UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended January 30, 1998
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 1-7707
MEDTRONIC, INC.
(Exact name of registrant as specified in its charter)
Minnesota 41-0793183
(State of incorporation) (I.R.S. Employer
Identification No.)
7000 Central Avenue N.E.
Minneapolis, Minnesota 55432
(Address of principal executive offices)
Telephone number: (612) 574-4000
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 ____
Shares of common stock, $.10 par value, outstanding on March 2, 1998:
469,511,615
<PAGE>
PART I--FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
MEDTRONIC, INC.
CONSOLIDATED STATEMENT OF EARNINGS
(Unaudited)
<TABLE>
<CAPTION>
Three months ended Nine months ended
--------------------------- ---------------------------
Jan. 30, Jan. 31, Jan. 30, Jan. 31,
1998 1997 1998 1997
----------- ----------- ----------- -----------
(in thousands, except per share data)
<S> <C> <C> <C> <C>
Net sales $ 631,377 $ 598,749 $ 1,919,765 $ 1,797,771
Costs and expenses:
Cost of products sold 170,782 152,314 489,809 458,955
Research and development
expense 74,252 69,531 215,731 203,459
Selling, general, and
administrative expense 184,040 188,517 575,674 569,191
Non-recurring charges 156,400 0 156,400 0
Foundation commitment 36,000 0 36,000 0
Interest expense 2,012 1,536 5,848 6,148
Interest income (6,895) (9,650) (17,226) (26,971)
----------- ----------- ----------- -----------
Total costs and expenses 616,591 402,248 1,462,236 1,210,782
----------- ----------- ----------- -----------
Earnings before income taxes 14,786 196,501 457,529 586,989
Provision for income taxes 7,530 67,793 160,276 202,511
----------- ----------- ----------- -----------
Net earnings $ 7,256 $ 128,708 $ 297,253 $ 384,478
=========== =========== =========== ===========
Weighted average shares
outstanding 469,087 479,915 468,799 479,407
Basic earnings per share $ 0.02 $ 0.27 $ 0.63 $ 0.80
=========== =========== =========== ===========
Earnings per share
assuming dilution $ 0.02 $ 0.26 $ 0.62 $ 0.79
=========== =========== =========== ===========
Weighted average shares
outstanding assuming dilution 476,690 489,179 475,987 488,079
</TABLE>
See accompanying Notes to Condensed Consolidated Financial Statements.
<PAGE>
MEDTRONIC, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
(Unaudited)
January 30, April 30,
1998 1997
----------- -----------
ASSETS (in thousands)
------
Current assets:
Cash and cash equivalents $ 310,602 $ 197,388
Short-term investments 37,027 53,181
Accounts receivable, less allowance for
doubtful accounts of $13,446 and $13,673 546,312 516,984
Inventories:
Finished goods 141,693 123,282
Work in process 72,360 68,034
Raw materials 106,148 91,235
----------- -----------
Total inventories 320,201 282,551
Prepaid expenses and other current assets 281,904 187,805
----------- -----------
Total current assets 1,496,046 1,237,909
Property, plant, and equipment 971,849 965,002
Accumulated depreciation (497,459) (477,786)
----------- -----------
Net property, plant, and equipment 474,390 487,216
Goodwill and other intangible assets, net 471,901 490,968
Long-term investments 120,106 125,847
Other assets 96,866 67,270
----------- -----------
Total assets $ 2,659,309 $ 2,409,210
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
Current liabilities:
Short-term borrowings $ 94,393 $ 106,375
Accounts payable 79,997 110,337
Accrued liabilities 345,650 301,979
Restructuring liabilities 80,675 0
----------- -----------
Total current liabilities 600,715 518,691
Long-term debt 15,535 13,980
Other long-term liabilities 142,552 128,155
Deferred tax liabilities 8,741 2,163
Shareholders' equity:
Common stock--par value $.10 46,922 46,762
Retained earnings 1,943,616 1,784,319
Cumulative translation adjustment (70,872) (56,960)
----------- -----------
1,919,666 1,774,121
Receivable from Employee Stock Ownership Plan (27,900) (27,900)
----------- -----------
Total shareholders' equity 1,891,766 1,746,221
----------- -----------
Total liabilities and shareholders' equity $ 2,659,309 $ 2,409,210
=========== ===========
See accompanying notes to condensed consolidated financial statements.
