SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
( X ) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1995
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _____________ to ____________________.
Commission file number 0-16055
XSCRIBE CORPORATION
(Exact name of registrant as specified in its charter)
California 95-3267788
------------------------------- ------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
6285 Nancy Ridge Drive, San Diego, California 92121
--------------------------------------------- ---------
(Address of principal executive offices) (Zip Code)
(619) 457-5091
----------------------------------------------------
(Registrant's telephone number, including area code)
----------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
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 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
----- -----
At December 31, 1995, 5,742,000 shares of Common Stock of the Registrant were
outstanding.
Exhibit Index on Page 15
Page 1 of 16 <PAGE>
INDEX
XSCRIBE CORPORATION
Page
----
PART I - FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS (UNAUDITED)
Condensed consolidated balance sheets as of
December 31, 1995 and March 31, 1995........ 3
Condensed consolidated statements of income
for the three months ended December 31, 1995
and 1994.................................... 4
Condensed consolidated statements of income
for the nine months ended December 31, 1995
and 1994.................................... 5
Condensed consolidated statements of cash flows
for the nine months ended December 31, 1995
and 1994.................................... 6
Notes to condensed consolidated financial
statements.................................. 7
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF
OPERATIONS............................... 8
PART II - OTHER INFORMATION
ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K........... 13
SIGNATURES.............................................. 14
Page 2 of 16 <PAGE>
XSCRIBE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 1995 AND MARCH 31, 1995
December 31, 1995
(Unaudited) March 31, 1995
----------------- --------------
CURRENT ASSETS:
Cash and cash equivalents $ 444,000 $ 311,000
Accounts receivable, net 3,256,000 3,623,000
Inventories 4,654,000 3,897,000
Prepaid expenses and other 484,000 509,000
----------- -----------
TOTAL CURRENT ASSETS 8,838,000 8,340,000
PROPERTY AND EQUIPMENT, NET 2,153,000 2,491,000
INTANGIBLES AND OTHER ASSETS, NET 4,047,000 4,322,000
----------- -----------
$15,038,000 $15,153,000
=========== ===========
CURRENT LIABILITIES:
Accounts payable $ 1,785,000 $ 2,182,000
Accrued liabilities and other 840,000 735,000
Customer deposits 1,258,000 680,000
Line of Credit -- 500,000
Current portion of notes payable 387,000 108,000
----------- -----------
TOTAL CURRENT LIABILITIES 4,270,000 4,205,000
NON-CURRENT LIABILITIES 1,253,000 699,000
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Common stock (5,742,000 and
5,719,000 shares outstanding) 20,098,000 20,132,000
Accumulated deficit (10,611,000) ( 9,887,000)
Other 28,000 4,000
----------- -----------
TOTAL SHAREHOLDERS' EQUITY 9,515,000 10,249,000
----------- -----------
$15,038,000 $15,153,000
=========== ===========
The accompanying notes are an integral part of these condensed
consolidated balance sheets.
Page 3 of 16 <PAGE>
XSCRIBE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED DECEMBER 31, 1995 AND 1994
(Unaudited)
1995 1994
---------- -----------
REVENUES $5,025,000 $5,974,000
COST OF REVENUES 3,347,000 3,840,000
---------- ----------
GROSS PROFIT 1,678,000 2,134,000
---------- ----------
OPERATING EXPENSES:
Selling, general and administrative 1,529,000 1,579,000
Research and development 175,000 103,000
---------- ----------
TOTAL OPERATING EXPENSES 1,704,000 1,682,000
---------- ----------
OPERATING INCOME (LOSS) (26,000) 452,000
OTHER INCOME (EXPENSE), NET (61,000) (44,000)
---------- ----------
INCOME (LOSS) FROM CONTINUING
OPERATIONS BEFORE INCOME TAXES (87,000) 408,000
PROVISION FOR INCOME TAXES 1,000 3,000
---------- ----------
INCOME (LOSS) FROM CONTINUING
OPERATIONS (88,000) 405,000
LOSS FROM DISCONTINUED OPERATION -- (104,000)
---------- ----------
NET INCOME (LOSS) $ (88,000) $ 301,000
========== ==========
INCOME (LOSS) PER COMMON SHARE:
CONTINUING OPERATIONS $ (0.02) $ 0.07
========== ==========
DISCONTINUED OPERATION -- $ (0.02)
========== ==========
NET INCOME (LOSS) $ (0.02) $ 0.05
========== ==========
Weighted average number of common
and common stock equivalent
shares outstanding 5,742,000 5,931,000
========== ==========
The accompanying notes are an integral part of these condensed
consolidated financial statements.
