<PAGE> 1
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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, 2000
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 - 18323
SYNTELLECT INC.
(Exact name of registrant as specified in its charter)
Delaware 86-0486871
(State or other jurisdiction of (IRS employer identification number)
incorporation)
20401 North 29th Avenue, Phoenix, Arizona 85027
(Address of principal executive office) (Zip Code)
(602) 789-2800
(Registrant's telephone number, including area code)
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.
11,786,242 shares of common stock, $.01 par value per share, were
outstanding on May 11, 2000
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SYNTELLECT INC. AND SUBSIDIARIES
INDEX
<TABLE>
<CAPTION>
Page
----
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Unaudited Condensed Consolidated Balance Sheets -
March 31, 2000 and December 31, 1999 3
Unaudited Condensed Consolidated Statements of Operations -
Three Months Ended March 31, 2000 and March 31, 1999 4
Unaudited Condensed Consolidated Statements of Cash Flows -
Three Months Ended March 31, 2000 and March 31, 1999 5
Notes to Condensed Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
Item 3. Quantitative and Qualitative Disclosure about Market Risk 10
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 11
SIGNATURES 12
EXHIBITS
Exhibit Index 13
</TABLE>
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ITEM 1. FINANCIAL STATEMENTS
SYNTELLECT INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts)
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
---- ----
(unaudited)
-----------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 4,657 $ 6,185
Marketable securities ($1,100 restricted) 1,100 1,100
Trade receivables, net of allowance for doubtful accounts of $615 and
$784, respectively 9,527 9,999
Other receivables 1,832 1,406
Inventories, net 1,753 2,041
Prepaid expenses 628 677
-------- --------
Total current assets 19,497 21,408
Property and equipment, net 4,464 4,787
Other assets 13 29
-------- --------
Total assets $ 23,974 $ 26,224
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,960 $ 1,873
Accrued liabilities 3,203 3,268
Customer deposits 1,363 3,238
Deferred revenue 3,536 2,914
Capital lease obligations 225 248
-------- --------
Total current liabilities 10,287 11,541
Capital lease obligations - less current portion 244 293
-------- --------
Total liabilities 10,531 11,834
-------- --------
Shareholders' equity:
Preferred stock, $.01 par value per share. Authorized 2,500,000 shares; -- --
no shares issued or outstanding
Common stock, $.01 par value per share. Authorized 25,000,000 shares;
issued 14,271,974 and 13,889,487, respectively 143 139
Additional paid-in capital 61,676 61,177
Accumulated deficit (40,741) (41,938)
Accumulated other comprehensive income (loss) 59 (32)
-------- --------
21,137 19,346
Treasury stock, at cost, 2,485,732 and 1,885,732 shares, respectively
(7,694) (4,956)
-------- --------
Total shareholders' equity 13,443 14,390
-------- --------
Total liabilities and shareholders' equity $ 23,974 $ 26,224
======== ========
</TABLE>
See accompanying notes to unaudited condensed consolidated financial statements.
3
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SYNTELLECT INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
---------
2000 1999
---- ----
<S> <C> <C>
Net revenues:
System sales $ 7,735 $ 5,888
Hosted services 1,350 2,211
Maintenance and other services 3,633 3,149
-------- --------
Total net revenues 12,718 11,248
Cost of revenues:
System sales 3,922 3,576
Hosted services 1,061 1,408
Maintenance and other services 868 1,166
-------- --------
Total cost of revenues 5,851 6,150
-------- --------
Gross margin 6,867 5,098
Operating expenses:
Selling, marketing and administrative 4,324 4,980
Research and development 864 1,176
Depreciation and amortization 469 611
-------- --------
Total operating expenses 5,657 6,767
-------- --------
Operating income (loss) 1,210 (1,669)
Other income (expense)
Interest income 58 101
Other (71) (21)
-------- --------
Total other income (expense) (13) 80
-------- --------
Income (loss) before income taxes 1,197 (1,589)
Income taxes -- --
-------- --------
Net income (loss) $ 1,197 $ (1,589)
======== ========
Net income (loss) per common share - basic $ .10 $ (.12)
======== ========
Net income (loss) per common share - diluted $ .09 $ (.12)
======== ========
Weighted average shares - basic 11,859 13,505
======== ========
Weighted average shares - diluted 12,860 13,505
======== ========
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment 91 (46)
Unrealized loss on marketable securities -- (5)
-------- --------
Other comprehensive income (loss) 91 (51)
-------- --------
Comprehensive income (loss) $ 1,288 $ (1,640)
======== ========
</TABLE>
See accompanying notes to unaudited condensed consolidated financial statements.
