<PAGE>
- -------------------------------------------------------------------------------
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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 July 31, 1998
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____________ to _____________
Commission File No. 1-10555
--------
POLYVISION CORPORATION
------------------------------------------------------
(Exact name of registrant as specified in its charter)
New York 13-3482597
------------------------------- ------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
29 Laing Avenue
Dixonville, Pennsylvania 15734
- ---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
(724) 254-4321
----------------------------------------------------
(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 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
--- ---
The number of shares outstanding of the registrant's Common Stock, par value
$.001 per share, as of September 10, 1998, was 8,561,762.
Page 1 of 13 Pages
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<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with the requirements of Form 10-Q and,
therefore, do not include all information and footnotes required by generally
accepted accounting principles. However, in the opinion of management, all
adjustments (which, except as disclosed elsewhere herein, consist only of
normal recurring accruals) necessary for a fair presentation of the results
of operations for the relevant periods have been made. Results for the
interim periods are not necessarily indicative of the results to be expected
for the year. These financial statements should be read in conjunction with
the summary of significant accounting policies and the notes to the
consolidated financial statements included in the Company's Annual Report on
Form 10-K for the year ended April 30, 1998.
2
<PAGE>
POLYVISION CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
JULY 31, APRIL 30,
1998 1998
------- -------
(unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents............................... $ 333 $ 291
Accounts receivable, (less allowance for doubtful
accounts of: July 1998, $741; April 1998, $795)..... 8,599 7,267
Inventories............................................. 4,765 4,519
Costs and estimated earnings in excess
of billings on uncompleted contracts................ 1,670 719
Other current assets.................................... 464 453
------- -------
Total current assets................................ 15,831 13,249
------- -------
Property, plant and equipment, net.......................... 1,455 1,513
Goodwill, (less accumulated amortization: July 1998, $1,577;
April 1998, $1,540) .................................... 3,655 3,692
Other assets................................................ 11 10
-------- -------
Total assets........................................ $20,952 $18,464
-------- -------
-------- -------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term borrowings................................... $ 4,191 $ 2,965
Current maturities of long-term debt.................... 303 240
Accounts payable........................................ 3,120 2,499
Accrued expenses........................................ 1,719 2,014
Billings in excess of costs and estimated
earnings on uncompleted contracts................... 312 379
------- -------
Total current liabilities............................. 9,645 8,097
------- -------
Long-term debt, less current maturities..................... 163 160
Indebtedness to The Alpine Group, Inc....................... 12,886 12,560
Other long-term liabilities................................. 370 1,122
------- -------
Total liabilities..................................... 23,064 21,939
------- -------
Stockholders' equity:
Series A Preferred stock, at liquidation value.......... 25,731 25,731
Common stock, $.001 par value; authorized 25,000,000
shares, issued and outstanding 8,561,762 shares........ 9 9
Capital in excess of par value.......................... 38,674 38,668
Accumulated deficit..................................... (66,526) (67,883)
-------- --------
Total stockholders' (deficit)......................... (2,112) (3,475)
--------- --------
Total liabilities and stockholders' equity...... $20,952 $18,464
-------- -------
-------- -------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS.
3
<PAGE>
POLYVISION CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED
JULY 31,
---------------------------
1998 1997
---- ----
<S> <C> <C>
Net sales................................................... $11,021 $ 8,499
Cost of goods sold.......................................... 7,743 5,882
------- -------
Gross profit............................................ 3,278 2,617
Selling, general and administrative......................... 2,123 1,960
------- -------
Operating profit........................................ 1,155 657
Interest (expense).......................................... (216) (151)
Interest and other income................................... (18) (9)
-------- --------
Income before income taxes and extraordinary item....... 921 497
Provision for income taxes.................................. -- --
Gain on the extinguishment of debt.......................... 436 --
------- -------
Net income.............................................. 1,357 497
Preferred stock dividends................................... -- 514
------- -------
Net income (loss) applicable to common stock............ $ 1,357 $ (17)
------- -------
------- -------
Net income per share of common stock:
Basic:
Income before extraordinary item.................... $ 0.11 $ -
Extraordinary gain on early extinguishment of debt.. 0.05 -
------- -------
Net income per basic share of common stock...... $ 0.16 $ -
------- -------
------- -------
Diluted:
Income before extraordinary item.................... $ 0.10 $ -
Extraordinary gain on early extinguishment of debt.. 0.05 -
------- -------
Net income per diluted share of common stock.... $ 0.15 $ -
------- -------
------- -------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS.
