UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF
1934
For the quarterly Period Ended September 30, 1996
Commission File Number: 0-18668
MAIN STREET AND MAIN INCORPORATED
(Exact name of registrant as specified in its charter)
DELAWARE 11-294-8370
(State of other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5050 N. 40TH STREET, SUITE 200, PHOENIX, ARIZONA 85018
(Address of principal executive offices)
(602) 852-9000
(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
----- -----
Number of shares of common stock, .001 par value, of registrant outstanding at
September 30, 1996: 8,451,825
<PAGE>
MAIN STREET AND MAIN INCORPORATED
- --------------------------------------------------------------------------------
INDEX
PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements - Main Street and Main Incorporated
<TABLE>
<S> <C>
Consolidated Balance Sheets -September 30, 1996 and
December 25, 1995 3
Consolidated Statements of Operations - Three Months
and Nine Months Ended September 30, 1996 and September 25, 1995 4
Consolidated Statements of Cash Flows - Nine Months
Ended September 30, 1996 and September 25, 1995 5
Notes to Consolidated Financial Statements -
September 30, 1996 6
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations 8
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 13
SIGNATURES 13
</TABLE>
2
<PAGE>
MAIN STREET AND MAIN INCORPORATED
CONSOLIDATED BALANCE SHEETS
(In Thousands)
<TABLE>
<CAPTION>
September 30, 1996 December 25, 1995
------------------ -----------------
(Unaudited)
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 3,695 $ 4,741
Accounts receivable, net 1,325 2,484
Inventories 1,495 1,517
Prepaid expenses 356 461
-------- --------
Total current assets 6,871 9,203
Property and equipment, net 45,691 44,104
Other assets, net 5,806 6,287
Franchise costs, net 22,229 22,761
Notes receivable, net 1,250 6,250
-------- --------
$ 81,847 $ 88,605
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current portion of long-term debt $ 5,245 $ 4,567
Accounts payable 2,904 3,543
Other accrued liabilities 8,508 8,941
-------- --------
Total current liabilities 16,657 17,051
-------- --------
Long-term debt, net of current portion 31,363 31,204
-------- --------
Other liabilities and deferred credits 2,662 3,089
-------- --------
Commitments and contingencies
Stockholders' Equity
Common stock, $.001 par value, 40,000,000 shares
authorized; 8,451,825 and 7,951,825 shares
issued and outstanding in 1996 and 1995,
respectively 8 8
Additional paid-in capital 41,205 40,205
Accumulated deficit (10,048) (2,952)
-------- --------
31,165 37,261
-------- --------
$ 81,847 $ 88,605
======== ========
</TABLE>
The accompanying notes are an integral part of these consolidated
balance sheets.
3
<PAGE>
MAIN STREET AND MAIN INCORPORATED
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In Thousands, Except Per Share Amounts)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
------------------ -----------------
September 30, September 25, September 30, September 25,
1996 1995 1996 1995
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenue $ 29,638 $ 29,858 $ 93,557 $ 90,780
-------- -------- -------- --------
Restaurant Operating Expenses:
Cost of sales 8,538 8,478 26,744 25,784
Payroll and benefits 9,412 9,469 29,192 27,906
Depreciation and amortization 1,130 1,124 3,360 3,227
Other operating expenses 9,030 9,132 27,523 26,509
-------- -------- -------- --------
Total restaurant operating expenses 28,110 28,203 86,819 83,426
-------- -------- -------- --------
Income from restaurant operations 1,528 1,655 6,738 7,354
Depreciation and amortization 351 371 1,087 1,026
General and administrative expenses 913 1,062 2,918 3,283
Restructuring charge -- -- 7,448 --
-------- -------- -------- --------
Operating income (loss) 264 222 (4,715) 3,045
Interest expense, net 771 1,217 2,381 3,494
-------- -------- -------- --------
Net loss before taxes (507) (995) (7,096) (449)
Income tax expense -- -- -- --
-------- -------- -------- --------
Net loss $ (507) $ (995) $ (7,096) $ (449)
======== ======== ======== ========
Net Loss Per Share $ (0.06) $ (0.27) $ (0.89) $ (0.12)
======== ======== ======== ========
Weighted average shares outstanding 8,084 3,639 7,995 3,638
======== ======== ======== ========
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
4
