Page 1 of 10
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 September 30, 1997 .
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 for the transition period from __________ to _________.
1-7921
- -------------------------------------------------------------------------
(Commission file number)
SECURITY CAPITAL CORPORATION
- -------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 13-3003070
- --------------------------------- ---------------------------------
(State or other jurisdiction of (I.R.S. Employee Identification No.)
incorporation or organization)
1111 NORTH LOOP WEST, SUITE 400, HOUSTON, TEXAS 77008
- -------------------------------------------------------------------------
(Address of principal executive offices, including zip code)
(713) 880-7100
- -------------------------------------------------------------------------
(Registrant's telephone number, including area code)
N.A.
- -------------------------------------------------------------------------
(Former address, 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 No _.
Indicate the number of shares outstanding of each of the registrant's
classes of common stock as of the latest practicable date: as of November 14,
1997, there were 4,059,766 outstanding shares of Class A Common Stock, par value
$ .01, and 392 outstanding shares of Common Stock, par value $ .01, of the
registrant.
<PAGE>
Security Capital Corporation and Subsidiaries
Consolidated Statements of Income
- ---------------------------------------------------------------------------
For the Three
Months For the Nine Months
Ended Ended
September 30, September 30,
- --------------------------------------------------------------------------
1997 1996 1997 1996
- --------------------------------------------------------------------------
(Dollars in thousands, except per
share amounts)
Product sales $ 14,863 $ 8,401 $ 20,895 $ 9,854
Cost of goods sold 6,837 4,096 9,454 4,764
- --------------------------------------------------------------------------
Gross profit $ 8,026 $ 4,305 $ 11,441 $ 5,090
- --------------------------------------------------------------------------
Selling, general and
administrative 4,437 2,497 7,831 4,014
- --------------------------------------------------------------------------
Operating income $ 3,589 $ 1,808 $ 3,610 $ 1,076
- --------------------------------------------------------------------------
OTHER INCOME(EXPENSE)
Income(loss) from joint
enterprise $ (145) $ 9 $ 129 $ 452
Gain on sale of beneficial
interest in joint enterprise 1,298 - 1,298 -
Interest income 105 95 287 325
Interest expense (690) (731) (1,434) (731)
Other income 58 62 8 66
- --------------------------------------------------------------------------
Total other income(expense) $ 626 $ (565) $ 288 $ 112
- --------------------------------------------------------------------------
Minority interest share of net
income(loss) (800) (161) (714) (129)
- --------------------------------------------------------------------------
Income before provision for
Federal
income taxes $ 3,415 $ 1,082 $ 3,184 $ 1,059
Provision for Federal income
taxes 56 58 64 58
- --------------------------------------------------------------------------
Net income $ 3,359 $ 1,024 $ 3,120 $ 1,001
Less preferred stock dividends (113) (112) (338) (337)
- --------------------------------------------------------------------------
Net income applicable to common
stockholders $ 3,246 $ 912 $ 2,782 $ 664
- --------------------------------------------------------------------------
Net income per common share: $ .80 $ .22 $ .69 $ .16
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
Weighted average shares
outstanding 4,060 4,060 4,060 4,060
- --------------------------------------------------------------------------
The accompanying Notes to Consolidated Financial Statements are an integral part
of these financial statements.
