<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(MARK ONE)
( X ) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 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 0-8410
---------------------------------------
WYANT CORPORATION
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
New York 11-2236837
- -------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1170 U.S. Highway 22 East, Suite 203, Bridgewater, New Jersey 08807
- ------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code 514-636-9926
- -------------------------------------------------------------------------------
(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 12 months (or for such shorter period that the
registrant was required to file such reports, and (2) has been subject to such
filing requirement for the past 90 days.
Yes X No
------- -----------
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the close of the latest practicable date.
Class Outstanding at November 11, 1999
- -------------------------------------------------------------------------------
Common stock, $.01 par value 2,270,617
1
<PAGE> 2
WYANT CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 1999
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The attached unaudited consolidated financial statements of Wyant Corporation
and Subsidiaries reflect all adjustments which are, in the opinion of
management, necessary to present a fair statement of the operating results for
the interim periods.
Consolidated balance sheet 3
Consolidated statement of operations 4
Consolidated statement of cash flows 5
Consolidated statement of stockholders' equity 6
Notes to consolidated financial statements 7-11
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
2
<PAGE> 3
PART 1. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
WYANT CORPORATION
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
<TABLE>
<CAPTION>
SEPTEMBER 30 DECEMBER 31
1999 1998
------------ ------------
<S> <C> <C>
ASSETS
CURRENT
Cash and cash equivalents $ 2,663,856 $ 59,985
Accounts receivable 14,787,144 10,215,812
Inventories (note 3) 8,153,453 8,576,960
Net assets held for divestiture (note 2) -- 9,203,356
Other 708,160 1,393,270
----------- -----------
TOTAL CURRENT ASSETS 26,312,613 29,449,383
Property, plant and equipment, net of
accumulated amortization of $12,612,699
(December 31, 1998 - $11,474,155) 10,845,888 8,593,460
Other assets 5,561,233 4,496,821
----------- -----------
TOTAL ASSETS $42,719,734 $42,539,664
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT
Revolving line of credit $ 3,381,558 $ 4,092,128
Committed revolving credit facility -- 4,238,720
Accounts payable 5,831,826 4,856,657
Accrued expenses 3,568,136 3,228,412
Income taxes payable 1,703,626 433,288
Current portion of long-term debt (note 4) 1,449,734 1,061,332
Current portion of preferred stock of subsidiary 536,251 513,204
----------- -----------
TOTAL CURRENT LIABILITIES 16,471,131 18,423,741
Long-term debt (notes 4 & 6) 4,394,625 3,887,593
Other long-term liabilities 1,522,067 --
Preferred stock of subsidiary (note 6) 5,341,256 5,477,072
Deferred income taxes 1,115,526 2,076,416
STOCKHOLDERS' EQUITY
Common stock, par value $0.01 per share 27,022 27,053
Additional paid-in capital 6,812,992 6,821,825
Retained earnings 7,302,204 6,326,679
Cumulative translation adjustment (267,089) (500,715)
----------- -----------
TOTAL STOCKHOLDERS' EQUITY 13,875,129 12,674,842
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $42,719,734 $42,539,664
=========== ===========
</TABLE>
See accompanying notes
3
<PAGE> 4
WYANT CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
----------------------------- ----------------------------
1999 1998 1999 1998
---- ---- ---- ----
(Restated) (Restated)
<S> <C> <C> <C> <C>
Net sales $20,513,485 $17,949,887 $59,339,783 $49,362,698
Cost of sales 13,458,842 11,699,390 38,841,165 31,785,235
----------- ----------- ----------- -----------
Gross profit 7,054,643 6,250,497 20,498,618 17,577,463
Expenses
Selling 4,180,620 3,256,405 11,752,320 9,267,035
General and administration 2,165,272 2,664,409 6,736,959 6,374,400
Amortization 192,409 155,660 483,589 357,172
Interest expense 223,906 325,919 870,182 855,457
Other income (69,908) (65,442) (219,454) (151,121)
----------- ----------- ----------- -----------
6,692,299 6,336,951 19,623,596 16,702,943
----------- ----------- ----------- -----------
Income (loss) from continuing operations
before income taxes 362,344 (86,454) 875,022 874,520
Income tax expense
Current 101,000 (88,400) 304,500 276,000
Deferred 22,228 80,000 65,728 139,000
----------- ----------- ----------- -----------
123,228 (8,400) 370,228 415,000
----------- ----------- ----------- -----------
Income (loss) from continuing operations 239,116 (78,054) 504,794 459,520
Discontinued operations (note 2)
Income from operations of Wyant Health Care Division
(net of income taxes of $108,400 and $495,000
respectively) -- 182,607 -- 885,804
Gain (loss) on disposal of Wyant Health Care Division
(net of income tax (recovery) of ($17,000) and
$500,000 respectively) (224,451) -- 749,602 --
----------- ----------- ----------- -----------
Net income 14,665 104,553 1,254,396 1,345,324
Dividends and accretion of mandatorily
redeemable preferred stock 93,220 100,318 278,871 261,504
----------- ----------- ----------- -----------
Net income (loss) attributable to common shares $ (78,555) $ 4,235 $ 975,525 $ 1,083,820
----------- ----------- ----------- -----------
Per common share (note 5)
BASIC
Income (loss) from continuing operations $ 0.04 $ (0.05) $ 0.06 $ 0.05
Discontinued operations (0.06) 0.05 0.21 0.25
Net income (loss) (0.02) -- 0.27 0.30
DILUTED
Income (loss) from continuing operations 0.04 (0.05) 0.06 0.05
