<PAGE>
U. S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the nine-month and quarterly period ended November 30, 1997
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from to
---- ---
Commission file number 0-17879
BEST COLLATERAL, INC.
(Exact name of small business issuer as specified in its charter)
COLORADO 84-1107903
-------------------------------- ------------------
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
2447 MISSION STREET, SAN FRANCISCO, CA 94110
(Address of principal executive offices) (Zip code)
(415) 550 - 6674
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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:
--- ---
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: 4,024,990 shares
Transitional Small Business Disclosure Format (check one): Yes: No: X
--- ---
<PAGE>
BEST COLLATERAL, INC.
FORM 10-QSB
INDEX
Page
Part I. Financial Information
Item 1. Financial Statements
Balance Sheets as of November 30, 1997
and February 28, 1997 3
Statements of Operations for the three
and nine months ended November 30, 1997 and 1996 4
Statements of Cash Flows for the nine months
ended November 30, 1997 and 1996 5
Notes to Financial Statements 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 7
Part II. Other Information
Item 1. Legal Proceedings 11
Item 2. Changes in Securities 11
Item 3. Default Upon Senior Securities 11
Item 4. Submission of Matters to a Vote of
Securities Holders 11
Item 5. Other Information 11
Item 6. Exhibits and Reports on Form 8-K 12
Signature 12
2
<PAGE>
Part I. Financial Information
Item 1. Financial Statements
BEST COLLATERAL, INC.
BALANCE SHEETS
<TABLE>
<CAPTION>
November 30, 1997 February 28, 1997
ASSETS (Unaudited) (Audited)
<S> <C> <C>
Current assets:
Cash $ 8,645 $ 179,546
Pawn service charges receivable 326,464 307,839
Pawn loans receivable 2,433,394 2,180,826
Layaway sales receivable, net 322,737 274,153
Inventory 989,519 931,452
Prepaid expenses and other assets 88,482 13,801
---------- ----------
Total current assets 4,169,241 3,887,617
Property and equipment, net 609,555 424,897
Deferred tax assets 39,458 39,458
Other assets 14,142 18,338
---------- ----------
Total asset $4,832,396 $4,370,310
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 161,113 $ 206,243
Income tax payable 57,136 109,097
Accrued interest1 153,250 157,900
Bank line of credit 2,645,216 2,177,216
Loans from stockholders 349,434 349,434
Deferred tax liability 107,645 107,645
---------- ----------
Total current liabilities 3,473,794 3,107,535
Convertible notes payable to employee
and director 252,500 252,500
Convertible notes payable to others 150,000 175,000
---------- ----------
Total liabilities 3,876,294 3,535,035
---------- ----------
Excess of fair value of net assets
acquired over cost, net --- 32,194
---------- ----------
Stockholders' equity:
Preferred stock, no par value, 1,000,000
shares authorized; none issued --- ---
Common stock, $.10 par value, 50,000,000
shares authorized; 3,999,990 shares
at February 28 and 4,024,990 at
November 30 issued and outstanding 402,499 399,999
Additional paid-in capital (235,180) (257,680)
Retained earnings 788,783 660,762
---------- ----------
Total stockholders' equity 956,102 803,081
---------- ----------
Total liabilities & stockholders equity $4,832,396 $4,370,310
========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements
3
<PAGE>
Part I. Financial Information
Item 1. Financial Statements
BEST COLLATERAL, INC.
STATEMENTS OF OPERATIONS
For the three and nine months ended November 30, 1997 and 1996
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
November 30, November 30,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Revenues:
Merchandise sales $ 742,813 $ 804,652 $2,140,466 $1,933,892
Pawn service charges 360,694 325,748 1,044,613 903,204
Gold melt income, net 3,608 4,028 3,608 94,526
---------- ---------- ---------- ----------
Total revenues 1,107,115 1,134,428 3,188,687 2,931,622
Cost of merchandise sales (328,967) (336,609) (981,726) (827,376)
---------- ---------- ---------- ----------
Revenues net of cost of
merchandise sales 778,148 797,819 2,206,961 2,104,246
Selling, general and
administrative expenses:
Store operating expenses (439,695) (382,701) (1,262,638) (1,067,450)
Administrative expenses (171,497) (122,872) (436,730) (344,015)
---------- ---------- ---------- ----------
Operating income 166,956 292,246 507,593 692,781
Other income (expense):
Rental income 25,075 22,221 69,385 64,767
Interest expense and
financing costs (78,534) (74,296) (232,397) (218,170)
Depreciation & amortization (46,956) (35,850) (114,456) (100,300)
Amortization of excess of
Fair value of net assets
acquired over cost --- 32,193 32,194 64,387
Other expenses (19,077) (23,162) (56,298) (66,235)
---------- ---------- ---------- ----------
Income before income taxes 47,464 213,352 206,021 437,230
Income tax provision (24,300) (85,343) (78,000) (174,893)
---------- ---------- ---------- ----------
Net income $ 23,164 $ 128,009 $ 128,021 $ 262,337
========== ========== ========== ==========
Income per share of
common stock $ 0.01 $ 0.03 $ 0.03 $ 0.07
========== ========== ========== ==========
Weighted average shares
Outstanding 4,024,990 3,999,990 4,008,323 3,999,990
========== ========== ========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements
4
<PAGE>
Part I. Financial Information
Item 1. Financial Statements
BEST COLLATERAL, INC.