<PAGE>
MEDTRONIC, INC.
CONDENSED STATEMENT OF CONSOLIDATED CASH FLOWS
(Unaudited)
Nine months ended
-----------------------
Jan. 30, Jan. 31,
1998 1997
--------- ---------
(in thousands)
OPERATING ACTIVITIES:
Net earnings $ 297,253 $ 384,478
Adjustments to reconcile net earnings to net
cash provided by operating activities:
Depreciation and amortization 94,928 98,351
Non-recurring charges 156,400 0
Change in assets and liabilities:
Increase in accounts receivable (33,133) (42,869)
Increase in inventories (45,237) (50,195)
Decrease in accounts payable and
accrued liabilities (29,051) (70,305)
Changes in other operating assets and
liabilities (68,796) (21,675)
--------- ---------
Net cash provided by operating activities 372,364 297,785
INVESTING ACTIVITIES:
Additions to property, plant, and equipment (83,249) (119,738)
Purchases of marketable securities (86,400) (499,640)
Sales and maturities of marketable securities 52,131 398,375
Acquisition of subsidiary, net of cash acquired 0 (18,873)
Other investing activities (net) 18,229 (66,474)
--------- ---------
Net cash used in investing activities (99,289) (306,350)
FINANCING ACTIVITIES:
(Decrease) increase in short-term borrowings (net) (13,692) 31,836
Increase (decrease) in long-term debt (net) 1,555 (317)
Dividends to shareholders (77,188) (68,153)
Repurchases of common stock (122,371) (74,533)
Issuance of common stock 53,086 35,673
--------- ---------
Net cash used in financing activities (158,610) (75,494)
Effect of exchange rate changes on cash and
cash equivalents (1,251) (5,855)
--------- ---------
Net change in cash and cash equivalents 113,214 (89,914)
Cash and cash equivalents at beginning of period 197,388 151,050
--------- ---------
Cash and cash equivalents at end of period $ 310,602 $ 61,136
========= =========
See accompanying notes to condensed consolidated financial statements.
<PAGE>
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(amounts in thousands, except per share data)
Note 1 - Basis of Presentation
- ------------------------------
The unaudited condensed consolidated financial statements include the accounts
of Medtronic, Inc. and all of its subsidiaries, after elimination of all
significant intercompany transactions and accounts. In the opinion of
management, all adjustments necessary for a fair presentation of operating
results have been made. Operating results for interim periods are not
necessarily indicative of results that may be expected for the year as a whole.
Note 2 - Stockholders' Equity
- -----------------------------
On July 10, 1997, the Board of Directors approved a two-for-one common stock
split effected September 12, 1997 in the form of a 100 percent stock dividend to
shareholders of record at the close of business on August 29, 1997. The stock
split resulted in the issuance of 234,509 additional shares and the reclass of
$23,451 from retained earnings to common stock, representing the par value of
the shares issued. All references in the financial statements to average number
of shares outstanding and earnings per share amounts for the current and prior
year have been restated to reflect the split.
Note 3 - Non-Recurring Charges and Foundation Commitment
- --------------------------------------------------------
The company recorded pre-tax charges totaling $205.3 million during the third
quarter. $156.4 million of this pre-tax charge pertained to management
initiatives to restructure the vascular organization and reduce global
infrastructure by streamlining certain manufacturing and administrative
operations within the United States, Europe and Japan. These actions will
include the closing of several manufacturing facilities and will result in the
elimination of approximately 1,000 positions and a net reduction of about 600 in
the company's worldwide workforce. The components of these charges included $7.7
million for facility reductions, $58.4 million for severance and related costs,
$68.8 million for impairments to reduce the carrying value of certain
intangibles and other assets to fair value, and $21.5 million for noncancelable
contractual commitments and other non-recurring expenses.
