SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 10-QSB
QUARTERLY REPORT UNDER SECTION 18
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended September 30, 1998 Commission File Number
0-12575
Arizona Instrument Corporation
(Exact name of registrant as specified in its charter)
Delaware 86-0410138
(State of Incorporation) (I.R.S. Employer identification number)
4114 East Wood Street, Phoenix Arizona 85040-1941
(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code: (602) 470-1414
Indicate by check mark whether the registrant (1) has filled all reports
required to be filed by Section 13 or 15(d) of the Securities and 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 [ ]
Transitional Small Business Disclosure Format (check one):
Yes [ ] No [X]
As of November 6, 1998, 6,862,523 shares of Common Stock ($0.01 par value) were
outstanding.
<PAGE>
ARIZONA INSTRUMENT CORPORATION
TABLE OF CONTENTS
PART 1. FINANCIAL INFORMATION
Item 1 Financial Statements
Consolidated Balance Sheets
September 30, 1998 and December 31, 1997
Consolidated Statements of Operations
Three and nine months ended September 30, 1998 and September 30, 1997
Consolidated Statements of Cash Flows
Nine months ended September 30, 1998 and September 30, 1997
Notes to Consolidated Financial Statements
Item 2 Management's Discussion and Analysis of
Financial Condition and Results of Operations
II. OTHER INFORMATION
Item 1 Legal Proceedings
Item 5 Other Information
Item 6 Exhibits and Reports on Form 8-K
<PAGE>
ARIZONA INSTRUMENT CORPORATION AND SUBSIDIARIES
-----------------------------------------------
CONSOLIDATED BALANCE SHEETS
---------------------------
<TABLE>
<CAPTION>
-------------------------------------------
September 30, 1998 December 31, 1997
-------------------------------------------
<S> <C> <C>
ASSETS
----------------------------
CURRENT ASSETS:
Cash and cash equivalents $ 1,482,034 $ 143,173
Receivables, net 3,060,952 3,990,192
Inventories 1,851,190 2,556,993
Prepaid expenses and other current assets 78,722 49,942
-------------------------------------------
Total current assets 6,472,898 6,740,300
PROPERTY, PLANT AND EQUIPMENT, net 888,817 975,180
GOODWILL, net of accumulated amortization 1,540,186 1,680,261
DEFERRED INCOME TAXES 1,162,970 1,431,237
OTHER ASSETS 641,218 764,738
-------------------------------------------
TOTAL ASSETS $ 10,706,090 $ 11,591,716
===========================================
LIABILITIES AND SHAREHOLDERS' EQUITY
- ----------------------------------------------------------
CURRENT LIABILITIES
Lines of credit $ 800,000 $ 1,066,000
Accounts payable 393,891 1,342,539
Current portion of long-term debt and
capital lease obligations 18,641 284,801
Other accrued expenses 1,662,148 1,489,976
-------------------------------------------
Total current liabilities 2,874,680 4,183,316
-------------------------------------------
LONG-TERM DEBT AND CAPITAL LEASE
OBLIGATIONS - less current portions 9,297 93,444
SHAREHOLDERS' EQUITY Common stock, .01 par value per share:
Authorized, 10,000,000 shares;
Issued, 6,819,582 and 6,774,696 shares 68,196 67,747
Preferred stock, $.01 par value per share:
Authorized, 1,000,000 shares
Additional paid-in capital 9,856,334 9,826,964
Deficit (1,867,635) (2,357,304)
-------------------------------------------
8,056,894 7,537,407
Less treasury stock, 98,496 shares at cost (234,782) (222,451)
-------------------------------------------
Total shareholders' equity 7,822,112 7,314,956
-------------------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 10,706,090 $ 11,591,716
===========================================
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
<PAGE>
ARIZONA INSTRUMENT CORPORATION AND SUBSIDIARIES
-----------------------------------------------
CONSOLIDATED STATEMENTS OF OPERATIONS
-------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
------------------------------ ------------------------------
