UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------
FORM 10-QSB
(Mark one)
|X| QUARTERLY Report purSUANT TO Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended April 30, 1999
|_| 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 1-8460
UNIVERSAL MONEY CENTERS, INC.
(Exact name of small business issuer as specified in its charter)
Missouri 43-1242819
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
6800 Squibb Road, Mission, Kansas 66202
(Address of principal executive offices)
(913) 831-2055
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities and Exchange Act during the past 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 __
Number of shares outstanding of each of the issuer's classes of common
equity as of May 20, 1999: 39,293,069 shares of Common Stock, $.01 par value
per share.
Transitional Small Business Disclosure Format: Yes __ No X
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NOTE CONCERNING FORWARD-LOOKING STATEMENTS
Certain statements contained in this Quarterly Report on Form 10-QSB that
are not statements of historical fact constitute forward-looking statements
within the meaning of Section 21E of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). These statements involve risks and uncertainties
that may cause actual results to differ materially from those in such
statements. See Part I, Item 2 "Management's Discussion and Analysis or Plan of
Operation - Cautionary Statement Concerning Forward-Looking Statements" for
additional information and factors to be considered with respect to
forward-looking statements.
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
UNIVERSAL MONEY CENTERS, INC.
CONSOLIDATED BALANCE SHEETS
ASSETS
April 30, 1999
(unaudited) January 31, 1999
-------------- ----------------
CURRENT ASSETS
Cash $ 405,035 $ 601,922
Notes receivable - affiliate 212,000 --
Accounts receivable - trade, less allowance
for doubtful accounts: April 30, 1999 -
$21,370; January 31, 1999 - $21,370 81,862 39,012
Accounts receivable - affiliate 37,314 35,064
Inventories 300 300
Prepaid expenses and other 6,210 12,894
Interest receivable - affiliate 5,410 3,636
---------- -----------
Total Current Assets 748,131 692,828
---------- -----------
PROPERTY AND EQUIPMENT, At cost
Equipment 3,611,083 3,453,071
Leasehold improvements 117,803 117,803
Vehicles 9,722 9,722
---------- -----------
3,738,608 3,580,596
Less accumulated depreciation 1,994,164 1,873,919
---------- -----------
Total Property and Equipment 1,744,444 1,706,677
---------- -----------
OTHER ASSETS
Deferred income taxes 375,000 375,000
Other 30,531 30,531
---------- -----------
Total Other Assets 405,531 405,531
---------- -----------
Total Assets $2,898,106 $2,805,036
========== ===========
See Notes to Consolidated Financial Statements (Unaudited)
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UNIVERSAL MONEY CENTERS, INC.
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' EQUITY
April 30, 1999
(unaudited) January 31, 1999
-------------- ----------------
CURRENT LIABILITIES
Current maturities of long-term debt and
capital lease obligations $ 231,735 $ 314,606
Accounts payable 453,418 313,319
Accounts payable - affiliate 1,261 --
Accrued expenses 220,851 210,817
--------- ---------
Total Current Liabilities 907,265 838,742
--------- ---------
LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS 718,370 714,087
--------- ---------
STOCKHOLDERS' EQUITY
Common stock; no par value; $.01 stated value;
$40,000,000 shares authorized; 39,851,380
issued as of 04/30/99 and 01/31/99 398,514 398,514
Additional paid-in capital 18,593,430 18,593,430
Retained earnings (deficit) (16,057,165) (16,077,429)
------------ ------------
2,934,779 2,914,515
Less treasury stock, at cost; common stock
558,311 shares as of 04/30/99 and 01/31/99 (1,662,308) (1,662,308)
------------ ------------
Total Stockholders' Equity 1,272,471 1,252,207
------------ ------------
Total Liabilities and
Stockholders' Equity $ 2,898,106 $ 2,805,036
=========== ===========
See Notes to Consolidated Financial Statements (Unaudited)
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UNIVERSAL MONEY CENTERS, INC.
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
Three Months Three Months
Ended Ended
April 30, 1999 April 30, 1998
-------------- --------------
NET REVENUES $ 1,391,120 $ 1,155,420
COSTS OF REVENUES 993,611 775,205
------------- ------------
GROSS PROFIT 397,509 380,215
OPERATING EXPENSES 357,047 307,631
------------- ------------
INCOME FROM OPERATIONS 40,462 72,584
------------- ------------
OTHER INCOME (EXPENSE)
Interest income 13,244 6,007
Interest expense (33,442) (32,800)
Other 0 0
------------- ------------
(20,198) (26,793)
------------- ------------
INCOME BEFORE INCOME TAXES 20,264 45,791
INCOME TAX PROVISION (CREDIT) -- --
------------- ------------
NET INCOME $ 20,264 $ 45,791
============= ============
BASIC AND DILUTED EARNINGS PER SHARE $ 0.0005 $ 0.0012
============= ============
See Notes to Consolidated Financial Statements (Unaudited)
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UNIVERSAL MONEY CENTERS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
\
Three Months Three Months
Ended Ended
April 30, 1999 April 30, 1998
-------------- --------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 20,264 $ 45,791
Items not requiring (providing) cash:
Depreciation 123,246 101,365
Loss on disposal of property and
equipment --
Deferred income taxes --
Changes in:
Accounts receivable (46,874) 23,065
Inventories -- --
Prepaid expenses and other 8,017 (20,903)
Accounts payable and accrued expenses 151,394 (88,351)
------------- -------------
Net cash provided by (used in)
operating activities 256,047 60,967
------------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment (162,347) (199,801)
Increase from notes receivable - affiliate (212,000) (210,000)
Proceeds from sale of property and -- --
equipment ------------- -------------
Net cash provided by (used in)
investing activities (374,347) (409,801)
------------- -------------
CASH FLOWS FROM FINANCING ACTIVITIES
Principal payments under long-term debt
and capital lease obligations (78,587) (61,048)
Proceeds from issuance of long-term debt -- 149,480
------------- --------------
Net cash provided by (used in) (78,587) 88,432
financing activities ------------- --------------
(DECREASE) IN CASH (196,887) (260,402)
CASH, BEGINNING OF PERIOD 601,922 374,675
------------- --------------
CASH, END OF PERIOD $ 405,035 $ 114,273
============= ==============
See Notes to Consolidated Financial Statements (Unaudited)
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UNIVERSAL MONEY CENTERS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. General
The consolidated financial statements include the accounts of Universal
Money Centers, Inc. (the "Company"), and its wholly-owned subsidiaries,
Electronic Funds Transfer, Inc., Corporate Payments Systems, Inc. (inactive) and
A.M. Corporation (inactive). All significant intercompany accounts and
transactions have been eliminated in consolidation.
