<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(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, 1995
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 1-7960
--------------------------------------------------------
TIE/COMMUNICATIONS, INC.
-------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 06-0872068
------------------------------- ---------------------------------------
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
8500 W. 110th Street, Overland Park, Kansas 66210
------------------------------------------- -----------------------------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
Registrant's telephone number, including area code: (913) 344-0400
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 by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
Yes X No
----- -----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:
Date Class Shares Outstanding
----------------- ----------------------------- -----------------------------
June 30, 1995 Common Stock, par 3,981,338
----------------- ----------------------------- -----------------------------
value $.10 per share
----------------- ----------------------------- -----------------------------
<PAGE>
TIE/communications, Inc. and Subsidiaries
INDEX
PART I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
Consolidated Balance Sheets - June 30, 1995 and
December 31, 1994 3-4
Consolidated Statements of Operations -
Six Months Ended June 30, 1995 and 1994 5
Consolidated Statements of Operations -
Three Months Ended June 30, 1995 and 1994 6
Consolidated Statements of Cash Flows -
Six Months Ended June 30, 1995 and 1994 7-8
Notes to Consolidated Financial Statements 9
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS 10-12
PART II. OTHER INFORMATION
Item 4. SUBMISSION OF MATTERS TO A VOTE OF
SECURITY HOLDERS 12
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<PAGE>
Part I. FINANCIAL INFORMATION
The condensed financial statements included herein have been provided by
Registrant, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations, however, Registrant believes that the
disclosures are adequate to make the information presented not misleading.
These condensed financial statements should be read in conjunction with the
financial statements and the notes thereto included in the Registrant's Annual
Report on Form 10-K for the fiscal year ended December 31, 1994.
The condensed interim financial statements included herein, which are unaudited,
include, in the opinion of management, all adjustments (consisting primarily of
normal recurring accruals) necessary to present fairly the consolidated
financial position and consolidated results of operations of the Registrant and
its subsidiaries (hereinafter sometimes collectively referred to as the
"Company") for the periods presented. The December 31, 1994 financial
statements are derived from the audited financial statements presented in the
Registrant's Annual Report on Form 10-K.
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<PAGE>
ITEM 1. FINANCIAL STATEMENTS
TIE/communications, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
June 30, December 31,
1995 1994
--------------- -------------
(Unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 212,000 $ 887,000
Notes and accounts receivable, net
of allowance for doubtful accounts:
June 30, 1995 - $ 1,838,000
December 31, 1994 - $2,172,000 13,360,000 13,780,000
Inventories, net 11,853,000 13,704,000
Restricted cash equivalents 232,000 232,000
Current portion of long-term notes receivable 72,000 215,000
Current deferred tax assets, net 82,000 82,000
Prepaid expenses 1,082,000 952,000
Miscellaneous 1,523,000 1,683,000
----------- -----------
Total current assets 28,416,000 31,535,000
----------- -----------
Property, net 1,803,000 1,852,000
Intangible assets, net 18,858,000 19,735,000
Long-term deferred tax assets, net 563,000 563,000
Long-term notes receivable 398,000 385,000
Other assets 176,000 155,000
----------- -----------
Total assets $50,214,000 $54,225,000
----------- -----------
----------- -----------
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
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<PAGE>
TIE/communications, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
June 30, December 31,
1995 1994
----------- ------------
(Unaudited)
<S> <C> <C>
Current liabilities:
Notes payable and current
maturities of long-term debt $ 1,700,000 $ --
Accounts payable 3,908,000 7,499,000
Accrued expenses 12,052,000 12,243,000
Relocation reserves 316,000 123,000
Deferred service revenue 8,952,000 9,297,000
Income taxes payable 2,087,000 2,127,000
------------ -----------
Total current liabilities 29,015,000 31,289,000
Other non-current liabilities 283,000 376,000
Long-term tax liability 1,517,000 2,741,000
Minority interest 63,000 79,000
------------ -----------
Total liabilities 30,878,000 34,485,000
------------ -----------
Stockholders' equity:
Common stock, par value $0.10 399,000 399,000
