<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE
- --- SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED
March 31, 1997.
---------------
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE
- --- SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM
TO
--------------- --------------.
Commission File No. 0-1093
KAMAN CORPORATION
(Exact Name of Registrant)
Connecticut 06-0613548
(State of Incorporation) (I.R.S. Employer Identification No.)
1332 Blue Hills Avenue
Bloomfield, Connecticut 06002
(Address of Principal Executive Offices)
Registrant's telephone number, including area code: (860) 243-7100
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15 (d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes x No
--- ---
Indicate the number of shares outstanding of each of the issuer's
classes of common stock as of May 1, 1997:
Class A Common 18,212,701
Class B Common 667,814
Page 1 of 15 Pages
<PAGE>
<PAGE>
KAMAN CORPORATION AND SUBSIDIARIES
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements:
Condensed Consolidated Balance Sheets(In thousands)
<TABLE>
March 31, December 31,
Assets 1997 1996
------ ----------------- ------------------
<S> <C> <C> <C> <C>
Current assets:
Cash $ 5,220 $ 5,445
Accounts receivable (net of
allowance for doubtful
accounts of $3,234 in
1997, $2,574 in 1996) 205,697 185,516
Inventories:
Raw materials $ 7,151 $ 9,278
Work-in-process 71,071 75,056
Finished goods 21,825 19,008
Merchandise for resale 108,987 209,034 110,126 213,468
------- -------
Other current assets 36,382 29,702
------- -------
Total current assets 456,333 434,131
Property, plant & equip., at cost 187,628 191,323
Less accumulated depreciation
and amortization 114,693 114,930
------- -------
Net property, plant & equipment 72,935 76,393
Other assets 11,123 11,212
-------- --------
$ 540,391 $ 521,736
======== ========
Liabilities and Shareholders' Equity
------------------------------------
<S> <C> <C> <C> <C>
Current liabilities:
Notes payable $ 79,837 $ 63,002
Accounts payable 53,079 61,334
Accrued liabilities 40,715 41,087
Other current liabilities 45,558 30,215
------- -------
Total current liabilities 219,189 195,638
Deferred credits 15,280 14,028
Long-term debt, excl. current portion 84,529 83,940
Shareholders' equity:
Series 2 preferred stock $ 57,167 $ 57,167
Other shareholders' equity 164,226 221,393 170,963 228,130
-------- -------- -------- --------
$540,391 $521,736
======== ========
</TABLE>
- 2 -
<PAGE>
<PAGE>
KAMAN CORPORATION AND SUBSIDIARIES
PART I - FINANCIAL INFORMATION, Continued
Item 1. Financial Statements, Continued:
Condensed Consolidated Statements of Operations
(In thousands except per share amounts)
<TABLE>
For the Three Months
Ended March 31,
--------------------
1997 1996
---- ----
<S> <C> <C>
Revenues $ 252,157 $ 240,033
Costs and expenses:
Cost of sales 189,069 177,464
Selling, general and
administrative expense 51,033 51,013
Loss on closure of amplifier business 15,000 -
Interest expense 2,479 2,429
Other expense (income) (350) 155
-------- -------
257,231 231,061
-------- -------
Earnings (loss) before
income taxes (5,074) 8,972
Income taxes (benefit) (667) 3,770
-------- -------
Net earnings (loss) $ (4,407) $ 5,202
======== =======
Preferred stock dividend
requirement $ (929) $ (929)
======== =======
Earnings (loss) applicable to
common stock $ (5,336) $ 4,273
======== =======
Net earnings (loss) per common share:
Primary $ (.28) $ .23
Fully diluted $ (.28) $ .22
======== =======
Dividends declared per share:
Series 2 preferred stock $ 3.25 $ 3.25
Common stock $ .11 $ .11
======== =======
</TABLE>
- 3 -
<PAGE>
<PAGE>
KAMAN CORPORATION AND SUBSIDIARIES
PART I - FINANCIAL INFORMATION, Continued
Item 1. Financial Statements, Continued:
