<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 29, 1999
---------------------------------------
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________________ to ________________
COMMISSION FILE NUMBER 1-9684
------------------------------
CHART HOUSE ENTERPRISES, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 33-0147725
- --------------------------------------------------------------------------------
(State of other jurisdiction of (I.R.S. Employer
Incorporation or organization) Identification No.)
640 North LaSalle, Suite 295, Chicago, Illinois, 60610
- --------------------------------------------------------------------------------
(Address of principal executive offices, including zip code)
(312) 266-1100
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
act of 1934 during the preceding 12 months (or for such shorter periods 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 April 28, 1999:
Common Stock ($.01 par value) -- 11,762,561
----------
<PAGE>
PART I-FINANCIAL INFORMATION
Item 1. Financial Statements.
CHART HOUSE ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Share Data)
<TABLE>
<CAPTION>
March 29, December 28,
ASSETS 1999 1998
-------------- ----------------
(Unaudited)
<S> <C> <C>
Current Assets:
Cash $ 246 $ 266
Accounts Receivable 2,636 3,093
Inventories 1,933 2,288
Prepaid Expenses and Other Current Assets 388 306
Current Portion of Deferred Tax Asset 685 685
-------- --------
Total Current Assets 5,888 6,638
-------- --------
Property and Equipment, at Cost:
Land 6,258 6,258
Buildings 18,821 18,844
Equipment 34,079 31,400
Leasehold Interests & Improvements 51,515 50,532
Construction in Progress 2,656 2,063
-------- --------
113,329 109,097
Less: Accumulated Depreciation and Amortization 46,697 44,659
-------- --------
Net Property & Equipment 66,632 64,438
-------- --------
Leased Property under Capital Leases, Less Accumulated
Amortization of $6,593 in 1999 and $6,376 in 1998 3,911 4,128
-------- --------
Deferred Tax Asset 4,679 4,679
-------- --------
Other Assets and Goodwill, Net 8,135 8,127
-------- --------
$ 89,245 $ 88,010
======== ========
</TABLE>
The accompanying notes are an integral part of these consolidated
balance sheets.
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<PAGE>
CHART HOUSE ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Share Data)
<TABLE>
<CAPTION>
March 29, December 28,
LIABILITIES AND STOCKHOLDERS' EQUITY 1999 1998
----------- ------------
(Unaudited)
<S> <C> <C>
Current Liabilities:
Current Portion of Obligations under Capital Leases $ 688 $ 724
Accounts Payable 3,234 4,772
Accrued Liabilities 12,595 14,290
----------- ------------
Total Current Liabilities 16,517 19,786
----------- ------------
Long-Term Debt 8,000 3,450
----------- ------------
Long-Term Obligations under Capital Leases 4,850 5,020
----------- ------------
Stockholders' Equity:
Preferred Stock, $1.00 par value, authorized 10,000,000
shares; none outstanding - -
Common Stock, $.01 par value, authorized 30,000,000
shares; 11,762,561 shares outstanding in 1999 and
11,762,561 in 1998 118 118
Additional Paid-In Capital 61,103 61,103
Accumulated Deficit (1,343) (1,467)
----------- ------------
Total Stockholders' Equity 59,878 59,754
----------- ------------
$ 89,245 $ 88,010
=========== ============
</TABLE>
The accompanying notes are an integral part of these consolidated
balance sheets.
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<PAGE>
CHART HOUSE ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, Except Per Share Data)
(Unaudited)
<TABLE>
<CAPTION>
First Quarter First Quarter
Ended March 29, Ended March 30,
1999 1998
--------------- ---------------
<S> <C> <C>
Revenues $ 34,631 $ 37,152
--------------- ---------------
Costs and Expenses:
Cost of Sales 11,099 11,957
Restaurant Labor 10,406 10,022
Other Operating Costs 7,904 8,428
Selling, General and
Administrative Expenses 2,986 3,586
Depreciation and Amortization 1,837 1,823
Interest Expense 275 211
--------------- ---------------
Total Costs and Expenses 34,507 36,027
--------------- ---------------
Income Before Income Taxes 124 1,125
Provision for Income Taxes - 349
--------------- ---------------
Net Income $ 124 $ 776
=============== ===============
Net Income Per Common Share--Basic and
Diluted $ .01 $ .07
=============== ===============
Weighted Average Shares Outstanding 11,763 11,734
=============== ===============
</TABLE>
The accompanying notes are an integral part of these consolidated statements.
