SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended MARCH 31, 1998
--------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _________________ to ___________________
Commission File Number 1-10670
HANGER ORTHOPEDIC GROUP, INC.
--------------------------------------------------------------------
(Exact name of registrant as specified in its charter.)
Delaware 84-0904275
---------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
7700 Old Georgetown Road, Bethesda, MD 20814
---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's phone number, including area code: (301) 986-0701
-----------------------------------------------------------------------------
Former name, former address and former fiscal year, if changed since last
report.
Indicate by check 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 [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares
outstanding of each of the issuer's classes of common stock, as of April 27,
1998 15,645,501 shares of common stock, $.01 par value per share.
<PAGE>
HANGER ORTHOPEDIC GROUP, INC.
<TABLE>
INDEX
<CAPTION>
Page No.
--------
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets - March 31, 1998
(unaudited) and December 31, 1997 2
Consolidated Statements of Income for the three
months ended March 31, 1998 and 1997 (unaudited) 4
Consolidated Statements of Cash Flows for the three
months ended March 31, 1998 and 1997 (unaudited) 5
Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 14
SIGNATURES 15
</TABLE>
<PAGE>
HANGER ORTHOPEDIC GROUP, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
-------------------------------------
(unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 5,652,746 $ 6,557,409
Accounts receivable less allowances for
doubtful accounts of $6,266,000 and
$4,871,000 in 1998 and 1997 respectively 31,655,712 31,145,327
Inventories 17,633,551 17,445,476
Prepaid expenses and other assets 4,028,619 4,260,656
Deferred income taxes 2,127,185 2,127,185
------------- -------------
Total current assets 61,097,813 61,536,053
------------- -------------
PROPERTY, PLANT AND EQUIPMENT
Land 4,267,045 4,269,045
Buildings 8,342,849 8,326,732
Machinery and equipment 8,295,019 7,591,821
Furniture and fixtures 2,465,199 2,378,808
Leasehold improvements 3,495,718 3,142,244
------------- -------------
26,865,830 25,708,650
Less accumulated depreciation and amortization 8,134,225 7,538,385
------------- -------------
18,731,605 18,170,265
------------- -------------
INTANGIBLE ASSETS
Excess of cost over net assets acquired 92,853,728 81,150,328
Non-compete agreements 2,295,265 2,236,979
Other intangible assets 3,230,052 3,221,912
------------- -------------
98,379,045 86,609,219
Less accumulated amortization 9,765,256 9,101,531
------------- -------------
88,613,789 77,507,688
------------- -------------
OTHER ASSETS
Other 964,205 768,604
------------- -------------
TOTAL ASSETS $169,407,412 $157,982,610
============= =============
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
2
<PAGE>
HANGER ORTHOPEDIC GROUP, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
-------------------------------------
(unaudited)
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Current portion of long-term debt $ 10,310,984 $ 5,747,865
Accounts payable 3,712,060 3,827,338
Accrued expenses 4,465,388 3,597,104
Customer deposits 1,130,483 1,145,001
Accrued wages and payroll taxes 5,313,447 8,037,805
Deferred revenue 309,801 150,418
------------- -------------
Total current liabilities 25,242,163 22,505,531
------------- -------------
Long-term debt 29,286,054 23,237,321
Deferred income taxes 3,405,833 3,405,833
Other liabilities and accrued dividends 2,236,007 2,210,445
Mandatorily redeemable preferred stock, class C,
300 shares authorized, liquidation preference
of $500 per share 310,588 303,753
Mandatorily redeemable preferred stock, class F,
100,000 shares authorized, liquidation
preference of $500 per share
SHAREHOLDERS' EQUITY
Common stock, $.01 par value; 25,000,000 shares
authorized, 15,778,996 and 15,670,100 shares
issued and 15,645,501 and 15,536,605 shares
outstanding in 1998 and 1997, respectively 157,791 156,702
Additional paid-in capital 103,496,362 102,585,837
Retained earnings 5,928,176 4,232,750
------------- -------------
109,582,329 106,975,289
Treasury stock - (133,495 shares) (655,562) (655,562)
------------- -------------
108,926,767 106,319,727
------------- -------------
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY $169,407,412 $157,982,610
============= =============
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
3
<PAGE>
HANGER ORTHOPEDIC GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED March 31, 1998 and 1997
(unaudited)
<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
Net Sales $ 40,750,018 $ 30,949,614
Cost of products and services sold 21,303,131 16,229,929
------------- -------------
