<PAGE>
UNITED STATES
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 March 31, 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 number: 0-16310
AMERICAN EDUCATIONAL PRODUCTS, INC.
_________________________________________________________________
(Exact Name of Small Business Issuer as Specified in its Charter)
Colorado 84-1012129
____________________________ ____________
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification number)
5350 Manhattan Circle, Suite 210, Boulder, Colorado 80303
___________________________________________________ ____________
(Address of principal executive offices) (Zip Code)
(303) 543-0123
___________________________
(Issuer's telephone number)
______________________________________________________________________________
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 Exchange Act during the past 12 months (or for such shorter
period that the Issuer 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 ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Check whether the Registrant has filed all documents and reports required to be
filed by Sections 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
As of May 6, 1995 the Company had 4,165,272 shares of its $.01 par value common
stock outstanding.
Transitional Small Business Disclosure Format (Check one): Yes [ ] No [ X ]
<PAGE>
<PAGE>
INDEX
PART I -- FINANCIAL INFORMATION
<TABLE>
<CAPTION>
Page
----
<S> <C>
Item 1. Financial Statements
Consolidated Balance Sheets as of March 31, 1996
and December 31, 1995 2
Consolidated Statements of Operations for the
three months ended March 31, 1996 and
March 31, 1995 3
Consolidated Statements of Cash Flows for the
three months ended March 31, 1996 and
March 31, 1995 4
Consolidated Statement of Stockholders' Equity
from January 1, 1996 through March 31, 1996 5
Notes to Consolidated Financial Statements 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Liquidity and Capital Resources 7
Results of Operations 9
PART II -- OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS 12
ITEM 2. CHANGES IN SECURITIES 12
ITEM 3. DEFAULTS UPON SENIOR SECURITIES 12
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 12
ITEM 5. OTHER INFORMATION 12
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 12
</TABLE>
<PAGE>
<PAGE>
AMERICAN EDUCATIONAL PRODUCTS, INC.
CONSOLIDATED BALANCE SHEETS
As of March 31, 1996 and December 31, 1995
<TABLE>
<CAPTION>
March 31, December 31,
1996 1995
(Unaudited)
___________ ___________
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash $ 220,000 $146,000
Trade receivables, net of allowance
of $90,000 and $109,000 1,747,000 1,783,000
Income tax refunds receivable - 304,000
Inventories 2,618,000 2,358,000
Prepaid advertising costs 280,000 102,000
Other 75,000 126,000
___________ ___________
TOTAL CURRENT ASSETS 4,940,000 4,819,000
PROPERTY AND EQUIPMENT, net of $3,032,000
and $2,844,000 4,233,000 4,362,000
VIDEO LIBRARY, net of $439,000 and $345,000 1,390,000 1,407,000
INTANGIBLE ASSETS, net 474,000 511,000
OTHER ASSETS 149,000 141,000
___________ ___________
TOTAL ASSETS $11,186,000 $11,240,000
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Note payable $ 1,345,000 $1,081,000
Current maturities of long term debt 1,412,000 1,412,000
Accounts payable 1,193,000 935,000
Accrued expenses 586,000 613,000
___________ ___________
TOTAL CURRENT LIABILITIES 4,536,000 4,041,000
LONG TERM DEBT, less current maturities 1,990,000 2,360,000
COMMITMENTS - -
STOCKHOLDERS' EQUITY
Preferred stock, $0.01 par value;
50,000,000 shares authorized;
none issued or outstanding - -
Common stock; $0.01 par value;
100,000,000 shares authorized;
4,165,272 and 4,150,618 shares
issued and outstanding 42,000 42,000
Additional paid in capital 6,070,000 6,048,000
Retained earnings (accumulated deficit) (1,452,000) (1,251,000)
___________ ___________
TOTAL STOCKHOLDERS' EQUITY 4,660,000 4,839,000
___________ ___________
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 11,186,000 $11,240,000
============ ===========
</TABLE>
<PAGE>
<PAGE>
AMERICAN EDUCATIONAL PRODUCTS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
for the Three Months ended March 31, 1996 and March 31, 1995
(Unaudited)
<TABLE>
<CAPTION>
March 31, March 31,
1996 1995
___________ ___________
<S> <C> <C>
INCOME:
Net sales $2,047,000 $4,689,000
Cost of goods sold 1,196,000 2,617,000
___________ ___________
Gross profit 851,000 2,072,000
OPERATING EXPENSES:
Advertising and catalog costs 24,000 693,000
