U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
{X} Quarterly Report under Section 13 or 15(d) of the Securities Exchange Act
of 1934.
For the Quarterly Period ended September 30, 1999
{ } Transition Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act
For the Transition Period from __________ to __________
Commission file Number 0-14266
POLLUTION RESEARCH AND CONTROL CORP.
------------------------------------
(Exact Name of Small Business Issuer as Specified in its Charter)
California 95-2746949
---------- ----------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Number)
506 Paula Avenue, Glendale, California 91201
--------------------------------------------
(Address of Principal Executive Offices)
(818) 247-7601
--------------
(Issuer's telephone number, including area code)
Check whether the Small Business Issuer (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act of 1934 during the past 12
months (or such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements of the past 90
days.
Yes X No _
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:
Class Date No. of Shares Outstanding
----- ----- -------------------------
Common November 8, 1999 4,036,770
Traditional Small Business Disclosure Format (check one):
YES X No ___
1
<PAGE>
POLLUTION RESEARCH AND CONTROL CORP.
Form 10-QSB
For the Nine-Month Period Ended September 30, 1999
TABLE OF CONTENTS
Page
----
Part I Financial Information
Item 1. Financial Statements:
Consolidated Balance Sheet 3
Consolidated Statements of Operations 5
Consolidated Statement of Shareholders Equity 7
Consolidated Statement of Cash Flows 8
Notes to Financial Statements 10
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 13
Part II Other Information 16
Item 1 Legal Proceedings 16
Item 6(b) Reports on Form 8-K 16
2
<PAGE>
PART 1 - FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEET
ASSETS
(Unaudited)
As of
09/30/99
--------
CURRENT ASSETS
Cash $ 279,629
Accounts receivable, trade, less allowance for doubtful 2,522,041
accounts of $ 4,734
Inventories (Note 2) 1,784,013
Prepaid expenses (Note 3) 618,994
Other current assets 8,214
----------
TOTAL CURRENT ASSETS 5,212,891
----------
PROPERTY, EQUIPMENT AND LEASEHOLD
IMPROVEMENTS, less accumulated depreciation of $202,653 102,569
----------
OTHER ASSETS
Advances to joint venture 203,938
Technical service center 600,000
Other intangible assets 88,112
Other assets 12,140
----------
TOTAL OTHER ASSETS 904,190
----------
TOTAL ASSETS $6,219,650
==========
See notes to financial statements
3
<PAGE>
CONSOLIDATED BALANCE SHEET
LIABILITIES AND SHAREHOLDERS' EQUITY
(Unaudited)
As of
CURRENT LIABILITIES 9/30/99
-------
Notes payable $ 1,830,303
Accounts payable 342,787
Accrued expenses (Note 4) 320,993
-----------
TOTAL CURRENT LIABILITIES 2,494,083
-----------
DEFERRED RENT 47,235
-----------
SHAREHOLDERS' EQUITY : (Note 5)
Preferred Stock, no par value; 20,000,000
shares authorized, none issued and outstanding
Common Stock, no par value; 30,000,000 shares
authorized, 4,036,770 issued and outstanding 7,695,420
Other paid in capital 1,106,216
Accumulated deficit (5,123,304)
-----------
TOTAL SHAREHOLDERS' EQUITY $ 3,678,332
-----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 6,219,650
===========
See notes to financial statements
4
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months
Ended September 30,
--------------------------
1999 1998
----------- -----------
<S> <C> <C>
Net Revenues $ 2,814,886 $ 944,754
Cost of goods sold 1,504,944 493,412
----------- -----------
Gross profit 1,309,942 451,342
----------- -----------
Operating expenses:
Selling, general and administrative expenses 860,319 513,687
Research and development 49,866 3,780
----------- -----------
Total operating expenses 910,185 517,467
----------- -----------
Income (loss) from operations 399,757 (66,125)
Other Income (Expense)
Interest Expense (141,096) (7,935)
Other income (expense) (5,020) 3,490
----------- -----------
Income (loss) from continuing operations
Before Income Taxes 253,641 (70,570)
Provision for income taxes 1,600 --
----------- -----------
Income (loss) from continuing operations 252,041 (70,570)
Discontinued operations (Note 6)
Income (loss) from discontinued operations -- 2,712
Loss on disposal -- (503,997)
----------- -----------
-- (501,285)
----------- -----------
Net Income $ 252,041 $ (571,855)
=========== ===========
Earnings per share
Net Income (loss) per share - basic
Continuing operations $ .06 $ (.03)
=========== ===========
Discontinued operations $ -- $ (.21)
=========== ===========
Net Income (loss) per share - diluted
Continuing operations $ .06 $ (.03)
=========== ===========
Discontinued operations $ -- $ (.21)
=========== ===========
Weighted Average Shares
Basic 3,893,770 2,399,689
=========== ===========
Diluted 4,572,578 2,399,689
=========== ===========
See notes to financial statements
5
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Nine Months
Ended September 30,
--------------------------
1999 1998
----------- -----------
<S> <C> <C>
Net Revenues $ 5,756,783 $ 2,174,672
Cost of goods sold 3,213,866 1,288,094
----------- -----------
Gross profit 2,542,917 886,578
----------- -----------
Operating expenses:
