SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
----------------------------------------------------
FORM 10-Q
(mark one)
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the Quarter Ended April 3, 1999
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Commission File Number 1-10114
THERMO CARDIOSYSTEMS INC.
(Exact name of Registrant as specified in its charter)
Massachusetts 04-3027040
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
470 Wildwood Street, P.O. Box 2697
Woburn, Massachusetts 01888-2697
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (781) 622-1000
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.
Class Outstanding at April 30, 1999
---------------------------- -----------------------------
Common Stock, $.10 par value 38,394,471
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PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
THERMO CARDIOSYSTEMS INC.
Consolidated Balance Sheet
(Unaudited)
<S> <C> <C>
Assets
April 3, January 2,
(In thousands) 1999 1999
- ----------------------------------------------------------------------------------- ----------- ---------
Current Assets:
Cash and cash equivalents (includes $21,078 and $20,717 under $ 22,152 $42,026
repurchase agreement with affiliated company)
Short-term available-for-sale investments, at quoted market value 86,242 43,310
(amortized cost of $86,094 and $43,155)
Accounts receivable, less allowances of $981 and $951 13,043 12,240
Inventories:
Raw materials 2,749 3,010
Work in process 6,025 6,139
Finished goods 2,479 2,788
Prepaid income taxes 2,628 2,629
Prepaid expenses and other current assets 194 411
-------- --------
135,512 112,553
-------- --------
Property, Plant, and Equipment, at Cost 19,279 18,980
Less: Accumulated depreciation and amortization 12,221 11,650
-------- --------
7,058 7,330
-------- --------
Long-term Available-for-sale Investments, at Quoted Market Value 25,866 47,259
(amortized cost of $25,822 and $47,227)
-------- --------
Prepaid Income Taxes 3,195 3,195
-------- --------
Other Assets 1,924 2,026
-------- --------
$173,555 $172,363
======== ========
2
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THERMO CARDIOSYSTEMS INC.
Consolidated Balance Sheet (continued)
(Unaudited)
Liabilities and Shareholders' Investment
April 3, January 2,
(In thousands except share amounts) 1999 1999
- ----------------------------------------------------------------------------------- ----------- ----------
Current Liabilities:
Accounts payable $ 3,549 $ 4,356
Accrued payroll and employee benefits 2,759 3,126
Accrued warranty expenses 1,263 1,210
Accrued income taxes 2,147 1,468
Other accrued expenses 3,802 3,154
Due to parent company and Thermo Electron Corporation 492 335
-------- --------
14,012 13,649
-------- --------
Subordinated Convertible Debentures 70,000 70,000
-------- --------
Shareholders' Investment:
Common stock, $.10 par value, 100,000,000 shares authorized; 4,052 4,052
40,522,021 shares issued
Capital in excess of par value 98,489 98,489
Retained earnings 41,689 39,916
Treasury stock at cost, 2,137,695 and 2,031,795 shares (54,817) (53,892)
Accumulated other comprehensive items (Note 2) 130 149
-------- --------
89,543 88,714
-------- --------
$173,555 $172,363
======== ========
The accompanying notes are an integral part of these consolidated financial
statements.
3
<PAGE>
THERMO CARDIOSYSTEMS INC.
Consolidated Statement of Income
(Unaudited)
Three Months Ended
April 3, April 4,
(In thousands except per share amounts) 1999 1998
- ----------------------------------------------------------------------------------- ----------- ---------
Revenues $ 19,461 $16,485
-------- -------
Costs and Operating Expenses:
Cost of revenues 8,367 6,909
Selling, general, and administrative expenses 5,462 4,293
Research and development expenses 3,572 2,573
-------- -------
17,401 13,775
-------- -------
Operating Income 2,060 2,710
Interest Income 1,722 1,906
Interest Expense (905) (898)
Gain on Sale of Investments, Net - 19
-------- -------
Income Before Provision for Income Taxes 2,877 3,737
Provision for Income Taxes 1,104 1,429
-------- -------
Net Income $ 1,773 $ 2,308
======== =======
Basic and Diluted Earnings per Share (Note 3) $ .05 $ .06
======== =======
Weighted Average Shares (Note 3):
Basic 38,412 39,025
======== =======
Diluted 38,455 39,284
======== =======
The accompanying notes are an integral part of these consolidated financial
statements.