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<PAGE>
CHART HOUSE ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)
<TABLE>
<CAPTION>
First Quarter First Quarter
Ended March 29, Ended March 30,
1999 1998
--------------- ---------------
<S> <C> <C>
Cash Flows from Operating Activities:
Net Income $ 124 $ 776
Adjustments to Reconcile Net Income to
Cash Flows from Operating Activities:
Depreciation and Amortization 1,837 1,823
Deferred Income Taxes - 326
Loss on Write-Down and Disposition of Assets 2 12
Change in Net Current Liabilities (2,503) (1,828)
------- -------
Cash (Used in) Provided by Operating Activities (540) 1,109
------- -------
Cash Flows from Investing Activities:
Expenditures for Property and Equipment (3,647) (1,516)
(Additions to) Reductions in Other Assets (177) 92
Proceeds from Disposition of Assets - 12
------- -------
Cash Used in Investing Activities (3,824) (1,412)
------- -------
Cash Flows from Financing Activities:
Principal Payments on Obligations under
Capital Leases (206) (209)
Net Borrowings under Revolving Credit
Agreement 4,550 500
Net Proceeds from Sale/Issuance of Common Stock - 7
------- -------
Cash Provided by Financing Activities 4,344 298
------- -------
Decrease in Cash (20) (5)
Cash, Beginning of Period 266 205
------- -------
Cash, End of Period $ 246 $ 200
======= =======
</TABLE>
The accompanying notes are an integral part of these consolidated statements.
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<PAGE>
CHART HOUSE ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
(In Thousands)
(Unaudited)
<TABLE>
<CAPTION>
First Quarter First Quarter
Ended March 29, Ended March 30,
1999 1998
--------------- --------------
<S> <C> <C>
The Change in Net Current Liabilities is Comprised of
the Following:
Decrease in Accounts Receivable $ 457 $ 341
Decrease in Inventories 355 453
Increase in Prepaid Expenses and
Other Current Assets (82) (164)
Decrease in Accounts Payable (1,538) (2,354)
Decrease in Accrued Liabilities (1,695) (104)
------- -------
Change in Net Current Liabilities $(2,503) $(1,828)
======= =======
Supplemental Cash Flow Disclosures:
Cash Paid During the Period for:
Interest (Net of Amount Capitalized) $ 133 $ 183
Income Taxes (Net of Refunds) $ 2 $ 12
</TABLE>
The accompanying notes are an integral part of these consolidated statements.
-5-
<PAGE>
CHART HOUSE ENTERPRISES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 29, 1999
(Unaudited)
(1) BASIS OF PRESENTATION
The accompanying consolidated financial statements of Chart House
Enterprises, Inc. and subsidiaries (the "Company") for the quarterly periods
ended March 29, 1999 and March 30, 1998 have been prepared in accordance with
generally accepted accounting principles, and with the instructions to Form
10-Q. These financial statements have not been audited by independent public
accountants, but include all adjustments (consisting of normal recurring
adjustments) which are, in the opinion of management, necessary for a fair
presentation of the financial condition, results of operations and cash flows
for such periods. However, these results are not necessarily indicative of
results for any other interim period or for the full year.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities as of the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Certain information and footnote disclosures normally included in financial
statements in accordance with generally accepted accounting principles have been
omitted pursuant to requirements of the Securities and Exchange Commission.
