<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) AUGUST 6, 1996
GALILEO CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 0-11309 04-2526583
(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification No.)
GALILEO PARK, P.O. BOX 550 01566-0550
STURBRIDGE, MASSACHUSETTS (Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code (508) 347-9191
GALILEO ELECTRO-OPTICS CORPORATION
GALILEO PARK, P.O. BOX 550
STURBRIDGE, MA 01566
(Former name or former address, if changed since last report.)
<PAGE> 2
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
a) Financial Statements of Business Acquired.
Financial statements of the business acquired are filed as Exhibit
99.1 hereto.
b) Pro Forma Financial Information.
Pro forma financial information is filed as Exhibit 99.2 hereto.
c) Exhibits
2.1 Agreement and Plan of Merger, dated July 17, 1996, by and
among Galileo Electro-Optics Corporation, LMI Acquisition
Corporation, Leisegang Medical, Inc. and the principal
stockholders of Leisegang Medical, Inc. (previously filed).
20.1 Press Release, dated August 8, 1996, issued by Galileo
Electro-Optics Corporation (previously filed).
23.1 Consent of Independent Auditors (filed herewith).
99.1 Financial Statements of Business Acquired (filed herewith).
99.2 Pro Forma Financial Information (filed herewith).
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 hereunto duly authorized this 17th day of October, 1996.
GALILEO CORPORATION
By /s/ Josef W. Rokus
-------------------
Josef W. Rokus
Vice President, Finance and
Chief Financial Officer
<PAGE> 3
EXHIBIT INDEX
Exhibit
No. Exhibit Description
- ------- -------------------
2.1 Agreement and Plan of Merger, dated July 17, 1996, by and among
Galileo Electro-Optics Corporation, LMI Acquisition Corporation,
Leisegang Medical, Inc. and the principal stockholders of
Leisegang Medical, Inc. (previously filed).
20.1 Press Release, dated August 8, 1996, issued by Galileo
Electro-Optics Corporation (previously filed).
23.1 Consent of Independent Auditors (filed herewith).
99.1 Financial Statements of Business Acquired (filed herewith).
99.2 Pro Forma Financial Information (filed herewith).
<PAGE> 1
Exhibit 23.1
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration
Statements (Form S-8, Nos. 2-92671, 33-5142, 33-47589 and 33-47588) pertaining
to the Stock Option and Purchase Plans of Galileo Corporation of our report
dated September 13, 1996, with respect to the financial statements of Leisegang
Medical, Inc. included in the Current Report on Form 8-K/A of Galileo
Corporation dated October 17, 1996.
Ernst & Young LLP
Providence, Rhode Island
October 16, 1996
<PAGE> 1
Exhibit 99.1
Financial Statements
Leisegang Medical, Inc.
Year Ended September 30, 1995 (Audited)
and
For the Nine Months Ended
June 30, 1996 and June 30, 1995 (Unaudited)
<PAGE> 2
REPORT OF INDEPENDENT AUDITORS
The Board of Directors
Leisegang Medical, Inc.
We have audited the accompanying balance sheet of Leisegang Medical, Inc. as of
September 30, 1995 and the related statements of income and retained earnings
and cash flows for the year then ended. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Leisegang Medical, Inc. at
September 30, 1995 and the results of its operations and its cash flows for the
year then ended, in conformity with generally accepted accounting principles.
Ernst & Young LLP
West Palm Beach, Florida
September 13, 1996
<PAGE> 3
Leisegang Medical, Inc.