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SYNTELLECT INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
---------
2000 1999
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ 1,197 $(1,589)
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Depreciation and amortization 513 611
Provision for doubtful accounts 102 81
Increase in receivables (56) (3,363)
Decrease in inventories 288 219
(Decrease) increase in accounts payable 87 (363)
(Decrease) increase in customer deposits (1,875) 584
Increase in deferred revenue 622 972
Decrease in accrued liabilities (65) (183)
Change in other assets and liabilities 66 (384)
------- -------
Net cash provided by (used in) operating activities 879 (3,415)
------- -------
Cash flows from investing activities:
Purchase of marketable securities -- (3,545)
Maturities of marketable securities -- 6,542
Purchase of property and equipment (190) (519)
------- -------
Net cash provided by (used in) investing activities (190) 2,478
------- -------
Cash flows from financing activities:
Proceeds from issuance of common stock 503 19
Purchase of treasury stock (2,738) (158)
Principal payments on long-term debt (72) (59)
------- -------
Net cash used in financing activities (2,307) (198)
------- -------
Effect of exchange rates on cash 91 (46)
------- -------
Net decrease in cash and cash equivalents (1,527) (1,181)
Cash and cash equivalents at beginning of period 6,184 3,236
------- -------
Cash and cash equivalents at end of period $ 4,657 $ 2,055
======= =======
Supplemental disclosure of cash flow information:
Cash paid for interest $ 16 $ 21
======= =======
</TABLE>
See accompanying notes to unaudited condensed consolidated financial statements.
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SYNTELLECT INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except shares and per share amounts)
(unaudited)
(1) BASIS OF PRESENTATION
The accompanying unaudited, condensed, consolidated financial
statements include the accounts of Syntellect Inc. ("Syntellect" or the
"Company") and its wholly-owned subsidiaries, Syntellect Canada Inc., Syntellect
Europe Ltd., Syntellect Deutschland GmbH, Syntellect Technology Corporation and
Syntellect Interactive Services, Inc. ("SIS"). All significant intercompany
balances and transactions have been eliminated in consolidation.
The financial statements have been prepared in accordance with
generally accepted accounting principles, pursuant to the rules and regulations
of the Securities and Exchange Commission. In the opinion of management, the
financial statements include all adjustments of a normal recurring nature which
are necessary for a fair presentation of the results for the interim periods
presented. Certain information and footnote disclosures normally included in
financial statements have been condensed or omitted pursuant to such rules and
regulations. Although the Company believes that the disclosures are adequate to
make information presented not misleading, it is suggested that these financial
statements be read in conjunction with the consolidated financial statements and
the notes thereto included in the Company's 1999 Annual Report on Form 10-K. The
results of operations for the three months ended March 31, 2000 are not
necessarily indicative of the results to be expected for the full year.
REVENUE RECOGNITION
Syntellect recognizes revenue from sales of systems and services in
accordance with Statement of Position 97-2, Software Revenue Recognition ("SOP
97-2").
(2) BUSINESS SEGMENTS
Effective for financial statements for fiscal periods beginning after
December 15, 1997, Statement of Financial Accounting Standards No. 131,
"Disclosures about Segments of an Enterprise and Related Information," requires
that an enterprise disclose certain information about operating segments. An
operating segment is defined as a component of an enterprise that engages in
business activities which may earn revenues and incur expenses, whose results
are regularly reviewed by a chief operating decision maker, and for which
discrete financial information is available. The Company has three operating
segments which are organized around differences in products and services:
Systems, Hosted Services ("HS"), and Patents:
<TABLE>
<CAPTION>
(IN THOUSANDS)
QUARTER ENDED MARCH 31, 2000 SYSTEMS HS PATENTS TOTAL
- ----------------------------- ------- -- ------- - ----
<S> <C> <C> <C> <C>
Revenues from customers $ 10,593 $ 1,350 $ 775 $ 12,718
Depreciation and amortization 363 150 -- 513
Segment income (loss) 1,025 (396) 568 1,197
Expenditures for segment assets 40 150 -- 190
QUARTER ENDED MARCH 31, 1999
Revenues from customers $ 9,037 $ 2,211 $ -- $ 11,248
Depreciation and amortization 494 117 -- 611
Segment income (loss) (1,699) 110 -- (1,589)
Expenditures for segment assets 311 208 -- 519
</TABLE>
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(3) INVENTORIES
Inventories consist of the following:
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
---- ----
<S> <C> <C>
Finished goods $ 942 $ 705
Purchased components 299 611
Repair, warranty and maintenance inventory 1,271 1,600
----- -----
2,512 2,916
Less allowances for obsolescence (759) (875)
----- -----
$ 1,753 $ 2,041
======= =======
</TABLE>
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
NET REVENUES
Net revenues for the quarter ended March 31, 2000 were $12.7 million,
an increase of 13% from the $11.2 million reported for the first quarter of
1999. Net revenues consist of System Sales, Hosted Services Revenues and
Maintenance and Other Services Revenues, which represented 61%, 11% and 28% of
net revenues, respectively, for the quarter ended March 31, 2000, and 52%, 20%
and 28% of net revenues, respectively, for the comparable prior year period.
