<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 June 30, 1995
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 number ___________0-17637____________________
Fronteer Directory Company, Inc.
(Exact name of registrant as specified in its charter)
_________Colorado______________ _____45-0411501______
(State or other jurisdiction of (IRS Employer ID No.)
incorporation or organization)
_____________216 N 23rd Street, Bismarck, ND 58501__________
(Address of principal executive offices)
_______________________(701) 258-4970________________________
(Registrant's telephone number, including are 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.
/X/ Yes / / No
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
The registrant had 12,558,061 shares of its $.01 par
value common stock outstanding as of August 9, 1995.
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
FRONTEER DIRECTORY COMPANY, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1995 1994
(Unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 1,974,304 $ 2,276,654
Broker/dealer receivables, net 4,435,385 14,451,287
Trade receivables, net 4,755,962 465,420
Securities owned, at market 1,420,131 1,406,214
Current portion of notes receivable 500,751
Deferred directory costs 552,859
Deferred income tax benefit 98,900
Other 475,623
----------- ---------
Total current assets 14,213,915 18,599,575
PROPERTY AND EQUIPMENT, net 1,561,169 1,424,689
LONG-TERM NOTES RECEIVABLE, net of 607,192
current portion
DEFERRED INCOME TAX BENEFIT 760,521
INTANGIBLE ASSETS:
Directories, net 4,724,621
Other assets 1,541,173
----------- ----------
Total assets $21,106,897 $22,325,958
----------- ----------
----------- ----------
<PAGE>
<CAPTION>
JUNE 30, DECEMBER 31,
1995 1994
(Unaudited)
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
Accounts payable, accrued expenses, $ 4,073,811 $ 1,693,286
and other liabilities
Broker/dealer payables 3,170,948 15,533,160
Current portion of long-term debt 964,487 555,675
Due affiliates 548,900
Other current liabilities 476,924 17,193
--------- ----------
Total current liabilities 9,235,070 17,799,314
Notes payable and long-term debt 1,841,072 1,363,156
Deferred rent concessions 1,804,820 1,808,895
Deferred income taxes payable 399,129
---------- ----------
Total liabilities 13,280,091 20,971,365
----------- ----------
Minority interest in subsidiary 227,327 166,158
----------- ----------
Stockholders's equity:
Common stock; authorized 100,000,000 125,581 1
shares, $.01 par value; shares
issued and outstanding; June 30,
1995 - 12,558,061
Preferred stock; authorized 25,000,000 875,000 823,750
shares, $.10 par value, shares issued
and outstanding; June 30, 1995 -
87,500
Additional paid-in capital 6,492,487 99
Retained earnings 186,645 364,585
Treasury stock; June 30, 1995 - (80,234)
87,084 shares
---------- ----------
Total stockholders' equity 7,599,479 1,188,435
Total liabilities and $21,106,897 $22,325,958
stockholders' equity ---------- ----------
---------- ----------
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
FRONTEER DIRECTORY COMPANY, INC.