<TABLE>
Balance Sheets
<CAPTION>
June 30 September 30
1996 1995
---------------------------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 231,379 $ 305,851
Trade accounts receivable, net 716,946 624,116
Deferred taxes 235,362 265,134
Inventories 1,535,618 1,692,237
---------- ----------
Total current assets 2,719,305 2,887,338
Property and equipment, net 236,280 255,925
Other assets 39,550 5,291
---------- ----------
Total assets $2,995,135 $3,148,554
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 361,082 $ 631,399
Accrued expenses 326,109 345,665
Deferred revenue 84,124 84,124
Customer deposits 48,141 50,613
Note payable to related party 72,813 69,100
---------- ----------
Total current liabilities 892,269 1,180,901
Deferred taxes 147,770 127,450
Note payable to related party, less current portion 487,100 542,183
Commitments
Shareholders' equity:
Common stock, Class A 10,000 10,000
Common stock, Class B 492 492
Treasury stock (2,500) (2,500)
Additional paid-in capital 39,508 39,508
Retained earnings 1,420,496 1,250,520
---------- ----------
Total shareholders' equity 1,467,996 1,298,020
---------- ----------
Total liabilities and shareholders' equity $2,995,135 $3,148,554
========== ==========
</TABLE>
See accompanying notes.
<PAGE> 4
Leisegang Medical, Inc.
<TABLE>
Statements of Income and Retained Earnings
<CAPTION>
Nine months ended Year ended
June 30 September 30
1996 1995 1995
---------------------------------------
(Unaudited) (Unaudited)
<S> <C> <C> <C>
Revenue:
Net sales $4,487,097 $4,830,678 $6,584,662
Other income 117,411 96,598 125,718
---------- ---------- ----------
4,604,508 4,927,276 6,710,380
Cost and expenses:
Cost of sales 2,230,393 2,634,705 3,597,707
Selling, general and administrative 2,029,301 2,028,591 2,704,091
Research and development 65,161 51,007 68,007
Interest, net 14,675 21,325 50,971
---------- ---------- ----------
4,339,530 4,735,628 6,420,776
---------- ---------- ----------
Income before provision for income
taxes 264,978 191,648 289,604
Provision for income taxes 95,002 95,705 132,566
---------- ---------- ----------
Net income 169,976 95,943 157,038
Retained earnings at beginning of period 1,250,520 1,093,482 1,093,482
---------- ---------- ----------
Retained earnings at end of period $1,420,496 $1,189,425 $1,250,520
========== ========== ==========
</TABLE>
See accompanying notes.
<PAGE> 5
Leisegang Medical, Inc.
<TABLE>
Statements of Cash Flows
<CAPTION>
Nine months ended Year ended
June 30 September 30
1996 1995 1995
----------------------------------------
(Unaudited) (Unaudited)
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net income $ 169,976 $ 95,943 $ 157,038
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 52,170 45,039 57,385
Gain on sale of marketable securities -- (29,284) (29,284)
CHANGES IN OPERATING ASSETS AND LIABILITIES
Trade accounts receivable (92,830) 179,905 (37,782)
Deferred taxes 50,092 95,706 132,566
Inventories 156,619 106,501 (151,983)
Other assets (34,259) -- (230)
Accounts payable (270,317) (301,435) (96,639)
Accrued expenses (19,556) (70,924) 11,280
Deferred revenue -- 104,124 84,124
Customer deposits (2,472) (51,034) (51,507)
--------- --------- ---------
CASH PROVIDED BY OPERATING ACTIVITIES 9,423 174,541 74,968
INVESTING ACTIVITIES
Sale of marketable securities -- 126,159 126,159
Purchases of property and equipment (32,525) (130,123) (251,033)
--------- --------- ---------
CASH USED IN INVESTING ACTIVITIES (32,525) (3,964) (124,874)
FINANCING ACTIVITIES
Proceeds from notes payable to related party -- -- 27,394
Payments on note payable -- (259) (60,311)
Payments on notes payable to related party (51,370) (48,390) (92,319)
--------- --------- ---------
CASH USED IN FINANCING ACTIVITIES (51,370) (48,649) (125,236)
--------- --------- ---------
Net increase (decrease) in cash and cash
equivalents (74,472) 121,928 (175,142)
Cash and cash equivalents at beginning of
period 305,851 480,993 480,993
--------- --------- ---------
Cash and cash equivalents at end of period $ 231,379 $ 602,921 $ 305,851
========= ========= =========
</TABLE>
See accompanying notes.
