UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 1O-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended April 29, 2000
---------------
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: 1-10089
FACTORY 2-U STORES, INC.
(Exact name of registrant as specified in its charter)
Delaware 51-0299573
-------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4000 Ruffin Road, San Diego, CA 92123-1866
------------------------------- ----------
(Address of principal executive office) (Zip Code)
(858) 627-1800
(Registrant's telephone number, including area code)
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.
[X] YES [ ] NO
The number of shares outstanding of the registrant's of common stock, as of
April 29, 2000, was 12,430,342 shares.
<PAGE>
FACTORY 2-U STORES, INC.
FORM 10-Q FOR THE QUARTERLY PERIOD ENDED APRIL 29, 2000
INDEX
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Factory 2-U Stores, Inc. Balance Sheets as of April 29, 2000
(Unaudited) and January 29, 2000 ..........................................F-1
Factory 2-U Stores, Inc. Statements of Operations (Unaudited) for the
13 weeks ended April 29, 2000 and May 1, 1999..............................F-3
Factory 2-U Stores, Inc. Statements of Cash Flows (Unaudited) for the
13 weeks ended April 29, 2000 and May 1, 1999 .............................F-4
Factory 2-U Stores, Inc. Notes to Financial Statements
(Unaudited) .........................................................F-6
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations ...............................................3
PART II. OTHER INFORMATION
Item 1. Legal Proceedings........................................... 6
Item 2. Changes in Securities and Use of Proceeds....................6
Item 3. Defaults Upon Senior Securities..............................6
Item 4. Submission of Matters to a Vote of Security Holders..........6
Item 5. Other Information........................................... 7
Item 6. Exhibits and Reports on Form 8-K ............................7
Signatures...................................................8
Exhibit Index................................................9
2
<PAGE>
PART I
Item 1. Financial Statements
FACTORY 2-U STORES, INC.
Balance Sheets
(in thousands, except share data)
April 29, January 29,
2000 2000
------------- ------------
(Unaudited)
ASSETS
Current assets:
Cash $ 3,571 $ 9,473
Merchandise inventory 52,447 35,048
Prepaid expenses and other assets 3,980 2,291
Deferred income taxes 2,184 2,184
------ -----
Total current assets 62,182 48,996
Leasehold improvements and equipment,
net of accumulated depreciation
and amortization 31,221 27,425
Deferred income taxes 1,032 1,032
Other assets 1,558 1,507
Excess of cost over net assets acquired,
less accumulated amortization of
$10,540 and $10,139 at April 29, 2000
and January 29, 2000, respectively 29,105 29,506
------- ------
Total assets $ 125,098 $ 108,466
============ ==========
(continued)
F-1
<PAGE>
FACTORY 2-U STORES, INC.
Balance Sheets
(in thousands, except share data)
(continued)
April 29, January 29,
2000 2000
-------------- -------------
(Unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt
and capital lease obligations $ 1,228 $ 1,251
Accounts payable 30,459 19,994
Income taxes payable 1,374 4,235
Accrued expenses 19,401 22,275
------- ------
Total current liabilities 52,462 47,755
Revolving credit facility 9,300 -
Long-term debt, less current maturities 10,346 10,067
Capital leases and other long-term obligations 1,606 1,658
Deferred rent 2,639 2,556
------ -----
Total liabilities 76,353 62,036
------ ------
Stockholders' equity:
Series A convertible preferred stock,
$0.01 par value; 4,500,000 shares
authorized, 0 shares issued and
outstanding (aggregate liquidation
preference of $0) at April 29, 2000 and
January 29, 2000 - -
Series B junior convertible, exchangeable
preferred stock, $0.01 par value;
40,000 shares authorized, 0 shares issued
and outstanding (aggregate liquidation
preference of $0 at April 29, 2000
and January 29, 2000 - -
Common stock, $0.01 par value; 35,000,000
shares authorized and 12,430,342
shares and 12,390,817 shares issued and
outstanding at April 29, 2000 and
January 29, 2000, respectively 124 124
Stock subscription notes receivable (2,542) (2,710)
Additional paid-in capital 108,634 108,091
Accumulated deficit (57,471) (59,075)
-------- --------
Total stockholders' equity 48,745 46,430
------- ------
Total liabilities and
stockholders' equity $ 125,098 $ 108,466
======== =======
The accompanying notes are an integral part of these financial statements.
