<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR l5(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended April 1, 2000
Commission file number 0-19882
KOPIN CORPORATION
-----------------
(Exact name of registrant as specified in its charter)
Delaware 04-2833935
-------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
695 Myles Standish Blvd.,Taunton, MA 02780-1042
------------------------------------ ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (508) 824-6696
--------------
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or l5(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 [ ]
Applicable only to corporate issuers:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding as of April 30, 2000
----- --------------------------------
Common Stock, par value $ .01 31,439,755
<PAGE>
KOPIN CORPORATION
INDEX
-----
<TABLE>
<CAPTION>
Page No.
-------
<S> <C>
PART I - FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements:
Consolidated Balance Sheets at 3
April 1, 2000 and December 31, 1999
Consolidated Statements of Operations and Comprehensive Income 4
for the three months ended April 1, 2000 and April 3, 1999
Consolidated Statements of Stockholders' Equity for the 5
three months ended April 1, 2000 and April 3, 1999
Consolidated Statements of Cash Flows for the 6
three months ended April 1, 2000 and April 3, 1999
Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial Condition 8
and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk 10
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 10
SIGNATURES 11
</TABLE>
2
<PAGE>
KOPIN CORPORATION
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
April 1, 2000 December 31, 1999
---------------------- ----------------------
<S> <C> <C>
Assets
Current assets:
Cash and equivalents $ 59,356,626 $ 65,981,848
Marketable securities, at fair value 44,324,709 33,117,555
Accounts receivable, net of allowance of $450,800
Billed 12,041,729 10,547,762
Unbilled 988,220 655,220
Inventory 4,180,838 6,157,195
Prepaid expenses and other current assets 1,247,738 1,651,905
------------ ------------
Total current assets 122,139,860 118,111,485
Equipment and improvements:
Equipment 33,953,600 32,849,431
Leasehold improvements 808,884 808,884
Furniture and fixtures 493,802 459,097
Equipment under construction 8,027,576 7,207,812
------------ ------------
43,283,862 41,325,224
Accumulated depreciation and amortization 22,047,496 20,653,963
------------ ------------
21,236,366 20,671,261
Other assets 5,942,817 4,352,793
Intangible assets 1,957,778 1,938,190
------------ ------------
Total assets $151,276,821 $145,073,729
============ ============
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 6,942,600 $ 7,564,070
Accrued payroll and expenses 1,344,191 990,073
Other accrued liabilities 1,629,632 933,583
Current portion of long-term obligations 1,848,521 2,142,373
------------ ------------
Total current liabilities 11,764,944 11,630,099
Long-term obligations, less current portion 1,998,817 2,567,100
Minority interest 844,404 809,238
Commitments
Stockholders' equity:
Preferred stock, par value $.01 per share: Authorized, 3,000 shares;
none issued and outstanding - -
Common stock, par value $.01 per share: Authorized, 60,000,000 shares;
issued, 31,352,803 shares in 2000 and 30,149,362 shares in 1999 313,528 301,494
Additional paid-in capital 190,463,395 186,077,638
Deferred compensation (96,280) (110,035)
Accumulated other comprehensive income 426,801 509,725
Deficit (54,438,788) (56,711,530)
------------ ------------
Total stockholders' equity 136,668,656 130,067,292
------------ ------------
Total liabilities and stockholders' equity $151,276,821 $145,073,729
============ ============
</TABLE>
See notes to consolidated financial statements.
3
<PAGE>
KOPIN CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
-------------------
April 1, 2000 April 3, 1999
--------------- ---------------
<S> <C> <C>
Revenues:
Product revenues $19,310,263 $ 5,984,932
Research and development revenues 429,500 744,664
----------- -----------
19,739,763 6,729,596
Expenses:
Cost of product revenues 13,977,048 3,930,174
Research and development 3,101,867 1,999,144
Selling, general and administrative 1,626,536 922,930
Other 87,900 87,900
----------- -----------
18,793,351 6,940,148
----------- -----------
Income (loss) from operations 946,412 (210,552)
Other income and expense:
Interest and other income 1,439,063 534,516
Interest expense (85,886) (118,264)
----------- -----------
Income before minority interest 2,299,589 205,700
Minority interest in (income) loss of subsidiary (26,847) 167
----------- -----------
Net income $ 2,272,742 $ 205,867
=========== ===========
Net income per share:
Basic $.07 $.01
=========== ===========
Diluted $.07 $.01
=========== ===========
Weighted average number of common
shares outstanding:
Basic 31,001,555 24,776,306
=========== ===========
Diluted 34,009,621 26,278,758
=========== ===========
</TABLE>
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
-------------------
April 1, 2000 April 3, 1999
--------------- ---------------
<S> <C> <C>
Net income $2,272,742 $205,867
Foreign currency translation adjustments 15,447 (56,516)
Unrealized loss on marketable securities, net (98,371) (7,312)
---------- --------
Comprehensive income $2,189,818 $142,039
========== ========
</TABLE>
See notes to consolidated financial statements.