<PAGE> 6
Leisegang Medical, Inc.
Notes to Financial Statements
September 30, 1995
1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION AND NATURE OF BUSINESS
Leisegang Medical, Inc. (the Company), founded in 1988, is engaged primarily in
designing, manufacturing and marketing precision medical instrumentation for use
in surgical procedures performed by physicians in hospitals domestically and
internationally. Additionally, the Company is the exclusive supplier in North
America of Pie Medical BV ultrasound equipment and offers minimally invasive
surgical instruments for appendectomy, hysterectomy, colon resection, and
numerous other surgical procedures.
CASH AND CASH EQUIVALENTS
The Company considers all highly liquid investments with a maturity of three
months or less at the date of acquisition to be cash equivalents.
INVENTORIES
Inventories consist of finished goods and component parts and are valued at the
lower of cost (first-in, first-out) or market.
PROPERTY AND EQUIPMENT
Property and equipment is stated at cost. Depreciation is computed using the
straight-line method over the estimated useful lives of the assets, which range
from five to seven years. The cost of maintenance and repairs is charged to
operations as incurred.
REVENUE RECOGNITION
Revenue is recognized when goods are shipped. Returns are estimated and
reflected as adjustments to current period sales and cost of sales.
WARRANTY COSTS AND SERVICE CONTRACTS
The Company provides a one year warranty on all products sold. The Company has
estimated an amount to cover future costs related to these warranties. Sales are
recorded net of a provision for warranties. Upon expiration of the warranty
period, the Company offers service contracts for repairs and maintenance.
Revenue on these contracts is recognized on a straight line basis over the life
of the contract.
<PAGE> 7
Leisegang Medical, Inc.
Notes to Financial Statements (continued)
1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
RESEARCH AND DEVELOPMENT
Research and development is expensed as incurred.
ADVERTISING COSTS
Advertising costs are expensed as incurred. During the year ended September 30,
1995, the Company expensed advertising costs of approximately $238,000.
INCOME TAXES
The Company accounts for income taxes under Financial Accounting Standards Board
(FASB) Statement No. 109, Accounting for Income Taxes. Under this method,
deferred tax assets and liabilities are determined based on differences between
financial reporting and tax bases of assets and liabilities, and are measured
using the enacted tax rates and laws that will be in effect when the differences
are expected to reverse.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.
INTERIM FINANCIAL STATEMENTS
The unaudited consolidated financial statements for the nine months ended June
30, 1995 and June 30, 1996 contained herein have been prepared on the same basis
as audited statements and contain all adjustments (consisting of only normal
recurring adjustments) necessary for a fair statement of the Company's
performance.
2. INVENTORY
<TABLE>
Inventory consists of the following:
<CAPTION>
As of
-----------------------------------------
June 30, 1996 September 30, 1995
------------- ------------------
<S> <C> <C>
Component parts $ 405,528 $ 349,969
Finished goods 1,130,090 1,342,268
---------- ----------
$1,535,618 $1,692,237
========== ==========
</TABLE>
<PAGE> 8
Leisegang Medical, Inc.
Notes to Financial Statements (continued)
3. PROPERTY AND EQUIPMENT
<TABLE>
At September 30, 1995 property and equipment consists of the following:
<S> <C>
Furniture and equipment, 7 year useful life $141,286
Manufacturing equipment, 5 year useful life 253,317
--------
394,603
Less accumulated depreciation (138,678)
--------
$255,925
========
</TABLE>
4. NOTE PAYABLE AND NOTES PAYABLE TO RELATED PARTY
During the year, the Company paid-off a note payable to a bank bearing interest
at 8.25% in the amount of $60,311.
