Form 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended July 30, 1995 Commission File Number 0-5449
COMARCO, Inc.
-----------------------------------------------------
(Exact name of registrant as specified in its charter)
CALIFORNIA 95-2088894
------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
22800 Savi Ranch Parkway, Suite 214, Yorba Linda, California 92808-1299
------------------------------------------------------------ ----------
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code (714) 282-3832
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
----- -----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of August 31, 1995.
Common Stock,
$.10 Par Value 4,617,209 Shares
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<PAGE>
INDEX TO 10-Q
Page No.
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Part I. Financial Information
Condensed Consolidated Balance Sheets
July 30, 1995 and January 31, 1995 1
Condensed Consolidated Statements of Income
Quarters ended and Two Quarters Ended July 30, 1995
and July 31, 1994 2
Condensed Consolidated Statements of Cash Flows
Two Quarters ended July 30, 1995 and July 31, 1994 3
Notes to Condensed Consolidated Financial Statements 4
Management's Discussion and Analysis of Financial
Condition and Results of Operations 5-9
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 10
Signature 11
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
<TABLE>
COMARCO, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
July 30, 1995 January 31, 1995
ASSETS (Unaudited) *
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 7,183,000 $ 7,968,000
Short-term investments 2,523,000 1,939,000
Accounts receivable, net 8,881,000 8,703,000
Other current assets 1,388,000 1,238,000
---------- ----------
Total current assets 19,975,000 19,848,000
Long-term investments 989,000 1,023,000
Property and equipment, net 1,157,000 970,000
Software development costs, net 1,322,000 676,000
Intangible assets, net 2,804,000 3,011,000
Other assets 265,000 282,000
---------- ----------
TOTAL ASSETS $ 26,512,000 $ 25,810,000
========== ==========
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities:
Accounts payable $ 506,000 $ 616,000
Deferred revenue 1,147,000 1,044,000
Accrued liabilities 5,428,000 5,794,000
---------- ----------
Total current liabilities 7,081,000 7,454,000
Convertible subordinated debentures - 844,000
Deferred income taxes 489,000 309,000
Stockholders' equity:
Common stock, $.10 par value,
33,705,000 shares authorized,
4,617,209 and 4,602,009 shares
outstanding at July 30, 1995 and
January 31, 1995, respectively 462,000 460,000
Capital contributed in excess
of par value 3,305,000 3,244,000
Retained earnings 15,175,000 13,499,000
---------- ----------
Total stockholders' equity 18,942,000 17,203,000
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 26,512,000 $ 25,810,000
========== ==========
See accompanying notes to the condensed consolidated financial statements.
*The condensed consolidated balance sheet as of January 31, 1995 has been
summarized from the Company's audited consolidated balance sheet as of that
date.
</TABLE>
<PAGE>
<TABLE>
COMARCO, Inc. and Subsidiaries
Condensed Consolidated Statements of Income
(Unaudited)
Quarter Ended Two Quarters Ended
------------------------------- -------------------------------
July 30, 1995 July 31, 1994 July 30, 1995 July 31, 1994
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenues:
Contract revenues $ 14,347,000 $ 14,896,000 $ 28,189,000 $ 29,301,000
Product sales 2,898,000 1,118,000 6,385,000 2,381,000
---------- ---------- ---------- ----------
17,245,000 16,014,000 34,574,000 31,682,000
---------- ---------- ---------- ----------
Direct costs:
Contract costs 9,602,000 10,020,000 18,868,000 19,262,000
Cost of product sales 1,130,000 743,000 2,848,000 1,527,000
---------- ---------- ---------- ----------
10,732,000 10,763,000 21,716,000 20,789,000
Indirect costs 5,303,000 4,208,000 10,342,000 8,834,000
---------- ---------- ---------- ----------
16,035,000 14,971,000 32,058,000 29,623,000
---------- ---------- ---------- ----------
Operating income 1,210,000 1,043,000 2,516,000 2,059,000
Net interest income (expense) 141,000 16,000 232,000 (38,000)
---------- ---------- ---------- -----------
Income before income taxes 1,351,000 1,059,000 2,748,000 2,021,000
Income taxes 513,000 360,000 1,072,000 687,000
---------- ---------- ---------- ----------
Net income $ 838,000 $ 699,000 $ 1,676,000 $ 1,334,000
========== ========== ========== ==========
Earnings per share*
Primary $ .17 $ .14 $ .33 $ .27
========== ========== ========== ==========
Weighted average shares of
common stock*
Primary 4,961,000 4,940,000 4,949,000 4,977,000
*Fully diluted earnings per share has not been presented as the effect is
immaterial.
