SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996
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 No. 1-13048
HEALTHY PLANET PRODUCTS, INC.
-----------------------------
(Exact name of registrant as specified in its charter)
Delaware 94-2601764
-------- ----------
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
1700 Corporate Circle, Petaluma, California 94954
- ------------------------------------------- -----
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (707) 778-2280
- --------------------------------------------------------------------------------
Former name, former address and former fiscal year, if changed since last
report.
Check whether the Issuer (1) 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
----- -----
As of October 31, 1996, there were issued and outstanding 1,827,362
shares of common stock of the registrant (exclusive of 186,341 shares of voting
Series D Preferred Stock convertible into 186,341 shares of common stock).
Page 1 of 14
<PAGE>
<TABLE>
HEALTHY PLANET PRODUCTS, INC.
INDEX
<CAPTION>
Page
----
<S> <C>
Form 10-QSB Cover Page 1
Index 2
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheet at September 30, 1996 3
Statements of Income for the three-months ended 5
and nine months ended September 30, 1996 and 1995
Statements of Cash Flows for the three-months ended 6
and nine months ended September 30, 1996 and 1995
Notes to the Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K, Signature 13 - 14
</TABLE>
Page 2 of 14
<PAGE>
PART I
FINANCIAL INFORMATION
Item 1. Financial Statements
HEALTHY PLANET PRODUCTS, INC.
BALANCE SHEET
ASSETS
September 30,
1996
----------
(Unaudited)
CURRENT ASSETS
Cash $3,215,376
Accounts receivable - net of allowances for doubtful
accounts and returns of $286,077 1,658,869
Inventories 1,354,796
Advance on royalties 105,473
Prepaid expenses 105,678
Deferred income taxes 740,000
----------
Total current assets 7,180,192
----------
PROPERTY AND EQUIPMENT, at cost, net of accumulated
depreciation and amortization 428,128
----------
OTHER ASSETS
Deferred income taxes 1,060,370
Security deposits 36,353
Publishing rights - net of accumulated
amortization of $312,611 99,151
Deferred rent 131,160
Other 2,215
----------
Total other assets 1,329,249
----------
TOTAL ASSETS $8,937,569
==========
The accompanying notes are an integral
part of these financial statements.
Page 3 of 14
<PAGE>
HEALTHY PLANET PRODUCTS, INC.
BALANCE SHEET (Continued)
LIABILITIES AND SHAREHOLDERS' EQUITY
September 30,
1996
-----------
(Unaudited)
CURRENT LIABILITIES
Accounts payable $ 517,922
Royalties payable 18,106
Commissions payable 122,076
Accrued wages, bonus' and payroll taxes 97,188
Accrued liabilities 2,149
-----------
Total current liabilities 757,441
ACCRUED RENT PAYABLE 25,902
-----------
TOTAL LIABILITIES 783,343
-----------
SHAREHOLDERS' EQUITY
Common stock, $.01 par value, 12,000,000 shares
authorized, 1,827,362 shares issued and outstanding 18,273
Preferred stock, Series B, $.10 par value, with
aggregate liquidation preferences of $100,080,
14,250 shares authorized, 834 shares issued
and outstanding 83
Preferred stock, Series D, $.10 par value, with
aggregate liquidation preferences of $952,203
371,009 shares authorized, 186,341 issued and
outstanding 18,634
Additional paid-in capital 12,285,611
Accumulated deficit (4,168,375)
-----------
Total shareholders' equity 8,154,226
-----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 8,937,569
===========
The accompanying notes are an integral
part of these financial statements.
Page 4 of 14
<PAGE>
<TABLE>
HEALTHY PLANET PRODUCTS, INC.