System Sales for the period ended March 31, 2000 were $7.7 million, an
increase of approximately $1.8 million, or 31%, over the $5.9 million reported
for the same prior year period. The increase in System Sales was primarily
related to sales of the Company's Vista(TM) IVR product in the amount of $5.5
million, or 70% of total System Sales revenues. Core product sales include
Vista, an open standards-based Interactive Communications Management (ICM)
software platform for enterprise customer call centers; VocalPoint, an open
architecture Interactive Voice Response ("IVR") platform; VocalPoint Interactive
Services, providing computer telephony integration ("CTI") functionality; and
Interactive Web Response ("IWR"). Non-core products include the Premier and
Premier 030 proprietary IVR systems.
Hosted Services Revenues decreased by $861,000, or 39%, from the same
period in 1999. The primary reason for the decline rests with the Company's Home
Ticket, a pay-per-view service for cable television providers which is offered
through SIS. The cable TV industry has been deploying new order entry
technologies for consumer purchases of pay-per-view events which do not utilize
toll free 800 numbers. This has resulted in a downward trend in transaction
processing fees for the Company; a trend which is expected to continue. To
offset the decline in pay-per-view services, Hosted Services has offered other
out-sourced electronic capabilities including benefits enrollment, broadcast
faxing, call center processing, audiotext, and dealer locators.
Maintenance and Other Services Revenues increased by approximately
$484,000 between the comparable quarters. The maintenance component decreased
$771,000, or 28%. The decrease was anticipated as the Company's VocalPoint ARU
product reached end-of-life in 1999 and associated maintenance contracts were
not renewed. In addition, the Company sold its predictive dialer product line
and associated maintenance contracts in 1999, further reducing maintenance
revenues. Revenues from the other services component, which includes patent
revenue, increased $1.3 million, or 324%, as compared to the same prior year
period. The increase was due primarily to the settlement of a patent lawsuit in
the amount of $775,000 which was related to economic rights maintained by the
Company after the sale of its patent portfolio in 1997. There were no such
revenues in the comparable period of 1999, and the Company does not expect any
further patent revenue.
International Revenues for the first quarter of 2000 were $5.7 million,
or 45% of total revenues, compared to $2 million, or 18% of total revenues, for
the first quarter of 1999. International revenues typically consist of a small
number of larger orders and are subject to quarter-to-quarter fluctuations.
GROSS MARGIN
The gross margin percentage for the quarter ended March 31, 2000 was
54% of net revenues as compared to 45% in the prior year quarter. Gross margins
for System Sales increased to 49% from 39% between comparable quarters primarily
as a result of increased System revenues and the proportion of fixed costs in
cost of sales. Gross margins for Hosted Services decreased from 36% to 21%
between the comparable quarters. The Hosted Services margins declined on reduced
sales primarily due to the relatively fixed nature of hosted services costs.
Gross margins on Maintenance and Other Services increased to 76% from 63%
between the comparable quarters. Contributing to the increase in Maintenance and
Other Services margins were costs which decreased at a faster rate than revenue,
and relatively higher margin patent revenues which were absent from the
comparable period in 1999. The Company includes those costs directly associated
with the generation of revenue in its computation of gross margin, including
direct labor, application development, travel, maintenance, customer support,
supplies and hardware. Gross margins will fluctuate on a quarterly basis due to
changes in competitive pressures, sales volume, product mix, variations in the
ratio of domestic versus international sales, or changes in the mix of direct
and indirect sales activity.
