<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
---------------
FORM 10-Q
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended October 3, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _____________to_____________
---------------
Commission File Number 0-9653
XICOR, INC.
(Exact name of registrant as specified in its charter)
California 94-2526781
(State or other jurisdiction of (I.R.S.Employer
incorporation or organization) Identification No.)
1511 Buckeye Drive, Milpitas, California 95035
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (408) 432-8888
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 [ ]
NUMBER OF SHARES OUTSTANDING AT OCTOBER 3, 1999
20,403,643
-i-
<PAGE> 2
XICOR, INC.
FORM 10-Q
QUARTER ENDED OCTOBER 3, 1999
INDEX
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C> <C>
PART I: FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Consolidated Balance Sheets at October 3, 1999 1
and December 31, 1998
Consolidated Statements of Operations for the three 2
and nine months ended October 3, 1999 and
September 27, 1998
Consolidated Statements of Cash Flows for the nine 3
months ended October 3, 1999 and September 27, 1998
Notes to Consolidated Financial Information 4
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL 5
CONDITION AND RESULTS OF OPERATIONS
PART II: OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 10
SIGNATURES 10
</TABLE>
-I-
<PAGE> 3
PART I: FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
XICOR, INC.
CONSOLIDATED BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
October 3, December 31,
1999 1998
------------- -------------
(Unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 14,467,000 $ 17,881,000
Accounts receivable 11,861,000 8,835,000
Inventories 12,152,000 12,770,000
Prepaid expenses and other current assets 677,000 1,016,000
------------- -------------
Total current assets 39,157,000 40,502,000
Property, plant and equipment,
at cost less accumulated depreciation 29,055,000 38,074,000
Other assets 302,000 286,000
------------- -------------
$ 68,514,000 $ 78,862,000
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 7,471,000 $ 9,279,000
Accrued expenses 8,820,000 9,504,000
Deferred income on shipments to distributors 11,805,000 9,121,000
Current portion of long-term obligations 5,067,000 7,216,000
------------- -------------
Total current liabilities 33,163,000 35,120,000
------------- -------------
Long-term obligations 9,637,000 13,137,000
------------- -------------
Shareholders' equity:
Preferred stock; 5,000,000 shares authorized -- --
Common stock; 75,000,000 shares authorized;
20,403,643 and 20,134,427 shares outstanding 128,657,000 128,232,000
Accumulated deficit (102,943,000) (97,627,000)
------------- -------------
25,714,000 30,605,000
------------- -------------
$ 68,514,000 $ 78,862,000
============= =============
</TABLE>
See accompanying notes to consolidated financial information
-1-
<PAGE> 4
XICOR, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
----------------------------- -----------------------------
October 3, September 27, October 3, September 27,
1999 1998 1999 1998
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net sales $ 29,542,000 $ 24,695,000 $ 83,949,000 $ 79,228,000
Cost of sales 18,840,000 21,479,000 61,146,000 66,892,000
------------ ------------ ------------ ------------
Gross profit 10,702,000 3,216,000 22,803,000 12,336,000
------------ ------------ ------------ ------------
Operating expenses:
Research and development 3,581,000 4,304,000 10,823,000 13,498,000
Selling, general and
administrative 5,864,000 5,448,000 16,679,000 16,566,000
Restructuring charge -- 1,267,000 -- 1,267,000
------------ ------------ ------------ ------------
9,445,000 11,019,000 27,502,000 31,331,000
------------ ------------ ------------ ------------
Income (loss) from operations 1,257,000 (7,803,000) (4,699,000) (18,995,000)
Interest expense (354,000) (463,000) (1,105,000) (1,444,000)
Interest income 171,000 228,000 488,000 863,000
------------ ------------ ------------ ------------
Income (loss) before income taxes 1,074,000 (8,038,000) (5,316,000) (19,576,000)
Provision for income taxes -- -- -- --
------------ ------------ ------------ ------------
Net income (loss) $ 1,074,000 $ (8,038,000) $ (5,316,000) $(19,576,000)
============ ============ ============ ============
Net income (loss) per common share:
Basic $ 0.05 $ (0.42) $ (0.26) $ (1.02)
============ ============ ============ ============
Diluted $ 0.05 $ (0.42) $ (0.26) $ (1.02)
============ ============ ============ ============
Shares used in per share calculations:
Basic 20,364,000 19,123,000 20,265,000 19,108,000
============ ============ ============ ============
Diluted 22,141,000 19,123,000 20,265,000 19,108,000
============ ============ ============ ============
</TABLE>
See accompanying notes to consolidated financial information
-2-
<PAGE> 5
XICOR, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
--------------------------------
