<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 2, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________________ to ____________________
Commission file number 0-11003
WEGENER CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 81-0371341
(State of incorporation) (I.R.S. Employer
Identification No.)
11350 TECHNOLOGY CIRCLE, DULUTH, GEORGIA 30136
(Address of principal executive offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (404) 623-0096
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days:
YES X NO
----- -----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Common Stock, $.01 par value 8,267,285 Shares
---------------------------- -------------------------------
Class Outstanding as of June 30, 1995
<PAGE>
WEGENER CORPORATION AND SUBSIDIARIES
Form 10-Q For the Quarter Ended June 2, 1995
INDEX
Page(s)
-------
PART I. Financial Information
Item I. Consolidated Financial Statements
Introduction. . . . . . . . . . . . . . . . . . . . . . . 3
Consolidated Statements of Operations
(Unaudited) - Three Months and Nine Months Ended
June 2, 1995 and May 27, 1994 . . . . . . . . . . . . . . 4
Consolidated Balance Sheets - June 2,
1995 (Unaudited) and September 2, 1994. . . . . . . . . . 5
Consolidated Statements of Stockholders' Equity
(Unaudited) - Nine Months Ended June 2,
1995 and May 27, 1994 . . . . . . . . . . . . . . . . . . 6
Consolidated Statements of Cash Flows
(Unaudited) - Nine Months Ended June 2, 1995
and May 27, 1994. . . . . . . . . . . . . . . . . . . . . 7
Notes to Consolidated Financial
Statements (Unaudited). . . . . . . . . . . . . . . . . . 8-10
Item 2. Managements' Discussion and Analysis of
Financial Condition and Results of Operations . . . . . . 11-13
PART II. Other Information
Item 1. None
Item 2. None
Item 3. None
Item 4. Submission of Matters to a Vote of
Security Holders. . . . . . . . . . . . . . . . . . . . . 14
Item 5. None
Item 6. Exhibits and Reports on Form 8-K. . . . . . . . . . . . . 14
Signatures. . . . . . . . . . . . . . . . . . . . . . . . 15
Page 2
<PAGE>
PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS
INTRODUCTION - CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial statements included herein have been prepared
pursuant to the rules and regulations of the Securities and Exchange Commission.
The consolidated balance sheet as of June 2, 1995; the consolidated statements
of stockholders' equity as of June 2, 1995 and May 27, 1994; the consolidated
statements of operations for the three and nine months ended June 2, 1995 and
May 27, 1994; and the consolidated statements of cash flows for the nine months
ended June 2, 1995 and May 27, 1994 have been prepared without audit. The
consolidated balance sheet as of September 2, 1994 has been examined by
independent certified public accountants. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations, although the Company believes that the
disclosures herein are adequate to make the information presented not
misleading. It is suggested that these consolidated financial statements be
read in conjunction with the financial statements and the notes thereto included
in the Company's Annual Report on Form 10-K, for the fiscal year ended September
2, 1994 File No. 0-11003.
In the opinion of the Company, the statements for the unaudited interim
periods presented include all adjustments, which were of a normal recurring
nature, necessary to present a fair statement of the results of such interim
periods. The results of operations for the interim periods presented are not
necessarily indicative of the results of operations for the entire year.
Page 3
<PAGE>
WEGENER CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three months ended Nine Months Ended
June 2, May 27, June 2, May 27,
1995 1994 1995 1994
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues $5,492,665 $4,376,518 $12,803,061 $12,070,557
- -----------------------------------------------------------------------------------------------------
Costs and expenses
Cost of products sold 3,612,879 2,761,024 8,452,248 7,889,571
Selling, general, and administrative 1,082,293 838,850 2,524,746 2,484,957
Research and development 501,836 588,038 1,415,072 1,506,645
Interest expense 161,455 103,882 437,590 313,087
Other expense (income), net (1,629) (96) (1,629) (4,247)
- -----------------------------------------------------------------------------------------------------
5,356,834 4,291,698 12,828,027 12,190,013
- -----------------------------------------------------------------------------------------------------
Earnings (loss)
before income taxes 135,831 84,820 (24,966) (119,456)
Income tax expense (benefit) - - - -
- -----------------------------------------------------------------------------------------------------
Net earnings (loss) $ 135,831 $ 84,820 $ (24,966) $ (119,456)
- -----------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------
Net earnings (loss) per common and common
equivalent shares .02 .01 (.00) (.02)
- -----------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------
Weighted average number of shares
outstanding 7,301,805 7,508,694 7,103,513 7,493,902
- -----------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to consolidated financial statements.