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Accordingly, the gross margins reported for the first quarter of 2000 are not
necessarily indicative of the results to be expected for the full year.
OPERATING EXPENSES
Operating expenses for the first quarter of 2000 were $5.7 million, a
decrease of $1.1 million, or 16%, from the prior year quarter of $6.8 million.
Selling, marketing and administrative expenses decreased $656,000, or 13%,
compared to the prior year period. The primary reasons for the decrease were the
consolidation of the corporate structure and general cost reductions which took
place during the second and third quarters of the prior year. Research and
development (R&D) expenses decreased $312,000, or 27%, compared to the prior
year period. The Company believes that R&D expenses will probably increase in
future periods.
NET INCOME (LOSS)
Syntellect reported a net income of $1.2 million, or $ .09 per diluted
share, for the first quarter of 2000, compared to a net loss of $1.6 million, or
$ .12 per share, for the prior year quarter. The Company has not recorded income
tax expense due to net operating loss carry-forwards, which offset any taxable
income.
LIQUIDITY AND CAPITAL RESOURCES
For the first three months of 2000, the Company had net income of $1.2
million. After adjustment for non-cash activities and the changes in certain
balance sheet items, the Company's operations provided positive cash flows of
$879,000 compared to negative cash flows of $3.4 million in the same period of
1999. The primary factor affecting the difference between net income and cash
flow was the decrease in customer deposits which was only partially offset by
the increase in deferred revenues, the decrease in inventories, and the affects
of depreciation and the provision for doubtful accounts which are non-cash items
Cash flows from investing activities, namely the purchase of property
and equipment, used $190,000 during the period.
Cash used in financing activities totaled $2.3 million for the period.
Proceeds from the issuance of common stock totaled $503,000, while the purchase
of treasury stock used $2.7 million and the repayment of long-term debt used
$72,000.
Syntellect had working capital of $9.2 million at March 31, 2000, as
compared with $9.9 million at December 31, 1999. The current ratio was 1.90:1
and 1.85:1 on such dates, respectively. Cash, cash equivalents and marketable
securities at the end of the first quarter totaled $5.8 million as compared with
$7.3 million at year end.
Syntellect expects that its current cash, cash equivalents and
marketable securities, combined with future cash flows from operating
activities, will be sufficient to support the Company's operations for the
remainder of 2000. The Company has letters of credit totaling $1.1 million
pledged as security deposits for the Company's facilities in Phoenix and
Chicago. These letters of credit are secured by a U.S. Treasury security held in
the Company's available-for-sale portfolio and a bank certificate of deposit
which are restricted as to disposal by the letters of credit agreements.
On November 5, 1999, the Board of Directors of Syntellect approved the
stock buyback plan to purchase up to one million shares of its stock over a
one-year period. As of May 12, 2000, the Company had repurchased 724,800 shares.
OPERATING BUSINESS SEGMENTS
An operating segment is defined as a component of an enterprise that
engages in business activities which may earn revenues and incur expenses, whose
results are regularly reviewed by a chief operating decision maker, and for
which discrete financial information is available. The Company has three
operating segments which are organized around differences in products and
services: Systems; Hosted Services; and Patents (see Note 2).
Systems is the operating segment which has products and services
including IVR, IWR, CTI, and maintenance.
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Hosted Services is the operating segment which has products and
services including Home Ticket pay-per-view, Hot Spots, Call Redirect,
Cyberstats, and a variety of out-sourced electronic capabilities such as
benefits enrollment and broadcast faxing.
Patents is the operating segment which held the Company's patent
portfolio. In October 1997, the Company sold the patent portfolio to a third
party for $10 million. As additional consideration under the agreement, the
Company retained certain economic rights, including the right to pursue certain
litigation against third parties. Revenues from Customers include payments for
settlement of patent lawsuits. The Company recognized $775,000 in revenue in the
quarter ended March 31, 2000 from a patent lawsuit, but had no such revenue in
the prior year period. The Company does not expect any further patent related
revenue.
YEAR 2000
Many currently installed computer systems and software products were
coded to accept only two-digit year entries in the date code field.