Condensed Consolidated Statements of Cash Flows
(In thousands)
<TABLE>
For the Three Months
Ended March 31,
--------------------
1997 1996
--------- --------
<S> <C> <C>
Cash flows from operating activities:
Net earnings(loss) $ (4,407) $ 5,202
Depreciation and amortization 3,048 2,980
Gain on sale of assets (505) (213)
Loss on closure of amplifier business 15,000 -
Changes in current assets and liabilities (30,344) (24,753)
Other, net 518 645
-------- --------
Cash provided by (used in) operating
activities (16,690) (16,139)
-------- --------
Cash flows from investing activities:
Proceeds from sale of assets 3,623 1,669
Expenditures for property, plant & equipment (2,133) (1,794)
Other, net (76) (170)
-------- --------
Cash provided by (used in) investing
activities 1,414 (295)
-------- --------
Cash flows from financing activities:
Additions to notes payable 16,835 152
Additions to long-term debt 589 20,000
Dividends paid (3,002) (2,970)
Other, net 629 349
-------- --------
Cash provided by (used in) financing
activities 15,051 17,531
-------- --------
Net increase (decrease) in cash (225) 1,097
Cash at beginning of period 5,445 4,078
-------- --------
Cash at end of period $ 5,220 $ 5,175
======== ========
</TABLE>
- 4 -
<PAGE>
<PAGE>
KAMAN CORPORATION AND SUBSIDIARIES
PART I - FINANCIAL INFORMATION, Continued
Item 1. Financial Statements, Continued:
Notes to Condensed Consolidated Financial Statements
(In Thousands)
Basis of Presentation
- ----------------------
The December 31, 1996 condensed consolidated balance sheet
amounts have been derived from the previously audited consolidated
balance sheet of Kaman Corporation and subsidiaries.
The balance of the condensed financial information reflects all
adjustments which are, in the opinion of management, necessary for
a fair presentation of the financial position, results of
operations and cash flows for the interim periods presented and
are of a normal recurring nature unless otherwise disclosed in
this report.
The statements should be read in conjunction with the notes to
the consolidated financial statements included in Kaman
Corporation's 1996 Annual Report.
Loss on Closure of Amplifier Business
- -------------------------------------
The corporation recorded a pre-tax charge of $15,000 in the first
quarter of 1997 as a result of management's decision to close Kaman
Music's Trace Elliot amplifier manufacturing business in Great
Britain. The closure is expected to be substantially completed by
the end of 1997.
Cash Flow Items
- ---------------
Cash payments for interest were $2,984 and $2,717 for the three
months ended March 31, 1997 and 1996, respectively. Cash
payments for income taxes for the comparable periods were $1,033
and $1,158, respectively.
- 5 -
<PAGE>
<PAGE>
KAMAN CORPORATION AND SUBSIDIARIES
PART I - FINANCIAL INFORMATION, Continued
Item 1. Financial Statements, Continued:
Notes to Condensed Consolidated Financial Statements
(In Thousands)
Recently Issued Accounting Standard
- -----------------------------------
Effective for periods ending on or after December 15, 1997, the
computation, presentation, and disclosure requirements of Statement
of Financial Accounting Standards No. 128, Earnings per Share, will
apply to the corporation. The corporation does not anticipate any
material adjustment to its consolidated financial statements as a
result of the new statement.
- 6 -
<PAGE>
<PAGE>
KAMAN CORPORATION AND SUBSIDIARIES
PART I - FINANCIAL INFORMATION, Continued
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Results of Operations
- ---------------------
Consolidated revenues for the three months ended March 31, 1997
were up 5% compared to the same period of 1996. These results
reflect increased revenues in the Diversified Technologies segment.
