<PAGE>
FORM 10Q
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended June 30, 1997
Commission File No. 0-18200
ARMANINO FOODS OF DISTINCTION, INC.
-----------------------------------------------------
(Exact name of registrant as specified in its charter)
COLORADO 84-1041418
- --------------------------------- -------------------------------
(State or other jurisdiction (I.R.S. Employer Identification
of incorporation or organization) Number)
30588 San Antonio Street, Hayward, CA 94544
--------------------------------------------------
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code: (510) 441-9300
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 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 ---.
Number of registrant's common shares outstanding at June 30, 1997: 11,275,199.
<PAGE>
PART I - FINANCIAL INFORMATION
ARMANINO FOODS OF DISTINCTION, INC.
Condensed Consolidated Balance Sheets
(Unaudited)
ASSETS
June 30, December 31,
1997 1996
Current Assets: ---------- -----------
Cash and cash equivalents $ 362,791 $ 742,856
Treasury bills, held to maturity 3,673,591 3,990,912
Accounts receivable 969,110 1,698,339
Inventory 957,370 1,066,904
Prepaid expenses 176,931 108,106
Current deferred tax asset 512,949 656,000
Total Current Assets 6,652,742 8,263,117
Property and Equipment, Net 2,462,702 2,599,936
Other Assets:
Deposits 1,970,811 477,610
Goodwill, net 564,438 585,438
Total Other Assets 2,535,249 1,063,048
Total Assets $11,650,693 $11,926,101
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued expenses $ 594,710 $ 999,476
Notes payable - 32,073
Current portion of long-term debt 24,610 25,749
Line of credit payable 392,970 -
Net liabilities of discontinued operations - 75,145
Total Current Liabilities 1,012,290 1,132,443
Deferred tax liability 126,000 126,000
Long-term debt 34,735 45,850
Total Liabilities 1,173,025 1,304,293
Stockholders' Equity:
Common stock 11,171,031 11,529,739
Additional paid in capital 22,311 22,311
Accumulated deficit (715,674) (930,242)
Total Stockholders' Equity 10,477,668 10,621,808
Total Liabilities and Stockholders' Equity $11,650,693 $11,926,101
The accompanying notes are an integral part of these condensed financial
statements. The balances for December 31, 1996 were taken from the audited
financial statements at that date and condensed.
-2-
<PAGE>
PART I - FINANCIAL INFORMATION
ARMANINO FOODS OF DISTINCTION, INC.
Condensed Consolidated Statements of Operations
For the Quarter Ended June 30, 1997 and 1996
(Unaudited)
June 30, June 30,
1997 1996
Net Sales $3,747,112 $3,512,706
Cost of Goods Sold 2,527,114 2,344,919
Gross Profit 1,219,998 1,167,787
Operating Expenses:
General and administrative 382,893 265,178
Salaries and wages 311,173 300,067
Commissions 70,128 94,507
Advertising, demonstrations, promotions,
and slotting allowances 201,952 155,473
Total Operating Expenses 966,146 815,225
Income (Loss) From Operations 253,852 352,562
Other Income 54,674 72,069
Income From Continuing Operations Before
Income Taxes 308,526 424,631
Current Tax Expense 84,000 30,000
Deferred Tax Expense 38,428 139,852
Income From Continuing Operations Before
Discontinued Operations 186,098 254,779
Net (Loss) From Discontinued Operations
Of AFDI, Inc. - (59,369)
Net Income $ 186,098 $ 195,410
Primary Earnings Per Share $ .02 $ .02
Weighted Average Common Shares
Outstanding 11,487,018 12,623,090
The accompanying notes are an integral part of these condensed financial
statements.
-3-
<PAGE>
PART I - FINANCIAL INFORMATION
ARMANINO FOODS OF DISTINCTION, INC.