The unaudited consolidated financial statements included herein have been
prepared by the Company pursuant to the rules and regulations of the Securities
and Exchange Commission. Accordingly, they reflect all adjustments that are, in
the opinion of management, necessary for a fair presentation of the financial
results for the interim periods. Certain information and notes normally included
in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such rules and
regulations. The Company believes, however, that the disclosures are adequate to
make the information presented not misleading. These consolidated financial
statements should be read in conjunction with the consolidated financial
statements and the notes thereto included in the Company's Annual Report on Form
10-KSB for the fiscal year ended January 31, 1999.
2. Future Changes in Accounting Principles
In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities." This Statement establishes the accounting
for derivative instruments, including certain derivative instruments imbedded in
other contracts and hedging activities. This Statement is effective for all
fiscal quarters of fiscal years beginning after June 15, 1999. Management has
not yet determined the impact of adopting this pronouncement on the Company's
results of operations or financial position.
In March 1998, the AICPA issued SOP 98-1, "Accounting for the Costs of
Computer Software Developed or Obtained for Internal Use." This SOP provides
guidance on accounting for the costs of computer software developed or obtained
for internal use. This SOP is effective for fiscal years beginning after
December 15, 1998. Management has not yet determined the impact of adopting this
pronouncement on the Company's results of operations or financial position.
3. Earnings Per Share
The computation of earnings per share is based upon the weighted average
number of common shares outstanding during the respective period. For all
periods reflected in the Consolidated Financial Statements, the weighted average
number of common shares outstanding was 39,293,069 shares.
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Item 2. Management's Discussion and Analysis or Plan of Operation
Overview
Universal Money Centers, Inc. (the "Company") operates a network of
automated teller machines ("ATMs"). The ATMs provide holders of debit and credit
cards access to cash, account information and other services at convenient
locations and times. At April 30, 1999, the network consisted of approximately
304 ATMs owned by the Company and its affiliate, Universal Funding Corporation
("Funding"), 74 ATMs owned by banks and 40 ATMs owned by third party merchants.
ATMs in the Company's network are principally installed in convenience stores
and banks with locations concentrated in the Kansas City and St. Louis, Missouri
and El Paso, Texas metropolitan areas, and the state of Kansas. The Company also
provides ATM network management services to banks and third parties owning ATMs
in the Company's ATM network.
The Company's revenues are principally derived from two types of fees,
which the Company charges for processing transactions on its ATM network. The
Company receives an interchange fee from the issuer of the credit or debit card
for processing a transaction when a cardholder uses an ATM in the Company's
network. In addition, in most cases the Company receives a surcharge fee from
the cardholder when the cardholder makes a cash withdrawal from an ATM in the
Company's network.
Interchange fees are processing fees that are paid by the issuer of the
credit or debit card used in a transaction. Interchange fees vary for cash
withdrawals, balance inquiries, account transfers or uncompleted transactions,
the primary types of transactions that are currently processed on ATMs in the
Company's network. The maximum amount of the interchange fees is established by
the national and regional card organizations and credit card issuers with which
the Company has a relationship. The Company (or its affiliate, Funding) receives
the full interchange fee for transactions on Company owned ATMs, but sometimes
rebates a portion of the fee to the owner of the ATM location under the
applicable lease for the ATM site. The Company also receives the full
interchange fee for transactions on ATMs owned by banks or third party vendors
included within the Company's network, but rebates a portion of each fee to the
bank or third party vendor based upon negotiations between the parties. The
interchange fees received by the Company vary from network to network and to
some extent from issuer to issuer, but generally range from $0.35 to $0.75 per
cash withdrawal. Interchange fees for balance inquiries, account transfers and
denied transactions are generally substantially less than fees for cash
withdrawals. The interchange fees received by the Company from the card issuer
are independent of the service fees charged by the card issuer to the cardholder
in connection with ATM transactions. Service fees charged by card issuers to
cardholders in connection with transactions through the Company's network range
from zero to as much as $2.50 per transaction. The Company does not receive any
portion of the service fees charged by the card issuer to the cardholder.
In most markets the Company imposes a surcharge fee for cash withdrawals.
The Company expanded its practice of imposing surcharge fees in April 1996 when
national debt and credit card organizations changed rules applicable to their
members to permit these fees. Subsequently, surcharge fees have been a
substantial additional source of revenue for the Company and other ATM network
operators. The surcharge fee for ATMs in the Company's network owned by or
located in banks ranges between $0.50 and $1.50 per withdrawal. The surcharge
fee for other ATMs in the Company's network ranges between $0.50 and $2.50 per
withdrawal. The Company receives the full surcharge fee for transactions on
Company owned ATMs, but sometimes rebates a portion of the fees to the owner of
the ATM location under the applicable
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lease for the ATM site. The Company also receives the full surcharge fee for
transactions on ATMs owned by banks and third party vendors included within the
Company's network, but rebates a portion of each fee to the bank or third party
vendor based upon a variety of factors, including transaction volume and the
party responsible for supplying vault cash to the ATM.
The Company's profitability is substantially dependent upon the imposition
of surcharge fees. Any changes in laws or card association rules materially
limiting the Company's ability to impose surcharge fees would have a material
adverse effect on the Company.
In addition to revenues derived from interchange and surcharge fees, the
Company also derives revenues from providing network management services to
banks and third parties owning ATMs included in the Company's ATM network. These
services include 24 hour transaction processing, monitoring and notification of
ATM status and cash condition, notification of ATM service interruptions, in
some cases, dispatch of field service personnel for necessary service calls and
cash settlement and reporting services. The fees for these services are paid by
the owners of the ATMs.