For the quarter ended March 31, 1997, the corporation recorded a
pre-tax charge of $15 million related to closure of Music
Distribution's amplifier manufacturing business located in Great
Britain. As a result, the corporation recorded a loss of $4.4
million for the first quarter compared to earnings of $5.2 million
for the same period of 1996. The loss applicable to common
shareholders was $5.3 million, or 28 cents per share primary and
fully diluted in 1997, compared to earnings of $4.3 million, or 23
cents per common share primary, 22 cents per common share fully
diluted in the same period last year. Excluding the charge, first
quarter earnings grew nearly 9% to $5.7 million, or 25 cents per
common share primary, 24 cents per common share fully diluted. The
first quarter charge reflects management's decision to cease the
amplifier manufacturing operation in Great Britain and thereby
reduce capital investment.
Diversified Technologies segment revenues increased by about 15%
for the quarter ended March 31, 1997 compared to the same period of
1996. The increase is primarily attributable to increased demand
for the corporation's specialty self-lubricating bearings and
scientific services.
Within the Diversified Technologies segment, management continues
efforts to adapt the corporation's businesses to conditions in
defense and commercial aircraft markets. In this regard, management
believes that there is potential for use of its SH-2 aircraft by
foreign military services, particularly those using smaller ships
with landing platforms that are well- suited to this helicopter.
The corporation is currently performing a contract for the Republic
of Egypt's acquisition of ten (10) SH-2G helicopters from the U.S.
Navy. This work, which involves the retrofit of SH-2F helicopters
already manufactured for the U.S. Navy into the SH-2G
configuration, is expected to have a value of about $150 million
over a three year period. Deliveries are scheduled to begin in the
fourth quarter of this year. As it pursues other opportunities for
foreign sales, the corporation has maintained an office in
- 7 -
<PAGE>
<PAGE>
KAMAN CORPORATION AND SUBSIDIARIES
PART I - FINANCIAL INFORMATION, Continued
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations (Continued)
Australia to coordinate work on competitions in Australia, New
Zealand, and Malaysia. During the first quarter of 1997, the
corporation was notified by the Australian government that it had
been selected as the "preferred tenderer" in a competition to
supply eleven (11) multi-mission helicopters to go aboard Royal
Australian Navy ANZAC frigates. Contract negotiations have begun
and are expected to take several months to complete. The retrofit
aircraft for Australia will incorporate a new cockpit and new
weapons and sensors. Therefore, while the contract value is
presently undetermined, management expects that it will be
significantly larger in dollar value than the program for Egypt.
It is also anticipated that revenues and earnings will phase in
gradually, with deliveries expected to begin in 2001. In the first
quarter, Kaman was also chosen by the government of New Zealand as
the "preferred tenderer" for that country's procurement of four (4)
retrofitted aircraft. Contract negotiations should begin shortly
and are expected to take several months to complete. Although the
contract value and delivery schedule will not be determined until
those negotiations are finalized, it is anticipated that the
program will have a value in the range of the program for Egypt.
The corporation continues to pursue other opportunities for foreign
sales as well, including Malaysia and other countries in Southeast
Asia and the Middle East. In the U.S., the corporation is not
manufacturing further aircraft for the U.S. Navy, however there are
sixteen aircraft currently in the Naval Reserves and the
corporation expects to continue to provide logistics and spare
parts support for these aircraft.
As to its advanced technology defense programs, management believes
that it is well positioned to compete in a defense environment that
is increasingly emphasizing advanced technology "smart weapons"
programs in its strategic planning. The corporation has
significant expertise in the field of high-technology programs,
having performed a multitude of government contracts over the
years. These contracts have involved products and systems, as well
as services such as computer software development, intelligence
analysis, and research and development. The corporation continues
to be successful in maintaining revenues from this type of
business, however competition in this area is increasing.
The corporation also performs aerospace subcontracting work for
several airframe manufacturing programs. This business has shown
some improvement due to renewed health in the domestic aviation
market, examples of which include work associated with the Boeing
777 and the McDonnell Douglas C-17.
