<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(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, 1998
Transition report pursuant to Section 13 or 15(d) of the Securities
- ----- Exchange Act of 1934
For the transition period from ______________________ to ____________________
Commission File No. 0-18785
OXBORO MEDICAL INTERNATIONAL, INC.
- -------------------------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
Minnesota 41-1391803
- -------------------------------- --------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
13828 Lincoln Street NE, Ham Lake, Minnesota 55304
- -------------------------------- --------------------
(Address of principal executive offices) (ZIP Code)
Issuer's telephone number, including area code: (612) 755-9516
--------------------
No Change
- -------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the issuer (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the past 12 months (or for such shorter period that the issuer was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
---
The number of shares of the issuer's Common Stock outstanding at
June 30, 1998 was 3,168,942 shares.
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OXBORO MEDICAL INTERNATIONAL, INC.
TABLE OF CONTENTS
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Page No.
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets as of
June 30, 1998 (unaudited) and September 30, 1997 3
Condensed Consolidated Statements of Operations for Three Months
and Nine Months Ended June 30, 1998 and 1997 (unaudited) 4
Condensed Consolidated Statements of Cash Flows for
Nine Months Ended June 30, 1998 and 1997 (unaudited) 5
Notes to Condensed Consolidated Financial Statements (unaudited) 6
Item 2. Management's Discussion and Analysis 8
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 10
Item 6. Exhibits and Reports on Form 8-K 11
Signature 11
</TABLE>
2
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, September 30,
1998 1997
----------------- ---------------------
(unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 114,881 $ 124,815
Accounts receivable, less allowance for doubtful
accounts of $22,232 and $28,276, respectively 734,257 719,547
Inventories 1,803,760 1,659,838
Deferred income taxes 188,000 188,000
Other current assets 243,514 250,329
----------------- ---------------------
TOTAL CURRENT ASSETS 3,084,412 2,942,529
PROPERTY AND EQUIPMENT:
Building 905,366 891,919
Land 57,211 57,211
Furniture and equipment 1,295,054 1,243,080
----------------- ---------------------
2,257,631 2,192,210
Less accumulated depreciation (966,719) (841,582)
----------------- ---------------------
1,290,912 1,350,628
INVESTMENTS 254,835 203,770
INVENTORIES 851,000 910,000
OTHER ASSETS 132,975 171,250
----------------- ---------------------
TOTAL ASSETS $ 5,614,134 $ 5,578,177
----------------- ---------------------
----------------- ---------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long-term obligations $ 6,411 $ 6,411
Note payable to bank 388,313 131,313
Accounts payable 154,627 231,704
Accrued salaries, wages, payroll taxes 191,127 245,126
Income taxes payable 23,742 32,602
Other accrued expenses 104,811 195,139
----------------- ---------------------
TOTAL CURRENT LIABILITIES 869,031 842,295
LONG TERM OBLIGATIONS 381,861 386,754
DEFERRED INCOME TAXES 115,000 115,000
SHAREHOLDERS' EQUITY:
Common stock 31,690 22,586
Additional paid-in capital 2,737,399 1,313,057
Retained earnings 2,981,045 2,992,291
Less:
Receivable from ESOP (174,306) (93,806)
Stock subscription receivable (318,746) -
Shares in escrow - Employee Agreement (708,840) -
Shares in escrow - Royalty Agreement (300,000) -
----------------- ---------------------
TOTAL SHAREHOLDERS' EQUITY 4,248,242 4,234,128
----------------- ---------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 5,614,134 $ 5,578,177
----------------- ---------------------
----------------- ---------------------
</TABLE>
See accompanying notes to condensed consolidated financial statements.
3
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
June 30 June 30
---------------------------------------- ----------------------------------------
1998 1997 1998 1997
------------------ ------------------ ------------------ ------------------
<S> <C> <C> <C> <C>
Net sales $1,367,603 $1,185,167 $3,772,149 $3,486,462
Cost of goods sold 483,247 374,792 1,297,111 1,013,166
------------------ ------------------ ------------------ ------------------
Gross margin 884,356 810,375 2,475,038 2,473,296
Selling, general and administrative expenses 871,068 931,867 2,478,111 2,512,394
------------------ ------------------ ------------------ ------------------
Operating income (loss) 13,288 (121,492) (3,073) (39,098)
Interest and other income (expense)
(1,029) (15,442) (10,673) (25,760)
------------------ ------------------ ------------------ ------------------
Earnings (loss) before income taxes 12,259 (136,934) (13,746) (64,858)
Income tax provision (benefit) 2,500 (31,694) (2,500) (9,287)
------------------ ------------------ ------------------ ------------------
Net earnings (loss) $ 9,759 $ (105,240) $ (11,246) $ (55,571)
------------------ ------------------ ------------------ ------------------
------------------ ------------------ ------------------ ------------------
Net earnings (loss) per share
Basic $ - $ (.04) $ - $ (.02)
Diluted $ - $ (.04) $ - $ (.02)
Weighted average common and common
equivalent shares outstanding
Basic 3,168,942 2,698,392 2,740,852 2,692,997
Diluted 3,168,942 2,698,392 2,740,852 2,692,997
</TABLE>
See accompanying notes to condensed consolidated financial statements.