Interchange fees are credited to the Company by networks and credit card
issuers on a periodic basis which is generally either daily or monthly depending
upon the party. Surcharge fees are charged to the cardholder and credited to the
Company by networks and credit card issuers on a daily basis. The Company
periodically rebates the portion of these fees owed to ATM owners and owners of
ATM locations. Fees for network management services are generally paid to the
Company on a monthly basis.
Comparison of Results of Operations for the Three Months Ended April 30, 1999
and April 30, 1998.
Revenues. The Company's total revenues increased to $1,391,120 for the
three months ended April 30, 1999 ("first quarter 2000") from $1,155,420 for the
three months ended April 30, 1998 ("first quarter 1999"). This increase is
primarily attributable to an increase in the number of ATMs in the Company's
network on which the Company imposed surcharge fees for cash withdrawals. The
number of such ATMs increased to 400 in first quarter 2000 from 298 in first
quarter 1999. Surcharge fees increased to $976,624 or 70.2% of total revenues in
first quarter 2000 from $669,957 or 58.0% of total revenues in first quarter
1999. The increase in total revenues is also partially due to an increase in the
number of ATMs in the Company's network, from 321 in first quarter 1999 to 418
in first quarter 2000. The increase in the number of ATMs resulted in an
increase in the number of transactions processed on ATMs in the Company's
network. Revenues derived from interchange fees increased to $229,890 in first
quarter 2000 from $207,847 in first quarter 1999. Revenues derived from
interchange fees did not increase at the same percentage rate as other revenues
primarily because the Company imposed surcharge fees on a greater number of
ATMs. The imposition of surcharge fees on cash withdrawals from an ATM generally
causes a decrease in use of the ATM for transactions for which interchange fees
are charged. Revenues received from Funding under a Management Agreement between
the Company and Funding decreased to $71,330 in first quarter 2000 from $169,070
in first quarter 1999. See "-Revenues from Funding" below. The Company's
revenues from providing network management services to banks and third parties
increased to $113,276 in first quarter 2000 from $108,546 in first quarter 1999.
Generally, new ATM sites are not fully utilized for several months after
installation. Therefore, revenues may not increase at the same percentage rate
as increases to the number of ATMs.
Revenues from Funding. The Company has maintained a business relationship
with Funding since August 1989. The relationship began in 1989 as a result of
the Company's severe financial problems. The operation of the Company's ATM
network generally requires that the Company supply vault cash to ATMs owned by
the Company to fund cash withdrawals. As a
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result of the Company's financial problems, lenders were generally unwilling to
extend loans, partly because of the concern that the Company's creditors would
assert claims against cash physically located in ATM's owned by the Company. The
Company has not had sufficient cash to supply the vault cash for these ATMs. In
order to resolve this problem and to permit the Company to continue to operate
certain ATMs, Funding was formed in 1989 by David S. Bonsal, the Chairman of the
Company's Board of Directors, John L. Settles, the President of the Company
since June 3, 1999 and from April 1989 through October 1990, and William
Smithson, a shareholder of the Company. Each of these individuals has a
one-third ownership interest in Funding.
Under a Management Agreement between the Company and Funding, Funding
provides vault cash for certain ATMs in the Company's network that are owned by
the Company or Funding, and receives all interchange fees for transactions
processed on these ATMs. At April 30, 1999 and 1998, Funding had vault cash
located in approximately 302 and 213 ATMs, respectively, owned by Funding or the
Company. The Company receives a management fee from Funding under the Management
Agreement for providing services to Funding. The management fee paid to the
Company under the Management Agreement equals Funding's "net income." Funding's
"net income" is defined in the Management Agreement as revenues from interchange
fees, less armored security charges, interest expense on funds borrowed to
provide vault cash, ATM location expenses, debt service related to the purchase
of the ATMs, taxes or insurance on ATMs, and a monthly payment to each of
Funding's shareholders representing a return on their equity investment in
Funding.
The revenues received by the Company from Funding under the Management
Agreement were $71,330 in first quarter 2000, equal to Funding's "net income"
under the Management Agreement for the same period. Funding's "net income" of
$71,330 consisted of $332,776 in revenues from interchange fees earned by
Funding, less Funding's expenses in the amount of $255,376 and Funding's return
on equity payment to shareholders of Funding in the amount of $6,070. Pursuant
to the Management Agreement, Funding's expenses for purposes of computing its
"net income" did not include Funding's depreciation, amortization and bad debt
expenses, which were $977 for the respective period. The revenues received by
the Company from Funding under the Management Agreement were $169,070 in first
quarter 1999, equal to Funding's "net income" under the Management Agreement for
the same period. Funding's "net income" of $169,070 consisted of $336,646 in
revenues from interchange fees earned by Funding, less Funding's expenses in the
amount of $161,506 and Funding's return on equity payment to shareholders of
Funding in the amount of $6,070. Pursuant to the Management Agreement, Funding's
expenses for purposes of computing its "net income" did not include Funding's
depreciation, amortization and bad debt expenses, which were $977 for the
respective period. The revenues earned by Funding from interchange fees declined
in first quarter 2000 from first quarter 1999, as a result of fewer interchange
transactions on ATMs for which Funding provided vault cash. The number of
transactions decreased despite the fact that Funding provided vault cash for a
greater number of ATMs in first quarter 2000. The number of transactions
decreased principally because a greater number of the Company's ATMs charged
surcharge fees in first quarter 2000. The imposition of surcharge fees on cash
withdrawals from an ATM generally causes a decrease in use of the ATM for
transactions for which interchange fees are charged. The increase in Funding's
expenses in first quarter 2000 from first quarter 1999 was caused principally by
higher outstanding balances on borrowings by Funding and higher armored security
charges. For additional information, see the Company's Annual Report on Form
10-KSB for the fiscal year ended January 31, 1999, Item 1, "DESCRIPTION OF
BUSINESS -- Relationship with Universal Funding Corporation."