Management believes that the disclosures included in the accompanying interim
financial statements and footnotes are adequate to make the information not
misleading, but should be read in conjunction with the consolidated financial
statements and notes thereto included in the Company's annual report on Form 10-
K for the year ended December 28, 1998.
(2) INCOME TAXES
No provision for income taxes has been recorded as of March 29, 1999 as the
Company expects to offset 1999 income tax expense with income tax benefits
associated with net operating losses and tax credits.
(3) COMPUTER SOFTWARE COSTS
The Company implemented AICPA, Statement of Position 98-1, "Accounting for
the Costs of Computer Software Developed or Obtained for Internal Use,"
effective December 29, 1998. This Statement provides criteria to determine
whether computer software costs are expensed or capitalized. The adoption of
this Statement had no material impact on the Company's financial statements for
the quarter ended March 29, 1999.
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<PAGE>
(4) RESTRUCTURING ACTIONS AND SPECIAL CHARGES FROM 1997
In the first quarter of 1999, amounts paid and charged against the
liability for severance and other special costs totaled approximately $416,000.
At March 29, 1999 and December 28, 1998, the balance of the liability (included
in Accrued Liabilities) was $103,000 and $519,000, respectively.
(5) SUBSEQUENT EVENT
On April 22, 1999 the Company purchased a restaurant business located in
New York, New York. The business combination was accounted for under the
purchase method of accounting.
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<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
Results of Operations
- ---------------------
The following is a comparative discussion of the results of operations for
the quarterly periods ended March 29, 1999 and March 30, 1998. The results of
operations for the first quarter of 1999 are not necessarily indicative of the
results to be expected for the fiscal year ending December 27, 1999. The dollar
amounts in the table below are in thousands.
<TABLE>
<CAPTION>
First Quarter First Quarter
Ended March 29, Ended March 30,
1999 1998
------------------------------ ---------------------------------
Dollars Percent Dollars Percent
------------ ----------- ------------- -------------
<S> <C> <C> <C> <C>
(Unaudited)
Revenues 34,631 100.0 37,152 100.0
------ ----- ------ -----
Costs and Expenses:
Cost of Sales 11,099 32.0 11,957 32.2
Restaurant Labor 10,406 30.0 10,022 27.0
Other Operating Costs 7,904 22.8 8,428 22.7
Selling, General and Administrative
Expenses 2,986 8.6 3,586 9.6
Depreciation and Amortization 1,837 5.4 1,823 4.9
Interest Expense 275 0.8 211 0.6
------ ----- ------ -----
Total Costs and Expenses 34,507 99.6 36,027 97.0
------ ----- ------ -----
Income Before Income Taxes 124 0.4 1,125 3.0
Provision for Income Taxes - - 349 0.9
------ ----- ------ -----
Net Income 124 0.4 776 2.1
====== ===== ====== =====
</TABLE>
Management believes that the most meaningful approach to analyzing results
of operations is through comparable restaurant sales and margin analysis, which
requires critically reviewing the relationships that certain costs and expenses
bear to revenues. Accordingly, the discussion below follows this approach.
Revenues for the first quarter decreased by $2,521,000 from 1998 to 1999.
The majority of this decrease is represented by the sale of the Solana Beach
Baking Company, which accounted for $1,535,000 of the decrease, and two Chart
House restaurant closures, which accounted for a decrease in revenues of
$724,000. Chart House comparable sales (sales at restaurants open the entire
quarter of both years) were down $262,000 for the quarter. Comparable sales
results were heavily influenced by weather. Restaurants in the western region
reported average sales increases of 1.9% over the first quarter of 1998. The
eastern region experienced unpleasant weather during the first quarter of 1999
compared to 1998, which helped to diminish restaurant sales on the east coast an
average decrease of 4.1%.
The Company expects to continue implementation of the new menu in a further
thirteen restaurants; three in the eastern region, ten in the western region.