F-2
<PAGE>
FACTORY 2-U STORES, INC.
Statements of Operations
(in thousands, except per share data)
(Unaudited)
13 Weeks Ended
----------------------------------
April 29, May 1,
2000 1999
---------------- ----------------
Net sales $ 108,375 $ 85,099
Cost of sales 70,150 56,108
------- ------
Gross profit 38,225 28,991
Selling and administrative expenses 32,846 26,304
Pre-opening expenses 1,698 993
Amortization of intangibles 589 589
------- ------
Operating income 3,092 1,105
Interest expense 350 539
------- ------
Income before income taxes 2,742 566
Income taxes 1,140 232
--------- ------
Net income $ 1,602 $ 334
=========== =========
Earnings per share:
Basic $ 0.13 $ 0.03
Diluted $ 0.12 $ 0.03
Weighted average common shares outstanding:
Basic 12,412 12,107
Diluted 12,828 12,577
The accompanying notes are an integral part of these financial statements.
F-3
<PAGE>
FACTORY 2-U STORES, INC.
Statements of Cash Flows
(in thousands)
(Unaudited)
13 Weeks Ended
-------------------------------
April 29, May 1,
2000 1999
--------------- -------------
Cash flows from operating activities:
Income from operating activities $ 1,602 $ 334
Adjustments to reconcile net income to
net cash used in operating activities:
Depreciation 2,245 1,429
Amortization of intangibles 589 589
Amortization of debt discount 279 276
Loss on disposal of equipment 280 71
Deferred rent expense 111 21
Changes in operating assets and liabilities:
Merchandise inventory (17,399) (4,837)
Prepaid expenses and other assets (1,654) (3,200)
Accounts payable 10,465 6,848
Accrued expenses and other liabilities (6,161) (4,998)
------ -------
Net cash used in operating activities (9,643) (3,467)
Cash flows used in investing activities:
Purchase of leasehold improvements and equipment (5,553) (3,266)
------- -------
Net cash used in investing activities (5,553) (3,266)
------- -------
(continued)
F-4
<PAGE>
FACTORY 2-U STORES, INC.
Statements of Cash Flows
(in thousands)
(Continued)
13 Weeks Ended
--------------------------------
April 29, May 1,
2000 1999
-------------- ------------
Cash flows from financing activities:
Borrowings on revolving credit facility 51,694 98,890
Payments on revolving credit facility (42,394) (89,347)
Payments of long-term debt and
capital lease obligations (70) (1,125)
Repurchase of warrants - (288)
Payment of deferred debt issuance costs (250) -
Payments of stock subscription notes receivable 169 30
Proceeds from exercise of stock options 145 11
------- --------
Net cash provided by financing activities 9,294 8,171
-------- --------
Net increase (decrease) in cash (5,902) 1,438
Cash at the beginning of the period 9,473 3,124
-------- --------
Cash at the end of the period $ 3,571 $ 4,562
=========== ===========
Supplemental disclosure of
cash flow information:
Cash paid during the period for:
Interest $ 47 $ 170
Income taxes $ 4,001 $ 2,647
The accompanying notes are an integral part of these financial statements.
F-5
<PAGE>
FACTORY 2-U STORES, INC.
Notes to Financial Statements
(Unaudited)
(1) Unaudited Interim Financial Statements
The accompanying unaudited financial statements do not include all of
the information and footnotes required by generally accepted accounting
principles for annual financial statements and should be read in
conjunction with the financial statements for the fiscal year ended
January 29, 2000 included in the Factory 2-U Stores, Inc. (the
"Company") Form 10-K as filed with the Securities and Exchange
Commission.