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Cost of Revenues. The Company's cost of revenues increased to $993,611 in
first quarter 2000 from $775,205 in first quarter 1999. The principal components
of cost of revenues are salaries, telecommunication services and transaction
processing charges, interchange and surcharge rebates, ATM site rentals,
maintenance and repairs, and depreciation and amortization. This increase is
principally due to an increase in interchange and surcharge rebates paid to
third party owners of ATMs included in the Company's ATM network and to ATM site
owners. Rebates generally increase approximately in proportion to increases in
total revenues from interchange and surcharge fees. The increase is also
attributable to increased depreciation associated with the larger number of ATMs
owned by the Company, and increased telecommunications expenses associated with
the larger number of ATMs in the Company's network.
Gross Margin. Gross profit as a percentage of revenues was 28.6% in first
quarter 2000 and 32.9% in first quarter 1999. The decrease in first quarter 2000
was caused by a number of factors, including increased interchange and surcharge
rebates, increased depreciation expense resulting from the purchase of new ATMs
and increased personnel expense and telecommunications charges resulting from
growth in the ATM network.
Operating Expenses. The Company's total operating expenses increased to
$357,047 in first quarter 2000 from $307,631 in first quarter 1999. The
principal components of operating expenses are administrative salaries and
benefits, professional fees, occupancy costs, sales and marketing expenses and
administrative expenses. This increase is principally attributable to increased
professional fees incurred in connection with the Company's efforts to resume
filing periodic reports with the Securities and Exchange Commission.
Other Income (Expense). The Company extends short-term loans to Funding,
which uses the proceeds as vault cash in the ATMs owned by Funding. These loans
generally have a term of one month and bear interest at 12% per annum. Interest
income primarily represents the interest paid by Funding to the Company on the
outstanding balance of these loans. Interest income increased to $13,244 in
first quarter 2000 from $6,007 in first quarter 1999 as a result of higher
average outstanding balances.
Income Taxes. The Company paid no income taxes for first quarter 2000 or
first quarter 1999, utilizing operating loss carryforwards to reduce taxable
income to zero. In addition, the Company has recorded a deferred tax credit of
$375,000 at January 31, 1999, which is primarily a result of operating loss
carryforwards which management believes are more likely than not to be realized
prior to their expiration between 2005 and 2012. Realization is dependent on
generating sufficient future taxable income to absorb the carryforwards. The
amount of the deferred tax credit considered realizable could be increased or
reduced in the near term if estimates of future taxable income during the
carryforward period change. As of April 30, 1999, the Company had approximately
$195,000 of tax credits available to offset future federal income taxes. These
credits expire between 1999 and 2002. The Company also has unused operating loss
carryforwards of approximately $1,500,000, which expire between 2005 and 2012.
Net Income. The Company had net income of $20,264, or $0.0005 per share, in
first quarter 2000, compared to net income of $45,791, or $0.0012 per share, in
first quarter 1999. Net income was lower in first quarter 2000 principally as a
result of higher costs of revenues and operating expenses, as described above.
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Liquidity and Capital Resources
At April 30, 1999, the Company had a working capital deficit of $159,134,
compared to a working capital deficit of $145,914 at January 31, 1999. The ratio
of current assets to current liabilities decreased to .82 at April 30, 1999 from
.83 at January 31, 1999.
The Company has funded its operations and capital expenditures from cash
flow generated by operations, capital leases and borrowings from lenders.
Operating activities provided net cash of $256,047 in first quarter 2000 and
$60,967 in first quarter 1999. Net cash provided by operating activities in
first quarter 2000 consisted primarily of net income of $20,264, depreciation of
$123,246 and an increase in accounts payable of $151,394, partially offset by an
increase in accounts receivable of $46,874. Net cash used in investing
activities was $374,347 in first quarter 2000, compared to $409,801 in first
quarter 1999. The net cash used in investing activities resulted primarily from
loans to Funding to provide vault cash and purchases of plant and equipment
(principally ATMs) in first quarter 2000. Net cash used in financing activities
was $78,587 in first quarter 2000, compared to net cash provided by financing
activities of $88,432 in first quarter 1999. This difference occurred because
the Company did not borrow any new funds under loan agreements or capital leases
in first quarter 2000. The Company had cash and cash equivalents of $405,035 at
April 30, 1999, compared to cash and cash equivalents of $601,922 at January 31,
1999.
Much of the Company's cash requirements relate to the need for vault cash
for ATMs owned by the Company and Funding. Funding currently provides vault cash
for a majority of these ATMs. See "Comparison of Results of Operations for the
Three Months Ended April 30, 1999 and April 30, 1998 - Revenues from Funding"
and the Company's Annual Report on Form 10-KSB for the fiscal year ended January
31, 1999, Item 1, "DESCRIPTION OF BUSINESS - Relationship with Universal Funding
Corporation." At April 30, 1999 and 1998, Funding had vault cash of
approximately $2,900,000 and $2,000,000, respectively, located in approximately
302 and 213 ATMs, respectively, owned by Funding and the Company. The Company,
through its subsidiary Electronic Funds Transfer, Inc. ("EFT"), lends funds to
Funding for vault cash to the extent that Funding cannot obtain financing on
reasonable terms from other sources and to the extent that the Company has cash
available to lend to Funding. The outstanding balance of the loans made by EFT
to Funding at April 30, 1999 was $212,000 and at April 30, 1998 was $210,000.
Certain of the ATMs owned by the Company are sponsored by banks. Vault cash for
these ATMs is supplied by the sponsoring bank. Vault cash for ATMs in the
Company's ATM network that are owned by banks and third party vendors is
provided by the ATM owner. Currently, the Company does not directly provide
vault cash to any ATMs in its network. At January 31, 1999, Pinnacle Cash
Systems, L.L.C. provided vault cash of $600,000 for approximately 40 ATMs owned
by the Company. In March 1999, Pinnacle Cash Systems, L.L.C. terminated its
relationship with the Company. As a result of the termination, the Company,
through EFT, has had to lend additional available cash to Funding to provide
vault cash for these ATMs. The Company is currently engaged in discussions with
two banks regarding their willingness to directly provide vault cash for certain
ATMs owned by the Company.
