<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[ X ] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended September 30, 1998.
Commission file number 0-11284
Z-Axis Corporation
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(Exact name of registrant as specified in its charter)
Colorado 84-0910490
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(State or other jurisdiction of incorporation (I.R.S. Employer
of organization) Identification No.)
7395 East Orchard Road, Suite A-100
Greenwood, Colorado 80111-2509
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (303) 713-0200
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 [ ]
The number of common shares outstanding as of September 30, 1998: 3,805,000
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CONTENTS
<TABLE>
<S> <C> <C>
PART I FINANCIAL STATEMENTS.
Item 1. Condensed Balance Sheets, March 31 and
September 30, 1998. 3
Condensed Statements of Operations, three and
six month periods ended September 30, 1998
and 1997. 4
Condensed Statements of Cash Flows, six month periods
ended September 30, 1998 and 1997. 4
Notes to Condensed Financial Statements. 5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations. 6-10
PART II OTHER INFORMATION. 10
Item 1. Legal proceedings. 10
Item 2. Changes in securities. 10
Item 3. Defaults upon senior securities. 10
Item 4. Submission of matters to a vote of security holders. 10
Item 5. Other information. 10
Item 6. Exhibits and reports on Form 8-K. 10
SIGNATURES 11
</TABLE>
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PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
September 30, March 31,
1998 1998
(Unaudited)
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<S> <C> <C>
ASSETS
Current assets:
Cash $ 19,918 $ 139,254
Trade accounts receivable 1,043,205 1,121,753
Other current assets 45,079 46,956
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Total current assets 1,108,202 1,307,963
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Property and equipment, at cost 1,431,815 1,450,837
Accumulated depreciation (947,343) (977,566)
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Net property and equipment 484,472 473,271
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Deferred income taxes 96,890 132,575
Other assets 15,948 13,819
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TOTAL ASSETS $1,705,512 $1,927,628
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Line of Credit $ 60,000 $ 200,000
Accounts payable 56,794 113,829
Accrued expenses 174,745 278,168
Customer deposits 13,000 27,000
Current portion of long-term obligations 95,340 72,651
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Total current liabilities 399,879 691,648
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Long-term obligations 109,239 114,585
Stockholders' equity:
Common stock 3,805 3,785
Additional paid in capital 1,444,191 1,441,711
Retained earnings (deficit) (251,602) (324,101)
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Total stockholders' equity 1,196,394 1,121,395
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $1,705,512 $1,927,628
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</TABLE>
See notes to condensed financial statements.
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CONDENSED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Three months ended Six months ended
September 30, September 30,
-----------------------------------------------------
1998 1997 1998 1997
(Unaudited) (Unaudited)
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<S> <C> <C> <C> <C>
Net sales $ 939,870 $ 788,538 $2,002,444 $1,549,133
Operating expenses:
Production 398,057 351,146 813,052 681,458
Research and development 72,533 40,680 116,450 68,848
General and administrative 183,949 157,445 379,257 311,273
Marketing 201,710 181,989 444,456 357,886
Depreciation 65,570 42,635 124,518 82,662
Amortization of prior year's software
development costs - 15,498 - 30,429
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Total operating expenses 921,819 789,393 1,877,733 1,532,556
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Income (loss) from operations 18,051 (855) 124,711 16,577
Other (expense) income, net: (8,944) (6,746) (16,112) (15,283)
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Income (loss) before income taxes 9,107 (7,601) 108,599 1,294
Income tax (expense) benefit (3,400) 2,300 (36,100) (700)
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NET INCOME (LOSS) $ 5,707 $ (5,301) $ 72,499 $ 594
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INCOME (LOSS) PER COMMON SHARE OF STOCK:
BASIC $ 0.002 $ (0.001) $ 0.019 $ 0.000
DILUTED $ 0.001 $ (0.001) $ 0.019 $ 0.000
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Weighted average number of common shares
outstanding during the period
Basic 3,795,055 3,765,984 3,795,055 3,765,984
Diluted 3,855,055 3,809,317 3,855,055 3,809,317
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</TABLE>
CONDENSED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Six months ended
September 30,
----------------------
1998 1997
(Unaudited)
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<S> <C> <C>
CASH FLOWS FROM OPERATIONS:
Net cash provided by operations $ 139,834 $ 290,829
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CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (78,446) (63,070)
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Net cash used in investing activities (78,446) (63,070)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings on line of credit 465,000 395,000
Payments on line of credit (605,000) (550,000)
Debt and capital lease payments (43,224) (73,997)
Proceeds from exercise of stock options 2,500 2,500
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Net cash used in financing activities (180,724) (226,497)
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Net (decrease) increase in cash (119,336) 1,262
Cash, beginning of period 139,254 24,692
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CASH, END OF PERIOD $ 19,918 $ 25,954
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</TABLE>
See notes to condensed financial statements.
