompany advance amounted to approximately $5,000 which is included in the
intercompany advance payable. The Parent has agreed not to require repayment
of the intercompany advances prior to July 1, 1997 and therefore, the advances
have been classified as long-term at June 30, 1996.
NOTE 6--STOCK OPTIONS
In November, 1995, the Company adopted a stock option plan for up to 250,000
options, with 203,000 options currently outstanding. Pursuant to this plan,
in November, 1995, the board of directors granted 210,000 options to certain
of its officers, directors, employees and consultants. These options are
exercisable for a period of five years through November 9, 2000 at $1.50 per
share.
<PAGE> 10
DIALYSIS CORPORATION OF AMERICA AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)
JUNE 30, 1996
(UNAUDITED)
NOTE 7--COMMON STOCK
In April 1996, the Company completed a public offering providing it with net
proceeds including the exercise of the underwriters' overallotment option of
approximately $3,445,000. See Item 2, "Management's Discussion and Analysis of
Financial Condition and Results of Operations".
Upon completion of its public offering, the Company retained the
underwriter to provide financial consulting services pertaining to the
Company's business, at a monthly fee of $3,000 per month for a period of 18
months, which was paid in full at the closing of the offering.
<PAGE> 11
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
RESULTS OF OPERATIONS
Medical service revenue increased approximately $522,000 (115%) and
$974,000 (109%) for the three months and six months ended June 30, 1996
compared to the same periods of the preceding year. The increase included the
commencement of treatments at the Company's new dialysis centers in Lemoyne,
Pennsylvania in June 1995 and Wellsboro, Pennsylvania in October 1995, which
accounted for approximately $437,000 and $813,000 in revenues for the three
months and six months ended June 30, 1996 with the new Lemoyne center having
revenues of $39,000 for June 1995. Revenues attributable to the Company's
Florida dialysis center increased $123,000 and $199,000 for the three months
and six months ended June 30, 1996 compared to the same periods of the
preceding year. Although the new Lemoyne and Wellsboro, Pennsylvania centers
are expected to result in increased revenues, during their developmental stage,
these centers will adversely affect the Company's results of operations.
As a result of the dividend to the Parent and advance repayment by
the Parent (see "Liquidity and Capital Resources below), the intercompany
receivable from Medicore on which the Company had been earning interest income
was repaid. Interest income from the Parent, which is included in interest and
other income amounted to approximately $60,000 and $124,000 for the three
months and six months ended June 30, 1995.
Cost of medical services sales amounted to 62% and 66% for the three
months and six months ended June 30, 1996, compared to 73% and 66% for the same
periods of the preceding year. Increased efficiencies related to the increased
revenues during the second quarter of 1996 were largely responsible for the
reduction in cost of medical services during this period.
Selling, general and administrative expenses increased approximately
$130,000 (53%) and $272,000 (57%) for the three months and six months ended
June 30, 1996 compared to the same periods of the preceding year reflecting
increases associated with the new Pennsylvania dialysis centers. Selling,
general and administrative expenses for the three months and six months ended
June 30, 1996 as a percentage of medical service revenues decreased compared to
the same periods of the preceding year.
Interest expense increased approximately $8,000 and $11,000 for the
three months and six months ended June 30, 1996 compared to the same periods of
the preceding year largely as a result of the equipment purchase agreements
for dialysis machines at the new Pennsylvania centers. Interest expense for
1996 also includes interest of approximately $5,000 on the intercompany
advance payable to the Parent with interest at the short-term Treasury Bill
rate. The prime rate was 8.25% at June 30, 1996 and 8.5% at December 31, 1995.
LIQUIDITY AND CAPITAL RESOURCES
Working capital totaled $4,567,000 at June 30, 1996, which reflected
an increase of approximately $3,916,000 during the six months ended June 30,
1996 largely as a result of the Company's security offering completed during
the second quarter of 1996. Included in the changes in components of working
capital was an increase in cash and cash equivalents of $3,571,000 which
included net cash used in operating activities of $265,000, net cash provided
by investing activities of $98,000 and net cash provided by financing
activities of $3,738,000 (including proceeds from the Company's security
offering of $3,445,000, advances from the Parent of $345,000 and debt
repayments of $52,000).
During 1988, the Company obtained mortgages totaling $1,080,000 on its
two buildings, one in Lemoyne, Pennsylvania and the other in Easton, Maryland,
each of which housed the Company's dialysis centers. These centers were sold
in October, 1989. The mortgages had a combined remaining balance of $540,000
and $576,000 at June 30, 1996 and December 31, 1995, respectively. The
Company was in default of certain covenants principally relating to net worth
and debt service ratio requirements under these loan agreements as of December
31, 1995. The lender has waived compliance with these covenants through
December 31, 1996.