<PAGE>
MAIN STREET AND MAIN INCORPORATED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In Thousands)
<TABLE>
<CAPTION>
Nine Months Ended
-----------------
September 30, 1996 September 25, 1995
------------------ ------------------
<S> <C> <C>
Cash Flows From Operating Activities
Net Loss $(7,096) $ (449)
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 4,447 4,253
Restructuring charge 7,448 --
Changes in assets and liabilities:
Accounts receivable 1,116 (81)
Inventories 22 (58)
Prepaid expenses 105 18
Other assets (1,041) (2,035)
Accounts payable (639) (2,097)
Other liabilities (805) 1,792
------- -------
Net cash - operating activities 3,557 1,343
Cash Flows From Investing Activities:
Investments in affiliates -- (700)
Payment of accrued acquisition costs -- (242)
Net additions to property and equipment (6,440) (3,992)
Cash received from sale-leaseback transactions -- 3,203
------- -------
Net cash - investing activities (6,440) (1,731)
------- -------
Cash Flows From Financing Activities:
Cash proceeds from sale of common stock 1,000 16
Borrowing under credit facilities 3,468 3,028
Principal payments on long-term debt (2,631) (3,107)
------- -------
Net cash - financing activities 1,837 (63)
------- -------
Net change in cash and cash equivalents (1,046) (451)
Cash and cash equivalents, beginning of period 4,741 3,049
------- -------
Cash and cash equivalents, end of period $ 3,695 $ 2,598
======= =======
Supplemental Disclosure of Cash Flow Information
Cash paid during the period for interest $ 2,310 $ 2,772
======= =======
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
5
<PAGE>
MAIN STREET AND MAIN INCORPORATED
Notes to Consolidated Financial Statements
September 30, 1996
(Unaudited)
1. The financial statements have been prepared by the Company without
audit, pursuant to the rules and regulations of the Securities and
Exchange Commission. The information furnished herein reflects all
adjustments (consisting of normal recurring accruals and adjustments)
which are, in the opinion of management, necessary to fairly state the
operating results for the respective periods. Certain information and
footnote disclosures normally included in annual financial statements
prepared in accordance with generally accepted accounting principles
have been omitted pursuant to such rules and regulations, although
management of the Company believes that the disclosures are adequate to
make the information presented not misleading. For a complete
description of the accounting policies, see the Company's Form 10-K
filing for the year ended December 25, 1995.
2. The Company's restaurants operate on a fiscal quarter of 13 weeks.
3. The results of operations for the nine months ended September 30, 1996
are not necessarily indicative of the results to be expected for a full
year.
4. As a result of certain events taking place during the quarter ended
July 1, 1996, the Company recorded a restructuring charge of
$7,448,000. This charge is comprised of the following:
Non-core assets reduced to net realizable value $ 5,474,000
Under performing core assets 1,146,000
Other restructuring costs 828,000
------------
$ 7,448,000
============
Non-core assets reduced to net realizable value:
During the quarter ended July 1, 1996, the debtor on the $6 million
promissory note payable to the Company sold assets related to its dairy
operations, which represented a significant portion of the collateral
securing the note. The debtor used cash from the sale to pay down
senior debt and to provide working capital for its ice cream novelty
production facility. The Company converted its promissory note to an
equity position in the debtor's business. As a result of the
uncertainty of the debtor's business, the Company's promissory note,
net of a deferred gain booked at the time of the initial sale of the
Company's dairy and food distribution business, was written down by
$4.1 million. In addition, the Company has determined that its
investment in an indoor entertainment center being leased to a third
party may exceed its realizable value and has taken a charge of
$582,000. The remaining balance of non-core assets reduced to net
realizable value consist primarily of write downs of real estate that
the Company was holding for future restaurant development and now plans
to dispose of within the next 12 months.