In the opinion of management, the unaudited financial statements as of
and for the 13 weeks ended April 29, 2000 and May 1, 1999 reflect all
adjustments (which include normal recurring adjustments) necessary to
present fairly the financial position, results of operations and cash
flows for the periods presented. Due to the seasonal nature of the
Company's business, the results of operations for the interim period
may not necessarily be indicative of the results of operations for a
full year.
(2) New Accounting Pronouncements
In December 1999, the Securities and Exchange Commission (the "SEC")
issued Staff Accounting Bulletin (SAB) No. 101, "Revenue Recognition in
Financial Statements." This SAB summarizes the SEC's view in applying
generally accepted accounting principles to revenue recognition in
financial statements. This SAB was amended by SAB No. 101A, which
defers the effective date for all registrants with fiscal years that
begin between December 16, 1999 and March 15, 2000, to allow for the
adoption of implementing during the second quarter of fiscal 2000.
Management has reviewed the impact of SAB No. 101 on the Company's
financial statements, and does not believe that its adoption will have
a material impact on the Company's financial statements.
In June 1998, the Financial Accounting Standards Board issued SFAS No.
133, "Accounting for Derivative Instruments and Hedging Activities",
which establishes accounting and reporting standards for derivative
instruments and hedging activities. SFAS No. 133 requires that an
entity recognize all derivatives as either assets or liabilities in the
statement of financial position and measure those instruments at fair
value. This Statement was amended by SFAS No. 137 which defers the
effective date to all fiscal quarters of fiscal years beginning after
June 15, 2000. SFAS No. 133 is effective for the Company's first
quarter in the fiscal year beginning February 4, 2001 and is not
expected to have a material effect on the Company's financial position
or results of operations.
F-6
<PAGE>
(3) Revolving Credit Facility
In March 2000, the Company entered into a $50.0 million revolving
credit facility with a financial institution and terminated the prior
revolving credit facility. Under the new revolving credit facility the
Company may borrow up to 70% of its eligible inventory and 85% of its
eligible accounts receivables, as defined, not to exceed $50.0 million.
The new credit facility also provides a $5.0 million sub-facility for
letters of credit. Interest on the credit facility is at the prime
rate, or at the Company's election, LIBOR plus 2.0%. Under the terms of
the new credit facility, the interest rate may increase or decrease
subject to earnings, as defined, on a rolling four fiscal quarter
basis. Accordingly, prime rate borrowings could range from prime to
prime plus 0.50% and LIBOR borrowings from LIBOR plus 1.50% to LIBOR
plus 2.50%. The new credit facility expires on March 3, 2003, subject
to automatic one-year renewal periods, unless terminated earlier by
either party. The Company is obligated to pay fees equal to 0.125% per
annum on the unused amount of the new credit facility. The new credit
facility is secured by a first lien on accounts receivable and
inventory and requires the Company to maintain specified levels of
tangible net worth in the event that its borrowing availability is less
than a specified amount.
At April 29, 2000, the prime interest rate in effect was 9.0%. At April
29, 2000, based on its eligible inventory and accounts receivable, the
Company had $42.0 million available to borrow under the revolving
credit facility. Of the $42.0 million available to borrow, the Company
had $9.3 million outstanding.
(4) Long-term Debt
As of April 29, 2000, the Company had outstanding long-term
indebtedness, less current maturities, of $10.3 million. The long-term
indebtedness consists of the New Junior Subordinated Notes which are
non-interest bearing and are reflected on the Company's balance sheets
at the present value using a discount rate of 10%. As of April 29,
2000, the New Junior Subordinated Notes had a face value of $16.3
million and a related unamortized discount of $5.0 million, resulting
in a net carrying value of $11.3 million. The discount is amortized to
interest expense as a non-cash charge until the notes are paid in full.
The Company made a principal payment on the New Junior Subordinated
Notes of $1.0 million in December 1999. Additional principal payments
are scheduled on December 31, 2000 ($1.0 million), December 31, 2001
and December 31, 2002 ($2.0 million), December 31, 2003 and December
31, 2004 ($3.0 million) and on May 28, 2005 ($5.3 million).