Selling, general and administrative expenses 1,614,993 1,189,877
Research and development 55,576 12,908
----------- -----------
Total operating expenses 1,670,569 1,202,785
----------- -----------
Income (loss) from operations 872,348 316,207
Other Income (Expense)
Interest Expense (293,578) (19,879)
Other income (expense) (114,020) 3,529
----------- -----------
Income (loss) from continuing operations
Before Income Taxes 464,750 (332,557)
Provision for income taxes 1,600 --
-----------
Income (loss) from continuing operations 463,150 (332,557)
Discontinued operations (Note 6)
Income (loss) from discontinued operations -- (108,550)
Loss on disposal -- (1,018,411)
-----------
-- (1,126,961)
----------- -----------
Net Income $ 463,150 $(1,459,518)
=========== ===========
Earnings per share
Net Income (loss) per share - basic
Continuing operations $ .13 $ (.15)
=========== ===========
Discontinued operations $ -- $ (.50)
=========== ===========
Net Income (loss) per share - diluted
Continuing operations $ .12 $ (.15)
=========== ===========
Discontinued operations $ -- $ (.50)
=========== ===========
Weighted Average Shares
Basic 3,499,648 2,245,518
=========== ===========
Diluted 3,997,402 2,245,518
=========== ===========
See notes to financial statements
6
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
POLLUTION RESEARCH AND CONTROL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
For the Nine Months Ended September 30, 1999
Other Total
Series A Preferred Stock Series B Preferred Stock Common Stock Paid In Accumulated Shareholders'
Shares Amount Shares Amount Shares Amount Capital Deficit Equity
------------------- ------------------- ----------------------- ------- ------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE
12/31/98 220,000 $ 2,200 450,000 $ 4,500 2,368,439 $ 6,704,195 $ 928,831 $(5,586,454) $ 2,053,272
Issuance of
warrants with
note payable and
debentures 76,085 76,085
Issuance of 100,000 175,000 20,000 195,000
common
stock &
warrants under
compromise
agreement
Conversion of (220,000) (2,200) (450,000) (4,500) 670,000 6,700
Series A and
Series B
preferred stock
to common
stock
Issuance of 848,331 731,375 731,375
common
stock net
of issuance
costs of
$ 74,875
Shares & warrants
issued for
consulting services 50,000 78,150 81,300 159,450
Net Income for -- -- -- -- -- -- -- 463,150 463,150
the nine -------- -------- ---------- -------- ---------- ----------- ----------- ----------- -----------
months
Balance
September 30, 1999 -0- -0- -0- -0- 4,036,770 $ 7,695,420 $ 1,106,216 $(5,123,304) $ 3,678,332
======== ======== ========== ======== ========== =========== =========== =========== ===========
See notes to financial statements
7
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months
Ended September 30
--------------------------
1999 1998
----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net Income (Loss) $ 463,150 $(1,459,518)
Adjustments to reconcile net income to net cash
used for operating activities:
Loss on disposal of subsidiary -- 1,018,411
Losses on disposed subsidiary -- 26,418
Depreciation and amortization 100,156 82,775
Deferred rent 12,112 15,112
Changes in operating assets and liabilities:
Accounts receivable, trade, net (2,225,008) 44,545
Inventories 156,858 143,723
Prepaid expenses (454,544) --
Other current assets (4,135) 8,177
Other assets (12,140) 987
Accounts payable 86,095 (60,326)
Accrued liabilities 79,316 (12,620)
Unearned revenue -- (143,695)
----------- -----------
Net cash used for operating activities (2,111,856) (336,011)
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Loan fees (50,000) --
Proceeds from auction of equipment -- 165,064
Acquisition of property, equipment and leasehold
improvements (9,748) (1,919)
----------- -----------
Net cash used for investing activities (59,748) 163,145
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from private placements of stock 731,375 362,070
Advances on notes payable and line of credit 1,237,303 218,125
Increase in amount due under Nutek settlement agreement 118,604 --
Borrowings under long-term debt 300,000 --
Repayments of debt -- (556,835)
----------- -----------
Net cash provided by financing activities 2,387,282 23,360
----------- -----------
NET INCREASE (DECREASE) IN CASH 215,678 (149,506)
CASH AT BEGINNING OF PERIOD 63,951 514,895
----------- -----------
CASH AT END OF PERIOD $ 279,629 $ 365,389
=========== ===========
Supplemental Disclosure:
Cash paid for:
Interest $ 291,745 $ 19,879
Taxes $ 1,600 $ --
See notes to financial statements
8
</TABLE>
<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS (Cont)
(Unaudited)
Nine Months
Ended September 30
------------------
1999 1998
-------- -------
Supplemental disclosure of noncash financing activities:
Stock & warrants issued for:
Services $ 39,862 $ --
Prepaid consulting services 119,588 --
Loan fees 96,085 --
Debt repayment 175,000 --
9
<PAGE>
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
1. Basis of Presentation
The information furnished herein reflects all adjustments, consisting only of
normal recurring adjustments, which are, in the opinion of management, necessary
to a fair presentation of the financial statements for the period presented.
