UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
(X) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended December 31, 1997
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
( ) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period from to
Commission File Number 0-13084
WARRANTECH CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 13-3178732
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
300 Atlantic Street, Stamford, CT 06901
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (203) 975-1100
(Former name,former address and former fiscal year, if changed since last year)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at December 31, 1997_
Common stock, par value $.007 per share 13,325,917 shares
WARRANTECH CORPORATION AND SUBSIDIARIES
I N D E X
Page No.
PART I - Financial Information:
Item 1. Financial Statements:
Condensed Consolidated Balance Sheet at December 31, 1997
(Unaudited) and March 31, 1997................... 3
Condensed Consolidated Statement of Operations
For the Nine and Three Months Ended December 31, 1997
and 1996 (Unaudited) ............................ 4
Condensed Consolidated Statement of Cash Flows
For the Nine Months Ended December 31, 1997
and 1996 (Unaudited) ............................ 5
Notes to Condensed Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8
PART II - Other Information 11
Signatures .............................................. 13
<TABLE>
WARRANTECH CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
A S S E T S
Dec 31, March 31,
-------------------------------
1997 1997
------------- --------------
(Unaudited)
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 18,466,127 $ 17,031,925
Investments in marketable securities 535,362 286,099
Accounts receivable, (net of allowances of $458,629
and $300,328, respectively) 33,679,256 23,290,035
Other receivables, net 2,569,232 3,874,451
--------------- --------------
Income tax receivable - 115,064
Prepaid expenses and other current assets 2,402,730 1,633,699
--------------- --------------
Total Current Assets 57,652,707 46,231,273
------------- --------------
Property and Equipment - Net 12,545,763 10,111,193
------------- --------------
Other Assets:
Excess of cost over fair value of assets acquired
( net of accumulated amortization of
$3,878,731 and $3,637,233, respectively) 4,557,098 3,651,400
Deferred income taxes 2,395,127 2,009,941
Investments in marketable securities 1,857,749 2,041,001
Restricted cash 800,000 800,000
Split dollar life insurance policies 1,028,805 865,542
--------------- --------------
Notes receivable - long-term 708,781 42,076
Collateral security fund 199,389 199,389
Other assets 120,129 172,440
------------- --------------
Total Other Assets 11,667,078 9,781,789
------------- --------------
Total Assets $ 81,865,548 $66,124,255
============= ==============
LIABILITIES AND COMMON STOCKHOLDERS' EQUITY
1997 1997
--------------- --------------
(Unaudited)
Current Liabilities:
Current maturities of long-term debt and capital
lease obligations $ 1,838,443 $ 1,997,835
Insurance premiums payable 27,368,680 19,602,290
Income taxes payable 574,506 -
Accounts and commissions payable 7,452,001 5,261,867
Legal settlements payable - 1,635,000
Accrued expenses and other current liabilities 5,216,285 4,132,113
--------------- --------------
Total Current Liabilities 42,449,915 32,629,105
--------------- --------------
Deferred Revenues 6,303,408 5,019,190
--------------- --------------
Long-Term Debt and Capital Lease Obligations 2,373,543 2,491,786
--------------- --------------
Deferred Rent Payable 639,259 702,233
--------------- --------------
Convertible Exchangeable Preferred Stock
- - $.0007 par value
Authorized, 15,000,000 shares
Issued and outstanding 0 shares at December 31, 1997
and March 31, 1997
Common Stockholders' Equity:
Common stock - $.007 par value
Authorized - 30,000,000 shares
Issued - 13,325,917 shares
at December 31, 1997 and 13,261,636 shares
at March 31, 1997 92,004 90,911
Additional paid-in-capital 13,872,306 13,033,185
Unrealized loss on investments, net 6,751 (1,563)
Accumulated translation adjustments 37,185 16,544
Retained earnings 16,624,122 12,714,914
--------------- --------------
30,632,368 25,853,991
Less: Deferred compensation (39,126) (78,231)
Treasury stock - at cost, 100,000 shares
at December 31, 1997 and March 31, 1997 (493,819) (493,819)
--------------- --------------
Total Common Stockholders' Equity 30,099,423 25,281,941
--------------- --------------
Total Liabilities, Preferred Stock and
Common Stockholders' Equity $ 81,865,548 $66,124,255
=============== ==============
See accompanying notes to condensed consolidated financial statements.
