<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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
-------------------------------------------------
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: 1-8988
---------------------------------------------------------
ECC International Corp.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
Delaware 23-1714658
- ------------------------------------------------------------------------------------------------------------------
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
</TABLE>
175 Strafford Avenue, Suite 116, Wayne, PA 19087-3377
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(610) 687-2600
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
Not Applicable
- --------------------------------------------------------------------------------
(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 twelve 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.
[X] Yes [ ] No
As of September 30, 1997, there were 8,154,807 shares of the
Registrant's Common Stock, $.10 par value per share, issued and outstanding.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
ECC INTERNATIONAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
(In Thousands Except Share and Per Share Data)
(Unaudited)
Three Months Three Months
Ended Ended
9/30/97 9/30/96
------------ ------------
Net Sales $ 12,156 $ 22,426
Cost of Sales 9,474 17,526
---------- ----------
Gross Profit 2,682 4,900
---------- ----------
Expenses:
Selling, General & Administrative 2,912 3,031
Systems Development 683 151
---------- ----------
Total Expenses 3,595 3,182
---------- ----------
Operating (Loss)/Income (913) 1,718
---------- ----------
Other Income (Expense):
Interest Income 83 47
Interest Expense (390) (440)
Other - Net (67) (13)
---------- ----------
Total Other (Expense) (374) (406)
---------- ----------
(Loss)/Income from Continuing Operations
Before Income Taxes (1,287) 1,312
(Benefit)/Provision for Income Taxes (294) 572
---------- ----------
(Loss)/Income from Continuing Operations (993) 740
Discontinued Operations:
Loss from Operations (net of applicable
income tax benefit of $343 in 1996) -- (526)
Net (Loss)/Income $ (993) $ 214
========== ==========
Weighted Average Common Shares Outstanding 8,119,883 8,015,351
(Loss)/Earnings Per Common Share
from Continuing Operations (0.12) 0.10
(Loss)/Earnings Per Common Share
from Discontinued Operations -- (0.07)
Net (Loss)/Earnings Per Common Share $ (0.12) $ 0.03
========== ==========
See accompanying notes to the consolidated financial statements.
<PAGE> 3
ECC INTERNATIONAL CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In Thousands)
(Unaudited) (Audited)
9/30/97 6/30/97
----------- ---------
ASSETS
Current Assets:
Cash $ 4,312 $ 3,888
Accounts Receivable, Net 9,953 9,189
Costs and Estimated Earnings in Excess
of Billings on Uncompleted Contracts 21,678 25,497
Inventories
Raw Material 5,316 5,062
Work in Process 2,830 2,326
Finished Goods 2,019 2,278
Prepaid Expenses and Other 5,612 5,406
------- -------
Total Current Assets 51,720 53,646
Property, Plant and Equipment - Net 25,769 26,119
Other Assets 2,260 2,269
------- -------
Total Assets $79,749 $82,034
======= =======
Continued...
<PAGE> 4
ECC INTERNATIONAL CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (Continued)
(In Thousands)
(Unaudited) (Audited)
9/30/97 6/30/97
LIABILITIES & STOCKHOLDERS' EQUITY ----------- ---------
Current Liabilities:
Current Portion of Long-Term Debt $ -- $ 2,250
Accounts Payable 5,170 4,846
Advances on Long-Term Contracts 4,719 4,551
Accrued Expenses 6,749 6,642
------- -------
Total Current Liabilities 16,638 18,289
------- -------
Deferred Income Taxes 1,559 1,559
------- -------
Long-Term Debt 16,498 16,640
------- -------
Commitments and Contingencies
Stockholders' Equity:
Common stock, $.10 par; authorized
20,000,000 shares at 9/30/97 and
6/30/97; issued and outstanding,
8,154,807 shares at 9/30/97 and
8,046,707 at 6/30/97 815 805
Preferred stock, $.10 par; authorized
1,000,000 shares at 9/30/97 and at
6/30/96; none issued and outstanding
at 9/30/97 and 6/30/97 -- --
Capital in Excess of Par 24,348 23,935
Retained Earnings 19,756 20,749
Cumulative Translation Adjustment 135 57
------- -------
Total Stockholders' Equity 45,054 45,546
------- -------
Total Liabilities & Stockholders' Equity $79,749 $82,034
======= =======
See accompanying notes to the consolidated financial statements.