4
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
June 30
----------------------------------------------
1998 1997
-------------------- -------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (11,246) $ (55,571)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization 132,344 135,810
Compensation expense related to stock options 12,500 --
Change in current assets and current liabilities:
Accounts receivable (14,710) (34,770)
Inventories (84,922) (148,762)
Other current assets 6,815 (74,895)
Accounts payable (77,077) (102,865)
Income taxes payable (3,500) (29,000)
Accrued salaries, wages, payroll taxes and other accrued expenses (144,327) (23,733)
-------------------- -------------------
NET CASH USED IN OPERATING ACTIVITIES (184,123) (333,786)
CASH FLOWS FROM INVESTING ACTIVITIES:
Long-term investment (51,065) (59,208)
(Additions to) reduction of other assets 38,275 (52,181)
Purchase of property and equipment (72,628) (85,486)
Repurchase of stock -- (95,298)
-------------------- -------------------
NET CASH USED IN INVESTING ACTIVITIES (85,418) (292,173)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options -- 90,000
Payment of stock subscription -- 80,000
Proceeds from ESOP payment 7,500 7,500
Payment on long-term debt (4,893) (5,030)
Net borrowings under note payable to bank 257,000 500,000
-------------------- -------------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 259,607 672,470
-------------------- -------------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (9,934) 46,511
CASH AND CASH EQUIVALENTS, at beginning of period 124,815 13,323
-------------------- -------------------
-------------------- -------------------
CASH AND CASH EQUIVALENTS, at end of period $ 114,881 $ 59,834
-------------------- -------------------
-------------------- -------------------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the nine months ended June 30 for:
Income taxes $ 6,360 $ 29,000
</TABLE>
See accompanying notes to condensed consolidated financial statements.
5
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OXBORO MEDICAL INTERNATIONAL, INC. AND CONSOLIDATED SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NINE MONTHS ENDED JUNE 30, 1998
(UNAUDITED)
1. Basis of Financial Statement Presentation
The accompanying unaudited condensed consolidated financial
statements have been prepared by the Company 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. Although management believes that the
disclosures are adequate to make the information presented not
misleading, it is suggested that these interim consolidated
financial statements be read in conjunction with the Company's most
recent audited consolidated financial statements and notes thereto.
In the opinion of management, all adjustments (which include only
normal recurring adjustments) necessary for a fair presentation of
the financial position, results of operations and cash flows for
the interim periods presented have been made. Operating results for
the three months and nine months ended June 30, 1998 are not
necessarily indicative of the results that may be expected for the
year ending September 30, 1998.
2. Inventories
<TABLE>
<CAPTION>
June 30, September 30,
1998 1997
-------------------- ----------------------
<S> <C> <C>
Inventories consist of:
Raw materials $1,598,038 $1,385,987
Finished goods 1,056,722 1,183,851
-------------------- ----------------------
$2,654,760 $2,569,838
-------------------- ----------------------
-------------------- ----------------------
</TABLE>
The Company produces inventory in anticipation of customer demand.
Although management believes its estimated carrying value of
inventory is appropriate, it is possible that continuing limited
sales of various product lines could result in a significant
reduction of the value of this inventory, which could have a
material adverse effect on the Company.
3. Shareholders' Equity
Changes in shareholders' equity during the nine months ended June 30,
1998 were as follows:
<TABLE>
<CAPTION>
<S> <C>
Shareholders' equity at September 30, 1997 $4,234,128
Receivable from ESOP (a) (88,000)
Payment on ESOP receivable 7,500
Stock subscription receivable (b) (318,746)
Shares issued into escrow - Employment Agreement (c) (708,840)
Shares issued into escrow - Royalty Agreement (d) (300,000)
Paid-in capital received (e) 1,424,342
Common stock issued (f) 9,104
Net (loss) for the period (g) (11,246)
----------
Shareholders' equity at June 30, 1998 $4,248,242
----------
----------
</TABLE>
6
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(a) On January 16, 1998, the Company issued 80,000 shares of
its common stock to the Company's ESOP. The stock was
issued at $1.10 per share.
