UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
AMENDMENT NO. 1
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE
SECURITIES EXCHANGE ACT OF 1934
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended Commission File No.
December 31, 1997 0-15443
THERAGENICS CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 58-1528626
(State of incorporation) (I.R.S. Employer Identification Number)
5325 Oakbrook Parkway
Norcross, Georgia 30093
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:(770) 271-0233
Securities registered pursuant to Section 12(b) of the Act: None
Title of Class Name of each exchange on which registered
- -------------- -----------------------------------------
Common Stock, $.01 New York Stock Exchange
par value together with
the associated ommon Stock
Purchase Rights
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. YES X NO
<PAGE>
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
form 10-K.
As of March 16, 1998 the aggregate market value of the common stock of the
registrant held by non-affiliates of the registrant, as determined by reference
to the closing price of the Common Stock as reported on the Nasdaq National
Market system, was $1,003,681,314.
As of March 16, 1998 the number of shares of common stock, $.01 par value,
outstanding was 14,546,106.
Documents incorporated by reference: Proxy Statement for the registrant's 1998
Annual Meeting of Stockholders, to be filed with the Securities and Exchange
Commission not later than 120 days after December 31, 1997, is incorporated by
reference in Part III herein.
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<PAGE>
Explanatory Note:
This Amendment No. 1 on Form 10-K/A is filed solely to correct the inadvertent
omission of the typed signature of Grant Thornton LLP, the Company's independent
accountants, from the audit report and Consent of Independent Accountants
included in the electronic version of the Company's Form 10-K for the year ended
December 31, 1997 filed with the Securities and Exchange Commission ("SEC").
This filing does not reflect any substantive changes from the previously filed
Form 10-K, but rather merely corrects the Form 10-K on file with the SEC in
electronic format to conform to the original paper copy.
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<PAGE>
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
a) The following documents are filed as part of this Report.
1. Financial Statements
See index to financial statements on page 10
2. Financial Schedules
Not applicable
3. Exhibits
3.1 - Certificate of Incorporation (1)
3.2 - Certificate of Amendment to Certificate
of Incorporation (1)
3.3 - Certificate of Amendment to Certificate
of Incorporation (1)
3.4 - By-Laws (1)
4.1 - See Exhibits 3.1 - 3.4 for provisions in the Company's
Certificate of Incorporation and By-Laws defining the
rights of holders of the Company's Common Stock.
4.2 - Form of Warrant issued to the
Representatives of the Underwriters of the
Company's Public Offering (1)
4.3 - Warrant Agreements dated May 1, 1989 between the
Company and James Devas (4)
4.4 - Warrant Agreement dated May 8, 1993 between
the Company and James Devas (9)
10.1 - License Agreement with University of
Missouri, as amended (1)
10.2 - Agreement with Atomic Energy of Canada, Ltd. (1)
10.3 - Reassignment and Release Agreement among the Company,
John L. Russell, Jr., and Georgia Tech Research
Institute (1)
10.4 - 1986 Incentive and Non-Incentive Stock
Option Plan (1)
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<PAGE>
10.5 - Letter of Agreement between the Company and Yale-New
Haven Hospital (2)
10.6 - Lease between the Company and T. Rowe Price
Realty Income Fund II dated July 14, 1988 (2)
10.7 - Form of Purchase Agreement between the
Company and ten institutional investors (3)
10.8 - Form of Custody Agreement between the
Company and IBJ Schroder Bank & Trust
Company (3)
10.9 - 1990 Incentive and Non-Incentive Stock
Option Plan (5)*
10.10 - Employment Agreement of Bruce W. Smith (5)*
10.11 - Purchase Agreement between Theragenics
Corporation and Production Equipment
Manufacturer (6)
10.12 - Term Loan and Security Agreement between
Theragenics Corporation and Heller
Financial, Inc. (7)
10.13 - Purchase Agreement between Theragenics
Corporation and Production Equipment
Manufacturer (8)
10.14 - Amendment to Purchase Agreement between
Theragenics Corporation and Production
Equipment Manufacturer (9)
10.15 - Employment Agreement of John V. Herndon
dated August 1, 1993 (9)*
10.16 - Employment Agreement of M. Christine Jacobs* (14)
10.17 - Lease between the Company and T. Rowe Price
Realty Income Fund II dated January 1, 1994
(9)
10.18 - Agreement with Nordion International Inc.
(11)
10.19 - Purchase Agreements between Theragenics
Corporation and Production Equipment
Manufacturer (12)
10.20(a) Purchase Agreement dated December 27, 1996 between
Theragenics Corporation and Ion Beam Applications s.a.
(15)
10.20(b) Purchase Agreement dated December 27, 1996
between Theragenics Corporation and Ion Beam
Applications s.a. (15)
10.20(c) Purchase Agreement dated December 27, 1996 between
Theragenics Corporation and Ion Beam Applications s.a.
(15)
10.20(d) Purchase Agreement dated December 27, 1996 between
Theragenics Corporation and Ion Beam Applications s.a.
(15)
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<PAGE>
10.21 - Second Amended and Restated Loan and Security Agreement
by and between Theragenics Corporation and NationsBank,
N.A. (South), Dated as of December 9,
1996 (15)
10.22 - First modification of Second Amended and Restated Loan
and Security Agreement between Theragenics Corporation
and NationsBank, N.A., Dated September 30, 1997.
10.23 - Second Modification of Second Amended and Restated
Loan and security Agreement between Theragenics
Corporation and NationsBank, N.A., Dated November 26,
1997.