In connection with this initiative, included in the $205.3 million pre-tax
charge was a $12.9 million obsolescence charge to cost of products sold as a
result of identified obsolescence on certain vascular inventories.
Included in the $205.3 million pre-tax charge was a commitment made by the
company during the third quarter to contribute $36.0 million to the Medtronic
Foundation. This commitment is expected to fund the Medtronic Foundation through
the end of fiscal 2001. The Medtronic Foundation, funded entirely by the
company, was established to maintain good corporate citizenship in its
communities. This commitment is included in accrued liabilities at January 30,
1998.
<PAGE>
Note 4 - New Accounting Pronouncement
- -------------------------------------
In February 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standard (SFAS) No. 128 "Earnings per Share." SFAS No. 128
requires dual presentation of basic earnings per share and diluted earnings per
share and is effective for financial statements for periods ending after
December 15, 1997. Under SFAS No. 128, basic earnings per share is computed
based on the weighted average number of common shares outstanding, while diluted
earnings per share is computed based on the weighted average number of common
shares outstanding plus all potential dilutive common shares of stock. Potential
dilutive shares of common stock include stock options and other stock based
awards granted under stock-based compensation plans and shares committed to be
purchased under the employee stock purchase plan. The company adopted SFAS No.
128 during the third quarter ended January 30, 1998.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations
- ---------------------
Net Earnings
- ------------
Net earnings for the third quarter ended January 30, 1998 were $7.3 million, or
$0.02 per share (basic). For the comparable third quarter last year, net
earnings were $128.7 million, or $0.27 per share (basic). Net earnings were
$297.3 million, or $0.63 per share (basic) for the nine-month period ended
January 30, 1998, compared to $384.5 million, or $0.80 per share (basic) for the
same period last year. Without the $205.3 million in pre-tax charges, net
earnings would have been $0.31 and $0.93 per share (basic) for the three and
nine-month periods ended January 30, 1998, respectively.
Earnings per share assuming dilution were $0.02 and $0.62 for the three and
nine-month periods ended January 30, 1998, respectively, compared to $0.26 and
$0.79, respectively, for the same periods last year. Without the $205.3 million
in pre-tax charges, earnings per share assuming dilution would have been $0.30
and $0.91 for the three and nine-month periods ended January 30, 1998,
respectively.
Sales
- -----
Sales for the quarter and nine-month period ended January 30, 1998 increased 5.4
percent and 6.8 percent, respectively, compared to the same periods last year.
Exclusive of the effects of foreign currency translation, sales for the quarter
and nine-month period ended January 30, 1998 increased 10.2 percent and 11.5
percent, respectively, over the comparable periods last year. Sales growth in
the quarter and nine-month period was negatively impacted by $28.2 million and
$83.9 million, respectively, of unfavorable exchange rate movements caused
primarily by the strengthening of the U.S. dollar against major European
currencies and the Japanese Yen.
<PAGE>
After removing the impact of foreign exchange rate fluctuations, worldwide sales
of the Pacing Business, which consists primarily of Bradycardia Pacing and
Tachyarrhythmia Management, grew 8.5 percent and 8.9 percent during the quarter
and nine-month period ended January 30, 1998, respectively, compared to the same
periods a year ago. This growth was lead by strong contributions from
Tachyarrhythmia Management's Micro Jewel(R) II implantable
cardioverter-defibrillator, which continues to hold a strong market share
position in the highly competitive defibrillator marketplace. The Gem(TM)DR,
part of the next generation Gem family of defibrillators, is currently in
clinical evaluations in Europe and the U.S. The Gem(TM), a single chamber
version of the Gem family of defibrillators, entered clinical evaluations in
Europe in February 1998. Bradycardia Pacing sales during the quarter were lead
by strong non-U.S. sales of the Kappa(R) 400 series of pacemakers. The Kappa(R)
400 series of pacemakers received FDA clearance in the U.S. on the last day of
the quarter. Its successor product, the Kappa(R) 700 series family of pacemakers
entered clinical evaluations in Europe in November 1997.