4
<PAGE>
KOPIN CORPORATION
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
THREE MONTHS ENDED APRIL 1, 2000 AND APRIL 3, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
Common Stock Additional Accumulated Other
----------------- Paid-in Deferred Comprehensive
Shares Amount Capital Compensation Income (Loss) Deficit Total
--------- ------ --------- ------------ ------------- ------- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1998 12,268,561 $122,686 $108,954,779 ($165,055) $420,812 ($57,486,799) $ 51,846,423
Exercise of stock options 139,736 1,397 424,830 -- -- -- 426,227
Amortization of compensation
relating to grant of stock -- -- -- 13,755 -- -- 13,755
options
Net unrealized loss on marketable
securities -- -- -- -- (7,312) -- (7,312)
Foreign currency translation
adjustments -- -- -- -- (56,516) -- (56,516)
Net income for the three month
period ended April 3, 1999 -- -- -- -- -- 205,867 205,867
---------- -------- ------------ --------- -------- ------------ ------------
Balance, April 3, 1999 12,408,297 $124,083 $109,379,609 ($151,300) $356,984 ($57,280,932) $ 52,428,444
========== ======== ============ ========= ======== ============ ============
Balance, December 31, 1999 30,149,362 $301,494 $186,077,638 ($110,035) $509,725 ($56,711,530) $130,067,292
Exercise of stock options 1,203,441 12,034 4,385,757 -- -- -- 4,397,791
Amortization of compensation
relating to grant of stock -- -- -- 13,755 -- -- 13,755
options
Net unrealized loss on marketable
securities -- -- -- -- (98,371) -- (98,371)
Foreign currency translation
adjustments -- -- -- -- 15,447 -- 15,447
Net income for the three month
period ended April 1, 2000 -- -- -- -- -- 2,272,742 2,272,742
---------- -------- ------------ --------- -------- ------------ ------------
Balance, April 1, 2000 31,352,803 $313,528 $190,463,395 ($96,280) $426,801 ($54,438,788) $136,668,656
========== ======== ============ ========= ======== ============ ============
</TABLE>
See notes to consolidated financial statements.
5
<PAGE>
KOPIN CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
-----------------------------
April 1, April 3,
2000 1999
---------- --------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 2,272,742 $ 205,867
Adjustments to reconcile net income
to net cash provided by (used in) operating activities:
Depreciation and amortization 1,452,503 937,631
Amortization of compensation relating to grant
of stock options 13,755 13,755
Decrease in deferred rent - -
Minority interest in income (loss) of subsidiary 26,847 (167)
Changes in assets and liabilities:
Accounts receivable (1,808,816) (2,525,556)
Inventory 1,994,298 (527,364)
Prepaid expenses and other current assets 408,597 (287,433)
Intangible assets (107,488) (46,979)
Accounts payable and accrued expenses 328,722 1,539,976
------------ -----------
Net cash provided by (used in) operating activities 4,581,160 (690,270)
------------ -----------
Cash flows from investing activities:
Marketable securities (11,305,525) (1,612,678)
Other assets (1,589,900) 215,963
Capital expenditures (1,882,622) (3,302,792)
------------ -----------
Net cash provided by (used in) investing activities (14,778,047) (4,699,507)
------------ -----------
Cash flows from financing activities:
Principal payment on long-term obligations (862,135) (597,945)
Proceeds from exercise of stock options 4,397,791 426,227
------------ -----------
Net cash provided by (used in) financing activities 3,535,656 (171,718)
------------ -----------
Effect of exchange rate changes on cash 36,009 (18,385)
------------ -----------
Net decrease in cash and equivalents (6,625,222) (5,579,880)
Cash and equivalents, beginning of period 65,981,848 30,807,335
------------ -----------
Cash and equivalents, end of period $ 59,356,626 $25,227,455
============ ===========
Supplementary information -Interest paid in cash $ 108,391 $ 122,596
</TABLE>
See notes to consolidated financial statements.