(b) On January 16, 1998, various officers and directors
exercised stock options to purchase 300,364 shares of
common stock. The average exercise price was $1.061 per
share. A stock subscription receivable of $318,746 was
established concurrent with the exercises, payable over
five years. The Company also received a $5,360 tax benefit
related to this transaction.
(c) On February 25, 1998, 360,000 shares of newly issued common
stock were placed in escrow in connection with an amendment
to the Employment Agreement with an officer of the Company.
The stock was issued at $1.969 per share.
(d) On February 25, 1998, 150,000 shares of newly issued common
stock were placed in escrow in connection with an amendment
to the Royalty Agreement with an officer of the Company.
The stock was issued at $2.00 per share.
(e) Paid-in capital increased by $1,424,342 due to the above
transactions.
(f) Common stock increased by $8,904 due to the above
transactions. Common stock also increased by an
additional $200 to account for options paid for by an
officer in fiscal 1997.
(g) Operations during the nine months ended June 30, 1998
resulted in a net loss of $11,246.
Earnings Per Share
The Company's basic net earnings (loss) per share amounts have been
computed by dividing net earnings (loss) by the weighted average
number of outstanding common shares. The Company's diluted net
earnings (loss) per share is computed by dividing net earnings
(loss) by the weighted average number of outstanding common shares
and common share equivalents relating to stock options, when
dilutive.
For the three months ended June 30, 1998 no common share
equivalents were included in the computation of diluted net
earnings per share as the effect would have been anti-dilutive.
For the three months ended June 30, 1997, and the nine months
ended June 30, 1998 and 1997, the Company reported net losses and
accordingly, no common share equivalents were included in the
computation of diluted net loss per share.
Options to purchase 40,000 and 140,364 shares of common stock with
a weighted average exercise price of $1.63 and $1.31 were
outstanding during the three months ended June 30, 1998 and 1997,
but were excluded from the computation of common share equivalents
because their exercise prices were greater than the average market
price of the common shares.
Options to purchase 60,121 and 127,031 shares of common stock with
a weighted average exercise price of $1.50 and $1.46 were
outstanding during the nine months ended June 30, 1998 and 1997,
but were excluded from the computation of common share equivalents
because their exercise prices were greater than the average market
price of the common shares.
4. Supplemental Disclosure of Cash Flow Information
The Company paid $38,866 and $51,661 in interest during the nine
months ended June 30, 1998 and 1997, respectively, and received cash
of $13,594 and $25,567 as interest payments during the nine months
ended June 30, 1998 and 1997, respectively.
5. Recently Issued Accounting Standards
In June 1997, the Financial Accounting Standards Board (FASB) issued
SFAS No. 130, "Reporting Comprehensive Income," which is effective
for fiscal years beginning after December 15, 1997. SFAS No. 130
establishes standards for the reporting and display of comprehensive
income and its components. Comprehensive income includes certain
non-owner changes in equity that are currently excluded from net
income. Because the
7
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Company historically has not experienced transactions that would
be included in comprehensive income, the adoption of SFAS No. 130
is not expected to have a material effect on the financial
position, results of operations or cash flows of the Company.
The FASB also issued SFAS No. 131, "Disclosures about Segments of
Enterprise and Related Information" effective for fiscal years
beginning after December 15, 1997. SFAS No. 131 requires public
companies to report certain information about operating segments in
their financial statements, and establishes related disclosures about
products and services, geographic areas and major customers. SFAS No.
131 does not need to be applied to interim financial statements in
the initial year of application; however, comparative information for
interim periods in the initial year of application will be reported
in the financial statements for interim periods in fiscal 2000.
The AICPA's Accounting Standard Executive Committee has issued SOP
98-1, "Accounting for the Costs of Computer Software Developed or
Obtained for Internal Use." Capitalized costs of internal-use
software projects consist of external direct costs of materials and
services used to develop or purchase internal-use software, payroll
and payroll-related costs, and interest costs incurred during the
development of internal-use software. SOP 98-1 is effective for
fiscal years beginning after December 15, 1998 for costs incurred in
those fiscal years for all projects, including projects in progress
when the SOP is adopted. The adoption of this standard is not
expected to have a material effect on the financial statements of the
Company.
