UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT
UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended September 30, 1999
Commission File No. 0-5200
BONTEX, INC.
(Exact name of registrant as specified in its charter)
VIRGINIA 54-0571303
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
ONE BONTEX DRIVE, BUENA VISTA, VIRGINIA 24416-1500
(Address of principal executive offices) (Zip Code)
Registrant's telephone number: 540-261-2181
Indicate by checkmark whether the registrant (1) has filed all reports 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 description and number of shares outstanding of each of the
issuer's classes of common stock as of the latest practicable date.
Class Outstanding at November 10, 1999
Common Stock - $.10 par value 1,572,824
1
<PAGE>
BONTEX, INC.
FORM 10-Q
FOR THE FIRST QUARTER ENDED SEPTEMBER 30, 1999
INDEX
PART I. FINANCIAL INFORMATION Page No.
Item 1. Financial Statements
CONDENSED CONSOLIDATED BALANCE SHEETS
September 30, 1999 and June 30, 1999..........................3
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND
COMPREHENSIVE INCOME (LOSS) AND CONDENSED CONSOLIDATED STATEMENTS
OF CHANGES IN STOCKHOLDERS' EQUITY
First Quarter Ended September 30, 1999 and 1998................4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
First Quarter Ended September 30, 1999 and 1998................5
CONDENSED NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS...................................................6,7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.................8-10
Item 3. Quantitative and Qualitative Disclosures About
Market Risk.......................................10, 11
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K......................12
2
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
BONTEX, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Share and Per Share Data)
<TABLE>
<CAPTION>
September 30, June 30,
(unaudited)
1999 1999
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 224 $ 336
Trade accounts receivable, less allowance for doubtful
accounts of $182 ($128 at June '99) 9,758 11,765
Other receivables 381 278
Inventories 6,465 5,798
Deferred income taxes 123 124
Income taxes refundable 54 67
Other current assets 388 152
------------- --------------
TOTAL CURRENT ASSETS 17,393 18,520
------------- --------------
Property, plant and equipment:
Land and land improvements 368 361
Buildings and building improvements 6,080 5,953
Machinery, furniture and equipment 18,015 17,885
Construction in progress 489 239
------------- --------------
24,952 24,438
Less accumulated depreciation and amortization 13,376 12,915
------------- --------------
Net property, plant and equipment 11,576 11,523
Deferred income taxes 743 599
Other assets, net 523 522
------------- --------------
TOTAL ASSETS $ 30,235 $ 31,164
============= ==============
LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities:
Short-term borrowings $ 8,854 $ 9,215
Long-term debt due currently 1,116 781
Accounts payable 6,085 6,375
Accrued expenses 1,782 1,590
Income taxes payable 184 197
------------- --------------
TOTAL CURRENT LIABILITIES 18,021 18,158
Long-term debt, less current portion 2,154 2,601
Deferred income taxes 49 48
Other long-term liabilities 521 464
------------- --------------
TOTAL LIABILITIES 20,745 21,271
------------- --------------
Stockholders' equity:
Preferred stock of no par value. Authorized 10,000,000
shares; none issued - -
Common stock of $.10 par value. Authorized 10,000,000
shares; issued and outstanding 1,572,824 shares 157 157
Additional capital 1,551 1,551
Retained earnings 7,581 8,120
Accumulated other comprehensive income 201 65
------------- --------------
TOTAL STOCKHOLDERS' EQUITY 9,490 9,893
------------- --------------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 30,235 $ 31,164
============= ==============
</TABLE>
See accompanying condensed notes to unaudited condensed consolidated financial
statements.
3
<PAGE>
BONTEX, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)
AND COMPREHENSIVE INCOME (LOSS)
AND CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(In Thousands, Except Per Share Data)
(Unaudited)
Condensed Consolidated Statements of Income (Loss) and Comprehensive Income
(Loss):
<TABLE>
<CAPTION>
First Quarter Ended
September 30,
1999 1998
<S> <C> <C> <C> <C> <C> <C>
Net Sales $ 8,059 $ 8,717
Cost of Sales 6,138 6,577
--------- ---------
Gross Profit 1,921 2,140
Selling, General and Administrative Expenses 2,412 2,339
--------- ---------
Operating Income (Loss) (491) (199)
--------- ---------
Other (Income) Expense:
Interest expense 200 243
Interest income - (1)
Foreign currency exchange (gain) loss (15) 30
Other, net 7 5
--------- ---------
Total Other (Income) Expense 192 277
--------- ---------
Income (Loss) Before Income Taxes (683) (476)
Income Tax Benefit (144) (96)
--------- ---------
Net income (Loss) (539) (380)
--------- ---------
Other Comprehensive Income
Foreign currency translation adjustment 136 330
--------- ---------
Comprehensive Income (Loss) $ (403) $ (50)
========= =========
Net income (loss) per share $ (.34) $ (.24)
========= =========
Condensed Consolidated Statements of Changes in Stockholders' Equity:
Stockholders' Equity, beginning balance $ 9,893 $ 10,891
Net income (loss) (539) (380)
Other comprehensive income
Foreign currency translation adjustment 136 330
--------- ---------
Stockholders' Equity, ending balance $ 9,490 $ 10,841
========= =========
</TABLE>
See accompanying condensed notes to unaudited condensed consolidated financial
statements.