Management believes that the anticipated cash flow from operations will
provide the capital resources necessary to meet the Company's current working
capital needs and existing capital expenditure obligations. The Company expects
that its capital expenditures will increase in the future to the extent that the
Company is able to pursue its strategy of expanding its network and increasing
the number of installed ATMs. These increased expenditures are expected to be
funded from cash flow from operations, capital leases and additional borrowings,
to the extent financing is available. There can be no assurance that the Company
will be able to obtain financing under a credit facility on terms that are
acceptable to the Company or at all. The Company's expansion plans will be
limited if the Company is unsuccessful in obtaining a credit facility or other
financing.
Impact of Inflation and Changing Prices
While subject to inflation, the Company was not impacted by inflation
during the past two fiscal years in any material respect.
Year 2000 Compliance
General Discussion. The Year 2000 issue is the result of computer code
being written using two digits to represent years rather than four digits, which
include the century designation. Without corrective action, it is possible that
computer programs could recognize a date using "00" as the year 1900 rather than
the year 2000. Additionally, certain equipment may contain embedded chips that
include date functions that may be affected by the transition to the Year 2000.
In some systems, Year 2000 problems could result in a system failure or
miscalculations causing disruptions of operations and an inability to process
transactions.
As the operator of an ATM network, the Company relies upon computers and
related telecommunications equipment for the operation of its business. The
Company acts as an
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intermediary for the transfer of data between its clients and third parties, and
in doing so supplies the operating and technical resources necessary to cause
electronic data to be transmitted. The Company also owns and operates ATMs,
which utilize computer hardware and software to operate.
The Company has initiated a Year 2000 Project ("Project2000") to locate and
address possible Year 2000 problems. The Company has assigned a project
coordinator for Project2000 who generally manages Project2000, ensures that
Project2000 meets or exceeds requirements set forth by banking regulatory
agencies including the Federal Deposit Insurance Corporation, the Federal
Reserve Bank, and the Office of the Comptroller of the Currency, and assists in
identifying points of concern and providing solutions.
Status of Year 2000 Readiness. The Company's Project2000 consists of the
following five phases: awareness, assessment, corrective action, validation and
implementation.
The awareness phase consists of defining the scope of the Year 2000 problem
and establishing a corporate infrastructure and overall strategy to perform
compliance work. In the assessment phase, the Company attempts to identify all
hardware, software, networks, ATMs, other various processing platforms and
customer and vendor interdependencies affected by the Year 2000 problem. This
assessment goes beyond information systems and includes equipment and support
systems that may be dependent on embedded microchips. The corrective action
phase involves code enhancements, hardware and software upgrades, system
replacements, vendor certification and other associated changes. The validation
phase involves the testing of incremental changes to hardware and software
components. In the implementation phase, systems are to be certified as Year
2000 compliant. For any systems that are not determined to be compliant, the
consequences must be assessed, and corrective actions or contingency plans put
into effect.
Awareness Phase. The Company's Project2000 encompasses an overall strategy
to address Year 2000 problems. The Company's Project2000 focuses chiefly upon
the in-house, real-time, on-line systems, but also includes assessing and
assuring year 2000 compliance from third parties. Because of the seriousness of
the year 2000 issues, the Company appointed a Project2000 Coordinator and
established a Project2000 team consisting of the Coordinator, all officers of
the Company and the Accounting Manager.
To determine the size of the compliance project relating to internal
systems, the Company searched all of its production computer programs for
references to, and actions taken by reference to, the date (year in particular),
and compiled a list of those programs for evaluation for Project2000 issues. The
Company searched for date references that related to performing calculations or
that provided application program logic affecting the decision path of the
application, and date-driven calculations using "00" as an operand.
The Company also identified all third parties whose ability to comply with
Year 2000 problems might affect the Company's operations, which include product
and service vendors and suppliers, including card issuers and other real-time
connections, and clients.
The Company has completed the awareness phase.
Assessment Phase. The assessment phase involves three components: (1)
determining Year 2000 compliance of the Company's internal systems used to
process data and to transfer
Page - 13
<PAGE>
data between its clients and third parties, including the Company's computer
switch, (2) determining Year 2000 compliance of its individual ATMs and (3)
determining Year 2000 compliance of third party vendors and clients.
Internal Systems. With respect to the Company's internal data processing
and transfer systems, in January 1985, as a result of incorrect year-end date
processing, the Company implemented a policy requiring all production programs
making date-related processing decisions to do so using Julian dates. This form
of date processing should not be sensitive to the century rollover.
Consequently, the Company's computer switch was developed using a year 2000
compliant philosophy. The principal piece of equipment comprising the computer
switch is a Tandem computer. In 1997, the Company entered into a lease for a new
Tandem computer that the Company believes is Year 2000 compliant. The Company
also believes that the operating software for the new system is Year 2000
compliant. To assess its internal systems, the Company evaluated all references
to, and actions taken by reference to, the date (year in particular), in its
internal systems. The Company also examined systems and equipment that may be
dependent upon embedded microprocessors. The Company concluded from the
evaluation that its internal systems were Year 2000 compliant. In order to
verify this conclusion, a comprehensive test was completed on September 30, 1997
of all of the Company's critical applications. Prior to cutting over from its
old production system to its new production system on that date, the Company had
the opportunity to set the clock forward in a controlled environment to test all
internal systems and program functionality with regard to the year 2000
rollover. The test revealed no Year 2000 problems.
The Company believes its conclusion is supported by the fact that the
Company's system is not highly date-dependent. The Company processes
transactions in segments from 2:00 p.m. one day through 2:00 p.m. the next day.
Consequently, the Company believes that the window of risk for the Company's
internal systems from the year 2000 rollover should be limited to a maximum of
24 hours. Furthermore, the Company processes dates and makes all programmatic
date decisions based on a Julian representation of the date which should not be
vulnerable to the year 2000 rollover. The Company believes that its conclusion
is further supported by the fact that all of the application code was developed
in-house, all source code is intact and available, and the Company has the
in-house expertise to revise and maintain the software as needed for the year
2000 rollover.
Individual ATMs. The Company has assessed whether its individual ATMs are
Year 2000 compliant and determined that as of February 28, 1999 approximately
70% of the Company's individual ATMs are Year 2000 compliant or can be made Year
2000 compliant with the purchase of software upgrades from the manufacturer.