STATEMENTS OF OPERATIONS
(Unaudited)
<CAPTION>
Six Months Ended Three Months Ended
June 30, June 30,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
REVENUE:
Directory $ 2,018,808 $ $ 2,018,808 $
Broker/dealer 6,111,602 5,791,192 3,564,028 3,426,892
Computer 2,161,888 1,264,766 940,920 837,579
Other 168,434 20,601 163,705 15,846
---------- --------- --------- ---------
10,460,732 7,076,559 6,687,461 4,280,317
---------- --------- --------- ---------
COST OF SALES AND OPERATING
EXPENSES:
Directory cost of sales 1,453,627 1,453,627
Commissions 3,044,281 1,802,787 1,810,028 1,031,934
Computer cost of sales 2,240,697 1,724,921 1,013,221 999,530
General and administrative 3,756,231 4,027,394 1,996,883 2,074,426
Depreciation and amortization 283,324 181,616 193,760 90,620
---------- --------- --------- ---------
10,778,160 7,736,718 6,467,519 4,196,510
---------- --------- --------- ---------
Operating income (loss) ( 317,428) ( 660,159) 219,942 83,807
---------- ---------- ---------
OTHER INCOME (EXPENSE):
Interest income 354,278 506,259 130,293 283,820
Interest expense ( 293,423) ( 258,342) ( 89,648) ( 153,379)
---------- ---------- ---------- -----------
60,855 247,917 40,645 130,441
Net earnings (loss) before
minority interest and
income tax expense ( 256,573) ( 412,242) 260,587 214,248
Minority interest loss
(earnings) ( 59,680) 86,611 ( 22,875) 36,667
---------- ---------- ---------- -----------
Net earnings (loss) before
income tax expense ( 316,253) ( 325,631) 237,712 250,915
Income tax expense (benefit) ( 130,000) ( 98,243) 97,000 100,366
---------- ---------- ---------- -----------
Net earnings (loss) $( 186,253) $( 227,388) $ 140,712 $ 150,549
---------- ---------- ---------- -----------
---------- ---------- ---------- -----------
Earnings (loss) per $( 0.02) * $ 0.02 *
common share
Weighted average number of 7,851,777 10,465,628
common shares outstanding
<FN>
-------------------
* - Due to the limited number of shares of RAFCO outstanding during 1994,
presentation of earnings per share would not be meaningful.
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
FRONTEER DIRECTORY COMPANY, INC.
STATEMENTS OF CASH FLOWS
(Unaudited)
<CAPTION>
Six Months Ended Six Months Ended
June 30, 1995 June 30, 1994
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ (186,253) $ (326,005)
Adjustments to reconcile net income to cash
provided by operating activities:
Depreciation 260,706 207,277
Amortization of directory costs 90,117
Amortization of start-up costs 1,018
Amortization of rent concessions ( 4,075) 99,537
Forgiveness of notes from employees 120,750
Provision for (benefit from) deferred
income taxes ( 62,450)
Gain on sale of assets ( 91,760)
Minority interest earnings 59,680 ( 80,618)
Change in assets and liabilities
Decrease in broker/dealer receivables 10,015,902 (7,797,424)
Decrease (Increase) in trade receivables (512,418)
(Increase) in securities owned ( 21,249) (844,930)
(Increase) in deferred directory costs 127,809
(Increase) in other assets (42,183) 702,885
Increase in accounts payable 1,171,855 (527,920)
(Decrease) in broker/dealer payables (12,362,213) 5,558,962
(Decrease) in other liabilities (203,809)
---------- ---------
Net cash provided by operating activities ( 1,638,573) (3,008,236)
---------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Principal collected on notes receivable 3,266
Proceeds from sale of assets 264,243 750
Net proceeds from sale of directories 1,099,063
Cash acquired in business combination (180,822)
Purchase of property and equipment (132,243) 331,081
---------- ---------
Net cash provided by investing activities 1,053,507 331,831
---------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net payments on short-term notes (400,000)
Proceeds from long-term notes payable 500,000
Net borrowings from affiliates 483,000
Principal payments on long-term borrowings (297,384) (476,355)
Issuance of common stock 100
Repurchase of common stock ( 3,000)
---------- ----------
Net cash used in financing activities 282,716 (476,355)
---------- ----------
NET INCREASE IN CASH AND CASH EQUIVALENTS (302,350) (3,152,760)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 2,276,654 3,981,565
---------- ----------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 1,974,304 $ 828,805
---------- ----------
---------- ----------
</TABLE>
See notes to financial statements.
<PAGE>
FRONTEER DIRECTORY COMPANY, INC.