STATEMENT OF INCOME
(Unaudited)
<CAPTION>
Three Months Ended Sept. 30, Nine Months Ended Sept. 30,
----------------------------- -------------------------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
NET SALES $1,910,038 $2,590,692 $3,730,434 $4,627,557
COST OF GOODS SOLD 792,830 1,072,773 1,433,637 1,763,299
---------- ---------- ---------- ----------
GROSS PROFIT 1,117,208 1,517,919 2,296,797 2,864,258
---------- ---------- ---------- ----------
OPERATING EXPENSES:
Selling, shipping and marketing 280,074 415,908 662,885 811,188
General and administrative 569,073 505,465 1,301,475 1,276,223
---------- ---------- ---------- ----------
849,147 921,373 1,964,360 2,087,411
---------- ---------- ---------- ----------
OPERATING INCOME 268,061 596,546 332,437 776,847
---------- ---------- ---------- ----------
OTHER INCOME:
Interest income 40,028 27,920 121,945 97,194
Other income 135 1,495 135,144 1,749
---------- ---------- ---------- ----------
40,163 29,415 257,089 98,943
---------- ---------- ---------- ----------
INCOME BEFORE TAXES 308,224 625,961 589,526 875,790
PROVISION (BENEFIT) FOR
INCOME TAXES 123,289 (760,717) 235,810 (882,417)
---------- ---------- ---------- ----------
NET INCOME 184,935 1,386,678 353,716 1,758,207
DIVIDENDS ACCUMULATED
ON PREFERRED STOCK -- -- (4,504) (6,755)
INCOME APPLICABLE TO
COMMON STOCK $ 184,935 $1,386,678 $ 349,212 $1,751,452
---------- ---------- ---------- ----------
EARNINGS PER SHARE $ .09 $ .67 $ .17 $ .85
========== ========== ========== ==========
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING 2,020,849 2,071,195 2,015,971 2,050,191
========== ========== ========== ==========
<FN>
The accompanying notes are an integral
part of these financial statements.
</FN>
</TABLE>
Page 5 of 14
<PAGE>
<TABLE>
HEALTHY PLANET PRODUCTS, INC.
STATEMENT OF CASH FLOWS
(Unaudited)
<CAPTION>
Three Months Ended Sept. 30, Nine Months Ended Sept. 30,
----------------------------- -----------------------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 184,935 $ 1,386,678 $ 353,716 $ 1,758,207
Non-cash items included in net income
Depreciation and amortization 45,956 39,137 137,888 109,255
Increase/(decrease) in allowances for
doubtful accounts and returns 144,163 229,595 (220,923) 175,969
Change in inventory reserves (31,000) 95,000 (56,000) 14,203
(Increase)decrease in deferred income taxes 123,289 (762,750) 222,630 (902,000)
Abandonment of leasehold improvements -- -- 12,493 --
Changes in:
Accounts receivables (966,309) (1,634,479) (701,488) (1,381,147)
Inventories 108,024 87,828 (393,522) (240,054)
Advances on royalties 110,422 153,055 (105,473) (117,624)
Prepaid expenses 3,298 58,130 (72,467) (24,229)
Accounts payable 178,807 201,231 224,062 445,105
Royalties payable 7,647 10,308 9,500 3,551
Commissions payable 67,345 108,740 (33,879) 25,686
Accrued wages, bonus and payroll taxes 70,873 93,331 (34,312) 58,278
Accrued liabilities (24,731) 4,930 (25,352) (13,443)
Accrued rent payable 20,966 (33) (64,530) 3,650
----------- ----------- ----------- -----------
Net cash used by operating activities 43,685 70,701 (747,657) (84,593)
----------- ----------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of equipment and color separations (3,593) (10,921) (80,874) (287,946)
Increase in publishing rights (11,970) (600) (34,923) (20,756)
Other (1,774) -- (22,141) 86,200
Deferred rent 3,437 -- (131,160) --
----------- ----------- ----------- -----------
Net cash used by investing activities (13,900) (11,521) (269,098) (222,502)
----------- ----------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from stock options exercised -- 47,500 90,000 296,250
Proceeds from warrants exercised -- 188,493 -- 188,493
Costs on registration of warrants -- (40,697) -- (40,697)
----------- ----------- ----------- -----------
Net cash from financing activities -- 195,296 90,000 444,046
----------- ----------- ----------- -----------
INCREASE (DECREASE) IN CASH 29,785 254,476 (926,755) 136,951
CASH, BEGINNING OF PERIOD 3,185,591 2,430,012 4,142,131 2,547,537
----------- ----------- ----------- -----------
CASH, END OF PERIOD $ 3,215,376 $ 2,684,488 $ 3,215,376 $ 2,684,488
=========== =========== =========== ===========
SUPPLEMENTARY CASH FLOW INFORMATION INCLUDES
THE FOLLOWING:
Cash paid during the period for:
Interest $ -- $ -- $ -- $ --
Income taxes $ -- $ 2,033 $ 22,780 $ 19,583
<FN>
The accompanying notes are an integral part of these financial statements.
</FN>
</TABLE>
Page 6 of 14
<PAGE>
HEALTHY PLANET PRODUCTS, INC.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION
The financial statements included herein have been prepared by the Company,
without audit, pursuant to the rules and regulations of the Securities and
Exchange Commission. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been omitted pursuant to such rules and regulations.
It is believed, however, that the disclosures are adequate to make the
information presented not misleading.