</TABLE>
Page 3
<TABLE>
WARRANTECH CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
For the Nine Months Ended For the Three Months Ended
December 31, December 31,
--------------------------------------- -------------------------------
1997 1996 1997 1996
----------------- ----------------- ----------------- ------------
<S> <C> <C> <C> <C>
Gross revenues $156,743,579 $116,794,753 $53,224,914 $42,131,293
Revenues deferred to future periods (2,052,753) (1,305,692) (887,704) (455,889)
Deferred revenues earned 613,474 347,451 259,020 119,657
----------------- ----------------- ----------------- -------------
Net revenues 155,304,300 115,836,512 52,596,230 41,795,061
Costs and expenses:
Direct costs 111,362,547 81,915,935 36,595,198 28,397,004
Service, selling, and general and administrative 35,697,462 25,940,313 13,673,500 9,916,149
Provision for bad debt expense 108,674 41,156 - -
Depreciation and amortization 2,436,115 1,751,172 935,164 640,894
----------------- ----------------- ----------------- -----------
Total costs and expenses 149,604,798 109,648,576 51,203,862 38,954,047
----------------- ----------------- ----------------- -----------
Income from operations 5,699,502 6,187,936 1,392,368 2,841,014
----------------- ----------------- ----------------- ------------
Gain on sale of equity joint venture - 1,876,480 - -
Other income, net 649,766 336,851 253,855 160,965
----------------- ----------------- ----------------- ------------
Total other income (expense) 649,766 2,213,331 253,855 160,965
----------------- ----------------- ----------------- ------------
Income before provision for income taxes 6,349,268 8,401,267 1,646,223 3,001,979
Provision for income taxes 2,440,060 3,134,897 633,899 1,169,926
================= ================= ================= ===========
Net income $ 3,909,208 $ 5,266,370 $ 1,012,324 1,832,053
================= ================= ================= ===========
Earnings per share:
Basic $.30 $.40 $.08 $.14
Fully Diluted $.25 $.34 $.06 $.12
Weighted average number of shares outstanding:
Basic 13,228,056 13,014,242 13,284,760 13,064,092
Fully Diluted 15,785,414 15,528,601 15,786,572 15,606,166
See accompanying notes to condensed consolidated financial statements.
Page 4
</TABLE>
<TABLE>
WARRANTECH CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
For the Nine Months
Ended December 31,
----------------------------------------------
1997 1996
--------------------- ---------------------
<S> <C> <C>
Net cash provided by operating activities $ 7,339,879 $ 7,779,544
--------------------- ---------------------
Cash flows from investing activities:
Purchase of property and equipment (3,062,217) (4,158,256)
Purchased goodwill (1,301,999) -
Investment in marketable securities (447,253) (1,160,562)
Proceeds from sale of marketable securities 383,368 927,763
--------------------- ---------------------
Net cash (used in) investing activities (4,428,101) (4,391,055)
Cash flows from financing activities:
(Increase) decrease in notes receivable (666,705) 22,636
Proceeds from exercise of common stock options 840,214 496,820
Purchase of Treasury Stock - (101,070)
Payments on long-term note payable (1,651,085) (1,290,167)
--------------------- ---------------------
Net cash (used in) provided by financing activities (1,477,576) (871,781)
--------------------- ---------------------
Net increase (decrease) in cash and cash equivalents 1,434,202 2,516,708
Cash and cash equivalents at beginning of period 17,031,925 11,859,487
--------------------- ---------------------
Cash and cash equivalents at end of period $ 18,466,127 $14,376,195
===================== =====================
Supplemental Cash Flows Information:
Cash Payments for the Periods:
Interest $ 262,868 $ 221,241
===================== =====================
Income taxes $ 2,132,175 $ 3,028,877
===================== =====================
Noncash Investing and Financing Activities:
Gain on sale of investment in joint venture $ - $ 1,876,480
Purchase of preferred stock - (6,420,363)
Note issued in connection with purchase of preferred stock - 2,395,960
Capital lease obligations incurred 1,373,450 1,484,319
See accompanying notes to condensed consolidated financial statements.