SELECTED INFORMATION - SUBSTANTIALLY ALL
DISCLOSURES REQUIRED BY GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES ARE NOT INCLUDED
JUNE 30, 1995
NOTE 1 - UNAUDITED FINANCIAL STATEMENTS
The accompanying consolidated financial statements of Fronteer Directory
Company, Inc. as of June 30, 1995, are the responsibility of the Company's
management. Except as explained in the following paragraph, management is not
aware of any material modifications that should be made to the accompanying
financial statements in order for them to be in conformity with generally
accepted accounting principles.
Management has elected to omit substantially all of the disclosures required by
generally accepted accounting principles.
The accompanying financial statements should be read in conjunction with the
Company's financial statements as of December 31, 1994.
NOTE 2 - BUSINESS COMBINATION
On April 26, 1995, Fronteer Directory entered into a Plan of Reorganization and
Exchange Agreement with RAFCO, Ltd. Under the Agreement, Fronteer acquired all
of the assets of RAFCO in exchange for the assumption by Fronteer of the
liabilities of RAFCO and the issuance by Fronteer to RAFCO of 7,223,871 shares
of $.01 par value common stock and 87,500 shares of $.10 par value series A
voting cumulative preferred stock ($10.00 per share redemption value). RAFCO
has dissolved as a corporation and has distributed Fronteer's common and
preferred stock to the shareholders of RAFCO. As a result of the transaction
described in the Agreement, the former shareholders of RAFCO acquired a 55%
interest in Fronteer. Accordingly, the transaction has been accounted for as a
"reverse acquisition" of Fronteer by RAFCO using the purchase method of
accounting and the former Fronteer Directory's assets and liabilities have been
adjusted to their market value as of the date of the combination. The
adjustment to market value resulted in an intangible asset, directories, which
was valued at $6,164,951. The purchase method also dictates that Fronteer's
business activities be included in the ongoing financial statements beginning
May 1, 1995, the effective date of the transaction. As a result of the reverse
acquisition accounting, historical financial statements presented for periods
prior to the combination date include the assets, liabilities, equity, revenue,
and expenses of RAFCO only.
NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Cash and cash equivalents - For purposes of reporting cash flows, the Company
considers all highly liquid investments purchased with a maturity of three
months or less to be cash equivalents.
Intangible assets, directories - Under the purchase method of accounting for
business combinations, Fronteer Directory's assets and liabilities were adjusted
to market value at the time of the combination with RAFCO. The amount by which
Fronteer's market value exceeded its equity was included in this account and is
being amortized over ten years.
(continued)
<PAGE>
NOTE 3 - (continued)
Amortization - Intangible assets, directories, is being amortized over ten years
using the straight-line method.
Income taxes - Income taxes are provided for the tax effects of transactions
reported in the financial statements and consist of taxes currently due plus
deferred taxes. Deferred taxes are computed on the liability method as
prescribed in FASB Statement No. 109 "Accounting for Income Taxes."
Earnings (loss) per common share - Earnings per common share have been
calculated upon weighted average number of common shares of Fronteer Directory
outstanding during the year.
NOTE 4 - LOANS FROM OFFICERS
At June 30, 1995, loans from officers and other insiders totalled $548,900, are
unsecured, pay 11.25% interest and are payable on demand. A majority of these
loans are not expected to be repaid during the fiscal year. An officer has also
loaned the Company $100,000 through a 10% senior subordinated debenture which is
due on December 31, 2003.
NOTE 5 - EMPLOYEE STOCK OWNERSHIP PLAN (ESOP)
The Company has guaranteed its ESOP's note payable of $350,000 to BNC National
Bank. This guarantee is secured by the shares of Fronteer Directory Company,
Inc. stock owned by the ESOP.
NOTE 6 - SALE OF DIRECTORIES
On April 27, 1995, Fronteer sold certain telephone directories to Telecom*USA
for a purchase price of $2,400,000. The purchase price included a cash payment
of $1,500,000 and a promissory note of $900,000, conditioned upon the completion
of delivery of two directories and certain other transfers of information to
Telcom. Also on April 27, 1995, Fronteer granted Telecom the option to purchase
certain other telephone directories in the future. These related transactions
were contemplated by the Agreement.