4
<PAGE>
THERMO CARDIOSYSTEMS INC.
Consolidated Statement of Cash Flows
(Unaudited)
Three Months Ended
April 3, April 4,
(In thousands) 1999 1998
- ----------------------------------------------------------------------------------- ----------- ---------
Operating Activities:
Net income $ 1,773 $ 2,308
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation and amortization 685 688
Provision for losses on accounts receivable 30 30
Gain on sale of investments, net - (19)
Changes in current accounts:
Accounts receivable (837) 412
Inventories 679 1,229
Other current assets 218 (118)
Accounts payable (806) 105
Other current liabilities 1,178 1,853
-------- -------
Net cash provided by operating activities 2,920 6,488
-------- -------
Investing Activities:
Proceeds from sale and maturities of available-for-sale investments 67,237 43,456
Purchases of available-for-sale investments (88,773) (81,192)
Purchases of property, plant, and equipment (318) (515)
Other 6 (19)
-------- -------
Net cash used in investing activities (21,848) (38,270)
-------- -------
Financing Activities:
Net proceeds from issuance of Company common stock - 38
Payment of withholding taxes related to stock option exercises - (220)
Purchases of Company common stock (925) -
-------- -------
Net cash used in financing activities (925) (182)
-------- -------
Exchange Rate Effect on Cash (21) 1
-------- -------
Decrease in Cash and Cash Equivalents (19,874) (31,963)
Cash and Cash Equivalents at Beginning of Period 42,026 71,158
-------- -------
Cash and Cash Equivalents at End of Period $ 22,152 $39,195
======== =======
The accompanying notes are an integral part of these consolidated financial
statements.
5
<PAGE>
Notes to Consolidated Financial Statements
1. General
The interim consolidated financial statements presented have been prepared
by Thermo Cardiosystems Inc. (the Company) without audit and, in the opinion of
management, reflect all adjustments of a normal recurring nature necessary for a
fair statement of the financial position at April 3, 1999, and the results of
operations and cash flows for the three-month periods ended April 3, 1999, and
April 4, 1998. Interim results are not necessarily indicative of results for a
full year.
The consolidated balance sheet presented as of January 2, 1999, has been
derived from the consolidated financial statements that have been audited by the
Company's independent public accountants. The consolidated financial statements
and notes are presented as permitted by Form 10-Q and do not contain certain
information included in the annual financial statements and notes of the
Company. The consolidated financial statements and notes included herein should
be read in conjunction with the financial statements and notes included in the
Company's Annual Report on Form 10-K for the fiscal year ended January 2, 1999,
filed with the Securities and Exchange Commission.
2. Comprehensive Income
Comprehensive income combines net income and "other comprehensive items,"
which represents certain amounts that are reported as components of
shareholders' investment in the accompanying balance sheet, including foreign
currency translation adjustments and unrealized net of tax gains and losses from
available-for-sale investments. During the first quarter of 1999 and 1998, the
Company's comprehensive income totaled $1,754,000 and $2,289,000, respectively.
3. Earnings per Share
Basic and diluted earnings per share were calculated as follows:
Three Months Ended
April 3, April 4,
(In thousands except per share amounts) 1999 1998
- ----------------------------------------------------------------------------------- ----------- ---------
Basic
Net Income $ 1,773 $2,308
------- ------
Weighted Average Shares 38,412 39,025
------- ------
Basic Earnings per Share $ .05 $ .06
======= ======
Diluted
Net Income $ 1,773 $2,308
------- ------
Weighted Average Shares 38,412 39,025
Effect of Stock Options 43 259
------- ------
Weighted Average Shares, as Adjusted 38,455 39,284
------- ------
Diluted Earnings per Share $ .05 $ .06
======= ======
6
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3. Earnings per Share (continued)
The computation of diluted earnings per share excludes the effect of
assuming the exercise of certain outstanding stock options because the effect
would be antidilutive. At April 3, 1999, there were 1,389,000 of such options
outstanding, with exercise prices ranging from $9.39 to $48.63 per share. In
addition, the computation of diluted earnings per share for both periods
presented excludes the effect of assuming the conversion of $70,000,000
principal amount of 4 3/4% subordinated convertible debentures, convertible at
$31.415 per share, because the effect would be antidilutive.