10.24 - Rights Agreement dated as of February 17, 1997 between
the Company and SunTrust Bank, Atlanta (16)
10.25 - Theragenics Corporation 1995 Stock Option Plan (17)*
10.26 - 1997 Stock Incentive Plan (18)*
10.27 - Marketing and Sales Agreement by and between the
Company and Indigo Medical, Inc. dated May 30, 1997 (19)
24.1 - Consent of Independent Public Accountants
for Incorporation by Reference of Audit
Report into Registration Statements **
27.1 - Financial Data Schedule for the years ended December 31,
1997 and 1996 (for SEC use only)
27.2 - Financial Data Schedule for the interim periods in the
year ended December 31, 1997
27.3 - Financial Data Schedule for the interim periods in the
year ended December 31, 1996
* Management contract or compensatory plan or arrangement identified
pursuant to Item 14(a)(3) of Form 10-K
** Included herein
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<PAGE>
(1) Incorporated by reference to the exhibits filed with the Company's
registration statement on Form S-1, File No. 33-7097, and post-effective
amendments thereto.
(2) Incorporated by reference to the exhibits to the report on Form 10-K for
the period ended December 31, 1988.
(3) Incorporated by reference to the exhibits to the report on Form 10-Q for
the period ended June 30, 1989.
(4) Incorporated by reference to the exhibits to the report on Form 10-K for
the period ended December 31, 1989.
(5) Incorporated by reference to the exhibits to the report on Form 10-K for
the period ended December 31, 1990.
(6) Incorporated by reference to the exhibits to the report on Form 10-K for
the period ended December 31, 1991.
(7) Incorporated by reference to the exhibits to the report on Form 10-K for
the period ended December 31, 1992.
(8) Incorporated by reference to the exhibits to the report on Form 10-Q for
the period ended June 30, 1993.
(9) Incorporated by reference to the exhibits to the report on Form 10-K for
the period ended December 31, 1993.
(10) Incorporated by reference to the exhibits to the report on Form 10-K for
the period ended December 31, 1994.
(11) Incorporated by reference to the exhibits to the report on Form 8-K dated
March 23, 1995.
(12) Incorporated by reference to the exhibits to the report on Form 8-K dated
June 29, 1995.
(13) Incorporated by reference to the exhibits to the report on Form 10-K for
the period ended December 31, 1995.
(14) Incorporated by reference to the exhibits to the report on Form 10-K for
the period ended December 31, 1996.
(15) Incorporated by reference to the exhibits to the report on Form 8-K dated
January 13, 1997.
(16) Incorporated by reference to the exhibits to the Company's registration
statement on Form 8-1 filed February 27, 1997.
(17) Incorporated by reference to the exhibits to the Common Stock Registration
Statement on for S-8, file #333- 15313.
(18) Incorporated by reference to appendix B to the Company's proxy statement
for its 1997 Annual Meeting of Stockholders filed on schedule 14A.
(19) Incorporated by reference to the exhibits to the report on Form 10Q for the
period ended September 30, 1997.
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<PAGE>
(b) Reports on Form 8-K
No reports on Form 8-K were filed by the Company during the last quarter
of the most recent fiscal year.
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<PAGE>
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) 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.
THERAGENICS CORPORATION
(Registrant)
By:/s/ Bruce W. Smith
------------------
Bruce W. Smith
Secretary, Treasurer and
Chief Financial Officer
Dated: October 15, 1998
Norcross, Georgia
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<PAGE>
THERAGENICS CORPORATION
TABLE OF CONTENTS
Page
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS ................11
(For the periods ended December 31, 1995, 1996 and 1997)
FINANCIAL STATEMENTS
Balance Sheets - December 31, 1996 and 1997 .............12
Statements of Earnings for the Three Years Ended
December 31, 1997 .......................................13
Statement of Shareholders' Equity for
the Three Years Ended December 31, 1997 .................14
Statements of Cash Flows for the Three Years Ended
December 31, 1997 .......................................16
NOTES TO FINANCIAL STATEMENTS ...........................18
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<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Board of Directors
Theragenics Corporation
We have audited the balance sheets of Theragenics Corporation (a
Delaware corporation) as of December 31, 1996 and 1997, and the related
statements of earnings, shareholders' equity, and cash flows for each of the
three years in the period ended December 31, 1997. These financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Theragenics
Corporation as of December 31, 1996 and 1997, and the results of its operations
and its cash flows for each of the three years in the period ended December 31,
1997, in conformity with generally accepted accounting principles.
/s/ GRANT THORNTON LLP
- ----------------------
Atlanta, Georgia
January 15, 1998
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<PAGE>
THERAGENICS CORPORATION
BALANCE SHEETS
December 31,
<TABLE>
<CAPTION>
1996 1997
--------------------- ----------------------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and short-term investments $ 2,986,123 30,161,614
Marketable securities -- 8,391,807
Trade accounts receivable, less
allowance of $0 in 1996 and $65,446 in 1997 2,258,936 2,925,390
Inventories 229,298 433,873
Prepaid expenses and other current assets 133,625 160,620
-------------------- -------------------
Total current assets 5,607,982 42,073,304
PROPERTY, PLANT AND EQUIPMENT - AT COST
Building and improvements 3,333,728 3,333,728
Leasehold improvements 138,978 138,978
Machinery and equipment 11,522,064 14,698,623
Office furniture and equipment 65,057 66,464
-------------------- --------------------
15,059,827 18,237,793
Less accumulated depreciation (3,237,684) (4,695,669)
------------------- --------------------
11,822,143 13,542,124
Land 525,372 525,754
Construction in progress 5,238,056 14,917,788
------------------- --------------------
17,585,571 28,985,666
OTHER ASSETS
Deferred income tax asset 360,000 --
Patent costs 80,685 71,836
Other 55,183 9,503
------------------- --------------------
495,868 81,339
------------------- --------------------
Total Assets 23,689,421 $ 71,140,309
=================== ====================
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Current portion of long-term debt 3,458,436 --
Trade accounts payable 330,375 1,435,154
Accrued salaries, wages and payroll taxes 459,421 689,610
Income taxes payable -- 845,364
Other current liabilities 56,677 137,097
------------------- ---------------------
Total current liabilities 4,304,909 3,107,225
DEFERRED INCOME TAXES -- 1,000,000
COMMITMENTS AND CONTINGENCIES -- --
SHAREHOLDERS' EQUITY
Common stock authorized 50,000,000 shares of $.01 par
value; issued and outstanding, 11,814,278 in 1996 and
14,537,841 in 1997 118,143 145,378
Additional paid-in capital 17,616,560 55,740,366
Retained earnings 1,649,809 11,147,340
------------------- ---------------------
------------------- ---------------------
19,384,512 67,033,084
------------------- ---------------------
=================== =====================
Total Liabilities and Shareholders' Equity $ 23,689,421 $ 71,140,309
=================== =====================
</TABLE>
The accompanying notes are an integral part of these statements.