Because Fronteer's assets were adjusted to market value at the time of the
business combination, the subsequent sale of directories to Telecom*USA resulted
in no gain to the Company, as the directories were presumed to be sold at their
market value on the day following the business combination. This sale reduced
the Company's intangible asset, directories, to $4,775,198 and this amount will
be amortized over ten years.
<PAGE>
ITEM 2. 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 the Company's financial position and operating
results during the periods included in the accompanying condensed financial
statements.
FINANCIAL CONDITION
At June 30, 1995, shareholders' equity was $7,599,479, up $6,411,044, or 539%,
from fiscal year end December 31, 1994. This increase is due to the business
combination between Fronteer Directory and RAFCO during the year and the
adjustment of Fronteer's net assets to market value.
The ratio of current assets to current liabilities was 1.54 to 1 at June 30,
1995, an increase from the 1.04 to 1 at December 31, 1994.
SIX MONTHS ENDED JUNE 30, 1995 VS. SIX MONTHS ENDED JUNE 30, 1994
On April 26, 1995, Fronteer Directory and RAFCO, Ltd. entered a business
combination which has been accounted for using the purchase method of
accounting. This resulted in Fronteer Directory adjusting its assets and
liabilities to their fair market value at the time of the combination. The
enclosed financial statements include RAFCO and subsidiaries for both the six
months ended June 30, 1994 and 1995, while Fronteer Directory and subsidiaries
are included from May 1, 1995 to June 30, 1995, in accordance with the purchase
method. RAFCO was not a SEC reporting company prior to the business
combination, therefore no financial information has been previously filed or
disclosed.
Revenues for the six months ended June 30, 1995, totalled $10,460,732, an
increase of $3,384,173, or 48%, over last year's total. Directory revenues
totalled $2,018,808 for the period, as compared to no revenues shown for last
year. Broker/dealer revenues from RAF Financial were up $320,410 for the
period, an increase of 6% to $6,611,602, when compared to the same period last
year. Revenues were up due to the opening of a new office in Restin, VA in the
past year and also due to an increase in overall stock market activity during
the first six months of 1995. Computer revenues totalled $2,161,888 for the
first six months of this year. That compares to $1,264,766 last year, a
$897,122, or 71%, increase.
Net loss amounted to $186,253 for the six months ended June 30, 1995. This
compares to a loss of $227,388 for the same period last year.
Directory cost of sales totalled $1,453,627 for the first six months of the
year. No cost of sales were recognized for directories during last year.
Commissions related to RAF Financial totalled $3,044,281 for the six month
period. This compares to $1,802,787 for the same period last year, an increase
of $1,241,494, or 69%. During the period, RAF paid higher upfront commission
percentages to new brokers who were recruited to work in RAF's Denver office.
These higher commission rates were not paid the previous year and have since
been removed. During the period, the Company also expensed $120,000 in
forgivable loans made to recruit and retain brokers in RAF's Reston, VA office.
Commissions are also up due to brokerage revenues being up when compared to the
same period last year.
Computer cost of sales totalled $2,240,697 for the first two quarters of 1995.
This is an increase of $515,776 over the same period last year. This 30%
increase in cost of sales compares favorably with the 71% increase in sales for
the period. Cost of sales were up for the same reason cited above for revenues.
<PAGE>
Depreciation and amortization came to $283,324 for the six months ended June 30,
1995. This is an increase of $101,708 over last year. At the time of the
business combination, Fronteer Directory's intangible assets, directories, were
adjusted to market value in the amount of $6,164,951. Directories valued at
$1,389,754 were sold to Telecom*USA subsequent to the combination. The
remaining balance of $4,775,198 is being amortized over ten years. The two
months of amortization included in the six months ended June 30, 1995, come to
$79,587, while no amortization was expensed last year.