Interim results are not necessarily indicative of results for a full year.
The financial statements should be read in conjunction with the financial
statements and notes thereto included in the Company's annual report on Form
10-KSB for the year ended December 31, 1998.
2. Inventories:
Inventories at September 30, 1999 consisted of the following:
Raw Materials $ 855,394
Work-in-Progress 451,149
Finished Goods 477,470
-----------
$ 1,784,013
===========
3. Prepaid Expense:
Prepaid expense at September 30, 1999 consists of:
Prepaid facility fees under China Contract $ 463,611
Prepaid consulting services 150,383
Other 5,000
-----------
$ 618,994
===========
4. Accrued Expenses:
Accrued expenses at September 30, 1999 consisted of the following:
Accrued travel and other costs under China Contract $ 100,000
Accrued payroll and related taxes 161,862
Accrued vacation 25,013
Current portion of deferred rent 23,012
Other 11,106
-----------
$ 320,993
===========
5. Shareholders' Equity:
During the third quarter of 1999, the Company received $305,750, net of issuance
costs, from the issuance of 260,000 shares of common stock under private
placements. As part of the private placements, the Company issued three-year
warrants to purchase 75,000 shares of common stock at $.75 and 75,000 shares at
$2.40.
In addition, the Company issued 50,000 shares of common stock and warrants to
purchase 100,000 shares of common stock at $.75 under a consulting agreement.
10
<PAGE>
During the second quarter of 1999, the Company received $229,500, net of $25,500
of issuance costs, from the issuance of 300,000 shares of common stock under a
private placement.
During the first quarter of 1999, the Company received $196,125, net of $20,125
of issuance costs, from the issuance of 288,331 shares of common stock under a
private placement. As part of the private placement, the Company issued
three-year warrants to purchase 288,331 shares of common stock at $.75 per
share.
During the first quarter of 1999 all of the holders of the Series A and Series B
preferred stock converted their shares to 670,000 shares of common stock in
accordance with the original conversion terms.
6. Discontinued Operations:
In September 1999 the Company was advised that Chinese technicians and engineers
would not be able to obtain visas to Macau for training in a timely manner. The
China State Environmental Protection Agency (SEPA) dictated that training and
even future services should be based on a localized six city office network
supplied by the Company. Therefore, on October 25, 1999 the Company rescinded
the purchase of its Macau training center and retired 450,000 common shares
which had been placed in escrow pending completion of the purchase.
7. Notes Payable:
On October 7, 1999 the Company obtained an $800,000 working capital loan
guaranteed by the California Export Finance Office (CEFO) and provided by World
Trade Finance. The loan is at prime plus 3% and requires related fees of
approximately $30,000. The expiry date is December 15, 1999 and the loan
involves a U.C.C.1 on the assets of the Company and will be repaid with the
proceeds of the 4th shipment Letter of Credit on the China project.
The Company received a working capital loan of approximately $380,000 from MFR
Financial Resources Inc. as interim accounts payable financing with the
intention and subsequent actual repayment by the CEFO guaranteed loan as
discussed above. The fees for this 30 day loan were an estimated $56,000.
On September 1, 1999 the Company entered into 12% subordinated convertible
debenture agreements totaling $300,000 due June 1, 2000. The debentures are
convertible into the Company's common stock at any time at the option of the
holder. The conversion price is the lesser of 80% of the market price of the
common stock on the date of conversion or $2.25. In addition, the Company issued
warrants to purchase 45,000 shares of the Company's common stock at $2.25 per
share to the debenture holders. Additional warrants to purchase 18,000 shares of
the Company's common stock at $2.25 were issued as loan fees.