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NOTES TO CONDENSED FINANCIAL STATEMENTS.
NOTE 1. INTERIM FINANCIAL INFORMATION
The accompanying Condensed Balance Sheets at September 30, 1998 and March 31,
1998, Condensed Statements of Operations for the three and six month periods
ended September 30, 1998 and 1997 and Cash Flows for the six month periods
ended September 30, 1998 and 1997, should be read in conjunction with the
Company's financial statements and notes for the years ended March 31, 1998,
1997 and 1996. These condensed financial statements contain all adjustments
that management considers necessary for fair presentation. Results for
interim periods are not necessarily indicative of results for a full year.
NOTE 2. TRADE ACCOUNTS RECEIVABLE
Trade accounts receivable consists of the following:
<TABLE>
<CAPTION>
September 30, March 31,
1998 1998
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<S> <C> <C>
Trade accounts receivable $1,081,307 $1,131,756
Less allowance for bad debt 38,102 10,003
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Trade accounts receivable, net $1,043,205 $1,121,753
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</TABLE>
Approximately 34% of the Company's trade receivables were due from two
different customers at September 30, 1998. Approximately 35% of the
Company's trade accounts receivable was due from a different customer at
March 31, 1998.
NOTE 3. DEBT
Long-term debt consists of the following:
<TABLE>
<CAPTION>
September 30, March 31,
1998 1998
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<S> <C> <C>
Capital lease obligations $204,579 $187,236
Less current portion 95,340 72,651
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Long term capital lease obligations $109,239 $114,585
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</TABLE>
The Company leases certain production and office equipment under the terms of
capital leases. The capitalized value of the leased equipment was $287,324
at September 30, 1998 and $226,757 at March 31, 1998. The related
accumulated depreciation was $101,739 at September 30, 1998 and $48,824 at
March 31, 1998. These amounts are combined with similar equipment in the
accompanying condensed financial statements. Lessors have a security
interest in all equipment classified as a capital lease.
The Company maintains a line of credit in the amount of $250,000 with a bank,
which matured August 1998. The bank granted an extension of the maturity
date to October 31, 1998. If drawn upon, the indebtedness bears interest at
the bank's prime rate plus two percent per annum (10.0% at September 30, 1998
and 10.5% at March 31, 1998). The Company's accounts receivable secure any
amounts drawn under the line of credit. As of September 30, 1998 and March
31, 1998, the balance outstanding was $60,000 and $200,000, respectively.
NOTE 4. EARNINGS PER SHARE
Basic earnings per share includes no dilution and is computed by dividing
income available to common shareholders by the weighted average number of
common shares outstanding for the period. Diluted earnings per share reflect
the potential dilution of securities that could share in the earnings of the
entity. For purposes of computing diluted earnings per share, dilutive
securities represented 60,000 and 43,333 common stock equivalents at
September 30, 1998 and 1997, respectively.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The accompanying Condensed Balance Sheets at March 31 and September 30, 1998
and Condensed Statements of Operations and Cash Flows for the three month
periods ended September 30, 1998 and 1997 should be read in conjunction with
the Company's financial statements and notes for the years ended March 31,
1998, 1997 and 1996. These condensed financial statements contain all
adjustments that management considers necessary for fair presentation.