October 3, September 27,
1999 1998
------------ ------------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ (5,316,000) $(19,576,000)
Adjustments to reconcile net income (loss) to
cash provided by (used for) operating activities:
Depreciation and amortization 9,949,000 9,024,000
Changes in assets and liabilities:
Accounts receivable (3,026,000) 2,060,000
Inventories 618,000 7,326,000
Prepaid expenses and other current assets 339,000 (43,000)
Other assets (16,000) (77,000)
Accounts payable and accrued expenses (2,492,000) (2,267,000)
Deferred income on shipments to distributors 2,684,000 (2,642,000)
------------ ------------
Net cash provided by (used for) operating activities 2,740,000 (6,195,000)
------------ ------------
Cash flows from investing activities:
Investments in plant and equipment, net (930,000) (3,530,000)
Purchases of short-term investments -- (4,335,000)
Maturities of short-term investments -- 13,729,000
------------ ------------
Net cash provided by (used for) investing activities (930,000) 5,864,000
------------ ------------
Cash flows from financing activities:
Repayments of long-term obligations (5,649,000) (4,553,000)
Net proceeds from sale of common stock 425,000 41,000
------------ ------------
Net cash used for financing activities (5,224,000) (4,512,000)
------------ ------------
Decrease in cash and cash equivalents (3,414,000) (4,843,000)
Cash and cash equivalents at beginning of year 17,881,000 21,106,000
------------ ------------
Cash and cash equivalents at end of period $ 14,467,000 $ 16,263,000
============ ============
Supplemental information:
Cash paid (refunded) for:
Interest expense $ 1,174,000 $ 1,444,000
Income taxes 80,000 (93,000)
Equipment acquired pursuant to long-term obligations -- 1,097,000
</TABLE>
See accompanying notes to consolidated financial information
-3-
<PAGE> 6
XICOR, INC.
NOTES TO CONSOLIDATED FINANCIAL INFORMATION
(Unaudited)
NOTE 1 - THE COMPANY:
In the opinion of management, all adjustments necessary for a fair
statement of the results of the interim periods presented (consisting only of
normal recurring adjustments) have been included. These financial statements,
notes and analyses should be read in conjunction with Xicor's Annual Report on
Form 10-K for the year ended December 31, 1998 filed with the Securities and
Exchange Commission.
NOTE 2 - NET INCOME (LOSS) PER SHARE:
Basic net income (loss) per share is computed using the weighted average
number of common shares outstanding. Diluted net income (loss) per share is
computed using the weighted average number of common shares and all dilutive
potential common shares outstanding. Options to purchase 2,891,650 shares of
common stock were outstanding at October 3, 1999, but were excluded from the
earnings per share (EPS) computation for the nine months ended October 3, 1999
as they were antidilutive.
NOTE 3 - COMPREHENSIVE INCOME (LOSS):
The net income (loss) for the periods reported also approximated the
comprehensive net income (loss) for such periods.
NOTE 4 - BALANCE SHEET DETAIL:
<TABLE>
<CAPTION>
October 3, December 31,
1999 1998
------------- -------------
<S> <C> <C>
Inventories:
Raw materials and supplies $ 940,000 $ 1,450,000
Work in process 7,161,000 7,036,000
Finished goods 4,051,000 4,284,000
------------- -------------
$ 12,152,000 $ 12,770,000
============= =============
Property, plant and equipment:
Leasehold improvements $ 16,187,000 $ 17,674,000
Equipment 119,205,000 124,371,000
Furniture and fixtures 1,879,000 1,881,000
Construction in progress 728,000 1,501,000
------------- -------------
137,999,000 145,427,000
Less accumulated depreciation (108,944,000) (107,353,000)
------------- -------------
$ 29,055,000 $ 38,074,000
============= =============
Accrued expenses:
Accrued wages and employee benefits $ 4,588,000 $ 4,038,000
Other accrued expenses 4,232,000 5,466,000
------------- -------------
$ 8,820,000 $ 9,504,000
============= =============
</TABLE>
-4-
<PAGE> 7
Accounts receivable:
Accounts receivable at October 3, 1999 and December 31, 1998 are
presented net of an allowance for doubtful accounts of $500,000.
Accrued restructuring costs:
During 1998 Xicor announced and began to implement a restructuring plan
to revise its manufacturing and procurement strategies to significantly increase
outsourcing of wafer fabrication and product testing to overseas subcontractors
and to streamline operations. Estimated restructuring costs of $1.4 million were
accrued at December 31, 1998. During the first nine months of 1999, $0.5 million
of such severance costs were paid, with the $0.9 million balance of accrued
restructuring costs expected to be paid by 2000.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the
accompanying Quarterly Financial Information and Notes thereto and Xicor's
Annual Report on Form 10-K for the year ended December 31, 1998. The results of
operations for the three and nine months ended October 3, 1999 are not
necessarily indicative of results to be expected in future periods.