Page 4
<PAGE>
WEGENER CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
June 2, September 2,
1995 1994
- -------------------------------------------------------------------------------
Assets (Unaudited)
<S> <C> <C>
Current
Cash $ 10,355 $ 2,515
Accounts receivable 4,013,708 2,911,479
Inventories 4,527,947 4,308,104
Other 28,703 42,448
- --------------------------------------------------------------------------------
Total current assets 8,580,713 7,264,546
Property and equipment, less accumulated
depreciation 4,121,977 4,198,348
Other assets 768,413 430,360
- --------------------------------------------------------------------------------
$13,471,103 $11,893,254
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Liabilities and Stockholders' Equity
Current liabilities
Note payable $ 2,229,379 $ 1,981,766
Accounts payable 2,800,826 3,068,258
Accrued expenses 470,917 559,657
Customer deposits 856,437 271,499
Current maturities of long-term debt 823,466 369,872
- --------------------------------------------------------------------------------
Total current liabilities 7,181,025 6,251,052
Long-term debt, less current maturities 2,320,645 2,609,572
- --------------------------------------------------------------------------------
Total liabilities 9,501,670 8,860,624
- --------------------------------------------------------------------------------
Commitments - -
Shareholders' equity
Common stock, $.01 par value, 10,000,000 shares
authorized, 7,818,680 shares issued 78,187 74,937
Additional paid-in capital 7,333,401 6,498,358
Deficit (2,934,389) (2,909,423)
Less treasury stock, at cost (546,841 and
589,351 shares) (507,766) (631,242)
- --------------------------------------------------------------------------------
Total shareholders' equity 3,969,433 3,032,630
- --------------------------------------------------------------------------------
$13,471,103 $11,893,254
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
See accompanying notes to consolidated financial statements.
Page 5
<PAGE>
WEGENER CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(Unaudited)
<TABLE>
<CAPTION>
Common Stock Additional Retained Treasury Stock
--------------------- Paid-in Earnings -----------------------
Shares Amount Capital (Deficit) Shares Amount
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Balance, at August 27, 1993 7,493,680 $ 74,937 $6,695,448 $(2,840,066) (89,126) $(370,752)
Treasury stock reissued through
stock options and 401(k) plan - - (182,793) - 51,056 230,975
Net loss for
the nine months - - - (119,456) - -
- -----------------------------------------------------------------------------------------------------------------------
BALANCE, at May 27, 1994 7,493,680 $ 74,937 $6,512,655 $(2,959,522) (38,070) $(139,777)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Balance, at September 2, 1994 7,493,680 $ 74,937 $6,498,358 $(2,909,423) (589,351) $(631,242)
Treasury stock reissued through
stock options and 401(k) plan - - (67,957) - 42,510 123,476
Issuance of restricted common
stock in private placements 325,000 3,250 903,000 - - -
Net loss for
the nine months - - - (24,966) - -
- -----------------------------------------------------------------------------------------------------------------------
BALANCE, at June 2, 1995 7,818,680 $ 78,187 $7,333,401 $(2,934,389) (546,841) $(507,766)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to consolidated financial statements.