Condensed Consolidated Statements of Operations
For the Six Months Ended June 30, 1997 and 1996
(Unaudited)
June 30, June 30,
1997 1996
---------- ----------
Net Sales $7,086,725 $6,897,905
Cost of Goods Sold 4,876,975 4,538,921
Gross Profit 2,209,750 2,358,984
Operating Expenses:
General and administrative 745,642 519,382
Salaries and wages 646,684 598,840
Commissions 179,472 199,351
Advertising, demonstrations, promotions,
and slotting allowances 390,200 336,609
Total Operating Expenses 1,961,998 1,654,182
Income (Loss) From Operations 247,752 704,802
Other Income 109,867 120,351
Income From Continuing Operations Before
Income Taxes 357,619 825,153
Current Tax Expense 97,000 58,000
Deferred Tax Expense 46,051 272,061
Income From Continuing Operations Before
Discontinued Operations 214,568 495,092
Net (Loss) From Discontinued Operations
Of AFDI, Inc. - (59,369)
Net Income $ 214,568 $ 435,723
Primary Earnings Per Share $ .02 $ .04
Weighted Average Common Shares
Outstanding 11,808,354 11,890,097
The accompanying notes are an integral part of these condensed financial
statements.
-4-
<PAGE>
PART I - FINANCIAL INFORMATION
ARMANINO FOODS OF DISTINCTION, INC.
Condensed Consolidated Statements of Cash Flows
For the Six Months Ended June 30, 1997 and 1996
(Unaudited)
June 30, June 30,
1997 1996
----------- -----------
Cash Flows From Operating Activities:
Net income $ 214,568 $ 435,723
Adjustment to reconcile net income
to net cash (used for) provided
by operations:
Depreciation and amortization 209,509 164,030
Changes in assets and liabilities:
Decrease in accounts receivable 729,229 261,673
(Increase)Decrease in inventories 109,534 (44,762)
(Increase)Decrease in prepaid expenses (68,825) (103,710)
(Increase)in other assets - (150,715)
Decrease in deferred tax assets 143,051 290,482
(Decrease)in accounts payable
and accrued expenses (404,766) (72,014)
Increase (Decrease) in net liabilities
of discontinued operations (75,145) -
Total Adjustments 642,587 489,012
Net Cash Provided By
Operating Activities 857,155 924,735
Cash Flows To Investing Activities:
Organizational costs paid - (42,776)
Purchase of Goodwill - (626,267)
Increase in deposits on future equipment
purchases (1,493,201) -
Capital expenditures (51,275) (615,958)
Reduction (Increase) in U.S. treasury
bills, net 317,321 (2,229,776)
Net Cash (Used For) Investing Activities (1,227,155) (3,514,777)
Cash Flows From Financing Activities:
Issuance of common stock 9,250 2,695,075
Purchase of treasury stock (367,958) -
Payments on capital lease obligations (12,254) (11,504)
Increase in borrowings 392,970 152,348
Payments on notes payable (32,073) -
Net Cash (Used For) Provided By
Financing Activities (10,065) 2,835,919
Net Increase (Decrease) In Cash and
Cash Equivalents (380,065) 245,877
Cash and Cash Equivalents Beginning of Period 742,856 746,250
Cash and Cash Equivalents End of Period $ 362,791 $ 992,127
The accompanying notes are an integral part of these condensed financial
statement.
-5-
<PAGE>
PART I - FINANCIAL INFORMATION
ARMANINO FOODS OF DISTINCTION, INC.
Notes to Condensed Consolidated Financial Statements
June 30, 1997
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all
adjustments, consisting of normal recurring accruals, considered necessary for
a fair presentation have been included. It is suggested that these condensed
consolidated financial statements be read in conjunction with the financial
statements and notes thereto included in the December 31, 1996 audited financial
statements for Armanino Foods of Distinction, Inc. The results of operations
for the periods ended June 30, 1997 and 1996 are not necessarily indicative
of the operating results for the full year.
During the first quarter of 1997, the Company discontinued the operations
of AFDI, Inc. The financial statements for the prior period have been restated
to reflect the operating results of AFDI, Inc. as discontinued operations.