Discontinued operations (0.06) 0.05 0.19 0.23
Net income (loss) (0.02) -- 0.27 0.29
</TABLE>
See accompanying notes
4
<PAGE> 5
WYANT CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30
------------------------------
1999 1998
---- ----
[Restated]
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income from continuing operations $ 504,794 $ 459,520
Adjustments to reconcile net income to net cash provided by
operating activities
Depreciation and amortization 952,467 824,998
Loss on sale of fixed assets 3,323 12,188
Deferred income tax expense (463,241) 263,000
Deferred pension costs (28,533) (95,054)
Changes in non-cash working capital balances
Accounts receivable (4,284,588) 273,384
Inventories 538,207 (30,551)
Other current assets 142,727 (57,998)
Accounts payable 1,208,340 50,684
Income taxes payable 1,270,338 (820,114)
Cash provided by discontinued operations 1,043,247 1,891,344
----------- ----------
NET CASH PROVIDED BY OPERATING ACTIVITIES 887,081 2,771,401
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of businesses, net of cash acquired (1,029,649) (3,778,603)
Capital expenditures (2,597,705) (523,886)
Cash proceeds from sale of fixed assets 8,732 10,775
Decrease (increase) in other assets (42,222) 24,354
Cash used for discontinued operations (49,377) (137,045)
Proceeds of sale of discontinued operations, net of $581,000
held in escrow and expenses of $3,060,848 8,551,152 --
----------- ----------
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES 4,840,931 (4,404,405)
CASH FLOWS FROM FINANCING ACTIVITIES
Decrease in committed revolving credit facility (4,238,720) (1,455,063)
Repayment of long-term debt (1,014,883) (611,008)
Increase in long-term debt 3,282,825 3,723,111
Redemption of preferred shares (513,204) (550,122)
Dividends paid by subsidiary (126,748) (145,133)
Purchase of common shares for cancellation (8,864) --
Issue of common shares -- 15,688
Purchase of fractional shares on stock split -- (714)
Increase (decrease) in bank indebtedness (710,570) 844,738
Cash provided by discontinued operations -- 80,101
----------- ----------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES (3,330,164) 1,901,598
Effect of exchange rate changes on cash 206,023 (342,649)
----------- ----------
Net increase (decrease) in cash and cash equivalents 2,603,871 (74,055)
Cash and cash equivalents, beginning of period 59,985 156,131
----------- ----------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 2,663,856 $ 82,076
============ ==========
</TABLE>
See accompanying notes
5
<PAGE> 6
WYANT CORPORATION
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30
------------------------------
1999 1998
------ ------
<S> <C> <C>
COMMON STOCK AT PAR VALUE
Balance at beginning of period $ 27,053 $ 27,037
Stock purchased for cancellation (31) --
Stock issued for options exercised -- 16
----------- -----------
BALANCE AT END OF PERIOD 27,022 27,053
----------- -----------
ADDITIONAL PAID-IN CAPITAL
Balance at beginning of period 6,821,825 6,806,867
Stock purchased for cancellation (8,833) --
Stock issued for options exercised -- 15,672
Purchase of fractional shares on stock split -- (714)
----------- -----------
BALANCE AT END OF PERIOD 6,812,992 6,821,825
----------- -----------
RETAINED EARNINGS
Balance at beginning of period 6,326,679 5,112,006
Net income 1,254,396 1,345,324
Dividends declared by subsidiary (126,748) (145,133)
Accretion on preferred shares of subsidiary (152,123) (116,371)
----------- -----------
BALANCE AT END OF PERIOD 7,302,204 6,195,826
----------- -----------
ACCUMULATED OTHER COMPREHENSIVE INCOME
Balance at beginning of period (500,715) (165,925)
Foreign currency translation adjustments 233,626 (329,759)
----------- -----------
BALANCE AT END OF PERIOD (267,089) (495,684)
----------- -----------
TOTAL STOCKHOLDERS' EQUITY $13,875,129 $12,549,020
============ ===========
COMPREHENSIVE INCOME
Net income $ 1,254,396 $ 1,345,324
Other - Foreign currency translation adjustments 233,626 (329,759)
----------- -----------
COMPREHENSIVE INCOME FOR PERIOD $ 1,488,022 $ 1,015,565
=========== ===========
COMMON SHARES
Number of common shares issued at beginning of period 2,273,817 2,271,484
Shares purchased for cancellation (3,200) --
Shares issued for options exercised during period -- 2,333
----------- -----------
NUMBER OF COMMON SHARES ISSUED AND OUTSTANDING 2,270,617 2,273,817
COMMON SHARES ISSUABLE UPON CONVERSION
OF EXCHANGEABLE SHARES 1,333,333 1,333,333
----------- -----------
NUMBER OF COMMON SHARES ISSUED, ISSUABLE AND OUTSTANDING 3,603,950 3,607,150
=========== ===========
</TABLE>
See accompanying notes
6
<PAGE> 7
WYANT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(INFORMATION AS AT SEPTEMBER 30, 1999 AND FOR THE NINE MONTHS
ENDED SEPTEMBER 30, 1999 AND 1998 ARE UNAUDITED)
1. GENERAL
The accompanying unaudited consolidated financial statements include the
accounts of Wyant Corporation and its wholly-owned subsidiaries, IFC
Disposables, Inc. and Wood Wyant Inc. They have been prepared in accordance
with accounting principles generally accepted in the United States for
interim financial information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of
management, the accompanying consolidated financial statements contain all
adjustments, consisting only of normal recurring accruals considered
necessary to present fairly the financial position as of September 30,
1999, the results of operations for the nine months and three months ended
September 30, 1999 and 1998 and cash flows and changes in stockholders'
equity for the nine months ended September 30, 1999 and 1998. For further
information, refer to the financial statements and notes thereto included
in the Company's annual report for the year ended December 31, 1998.