6
<PAGE>
Under performing core assets:
The charge related to under performing core assets relates primarily to
the write off of preopening costs associated with two of the Company's
recently developed restaurants. While it is the Company's policy to
amortize preopening costs over 12 months commencing with the opening of
each new restaurant, the operating results at these restaurants were
not sufficient to support the amortization of preopening costs. One of
the restaurants was the recently opened Front Row Sports Grill. The
Company is currently negotiating with various parties regarding the
future of this restaurant. The remaining balance of under performing
core assets relates to a charge the Company is taking in anticipation
of closing a 20 year old T.G.I. Friday's restaurant in southern
California.
Other restructuring costs:
Other restructuring costs include costs to be incurred through December
31, 1998 under the terms of an existing employment agreement with the
Company's former Chairman and accrued professional fees incurred in
conjunction with the restructuring.
5. The Company's debt at September 30, 1996 consists of the following:
The Company's Term Loan of $27,750,000 bears interest at LIBOR plus 280
basis points (8.55% as of October 1, 1996) and is payable in quarterly
installments of $750,000 with a final payment of $9,000,000 due upon
maturity on September 30, 2002.
In conjunction with the acquisition of Friday's of California, Inc., the
Company issued an unsecured note to TGI Friday's Inc. This note has an
outstanding balance of approximately $1,742,000 which bears interest at
12% per annum and has a maturity date extended to March 31, 1998. As a
result of the terms of an intercreditor agreement, the Company is
currently prohibited from making payments under this note.
The Company currently finances equipment and leasehold improvements at
restaurants it develops and has approximately $7,116,000 in debt secured
by specific restaurants. The notes relating to these range from $400,000
to $950,000, have interest rates ranging from 10.3% to 11.0% and require
monthly principal and interest payments.
The Term Loan contains certain financial covenants relative to debt
service coverage, capital expenditures, minimum cash balances and other
ratios. The Company and its lender are currently in discussions with
regard to the debt service coverage ratio, with which the Company is not
in compliance. The lender has indicated that it will not exercise any of
its rights as a result of the covenant violation, including accelerating
the payments under the loan, until December 31, 1996. The Company is
exploring various options which will bring it into compliance with
covenants under the Term Loan. During this period, the lender may limit
the Company from incurring additional debt and entering into new leases
for sites for future restaurant development. There can be no assurance
that the Company's negotiations with its lender will be successful. If the
negotiations are not successful, the lender could declare the Term Loan to
be immediately due and payable and exercise its remedies under the Term
Loan, including foreclosing on the collateral securing the loan which
includes substantially all of the Company's assets.
7
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Results of Operations
The following table sets forth, for the periods indicated, the percentages which
certain items of income and expense bear to total revenue:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
------------------ -----------------
September 30, September 25, September 30, September 25,
1996 1995 1996 1995
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenue 100.0% 100.0% 100.0% 100.0%
Restaurant Operating Expenses
Cost of sales 28.8 28.4 28.6 28.4
Payroll and benefits 31.7 31.7 31.2 30.7
Depreciation and amortization 3.8 3.8 3.6 3.6
Other operating expenses 30.5 30.6 29.4 29.2
----- ----- ----- -----
Total restaurant operating expenses 94.8 94.5 92.8 91.9
----- ----- ----- -----
Income from restaurant operations 5.2 5.5 7.2 8.1
Depreciation and amortization 1.2 1.2 1.2 1.1
General and administrative expenses 3.1 3.6 3.1 3.6
Restructuring charge -- -- 8.0 --
----- ----- ----- -----
Operating income (loss) .9 .7 (5.1) 3.4
Interest expense, net 2.6 4.0 2.5 3.9
----- ----- ----- -----
Net loss (1.7)% (3.3)% (7.6)% (0.5)%
===== ===== ===== =====
</TABLE>
Revenue for the three months ended September 30, 1996 decreased by 0.7% to
$29,638,000 compared to $29,858,000 in the same period in 1995. Revenue for the
nine months ended September 30, 1996 increased by 3.1% to $93,557,000 compared
to $90,780,000 in the same period in 1995. Revenue from the four restaurants
opened subsequent to September 25, 1995 contributed to the overall revenue gain
for the nine months ended September 30, 1996; however, it was offset by a
decline in same store sales for the three and nine months ended September 30,
1996 of 4.7% and 2.7%, respectively.