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<PAGE>
THERAGENICS CORPORATION
STATEMENTS OF EARNINGS
Year ended December 31,
<TABLE>
<CAPTION>
1995 1996 1997
-------------------- ---------------------- ---------------------
<S> <C> <C> <C>
REVENUE
Product sales $ 7,781,962 $ 12,257,165 $ 12,169,724
Product sales - affiliate -- -- 12,287,650
Licensing fees 85,431 100,000 100,000
-------------------- ---------------------- ---------------------
-------------------- ---------------------- ---------------------
7,867,393 12,357,165 24,557,374
-------------------- ---------------------- ---------------------
COSTS AND EXPENSES
Cost of product sales 2,645,730 3,735,669 6,141,330
Selling, general
and 2,395,846 3,198,663 4,818,650
administrative
Research and development 17,954 6,952 55,390
-------------------- ---------------------- ---------------------
-------------------- ---------------------- ---------------------
5,059,530 6,941,284 11,015,370
-------------------- ---------------------- ---------------------
OTHER INCOME (EXPENSE)
Interest income 143,424 126,953 1,361,890
Interest expense (51,967) (84,517) (21,095)
Other (26,995) (6,311) (35,268)
--------------------- --------------------- --------------------
-------------------- ---------------------- ---------------------
64,462 36,125 1,305,527
-------------------- ---------------------- ---------------------
Net earnings before income taxes 2,872,325 5,452,006 14,847,531
Income tax expense 1,100,000 2,067,500 5,350,000
-------------------- ---------------------- ---------------------
Net earnings $ 1,772,325 $ 3,384,506 $ 9,497,531
==================== ====================== =====================
Net earnings per common share
Basic $ .16 $ .29 $ .69
==================== ====================== =====================
Diluted $ .15 $ .28 $ .66
==================== ====================== =====================
</TABLE>
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<PAGE>
Theragenics Corporation
STATEMENTS OF SHAREHOLDERS' EQUITY
For the three years ended December 31, 1997
<TABLE>
<CAPTION>
Retained
Common stock Additional earnings
Number of Par value paid-in (accumulated
shares $.01 capital deficit) Total
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1994 10,961,887 $ 109,618 $ 15,207,453 $ (3,507,022) $ 11,810,049
Exercise of stock options, net of 17,102
common shares redeemed 432,898 4,330 469,717 - 474,047
Income tax benefit from stock options exercised - - 713,000 - 713,000
Net earnings for the year - - - 1,772,325 1,772,325
------------- ---------- -------------- -------------- -------------
Balance, December 31, 1995 11,394,785 113,948 16,390,170 (1,734,697) 14,769,421
Exercise of stock options, net of 11,723
common shares redeemed 379,493 3,795 398,163 - 401,958
Exercise of warrants 40,000 400 299,600 - 300,000
Income tax benefit from stock options exercised - - 528,627 - 528,627
Net earnings for the year - - - 3,384,506 3,384,506
------------ ---------- -------------- -------------- -------------
Balance, December 31, 1996 11,814,278 118,143 17,616,560 1,649,809 19,384,512
</TABLE>
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<PAGE>
Theragenics Corporation
STATEMENTS OF SHAREHOLDERS' EQUITY - CONTINUED
For the three years ended December 31, 1996
<TABLE>
<CAPTION>
Retained
Common stock Additional earnings
Number of Par value paid-in (accumulated
shares $.01 capital deficit) Total
------------------------ ----------- ------------- ------------
<S> <C> <C> <C> <C> <C>
Issuance of common stock in secondary public
offering, net of offering costs of $2,482,701 2,300,000 23,000 31,994,299 - 32,017,299
Issuance of common stock to Johnson & Johnson
Development Corporation 254,453 2,544 4,997,456 - 5,000,000
Exercise of stock options, net of 1,000 common
shares redeemed 149,110 1,491 492,615 - 494,106
Exercise of warrants 20,000 200 149,800 - 150,000
Income tax benefit from stock options exercised - - 489,636 - 489,636
Net earnings for the year - - - 9,497,531 9,497,531
---------- --------- ---------- ---------- ----------
Balance, December 31, 1997 14,537,841 $ 145,378 $55,740,366 $ 11,147,340 $67,033,084
========== ========= ========== =========== ==========
</TABLE>
The accompanying notes are an integral part of these statements.