Authorized - 10,000,000 shares
Issued - 3,988,392 shares
Outstanding - 3,981,338 shares
Additional paid-in capital 19,217,000 19,217,000
Retained earnings (deficit) (1,241,000) (711,000)
Common stock in treasury, at cost (60,000) (60,000)
------------ -----------
18,315,000 18,845,000
Cumulative foreign currency translation adjustment 1,021,000 895,000
------------ -----------
Total stockholders' equity 19,336,000 19,740,000
------------ -----------
Total liabilities and stockholders' equity $50,214,000 $54,225,000
------------ -----------
------------ -----------
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
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<PAGE>
TIE/communications, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended June 30,
-----------------------------------
1995 1994
-------------- -------------
<S> <C> <C>
Net revenue:
Equipment sales $ 48,464,000 $ 47,099,000
Services provided 13,739,000 14,318,000
-------------- -------------
62,203,000 61,417,000
-------------- -------------
Cost of sales:
Equipment sales 27,670,000 25,768,000
Services provided 5,976,000 6,233,000
-------------- -------------
33,646,000 32,001,000
-------------- -------------
Gross margin:
Equipment sales 20,794,000 21,331,000
Services provided 7,763,000 8,085,000
-------------- -------------
28,557,000 29,416,000
-------------- -------------
Operating expenses 29,557,000 29,344,000
-------------- -------------
Operating income (loss) from
consolidated operations (1,000,000) 72,000
Interest income 83,000 170,000
Interest expense (189,000) (117,000)
Other income, net 810,000 634,000
-------------- -------------
Pretax income (loss) (296,000) 759,000
Provision for income taxes 234,000 475,000
-------------- -------------
Net income (loss) $ (530,000) $ 284,000
-------------- -------------
-------------- -------------
Net income (loss) per share $ (0.13) $ 0.07
------------- -------------
------------- -------------
Average shares outstanding 3,981,338 3,981,338
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
-5-
<PAGE>
TIE/communications, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended June 30,
--------------------------------
1995 1994
------------ -------------
<S> <C> <C>
Net Revenue:
Equipment sales $ 23,837,000 $ 24,434,000
Services provided 6,874,000 7,280,000
------------ -------------
30,711,000 31,714,000
------------ -------------
Cost of sales:
Equipment sales 13,613,000 13,533,000
Services provided 2,942,000 2,951,000
------------ -------------
16,555,000 16,484,000
------------ -------------
Gross margin:
Equipment sales 10,224,000 10,901,000
Services provided 3,932,000 4,329,000
------------ -------------
14,156,000 15,230,000
------------ -------------
Operating expenses 14,610,000 14,732,000
------------ -------------
Operating income (loss) from consolidated operations (454,000) 498,000
Interest income 36,000 91,000
Interest expense (86,000) (56,000)
Other income, net 465,000 317,000
------------ -------------
Pretax income (loss) (39,000) 850,000
Provision for income taxes 81,000 424,000
------------ -------------
Net income (loss) $ (120,000) $ 426,000
------------ -------------
------------ -------------
Net income (loss) per share $ (0.03) $ 0.11
------------ -------------
------------ -------------
Average shares outstanding 3,981,338 3,981,338
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
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<PAGE>
TIE/communications, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended June 30,
----------------------------
1995 1994
----------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ (530,000) $ 284,000
Adjustments to reconcile net income (loss)
to cash flows from operating activities:
Depreciation and amortization 1,456,000 1,356,000
Loss from disposition of assets 71,000 --
Deferred income (36,000) (33,000)
Minority interest (16,000) 68,000
Deferred income taxes 210,000 475,000
Relocation expense 200,000 300,000
Changes in working capital, net of
acquisitions and divestitures:
Accounts receivable 171,000 (298,000)
Inventories 588,000 (1,825,000)
Other receivables 142,000 152,000
Prepaid expenses and miscellaneous current assets 36,000 (227,000)
Accounts payable (3,619,000) (3,393,000)
Accrued expenses (362,000) 1,464,000
Relocation reserves (7,000) (518,000)
Deferred service revenue (388,000) (428,000)
Taxes payable (167,000) 3,000
----------- -----------
Cash flows used for operating activities (2,251,000) (2,620,000)
Cash flows from investment activities:
Capital expenditures, net of disposals (571,000) (534,000)
Proceeds from disposition of assets 1,703,000 --
Assets of businesses acquired (255,000) (299,000)
Purchase of minority interest in
consolidated subsidiary (4,000) (2,551,000)
Other (21,000) --
----------- -----------
Cash flows provided by (used for)
investment activities 852,000 (3,384,000)
</TABLE>
(Continued)
See accompanying Notes to Consolidated Financial Statements.
