<PAGE>
U.S. 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 September 30, 1996
---------------------
[ ]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE EXCHANGE ACT
For the transition period from ________ to _________
Commission file number 0-14068
------------------------
Memry Corporation
-----------------------------------------
(Exact name of small business issuer as
specified in its charter)
Delaware 06-1084424
------------------------------- ---------------------------------
(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or organization)
57 Commerce Drive, Brookfield, Connecticut 06804
----------------------------------------------------
(Address of principal executive offices)
(203) 740-7311
----------------------------------------------------
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the 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 [ ]
State the number of shares outstanding of each of the issuer's classes of common
equity as of the latest practicable date. As of September 30, 1996, 16,657,354
shares of the registrant's common stock, par value $.01 per share, were issued
and outstanding.
Transitional Small Business Disclosure Format (check one):
Yes X No
---- ----
<PAGE>
INDEX
PART I - FINANCIAL INFORMATION
ITEM 1. Financial Statements
Consolidated Balance Sheet as of
September 30, 1996 and June 30, 1996
Consolidated Statement of Operations for
the three months ended September 30, 1996 and 1995
Consolidated Statement of Cash Flows for
the three months ended September 30, 1996 and 1995
Notes to the Consolidated Financial Statements
ITEM 2. Management's Discussion and Analysis or Plan
of Operation
PART II - OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K
Signatures
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
MEMRY CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS - (Unaudited)
September 30, 1996
================================================================================
<TABLE>
<CAPTION>
September 30, June 30,
ASSETS 1996 1996
----------- -----------
<S> <C> <C>
Current Assets
Cash and cash equivalents $ 84,000 $ 57,000
Accounts receivable, less allowance for doubtful
accounts Sept 30, 1996 $34,000; June 30, 1996 $29,000 1,365,000 568,000
Inventories 2,059,000 2,044,000
Prepaid expenses and other 51,000 63,000
----------- ----------
Total current assets 3,559,000 2,732,000
----------- ----------
Property,Plant and Equipment, at cost, net 3,770,000 3,881,000
Other Assets
Patents and patent rights, less accumulated amortization
September 30, 1996 $93,000; June 30, 1996 $60,000 1,969,000 2,002,000
Goodwill, less accumulated amortization September 30,
1996 $16,000; June 30, 1996 $0 973,000 989,000
Deferred financing, less accumulated amortization
1996 $7,000; June 30, 1996 $0 139,000 36,000
Deposits 53,000 39,000
----------- ----------
3,134,000 3,066,000
----------- ----------
Total assets $10,463,000 $9,679,000
=========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable and accrued expenses $1,915,000 $ 1,733,000
Notes payable 2,295,000 1,698,000
Unearned revenue 150,000 150,000
Current maturities of capital lease obligations 3,000 3,000
----------- -----------
Total current liabilities 4,363,000 3,584,000
----------- -----------
Capital lease obligations, less current maturities 4,000 4,000
Stockholders' Equity
Preferred stock - 36,000
Common stock, $.01 par value; 25,000,000 authorized
shares; 16,657,354 shares issued and outstanding 166,000 130,000
Additional paid-in capital 39,034,000 39,034,000
Accumulted deficit (33,104,000) (33,109,000)
----------- -----------
Total stockholders' equity 6,096,000 6,091,000
----------- -----------
Total liabilities and stockholders' equity $10,463,000 $ 9,679,000
=========== ===========
</TABLE>
<PAGE>
MEMRY CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
For Three Months Ended September 30, 1996 and 1995
================================================================================
<TABLE>
<CAPTION>
September 30,
1996 1995
---------- ----------
<S> <C> <C>
Revenues
Product sales $2,511,000 $1,016,000
Research and development 96,000 165,000
Other 150,000
---------- ----------
2,757,000 1,181,000
---------- ----------
Cost of revenues
Manufacturing 1,582,000 898,000
Research and development 84,000 137,000
---------- ----------
1,666,000 1,035,000
---------- ----------
Gross profit 1,091,000 146,000
---------- ----------
Operating expenses
General, selling and administration 840,000 442,000
Depreciation and amortization 176,000 24,000
---------- ----------
1,016,000 466,000
---------- ----------
Operating profit (loss) 75,000 (320,000)
Interest expense 70,000 55,000
---------- ----------
Net profit (loss) $5,000 ($375,000)
========== ==========
Weighted average number of common shares outstanding 14,018,151 8,091,000
========== ==========
-fully diluted 22,978,722 N/A
========== ==========
Net profit (loss) per common share $0.00 ($0.05)
========== ==========
-fully diluted $0.00 N/A
========== ==========
</TABLE>
<PAGE>
MEMRY CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOW-(Unaudited)
For Three Months Ended September 30, 1996 and 1995
================================================================================