Third Party Compliance. The Company has attempted to obtain initial
certification from its "higher risk" vendors as to Year 2000 Compliance. The
Company has mailed questionnaires to these vendors to identify and, to the
extent possible, to resolve issues involving Year 2000 issues. Responses to
these questionnaires have been verified against information included with
current releases of vendors' products and services and on vendor web sites and
are shared with the Company's clients upon request. In addition, the Company has
engaged in joint testing with most of these vendors and service providers,
testing each party's system and the interface between the systems. The Company
believes that all mission critical vendors and service providers have completed
their internal Year 2000 corrective actions. Service providers, vendors and
suppliers whom the Company deems "no risk" will not be contacted. The Company is
also coordinating with its clients regarding their activities related to the
Year 2000 problem. Most of
Page - 14
<PAGE>
the Company's clients maintain their own application programs, although they
utilize the Company's computer and network resources. The Company conducted its
own testing on the systems of its largest clients, and did not discover any Year
2000 problems.
The assessment phase is complete.
Corrective Action Phase. The corrective action phase involves addressing
compliance problems identified during the assessment phase.
Internal Systems. Because the assessment phase revealed no material Year
2000 problems, the Company does not plan any system replacements, code
enhancements or hardware or software upgrades. However, the Company does plan to
implement "mature" releases of the Tandem operating system and to monitor Tandem
Year 2000 Compliance statements regarding such releases.
Individual ATMs. With respect to those ATMs that can be made Year 2000
compliant with the purchase of software upgrades from the manufacturer, the
Company expects to obtain software upgrades at no charge because of the recent
date of purchase of these ATMs. However, in the event the Company must purchase
ATM software upgrades, management estimates that the cost should not exceed
$50,000. The Company expects to replace approximately half of these ATMs prior
to the Year 2000 as part of an ongoing program of replacing ATMs and other
equipment for technology and maintenance reasons. Some of these ATMs may be
replaced with used Year 2000 compliant ATMs to minimize cost. The balance of the
ATMs that are not Year 2000 compliant are located in marginally profitable
locations, will not be replaced and will be phased out.
Third Party Compliance. Because no material Year 2000 problems have been
discovered to date, the Company does not currently plan any corrective action
with respect to service providers, vendors, suppliers and clients.
The corrective action phase has been completed as to the Company's internal
systems and third party vendors, although as described below, the Company
intends to continue testing in these areas. The corrective action phase with
respect to individual ATMs will be completed prior to the Year 2000 when all
replacement or upgraded ATMs are expected to be in operation.
Validation Phase. During the validation phase, the Company will continue to
test its internal systems, test its new and upgraded ATMs for Year 2000
compliance and engage in further testing with certain third parties.
Internal Systems. The Company will test and validate all incremental
changes to hardware, software, and connections with other systems as those
changes (or additions) occur in the ordinary course of business prior to Year
2000. All users of the Company's products and services have been asked to
validate the Company's Year 2000 compliance. All such testing should be complete
by August 31, 1999.
Individual ATMs. Year 2000 compliance of all replacement and upgraded ATMs
will be tested prior to or at the time such ATMs are brought on line.
Third Party Compliance. During the first half of 1999, the Company intends
to review and possibly "re-validate" certifications from outside service
providers, vendors, and suppliers
Page - 15
<PAGE>
for compliance and will request each to provide quarterly statements of
compliance through the end of 1999.
The validation phase will be completed at the times described above.
Implementation Phase. The Company plans a final full internal system test
on or about September 1, 1999. Any resulting component failure (internal and
external) will be resolved to the Company's satisfaction prior to December 30,
1999, or the component will be (1) eliminated or replaced or (2) suspended from
production on December 30, 1999 and implemented after January 1, 2000 and after
re-certification.
Regulatory and Independent Assessment. In addition to developing an
internal risk assessment methodology with respect to Year 2000 issues, the
Company is subject to external examinations and project reviews by regulatory
agencies and governmental bodies of the federal government. To date, these
examinations have not identified any material issues regarding the Company's
Year 2000 compliance efforts.
At this time, the Company does not anticipate obtaining verification or
validation by independent third parties to assess Year 2000 risk. The Company's
Project2000 team continues to review the Company's readiness for the Year 2000.
Year 2000 Compliance of Support Systems. In addition to computers and
related systems, the operation of office and facilities equipment, such as fax
machines, photocopiers, security systems, air conditioning, fire systems and
other common devices may be affected by Year 2000 problems. The Company does not
expect to devote substantial resources or time to evaluating potential Year 2000
problems with respect to these systems, other than contacting the manufacturer
or provider of these systems to determine Year 2000 compliance and taking or
arranging for appropriate corrective action.
Costs of Year 2000 Compliance. The principal cost incurred by the Company
in connection with Project2000 will be the cost of replacing obsolete ATM
equipment as part of the Company's ongoing process of upgrading and modernizing
its ATMs. As of April 30, 1999, approximately 70 NCR model 1773 ATMs currently
in operation are not and will not be made Year 2000 compliant. These ATMs are
predominately in low volume sites, many of which do not support the expense of
replacement with new equipment. The Company expects to simply pull out of the
lowest tier of these sites, replace the medium volume sites with low cost
pre-owned equipment, and replace the highest volume sites with new and higher
end pre-owned equipment. The expected remaining cost of this project is
approximately $225,000. The Company has previously incurred approximately
$175,000 in expenses related to this project.
The Company has not identified any other significant costs directly
relating to the Year 2000 problem. The cost of compliance testing of external
client systems is billed to the Company clients. Testing and repair, and the
day-to-day burden of Project2000 has consumed incremental overhead of managers
and executive officers of the Company. Such overhead has been effectively
absorbed with no material effect on budgets and operations.