Page 5
</TABLE>
WARRANTECH CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997
(Unaudited)
1. THE COMPANY
Warrantech, through its wholly-owned subsidiaries, Warrantech Automotive, Inc.,
Warrantech Consumer Product Services, Inc., Warrantech Help Desk, Inc.,
Warrantech Direct, Inc., Warrantech Home Service Company and Warrantech
International, Inc., markets and administers service contract programs for
retailers, distributors and manufacturers of automobiles, homes, home
appliances, home entertainment products, computers and peripherals, and office
and communication equipment call center services and technicalcomputer
services, in the United States, Puerto Rico, Mexico, Canada, Caribbean, South
America, Central America and the United Kingdom. Additionally, third-party
administrative services are provided to manufacturers of consumer and
automotive products and other business entities requiring such services. The
actual repair service under such extended service contracts and limited
warranties is provided by third party repair facilities and the cost of such
repair services is borne by the insurance companies. The predominant terms of
the contracts and manufacturers' warranties range from twelve (12) to
eighty-four (84) months.
2. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include all informatio
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 quarter ended
December 31, 1997 are not necessarily indicative of the results that may be
expected for the year ending March 31, 1998. For further information, refer to
the consolidated financial statements and footnotes thereto included in the
Company's Form 10-K for the year ended March 31, 1997.
3. JOINT VENTURE
In July, 1993, the Company and American International Group Inc. ("AIG") formed
a corporate joint venture, Techmark Services Ltd. ("Techmark" or the
"Joint Venture") owned fifty-one percent (51%) by AIG and forty-nine percent
(49%) by the Company.
Page 6
In conjunction with the foregoing alliance, in October, 1993, AIG purchased,
for a price of $6,430,000, options and a special issue of preferred stock which
was convertible into an issue of new shares of common stock which, subsequent
to its issuance, would be equivalent to twenty percent (20%) of the Company's
issued and outstanding common stock. Under the terms of this purchase
agreement, AIG had the right to purchase an increased interest in the Company,
to a maximum of thirty percent (30%) of the Company's issued and outstanding
common stock, if certain operating goals were achieved by the Company.
On April 18, 1996, the Company and AIG consummated an agreement for the
termination of the Techmark Joint Venture (the"Agreement"). Under the terms
of the Agreement, AIG agreed to purchase the Company's forty-nine (49%)
interest in the Joint Venture for $3,762,154 and the Company agreed to
repurchase the 3,234,697 shares of convertible preferred stock held by AIG for
its original redemption value of $6,430,000 and further relinquish their rights
to other options under the original agreement. As a result of this transaction,
the Company no longer has any investment in or liability to the Joint Venture
and will no longer record any equity in the operations of the Joint Venture.
The redemption value will be offset by the amount due the Company from the sale
of its investment, with the net amount due AIG of $2,395,960 resulting in a
three year, non-interest bearing note payable in 11 equal quarterly
installments of $205,000 commencing June 30, 1996 with a final installment of
$140,960 due March 31, 1999. In the event of default by the Company under the
note payable, the Company would be required to reissue to AIG preferred stock
for the remaining amount due at the default date.
At March 31, 1996, the Company's carrying value of its investment amounted to
$1,885,674 which resulted in a gain on the sale of the investment of $1,876,480,
recognized in the first quarter of fiscal 1997.