Results for interim periods are not necessarily indicative of results for a
full year. Except where otherwise noted, references to periods are to
periods of fiscal years ended March 31 of the year stated.
FORWARD LOOKING STATEMENTS
In addition to the historical information, this 10-Q and Annual Report
incorporated by reference herein, contain forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995 and the
Company desires to take advantage of the "Safe Harbor" provisions thereof.
Therefore, the Company is including this statement for the express purpose of
availing itself of the protections of such Safe Harbor with respect to all of
such forward-looking statements. The forward-looking statements in this
report reflect the Company's current views with respect to future events and
financial uncertainties, including those discussed herein, that could cause
actual results to differ materially from historical results or those
anticipated. In this report, the words "anticipates", "believes", "expects",
"intends", "future" and similar expressions identify forward-looking
statements. Readers are cautioned not to place undue reliance on the
forward-looking statements contained herein, which speak only as of the date
hereof. The Company undertakes no obligation to publicly revise these
forward-looking statements to reflect events or circumstances that may arise
after the date of this report.
RESULTS OF OPERATIONS
NET SALES
Net sales for the three and six-month periods ended September 30, 1998 were
$939,870 and $2,002,444, respectively. Net sales for the corresponding
periods ended September 30, 1997 were $788,538 and $1,549,133, respectively.
The increase in sales for the three and six month periods ended September 30,
1998 as compared to the corresponding periods ended September 30, 1997 were
19% and 29% respectively. The increase in revenues during the first and
second quarters of fiscal 1998 was primarily due to an increase in core
business revenues of 37%. Core business revenues are primarily earned from
providing animation and video presentation services to the litigation support
market. Litigation support customers include law firms, corporations,
insurance companies and certain government agencies. The Company also earns
revenues from the rental and service of an advanced electronic courtroom
presentation system consisting of proprietary software in combination with
off-the-shelf hardware. The system has been named "VuPoint" and the Company
has received trademark protection of the name. The Company has applied for
patent protection for the software. Revenues from the rental of the VuPoint
system and corresponding service revenues earned during the three and six
month periods ended September 30, 1998 were $0 and $19,385 as compared to
$49,993 and $99,137 for the same periods during fiscal 1998. The decrease
in revenues from VuPoint rental and service was due to fewer trials utilizing
the system during the first and second quarters of fiscal 1999 as compared to
the same periods during fiscal 1998. Management anticipates that sales
volume, including VuPoint rental and service revenue will increase during the
third quarter of fiscal 1999 as a result of increased client trial activity.
OPERATING INCOME AND EXPENSES
Income from operations was $18,051 and $124,711 for the three and six-month
periods ended September 30, 1998. Income (loss) from operations was $(855)
and $16,577 for the corresponding three and six month period ended September
30, 1997. The increase in operating income during the three and six month
periods ended September 30, 1998 as compared to the same periods of fiscal
1997 was due to the 19% and 29% increase in revenues noted above.
Corresponding operating expenses increased by 17% and 23% for the three and
six month periods ended September 30, 1998 as compared to the three and six
month periods ended September 30, 1997.
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PRODUCTION EXPENSES
Production expenses were $398,057 and $813,052 for the three and six-month
periods ended September 30, 1998 as compared to $351,146 and 681,458 for the
three and six-month periods ended September 30, 1997. These results
represent an increase of 13% and 19% for the three and six-month periods
ended September 30, 1998 as compared to the same periods of the prior fiscal
year. The increase is consistent with the increase in core business revenues
and was primarily due to the higher expenditures in labor needed to produce
the resulting revenue levels. Production costs for direct contract labor and
other billable expenses will vary directly with sales levels.