<PAGE>
Security Capital Corporation and Subsidiaries
Consolidated Balance Sheets
- --------------------------------------------------------------------------
September 30, December 31,
1997 1996
- --------------------------------------------------------------------------
(Unaudited) (Unaudited)
- --------------------------------------------------------------------------
(Dollars in thousands, except par value)
ASSETS
Current assets:
Cash and cash equivalents 7,969 $ 8,010
Account receivable (net of
allowance for
doubtful accounts of $139 and
$70) 16,319 3,063
Inventory 5,238 3,612
Other current assets 517 628
--------------- ---------------
Total current assets 30,043 15,313
Property and equipment (net of
accumulated
depreciation of $92 and
$211) 1,413 1,095
Intangible assets (net of
accumulated amortization of $875
and $353) 13,500 8,984
Licenses and other assets 428 405
- --------------------------------------------------------------------------
Total Assets $ 45,384 $ 25,797
- --------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities:
Note payable $ 11,227 $ 1,000
Current portion of long-term debt 1,450 950
Accounts payable 1,318 1,047
Accrued expenses and other
liabilities 1,370 407
--------------- ---------------
Total current liabilities 15,365 3,404
Long-term debt, less current
portion 13,386 10,047
Other long-term liabilities 303 -
Minority interest 1,777 913
- --------------------------------------------------------------------------
Total Liabilities $ 30,831 $ 14,364
- --------------------------------------------------------------------------
Commitments and Contingencies $ - $ -
- --------------------------------------------------------------------------
Class A preferred stock
(redeemable), $.01
par value, 50,000 shares
authorized, 30,000
shares issued (including
dividends in arrears
of $1,875 and $1,537) $ 4,875 $ 4,537
- --------------------------------------------------------------------------
STOCKHOLDERS' EQUITY
Common stock, $.01 par value,
7,500 shares
authorized; 551 shares issued $ - $ -
Class A common stock, $.01 par
value,
10,000,000 shares authorized;
4,378,183
shares issued 44 44
Preferred stock, $.01 par value,
2,500,000
shares authorized, none issued - -
Additional paid-in capital 62,544 62,544
Accumulated deficit (47,695) (50,477)
Less: Treasury stock, at cost,
318,576 shares (5,215) (5,215)
- --------------------------------------------------------------------------
Total Stockholders' Equity $ 9,678 $ 6,896
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
Total Liabilities and
Stockholders' Equity $ 45,384 $ 25,797
- --------------------------------------------------------------------------
The accompanying Notes to Consolidated Financial Statements are an integral part
of these financial statements.
<PAGE>
Security Capital Corporation and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)
- -----------------------------------------------------------------------
For the Nine Months
Ended
September 30,
- -----------------------------------------------------------------------
1997 1996
- -----------------------------------------------------------------------
(Dollars in thousands)
Cash flows from operating activities:
Net income $ 3,120 $ 1,001
Adjustments to reconcile income
to net
cash used by operating
activities:
Depreciation and
amortization of property and
equipment, and amortization
of
deferred items 589 295
Net change in operating
assets and liabilities
(excluding purchased
operating assets and
assumed liabilities of
Pumpkin)
Increase in accounts
receivable (13,081) (6,969)
Decrease(increase) in
inventories 721 (1,566)
Decrease in other assets 102 548
Increase(decrease) in
accounts payable (663) 1,156
Increase in accrued
interest and
other liabilities 812 -
Minority interest in net
earnings of subsidiary 714 129
- -----------------------------------------------------------------------
Net cash from (used for) operating
activities (7,686) (5,406)
- -----------------------------------------------------------------------
Cash flows (used for) investing
activities
Net additions to property and
equipment (97) (13)
Purchase of assets of Pumpkin
Ltd.(net of cash acquired of $134) (6,366) -
Purchase of assets of Possible
Dreams and Columbia National
Corporation (net of cash acquired of
$764) - (16,296)
- -----------------------------------------------------------------------
Cash flow from (used for) investing
activities (6,463) (16,309)
- -----------------------------------------------------------------------
Net cash from (used for) financing
activities
Net increase in borrowings under
line of credit 10,100 6,234
Repayment of term loans (992) -
Borrowings incurred to finance the
acquisition of Pumpkin, Ltd. 5,000 -
Borrowings incurred to finance the
acquisition of Possible Dreams and
Columbia National Corporation - 14,360
- -----------------------------------------------------------------------
Cash flow from (used for) financing
activities 14,108 20,594
- -----------------------------------------------------------------------
Net increase(decrease) in cash and
cash equivalents (41) (1,121)
Cash and cash equivalents, beginning
of period 8,010 9,827
- -----------------------------------------------------------------------
Cash and cash equivalents, end of
period $ 7,969 $ 8,706
- -----------------------------------------------------------------------
The accompanying Notes to Consolidated Financial Statements are an integral part
of these financial statements.