In June, 1999 the Company entered into a compromise settlement agreement with
Fidelity Federal, the major secured lender of Nutek. Under this agreement, the
Company agreed to repay $468,000 through issuance of 100,000 shares of common
stock (valued at $1.75 per share on date of issuance) and payment on February 1,
2000 of the remaining balance due, including interest accruing from the
settlement date at 12% per annum. The Company is required to register the
100,000 shares and sell them on behalf of Fidelity Federal. The net proceeds
from the sale of these shares will be used to reduce the balance owed Fidelity
Federal under the settlement agreement. In addition, the Company issued warrants
to purchase 20,000 shares of the Company's common stock at $.75 per share to
Fidelity Federal as an inducement to enter into this settlement agreement.
On May 28, 1999 the Company entered into an 18% subordinated convertible
debenture agreement for $500,000 due December 1, 1999. The debenture is
convertible into the Company's common stock at any time at the option of the
holder. The conversion price is the lesser of 80% of the market price of the
common stock on the date of conversion or 115% of the market price of the common
11
<PAGE>
stock on May 28, 1999. As part of this agreement, the Company agreed to repay
$101,000 received from the debenture holder in 1998 that was previously reported
as income in 1998. In addition, the Company paid $50,000 and issued warrants to
purchase 105,000 shares of the Company's common stock at $1.50 per share as loan
fees.
During the first quarter of 1999, the Company borrowed $100,000 under a
four-month note, bearing interest at 11% per annum. In conjunction with this
loan, the Company issued the note holder three-year warrants to purchase 48,000
shares of common stock at $.75 per share. The Company paid loan fees of $10,000
plus warrants to purchase an additional 5,000 shares of common stock at $.75 per
share. This note was subsequently increased to $300,000 with interest at 12% per
annum and is due in June, 2000.
12
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULT OF OPERATIONS
General
The Company designs, manufactures and markets automated continuous monitoring
instruments used to detect and measure various types of air pollution through
its wholly-owned subsidiary, Dasibi Environmental Corp.
The Company experienced operating losses during the three quarters ending March
31, 1999 as it geared up operations to manufacture and ship product to the
People's Republic of China pursuant to a contract signed in June 1998 (The
"China Contract"). The Company shipped the first such product in June 1999. The
Company shipped the largest portion of the China Contract on September 30, 1999.
Successful progress thus far has been largely due to obtaining working capital
financing under a State of California (CEFO) guarantee.
A relatively minor shipment is due in the middle of November, at which time all
equipment due will have been received in China. Training as required under the
contract is essentially complete. Installation and start-up is 40% complete. The
project status is ahead of schedule.
The Company's future operating results may be affected by a number of important
factors, including: but not limited to the ability of the Company to obtain
further contracts for China; uncertainties relative to global economic
conditions; industry factors; the availability and cost of components; the
Company's ability to develop, manufacture and sell its products profitably; the
Company's ability to successfully increase its market share in its core business
while expanding its products base into other markets; the strength of its
distribution channels, and the Company's ability to effectively manage expense
growth relative to revenue growth in anticipation of continued pressure on gross
margins.
13
<PAGE>
RESULTS OF OPERATIONS
Three Months Ended September 30, 1999, versus Three Months Ended September 30,
1998
Net revenues increased 198% from $944,754 during the third quarter of 1998 to
$2,814,886 during the third quarter of 1999. The increase was primarily due to
shipment of product under the China Contract which substantially exceeded
domestic and other international shipments.
Gross profit margin was 46% for the third quarter of 1999 versus 48% for the
third quarter of 1998, which range is considered normal for the Company's
business.
Selling, general and administrative expenses increased $346,632, or 67% during
the third quarter of 1999, versus the same period in 1998, principally due to a
larger workforce required to perform the increased manufacturing demands
required by the China Contract.
As a result of the foregoing factors, net operating income increased from a net
operating loss of ($70,570) during the three months ended September 30, 1998 to
a net operating income of $252,041 during the three months ended June 30, 1999.
Nine Months Ended September 30, 1999, versus Nine Months Ended September 30,
1998
Net revenues increased 164% from $2,174,672 during the nine months ended
September 30, 1998 to $5,756,783 during the nine months ended September 30,
1999. The increase was primarily due to product shipment under the China
Contract which substantially exceeded domestic and other international
shipments.