See accompanying notes to the condensed consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
COMARCO, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)
Two Quarters Ended
----------------------------------------
July 30, 1995 July 31, 1994
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<S> <C> <C>
Cash flows from operating activities:
Net income $ 1,676,000 $ 1,334,000
Adjustments to reconcile net income to net
cash used by operating activities:
Depreciation and amortization 1,017,000 306,000
Loss in disposal of property and equipment 9,000 -
Deferred income taxes 153,000 280,000
Provision for doubtful accounts receivable 15,000 6,000
Decrease (increase) in accounts receivable (193,000) 1,395,000
Increase in other current assets (123,000) (391,000)
Decrease in other assets 17,000 64,000
Decrease in accounts payable (110,000) (454,000)
Increase in deferred revenue 103,000 -
Decrease in other current liabilities (366,000) (450,000)
------------- -------------
Net cash provided by operating activities 2,198,000 2,090,000
Cash flows from investing activities:
Purchases of investments (1,482,000) -
Proceeds from sales of investments 932,000 -
Purchases of property and equipment (413,000) (310,000)
Software development costs (1,239,000) (826,000)
------------- -------------
Net cash used in investing activities (2,202,000) (1,136,000)
Cash flows from financing activities:
Proceeds from issuance of common stock 63,000 57,000
Purchase of common stock - (1,392,000)
Purchase of subordinated debentures (844,000) (1,967,000)
------------- -------------
Net cash used in financing activities (781,000) (3,302,000)
------------- -------------
Net decrease in cash and cash equivalents $ (785,000) $ (2,348,000)
============= =============
Supplemental disclosures of cash flow information:
Cash paid during the two quarters for:
Interest $ 41,000 $ 146,000
Income taxes 1,090,000 671,000
See accompanying notes to the condensed consolidated financial statements.
</TABLE>
<PAGE>
COMARCO, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
July 30, 1995 and July 31, 1994
(Unaudited)
1. General
The financial statements have been prepared without audit. However, they
reflect all adjustments which in the opinion of management are necessary
to fairly state the Company's financial position at July 30, 1995 and
July 31, 1994 and the results of its operations and cash flows for the
quarter ended and two quarters ended July 30, 1995 and July 31, 1994. The
information has been prepared in accordance with Form 10-Q instructions,
but does not necessarily include all information and footnotes required
by generally accepted accounting principles for complete financial
statements. The results of the quarter ended and two quarters ended July
30, 1995 are not necessarily indicative of the results to be obtained for
the full fiscal year.
2. China Lake Competition
On May 26, 1995, the Company was notified that it was not selected in the
contract competition with the Naval Air Warfare Center ("NAWC") at China
Lake, California. The current contract in this location accounted for
approximately 15% of total revenue for the first two quarters of the
Company's Fiscal Year 1996 and 16% of the operating income for the same
period. Most costs associated with this effort are directly attributable
to the contract itself, so there will be few direct residual costs not
reimbursed by the customer. The Company's goal is to attempt to maintain
its historical profit margin in this line of business.
The Company's current work at China Lake substantially ends on September
30, 1995.