4
<PAGE>
BONTEX, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(unaudited)
<TABLE>
<CAPTION>
First Quarter Ended
September
1999 1998
<S> <C> <C> <C> <C> <C> <C>
Cash Flows from Operating Activities:
Cash received from customers $ 9,765 $ 10,577
Cash paid to suppliers and employees (8,850) (10,418)
Interest received 1 2
Interest paid (193) (266)
Income taxes paid, net of refunds 2 35
-------- --------
Net cash provided by (used in) operating activities 725 (70)
-------- --------
Cash Flows from Investing Activities:
Acquisition of property, plant and equipment (182) (262)
-------- --------
Net cash used in investing activities (182) (262)
-------- --------
Cash Flows from Financing Activities:
Increase (decrease) in short-term borrowings, net (479) 283
Long-term debt incurred 19 350
Principal payments on long-term debt (186) (390)
-------- --------
Net cash provided by (used in) financing activities (646) 243
-------- --------
Effect of Exchange Rate Changes on Cash (9) 47
-------- --------
Net decrease in Cash and Cash Equivalents (112) (42)
Cash and Cash Equivalents at Beginning of Period 336 517
-------- --------
Cash and Cash Equivalents at End of Period $ 224 $ 475
======== ========
Reconciliation of Net Income (Loss) to Net Cash Used In
Operating Activities:
Net income (loss) $ (539) $ (380)
Adjustments to reconcile net income (loss) to net cash used in
operating activities:
Depreciation and amortization 328 336
Provision for bad debts 56 10
Deferred income taxes (144) (128)
Change in assets and liabilities:
Decrease in trade accounts and other receivables 1,974 1,631
Increase in inventories (491) (216)
Increase in other assets (233) (379)
Decrease in accounts payable and accrued expenses (256) (976)
Increase in income taxes 2 -
Increase in other liabilities 28 32
-------- --------
Net cash provided by (used in) operating activities $ 725 $ (70)
======== ========
</TABLE>
See accompanying condensed notes to unaudited condensed consolidated financial
statements.
5
<PAGE>
BONTEX, INC. AND SUBSIDIARIES
CONDENSED NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1999 AND 1998 AND JUNE 30, 1999
(Unaudited)
1. The accompanying unaudited condensed consolidated financial statements have
been prepared by Bontex, Inc. and its subsidiaries ("Bontex" or the
"Company") in accordance with generally accepted accounting principles for
interim financial reporting information and the instructions to Form 10-Q
and Article 10 of Regulation S-X. Accordingly, they do not include all of
the information and notes required by generally accepted accounting
principles for complete financial statements. In the opinion of management,
all material reclassifications and adjustments, consisting of normal
recurring accruals, considered necessary for a fair presentation of the
results of operations, financial position and cash flows for each period
shown, have been included. Operating results for interim periods are not
necessarily indicative of the results for the full year. The unaudited
condensed consolidated financial statements and condensed notes are
presented as permitted by Form 10-Q and do not contain certain information
included in the Company's annual consolidated financial statements and
notes. For further information, refer to the consolidated financial
statements and notes thereto included in the Company's Annual Report on
Form 10-K for the year ended June 30, 1999.
