<PAGE> 1
FORM 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarter ended SEPTEMBER 30, 1995 Commission file number: 0-16641
RAINBOW TECHNOLOGIES, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 95-3745398
(State of Incorporation) (I.R.S. Employer
Identification No.)
50 TECHNOLOGY DRIVE, IRVINE, CALIFORNIA 92718
(Address of principal executive offices) (Zip Code)
(714) 450-7300
Indicate by check mark whether the Registrant (i) 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 (ii) has been subject to
such filing requirements for the past 90 days. Yes X No .
----- -----
The number of shares of common stock, $.001 par value, outstanding as of
September 30, 1995 was 7,319,587.
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RAINBOW TECHNOLOGIES, INC.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
PART I - FINANCIAL INFORMATION
Item 1. Condensed Consolidated Balance Sheets at
September 30, 1995 and December 31, 1994. 3
Condensed Consolidated Statements of Income
for the Three and Nine Months ended September 30, 1995
and 1994. 4
Condensed Consolidated Statements of Cash Flows
for the Nine Months ended
September 30, 1995 and 1994. 5
Notes to Condensed Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 9
PART II - OTHER INFORMATION
Items 1 to 5 Not applicable
Item 6 Exhibits and Reports on Form 8-K 12
SIGNATURES 12
</TABLE>
2
<PAGE> 3
RAINBOW TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
A S S E T S
<TABLE>
<CAPTION>
September 30, December 31,
1995 1994
------------- -------------
<S> <C>
Current assets:
Cash and cash equivalents............................. $23,670,000 $19,755,000
Marketable securities available for sale.............. 11,881,000 3,592,000
Accounts receivable (less allowance for
doubtful accounts of $399,000 and $368,000
in 1995 and 1994, respectively..................... 11,570,000 10,337,000
Note receivable....................................... - 3,000,000
Inventories .......................................... 2,455,000 2,862,000
Unbilled costs and fees............................... 3,576,000 2,895,000
Prepaid expenses and other current assets............. 1,670,000 1,878,000
----------- -----------
Total current assets............................. 54,822,000 44,319,000
Property, plant and equipment, at cost:
Buildings............................................. 9,553,000 8,889,000
Furniture............................................. 797,000 750,000
Equipment............................................. 4,219,000 3,322,000
Leasehold improvements................................ 221,000 494,000
----------- -----------
14,790,000 13,455,000
Less accumulated depreciation and amortization........ 3,875,000 3,586,000
----------- -----------
Net property, plant and equipment................ 10,915,000 9,869,000
Goodwill, net of accumulated amortization of
$6,112,000 and $4,380,000 in 1995 and 1994,
respectively.......................................... 6,623,000 7,425,000
Other assets, net of accumulated amortization of
$1,154,000 and $627,000 in 1995 and 1994,
respectively ......................................... 3,261,000 3,254,000
----------- -----------
$75,621,000 $64,867,000
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable...................................... $ 2,949,000 $ 2,098,000
Accrued payroll and related expenses.................. 2,096,000 2,451,000
Other accrued liabilities............................. 631,000 671,000
Income taxes payable.................................. 1,731,000 402,000
Billings in excess of costs and fees.................. 10,000 422,000
Long-term debt, due within one year................... 315,000 364,000
----------- -----------
Total current liabilities........................ 7,732,000 6,408,000
Long-term debt, net of current portion.................. 2,682,000 2,695,000
Deferred income taxes .................................. 2,147,000 1,441,000
Shareholders' equity:
Common stock, $.001 par value, 20,000,000 shares
authorized, 7,319,587 and 7,223,946 shares issued
and outstanding in 1995 and 1994,
respectively (note 5)............................... 7,000 7,000
Additional paid-in capital............................ 29,201,000 28,222,000
Cumulative translation adjustment..................... 402,000 (465,000)
Retained earnings..................................... 33,450,000 26,559,000
----------- -----------
Total shareholders' equity....................... 63,060,000 54,323,000
----------- -----------
$75,621,000 $64,867,000
=========== ===========
</TABLE>
See accompanying notes.