<PAGE>
Security Capital Corporation and Subsidiaries
Notes to Consolidated Financial Statements
(Unaudited)
- -------------------------------------------------------------------------
(1) Accounting and Financial Reporting Policies
- -------------------------------------------------------------------------
The accompanying consolidated financial statements include the accounts of
Security Capital Corporation and all of its subsidiaries engaged in continuing
operations ("Security Capital" or the "Company"). The Company's subsidiaries
include Possible Dreams, Ltd., a Delaware corporation, that engages in the
business of designing, importing, warehousing and distributing Christmas
figurines and ornaments and, to a lesser extent, religious statutes. On June 27,
1997, the Company's subsidiary, Pumpkin Masters Holdings, Inc. ("Holdings"),
through its subsidiary, Pumpkin Ltd. ("Pumpkin"), both Delaware corporations,
acquired substantially all of the assets and assumed certain liabilities of
Pumpkin Ltd. d/b/a Pumpkin Masters, Inc., a Colorado corporation (the "Seller").
Pumpkin is engaged in the business of manufacturing and distributing pumpkin and
watermelon carving kits and related accessories.
All significant intercompany balances and transactions have been eliminated in
consolidation. The condensed consolidated financial statements included herein
have been prepared by Security Capital, in accordance with the rules and
regulations of the Securities and Exchange Commission, without audit. Security
Capital's accounting and financial reporting policies conform with generally
accepted accounting principles and include adjustments in interim periods,
consisting only of normal recurring items, considered necessary for a fair
presentation of the financial statements. 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, although Security Capital believes that
the accompanying disclosures are adequate to make the information presented not
misleading. It is suggested that these condensed consolidated financial
statements be read in conjunction with the consolidated financial statements and
the notes thereto included in the latest Annual Report of Security Capital on
Form 10-K. Prior period financial statements are presented for comparative
purposes.
- -------------------------------------------------------------------------
(2) Federal Income Taxes
- -------------------------------------------------------------------------
The Company adopted Statement of Financial Accounting Standards ("SFAS") No.
109, "Accounting for Income Taxes" during fiscal year 1994. SFAS No. 109
requires the Company to compute deferred income taxes based on the difference
between the financial statement basis and tax basis of assets and liabilities
using enacted tax rates in effect in the years in which the differences are
expected to reverse. The adoption had no effect on the financial position or
results of operations because of a 100% valuation allowance applied against the
deferred tax assets. The Company continued to provide a 100% valuation allowance
on all net deferred tax assets at September 30, 1997.
- -------------------------------------------------------------------------
(3) Earnings Per Share Fiscal Year 1997 and Fiscal Year 1996
- -------------------------------------------------------------------------
Earnings per common and common equivalent share amounts are based on the
weighted average number of shares of Common Stock and Class A Common Stock
outstanding. The sum of Common Stock and Class A Common Stock is used because
the two classes are identical except for certain transfer restrictions imposed
on the Class A Common Stock.
<PAGE>
The weighted average number of shares outstanding used in the computation of
primary and fully diluted earnings per share is as follows (in thousands):
Fiscal Year 1997 Fiscal Year 1996
9 MONTHS 3 MONTHS 9 MONTHS 3 MONTHS
-------- -------- -------- --------
Primary 4,060 4,060 4,060 4,060
Fully diluted 4,060 4,060 4,060 4,060
- -------------------------------------------------------------------------
(4) Asset Purchase of Pumpkin Ltd.