Possible Consequences of Year 2000 Problems. It is not possible to predict
with any certainty the extent and nature of Year 2000 problems that the Company
may encounter. Management believes that the following are possible consequences
of Year 2000 problems that could arise:
Page - 16
<PAGE>
o operational inconveniences and inefficiencies for the Company and its
clients which will divert management's time and attention and financial and
human resources from ordinary business activities;
o serious system failures that will cause material business disruptions or
require significant efforts by the Company or its clients to prevent or
alleviate material business disruptions;
o routine business disputes and claims for pricing adjustments or penalties
due to Year 2000 Problems incurred by clients, which would be resolved in
the ordinary course of business; and
o serious business disputes alleging that the Company failed to comply with
the terms of contracts or industry standards of performance, some of which
could result in litigation or contract termination.
Contingency Plans. The Company has developed department-by-department
contingency plans to be implemented if its efforts to identify and correct Year
2000 Problems affecting its internal systems are not effective. Depending upon
the systems affected, these plans include accelerated replacement of affected
equipment or software; short- to medium-term use of backup sites, equipment, and
software, increased work hours for Company personnel; and similar approaches.
Disclaimer. Management of the Company believes that it is not possible to
determine with complete certainty that all Year 2000 problems affecting the
Company or its clients have been or will be identified or corrected. The number
of devices that could be affected and the interactions among these devices are
simply too numerous. In addition, no one can accurately predict how many Year
2000-related failures will occur or the severity, duration, or financial
consequences of any such failure.
The Company's policy is not to acquire hardware, software or other
technology that is not contractually represented by the vendor as Year 2000
compliant. However, the Company cannot be sure that all of these products are in
fact Year 2000 compliant. In addition, although the Company does not have any
contractual responsibility to ensure that its clients' application programs are
compliant, if its clients experience Year 2000 problems with such applications,
such clients may reduce or cease use of the Company's products and computing
resources. The successful operation of the Company's data processing and
transfer systems is dependent upon the proper functioning of the systems of
third parties that utilize the Company's services. Any failure of third parties
to resolve Year 2000 problems in a timely manner could materially adversely
affect the Company's operations.
There can be no assurance that the Company will identify and resolve all
Year 2000 issues in a timely manner. Any failure by the Company to adequately
resolve all Year 2000 issues could have a material adverse effect on the
Company's business, financial condition, and results of operation.
Forward-Looking Statements. Many of the statements contained in this
discussion of Year 2000 issues are "forward-looking statements." These
statements are not guarantees of future performance or results. They involve
risks, uncertainties and assumptions. Consequently, actual results may differ
materially from those discussed in these forward-looking statements.
Page - 17
<PAGE>
See "-Cautionary Statement Concerning Forward-Looking Statements" for
additional information and factors to be considered with respect to
forward-looking statements.
Future Changes in Accounting Principles
In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities." This Statement establishes the accounting
for derivative instruments, including certain derivative instruments imbedded in
other contracts and hedging activities. This Statement is effective for all
fiscal quarters of fiscal years beginning after June 15, 1999. Management has
not yet determined the impact of adopting this pronouncement on the Company's
results of operations or financial position.
In March 1998, the AICPA issued SOP 98-1, "Accounting for the Costs of
Computer Software Developed or Obtained for Internal Use." This SOP provides
guidance on accounting for the costs of computer software developed or obtained
for internal use. This SOP is effective for fiscal years beginning after
December 15, 1998. Management has not yet determined the impact of adopting this
pronouncement on the Company's results of operations or financial position.
Cautionary Statement Concerning Forward-Looking Statements
Certain statements contained in this Quarterly Report on Form 10-QSB that
are not statements of historical fact constitute "forward-looking statements"
within the meaning of Section 21E of the Exchange Act. These statements are
subject to risks and uncertainties, as described below.
Examples of forward-looking statements include, but are not limited to: (i)
projections of revenues, income or loss, earnings or loss per share, capital
expenditures, the payment or non-payment of dividends, capital structure and
other financial items, (ii) statements of plans and objectives of the Company or
its management or Board of Directors, including plans or objectives relating to
the products or services of the Company, (iii) statements of future economic
performance, and (iv) statements of assumptions underlying the statements
described in (i), (ii) and (iii). Forward-looking statements can often be
identified by the use of forward-looking terminology, such as "believes,"
"expects," "may," "will," "should," "could," "intends," "plans," "estimates" or
"anticipates," variations thereof or similar expressions.
Forward-looking statements are not guarantees of future performance or
results. They involve risks, uncertainties and assumptions. The Company's future
results of operations, financial condition and business operations may differ
materially from those expressed in these forward-looking statements. Investors
are cautioned not to put undue reliance on any forward-looking statement.
There are a number of factors that could cause actual results to differ
materially from those discussed in the forward-looking statements, including
those factors described below. Other factors not identified herein could also
have such an effect. Among the factors that could cause actual results to differ
materially from those discussed in the forward-looking statements are the
following:
o Changes in laws or card association rules affecting the Company's ability
to impose surcharge fees, and continued customer willingness to pay
surcharge fees;
Page - 18
<PAGE>
o The ability of the Company to form new strategic relationships and maintain
existing relationships with issuers of credit cards and national and
regional card organizations;
o The ability of the Company to expand its ATM base and transaction
processing business;
o The availability of financing at reasonable rates for vault cash and for
other corporate purposes, including funding the Company's expansion plans;
o The ability of the Company to maintain its existing relationships with two
operators of combination convenience stores and gas stations at which the
Company maintains 44 and 43 ATMs, respectively, as of April 30, 1999;
o The ability of the Company to keep its ATMs at other existing locations at
reasonable rental rates and to place additional ATMs in preferred locations
at reasonable rental rates;
o The extent and nature of competition from financial institutions, credit
card processors and third party operators, many of whom have substantially
greater resources than the Company;
o The ability of the Company to maintain its ATMs and information systems
technology without significant system failures or breakdowns;
o The ability of the Company to cause its ATMs and information systems to be
Year 2000 compliant and the extent to which the systems of card issuers,
card organizations, banks and other companies on which the Company's
systems rely are Year 2000 compliant;
o The extent of losses from errors and omissions, employee dishonesty and
vault cash losses, for which the Company does not maintain insurance;
o The ability of the Company to develop new products and enhance existing
products to be offered through ATMs, and the ability of the Company to
successfully market these products;
o The ability of the Company to identify suitable acquisition candidates, to
finance and complete acquisitions and to successfully integrate acquired
assets and businesses into existing operations;
o The ability of the Company to retain senior management and other key
personnel;
o Changes in general economic conditions.