2. The last in, first out (LIFO) method of inventory pricing is used by the
Company in the United States. Inventories of the European subsidiaries are
valued at the lower of cost or market using the first-in, first-out (FIFO)
and weighted average bases. Inventories are summarized as follows:
<TABLE>
<CAPTION>
September 30, June 30,
1999 1999
(Dollars in Thousands)
<S> <C> <C>
Finished goods $ 3,546 $ 3,341
Raw Materials 2,506 2,025
Supplies 755 774
-------- ---------
Inventories at FIFO and weighted average cost 6,807 6,140
LIFO reserves 342 342
-------- ---------
$ 6,465 $ 5,798
======== =========
</TABLE>
3. Business segment information related to the North American and European
operations follows:
<TABLE>
<CAPTION>
North
American European Eliminations Consolidated
Operations Operations
<S> <C> <C>
First Quarter Ended September 30, 1999
Net Sales $3,703 $4,450 $ (94) $8,059
Net Income (Loss) (281) (261) 3 (539)
First Quarter Ended September 30, 1998
Net Sales $3,886 $4,918 $(87) $8,717
Net Income (Loss) (239) (141) - (380)
</TABLE>
6
<PAGE>
BONTEX, INC. AND SUBSIDIARIES
CONDENSED NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1999 AND 1998 AND JUNE 30, 1999
(Unaudited)
4. Net income (loss) per share calculations are based on the weighted average
number of shares outstanding of 1,572,824 shares for all periods.
7
<PAGE>
BONTEX, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
QUARTER ENDED SEPTEMBER 30, 1999
(Unaudited)
Except for historical data set forth herein, the following discussion contains
forward-looking statements within the meaning of the Private Securities
Litigation Act of 1995. Forward-looking statements include, for example,
statements about future results of operations or market conditions and involve
risks, uncertainties and assumptions. Actual results may differ materially from
these forward-looking statements. Factors that could cause or contribute to
those differences include, but are not limited to, the global economic crisis
emanating from Southeast Asia, excessive worldwide footwear inventories, a
shrinking domestic market for Bontex products, decreased sales to key customers,
increased competition from non-woven materials, the Year 2000 problem, the
increase in the relative prices of Bontex's products due to foreign currency
devaluations, increased pulp and latex prices, and capital illiquidity resulting
from the breach of loan covenants and/or an inability to identify additional
sources of financing.
RESULTS OF OPERATIONS
The results of operations for the first quarter of fiscal year 2000 reflect a
decrease in profitability. During the first quarter, the Company generated a
consolidated operating loss of $491,000, and a net loss of $539,000 or $.34 per
share. Consolidated net sales decreased $658,000 or 7.5 percent to $8.1 million
for the first quarter ended September 30, 1999. The fluctuation in foreign
currency exchange rates resulted in a $312,000 translation decrease in net
sales. There are several reasons contributing to the decrease in sales. The
situation in Asia continues to have a significant impact on the Company's sales
and profitability. It has been well publicized that athletic footwear sales, the
largest footwear segment globally, have dropped considerably. Another item
adversely impacting Bontex sales is the trend of increased usage of other
materials, such as non-wovens and plastics, which have replaced Bontex cellulose
materials in athletic footwear. Furthermore, our primary global competitor has
reduced prices in several markets in an attempt to increase its sales, which
has resulted in Bontex reducing prices to meet the competition to maintain
market share.
Seasonality generally exists in that the first half of each fiscal year is
typically lower in volume than the second half, which is largely due to
customer's scheduled vacations, shutdowns, holidays and purchasing cycles. Over
the past fifteen years, the Company has generated net income during the first
quarter only six times, the most recent being in fiscal year 1997.
Gross profit as a percentage of net sales (i.e., Gross Margin) for the first
quarter of fiscal year 2000 decreased slightly compared to the same period last
year from 24.5 to 23.8 percent. This decrease in profit margins is primarily
attributed to competitive pricing pressures which have resulted in lower selling
prices and have had a negative impact on net sales and profit margins.
The cost of pulp has been stable during the past fiscal year, but may be showing
signs of increasing in fiscal year 2000. It is difficult to predict future raw
material costs, and there can be no assurance that raw material prices will not
have an adverse impact on the Company's operations or competitive position in
the future.
Selling General & Administrative (SG&A) expenses increased 3.1 percent compared
to the same period last year and as a percent of net sales increased from 26.8
percent to 29.9 percent, as compared to the corresponding prior year. The
increased SG&A percentage is mainly due to higher professional fees and the
decrease in sales.
Interest expense has decreased $43,000 for the quarter ended September 30, 1999,
as compared to the same period last year due to reduced short-term borrowing.
8
<PAGE>
Other comprehensive income, foreign currency translation adjustment, which
totaled $136,000 for the quarter ended September 30, 1999, is primarily the
result of the strengthening of the US Dollar verses the Euro since June 30,
1999.
FINANCIAL CONDITION
Consolidated stockholders' equity decreased $403,000 from June 30, 1999, and
totaled 9.5 million at the end of September 1999. Financial ratios at September
30, 1999 generally decreased from June 30, 1999 because of the negative
operating results. The fluctuation in foreign currency exchange rates resulted
in a translation decrease of $1.8 million in consolidated total assets as
compared to September 30, 1998.