Page 6
<PAGE>
WEGENER CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Nine months ended
June 2, May 27,
1995 1994
- --------------------------------------------------------------------------------
<S> <C> <C>
CASH PROVIDED (USED) BY OPERATIONS
Net loss $ (24,966) $ (119,456)
Adjustments to reconcile net loss to
cash provided by operating activities
Depreciation and amortization 495,928 560,230
Warranty reserves 45,000 -
Changes in assets and liabilities
Accounts receivable (1,102,229) (1,017,851)
Inventories (219,843) (368,236)
Other current and non-current assets (463,655) (372,999)
Accounts payable (267,432) 1,267,476
Customer deposits and accrued expenses 477,325 324,995
- --------------------------------------------------------------------------------
(1,059,872) 274,159
- --------------------------------------------------------------------------------
NET CASH PROVIDED BY DISCONTINUED BUSINESS - 100,000
- --------------------------------------------------------------------------------
CASH (USED) BY INVESTING ACTIVITIES
Net property and equipment expenditures (280,210) (196,470)
- --------------------------------------------------------------------------------
(280,210) (196,470)
- --------------------------------------------------------------------------------
CASH PROVIDED (USED) BY FINANCING ACTIVITIES
Net change in borrowings under
revolving line of credit 247,613 516,261
Repayment of long-term debt (288,927) (707,975)
Proceeds from long-term debt 453,594 -
Issuance of common stock 906,250 -
Proceeds from stock options exercised 29,392 15,300
- --------------------------------------------------------------------------------
1,347,922 (176,414)
- --------------------------------------------------------------------------------
Increase in cash 7,840 1,275
Cash, beginning of period 2,515 1,156
- --------------------------------------------------------------------------------
Cash, end of period $ 10,355 $ 2,431
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the nine months for:
Interest $ 406,651 $ 307,157
Income taxes $ - $ -
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
See accompanying notes to consolidated financial statements.
Page 7
<PAGE>
WEGENER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1 Significant Accounting Policies
The significant accounting policies followed by the Company are set
forth in Note 1 to the Company's audited consolidated financial
statements included in the annual report on Form 10-K for the year
ended September 2, 1994.
Fiscal Year
The Company uses a fifty-two, fifty-three week year. The fiscal year
ends on the Friday closest to August 31. Fiscal year 1995 contains
fifty-two weeks, while fiscal year 1994 contained fifty-three weeks.
Financial Presentation
Certain prior period amounts have been reclassified to conform with
current period presentation.
Note 2 Accounts Receivable
Accounts receivable are summarized as follows:
<TABLE>
<CAPTION>
June 2, September 2,
1995 1994
----------- ------------
(Unaudited)
<S> <C> <C>
Accounts receivable - trade $3,968,254 $2,923,279
Other receivables 120,576 100,240
---------- ----------
4,088,830 3,023,519
Less allowance for
doubtful accounts (75,122) (112,040)
---------- ----------
$4,013,708 $2,911,479
---------- ----------
---------- ----------
</TABLE>
Page 8
<PAGE>
WEGENER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
Note 3 Inventories
Inventories are summarized as follows:
<TABLE>
<CAPTION>
June 2, September 2,
1995 1994
----------- ------------
(Unaudited)
<S> <C> <C>
Raw materials $2,639,824 $1,989,929
Work-in-process 1,945,869 2,393,651
Finished goods 601,544 779,617
----------- ----------
5,187,237 5,163,197
Less inventory reserves (659,290) (855,093)
----------- -----------
$4,527,947 $4,308,104
----------- -----------
----------- -----------
</TABLE>
Note 4 Income Taxes
At June 2, 1995, deferred tax assets of approximately $1,154,000 were
fully reserved by a valuation allowance. The Company has at June 2,
1995 approximately $1,315,000 of federal net operating loss
carryforwards which expire in 2009 and 2010; $137,000 of alternative
minimum tax credits and $152,000 of federal tax credits expiring
through 2004 available to offset future tax liabilities.
Note 5 Long-term Debt
During the second quarter, Wegener Corporation Chairman, Robert A.
Placek, sold 150,000 shares of Wegener Corporation common stock in an
open market transaction and loaned the proceeds to the Company in the
form of two unsecured promissory notes. The promissory notes dated
February 2 and February 9, 1995 in the amounts of $404,844 and $48,750
respectively carry maturity dates at the earlier of (1) five years or
(2) the date upon which additional financing is obtained for at least
$453,594 (see Note 6). The notes bear interest at 7.43% per annum
compounded annually payable at the maturity dates. The notes are
classified as current portion of long-term debt as the Company expects
to repay the notes within one year.
Page 9
<PAGE>
WEGENER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
Note 6 Common Stock and Subsequent Event
During the third quarter, the Company, in private placements to
certain accredited investors, issued 325,000 shares of unregistered
common stock. The net proceeds of $906,250 were used for working
capital.
During the fourth quarter, the Company, in private placements to
various accredited investors issued 975,000 shares of unregistered
common stock for a net proceeds of $3,876,375. Proceeds are to be
used for working capital.
Note 7 Common Stock Option Plans
Directors' Stock Option Plan.
