<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number 0-15946
DELPHI INFORMATION SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 77-0021975
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3501 ALGONQUIN ROAD
ROLLING MEADOWS, IL 60008
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 847-506-3100
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
--- ---
Indicate the number of shares outstanding of each of the issuer's classes
of common stock as of the latest practicable date. 36,847,296 shares as of
October 31, 1997.
<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________
DELPHI INFORMATION SYSTEMS, INC.
INDEX
PART I - FINANCIAL INFORMATION PAGE
Item 1. Consolidated Financial Statements
Consolidated Balance Sheets at September 30, 1997 (unaudited)
and March 31, 1997................................................... 3
Consolidated Statements of Operations for the Three and Six
Months Ended September 30, 1997 and 1996 (unaudited)................. 4
Consolidated Statements of Cash Flows for the Six Months
Ended September 30, 1997 and 1996 (unaudited)........................ 5
Notes to Consolidated Financial Statements (unaudited)................. 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations................................... 7
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders.......... 12
Item 6. Exhibits and Reports on Form 8-K............................. 13
SIGNATURE................................................................... 14
2
<PAGE>
PART 1. CONSOLIDATED FINANCIAL INFORMATION
Item 1. Financial Statements
DELPHI INFORMATION SYSTEMS, INC.
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT FOR SHARE AMOUNTS)
ASSETS
(Unaudited)
September 30, March 31,
1997 1997
------------- ---------
CURRENT ASSETS:
Cash $3,973 $6,596
Accounts receivable, net 4,558 5,241
Inventories 17 16
Prepaid expenses and other assets 122 111
------- -------
TOTAL CURRENT ASSETS 8,670 11,964
Property and equipment, net 2,006 2,242
Capitalized and purchased software, net 5,074 7,301
Goodwill and customer lists, net 0 906
Other assets 111 164
------- -------
TOTAL ASSETS $15,861 $22,577
------- -------
LIABILITIES & STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Notes payable $1,600 $1,600
Accounts payable and accrued expenses 3,230 4,667
Accrued payroll and related benefits 542 620
Deferred revenue 5,475 7,205
------- -------
TOTAL CURRENT LIABILITIES 10,847 14,092
Other liabilities 40 37
------- -------
TOTAL LIABILITIES 10,887 14,129
------- -------
Commitments and contingent liabilities
STOCKHOLDERS' EQUITY:
Preferred stock, $.10 par value,
2,000,000 shares authorized
Series D, 221 shares issued and outstanding 49 49
Common stock, $.10 par value,
Non-designated, 75,000,000 shares authorized
36,734,296 and 36,351,168 shares issued and
outstanding, respectively 3,673 3,635
Additional paid-in capital 45,568 45,259
Accumulated deficit (44,428) (40,611)
Cumulative foreign currency translation adjustment 112 116
------- -------
TOTAL STOCKHOLDERS' EQUITY 4,974 8,448
------- -------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $15,861 $22,577
======= =======
The accompanying notes are an integral part of these consolidated financial
statements.
3
<PAGE>
DELPHI INFORMATION SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
September 30, September 30,
------------------ ----------------
1997 1996 1997 1996
------ ------- ------ ------
<S> <C> <C> <C> <C>
REVENUES:
Systems $ 847 $2,074 $1,829 $4,009
Services 4,550 5,169 9,134 11,403
------ ------- ------ ------
TOTAL REVENUES 5,397 7,243 10,963 15,412
------ ------- ------ ------
COSTS OF REVENUES:
Systems 781 2,341 1,558 4,386
Services 2,538 3,290 4,703 7,062
------ ------- ------ ------
TOTAL COSTS OF REVENUES 3,319 5,631 6,261 11,448
------ ------- ------ ------
GROSS MARGIN:
Systems 66 (267) 271 (377)
Services 2,012 1,879 4,431 4,341
------ ------- ------ ------
TOTAL GROSS MARGIN 2,078 1,612 4,702 3,964
------ ------- ------ ------
OPERATING EXPENSES:
Product development 1,406 1,354 2,480 2,602
Sales and marketing 1,124 1,538 1,829 3,147
General and administrative 1,260 1,259 2,002 2,794
Amortization of goodwill, customer
lists and noncompete agreements 69 95 138 163
Restructuring charge 0 1,297 0 1,297
Write off of capitalized and purchased software,
goodwill and customer lists 2,053 0 2,053 0
------ ------- ------ ------
TOTAL OPERATING EXPENSES 5,912 5,543 8,502 10,003
------ ------- ------ ------
OPERATING LOSS (3,834) (3,931) (3,800) (6,039)
OTHER EXPENSES:
Interest income (45) (38) (99) (76)
Interest expense 89 17 155 49
------ ------- ------ ------
LOSS BEFORE INCOME TAXES (3,878) (3,910) (3,856) (6,012)
Income tax provision/(benefit) (40) (7) (39) 28