<TABLE>
<CAPTION>
For Three Months Ended
September 30,
1996 1995
-------- ----------
<S> <C> <C>
Cash Flows From Operating Activities
Net profit (loss) $ 5,000 ($375,000)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization 176,000 24,000
Change in operating assets and liabilities:
(Increase) decrease in accounts receivable (797,000) (297,000)
(Increase) decrease in inventories (15,000) (21,000)
(Increase) decrease in prepaid & other (114,000) (4,000)
Increase (decrease) in accounts payable and accrued
expenses 182,000 (830,000)
-------- ----------
Net cash used in operating activities (563,000) (1,503,000)
-------- ----------
Cash Flows From Investing Activities
Purchases of property, plant and equipment (7,000) (3,000)
Cash Flows From Financing Activities
Proceeds from sale of stock 1,561,000
Stock issue costs (125,000)
Net proceeds from (payments on) notes payable 597,000 (522,000)
-------- ----------
Net cash provided by financing activities 597,000 914,000
-------- ----------
Increase (Decrease) in cash & cash equivalents 27,000 (592,000)
Cash & Cash Equivalents at the begining of period 57,000 1,145,000
-------- ----------
Cash & cash equivalents -end of period $84,000 $553,000
======== ==========
</TABLE>
<PAGE>
MEMRY CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE A. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principals for interim
financial information and with the instructions to Form 10-QSB. Accordingly,
they do not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. In the
opinion of management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included. Operating
results for the three month period ended September 30, 1996 are not necessarily
indicative of the results that may be expected for the year ending June 30,
1997. For further information, refer to the consolidated financial statements
and footnotes thereto included in the Company's Annual Report on Form 10-KSB for
the year ended June 30, 1996.
NOTE B. NOTES PAYABLE
On August 9, 1996, the Company entered into a term and revolving loan agreement
with Affiliated Business Credit Corporation ("ABCC"), a commercial financing
subsidiary of Center Financial Corporation, allowing up to $2.635 million of
aggregate borrowings. The term loan is a five year $1.135 million loan, with
principal payable in monthly installments of approximately $19,000. An
additional $135,000 of principal is due (i) on or prior to December 31, 1996 if,
prior to December 31, 1996, the Company raises additional equity (excluding
equity raised to purchase intellectual property, medical patents and other
assets related thereto from Raychem), and (ii) on or before June 30, 1997 if the
Company does not raise such additional equity prior to December 31, 1996. The
entire unpaid balance, if not earlier demanded, is due and payable on July 31,
2001; provided, however, that ABCC has the right to accelerate the loan and
require full payment upon demand. Interest on the term loan accrues at the rate
of prime plus 2.25%. The revolving credit facility provides for borrowings at
the lesser of $1.5 million or the sum of (a) 80% of eligible accounts receivable
plus (b) the lesser of $500,000 or 25% of eligible inventory. Borrowings
pursuant to the revolving loan agreement are due upon demand and bear interest,
payable monthly, at prime plus 2%. The terms with ABCC generally are more
favorable than the terms that the Company's Wright subsidiary had with Fleet
Bank, the Company's prior lender. The loan documents contain standard covenants,
including security interests in substantially all of the Company's consolidated
assets, commitment fees and negative covenants (including restrictions on
dividends and other payments), which the Company does not expect to materially
impact operations. At the August 9, 1996 closing, Wright's debt to Fleet Bank
was repaid with a $140,000, or 16%, discount.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The following is management's discussion and analysis of certain significant
factors which have affected the Company's financial position and operating
results.
(a) LIQUIDITY AND CAPITAL RESOURCES
During the first fiscal quarter ended September 30, 1996, the Company was able
to fund operations from cash flow generated through its revolving credit
facility, as described below. The improved ability of the Company to fund its
operations is the combined result of the acquisition of the nickel-titanium
product line and the attainment of the revolving credit facility. The Company
historically satisfied its cash requirements from sales of equity securities and
borrowings. Net cash used in operating activities was $563,000, net cash used
for purchases of property, plant and equipment was $7,000 and net cash provided
by financing activities was $597,000. As a result of the foregoing, at the end
of the first quarter, the Company held cash and cash equivalents of $84,000, up
$27,000 from the start of fiscal 1997. At September 30, 1996 the Company had
negative working capital (current assets less current liabilities) of $804,000
(down $96,000 from negative working capital of $900,000 at June 30, 1996).