(5) Earnings per Share
The Company computes earnings per share in accordance with SFAS No.
128, "Earnings Per Share." Under the provisions of SFAS No. 128, basic
earnings per share are computed based on the weighted average shares
outstanding. Diluted earnings per share are computed based on the
weighted average shares outstanding and potentially dilutive common
equivalent shares.
F-7
<PAGE>
At April 29, 2000, there were 411,785 anti-dilutive stock options
outstanding.
(6) Provision for Income Taxes
The Company recorded a $1.1 million provision for income taxes for the
13 weeks ended April 29, 2000. The provision for income taxes is based
upon the estimated effective tax rate for the entire fiscal year. The
estimated effective tax rate is subject to ongoing review and
evaluation.
(7) Stock Options and Warrants
As of April 29, 2000, options to purchase 1,436,354 shares of the
Company's common stock were outstanding. Of those stock options,
250,348 options will become exercisable once specified market price
hurdles for the Company's common stock have been achieved and
maintained for 60 consecutive trading days (92,961 will become
exercisable at a market price hurdle of $24.89; 78,693 will become
exercisable at $33.19; and 78,694 will become exercisable at $49.78).
When the market price of the Company's common stock reaches $24.89,
$33.19 and $49.78 for the specified periods of time, the Company will
be required to record aggregate non-cash compensation expense in the
minimum amounts of $1.6 million, $2.0 million and $3.3 million,
respectively.
At April 29, 2000, warrants to purchase 82,690 shares of the Company's
common stock at $19.91 per share were outstanding.
F-8
<PAGE>
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations
General
Management's discussion of the results of operations provides analysis of the
Company's operations for the 13 weeks ended April 29, 2000 and May 1, 1999.
Results of Operations
The following discussion and analysis should be read in conjunction with the
Company's Financial Statements and notes thereto included elsewhere in this Form
10-Q. As of April 29, 2000, the Company operated 203 stores compared to 169 as
of May 1, 1999. The Company opened 25 new stores and closed 9 stores during the
current period.
13 Weeks Ended April 29, 2000 Compared to the 13 Weeks Ended May 1, 1999
Net sales were $108.4 million for the 13 weeks ended April 29, 2000 compared to
$85.1 million for the 13 weeks ended May 1, 1999, an increase of $23.3 million,
or 27.4%. Comparable store sales increased 4.0%.
Gross profit was $38.2 million for the 13 weeks ended April 29, 2000 compared to
$29.0 million for the 13 weeks ended May 1, 1999, an increase of $9.2 million,
or 31.9%. As a percentage of net sales, gross profit was 35.3% for the 13 weeks
ended April 29, 2000 compared to 34.1% for the 13 weeks ended May 1, 1999. The
increase in gross profit as a percentage of net sales was primarily attributable
to a higher initial markup on purchases, lower markdown volume and lower
inventory shrinkage.
Selling and administrative expenses were $32.8 million for the 13 weeks
ended April 29, 2000 compared to $26.3 million for the 13 weeks ended May 1,
1999, an increase of $6.5 million, or 24.9%. As a percentage of net sales,
selling and administrative expenses were 30.3% for the 13 weeks ended April 29,
2000 and 30.9% for the 13 weeks ended May 1, 1999. Approximately $6.3 million of
the increase was related to sales volume and new store growth. Selling and
administrative expenses as apercentage of net sales decreased due to sales
volume leverage.
Interest expense was $350,000 for the 13 weeks ended April 29, 2000 compared to
$539,000 for the 13 weeks ended May 1, 1999, a decrease of $189,000. The
decrease was due to lower average outstanding borrowings on the revolving credit
facility.
Income taxes were $1.1 million for the 13 weeks ended April 29, 2000 and
$232,000 for the 13 weeks ended May 1, 1999. Income taxes increased as a result
of higher taxable income versus the same period a year ago.
3
<PAGE>
Net income was $1.6 million for the 13 weeks ended April 29, 2000 compared to
$334,000 for the 13 weeks ended May 1, 1999. The increase in net income was a
result of the operating and other factors cited above.