Page 4 of 16 <PAGE>
XSCRIBE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FOR THE NINE MONTHS ENDED DECEMBER 31, 1995 AND 1994
(Unaudited)
1995 1994
----------- -----------
REVENUES $14,059,000 $16,240,000
COST OF REVENUES 9,397,000 10,200,000
----------- -----------
GROSS PROFIT 4,662,000 6,040,000
----------- -----------
OPERATING EXPENSES:
Selling, general and administrative 4,621,000 4,699,000
Research and development 567,000 361,000
----------- -----------
TOTAL OPERATING EXPENSES 5,188,000 5,060,000
----------- -----------
OPERATING INCOME (LOSS) (526,000) 980,000
OTHER INCOME (EXPENSE), NET (182,000) (91,000)
----------- -----------
INCOME (LOSS) FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES (708,000) 889,000
PROVISION FOR INCOME TAXES 1,000 8,000
----------- ----------
INCOME (LOSS) FROM CONTINUING OPERATIONS (709,000) 881,000
LOSS FROM DISCONTINUED OPERATION (15,000) (274,000)
----------- -----------
NET INCOME (LOSS) $ (724,000) $ 607,000
=========== ===========
INCOME (LOSS) PER COMMON SHARE:
CONTINUING OPERATIONS $ (0.12) $ 0.15
=========== ===========
DISCONTINUED OPERATION -- $ (0.05)
=========== ===========
NET INCOME (LOSS) $ (0.13) $ 0.10
=========== ===========
Weighted average number of common and
common stock equivalent shares outstanding 5,748,000 6,013,000
=========== ===========
The accompanying notes are an integral part of these condensed
consolidated financial statements.
Page 5 of 16 <PAGE>
XSCRIBE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED DECEMBER 31, 1995 AND 1994
(Unaudited)
1995 1994
----------- -----------
CASH FLOWS FROM OPERATIONS:
Income (loss) from continuing operations $ (709,000) $ 881,000
Adjustments:
Depreciation and amortization 1,262,000 1,246,000
Changes in assets and liabilities:
Accounts receivable 367,000 (646,000)
Inventories (757,000) (628,000)
Prepaid expenses and other 40,000 (117,000)
Accounts payable (397,000) (324,000)
Accrued liabilities and other 109,000 61,000
Customer deposits 578,000 8,000
----------- -----------
Net cash flow provided by continuing
operations 493,000 481,000
Net operating cash flows provided (used)
by discontinued operation 9,000 (312,000)
----------- -----------
NET CASH PROVIDED BY OPERATIONS 502,000 169,000
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (688,000) (1,236,000)
----------- -----------
NET CASH (USED) FOR INVESTING ACTIVITIES (688,000) (1,236,000)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from credit facility, net 500,000 690,000
Repayment of notes payable (171,000) (59,000)
Other (34,000) 53,000
----------- -----------
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES 295,000 684,000
----------- -----------
EFFECTS OF EXCHANGE RATES ON CASH 24,000 (6,000)
----------- -----------
NET INCREASE (DECREASE) TO CASH 133,000 (389,000)
CASH - BEGINNING OF PERIOD 311,000 557,000
----------- -----------
CASH - END OF PERIOD $ 444,000 $ 168,000
=========== ===========
The accompanying notes are an integral part of these condensed
consolidated financial statements.
Page 6 of 16 <PAGE>
XSCRIBE CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1995 AND MARCH 31, 1995 AND FOR
THE NINE MONTHS ENDED DECEMBER 31, 1995 AND 1994
(Unaudited)
1. GENERAL
Basis of presentation
---------------------
The accompanying unaudited condensed consolidated financial
statements reflect the accounts of Xscribe Corporation (the
"Company"), together with its majority-owned subsidiaries. All
significant intercompany transactions and balances have been
eliminated.
These unaudited condensed consolidated financial statements
have been prepared pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and
disclosures normally included in annual financial statements
prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to those rules
and regulations, although the Company believes that the
disclosures made are adequate to prevent the information from
being misleading. These unaudited condensed consolidated
financial statements reflect, in the opinion of management, all
adjustments (which include only normal recurring adjustments)
necessary to present the results of operations and financial
position as of the dates and for the periods presented. These
unaudited condensed consolidated financial statements should be
read in conjunction with the audited financial statements and
related notes included in the Company's Form 10-K filed with the
Securities and Exchange Commission for the year ended March 31,
1995. The results for the interim periods presented are not
necessarily indicative of results to be expected for a full year.