------ ------- ------ ------
NET LOSS ($3,838) ($3,903) ($3,817) ($6,040)
====== ======= ====== ======
NET LOSS PER COMMON SHARE ($0.10) ($0.13) ($0.10) ($0.21)
====== ======= ====== ======
Shares used in computing per share data 36,719 30,374 36,569 29,347
------ ------- ------ ------
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
4
<PAGE>
DELPHI INFORMATION SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended
September 30
1997 1996
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net loss ($3,817) ($6,040)
Adjustment to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization 586 660
Amortization of capitalized and purchased software 1,150 1,096
Amortization of goodwill and customer lists 136 163
Write off of capitalized and purchased software,
goodwill and customer lists 2,053 0
Retirement of property and equipment 0 14
Foreign currency translation adjustment (4) 2
Excess lease liability 0 (326)
Changes in assets & liabilities:
Accounts receivable, net 683 2,105
Inventories (1) 505
Prepaid expenses and other assets 42 168
Accounts payable and accrued expenses (1,437) 555
Accrued payroll and related (78) (237)
Other liabilities and deferred revenue (1,727) (2,282)
------- -------
Net cash used in operating activities (2,414) (3,617)
------- -------
Cash flows from investing activities:
Capital expenditures (350) (422)
Expenditures for capitalized and purchased software (206) (944)
Acquisition of Complete Broking Systems 0 (784)
------- -------
Net cash used in investing activities (556) (2,150)
------- -------
Cash flows from financing activities:
Borrowings on note payable 0 0
Payments on note payable 0 (3,030)
Proceeds from exercise of stock options 353 44
Net proceeds from private equity placement (17) 9,361
Proceeds from employee stock purchase plan 11 27
------- -------
Net cash provided by financing activities 347 6,402
------- -------
Net increase (decrease) in cash (2,623) 635
Cash at the beginning of the period $6,596 $ 920
------- -------
Cash at the end of the period $3,973 $1,555
======= =======
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
5
<PAGE>
DELPHI INFORMATION SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1. BASIS OF PRESENTATION
These financial statements are unaudited and reflect all adjustments
(consisting only of normal recurring adjustments) which are, in the opinion
of management, necessary for a fair presentation of the results of the
interim periods.
These financial statements should be read in conjunction with the financial
statements, and accompanying notes thereto, included in the Company's Annual
Report on Form 10-K for the fiscal year ended March 31, 1997.
The results of operations for current interim periods are not necessarily
indicative of results to be expected for the entire current year.
6
<PAGE>
DELPHI INFORMATION SYSTEMS, INC.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following information should be read in conjunction with the unaudited
financial statements and the notes thereto included in Item 1 of this Quarterly
Report and the financial statements and notes thereto, and Management's
Discussion and Analysis of Financial Condition and Results of Operations
contained in the Company's Annual Report on Form 10-K for the fiscal year ended
March 31, 1997.
FINANCIAL CONDITION
LIQUIDITY AND CAPITAL RESOURCES
Working capital at September 30, 1997 was a negative $2,177,000, or a decrease
of $49,000 from March 31, 1997. The significant changes in working capital
were a decrease in cash of $2,623,000 and a reduction in accounts receivable of
$683,000; partially offset by a decrease in deferred revenue of $1,730,000 and
a reduction in accounts payable and accrued expenses of $1,437,000.
A major component of the Company's negative net working capital position
consists of deferred revenues of $5,475,000 at September 30, 1997, primarily
representing prepaid software maintenance fees from customers that are
recognized ratably over the software maintenance agreement terms. This
liability is satisfied through normal ongoing operations of the Company's
service organization and generally does not require a payment to a third party.
As of September 30, 1997, the borrowings under the Company's bank line of
credit totaled $1,600,000. Borrowings under the line of credit are limited to
75% of eligible accounts receivable. At September 30, 1997, $1,082,000
remained available for borrowing. Due to lower sales revenues, the amount of
borrowings and cash available may not be sufficient to cover the Company's
operating expenses. Therefore, the Company is currently renegotiating its bank
line of credit to allow the Company to borrow based on several alternatives.