Note payable to related party at September 30, 1995 consists of an unsecured
note payable, bearing interest at 7%, payable through October 1, 2002 in equal
monthly payments of $9,142 including interest.
<TABLE>
Maturities of notes payable to related party for each of the five years
subsequent to September 30, 1995 and in the aggregate are as follows:
<CAPTION>
Year ended September 30
<S> <C>
1996 $ 69,100
1997 74,095
1998 79,452
1999 85,195
2000 91,354
Thereafter 212,087
--------
$611,283
========
</TABLE>
<PAGE> 9
Leisegang Medical, Inc.
Notes to Financial Statements (continued)
5. RELATED PARTY TRANSACTIONS
During the year ended September 30, 1995, the Company purchased approximately
$1,416,000 of inventory from an affiliate of a 40% stockholder. Approximately
$401,000 of the September 30, 1995 accounts payable balance is due to this
affiliate (see Note 8).
Consulting fees of approximately $145,000 were paid to related parties and fees
of approximately $19,000 were paid to directors of the Company.
6. INCOME TAXES
<TABLE>
The components of the provision for income taxes at September 30, 1995 are as
follows:
<S> <C>
Current $ --
Deferred 132,566
--------
Total $132,566
========
</TABLE>
<TABLE>
Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amount of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. Significant components of
the Company's net deferred income taxes are as follows:
<CAPTION>
Deferred tax assets:
<S> <C>
Reserves $ 69,600
Accrued expenses 100,027
Accumulated amortization 28,735
Deferred revenue 31,656
Net operating loss carryforward 35,116
--------
Deferred tax assets 265,134
Deferred tax liabilities:
Accumulated depreciation (127,450)
--------
Total net deferred taxes $137,684
========
</TABLE>
During the year ended September 30, 1995, the Company utilized $408,000 in net
operating loss carryforwards. At September 30, 1995, the Company has available
net operating loss carryforwards of $93,000, which expire in the year 2010.
<PAGE> 10
Leisegang Medical, Inc.
Notes to Financial Statements (continued)
7. SIGNIFICANT VENDORS
The Company purchased approximately $2,600,000 of inventory from two vendors,
one of which is an affiliate of a 40% stockholder (see Note 5).
8. COMMITMENTS
The Company leases its operating facilities and certain equipment under
operating lease agreements with nonrelated parties through 1997. Rent expense
for the year ended September 30, 1995 was approximately $98,000.
<TABLE>
At September 30, 1995, future minimum rentals, subject to cost-of-living
adjustments, are approximately as follows:
<S> <C>
1996 $ 91,000
1997 87,000
=========
$178,000
=========
</TABLE>
During the year, the Company committed to purchase approximately $659,000 of
inventory from an affiliate of a 40% stockholder through March 1996. At
September 30, 1995, approximately $330,000 of this commitment was outstanding
(see Note 5).
9. PROFIT SHARING PLAN AND EMPLOYEE BENEFIT PLANS
The Company had a discretionary noncontributory profit sharing plan (the Plan)
available to all employees who worked at least 1,000 hours in each 12 month
period from the first day of employment. The plan year was April 1 to March 31.
Plan expense for the year ended September 30, 1995 was $60,000 and is included
in selling, general and administrative expenses.
In August 1996, the Plan was terminated and distributions were made to employees
according to each employee's vested percentage. On August 6, 1996, all
participants in the Plan became eligible to participate in the Galileo
Electro-Optics Corporation 401(k) Plan (see Note 11).
10. ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying value of cash and cash equivalents, trade accounts receivable and
borrowings reflected in the financial statements approximate their fair value as
no events have occurred subsequent to their inception that would affect their
market value.
<PAGE> 11
Leisegang Medical, Inc.
Notes to Financial Statements (continued)
11. SUBSEQUENT EVENT
On August 6, 1996, the Company was acquired by Galileo Electro-Optics
Corporation in a stock-for-stock transaction.