6
<PAGE>
KOPIN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
---------------------
The consolidated financial statements for the three month periods ended April 1,
2000 and April 3, 1999 are unaudited and include all adjustments which, in the
opinion of management, are necessary to present fairly the results of operations
for the periods then ended. All such adjustments are of a normal recurring
nature. These consolidated financial statements should be read in conjunction
with the consolidated financial statements and notes thereto included in the
Company's Annual Report on Form 10-K filed with the Securities and Exchange
Commission (File No. 0-19882) for the year ended December 31, 1999.
The results of the Company's operations for any interim period are not
necessarily indicative of the results of the Company's operations for any other
interim period or for a full fiscal year.
The consolidated financial statements include the accounts of the Company, its
wholly owned subsidiary and Kowon Technology Co., Ltd., a majority owned (65%)
subsidiary located in Korea. All intercompany transactions and balances have
been eliminated.
All shares, income per share, and related information for 1999 give retroactive
effect to the 2 for1 stock split effected in the form of a stock dividend for
shareholders of record as of December 20, 1999, and effected on December 29,
1999.
2. FOREIGN CURRENCY TRANSLATION
----------------------------
Assets and liabilities of non-U.S. operations are translated into U.S. dollars
at period end exchange rates, and revenues and expenses at rates prevailing
during the quarter. Resulting translation adjustments are accumulated as part of
other comprehensive income and aggregate $528,531 of unrealized gain at April 1,
2000. Transaction gains or losses are recognized in income or loss currently.
3. NET INCOME PER SHARE
--------------------
Basic net income per share is computed using the weighted average number of
shares of common stock outstanding during the period. Diluted net income per
share is computed using the weighted average number of common shares and
potential common shares outstanding during the period using the treasury method.
Potential common shares have not been included in any periods in which the
effect would be anti-dilutive.
4. STOCKHOLDERS' EQUITY
--------------------
In October 1999, the Company completed a public offering of 4,600,000 shares of
common stock at a price of $16.97 per share. Net proceeds to the Company totaled
approximately $73,154,000.
5. RECENT PRONOUNCEMENTS
---------------------
The Financial Accounting Standards Board ("FASB") has issued Statement of
Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative
Instruments and Hedging Activities", which is effective for fiscal years
commencing after June 15, 2000. SFAS No. 133 requires fair value accounting for
all stand-alone derivatives and many derivatives embedded in other financial
instruments and contracts. The impact of SFAS No. 133 on us has not yet been
determined.
7
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
-----------------------------------------------------------------------
OF OPERATIONS
- -------------
Kopin is a leading developer and manufacturer of advanced semiconductor
materials and miniature flat panel displays. We use our proprietary technology
to design, manufacture and market products used in highly demanding commercial
wireless communications and high resolution portable applications. Our products
enable our customers to develop and market an improved generation of products
for these target applications.
We have two principal components of revenues: product revenues and research
and development revenues. Historically, product revenues have consisted of sales
of our Heterojunction Bipolar Transistor ("HBT") transistor wafers. For the
three month period ended April 1, 2000, we had product revenues of $19.3
million, or 97.8% of total revenues compared to $6.0, or 88.9% of total revenues
for the same period in 1999. We began shipping our CyberDisplay product in 1998.
This product line represented 14.9% of our product revenues for the three months
ended April 1, 2000 compared to 1.5% for the same period in 1999.
Research and development revenues consist primarily of development contracts
with agencies of the U.S. government. Management has intensified its efforts on
the marketing and sales of its commercial products over the past few years
resulting in the decline of research and development revenues as a percentage of
total revenues. For the three months ended April 1, 2000, research and
development revenues declined to $.4 million, or 2.2% of total revenues compared
to $.7 million, or 11.1% of total revenues for the same period in 1999. We
believe that research and development revenues will continue to decline on an
annual basis as a percentage of total revenues for the near future.
RESULTS OF OPERATIONS
REVENUES. Our total revenues for the three months ended April 1,
2000 were $19.7 million compared to $6.7 million for the three months ended
April 3, 1999, an increase of approximately $13.0 million or 194.0%. Our product
revenues were $19.3 million for the three months ended April 1, 2000 compared to
$6.0 million for the same period in 1999, an increase of approximately $13.3
million, or 221.7%. Product revenue growth was attributable to an increase in
sales of our gallium arsenide products as well as our CyberDisplay products in
the three months ended April 1, 2000 compared to the same period in 1999. For
the three months ended April 1, 2000, gallium arsenide product sales and
CyberDisplay product sales were $16.4 million and $2.9 million, respectively, as
compared to $5.9 million and $.1 million, respectively, for the three months
ended April 3, 1999. Research and development revenues for the three months
ended April 1, 2000 were $.4 million, compared to $.7 million for the same
period in 1999, a decrease of .3 million, or 42.9%. Research and development
revenues declined primarily due to the expirations of multi-year contracts with
the U.S. government.