2. SUPPLEMENTARY FINANCIAL INFORMATION
Inventories
-----------
As of December 31, 1995, inventories consist of the
following:
Raw materials and
spare parts $2,233,000
Work in process 965,000
Finished goods 1,456,000
----------
$4,654,000
==========
Page 7 of 16 <PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
RESULTS OF OPERATIONS
Management's discussion and analysis of financial condition
and results of operations should be read in conjunction with the
condensed consolidated financial statements and notes to condensed
consolidated financial statements included elsewhere herein.
Results of Operations
Three months ended December 31, 1995 compared to the three months
ended December 31, 1994
---------------------------------------------------------------
Consolidated revenues in the quarter ended December 31, 1995
decreased $949,000 (16%) to $5,025,000 from $5,974,000 in the
quarter ended December 31, 1994. Revenues in the Solutions
Segment decreased $964,000 (30%) from $3,245,000 in prior quarter
to $2,281,000 in the current quarter due to a continued decline in
the computer-aided-transcription (CAT) system prices and units
sold as well as a $597,000 decrease in groupware sales. Revenues
in the Imaging Segment increased $15,000 (1%) to $2,744,000 in the
quarter ended December 31, 1995 from $2,729,000 in the quarter
ended December 31, 1994. This slight increase in the Imaging
Segment revenues reflects a 57% decrease in computer-output-
microfiche (COM) related revenue offset by a 34% increase in
scanner product and service revenue.
Consolidated gross margin decreased $456,000 (21%) from
$2,134,000 in the quarter ended December 31, 1994 to $1,678,000 in
the quarter ended December 31, 1995. Gross margin in the
Solutions Segment decreased $653,000 (56%) from $1,163,000 in the
prior quarter to $510,000 in the current quarter. This decrease
in gross margin was due to volume and price decreases in the CAT
business and the $597,000 decrease in groupware sales. Gross
margin as a percent of sales in the Solutions Segment decreased
from 36% in the quarter ended December 31, 1994 to 22% in the
quarter ended December 31, 1995 primarily due to eroding CAT
prices and a change in the mix of groupware sales from higher
margin software sales to lower margin hardware sales. Gross
margin in the Imaging Segment increased $197,000 (20%) from
$971,000 to $1,168,000 in the quarters ended December 31, 1994 and
1995, respectively. Gross margin as a percent of sales in the
Imaging Segment increased from 36% in the quarter ended December
31, 1994 to 43% in the quarter ended December 31, 1995. This
increase resulted from volume efficiencies as well as a change in
the mix from lower-margin COM duplicators towards higher-margin
aperture card scanners.
Selling, general and administrative expenses decreased
$50,000 from $1,579,000 to $1,529,000 in the quarters ended
December 31, 1994 and 1995, respectively. This decrease consists
of a $140,000 increase in costs at Photomatrix to develop its
sales and marketing channels, offset by $190,000 of cost
reductions in the Solutions Segment and corporate headquarters.
As a percent of sales, SG&A increased from 26% to 30% in the
Page 8 of 16 <PAGE>
quarters ended December 31, 1994 and 1995, respectively, primarily
due to the decrease in revenues referred to above.
Product development expenses increased $72,000 from $103,000
in the quarter ended December 31, 1994 to $175,000 in the quarter
ended December 31, 1995. Product development expenditures that
were capitalized because they related to technologically feasible
projects were $148,000 in the current quarter compared to $149,000
in the prior quarter. Total product development spending
increased $71,000 from $252,000 in the prior quarter to $323,000
in the current quarter. This increased spending was due primarily
to increased scanner-development activity at Photomatrix.
Other income (expense), which consists primarily of interest
expense, increased $17,000 from $44,000 to $61,000 in the quarters
ended December 31, 1994 and 1995, respectively. This increase was
due to an increase in borrowings under the Company's credit
facility in the current quarter as compared to the prior quarter.
The Company's provisions for income taxes were $1,000 and
$3,000 in the quarters ended December 31, 1995 and 1994,
respectively. These amounts are substantially less than the
provision calculated using the statutory rates because of the
effects of net operating losses and related carryforwards, net of
valuation allowances.
The decreases in revenues and gross margin and the increased
product development and interest expenses, offset slightly by
decreased SG&A expenses, resulted in a net loss from continuing
operations of $88,000 for the quarter ended December 31, 1995.
This compares to income from continuing operations of $405,000 for
the quarter ended December 31, 1994.
In the quarter ended December 31, 1994, the Company operated
a scanning service bureau. Subsequent thereto, this service
bureau was discontinued. Including the prior-quarter loss from
discontinued operation of $104,000, net income decreased from
$301,000 ($.05 per share) in the prior quarter to a net loss of
$88,000 ($.02 per share) in the current quarter.