2. DISCONTINUED OPERATIONS
The sale of the Company's Wyant Health Care Division ("Division") was
completed on July 21, 1999 for cash proceeds of $12,193,000, of which an
amount of $581,000 is to be held in escrow for a period of 24 months from
the date of sale. On December 17, 1998, the Board of Directors authorized
management to pursue the sale of the Division and on February 23, 1999 the
Board approved the sale of the Division to Paper-Pak Products, Inc.
("PaperPak"), subject to completion of buyer financing, customary
regulatory approvals and the approval of the Company's shareholders.
Consequently, the results of the Division have been reported in these
financial statements as discontinued operations.
The operating results of the Division are as follows:
<TABLE>
<CAPTION>
Nine months ended September 30,
--------------------------------------
1999 1998
------ ------
<S> <C> <C>
Net sales $22,746,885 $27,686,331
Income before income taxes 1,834,817 1,380,804
</TABLE>
7
<PAGE> 8
3. INVENTORIES
<TABLE>
<CAPTION>
September 30, December 31,
1999 1998
------ ------
<S> <C> <C>
Raw materials $2,179,544 $2,065,073
Finished goods 5,973,909 6,511,887
---------- ----------
$8,153,453 $8,576,960
========== ==========
</TABLE>
4. LONG-TERM DEBT
<TABLE>
<CAPTION>
September 30, December 31,
1999 1998
------ ------
<S> <C> <C>
Wood Wyant Inc.
Term loan repayable in monthly installments
of Cdn. $20,476 plus interest at prime plus
3/4% (prime at September 30, 1999 - 6.25%),
maturing October 1, 2001. Principal amount
Cdn. $1,508,571 (December 31, 1998 - Cdn.
$1,692,856) $1,028,057 $1,104,060
Term loan repayable in monthly installments
of Cdn. $35,000 plus interest at prime plus
3/4%, maturing April 30, 2003. Principal
amount Cdn. $1,505,000 (December 31, 1998
- Cdn. $1,820,000) 1,025,623 1,186,982
Term loan repayable in monthly installments
of Cdn. $49,523 plus interest at prime plus
3/4%, maturing June 30, 2003. Principal
amount Cdn. $2,228,500 (December 31, 1998
- Cdn. $2,674,207) 1,518,672 1,744,086
Term loan repayable in monthly installments
of Cdn. $41,667 plus interest at prime plus
3/4%, maturing March 15, 2004. Principal
amount Cdn. $2,208,331 1,504,928 --
Revolving credit facility (Cdn. $1,125,612
- December 31, 1998 - Cdn. $1,401,125) 767,079 913,797
---------- ----------
5,844,359 4,948,925
Current portion 1,449,734 1,061,332
---------- ----------
$4,394,625 $3,887,593
========== ==========
</TABLE>
8
<PAGE> 9
5. EARNINGS PER SHARE
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30 September 30
------------------------ ------------------------
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
Numerator
Income (loss) from continuing operations $ 239,116 $ (78,054) $ 504,794 $ 459,520
Preferred stock dividends and accretion 93,220 100,318 278,871 261,504
---------- ---------- ---------- ----------
Numerator for basic earnings per share -
income from continuing operations available
to common stockholders 145,896 (178,372) 225,923 198,016
Accretion on convertible preferred shares 28,793 26,648 86,135 35,370
---------- ---------- ---------- ----------
Numerator for diluted earnings per share -
income from continuing operations available
to common stockholders $ 174,689 $ (151,724) $ 312,058 $ 233,386
========== ========== ========== ==========
Denominator
Denominator for basic earnings per share -
weighted-average shares issued, issuable and
outstanding 3,607,080 3,607,150 3,607,127 3,605,943
Effect of dilutive securities
Convertible securities 283,111 283,111 283,111 125,395
Stock options -- 35,384 -- 94,100
---------- ---------- ---------- ----------
Denominator for diluted earnings per share -
adjusted weighted-average shares 3,890,191 3,925,645 3,890,238 3,825,438
========== ========== ========== ==========
Basic earnings per share from continuing operations $ 0.04 $ (0.05) $ 0.06 $ 0.05
Diluted earnings per share from continuing operations $ 0.04 $ (0.05) $ 0.06 $ 0.05
</TABLE>
The effect of the convertible preferred shares has not been included in
computing the diluted earnings per share from continuing operations for the
nine months ended September 30, 1999 and both the three months and nine
months ended September 30, 1998, since to do so would be anti-dilutive.
6. PURCHASE OF BUSINESSES
During the second quarter of 1998, the Company, through its wholly-owned
subsidiary, Wood Wyant Inc. acquired 100% of the outstanding shares of
the following companies:
<TABLE>
<S> <C>
April 30, 1998 H.A. Perigord Company Limited
June 26, 1998 Professional Sanitation Products Ltd.
June 30, 1998 Midway Supply Ltd.
Purnel Distributors Ltd.
Midway Purnel Sanitary Supply Ltd.
Fraser Valley Industrial Chemicals Inc.
</TABLE>
9
<PAGE> 10
6. PURCHASE OF BUSINESSES (CONT'D)
Fraser Valley Industrial Chemicals Inc. is a manufacturer of sanitary
chemical products. All of the other acquired companies are distributors of
sanitation products. The acquisitions have been accounted for under the
purchase method. Financial results of the companies are included in the
Company's consolidated statement of operations from the respective dates of
acquisition.
The cost of purchase of the above companies totalled $5,715,895, including
expenses related to the transactions but excluding cash acquired. This was
financed by the issue of 283,111 Class F Preferred shares of Wood Wyant
Inc., with a fair value of $1,861,876 at the respective transaction dates,
with the balance paid in cash. The cash portion was financed by term bank
loans, from which $3,525,440 had been drawn at September 30, 1999. The
Class F Preferred shares are exchangeable at any time for common shares of
Wyant Corporation on a one-for-one basis, and in addition holders have a
one-time option in July 2000 to retract all of the Class F shares at Cdn.