Cost of sales increased as a percentage of revenue to 28.8% in the three months
ended September 30, 1996 from 28.4% in the same period in 1995. Cost of sales
increased as a percentage of revenue to 28.6% in the first nine months of 1996
from 28.4% from the same period in 1995. Cost of sales have increased due to a
shift in the beverage market to premium/specialty beers and liquors which have
slightly lower margins and higher prices for dairy products. In addition, cost
of sales increased as a result of increases in portion sizes on several menu
items; however, some of the resulting increase has been offset by negotiated
purchasing discounts.
8
<PAGE>
Labor costs as a percentage of revenue were 31.7% in the three months ended
September 30, 1996 which is unchanged from the same period in 1995. Labor costs
increased as a percentage of revenue to 31.2% in the first nine months of 1996
from 30.7% in the same period of 1995. This increase is almost entirely related
to the decline in same store sales in relation to the fixed component of labor
costs.
Other restaurant operating expenses decreased as a percentage of revenue to
30.5% in the three months ended September 30, 1996 from 30.6% in the same period
in 1995. Other restaurant operating expenses increased as a percentage of
revenue to 29.4% in the first nine months of 1996 from 29.2% in the same period
of 1995. This increase for the nine month period is primarily related to the
fixed nature of occupancy costs and the decline in same store sales.
Income from restaurant operations decreased as a percentage of revenue to 7.2%
in the nine months ended September 30, 1996 from 8.1% in the same period of
1995. In addition to the items discussed above, there were two primary factors
contributing to this decrease. In February 1996, the Company opened its first
Front Row Sports Grill in Portland, Oregon. The higher costs associated with
opening a new concept coupled with lower than anticipated revenue accounted for
approximately 60 basis points of the decrease. In addition, the nine-month
period of 1995 included $300,000 or approximately 30 basis points related to the
Company's management assistance agreement with AsianStar Co., Ltd. (AsianStar)
to provide management services and expertise relative to the development and
operation of T.G.I. Friday's restaurants in the Republic of Korea. No revenue
related to the management assistance agreement was recorded in the nine-month
period ended September 30, 1996 as the Company has entered into an agreement for
an ownership interest in AsianStar, which currently owns and operates seven
T.G.I. Friday's restaurants in Korea.
In total, depreciation and amortization as a percentage of revenue is 5.0% in
the three months ended September 30, 1996 which is unchanged from the same
period in 1995. Depreciation and amortization increased as a percentage of
revenue to 4.8% in the first nine months of 1996 from 4.7% in the same period of
1995. These increases are due primarily to the fixed nature of these expenses
given a decline in same store sales.
General and administrative expenses decreased as a percentage of revenue to 3.1%
in the three months ended September 30, 1996 from 3.6% in the same period in
1995. General and administrative expenses decreased as a percentage of revenue
to 3.1% in the first nine months of 1996 from 3.6% in the same period of 1995.
This decrease relates to reductions in corporate staff coupled with the
relatively fixed nature of these expenses in comparison to the overall increase
in revenue.
A restructuring charge of $7,448,000 was recorded during the quarter ended July
1, 1996 as a result of certain events taking place. This charge is comprised of
the following:
Non-core assets reduced to net realizable value $5,474,000
Under performing core assets 1,146,000
Other restructuring costs 828,000
----------
$7,448,000
==========
9
<PAGE>
Non-core assets reduced the net realizable value:
During the quarter ended July 1, 1996, the debtor of the Company's $6
million promissory note sold assets related to its dairy operations
which represented a significant portion of the collateral securing the
note. The debtor used cash from the sale to pay down senior debt and to
provide working capital for its ice cream novelty production facility.