<PAGE> 1
Exhibit 99.2
Galileo Corporation
Pro Forma Combined Condensed Balance Sheet and Statements of Operations
(Unaudited)
BACKGROUND INFORMATION
On August 6, 1996 Galileo Electro-Optics Corporation, a Delaware corporation
(the "Company" or "Galileo") merged with privately held Leisegang Medical, Inc.,
a Florida corporation, (LMI). The Company acquired LMI in a stock for stock
transaction issuing 269,923 shares of Galileo stock. The acquisition was
accounted for as a pooling of interest.
LMI is a distributor and manufacturer of OB/GYN diagnostic and surgical
equipment.
BASIS OF ACCOMPANYING PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS
The unaudited Pro Forma Combined Condensed Balance Sheet assumes that the merger
of Galileo and LMI occurred on June 30, 1996. The Pro Forma Combined Condensed
Statements of Operations combine the historical results of operations of Galileo
and LMI for the year ended September 30, 1995 and the nine months ended June 30,
1996, assuming the merger occurred on October 1, 1994 and October 1, 1995,
respectively. The Pro Forma Combined Condensed Statements of Operations do not
reflect the estimated expenses associated with the merger or other non-recurring
items. Pro Forma Combined Condensed Statements of Operations for fiscal years
1994 and 1993 have not been presented because it is impracticable to do so
because audited financial statements of LMI for such periods are not available.
Management expects to present restated financial statements reflecting the
pooling of interest business combination when the Company files its Annual
Report on form 10-K for the year ended September 30, 1996.
Management believes that the assumptions used in preparing the Pro Forma
Combined Condensed Financial Statements provide a reasonable basis for
presenting all of the significant effects of the merger. These Pro Forma
Combined Condensed Financial Statements do not purport to be indicative of the
results which actually would have been obtained if the merger had been effected
on the date indicated or of those results which may be achieved in the future.
The Pro Forma Combined Condensed Financial Statements should be read in
conjunction with the historical financial statements of Galileo and LMI which
have been included elsewhere herein or incorporated by reference in this Form
8-K/A.
<PAGE> 2
Galileo Corporation
Pro Forma Combined Condensed Balance Sheet and Statements of Operations
(Unaudited)
PRO FORMA ADJUSTMENTS
A summary of the Pro Forma Adjustments is set forth as follows:
(a) Reflects the cost incurred prior to June 30, 1996, associated with the
merger.
(b) The amounts of $2,699 and $44,801 reflect the additional shares and related
additional paid in capital from the acquisition of Leisegang Medical, Inc. The
$7,992 and $39,508 are the elimination due to consolidation of Leisegang
Medical's common stock and additional paid in capital.
(c) Reflects estimated additional expenses related to the LMI merger.
(d) Adjustment to valuation allowance for deferred tax assets.