The condensed consolidated financial statements include the accounts of
Armanino Foods of Distinction, Inc. ("Parent") and it's wholly-owned subsidiary
Alborough, Inc. (dba "Emilia Romagna").
For purposes of the statement of cash flows, the Company considers all
highly liquid debt instruments (Treasury Bills) purchased with a maturity of
three months or less to be cash equivalents.
The calculation of primary earnings per share is based on the weighted
average number of outstanding common shares during the period plus, when their
effect is dilutive, additional shares assuming the exercise of certain vested
and non-vested stock options and warrants reduced by the number of shares which
could be repurchased with the proceeds. Fully dilutive earnings per share are
not presented as their effect for the quarter and six months ended June 30,
1997 and June 30, 1996 was anti-dilutive.
The Company acquired a subsidiary (Alborough, Inc.) during May, 1996. The
Company recorded goodwill in the amount of $609,938 as part of the purchase.
The Company is amortizing the goodwill over 15 years, on a straight line basis.
NOTE 2 - INVENTORY
Inventory is carried at the lower of cost or market with cost being
determined on the first-in, first-out method and consisted of the following at
June 30, 1997 and December 31, 1996:
June 30, December 31,
1997 1996
--------- -----------
Raw materials & supplies $ 637,846 $ 275,472
Finished goods 319,524 791,432
--------- -----------
$ 957,370 $ 1,066,904
-6-
<PAGE>
PART I - FINANCIAL INFORMATION
ARMANINO FOODS OF DISTINCTION, INC.
Notes to Condensed Consolidated Financial Statements
June 30, 1997
(Unaudited)
NOTE 3 - RELATED PARTY TRANSACTIONS
The Company incurred $13,958 and $17,502 respectively, for the six months
ended June 30, 1997 and 1996, in accounting and consulting fees to Polly,
Scatena, Gekakis & Co., an accounting firm, the managing partner of which is
also a stockholder and director of the Company. Services provided by the
accounting firm are an extension of the internal accounting functions of the
Company, as well as management, business and systems consulting.
NOTE 4 - INCENTIVE COMPENSATION
The Company has accrued $82,128 and $153,450 for the six months ended June
30, 1997 and June 30, 1996 respectively, for its management and employee
incentive compensation plans. These amounts are based on achieving a
predetermined level of sales, net income and personal goals and objectives. For
the current year this amount is eligible for distribution only when the (1)
predetermined level of sales and net income and/or (2) personal goals and
objectives are achieved.
NOTE 5 - PROPERTY AND EQUIPMENT
Property and equipment consists of the following:
June 30, December 31,
1997 1996
---------- -----------
Furniture & Office Equipment $ 244,230 $ 224,968
Plant Machinery & Equipment 2,108,275 2,096,048
Leasehold Improvements 1,407,299 1,389,223
---------- ----------
3,759,804 3,710,239
Accumulated Depreciation 1,297,102 1,110,303
---------- ----------
$2,462,702 $2,599,936
As of June 30, 1997 the Company included in other assets deposits in the
amount of $1,950,000 for equipment and leasehold improvements to be placed in
service during the third quarter of 1997 at its Hayward, California facility.
On May 20, 1996, the Company acquired Alborough, Inc., (dba Emilia
Romagna). The Company recorded property and equipment acquired at the fair
market value of these assets on May 20, 1996. Above amounts include the
property and equipment acquired through the purchase of Alborough, Inc.
NOTE 6 - LINES OF CREDIT
In September of 1994, the Company obtained two lines of credit totalling
$1,250,000 with Wells Fargo Bank in San Francisco, California. These two lines
consisted of a $500,000 business loan line of credit and a $750,000 equipment
loan line of credit.
-7-
<PAGE>
PART I - FINANCIAL INFORMATION
ARMANINO FOODS OF DISTINCTION, INC.