<PAGE> 5
ECC INTERNATIONAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED
SEPTEMBER 30, 1997 AND 1996
(In Thousands)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Three Months
Ended Ended
9/30/97 9/30/96
------------ ------------
<S> <C> <C>
Cash Flows From Operating Activities:
Net (Loss)/Income $ (993) $ 214
Items Not Requiring Cash:
Depreciation 1,128 1,044
Changes in Certain Assets and Liabilities:
Accounts Receivable (764) 2,258
Cost and Estimated Earnings in Excess
of Billings on Uncompleted Contracts 3,819 194
Inventories (499) (1,643)
Prepaid Expenses and Other (206) (26)
Accounts Payable 324 (4,299)
Advances on Long-Term Contracts 168 (844)
Accrued Expenses 528 (1,439)
------- -------
Net Cash Provided By/(Used In) Operating Activities 3,505 (4,541)
------- -------
Cash Flows From Investing Activities:
Additions to Property, Plant and Equipment (778) (1,033)
Other 87 279
------- -------
Net Cash Used In Investing Activities (691) (754)
------- -------
Cash Flows From Financing Activities:
Proceeds From Issuance of Common Stock, Options
Exercised and Warrants, Including Related Tax Benefit 2 71
Repayments under Term Loan (2,250) (750)
New Borrowings under Revolving Credit Facility, Net (142) 1,770
------- -------
Net Cash (Used In)/Provided By Financing Activities (2,390) 1,091
------- -------
Net Increase/(Decrease) in Cash 424 (4,204)
Cash at Beginning of the Period 3,888 5,057
------- -------
Cash at End of the Period $ 4,312 $ 853
======= =======
</TABLE>
Continued...
<PAGE> 6
ECC INTERNATIONAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED
SEPTEMBER 30, 1997 AND 1996 (Continued)
(In Thousands)
(Unaudited)
Three Months Three Months
Ended Ended
9/30/97 9/30/96
------------ ------------
Supplemental Disclosure of Cash Flow Information:
Cash Paid During the Year For:
Interest $393 $420
Income Taxes $ -- $922
Supplemental Schedule of
Non Cash Financing Activities:
Issuance of Employee Stock Incentives $421 $ --
See accompanying notes to the consolidated financial statements.
<PAGE> 7
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
1. The accompanying statements are unaudited and have been prepared by ECC
pursuant to the rules and regulations of the Securities and Exchange
Commission. The June 30, 1997 consolidated balance sheet was derived from
audited financial statements but does not include all disclosures required
by generally accepted accounting principles. In the opinion of management
the accompanying unaudited consolidated financial statements contain all
adjustments, consisting of only normal recurring adjustments, necessary to
present fairly the consolidated financial position, results of operations
and cash flows for the interim period presented. These unaudited
consolidated financial statements should be read in conjunction with the
consolidated financial statements and footnotes thereto in the Company's
1997 Annual Report to Shareholders.
2. Loss per common share is computed by dividing net loss by the weighted
average number of common shares outstanding during the period without
giving effect to the exercise of outstanding stock options assumed
converted to common stock due to these incremental shares being
anti-dilutive.
Earnings per common share is computed by dividing net income by the
weighted average number of common shares outstanding during the period
after giving effect to the exercise of outstanding stock options assumed
converted to common stock.
3. The Company did not comply with the minimum fixed charge coverage ratio at
September 30, 1997 under its Term Loan and Revolving Credit Agreement and,
accordingly, has received an irrevocable waiver with respect to such
covenant from its bank lender. The Company made the two final required
payments on its term loan totaling $2,250,000 during the first quarter of
fiscal year 1998.
Due to the pending re-negotiation of the Revolving Credit Agreement, the
Company's bank lenders extended the expiration date to October 1, 1998. As
such, the amount originally due on September 30, 1998 continues to be
classified as long-term debt on the Consolidated Balance Sheets at
September 30, 1997.
4. In February 1997, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 128, "Earnings Per Share"
("SFAS 128"). SFAS 128 specifies new standards designed to improve the
earnings per share ("EPS") information provided in financial statements by
simplifying the existing computational guidelines, revising the disclosure
requirements, and increasing the comparability of EPS data on an
international basis. Changes made to simplify the EPS computation include:
eliminating the presentation of primary EPS and replacing it with basic
EPS, with the principal difference being that common stock equivalents are
not considered in computing basic EPS. The statement is effective for
periods ending after December 15, 1997, with prior periods restated to
comply with the new standard at that time. If the new standard had been
effective for the periods ended September 30, 1997 and 1996, there would
have been no significant change in (loss)/earnings per share as presented
in the accompanying Consolidated Statements of Operations.