Other marketing 534,000 668,000
___________ ___________
Total marketing 558,000 1,361,000
General and administrative 357,000 821,000
___________ ___________
Total operating expenses 915,000 2,182,000
___________ ___________
OPERATING INCOME (LOSS) (64,000) (110,000)
OTHER INCOME (EXPENSE):
Other income - 29,000
Interest expense (137,000) (229,000)
___________ ___________
Net other income (expense) (137,000) (200,000)
___________ ___________
INCOME (LOSS) BEFORE INCOME TAXES (201,000) (310,000)
Income tax benefit (expense) - 114,000
___________ ___________
NET INCOME (LOSS) $(201,000) $(196,000)
========== ==========
Earnings (loss) per common share
and common share equivalent ($0.05) ($0.05)
======= =======
Average number of common and common
equivalent shares outstanding 4,155,000 4,106,000
========= =========
</TABLE>
<PAGE>
<PAGE>
AMERICAN EDUCATIONAL PRODUCTS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
for the Three Months ended March 31, 1996 and March 31, 1995
(Unaudited)
<TABLE>
<CAPTION>
March 31, March 31,
1996 1995
___________ ___________
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $(201,000) $(196,000)
Adjustments to reconcile net income
to cash provided by operating activities:
Depreciation 188,000 172,000
Amortization 131,000 163,000
Bad debt expense 2,000 1,000
Change in deferred income taxes - (153,000)
Changes in operating assets and liabilities:
Decrease (increase) in operating assets:
Accounts receivable 34,000 (574,000)
Income tax refunds receivable 304,000 13,000
Inventories (260,000) 356,000
Prepaid advertising costs (178,000) 59,000
Other 43,000 14,000
Increase (decrease) in operating
liabilities:
Accounts payable 258,000 (158,000)
Accrued expenses (26,000) 24,000
___________ ___________
Net cash provided (used)
by operating activities 295,000 (279,000)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (60,000) (4,000)
Cost incurred for video production (77,000) (68,000)
Other - (15,000)
___________ ___________
Net cash provided (used)
by investing activities (137,000) (87,000)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from notes payable and long term debt 264,000 436,000
Payments on notes payable and long term debt (370,000) (176,000)
Net proceeds from the sale of stock 22,000 58,000
___________ ___________
Net cash provided (used)
by financing activities (84,000) 318,000
___________ ___________
NET INCREASE (DECREASE) IN CASH 74,000 (48,000)
Cash, at beginning of period 146,000 220,000
___________ ___________
Cash, at end of period $220,000 $172,000
======== ========
</TABLE>
<PAGE>
<PAGE>
AMERICAN EDUCATIONAL PRODUCTS, INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
January 1, 1996 through March 31, 1996
(Unaudited)
<TABLE>
<CAPTION>
COMMON STOCK Additional Retained
Number Paid Earnings
of Common in (Accumulated
Shares Stock Capital Deficit) Total
--------- ------- ---------- ------------ -----------
<S> <C> <C> <C> <C> <C>
Balance as of
January 1, 1996 4,150,658 $42,000 $6,048,000 $(1,251,000) $4,839,000
Sale of common
stock under the
employee stock
purchase plan 14,614 - 22,000 - 22,000
Net loss - - - (201,000) (201,000)
--------- ------- ---------- ------------ -----------
Balance as of
March 31, 1996 4,165,272 $42,000 $6,070,000 $(1,452,000) $4,660,000
</TABLE>
<PAGE>
<PAGE>
AMERICAN EDUCATIONAL PRODUCTS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1 -- Presentation
In the opinion of the Company, these unaudited consolidated financial
statements contain all adjustments (consisting of normal accruals) necessary to
present fairly the financial position as of December 31, 1995 and March 31,
1996, and the results of operations for the three months ended March 31, 1996
and 1995. These statements should be read in conjunction with the audited
financial statements and notes thereto included in the Company's Annual Report
on Form 10-KSB for the year ended December 31, 1995.
<PAGE>
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND
RESULTS OF OPERATIONS
The following discussion addresses the financial condition and results of
operations for American Educational Products, Inc. and Subsidiaries ("AMEP" or
the "Company"). The four subsidiaries are AEP Media Corporation d.b.a.
Churchill Media ("Churchill"), Hubbard Scientific, Inc. ("Hubbard"), Scott
Resources, Inc. ("Scott") and Summit Learning, Inc. ("Summit").
In December, 1995, AMEP sold substantially all of the assets of Summit for
total proceeds of $3,982,000.