Notes to Condensed Consolidated Financial Statements
June 30, 1997
(Unaudited)
NOTE 6 - LINES OF CREDIT (Continued)
The $500,000 business loan provides for interest at prime plus .75% with
a maturity date of September 10, 1997. At June 30, 1997, there was a balance of
$392,970 due on this line. This line of credit is secured by the Company's
inventory, accounts receivable and equipment.
The $750,000 equipment loan line of credit provided for interest at prime
plus .75% with a conversion date of September 15, 1997 to an installment
equipment loan. At June 30, 1997, there were no amounts borrowed against this
line. This line of credit is secured by the Company's inventory, accounts
receivable and equipment.
NOTE 7 - INCOME TAXES
The Company accounts for income taxes in accordance with FASB Statement
109, "Accounting for Income Taxes."
As of June 30, 1997 and December 31, 1996 the net deferred tax assets and
liabilities consisted of the following:
June 30, December 31,
1997 1996
---------- -----------
Current deferred tax asset $ 512,949 $ 656,000
Deferred Tax Liability (126,000) (126,000)
Management estimates that the Company will generate adequate net profits
to offset net operating loss carryforwards prior to the expiration of the net
operating loss carryforwards. Consequently, a deferred tax asset valuation
allowance has not been accrued.
NOTE 8 - COMMON STOCK
The Company received $9,250, for the six months ended June 30, 1997, from
the issuance of 10,000 shares at $.925 in connection with options exercised,
under the 1993 Stock Option Plan.
During the second quarter of 1997, the Company purchased 318,900 shares of
common stock for $367,958 on the open market to be retired by the Company.
NOTE 9 - ACQUISITION OF SUBSIDIARY
On May 20, 1996, the Company acquired all of the outstanding common stock
of Alborough, Inc., (dba Emilia Romagna), in a business combination accounted
for as a purchase. Alborough, Inc. is primarily engaged in the manufacturing of
gourmet Italian foods. The results of operations of Alborough, Inc. is included
in the accompanying financial statements since the date of acquisition. The
total cost of the acquisition was $738,779, which exceeded the fair market value
of the net assets of Alborough, Inc. by $609,938. The excess is recorded as
goodwill and is being amortized over 15 years. The purchase price could
increase significantly depending upon Alborough, Inc. meeting certain
earnings performance
-8-
<PAGE>
PART I - FINANCIAL INFORMATION
ARMANINO FOODS OF DISTINCTION, INC.
Notes to Condensed Consolidated Financial Statements
June 30, 1997
(Unaudited)
NOTE 9 - ACQUISITION OF SUBSIDIARY (Continued)
criteria over the 3 year period subsequent to the consummation of the purchase
agreement. The agreement between the parties provides that additional payments
may be earned by Alborough, Inc's previous shareholders based on a percentage of
gross margin attributable to sales made to specified customers. The sales must
be made during a specified period of time and subject to certain minimum sales
levels being achieved. As of June 30, 1997, no additional payments have been
made to Alborough Inc.'s former shareholders as minimum sales to the specified
customers had not been achieved.
NOTE 10 - DISCONTINUED OPERATIONS
During the first quarter of 1997 the Company closed its quick service
Italian restaurant locations and discontinued the operations of AFDI, Inc. The
Company completed the disposition of the business during the second quarter of
1997. AFDI, Inc. is reported as a discontinued operation for the year ended
December 31, 1996. During the six months ended June 30, 1997, the net liability
from discontinued operations has been reduced to $0.
-9-
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM II: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
QUARTER AND SIX MONTHS ENDED JUNE 30, 1997 V. QUARTER AND SIX MONTHS ENDED JUNE
30, 1996
Net sales for the quarter ended June 30, 1997 were $3,747,112 as compared
to $3,512,706 for the quarter ended June 30, 1996. For the six months ended
June 30, 1997, net sales were $7,086,725 as compared to $6,897,905 for the
six months ended June 30, 1996. The small increase is primarily attributed
to the inclusion of sales of Emilia Romagna, the Company's subsidiary, for a
full six months in 1997 vs. one month in 1996. These additional sales were
offset by lower pasta sales for the parent company. The lower sales, for the
parent, were due to the decision of a club store customer in August 1996 to
buy its pasta products from a different manufacturer. The Company's pesto
product line showed a 3% increase during the six months ended June 30, 1997
compared to the six months ended June 30, 1996. Sales of the pesto product
line were stronger in the foodservice area. Meatball sales for the first
six months increased 20% from the same period last year.