RESEARCH AND DEVELOPMENT EXPENSES
Research and development expenses were $72,533 and $116,450 for the three and
six-month periods ended September 30, 1998 as compared to $40,680 and $68,848
for the three and six-month periods ended September 30, 1997. These results
represent an increase of 79% and 69% for the three and six-month periods
ended September 30, 1998 as compared to the same periods of the prior fiscal
year. The increase is due to addition of a Director of Software Development
during the second quarter of the current fiscal year. This management level
position was added in order to provide a technical level of management
support over the Company's software development activities. Research and
development costs are incurred as the Company continues to refine and enhance
the VuPoint system. Management considers VuPoint to have significant
long-term revenue potential and will continue further developments in the
foreseeable future. Research and development expenses are expected to
continue at their current level through out the remaining quarters of the
current fiscal year.
GENERAL AND ADMINISTRATIVE EXPENSES
General and administrative expenses were $183,949 and $379,257 for the three
and six-month periods ended September 30, 1998 as compared to $157,445 and
$311,273 for the three and six-month periods ended September 30, 1997. These
results represent an increase of 17% and 22% for the three and six-month
periods ended September 30, 1998 as compared to the same periods of the prior
fiscal year. The increase is due to an increase in the cost of office space
rental, additional professional fees for management consulting activities and
an increase in the reserves booked for accounts receivable.
MARKETING EXPENSES
Marketing expenses were $201,710 and $444,456 for the three and six-month
periods ended September 30, 1998 as compared to $181,989 and $357,886 for the
three and six-month periods ended September 30, 1997. These results
represent an increase of 11% and 24% for the three and six-month periods
ended September 30, 1998 as compared to the same periods of the prior fiscal
year. The additional expense is due to an increase in salespersons
commissions and is directly proportional to the 19% and 29% increase in
revenues for the three and six month periods ended September 30, 1998. Sales
commissions are calculated as a percentage of revenues.
DEPRECIATION EXPENSE
Depreciation expenses were $65,570 and $124,518 for the three and six-month
periods ended September 30, 1998 as compared to $42,635 and $82,662 for the
three and six-month periods ended September 30, 1997. The increase is due
to additions to property and equipment in the amount of $339,910 during the
fiscal year ended March 31, 1998 as well as additions to property and
equipment in the amount of $141,083 during the six month period ended
September 30, 1998.
AMORTIZATION OF PRIOR YEARS' SOFTWARE DEVELOPMENT COSTS
The decrease in amortization costs was due to amortization of capitalized
software development costs related to VuPoint in the amount of $15,498 and
$30,429 for the three and six-month periods ended September 30, 1997. These
costs were fully amortized by fiscal year ended March 31, 1998; accordingly,
no amortization costs were recorded for the three and six-month periods ended
September 30, 1998.
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OTHER EXPENSE
Other expense was $8,944 and $16,112 for the three and six-month periods
ended September 30, 1998 as compared to $6,746 and $15,283 for the three and
six-month periods ended September 30, 1997. The increase of 33% for the
three months ended September 30, 1998 as compared to the same period ended
September 30, 1997 was due to loss on disposal of computer equipment. The
overall decrease of 5% in other expenses for the six month period ended
September 30, 1998 as compared to the same period ended September 30, 1997 is
due to lower interest costs as certain debt obligations were paid off during
the fiscal year ended March 31, 1998.
INCOME TAX EXPENSE
Income tax (expense)/benefit was $(3,400) and $(36,100) for the three and six
month periods ended September 30, 1998 as compared to $2,300 and $(700) for
the three and six month periods ended September 30, 1997. The increase in
income tax expense for the first two quarters of the current fiscal year is
the result of the increase in income from operations noted above.