COST OF PRODUCT REVENUES. Cost of product revenues, which is comprised of
materials, labor and manufacturing overhead related to our products, was $14.0
million for the three months ended April 1, 2000 compared to $3.9 million for
the three months ended April 3, 1999, an increase of $10.1 million, or 259%. The
increase in cost of product revenues as a percentage of product revenues in 2000
is primarily due to increased production staffing as we increased production
capacity, and increased Cyberdisplay product sales as a percentage of total
sales.
RESEARCH AND DEVELOPMENT. Research and development expenses (R&D) are
incurred under development programs for gallium arsenide and display products in
support of internal development programs or programs funded by agencies of the
U.S. government. R&D costs include staffing, purchases of materials and
laboratory supplies, circuit design costs, fabrication and packaging of display
products, and overhead. Funded R&D was $.4 million for the three months ended
April 1, 2000 compared to $.9 million for the three months ended April 3, 1999,
a decrease of $.5 million, due to reduced expenses caused by the expiration of
multi-year contracts with agencies of the U.S. government. Internal R&D was $2.6
million for the three months ended April 1, 2000 compared to $1.1 million during
the corresponding period in 1999, an increase of $1.5 million. The increase in
internal R&D was primarily the result of development activities related
primarily to higher resolution displays.
SELLING, GENERAL AND ADMINISTRATIVE. Selling, general and administrative
expenses (S,G&A) consist of the expenses incurred by our's sales and marketing
personnel and related expenses, and administrative and general corporate
expenses. S,G&A was $1.6 million for the three months ended April 1, 2000
compared to $.9 million during the corresponding period in 1999, an increase of
$.7 million, or 78.8%. The increase in S,G&A for the three months ended April 1,
2000 was primarily due
8
<PAGE>
to increases in headcount in the sales and marketing, procurement and accounting
staffs in support of our revenue growth. In addition, S,G&A expenses include
non-cash charges for compensation expense of $13,755 for both three month
periods in 2000 and 1999, relating to the issuance of certain stock options.
OTHER. Other expenses, primarily amortization of patents and licenses, were
$87,900 for both the three month periods ended April 1, 2000 and April 3, 1999.
OTHER INCOME, NET. Other income, net was $1.3 million for the three months
ended April 1, 2000 compared to $.4 million during the corresponding period in
1999. Interest income earned during the three months ended April 1, 2000
increased $.9 million, compared to the corresponding period in 1999, due to
higher cash balances resulting from the October 1999 equity placement and higher
interest rates.
LIQUIDITY AND CAPITAL RESOURCES
We have financed our operations primarily through public and private
placements of its equity securities, research and development contract revenues,
and sales of its gallium arsenide and display products. We believe our available
cash resources will support our operations and capital needs for at least the
next twelve months.
As of April 1, 2000, we had cash and equivalents and marketable securities of
$103.7 million and working capital of $110.4 million compared to $99.1 million
and $106.5 million, respectively, as of December 31, 1999. The increase in cash
and equivalents and marketable securities was primarily due to cash provided by
operations of $4.6 million and proceeds from the exercise of stock options of
$4.4 million, offset by capital and investment expenditures of $3.5 million and
principal payments on long-term obligations of $.9 million. The increase in
capital expenditures is primarily for our expansion programs to increase
manufacturing capacity for our gallium arsenide and display products.
We periodically enter into long-term debt arrangements to finance equipment
purchases and other activities. As of April 1, 2000, debt obligations totaled
$3.8 million, of which $1.8 million is payable in the next twelve months.
Our CyberDisplay products are targeted at are large sales volume consumer
electronic and wireless communication applications. We believe that in order to
obtain customers in these markets, it has been necessary to make significant
investments in equipment and infrastructure. We believe that it will be
necessary to continue to make significant investments in equipment and
development in order to produce current and future CyberDisplay products. As a
result of the current cost structure of our CyberDisplay product line, our
ability to achieve profitability in that product line depends upon increasing
significant sales volumes, automating certain processes and achieving higher
gross profit margins. We have not yet produced our CyberDisplay products at
volumes necessary to achieve profitability. Accordingly, we may not be able to
obtain sufficient sales volumes, or if sufficient sales volumes are achieved, we
may not be able to produce our CyberDisplay products at a gross margin which
will allow the product line to generate a profit.