Cost of goods sold as a percentage of net sales increased from 66.8% for
the quarter ended June 30, 1996 to 67.4% for the quarter ended June 30, 1997.
Cost of goods sold as a percentage of net sales increased from 65.8% for the six
months ended June 30, 1996 to 68.8% for the six months ended June 30, 1997. This
increase was primarily due to a change in the product mix. The change in the
product mix was the result of purchasing a new subsidiary (Alborough, Inc.).
The new products of the subsidiary currently have lower margins than some of
the Company's other products. Additionally, higher freight charges to one of
the customers of the subsidiary increased this percentage.
Operating expenses as a percentage of net sales were approximately 25.8%
for the quarter ended June 30, 1997 as compared to 23.2% for the quarter ended
June 30, 1996. Operating expenses for the first six months of 1997 were
approximately 27.7% as compared to 24.0% for first six months of 1996. The
increase is primarily due to increases in general and administrative
expenses and salaries expense. General and administrative expenses
increased due to the inclusion of Alborough, Inc. in the consolidated
financial statements and the hiring of a public relations firm.
Additionally, the revision of the packaging design and merchandising
materials for the Company's product lines added to this expense. Salaries
increased due to additional personnel at the Company.
Net income from continuing operations was $186,098 for the quarter ended
June 30, 1997 compared to $254,779 for the quarter ended June 30, 1996. Net
income from continuing operations was $214,568 for the six months ended June 30,
1997, as compared to $495,092 for the six months ended June 30, 1996. The
decrease in the net income is attributed to lower gross margins due to the
change in the product mix and an increase in operating expenses.
LIQUIDITY AND CAPITAL RESOURCES
At June 30, 1997, the Company had working capital of $5,640,452, a decrease
of $1,490,222 from December 31, 1996. The decrease was primarily due to
deposits being made on pasta equipment purchases. Current assets included
$5,005,492 in cash and cash equivalents, U.S. treasury bills, and accounts
receivable.
Management believes that this level of working capital is adequate to meet
anticipated needs for liquidity.
-10-
<PAGE>
During the six months ended June 30, 1997, cash provided by operating
activities of the Company amounted to $857,155. This was primarily a result of
the decrease in accounts receivable.
In September 1994, the Company obtained two lines of credit totaling
$1,250,000 with Wells Fargo Bank in San Francisco, California. These two lines
consisted of a $500,000 business loan line of credit and a $750,000 equipment
loan line of credit. The $500,000 business loan provides for interest at prime
plus .75% with a maturity date of September 10, 1997. The $750,000 equipment
loan line of credit provides for interest at prime plus .75% with a conversion
date of September 15, 1997, to an installment equipment loan. At June 30, 1997,
there was a $392,970 balance due on the business loan line. The purpose for
obtaining both lines of credit was to afford the Company greater cash liquidity.
During the second quarter of 1997, the Company purchased 318,900 shares of
common stock for $367,958 on the open market to be retired by the Company. The
Company intends to purchase additional stock for approximately $38,000 in the
third quarter of 1997.
The Company has made deposits on manufacturing equipment and leasehold
improvements in the amount of $1,950,000 as of June 30, 1997. The Company
anticipates incurring an additional $475,000 during the third quarter for
equipment and leasehold improvements. The equipment and leasehold improvements
are expected to be placed in service during the third quarter of 1997 at the
Hayward, California facility.
On May 20, 1996, the Company purchased all of the outstanding stock of
Alborough, Inc. (dba Emilia Romagna). The total cost of the acquisition was
$738,779 including professional fees paid in relation to the acquisition.