$11.250028 per share, payable in five equal annual instalments commencing
August 3, 2000, with dividends at 3.5% per annum payable monthly from July
1, 2000 if the option is exercised.
The pro-forma unaudited results of operations for the nine months ended
September 30, 1998, assuming consummation of the transactions as of January
1, 1998, are as follows:
<TABLE>
<CAPTION>
Nine months ended
September 30, 1998
------------------
<S> <C>
Net sales $55,630,047
Income from continuing operations 435,682
Net income 1,321,486
Per common share
Income from continuing operations 0.03
Net income 0.28
</TABLE>
7. SEGMENT INFORMATION FROM CONTINUING OPERATIONS
Three months ended September 30
-------------------------------
<TABLE>
<CAPTION>
Sanitation Wiping
Products Products Corporate Total
----------- ----------- ---------- -----------
<S> <C> <C> <C> <C>
1999
----
Revenues from external customers $15,192,890 $ 5,320,595 $20,513,485
Intersegment revenues 965,835 71,780 1,037,615
Segment income (loss) before taxes 391,155 67,466 (96,277) 362,344
Segment assets 31,692,993 6,687,567 4,339,174 42,719,734
1998
----
Revenues from external customers 13,727,748 4,222,139 17,949,887
Intersegment revenues 859,358 95,284 954,642
Segment income (loss) before taxes 117,043 27,503 (231,000) (86,454)
</TABLE>
10
<PAGE> 11
Nine months ended September 30
------------------------------
<TABLE>
<CAPTION>
Sanitation Wiping
Products Products Corporate Total
----------- ----------- ---------- -----------
<S> <C> <C> <C> <C>
1999
----
Revenues from external customers $45,207,141 $14,132,642 $59,339,783
Intersegment revenues 2,941,321 253,322 3,194,643
Segment income (loss) before taxes 1,155,906 154,909 (435,793) 875,022
1998
----
Revenues from external customers 37,147,708 12,214,990 49,362,698
Intersegment revenues 2,792,263 282,734 3,074,997
Segment income (loss) before taxes 1,472,339 129,181 (727,000) 874,520
</TABLE>
8. RECLASSIFICATIONS
Certain prior period amounts have been reclassified to conform with the
presentation in the current period.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following information should be read in conjunction with the accompanying
unaudited financial statements and the notes thereto included in Item I of this
quarterly report, and the financial statements and the notes thereto and
management's discussion and analysis of financial condition and results of
operations contained in the Company's Annual Report on Form 10-K for the year
ended December 31, 1998. As indicated in Note 2 to the consolidated financial
statements, the Company has sold its Wyant Health Care Division and
substantially all of its operating assets. Accordingly, such consolidated
financial statements, as well as the discussion below, reflect the consummation
of this transaction by showing the health care business as "discontinued
operations" for income statement purposes and as "net assets held for
divestiture" for balance sheet purposes.
The following information includes forward-looking statements (within the
meaning of Section 21E of the Securities Exchange Act of 1934) that involve a
number of risks and uncertainties that may influence the financial performance
and earnings of the Company, and may cause actual results to differ materially
from those in the forward-looking statements, including, but not limited to,
factors such as the ability of the Company to adequately address Year
2000-related issues, unforeseen price pressure on the Company's products or
significant cost increases that cannot be recovered through price increases or
productivity improvements, the ability to obtain any necessary financing on
reasonably satisfactory terms, the effect of exchange rate fluctuations and the
effect of competitive, capital market and general economic conditions. Such
forward-looking statements, which reflect the Company's current views with
respect to certain future events and financial performance, should be considered
in light of such factors.
11
<PAGE> 12
RESULTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 1999 COMPARED WITH THE THREE MONTHS ENDED
SEPTEMBER 30, 1998
SALES
- -----
Sales of continuing operations for the third quarter of 1999 increased by
$2,563,598 or 14.3% to $20,513,485 from the total of $17,949,887 in the same
quarter last year, after eliminating inter-segment sales of $1,037,615 in the
current quarter and $954,642 in the third quarter of 1998. Sales of the
sanitation products segment were $16,158,725 in the three months ended September
30, 1999, an increase of $1,571,619 or 10.8% over the sales of $14,587,106 in
the corresponding quarter of 1998. The improvement resulted primarily from an
increase of $517,900 in direct sales of paper products from the Company's paper
converting operations and additional sales derived from a business acquired in
June 1999, together with higher sales in the Company's ongoing business. Sales
of the wiping products segment were $5,392,375, an increase of $1,074,952 or
24.9% over the third quarter of 1998. The improvement was due to higher sales
of wipers.
COST OF SALES AND GROSS PROFIT
- ------------------------------
Gross profit of the sanitation products segment was 37.9% of sales for the third
quarter of 1999, compared with 37.8% in the same quarter last year. Gross profit
of the wiping products segment was 16.6% of sales for the current quarter, down
from 17.2% in the corresponding quarter last year, primarily as a result of
lower margins for wipers.
SELLING EXPENSES
- ----------------
Selling expenses for the third quarter of 1999 amounted to $4,180,620, an
increase of $924,215 or 28.4% over the same quarter in 1998. In the sanitation
products segment, selling expenses at $3,493,037 were $804,180 or 29.9% higher
than in the same quarter last year. The increase resulted in part from higher
outward freight costs ($347,302), reflecting primarily the increased sales
level, and ongoing challenges relating to the implementation of new information
systems. In the wiping products segment, selling expenses at $687,583 were
$120,035 or 21.1% higher than in the third quarter of 1998. The increase was
primarily due to higher outward freight costs associated with the increased
level of sales.