5. On September 25, 1997, the Company announced a tentative agreement with
Maytag Corporation for the purchase for cash by Maytag of the technology,
fixed assets, inventory and trade receivables of the Company's vending
operation. The agreement is subject to final negotiations and a definitive
agreement between the parties. The proposed sale is currently expected to
be completed during the second quarter of fiscal year 1998. It is currently
anticipated that proceeds from the sale of the vending operation will be
used to reduce the Company's debt.
Operating results have been segregated in the accompanying consolidated
statements of operations. Net losses of the discontinued operation were
$721,000 for the three-month period ended September 30, 1997. This compares
to a $526,000 net loss for the three-month period ended September 30, 1996.
The net loss for the three-month period ended September 30, 1997 was
included as a component of discontinued operations in the Company's June
30, 1997 consolidated financial statements. Discontinued operations at June
30, 1997 included and continue to represent managements' best estimates of
the amounts expected to be realized on the proposed sale of the vending
operation, the costs directly associated with the disposal of the
operation, as well as the operating losses expected to be incurred during
the phase-out period. There can be no assurance that the actual amounts
will not exceed management's estimates or that such actual amounts will not
have a material adverse effect on the Company's financial condition and
results of operations.
<PAGE> 8
ECC INTERNATIONAL CORP. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
This Quarterly Report on Form 10-Q contains forward-looking statements
within the meaning of Section 21E of the Securities Exchange Act of 1934,
as amended. For this purpose, any statements contained herein that are not
statements of historical fact may be deemed to be forward-looking
statements. Without limiting the foregoing, the words "believes,"
"anticipates," "plans," "expects," and similar expressions are intended to
identify forward-looking statements. There are a number of factors that
could cause the Company's actual results to differ materially from those
indicated by such forward-looking statements. These factors include,
without limitation, those set forth below under the caption "Certain
Factors that May Affect Future Operating Results."
a) MATERIAL CHANGES IN FINANCIAL CONDITION.
During the three-month period ended September 30, 1997, the Company's
principal sources of cash were billings and receipts on costs and estimated
earnings in excess of billings on completed contracts and advances on
contracts in the UK subsidiary. The principal uses of these and existing
funds were to make the final payments on the term loan, to finance the
increase in inventories and to fund improvements to the Orlando facility.
Accounts receivable increased primarily due to billings in late September
on two large F18 contracts. Payment on these billings was received in the
second quarter of fiscal year 1998.
Costs and estimated earnings in excess of billings on completed contracts
decreased due to the completion or near completion of several contracts in
the domestic training division.
Work in process inventory increased primarily due to unabsorbed overhead.
Overhead is absorbed on an annualized projected rate. Management expects
that volume during the remaining fiscal 1998 quarters will support the
currently budgeted overhead rate.
Finished goods inventory decreased as a result of the sale of vending units
inventoried at June 30, 1997.
Prepaid expenses and other increased primarily due to the federal tax
benefit recorded during the first quarter of fiscal year 1998 for federal
net operating losses realized in that period.
Accrued expenses increased as a result of accruals for payroll related
expenditures, including profit sharing contributions and employee stock
purchases. In addition, accruals for marketing representative commissions
and fees increased during the first quarter of fiscal year 1998.
The increase in capital in excess of par was primarily the result of
employee stock bonuses issued during the first quarter of fiscal year 1998.
<PAGE> 9
The Company did not comply with the minimum fixed coverage ratio at
September 30, 1997 under its Term Loan and Revolving Credit Agreement.
Accordingly, the Company has received irrevocable waivers from its bank
lenders with respect to this covenant. The Company made the two final
required payments on its term loan totaling $2,250,000 during the first
quarter of fiscal year 1998.
Due to the pending re-negotiation of the Revolving Credit Agreement, the
Company's bank lenders extended the expiration date to October 1, 1998. As
such, the amount originally due on September 30, 1998 continues to be
classified as long-term debt on the Consolidated Balance Sheets at
September 30, 1997.
During the remainder of fiscal year 1998, the Company anticipates spending
approximately $2.1 million for new machinery and equipment and to continue
to refurbish the Orlando facility.
Other than as stated above, the Company currently has no other material
commitments for capital expenditures. Management believes that with funds
available under its loan facility and its projected cash flows the Company
will have sufficient resources to meet current and future operating
commitments.
b) MATERIAL CHANGES IN RESULTS OF OPERATIONS.