3. Reclassifications
Certain reclassifications of prior year amounts have been made to conform
with the current year presentation.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
(a) Results of Operations
During the second quarter of Fiscal Year 1996 (year ending January
31, 1996), the Company recorded total revenues of $17.2 million,
up 7.5% from the revenues of $16.0 million for the comparable
period of a year earlier. Increased year-to-year revenues are
primarily due to:
o increased sales of the Company's wireless communications
products,
o revenue contributed by LCTI, Inc., which was acquired by the
Company in the third quarter of Fiscal Year 1995,
partially offset by:
o continued reduction in activity in support of the Naval Air
Warfare Center at China Lake, California, and
o reduction in activity in support of the Army's Software
Development Center at Ft. Lee Virginia.
On May 26, 1995, the Company was notified that it was not selected
in the contract competition with the Naval Air Warfare Center
("NAWC") at China Lake, California. However, the Navy did exercise
an option to extend the Company's current work through September
30, 1995 at which time work will substantially end.
The current contract in this location accounted for approximately
15% of the Company's total revenues and 16% of its operating
income for the first two quarters of Fiscal Year 1996 . Most costs
associated with this effort are directly attributable to the
contract itself, so there will be few direct residual costs not
reimbursed by the customer. The loss of this contract will have an
adverse effect on operations - a loss of approximately 15% of the
Company's revenues and approximately the same percentage of loss
in operating profits.
The Company's contract at the Naval Air Warfare Center in China
Lake, California has experienced a decrease in activity of
approximately 15% from the comparable quarter last year. In
addition, the Company's contract in support of the Army's Software
Development Center at Ft. Lee, Virginia has experienced a decrease
in activity of approximately 50% from the comparable quarter last
year. These decreases in revenue are due to reductions in
Government funding available for these projects. The Company
expects that defense related activity in the remainder of Fiscal
Year 1996 will continue to show reductions from prior year periods
due to the above-stated contract declines and general Government
budgetary pressures. Except as noted above, the Company's other
defense-related activity has been steady during the first half of
Fiscal Year 1996.
The Company plans to aggressively compete for all work opened for
recompetition to the extent possible, selectively pursue certain
high value defense procurements, and build its non-defense work in
the areas of airport management, wireless communications products,
and non-defense systems engineering and integration. If the
Company is unable to increase defense related activity by pursuit
of suitable Government awards or replace it with commercial work,
the Company will need to consider appropriate additional
organizational changes and cost reduction efforts.
In addition, government agencies may generally terminate their
contracts in whole or in part at their convenience. Government
agencies may remove funding previously attached or may not
exercise option periods. Therefore, there can be no assurances
that the Government will fund those portions of existing contracts
that are unfunded, or that the Government will exercise any
options.
Airport management services revenues decreased from $4.8 million
in the second quarter of Fiscal Year 1995 to $4.5 million in the
second quarter of Fiscal Year 1996, a decrease of 6.3%. This
decrease is principally due to decreased activity at the Company's
contract to manage five general aviation airports in Los Angeles
County, California. Revenue in the prior year was higher than
historical levels due to forest fires in Los Angeles County which
caused a strong increase in jet fuel sales to fire fighting
authorities. In spite of the decrease in revenues, operating
income from airport management services was unchanged from year to
year.
Wireless communications products revenues increased 145% to $2.7
million for the second quarter of Fiscal Year 1996 from $1.1
million for the comparable period of the prior fiscal year. This
increase is due to increased sales of the Company's network
evaluation systems and revenue assurance systems for major
cellular telephone carriers. Revenues from sales of callboxes were
minimal during the first half of Fiscal Year 1996, as states other
than California are only at the field testing stage of these
units. If these other states move forward and select the Company's
units, the Company believes that production of units may return in
Fiscal Year 1997, although there can be no assurance that
production will resume.