Also, as part of the agreement, AIG paid the Company $1,480,000 related to
amounts due the Company as of March 31, 1997, under its profit sharing
arrangement. In connection with this payment, the Company issued an irrevocable
letter of credit to the benefit of AIG through December 2002 which can be drawn
upon by AIG in the event the ultimate profit sharing amount due the Company is
less than the amount previously paid. It is anticipated at this time that no
amounts will be due AIG under the letter of credit.
Page 7
WARRANTECH CORPORATION AND SUBSIDIARIES
ITEM 2. Managemen's Discussion and Analysis of Financial Condition and Results
of Operations
Results of Operations
Gross revenues for the nine month and three month periods ended December 31,
1997 amounted to $156,743,579 and $53,224,914, respectively as compared with
$116,794,753 and $42,131,293 for the same periods a year ago representing a 34%
and 26% increase for those periods, respectively. The increases in the nine
and three month periods are directly attributable to approximately $10 million
and $5 million, respectively, related to new customers in both the consumer
product and automotive businesses and approximately $29 million and $9 million,
respectively, related to volume increases with existing customers and renewals
despite the loss and bankruptcy of two large accounts.
The net increase in deferred revenues for the nine month and three month
periods, ended December 31, 1997 as compared with the same period a year ago is
directly attributable to the increased number of service contracts sold with a
service period greater than one year during that period of time offset in part
by amounts earned on expiring contracts during the same period.
Direct costs are those costs directly related to the production and acquisition
of service contracts. Direct costs were $111,362,547 and $36,595,198 for the
nine and three month periods ended December 31, 1997, respectively, as compared
with $81,915,935 and $28,397,004 for the comparable period in Fiscal 1997. The
increase is directly attributable to the volume increases in contracts sold and
a higher level of premium reflecting improved coverage on selected programs.
Service, selling and general and administrative expenses for the nine and three
month periods ended December 31, 1997 were $35,697,462 and $13,673,500,
respectively, as compared with $25,940,313 and $9,916,149 for the nine and
three month periods ended December 31, 1996. These increases are related to
payroll, payroll related, training costs and additional office space arising
from an increase in head count to meet the service requirements associated with
the increased number of service contracts being sold as compared with the same
levels a year ago and the ongoing costs incurred relative to the International
and Home Service start-up infrastructure.
The provision for bad debts results from the write-off of accounts considered
to be uncollectible for the respective periods.
The increase in depreciation and amortization for the nine month and three
month periods ended December 31, 1997 over the comparable periods a year ago is
the result of capital additions related to the Company's ongoing up-grade of
its computer systems and the additional equipment requirements resulting from
the service level increases.
Page 8
In April 1996, the Company and its international joint venture partner, AIG,
agreed to terminate the joint venture, Techmark Services Ltd., effective
January 1, 1996. Under the terms of the agreement, AIG agreed to purchase the
Company's forty-nine percent (49%) investment in the joint venture for
$3,762,154. As of March 31, 1996, the Company's carrying value of the joint
venture investment amounted to $1,885,674 which resulted in a pre-tax gain
recognized in the three month period ended June 30, 1996 amounting to
$1,876,480 and an after tax gain of $1,144,653 or $.10 per share.
The provision for income taxes is based on the Company's projection of its
estimated effective tax rate for the fiscal year.
Net income for the nine and three month periods ended December 31, 1997 was
$3,909,208 or $.30 per share and $1,012,324 or $.08 per share, respectively,
as compared with $5,266,370 or $.40 per share and $1,832,053 or $.14 per share,
respectively, calculated on the same basis. The earnings per share for the
nine month period ended December 31, 1996 includes the effect of the gain on
the sale of the Company's joint venture in the first quarter of fiscal 1996
of $.10 per share (Refer to Footnote 3).