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<PAGE>
Theragenics Corporation
STATEMENTS OF CASH FLOWS
Year ended December 31,
<TABLE>
<CAPTION>
1995 1996 1997
-------------- ------------- -------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net earnings $ 1,772,325 $ 3,384,506 $ 9,497,531
Adjustments to reconcile net earnings to net
cash provided by operating activities:
Deferred income taxes 1,082,000 1,972,000 1,850,000
Depreciation and amortization 828,072 1,114,919 1,466,834
Provision for doubtful accounts receivable - - 65,446
Loss on disposal of property and equipment 1,677 - -
Change in assets and liabilities:
Accounts receivable (603,221) (923,291) (731,900)
Inventories 25,206 (62,343) (204,575)
Prepaid expenses and other current assets 24,280 (66,104) (26,995)
Other assets - - 45,680
Trade accounts payable 121,982 (17,816) 1,104,779
Accrued salaries, wages and payroll taxes 115,006 234,283 230,189
Other current liabilities (17,214) 47,369 80,056
Income taxes payable - - 845,364
--------- ----------- -----------
Net cash provided by operating activities 3,350,113 5,683,523 14,222,409
--------- ----------- -----------
Cash flows from investing activities:
Purchase and construction of property and equipment (2,426,961) (8,555,876) (12,858,080)
Purchase of marketable securities - - (8,391,807)
Maturities of marketable securities 50,000 - -
Patent costs (3,632) - -
--------- ----------- -----------
Net cash used by investing activities (2,380,593) (8,555,876) (21,249,887)
--------- ----------- -----------
</TABLE>
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<PAGE>
Theragenics Corporation
STATEMENTS OF CASH FLOWS - CONTINUED
Year ended December 31,
<TABLE>
<CAPTION>
1995 1996 1997
-------------- ---------------- ---------------
<S> <C> <C> <C>
Cash flows from financing activities:
Proceeds from long-term debt - 2,450,225 -
Repayment of long-term debt (469,622) (511,286) (3,458,436)
Proceeds from issuance of common stock, net - - 37,017,299
Proceeds from exercise of stock options and
warrants 474,047 701,958 644,106
Debt issue costs (25,070) (48,759) -
-------------- ---------------- ---------------
Net cash (used) provided by
financing activities (20,645) 2,592,138 34,202,969
-------------- ---------------- ---------------
Net increase (decrease) in cash and
short-term investments 948,875 (280,215) 27,175,491
Cash and short-term investments
at beginning of year 2,317,463 3,266,338 2,986,123
-------------- ---------------- ---------------
Cash and short-term investments
at end of year $ 3,266,338 $ 2,986,123 $ 30,161,614
============== ================ ===============
</TABLE>
Supplemental Schedule of Non Cash Financing Activities
During 1995, 1996 and 1997, the Company realized an income tax benefit from
the exercise and early disposition of certain stock options of approximately
$713,000, $529,000 and $490,000, respectively.
<TABLE>
<CAPTION>
Supplementary Cash Flow Disclosure
<S> <C> <C> <C> <C>
Interest paid, net of amounts capitalized $ 54,000 $ 82,000 $ 29,000
Income taxes paid $ 15,000 $ 99,000 $ 2,655,000
</TABLE>
The accompanying notes are an integral part of these statements.
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<PAGE>
Theragenics Corporation
NOTES TO FINANCIAL STATEMENTS
December 31, 1996 and 1997
NOTE A - ORGANIZATION AND DESCRIPTION OF BUSINESS
Theragenics Corporation (the "Company") was organized in November 1981 to
develop, manufacture, and market radiological pharmaceuticals and devices
used in the treatment of cancer. The Company manufactures and markets
primarily one product, TheraSeed(R), which is used primarily in the treatment
of prostate cancer. Use of the Company's product is regulated by the U.S.
Food and Drug Administration (FDA). Under a marketing and sales agreement
executed with Indigo Medical, Inc. (Indigo) in May 1997, (see Note F) all
TheraSeed(R) products used in the treatment of prostate cancer are sold to
Indigo. The TheraSeed(R) product is utilized by hospitals, physicians and
other health service providers in the United States. The Company therefore is
directly affected by changes in technology, as it may apply to cancer
treatment, and by FDA regulations and the well being of the health care
industry.
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A summary of the significant accounting policies consistently applied in the
preparation of the accompanying financial statements follows:
1.Use of Estimates
In preparing financial statements in conformity with generally accepted
accounting principles ("GAAP"), management is required to make certain
estimates and assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent assets and liabilities at the
date of the financial statements and revenues and expenses during the
reporting period. Actual results could differ from those estimates.
2.Cash and Short-Term Investments
For purposes of reporting cash flows, cash and short-term investments include
cash on hand, cash in banks and variable rate demand notes with original
maturities of less than 90 days.
3.Marketable Securities
Marketable securities are classified as available for sale and are reported
at fair value. Fair value is based upon quoted market prices. At December 31,
1997, marketable securities consisted of municipal and hospital authority
obligations. Marketable securities of $6,891,807 mature within one year and
marketable securities of $1,500,000 mature in 2004 with a put option
exercisable in 1998. At December 31, 1997, the fair value of marketable
securities approximated amortized cost. No marketable securities were held at
December 31, 1996.
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<PAGE>
Theragenics Corporation
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1996 and 1997
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued
4.Inventories
Inventories are stated at the lower of cost or market. Cost is determined
using the specific identification method which approximates the first-in,
first-out (FIFO) method. Inventories consist primarily of work in process.
5.Property, Equipment, Depreciation and Amortization
Property and equipment are recorded at historical cost. Depreciation is
provided for in amounts sufficient to relate the cost of depreciable assets
to operations over their estimated services lives on a straight-line basis.
Depreciation and amortization expense related to property and equipment
charged to operations was approximately $810,000, $1,044,000 and $1,458,000
for 1995, 1996 and 1997, respectively. Estimated services lives are as
follows:
Building and improvements 30 years
Machinery, leasehold improvements,
furniture and equipment 5-10 years
A significant portion of the Company's depreciable assets are utilized in the
production of its product. Management periodically evaluates the
realizability of its depreciable assets in light of its current industry
environment. Management believes that no impairment of depreciable assets
exists at December 31, 1997. It is possible, however, that management's
estimates concerning the realizability of the Company's depreciable assets
could change in the near term due to changes in the technological and
regulatory environment.
The primary machinery and equipment utilized in the Company's manufacturing
process has been acquired from one vendor. Currently, the Company has
contracts for additional manufacturing equipment with this vendor. Management
believes that the vendor has the ability to continue to deliver the equipment
in accordance with the terms of the contracts. Any inability of the vendor to
meet its obligations for delivery of the equipment could have an adverse
affect on the Company's ability to increase its production capacity.