4. Business Segment Information
Three Months Ended
April 3, April 4,
(In thousands) 1999 1998
- ----------------------------------------------------------------------------------- ----------- ---------
Revenues:
Left Ventricular-assist Systems $ 9,752 $7,100
Other Medical Equipment 9,709 9,385
------- -------
$19,461 $16,485
======= =======
Income Before Provision for Income Taxes:
Left Ventricular-assist Systems $ 14 $ 177
Other Medical Equipment 2,248 2,702
Corporate (a) (202) (169)
------- -------
Total operating income 2,060 2,710
Interest and other income, net 817 1,027
------- -------
$ 2,877 $3,737
======= =======
(a) Primarily general and administrative expenses
Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations
Forward-looking statements, within the meaning of Section 21E of the
Securities Exchange Act of 1934, are made throughout this Management's
Discussion and Analysis of Financial Condition and Results of Operations. For
this purpose, any statements contained herein that are not statements of
historical fact may be deemed to be forward-looking statements. Without limiting
the foregoing, the words "believes," "anticipates," "plans," "expects," "seeks,"
"estimates," and similar expressions are intended to identify forward-looking
statements. There are a number of important factors that could cause the results
of the Company to differ materially from those indicated by such forward-looking
statements, including those detailed under the heading "Forward-looking
Statements" in Exhibit 13 to the Company's Annual Report on Form 10-K for the
fiscal year ended January 2, 1999, filed with the Securities and Exchange
Commission.
Overview
The Company's businesses operate in two segments: Left Ventricular-assist
Systems (LVAS) and Other Medical Equipment. The LVAS segment researches,
develops, and manufactures two implantable LVAS: a pneumatic, or air- driven,
system, and an electric version. Its HeartMate(R) devices are designed to
perform substantially all or part of the pumping function of the left ventricle
of the natural heart for patients suffering from cardiovascular disease. This
7
<PAGE>
Overview (continued)
segment includes the Company's Nimbus Medical Inc. subsidiary. Nimbus has been
involved in artificial heart technology for over 20 years and has carried out
research in two primary fields: ventricular-assist devices and total artificial
hearts. Nimbus was instrumental in developing the basic technology for the
high-speed rotary blood pump that is the basis for the HeartMate II, the next
generation of the Company's LVAS. Because of its smaller size, the HeartMate II
may potentially be used to provide cardiac support in small adults and in
children.
The Other Medical Equipment segment consists of International Technidyne
Corporation, a leading manufacturer of near-patient, whole-blood coagulation
testing equipment and related disposables, as well as premium-quality,
single-use skin-incision devices.
In general, a profit cannot be earned from the sale of an LVAS in the
United States until approval of the device has been received from the U.S. Food
and Drug Administration (FDA) for commercial sale. Until such approval was
obtained, only the direct and indirect costs of the LVAS could be recovered,
which were included in the Company's revenues. With the FDA's approval of the
air-driven LVAS, the Company began earning a profit on the sale of such systems
in 1994. In September 1998, the FDA granted approval for commercial sale in the
U.S. of the electric LVAS as a bridge to transplant. As a result, the Company
has become eligible to earn a profit on the sale of that device. Following FDA
approval of the electric LVAS, the Company increased the price of the electric
LVAS by approximately 13%, effective November 1998.