On August 9, 1996, the Company entered into a term and revolving loan agreement
with Affiliated Business Credit Corporation ("ABCC"), a commercial financing
subsidiary of Center Financial Corporation, allowing up to $2.635 million of
aggregate borrowings. The term loan is a five year $1.135 million loan, with
principal payable in monthly installments of approximately $19,000. An
additional $135,000 of principal is due (i) on or prior to December 31, 1996,
if, prior to December 31, 1996, the Company raises additional equity (excluding
equity raised to purchase intellectual property, medical patents and other
assets related thereto from Raychem), and (ii) on or before June 30, 1997 if the
Company does not raise such additional equity prior to December 31, 1996. The
entire unpaid balance, if not earlier demanded, is due and payable on July 31,
2001; provided, however, that ABCC has the right to accelerate the loan and
require full payment upon demand. Interest on the term loan accrues at the rate
of prime plus 2.25%. The revolving credit facility provides for borrowings at
the lesser of $1.5 million or the sum of (a) 80% of eligible accounts receivable
plus (b) the lesser of $500,000 or 25% of eligible inventory. Borrowings
pursuant to the revolving loan agreement are due upon demand and bear interest,
payable monthly, at prime plus 2%. The terms with ABCC generally are more
favorable than the terms that the Company's Wright Machine Corportion ("Wright")
subsidiary had with Fleet Bank, the Company's prior lender. The loan documents
contain standard covenants, including security interests in substantially all of
the Company's consolidated assets, commitment fees and negative covenants
(including restrictions on dividends and other payments), which the Company does
not expect to materially impact operations. At the August 9, 1996 closing,
Wright's debt to Fleet Bank was repaid with a $140,000, or 16%, discount.
The Company's only currently contemplated material capital expenditure for
fiscal 1997 is the move of the medical assemblies portion of the business
purchased from Raychem Corporation ("Raychem") from Menlo Park, California to
the Company's headquarters in Brookfield, Connecticut, in the second quarter of
fiscal 1997. The Company anticipates that the cost of such move will be slightly
greater than $100,000. In addition, the Company anticipates making substantial
improvements to certain machinery and equipment located at Memry West (which is
part of the Company's Memry Segment and which manufactures semi-finished
materials utilizing Shape Memory Alloys and, through Raychem, sells such
materials into various industrial electronic, automotive and medical markets)
and used to manufacture tinel-lock product for Raychem. However, as a result of
an agreement entered into at the time of the acquisition of Raychem's nickel-
titanium product line (the "Raychem Acquisition"), it is anticipated that
Raychem will bear substantially all the costs of such improvements.
The Company has in the past grown through acquisitions (including both the
Raychem Acquisition and the Company's earlier acquisition of Wright) and, as
part of its continuing growth strategy, the Company expects to continue to
evaluate and pursue opportunities to acquire other companies, assets and product
lines that either complement or expand the Company's existing businesses. The
Company intends to use available cash from operations, when and if available,
and sales of equity to finance any such acquisitions that may be sought in the
future.
In connection with a December 1994 subordinated debt financing, the Company
granted Connecticut Innovations Incorporated ("CII"), currently the holder of
both common stock and warrants of the Company, a "put" right if: (i) at any time
before the earlier of June 28, 2006 and the date on which CII ceases to hold at
least 35% of the common stock underlying the convertible securities originally
issued to it, the Company ceases to (a) maintain its corporate headquarters and
all of its product business operations in the State of Connecticut (including,
after January 1, 1997, the assembly of all products to be sold to U.S. Surgical
Corporation, most of which are currently being manufactured at Memry West),
excluding business operations relating to Wright's production of screw machine
products and taper pins and the Company's components and sub-assembly business
acquired from Raychem, (b) base its president and chief executive officer, a
majority of its senior executives, and all of its administrative, financial,
research and development, marketing and customer service staff relating to its
product business (subject to the same inclusions and exclusions as clause (a))
in the State of Connecticut, (c) conduct all of its operations relating to its
product business directly or through subcontractors and through licensed
operations in the State of Connecticut (subject to the same inclusions and
exclusions as clause (a)), and (d) maintain its principal bank accounts with
banks located in the State of Connecticut, excluding all banks associated with
Wright; or (ii) the Company fails (a) to file by October 31, 1996 a registration
statement under the Securities Act of 1933, as amended (the "Registration
Statement"), covering, inter alia, the resale by CII of the shares of the
----- -----
Company's Common Stock owned by CII and underlying warrants owned by CII (the
"Registrable Securities") or to effect such Registration Statement by January
31, 1997, or (b) to keep the Registration Statement in effect for an aggregate
of 120 days during any rolling twelve month period during the three years which
the Company is required to maintain the effectiveness of the Registration
Statement. Upon CII's exercise of its put, the Company shall be obligated to
purchase from CII all the Registrable Securities then held by CII at a price
equal to the greater of the then current market price of the Company's common
stock or $2.00 per share, less, in either event, the aggregate amount of unpaid
exercise prices of all warrants put to the Company. Using $2.00 per share as the
put price per share, the aggregate put price that would have to be paid by the
Company if the put were exercised would be approximately $4,085,500. If CII were
to have the right to put its securities and were to choose to exercise that
right, it would have a serious adverse effect on the Company's liquidity and the
Company would most likely have to seek equity financing to be able to meet
its obligations to CII. However, the Company believes that it has the ability to
insure that its operations do not move from Connecticut in a manner that would
trigger CII's put, and the Company filed the Registration Statement on October
31, 1996. The Company intends to cause the Registration Statement to be
maintained in a manner that would prevent CII's put from being operative.