Continuing Operations
Net sales decreased for the three-month period ended September 30, 1997 as
compared to the same period ended September 30, 1996. The decrease in net
sales is primarily the result of several domestic training division
contracts with reduced activity as they are complete or near completion.
Sales volume in the UK subsidiary also decreased substantially over the
corresponding period in the prior fiscal year as the activity on its two
major contracts has declined as they are expected to be completed during
fiscal year 1998. In addition, there have been no significant contract
awards in the UK subsidiary over the past fiscal year.
Overall gross margin as a percentage of sales increased marginally for the
three-month period ended September 30, 1997 versus the same period ended
September 30, 1996.
The domestic training division was awarded a large Javelin multi-year
contract as well as several additions to other ongoing contracts late in
the first quarter of fiscal year 1998. However, significant work did not
commence on these contracts until the second quarter of fiscal year 1998
and therefore no revenues were realized which could have partially or fully
offset the decline in sales during the first quarter of fiscal year 1998.
While cost reduction initiatives continue, overhead and S,G&A levels have
not decreased proportionate to the decrease in sales volume. Management
anticipates that the award of the large Javelin multi-year contract,
additions to several ongoing contracts, combined with further cost
reduction initiatives, will result in improved results during fiscal year
1998.
Systems development expense increased for the three-month period ended
September 30, 1997 versus the corresponding period in the previous fiscal
year. The increase is primarily the result of efforts in the domestic
training division to develop and/or enhance technologies and processes in
order to remain competitive in the industry.
Interest expense decreased for the three-month period ended September 30,
1997 versus the corresponding period in the previous fiscal year. The
decrease is a result of the final payments totaling $2,250,000 made on the
Company's term loan during the first quarter of fiscal year 1998.
<PAGE> 10
Discontinued Operations
On September 25,1997, the Company announced a tentative agreement with
Maytag Corporation for the purchase for cash by Maytag of the technology,
fixed assets, inventory and trade receivables of the Company's vending
operation. The agreement is subject to final negotiations and a definitive
agreement between the parties. The proposed sale is currently expected to
be completed during the second quarter of fiscal year 1998. It is currently
anticipated that proceeds from the sale of the vending operation will be
used to reduce the Company's debt.
Operating results have been segregated in the accompanying consolidated
statements of operations. Net losses for the discontinued operation were
$721,000 for the three-month period ended September 30, 1997. This compares
to a $526,000 net loss for the three-month period ended September 30, 1996.
The net loss for the three-month period ended September 30, 1997 was
included as a component of discontinued operations in the Company's June
30, 1997 consolidated financial statements. Discontinued operations at June
30, 1997 included and continue to represent managements' best estimates of
the amounts expected to be realized on the proposed sale of the vending
operation, the costs directly associated with the disposal of the
operation, as well as the operating losses expected to be incurred during
the phase-out period. There can be no assurance that the actual amounts
will not exceed management's estimates or that such actual amounts will not
have a material adverse effect on the Company's financial condition and
results of operations.
c) CERTAIN FACTORS THAT MAY AFFECT FUTURE OPERATING RESULTS.
The following important factors, among others, could cause actual results
to differ materially from those indicated by forward-looking statements
made in this Quarterly Report on Form 10-Q and presented elsewhere by
management from time to time. All forward-looking statements included in
this document are based on information available to the Company on the date
hereof, and the Company assumes no obligation to update any such
forward-looking statements.
A number of uncertainties exist that could affect the Company's future
operating results, including, without limitation, general economic
conditions, changes in government spending, cancellation of weapons
programs, delays in contract awards, delays in the acceptance process of
contract deliverables, the Company's continued ability to develop and
introduce products, the introduction of new products by competitors,
pricing practices of competitors, the cost and availability of parts and
the Company's ability to control costs.
To date, a substantial portion of the Company's revenues have been
attributable to long-term contracts with various government agencies. As a
result, any factor adversely affecting procurement of long-term government
contracts could have a material adverse effect on the Company's financial
condition and results of operations.
On September 25, 1997, the Company announced a tentative agreement with
Maytag Corporation whereby Maytag would acquire the technology, fixed
assets, inventory and trade receivables of ECC Vending Corp. The agreement
is subject to final negotiations and a definitive agreement between the
parties.
<PAGE> 11
Because of these and other factors, past financial performance should not
be considered an indication of future performance. The Company's future
quarterly operating results may vary significantly, depending on factors
such as the timing of contract awards. Investors should not use historical
trends to anticipate future results and should be aware that the trading
price of the Company's Common Stock may be subject to wide fluctuations in
response to quarterly variations in operating results and other factors,
including those discussed above.