Completion is anticipated by the end of the third quarter of 1999. First quarter
sales at the restaurants with the new menu were slightly down; but less than
the total comparable store sales decline. Management is preparing to close six
underperforming restaurants whose sales volume for the first quarter of 1999
decreased by 6.6% compared to the first quarter of 1998.
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<PAGE>
Restaurant-level operating margins have changed since 1998 primarily due to
the implementation of a new menu in mid and late 1998. Cost of sales as a
percentage of revenues was lower in 1999 despite the implementation of the new
menu. The new menu includes lower priced entrees as well as larger, pre-
portioned meat and better quality seafood both of which produced negative
impacts to the cost of sales margin. The Company effectively managed product mix
to compensate for these impacts. Restaurant labor has increased between the 1999
and 1998 periods, due in part to the Company's initiative to build stronger
management presence at the restaurants. The minimum wage in California (a state
in which the Company operates 19 of its 57 restaurants) increased by 12% in
March 1998. This increase contributed to the negative variance for two months of
the first quarter of 1999. Further, training costs for the new menu were
incremental additions to routine labor costs. Other operating costs as a
percentage of revenues were consistent with 1998 costs.
Selling, general and administrative expenses have decreased from 1998
primarily because of 1998 corporate office relocation costs.
Depreciation and amortization and interest expense were consistent with
1998.
No provision for income taxes has been recorded as of March 29, 1999 as the
Company expects to offset 1999 income tax expense income tax benefits associated
with net operating losses and tax credits.
As a result of the foregoing, net income decreased by $652,000 from
$776,000 for the first quarter of 1998 to $124,000 for the first quarter of
1999.
Liquidity and Capital Resources
- -------------------------------
The working capital deficit decreased by approximately $2.5 million from
$13.1 million in the first quarter of 1998 to $10.6 million in the first quarter
of 1999. Net cash provided by operating activities decreased by approximately
$1.6 million, resulting primarily from the payment of outstanding insurance
claims.
Long-term debt consists of borrowings under the Company's revolving credit
agreement. During the first quarter of 1999, the Company increased its revolving
credit borrowings by $4,550,000. At March 29, 1999, the Company had outstanding
borrowings of $8,000,000 under the revolving credit agreement and approximately
$12,000,000 in available credit under the revolving credit agreement. In April
1999, the Company replaced its existing revolving credit agreement with a new
revolving credit and term loan agreement with the same bank. The new agreement
provides for a revolving loan of up to $25 million and a term loan of $15
million, each of which mature on March 31, 2004. Interest under the new
agreement is payable, at the Company's option, at the bank's base rate plus a
maximum of 1.25% or LIBOR plus a maximum of 3.0%. In April 1999, the Company
increased its outstanding borrowings by $12 million in order to execute the
acquisition of Angelo & Maxie's, which is described below.
The Company intends to dispose of up to six restaurant properties during
fiscal year 1999. Cash proceeds are anticipated to be received upon these sales,
however, no assurance can be given as to the likelihood or timing of such
disposals nor can management estimate the amount of such proceeds.
Capital expenditures for the first quarter of 1999 were primarily for the
remodeling of several restaurants and regular additions at all restaurants.
Capital expenditures for each of the remaining three quarters of 1999 are
expected to remain at a similar level as remodeling activities continue under
the
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<PAGE>
restaurant revitalization program. Other than the restaurant located in
Baltimore, Maryland, restaurants are anticipated to continue operations during
remodeling activities. The Baltimore, Maryland restaurant is undergoing
significant remodeling work and conceptual changes. The restaurant was closed to
begin work in April and is expected to re-open in 2000.
In the opinion of management, cash flows from operations, availability
under the new revolving credit and term loan agreement, and proceeds from the
sale of certain assets will be sufficient to fund working capital and regular
capital expenditure commitments for 1999. The Company currently projects 1999
capital expenditures to be approximately $11.5 million, however, this amount may
vary depending on the timing of revitalization activities. In order to fully
implement the remodeling and revitalization program, the Company may require
alternative sources of long-term financing. However, no assurance can be given
that such financing will be available or that it will be available on terms
satisfactory to the Company.