Sept 30, 1998 Sept 30, 1997 Sept 30, 1998 Sept 30, 1997
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
NET SALES $ 3,120,784 $ 3,078,738 $ 10,534,479 $ 10,364,559
COST OF GOODS SOLD 1,213,579 1,858,148 4,541,041 5,257,138
------------- ------------- ------------- -------------
Gross margin 1,907,205 1,220,590 5,993,438 5,107,421
------------- ------------- ------------- -------------
EXPENSES
Marketing 731,187 995,716 2,369,221 2,806,071
General & administrative 489,164 1,037,252 1,558,956 1,972,651
Research & development 333,290 368,813 982,136 741,497
Amortization & depreciation 104,239 149,586 308,937 454,718
------------- ------------- ------------- -------------
Total Expenses 1,657,881 2,551,367 5,219,250 5,974,937
------------- ------------- ------------- -------------
OPERATING INCOME 249,324 (1,330,777) 774,188 (867,516)
------------- ------------- ------------- -------------
OTHER REVENUE (EXPENSE)
Interest income -- -- -- --
Interest expense (16,619) (46,946) (86,707) (98,184)
Other 7,924 3,770 65,934 8,448
------------- ------------- ------------- -------------
Total other income (expense) (8,695) (43,176) (20,773) (89,736)
------------- ------------- ------------- -------------
INCOME BEFORE INCOME TAXES FROM
CONTINUING OPERATIONS 240,629 (1,373,953) 753,415 (957,252)
INCOME TAXES 74,946 (517,980) 268,267 (427,980)
------------- ------------- ------------- -------------
INCOME FROM CONTINUING OPERATIONS 165,683 (855,973) 485,148 (529,272)
LOSS FROM DISCONTINUED OPERATIONS, NET -- (499,840) -- (665,227)
------------- ------------- ------------- -------------
NET INCOME $ 165,683 $ (1,355,813) $ 485,148 $ (1,194,499)
============= ============= ============= =============
NET INCOME PER SHARE -BASIC:
FROM CONTINUING OPERATIONS $ 0.02 $ (0.13) $ 0.07 $ (0.08)
============= ============= ============= =============
NET INCOME PER SHARE - BASIC:
FROM DISCONTINUED OPERATIONS -- (0.08) -- (0.10)
============= ============= ============= =============
NET INCOME PER SHARE - BASIC $ 0.02 $ (0.20) $ 0.07 $ (0.18)
============= ============= ============= =============
NET INCOME PER SHARE - DILUTED:
FROM CONTINUING OPERATIONS $ 0.02 $ (0.13) $ 0.07 $ (0.08)
============= ============= ============= =============
NET INCOME PER SHARE - DILUTED:
FROM DISCONTINUED OPERATIONS -- (0.08) -- (0.10)
============= ============= ============= =============
NET INCOME PER SHARE - DILUTED $ 0.02 $ (0.20) $ 0.07 $ (0.18)
============= ============= ============= =============
BASIC SHARES OUTSTANDING 6,836,195 6,626,542 6,737,287 6,634,679
EQUIVALENT SHARES - STOCK OPTIONS -- -- -- --
------------- ------------- ------------- -------------
DILUTED SHARES OUTSTANDING 6,836,195 6,626,542 6,737,287 6,634,679
============= ============= ============= =============
</TABLE>
See Notes to Consolidated Financial Statements
<PAGE>
ARIZONA INSTRUMENT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Nine Months Ended
----------------------------------------
September 30, 1998 September 30, 1997
----------------------------------------
<S> <C> <C>
OPERATING ACTIVITIES:
Net income $ 485,149 $ (1,494,499)
Adjustments to reconcile net income to net cash
provided (used) by operating activities:
Depreciation and amortization 515,632 979,666
Decrease in receivables 929,240 375,716
Decrease (increase) in inventories 705,803 (808,241)
(Increase) decrease in prepaid expenses and
other current assets (24,261) 422,920
Decrease in other assets 48,999 207,039
Decrease (increase) in deferred income tax 268,267 (463,162)
(Decrease) increase in accounts payable
and other accrued expenses (776,475) 449,161
------------------ ------------------
NET CASH PROVIDED (USED) BY
OPERATING ACTIVITIES 2,152,354 (331,400)
------------------ ------------------
INVESTING ACTIVITIES:
Proceeds from the sale of assets 0 0
Gain on the sale of assets 0 0
Purchases of capital equipment (214,672) (480,785)