<PAGE> 12
PART II. OTHER INFORMATION
ECC INTERNATIONAL CORP.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
a. EXHIBITS
Exhibit 11 - Schedule of Computation of Earnings Per Share
Exhibit 27.1 - Financial Data Schedule
Exhibit 27.2 - Financial Data Schedule
b. REPORTS ON FORM 8-K
The Company filed no reports on Form 8-K during the quarter
for which this report is filed.
<PAGE> 13
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.
ECC INTERNATIONAL CORP.
Date November 13, 1997 /s/ George W. Murphy
-------------------------- -----------------------------------
George W. Murphy, President,
and Chief Executive Officer
Date November 13, 1997 /s/ Relland Winand
-------------------------- -----------------------------------
Relland Winand
Vice President, Finance and
Principal Financial and
Accounting Officer
<PAGE> 1
Exhibit 11
SCHEDULE OF COMPUTATION OF EARNINGS PER SHARE
(In Thousands, Except Share and Per Share Data)
(Unaudited)
Three Months Three Months
Ended Ended
September 30 September 30
1997 1996
Primary
- -------
Net (Loss)/Income $ (993) $ 214
========== ==========
Weighted Average Shares Outstanding 8,119,883 7,878,605
Incremental Shares from Assumed
Exercise of Stock Options -- 136,746
---------- ----------
Total Shares 8,119,883 8,015,351
========== ==========
Primary Per Share Amounts
- -------------------------
Net (Loss)/Income $ (0.12) $ 0.03
========== ==========
Fully Diluted *
- -------------
Net (Loss)/Income $ (993) $ 214
========== ==========
Weighted Average Shares Outstanding 8,119,883 7,878,605
Incremental Shares from Assumed
Exercise of Stock Options -- 136,746
---------- ----------
Total Shares 8,119,883 8,015,351
========== ==========
Fully Diluted Per Share Amounts
- -------------------------------
Net (Loss)/Income $ (0.12) $ 0.03
========== ==========
* Fully diluted earnings per share calculation is presented in accordance
with Regulation S-K item 601(b)(11) although not required by footnote 2 to
paragraph 14 of Accounting Principles Board Opinion No. 15 because it
results in dilution of less than 3%.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JUL-01-1997
<PERIOD-END> SEP-30-1997
<EXCHANGE-RATE> 1
<CASH> 4,312
<SECURITIES> 0
<RECEIVABLES> 10,059
<ALLOWANCES> 106
<INVENTORY> 10,165
<CURRENT-ASSETS> 51,720
<PP&E> 62,377
<DEPRECIATION> 36,608
<TOTAL-ASSETS> 79,749
<CURRENT-LIABILITIES> 16,638
<BONDS> 16,498
0
0
<COMMON> 815
<OTHER-SE> 44,239
<TOTAL-LIABILITY-AND-EQUITY> 79,749
<SALES> 12,156
<TOTAL-REVENUES> 12,156
<CGS> 9,474
<TOTAL-COSTS> 9,474
<OTHER-EXPENSES> 750
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 390
<INCOME-PRETAX> (1,287)
<INCOME-TAX> (294)
<INCOME-CONTINUING> (993)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (993)
<EPS-PRIMARY> (.12)
<EPS-DILUTED> (.12)
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> SEP-30-1996
<EXCHANGE-RATE> 1
<CASH> 853
<SECURITIES> 0
<RECEIVABLES> 9,013
<ALLOWANCES> 135
<INVENTORY> 14,627
<CURRENT-ASSETS> 61,631
<PP&E> 59,004
<DEPRECIATION> 32,329
<TOTAL-ASSETS> 90,134
<CURRENT-LIABILITIES> 16,526
<BONDS> 19,000
0
0
<COMMON> 785
<OTHER-SE> 52,389
<TOTAL-LIABILITY-AND-EQUITY> 90,135
<SALES> 22,426
<TOTAL-REVENUES> 22,426
<CGS> 17,526
<TOTAL-COSTS> 17,526
<OTHER-EXPENSES> 315
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 440
<INCOME-PRETAX> 1,312
<INCOME-TAX> 572
<INCOME-CONTINUING> 740
<DISCONTINUED> (526)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 214
<EPS-PRIMARY> .03
<EPS-DILUTED> .03
</TABLE>