Gross profit margin was 44% for the nine months ended September 30, 1999 versus
41% for the nine months ended September 30, 1998, primarily because of higher
margins on sales under the China Contract, versus margins on domestic shipments.
Selling, general and administrative expenses increased $425,116, or 36% during
the nine months ended September 30, 1999, versus the same period in 1998,
principally due to a larger workforce required to perform the increased
manufacturing demands required by the China Contract.
As a result of the foregoing factors, net operating income increased from a net
operating loss of ($332,557) during the nine months ended September 30, 1998 to
a net operating income of $463,150 during the nine months ended September 30,
1999.
Liquidity and Capital Resources
The Company has historically financed its growth and cash needs primarily
through borrowings, and the public and private sales of its securities. See Note
7 of Notes to Consolidated Financial Statements for a discussion of borrowings
and financings during the nine months ended September 30, 1999. The low market
value of the Company's securities and its unstable operating performance has
severely restricted the Company's access to capital, and when capital has been
obtained it has been necessarily costly due to high interest costs and related
loan fees.
Net cash used in operating activities in the nine months ended September 30,
1999, amounted to $2,111,856, primarily due to expenditures related to the
shipment of products to China and contracted installation and training. The
Company's cash level increased 337% as compared to December 31, 1998, primarily
due to private placements of common stock amounting to $731,000 and additional
borrowings of $1,537,000 resulting in a net increase of $215,700.
14
<PAGE>
Working capital was $2,718,807 at September 30, 1999.
The Company has no material commitments for capital expenditures as of September
30, 1999. The Company has several short term borrowings which on the one hand,
have been budgeted for repayment from scheduled payments from its China project
and, on the other, have been receptive to extensions if payments are delayed
past budget. The Company has experienced a four month delay in its receipt of
"down payment deposit" funds on the China Contract equal to $450,000. All other
payments have been received on such Contract albeit with delays by the Company's
banks. At this time, there are no cash shortfalls in the Company. In this
position the Company believes it will be able to meet its current obligations
with funds generated from operations during the next twelve months. However,
some combinations of significantly longer delay in "clearing" the down payment
deposits for the China project, along with no extensions of some repayment loan
dates would have a material adverse effect on the Company's business and
financial results. In addition, expanded operations will continue to require
additional working capital to be provided by additional financing. If such
financing cannot be obtained, or can only be obtained at cost-prohibitive rates,
the Company's expansion efforts will have to be curtailed or postponed, which
have a material adverse effect on the Company's business and financial results.
Inflation
The Company believes that inflation has not had a material impact on its
business.
Seasonality
The Company does not believe that its business is seasonal.
Year 2000 Compliance
General. The Company believes it has completed all internal efforts to avoid the
adverse effects of the Year 2000 issue.
State of Readiness. The Company received certifications of compliance from all
vendors deemed material to its business operations during the first quarter of
1999.
Contingency Plans. The Company believes it should not rely completely on key
vendor compliance certification. Therefore costs are being incurred to enable
the Company to utilize alternative design procedures to allow alternate vendor
supply. These design changes are on-going and the costs are not expected to be
material.
Risks. The Company presently does not anticipate any material business
disruption will occur as a result of Year 2000 issues. The greatest potential
risk appears to be with federal, state and local governments.
15
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Not applicable
(b) The Company did not file any reports on Form 8-K during the three
months ended September 30 , 1999.
16
<PAGE>
Signatures
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
POLLUTION RESEARCH AND CONTROL CORP.
------------------------------------
(Registrant)
Date: November 8, 1999 By: /s/ Albert E. Gosselin
--------------------------
Albert E. Gosselin, Jr., President and
Chief Executive Officer
Date: November 8, 1999 By: /s/ Donald Ford
-------------------
Donald Ford
Chief Financial Officer
17
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 280
<SECURITIES> 0
<RECEIVABLES> 2,527
<ALLOWANCES> (5)
<INVENTORY> 1,784
<CURRENT-ASSETS> 5,213
<PP&E> 305
<DEPRECIATION> (203)
<TOTAL-ASSETS> 6,220
<CURRENT-LIABILITIES> (2,494)
<BONDS> 0
0
0
<COMMON> 8,802
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 6,220
<SALES> 5,757
<TOTAL-REVENUES> 5,757
<CGS> 3,214
<TOTAL-COSTS> 3,214
<OTHER-EXPENSES> 1,785
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 294
<INCOME-PRETAX> 465
<INCOME-TAX> (2)
<INCOME-CONTINUING> 463
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 463
<EPS-BASIC> .13
<EPS-DILUTED> .12
</TABLE>