Item 2. Management's Discussion and Analysis
RESULTS OF OPERATIONS
The Company develops, assembles and markets disposable medical products for use
in general and cardiovascular surgery (Medical). Its wholly-owned subsidiary,
Oxboro Outdoors, Inc. (Outdoors), develops and markets products for outdoor
recreational use.
Net sales during the three-month and nine-month periods ended June 30, 1998
increased by 15.4% and 8.2%, respectively, as compared to the corresponding
periods in the previous fiscal year.
Medical sales for fiscal 1998 for the three-month and nine-month periods were
$1,150,693 and $3,366,026, respectively, representing increases of 5.6% for both
periods compared to the corresponding prior periods. Increases were realized in
sales to hospitals, international distributors, dealers/distributors, with a
slight decrease in sales (2%) to surgical kit packing companies.
Outdoors sales for fiscal 1998 for the three-month and nine-month periods
were $216,911 and $406,123, respectively, compared to $95,078 and $299,158 for
the comparable prior periods. The increases of Outdoors sales result
almost entirely from sales of National Football League licensed product.
Consolidated gross margin was 64.7 % for the three-month period and 65.6%
for the nine-month period ended June 30, 1998, as compared to 68.4% and
70.9%, respectively, for the same periods in fiscal 1997.
8
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For Medical, the gross margin was 68.4% and 69.0% for the three-month and
nine-month periods ended June 30, 1998, respectively, as compared to 71.9% and
75.0% for the same periods in fiscal 1997.
For Outdoors, the gross margin was 45.0% and 37.6%, respectively, for the
three-month and nine-month periods ended June 30, 1998, compared to 28.0% and
29.3% respectively, for the three and nine-month periods in fiscal 1997.
The decreases in gross margin for Medical were due mainly to the
establishment of a regulatory compliance office, CE Certification approval
processes, and general compliance activities which resulted in an increase in
cost of manufacturing.
For Outdoors, the increase in gross margin was due mainly to increased sales
and the mix of products sold.
Selling, general and administrative ("SG&A") expenses decreased 6.5% for the
three-month period and 1.5% for the nine-month period as compared to the
prior periods.
For the nine months ended June 30, 1998, Medical SG&A expenses increased by
approximately $104,830, including increases from certain one-time expenses,
such as $102,696 for compliance activities, $26,709 in non-conforming product
expenses, $51,537 in consulting fees, and $214,000 attributable to a proxy
contest. These were offset in part by decreases in several categories of
operating expenses. During the third quarter of fiscal 1997, the Company
incurred expenses of $152,590 in connection with the termination of the prior
Chief Executive Officer.
For the nine months ended June 30, 1998, Outdoors SG&A expenses decreased by
$139,114, primarily due to a decrease in advertising costs of $152,777. The
Company believes that the reduction in spending on advertising may have had a
negative impact on Outdoors sales.
Earnings (loss) before income taxes during the three-month and nine-month
periods ended June 30, 1998 were $12,259 and ($13,746), respectively,
compared to ($136,934) and ($64,858), respectively, for the corresponding
periods of fiscal 1997.
LIQUIDITY AND CAPITAL RESOURCES
As of June 30, 1998, the Company had working capital of $2,215,381, compared
to $2,100,234 at September 30, 1997, and long-term debt (net of current
maturities) of $381,861. As of June 30, 1998 the Company had $114,881 in
cash, compared to $124,815 at September 30, 1997.
During the nine months ended June 30, 1998, the Company used $184,123 net
cash in operating activities, including an increase of $84,922 in inventories
and decreases of $77,077 in accounts payable, $53,999 in accrued salaries,
wages, payroll taxes and $90,328 in other accrued expenses.
The Company used $85,418 in investing activities during the nine months ended
June 30, 1998, primarily for the purchase of property and equipment.
During the nine months ended June 30, 1998 the Company renewed its line of
credit of $1,500,000 subject to certain terms and conditions related to the
Company's financial performance and management stability. At June 30, 1998,
the Company was in compliance with all covenants; however, there can be no
assurance that the Company will continue to be in compliance in the future.
As of June 30, 1998 the Company's outstanding balance on this line of credit
9
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was $388,313. The Company believes that any additional funding necessary
during fiscal 1998 would be sufficiently available depending on the continued
availability of funds from the Company's line of credit.