Results of Operations
First Quarter 1999 Compared With First Quarter 1998
Total revenues increased to $19.5 million in the first quarter of 1999
from $16.5 million in the first quarter of 1998. LVAS segment revenues increased
to $9.8 million in 1999 from $7.1 million in 1998. These amounts include
international revenues of $1.6 million and $1.0 million in 1999 and 1998,
respectively. The increase in the LVAS segment revenue was primarily due to an
increase in demand for the Company's electric LVAS as a result of FDA approval,
which was granted in September 1998, and, to a lesser extent, price increases
for the electric LVAS. These increases were offset in part by a decrease in
revenues from the Company's air-driven LVAS of $2.8 million and a decrease in
revenues at Nimbus due to the expiration of several government research and
development contracts. For the foreseeable future, the Company expects that
Nimbus will focus on technological research and will no longer earn revenues
from government contracts.
Other Medical Equipment segment revenues increased to $9.7 million in the
first quarter of 1999 from $9.4 million in the first quarter of 1998, primarily
due to an increase in demand.
The gross profit margin decreased to 57% in the first quarter of 1999 from
58% in the first quarter of 1998. The gross profit margin for the Other Medical
Equipment segment decreased primarily due to an increase in manufacturing costs
and lower selling prices for certain of the Company's products. This decrease
was offset in part by an increase in the gross profit margin at the LVAS
segment, primarily due to a decrease in lower-margin revenues from government
contracts at Nimbus.
Selling, general, and administrative expenses as a percentage of revenues
increased to 28% in the first quarter of 1999 from 26% in the first quarter of
1998, primarily due to an increase in sales and marketing staff, principally at
the LVAS segment and, to a lesser extent, higher advertising costs in
anticipation of increased electric LVAS sales following FDA approval, which was
granted in September 1998. The Company plans to continue funding these efforts
through 1999, which may adversely affect its operating results. An increase in
selling, general, and administrative expenses, together with the decrease in
gross profit margin, contributed to lower profitability at the Other Medical
Equipment segment in 1999.
8
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First Quarter 1999 Compared With First Quarter 1998 (continued)
Research and development expenses increased to $3.6 million in the first
quarter of 1999 from $2.6 million in 1998, primarily due to an increase in
expenses at the LVAS segment relating to a clinical trial being conducted by the
Company to evaluate the electric LVAS as an alternative to medical therapy, as
well as expenses associated with the development of its HeartMate II system. The
Company expects research and development expenses to continue to increase over
the life of the clinical trial, estimated at two to three years. There can be no
assurance that the Company will complete this study.
Interest income decreased to $1.7 million in the first quarter of 1999
from $1.9 million in the first quarter of 1998, primarily as a result of a
decrease in interest rates in 1999. Interest expense was $0.9 million in both
periods.
The effective tax rate was 38% in the first quarter of 1999 and 1998. The
effective tax rate exceeded the statutory federal income tax rate primarily due
to the impact of state income taxes.
Liquidity and Capital Resources
Consolidated working capital was $121.5 million at April 3, 1999, compared
with $98.9 million at January 2, 1999. Cash, cash equivalents, and short- and
long-term available-for-sale investments were $134.3 million at April 3, 1999,
compared with $132.6 million at January 2, 1999. During the first quarter of
1999, $2.9 million of cash was provided by operating activities. Cash of $0.7
million was provided by a decrease in inventories, primarily due to an increase
in sales and improved inventory management. Cash of $0.4 million was provided by
a net increase in other current liabilities and accounts payable, primarily due
to the timing of payments. Cash of $0.8 million was used to fund an increase in
accounts receivable due to higher revenues.
During the first quarter of 1999, the Company's primary investing
activity, excluding available-for-sale investments activity, was the purchase of
property, plant, and equipment for $0.3 million. During the remainder of 1999,
the Company expects to make capital expenditures of approximately $3.0 million,
principally for manufacturing and tooling equipment and leasehold improvements.
During the first quarter of 1999, the Company's financing activities used
$0.9 million of cash to purchase Company common stock pursuant to authorizations
by the Company's Board of Directors. At April 3, 1999, the Company had a
remaining authorization to purchase $12.9 million of Company common stock in the
open market or negotiated transactions through August 14, 1999. Any such
repurchases are funded from working capital.