GENERAL AND ADMINISTRATION EXPENSES
- -----------------------------------
General and administration expenses amounted to $2,165,272 in the third quarter
of 1999, a reduction of $499,137 or 18.7% from the third quarter last year. In
the sanitation products segment, expenses declined by $503,205 or 20.5% to
$1,956,412, primarily due to the inclusion in the third quarter of 1998 of a
special charge of $464,286 related to the rationalization of Wood Wyant Inc's
operations following the acquisition of businesses during the second quarter of
1998. General and administration expenses of the wiping products segment
amounted to $123,890 in the current quarter, a reduction of $7,902 or 6.0% from
the same quarter last year. Corporate charges in the current quarter at $84,970
were $11,970 higher than in the third quarter of 1998.
AMORTIZATION
- ------------
Amortization in the third quarter of 1999 totalled $192,409, an increase of
$36,749 over the corresponding quarter last year. This increase resulted from
the amortization of Wood Wyant's new business applications software and related
hardware.
12
<PAGE> 13
INTEREST EXPENSE
- ----------------
Interest expense amounted to $223,906 in the third quarter, a reduction of
$102,013 from the same quarter last year. The reduction resulted from the
utilization of part of the proceeds from the sale of the health care business
to pay off the Company's loan from Congress Financial Corporation and to reduce
the level of borrowing in Canada.
OTHER INCOME
- ------------
Other income increased to $69,908 from $65,442 in the same quarter last year.
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
- -----------------------------------------------------
Income from continuing operations before income taxes totalled $362,344 in the
third quarter of 1999, compared with a loss of $86,454 in the corresponding
quarter in 1998. The sanitation products segment improved by $274,112, while
income of the wiping products segment increased by $39,963 and corporate
expenses were $134,723 lower than in the third quarter of 1998.
INCOME TAXES
- ------------
Income tax expense was $123,288 in the current quarter, compared with a
recovery of $8,400 in the same quarter last year, reflecting the improved
pre-tax results.
DISCONTINUED OPERATIONS
- -----------------------
The Company incurred an after-tax loss of $224,451 or $0.06 per common share in
the third quarter of 1999 on the sale of the health care operations. The loss
comprised an after-tax loss of $386,215 on the sale of the business, partially
offset by after-tax income from operations to the date of sale on July 21, 1999
of $161,764. Gross proceeds on the sale amounted to $12,193,000, including
$581,000 to be held in escrow for 24 months from the date of sale. Income from
operations to the date of sale included an after-tax gain of $60,158 on
settlement of an insurance claim relating to a fire which occurred in
late-1998.
After-tax income from operations generated in the third quarter of 1998
amounted to $182,607 or $0.05 per common share.
NET INCOME
- ----------
Net income for the third quarter of 1999 was $14,665, or a loss of $0.02 per
common share after deducting dividends and accretion relating to the
mandatorily redeemable preferred shares, compared with net income of $104,553,
a breakeven per common share, in the third quarter of 1998.
NINE MONTHS ENDED SEPTEMBER 30, 1999 COMPARED WITH THE NINE MONTHS ENDED
SEPTEMBER 30, 1998
SALES
- -----
Sales of continuing operations for the nine months ended September 30, 1999
were $59,339,783, an increase of $9,977,085 or 20.2% over the same period last
year, after eliminating inter-segment sales of $3,194,643 in the current period
and $3,074,997 in the same period last year. Sales of the sanitation products
segment were $48,148,462 in the current period, an increase of $8,208,491 or
20.6% over the total of $39,939,971 for the 1998 period. The increase resulted
primarily from the added sales revenue from the businesses acquired in the
second quarter of both 1998 and 1999, together with an increase of $2,720,491
in direct sales of paper products from the Company's paper converting
operation. In the wiping products segment, sales increased by $1,888,240 or
15.1% to $14,385,964, due to higher sales of wipers.
13
<PAGE> 14
COST OF SALES AND GROSS PROFIT
- ------------------------------
Gross profit of the sanitation products segment was 37.4% of sales for the
first nine months of 1999, compared with 38.6% of sales in the same period last
year. The reduced margin resulted from continued heavy competition in the
tissue paper market and increased direct sales of paper products from the
Company's paper converting operation, which generate lower margins. Gross
profit of the wiping products segment was 17.5% of sales, compared with 17.2%
in the corresponding period last year. The improvement was primarily due to
higher margins for paper products.
SELLING EXPENSES
- ----------------
Selling expenses for the nine months ended September 30, 1999 amounted to
$11,752,320, an increase of $2,485,285 or 26.8% over the same period last year.
In the sanitation products segment, selling expenses increased by $2,206,799 or
28.8% to $9,862,300. The increase resulted primarily from the added expenses
of the businesses acquired in the second quarter of 1998 and an increased level
of outward freight costs due to the higher level of sales and to challenges
associated with the implementation of new information systems. Selling
expenses of the wiping products segment increased by $278,486 or 17.3% to
$1,890,020 in the first nine months of 1999. The increase was primarily due
to higher outward freight costs and other variable selling expenses.
GENERAL AND ADMINISTRATION EXPENSES
- -----------------------------------
General and administration expenses totalled $6,736,959 in the current period,
an increase of $362,559 or 5.7% over the corresponding period last year. In
the sanitation products segment, expenses amounted to $6,137,400, an increase
of $347,309 or 6.0% over the same period in 1998. The increase was due
primarily to the additional expenses of the businesses acquired in the second
quarter of 1998. Expenses of the wiping products segment were $388,830 in the
current period, an increase of $25,521 or 7.0% over the first nine months of
1998. Corporate charges at $210,729 were $10,271 lower than in the same period
last year.
AMORTIZATION
- ------------
Amortization totalled $483,589 in the first nine months of 1999, an increase of
$126,417 over the same period last year. The increase resulted from the
businesses acquired by Wood Wyant in the second quarter of 1998, including
amortization of goodwill related to their acquisition, together with the
amortization of Wood Wyant's new business applications software and related
hardware.