Nine months ended December 31, 1995 compared to the nine months
ended December 31, 1994
---------------------------------------------------------------
Consolidated revenues for the period ended December 31, 1995
decreased $2,181,000 (13%) to $14,059,000 from $16,240,000 for the
period ended December 31, 1994. Revenues in the Solutions Segment
decreased $1,934,000 (21%) to $7,062,000 in the current period
from $8,996,000 in the prior period. This decrease was due to
decreased CAT sales volumes and continued price erosion as well as
a $706,000 decrease in groupware sales. Revenues in the Imaging
Segment decreased $247,000 (3%) to $6,997,000 in the period ended
December 31, 1995 from $7,244,000 in the period ended December 31,
1994. The decrease in revenue in the Imaging Segment was due to a
Page 9 of 16 <PAGE>
46% decrease in COM duplicator sales, offset by a 30% increase in
scanner product and service revenue.
Consolidated gross margins for the period ended December 31,
1995 decreased $1,378,000 (23%) to $4,662,000 from $6,040,000 in
the period ended December 31, 1994. Gross margin in the Solutions
Segment decreased $1,495,000 (42%) to $2,044,000 in the current
period from $3,539,000 in the prior period. The decrease in gross
margin was due to declining prices and sales volumes in the CAT
marketplace, coupled with a decrease in groupware sales. Gross
margin as a percent of sales in the Solution Segment decreased
from 39% in the prior period to 29% in the current period due to
continued CAT price erosion and product-mix issues. Gross margin
in the Imaging Segment increased $117,000 (5%) to $2,618,000 in
the period ended December 31, 1995 from $2,501,000 in the period
ended December 31, 1994. Gross margin as a percent of sales in
the Imaging Segment increased from 35% in the prior period to 37%
in the current period due primarily to volume efficiencies and
product mix issues.
Sales, general and administrative expenses decreased $78,000
from $4,699,000 in the prior period to $4,621,000 in the current
period. The decrease represents a $317,000 increase in SG&A
expenses at Photomatrix to develop its sales and marketing
channels, offset by $395,000 of cost reductions in the Solutions
Segment and corporate headquarters. As a percent of sales, SG&A
increased from 29% in the prior period to 33% in the current
period, primarily due to the decreased revenues in the current
period.
Product development expenses increased $206,000 from $361,000
in the period ended December 31, 1994 to $567,000 in the period
ended December 31, 1995. Product development expenditures that
were capitalized because they related to technologically feasible
projects were $481,000 in the current period compared to $508,000
in the prior period. Total product development spending increased
$179,000 from $869,000 in the prior period to $1,048,000 in the
current period. This increased spending was due primarily to
increased scanner-development activity at Photomatrix.
Other income (expense), which consists primarily of interest
expense, increased $91,000 from $91,000 in the period ended
December 31, 1994 to $182,000 in the period ended December 31,
1995. This increase was due to an increase in borrowings under
the Company's credit facility in the current period as compared to
the prior period.
The Company's provisions for income taxes were $1,000 and
$8,000 in the periods ended December 31, 1995 and 1994,
respectively. These amounts are substantially less than the
provision calculated using the statutory rates because of the
effects of net operating losses and related carryforwards, net of
valuation allowances.
The decreases in revenues and gross margin, and the increased
product development and interest expenses, offset slightly by the
Page 10 of 16 <PAGE>
reduction in SG&A costs, resulted in a net loss from continuing
operations of $709,000 ($.12 per share) for the period ended
December 31, 1995. This compares to income from continuing
operations of $881,000 ($.15 per share) for the period ended
December 31, 1994.
In the period ended December 31, 1994, the Company operated a
scanning service bureau. Subsequent thereto, this service bureau
was discontinued. Including the loss from discontinued operation
of $274,000 and $15,000 in the prior and current periods,
respectively, net income decreased from $607,000 ($.10 per share)
in the period ended December 31, 1994 to a net loss of $724,000
($.13 per share) in the period ended December 31, 1995.
Liquidity and Capital Resources
Following is a discussion of Xscribe's recent and future
sources of and demands on liquidity as well as an analysis of
liquidity levels.
Recent and Future Sources of and Demands on Liquidity and Capital
Resources
---------------------------------------------------------------
During the nine months ended December 31, 1995, the Company's
primary sources of liquidity were cash generated by operations
(net loss plus depreciation and amortization) of $553,000,
reductions in the Company's accounts receivable of $367,000,
increases in the Company's accrued liabilities of $109,000,
increases in customer deposits of $578,000, proceeds from the
Company's credit facility of $500,000, and cash reserves. Primary
uses of cash in the period ended December 31, 1995 were to
increase inventories ($757,000), reduce accounts payable
($397,000), capital expenditures ($688,000), and to repay notes
payable ($171,000). In the period ended December 31, 1995, the
Company's cash balance increased $133,000 from $311,000 to
$444,000.