The Company converted its promissory note to an equity position in the
debtor's business. As a result of the uncertainty of the debtor's
business, the Company's promissory note, net of a deferred gain booked
at the time of the initial sale of the Company's dairy and food
distribution business, was written down by $4.1 million. In addition,
the Company has determined that its investment in an indoor
entertainment center being leased to a third party may exceed its
realizable value and has taken a charge of $582,000. The remaining
balance of non-core assets reduced to net realizable value is comprised
primarily of write downs of real estate that the Company was holding
for future restaurant development and now plans to dispose of within
the next 12 months.
Under performing core assets:
The charge related to under performing core assets relates primarily to
the write off of preopening costs associated with two of the Company's
recently developed restaurants. While it is the Company's policy to
amortize preopening costs over 12 months commencing with the opening of
each new restaurant, the operating results at these restaurants were
not sufficient to support the amortization of preopening costs. One of
the restaurants was the recently opened Front Row Sports Grill. The
Company is currently negotiating with various parties regarding the
future of this restaurant. The remaining balance of under performing
core assets relates to a charge the Company is taking in anticipation
of closing a 20 year old T.G.I. Friday's restaurant in southern
California.
Other restructuring costs:
Other restructuring costs include costs to be incurred through December
31, 1998 under the terms of an existing employment agreement with the
Company's former Chairman and accrued professional fees incurred in
conjunction with the restructuring.
Interest expense was $771,000 in the three months ended September 30, 1996
compared to $1,217,000 in the same period of 1995. Interest expense was
$2,381,000 in the first nine months of 1996 compared to $3,494,000 in the same
period of 1995. This decrease was a result of the retirement of over $8.7
million of indebtedness with the proceeds from a public offering completed in
September 1995 and the concurrent modification of the Company's Senior Term
Loan.
No income tax provision was recorded in 1996 or 1995 due to the availability of
net operating loss carryforwards. At December 25, 1995, the Company had
approximately $7,000,000 of net operating loss carryforwards to be used to
offset future income for income tax purposes.
10
<PAGE>
Liquidity and Capital Resources
The Company's primary use of funds over the past three years has been for the
acquisition of existing T.G.I. Friday's restaurants and exclusive development
rights. These acquisitions were financed principally through the issuance of
long-term debt and Common Stock. The Company has also expended funds for the
development of new restaurants. The principal source of these funds has been
operating cash flows, supplemented by bank and lease financing.
The Company's current liabilities exceed its current assets due in part to cash
expended on the Company's development requirements and because the restaurant
business receives substantially immediate payment for sales, while payables
related to inventories and other current liabilities normally carry longer
payment terms, usually 15 to 30 days. The Company currently generates average
monthly cash receipts of approximately $11,000,000, which have been sufficient
to pay all obligations as they become due.
The Company's debt at September 30, 1996 consists of the following:
The Company's Term Loan of $27,750,000 bears interest at LIBOR plus 280
basis points (8.55% as of October 1, 1996) and is payable in quarterly
installments of $750,000 with a final payment of $9,000,000 due upon
maturity on September 30, 2002.
In conjunction with the acquisition of Friday's of California, Inc., the
Company issued an unsecured note to TGI Friday's Inc. This note has an
outstanding balance of approximately $1,742,000 which bears interest at
12% per annum and has a maturity date extended to March 31, 1998. As a
result of the terms of an intercreditor agreement, the Company is
currently prohibited from making payments under this note.
The Company currently finances equipment and leasehold improvements at
restaurants it develops and has approximately $7,116,000 in debt secured
by specific restaurants. The notes relating to these debt range from
$400,000 to $950,000, have interest rates ranging from 10.3% to 11.0% and
require monthly principal and interest payments.