3
<PAGE> 4
RAINBOW TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
<TABLE>
<CAPTION>
Three months ended Nine months ended
---------------------------- ----------------------------
September 30, September 30, September 30, September 30,
1995 1994 1995 1994
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Revenues:
Sales............................... $10,720,000 $ 9,011,000 $31,952,000 $27,313,000
Contracts........................... 5,090,000 3,721,000 16,272,000 12,635,000
----------- ----------- ----------- -----------
Total revenues................. 15,810,000 12,732,000 48,224,000 39,948,000
Cost of revenues:
Cost of sales....................... 2,910,000 2,856,000 9,053,000 8,004,000
Cost of contracts................... 3,217,000 2,418,000 10,056,000 8,473,000
----------- ----------- ----------- -----------
Total cost of revenues......... 6,127,000 5,274,000 19,109,000 16,477,000
----------- ----------- ----------- -----------
Gross profit........................ 9,683,000 7,458,000 29,115,000 23,471,000
Operating expenses:
Selling, general and administrative. 4,046,000 2,914,000 11,400,000 8,715,000
Research and development............ 1,487,000 1,213,000 5,452,000 4,842,000
Goodwill amortization............... 465,000 430,000 1,368,000 1,238,000
----------- ----------- ----------- -----------
Total operating expenses....... 5,998,000 4,557,000 18,220,000 14,795,000
----------- ----------- ----------- -----------
Operating income...................... 3,685,000 2,901,000 10,895,000 8,676,000
Interest income....................... 501,000 220,000 1,220,000 518,000
Interest expense...................... (92,000) (96,000) (297,000) (290,000)
Foreign currency gains (losses)....... 23,000 (110,000) (217,000) (596,000)
----------- ----------- ----------- -----------
Income before provision for income tax 4,117,000 2,915,000 11,601,000 8,308,000
Provision for income taxes ........... 1,637,000 1,254,000 4,710,000 3,392,000
----------- ----------- ----------- -----------
Net income............................ $ 2,480,000 $ 1,661,000 $ 6,891,000 $ 4,916,000
=========== =========== =========== ===========
Net income per common and common
equivalent share ................... $ 0.32 $ 0.22 $ 0.89 $ 0.66
=========== =========== =========== ===========
Weighted average common and common
equivalent shares outstanding....... 7,811,000 7,475,000 7,700,000 7,469,000
=========== =========== ========== ===========
</TABLE>
See accompanying notes.
4
<PAGE> 5
RAINBOW TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
<TABLE>
<CAPTION>
Nine months ended Nine months ended
September 30, 1995 September 30, 1994
------------------ ------------------
<S> <C> <C>
Cash flows from operating activities:
Net income.......................................... $ 6,891,000 $ 4,916,000
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization..................... 2,490,000 2,248,000
Change in deferred income taxes................... 598,000 77,000
Allowance for doubtful accounts................... 23,000 (78,000)
Loss from retirement of property, plant,
and equipment.................................... 12,000 18,000
Changes in operating assets and liabilities:
Accounts receivable............................. (1,104,000) 68,000
Inventories..................................... 452,000 714,000
Unbilled costs and fees......................... (681,000) (390,000)
Prepaid expenses and other current assets....... 241,000 31,000
Accounts payable................................ 815,000 (489,000)
Accrued liabilities............................. (837,000) (12,000)
Income taxes payable............................ 1,268,000 (566,000)
------------ ----------
Net cash provided by operating activities..... 10,168,000 6,537,000
Cash flows from investing activities:
Purchase of marketable securities................... (12,005,000) (2,831,000)
Sale of marketable securities....................... 3,715,000 3,660,000
Purchases of property, plant, and equipment......... (1,314,000) (459,000)
Notes receivable.................................... 3,000,000 (3,000,000)
Other long-term assets.............................. (412,000) -
Acquisition of AND Group, Inc....................... - (1,531,000)
Capitalized software development costs.............. - (457,000)
------------ -----------
Net cash used in investing activities......... (7,016,000) (4,618,000)