- 8 -
<PAGE>
<PAGE>
KAMAN CORPORATION AND SUBSIDIARIES
PART I - FINANCIAL INFORMATION, Continued
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations (Continued)
Management continues to take a conservative approach to production
of its K-MAX helicopter, a medium to heavy lift 'aerial truck' for
use in logging, fire fighting, reforestation, utility power line
work, and other applications. Management believes that this
approach will give the aircraft's markets time to develop and
expects that sales and profitability will take some time to
achieve. Management also recognizes that the market has been
affected by the availability of military surplus aircraft released
to the public at lower cost than new aircraft.
Another potential application for the K-MAX is the task of vertical
replenishment ("VERTREP"), a non-combat role in the military.
Since 1995, the K-MAX has been chosen by the U.S. Navy Military
Sealift Command ("MSC") to provide two separate demonstrations of
its VERTREP capabilities under charter/lease arrangements. A third
demonstration opportunity was recently awarded to another provider.
Management does not consider it unusual that the government would
choose to award the latest project to another provider in order to
provide comparative performance data.
Overall, Distribution segment revenues were relatively flat for the
quarter ended March 31, 1997 compared to the same period of 1996.
These results reflect an increase of 3% in Industrial Distribution
revenues (which constitutes 78% of the segment's revenues) offset
by a decrease of about 13% for Music Distribution.
The Industrial Distribution business continues to benefit from
efforts to enhance operating efficiencies, expand partnering
relationships with suppliers, address the needs of customers who
want to consolidate their vendor base, and provide value added
services in areas such as electrical and electronic systems,
materials handling, and precision positioning systems. For certain
of its larger customers, the company also performs an "integrated
supply" function, involving management of parts inventories and
associated personnel as well as selection of suppliers for the
customer's facility. Sales for this business are made to nearly
every sector of U.S. industry, however, so demand for products
tends to be influenced by industrial production levels. During the
first quarter of 1997, the Music Distribution business was affected
by softness in both foreign and domestic markets for its products.
- 9 -
<PAGE>
<PAGE>
KAMAN CORPORATION AND SUBSIDIARIES
PART I - FINANCIAL INFORMATION, Continued
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations (Continued)
Total operating profits for the segments for the first quarter of
1997 declined substantially compared to the same period of 1996 due
to the pre-tax charge in the Distribution segment. Operating
profits for Diversified Technologies increased about 4% for the
quarter over the same period last year, primarily attributable to
specialty bearings and scientific services. As a result of the
pre-tax charge, the Distribution segment experienced an operating
loss for the three month period ended March 31, 1997. Management
has come to believe that certain structural changes in consumer
music markets may be occurring and it is continuing to evaluate its
strategic direction in this business.
Interest expense for the first quarter of 1997 increased 2%
compared to the same period of 1996, primarily due to increases in
average borrowings.
The corporation recorded an income tax benefit at an overall rate
of 13.1% as a result of the pre-tax charge and the loss for the
first three months of 1997. The tax benefit rate would have been
larger but for the fact that the tax benefit is limited for losses
associated with operations in Great Britain. The consolidated
effective income tax rate was 42.0% for the comparable period of
1996.
Effective for periods ending on or after December 15, 1997, the
computation, presentation, and disclosure requirements of Statement
of Financial Accounting Standards No. 128, Earnings per Share, will
apply to the corporation. The corporation does not anticipate any
material adjustment to its consolidated financial statements as a
result of the new statement.
Liquidity and Capital Resources
- -------------------------------
The corporation's cash flow from operations has generally been
sufficient to finance a significant portion of its working capital
and other capital requirements. During the past few years,
however, the corporation's capital requirements have continued to
increase, and this resulted in financing more of its requirements
from bank borrowings.
- 10 -
<PAGE>
<PAGE>
KAMAN CORPORATION AND SUBSIDIARIES
PART I - FINANCIAL INFORMATION, Continued
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations (Continued)
During the first quarter, operating activities required additional
cash principally due to working capital requirements, including
increases in accounts receivable for the Industrial Distribution
business and for work on the SH-2 program for Egypt, specialty
bearings, and scientific services, and reductions in accounts
payable in the Diversified Technologies segment.