Comparisons between 1996 and 1995 are affected by this divestiture.
LIQUIDITY AND CAPITAL RESOURCES -- MARCH 31, 1996 COMPARED TO DECEMBER 31, 1995
During the first quarter of 1996, the Company continued to experience a lack of
liquidity and capital resources. The liquidity shortfall was primarily caused
by a continuation of operating losses, spending on inventory to be sold in
future quarters, investment in the spring catalog mailing program, and payments
required under various loan agreements. The Company was unable to make timely
payments to its trade creditors during the first quarter.
The Company continued its efforts to reduce expenditures and conserve cash.
Those efforts have resulted in decreased operating expenses and are expected to
assist the Company's efforts to achieve profitable operations.
As previously disclosed in Form 10-KSB for the year ended December 31, 1995,
the Company renegotiated its bank debt during the first quarter of 1996. The
new debt arrangement includes a working capital line of credit (LOC) with
maximum borrowings up to $1,500,000 and an expiration date of September 30,
1996. The LOC bears interest at the prime rate (8.25% as of March 31, 1996)
plus 2%. The debt agreements also provide the Company with two term loans.
One term loan bears interest at the prime rate plus 3%. It requires monthly
principal payments of $60,000 plus additional principal payments aggregating
$400,000 during June, July, August, and September. The other term loan bears
interest at 8.1% and is payable in monthly installments of $10,000, including
interest. Substantially all the Company's assets have been pledged as
collateral under the various loan agreements.
The loan agreements contain covenants that restrict the payment of dividends
and require, among other requirements, that the Company maintain minimum
financial ratios and achieve certain operating income levels. The Company's
projections indicate that it will regain profitable operations during the year
and that it will meet the bank's requirements. Should the Company fail to
operate profitably or fail to meet any other bank requirement, the bank has the
right to foreclose on substantially all the Company's assets. Such an event
would have material adverse consequences to the Company and its stockholders.
As of March 31, 1996, the Company was in compliance with the bank requirements.
During the first quarter of 1996, the Company borrowed substantially all the
funds available under the line of credit and reduced long term borrowings by
$370,000. As of and subsequent to March 31, 1996, the Company has borrowed
substantially all funds available to it under the various borrowing agreements.
Since there are no guarantees that the Company will achieve profitable
operations and generate sufficient cash from operations to meet its liquidity
needs, the Company is exploring the sale of assets that are not critical to the
Company's long term strategy. In this regard, the Company has signed a
contract to sell certain real estate, which is expected to close on the third
<PAGE>
<PAGE>
quarter. It is believed that a successful sale of real estate would yield net
proceeds approximating $1,000,000. All of the proceeds would be used to reduce
bank debt and to pay trade creditors.
Management continually assesses the Company's need for capital resources. From
time to time, the Company may evaluate and pursue additional sources of
capital, as required.
The Company experienced a 48% working capital decrease in the first quarter of
1996. While current assets of $4,940,000 increased $121,000 from December 31,
1995, current liabilities increased by $495,000, from $4,041,000 to $4,536,000.
As a result, working capital decreased from $778,000 to $404,000, and the
current ratio decreased from 1.2 to 1.1. These changes were primarily caused
by the net loss for the first quarter and by payments required under long-term
debt arrangements.
Neither total assets nor total liabilities nor total stockholders' equity
changed materially from December 31, 1995, to March 31, 1996.
Accounts receivable decreased from $1,783,000 at December 31, 1995, to
$1,747,000 at March 31,1996, a decrease of $36,000 or 2%. The balance at
December 31, 1995, included receivables resulting from a special sales
promotion that provided customers with special pricing and extended payment
terms. During the first quarter, these receivables were collected in the
ordinary course of business.
Inventories increased from $2,358,000 at the end of 1995 to $2,618,000 at March
31, 1996, an increase of $260,000 or 11%. This increase is attributable to
investment in inventory for new product introductions and investment in
inventory for normal increases in sales activity expected during future
quarters.
Prepaid advertising costs increased from $102,000 at December 31, 1995, to
$280,000 at March 31, 1996, an increase of $178,000 or 175%. This increase is
due to investment in the spring 1996 catalog program offset by partial
amortization of this program. The balance of the program will be fully
amortized over the remainder of 1996.
Net property and equipment decreased from $ 4,362,000 at December 31, 1995, to
$4,233,000 at March 31, 1996, a decrease of $129,000 or 3%. This decrease is
primarily the result of depreciation expense of $188,000.