We lease equipment and our facilities located in Taunton and Westborough,
Massachusetts, and Los Gatos, California, under non-cancelable operating leases.
Our Taunton leases expire through May 2010. The Westborough lease expires in
October 2002, with renewable options for up to two additional years at our
election. The Los Gatos lease covers a five year period terminating in 2002. We
will make lease payments of approximately $1.4 million per year over the
remaining terms of these leases.
We expect to expend approximately $30.0 million on capital expenditures over
the next twelve months, primarily for the acquisition of equipment relating to
the production of our HBT transistors and the manufacturing, packaging and
testing of CyberDisplay products, including the establishment of a second
manufacturing product facility for our HBT transistor wafers.
9
<PAGE>
RECENT ACCOUNTING PRONOUNCEMENTS
The Financial Accounting Standards Board ("FASB") has issued Statement of
Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative
Instruments and Hedging Activities", which is effective for fiscal years
commencing after June 15, 2000. SFAS No. 133 requires fair value accounting for
all stand-alone derivatives and many derivatives embedded in other financial
instruments and contracts. The impact of SFAS No. 133 on us has not yet been
determined.
Certain of the statements contained in this Form 10-Q, including Management's
Discussion and Analysis of Financial Condition and Results of Operations, are
forward-looking statements that involve risks and uncertainties. In addition to
the risks and uncertainties set forth in this Form 10-Q, other factors that
could cause actual results to differ materially include the following: general
economic and business conditions and growth in the flat panel display industry
and the gallium arsenide integrated circuit and materials industries, the impact
of competitive products and pricing, availability of third party components,
availability of integrated circuit fabrication facilities, cost and yields
associated with production of the Company's CyberDisplay imaging devices and
transistor wafers, loss of significant customers, acceptance of the Company's
products, continued performance by Kopin and its key customers under strategic
relationships, changes in foreign currency exchange rates, and the risk factors
and cautionary statements listed from time to time in the Company's periodic
reports and registration statements filed with the Securities and Exchange
Commission, including but not limited to the Company's Annual Report on Form 10-
K for the fiscal year ended December 31, 1999.
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
----------------------------------------------------------
We invest our excess cash in high quality government and corporate financial
instruments which bear minimal risk. We believe that the effect, if any, of
reasonably possible near-term changes in interest rates on our financial
position, results of operations, and cash flows should not be material. We sell
our products to customers worldwide. We maintain a reserve for potential credit
losses and such losses have been minimal. We are exposed to changes in foreign
currency exchange primarily through our translation of our foreign subsidiary's
financial position, results of operations, and cash flows and the sale of
CyberDisplay products to customers in Asia.
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
None
10
<PAGE>
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.
KOPIN CORPORATION
(Registrant)
Date: May 16, 2000 By: /s/ John C.C. Fan
----------------------------------
John C.C. Fan
President, Chief Executive Officer
and Chairman of the Board of Directors
(Principal Executive Officer)
Date: May 16, 2000 By: /s/ Richard A. Sneider
----------------------------------
Richard A. Sneider
Treasurer and Chief Financial Officer
(Principal Financial and Accounting
Officer)
11
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> APR-01-2000
<CASH> 59,356,626
<SECURITIES> 44,324,709
<RECEIVABLES> 13,029,949
<ALLOWANCES> 0
<INVENTORY> 4,180,838
<CURRENT-ASSETS> 122,139,860
<PP&E> 43,283,862
<DEPRECIATION> 22,047,496
<TOTAL-ASSETS> 151,276,821
<CURRENT-LIABILITIES> 11,764,944
<BONDS> 1,998,817
0
0
<COMMON> 313,528
<OTHER-SE> 136,355,128
<TOTAL-LIABILITY-AND-EQUITY> 151,276,821
<SALES> 19,310,263
<TOTAL-REVENUES> 19,739,763
<CGS> 13,977,048
<TOTAL-COSTS> 17,078,915
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 85,886
<INCOME-PRETAX> 2,272,742
<INCOME-TAX> 0
<INCOME-CONTINUING> 2,272,742
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,272,742
<EPS-BASIC> .07
<EPS-DILUTED> .07
</TABLE>