STATEMENTS OF CASH FLOWS
For the nine months ended November 30, 1997 and 1996
(Unaudited)
<TABLE>
<CAPTION>
1997 1996
<S> <C> <C>
Cash flows from operating activities:
Net income $ 128,021 $ 262,337
Adjustments to reconcile net income to
net cash (used in)provided by operations:
Depreciation and amortization 82,262 38,462
Change in assets and liabilities:
Pawn service charges receivable (14,917) (35,782)
Layaway sales receivable, net (48,584) (100,296)
Inventory (58,067) 34,546
Prepaid expenses and other assets (73,041) 618
Accounts payable and accrued expenses (49,780) (54,061)
Income taxes payable (51,961) 164,593
----------- ----------
Total adjustments (214,088) 48,080
----------- ----------
Net cash (used in) provided by operating
activities (86,067) 310,417
----------- ----------
Cash flows from investing activities:
Loans made, including loans renewed (5,857,340) (4,529,288)
Loans repaid, including loans renewed 4,942,304 3,556,128
Inventory acquired through defaulted
pawn loans 678,235 513,518
Capital expenditures (280,168) (80,280)
Acquisition of pawn shop assets (35,865) (625,000)
----------- ----------
Net cash used in investing activities (552,834) (1,164,922)
----------- ----------
Cash flows from financing activities:
Borrowings under bank line of credit 840,000 1,978,308
Repayments of bank line of credit borrowings (372,000) (706,360)
Repayments of bank debt --- (410,416)
Borrowings under loans payable to officer
and directors --- 105,879
Repayments under loans payable to officer
and directors --- (87,949)
----------- ----------
Net cash provided by financing activities 468,000 879,462
Net (decrease) increase in cash (170,901) 24,957
Cash at beginning of period 179,546 52,417
----------- ----------
Cash at end of period $ 8,645 $ 77,374
----------- ----------
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest $ 226,130 $ 228,993
----------- ----------
Income taxes $ 156,451 $ 10,150
----------- ----------
Conversion of note payable to equity $ 25,000 ---
----------- ----------
</TABLE>
The accompanying notes are an integral part of these financial statements
5
<PAGE>
Part I. Financial Information
Item 1. Financial Statements
Best Collateral, Inc.
Notes to Financial Statements
November 30, 1997
(Unaudited)
Note 1: Basis of Presentation
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim
financial information. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting
principles for complete fiscal year financial statements. In the opinion of
management, all normal adjustments, including normal recurring accruals,
considered necessary for a fair presentation of the results for such interim
periods have been included. The results of operations for the periods ended
November 30, 1997 and 1996 may not necessarily be indicative of the operating
results for the full year.
Note 2: Acquisitions
During the nine month period ended November 30, 1997 and 1996, the Company
purchased the assets of pawnshops. The acquisitions have been accounted for
as a purchase, and the assets and operations of the acquired stores have been
included in the accompanying unaudited financial statements subsequent to the
date of acquisition.
Note 3: Reclassifications
Certain items in previously reported financial statements have been
reclassified to conform to the presentation used in this Form 10-QSB. There
has been no change to previously reported net income or retained earnings.
Note 4: Other Recent Pronouncements
In February 1997, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 128, "Earnings Per
Share". SFAS No. 128 requires all companies whose capital structures include
convertible securities and options to make a dual presentation of basic and
diluted earnings per share. The new standard becomes effective for periods
ending after December 15, 1997. Management is currently evaluating the
requirements of SFAS No. 128.
In June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive Income".
This statement establishes standards for reporting and presentation of
comprehensive income and its components, specifically the change in equity
during a period from transactions and other events and circumstances from
non-owner sources, in a full set of general purpose financial statements.