Liquidity and Capital Resources
General
As of April 29, 2000, the Company had outstanding indebtedness of $22.5 million.
The Company finances its operations through credit provided by vendors and other
suppliers, amounts borrowed under its $50.0 million revolving credit facility
and internally generated cash flow. Credit terms provided by vendors and other
suppliers are usually net 30 days. Amounts which may be borrowed under the
revolving credit facility are based on a percentage of eligible inventory and
accounts receivable, as defined, outstanding from time to time, as more fully
described in Note 3 of Notes to Financial Statements.
Management believes that the Company's sources of cash, including the revolving
credit facility, will be adequate to finance its operations, capital
requirements and debt obligations as they become due for at least the next
twelve months. See Notes 3 and 4 of Notes to Financial Statements.
Capital Expenditures
The Company anticipates capital expenditures of approximately $13.6 million
during the remainder of the current fiscal year ending February 3, 2001 which
include costs to open approximately 35 new stores, to renovate 13 existing
stores, to construct a new distribution center, to upgrade information systems
and to renovate and expand our administrative offices. Management believes that
future capital expenditures will be financed from internal cash flow and
borrowings under the revolving credit facility.
Inflation
In general, the Company believes that inflation has had no recent material
impact on operations and none is anticipated in the next fiscal year.
Minimum Wage Increases
The Company employs, both in its stores and in its corporate headquarters, a
substantial number of employees who earn hourly wages near or at the minimum
wage. Actions by both the federal and certain state governments have increased
and may continue to increase the hourly wages that the Company must pay to such
employees. Historically, the Company has mitigated such increases through
policies to manage its ratio of wages to sales. However, the Company can make no
assurances that these measures and other steps taken will be adequate to control
the impact of any hourly wage increases in the future and may have a negative
impact on profitability in the future.
4
<PAGE>
Seasonality and Quarterly Fluctuations
The Company historically has realized its highest level of sales and income
during the third and fourth quarters of its fiscal year (the quarters ending in
October and January) as a result of the "Back to School" (August and September)
and Holiday (November and December) seasons. The seasonally lower sales in the
Company's first two quarters (February through July), can result in the
Company's incurring losses during those quarters even in years in which it will
have full year profits.
Year 2000 Issue
The Year 2000 issue was the result of computer systems and software products
coded to accept only 2 digit entries in the date code field. This could have
resulted in system failure or the generation of erroneous data in systems that
do not properly recognize such information.
The Company diligently addressed the potential Year 2000 issue by utilizing both
internal and external resources as applicable, to identify, correct or reprogram
its internal systems for Year 2000 compliance. In fiscal 1999, the Company
implemented a new integrated software package to support future growth and to
address issues associated with the Year 2000 at a cost of approximately $2.8
million.
To date, the Company has not experienced any significant business disruptions or
system failures as a result of the Year 2000 issue and none of its major
vendors, service providers and customers has reported substantial Year 2000
related problems.
Although the Year 2000 event has occurred, and while there can be no assurance
that there will be no problems related to the Year 2000 issue after January 1,
2000, the Company believes it will not be adversely impacted by the Year 2000
issue.
Cautionary Statement for Purposes of "Safe Harbor Provisions" of the Private
Securities Litigation Reform Act of 1995
In December 1995, Congress enacted the Private Securities Litigation Reform Act
of 1995. The Act contains amendments to the Securities Act of 1933 and the
Securities Exchange Act of 1934 which provide protection from liability in
private lawsuits for "forward-looking" statements made by specified persons. We
desire to take advantage of the "safe harbor" provisions of the Act.