4
<PAGE>
POLYVISION CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED
JULY 31,
--------------------------
1998 1997
---- ----
<S> <C> <C>
Cash flow from operating activities
Net income.............................................. $ 1,357 $ 497
Non-cash items included in net income:
Depreciation and amortization......................... 107 81
Compensation expense for stock grants................. 6 24
Deferred interest..................................... 135 (340)
Gain on extinguishment of debt........................ (436) --
Changes in operating assets and liabilities:
Accounts receivable................................... (1,332) (863)
Inventory............................................. (246) (763)
Other current assets.................................. (12) (123)
Costs and estimated earnings in excess of
billings on uncompleted contracts................. (951) (270)
Accounts payable and accrued liabilities.............. 329 581
Billings in excess of costs and estimated
earnings on uncompleted contracts................. (67) 38
--------- -------
Cash (used for) operating activities.................. (1,110) (1,138)
--------- --------
Cash flow from investing activities
Purchases of property, plant and equipment.............. (14) (170)
Proceeds from sale of equipment......................... -- 3
-------- -------
Cash (used for) investing activities...................... (14) (167)
--------- --------
Cash flow from financing activities
Short-term borrowings................................... 1,226 782
Borrowings (repayments) of long-term debt............... (60) (60)
Borrowings on Alpine promissory note.................... -- 546
-------- -------
Cash provided by financing activities....................... 1,166 1,268
-------- -------
Net increase (decrease) in cash and cash equivalents........ 42 (37)
Cash and cash equivalents at beginning of period............ 291 415
-------- -------
Cash and cash equivalents at end of period.................. $ 333 $ 378
-------- -------
-------- -------
Supplemental disclosures:
Cash paid for interest.................................. $ 81 $ 77
-------- -------
-------- -------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS.
5
<PAGE>
POLYVISION CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
JULY 31, 1998
1. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements
include the accounts of PolyVision Corporation and its wholly-owned
subsidiaries ("PolyVision" or the "Company"). Certain reclassifications
have been made to the prior period presentation to conform to the current
period.
2. EARNINGS PER SHARE
The computation of basic and diluted earnings per share for the three
months ended July 31, 1998 is as follows:
<TABLE>
<CAPTION>
For the Three Months ended July 31, 1998
----------------------------------------------
Per-Share
Income Shares Amount
------ ------ ---------
<S> <C> <C> <C>
Income attributable to common stock
before extraordinary gain ......... $ 921,000
Less: Preferred stock dividends ...... --
---------
Basic earnings per share before
extraordinary gain ................ 921,000 8,561,762 $ 0.11
--------
--------
Dilutive impact of dilutive securities -- 279,000
--------- ---------
Diluted earnings per share before
extraordinary gain ................ $ 921,000 8,840,762 $ 0.10
--------- --------- --------
--------- --------- --------
</TABLE>
Given the net loss to common stockholders for the quarter ended July 31,
1997, there were no reconciling dilutive securities as all options
outstanding to purchase common stock would have been antidilutive had they
been exercised.
6
<PAGE>
POLYVISION CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
JULY 31, 1998
3. INVENTORIES
At July 31, 1998 and April 30, 1998, the components of inventories were as
follows:
<TABLE>
<CAPTION>
JULY 31, APRIL 30,
1998 1998
-------- ---------
(in thousands)
<S> <C> <C>
Raw materials.................... $4,048 $3,814
Work in process.................. 508 395
Finished goods................... 209 310
------ ------
$4,765 $4,519
------ ------
------ ------
</TABLE>
4. CONTRACTS IN PROGRESS
The status of contract costs on uncompleted construction contracts were as
follows:
<TABLE>
<CAPTION>
Costs and estimated Billings in excess
earnings in of costs and
excess of billings estimated earnings Net
------------------ ------------------ ---
(in thousands)
<S> <C> <C> <C>
July 31, 1998:
Costs and estimated earnings .... $5,069 $2,354 $7,423
Billings......................... (3,399) (2,666) (6,065)
------- -------- -------
$1,670 $( 312) $1,358
------- -------- -------
------- -------- -------
April 30, 1998:
Costs and estimated earnings .... $4,400 $ 4,015 $8,415
Billings......................... (3,681) (4,394) (8,075)
------- ------- -------
$ 719 $( 379) $ 340
------- -------- -------
------- -------- -------
</TABLE>
Accounts receivable at July 31, 1998 and April 30, 1998 include amounts
billed but not yet paid by customers under retainage provisions of $1.1
million and $1.0 million, respectively. Such amounts are generally due
within one year.