The bank has liens on the real and personal property of the Company,
including a lien on all rents due and security deposits from the rental of
these properties. The loans contain a provision allowing the bank mandatory
repayment upon 90 days written notice after five years. The five year period
has elapsed; accordingly, while no notice has been given, the unpaid principal
balance is carried as a current liability. The unaffiliated Maryland dialysis
center continues to lease space from the Company in its building. The
Pennsylvania center relocated during 1995 and the Company constructed its own
new dialysis center at that property which commenced treatments in June 1995.
The Company also opened a new dialysis center in a leased facility in
Wellsboro, Pennsylvania in October 1995.
<PAGE> 12
In November, 1995, the board of directors authorized a 50% stock
dividend which increased the outstanding Common Stock to 2,432,844 shares. The
board also authorized the declaration of a $1.30 per share dividend for which
the Parent's portion related to its 99.1% ownership interest in the Company
amounted to approximately $3,134,000, which was paid by a reduction in the
intercompany advances receivable from the Parent, and the minority interest
portion of approximately $29,000 was paid in cash.
In October, 1995, the Parent repaid approximately $1,000,000 of the
indebtedness due to the Company.
The Company believes that current levels of working capital, including
the proceeds of its security offering, will enable it to successfully meet its
liquidity demands for at least the new twelve months.
Net proceeds of the Company's security offering were approximately
$3,445,000 including the over-allotment options exercise. The Company, having
operated on a larger scale in the past, is seeking to expand its outpatient
dialysis treatment facilities and inpatient dialysis care. Such expansion,
whether through acquisition of existing centers, or the development of its own
dialysis centers, requires capital, which was the basis for the Company's
security offering. No assurance can be given that the Company will be
successful in implementing its growth strategy or that the funds from its
securities offering will be adequate.
IMPACT OF INFLATION
Inflationary factors have not had a significant effect on the
Company's operations, although the Company can experience increased costs of
supplies, salaries and general and administrative expenses.
A substantial portion of the Company's revenue is subject to
reimbursement rates established and regulated by the federal government. These
rates do not automatically adjust for inflation. Any rate adjustments relate
to legislation and executive and Congressional budget demands, and have little
to do with the actual cost of doing business. Therefore, dialysis services
revenues cannot be voluntary increased to keep pace with increases in nursing
and other patient care costs.
<PAGE> 13
PART II -- OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
(11) Statement re: computation of per share (loss) earnings
(27) Financial Data Schedule (for SEC use only)
(b) Reports on Form 8-K
There were no reports on Form 8-K filed for the quarter ended
June 30, 1996.
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.
Dialysis Corporation of America
By /s/ Daniel R. Ouzts
----------------------------
DANIEL R. OUZTS, Controller and
Principal Accounting Officer
Dated: August 9, 1996
<PAGE> 14
EXHIBIT INDEX
Exhibit
No.
- -------
(11) Statement re: computation of per share (loss) earnings
(27) Financial Data Schedule (for SEC use only)
<PAGE> 1
DIALYSIS CORPORATION OF AMERICA AND SUBSIDIARIES
EXHIBIT 11 -- COMPUTATION OF (LOSS) EARNINGS PER SHARE
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Primary and Fully Diluted
Weighted average shares outstanding 3,334,493 2,432,844 2,883,668 2,432,844
========== ========== ========== ==========
Net (loss) income $ 29,584 $ (28,435) $ (55,065) $ 37,024
========== ========== ========== ==========
Net (loss) income per share $ .01 $ (.01) $ (.02) $ .02
========== ========== ========== ==========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 4,632,527
<SECURITIES> 0
<RECEIVABLES> 526,197<F1>
<ALLOWANCES> 0
<INVENTORY> 111,544
<CURRENT-ASSETS> 5,483,247
<PP&E> 2,659,700
<DEPRECIATION> 733,578
<TOTAL-ASSETS> 7,447,406
<CURRENT-LIABILITIES> 916,479
<BONDS> 133,891
0
0
<COMMON> 35,828
<OTHER-SE> 5,923,106
<TOTAL-LIABILITY-AND-EQUITY> 7,447,406
<SALES> 1,871,025
<TOTAL-REVENUES> 1,977,520
<CGS> 1,233,500
<TOTAL-COSTS> 1,233,500
<OTHER-EXPENSES> 749,641
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 41,855
<INCOME-PRETAX> (47,476)
<INCOME-TAX> 10,000
<INCOME-CONTINUING> (55,065)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (55,065)
<EPS-PRIMARY> (.02)
<EPS-DILUTED> 0
<FN>
<F1>ACCOUNTS RECEIVABLES ARE NET OF ALLOWANCE OF $97,000 AT JUNE 30, 1996.
</FN>
</TABLE>