6.Patent Costs
The Company capitalizes the costs of patent applications for its products.
Amortization is computed on a straight line basis over the estimated economic
lives of the patents, commencing at the date of grant of the related patent.
Patent costs are net of accumulated amortization of $47,295 and $56,144 at
December 31, 1996 and 1997, respectively. Amortization related to patent
costs charged to operations was approximately $8,000, $10,000 and $9,000 for
1995, 1996 and 1997, respectively.
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<PAGE>
Theragenics Corporation
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1996 and 1997
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued
7.Income Taxes
The Company accounts for income taxes using the asset and liability method.
Under this method, deferred tax assets and liabilities are recognized for the
future tax consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and their
respective tax bases. Deferred tax assets and liabilities are measured using
enacted tax rates applied to taxable income. The effect on deferred tax
assets and liabilities of a change in tax rates is recognized in income in
the period that includes the enactment date. A valuation allowance is
provided for deferred tax assets when it is more likely than not that the
asset will not be realized.
8.Research and Development Costs
The costs of research and development and consumable supplies and materials
to be used for the development of the Company's intended products are
expensed when incurred.
9.Advertising
The Company expenses the cost of advertising as incurred. Advertising expense
for the years ended December 31, 1995, 1996 and 1997 was approximately
$139,000, $229,000 and $230,000, respectively.
10. Earnings Per Share
The Company adopted Statement of Financial Accounting Standards No. 128 (SFAS
128), Earnings Per Share, in the fourth quarter of 1997. Basic net earnings
per common share is based upon the weighted average number of common shares
outstanding during the period. Diluted net earnings per common share is based
upon the weighted average number of common shares outstanding plus dilutive
potential common shares, including options and warrants outstanding during
the period. All comparative earnings per share data for prior periods
presented has been restated.
11. Stock Based Compensation
The Company's stock option plans are accounted for under the intrinsic value
method in which compensation expense is recognized for the amount, if any,
that the fair value of the underlying common stock exceeds the exercise price
at the date of grant.
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<PAGE>
Theragenics Corporation
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1996 and 1997
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued
12. Fair Value of Financial Instruments
The Company's financial instruments include cash, cash equivalents,
marketable securities and long-term debt. The carrying value of cash and cash
equivalents approximates fair value due to the relatively short period to
maturity of the instruments. Marketable securities are classified as
available for sale and are reported at fair value. The carrying value of the
Company's long-term obligations approximates fair value based upon borrowing
rates currently available to the Company for borrowings with comparable
maturities.
13. Hedging Activities
The Company enters into foreign exchange forward contracts to hedge the price
risks associated with equipment purchase commitments denominated in foreign
currencies. The forward contracts typically mature concurrently with payments
required under the equipment purchase contracts. The Company does not hold
foreign exchange forward contracts for trading or speculative purposes. Gains
and losses are deferred and accounted for as part of the underlying
transactions. At December 31, 1997, foreign exchange forward contracts were
not significant.
NOTE C - CONSTRUCTION IN PROGRESS
Construction in progress consists primarily of payments made for construction of
manufacturing equipment and facilities expansion. Total cost of this project is
expected to be approximately $54,000,000 and is expected to be completed in
various stages through 1999. Total outstanding commitments of this project at
December 31, 1997 are approximately $40,000,000. Construction of equipment and
facilities totaling approximately $4,900,000 and $3,000,000 were completed and
placed in service during 1996 and 1997, respectively.
-21-
<PAGE>
Theragenics Corporation
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1996 and 1997
<TABLE>
<CAPTION>
NOTE D - INCOME TAXES
The provision for income taxes is summarized as follows:
1995 1996 1997
-------------- ------------- ------------
<S> <C> <C> <C>
Current tax expense $ 18,000 $ 95,500 $ 3,500,000
Deferred tax expense 1,082,000 1,972,000 1,850,000
-------------- ------------- ------------
$ 1,100,000 $ 2,067,500 $ 5,350,000
============== ============= ============
</TABLE>
The Company's temporary differences result in a deferred income tax asset at
December 31, 1996 and a deferred income tax liability at December 31, 1997,
summarized as follows:
<TABLE>
<CAPTION>
December 31,
----------------------------------
1996 1997
------------ ------------
<S> <C> <C>
Deferred tax assets:
Net operating loss carryforwards $ 870,000 $ -
Tax credit carryforwards 174,000 -
Nondeductible accruals and allowances 50,000 60,000
Other 14,000 -
------------ ------------
Gross deferred tax asset 1,108,000 60,000
Deferred tax liabilities:
Depreciation 748,000 (1,060,000)
----------- ------------
Net deferred tax asset (liability) $ 360,000 $ (1,000,000)
=========== ============
</TABLE>
The provision for income taxes differs from the amount of income tax
determined by applying the applicable federal rates due to the following:
<TABLE>
<CAPTION>
Year ending December 31,
------------------------
1995 1996 1997
-------- ----------- ---------
<S> <C> <C> <C>
Tax at applicable federal rates $ 977,000 $ 1,854,000 $ 5,097,000
State tax, net 115,000 208,000 254,000
Tax exempt interest - - (40,000)
Other 8,000 5,500 39,000
--------- ----------- ---------
$ 1,100,000 $ 2,067,500 $ 5,350,000
========= =========== =========
</TABLE>
-22-
<PAGE>
Theragenics Corporation
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1996 and 1997
NOTE E - NOTES PAYABLE
The Company has entered into an amended and restated loan and security
agreement ("the loan agreement") with a bank. The loan agreement provides for
a revolving credit facility of up to $15,000,000. Interest on outstanding
borrowings is payable monthly at the prime rate or at a LIBOR based rate.