The Company is continuing its software product development program
in its wireless communications products business. The Company
views the next few years as a window of opportunity to expand its
product line to take advantage of the worldwide growth in this
market. In accordance with Financial Accounting Standard No. 86,
Accounting for the Costs of Computer Software to be Sold, Leased,
or Otherwise Marketed, the Company capitalized and amortized $1.4
million and $.9 million, respectively, of software product
development costs related to this program in Fiscal Year 1995.
Corresponding amounts for the first half of Fiscal Year 1996 are
$700,000 and $500,000, respectively. The Company's orders for
these products totalled $9.6 million and $7.3 million for Fiscal
Year 1995 and the first half of Fiscal Year 1996, respectively, up
from $5.8 million and $3.5 million, respectively, from the
comparable prior periods. The value of unfilled orders at July 30,
1995 totaled $3.2 million. The Company has experienced in each of
the past two years a fluctuation in wireless communications
product activity, with greater sales in the second half of its
fiscal year and lesser amounts in the first half. Profit margins
from the Company's wireless communications products business have
been significantly higher than margins from the services business.
The nature of the wireless communications products business is
inherently less predictable than the longer-term services
contracts. Therefore, sales levels and profits will be more
difficult to predict and may fluctuate significantly from quarter
to quarter.
In addition, the Company is also investing in development of the
next generation of Computer-Aided Software Engineering (CASE)
tools for test program engineers sold by its newly acquired
subsidiary, LCTI, Inc. The amounts capitalized and amortized in
accordance with Financial Accounting Standards No. 86, Accounting
for the Costs of Computer Software to be Sold, Leased, or
Otherwise Marketed totaled $500,000 and $100,000, respectively in
the first half of Fiscal Year 1996. LCTI sustained operating
losses of $400,000 for the first half of Fiscal Year 1996, and
while management believes that longer term prospects look
favorable for this operation, the near term could continue to show
losses.
Revenues for the first two quarters of Fiscal Year 1996 of $34.6
million are up $2.9 million (9.1%) from $31.7 million for the
comparable period of the prior fiscal year. Engineering and
technical services revenues for the first two quarters of Fiscal
Year 1996 of $19.9 million are down $.3 million (1.5%) from $20.2
million for the comparable period of the prior fiscal year. The
year-to-year decrease is primarily due to the reduced activity in
the Company's contracts with the Naval Air Warfare Center at China
Lake, California and the Army's Software Development Center at Ft.
Lee, Virginia, as discussed above. Airport management services
revenues for the first two quarters of Fiscal Year 1996 of $9.0
million are down $.1 million (1.1%) from $9.1 million for the
comparable period of the prior fiscal year, due to the decreased
activity at the Los Angeles County Airports in the second quarter
of the current fiscal year, as discussed above. Wireless
communications products revenues for the first two quarters of
Fiscal Year 1996 of $5.7 million are up $3.3 million (138%) from
$2.4 million for the comparable period of the prior fiscal year,
due to increased orders for the Company's wireless communications
products, as discussed above.
Direct costs of $10.7 million for the second quarter of Fiscal
Year 1996 are down $.1 million (.9%) from $10.8 million for the
comparable period of the prior fiscal year. This decrease is due
to the decrease in engineering and technical services activity, as
discussed above, offset by the increase in wireless communications
products activity. Direct costs for the two quarters ended July
30, 1995 are $21.7 million, up $.9 million (4.3%) from $20.8
million for the comparable period of the prior fiscal year. This
increase is due to the strong increase in wireless communications
products activity in the two quarters of the current fiscal year
versus the prior fiscal year.
Indirect costs for the quarter ended July 30, 1995 are $5.3
million, up $1.1 million (26.2%) from $4.2 million for the
comparable period of the prior fiscal year. Indirect costs for the
two quarters ended July 30, 1995 are $10.3 million, up $1.5
million (17.0%) from $8.8 million for the comparable period of the
prior fiscal year. These increases are due to increased research
and development costs incurred in the wireless communications
products area and at the Company's subsidiary, LCTI, Inc., as well
as increases in costs associated with the increase in revenues, as
discussed above.