This statement is effective for periods beginning after December 15, 1997.
Application of this standard is not expected to have a material effect on the
Company's financial position or results of operations.
In June 1997, the FASB issued SFAS No. 131, "Disclosures about Segments of an
Enterprise and Related Information". SFAS No. 131 establishes standards for
the way that a public enterprise reports information about operating segments
in annual financial statements and requires that those enterprises report
selected information about operating segments in interim financial reports
issued to shareholders. SFAS No. 131 is effective for fiscal years beginning
after December 15, 1997 and requires restatement of earlier periods
presented. Management is currently evaluating the requirements of SFAS No.
131.
6
<PAGE>
Part I. Financial Information
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
Best Collateral, Inc.
Management's Discussion and Analysis
PROSPECTIVE INFORMATION
Effective December 22, 1997, the Company renewed its bank line of credit with
Bank of America, NA (the "Bank"). Since its' original expiration date of
August 1, 1997, the line of credit due date has been extended by the Bank
while terms and conditions for a new line of credit were negotiated.
The renewed line of credit provides a credit limit of four million dollars
($4,000,000) and an interest rate at the Bank's Reference Rate (8.5% at
December 22, 1997) plus 1.25%. The old line of credit had a credit limit of
three million dollars ($3,000,000) and an interest rate at the Bank's
Reference Rate plus 1.5%. Interest continues to be payable monthly and all
borrowings and accrued interest are due August 1, 1998.
RESULTS OF OPERATIONS
The following discussion reflects the results of operations during the three
and nine month periods ended November 30, 1997 (the "Fiscal 1998 Periods") as
compared to the results of operations for the three and nine month periods
ended November 30, 1996 (the "Fiscal 1997 Periods"). The discussion should be
read in conjunction with the financial statements and related notes.
General
On September 8, 1997, the Company acquired all of the assets of a pawnshop
located in Northern California. The assets acquired included outstanding pawn
loans and accrued interest, equipment, trade fixtures, leasehold
improvements, contract rights, transferable licenses, goodwill, trade name,
and supplies. The effect on the Company's balance sheet was the addition of
assets comprised of pawn loans of $15,767, pawn service charges of $3,714 and
equipment and trade fixtures of $16,384. The purchase price of $35,865 was
financed through the Company's bank line of credit.
On May 1, 1996, the Company acquired all of the assets of a pawnshop located
in Northern California. The assets acquired included outstanding loans,
equipment, trade fixtures, leasehold improvements, customer list, contract
rights, transferable licenses, goodwill, trade name, supplies and inventory.
The purchase price of $625,000 was financed through a $700,000 increase in
the Company's primary bank line of credit. The effect on the Company's
balance sheet was the addition of assets comprised of pawn loans receivable
of $373,699, pawn service charges receivable of $52,989 and inventory of
$327,087. The fair market value of the acquired assets exceeded the purchase
price by $128,775 and the Company recorded a deferred credit of that amount.
Acquired inventory, not immediately liquidated through wholesale or melting
of precious metals, was allocated to Company stores based on inventory
requirements and historical sales experience.
As the acquired store was located near another Company store, the acquired
assets were consolidated with existing operations. As a result of this
consolidation, the Company maximized the positive impact of the acquired
assets to its' operating income. While statements of income of the acquired
store were unavailable, management estimates that the acquisition added
approximately $240,000 to the combined stores' ("Combined Store") annual
merchandise sales.
7
<PAGE>
Part I. Financial Information
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
Sales
The 7.7% decrease in merchandise sales for the three months ended November
30, 1997 and 10.7% increase for the nine months ended November 30, 1997 is a
result of 11.3% decrease and 9.2% increase, respectively, in merchandise
sales for stores operated in the Fiscal 1997 Periods ("Comparable Stores")
and a 3.9% and 1.4% contribution by the store acquired in September 1997
("New Store"). The Comparable Stores results consisted of a $428 (0.0%) and
$138,998 (49.8%) increase for two stores opened in November 1995 ("November
1995 Stores"), a $39,073 (-25.4%) decrease and $58,423 (19.8%) increase by
the Combined Store and a $51,834 (-9.9%) and $19,486 (-1.5%) decrease for all
other locations.
During the nine months ended November 30, 1997 and 1996, the Company realized
$3,608 and $94,526, respectively, in net gold melt income. The 1996 income
was primarily from the melting of excess precious metal acquired in the May
1996 acquisition. While income from melting excess precious metal is an
aspect of the Company's on-going operations, the amount of revenue derived
during the nine month period ended November 30, 1996 is unusually high and is
not indicative of future results.