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<PAGE>
TIE/communications, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended June 30,
-----------------------------
1995 1994
------------ -----------
<S> <C> <C>
Cash flows from financing activities:
Long-term and short-term borrowings $ 1,700,000 $ --
Long-term and short-term debt repayments -- (424,000)
Payment of long-term tax liability (1,099,000) (272,000)
Other 131,000 122,000
------------ -----------
Cash flows provided by (used for) financing activities 732,000 (574,000)
Impact of changes in foreign currency
translation (8,000) (127,000)
------------ -----------
Decrease in cash and cash equivalents (675,000) (6,705,000)
Cash and cash equivalents at the
beginning of period 887,000 8,133,000
------------ -----------
Cash and cash equivalents at the end of period $ 212,000 $ 1,428,000
------------ -----------
------------ -----------
---------------------------------------
Cash flow information:
Interest paid $ 45,000 $ 62,000
------------ -----------
------------ -----------
Income taxes paid (excluding
payment of long term tax liability) $ 130,000 $ 65,000
------------ -----------
------------ -----------
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
-8-
<PAGE>
TIE/communications, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Consolidation
The consolidated financial statements include the accounts of the Company and
its majority-owned domestic and foreign subsidiaries. All material
intercompany accounts and transactions are eliminated. Certain amounts
previously reported have been reclassified to conform with revised
classifications adopted in the first six months of 1995.
2. Inventories
<TABLE>
<CAPTION>
June 30, December 31,
1995 1994
----------- -----------
<S> <C> <C>
Spare parts and jobs in progress $ 1,848,000 $ 3,058,000
Finished goods 10,005,000 10,646,000
------------ -----------
$11,853,000 $13,704,000
----------- -----------
----------- -----------
</TABLE>
3. Property
The following is a schedule of property, plant and equipment:
<TABLE>
<CAPTION>
June 30, December 31,
1995 1994
----------- -----------
<S> <C> <C>
Land $ 10,000 $ 10,000
Buildings 224,000 224,000
Equipment and tooling 14,673,000 14,665,000
Leasehold improvements 738,000 729,000
Furniture and fixtures 3,596,000 3,475,000
----------- -----------
19,241,000 19,103,000
Less accumulated depreciation
and amortization 17,438,000 17,251,000
----------- -----------
$ 1,803,000 $ 1,852,000
----------- -----------
----------- -----------
</TABLE>
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<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
SIX MONTHS AND THREE MONTHS ENDED JUNE 30, 1995 VERSUS JUNE 30, 1994
For the quarter ended June 30, 1995, the Company incurred a net loss of $120
thousand or $0.03 per share as compared to net income of approximately $426
thousand or $0.11 per share for the second quarter of 1994. The second quarter
results, combined with the net loss of $410 thousand or $0.10 per share incurred
in the first quarter of 1995, resulted in a net loss of $530 thousand or $0.13
per share for the six months ended June 30, 1995, as compared to net income of
$284 thousand or $0.07 per share for the comparable six month period in 1994.
The decline in net earnings of $814 thousand for the six months ended June 30,
1995 from 1994 is due primarily to a decline in gross margin percentage to 45.9%
from 47.9%, respectively. This is primarily a result of eroding margin on sales
of new equipment.
Total net revenue for the second quarter of 1995 decreased $1.0 million or 3.2%
while the first six months of 1995 increased $786 thousand or 1.3% over the
comparable 1994 period. The increase in the first six months of 1995 occurred
in new equipment sales with a $1.4 million or 2.9% increase over the comparable
1994 period. Net revenue from new equipment sales accounted for approximately
77.6% and 77.0% of the total revenue for the second quarter of 1995 and 1994,
respectively, and 77.9% and 76.7% of the total revenue for the first six months
of 1995 and 1994, respectively. New equipment sales were represented by
increases in the direct sales and service division and an increase in sales in
the video conferencing product lines and long distance services. Offsetting
declines were noted in the Company's Canadian repair operations resulting from
the sale of a segment of its business dealing with Caller Identification
products during the second quarter of 1995. The service revenue decreased $579
thousand or 4.0% in the first six months of 1995 from the comparable 1994 period
with the decrease primarily in the direct sales and service division. The
decline occurred in both revenue associated with maintenance contracts and time
and material billings due to increased sales volume of higher quality products.