Gross profit 19,446,887 14,719,685
Selling, general & administrative 14,729,001 10,924,635
Depreciation and amortization 709,022 749,305
Amortization of excess cost over net assets acquired 550,961 409,512
------------- -------------
Income from operations 3,457,903 2,636,233
Other expense:
Interest expense, net (614,822) (1,527,269)
Other 30,345 (43,749)
------------- -------------
Income from operations before income taxes 2,873,426 1,065,215
Provision for income taxes 1,178,000 447,300
------------- -------------
Net income $ 1,695,426 $ 617,915
============= =============
BASIC PER COMMON SHARE DATA:
Net income $ .11 $ .07
============= =============
Shares used to compute basic per common share
amounts 15,576,030 9,358,529
============= =============
DILUTED PER COMMON SHARE DATA:
Net income $ .10 $ .06
============= =============
Shares used to compute diluted per common share
amounts 17,081,983 9,940,659
============= =============
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
4
<PAGE>
HANGER ORTHOPEDIC GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED March 31, 1998 and 1997
(unaudited)
<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income $ 1,695,426 $ 617,915
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Provision for bad debt 1,702,241 999,208
Depreciation and amortization 709,022 749,305
Amortization of excess cost over net
assets acquired 550,961 409,512
Amortization of Debt Discount 318,515
Changes in assets and liabilities, net
of effect from acquired companies:
Accounts receivable (272,575) (1,145,684)
Inventory 236,234 274,166
Prepaid and other assets 362,852 (1,161,495)
Other assets (203,723) (49,638)
Accounts payable (624,949) (1,314,988)
Accrued expenses 848,880 1,407,612
Accrued wages and payroll taxes (3,221,776) (3,433,979)
Customer deposits (14,294) 127,954
Deferred revenue (38,507) (20,486)
Other liabilities 25,562 72,577
------------- -------------
Total adjustments (2,902,296) (2,767,421)
------------- -------------
Net cash provided by (used in) operating activities 1,755,354 (2,149,506)
------------- -------------
Cash flows from investing activities:
Purchase of fixed assets, net (605,905) (495,970)
Acquisition, net of cash (10,713,583) (2,301,618)
Purchase of patents (8,140) (40,009)
Purchase of non-compete agreements (58,286) (50,000)
------------- -------------
Net cash used in investing activities (11,385,914) (2,887,597)
------------- -------------
</TABLE>
Continued
The accompanying notes are an integral part of the consolidated financial
statements.
5
<PAGE>
HANGER ORTHOPEDIC GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED March 31, 1998 and 1997
(unaudited)
<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
Cash flows from financing activities:
Net borrowings under revolving credit facility $ 4,000,000 $ 500,000
Proceeds from long-term debt 5,000,000 5,500,000
Repayment of long-term debt (1,192,552) (900,678)
Proceeds from the sale of common stock 918,449 85,400
------------- -------------
Net cash provided by financing activities 8,725,897 5,184,722
------------- -------------
Net change in cash and cash equivalents for the period (904,663) 147,619
Cash and cash equivalents at beginning of period 6,557,409 6,572,402
------------- -------------
Cash and cash equivalents at end of period $ 5,652,746 $ 6,720,021
============= =============
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest $ 483,646 $ 641,926
============= =============
Taxes $ 325,400 $ 99,240
============= =============
Non-cash financing and investing activities:
Issuance of notes in connection with acquisitions $ 2,755,000 $ 250,000
============= =============
Dividends declared - preferred stock $ 6,835 $ 6,295
============= =============
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
6
<PAGE>
NOTE A -- BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared in
accordance with Rule 10-01 of Regulation S-X. 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 a normal recurring nature, considered necessary for
a fair presentation have been included.
These financial statements should be read in conjunction with the
financial statements of Hanger Orthopedic Group, Inc. (the "Company"), as of
December 31, 1997 and notes thereto included in the Annual Report on Form 10-K
for the year December 31, 1997, filed by the Company with the Securities and
Exchange Commission.
NOTE B - NEW ACCOUNTING STANDARDS
The Company adopted Statement of Financial Accounting Standards (SFAS)
128, "Earnings per Share," effective January 1, 1997. As a result, earnings
per share for the first quarter ended March 31, 1997 have been restated to
conform to the provisions of this statement. In addition, the Company adopted
SFAS 130, "Reporting Comprehensive Income, " effective January 1, 1998. Total
comprehensive income and net income are identical for the period ended March
31, 1998.