Interest income declined by $151,981 when compared to last year. This is a 30%
decrease, which is attributable to a decrease in the amount of margin business
done by RAF during the period. Due to a cash flow decrease during the first
quarter of the year, RAF was forced to reduce the amount and number of its
margin accounts, resulting in this decline. Due to the business combination, it
can begin to rebuild these positions.
Interest expense totalled $293,423 for the first two quarters of 1995, an
increase of $35,081, or 14%, from last year. The addition of Fronteer Directory
for two months this year is the cause for the increase.
THREE MONTHS ENDED JUNE 30, 1995 VS. THREE MONTHS ENDED JUNE 30, 1994
Revenues for the three months ended June 30, 1995, totalled $6,687,461, an
increase of $2,407,144, or 56%, over last year's total. Directory revenues
totalled $2,018,808 for the period, as compared to no sales shown for last year.
Broker/dealer revenues from RAF Financial were up $137,136 for the period, an
increase of 4% to $3,564,028, when compared to the same period last year for the
reasons cited previously. Computer revenues totalled $940,920 for the first
three months of this year, an increase of $103,341, or 12%, over last year.
Net income for the quarter totalled $140,712, which compares to net income of
$150,549 for the same period last year, a decrease of $9,837, or 7%.
Directory cost of sales totalled $1,453,627 for the quarter, while no cost of
sales were recognized for directories last year.
Commissions related to RAF Financial totalled $1,810,028 for the three month
period. This compares to $1,031,934 for the same period last year, an increase
of $778,094, or 75%. During the period, RAF paid higher upfront commission
percentages to new brokers who were recruited to work in RAF's Denver office.
These higher commission rates were not paid the previous year and have since
been removed. During the period, the Company also expensed $120,000 in
forgivable loans made to recruit and retain brokers in RAF's Reston, VA office.
Commissions are also up due to brokerage revenues being up when compared to the
same period last year.
Computer cost of sales totalled $1,013,221 for the first quarter of 1995. This
is an increase of $13,691, or 1%, over the same period last year. This 1%
increase in cost of sales compares favorably with the 12% increase in sales for
the period. Depreciation and amortization came to $193,760 for the three months
ended June 30, 1995. This is an increase of $103,140, or 114%, over last year.
At the time of the business combination, Fronteer Directory's intangible assets,
directories, were adjusted to market value. This intangible asset is being
amortized over ten years. The two months of amortization included for 1995 come
to $79,587, while no amortization was expensed last year. The second quarter of
1995 also included depreciation for Fronteer Directory and its subsidiaries
while 1994 reflected none.<PAGE>
<PAGE>
Interest income declined by $153,527 when compared to last year. This is a 54%
decrease, which is attributable to a decrease in the amount of margin business
done by RAF during the period. Due to a cash flow decrease during the first
quarter of the year, RAF was forced to reduce the amount and number of its
margin accounts, resulting in this decline. Due to the business combination, it
can begin to rebuild these positions.
Interest expense totalled $89,648 for the second quarter of 1995, a decrease of
$63,731, or 42%, from last year. This decrease is also related to the reduction
in margin accounts as discussed under interest income.
LIQUIDITY AND CAPITAL RESOURCES AS OF JUNE 30, 1995
At June 30, 1995, the Company had working capital of $4,978,845 as compared to
$800,261 at December 31, 1994, an increase of $4,178,584, or 522%. A
significant portion of this increase relates to the proceeds from the sale of
directories in April 1995.
The Company currently has over $1 million available on its line of credit and
anticipates no liquidity problems this fiscal year.
Prior to the business combination with Fronteer Directory, RAFCO, through RAF
Financial, was unable to aggressively grow its business due to limited capital.
The combination and subsequent infusion of $1,500,000 from the sale of certain
telephone directories has increased the new Company's cash and capital position
significantly in the financial markets. With a substantially higher capital
total and access to a line of credit, the Company may pursue larger stock
offerings, take bigger inventory positions, and handle more and larger margin
debits.