Net revenues from services provided accounted for approximately 22.4% of total
revenue in the second quarter of 1995 as compared to 23.0% of total revenue in
the second quarter of 1994 and 22.1% of total revenue in the first six months of
1995 as compared to 23.3% in the comparable 1994 period. Revenue from service
transactions is expected to continue to comprise a significant portion of the
Company's overall net revenue in future periods; however, there are no
assurances that the foregoing will occur as the nature of after market service
opportunities is impacted by newer technology products with a higher mean time
before failure.
The gross margin percentage for the quarter and six months ended June 30, 1995
was 46.1% and 45.9% as compared to 48.0% and 47.9%, respectively, for the same
periods of 1994. The decline in the gross margin percentage is due to the
change in sales mix with a higher proportion of revenue being generated from new
equipment sales and sales of proprietary products, which carry a lower margin
versus service transactions. The product mix included in new equipment sales
has shifted to an increase in volume of lower margin products. New equipment
margins are also lower due to declining sales of the Company's proprietary
design key system as compared to the newer Northern Telecom key system product.
Although new equipment sales carry lower margins, these sales present future
service and software based business to the Company. The gross margin on new
equipment sales has declined from 44.6% and 45.3% for the
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<PAGE>
quarter and six months ended June 30, 1994 to 42.9% for both comparable periods
of 1995. Gross margin on service revenue has decreased from 59.5% in the second
quarter of 1994 to 57.2% in the second quarter of 1995 primarily due to newer
technology products entering the customer base. For the six months ended June
30, 1994 and 1995, the gross margin on service revenue was 56.5%.
Another factor that may affect the Company's gross margin percentage in the more
distant future relates to the Company's agreement with NTK America. Under that
agreement, the Company is provided with the most favorable purchase prices on
NTK America products for the duration of the agreement. The agreement has been
extended through June 2001, with a five-year option to renew through June 2006.
It is anticipated that if NTK America does not invest in research and
development to advance the technology and improve the cosmetics of the products,
the marketability of these products will decline. Although the Company has
agreed to provide an incentive to NTK America to invest in such research and
development, the Company cannot guarantee that NTK America will perform future
development on these products. Therefore, the Company cannot estimate the
impact of the foregoing on future gross margin at this time.
Operating expenses in the second quarter of 1995 decreased $122 thousand (0.8%)
and in the first six months of 1995 increased $213 thousand (0.7%) over the
comparable 1994 periods. This reflects the costs associated with the Company's
restructuring of field operations and the exploration of strategic alternatives
to add shareholder value. Operating expenses as a percent of sales were 47.6%
and 47.5%, respectively, in the second quarter of 1995 and the first six months
of 1995 as compared to 46.5% and 47.8% in the comparable periods of 1994. The
Company is continuing to monitor operating expenses and will seek to continue to
control costs in future periods. It is not expected that operating expenses
will increase significantly in the future without a corresponding significant
increase in revenue.
Nonoperating income (expense) increased $63 thousand and $17 thousand in the
second quarter and the first six months of 1995, respectively, as compared to
the same periods of 1994. These increases for the six months of 1995 are
represented by: (a) an unfavorable decrease in net interest income (expense) of
$159 thousand resulting from $87 thousand lower interest income due to declining
cash balances in 1995 and an increase in interest expense of $72 thousand from
the debt borrowings in 1995 discussed below, and (b) an increase in other
income, net of $176 thousand. Other income, net is substantially comprised of
royalty income of $821 thousand and $802 thousand for the first six months of
1995 and 1994, respectively, primarily from NTK America for its sale of
equipment designed by the Company.
The Company continues to focus its efforts on maintaining its existing customer
base through providing higher margin software based products and network
services and implementation of training and marketing programs related to its
strategic business direction.
INFLATION
Inflation has had a relatively minor impact on the Company as the rate of
inflation has declined in recent reporting periods. If operating expenses
increase, then the Company, to the extent permitted by competition, may attempt
to recover these increased costs by increasing sales prices to customers.
LIQUIDITY AND CAPITAL RESOURCES
Cash and cash equivalents at June 30, 1995 totalled $212 thousand, a decrease of
$675 thousand from December 31, 1994. For the first six months of 1995, the
Company used approximately $2.3 million of
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<PAGE>
cash for operating activities primarily from reduction of accounts payable.