Angelo & Maxie's Acquisition
- ----------------------------
On April 22, 1999 the Company acquired the assets of Angelo & Maxie's Steak
House, a restaurant business located in New York, New York. The acquisition was
accounted for under the purchase method of accounting. Accordingly, the acquired
business's operating results are not included in the Company's 1999 first
quarter consolidated statement of operations. The Company will include the
operating results of the business beginning April 22, 1999. While no assurance
can be given as to the success of this or any other Chart House restaurant, nor
can past performance be necessarily indicative of future performance, management
expects the Angelo & Maxie's restaurant to have a favorable impact on overall
revenues and income.
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<PAGE>
Year 2000
- ---------
Many software applications and operational programs written in the past
were not designed to recognize calendar dates beginning in the year 2000. The
failure of such applications or systems to properly recognize the dates
beginning in the year 2000 could result in miscalculations or system failures
that may result in an adverse effect on the Company's operations. The Company
has instituted a Year 2000 project in an attempt to prevent these occurrences.
As of March 29, 1999, the Company was approximately 70% complete in achieving
compliance with the project's requirements. The Company has completed the
Awareness and Assessment phases of this project and has partially completed
Replacement, Testing, and Implementation. The Company expects the remaining
phases to be substantially complete by the third quarter of 1999.
The operation of Chart House restaurants does not rely heavily on
information technology. The most direct operational issue the Company faces with
its information technology is the point-of-sale system at each of the
restaurants. The replacement of the point-of-sale system is one part of a
significant operational and financial systems overhaul expected to be complete
by the second quarter of 1999. The overhaul was scheduled and represents the
most cost-effective way of enhancing reporting capabilities; the Company has
received assurances from the hardware and software manufacturers that the
replacement technology will be Year 2000 compliant. The Company expects to fund
the overhaul with operating cash flows and availability under its revolving
credit and term loan agreement. Since the overhaul was contemplated prior to the
institution of a Year 2000 project, the Company does not believe that it will
incur significant incremental expense with respect to Year 2000 compliance. The
Company does not believe that it faces any significant operational issues with
embedded technology or non-IT systems.
In identifying a "worst case scenario" the Company believes that a failure
of the project will only affect internal reporting capabilities. As a result,
the Company's restaurants should be able to function with no anticipated
interruption. Under this scenario, the Company's contingency plan consists of
administrative personnel analyzing source data information, if necessary, to
continue daily operations support for the Company.
The Company's potential third party risk is with its food distributors.
Evaluations, including review of disclosures in third party SEC filings and
review of correspondence regarding Year 2000 compliance, indicate that such
distributors are addressing the issue on a timely basis and, therefore, do not
expect significant operational difficulties.
Due to the general uncertainty inherent in the Year 2000 issue as well as
the uncertainty of third party suppliers and distributors becoming Year 2000
compliant, the Company is unable at this time to determine if consequences of
Year 2000 failures, both internal and external, will have a material impact on
the Company's results of operations, liquidity and financial condition. The
Company believes that its Year 2000 compliance efforts should reduce the
likelihood of a material and adverse impact to normal operations.