The Company will adopt the provisions of SFAS 131, "Disclosures about
Segments of an Enterprise and Related Information" effective with the
financial statements for the year ended December 31, 1998. SFAS 131
establishes standards for the way that public business enterprises report
information about operating segments in annual financial statements and
requires that those enterprises report selected information about operating
segments in interim financial reports issued to shareholders. It also
establishes standards for related disclosures about products and services,
geographic areas, and major customers. Financial statement disclosures for
prior periods are required to be restated. The Company is in the process of
evaluating the disclosure requirements. The adoption of SFAS 131 will not have
a material impact on the Company's consolidated results of operations,
financial position or cash flows.
7
<PAGE>
NOTE C -- INVENTORY
Inventories at March 31, 1998 and December 31, 1997 were comprised of
the following:
<TABLE>
<CAPTION>
March 31, 1998 December 31, 1997
------------- -----------------
(unaudited)
<S> <C> <C>
Raw materials $ 7,858,656 $ 7,685,134
Work-in-process 1,467,133 1,437,946
Finished goods 8,307,762 8,322,396
------------ ------------
$17,633,551 $17,445,476
============ ============
</TABLE>
NOTE D - ACQUISITIONS
During the first three months ended March 31, 1998, the Company acquired
three orthotic and prosthetic companies. The aggregate purchase price was
$13,230,000, comprised of $10,475,000 in cash and $2,755,000 in promissory
notes.
NOTE E - NET INCOME PER COMMON SHARE
The following is a reconciliation of the numerators and denominators of
the basic and diluted income per common share amounts for the three months
ended March 31, 1998 and 1997.
<TABLE>
<CAPTION>
Three Months Ended March 31,
1998 1997
---- ----
<S> <C> <C>
Net income $ 617,915 $ 1,695,426
Less preferred stock dividends declared (6,295) (6,835)
------------ ------------
Income available to common stockholders $ 611,620 $ 1,688,591
============ ============
Average shares of common stock
outstanding used to compute basic per
common share amounts 15,576,030 9,358,529
Effect of dilutive options 1,049,473 193,849
Effect of dilutive warrants 456,480 388,281
Shares used to compute dilutive per ------------ ------------
common share amounts 17,081,983 9,940,659
============ ============
Basic income per common share $ .11 $ .07
Diluted income per common share $ .10 $ .06
</TABLE>
Options to purchase 2,389 shares of common stock were outstanding at
March 31, 1998 but were not included in the computation of diluted income per
common share because the options' exercise price was greater than the average
market price of the common shares.
8
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
The following table sets forth for the periods indicated certain items
of the Company's statements of operations and their percentage of the
Company's net sales:
<TABLE>
<CAPTION>
For the Three
Months Ended
March 31,
1998 1997
---- ----
<S> <C> <C>
Net sales 100.0% 100.0%
Cost of products and services sold 52.3 52.4
Gross profit 47.7 47.6
Selling, general & administrative
expenses 36.1 35.3
Depreciation and amortization 1.7 2.4
Amortization of excess cost over net
assets acquired 1.4 1.3
Income from operations 8.5 8.5
Interest expense 1.5 4.9
Provision for income taxes 2.9 1.4
Net income 4.2 2.0
</TABLE>
FOR THE THREE MONTHS ENDED MARCH 31, 1998 COMPARED TO THE THREE MONTHS ENDED
MARCH 31, 1997
NET SALES
Net sales for the three months ended March 31, 1998, amounted to
approximately $40,750,000, an increase of approximately $9,800,000, or 31.7%,
over net sales of approximately $30,950,000 for the three months ended March
31, 1997. Contributing to the increase were (i) an 13.8% increase in sales by
those Hanger patient-care centers operating during both quarters ("same store
sales") and (ii) sales by patient-care centers acquired by Hanger subsequent
to March 31, 1997.
GROSS PROFIT
Gross profit during the three months ended March 31, 1998 amounted to
approximately $19,447,000, an increase of approximately $4,727,000, or 32.1%,
over gross profit of approximately $14,720,000 for the three months ended
March 31, 1997. Gross profit as a percent of net sales for the quarters ended
March 31, 1998 and 1997 remained approximately the same at 47.7% and 47.6,
respectively.