The financial statements, in the opinion of management, reflect all
adjustments necessary, which are of a normal recurring nature, to fairly state
the financial position and the results of operations. These results are not
necessarily to be considered indicative of the results for the entire year.
NOTE 2 - INVENTORIES
Inventories consist of the following: September 30,
1996
-----------
Raw materials $ 157,060
Work-in-process 798,149
Finished goods 399,587
----------
$1,354,796
==========
NOTE 3 - PROPERTY AND EQUIPMENT
Property and equipment consist of the following:
September 30,
1996
-----------
Machinery, equipment and leasehold improvements $ 795,273
Color separations 328,791
Furniture and fixtures 72,664
Computer software 38,171
-----------
1,234,899
Less accumulated depreciation and amortization (806,771)
-----------
$ 428,128
===========
Page 7 of 14
<PAGE>
HEALTHY PLANET PRODUCTS, INC.
NOTES TO FINANCIAL STATEMENTS (Continued)
(Unaudited)
NOTE 4 - INCOME TAXES
As of January 1, 1996 the Company had available federal net operating loss and
investment tax credit carryforwards of approximately $5,090,000 and $15,600
respectively to be applied against future federal taxable income, of which
$3,339,000 of net operating losses are subject to a limitation under Section 382
of the Internal Revenue Code of $476,950 per year. Also available are
approximately $34,000 of alternative minimum tax credit carryforwards to reduce
future federal and California regular income taxes over an indefinite period. In
1992, when the Company adopted FAS 109, Accounting for Income Taxes, it reduced
the deferred income tax benefit of these loss carryforwards by establishing a
valuation allowance. For the quarter and the nine months ended September 30,
1995, a portion of the valuation allowance was eliminated, resulting in a net
income tax benefit of $760,717 and $882,417 respectively. Based on anticipated
growth in future years, the Company believes it will fully utilize available
Federal net operating losses prior to expiration.
The income tax provision of $235,810 in 1996 is approximately 40% of pre-tax
earnings. The Company has substantial net operating loss carryforwards and
credits available to offset future income tax liabilities. The expected tax
effect of these losses and credits are reflected as deferred tax assets on the
accompanying balance sheet. The income tax provision in 1996 will result in a
reduction of this asset, in lieu of payment of taxes. Accordingly, as of
September 30, 1996, deferred tax assets have been reduced by $235,810. Deferred
tax assets consist of the following:
Net operating loss carryforwards $ 1,494,590
AMT carryforwards 34,000
Other 271,780
-----------
1,800,370
Deferred income taxes expected
to be utilized currently (740,000)
-----------
Deferred income taxes $ 1,060,370
===========
Page 8 of 14
<PAGE>
Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Special Note Regarding Forward-Looking Statements
Certain statements in this Form 10-QSB, including information set forth under
this Item 2 "Management's Discussion and Analysis of Financial Condition and
Results of Operations" constitute "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995 (the "Act").
Healthy Planet Products, Inc. (the "Company") desires to avail itself of certain
"safe harbor" provisions of the Act and is therefore including this special note
to enable the Company to do so. Forward-looking statements included in this Form
10-QSB or hereafter included in other publicly available documents filed with
the Securities and Exchange Commission, reports to the Company's stockholders
and other publicly available statements issued or released by the Company
involve known and unknown risks, uncertainties, and other factors which could
cause the Company's actual results, performance (financial or operating) or
achievements to differ from the future results, performance (financial or
operating) achievements expressed or implied by such forward looking statement.
Such future results are based upon management's best estimates based upon
current conditions and the most recent results of operations. These include
management's forecasts of increased sales, the decrease in net sales for the
nine and three month period ended September 30, 1996, purchasing plans and
programs of certain large chain buyers relating to holiday product recently
experienced a decline in gross margin as well as marginal increases in general
and administrative expenses, the recent adverse trend in the general retail
environment, general economic conditions, competition generally and specifically
relating to greeting cards having environmental, nature or wildlife themes and
the ability of the Company to sustain consumer demand for the Company's
principal Sierra Club card line. In addition, the ability of the Company to
enhance and expand its product mix and to successfully introduce new products
which will meet with consumer acceptance may also affect future results. The
Company to date has been materially dependent upon the efforts of Messrs. Bruce
Wilson and M. Scott Foster, who constitute the Company's core senior management.
The loss of either Mr. Wilson's or Mr. Foster's services may have a materially
adverse effect upon the business or operations of the Company.