The decrease in cash balances is mainly attributed to the payment of debt from
operating cash flows.
Trade accounts receivables decreased by $2.0 million to $9.8 million, and is
primarily because of the decrease in consolidated net sales.
The $667,000 increase in inventories to $6.5 million mainly corresponds to raw
material increases from year end lows to support current operations.
Other current assets increased $236,000 to $388,000 from June 30, 1999,
primarily due to prepaid insurance for fiscal year 2000.
The $514,000 increase in gross property, plant and equipment is due to the
addition of routine equipment costs and exchange rate changes resulting in
translation adjustments at the Company's European operations.
Accounts payable, accrued expenses and short-term borrowings decreased $459,000,
which primarily corresponds to decreased trade account receivables. Management
believes that existing short-term credit facilities will be sufficient to meet
future operating and capital requirements.
As of September 30, 1999, Bontex USA was not in compliance with certain loan
covenants of its secured debt agreement, under which certain current and
noncurrent assets are pledged as collateral. Accordingly, Bontex has classified
$320,000 of long-term debt as current. In the meantime, the Company is seeking
alternative means of capital and/or financing, which management believes they
will successfully complete in the second quarter of fiscal year 2000. If Bontex
is unable to obtain refinancing, Bontex might have difficulty in obtaining funds
to meet operating and capital requirements, which could cause a material adverse
impact on its financial condition and results of operations.
FINANCIAL INSTRUMENTS
From time to time, the Company utilizes derivatives and other financial
instruments in the normal course of business. By their nature, all such
instruments involve risk, and the Company's maximum potential loss may exceed
amounts recorded in the balance sheet.
The Company is exposed to a variety of market risks, including the effects of
changes in foreign currency exchange rates, interest rates and commodity prices.
In the past, the Company has primarily used such derivative financial
instruments for the purpose of hedging currency and interest rates exposures.
For further information concerning the aforementioned financial instruments,
refer to the consolidated financial statements and notes thereto included in the
Company's Annual Report on Form 10-K for the year ended June 30, 1999.
REFOCUSING
Bontex has recently developed several new innovative products for footwear that
it believes will have good sales potential based on early marketing efforts. The
Company has also concluded new marketing agreements for stitch
9
<PAGE>
bonded non-wovens, open celled polyurethane foams, thermoplastics, and
specialized moulds. Each of these projects should bring advanced technology to
the footwear industry and should add value for Bontex customers. Bontex
management believes that the key to success in these areas relies upon bringing
added value to our customers. We have an aggressive strategy to locate such
technologies and bring them to the marketplace. Sales from these projects are
expected to occur during fiscal year 2000, however it is impossible to
accurately predict the level of sales potential or profitability at this time.
YEAR 2000 ISSUE
Over the past two years, Bontex has invested and capitalized approximately
$200,000 in information and non-information technology (IT) systems to improve
data efficiency and address the Company's Year 2000 systems exposure. The Year
2000 issue relates to computer programs using two digits rather than four to
define the applicable year. Inability to process data properly due to this
phenomenon may result in system's failures. The project to address the Company's
Year 2000 systems exposure is complete. The IT systems software has been tested
and all software appears to operate as intended. Testing of non-IT systems was
also completed in October 1999, and all non-IT systems appear to operate as
intended.
Bontex continues to assess the Year 2000 readiness of its major customers and
vendors. The review is substantially complete with no material risks identified.
Major customers and vendors who have not responded, however, could suffer
disruptions for the Year 2000 problem. Furthermore, even if the systems of
Bontex's major customers and vendors are Year 2000 compliant, their operations
may suffer disruptions as a result of the Year 2000 problems of the outside
parties on which they rely. Therefore, there can be no assurances that the Year
2000 will not significantly affect the Company's third parties, which in turn
could affect Bontex's operations and financial results.
The Company is currently in the process of formulating a contingency plan to
maintain operations in the event of its most likely worse case Year 2000
scenario. Bontex intends to complete the plan in December 1999. Bontex expects
that the contingency plan will provide, if necessary, for manual processing of
accounting and financial information. The contingency plan, however, would be
unable to mitigate extreme Year 2000 effects, such as power or communications
failures, interrupted deliveries from major suppliers, or decreased sales
resulting from regional or worldwide recessions or disruptions in the operations
of major customers. Therefore, there can be no assurance that the date change
from 1999 to 2000 will not materially affect the Company's operations and
financial results.