The Company recently announced that its Chief Executive Officer would be
retiring effective September 1, 1998. The terms of his retirement
compensation are currently being negotiated.
YEAR 2000
The Company has assessed and continues to assess the impact of the Year 2000
issue on its reporting systems and operations. The Year 2000 issue exists
because many computer systems and applications currently use two-digit fields
to designate a year. As the century date occurs, date sensitive systems may
recognize the Year 2000 as 1900 or not at all. This inability to recognize or
properly treat the Year 2000 may cause systems to process critical financial
and operational information incorrectly.
Most systems under which the Company is currently operating recognize the
Year 2000. The Company plans to devote the necessary resources to resolve all
significant Year 2000 issues in a timely manner and has not yet quantified the
cost of any required modifications. If Year 2000 modifications are not
properly completed either by the Company or any entities with whom the
Company conducts business, which include approximately 3800 hospitals, the
Company could be adversely impacted.
FORWARD-LOOKING STATEMENTS
Forward-looking statements herein are made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995. There are
certain important factors that could cause results to differ materially from
those anticipated by some of the statements made herein. Investors are
cautioned that all forward-looking statements involve risks and uncertainty.
Among the factors that could cause actual results to differ materially are
the following: market acceptance of new products, changes in competitive
environment, general conditions in the industries served by the Company's
products, personnel changes and associated costs, financial obligations under
retirement agreement with senior management, continued availability of bank
financing and related costs, overall economic conditions including inflation,
potential business combinations or divestitures, and timeliness and
cost of regulatory compliance activities and any related impact on sales.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
The Company previously reported a favorable jury verdict in an action
brought by Up North Communications, Ltd. ("Up North") against the Company and
Outdoors, in Minnesota District Court, Anoka County. Up North sought payment of
approximately $64,000, plus interest, for goods and services provided to
Outdoors. Outdoors asserted a counterclaim against Up North alleging breach of
contract, breach of warranty and misrepresentation, seeking damages in excess of
$50,000, for Up North's failure to comply with the contract by supplying
defective goods and services and misrepresenting its abilities and experience. A
jury trial held in late 1997 resulted in a jury verdict in favor of the Company
and Outdoors for between $19,000 and $26,700, depending on the court's
interpretation of the legal effect of one of the jury's answers to the special
verdict, plus attorneys' fees. Subsequently, post-trial motions were filed by Up
North seeking judgment notwithstanding the verdict ("JNOV") or, in the
alternative, a new trial. Outdoors, in turn, filed a motion seeking a
determination of the amount of attorneys' fees. The motions were heard on March
17, 1998.
10
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The Court denied Up North's Motion for JNOV and/or a new trial, and
awarded Outdoors attorneys' fees and costs in the amount of $22,500. Judgment
was entered in favor of Outdoors against Up North on June 24, 1998 in the
amount of $43,054, which included the damages, interest and attorneys' fees.
Up North's time to appeal from the denial of its post-trial motions has
expired and the time to appeal from the judgment will expire on September 24,
1998.
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 during the quarter ended June
30, 1998.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
OXBORO MEDICAL INTERNATIONAL, INC.
Dated: August 14, 1998 By /s/ Larry A. Rasmusson
----------------------------------
Larry A. Rasmusson
Its Chief Financial Officer
11
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S FINANCIAL STATEMENTS FOR THE 9 MONTHS ENDED JUNE 30, 1998, AND IS
QUALIFIED IN ITS ENTIRETY BY REFERNCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-START> OCT-01-1997
<PERIOD-END> JUN-30-1998
<CASH> 114,881
<SECURITIES> 0
<RECEIVABLES> 756,489
<ALLOWANCES> 22,232
<INVENTORY> 2,654,760
<CURRENT-ASSETS> 3,084,412
<PP&E> 2,257,631
<DEPRECIATION> 966,719
<TOTAL-ASSETS> 5,614,134
<CURRENT-LIABILITIES> 869,031
<BONDS> 0
0
0
<COMMON> 31,690
<OTHER-SE> 4,216,552
<TOTAL-LIABILITY-AND-EQUITY> 5,614,134
<SALES> 3,772,149
<TOTAL-REVENUES> 3,772,149
<CGS> 1,297,111
<TOTAL-COSTS> 1,297,111
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 38,866
<INCOME-PRETAX> (13,746)
<INCOME-TAX> (2,500)
<INCOME-CONTINUING> (11,246)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (11,246)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