The Company adopted Statement of Financial Accounting Standards No. 128,
"Earnings per Share," which modifies the calculation of earnings per share
("EPS"). The Standard replaces the previous presentation of primary and fully
diluted EPS to basic and diluted EPS. Basic EPS excludes dilution and is
computed by dividing income available to common stockholders by the weighted
average number of common shares outstanding for the period. Diluted EPS
includes the dilution of common stock equivalents, and is computed
similarly to fully diluted EPS pursuant to APB Opinion 15. All prior periods
presented have been restated to reflect this adoption.
Liquidity and Financial Resources
The Company has an ongoing relationship with an equipment financing company and
intends to continue financing certain future equipment needs through leasing
transactions. The total amount financed through leasing transactions during the
nine and three month periods ended December 31, 1997 amounted to $1,373,450 and
$503,855, respectively. The Company has a line of credit with a bank which
provides for a maximum aggregate borrowing up to $10 million. The line of
credit is secured by certain accounts receivable and has been renewed and now
expires on August 31, 1998. At December 31, 1997, the Company did not have any
borrowing under the line of credit.
The Company believes that internally generated funds will be sufficient to
finance its current operations for at least the next twelve months. Cash
provided by operations during the nine month period ended December 31, 1997
amounted to $7,339,879 which is principally attributable to both new accounts
and increases in volume with existing customers as compared with comparable
levels of accounts receivable at December 31, 1996.
Management believes that there are significant opportunities for growth through
acquisitions in the business services industry. While there can be no assurance
that any transactions will materialize, to the extent that capital resources
are required in connection with any proposed transaction,
Page 9
the Company believes that it will be able to meet its needs through a
combination of available cash on hand, borrowings against its available bank
credit line, and additional third-party financing. Based on discussions with
third parties, the Company believes such funding will be available to the
Company if needed on acceptable terms, although such availability cannot be
assured.
In connection with the sale of the Company's joint venture interest to AIG, the
Company agreed to repurchase 3,234,697 shares of convertible exchangeable
preferred stock held by AIG at their redemption value of $6,430,000. This
amount was offset by the amount due the Company for the sale of its investment,
with the net amount due AIG of $2,395,960 resulting in a three year,
non-interest bearing note payable. The note is payable in 11 equal quarterly
installments of $205,000 commencing June 30, 1996, with a final installment of
$140,960 due March 31, 1999. Also, as part of the agreement, AIG agreed to pay
the Company $1,480,000 related to amounts due the Company under its profit
sharing arrangement. In connection with this payment, the Company issued an
irrevocable letter of credit to the benefit of AIG through December 31, 2002
which can be drawn against by AIG in the event that the ultimate profit sharing
amount due the Company is less than the amount paid. It is anticipated at thi
time that no amounts will be due AIG under this letter of credit.
The effect of inflation has not been significant to the Company since its
formation.
Page 10
PART II. Other Information
Item 1. Legal Proceedings
A. The Oak Agency, Inc. and The Oak Financial Services, Inc.
(collectively, "Oak") v.Warrantech Dealer Based Services, Inc.
("WDBS").
Final judgment in this matter was entered on November 12,
1997. WDBS was directed to pay Oak (i) $1,243,359 which
represents commissions earned by Oak for the period July 1,
1991 through May 31, 1997, (ii) $28,500 which represents
costs of the action recoverable by Oak, and (iii) future
commissions earned on vehicle service contracts sold on or
after June 1, 1997 by a specified group of automobile dealers.
Furthermore, Oak was directed to pay Warrantech Corporation
$7,500 which represents Warrantech's recoverable costs of a
separate action which previously had been dismissed by the
Court with prejudice.
WDBS has made all payments described in clauses (i) and (ii)
above and continues to make those periodic payments described
in clause (iii). No further legal action is anticipated and
WDBS considers this matter closed.