Consequently, subsequent to December 31, 1999, many of these systems became
subject to failure or malfunction. Although the Company is not aware of any
material Year 2000 issues at this time, Year 2000 problems may occur or be made
known to the Company in the future. Year 2000 issues may possibly affect
software solutions developed by the Company or third-party software incorporated
into the Company's solutions. The Company generally does not guarantee that the
software licensed from third parties by the Company's clients is Year 2000
compliant, but the Company does sometimes warrant that solutions written and
developed by the Company are Year 2000 compliant.
FORWARD LOOKING STATEMENTS
This report on Form 10-Q contains "forward-looking statements" within
the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. Although the
Company believes that the expectations reflected in such forward-looking
statements are reasonable, it can give no assurance that such expectations will
prove to be correct. Also see "Management's Discussion and Analysis of Financial
Condition and Results of Operations" in the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 1999 for a discussion of important
factors that could affect the validity of any such forward-looking statements.
ITEM 3. FOREIGN CURRENCY EXCHANGE RATE RISK
The Company invoices all international customers in U. S. dollars
except customers of the Company's United Kingdom (U.K.) subsidiary which are
invoiced in pounds sterling. The U.K. subsidiary's financials including balance
sheet, revenue, and operating expenses are transacted in pounds sterling.
Therefore, the Company's exposure to foreign currency exchange rate risk occurs
when translating the financial results of the U.K. subsidiary to U.S. dollars in
consolidation. At this time, the Company does not use instruments to hedge its
foreign exposure in the U.K. because the effects of foreign exchange rate
fluctuations are not material.
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PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit 11 - Computation of net income per share
Exhibit 27.1 - Financial Data Schedule-2000
(b) Reports on Form 8-K
No current reports on Form 8-K were filed during the three
months ended March 31, 2000.
11
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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.
SYNTELLECT INC.
Date: May 11, 2000 By: /s/ Timothy P. Vatuone
----------------------------------------
Timothy P. Vatuone
Vice President, Chief Financial Officer,
Secretary and Treasurer
By: /s/ Keith A. Pekkala
---------------------------------------
Keith A. Pekkala
Vice President and Controller
(Principal Accounting Officer)
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EXHIBIT INDEX
Exhibit 11 - Computation of net income per share
Exhibit 27.1 - Financial Data Schedule - 2000
13
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EXHIBIT 11
SYNTELLECT INC.
COMPUTATION OF NET INCOME (LOSS) PER SHARE
<TABLE>
<CAPTION>
Three Months Ended
March 31
--------
2000 1999
---- ----
<S> <C> <C>
Numerator:
Numerator for basic and diluted income (loss) per
share - net income (loss) $ 1,197,000 $ (1,589,000)
============ ============
Denominator:
Denominator for basic income (loss) per share -
weighted average number of common shares
outstanding during the period 11,859,000 13,505,000
Incremental common shares attributable to exercise of
outstanding common stock options 1,001,000 --
------------ ------------
Denominator for diluted income (loss) per share 12,860,000 13,505,000
============ ============
Basic net income (loss) per share $ 0.10 $ (0.12)
============ ============
Diluted net income (loss) per share $ 0.09 $ (0.12)
============ ============
</TABLE>
The computation of diluted loss per share for March 31, 1999 excluded the effect
of incremental common shares numbering 557,000 attributable to the exercise of
common stock options because their effect would have been anti-dilutive.
14
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET OF SYNTELLECT, INC. AND SUBSIDIARIES AS OF MARCH 31,
2000, AND THE CONSOLIDATED STATEMENT OF OPERATIONS OF SYNTELLECT, INC. AND
SUBSIDIARIES FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<EXCHANGE-RATE> 1
<CASH> 4656
<SECURITIES> 1101
<RECEIVABLES> 11974
<ALLOWANCES> 615
<INVENTORY> 1753
<CURRENT-ASSETS> 19497
<PP&E> 13084
<DEPRECIATION> 8620
<TOTAL-ASSETS> 23974
<CURRENT-LIABILITIES> 10287
<BONDS> 0
0
0
<COMMON> 143
<OTHER-SE> 13300
<TOTAL-LIABILITY-AND-EQUITY> 23974
<SALES> 7735
<TOTAL-REVENUES> 12718
<CGS> 3922
<TOTAL-COSTS> 5851
<OTHER-EXPENSES> 5657
<LOSS-PROVISION> 102
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1197
<INCOME-TAX> 0
<INCOME-CONTINUING> 1197
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1197
<EPS-BASIC> 0.10
<EPS-DILUTED> 0.09
</TABLE>