Additionally, the terms of the agreement include an "earn-out" formula which
provides for payments to Alborough shareholders over a three year period based
on certain performance criteria established. The purchase price could increase
significantly depending upon Alborough, Inc. meeting certain earnings
performance criteria over the 3 year period subsequent to the consummation of
the purchase agreement. The agreement between the parties provides that
additional payments may be earned by Alborough, Inc. shareholders based on a
percentage of gross margin attributable to sales made to specified customers.
The sales must be made during a specified period of time and subject to
certain minimum sales levels being achieved. As of June 30, 1997, the
Company has not incurred any additional cost due to this provision.
-11-
<PAGE>
PART II
OTHER INFORMATION
II. OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes In Securities
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission Of Matters To A Vote Of Security Holders.
On May 22, 1997, the Company held an Annual Meeting of
Shareholders at which William J. Armanino, Deborah Armanino-LeBlanc, John J.
Micek, III, David Scatena, Robert M. Geller, Tino Barzie, Henry W. Poett, III,
and Soren Svenningsen were each reelected to the Board of Directors. In
addition, the Company' shareholders ratified the appointment of Pritchett, Siler
& Hardy, P.C. as the Company's auditors. The following sets forth the votes
cast for, against or withheld, as well as the number of abstentions and broker
non-votes, as to each of the matters presented at the meeting:
1. ELECTION OF DIRECTORS
Nominees For Withheld
- ------------------------ ---------------- --------------
William J. Armanino 8,619,488 Shares 98,978 Shares
Deborah Armanino-LeBlanc 8,620,491 Shares 97,975 Shares
John J. Micek, III 8,624,991 Shares 93,475 Shares
David Scatena 8,619,031 Shares 106,295 Shares
Robert M. Geller 8,612,171 Shares 99,435 Shares
Tino Barzie 8,593,171 Shares 125,295 Shares
Henry W. Poett, III 8,619,506 Shares 98,960 Shares
Soren Svenningsen 8,614,064 Shares 104,402 Shares
2. APPOINTMENT OF PRITCHETT, SILER & HARDY, P.C.
Abstentions
and Broker
For Against Non-Votes
---------------- ------------- --------------
8,553,186 Shares 24,544 Shares 140,736 Shares
Item 5. Other Information
None
Item 6. Exhibits And Reports On Form 8-K
A. Exhibit
27 - Financial Data Schedule Filed herewith
electronically
B. Reports on Form 8-K - None
-12-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on behalf of the undersigned
thereunto duly authorized.
ARMANINO FOODS OF DISTINCTION, INC.
By:/s/William J. Armanino Dated: August 8, 1997
William J. Armanino
President
Chief Executive Officer
Chief Financial Officer
Treasurer
-13-
<PAGE>
EXHIBIT INDEX
EXHIBIT METHOD OF FILING
27. Financial Data Schedule Filed herewith electronically
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the balance
sheets and statements of operations found on page 2 and 4 of the Company's Form
10-Q for the year to date, and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> 12/31/96
<PERIOD-END> 06/30/97
<CASH> 362,791
<SECURITIES> 3,673,591
<RECEIVABLES> 969,110
<ALLOWANCES> 0
<INVENTORY> 957,370
<CURRENT-ASSETS> 6,652,742
<PP&E> 2,462,702
<DEPRECIATION> 0
<TOTAL-ASSETS> 11,650,693
<CURRENT-LIABILITIES> 1,012,290
<BONDS> 0
<COMMON> 11,171,031
0
0
<OTHER-SE> (693,363)
<TOTAL-LIABILITY-AND-EQUITY> 11,650,693
<SALES> 7,086,725
<TOTAL-REVENUES> 7,086,725
<CGS> 4,876,975
<TOTAL-COSTS> 4,876,975
<OTHER-EXPENSES> 1,961,998
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 357,619
<INCOME-TAX> 143,051
<INCOME-CONTINUING> 214,568
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 214,568
<EPS-PRIMARY> .02
<EPS-DILUTED> 0
</TABLE>