- -------------------------------------------------------------------------
On June 27,1997, Pumpkin acquired substantially all of the assets and assumed
certain liabilities of the Seller. The consideration paid to the Seller and the
transaction fees and expenses incurred as of the closing date aggregated
$7,871,136. This amount consisted of the following:
Cash paid to the Seller $ 6,079,172
Transaction fees and
expenses 651,125
Assumption of accounts
payable and accrued
liabilities 1,140,839
Total $ 7,871,136
The assets purchased consisted of the assets used by the Seller in the conduct
of its business, including cash, accounts receivable, inventories, prepaid
expenses, furniture, fixtures, computers and intellectual property rights and
other intangibles. Of the cash paid to the Seller, $1,500,000 was provided by
the Company and the balance was borrowed pursuant to a credit agreement. The
credit agreement provides various credit facilities to Pumpkin to partially
finance the acquisition, provide for seasonal working capital and letter of
credit requirements and to pay transaction expenses. The facilities consist of a
revolving credit facility of up to $3,500,000 and amortizing term debt of
$5,000,000 maturing from four to six years from the closing date. The facilities
are secured by all of the acquired assets as well as by a pledge to the lenders
under such credit agreement of the capital stock of Pumpkin owned by Holdings.
In connection with this financing, the lenders were issued a warrant
excercisable for 10% of the Class B Common Stock, on a fully diluted basis, of
Pumpkin. The Class B Common Stock is non-voting and convertible at any time into
voting, Class A Common Stock of Pumpkin. An executive of Pumpkin was granted an
option to acquire 4% of the Class A Common Stock of Pumpkin at an exercise price
per share of $1,754.39. This option is subject to certain restrictions on
transfers of the shares of Pumpkin owned by the executive, together with certain
preemptive rights, puts and calls and "tag along/drag along" rights with respect
to these shares.
The Seller received stock of Holdings constituting 20% of the outstanding Common
Stock of Holdings. The Seller is also entitled to receive a payment of up to
$2,000,000 (the "Earnout Amount") if Pumpkin's average earnings before income
taxes, depreciation and amortization ("EBITDA"), as defined in the asset
purchase agreement, is in excess of $1,500,000 during the four fiscal years
following the closing. If earned, the amount is first payable in June 2002, with
the possibility of being deferred until June 2004. In addition the Seller will
receive a payment of at least $120,000 and up to $160,000 each fiscal year,
payable quarterly, until the Earnout Amount is either not to be earned or, if
determined to be earned, paid. The Earnout Amount is fully subordinate to debt
under such credit agreement and any loans by the Company to Pumpkin.
In connection with the acquisition, the Company entered into a Second Amendment
to the Advisory Services Agreement with Capital Partners, Inc.("CP, Inc."),
pursuant to which CP, Inc. agreed to assist Security Capital in providing
management advisory services to Pumpkin in the areas of corporate development,
strategic planning, investment and financial matters and general business
policies. The Company agreed to increase CP, Inc.'s fees in an amount equal to
the greater of $100,000 or 5% of Pumpkin's annual EBITDA, as defined in such
asset purchase agreement.
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS-
Security Capital reported net income of $3,359,000 and $3,120,000 for the three
and nine month periods ended September 30, 1997. This compares to net income of
$1,024,000 and $1,001,000 for the same three and nine month periods of the prior
calendar year. The Company reported net income per common share (after accrual
for Class A Preferred Stock dividends) of $.80 and $.69 for the three and nine
month periods ended September 30, 1997 as compared to net income per common
share (after accrual for Class A Preferred Stock dividends) of $.22 and $.16 for
the same three and nine month periods of the prior calendar year.
The acquisition of Pumpkin had a major impact on sales and profitability for the
Company during the third quarter. Product sales for the current third quarter
increased 77% to $14,863,000 as compared to $8,401,000 in the same prior year
calendar quarter, due to the acquisition of Pumpkin. Pumpkin accounted for
approximately $6,276,000 of the Company's third quarter product sales increase.
Pumpkin's business is very seasonal in nature. The third calendar quarter
accounts for over 70% of Pumpkins's annual product sales. Possible Dreams' sales
for the third quarter were up $186,000 to $8,587,000. Possible Dreams' annual
sales for the year have increased $1,182,000, primarily due to increased
promotion of its products and a reduction in pricing in certain product lines.