The decline in merchandise sales in the three months ended November 30, 1997
was due to several factors including a dilution in the experience level of
the store sales staff caused by the hiring and training of employees to fill
new store staff positions, the disruption of normal store operations caused
by store remodeling, and the tightening of the qualifications for recording
layaway sales. Management believes that as the Company continues to seek out
growth opportunities it will require additional management to oversee its on-
going operations and position the Company for future growth. The Company is
actively engaged in searching for a qualified individual with experience in
managing a multi-store environment.
Gross Profit
While gross profits from merchandise sales declined by $54,197 (-11.6%)
during the three months ended November 30, 1997 and increased by $52,224
(4.8%) for the nine months ended November 30, 1997, the gross profit
percentage (as a percentage of merchandise sales) decreased to 55.8% and
54.2% in the Fiscal 1998 Periods compared to 58.2% and 57.3% in the Fiscal
1997 Periods. In the Fiscal 1998 Periods the November 1995 Stores contributed
$64,947 at a gross profit percentage ("GPP") of 51.6% and $230,450 (GGP of
55.2%), the Combined Store contributed $58,267 (GGP of 50.7%) and $171,086
(GGP of 48.3%), the New Store contributed $18,582 (GGP of 64.9%) and all
others contributed $272,050 (GGP of 57.5%) and $738,622 (GGP of 55.2%).
In addition to the effect resulting from a reduction in the daily oversight
of on-going operations, the decline in the gross profit percentage is a
result of increases in the Company's average loan amounts (see discussion
under Pawn Service Charges). Due primarily to the reduced merchandise sales,
aggregate inventory turnover for the nine-month period ended November 30,
1997 declined to 1.38 compared to 1.53 for the nine months ended November 30,
1996.
8
<PAGE>
Part I. Financial Information
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
Pawn Service Charges
The $34,946 (10.8%) and $141,409 (15.7%) increase in revenue from pawn
service charges in the Fiscal 1998 Periods is a result of a decrease of
$2,293 (-2.4%) for the three month period ended November 30, 1997 and an
increase of $27,037 (11.0%) for the nine months ended November 30, 1997 in
the Combined Store, an increase of $26,723 (78.7%) and $76,748 (90.6%) in the
November 1995 Stores, a contribution of $5,715 from the New Store and an
increase of $4,801 (2.5%) and $31,909 (5.6%) in all other locations.
Since February 28, 1997, pawn loans outstanding increased by $252,568
(11.6%). Comparable Store pawn loans outstanding grew by $218,203 (10.0%) and
the New Store grew by $18,598 (118.0%). The loans obtained in the September
acquisition added $15,767 during the nine-month period ended November 30,
1997. The average annual yield on pawn loans decreased to 61.2% for the nine
month period ended November 30, 1997 compared to 69.8% for the nine month
period ended November 30,1996.
The decline in the Company's average annual yield is attributable to an
increase in its average loan amount to approximately $93.48 for the nine
months ended November 30, 1997 compared to approximately $87.49 for the nine
months ended November 30, 1996. Under California law, the effective loan
yield decreases as the loan amount goes up. As it remains a goal of
management to increase the Company's aggregate pawn loans outstanding balance
and thus its gross pawn service charges revenue through gathering a greater
market share of the larger dollar, higher value pawn loans, the average
annual yield decrease was expected. Management's intentions are to continue
this practice until pawn service charge revenue increases no longer outweigh
the increased investment in higher valued pawn loans.
Operating Expenses
Store operating expenses, as a percent of total revenues (net of the gold
melt income), were 39.9% and 39.7% in the Fiscal 1998 Periods compared to
33.9% and 37.7% in the Fiscal 1997 Periods. Comparable Stores increased to
38.6% and 39.2% in the Fiscal 1997 Periods while the New Store operating
expenses were approximately 79.7% during the three months ended November 30,
1997.
In anticipation of opening or acquiring several locations in the third fiscal
period, the Company had increased costs related to the recruitment and hiring
of extra store level managerial and staff employees. This directly
contributed to the increased store operating expense percentage for the three
and nine months ended November 30, 1997. Store operating expense increases
included the addition of store personnel, defaulted layaway expense (the
percent of defaulted layaway expense to merchandise sales remained
approximately the same) and increases in insurance and advertising costs.