------------------ ------------------
NET CASH USED BY INVESTING ACTIVITIES (214,672) (480,785)
FINANCING ACTIVITIES:
Net (payment) borrowing under lines of credit (266,000) 1,070,000
Issuance of common stock pursuant to
stock purchase plan 29,819 72,806
Stock issued pursuant to option exercises 0 43,240
Purchase of treasury stock (12,331) 0
Payments of long-term debt and capital leases (350,309) (696,446)
------------------ ------------------
NET CASH (USED) PROVIDED BY
FINANCING ACTIVITIES (598,821) 489,600
------------------ ------------------
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 1,338,861 (322,585)
CASH AND CASH EQUIVALENTS,
beginning of period 143,173 597,931
------------------ ------------------
CASH AND CASH EQUIVALENTS
end of period $ 1,482,034 $ 275,346
================== ==================
</TABLE>
Supplemental cash flow information:
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
<PAGE>
ARIZONA INSTRUMENT CORPORATION AND SUBSIDIAIRES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. CONSOLIDATED FINANCIAL STATEMENTS
The consolidated balance sheet as of September 30, 1998, the consolidated
statements of operations and cash flows for the three-month and nine-month
periods ended September 30, 1998 and 1997 have been prepared by the Company
without audit. In the opinion of management, all adjustments (which include only
normal recurring adjustments) necessary to present fairly the financial position
at September 30, 1998 and the results of operations and cash flows for the
three-month and nine-month periods ended September 30, 1998 and September 30,
1997 have been made.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted. These consolidated financial statements should
be read in conjunction with the financial statements and notes thereto included
in the Company's 1997 Report on Form 10-KSB. The results of operations for the
interim periods are not necessarily indicative of the results to be obtained for
the entire year.
The Financial Accounting Standards Board recently issued SFAS No. 130 on
"Reporting Comprehensive Income" and SFAS No. 131 on "Disclosures about Segments
of an Enterprise and Related Information." The "Reporting Comprehensive Income"
standard is effective for fiscal years beginning after December 15, 1997. This
standard changes the reporting of certain items currently reported in the common
stock equity section of the balance sheet. The "Disclosure about Segments of an
Enterprise and Related Information" standards is also effective for the fiscal
years beginning after December 15, 1997. This standard requires that public
companies report certain information about operating segments in their financial
statements. It also establishes related disclosures about products and services,
geographic areas, and major customers.
2. INVENTORIES
Inventories consist of the following
September 30, December 31,
1998 1997
------------- ------------
Finished Goods $ 214,122 $ 582,440
Components 1,637,068 1,974,553
------------- ------------
$ 1,851,190 $ 2,556,993
============= ============
<PAGE>
3. NEW ACCOUNTING PRONOUNCEMENTS
The Company adopted Statement of Financial Accounting Standard No. 130,
"Reporting Comprehensive Income", in the quarter ended March 31, 1998.
Comprehensive income is the same as net income for the quarter.
The following discussion should be read in conjunction with, and is qualified in
its entirety by, the Company's Consolidated Financial Statements and Notes
thereto appearing elsewhere herein. Historical results are not necessarily
indicative of trends in operating results for any future period.
ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
Results of Operations
Nine months ended September 30, 1998 and September 30, 1997.
Net sales for the nine months ended September 1998 were $10,534,479, an increase
of $169,920 or 1.64% from the $10,364,559 generated for the same period of 1997.