In August 1995, the Company increased its total credit
facility with a bank from $1.5 million to $2.0 million and
converted $1.0 million of outstanding borrowings into a 48-month
amortizing term loan at prime plus 1-1/2% per annum; monthly
principal payments on this term note are $21,000. The remaining
$1.0 million line of credit accrues interest on outstanding
borrowings at prime plus 1-1/4% per annum. Outstanding borrowings
under the credit facility are collateralized by all of the
Company's assets. The Company is required to maintain certain
financial balances and ratios, the most restrictive of which is a
maximum debt to tangible net worth ratio of 1.0 to 1.0. The line
expires in August 1996. The Company had a zero outstanding
balance on the line of credit as of December 31, 1995.
The Company is obligated under a series of notes payable
totalling $777,000. These notes bear interest at a rate of 8% per
Page 11 of 16 <PAGE>
annum and mature in April 2000. Interest and principal payments
totalling $16,000 are due monthly.
The Company's assured sources of future short-term liquidity
as of December 31, 1995 are its cash balance of $444,000 and the
unused portion of its line of credit of $1,000,000.
The Company is currently obligated to pay approximately
$40,000 per month in lease payments. Aside from these
commitments, the Company has not made any material capital
commitments.
Analysis of Liquidity Levels
----------------------------
The Company expects that the capital expenditures required to
maintain and grow its consolidated operations will approximate
$1.2 million per year for the coming three years. The capital
expenditures required in future periods will consist primarily of
software development costs needed to maintain products at
competitive levels and demonstration equipment needed to sell the
Company's products. However, the Company may be required to
reallocate or increase its capital expenditures due to competitive
conditions or other unforeseen circumstances and the Company
reserves the right to change its strategy and to reallocate or
change the amount of its capital expenditures. Future additional
working capital requirements will depend on future growth rates,
if any, and will stem from the need to finance increased inventory
and accounts receivable levels commensurate with the growth rate.
The Company believes that the future capital expenditures and
working capital increases will be financed from internally
generated funds (i.e. profits before depreciation and
amortization). Accordingly, the Company believes that it
currently has sufficient liquidity to fund its consolidated
operating needs for at least three years, assuming that Xscribe
can improve profitability and reduce inventory levels.
Page 12 of 16 <PAGE>
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
a. Exhibits
--------
Exhibit 27 - Financial Data Schedule
b. Reports on Form 8-K
-------------------
There were no reports on Form 8-K filed during the
quarter ended December 31, 1995.
Page 13 of 16 <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.
XSCRIBE CORPORATION
Date: February 12, 1996 By /s/ Suren G. Dutia
---------------------------
Suren G. Dutia
President
Chief Executive Officer
Date: February 12, 1996 By /s/ Bruce C. Myers
---------------------------
Bruce C. Myers
Chief Financial Officer
Date: February 12, 1996 By /s/ Peter B. Harker
---------------------------
Peter B. Harker
Controller
Principal Accounting
Officer
Page 14 of 16 <PAGE>
EXHIBIT INDEX
-------------
Exhibit Description Page
------- ----------- ----
27 Financial Data Schedule 16
Page 15 of 16 <PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAR-31-1996
<PERIOD-END> DEC-31-1995
<CASH> 444,000
<SECURITIES> 0
<RECEIVABLES> 3,256,000
<ALLOWANCES> 0
<INVENTORY> 4,654,000
<CURRENT-ASSETS> 8,838,000
<PP&E> 2,153,000
<DEPRECIATION> 0
<TOTAL-ASSETS> 15,038,000
<CURRENT-LIABILITIES> 4,270,000
<BONDS> 1,253,000
0
0
<COMMON> 20,098,000
<OTHER-SE> (10,583,000)
<TOTAL-LIABILITY-AND-EQUITY> 15,038,000
<SALES> 0
<TOTAL-REVENUES> 14,059,000
<CGS> 0
<TOTAL-COSTS> 9,397,000
<OTHER-EXPENSES> 5,188,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 182,000
<INCOME-PRETAX> (708,000)
<INCOME-TAX> 1,000
<INCOME-CONTINUING> (709,000)
<DISCONTINUED> (15,000)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (724,000)
<EPS-PRIMARY> (0.13)
<EPS-DILUTED> (0.13)
</TABLE>