The Company had a net deferred tax asset of $96,890 at September 30, 1998 as
compared to $132,575 at March 31, 1998. The decrease in the deferred tax
asset was the direct result of the corresponding increase in the Company's
income before taxes for the six months ended September 30, 1988. The Company
has established a valuation allowance of $14,000 at September 30, 1998 and
March 31, 1998 against the deferred tax asset as management believes that it
is more likely than not, that the deferred tax asset related to the tax
credits and a portion of the loss carryforwards may not be realized before
all carryforward expiration dates.
NET INCOME
Net income was $5,707 and $72,499 for the three and six month periods ended
September 30, 1998 as compared to $(5,301) and $594 for the three and six
month periods ended September 30, 1997. Basic earnings per share were $0.002
and $0.019 for the three month periods ended September 30, 1998 as compared
to $(0.001) and $0.000 for the three month periods ended September 30, 1997.
Diluted earnings per share were $0.001 and $0.019 for the three and six month
periods ended September 30, 1998 as compared to $(0.001) and $0.000 for the
three and six month periods ended September 30, 1997. The increase in net
income, basic earnings per share and diluted earnings per share for the
current fiscal year is due to the higher level of operating income than in
the prior fiscal year for the same periods.
LIQUIDITY AND CAPITAL RESOURCES
At September 30, 1998, the Company's working capital position was $708,323,
an increase of $18,166 during the current quarter and an increase of $92,008
over the position at March 31, 1998. The year-to-date increase is attributed
to positive cash flows from operations. Cash flow from operations was
$139,834 for the six months ended September 30, 1998, as compared to $174,588
for the three months ended June 30, 1998 and $290,829 for the six months
ended September 30, 1997. The majority of the Company's cash flow from
operations during the first and second quarters of fiscal 1999 was used to
paydown the line of credit, purchase new equipment and make normal payments
on capital lease obligations. It is management's opinion that through cash
management and other measures, working capital for the foreseeable future
will be sufficient to meet operating requirements.
Capital additions were $33,455 and $141,083 during the three and six-month
periods ended September 30, 1998; $60,567 of these additions were financed
through capital lease arrangements.
Debt and capital lease payments were $180,724 for the six-month period ended
September 30, 1998. Debt and capital lease payments are reported at net of
borrowings. The proceeds from borrowing during these periods were used for
financing normal operations and acquisition of new production equipment.
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YEAR 2000 COMPLIANCE
GENERAL
Many older computer systems, software products and embedded chips that are in
use today were programmed to accept two digit entries in the date code field
(e.g. "98" for "1998"). These systems, software and embedded chips need to
be modified or upgraded to distinguish twenty-first century dates (e.g.
"2002") from twentieth century dates (e.g. "1902"), in order to avoid the
possibility of erroneous results or systems failures.
The Company's management has launched an effort to address any potential Year
2000 compliance issues relating to its 1) internal operating systems, 2)
vendors, facilities and other third parties and 3) software products that it
licenses to customers. Management believes that adequate resources have been
allocated to this effort and expects that any Year 2000 considerations will
not materially impact the Company's internal operations. Year 2000
considerations may have an affect on some of the Company's customers and
suppliers, and thus indirectly affect the Company.
CORPORATE INFRASTRUCTURE STATE OF READINESS
Management is addressing the Year 2000 issues with respect to the software
product ("VuPoint") which it intends to license to existing and potential
customers. VuPoint currently is Year 2000 compliant and any modifications or
rewrites of the software code will be tested to be assured that they are also
Year 2000 compliant. Management is also evaluating the Company's internal
critical business systems that have date sensitivity. Any internal critical
business systems that are not Year 2000 compliant will be replaced or
modified before their potential "failure date". Management will be
communicating with major vendors, suppliers, landlords and other third
parties regarding Year 2000 compliance of embedded processors in the
Company's computers and facilities, software and other information
technology, and other products and services which the Company obtains from
third parties.
COSTS
The Company has not incurred any significant costs associated with Year 2000
compliance evaluations or modifications. Management has not estimated the
possible future cost of replacing or modifying critical business systems as
the extent to which any of these systems might be non-compliant has not been
completely determined. However, based on the evaluations completed to date,
none of the Company's critical business systems will require significant
modification or replacement.