7
<PAGE>
POLYVISION CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
JULY 31, 1998
5. EXTRAORDINARY ITEM
On June 9, 1998, the Company entered into an agreement with Connecticut
Innovations Inc. ("CII") pursuant to which, in exchange for 9,509 shares
of The Alpine Group, Inc. ("Alpine") common stock (acquired from Alpine
and funded by an increase in indebtedness to Alpine) and a $0.1 million
promissory note, CII terminated a Development Agreement originally
entered into to finance product development costs at a Company subsidiary,
which is currently inactive. As a result of this agreement, the Company
has recorded an extraordinary gain of $0.4 million for the quarter ended
July 1998.
6. SUBSEQUENT EVENT
On September 1, 1998, the Company executed a definitive agreement to
acquire all of the outstanding capital stock of Alliance International
Group, Inc. ("Alliance") for approximately $75.0 million in cash. The
acquisition is expected to be completed in October 1998 and will be
funded through a $115.0 million senior credit facility, the proceeds of
which will be utilized to (i) finance the acquisition, (ii) repay
certain Alliance indebtedness, (iii) repay existing outstanding bank
debt, (iv) pay related transaction expenses, and (v) provide a $20
million facility to be utilized to facilitate future acquisitions.
Alliance manufactures ceramic-coated steel for writing surfaces and also
produces proprietary projection screen surfaces and various building
components using ceramic steel. The acquisition will be accounted for using
the purchase method. The purchase price will be allocated based upon the
estimated fair value of assets and liabilities at the date of acquisition.
The excess of the purchase price over the net assets acquired will be
amortized on a straight-line basis over 30 years.
The Company has also reached agreement with Alpine, its largest
shareholder, under which, on or before the closing of the acquisition
Alpine will exchange $25.2 million Series A Preferred Stock, together
with accrued dividends, and indebtedness of approximately $7.5 million
for approximately 5.2 million shares of the Company's common stock and
approximately $12.5 million 9% convertible subordinated securities. As a
result, Alpine will own directly approximately 48% of the Company's
outstanding common stock, inclusive of 17% of the Company's common
stock currently owned by Alpine.
8
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
PolyVision, though its subsidiaries, Greensteel, Inc. ("Greensteel") and
Posterloid Corporation ("Posterloid") operate in two industry segments.
Greensteel manufactures and sells custom-designed and engineered writing,
projection and other visual display surfaces (such as porcelain chalkboards
and markerboards), custom cabinets, and workstation and conference center
casework to schools, health care facilities, offices and other institutions
throughout North America. Posterloid manufactures and sells indoor and
outdoor menuboard display systems to the fast food and convenience store
industries and changeable magnetic display signage used primarily by banks to
display interest rates, currency exchange rates and other information.
RESULTS OF OPERATIONS
The following table provides financial information on each business
segment for the three months ended July 31, 1998 and 1997:
<TABLE>
<CAPTION>
THREE MONTHS ENDED JULY 31,
---------------------------
1998 1997
---- ----
(IN THOUSANDS, EXCEPT PERCENTAGES)
<S> <C> <C>
Net sales
Greensteel....................................... $ 9,259 $ 7,094
Posterloid .................................... 1,762 1,405
------- -----
11,021 8,499
Gross profit
Greensteel........................................ $ 2,599 $ 2,085
Posterloid........................................ 679 532
------ ------
3,278 2,617
Gross margin
Greensteel ...................................... 28.1% 29.4%
Posterloid ...................................... 38.5% 37.9%
Consolidated................................. 29.7% 30.8%
Selling, general and administrative expenses
Greensteel ...................................... $ 1,633 $ 1,530
Posterloid ...................................... 490 430
------ ------
2,123 1,960
Operating income
Greensteel ...................................... $ 966 $ 555
Posterloid ...................................... 189 102
------ ------
$ 1,155 $ 657
------ ------
------ ------
Bookings
Greensteel ...................................... $11,417 $7,482
Posterloid ...................................... 1,768 1,418
-------- -------
$13,185 $8,900
------- -----
------- -----
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
THREE MONTHS ENDED JULY 31,
---------------------------
1998 1997
---- ----
(IN THOUSANDS, EXCEPT PERCENTAGES)
<S> <C> <C>
Backlog
Greensteel ...................................... $18,917 $12,259
Posterloid ...................................... 766 586
-------- --------
$19,683 $12,845
-------- --------
-------- --------
</TABLE>
THREE MONTHS ENDED JULY 31, 1998, COMPARED WITH THREE MONTHS ENDED JULY 31, 1997
The Company's net sales for the three months ended July 31, 1998 increased by
30% to $11.0 million compared to net sales of $8.5 million for the three
months ended July 31, 1997. Greensteel's sales increased by 31% to $9.3
million compared to $7.1 million for the three months ended July 31, 1997.