B. Intercontinental Brokerage, Incorporated ("IBI") v.
Warrantech Consumer Product Services, Inc. and Warrantech
Corporation (collectively, "Warrantech").
This suit was filed in the 67th District court,Tarrant County,
Texas on October 10, 1997. IBI had provided various insurance
services to and on behalf of Warrantech over a period of
years. Warrantech asserts, however, that it terminated its
relationship with IBI in 1996 and has not requested or used
IBI's services since the date of termination. IBI alleges in
this action that it continued to perform services for
Warrantech though June 30, 1997 and that it is entitled to be
compensated for these services under several theories of
liability. IBI is seeking specified damages of up to
$1,330,000 as well as such other sums as the Court may find
it is entitled to recover.
Both parties are actively engaged in the discovery process
and no trial date has been discussed at this early state in
the litigation. Warrantech continues to deny the allegations
and is pursuing all of the legal rights and remedies
available to it.
Page 11
Item 2. Changes in Securities
Not applicable.
Item 3. Defaults Upon Senior Securities
Not applicable.
Item 4. Submission of Matters to Vote of Security Holders
Not applicable.
Item 5. Other Information
Not applicable.
Item 6 (a) Exhibits
(11) Statement re: Computation of Per Share Earnings
(27) Financial Data Schedule
Item 6 (b) Reports on 8-K
None.
Page 12
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.
WARRANTECH CORPORATION
S/N/S Joel San Antonio
Joel San Antonio - Chairman of the Board
(Chief Executive Officer)
Date: February 17, 1998
S/N/S Harris Miller
Harris Miller Executive V.P.Customer Affairs
and Acting Chief Financial Officer
Date: February 17, 1998
Page 13
<TABLE>
WARRANTECH CORPORATION AND SUBSIDIARIES
EXHIBIT 11
STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS
(UNAUDITED)
For the Nine Months Ended For the Three Months Ended
December 31, December 31,
------------------ -- -------------------- ----------------- -- ----------------
1997 1996 1997 1996
------------------ -------------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Earnings:
Net income $ 3,909,208 $ 5,266,370 $ 1,012,324 $ 1,832,053
================== ==================== ================= ================
Weighted average shares outstanding:
Basic:
Common shares 13,228,056 13,014,242 13,284,760 13,064,092
================== ==================== ================= ================
Fully diluted:
Common shares 13,228,056 13,014,242 13,284,760 13,064,092
Assumed exercise of stock options 2,530,358 2,514,359 2,501,812 2,542,074
================== ==================== ================= ================
15,785,414 15,528,601 15,786,572 15,606,166
================== ==================== ================= ================
Earnings Per Common Share:
Basic:
Net income $.30 $.40 $.08 $.14
================== ==================== ================= ================
Fully diluted:
Net income $.25 $.34 $.06 $.12
================== ==================== ================= ================
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-END> DEC-31-1997
<CASH> 18,466,127
<SECURITIES> 535,362
<RECEIVABLES> 33,679,256
<ALLOWANCES> 458,629
<INVENTORY> 0
<CURRENT-ASSETS> 57,652,707
<PP&E> 21,693,632
<DEPRECIATION> 9,147,869
<TOTAL-ASSETS> 81,865,548
<CURRENT-LIABILITIES> 42,449,915
<BONDS> 0
<COMMON> 92,004
0
0
<OTHER-SE> 30,007,419
<TOTAL-LIABILITY-AND-EQUITY> 81,865,548
<SALES> 0
<TOTAL-REVENUES> 156,743,579
<CGS> 0
<TOTAL-COSTS> 149,604,798
<OTHER-EXPENSES> 912,634
<LOSS-PROVISION> 108,674
<INTEREST-EXPENSE> 262,868
<INCOME-PRETAX> 6,349,268
<INCOME-TAX> 2,440,060
<INCOME-CONTINUING> 3,909,208
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,909,208
<EPS-PRIMARY> .30
<EPS-DILUTED> .25
</TABLE>