Net interest income (interest income, less amortization of
offering costs and interest expense) for the second quarter of
Fiscal Year 1996 amounted to $141,000, as compared to net interest
income of $16,000 for the comparable period of the prior fiscal
year. Net interest income for the first two quarters of Fiscal
Year 1996 amounted to $232,000, as compared to net interest
expense of $38,000 for the comparable period of the prior fiscal
year. The increases are principally due to the decrease in the
Company's convertible subordinated debentures outstanding and the
accelerated amortization of offering costs related to the
Company's purchase of its convertible subordinated debentures
during the first quarters of Fiscal Years 1996 and 1995, as well
as the increase in interest rates available for the Company's
invested funds in the first half of Fiscal Year 1996. The Company
recorded accelerated offering cost amortization of $23,000 and
$64,000 in the first half of Fiscal Years 1996 and 1995,
respectively. The Company retired the remaining $844,000 of its
convertible subordinated debentures on April 15, 1995, leaving no
outstanding debt as of July 30, 1995.
The Company's effective tax rate for the first two quarters of
Fiscal Year 1996 is 39% versus an effective tax rate of 34% for
the comparable period of the prior fiscal year. The increased
effective tax rate is due to a reduced level of current tax
credits available to offset income taxes on current taxable
income.
The overall increase in net income from the prior fiscal year is
primarily due to the significant increase in the sales of wireless
communications products at higher operating income margins, as
well as increased net interest income, partially offset by a
higher effective income tax rate.
(b) Financial Condition
The Company signed a loan agreement with a bank effective
September 26, 1994. The loan agreement consists of (1) an $8
million revolving credit facility, which expires September 30,
1996, and (2) a $5 million guidance line of credit, which expires
September 30, 1995. The revolving credit facility and the guidance
line of credit are unsecured provided that the Company maintains
certain covenants. Currently, management anticipates that cash
flow will remain at a level which will enable the Company to avoid
utilizing the credit facility except to support letters of credit
and acquisition financing, and that the Company will be able to
purchase investments on a regular basis. The Company's cash and
investment balances averaged $10.6 million during the second
quarter of Fiscal Year 1996. However, maintaining such cash
balances is predicated on the Company maintaining its business
base and is subject to the cost of financing new contracts,
acquisitions, and software product development costs for Comarco
Wireless Technologies, Inc. and LCTI, Inc.
During the second quarter of Fiscal Year 1996, the Company's
average days' sales in accounts receivable have remained steady
from the prior fiscal year's levels, at approximately 46 days.
Several additional key factors indicating the Company's financial
condition include:
July 30, 1995 January 31, 1995
------------- ----------------
Current ratio 2.82 2.66
Working capital $ 12,894,000 $ 12,394,000
Debt to equity 0 .05
Book value per share $4.10 $3.74
The Company continues to demonstrate improvements in the above
financial factors during the first two quarters of fiscal year
1996, primarily due to increased operating margins from increased
sales of wireless communications products.
The Company has two significant commitments for capital
expenditures at July 30, 1995 for Comarco Wireless Technologies,
Inc. and LCTI, Inc. In February 1994, the Company embarked on a
multi-year software product development program in its wireless
communications products business. During this time, the Company
intends to develop over two dozen new product line extensions for
the wireless communications industry. This software product
development program is expected to be funded from the Company's
current working capital. In addition, the Company is also
investing in development of the next generation of Computer-Aided
Software Engineering (CASE) tools for test program engineers sold
by its newly acquired subsidiary, LCTI, Inc. The amounts
capitalized and amortized in accordance with Financial Accounting
Standard No. 86, Accounting for the Costs of Computer Software to
be Sold, Leased, or Otherwise Marketed, totaled $1.2 million and
$.6 million, respectively in the first two quarters of Fiscal Year
1996.