This increase was due to increased sales of the Company's instruments which more
than offset the decline in installation revenue.
Cost of goods sold for the nine months ended September 30, 1998 was $4,541,041,
a decrease of $716,097 or 13.62% from the $5,257,138 incurred for the same
period of 1997. The decrease in cost of goods sold was due to a change in
product mix to more profitable products and a decrease in expenses related to
warranty and inventory obsolescence.
Operating expenses for the nine months ended September 30, 1998 were $5,219,250,
a decrease of $755,687 or 12.65% as compared to operating expenses of $5,974,937
for the same period of 1997. Marketing expenses for the nine months ended
September 30, 1998 were $2,369,221, a decrease of $436,850 or 15.57% as compared
to the $2,806,071 for the same period in 1997. Decreased marketing expenses were
due to decreased personnel expenses associated with the Company's turnaround
program and decreased promotional expenses. General and administrative expenses
for the nine months ended September 30, 1998 were $1,558,956, a decrease of
$413,695 or 20.97% as compared to $1,972,651 for the same period of 1997, due
primarily to a reduction of bad debt expense and reduced personnel expenses.
Research and development expenses for the nine months ended September 30, 1998
were $982,136, an increase of $240,639 or 32.45% compared to the $741,497 of
research and development expenses incurred in the comparable period of 1997.
This increase was due primarily to an increase in personnel related costs and
expanded responsibilities of the research and development department. As a
result, operating income for the nine months ended September 30, 1998 grew to
$774,188, an increase of $1,641,704 from the operating loss of $867,516 earned
by the Company for the same period of 1997.
<PAGE>
Other expenses for the first nine months of 1998 were $20,773, a decrease of
$68,964 or 76.85% from the $89,736 in expense realized for the same period of
1997. This was due primarily to an increase in other income and a decrease in
interest expense.
As a result of these changes, income before taxes for continuing operations for
the nine months ended September 30, 1998 was $753,415, an increase of $1,710,667
from the loss of $957,252 recorded for the same period of 1997. Provision for
income taxes increased to $268,267 for the nine months ended September 30, 1998
as compared to a tax deferment of $427,980 for the same period of 1997. The
Company expects its provision for income taxes to approximate the amount
computed at the statutory rate for 1998. As a result, net income from continuing
operations for the first nine months of 1998 was $485,148, an increase of
$1,014,420 or over the net loss from continuing operations of $529,272 achieved
for the same period of 1997.
The Company discontinued its tank testing business in 1997. For the first nine
months of 1998, the Company had no gain or loss from discontinued operations,
while the loss from discontinued operations for the first nine months of 1997
was $665,227. As a result, net income for the first nine months of 1998 was
$485,148, an increase of $1,679,647 from net loss of $1,194,499 generated for
the first nine months of 1997.
Three months ended September 30, 1998 and September 30, 1997
Net sales for the three months ended September 30, 1998 were $3,120,784, an
increase of $42,046 or 1.37% from the $3,078,738 generated for the third quarter
of 1997. This increase was due to increased sales of the Company's instruments
which more than offset the decrease of installation revenues
Cost of goods sold for the three months ended September 30, 1998 were
$1,213,579, a decrease of $644,569 or 34.69% from the $1,858,148 incurred for
the third quarter of 1997. The decrease in cost of goods sold was due to a
change in product mix as well as a decrease in expenses related to warranty and
inventory obsolescence.
Operating expenses for the third quarter of 1998 were $1,657,882, a decrease of
$893,485 or 35.02% as compared to operating expenses of $2,551,367 for the third
quarter of 1997. Marketing expenses for the third quarter of 1998 were $731,188,
a decrease of $264,528 or 26.57% over the same period in 1997. Decreased
marketing expenses were due to decreased personnel expenses as well as expense
reductions associated with the Company's turnaround program. General and
administrative expenses for the third quarter of 1998 were $489,164, a decrease
of $548,088 or 52.84% as compared to $1,037,252 for the third quarter of 1997,
due primarily to decreased personnel related expenses. Research and development
expenses for the third quarter of 1998 were $333,290, a decrease of $35,523 or
9.63% compared to the $368,813 of research and development expenses incurred in
the third quarter of 1997. This decrease was due primarily to a decrease in
outside research projects. As a result, operating income for the third quarter
of 1998 grew to $249,323, an increase of $1,580,100 from the operating loss of
$1,330,777 generated by the Company for the third quarter of 1997.