Additionally, the Company used approximately $1.1 million for payment of the
long-term tax liability, $571 thousand for net capital expenditures and $255
thousand to expand its service network. The Company's Canadian subsidiary sold
a segment of its business during the second quarter 1995 for approximately $1.7
million. The Company borrowed $1.7 million during the first six months of 1995
under its revolving line of credit as discussed below.
The Company has a $7,000,000 line of credit with Marmon Holdings, Inc. which
expires December 31, 1996. The indebtedness under the line of credit is secured
by substantially all of the Company's assets and has been guaranteed by the
principal subsidiaries of the Company.
The Company believes sufficient cash resources exist to support its needs
through currently available cash, cash expected to be generated from future
operations, or from the line of credit previously mentioned. The Company can
borrow against this line of credit if needed, assuming no breach of any of the
covenants (which include restrictions on asset purchases and require specified
levels of working capital and net worth to be maintained) and that the aggregate
principal amount outstanding at any time under the credit agreement does not
exceed the "Borrowing Base" (which is based on inventory and receivables) set
forth in the credit agreement. The Company was in compliance with or had
received a waiver of the covenants as of June 30, 1995 and, therefore, was
qualified to borrow the entire $7,000,000 available under the line. The Company
borrowed under this line of credit during the first six months of 1995 and $1.7
million of borrowings were outstanding as of June 30, 1995.
At June 30, 1995 the Company did not have any material commitments for capital
expenditures.
Part II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) - (c) The 1995 Annual Meeting of Stockholders of the Company was held on
June 12, 1995. At the meeting, the election of eight directors to serve for a
one year term and the ratification of the selection of KPMG Peat Marwick as the
Company's independent auditors for 1995 were approved. A total of 3,981,338
votes were eligible to be cast for each matter.
The result of the voting on the election of directors, as determined by the
independent inspectors of election, is as follows:
For Withheld
--------- ------
George N. Benjamin, III 3,834,929 30,867
Eric V. Carter 3,834,814 30,982
Robert C. Gluth 3,834,942 30,854
Donald E. Goss 3,834,953 30,843
Robert H. Hayes 3,834,951 30,845
Robert E. LaBlanc 3,834,974 30,822
Robert A. Pritzker 3,834,948 30,848
Robert W. Webb 3,834,956 30,840
A total of 3,865,796 votes were submitted with respect to the ratification of
the selection of KPMG Peat Marwick as the Company's independent auditors for
1995. The result of the voting on such matter, as determined by the
independent inspectors of election, is as follows:
3,851,836 shares voted in favor of the motion, 7,962 shares voted against the
motion, and 5,998 shares abstained.
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<PAGE>
SIGNATURES
Pursuant to the requirement 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.
TIE/communications, Inc.
Dated: August 14, 1995 By: \s\ George N. Benjamin III
-------------------------------------
George N. Benjamin, III
President and Chief Executive Officer
Dated: August 14, 1995 By: \s\ John W. Wellhausen
-------------------------------------
John W. Wellhausen
Chief Financial Officer
-13-
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> JUN-30-1995
<CASH> 212,000
<SECURITIES> 0
<RECEIVABLES> 15,198,000
<ALLOWANCES> 1,838,000
<INVENTORY> 11,853,000
<CURRENT-ASSETS> 28,416,000
<PP&E> 19,241,000
<DEPRECIATION> 17,438,000
<TOTAL-ASSETS> 50,214,000
<CURRENT-LIABILITIES> 29,015,000
<BONDS> 0
<COMMON> 399,000
0
0
<OTHER-SE> 18,937,000
<TOTAL-LIABILITY-AND-EQUITY> 50,214,000
<SALES> 48,464,000
<TOTAL-REVENUES> 62,203,000
<CGS> 27,670,000
<TOTAL-COSTS> 33,646,000
<OTHER-EXPENSES> 29,557,000
<LOSS-PROVISION> 418,000
<INTEREST-EXPENSE> (189,000)
<INCOME-PRETAX> (296,000)
<INCOME-TAX> 234,000
<INCOME-CONTINUING> (530,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (530,000)
<EPS-PRIMARY> (.13)
<EPS-DILUTED> (.13)
</TABLE>