Video and film library costs decreased from $1,407,000 at December 31, 1995, to
$1,390,000 at March 31, 1996, a decrease of $17,000 or 1%. This decrease
consists of amortization of $94,000 offset by additional investment in video
products of $77,000.
Intangible and other assets decreased from $652,000 at December 31, 1995, to
$623,000 at March 31, 1996, a decrease of $29,000 or 4%. The majority of this
decrease is associated with amortization of $37,000.
Accounts payable and accrued expenses increased from $1,548,000 at December 31,
1995, to $1,779,000 at March 31, 1996, an increase of $231,000 or 15%. The
majority of this increase reflects investment in inventory and prepaid
advertising costs. In addition, the Company has not been able to make all
payments to trade creditors in a timely fashion during the first three months
of 1996. This trend is expected to continue at least until the Company returns
to profitability.
At March 31, 1996, the Company had borrowings under its working capital line of
credit facility in the amount of $1,345,000, up $264,000 from $1,081,000 at
December 31, 1995.<PAGE>
<PAGE>
Long term debt, including current maturities, decreased $370,000 as a result of
long-term debt payments made during the first quarter.
Other than the foregoing, management knows of no trends, demands, or
uncertainties that are reasonably likely to have a material impact on the
Company's short-term liquidity or capital resources.
RESULTS OF OPERATIONS -- THREE MONTHS ENDED MARCH 31, 1996, COMPARED TO THE
THREE MONTHS ENDED MARCH 31, 1995
As previously discussed, the comparison of operating results for the first
three months of 1996 to the first three months of 1995 is affected by the sale
of Summit in 1995.
The Company's revenues were $2,047,000 in the first three months of 1996, a
decrease of $2,642,000 or 56% from the same period 1995 revenues of $4,689,000.
Summit's impact on revenues during this period in 1995 was $2,269,000.
Slightly lower unit sales during the quarter across all remaining divisions
combined with slightly lower average selling prices at the manufacturing
division resulted in the remaining $373,000 decrease.
The cost of goods sold for the quarter ended March 31, 1996, was $1,196,000, a
decrease of $1,421,000 or 54% from the same period 1995 figure of $2,617,000.
Summit's impact on cost of goods sold during this period in 1995 was
$1,216,000.
Consolidated gross profits for the first quarter of 1996 were $851,000, a
decrease of $1,221,000 or 59% from the same period 1995 gross profits of
$2,072,000. Summit's impact on consolidated gross profits during this period
in 1995 was $1,053,000. As a percentage of sales, the gross margin decreased
from 44% in 1995 to 42% in 1996. Adjusting for the impact of Summit, the gross
margin in 1995 would also have been 42%.
The advertising component of marketing costs for the first quarter of 1996 were
$24,000, a decrease of $669,000 or 97% from the same period 1995 cost of
$693,000. Summit's advertising costs for the first quarter of 1995 were
$619,000. These costs were 1% of sales in the first three months of 1996 and
15% of sales in the first three months of 1995. Substantially all advertising
costs consist of printing and mailing catalogs. In 1996, the Company plans to
conduct a limited direct mail campaign and costs for the year are estimated at
$300,000.
Other marketing costs for the first quarter of 1996 were $534,000, a decrease
of $134,000 or 20% from the same period 1995 cost of $668,000. Summit's other
marketing costs for the first quarter of 1995 were $153,000. As a percentage
of sales, these costs were 26% in the first three months of 1996, and 14% in
the first three months of 1995. In 1996, the Company increased its
institutional marketing activities. Specifically, it increased its presence at
industry trade shows and conventions, it increased the number of presentations
to distributors, and it increased the number of marketing personnel compared to
the same period in 1995.
General and administrative expenses were $357,000 a decrease of $464,000 or 57%
from the first quarter of 1995 general and administrative expense of $821,000.
Summit's general and administrative expense for the first quarter of 1995 was
$103,000. As a percent of sales, G&A expenses were 17% in the first quarter of
1996, and 18% in the first quarter of 1995. In 1996, G&A expenses were reduced
by recognition of a lawsuit settlement under which the Company will receive
proceeds of $100,000. The balance of the reduction reflects decreased staff
levels employed in accounting and administrative functions.
<PAGE>
<PAGE>
Total operating costs decreased 58% from $2,182,000 in the first three months
of 1995 to $915,000 in the first three months of 1996. Summit's portion of
total operating costs during this period in 1995 was $875,000. As a percentage
of sales, total operating costs decreased from 47% in the first quarter of 1995
to 45% for the first quarter of 1996.