Sales
For the nine months ended September 30, 1996, the Company's net sales amounted
to $3,730,434 versus the prior year nine month result of $4,627,557 representing
a decrease of $897,123 or 19.4%. Barnes & Noble and The Nature Company accounted
for $621,000 or 69.2% of the revenue decline due to their decision not to order
holiday merchandise this year. Barnes & Noble continues to carry everyday
product on a store by store basis. The balance of the decline can be attributed
to everyday business which has been adversely impacted during 1996 due to the
general economic downturn at retail.
For the three months ended September 30, 1996, net sales amounted to
$1,910,038 which reflected a decrease of $680,654 or 26.3% versus last years'
three month results of $2,590,692. Barnes & Noble and The Nature Company
accounted for the overall decrease in revenues due to their not ordering holiday
merchandise this year.
Page 9 of 14
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)
Gross Profit
For the nine months ended September 30, 1996, gross profit amounted to
$2,296,797 or 61.6% of sales. For the comparable prior year nine month period,
gross profit amounted to $2,864,258 or 61.9% of sales. Lower overall sales and
higher returns of last year's seasonal merchandise contributed to the marginal
decline in gross margin.
For the three months ended September 30, 1996, gross profit amounted to
$1,117,208 or 58.5% of sales. For the comparable prior year quarter, gross
profit amounted to $1,517,919 or 56.0% of sales. Lower sales of seasonal
products which have lower gross margins versus everyday sales contributed to the
period to period increase in gross margin.
Operating Expenses
For the nine months ended September 30, 1996, selling, shipping and marketing
expenses amounted to $662,885 reflecting a decrease of $148,303 versus the prior
year's level of $811,188. Lower commissions, bonuses and shipping expenses on
lower net sales combined to comprise the decrease.
For the three months ended September 30, 1996, selling, shipping and marketing
expenses amounted to $280,074 reflecting an decrease of $135,834 versus last
year's level of $415,908. Lower commissions, bonuses and shipping expenses on
lower net sales combined to comprise the decrease.
General and administrative expenses amounted to $1,301,475 for the nine months
ended September 30, 1996, reflecting a slight marginal increase of $25,252
versus last year's level of $1,276,223. Higher rent on the Company's new
facility, moving expenses and the abandonment of leasehold improvements in its
former facility accounted for the period to period increase.
For the three months ended September 30,, 1996, general and administrative
expenses amounted to $569,073 reflecting an increase of $63,608 versus the prior
year level of $505,465. Higher rent on the Company's new facility accounted for
substantially all of the increase.
Income
Operating income amounted to $332,437 for the nine months ended September 30,
1996 reflecting a decrease of $444,410 versus the prior year level of $776,847.
The decline at gross margin offset in part by lower operating expenses accounted
for the period to period operating income decline. For the nine months ended
September 30, 1996, the Company's operating income before taxes was $589,526 or
$.29 per share. For the comparable prior year period, the Company had net
operating income before taxes of $875,790 or $.43 per share. Income before taxes
decreased by $286,284 on a period to period basis. Included in the net income
before taxes was approximately $90,000 in accrued rent taken into other income.
In accordance with FAS13,
Page 10 of 14
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)
Income (continued)
Accounting For Leases, the Company was required to accrue rent on its old
facility based on the straight-line method versus accruing rent based on the
annually increasing base rent schedule. Excess of rent expense over cash
payments created a deferred credit. The new lease released the Company from all
liability under its former lease.
The income tax provision of $235,810 in 1996 is approximately 40% of pre-tax
earnings. The Company has substantial net operating loss carryforwards and
credits available to offset future income tax liabilities. The expected tax
effect of these losses and credits are reflected as deferred tax assets on the
accompanying balance sheet. The income tax provision in 1996 will result in a
reduction of this asset, in lieu of payment of taxes. Accordingly, as of
September 30, 1996, deferred tax assets have been reduced by $235,810. For the
comparable quarter last year, net income finished at $1,758,207 or $.86 per
share. Included in last year's nine month net income was a $882,417 tax credit
due to the adoption of FAS 109, Accounting for Income Taxes. The comparative per
share data is based on weighted average shares outstanding in each of the
respective periods.
Balance Sheet
Total assets amounted to $8,937,569 as of September 30, 1996 versus the
December 31, 1995 level of $8,418,300, reflecting an increase of $519,269. The
period to period increase was caused by increases in receivables, royalty
advances, inventory, prepaid expenses, capital expenditures and deferred assets,
and other assets offset by a decrease in cash. Total current liabilities
amounted to $757,441 at September 30, 1996 versus the December 31, 1995 level of
$707,900. The increase was the result of increases in trade and royalties
payable offset by decreases in commissions, bonuses, and the elimination of
deferred rent accrued on the Company's former facility.