Sales within the Other Cardiovascular Business, (consisting of balloon and
guiding catheters, stents, interventional neuroradiology products, heart valves,
perfusion and blood management systems, cannulae and surgical accessories)
increased 3.9 percent and 8.6 percent for the quarter and nine-month period
ended January 30, 1998, respectively, after excluding the effects of foreign
currency translation. Balloon catheter sales decreased significantly from the
same quarter in the prior year and for the second quarter in a row as
significant competition continued resulting in declining unit sales and
declining average selling prices. This continued price competition has resulted
in the deterioration of balloon catheter selling prices over the past five
years. The stent market has become increasingly competitive, particularly in the
U.S. where the quarter marked a sequential decline in stent sales as a result of
earlier than expected recent launches of competitive stents. These disappointing
sales results necessitated management initiatives during the quarter to
right-size the vascular organization as discussed in Note 3. The Medtronic
Freestyle(R) stentless aortic tissue heart valve, which received FDA clearance
in September 1997, achieved strong sales growth during the quarter. Sales of
surgical cannulae were solid during the quarter. Sales of perfusion and blood
management systems were nearly flat compared to last year's comparable quarter.
The endovascular stent-graft system, launched in the second quarter outside the
U.S., continues to gain rapid medical acceptance for minimally-invasive
treatment of abdominal aortic aneurysms.
<PAGE>
Exclusive of the effects of foreign currency translation, sales of the
Neurological and Diversified Businesses, consisting primarily of implantable
neurostimulation devices, drug administration systems, neurosurgery products,
diagnostic systems and developing businesses, grew 28.3 percent and 30.1
percent, respectively, for the quarter and nine-month period ended January 30,
1998 compared to the same periods last year. Particularly strong sales growth
was achieved in the drug delivery business as a result of continued increased
demand for the SynchroMed(R) drug infusion system for delivery of Lioresal(R)
(baclofen, USP) Intrathecal for treatment of cerebral and spinal spasticity.
Also contributing to the growth were sales of the SynchroMed(R) for delivery of
morphine for treatment of chronic pain, especially non-malignant chronic pain.
Another strong growth factor was the continued rapid sales growth in Europe of
Medtronic Activa(TM) neurostimulation therapy for control of essential tremor
and tremor associated with Parkinson's disease. This therapy received U.S.
clearance from the FDA in August 1997. Significant progress was made in the U.S.
during the quarter in the training of physicians and in gaining reimbursement
for this therapy in the majority of states. Also, the Mattrix(R) and Itrel(R) 3
spinal cord stimulation systems continue to hold strong market share positions.
In late September, the company received FDA clearance to market its Interstim
Continence Control Therapy. The company is currently working to actively train
centers and develop this market. In addition, neurosurgery (PS Medical) shunts
for hydrocephalus contributed to the strong growth.
Cost of Products Sold
- ---------------------
Cost of products sold as a percent of sales for the quarter and nine-month
period ended January 30, 1998 was 27.0 percent and 25.5 percent, respectively,
compared to 25.4 percent and 25.5 percent for the same periods last year.
Without the $12.9 million obsolescence charge on certain vascular inventories,
cost of products sold as a percent of sales for the quarter and nine-month
period ended January 30, 1998 would have been 25.0% and 24.8%, respectively.
Without the obsolescence charge, the decrease in the cost of products sold as a
percent of sales as compared to the prior year comparable periods resulted from
the impact of increased volumes combined with lower product costs, partially
offset by pricing pressures on certain products and costs related to new product
introductions.