Cash flows from financing activities:
Exercise of common stock options.................... 979,000 345,000
Payment of long-term debt........................... (291,000) (367,000)
Principal payment of capital lease.................. (24,000) (24,000)
Repurchase of Mykotronx common stock................ - (106,000)
Distribution of Mykotronx S Corporation earnings - (268,000)
------------ -----------
Net cash (used in) provided by financing
activities.................................. 664,000 (420,000)
Effect of exchange rate changes on cash............... 99,000 534,000
------------ -----------
Net increase in cash and cash equivalents............. 3,915,000 2,033,000
Cash and cash equivalents at beginning of period...... 19,755,000 12,936,000
------------ -----------
Cash and cash equivalents at end of period............ $ 23,670,000 $14,969,000
============ ===========
Supplemental disclosure of cash flow information:
Income taxes paid................................... $ 2,872,000 $ 2,432,000
Interest paid....................................... 282,000 234,000
</TABLE>
See accompanying notes
5
<PAGE> 6
RAINBOW TECHNOLOGIES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1995
(UNAUDITED)
1. BASIS OF PRESENTATION
The accompanying financial statements consolidate the accounts of Rainbow
Technologies, Inc. (the Company) and its wholly-owned subsidiaries and have
been restated for all prior periods presented to reflect the acquisition of
Mykotronx, Inc. (Mykotronx) which has been accounted for using the pooling of
interests method (Note 5). All significant inter-company accounts and
transactions have been eliminated.
In the opinion of the Company's management, the accompanying condensed
consolidated financial statements include all adjustments, consisting only of
normal recurring adjustments, necessary for a fair presentation of the
financial position at September 30, 1995 and results of operations for the
three and nine months ended September 30, 1995 and 1994, and cash flows for the
nine months ended September 30, 1995 and 1994. The condensed consolidated
financial statements do not include footnotes and certain financial information
normally presented annually under generally accepted accounting principles and,
therefore, should be read in conjunction with the Company's December 31, 1994
Annual Report on Form 10-K and its registration statement on Form S-4 that
became effective on April 24, 1995. Results of operations for the three and
nine months ended September 30, 1995 are not necessarily indicative of results
to be expected for the full year.
For research and development and other cost-plus-fee-type contracts, the
Company recognizes contract earnings using the percentage-of- completion
method. The estimated contract earnings are recognized based on percentage of
completion as determined by the cost-to-cost basis whereby revenues are
recognized ratably as contract costs are incurred. For catalog product sales
and certain fixed price contracts calling for delivery of a specific number of
product units, the Company recognizes revenues as units are shipped provided
that no significant vendor obligations remain.
Software development costs incurred subsequent to the determination of
technological feasibility and marketability of a software product are
capitalized. Amortization of capitalized software costs commences when the
products are available for general release to customers. Amortization is
computed on an individual product basis and is based on the product's estimated
economic life.
The Company has subsidiaries in the United Kingdom, Germany and France. The
Company utilizes the currencies of the countries where its foreign subsidiaries
operate as the functional currency. In accordance with Statement of Financial
Accounting Standards No. 52, the balance sheets of the Company's foreign
subsidiaries are translated into U.S. dollars at the exchange rates at the
respective dates. The income statements of those subsidiaries are translated
into U.S. dollars at the weighted average exchange rates for the respective
periods presented.
2. EARNINGS PER SHARE
Earnings per share are based on the weighted average number of common and
common equivalent shares outstanding during each period. Common equivalent
shares include the potential dilution from the exercise of stock options.