The Company's Board of Directors has authorized a stock
re-purchase program of up to 1,000,000 shares. As of July 30,
1995, the Company has re-purchased and retired approximately
796,000 shares. The average price paid per share re-purchased
under the program was $4.75.
The Company redeemed the remaining $844,000 of outstanding
convertible subordinated debentures in accordance with the
provisions of the debenture agreement on April 15, 1995.
On May 26, 1995, the Company was notified by the Navy that it was
not successful in the Naval Air Warfare Center, China Lake
contract competition. Activity on this contract will substantially
end on September 30, 1995. While the Company does anticipate lower
revenues and profits due to this decision, the Company does not
anticipate a proportional negative impact to its liquidity or
capital resources.
The Company believes that its cash flows from operations and
available bank borrowings will be sufficient to satisfy the
current and anticipated capital requirements for operations.
<PAGE>
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
The following exhibits are included herewith:
ll. Schedule of Computation of Net Income Per Share
(b) Reports on Form 8-K
On June 2, 1995, the Company filed a current Report on Form 8-K
reporting that the Company had not been selected for award of the
engineering services contract to support the Naval Air Warfare
Center at China Lake, California, and enclosed a press release of
May 26, 1995 to that effect.
<PAGE>
SIGNATURE
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.
COMARCO, Inc.
-------------------------
(Registrant)
September 13, 1995
THOMAS P. BAIRD
-----------------------
Thomas P. Baird
Chief Financial Officer
(Authorized Officer and Principal Financial Officer)
<TABLE>
Exhibit ll
SCHEDULE OF COMPUTATION OF NET INCOME PER SHARE
Two Quarters Ended
---------------------------------
July 30, 1995 July 31, 1994
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<S> <C> <C>
PRIMARY
Net income $ 1,676,000 $ 1,334,000
Less - net income allocated to subsidiary
dilutive stock options outstanding (31,000) -
-------------- -------------
Net income used in calculation of primary
income per share $ 1,645,000 $ 1,334,000
============= =============
Weighted average number of common shares
outstanding during the period 4,608,000 4,797,000
Add - common equivalent shares
(determined using the "treasury stock"
method)representing shares issuable
upon exercise of stock options 341,000 180,000
------------- -------------
Weighted average number of shares used in
calculation of primary income per share 4,949,000 4,977,000
============= =============
Primary income per common share $ .33 $ .27
============= =============
FULLY DILUTED
Net income used in calculation of primary
income per share $ 1,645,000 $ 1,334,000
============= =============
Weighted average number of common shares
outstanding during the period 4,608,000 4,797,000
Add - common equivalent shares
(determined using the "treasury stock"
method)representing shares issuable
upon exercise of stock options 341,000 181,000
------------- -------------
Weighted average number of shares used in
calculation of fully diluted income
per share 4,949,000 4,978,000
============= =============
Fully diluted income per common share $ .33 $ .27
============= =============
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-31-1996
<PERIOD-END> JUL-30-1995
<CASH> 7,183
<SECURITIES> 3,512
<RECEIVABLES> 8,881
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 19,975
<PP&E> 1,157
<DEPRECIATION> 0
<TOTAL-ASSETS> 26,512
<CURRENT-LIABILITIES> 7,081
<BONDS> 0
<COMMON> 462
0
0
<OTHER-SE> 18,480
<TOTAL-LIABILITY-AND-EQUITY> 26,512
<SALES> 6,385
<TOTAL-REVENUES> 34,574
<CGS> 2,848
<TOTAL-COSTS> 32,058
<OTHER-EXPENSES> 10,342
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (232)
<INCOME-PRETAX> 2,748
<INCOME-TAX> 1,072
<INCOME-CONTINUING> 1,676
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,676
<EPS-PRIMARY> .33
<EPS-DILUTED> .33
<FN>
NOTE: RECEIVALBES AND PP&E VALUES REPORTED REPRESENT NET AMOUNTS.
</FN>
</TABLE>