<PAGE>
Other income (expenses) for the third quarter of 1998 were $8,695 in expense, a
decrease of $34,481 or 79.86% from the $43,176 in expense realized for the third
quarter of 1997. The increase in income was due to an increase in other income
and reduction of interest expense.
As a result of these changes, income from continuing operations before taxes for
the third quarter of 1998 was $240,628, an increase of $1,614,581 from the
$1,373,953 loss recorded for the third quarter of 1997. Provision for income
taxes increased to $74,946 for the third quarter of 1998 as compared to a tax
deferment of $517,980 for the third quarter of 1997. The Company expects its
provision for income taxes to approximate the amount computed at the statutory
rate for 1998. As a result, net income from continuing operations for the third
quarter was $165,682, an increase of $1,021,655 or over the net loss from
continuing operations of $855,973 generated for the third quarter or 1997.
The Company discontinued its tank testing business in 1997. For the third
quarter of 1998, the Company had no gain or loss from discontinued operations,
while the loss from discontinued operations for the third quarter of 1997 was
$499,840. As a result, net income for the third quarter of 1998 was $165,682, an
increase of $1,521,495 from net loss of $1,355,813 generated for the third
quarter of 1997.
The Company has historically experienced and expects to continue to experience
quarterly fluctuations, potentially in material amount, in its operating
results. A variety of factors influence the Company's operating results in a
particular period, including economic conditions in the industries served by the
Company, regulatory developments, the timing of significant orders, shipment
delays, specific features requested by the customers, the introduction of new
products by the Company and its competitors, market acceptance of new products
and enhancements of existing products, changes in the cost of materials,
disruptions in the sources of supply, seasonal variations of spending by
customers, the timing of the Company's expenditures in anticipation of future
orders and other factors, many of which are beyond the Company's control.
Except for the historical information contained herein, the discussion in this
Report contains or may contain forward-looking statements that involve risks and
uncertainties. The Company's actual results could differ materially from those
discussed here. Factors that could cause or contribute to such differences
include, but are not limited to, those discussed in this Management's Discussion
and Analysis, and the Company's Report on Form 10-KSB for the year ended
December 31, 1997, as well as those factors discussed elsewhere herein.
Liquidity and Capital Resources
Working capital at September 30, 1998 was $3,598,218, an increase of $1,041,234
from the working capital of $2,556,984 as of December 31, 1997.Working capital
increased due to an increase in cash and a decrease in accounts payable which
more than offset a reduction in receivables and inventories. The Company's
current ratio as of September 30, 1998 increased to 2.3 from a current ratio of
1.6 as of December 31, 1997.
<PAGE>
The Company currently has a line of credit available through a bank,
collateralized by the Company's assets. The amount available under this line is
a maximum commitment of $2,000,000 which is available through June 30, 1999. At
September 30, 1998, $800,000 had been borrowed under this line of credit.
The Company believes that cash generated from ongoing operations and the
borrowing arrangements described above will satisfy the anticipated cash
requirements of the Company's current operations over the next 12 months, though
there can be no assurance that this will be the case. The Company's ability to
continue funding its planned operations beyond the next 12 months is dependent
upon its ability to generate sufficient cash flow to meet its obligations on a
timely basis, or to obtain additional funds through equity or debt financing, or
from other sources of financing, as may be required.
The inability of computers, software and other equipment utilizing
microprocessors to recognize and properly process data fields containing a
2-digit year is commonly referred to as the Year 2000 problem. As the year 2000
approaches, such systems may be unable to accurately process certain date-based
information.