The LIBOR based rate ranges from LIBOR plus 1.5% to LIBOR plus 2%, and is
determined by the Company's debt service coverage ratio, as defined in the
loan agreement. At December 31, 1996, $3,458,436 was outstanding under the
revolving credit facility with an effective interest rate of 8.25%. No
amounts were outstanding under the revolving credit agreement at December 31,
1997.
Outstanding borrowings under the loan agreement are collateralized by
substantially all of the Company's assets. Provisions of the loan agreement
limit the incurrence of additional debt and require the maintenance of
certain minimum financial ratios, among other things. As of December 31,
1997, the Company was in compliance with the provisions of the loan
agreement.
NOTE F - COMMITMENTS AND CONTINGENCIES
Marketing and Sales Agreement
In May 1997, the Company executed an agreement with Indigo Medical, Inc.
(Indigo), a subsidiary of Johnson & Johnson Development Corporation (Johnson
& Johnson), granting Indigo the exclusive worldwide right to market and sell
TheraSeed(R) for the treatment of prostate cancer for a period of seven years
with a provision for successive three year renewals. In accordance with this
agreement, all TheraSeed(R) products used for the treatment of prostate
cancer are sold to Indigo. Concurrently with the execution of the agreement,
Johnson & Johnson purchased 254,453 shares of the Company's common stock.
Licensing Agreement
The Company holds a worldwide exclusive license from the University of
Missouri for the use of technology, patented by the University, used in the
Company's "Therasphere" product. The licensing agreement provides for the
payment of royalties based on the level of sales and on lump sum payments
received pursuant to a licensing agreement with Nordion International, Inc.
(see below).
-23-
<PAGE>
Theragenics Corporation
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1996 and 1997
NOTE F - COMMITMENTS AND CONTINGENCIES - Continued
Licensing Agreement - Continued
The Company has granted certain of its geographical rights under the
licensing agreement with the University of Missouri to Nordion International,
Inc., a Canadian company which is a producer, marketer and supplier of
radioisotope products and related equipment. Under the Nordion agreement, the
Company will receive a licensing fee for each geographic area in which
Nordian receives new drug approval. The Company will also be entitled to a
percentage of future revenues earned by Nordion as royalties under the
agreement. Royalties from this agreement for each of the three years in the
period ended December 31, 1997 were not significant.
In 1995, 1996 and 1997, the Company received approximately $85,000, $100,000
and $100,000, respectively, from Nordion for the right to use certain patents
and to manufacture, distribute, and sell "Therasphere" for all applications
worldwide.
Letter of Credit
The Company has a letter of credit outstanding for approximately $315,000
relating to regulatory requirements.
Lease Commitment
The Company leases space and office equipment under noncancelable leases
which expire at various dates through April 2000. Approximate minimum lease
payments under the leases are as follows: 1998, $162,000; 1999, $25,000;
2000, $1,200.
Rent expense was approximately $61,500, $76,000 and $179,000 for the years
ended December 31, 1995, 1996 and 1997, respectively.
-24-
<PAGE>
Theragenics Corporation
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1996 and 1997
NOTE G - STOCK OPTIONS AND WARRANTS
Stock Options
The Company's board of directors has approved four stock option plans which
in aggregate cover up to 2,700,000 shares of common stock. The plans provide
for the expiration of options ten years from the date of grant and requires
the exercise price of the options granted to be at least equal to 100% of
market value on the date granted. Stock option transaction for each of the
three years in the period ended December 31, 1997 are summarized below:
<TABLE>
<CAPTION>
1995 1996 1997
--------------------- --------------------- -------------------
Weighted Weighted Weighted
Average Average Average
Exercise Exercise Exercise
Shares Price Shares Price Shares Price
--------- ------ -------- ------- --------- ------
<S> <C> <C> <C> <C> <C> <C>
Outstanding, beginning of year 1,226,716 $2.09 997,716 $ 3.11 826,500 $ 7.22
Granted 221,000 5.38 220,000 15.92 269,000 35.80
Exercised (450,000) 1.29 (391,216) 2.21 (150,110) 3.59
Forfeited - - - - (52,000) 5.38
--------- ------ -------- ------- --------- -----
Outstanding, end of year 997,716 $3.11 826,500 $ 7.22 893,390 $16.54
========= ====== ======== ======= ========= =====
</TABLE>
The following table summarizes information about stock options outstanding at
December 31, 1997:
<TABLE>
<CAPTION>
Options Outstanding Options Exercisable
-------------------------------------------- ------------------------------
Weighted
Average Weighted Weighted
Range of Number Remaining Average Number Average
Excise Outstanding at Contractual Exercise Exercisable at Exercise
Price December 31, 1997 Life (Years) Price December 31, 1997 Price
----------- ----------------- ------------ ------------ ----------------- --------
<S> <C> <C> <C> <C> <C>
$1.00-3.50 138,175 3.0 $ 2.03 138,175 $ 2.03
$5.38-6.38 278,215 7.6 5.59 113,881 5.78
$15.25-16.88 208,000 9.0 15.94 64,000 15.86
$23.50 24,000 9.5 23.50 - -
$37.00 245,000 10.0 37.00 - -
------- ----- ----- ----------- ------
893,390 7.9 $16.54 316,056 $ 6.18
======= ===== ===== =========== ======
</TABLE>
-25-
<PAGE>
Theragenics Corporation
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1996 and 1997
NOTE G - STOCK OPTIONS AND WARRANTS - Continued
The Company follows the practice of recording amounts received upon the
exercise of certain options by crediting common stock and additional paid-in
capital. No charges are reflected in the statements of operations as a result
of the grant or exercise of options. The Company realizes an income tax
benefit from the exercise or early disposition of certain stock options. This
benefit results in a reduction to income taxes payable and an increase in
additional paid-in capital.