9
<PAGE>
SELLING, GENERAL AND ADMINISTRATIVE
Selling, general and administrative expenses in the three months ended
March 31, 1998 increased by approximately $3,804,000, or 34.8%, compared to
the three months ended March 31, 1997. The increase in selling, general and
administrative expenses was primarily a result of the acquisitions subsequent
to March 31, 1997. Selling, general and administrative expenses as a percent
of net sales in the first three months of 1998 increased to 36.1% from 35.3%
for the same period a year ago.
INCOME FROM OPERATIONS
Principally as a result of the above, income from operations in the
quarter ended March 31, 1998 amounted to approximately $3,458,000, an increase
of $822,000, or 31.2%, over the prior year's comparable quarter. Income from
operations as a percent of net sales for the quarters ended March 31, 1998 and
1997 remained the same at 8.5%.
INTEREST EXPENSE
Interest expense in the first quarter of 1998 amounted to approximately
$615,000, a decrease of approximately $912,000, or 59.7%, from the
approximately $1,527,000 of interest expense incurred in the first quarter of
1997. Interest expense as a percent of net sales decreased to 1.5% in the
first quarter of 1998 from 4.9% for the same period a year ago. The decrease
in interest expense was primarily attributable to the repayment of $58.0
million of indebtedness during July and August of 1997 from the proceeds of a
underwritten public offering in which the Company sold 5,750,000 shares of
common stock at $11.00 per share.
INCOME TAXES
The Company's effective tax rate was 41% in the first quarter of 1998
versus 42% in 1997. The provision for income taxes in the first quarter of
1998 amounted to approximately $1,178,000 compared to approximately $447,000
in the first quarter of 1997.
NET INCOME
As a result of the above, the Company recorded net income of
approximately $1,695,000, or $.10 per diluted common share on approximately
17,082,000 shares outstanding for the quarter ended March 31, 1998, compared
to net income of approximately $618,000, or $.06 per diluted common share on
approximately 9,941,000 shares outstanding in the quarter ended March 31,
1997.
10
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
The Company's consolidated working capital at March 31, 1998 was
approximately $35,856,000. Cash and cash equivalents available at that date
was approximately $5,653,000. The Company's cash resources were satisfactory
to meet its obligations for the three months ended March 31, 1998.
The Company has a credit agreement (the "Credit Agreement") with a
syndicate of banks, (collectively, the "Banks") that provides for (i) an
A-Term Loan of up to $29,000,000 (the "A-Term Loan"); (ii) a B-Term Loan of up
to $28,000,000 (the "B-Term Loan"); (iii) an acquisition loan of up to
$25,000,000 (the "Acquisition Loan"); and (iv) a revolving loan of up to
$8,000,000 (the "Revolving Loan").
The Company's total long-term debt at March 31, 1998, including a
current portion of approximately $10,311,000, was approximately $39,597,000.
Such indebtedness included: (i) $16,888,000 borrowed under the A-Term Loan and
B-Term Loan; (ii) $5,000,000 borrowed under the Acquisition Loan; (iii)
$4,000,000 borrowed under the Revolving Loan; and (iv) a total of $13,709,000
of other indebtedness.
The Credit Agreement with the Banks is collateralized by substantially
all the assets of the Company, restricts the payment of dividends, and
contains certain affirmative and negative covenants customary in an agreement
of this nature.
The A-Term Loan, the Acquisition Loan and the Revolving Loan bear base
interest at the Company's option of either LIBOR plus 2.50% or the Bank's
prime rate plus 1.50%. The base interest rate is then reduced by .25% to 1.25%
depending upon the ratio of the Company's total indebtedness to annual
earnings before interest, taxes, depreciation and amortization. The
outstanding amount of the A-Term Loan at March 31, 1998 was $8,296,000, which
is being amortized in quarterly amounts and will mature on December 31, 2001.
The B-Term Loan bears base interest at the Company's option of either
LIBOR plus 2.75% or the Bank's prime rate plus 1.75%. The base interest rate
is then reduced by .25% to 1.25% depending upon the ratio of the Company's
total indebtedness to annual earnings before interest, taxes, depreciation and
amortization. The outstanding amount of the B-Term Loan at March 31, 1998 was
$8,592,000, which is being amortized in quarterly amounts and will mature on
December 31, 2003.
All of any portion of outstanding loans under the Credit Agreement may
be repaid at any time and commitments may be terminated in whole or in part at
the option of the Company without premium or penalty, except that LIBOR-based
loans may only be repaid at the end of the applicable interest period.