Research and Development Expense
- --------------------------------
Research and development expense was $74.3 million for the quarter and $215.7
million for the nine-month period ended January 30, 1998, respectively. Research
and development expense as a percentage of net sales was 11.8 and 11.2 percent,
respectively, for the quarter and nine-month period ended January 30, 1998,
compared to 11.6 and 11.3 percent, respectively, for the comparative periods
last year. The company remains committed to spending aggressively on R&D to
develop technological enhancements and new indications for existing products as
well as to develop less invasive and new technologies to address unmet patient
needs and to help reduce procedural cost and length of hospital stay.
Selling, General, and Administrative Expense (SG&A)
- ---------------------------------------------------
SG&A expense for the quarter ended January 30, 1998, was $184.0 million compared
to $188.5 million for the comparable period last year. SG&A as a percent of
sales decreased from 31.5 percent a year ago to 29.1 percent for the current
quarter. The decrease in SG&A as a percent of sales is attributable to continued
emphasis on achieving overall cost efficiencies in response to the weaker than
anticipated revenue trends for certain products.
<PAGE>
Non-Recurring Charges and Foundation Commitment
- -----------------------------------------------
As discussed in Note 3, the company recorded pre-tax charges totaling $205.3
million during the third quarter. Management believes these actions will
eventually result in annualized pre-tax cost savings in excess of $50.0 million.
Interest
- --------
Interest expense was $2.0 million for the quarter as compared to $1.5 million
for the same period last year. The increase was primarily due to increased
average short-term borrowings over the prior year. Due to decreased average
investment balances over the prior year as a result of significant repurchases
of common stock during the third and fourth quarters of fiscal 1997, interest
income decreased to $6.9 million for the quarter as compared to $9.7 million for
the same period a year ago.
Income Taxes
- ------------
Excluding the effect of the non-recurring charges discussed in Note 3, the
estimated effective tax rate for the company's current fiscal year is 34.5
percent which is consistent with the effective tax rate for the fiscal year
ended April 30, 1997. Despite tax legislation which reduces U.S. tax benefits
derived from the company's operations in Puerto Rico, management believes that
the adverse impact can be minimized by other tax planning initiatives.
Liquidity and Capital Resources
- -------------------------------
Operating activities provided $372.4 million of cash and cash equivalents for
the nine-month period ended January 30, 1998 compared to $297.8 million for the
same period a year ago. Working capital was $895.3 million at January 30, 1998,
an increase of $176.1 million over the $719.2 million at April 30, 1997. The
current ratio was 2.5:1 at January 30, 1998, compared to 2.4:1 at April 30,
1997. Cash and cash equivalents increased $113.2 million during the nine-month
period ended January 30, 1998. Significant uses of cash during the nine-month
period ended January 30, 1998 included purchases of property, plant and
equipment, repurchases of common stock and dividends paid to shareholders.
PART II -- OTHER INFORMATION
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
10 - Agreement with Officer
27 - Financial Data Schedule (For SEC use only)
(b) Reports on Form 8-K
No report on Form 8-K was filed by the company during the quarter
ended January 30, 1998.
<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.
Medtronic, Inc.
(Registrant)
Date: March 12, 1998 /S/ WILLIAM W. GEORGE
-------------------------------------
William W. George
Chairman
and Chief Executive Officer
Date: March 12, 1998 /S/ ROBERT L. RYAN
-------------------------------------
Robert L. Ryan
Senior Vice President
and Chief Financial Officer
Exhibit 10
Medtronic, Inc.
Agreement with Officer
January 30, 1998
November 25, 1997
Arthur D. Collins, Jr.
Medtronic, Inc.
7000 Central Avenue NE
Minneapolis, MN 55432
Dear Art:
In anticipation of Bill George's announced plan to relinquish the role of CEO on
May 1, 2001, the Medtronic Board has been actively engaged in succession
planning with Bill. As you have been informed, the Board on the recommendation
of Bill, views you as the successor CEO and presently intends to name you to
that position effective May 1, 2001 or earlier if the position becomes available
through circumstances not now foreseen.