The Company believes that it has adequate resources to meet its financial
needs for the foreseeable future.
Year 2000
The following information constitutes a "Year 2000 Readiness Disclosure"
under the Year 2000 Information Readiness Disclosure Act. The Company continues
to assess the potential impact of the year 2000 date recognition issue on the
Company's internal business systems, products, and operations. The Company's
year 2000 initiatives include (i) testing and upgrading significant
information-technology systems and facilities; (ii) testing and developing
upgrades, if necessary, for the Company's current products and certain
discontinued products; (iii) assessing the year 2000 readiness of its key
suppliers and vendors; and (iv) developing a contingency plan.
The Company's State of Readiness
The Company has implemented a compliance program to ensure that its
critical information-technology systems and facilities will be ready for the
year 2000. The first phase of the program, testing and evaluating the Company's
critical information-technology systems and facilities for year 2000 compliance,
has largely been completed. During
9
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Year 2000 (continued)
phase one, the Company tested and evaluated its significant computer systems,
software applications, and related equipment for year 2000 compliance. The
Company also evaluated the potential year 2000 impact on its critical
facilities. The Company's efforts included testing the year 2000 readiness of
its manufacturing, utility, and telecommunications systems at its critical
facilities. The Company is currently in phase two of its program, during which
any material noncompliant systems or facilities that were identified during
phase one are prioritized and remediated. Based on its evaluations of its
critical facilities, the Company does not believe any material upgrades or
modifications are required. The Company is currently upgrading or replacing its
material noncompliant information-technology systems, and this process was
approximately 80% complete as of April 3, 1999. In many cases, such upgrades or
replacements are being made in the ordinary course of business, without
accelerating previously scheduled upgrades or replacements. The Company expects
that all of its material information-technology systems and critical facilities
will be year 2000 compliant by October 1999.
The Company has also implemented a compliance program to test and evaluate
the year 2000 readiness of the material products that it currently manufactures
and sells or for which the Company continues to provide technical support. The
Company believes that substantially all of these material products are year 2000
compliant. The Company has evaluated and identified those products which may not
be year 2000 compliant and has focused corrective efforts on products that are
still under warranty or early in their expected life and/or are subject to FDA
considerations due to safety risks. The Company is offering upgrades where
reasonably practicable and where deemed necessary. However, as many of the
Company's products are complex, interact with or incorporate third-party
products, and operate on computer systems that are not under the Company's
control, there can be no assurance that the Company has identified all of the
year 2000 problems with its current products.
The Company is in the process of identifying and assessing the year 2000
readiness of key suppliers and vendors that are believed to be significant to
the Company's business operations. As part of this effort, the Company has
developed and is distributing questionnaires relating to year 2000 compliance to
its significant suppliers and vendors. To date, no significant supplier or
vendor has indicated that it believes its business operations will be materially
disrupted by the year 2000 issue. The Company is now following-up with its
significant suppliers and vendors that have not responded to the Company's
questionnaires. The Company has not completed the majority of its assessment of
third-party risk, but expects to be substantially completed by October 1999.
Contingency Plan
The Company is developing a contingency plan that will allow its primary
business operations to continue despite disruptions due to year 2000 problems.
This plan may include identifying and securing other suppliers, increasing
inventories, and modifying production facilities and schedules. As the Company
continues to evaluate the year 2000 readiness of its business systems and
facilities, products, and significant suppliers and vendors, it will modify and
adjust its contingency plan as may be required.
Estimated Costs to Address the Company's Year 2000 Issues
To date, costs incurred in connection with the year 2000 issue have not
been material. The Company does not expect total year 2000 remediation costs to
be material, but there can be no assurance that the Company will not encounter
unexpected costs or delays in achieving year 2000 compliance. Year 2000 costs
relating to products and facilities were funded from working capital. All
internal costs and related external costs, other than capital additions, related
to year 2000 remediation have been and will continue to be expensed as incurred.
The Company does not track internal costs incurred for its year 2000 compliance
project. Such costs are principally the related payroll costs for its
information-systems group.