The operating loss for the three months ending March 31, 1996, was $64,000,
compared to an operating loss of $110,000 in the same quarter of the prior
year, an improvement of $46,000. If the Company had not settled its litigation
and recognized proceeds of $100,000 in March, 1996, the operating loss for the
first quarter of 1996 would have been $164,000, a decrease of $54,000 from
1995.
Interest expense decreased from $229,000 in the first quarter of 1995 to
$137,000 in the first quarter of 1996, a decrease of $92,000 or 40%. The
decreased interest expense is the result of lower debt levels made possible by
proceeds from the 1995 sale of Summit.
Pretax loss was $201,000 for the quarter ended March 31, 1996, compared to
pretax loss of $310,000 for the three months ended March 31, 1995.
During the first three months of 1995, the Company recorded an income tax
benefit of $114,000 to offset tax expense recorded in earlier (profitable)
periods. By the end of 1995, all income tax liabilities had been offset
against operating losses. Thus, the Company did not recognize any tax benefit
for the first quarter of 1996. The Company has net operating loss carryovers
of approximately $1,600,000 available for Federal income tax purposes. The
Company will be able to offset those carryforwards against future taxable
income, if any. It will be able to record a benefit from those carryforwards
when they appear to be realizable.
The net loss for the first three months of 1996 was $201,000, compared with a
net loss of $196,000 in the same period of 1995. Loss per share was $0.05 for
the first three months of both 1995 and 1996.
Inflation has not had any material effect on the Company's operations during
the first three months of 1996. During 1995, price increases in postage,
paper, plastic, and formed metal parts adversely impacted profitability. While
the Company was able to partially mitigate the impact of these cost increases
through design changes and improved factory efficiencies, there is no guarantee
that it would be able to offset such cost increases should they recur in 1996.
The Company historically has experienced significant seasonality in its sales
primarily due to the purchasing cycle of educational institutions. Typically,
the first and fourth fiscal quarters each generate approximately 20% of annual
sales, with the second and third fiscal quarters each generating approximately
30% of annual sales. This distribution of sales is likely to continue
throughout 1996.
Other than the foregoing, management knows of no trends, demands, or
uncertainties that are reasonably likely to have a material impact on the
Company's results of operations.
<PAGE>
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
No legal proceedings have been filed on behalf of or against the
Company nor have any claims been made.
ITEM 2. CHANGES IN SECURITIES
None.
ITEM 3. DEFAULT UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
Exhibits: None.
Reports on Form 8-K:
1. Current Report on Form 8-K dated December 20, 1995, as filed with
the Commission on January 4, 1996
Item 2: Disposition of Assets
Item 7: Pro Forma Financial Information as of December 31, 1994
and September 30, 1995
<PAGE>
SIGNATURE
In accordance with the requirements of the Securities and Exchange Act,
the registrant caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
AMERICAN EDUCATIONAL PRODUCTS, INC.
Dated: May 13, 1996 By: /s/ Robert A. Scott
-------------- -----------------------
Robert A. Scott, Chairman of the Board
Dated: May 13, 1996 By: /s/ Frank L. Jennings
-------------- -----------------------
Frank L. Jennings, Chief Financial Officer
and Vice President of Finance
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AND STATEMENT OF OPERATIONS FOUND ON PAGES 3
AND 4 OF THE COMPANY'S FORM 10-QSB FOR THE THREE MONTHS ENDED MARCH 31,
1996, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1996
<CASH> 220,000
<SECURITIES> 0
<RECEIVABLES> 1,837,000
<ALLOWANCES> 90,000
<INVENTORY> 2,618,000
<CURRENT-ASSETS> 4,940,000
<PP&E> 7,265,000
<DEPRECIATION> 3,032,000
<TOTAL-ASSETS> 11,186,000
<CURRENT-LIABILITIES> 4,536,000
<BONDS> 0
0
0
<COMMON> 42,000
<OTHER-SE> 4,618,000
<TOTAL-LIABILITY-AND-EQUITY> 11,186,000
<SALES> 2,047,000
<TOTAL-REVENUES> 2,047,000
<CGS> 1,196,000
<TOTAL-COSTS> 1,196,000
<OTHER-EXPENSES> 915,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (137,000)
<INCOME-PRETAX> (201,000)
<INCOME-TAX> 0
<INCOME-CONTINUING> (201,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (201,000)
<EPS-PRIMARY> (.05)
<EPS-DILUTED> (.05)
</TABLE>