The increase was due primarily to continuing strong demand in the educational
visual display market combined with the Company's conversion to a dealer
network using specialty school supply dealers which has resulted in increased
unit sales volume due to broader geographical coverage. Dealer revenue
improved by 35% compared to the same period in the prior fiscal year. Total
first quarter bookings for Greensteel were $11.4 million compared to $7.5
million for the same period in prior fiscal year, an increase of $3.9 million
or 53%. The Company ended the quarter with a backlog of $18.9 million
representing an increase of 54% compared to the end of the July 1997 quarter.
Posterloid's net sales for the three months ended July 31, 1998 were $1.8
million as compared to $1.4 million for the three months ended July 31, 1997,
an increase of 25%. Bookings for the quarter were $1.8 million, an increase
of 25% compared to the three months ended July 1997. Posterloid's backlog at
July 31, 1998 was $0.8 million compared to $0.6 million at July 31, 1997.
The Company's gross profit for the three months ended July 31, 1998 increased
by 25% to $3.3 million compared to $2.6 million for the three months ended
July 31, 1997. The gross profit at Greensteel increased by 25% to $2.6
million for the three months ended July 31, 1998 as compared to $2.1 million
for the three months ended July 31, 1997. The gross profit at Posterloid
increased by 28% to $0.7 million for the three months ended July 31, 1998 as
compared to $0.5 million for the three months ended July 31, 1997. The
increase in gross profit at both Greensteel and Posterloid reflect the growth
in net sales in both segments due to continuing strong demand in their
respective markets. The Company's gross margin declined to 29.7% for the
three months ended July 31, 1998 as compared to 30.8% for the three months
ended July 31, 1997. The decline in gross margins was primarily the result of
a reduction in Greensteel's gross margin from 29.4% for the three months
ended July 31, 1997 as compared to 28.1% for the three months ended July 31,
1998. The decline in margin is primarily attributable to product mix.
Selling, general and administrative expenses for the three months ended July
31, 1998 were $2.1 million compared to $2.0 million for the same period in
fiscal 1998. Most of this increase was due to additional selling expenses
particularly for commissions paid for the increase in net sales.
10
<PAGE>
On June 9, 1998, the Company entered into an agreement with Connecticut
Innovations, Inc. to terminate a Development Agreement originally entered
into to finance product development costs at a Company subsidiary. As a
result of this agreement, the Company recorded an extraordinary gain of $0.4
million in the first quarter.
LIQUIDITY AND CAPITAL RESOURCES
During the three months ended July 31, 1998, the Company used $1.1 million in
cash to support operating activities consisting of $1.2 million in cash flows
generated from operations (net income plus non-cash charges) reduced by $2.3
million in cash flows used for net working capital changes. Working capital
changes included seasonal increases in accounts receivable of $1.3 million,
inventories of $0.2 million and costs in excess of billings of $0.9 million,
offset by an increase in accounts payable and accrued expenses of $0.3
million. Cash provided by financing activities consisted of an increase of
$1.2 million in the Company's revolving line of credit.
At July 31, 1998, the Company had outstanding debt of $17.5 million which
consisted principally of $12.9 million in debt due to Alpine and $4.2 million
due under the company's revolving credit facility. Availability under the
revolving credit facility at July 31, 1998 was $0.1 million. Substantially
all of Greensteel's assets are pledged as collateral under the revolving
credit facility. The revolving credit facility contains customary performance
and financial covenants. Debt due to Alpine consists of a $6.6 million
promissory note, accrued interest of $0.8 million and $5.5 million in accrued
preferred dividends on the Company's Series A Preferred Stock (the Series A
Preferred Stock ceased to accrue dividends on February 1, 1998). The Company
has entered into an agreement with Alpine in which Alpine has agreed not to
seek repayment of this debt until at least July 31, 1999.