The Term Loan contains certain financial covenants relative to debt service
coverage, capital expenditures, minimum cash balances and other ratios. The
Company and its leaders are currently in discussions with regard to the debt
service coverage ratio, with which the Company is not in compliance. The leader
has indicated that it will not exercise any of its rights as a result of the
covenant violation, including accelerating the payments under the loan, until
December 31, 1996. The Company is exploring various options which will bring it
into compliance with covenants under the Term Loan. During this period, the
lender may limit the Company from incurring additional debt and entering into
new leases for sites for future restaurant development. There can be no
assurance that the Company's negotiations with its lender will be successful. If
the negotiations are not successful, the lender could declare the Term Loan to
be immediately due and payable and exercise its remedies under the Term Loan,
including foreclosing on the collateral securing the loan which includes
substantially all of the Company's assets.
11
<PAGE>
Pursuant to its development agreements, the Company currently pays royalties of
4.0% and marketing fees of up to 1.4% of revenue to TGI Friday's Inc. The
Company also leases its restaurants with terms ranging from 10 to 20 years.
Minimum payments on the Company's existing lease obligations are approximately
$6,100,000 per year through 2000.
The Company has five separate development agreements with TGI Friday's Inc.
which in the aggregate require the Company to open at least 34 additional T.G.I.
Friday's restaurants by December 31, 1999. The Company intends to develop
restaurants with approximately 5,000 to 6,500 square feet involving development
costs (excluding land) of approximately $1.4 to $2.0 million per restaurant. The
Company expects that current financing commitments and management agreements
whereby a third-party lender finances the development costs and cash flows from
operations, will be sufficient to develop the additional restaurants that the
development agreements require the Company to open. However, given the current
competitive environment in the casual dining segment of the restaurant industry,
the Company is reviewing its development plans and while no final determination
has been made, may develop less restaurants than the current development
agreements require. Each development agreement gives TGI Friday's Inc. certain
remedies in the event the Company fails to comply with the development schedule
in a timely manner or there is a breach of the confidentiality or noncompete
provisions of the development agreement. These remedies include, under certain
circumstances, the right to reduce the number of restaurants the Company may
develop in the related development territory or to terminate the Company's
exclusive right to develop restaurants in the related territory.
12
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits. None.
(b) The Registrant did not file any reports on Form 8-K
during the three months ended September 30, 1996.
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.
Main Street and Main Incorporated
Dated: November 14, 1996 /s/ Joe W. Panter
-----------------
Joe W. Panter, President and
Chief Executive Officer
Dated: November 14, 1996 /s/ Mark C. Walker
------------------
Mark C. Walker, Chief Financial Officer,
Vice President Finance, Secretary and Treasurer
13
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This exhibit shall not be deemed filed for purposes of Section 11 of the
Securities Act of 1933 and Section 18 of the Securities Exchange Act of
1934, or otherwise subject to the liability of such sections, nor shall it
be deemed a part of any other filing which incorporates this report by
reference, unless such other filing expressly incorporates this Exhibit by
reference.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-30-1996
<PERIOD-END> SEP-30-1996
<CASH> 3,695
<SECURITIES> 0
<RECEIVABLES> 1,325
<ALLOWANCES> 0
<INVENTORY> 1,495
<CURRENT-ASSETS> 6,871
<PP&E> 57,418
<DEPRECIATION> (11,727)
<TOTAL-ASSETS> 81,847
<CURRENT-LIABILITIES> 16,657
<BONDS> 31,363
8
0
<COMMON> 0
<OTHER-SE> 31,157
<TOTAL-LIABILITY-AND-EQUITY> 81,847
<SALES> 93,557
<TOTAL-REVENUES> 93,557
<CGS> 26,744
<TOTAL-COSTS> 26,744
<OTHER-EXPENSES> 60,075
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,381
<INCOME-PRETAX> (7,096)
<INCOME-TAX> 0
<INCOME-CONTINUING> (7,096)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (7,096)
<EPS-PRIMARY> (.89)
<EPS-DILUTED> (.89)
</TABLE>