The Company uses the intrinsic value method in accounting for its stock
option plans. In applying this method, no compensation cost has been
recognized. Had compensation cost for the Company's stock option plans been
determined based on the fair value at the grant dates for awards under those
plans, the Company's net earnings and earnings per share would have resulted
in the pro forma amounts indicated below:
<TABLE>
<CAPTION>
1995 1996 1997
----------- ----------- -----------
<S> <C> <C> <C>
Net earnings As reported $ 1,772,325 $ 3,384,506 $ 9,497,531
Pro forma 1,750,736 3,015,123 8,628,538
Basic net earnings per
common share As reported $ .16 $ .29 $ .69
Pro forma .16 .26 $ .63
Diluted net earnings per
common share As reported $ .15 $ .28 $ .66
Pro forma .15 .24 $ .61
</TABLE>
For purposes of the pro forma amounts above, the fair value of each option
grant was estimated on the date of grant using the Black-Scholes
options-pricing model with the following weighted-average assumptions used
for grants in 1995, 1996 and 1997, respectively; expected volatility of 70%,
70% and 68%, risk-free interest rates of 5.86%, 6.33% and 5.87%; and expected
lives of 5.5 years, 7 years and 3.7 years.
Warrants
40,000 warrants were exercised during 1996 and 20,000 warrants were exercised
during 1997, resulting in proceeds to the Company of $300,000 and $150,000,
respectively. At December 31, 1997, there are outstanding warrants covering
40,000 shares of common stock. The warrants are exercisable at a price of
$7.50 per share and expire in May 1999.
-26-
<PAGE>
Theragenics Corporation
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1996 and 1997
NOTE H - EARNINGS PER SHARE
Earnings per common share was computed as follows:
Year ended December 31, 1997
----------------------------
<TABLE>
<CAPTION>
Earnings Shares Per share
(Numerator) (Denominator) Amount
------------ -------------- -----------
<S> <C> <C> <C>
Net earnings $ 9,497,531
============
Basic net earnings per common share
Earnings available to common shareholders $ 9,497,531 13,762,844 $ .69
===========
Effect of dilutive securities
Options and warrants 545,876
Diluted net earnings per common share $ 9,497,531 14,308,720 $ .66
============ ============== ===========
</TABLE>
<TABLE>
<CAPTION>
Year ended December 31, 1997
------------------------------
Earnings Shares Per share
(Numerator) (Denominator) Amount
-------------- -------------- -----------
<S> <C> <C> <C>
Net earnings $ 3,384,506
============
Basic net earnings per common share
Earnings available to common shareholders $ 3,384,506 11,624,778 $ .29
=====
Effect of dilutive securities
Options and warrants 666,462
Diluted net earnings per common share $ 3,384,506 12,291,240 $ .28
============ ========== =====
</TABLE>
-27-
<PAGE>
Theragenics Corporation
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1996 and 1997
<TABLE>
<CAPTION>
NOTE H - EARNINGS PER SHARE - Continued
Year ended December 31, 1995
Earnings Shares Per share
(Numerator) (Denominator) Amount
<S> <C> <C> <C>
Net earnings $ 1,772,325
============
Basic net earnings per common share
Earnings available to common shareholders $ 1,772,325 11,102,869 $ .16
=======
Effect of dilutive securities
Options and warrants 745,181
Diluted net earnings per common share $ 1,772,325 11,848,050 $ .15
============ =========== =======
</TABLE>
NOTE I - MAJOR CUSTOMERS
In 1997, sales to Indigo Medical, Inc. (Indigo) represented 50% of total
sales. Additionally, approximately 86% of accounts receivable were from
Indigo at December 31, 1997. Indigo is a subsidiary of a stockholder of the
Company.
During 1995 and 1996, there were no customers which individually comprised
ten percent or more of sales.
NOTE J - EMPLOYEE BENEFIT PLAN
The Company sponsors a defined contribution 401(k) Plan covering all
employees with at least six months of service and at least 21 years of age.
The Plan permits participants to defer a portion of their compensation
through payroll deductions. The Company may, at its discretion, contribute to
the Plan on behalf of participating employees. Company discretionary
contributions were approximately $40,000, $14,000 and $35,000 for 1995, 1996
and 1997, respectively.
-28-
<PAGE>
Theragenics Corporation
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1996 and 1997
<TABLE>
<CAPTION>
NOTE K - QUARTERLY FINANCIAL DATA (UNAUDITED)
The following summarizes certain quarterly results of operations (in thousands, except per share amounts):
Quarters ended
March 31 June 30 September 30 December 31
-------- ------- ------------ -----------
<S> <C> <C> <C> <C>
Year ended December 31, 1997:
Net revenue $ 4,107 $6,172 $ 7,018 $ 7,260
Gross profit 2,962 4,613 5,437 5,404
Net earnings 1,109 2,182 2,943 3,264
Basic net earnings per common share $ .09 $ .15 $ .20 $ .22
Diluted net earnings per
common share $ .09 $ .15 $ .20 $ .22
Year ended December 31, 1996:
Net revenue $ 2,798 $2,727 $ 3,144 $ 3,688
Gross profit 2,045 1,840 2,186 2,550
Net earnings 854 678 918 935
Basic net earnings per common share $ .07 $ .06 $ .08 $ .08
Diluted net earnings per
common share $ .07 $ .06 $ .08 $ .08
</TABLE>
NOTE L - NEW ACCOUNTING PRONOUNCEMENTS
The Financial Accounting Standards Board (FASB) has issued the following
Statements of Financial Accounting Standards (SFAS):
SFAS 130, Reporting Comprehensive Income, which is effective for fiscal years
beginning after December 15, 1997. SFAS 130 requires companies to include
details about comprehensive income that arise during a reporting period.
Comprehensive income includes revenue, expenses, gains and losses that bypass
the income statement and are reported directly in a separate component of
equity.