<PAGE> 3
GALILEO CORPORATION
<TABLE>
PRO FORMA COMBINED CONDENSED BALANCE SHEETS
(UNAUDITED)
<CAPTION>
Galileo Leisegang
Historical Historical Pro Forma Pro Forma
June 30, 1996 June 30, 1996 Adjustments Combined
-------------------------------------------------------------------
<S> <C> <C> <C> <C>
ASSETS
Current assets
Cash and cash equivalents $15,929,000 $ 231,379 $16,160,379
Accounts receivable, net 5,514,000 716,946 6,230,946
Inventories 4,476,000 1,535,618 6,011,618
Deferred income taxes 308,000 235,362 $ (86,592)(d) 456,770
Other current assets 314,000 -- (53,000)(a) 261,000
----------- ---------- --------- -----------
Total current assets 26,541,000 2,719,305 (139,592) 29,120,713
Property and equipment, net 19,442,000 236,280 19,678,280
Other assets 2,700,000 39,550 2,739,550
----------- ---------- --------- -----------
Total assets $48,683,000 $2,995,135 $(139,592) $51,538,543
=========== ========== ========= ===========
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current liabilities
Accounts payable, trade $ 1,051,000 $ 361,082 $ 1,412,082
Notes payable -- 72,813 72,813
Accrued liabilities 2,388,000 458,374 $ 547,000 (c) 3,393,374
----------- ---------- --------- -----------
Total current liabilities 3,439,000 892,269 547,000 4,878,269
Deferred taxes 469,000 147,770 616,770
Long-term obligations -
Capital lease 174,000 -- 174,000
Long-term notes payable -- 487,100 487,100
Post-retirement benefits 671,000 -- 671,000
----------- ---------- --------- -----------
Total liabilities 4,753,000 1,527,139 547,000 6,827,139
Shareholders' Equity
Common stock 65,000 7,992 2,699 (b) 67,699
(7,992)(b)
Additional paid-in capital 42,552,000 39,508 44,801 (b) 42,596,801
(39,508)(b)
Retained earnings 1,313,000 1,420,496 (53,000)(a) 2,046,904
(547,000)(c)
(86,592)(d)
----------- ---------- --------- -----------
Shareholders' equity 43,930,000 1,467,996 (686,592) 44,711,404
----------- ---------- --------- -----------
Total liabilities and
shareholders' equity $48,683,000 $2,995,135 $(139,592) $51,538,543
=========== ========== ========= ===========
</TABLE>
<PAGE> 4
GALILEO CORPORATION
<TABLE>
PRO FORMA COMBINED CONDENSED STATEMENTS OF OPERATIONS
<CAPTION>
Galileo Leisegang
Historical Historical
Year Ended Year Ended
September 30 September 30 Pro Forma Pro Forma
1995 1995 Adjustments Combined
--------------------------------------------------------------
<S> <C> <C> <C> <C>
Net sales $34,043,000 $6,710,380 $40,753,380
Cost of sales 24,646,000 3,597,707 28,243,707
----------- ---------- -----------
Gross profit 9,397,000 3,112,673 12,509,673
Operating expenses 8,561,000 2,772,098 11,333,098
----------- ---------- -----------
Operating profit 836,000 340,575 1,176,575
Other income, net 356,000 (50,971) 305,029
----------- ---------- -----------
Income before taxes 1,192,000 289,604 1,481,604
Income tax expense 82,000 132,566 $ (132,566) 82,000
----------- ---------- ---------- -----------
Net income $ 1,110,000 $ 157,038 $ 132,566 $ 1,399,604
Earnings per share $ 0.164 $ 0.023 $ 0.020 $ 0.207
Primary shares utilized in
calculation of earnings per
share 6,777,516 6,777,516 6,777,516 6,777,516
</TABLE>
<PAGE> 5
GALILEO CORPORATION
<TABLE>
PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS
(UNAUDITED)
<CAPTION>
Galileo Leisegang
Historical Historical
Nine Months Nine Months
Ended Ended Pro Forma Pro Forma
June 30, 1996 June 30, 1996 Adjustments Combined
-----------------------------------------------------------------------
<S> <C> <C> <C>
Net sales $27,187,000 $4,604,508 $31,791,508
Cost of sales 16,389,000 2,230,393 18,619,393
----------- ---------- -----------
Gross profit 10,798,000 2,374,115 13,172,115
Operating expenses 7,673,000 2,094,462 9,767,462
----------- ---------- -----------
Operating profit 3,125,000 279,653 3,404,653
Other income, net 513,000 (14,675) 498,325
----------- ---------- -----------
Income before taxes 3,638,000 264,978 3,902,978
Income tax expense
(benefit) (49,000) 95,002 46,002
----------- ---------- -----------
Income before extraordinary
item $ 3,687,000 $ 169,976 $ 3,856,976
Earnings per share before
extraordinary item $ 0.532 $ 0.025 $ 0.557
Primary shares utilized in
calculation of earnings per
share 6,933,877 6,933,877 6,933,877
</TABLE>