The Company believes this would allow it to temporarily meet its operating
needs.
THREE MONTH PERIODS ENDED SEPTEMBER 30, 1997 AND 1996
Revenues for the second quarter ended September 30, 1997 were $5,397,000,
representing a 25% decrease compared to the second quarter of the prior year.
The Company recorded a net loss of $3,838,000 or $0.10 per share in the second
quarter, compared to a net loss of $3,903,000, or $0.13 per share in the second
quarter of the prior year.
Systems revenues of $847,000 for the second quarter of the current fiscal year
reflect a decrease of 59% compared to the second quarter of the prior year.
This decrease was primarily the result of decreased sales of systems upgrades
to existing customers, few new sales to customers, and decreased hardware sales
due to the Company's exit from the hardware business in the prior fiscal year.
Service revenues were $4,550,000 in the second quarter of the current year,
7
<PAGE>
DELPHI INFORMATION SYSTEMS, INC.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
representing a decrease of $619,000 or approximately 12%, compared to the
second quarter of the prior year. The decrease is primarily the result of
decreased support, partially offset by increased education revenue in the
current quarter.
Costs of revenues as a percentage of revenues were 61% in the current quarter,
compared to the 78% in the second quarter of the prior year. Costs of systems
revenues were 92% of systems revenues in the second quarter of the current
fiscal year, compared to 113% in the second quarter of the prior fiscal year.
The decrease expressed in percentage terms was primarily due to an additional
provision for doubtful accounts in the second quarter of fiscal 1997. Costs of
services revenues as a percentage of services revenues decreased to 56% in the
second quarter of the current year, compared to 64% in the second quarter of
the prior fiscal year. The decrease in percentage terms is primarily due to a
decrease in direct labor, the largest component of cost of services revenue,
due to a reduction in headcount.
Product development expenses for the second quarter ended September 30, 1997
were $1,406,000, or an increase of $52,000, compared to the second quarter of
the prior fiscal year. The increase is primarily the result of reduced
capitalization of software development costs, partially offset by decreased
expenditures for the use of outside consultants of $262,000 and a reduction
in salaries and compensation of $141,000 due to reduced headcount.
Sales and marketing expenses for the quarter ended September 30, 1997 were
$1,124,000, representing a decrease of $414,000 or approximately 27%, from the
comparable quarter in the prior year. The decrease is primarily due to
decreased compensation expense due to a reduced sales force, and a reduction in
the use of outside consultants and temporary help.
General and administrative expenses for the quarter ended September 30, 1997
increased slightly from the second quarter of the prior year. The increase is
primarily due to increased travel, audit and legal expense in the current
quarter; partially offset by a decrease in salaries and compensation due to
lower headcount, and reduced expenditures due to a one-time charge in the prior
year related to fees associated with registering shares of stock from previous
private equity placements.
Amortization of goodwill, customer lists and noncompete agreements for the
quarter ended September 30, 1997 decreased $26,000, or 27%, from the second
quarter of the prior year. The decrease is primarily the result of some assets
having become fully amortized in the prior fiscal year.
The Company is operating according to a business plan which includes a product
strategy to develop a new generation of products (Common Delphi) and end
updates of the current legacy products, thus supporting the final releases of
the legacy products for as long as there is an adequate customer base to
economically justify the continued support. As customers migrate
8
<PAGE>
DELPHI INFORMATION SYSTEMS, INC.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
from the legacy products to the Common Delphi platform, the maintenance
revenue stream from legacy products decreases. The product strategy
includes modifying the underlying technology used in the original version of
Common Delphi due to changes in the marketplace. The Company is also
experiencing some customer attrition due to software support price increases
which became effective April 1st of the current fiscal year. As a result of
these factors, the recoverability of a portion of the Company's intangible
assets have become impaired, based upon projected future net cash flows
related to the aforementioned products compared to the net carrying value of
the related assets. Therefore the Company wrote off $1,283,000 of
capitalized and purchased software and $770,000 of goodwill and customer
lists in the current quarter.
Interest income for the quarter ended September 30, 1997 was $45,000, an
increase of $7,000 compared to the second quarter of the prior year.
Interest income in the current quarter was comprised of interest earned on a
$1,600,000 certificate of deposit, and a money market account. Interest
income in the second quarter of the prior fiscal years was due to short-term
investments. Interest expense for the quarter ended September 30, 1997 was
$89,000, an increase of $72,000 compared to the second quarter of the prior
year. The increase is due to interest expense related to the line of credit
which was established in the fourth quarter of the prior year.