10
<PAGE>
Year 2000 (continued)
Reasonably Likely Worst Case Scenario
At this point in time, the Company is not able to determine the most
reasonably likely worst case scenario to result from the year 2000 issue. One
possible worst case scenario would be that certain of the Company's material
suppliers or vendors experience business disruptions due to the year 2000 issue
and are unable to provide materials and services to the Company on time. The
Company's operations could be delayed or temporarily shut down, and it could be
unable to meet its obligations to customers in a timely fashion. The Company's
business, operations, and financial condition could be adversely affected in
amounts that cannot be reasonably estimated at this time. If the Company
believes that any of its key suppliers or vendors may not be year 2000
compliant, it will seek to identify and secure other suppliers or vendors as
part of its contingency plan.
Risks of the Company's Year 2000 Issues
While the Company is attempting to minimize any negative consequences
arising from the year 2000 issue, there can be no assurance that year 2000
problems will not have a material adverse impact on the Company's business,
operations, or financial condition. While the Company expects that upgrades to
its internal business systems will be completed in a timely fashion, there can
be no assurance that the Company will not encounter unexpected costs or delays.
Despite its efforts to ensure that its material current products are year 2000
compliant, the Company may see an increase in warranty and other claims,
especially those related to Company products that incorporate, or operate using,
third-party software or hardware. In addition, certain of the Company's older
products, which it no longer manufactures or sells, may not be year 2000
compliant, which may expose the Company to claims. As discussed above, if any of
the Company's material suppliers or vendors experience business disruptions due
to year 2000 issues, the Company might also be materially adversely affected.
There is expected to be a significant amount of litigation relating to the year
2000 issue and there can be no assurance that the Company will not incur
material costs in defending or bringing lawsuits. In addition, if any year 2000
issues are identified, there can be no assurance that the Company will be able
to retain qualified personnel to remedy such issues. Any unexpected costs or
delays arising from the year 2000 issue could have a material adverse impact on
the Company's business, operations, and financial condition in amounts that
cannot be reasonably estimated at this time.
Item 3 - Quantitative and Qualitative Disclosure About Market Risk
The company's exposure to market risk from changes in interest rates and
equity prices has not changed materially from its exposure at year-end 1998.
PART II - OTHER INFORMATION
Item 6 - Exhibits and Reports on Form 8-K
(a) Exhibits
See Exhibit Index on the page immediately preceding exhibits.
(b) Reports on Form 8-K
None.
11
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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 as of the 6th day of May 1999.
THERMO CARDIOSYSTEMS INC.
/s/ Paul F. Kelleher
------------------------
Paul F. Kelleher
Chief Accounting Officer
/s/ Theo Melas-Kyriazi
------------------------
Theo Melas-Kyriazi
Chief Financial Officer
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description of Exhibit
27 Financial Data Schedule.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THERMO
CARDIOSYSTEMS INC.'S QUARTERLY REPORT ON FORM 10-Q FOR THE PERIOD ENDED APRIL 3,
1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-01-2000
<PERIOD-END> APR-03-1999
<CASH> 22,152
<SECURITIES> 86,242
<RECEIVABLES> 14,024
<ALLOWANCES> 981
<INVENTORY> 11,253
<CURRENT-ASSETS> 135,512
<PP&E> 19,279
<DEPRECIATION> 12,221
<TOTAL-ASSETS> 173,555
<CURRENT-LIABILITIES> 14,012
<BONDS> 70,000
0
0
<COMMON> 4,052
<OTHER-SE> 85,491
<TOTAL-LIABILITY-AND-EQUITY> 173,555
<SALES> 19,461
<TOTAL-REVENUES> 19,461
<CGS> 8,367
<TOTAL-COSTS> 8,367
<OTHER-EXPENSES> 3,572
<LOSS-PROVISION> 30
<INTEREST-EXPENSE> 905
<INCOME-PRETAX> 2,877
<INCOME-TAX> 1,104
<INCOME-CONTINUING> 1,773
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,773
<EPS-PRIMARY> 0.05
<EPS-DILUTED> 0.05
</TABLE>