Other Information
- -----------------
Certain of the statements contained in this report may be forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. Forward-looking statements
include financial projections, estimates and statements regarding
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<PAGE>
plans, objectives and expectations of the Company and its management. Examples
of certain forward-looking statements are the Company's estimates of the cost,
timing and effect of its Year 2000 compliance efforts, the anticipated effect of
menu changes and acquisitions, the Company's intentions to dispose of assets,
remodel assets, or acquire assets, and the Company's quantitative and
qualitative disclosures about market risk. Although the Company believes that
the expectations reflected in all such forward-looking statements are based upon
reasonable assumptions, it can give no assurance that its expectations will be
achieved. Such forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause the actual results, performance
or achievements of the Company to be materially different from any future
results, performance or achievements expressed or implied by such forward-
looking statements.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
The Company is exposed to market risk from changes in interest rates on
debt and changes in commodity prices. The Company's exposure to interest rate
risk results from the fact that borrowings under its revolving credit and term
loan agreement are payable at floating rates of interest, which are pegged off
at the agent bank's base rate or the LIBOR rate. The Company does not use
derivative instruments to manage borrowing costs or reduce exposure to adverse
fluctuations in the interest rate. The Company does not use derivative
instruments for trading purposes. The potential loss in future earnings
resulting from a one-point interest rate change on the outstanding debt balance
as of March 29, 1999 may be significant to the extent the Company's earnings do
not increase, or decrease to break-even levels.
The Company purchases certain commodities such as beef, seafood, chicken,
and cooking oil. These commodities are generally purchased based upon purchase
agreements established with vendors. These purchase agreements may contain
contractual features that fix the commodity price or define the price from an
agreed upon formula. The Company does not use financial instruments to hedge
commodity prices because these purchase arrangements help control the ultimate
cost paid and any commodity price fluctuations are generally short term in
nature.
PART II - OTHER INFORMATION
Item 5. Other Information.
On April 22, 1999 the Company completed the purchase of the Angelo &
Maxie's restaurant business located in New York, New York from Diamond Jim's
Steak House, L.L.C., an unrelated third party. The acquisition was accounted for
under the purchase method of accounting. The purchase was funded with cash in
the amount of approximately $12 million representing the acquisition of fixed
assets and goodwill. Funding was provided from available credit under the
Company's revolving credit facility with BankBoston. The assets purchased were
previously used primarily for purposes of operating a restaurant and the Company
intends to continue to use them for the same purposes.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
Exhibit No. 27 Financial Data Schedule (required for electronic filing
only).
(b) Reports on Form 8-K. No reports on Form 8-K were filed during the
quarter of which this report is filed.
Item 7. Financial Statements and Exhibits.
(a) Financial statements of business acquired. The required financial
statements are not filed herein but will be filed as an exhibit to Form
8-K/A within 60 days of this filing.
(b) Pro forma financial information. The required pro forma financial
information is not filed herein but will be filed as an exhibit to Form
8-K/A within 60 days of this filing.
(c) Exhibits.
Exhibit No. 2.1 Asset Purchase Agreement (filed as an exhibit to Form
10-K for the fiscal year ended December 28, 1998.)
-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 its behalf by the
undersigned thereunto duly authorized.
CHART HOUSE ENTERPRISES, INC. (Registrant)
Date: May 5, 1999 By: /s/ THOMAS J. WALTERS
-----------------------------------------
Thomas J. Walters
President and Chief Executive Officer
By: /s/ WILLIAM M. SULLIVAN
-----------------------------------------
William M. Sullivan
Vice President--Finance
-13-
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-27-1999
<PERIOD-START> DEC-29-1998
<PERIOD-END> MAR-29-1999
<CASH> 246
<SECURITIES> 0
<RECEIVABLES> 2,636
<ALLOWANCES> 0
<INVENTORY> 1,933
<CURRENT-ASSETS> 5,888
<PP&E> 113,329
<DEPRECIATION> 46,697
<TOTAL-ASSETS> 89,245
<CURRENT-LIABILITIES> 16,517
<BONDS> 0
0
0
<COMMON> 118
<OTHER-SE> 59,760
<TOTAL-LIABILITY-AND-EQUITY> 89,245
<SALES> 34,631
<TOTAL-REVENUES> 34,631
<CGS> 11,099
<TOTAL-COSTS> 21,505
<OTHER-EXPENSES> 2,986
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 275
<INCOME-PRETAX> 124
<INCOME-TAX> 0
<INCOME-CONTINUING> 124
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 124
<EPS-PRIMARY> .01
<EPS-DILUTED> .01
</TABLE>