RESULTS OF OPERATIONS
Sales for the three and nine months ended October 3, 1999 increased 20%
and 6%, respectively, compared to the comparable prior year periods primarily
due to increased sales of products into wireless communications applications and
increased sales of digitally controlled potentiometer products.
Gross profit as a percentage of sales was 36% and 27% for the three and
nine months ended October 3, 1999 compared to 13% and 16% for the comparable
1998 periods. The 1998 gross profit percentage was impacted by lower average
selling prices as a result of competitive price pressures, Xicor's increased
manufacturing cost level associated with increased production capacity and
upgrading of the wafer fabrication operations during 1996 and 1997 and decreased
factory utilization. After the first quarter of 1998 Xicor substantially reduced
the production volume in its factory in response to declining business
conditions. Unfavorable overhead variances that resulted from the fixed nature
of certain manufacturing costs and the smaller number of units in production
were expensed. Additionally, in the second quarter of 1998, Xicor wrote down
inventories by $2.2 million to cover declining sales prices and inventories of
certain devices that were discontinued as Xicor streamlined its product
portfolio. To control wafer fabrication costs, Xicor has continued to limit 1999
wafer output at its in-house plant by operating at about one-third of its full
capacity. Although the income statement was burdened by
-5-
<PAGE> 8
the related factory underutilization, the gross profit percentage has improved
sequentially in 1999 primarily due to product mix, more stable average selling
prices and a reduction in the overall average cost of products shipped due to
increased outsourcing and cost reductions at Xicor's in-house manufacturing
operations.
Research and development expenses were 12% and 13% of sales in the three
and nine months ended October 3, 1999 compared to 17% in the comparable prior
year periods. Research and development expenses decreased as a percentage of
sales primarily due to lower personnel costs and higher sales and, to a lesser
extent, lower depreciation.
Selling, general and administrative expenses were 20% of sales for the
three and nine months ended October 3, 1999 compared to 22% and 21% for the
comparable prior year periods. Selling, general and administrative expenses
declined as a percentage of sales in 1999 primarily due to higher sales.
In 1998, Xicor took significant steps to reduce costs. Third quarter
results include a $1.3 million restructuring charge for severance costs relating
to a workforce reduction, primarily in manufacturing.
Interest expense decreased in the three and nine months ended October 3,
1999 compared to the comparable 1998 periods due to normal principal payments of
outstanding lease debt.
Interest income decreased in the three and nine months ended October 3,
1999 compared to the comparable prior year periods due to a decrease in the
average balance invested caused primarily by Xicor's use of such funds for
operating activities during 1998 and the first quarter of 1999, ongoing debt
repayments and 1998 and 1999 capital asset purchases.
No taxes were provided in 1999 or 1998 due to the net loss. Net deferred
tax assets of $44.7 million at December 31, 1998 remain fully reserved because
of the uncertainty regarding the ultimate realization of these assets.
During 1998 Xicor announced and began to implement a restructuring plan
to change its manufacturing and procurement strategies to significantly increase
outsourcing of wafer fabrication and product testing to overseas subcontractors
and to streamline operations. Xicor's initial foundry, Yamaha Corporation of
Japan was qualified as an outside foundry for Xicor in the third quarter of
1998. In the second quarter of 1999 Xicor entered into agreements with Sanyo
Electric Co., Ltd. of Japan and ZMD GmbH of Germany to fabricate wafers for
Xicor. Yamaha produced more than one-third of Xicor's wafer requirements in the
third quarter of 1999. Subsequent to the third quarter of 1999 the first wafers
from Sanyo and ZMD GmbH were received by Xicor and passed initial quality
criteria ahead of plan. Xicor is presently evaluating the progress made in
outsourcing wafers to outside foundries against the need to continue captive
wafer fabrication operations at its in-house Milpitas plant. This evaluation is
expected to be completed prior to December 31, 1999. It is possible that as a
result of this evaluation, Xicor
-6-
<PAGE> 9
may decide to close its Milpitas wafer fabrication operation which decision
would adversely impact its results of operations for the quarter ending December
31, 1999 because of significant charges associated with closing the wafer
fabrication operation. Such charges would consist primarily of a non-cash
write-off of fabrication equipment and to a lesser extent severance, facility
shutdown and other costs.