The Company believes that the combination of its improved borrowing facility,
its ability to raise equity capital in the past and, as a result of the Raychem
Acquisition, revenues from Memry West will be sufficient to meet the Company's
capital requirements (assuming both that ABCC does not demand immediate
repayment of the term loan and that CII's put rights are not triggered and
exercised (and, as stated above, the Company intends not to cause said put
rights to become exercisable)).
The Company does not expect that there are any contingencies which would have a
material effect on the Company's financial condition, future operating results
and/or liquidity.
(b) RESULTS OF OPERATIONS
REVENUE.
- --------
Sales Overview. Overall revenues increased 133%, to $2,757,000 in the first
- ----------------
three months of fiscal 1997 from $1,181,000 during the same period in fiscal
1996. Revenues relating to the Memry Segment were responsible for 100% of the
increase.
Memry Sales. Revenues at the Memry Segment increased 647% to $2,276,000 during
the period ended September 30, 1996 as compared with $305,000 during the same
period in fiscal 1996. The significant increase in revenues is entirely due
to the increase in product sales resulting from the acquisition of the nickel-
titanium product line from Raychem. Medical material, parts and component
sales were responsible for 60% of the Memry Segment revenue increase. Research
and development revenues were $96,000 as compared to $165,000, in period ended
September 30, 1996 and 1995, respectively, decreasing 42%, or $69,000. This
decrease is due to reduced labor hours working on government contracts as a
result of efforts being made to prepare for the medical assemblies unit move
from California to the Connecticut location.
Wright Sales. Wright Machine Segment revenues decreased 45% in the period ended
September 30, 1996, from $876,000 to $481,000 in the same period in fiscal 1996.
This decrease was offset by $140,000 of other income, or a 16% increase,
resulting from a negotiated discount with Wright's bank on it's principle loan
balance. The decrease in product sales is the result of the reduction in order
backlog due to Wright's inability to perform on orders resulting from cash
constraints in fiscal 1996.
COSTS AND EXPENSES
- ------------------
Manufacturing Costs Overview. Manufacturing costs increased $684,000 to
- -----------------------------
$1,582,000 in the three months ended September 30, 1996, from $898,000 during
the same three month period in fiscal 1996. This 76% increase is due to the
increased sales volume related to the aforementioned acquisition. Gross margin
increased 25% during the period ended September 30, 1996 to 37% , from a 12%
margin in the same fiscal 1996 period, due to the higher margin sales as a
result of the acquisition of the nickel-titanium product line.
<PAGE>
Memry Manufacturing Costs. Memry Segment manufacturing costs increased to
$1,108,000 from $161,000, or 588% in the first three months of fiscal years 1996
and 1997, respectively. The $947,000 increase is the result of the increased
sales volume. Gross margins increased 64% in the three month period ending
September 30, 1996 to 49% from negative margin of 15% in the same fiscal 1996
period ending September 30, 1995.
Wright Manufacturing Costs. The Wright Segment manufacturing costs decreased
37% to $474,000 from $750,000 in the three month periods ending September 30,
1996 and 1997, respectively. The decrease is due to the decrease in sales. Gross
margin decreased 53%, from 14%, to a negative 39% in the same three month fiscal
period ended September 30, 1995 and 1996, respectively due primarily to the
reduced sales volume.
Research and Development Costs. Research and development costs decreased 38% to
$84,000 in the first quarter of fiscal 1997 as compared with $137,000 in the
same quarter of fiscal 1996. This is directly linked to the revenue decrease of
42%.