5
<PAGE>
Certain statements in this Form 10-Q, or in documents incorporated by reference
into this Form 10-Q, are forward-looking statements. Those forward-looking
statements are subject to uncertainties that may cause the actual results to
differ from the results anticipated by the forward-looking statements. Factors
which may cause actual results to differ from those anticipated by
forward-looking statements include, among others, general economic and business
conditions (both nationally and in the regions in which we operate); government
regulations (including regulations regarding temporary immigration of
agricultural works and minimum wages of agricultural and other workers); claims
asserted against us; competition; changes in our business strategy or
development plans; difficulties attracting and retaining qualified personnel;
the inability to obtain adequate quantities of merchandise at favorable prices;
and the other factors described in the Company's other filings with the
Securities and Exchange Commission. Consequently, all of the forward-looking
statements are qualified by these cautionary statements and there can be no
assurance that the results or developments anticipated by the Company will be
realized or that they will save the expected effects on the Company or its
business or operations.
Quantitative and Qualitative Disclosures About Market Risk
The Company is exposed to interest rate risk on its fixed rate debt obligations.
At April 29, 2000, fixed rate debt obligations totaled $16.3 million. The fixed
rate debt obligations are non-interest bearing and are discounted at a rate of
10%, resulting in a net carrying value of $11.3 million. Maturities are $1.0
million, $2.0 million, $2.0 million, $3.0 million, $3.0 million and $5.3 million
in fiscal year 2000, 2001, 2002, 2003, 2004 and 2005, respectively. While
generally an increase in market interest rates will decrease the value of this
debt, and decreases in rates will have the opposite effect, the Company is
unable to estimate the impact that interest rate changes will have on the value
of this debt as there is no active public market for the debt and the Company is
unable to determine the market interest rate at which alternate financing would
have been available at April 29, 2000.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities and Use of Proceeds
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
None.
6
<PAGE>
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
11.1 Computation of per share loss
27 Financial Data Schedule
(b) Reports on Form 8-K
None.
7
<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.
FACTORY 2-U STORES, INC.
Date: May 23, 2000
By: /s/ Douglas C. Felderman
------------------------------------------------------
Name: Douglas C. Felderman
Title: Executive Vice President and Chief Financial Officer
(duly authorized officer and principal financial officer)
8
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description Page
11.1 Computation of earnings per share 10
27 Financial Data Schedule (for EDGAR filing only) 11
9
<PAGE>
EXHIBIT 11.1
COMPUTATION OF EARNINGS PER SHARE
(in thousands, except per share data)
13 weeks ended
---------------------------------
April 29, 2000 May 1, 1999
-------------- ------------
Net income $ 1,602 $ 334
Weighted average number of
common shares outstanding 12,412 12,107
Effect of dilutive securities:
Warrants that are common stock equivalents 21 -
Options that are common stock equivalents 395 470
Adjusted common shares outstanding used
for diluted computation 12,828 12,577
Earnings per share:
Basic $ 0.13 $ 0.03
Diluted $ 0.12 $ 0.03
10
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Balance Sheet and Statement of Operations as of and for the 13 weeks ended
April 29, 2000 and is qualified in its entirety by reference to such financial
statements as included in the Company's Quarterly Report on Form 10-Q.
</LEGEND>
<CIK> 0000813775
<NAME> Factory 2-U Stores, Inc.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-mos
<FISCAL-YEAR-END> FEB-03-2000
<PERIOD-START> JAN-30-2000
<PERIOD-END> APR-29-2000
<CASH> 3,571
<SECURITIES> 0
<RECEIVABLES> 1,996
<ALLOWANCES> 0
<INVENTORY> 52,447
<CURRENT-ASSETS> 62,182
<PP&E> 50,703
<DEPRECIATION> 19,482
<TOTAL-ASSETS> 125,098
<CURRENT-LIABILITIES> 52,462
<BONDS> 0
0
0
<COMMON> 124
<OTHER-SE> 48,621
<TOTAL-LIABILITY-AND-EQUITY> 125,098
<SALES> 108,375
<TOTAL-REVENUES> 108,375
<CGS> 70,150
<TOTAL-COSTS> 70,150
<OTHER-EXPENSES> 35,133
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 350
<INCOME-PRETAX> 2,742
<INCOME-TAX> 1,140
<INCOME-CONTINUING> 1,602
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,602
<EPS-BASIC> 0.13
<EPS-DILUTED> 0.12
</TABLE>