SFAS 131, Disclosure about Segments of An Enterprise and Related Information,
which is effective for fiscal years beginning after December 15, 1997. SFAS
131 requires companies to report information about an entity's different
types of business activities and the different economic environments in which
it operates, referred to as operating segments.
Management does not expect the adoption of these new standards to have a
material impact on the Company's results of operations or financial
condition.
-29-
<PAGE>
THERAGENICS CORPORATION
INDEX TO EXHIBIT
Page No.
24.1 Consent of Independent Public Accountants 31
for Incorporation by Reference of Audit
Report into Registration Statements
-30-
<PAGE>
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Board of Directors
Theragenics Corporation
We hereby consent to the incorporation by reference of our report dated January
15, 1998, appearing in your Annual Report on Form 10-K for the year ended
December 31, 1997, in the Company's Registration Statements on Form S-8, file
numbers 333-15313, 333-40737, and 333-40653.
/s/ GRANT THORNTON LLP
------------------
Atlanta, Georgia
March 31, 1998
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<CASH> 30,161,614
<SECURITIES> 8,391,807
<RECEIVABLES> 2,925,390
<ALLOWANCES> 65,000
<INVENTORY> 433,873
<CURRENT-ASSETS> 42,073,304
<PP&E> 28,985,666
<DEPRECIATION> 4,695,669
<TOTAL-ASSETS> 71,140,309
<CURRENT-LIABILITIES> 3,107,225
<BONDS> 0
0
0
<COMMON> 145,378
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 71,140,309
<SALES> 24,557,374
<TOTAL-REVENUES> 24,557,374
<CGS> 6,141,330
<TOTAL-COSTS> 11,015,370
<OTHER-EXPENSES> 35,268
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 21,095
<INCOME-PRETAX> 14,847,531
<INCOME-TAX> 5,350,000
<INCOME-CONTINUING> 9,497,531
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 9,497,531
<EPS-PRIMARY> .69
<EPS-DILUTED> .66
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C> <C>
<PERIOD-TYPE> 12-MOS 12-MOS
<FISCAL-YEAR-END> DEC-31-1995 DEC-31-1996
<PERIOD-START> JAN-01-1995 JAN-01-1996
<PERIOD-END> DEC-31-1995 DEC-31-1996
<CASH> $3,266,388 $2,986,123
<SECURITIES> 0 0
<RECEIVABLES> 1,335,645 2,258,936
<ALLOWANCES> 0 0
<INVENTORY> 166,955 229,298
<CURRENT-ASSETS> 4,836,459 5,607,982
<PP&E> 10,073,215 17,585,571
<DEPRECIATION> 2,194,164 3,237,684
<TOTAL-ASSETS> 16,878,182 23,689,421
<CURRENT-LIABILITIES> 1,100,626 4,304,909
<BONDS> 0 0
0 0
0 0
<COMMON> 113,948 118,143
<OTHER-SE> 0 0
<TOTAL-LIABILITY-AND-EQUITY> 16,878,182 23,689,421
<SALES> 7,867,393 12,357,165
<TOTAL-REVENUES> 7,867,393 12,357,165
<CGS> 2,645,730 3,735,669
<TOTAL-COSTS> 5,059,530 6,941,284
<OTHER-EXPENSES> 26,995 6,311
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 51,967 84,517
<INCOME-PRETAX> 2,872,325 5,452,006
<INCOME-TAX> 1,100,000 2,067,500
<INCOME-CONTINUING> 1,772,325 3,384,506
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 1,772,325 3,384,506
<EPS-PRIMARY> .16 .29
<EPS-DILUTED> .15 .28
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C> <C> <C>
<PERIOD-TYPE> 3-MOS 6-MOS 9-MOS
<FISCAL-YEAR-END> DEC-31-1997 DEC-31-1997 DEC-31-1997
<PERIOD-START> JAN-01-1997 JAN-01-1997 JAN-01-1997
<PERIOD-END> MAR-31-1997 JUN-30-1997 SEP-30-1997
<CASH> 3,306,140 36,342,099 35,428,093
<SECURITIES> 0 0 0
<RECEIVABLES> 2,750,667 4,428,877 6,217,953
<ALLOWANCES> 6,000 44,289 62,176
<INVENTORY> 312,793 413,228 468,680
<CURRENT-ASSETS> 6,563,720 41,335,348 268,857
<PP&E> 24,209,043 25,286,457 28,329,551
<DEPRECIATION> 3,583,918 4,007,183 4,405,241
<TOTAL-ASSETS> 27,462,534 62,697,306 66,326,189
<CURRENT-LIABILITIES> 6,622,477 2,121,119 1,790,770
<BONDS> 0 0 0
0 0 0
0 0 0
<COMMON> 118,435 143,994 145,037
<OTHER-SE> 0 0 0
<TOTAL-LIABILITY-AND-EQUITY> 27,462,534 62,697,306 66,326,189
<SALES> 4,107,358 10,279,857 17,297,364
<TOTAL-REVENUES> 4,107,358 10,279,857 17,297,364
<CGS> 1,145,361 2,704,701 4,284,908
<TOTAL-COSTS> 2,234,854 5,315,284 8,086,126
<OTHER-EXPENSES> 16,197 344,017 843,449
<LOSS-PROVISION> 0 0 0
<INTEREST-EXPENSE> 6,629 14,621 18,515
<INCOME-PRETAX> 1,788,701 5,308,590 10,054,687
<INCOME-TAX> 679,707 2,017,264 3,820,781
<INCOME-CONTINUING> 1,108,994 3,291,326 6,233,906
<DISCONTINUED> 0 0 0
<EXTRAORDINARY> 0 0 0
<CHANGES> 0 0 0
<NET-INCOME> 1,108,994 3,291,326 6,233,906
<EPS-PRIMARY> .09 .24 .44
<EPS-DILUTED> .09 .24 .44
</TABLE>