During the first quarter options for 20,000 shares of common stock
were granted to an officer and director at an exercise price of $1.50
vesting at 25% per year and expiring ten years and one day from the
date of grant.
During the second quarter, the Company amended the 1989 Directors'
Incentive Plan to increase the aggregate number of shares of common
stock that maybe awarded from 100,000 to 300,000 shares and granted
common stock options to an officer and director for 153,000 shares,
fully exercisable, at an exercise price of $3.00 per share expiring
ten years from the date of grant. Additionally, common stock options
for 18,000 shares, fully exercisable at an exercise price of $3.25 per
share expiring ten years and one day from the date of grant were
granted to non-employee directors.
1988 Incentive Plan.
During the first quarter options for 80,000 shares of common stock
were granted at an exercise price of $1.50 exercisable at 25% per year
and expiring five years from the date of grant.
Page 10
<PAGE>
WEGENER CORPORATION AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The Company manufactures satellite communications equipment through Wegener
Communications, Inc. (WCI), a wholly-owned subsidiary. WCI manufactures
products for transmission of audio, data, and video via satellite.
RESULTS OF OPERATIONS
THREE AND NINE MONTHS ENDED JUNE 2, 1995 COMPARED TO THREE AND NINE
MONTHS ENDED MAY 27, 1994
The operating results for the three and nine month periods ended June 2, 1995
were earnings of $136,000 or $0.02 per share and a loss of $(25,000) or $(0.00)
per share compared to earnings of $85,000 or $0.01 per share and a loss of
$(119,000) or $(0.02) per share for the three and nine month periods ended May
27, 1994.
REVENUES - The Company's revenues for the three months ended June 2, 1995 were
$5,493,000, up 25.5% from revenues of $4,377,000 for the three months ended May
27, 1994. Revenues were $12,803,000 for the nine months ended June 2, 1995, up
6.1% from revenues of $12,071,000 for the nine months ended May 27, 1994.
The increases in revenues in the third quarter and first nine months of fiscal
1995 reflect 44.6% and 18.3% increases in the Direct Broadcast Satellite (DBS)
revenues compared to fiscal 1994, primarily due to increased shipments of
digital audio and video products to the business music and private network
industries. Telecom and Custom Products Group revenues decreased 17.8% and
19.8% in the third quarter and first nine months of fiscal 1995 compared to
fiscal 1994, reflecting a maturing product line and reduced shipments to the
cable television and radio network industries. WCI's backlog was approximately
$31,356,000 as of June 2, 1995, compared to $10,502,000 as of September 2, 1994,
and $13,349,000 as of May 27, 1994.
GROSS PROFIT MARGINS - For the three and nine month periods ended June 2, 1995,
gross profit margin dollars increased $264,000 or 16.4% and $170,000 or 4.1% as
a result of the increased revenues for the periods. As a percentage of
revenues, the Company's gross profit margins were 34.2% and 34.0% for the three
and nine month periods ended June 2, 1995 compared to 36.9% and 34.6% for the
three and nine month periods ended May 27, 1994. DBS product margin percentages
improved in the three and nine month periods due to higher revenues resulting in
manufacturing efficiencies and a favorable product mix. Telecom and custom
product margin percentages decreased in the three and nine month periods due to
a decrease in Telecom revenues and higher custom product costs as a result of
the distributor agreement entered into in association with the divestiture of
the Custom Products Division in the fourth quarter of fiscal 1994.
SELLING, GENERAL AND ADMINISTRATIVE - Selling, general and administrative
expenses were 19.7% and 19.7% of revenues for the three and nine month periods
ended June 2, 1995, compared to 19.2% and 20.6% of revenues for the three and
nine month periods ended May 27, 1994. Ex-
Page 11
<PAGE>
penses increased $243,000 or 29.0% in the third quarter, principally due to
increases in selling and corporate professional expenses.
RESEARCH AND DEVELOPMENT - Research and development expenses were 9.1% and 11.1%
of revenues for the three and nine month periods ended June 2, 1995, compared to
13.4% and 12.5% for the three and nine month periods ended May 27, 1994.