Selling, general and administrative expense, which increased by $1,940,000 for
the quarter to $4,437,000 as compared to the same prior year calendar year
quarter, was also impacted by the acquisition of Pumpkin. Interest expense
decreased slightly to $690,000 for the quarter as compared to $731,000 in the
same prior year calendar quarter. Interest expense for the year has increased by
$703,000 to $1,434,000 for the nine months ended September 30, 1997 as compared
to the same prior year period. The acquisition of Possible Dreams occurred
during May of 1996. The prior years interest expense reflects the amount accrued
after the acquisition of Possible Dreams.
On July 17, 1997, the Company's subsidiary, Foster Insurance Managers, Inc.
("FIM"), entered into a Purchase Agreement with Bowen, Miclette, Descant & Britt
Inc.("Buyer") and certain employees of the Buyer to purchase FIM's beneficial
interest in Foster Insurance Services, Inc. ("FIS"), an independent insurance
agency located in Houston, Texas. FIS is a 50% partner of Bowen, Miclette,
Descant & Britt. The Company received proceeds of $1,525,845 in cash at closing.
The Company no longer has any interest in the insurance brokerage business as a
result of the completion of this transaction.. For accounting purposes, this
acquisition is effective July 1, 1997.
LIQUIDITY AND CAPITAL RESOURCES
Cash and cash equivalents decreased by $41,000 to $7,969,000 at September 30,
1997 as compared to $8,010,000 at December 31, 1996 The slight decrease in cash
and cash equivalents was primarily due to the following two events: (a) the
$1,500,000 payment made by the Company to the Sellers as part of the acquisition
of Pumpkin, which was netted against (b)proceeds of $1,525,345 received by the
Company for its beneficial interest in FIS The Company's consolidated working
capital at September 30, 1997 increased by $2,769,000 to $14,678,000 from
$11,909,000 at December 31, 1996. The increase in working capital was primarily
attributed to the impact of the new credit agreement with Pumpkin's lenders, as
part of the acquisition of Pumpkin. The acquisition of Pumpkin increased
consolidated working capital by $3,380,000.
The consideration paid to the Seller of Pumpkin and the transaction fees and
expenses incurred as of the closing date aggregated $7,871,136. This amount
consisted of the following:
Cash paid to the Seller $6,079,172
Transaction fees and
expenses .............. 651,125
Assumption of accounts
payable and accrued
liabilities ........... 1,140,839
----------
Total ................. $7,871,136
<PAGE>
The assets purchased consisted of the assets used by the Seller in the conduct
of its business, including cash, accounts receivable, inventories, prepaid
expenses, furniture, fixtures, computers and intellectual property rights and
other intangibles. Of the cash paid to the Seller, $1,500,000 was provided by
the Company and the balance was borrowed pursuant to a credit agreement. The
credit agreement provides various credit facilities to Pumpkin to partially
finance the acquisition, provide for seasonal working capital and letter of
credit requirements and to pay transaction expenses. The facilities consist of a
revolving credit facility of up to $3,500,000 and amortizing term debt of
$5,000,000 maturing from four to six years from the closing date. The facilities
are secured by all of the acquired assets as well as by a pledge to the lenders
under such credit agreement of the capital stock of Pumpkin owned by Holdings.
In connection with this financing, the lenders were issued a warrant
excercisable for 10% of the Class B Common Stock, on a fully diluted basis, of
Pumpkin. The Class B Common Stock is non-voting and convertible at any time into
voting, Class A Common Stock of Pumpkin. An executive of Pumpkin was granted an
option to acquire 4% of the Class A Common Stock of Pumpkin at an exercise price
per share of $1,754.39. This option is subject to certain restrictions on
transfers of the shares of Pumpkin owned by the executive, together with certain
preemptive rights, puts and calls and "tag along/drag along" rights with respect
to these shares.
The Seller received stock of Holdings constituting 20% of the outstanding Common
Stock of Holdings. The Seller is also entitled to receive a payment of up to
$2,000,000 (the "Earnout Amount") if Pumpkin's average earnings before income
taxes, depreciation and amortization ("EBITDA"), as defined in the asset
purchase agreement, is in excess of $1,500,000 during the four fiscal years
following the closing. If earned, the amount is first payable in June 2002, with
the possibility of being deferred until June 2004. In addition, the Seller will
receive a payment of at least $120,000 and up to $160,000 each fiscal year,
payable quarterly, until the Earnout Amount is either not to be earned or, if
determined to be earned, paid. The Earnout Amount is fully subordinate to debt
under such credit agreement and any loans by the Company to Pumpkin.