Cash used in investing activities has traditionally been for the
acquisition of equipment used for manufacturing and distribution.
During the first quarter, these customary requirements were
supplemented by proceeds from the sale of assets, principally the
disposition of a small fixed base operation subsidiary in the
Distribution segment.
Cash provided by financing activities was primarily used to support
the previously discussed increase in working capital requirements.
For this purpose, the corporation maintains a revolving credit
agreement involving twelve domestic and foreign banks. This
facility was established in January 1996 and provides a maximum
unsecured line of credit of $250 million. It replaces two previous
revolving credit arrangements and involves many of the same lenders
that participated in those arrangements. The agreement has a term
of five years and contains various covenants, including debt to
capitalization, consolidated net worth requirements, and
limitations on other loan indebtedness that the corporation may
incur.
Cash used by financing activities was primarily attributable to the
payment of dividends.
Under its revolving credit agreement, the corporation has the
ability to borrow funds on both a short-term and long-term basis.
As of March 31, 1997, the corporation's aggregate borrowings were
$130.1 million, most of which was borrowed under the revolving
credit facility. Average borrowings were $129.3 million for the
first three months of 1997, compared to $116.9 million for the same
period last year.
Management believes that the corporation's cash flow from
operations and available unused bank lines of credit under its
revolving credit agreement will be sufficient to finance its
working capital and other capital requirements for the foreseeable
future.
- 11 -
<PAGE>
<PAGE>
KAMAN CORPORATION AND SUBSIDIARIES
PART I - FINANCIAL INFORMATION, Continued
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations (Continued)
Forward-Looking Statements
- --------------------------
This report contains forward-looking information relating to the
corporation's business prospects, including future contract awards
and negotiations, the SH-2G and K-MAX helicopter programs, and
other matters that involve a number of uncertainties that may cause
actual results to differ materially from expectations. Those
uncertainties include, but are not limited to: 1) the successful
conclusion of contract negotiations with government authorities,
including foreign governments; 2) political developments in
countries where the corporation intends to do business; 3) standard
government contract provisions permitting termination for the
convenience of the government; 4) competitive conditions in markets
served by the corporation; 5) the degree of acceptance of new
products in the marketplace; 6) currency exchange rates, taxes,
laws and regulations, inflation rates, general business conditions
and other factors. Any forward-looking information should be
considered with these factors in mind.
- 12 -
<PAGE>
<PAGE>
KAMAN CORPORATION AND SUBSIDIARIES
Part II - OTHER INFORMATION
Item 4. Submission of Matters to Vote of Security Holders
The annual meeting of the shareholders of the corporation was
held at the offices of the corporation on April 15, 1997.
Following is a brief description of each matter voted upon at the
meeting:
1. Election of Directors
---------------------
The following fourteen (14) individuals were elected directors
of the corporation to serve until the next annual meeting and until
their successors have been elected:
Brian E. Barents Eileen S. Kraus
E. Reeves Callaway III Hartzel Z. Lebed
Frank C. Carlucci John A. DiBiaggio
Laney J. Chouest Walter H. Monteith, Jr.
Edythe J. Gaines John S. Murtha
Huntington Hardisty Wanda Lee Rogers
Charles H. Kaman
C. William Kaman II
For each director, the Class B shareholders voted 606,800
shares in favor; 20 shares against; no abstentions; and no broker
non-votes.
2. Authorization to Elect One Additional Director
----------------------------------------------
A proposal to authorize the Board of Directors to elect one
(1) additional director during the ensuing year was adopted by the
Class B shareholders who voted 605,120 shares in favor; 1,680
shares against; 20 shares abstaining; and no broker non-votes.
3. Appointment of KPMG Peat Marwick LLP
------------------------------------
A proposal to appoint KPMG Peat Marwick LLP as independent
auditors for the corporation during the ensuing year was adopted by
the Class B shareholders, who voted 606,800 shares in favor; 20
shares against; no abstentions; and no broker non-votes.