<PAGE>
PART II
ITEM 5. OTHER INFORMATION
ACQUISITION OF RAFCO, LTD.
On April 26, 1995, the Company entered into a Plan of Reorganization and
Exchange Agreement with RAFCO, Ltd. ("RAFCO"). Under the agreement, the Company
acquired all of the assets and business of RAFCO for 7,223,871 shares of par
value $.01 common stock and 87,500 shares of $.10 par value Series A Voting
Cumulative Preferred Stock. As a result of the transaction and as a result of
being a shareholder of RAFCO, Robert A. Fitzner, Jr. has received 4,784,705
shares of common stock of the Company and 5,000 shares of the Series A Preferred
Stock. As of April 26, 1995, Mr. Fitzner owned 37.9% of the outstanding voting
securities of the Company and may be deemed to be in control of the Company as a
result of his position as a director of the Company and his stock ownership.
SALE OF ELEVEN DIRECTORIES TO TELECOM*USA
On April 27, 1995, the Company sold eleven of its telephone directories to
Telecom*USA of Cedar Rapids, Iowa. The deal will result in payments of
approximately $2.4 million, payable $1,500,000 at the closing on May 5, 1995,
and $900,000 prior to December 31, 1995. The eleven directories sold cover
markets in five states, Montana, Idaho, Wyoming, Utah, and South Dakota, with a
total distribution of 700,000 copies. Telcom*USA has also made a noninterest
bearing and nonrecourse loan of $500,000 to the Company as consideration for the
option to purchase additional directories from the Company. If the option,
which runs from June 1, 1997 to June 1, 1999, is not exercised, the loan will be
forgiven. If Telecom*USA exercises their option, the loan will be applied to
the purchase price of the directories.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
3.1 Articles of Incorporation*
3.2 Bylaws*
10.1 Underwriter's Warrant**
10.3 Incentive Stock Option Plan as amended January 15, 1992
* Incorporated by reference to SEC File No. 33-26175-D filed December
16, 1988 and January 18, 1989.
** Incorporated by reference to SEC File No. 33-46321 filed March 11,
1992.
(b) Reports on Form 8-K:
A Form 8-K was filed on May 9, 1995, reporting the Company's business
combination with RAFCO, Ltd. and the sale of certain directories to
Telecom*USA.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report signed on its behalf by the undersigned,
thereunto duly authorized.
FRONTEER DIRECTORY COMPANY, INC.
By: /s/ Dennis W. Olson
--------------------------------
Dennis W. Olson, President
By: /s/ Lance Olson
--------------------------------
Lance Olson, CPA
Principal Accounting Officer
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1995
<PERIOD-START> APR-01-1995
<PERIOD-END> JUN-30-1995
<CASH> 1,974,304
<SECURITIES> 1,420,131
<RECEIVABLES> 9,397,792
<ALLOWANCES> (206,445)
<INVENTORY> 0
<CURRENT-ASSETS> 14,213,915
<PP&E> 4,028,499
<DEPRECIATION> (2,467,330)
<TOTAL-ASSETS> 21,106,897
<CURRENT-LIABILITIES> 9,235,070
<BONDS> 1,841,072
<COMMON> 125,581
0
875,000
<OTHER-SE> 6,598,898
<TOTAL-LIABILITY-AND-EQUITY> 21,106,897
<SALES> 0
<TOTAL-REVENUES> 6,687,461
<CGS> 0
<TOTAL-COSTS> 4,276,876
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 10,000
<INTEREST-EXPENSE> 89,648
<INCOME-PRETAX> 260,587
<INCOME-TAX> 97,000
<INCOME-CONTINUING> 140,712
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 140,712
<EPS-PRIMARY> .02
<EPS-DILUTED> .02
</TABLE>