6
<PAGE> 7
3. GOVERNMENT CONTRACTS
The Company is both a prime contractor and subcontractor under fixed-price and
cost-plus-fixed-fee contracts with the U.S. Government (Government). Such
contracts represent over 95% of the Company's contract operations. At the
commencement of each contract or contract modification, the Company submits
pricing proposals to the Government to establish indirect cost rates applicable
to such contracts. These rates, after audit and approval by the Government,
are used to settle costs on contracts completed during the previous fiscal
year.
To facilitate interim billings during the performance of its contracts, the
Company establishes provisional billing rates, which are used in recognizing
contract revenue and contract accounts receivable amounts in these financial
statements. These provisional billing rates are adjusted to actual at year-end
and are subject to adjustment after Government audit.
The Company has unbilled costs and fees at September 30, 1995 of $3,576,000.
Based on the Company's experience with similar contracts in recent years, the
unbilled costs and fees are expected to be collected within one year.
4. INVENTORIES
Inventoried costs relating to long-term contracts are stated at the actual
production cost, including pro rata allocations of factory overhead and general
and administrative costs, incurred to date reduced by amounts identified with
revenue recognized on units delivered. The costs attributed to units delivered
under such long-term contracts are based on the estimated average cost of all
units expected to be produced.
Inventories, other than inventoried costs relating to long term contracts, are
stated at the lower of cost (principally determined on a first- in first-out
basis) or market (net realizable value). Inventories consist of the following:
<TABLE>
<CAPTION>
September 30, December 31,
1995 1994
------------ ------------
<S> <C> <C>
Raw materials $ 672,000 $ 490,000
Work in process 285,000 318,000
Finished goods 900,000 1,391,000
Long term contracts 598,000 663,000
---------- ----------
$2,455,000 $2,862,000
========== ==========
</TABLE>
5. ACQUISITIONS.
On June 1, 1995, the Company and Mykotronx completed the merger of the two
companies. Mykotronx, a California corporation with headquarters in Torrance,
California, designs, develops and manufactures information security products to
provide privacy and security for voice communication and data transmission.
Shareholders of Mykotronx received 2.64 shares of Rainbow Technologies, Inc.
common stock for each share of issued and outstanding Mykotronx common stock,
and Mykotronx became a wholly-owned subsidiary of Rainbow Technologies, Inc.
Accordingly, the Company issued 1,650,000 shares of its common stock to
Mykotronx shareholders in exchange for Mykotronx shares. In addition, 195,096
shares of Rainbow common
7
<PAGE> 8
stock were reserved for issuance upon the exercise of assumed Mykotronx
options. The merger was accounted for as a pooling of interests.
Expenses associated with the merger of approximately $139,000 and $489,000,
respectively, were included in the consolidated results of operations for the
three and nine months ended September 30, 1995.
Revenues and net income derived from Mykotronx operations (prior to June 1,
1995) which are included in the accompanying condensed consolidated results of
operations were as follows:
FOR THE FIVE MONTHS ENDED MAY 31, 1995 (INCLUDED IN CONSOLIDATED RESULTS OF
OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995):
<TABLE>
<S> <C>
Revenues $ 9,663,000
Net Income 1,278,000
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1994:
Revenues $ 3,721,000
Net Income 361,000
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1994:
Revenues $12,635,000
Net Income 1,125,000
</TABLE>
In January 1994, the Company purchased the assets of the AND Group Inc., a
Canadian corporation, in exchange for the sum of U.S. $1.5 million. As a
result, the Company acquired all of the intellectual property rights to a
software product, and extinguished all previously existing obligations to pay
royalties to the AND Group, Inc. The acquisition was accounted for as a
purchase. Results of operations for the AND Group, Inc. are included in the
statements of income from the date of acquisition.
In June, 1995, the Company contributed the assets acquired from the AND Group,
Inc., and other assets related to its Vendor System division to a newly
established joint venture, Vendor Systems International, Inc. (VSI), in which
the Company owns a minority interest. VSI is located in Minneapolis, Minnesota.
VSI will focus on the development and support of the Vendor System technology.