INTEREST EXPENSE
- ----------------
Interest expense amounted to $870,182, an increase of $14,725 over the first
nine months of 1998. Increased borrowing costs in the first half of 1999, in
part to finance Wood Wyant's new business applications software and related
hardware, were for the most part offset by reduced interest costs in the third
quarter, as part of the proceeds from the sale of the health care business were
utilized to pay off the Company's loan from Congress Financial Corporation and
to reduce the level of borrowing in Canada.
OTHER INCOME
- ------------
Other income totalled $219,454 in the first nine months of 1999, an increase of
$68,333 over the corresponding period last year. The increase was primarily
due to an increase in the amount of cash discounts taken.
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
- -----------------------------------------------------
Income from continuing operations before income taxes totalled $875,022 in the
first nine months of 1999, compared with $874,520 in the same period last year.
The sanitation products segment was lower by $316,433, while the wiping
products segment improved by $25,728 and corporate expenses declined by
$291,207 from the nine months ended September 30, 1998.
14
<PAGE> 15
INCOME TAXES
- ------------
Income tax expense was $370,228 in the current period, compared with $415,000 in
the corresponding period last year. The reduction resulted from the lower tax
rates in the United States compared to Canada and the changed mix of pre-tax
earnings between the two countries.
DISCONTINUED OPERATIONS
- -----------------------
The sale of the health care operations generated an after-tax gain of $749,602
or $0.21 per common share in the nine months ended September 30, 1999, as the
after-tax income from operations from January 1 to the date of sale of July 21,
1999 of $1,135,817 more than offset the after-tax loss on the sale of $386,215.
For the nine months ended September 30, 1998, after-tax income from the health
care operations amounted to $885,804 or $0.25 per common share.
NET INCOME
- ----------
Net income for the nine months ended September 30, 1999 amounted to $1,254,396
or $0.27 per common share after deducting dividends and accretion on the
mandatorily redeemable preferred shares, compared with net income of $1,345,324
or $0.30 per common share in the corresponding period last year.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
Liquidity and capital resources of the Company's Canadian operations (Wood
Wyant) and United States operations (IFC Disposables) are discussed separately,
as each is self-financing and has separate banking facilities.
CANADIAN OPERATIONS
- -------------------
Cash utilized during the nine months ended September 30, 1999 amounted to
$329,834. Operating activities generated $353,998, after a net increase in
non-cash working capital of $1,067,561. The higher non-cash working capital
resulted primarily from an increase of $2,000,972 in receivables, due to higher
sales levels and poorer collection performance due in part to problems
associated with implementation of new applications software, partially offset
by lower inventories ($422,310) and higher income taxes payable ($348,866).
Capital expenditures in the nine months period totalled $2,559,046 and were
primarily for the purchase of the new business applications software and
related hardware, which was financed for the most part by a five-year term bank
loan of Cdn. $2,500,000 ($1,703,694). Expenditures for the purchase of a
business amounted to $1,029,649. Repayments of long-term debt in the current
period were $1,014,883, while $513,204 of outstanding Class A Preferred shares
of Wood Wyant were redeemed in January 1999 and dividends of $126,748 were paid
during the nine months period on the outstanding Class A and Class B Preferred
shares. In July 1999, Wyant Corporation invested an additional $3,000,000 in
its wholly-owned Canadian subsidiary, Wood Wyant Inc.
The Company has a Cdn. $7,500,000 ($5,111,081) secured revolving line of credit,
of which approximately $2,600,000 was available as at September 30, 1999. In
addition, approximately $630,000 was available to finance future capital
expenditures under a revolving credit facility of Cdn. $3,000,000 ($2,044,432).
15
<PAGE> 16
CANADIAN OPERATIONS (CONT'D)
- ----------------------------
All borrowings of the Canadian operations are with the Bank of Nova Scotia.
Long-term debt outstanding at September 30, 1999 amounted to $5,844,359,
including $1,449,734 due within one year. All of the loans were at the
commercial prime rate in Canada (6.25% at September 30, 1999) plus 0.75%. The
secured revolving line of credit bears interest at the prime rate in Canada.
Under the terms of the loan agreements, covenants exist which require Wood
Wyant to meet certain ratios relating to debt to tangible net worth, current
assets to current liabilities and cash flow to debt service, as well as
maintaining a minimum level of tangible net worth. Also, borrowings under the
revolving credit facility must not exceed a given proportion of accounts
receivable.
The Company has no commitments for material capital expenditures and has no
plans for major capital expenditures for existing businesses during the next
five years. Payments on long-term debt obligations existing at September 30,
1999 average less than $1,000,000 annually over the next five years, with a
maximum of $1,531,000 in 2000.
Amounts required to redeem Class A and Class B Preferred shares approximate
$536,000 per annum during that period, while redemption of the Class F
Preferred shares in the event that the option to redeem is exercised by the
holders of those shares would require an additional annual amount of
approximately $434,000 for five years commencing in 2000.
Management believes that future operating cash flows and the unused balance
available under existing credit facilities will be sufficient to meet its
ongoing operating cash requirements, to repay the term debt and redeem the
Preferred shares as they become due and to meet cash requirements for capital
asset additions.
U.S. OPERATIONS
- ---------------
Continuing operations in the United States utilized $1,396,629 of cash during
the nine months ended September 30, 1999. Operating activities utilized
$1,005,058 of cash, primarily due to an increase of $1,135,691 in receivables
resulting mainly from higher sales levels in the wiping products segment.
Capital expenditures amounted to $400,659 in the period. A total of $1,795,068
was drawn on the committed revolving credit facility with Congress Financial
Corporation prior to its repayment in full on July 21, 1999 from the proceeds
from the sale of the Wyant Health Care Division.