SIX MONTH PERIODS ENDED SEPTEMBER 30, 1997 AND 1996
Revenues for the six months ended September 30, 1997 were $10,963,000, a
decrease of $4,449,000 or 29%, compared to the first half of the prior year.
The Company recorded a net loss of $3,817,000 or $0.10 per share for the six
months ended September 30, 1997, compared to a net loss for the comparable
period in the prior fiscal year of $6,040,000 or $0.21 per share.
Systems revenues for the six months ended September 30, 1997 were $1,829,000,
a decrease of $2,180,000 or 54% compared to the same period of the prior
year. The decrease is primarily due to decreased hardware revenues of
$1,730,000 as a result of the Company's exit from the hardware business in
the second quarter of the prior year, and decreased software sales to new or
existing customers of $714,000; partially offset by hardware commissions of
$292,000. Service revenues for the six month period ended September 30, 1997
were $9,134,000, a decrease of $2,269,000 or 20%, compared to the six months
ended September 30, 1996. The decrease is primarily due to decreased support
due to a combination of the elimination of hardware support in the second
quarter of the prior year, and reduced software support due to customer
cancellations in response to a price increase effective in the first quarter
of the current year.
Costs of revenues expressed as a percentage of revenues were 57% in the first
half of fiscal 1998, compared to 74% in the first half of the prior year.
Costs of systems revenues expressed as a percentage of revenues were 85% in the
first half of fiscal 1998, compared to 109% in the first half of fiscal 1997.
The decrease expressed in percentage terms is primarily due to an additional
provision for doubtful accounts and various expenses incurred in the prior
fiscal year related to the Company's departure from the hardware business.
Costs of service revenues expressed as a
9
<PAGE>
DELPHI INFORMATION SYSTEMS, INC.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
percentage of revenues were 51% in the first half of fiscal 1998, compared to
62% in the first half of fiscal 1997. The decrease is primarily due to reduced
direct labor costs as a result of reduced headcount, and reduced costs related
to the exit from the hardware maintenance business, which was a low margin
business, in the prior fiscal year.
Product development expenditures for the six month period ended September 30,
1997 decreased $122,000 or 5%, compared to the same period of the prior fiscal
year. The decrease is primarily due to decreased expenditures of $722,000 for
the Company's legacy products which the Company believes are mature products
which do not require any significant additional product development; offset by
a reduction of $600,000 in expenses that are capitalized related to software
development compared to the prior fiscal year for the reasons stated above.
Sales and marketing expenses in the first half of fiscal 1998 decreased
$1,318,000, or 42%, compared to the comparable period in the prior year. The
decrease is primarily due to reduced headcount and reduced spending levels with
respect to marketing efforts compared to the prior year.
General and administrative expenses in the first half of fiscal 1998 decreased
$792,000 or 28%, compared to the same period of fiscal 1997. The decreased
expense is primarily due to a decrease in headcount and overall spending
reductions compared to the prior year.
Amortization of goodwill, customer lists, and noncompete agreements for the six
months ended September 30, 1997 decreased $25,000 or 15%, compared to the same
period of the prior year. The decrease is primarily the result of some assets
having become fully amortized in the prior fiscal year.
Interest income for the six months ended September 30, 1997 increased $23,000
or 30%, compared to the first half of the prior fiscal year. The increase in
interest income is primarily due to a higher yield on the certificate of
deposit and money market accounts than the short term investments noted above.
Interest expense for the first half of fiscal 1998 was $155,000, compared to
$49,000 for the first half of fiscal 1997. The increase in interest expense is
primarily due to interest related to the line of credit noted above.
This Quarterly Report on Form 10Q contains various forward-looking statements
and information that are based on management's beliefs as well as assumptions
made by and information currently available to management, including statements
regarding future economic performance and financial condition, liquidity and
capital resources, acceptance of the Company's products by the market and
management's plans and objectives. Such statements are subject to various
risks and uncertainties which could cause actual results to vary materially
from those stated. Should one or more of these risks or uncertainties
materialize, or should underlying assumptions prove incorrect, actual results
may vary materially from those anticipated, estimated, expected, or projected.