RECENT ACCOUNTING PRONOUNCEMENTS
Statement of Financial Accounting Standards (SFAS) No. 133, "Accounting for
Derivative Instruments and Hedging Activities," was to be effective for periods
beginning after June 15, 1999, but implementation has been delayed by the
Financial Accounting Standards Board to be effective for periods beginning after
June 15, 2000. This statement requires that the Company recognize all
derivatives as either assets or liabilities in the balance sheet, and measure
those instruments at fair value. The Company is currently in the process of
reviewing the impacts of this Statement.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company is exposed to certain risks related to interest rates, currency and
commodity positions. Market risk is defined as the risk of loss arising from
adverse changes in market rates and prices. The following disclosures provide
certain forward-looking data concerning potential exposures to market risk. In
general, the Company's policy is not to speculate on interest rates, currencies
and commodities in the markets, but rather to fix rates and prices at levels
considered favorable.
10
<PAGE>
There is no expected material foreign exchange risk for the Company's debt, as
these amounts are denominated in the local operating currencies of the
respective operations. Other assets and liabilities are hedged and accordingly,
are not considered subject to material foreign exchange risk as well.
The table below provides information about the Company's derivative financial
instruments that are sensitive to changes in interest rates. For debt
obligations, the table presents principal cash flows and related weighted
average interest rates by expected maturity dates. For interest rate swaps, the
table presents notional amounts and weighted average interest rates by expected
(contractual) maturity dates. Notional amounts are used to calculate the
contractual payments to be exchanged under contract. Weighted average variable
rates are based on implied forward rates in the yield curve at the reporting
date.
Derivative Financial Instruments held for other than trading purposes at
September 30, 1999 (dollars in thousands):
<TABLE>
<CAPTION>
Expected Maturity Date
There- Estimated
2000 2001 2002 2003 2004 after Total Fair Value
<S> <C> <C> <C> <C> <C> <C>
Liabilities
Long-term debt
Fixed Rate $ 1,069 $ 461 $ 468 $ 468 $ 462 $ 342 $ 3,270 $ 3,270
Average interest rate 6.40% 6.40% 5.49% 4.99% 5.00% 5.23% 5.75%
Interest Rate Derivative
Interest Rate Swap
Fixed to Variable $ 1,000 - - - - - $ 1,000 $ (6)
Average pay rate 6.35% 6.35%
Average receive rate 5.00% 5.00%
</TABLE>
The Company's interest rate swap fixes the rate of interest for $1,000 of $8,854
total variable rate debt. In the event of lowering BIBOR or LIBOR rates, the
Company is exposed to higher fixed rates. The $7,854 variable rate debt not
covered by the interest rate swap is subject to the risk of interest rate
changes. The market risk sensitivity analysis above does not fully reflect the
potential net market risk exposure, because other market risk exposures may
exist in other transactions.
11
<PAGE>
PART II. OTHER INFORMATION
BONTEX, INC.
FORM 10-Q
FOR THE QUARTER ENDED SEPTEMBER 30, 1999
Item 6. Exhibits and Reports on Form 8-K
(a.) Exhibits:
27 - Financial Data Schedule
(b.) Reports on Form 8-K:
None
12
<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.
BONTEX, INC.
(Registrant)
November 15, 1999 /s/James C. Kostelni
(Date) James C. Kostelni
Chairman of the Board
and President
November 15, 1999 /s/Charles W. J. Kostelni
(Date) Charles W. J. Kostelni
Corporate Controller
and Secretary
13
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM BONTEX,
INC.'S UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENT FOR THE QUARTER
ENDED SEPTEMBER 30, 1999, AS SET FORTH IN THE COMPANY'S QUARTERLY REPORT ON FORM
10-Q, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-2000
<PERIOD-END> SEP-30-1999
<CASH> 224
<SECURITIES> 0
<RECEIVABLES> 10,321
<ALLOWANCES> 182
<INVENTORY> 6,465
<CURRENT-ASSETS> 17,393
<PP&E> 24,952
<DEPRECIATION> 13,376
<TOTAL-ASSETS> 30,235
<CURRENT-LIABILITIES> 18,021
<BONDS> 3,270
157
0
<COMMON> 0
<OTHER-SE> 9,333
<TOTAL-LIABILITY-AND-EQUITY> 30,235
<SALES> 8,059
<TOTAL-REVENUES> 8,074
<CGS> 6,138
<TOTAL-COSTS> 8,757
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 56
<INTEREST-EXPENSE> 200
<INCOME-PRETAX> (683)
<INCOME-TAX> (144)
<INCOME-CONTINUING> (539)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (539)
<EPS-BASIC> (.34)
<EPS-DILUTED> (.34)
</TABLE>