LIQUIDITY AND CAPITAL RESOURCES
During the nine months ended October 3, 1999, Xicor generated $2.7
million of cash from operating activities and used $5.6 million to repay
long-term obligations and $0.9 million for equipment purchases. During the
balance of 1999 Xicor expects to be cash flow neutral to slightly positive.
Capital expenditures for 1999 are currently expected to be less than $2 million.
At October 3, 1999, Xicor had entered into commitments for equipment purchases
aggregating less than $0.5 million.
Xicor has a line of credit agreement with a financial institution that
expires March 31, 2000, provides for borrowings of up to $7.5 million against
eligible accounts receivable and is secured by all of Xicor's assets. Interest
on borrowings is charged at the prime lending rate plus 2% and is payable
monthly. At October 3, 1999, the entire $7.5 million was available to Xicor
based on the eligible accounts receivable balances and the borrowing formulas.
To date, no amounts have been borrowed under this line of credit. In the third
quarter of 1999, $1.7 million of the line of credit was reserved to secure a
standby letter of credit. Management believes that currently available cash and
the existing line of credit facility will be adequate to support Xicor's
operations for the next twelve months.
"SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995
This quarterly report contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934, including statements regarding the possibility
that Xicor may decide to close its Milpitas wafer fabrication operation which
decision would adversely impact its results of operations for the quarter ending
December 31, 1999, the expectation of being cash flow neutral to slightly
positive during the fourth quarter of 1999 and the expectation that currently
available cash and the existing line of credit facility will be adequate to
support Xicor's operations for the next twelve months.
Except for historical information, the matters discussed in this
Quarterly Report are forward-looking statements that are subject to certain
risks and uncertainties that could cause the actual results to differ materially
from those projected. Factors that could cause actual results to differ
materially include the following: general economic conditions and conditions
specific to the semiconductor industry; fluctuations in customer demand,
including loss of key customers, order cancellations or reduced bookings;
competitive factors such as pricing pressures on existing products and the
timing and market acceptance of new product introductions (both by Xicor and its
competitors); Xicor's ability to have available an appropriate amount of
competitive cost foundry production capacity in a timely manner; our foundry
partners' timely ability to
-7-
<PAGE> 10
successfully manufacture products for Xicor using Xicor's proprietary
technology; any disruptions of our foundry relationships; manufacturing
efficiencies; the ability to continue effective cost reductions; currency
fluctuations; the timely development and introduction of new products and
submicron processes; the ability of Xicor, its customers, vendors and
subcontractors to make their systems year 2000 ready; and the risk factors
listed from time to time in Xicor's SEC reports, including but not limited to
the "Factors Affecting Future Results" section following and Part I, Item 1. of
Xicor's Form 10-K for the year ended December 31,1998. Readers are cautioned not
to place undue reliance on these forward-looking statements, which speak only as
of the date hereof. Xicor undertakes no obligation to publicly release or
otherwise disclose the result of any revision to these forward-looking
statements which may be made as a result of events or circumstances after the
date hereof or to reflect the occurrence of unanticipated events.
FACTORS AFFECTING FUTURE RESULTS
The semiconductor industry is highly competitive and characterized by
rapidly changing technology and steadily declining product prices. The current
business climate has and will continue to result in underutilization of Xicor's
internal wafer fabrication factory, which will adversely affect Xicor's business
and results of operations. Xicor's results of operations, including gross
margins, are affected by a wide variety of factors, including general economic
conditions and conditions specific to the semiconductor industry, decreases in
average selling price over the life of any particular product, the timing of new
product introductions (both by Xicor and competitors), availability of new
manufacturing technologies, the ability to secure intellectual property rights
in a rapidly evolving market and the ability to have an appropriate amount of
competitive cost internal and outsourced production capacity in a timely manner.
The sales level in any specific quarter also depends significantly on orders
received during that quarter, as customers continue to shorten lead times for
purchase commitments. Consistent with industry practice, customer orders are
generally subject to cancellation by the customer without penalty. Xicor may be
at a disadvantage in competing with major domestic and foreign concerns that
have significant financial resources, established and diverse product lines,
worldwide vertically integrated production facilities and extensive research and
development capabilities.
The semiconductor industry is also characterized by substantial capital
and research and development investment for products and processes. The rapid
rate of technological change within the industry requires Xicor to continually
develop new and improved products and processes to maintain its competitive
position. Xicor expects to continue to invest in the research and development of
new products and manufacturing processes, although these research and
development efforts and new products may not be successful.