Any forward-looking statement contained herein is made as of the date of this
document. The Company does not undertake to publicly update or correct any of
these forward-looking statements in the future.
Page - 19
<PAGE>
PART II - OTHER INFORMATION
Item - 6 Exhibits and Reports on Form 8-K.
(a) Exhibits
The exhibits required by this item are listed in the Index to
Exhibits set forth at the end of this Form 10-QSB.
(b) Reports on Form 8-K
The Company did not file any reports on Form 8-K during the quarter
ended April 30, 1999.
Page - 20
<PAGE>
SIGNATURES
----------
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
UNIVERSAL MONEY CENTERS, INC.
(Registrant)
Date: June 14, 1999 By: /s/ David S. Bonsal
--------------------------------------------
David S. Bonsal
Chairman of the Board
and Chief Executive Officer
Date: June 14, 1999 By: /s/ John L. Settles
--------------------------------------------
John L. Settles
President
(Principal Financial and Accounting Officer)
Page - 21
<PAGE>
INDEX TO EXHIBITS
-----------------
Exhibit
Number Description
- ------- -----------
3.1* Articles of Incorporation of the Company, as amended
3.2* Amended and Restated Bylaws of the Company
4.1* Promissory Note dated June 3, 1996 issued by the Company to Bank
21 (formerly The Farmers Bank)
4.2* Business Loan Agreement dated June 3, 1996 between the
Company and Bank 21 (formerly The Farmers State Bank)
4.3* Promissory Note dated August 26, 1996 issued by the Company to
Bank 21 (formerly The Farmers State Bank)
4.4* Business Loan Agreement dated August 26, 1996 between the
Company and Bank 21 (formerly The Farmers State Bank)
4.5* Commercial Security Agreement dated August 26, 1996 between the
Company and Bank 21 (formerly The Farmers State Bank)
4.6** Promissory Note dated April 9, 1998 issued by the Company to
Bank 21 (formerly The Farmers Bank)
4.7** Negative Pledge Agreement dated April 9, 1998 between the
Company and Bank 21 (formerly The Farmers State Bank)
4.8** Commercial Security Agreement dated April 9, 1998 between the
Company and Bank 21 (formerly The Farmers State Bank)
10.1* Agreement dated August 15, 1989 among the Company, Funding,
David S. Bonsal, John L. Settles and William Smithson
10.2* Addendum dated August 29, 1989 among the Company, Funding,
David S. Bonsal, John L. Settles and William Smithson
10.3* Letter Agreement dated June 12, 1997 between the Company and
Funding
10.4* Master Equipment Lease Agreement dated October 18, 1996
between the Company and Newcourt Communications Finance
Corporation (formerly AT&T Credit Corporation)
Page - 22
<PAGE>
10.5* Master Equipment Lease Agreement Schedule dated December 30,
1996, between the Company and Newcourt Communications Finance
Corporation (formerly AT&T Credit Corporation), as amended
10.6* Master Equipment Lease Agreement Schedule dated October 30,
1996, between the Company and Newcourt Communications Finance
Corporation (formerly AT&T Credit Corporation)
10.7* Master Equipment Lease Agreement Schedule dated February 28,
1997, between the Company and Newcourt Communications Finance
Corporation (formerly AT&T Credit Corporation)
10.8** Master Lease Agreement dated February 28, 1998 between the
Company and Diebold Credit Corporation.
10.9** Lease Schedule dated April 20, 1998 between the Company and
Diebold Credit Corporation.
10.10*** Assignment and Delegation dated September 25, 1998 among the
Company, as assignor, Diebold Incorporated, as seller, and
Diebold Credit Corporation, as assignee.
10.11**** Master Lease Agreement dated November 20, 1998 between the
Company and Dana Commercial Credit.
10.12**** Master Lease Agreement dated January 18, 1999 between the
Company and Dana Commercial Credit.
27 Financial Data Schedule
* Incorporated by reference from the exhibit to the registrant's Annual Report
on Form 10-KSB for the fiscal year ended January 31, 1998 which bears the same
exhibit number.
**Incorporated by reference from the exhibit to the registrant's Quarterly
Report on Form 10-QSB for the quarter ended April 30, 1998 which bears the same
exhibit number.
***Incorporated by reference from the exhibit to the registrant's Quarterly
Report on Form 10-QSB for the quarter ended October 31, 1998 which bears the
same exhibit number.
****Incorporated by reference from the exhibit to the registrant's Annual Report
on Form 10-KSB for the fiscal year ended January 31, 1999 which bears the same
exhibit number.
Page - 23
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND> This Schedule Contains Summary Financial
Information Extracted From the Unaudited
Consolidated Balance Sheets as of April
30, 1999 and Unaudited Consolidated
Statements Of Income For The Year Ended
April 30, 1999 and is qualified in its
entirety by reference to such financial
statements.
</LEGEND>
<CURRENCY> United States
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-31-1999
<PERIOD-START> FEB-1-1999
<PERIOD-END> APR-30-1999
<EXCHANGE-RATE> 1
<CASH> 405,035
<SECURITIES> 0
<RECEIVABLES> 336,586
<ALLOWANCES> 21,370
<INVENTORY> 300
<CURRENT-ASSETS> 748,131
<PP&E> 3,738,608
<DEPRECIATION> 1,994,164
<TOTAL-ASSETS> 2,898,106
<CURRENT-LIABILITIES> 907,265
<BONDS> 718,370
0
0
<COMMON> 398,514
<OTHER-SE> 2,536,262
<TOTAL-LIABILITY-AND-EQUITY> 2,898,106
<SALES> 0
<TOTAL-REVENUES> 1,404,364
<CGS> 0
<TOTAL-COSTS> 1,350,658
<OTHER-EXPENSES> 33,442
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 33,442
<INCOME-PRETAX> 20,264
<INCOME-TAX> 0
<INCOME-CONTINUING> 20,264
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 20,264
<EPS-BASIC> .00
<EPS-DILUTED> .00
</TABLE>