On July 16, 1999 IFC Disposables, Inc. obtained a secured revolving line of
credit of $1,000,000 with Union Planters Bank bearing interest at bank prime
(8.25% at September 30, 1999) plus 1%. The line of credit is for a three-year
term and is guaranteed by Wyant Corporation. At September 30, 1999 none of the
line of credit was being utilized. Maximum borrowing under the facility is
determined by certain advance formulas applicable to the level of accounts
receivable and inventories.
Management believes that future operating cash flows and the unused balance
available under the existing credit facility will be sufficient to enable the
Company to meet its ongoing operating cash requirements and to finance capital
asset additions.
DISCONTINUED OPERATIONS
- -----------------------
On July 21, 1999 the Company sold its Wyant Health Care Division for cash
proceeds of $12,193,000, of which $581,000 is to be held in escrow for
twenty-four months. Part of the proceeds were immediately utilized to repay
the balance of $6,033,789 owing under the secured line of credit with Congress
Financial Corporation.
16
<PAGE> 17
DISCONTINUED OPERATIONS (CONT'D)
- --------------------------------
An additional amount of $3,000,000 was utilized to reduce the level of
short-term debt in its sanitation products subsidiary, Wood Wyant Inc. Expenses
and liabilities arising as a result of the sale amounted to $3,060,848,
including an amount of $1,628,620 representing a withdrawal liability from the
multi-employer defined benefit pension plan in which certain employees of the
Division were members. The purchaser of the business, PaperPak, did not assume
the Company's obligation under the plan. This liability will be paid by
quarterly payments over approximately nine years, commencing January 1, 2000.
Following completion of the sale, the Company ceased the manufacture of adult
incontinent products and the sale of the Division is not expected to materially
affect the operations of the Company's other operating units, as each is
autonomous and separately managed. The Company is precluded from re-entering
the adult incontinent products business for a period of five years following
the sale.
The Division supplies airlaid non-woven fabric and incontinent products to IFC
which are subject to a three-year supply agreement from completion of the sale.
IFC will supply PaperPak with Quickable(TM) absorbent washcloths at an
agreed upon price, which will be renegotiated every twelve months, and at a
predetermined volume.
SIGNIFICANT FACTORS AND KNOWN TRENDS
The Company has completed an in-depth review of its Canadian sanitation
business in order to significantly improve the efficiency and effectiveness of
its operations. As a consequence, it is anticipated that a restructuring
charge estimated at $510,000 after tax will be incurred in the fourth quarter
of 1999, which is expected to yield annual cost reductions of approximately
$680,000 after tax.
ENVIRONMENTAL
- -------------
The Company has been participating with the New Jersey Department of
Environmental Protection ("DEP") in the investigation and potential clean-up of
the Company's former site of operation located at 5 and 6 Easy Street,
Bridgewater, New Jersey. As a tenant, the Company is potentially responsible
to the DEP for environmental contamination based solely upon it having been a
tenant at the site where there is contamination. Similarly, the Company is
potentially jointly and severally liable with the landlord for both the
investigation and clean-up costs. To date, the investigation has established
that, in addition to on-site contamination, some of the contamination on the
site is or has come from off site. The Company disputes it caused any such
contamination and maintains that on-site contamination was a result of prior
tenants' acts.
17
<PAGE> 18
ENVIRONMENTAL (CONT'D)
- ----------------------
Nevertheless, the Company has fully cooperated with the DEP and has presently
been directed by the DEP to delineate the ground water contaminant plume, which
may result in establishing that the contamination is a regional problem rather
than one specific to the former site that the Company leased. The Company has
entered into a flat fee contract with its environmental consultants for $11,750
for the delineation investigation. Upon determination of the contaminant plume,
the Company will petition the DEP for a classification exception area where the
remedial action will be natural attenuation.
After the investigation is completed, the DEP could require clean-up or
remediation of the contamination on site. However, present technology is such
that no remedial action plan could bring the site in conformity with the present
DEP regulations, regardless of the funds spent.
The Company is unaware of any other environmental or similar matters that would
have a material effect on the capital expenditures, earnings or competitive
position of the Company.
BACKLOG, IMPACT OF INFLATION, SEASONALITY
- -----------------------------------------
The Company attempts to maintain sufficient inventory levels for all products to
allow shipment against most orders for wiping products within a one week period
and next day for core stocking items of the Company's sanitation products. To
some extent, however, certain components must be inventoried further in advance
of actual orders to ensure availability. For the most part, purchases are based
upon quarterly requirements as projected after calculating sales indications
from the sales and marketing departments.
The Company's products are not subject to significant seasonal influences.
Because its products are sold primarily to distributors throughout the United
States and to distributors and end-users in Canada, the Company is affected by
general economic conditions. Accordingly, any adverse change in the economic
climate may have an adverse impact on the Company's sales and financial
condition.
YEAR 2000
- ---------
The Year 2000 problem arises because many computer systems and software products
currently in use are coded to accept only two digit entries in the date code
field. Four digit entries will be required to identify 21st century dates.
Consequently, the use of software and computer systems that are not Year 2000
compliant could result in the disruption of operations. As a result, many
companies' computer systems and software may need to be upgraded or replaced to
conform with Year 2000 requirements.
In order to properly address the Year 2000 Issue, the Company has appointed the
Vice President, Information Technology of Wood Wyant as Year 2000 Project
Director to direct a project team for the implementation of a Year 2000 Plan.
The project team has conducted Year 2000 readiness assessment audits at all of
the Company's facilities, encompassing all equipment and processes deemed
important to the facility's operation.
Wood Wyant has installed new applications software for which it has obtained
written confirmation from the vendor that it is Year 2000 compliant. This
software became operational in the first quarter of 1999. The software at IFC
was replaced on November 1, 1999 by hardware and applications software which is
also Year 2000 compliant. As an additional precaution, the Company's critical
business functions are being tested to ensure Year 2000 compliance under normal
business conditions.