Xicor uses a significant number of computer software programs and
operating systems and intelligent hardware devices in its internal operations,
including information technology (IT) systems and non-IT systems used in the
design, manufacture and marketing of company products. These items are
considered to be Year 2000 "objects" and to the extent that these objects are
unable to correctly recognize and process date dependent information beyond the
year 1999, some level of modification or replacement is necessary.
-8-
<PAGE> 11
Xicor's Year 2000 readiness program addresses Xicor IT and non-IT
systems, Xicor products, key suppliers and key customers. The readiness program
consists of five phases: Planning, Assessment, Renovation, Validation and
Implementation. Xicor assigned the highest priority to "critical objects" that
would prevent Xicor from meeting its customer commitments. At the end of the
third quarter of 1999, all critical objects were Year 2000 ready and 97% of all
the objects used in the internal systems of Xicor were Year 2000 ready. Company
actions have and continue to include replacing certain systems, while modifying
others. Xicor believes its products are Year 2000 ready. Xicor is also actively
working with key suppliers of products and services to determine that the
suppliers' operations and the products and services they provide are Year 2000
ready. Xicor's key suppliers have represented to Xicor that they are Year 2000
ready and the majority of the remaining suppliers have active Year 2000
readiness programs in place. Xicor is developing contingency plans for Year 2000
readiness. These plans include identifying alternate suppliers, vendors and
procedures, generating supply and equipment lists, conducting staff training and
developing communication plans. Based on currently available information, the
incremental costs associated with the Year 2000 readiness efforts are expected
to be approximately $0.5 million, a portion of which relates to the purchase of
software and hardware and will be capitalized. Approximately $0.4 million of
these costs have been incurred to date.
Year 2000 readiness issues could have a significant adverse impact on
Xicor's operations and its financial results if modifications cannot be
completed in a timely manner; unforeseen needs or problems arise or if the
systems operated by Xicor's customers, vendors or subcontractors are not Year
2000 ready.
Xicor has an investment portfolio of fixed income securities that are
classified as "held to maturity securities". These securities, like all fixed
income instruments, are subject to interest rate risk and will fall in value if
market interest rates increase. Xicor attempts to limit this exposure by
investing primarily in short-term securities. In view of the nature and mix of
Xicor's total portfolio, a movement of 10% by market rates would not have a
material impact on the total value of the portfolio at October 3, 1999.
Xicor makes certain purchases denominated in foreign currencies. As a
result, Xicor's cash flows and earnings are exposed to fluctuations in interest
rates and foreign currency exchange rates. Xicor attempts to limit these
exposures through operational strategies and generally has not hedged currency
exposures.
Due to the foregoing and other factors, past results are a much less
reliable predictor of the future than is the case in many older, more stable and
less dynamic industries. In addition, the securities of many high technology
companies, including Xicor, have historically been subject to extensive price
and volume fluctuations that may adversely affect the market price of their
common stock.
-9-
<PAGE> 12
PART II: OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits:
27 Financial Data Schedule
(b) Reports on Form 8-K:
No reports on Form 8-K were filed with the Securities and Exchange
Commission during the quarter ended October 3, 1999.
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.
XICOR, INC., a
California Corporation
By /s/ Raphael Klein
-----------------------------
Raphael Klein
Chief Executive Officer
(Principal Executive Officer)
By /s/ Geraldine N. Hench
-----------------------------
Geraldine N. Hench
Vice President, Finance
(Principal Financial Officer)
Date: November 5, 1999
-10-
<PAGE> 13
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
27 Financial Data Schedule
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JAN-02-2000
<PERIOD-START> JAN-04-1999
<PERIOD-END> OCT-03-1999
<CASH> 14,467,000
<SECURITIES> 0
<RECEIVABLES> 12,361,000
<ALLOWANCES> 500,000
<INVENTORY> 12,152,000
<CURRENT-ASSETS> 39,157,000
<PP&E> 137,999,000
<DEPRECIATION> 108,944,000
<TOTAL-ASSETS> 68,514,000
<CURRENT-LIABILITIES> 33,163,000
<BONDS> 0
0
0
<COMMON> 128,657,000
<OTHER-SE> (102,943,000)
<TOTAL-LIABILITY-AND-EQUITY> 68,514,000
<SALES> 83,949,000
<TOTAL-REVENUES> 83,949,000
<CGS> 61,146,000
<TOTAL-COSTS> 61,146,000
<OTHER-EXPENSES> 10,823,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,105,000
<INCOME-PRETAX> (5,316,000)
<INCOME-TAX> 0
<INCOME-CONTINUING> (5,316,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (5,316,000)
<EPS-BASIC> (0.26)
<EPS-DILUTED> (0.26)
</TABLE>