Vendor System technology allows software developers and information publishers
to "lock" multiple products on a single CD-ROM disk.
8
<PAGE> 9
RAINBOW TECHNOLOGIES, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following is management's discussion and analysis of certain significant
factors which have affected earnings and the financial position of the Company
during the periods included in the accompanying financial statements. This
discussion reflects the acquisition of Mykotronx, Inc. and represents the
three and nine months ended September 30, 1995, compared with the three and
nine months ended September 30, 1994. This discussion should be read in
conjunction with the related condensed consolidated financial statements and
associated notes. Prior period financial statements have been restated to
reflect the acquisition of Mykotronx, Inc., using the pooling of interests
method.
RESULTS OF OPERATIONS
<TABLE>
<CAPTION>
Rainbow Mykotronx Combined
----------- ----------- -----------
<S> <C> <C> <C>
For the quarter ended September 30, 1995
Revenues $10,720,000 $ 5,090,000 $15,810,000
Gross Margin 7,810,000 1,873,000 9,683,000
Operating Income 2,391,000 1,294,000 3,685,000
For the quarter ended September 30, 1994
Revenues 9,011,000 3,721,000 12,732,000
Gross Margin 6,155,000 1,303,000 7,458,000
Operating Income 2,301,000 600,000 2,901,000
For the nine months ended September 30, 1995
Revenues 31,952,000 16,272,000 48,224,000
Gross Margin 22,899,000 6,216,000 29,115,000
Operating Income 7,393,000 3,502,000 10,895,000
For the nine months ended September 30, 1994
Revenues 27,313,000 12,635,000 39,948,000
Gross Margin 19,309,000 4,162,000 23,471,000
Operating Income 6,807,000 1,869,000 8,676,000
</TABLE>
9
<PAGE> 10
SALES
Sales for the three and nine months ended September 30, 1995 increased 19% and
17%, respectively, when compared to the corresponding 1994 periods. The
increases for the periods were primarily due to higher sales in Europe and
North America. Net sales for the three and nine months ended September 30,
1995 increased 13% and 10%, respectively, in the United States and increased
28% and 29%, respectively, internationally, when compared to the corresponding
1994 periods. The average selling price per product increased by 1% and
decreased by 3%, respectively, worldwide for the three and nine months ended
September 30, 1995, when compared to the same periods in 1994. The increase in
average selling price during the quarter is attributable to the higher currency
exchange rates in Europe. The decrease in the average selling price during the
nine month period is due to the price erosion in the international markets and
the addition of distributors which typically get lower prices. Unit volume for
the three and nine months ended September 30, 1995 was up 19% and 22%,
respectively, when compared to the corresponding 1994 periods. Management
believes that the increase is due to the stronger awareness of the software
piracy problem.
Contract revenues for the three and nine months ended September 30, 1995
increased 37% and 29%, respectively, when compared to the 1994 periods. The
increased contract revenues for the periods were primarily due to higher
revenues from satellite communication and encryption products and to the higher
number of contracts than the prior year.
GROSS PROFIT
Gross profit on sales revenues for the three and nine months ended September
30, 1995, was 73% and 72%, respectively, when compared to 68% and 71%,
respectively, experienced in the corresponding 1994 periods. The increase in
gross margin were due to increased sales in Europe with corresponding higher
margins and the reclassification of software amortization expenses due to the
spin-off of the Vendor System.
Gross profit on contract revenues for the three and nine months ended September
30, 1995 was 37% and 38%, respectively, when compared to 35% and 33%,
respectively, experienced in the corresponding 1994 periods. The increases in
gross margin for the three and nine months ended September 30, 1995 were
primarily due to increased sales in higher end encryption products (higher
prices and margins) to the U.S. government.