The Company has identified some applications that will require modification to
address the Year 2000 problem. Internal and external resources will be used to
make the required modifications and test these modifications. The Company plans
on completing the modifications and testing of these modifications by mid-1999.
The total cost to the Company of these Year 2000 problem-related activities is
not anticipated to be material. These costs and the date on which the Company
plans to complete the modifications and testing to solve the Year 2000 problem
are based upon management's estimates. However, there can be no assurance that
these estimates will be achieved and that the costs of solving the Year 2000
problem could differ significantly from management's estimates.
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Information is incorporated by reference from the Company's Report on Form
10-KSB for the year ended December 31, 1997
Item 5. Other information
On September 8, 1998 the Company received a letter from Nasdaq Stock Market,
Inc. informing the Company that its shares of common stock had failed to
maintain a closing bid price of greater than or equal to $1.00, as required for
continued listing on the Nasdaq SmallCap Market. The letter stated that if the
closing bid for the Company's common stock did not reach $1.00 or greater for 10
consecutive days by December 8, 1998, the Company's securities would be subject
to delisting from the Nasdaq SmallCap Market. To stay the delisting, the Company
may request a hearing by the close of business on December 8, 1998. The
Company's management is considering various responses to this letter, including
taking action to raise the closing bid price for the Company's common stock to
$1.00 or greater. If the Company's securities are delisted from the Nasdaq
SmallCap Market, the market value of the securities would likely decline and
holders of the Company's common stock would find it difficult to trade, or
obtain accurate quotations as to the market value of the Company's common stock.
Item 6. Exhibits and Reports on Form 8-K
(a)
3.1 Composite Certificate of Incorporation of Registrant as amended through
July 5, 1994. Incorporated by reference from the Form 8-A filed on June
26, 1996.
3.2 Bylaws of Registrant. Incorporated by reference from the Form 8-A filed
on June 26, 1996.
27 *Financial Data Schedule
* Filed herewith
(b) The following Form 8-K, as amended, was filed by Registrant during the
quarter ended September 30, 1998:
Amendment No. 1 to Form 8-K was filed on July 7, 1998. The amendment
amended the Form 8-K filed June 29, 1998 reporting under Item 4 that on
June 22, 1998 Registrant dismissed Deloitte & Touche LLP as its
principal independent accountant, and that on June 23, 1998 Registrant
engaged Toback CPAs as its new principal accountant. The Amendment
attached certain required correspondence from Deloitte & Touche.
<PAGE>
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.
August 13, 1998 /s/ George G. Hays
- ---------------- ------------------
Date George G. Hays, President, CEO
(Authorized officer)
August 13, 1998 /s/ Linda J. Shepherd
- --------------- ---------------------
Date Controller
(Principal accounting officer)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS
</LEGEND>
<CIK> 724904
<NAME> ARIZONA INSTRUMENT CORPORATION
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<EXCHANGE-RATE> 1
<CASH> 1,482,036
<SECURITIES> 0
<RECEIVABLES> 3,457,254
<ALLOWANCES> 396,302
<INVENTORY> 1,851,190
<CURRENT-ASSETS> 6,472,898
<PP&E> 3,642,526
<DEPRECIATION> 2,753,710
<TOTAL-ASSETS> 10,706,090
<CURRENT-LIABILITIES> 2,874,680
<BONDS> 18,641
68,196
0
<COMMON> 0
<OTHER-SE> 7,753,918
<TOTAL-LIABILITY-AND-EQUITY> 10,706,090
<SALES> 10,534,479
<TOTAL-REVENUES> 10,600,413
<CGS> 4,541,041
<TOTAL-COSTS> 5,219,250
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 86,707
<INCOME-PRETAX> 753,415
<INCOME-TAX> 268,267
<INCOME-CONTINUING> 485,148
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 485,148
<EPS-PRIMARY> 0.07
<EPS-DILUTED> 0.07
</TABLE>