Such risks and uncertainties include the Company's ability to overcome its
recent history of operating losses and declining revenues, its dependence upon
10
<PAGE>
DELPHI INFORMATION SYSTEMS, INC.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
raising additional capital, its ability to integrate recently acquired
businesses, the risks associated with future acquisitions, the willingness of
independent insurance agencies to outsource their computer and other processing
needs to third parties, completion and successful release of the Company's work
flow and transmission product (cd.connect), the Company's ability to continue
to develop new products to effectively address market needs in an industry
characterized by rapid technological change, the potential writedown of
significant accounts receivable, variability of the Company's results on a
quarterly basis, the potential effects of an on-going software dispute
involving one of the Company's licensor's, the Company's dependence on the
insurance agency (and in particular independent agents), the highly competitive
and rapidly changing automation systems market, the Company's ability to
effectively protect its applications software and other proprietary information
and the Company's ability to attract and retain quality management, and
software, technical sales and other personnel. Certain of these as well as
other risks and uncertainties are described in more detail in the Company's
Registration Statement on Form S-3 filed under the Securities Act of 1933,
Registration No. 333-12781, and the Company's periodic filings pursuant to the
Securities Exchange Act of 1934. The Company undertakes no obligation to
update any such factors or to publicly announce the results of any revisions to
any of the forward-looking statements contained herein to reflect future events
or developments.
11
<PAGE>
DELPHI INFORMATION SYSTEMS, INC.
PART II - OTHER INFORMATION
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At the Company's Annual Meeting of Stockholders (the "Annual Meeting"),
held on September 3, 1997, the following members were elected to the Company's
Board of Directors, each by the respective vote indicated to the right of such
nominee's name:
Authority Broker
Nominee For Withheld Abstentions Non-Votes
- ------- --- --------- ----------- ---------
Yuval Almog 26,006,528 50,000 0 0
William R. Baumel 26,006,528 50,000 0 0
Larry G. Gerdes 26,006,528 50,000 0 0
John W. Trustman 26,006,528 50,000 0 0
The terms of office of the remaining directors continued following the Annual
Meeting. There were no other matters submitted to a vote of stockholders for
the quarterly period ended September 30, 1997.
12
<PAGE>
DELPHI INFORMATION SYSTEMS, INC.
PART II - OTHER INFORMATION
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
None
(a.) Exhibits
COMPUTATION OF EARNINGS PER SHARE
(In thousands, except per share data)
(Unaudited)
Three Months Ended Six Months Ended
September 30, September 30,
------------------ ----------------
1997 1996 1997 1996
------- -------- -------- -------
Primary loss per share:
Net loss for calculation of
primary earnings per share ($3,838) ($3,903) ($3,817) ($6,040)
Weighted average number of
shares outstanding 36,719 30,374 36,569 29,347
Primary loss per share (2) ($0.10) ($0.13) ($0.10) ($0.21)
------- -------- -------- -------
(1) Common stock equivalent shares have not been considered in the
calculations for the three month period ended September 30, 1997 and 1996,
and the six months ended September 30, 1997 and 1996, because they would be
anti-dilutive.
(2) Primary and fully diluted earnings per share are the same for all periods
presented.
(b.) Reports
None.
13
<PAGE>
DELPHI INFORMATION SYSTEMS, INC.
SIGNATURE
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.
DELPHI INFORMATION SYSTEMS, INC.
Date: November 14, 1997 By /s/ John W. Trustman
-------------------------------
John W. Trustman
President and Chief Executive Officer
(Duly authorized officer and chief
executive officer)
14
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-START> APR-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 3,973
<SECURITIES> 0
<RECEIVABLES> 5,797
<ALLOWANCES> (1,239)
<INVENTORY> 17
<CURRENT-ASSETS> 8,670
<PP&E> 8,787
<DEPRECIATION> (6,781)
<TOTAL-ASSETS> 15,861
<CURRENT-LIABILITIES> 10,847
<BONDS> 0
0
49
<COMMON> 3,673
<OTHER-SE> 1,252
<TOTAL-LIABILITY-AND-EQUITY> 15,861
<SALES> 10,963
<TOTAL-REVENUES> 10,963
<CGS> 6,261
<TOTAL-COSTS> 6,261
<OTHER-EXPENSES> 8,375
<LOSS-PROVISION> 127
<INTEREST-EXPENSE> 56
<INCOME-PRETAX> (3,856)
<INCOME-TAX> (39)
<INCOME-CONTINUING> (3,817)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,817)
<EPS-PRIMARY> (.10)
<EPS-DILUTED> (.10)
</TABLE>