- 13 -
<PAGE>
<PAGE>
KAMAN CORPORATION AND SUBSIDIARIES
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits to Form 10-Q:
(11) Earnings per common share computation
(27) Financial Data Schedule
(b) Reports on Form 8-K:
There were no reports on Form 8-K filed during the
quarter ended March 31, 1997. A report on Form 8-K
dated April 15, 1997 was filed on April 16, 1997,
which report described the corporation's announcement
of a pre-tax charge of $15 million taken in the
first quarter 1997 as a result of management's
decision to close Kaman Music Corporation's Trace
Elliot amplifier manufacturing business in Great
Britain.
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.
KAMAN CORPORATION
Registrant
Date: May 13, 1997 By Charles H. Kaman
Chairman and
Chief Executive Officer
(Duly Authorized Officer)
Date: May 13, 1997 By Robert M. Garneau
Executive Vice President and
Chief Financial Officer
- 14 -
<PAGE>
<PAGE>
KAMAN CORPORATION AND SUBSIDIARIES
Index to Exhibits
Exhibit 11 Earnings Per Common Share
Computation Attached
Exhibit 27 Financial Data Schedule Attached
- 15 -
<PAGE>
<PAGE>
<PAGE>
KAMAN CORPORATION AND SUBSIDIARIES
EXHIBIT 11 - EARNINGS PER COMMON SHARE COMPUTATION
(In thousands except per share amounts)
<TABLE>
For the Three Months
Ended March 31,
--------------------
1997 1996
---- ----
<S> <C> <C>
Primary:
Net earnings (loss) applicable to common
stock $ (5,336) $ 4,273
======== ========
Weighted average number of common
shares outstanding 18,791 18,499
Weighted average shares issuable on
exercise of dilutive stock options * 112
-------- --------
Total 18,791 18,611
======== ========
Net earnings (loss) per
common share - primary $ (.28) $ .23
======== ========
Fully diluted:
Net earnings (loss) applicable to common stock $ (5,336) $ 4,273
Elimination of interest expense on 6%
subordinated convertible debentures
(net after taxes) * 288
Elimination of preferred stock dividend
requirement * 929
-------- --------
Net earnings (loss) (as adjusted) $ (5,336) $ 5,490
======== ========
Weighted average number of shares
outstanding including shares
issuable on stock option exercises 18,791 18,611
Shares issuable on conversion of 6%
subordinated convertible debentures * 1,421
Shares issuable on conversion of
Series 2 preferred stock * 4,552
Additional shares using ending market
price instead of average market on
treasury method use of stock option
proceeds * 14
-------- --------
Total 18,791 24,598
======== ========
Net earnings (loss)per common share
- fully diluted $ (.28) $ .22
======== ========
* Anti-dilutive and accordingly not included in the computation
</TABLE>
<PAGE>
<PAGE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
The schedule contains summary financial information extracted from
the corporation's quarterly report to shareholders 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> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 5,220
<SECURITIES> 0
<RECEIVABLES> 208,931
<ALLOWANCES> (3,234)
<INVENTORY> 209,034
<CURRENT-ASSETS> 456,333
<PP&E> 187,628
<DEPRECIATION> (114,693)
<TOTAL-ASSETS> 540,391
<CURRENT-LIABILITIES> 219,189
<BONDS> 84,529
0
57,167
<COMMON> 18,848
<OTHER-SE> 145,378
<TOTAL-LIABILITY-AND-EQUITY> 540,391
<SALES> 251,794
<TOTAL-REVENUES> 252,157
<CGS> 189,069
<TOTAL-COSTS> 255,102
<OTHER-EXPENSES> (350)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,479
<INCOME-PRETAX> (5,074)
<INCOME-TAX> (667)
<INCOME-CONTINUING> (4,407)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (4,407)
<EPS-PRIMARY> (.28)
<EPS-DILUTED> (.28)
<PAGE>
</TABLE>