The Company had no major capital expenditures during the quarter.. The Company
believes that with the proceeds from the sale of its insurance brokerage
business and existing cash on hand, the Company can continue to compete for
acquisition opportunities, as well as to meet its working capital and operating
expenditure requirements, for at least the next 12 months.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
Pursuant to the General Instructions to Rule 305 of Regulation S-K, the
quantitative and qualitative disclosures called for by this Item 3 and by Rule
305 of Regulation S-K are inapplicable to the Company at this time.
PART II -- OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
None
ITEM 3...DEFAULT UPON SENIOR SECURITIES
(a) None
(b) The Company's Class A Preferred Stock bears a dividend of 15% per
annum payable. Upon redemption or the liquidation of the Company,
dividends on Preferred Stock are payable only out of cumulative net income
since January 1990. (At a redemption date or upon the liquidation of the
Company, accumulated but unpaid dividends are payable in full regardless
of earnings since January 1, 1990.) There has been cumulative net income
of $2,717,000 since January 1, 1990, and preferred stock dividends of
$1,875,500 have been accrued from July 30, 1993 to September 30, 1997 and
were in arrears at September 30,1997.
<PAGE>
Item 4. Submission of Matters to a Vote of Security Holders
(a) The Company held its 1997 Annual Meeting of Stockholders (the "Annual
Meeting") on July 10, 1997.
(b) The following directors were elected at the Annual Meeting and are the
only directors whose terms of office as directors continued after the
Annual Meeting: William T. Bozarth, Brian D. Fitzgerald, A. George Gebauer
and Thomas J. Gochberg.
(c) Set forth below is a description of the matters voted upon at the
Annual Meeting, including the number of votes cast for, as well as the
number of votes withheld and broker non-votes, as to each nominee for
election as a director.
1.Election of four directors, each to serve until the next Annual
Meeting of Stockholders and until his successor is duly elected and
qualified.
Broker-
Nominees Votes For Votes Withheld Non-Votes
William T.
Bozarth 3,759,016 26,272 -0-
Brian D.
Fitzgerald 3,758,689 26,599 -0-
A. George
Gebauer 3,758,689 26,599 -0-
Thomas J.
Gochberg 3,758,901 26,387 -0-
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) EXHIBITS: None
(b) REPORTS ON FORM 8-K
Date of event
Date of Filing reported Items
July 10, 1997 June 27, 1997 Items 2 and 7
August 1, 1997 July 17,1997 Items 2 and 7
8-K/A Items 2
September 10, 1997 June 27, 1997 and 7
<PAGE>
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.
SECURITY CAPITAL CORPORATION
Date: November 14 , 1997 By: A. George Gebauer
------------------------------------
A. George Gebauer, President
Date: November 14 , 1997 By: Larry M. Karren
------------------------------------
Larry M. Karren, Treasurer
(Principal Financial and
Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 7,969
<SECURITIES> 0
<RECEIVABLES> 16,319
<ALLOWANCES> (139)
<INVENTORY> 5,238
<CURRENT-ASSETS> 30,043
<PP&E> 1,413
<DEPRECIATION> (92)
<TOTAL-ASSETS> 45,384
<CURRENT-LIABILITIES> 15,365
<BONDS> 0
4,875
0
<COMMON> 44
<OTHER-SE> 9,634
<TOTAL-LIABILITY-AND-EQUITY> 45,384
<SALES> 20,895
<TOTAL-REVENUES> 20,895
<CGS> 9,454
<TOTAL-COSTS> 9,454
<OTHER-EXPENSES> 7,831
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,434
<INCOME-PRETAX> 3,184
<INCOME-TAX> 64
<INCOME-CONTINUING> 3,120
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,120
<EPS-PRIMARY> 0.69
<EPS-DILUTED> 0.69
</TABLE>