Research and development expenses decreased $86,000 and $92,000 in the three and
nine month periods of fiscal 1995. The decreases were due to increases in
capitalized software development costs. Software costs capitalized in the three
and nine month periods of fiscal 1995 were $156,000 and $375,000 compared to
$37,000 and $123,000 for the same periods of fiscal 1994. The Company remains
committed to such research and development expenditures as are required to
effectively compete and maintain pace with the rapid technological changes in
the communications industry and to support innovative engineering and design in
its future products.
INTEREST EXPENSE - Interest expense increased 55.4% and 39.8% in the three and
nine month periods ended June 2, 1995, primarily due to increases in the prime
rate and higher facility fees on the revolving line-of-credit.
INCOME TAXES - The Company recognized no income tax benefit for the first nine
months of fiscal 1995 due to an increase in the valuation allowance to fully
reserve the increase in deferred tax assets.
LIQUIDITY AND CAPITAL RESOURCES
NINE MONTHS ENDED JUNE 2, 1995
During the second quarter, Wegener Corporation Chairman, Robert A. Placek, sold
150,000 shares of Wegener Corporation common stock in an open market transaction
and loaned the proceeds to the Company in the form of two unsecured promissory
notes. The promissory notes dated February 2, and February 9, 1995 in the
amounts of $404,844 and $48,750 respectively carry maturity dates at the earlier
of (1) five years or (2) the date upon which additional financing is obtained
for at least $453,594 (see below). The notes bear interest at 7.43% per annum
compounded annually payable at the maturity dates. The notes are classified as
current portion of long-term debt as the Company expects to repay the notes
within one year.
During the third quarter, the Company, in private placements to certain
accredited investors issued 325,000 shares of unregistered common stock. The
net proceeds of $906,250 were used for working capital.
During the fourth quarter, the Company, in private placements to various
accredited investors issued 975,000 shares of unregistered common stock for a
net proceeds of $3,876,375. Proceeds are to be used for working capital.
During the nine months ended June 2, 1995, the Company used $1,060,000 of cash
in operations primarily due to increases in accounts receivable balances-
reflective of higher sales in the third quarter and increases in inventories and
other assets. These increases were partially offset by increases in customer
deposits. Financing activities generated cash of $454,000 from proceeds of
long-term debt and $906,000 from issuance of common stock (Notes 5 and 6).
Page 12
<PAGE>
The outstanding balance on the line-of-credit was $2,229,000 at June 2, 1995,
compared to $1,982,000 at September 2, 1994. Long-term debt and current
maturities were $3,144,000 at the end of the third quarter compared to
$2,979,000 at September 2, 1994.
The Company believes that additional funds may be needed to achieve the revenue
growth forecasted for fiscal 1996. While no assurances may be given, management
believes the Company would be able to obtain any additional required financing
through an equity offering or through additional borrowings.
Page 13
<PAGE>
PART II. OTHER INFORMATION
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) None
(b) Reports on Form 8-K - No reports on Form 8-K were filed
during the quarter ended June 2, 1995.
Page 14
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
WEGENER CORPORATION
-----------------------
(Registrant)
Date: June 30, 1995 By: /s/ Robert A. Placek
------------------------------------
Robert A. Placek
President
Date: June 30, 1995 By: /s/ C. Troy Woodbury, Jr.
------------------------------------
C. Troy Woodbury, Jr.
Treasurer and Chief
Financial Officer
Page 15
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-1-1995
<PERIOD-END> JUN-2-1995
<CASH> 10,355
<SECURITIES> 0
<RECEIVABLES> 4,088,830
<ALLOWANCES> (75,122)
<INVENTORY> 4,527,947
<CURRENT-ASSETS> 8,580,713
<PP&E> 10,887,036
<DEPRECIATION> (6,765,059)
<TOTAL-ASSETS> 13,471,103
<CURRENT-LIABILITIES> 7,181,025
<BONDS> 2,320,645
<COMMON> 78,187
0
0
<OTHER-SE> 3,891,246
<TOTAL-LIABILITY-AND-EQUITY> 13,471,103
<SALES> 12,803,061
<TOTAL-REVENUES> 12,803,061
<CGS> 8,452,248
<TOTAL-COSTS> 12,392,066
<OTHER-EXPENSES> (1,629)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 437,590
<INCOME-PRETAX> (24,966)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (24,966)
<EPS-PRIMARY> (.00)
<EPS-DILUTED> (.00)
</TABLE>