General, Selling and Administrative Expense ("GS&A"). Overall GS&A increased
- -----------------------------------------------------
$398,000, or 90%, to $840,000 in the first fiscal quarter of 1997, as compared
to $442,000 during the same period of fiscal 1996. The increase is directly
related to the California facility which accounted for 64% of the increase. The
remaining 26% is related to the Connecticut facility which incurred an
increase of $26,000 in travel expense during the first quarter of fiscal 1997
and to $86,000 of negotiated supplier discounts taken in fiscal 1996.
Depreciation and Amortization Expense. Depreciation and amortization expense
- --------------------------------------
increased 633%, or $152,000, primarily as result of the inventory, patents, and
goodwill purchased as part of the acquisition made of the nickel-titanium
product line. In addition, the Company is amortizing over a five year period
certain debt financing costs.
Interest Expense. Interest expense increased $15,000, or 27%, as a result of
- -----------------
the $597,000 increase in notes payable.
NET PROFIT
- ----------
Overview. Net profit for the first quarter of fiscal 1997 was $5,000, as
- ---------
compared with a net loss of ($375,000) for first quarter of fiscal 1996, an
improvement of $380,000. The improvement is result of the increase in
revenues and margins resulting from the acquisition of the nickel-titanium
product line and the discount of $140,000 given by Wright's bank on it's
principle debt.
Memry Segment. Memry Segment's profit for the first three months of fiscal
1997 was $93,000, as compared with a net loss of $346,000 during the same fiscal
1996 period. The improvement of $439,000, or 127%, results from the
significantly increased revenues and margins.
Wright Segment. The Wright Segment net loss increased $66,000, or 228%, to
a loss of $95,000 from a loss of $29,000 during the three month period ended
September 30, 1996 and 1995, respectively. The increase in net loss was caused
by the 61% decrease in product sales.
PART II- OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) EXHIBITS
27. Financial Data Schedule (1)
- ----------
(1) Submitted separately, electronically.
(b) REPORTS ON FORM 8-K
A Form 10-K was filed on July 15, 1996 with respect to disclosure regarding
"Item 2. Acquisition or Disposition of Assets" and "Item 7. Financial
Statements and Exhibits," disclosing the consummation of the June 28, 1996
acquisition of Raychem Corporation's nickel-titanium product line. On
September 13, 1996, the Company filed a form 8-K/A containing the following
financial statements relating to such acquisition:
Financial Statements of the business acquired on June 28, 1996 from Raychem
Corporation:
Report of Independent Accountants
Statements of Assets Acquired
Statement of Operations for years ended June 30, 1996 and 1995
Notes to Statements of Assets Acquired and Statements of Operation
Pro Forma Consolidated Statements of Operations reflecting the business
acquired on June 28, 1996 from Raychem Corporation:
Pro Forma Consolidated Statement of Operations (unaudited) for year
ended June 30, 1995
Pro Forma Consolidated Statement of Operations (unaudited) for year
ended June 30, 1996
Notes to Pro Forma Financial Information
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Memry Corporation
-----------------
Date: November 14, 1996 /s/James G. Binch
----------------- -----------------------------
James G. Binch
President, CEO and Director
(Principal Executive Officer)
Date: November 14, 1996 /s/Wendy A. Gavaghan
------------------ -----------------------------
Wendy A. Gavaghan
Corporate Controller
(Principal Financial Officer)
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description of Exhibit
- ------- ----------------------
27 Financial Data Schedule (1)
- --------------
(1) Submitted separately, electronically.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM MEMRY
CORPORATION'S UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE
THREE MONTHS ENDED SEPTEMBER 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 84,000
<SECURITIES> 0
<RECEIVABLES> 1,399,000
<ALLOWANCES> 34,000
<INVENTORY> 2,059,000
<CURRENT-ASSETS> 3,559,000
<PP&E> 5,965,000
<DEPRECIATION> 2,195,000
<TOTAL-ASSETS> 10,463,000
<CURRENT-LIABILITIES> 4,363,000
<BONDS> 0
0
0
<COMMON> 166,000
<OTHER-SE> 5,929,000
<TOTAL-LIABILITY-AND-EQUITY> 10,463,000
<SALES> 2
<TOTAL-REVENUES> 2,757,000
<CGS> 1,582,000
<TOTAL-COSTS> 1,666,000
<OTHER-EXPENSES> 1,016,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 70,000
<INCOME-PRETAX> 5,000
<INCOME-TAX> 0
<INCOME-CONTINUING> 5,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,000
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