Although the Board cannot commit to taking action to name a successor CEO until
the position is actually vacant and the circumstances evaluated at that time,
the Board has concluded that it is prudent to take steps to ensure your
availability as a successor. It is the Board's understanding that your intent is
to serve in your current position and to be available as the successor to Bill
George.
The purpose of this letter is to establish a framework within which you will
continue to serve in your present capacity until a decision on successorship is
made by the Board and to provide the following incentives for you to do so.
In the event that:
(i) your employment is involuntarily terminated for any reason
other than "Cause" as defined in Paragraph 5(b) of your
Employment Agreement dated, June 1, 1992 ("the Agreement"); or
(ii) your employment as Chief Operating Officer is diminished in
the manner contemplated by Paragraph 5(c)(i) of the Agreement
including failure on the part of the Company to assign to you
responsibility for any operations added in the future; or
(iii) you are not named as CEO of the company on May 1, 2001 or upon
any earlier date when the office becomes available;
<PAGE>
then you may terminate your employment with the Company upon written
notice given within 60 days of the event and receive the severance
benefits described in Sections 6a and 9 of the Agreement as if a
"Change in Control" had occurred and you terminated the Agreement for
Good Cause in accordance with its terms. In addition to these severance
benefits all unvested stock options and restricted stock will vest
immediately in the same manner that options would vest if a "Change of
Control" had occurred as that term is defined in your various
restricted stock and stock option agreements.
These termination rights may be exercised by tendering your resignation in
writing within the 60 day period to the CEO of the Company, or in the absence of
a CEO, to the Chair of the Corporate Governance Committee of the Board together
with a written undertaking that for a period of three years from the date of
your resignation you will:
(i) not manage an enterprise (which includes an enterprise that is
part of a larger business) which is engaged primarily in a
medical device business which is directly competitive with the
Company; and
(ii) not solicit the employment of any employee of the Company; and
(iii) not interfere with any existing business relationship between
the Company and any customer or third party.
Under no circumstance will you be eligible for the benefits of both this letter
and the Agreement. This agreement will terminate on June 30, 2001 or on the date
when you are named CEO, whichever is earlier.
On behalf of the Board of Directors, we are pleased to provide these assurances
of the high regard in which you are held by the Board.
Your signature in the place provided below will indicate your acceptance of the
terms of this letter agreement.
/s/ William W. George /s/ Richard L. Schall
- -------------------------------- --------------------------------
William W. George Richard L. Schall
Chief Executive Officer and Chair,
Chairman of the Board Corporate Governance Committee
Accepted and Agreed:
/s/ Arthur D. Collins, Jr. December 20, 1997
- -------------------------------- -------------------
Arthur D. Collins, Jr. Date
President and
Chief Operating Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED STATEMENT OF EARNINGS AND CONDENSED CONSOLIDATED BALANCE SHEET FOR
THE QUARTERLY PERIOD ENDED JANAURY 30, 1998 FILED WITH THE SEC ON FORM 10-Q AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> APR-30-1998
<PERIOD-START> MAY-1-1997
<PERIOD-END> JAN-30-1998
<CASH> 310,602
<SECURITIES> 37,027
<RECEIVABLES> 559,758
<ALLOWANCES> (13,446)
<INVENTORY> 320,201
<CURRENT-ASSETS> 1,496,046
<PP&E> 971,849
<DEPRECIATION> (497,459)
<TOTAL-ASSETS> 2,659,309
<CURRENT-LIABILITIES> 600,715
<BONDS> 0
<COMMON> 46,922
0
0
<OTHER-SE> 1,844,844
<TOTAL-LIABILITY-AND-EQUITY> 2,659,309
<SALES> 1,919,765
<TOTAL-REVENUES> 1,919,765
<CGS> 489,809
<TOTAL-COSTS> 489,809
<OTHER-EXPENSES> 966,579
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5,848
<INCOME-PRETAX> 457,529
<INCOME-TAX> 160,276
<INCOME-CONTINUING> 297,253
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 297,253
<EPS-PRIMARY> .63
<EPS-DILUTED> .62
</TABLE>