SELLING, GENERAL AND ADMINISTRATIVE
Selling, general and administrative expenses for the three and nine months
ended September 30, 1995, increased by 39% and 31% when compared to the
corresponding 1994 periods. The increases during the three and nine months
ended September 30, 1995 were due to increased professional expenses,
acquisition expenses incurred in connection with the Mykotronx transaction,
and the reclassification of software amortization expenses due to the spin-off
of the Vendor System.
RESEARCH AND DEVELOPMENT
Total research and development expenses for the three and nine months ended
September 30, 1995 increased 23% and 13%, respectively, when compared to the
corresponding 1994 period. There
10
<PAGE> 11
were no capitalized software costs in either the three or nine months ended
September 30, 1995. Current research and development activities are focused on
additional Application Specific Integrated Circuits development for future
products and adaptation of the Company's products to additional software
operating environments and computer platforms.
OTHER INCOME (EXPENSE)
Interest income for the three and nine months ended September 30, 1995
increased by 128% and 136%, respectively, because of higher investment
balances.
During the nine months ended September 30, 1995, the Company incurred
predominantly unrealized foreign currency losses of $217,000, primarily due to
dollar denominated deposit accounts maintained in Europe. During the nine
months ended September 30, 1994, the Company recognized foreign currency losses
of $596,000, also primarily due to dollar denominated deposit accounts
maintained in Europe. Such foreign currency losses result from the movement
of the value of the U.S. dollar against the functional currencies used by the
Company's foreign subsidiaries.
PROVISION FOR INCOME TAXES
The provision for income taxes as a percentage of income before the provision
for income taxes for the three months ended September 30, 1995 and 1994 was 40%
and 43%, respectively. The provision for income taxes for each of the nine
months ended September 30, 1995 and September 30, 1994 was 41%.
LIQUIDITY AND CAPITAL RESOURCES
The Company's principal sources of operating funds have been from operations
and proceeds from sales of the Company's equity securities. The Company's cash
flow from operations for the nine months ended September 30, 1995 and 1994 was
$10,168,000 and $6,537,000, respectively.
Management believes the Company's current working capital of $47,090,000 and
anticipated working capital to be generated by future operations will be
sufficient to support the Company's requirements for at least the next twelve
months.
The Company's uses of cash include purchases of property, plant and equipment
and repayment of long-term debt.
The Company intends to use its capital resources to expand its product lines
and for the acquisition of additional products and technologies.
The Company's subsidiaries in France carry $3.1 million in interest earning
deposits which may result in foreign exchange gains or losses due to the fact
that the functional currency in those subsidiaries is not the U.S. dollar.
11
<PAGE> 12
PART II OTHER INFORMATION
Item 6 Exhibits and Reports on Form 8-K
(a) Exhibits
27 Financial Data Schedule
(b) Reports on Form 8-K
None
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 thereto duly authorized.
Dated: November 14, 1995
RAINBOW TECHNOLOGIES, INC.
By: /s/ PATRICK FEVERY
-------------------------
Patrick Fevery
Chief Financial Officer
12
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JUL-01-1995
<PERIOD-END> SEP-30-1995
<EXCHANGE-RATE> 1
<CASH> 23,670
<SECURITIES> 11,881
<RECEIVABLES> 11,969
<ALLOWANCES> (399)
<INVENTORY> 2,455
<CURRENT-ASSETS> 54,822
<PP&E> 14,790
<DEPRECIATION> 3,875
<TOTAL-ASSETS> 75,621
<CURRENT-LIABILITIES> 7,732
<BONDS> 0
<COMMON> 7
0
0
<OTHER-SE> 63,053
<TOTAL-LIABILITY-AND-EQUITY> 63,060
<SALES> 10,720
<TOTAL-REVENUES> 15,810
<CGS> 2,910
<TOTAL-COSTS> 6,127
<OTHER-EXPENSES> 23
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (92)
<INCOME-PRETAX> 4,117
<INCOME-TAX> 1,637
<INCOME-CONTINUING> 4,117
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,480
<EPS-PRIMARY> 0.32
<EPS-DILUTED> 0.32
</TABLE>