RISKS
The VuPoint software that the Company intends to offer to its customers under
licensing arrangements, might contain undetected errors or failures when
first introduced or when new versions are released, even though the product
is intended to be Year 2000 compliant. While the Company is assessing,
correcting and testing VuPoint in regard to Year 2000 compliance, there can
be no assurances that the product or future releases of the product will not
contain undetected date sensitivity errors. If the Company is unable or is
delayed in making the necessary date code changes to VuPoint or future
releases of the product, there would not be a material adverse effect upon
the Company's business, operating results, financial condition and cash flows.
There can be no assurances that the systems of other parties upon which the
Company relies will be made Year 2000 compliant on a timely basis. The
Company utilizes third party vendor equipment, telecommunications products,
and software products. Management intends to take steps to address the
impact, if any, of the Year 2000 issue surrounding such third party products.
However, third parties' Year 2000 compliance efforts are not within the
control of the Company. The failure of any critical technology components to
operate properly may have a material impact on business operations or require
the Company to incur unanticipated expenses to remedy any problems.
The most substantial operational risks are those that are beyond the
Company's control, including the progress of government agencies and
compliance efforts of utility companies. It is possible that interruptions
in vital services due to Year 2000 non-compliance will interfere with normal
business operations. Such failures could materially and adversely affect the
Company's results of operations.
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Forward-looking statements contained in this Year 2000 Compliance disclosure
should be read in conjunction with the Company's disclosure under the heading
of Forward Looking Statements for the purposes of the Safe Harbor provisions
of the Private Securities Litigation Act of 1995.
PART II OTHER INFORMATION.
ITEM 1. LEGAL PROCEEDINGS.
Not applicable.
ITEM 2. CHANGES IN SECURITIES.
Not applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
The Annual Meeting of Shareholders of the Corporation was held at the
corporate offices on September 29, 1997. The following individuals were
elected to serve as directors of the corporation:
<TABLE>
<CAPTION>
Name Shares Voted For Shares Voted "Withhold Authority"
---------------------------------------------------------------------------------
<S> <C> <C>
Steven H. Cohen 1,715,236 8,700
Alan Treibitz 1,715,736 8,200
Marilyn T. Heller 1,715,236 8,700
Marvin A. Davis 1,715,736 8,200
James E. Pacotti, Jr. 1,715,736 8,200
</TABLE>
ITEM 5. OTHER INFORMATION.
Not applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) No exhibits.
(b) No reports on Form 8-K have been filed during the quarter ended
September 30, 1998.
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<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
Z-AXIS CORPORATION
By: /s/ Alan Treibitz
-----------------
Alan Treibitz
President
Date: November 13, 1998
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this report has been signed below by the following persons on behalf
of the registrant and in the capacities and on the dates indicated.
<TABLE>
<S> <C> <C>
/s/ Steven H. Cohen Director, Chief Executive November 13, 1998
- --------------------- Officer
Steven H. Cohen
/s/ Alan Treibitz Director, President, Treasurer, November 13, 1998
- --------------------- Chief Financial Officer, Principal
Alan Treibitz Accounting Officer
</TABLE>
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<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAR-31-1999
<PERIOD-START> JUL-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 20
<SECURITIES> 0
<RECEIVABLES> 1,043
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,108
<PP&E> 1,432
<DEPRECIATION> (947)
<TOTAL-ASSETS> 1,705
<CURRENT-LIABILITIES> 400
<BONDS> 0
0
0
<COMMON> 4
<OTHER-SE> 1,196
<TOTAL-LIABILITY-AND-EQUITY> 1,705
<SALES> 940
<TOTAL-REVENUES> 940
<CGS> 0
<TOTAL-COSTS> 922
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 9
<INCOME-PRETAX> 9
<INCOME-TAX> 3
<INCOME-CONTINUING> 6
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