18
<PAGE> 19
YEAR 2000 (CONT'D)
- ------------------
The total cost of purchasing and installing the new Wood Wyant software amounted
to $2,342,020 (Cdn. $3,436,680), and is being financed primarily through a
five-year term loan with the Bank of Nova Scotia. The cost to replace computer
hardware and applications software at IFC is estimated to be $75,000.
The Company has received confirmation of suppliers' readiness from almost all
business-critical suppliers and expects to complete this process by
November 30, 1999.
To date, the Company has not incurred significant incremental costs in order to
comply with Year 2000 requirements and does not believe it will incur
significant incremental costs in the foreseeable future. However, there can be
no assurance that Year 2000 errors or defects will not be discovered in the
Company's software systems and, if errors or defects are discovered, there is
no assurance that this would not result in a material financial risk to the
Company.
In addition, the Company purchases goods and services from third party vendors
that may not be Year 2000 compliant. While the Company has obtained
confirmation of critical vendors' state of readiness, their failure to operate
properly with regard to Year 2000 requirements could require the Company to
incur material expenses to rectify the impact on the Company of such failure.
However, all of the Company's raw materials are widely available and the Company
is not dependent on any one supplier or group of suppliers.
The Company does not know the state of preparedness for Year 2000 issues of all
of its customers. However, no single customer exceeds 3% of consolidated sales
and therefore the risk the Company faces is broad based if many customers are
unable to use information systems necessary to place orders for Company
products.
The Company's Year 2000 Issue involves significant risks. There can be no
assurance that the Company will succeed in implementing its Year 2000 Plan.
The following describes the Company's most reasonably likely worst-case
scenario, given current uncertainties.
If the Company's replaced internal information technology systems fail the
Company will experience significant difficulties in supplying customers and
such a failure could hamper the Company's ability to manage the orderly
replenishment of inventories.
If the Company's vendors or suppliers of its required power,
telecommunications, transportation and financial services, fail to provide the
Company with products and services, it will be unable to provide services to
its customers.
If any of these uncertainties were to occur, the Company's business, financial
condition and results of operations would be adversely affected. The Company
is unable to assess the likelihood of such events occurring or the extent of
the effect on the Company.
Although the Company has not developed a comprehensive contingency plan to
address situations that may result if the Company or any of the third parties
upon which the Company is dependent is unable to achieve Year 2000 readiness,
the Company's Year 2000 compliance program is ongoing and its ultimate scope,
as well as the consideration of contingency plans, will continue to be
evaluated.
The Company plans to achieve Year 2000 compliance by the end of November 1999.
19
<PAGE> 20
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company is subject to market risk principally in two areas, interest rate
risk and foreign currency exchange rate risk.
INTEREST RATE RISK
- ------------------
The Company's lines of credit and long-term debt are all at rates of interest
which fluctuate with changes to bank prime rates in either the United States or
Canada. Consequently, increases in interest rates could have an adverse effect
on the Company's future results.
FOREIGN CURRENCY EXCHANGE RATE RISK
- -----------------------------------
The Company's results of operations are significantly dependent on, and
materially affected by, the results of operations of Wood Wyant and the
attendant business risks that are associated with the operation of Wood Wyant
as a going concern. These material risks include the following:
- A significant portion of the Company's earnings, on a consolidated basis,
will come from Wood Wyant, a Canadian corporation. As a result, the
Company's results of operations and earnings may be adversely affected by
the fluctuation in the currency exchange rate between US and Canadian
dollars.
- Since Wood Wyant conducts its business using Canadian dollars as its
operational currency, to the extent the Canadian dollar strengthens
against the US dollar, United States competitors in the institutional
sanitation business may become more active in the Canadian market. As a
result, the Company's results of operations and earnings may be adversely
affected in light of potential greater competition in times of a stronger
Canadian dollar.
PART II - OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS
The Company is not involved in any material legal proceedings.
ITEMS 2, 3, 4 & 5
Not applicable
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
a) Not applicable
b) Reports on Form 8-K
No current reports on Form 8-K have been filed during
the quarter ended September 30, 1999.
20
<PAGE> 21
WYANT CORPORATION
SIGNATURES
Pursuant to the requirement 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.
Wyant Corporation
(Registrant)
Date: November 11, 1999 SIGNATURE: /s/ Marc D'Amour
----------------- ----------------------
Marc D'Amour
Vice President,
Chief Financial Officer
and Treasurer
(For the registrant and as
Principal Financial Officer)
21
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM WYANT
CORPROATION FORM 10-Q RE QUARTER ENDED SEPTEMBER 30, 1999 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FORM 10-Q FOR QUARTER ENDED SEPTEMBER 30,
1999.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 2,663,856
<SECURITIES> 0
<RECEIVABLES> 14,787,144
<ALLOWANCES> 0
<INVENTORY> 8,153,453
<CURRENT-ASSETS> 26,312,613
<PP&E> 10,845,888
<DEPRECIATION> 0
<TOTAL-ASSETS> 42,719,734
<CURRENT-LIABILITIES> 16,471,131
<BONDS> 4,394,625
5,341,256
0
<COMMON> 27,022
<OTHER-SE> 13,848,107
<TOTAL-LIABILITY-AND-EQUITY> 42,719,734
<SALES> 59,339,783
<TOTAL-REVENUES> 59,339,783
<CGS> 38,841,165
<TOTAL-COSTS> 57,814,033
<OTHER-EXPENSES> (19,454)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 870,182
<INCOME-PRETAX> 875,022
<INCOME-TAX> 370,228
<INCOME-CONTINUING> 504,794
<DISCONTINUED> 749,602
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,254,396
<EPS-BASIC> 0.27
<EPS-DILUTED> 0.27
</TABLE>