During the next 12 months, the Company has principal debt service commitments
of approximately $0.3 million and expects to invest approximately $0.2 to
$0.3 million in capital expenditures, furthermore, the Company's revolving
credit facility matures on August 31, 1999. Management anticipates that the
Company will generate sufficient cash flows from operating activities to meet
its annual commitments and will renegotiate or extend its existing credit
facilities.
11
<PAGE>
In addition to its continuing funding requirements, on
September 1, 1998 the Company reached an agreement to acquire all of the
outstanding capital stock of Alliance International Group, Inc. ("Alliance
Acquisition") for approximately $75.0 million cash. Concurrent with the
Alliance Acquisition, the Company will enter into a $115.0 million senior
credit facility, the proceeds of which will be used to fund the acquisition,
repay the Company's existing credit facility and provide working capital.
The Company has also entered into an agreement pursuant to which Alpine will,
on or before the closing of the Alliance Acquisition, exchange its Series A
Preferred Stock together with accrued dividends and indebtedness of
approximately $7.5 million for approximately 5.2 million shares of Company
common stock and approximately $12.5 million 9% convertible securities.
YEAR 2000
Management has reviewed the Company's business software systems currently in
place, consisting of third-party licensed software and is satisfied that they
are substantially year 2000 compliant. Management continues to evaluate the
systems of its customer and vendor base with regard to this issue and its
possible impact on the Company.
FORWARD-LOOKING STATEMENTS
This report contains forward-looking statements within the meaning of Section
21E of the Securities Exchange Act of 1934. These forward-looking statements
are based largely on the Company's expectations and are subject to a number
of risks and uncertainties, certain of which are beyond the Company's
control. Actual results could differ materially from these forward-looking
statements as a result of, among other factors, risks related to the
Company's history of operating losses and accumulated deficit; future capital
requirements; competition, technological advances and seasonality;
environmental matters; dependence on the construction market generally; and
other risks. In light of these risks and uncertainties, there can be no
assurance that the forward-looking information contained in this report will
in fact occur.
12
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The information in Note 5, "Commitments and Contingencies" of the
Notes to the Company's Annual Report on Form 10-K for the year ended
April 30, 1998 is included in its entirety herein by this reference.
ITEM 2. CHANGES IN SECURITIES
Not applicable
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable
ITEM 5. OTHER INFORMATION
On September 1, 1998, the Company and its largest shareholder The
Alpine Group, Inc. jointly, announced that the Company had executed a
definitive agreement to acquire all of the outstanding capital stock
of Alliance International Group, Inc., a leading manufacturer of
ceramic steel products used in visual displays and writing surfaces
for schools, conference rooms and other business environments. The
purchase price is approximately $75 million cash. The acquisition is
expected to be completed in October 1998 upon completion of regulatory
filings and reviews.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
27 Financial Data Schedule.
(b) Reports on Form 8-K:
None
13
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
POLYVISION CORPORATION
Date: September 14, 1998 By: /s/ Lawrence W. Hay
-----------------------------------------
Vice President of Finance (as both a duly
authorized officer of the registrant and
the principal financial officer or chief
accounting officer of the registrant)
14
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<CURRENCY> US$
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> APR-30-1999
<PERIOD-START> MAY-01-1998
<PERIOD-END> JUL-31-1998
<EXCHANGE-RATE> 1
<CASH> 333
<SECURITIES> 0
<RECEIVABLES> 9,340
<ALLOWANCES> 741
<INVENTORY> 4,765
<CURRENT-ASSETS> 15,831
<PP&E> 2,238
<DEPRECIATION> 783
<TOTAL-ASSETS> 20,952
<CURRENT-LIABILITIES> 9,645
<BONDS> 0
0
25,731
<COMMON> 9
<OTHER-SE> (27,852)
<TOTAL-LIABILITY-AND-EQUITY> 20,952
<SALES> 11,021
<TOTAL-REVENUES> 11,021
<CGS> 7,743
<TOTAL-COSTS> 2,123
<OTHER-EXPENSES> 18
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 216
<INCOME-PRETAX> 921
<INCOME-TAX> 0
<INCOME-CONTINUING> 921
<DISCONTINUED> 0
<EXTRAORDINARY> 436
<CHANGES> 0
<NET-INCOME> 1,357
<EPS-PRIMARY> .16
<EPS-DILUTED> .15
</TABLE>