Liquidity and Capital Resources
At September 30, 1996, the Company's working capital was $6,422,751 reflecting
an increase of $573,551 over working capital at December 31, 1995 of $5,849,200.
Cash of $747,657 was used during the period to support operating activities.
Cash of $269,098 was used during the period for capital expenditures. Major
capital expenditures for the period included a $137,500 contribution for the
construction of the Company's new facility. Cash of $90,000 was generated by the
exercise of employee stock options.
The present primary sources of the Company's liquidity has been cash
internally generated from operations, proceeds obtained by the Company through
the public sale of its securities, and the availability of a secured line of
credit. The Company has a $500,000 secured line of credit from Westamerica Bank.
The Company draws on this line from time to time on a short term basis. As of
September 30, 1996, there was no outstanding amount under this line of credit.
Page 11 of 14
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)
Effects of Inflation
The Company does not view the effects of inflation as having a material effect
upon its business. Increases in paper and labor costs have been offset by
increases in the price of the Company's cards and through higher print runs,
which have reduced the unit cost of the Company's card product. While the
Company has in the past increased its prices to its customers, it has maintained
its relative competitive price position within the general range of greeting
cards.
Page 12 of 14
<PAGE>
<TABLE>
HEALTHY PLANET PRODUCTS, INC.
COMPUTATION OF EARNINGS PER SHARE
EXHIBIT II
<CAPTION>
Three Months Three Months Six Months Six Months
Ended Ended Ended Ended
Sept. 30, 1996 Sept. 30, 1995 Sept. 30, 1996 Sept. 30,1995
--------------- -------------- -------------- -------------
<S> <C> <C> <C> <C>
Primary earnings per share
Net income $ 184,935 $ 1,386,678 $ 353,716 $ 1,758,207
Dividends paid on preferred stock -- -- -- --
Cumulative dividends on preferred stock -- -- (4,504) (6,755)
----------- ----------- ----------- -----------
Income applicable to common stock $ 184,935 $ 1,386,678 $ 349,212 $ 1,751,452
=========== =========== =========== ===========
Shares
Weighted average number of common
shares outstanding 1,827,362 1,701,061 1,822,362 1,625,387
Add dilutive effect of conversion of preferred
stock and outstanding options and warrants,
as determined by the application of the
treasury stock method 193,487 370,134 193,609 424,804
----------- ----------- ----------- -----------
2,020,849 2,071,195 2,015,971 2,050,191
=========== =========== =========== ===========
Primary earnings per share $ .09 $ .67 $ .17 $ .85
=========== =========== =========== ===========
</TABLE>
Page 13 of 14
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits
27. Financial Data Schedule
b. Reports on Form 8-K
<TABLE>
During the quarter ended September 30, 1996, the following reports on Form 8-K
were filed by the Registrant:
<CAPTION>
Date of Report Item Reported Description of Item
- -------------- ------------- --------------------
<S> <C> <C>
August 19, 1996 Item 5. Other Events Reporting result of Registrant's Annual
Meeting of Stockholders held on August
5, 1996
September 5, 1996 Item. 6. Resignation Reporting Resignation of Michael G.
of Directors Jesselson and election of Daniel R.
Coleman as Director
</TABLE>
SIGNATURES
In accordance with the requirements of the Securities Exchange Act, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
HEALTHY PLANET PRODUCTS, INC.
(Registrant)
DATED: November 11, 1996 by: /s/ Bruce A. Wilson
-----------------------------
Bruce A. Wilson
President, Chief Executive, Chief Operating
and Chief Financial Officer.
Page 14 of 14
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JUL-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 3,215,376
<SECURITIES> 0
<RECEIVABLES> 1,658,869
<ALLOWANCES> 286,077
<INVENTORY> 1,354,796
<CURRENT-ASSETS> 7,180,192
<PP&E> 1,234,899
<DEPRECIATION> 806,771
<TOTAL-ASSETS> 8,937,569
<CURRENT-LIABILITIES> 757,441
<BONDS> 0
<COMMON> 18,273
0
18,717
<OTHER-SE> 8,117,236
<TOTAL-LIABILITY-AND-EQUITY> 8,937,569
<SALES> 3,730,434
<TOTAL-REVENUES> 3,987,523
<CGS> 1,433,637
<TOTAL-COSTS> 3,397,997
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 589,526
<INCOME-TAX> 235,810
<INCOME-CONTINUING> 353,716
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 353,716
<EPS-PRIMARY> (.17)
<EPS-DILUTED> (.00)
</TABLE>