Mandatory prepayments will be required in the event of certain sales of
assets, debt or equity financings and under certain other circumstances.
11
<PAGE>
During the first three months of 1998, the Company acquired three
orthotic and prosthetic companies. The aggregate purchase price was
$13,230,000, comprised of $10,475,000 in cash and $2,755,000 in promissory
notes.
The Company plans to finance future acquisitions through internally
generated funds or borrowings under the Acquisition Loan, the issuance of
notes or shares of common stock of the Company, or through a combination
thereof.
The Company is actively engaged in ongoing discussions with prospective
acquisition candidates. The Company plans to continue to expand its operations
aggressively through acquisitions.
OTHER
Inflation has not had a significant effect on the Company's operations,
as increased costs to the Company generally have been offset by increased
prices of products and services sold.
The Company will adopt the provisions of SFAS 131, "Disclosures about
Segments of an Enterprise and Related Information" effective with the
financial statements for the year ended December 31, 1998. SFAS 131
establishes standards for the way that public business enterprises report
information about operating segments in annual financial statements and
requires that those enterprises report selected information about operating
segments in interim financial reports issued to shareholders. It also
establishes standards for related disclosures about products and services,
geographic areas, and major customers. Financial statement disclosures for
prior periods are required to be restated. The Company is in the process of
evaluating the disclosure requirements. The adoption of SFAS 131 will not have
a material impact on the Company's consolidated results of operations,
financial position or cash flows.
The Company primarily provides services and customized devices
throughout the United States and is reimbursed, in large part, by the
patients' third-party insurers or governmentally funded health insurance
programs. The ability of the Company's debtors to meet their obligations is
principally dependent upon the financial stability of the insurers of the
Company's patients and future legislation and regulatory actions.
The Company's management believes that its major financial and
manufacturing applications are year 2000 compliant. The company expects no
material impact on its internal information systems from the year 2000 issue.
The Company has recently initiated communications with its significant
suppliers to determine the extent that the Company may be impacted by third
parties' failure to address the issue. The Company will continue to monitor
and evaluate the impact of the year 2000 on its operations.
This report contains forward-looking statements setting forth the
company's beliefs or expectations relating to future revenues and
profitability. Actual results may differ materially from projected or expected
12
<PAGE>
results due to changes in the demand for the company's O&P services and
products, uncertainties relating to the results of operations or recently
acquired and newly acquired O&P patient care practices, the Company's ability
to attract and retain qualified O&P practitioners, governmental policies
affecting O&P operations and other risks and uncertainties affecting the
health-care industry generally. Readers are cautioned not to put undue
reliance on forward-looking statements. The company disclaims any intent or
obligation to update publicly these forward-looking statements, whether as a
result of new information, future events or otherwise.
13
<PAGE>
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS -
Exhibit 27 - Financial Data Schedule
(b) REPORTS ON FORM 8-K
None.
14
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
HANGER ORTHOPEDIC GROUP, INC.
Date: May 11, 1998 /s/IVAN R. SABEL
------------ ------------------
Ivan R. Sabel, CPO
Chief Executive Officer
Date: May 11, 1998 /s/RICHARD A. STEIN
------------ -------------------
Richard A. Stein
Vice President - Finance
Principal Financial and
Accounting Officer
15
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 5,652,746
<SECURITIES> 0
<RECEIVABLES> 31,655,712
<ALLOWANCES> 6,266,000
<INVENTORY> 17,633,551
<CURRENT-ASSETS> 61,097,813
<PP&E> 18,731,605
<DEPRECIATION> 8,134,225
<TOTAL-ASSETS> 169,407,412
<CURRENT-LIABILITIES> 25,242,163
<BONDS> 29,286,054
310,588
0
<COMMON> 157,791
<OTHER-SE> 108,768,976
<TOTAL-LIABILITY-AND-EQUITY> 169,407,412
<SALES> 40,750,018
<TOTAL-REVENUES> 40,750,018
<CGS> 21,303,131
<TOTAL-COSTS> 21,303,131
<OTHER-EXPENSES> 15,988,984
<LOSS-PROVISION> 1,702,241
<INTEREST-EXPENSE> 614,822
<INCOME-PRETAX> 2,873,426
<INCOME-TAX> 1,178,000
<INCOME-CONTINUING> 1,695,426
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,695,426
<EPS-PRIMARY> 0.11
<EPS-DILUTED> 0.10
</TABLE>