9
<PAGE>
Part I. Financial Information
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
Corporate administrative expenses, as a percent of total revenues (net of the
gold melt income), increased to approximately 15.6% and 13.8% in the Fiscal
1998 Periods compared to 10.9% and 12.2% in the Fiscal 1997 Periods.
Increases in the Company's administrative expenses were primarily due to the
replacement of the Company's accounting manager with a corporate controller,
the hiring of a human resource specialist and the associated placement and
transition costs associated with these additions and the Company engaging a
marketing firm to assist in the development of a comprehensive and cohesive
marketing program.
Liquidity and Capital Resources
During the nine month period ended November 30, 1997, the Company utilized
cash available at February 28, 1997 and $468,000 in net additional borrowings
on its bank line of credit to fund its pawn loan growth, finance capital
expenditures of $280,168 and the September 1997 acquisition of $35,865. This
and other changes in the Company's assets and liabilities resulted in a net
decrease in its working capital of $84,635.
During the nine months ended November 30, 1997, the Company invested $625,000
on the acquisition of the assets of a pawnshop and $80,280 for additions to
its fixed assets. Operational growth in those nine months required $57,478 in
additional working capital. The acquisition was funded through a $700,000
increase in the Company's primary line of credit with operational growth
funded through cash available at February 29, 1996, net cash provided by
operations, loans from an employee and directors and bank borrowings.
During the third fiscal quarter, the Company remodeled and constructed
leasehold improvements on the pawnshop acquired on September 8, 1997 and the
location associated with a September 1, 1997 lease. The remodeling and
leasehold improvements included new display fixtures, flooring, lighting, and
other interior and exterior improvements. The associated expenditures were
the prime contributor to the additions in property and equipment.
In September 1997, a holder of the Company's convertible note payable
elected to convert their note into common stock of the Company. The
conversion of the note, which had a maturity date of April 30, 2000, resulted
in the issuance of 25,000 shares of the Company's common stock and the
reduction in its long-term convertible notes payable and annual interest
expense of $25,000 and $2,500, respectively.
For continuing operations, the Company's liquidity is greatly affected by the
amount of pawn loans outstanding. As it is a Company strategy to increase its
average loan portfolio within each store, the Company will continue to be
prudently aggressive in its loan policy and seek out opportunities to make
loans on collateral with greater value. The Company plans to manage growth in
its inventory levels such that it will not adversely impact availability of
funds for loan growth.
10
<PAGE>
Part I. Financial Information
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
It is also the Company's strategy to expand its operations through
acquisitions of existing or establishing new, start-up pawnshops. To this
end, the Company continues to discuss its financing requirements with
institutional lenders and private individuals. The Company believes that this
type of financing will be the manner in which it funds its next several
acquisitions or start-ups. It is expected that any such financing will be
entered into on a case by case basis. The Company expects any funding of this
nature to be adequate to allow for build out costs and pawn loan growth in
the acquired or start-up store. If adequate funding for acquiring or
establishing additional pawnshops is not available, the Company will have to
further consider the effect of any potential expansion on its liquidity.
The Company believes its cash flow from operations and cash available under
its line of credit will adequately cover its cash needs for operations during
fiscal 1998.
Part II. Other information
Item 1. Legal Proceedings
From time to time, the Company is involved in litigation relating to claims
arising from its normal business operations, none of which is expected,
individually or in the aggregate, to have a material adverse effect on the
Company.
Item 2. Changes in Securities
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Securities Holders
None
Item 5. Other Information
None
11
<PAGE>
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
10. Material Contracts
NONE
(b) Reports on Form 8-K
No reports on Form 8-K have been filed during the quarter for which
this report is filed.
SIGNATURE
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.
Best Collateral, Inc.
---------------------
(Registrant)
Date: January 13, 1998 /s/ Robert E. Verhoeff
-----------------------
Robert E. Verhoeff
Vice President and
Chief Financial Officer
12
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> FEB-28-1998
<PERIOD-START> MAR-01-1997
<PERIOD-END> NOV-30-1997
<CASH> 8,645
<SECURITIES> 0
<RECEIVABLES> 3,082,595
<ALLOWANCES> 70,840
<INVENTORY> 989,519
<CURRENT-ASSETS> 4,169,241
<PP&E> 1,179,010
<DEPRECIATION> 569,455
<TOTAL-ASSETS> 4,832,396
<CURRENT-LIABILITIES> 3,473,794
<BONDS> 0
0
0
<COMMON> 402,499
<OTHER-SE> 553,603
<TOTAL-LIABILITY-AND-EQUITY> 4,832,396
<SALES> 2,140,466
<TOTAL-REVENUES> 3,188,687
<CGS> 981,726
<TOTAL-COSTS> 1,699,368
<OTHER-EXPENSES> 69,175
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 232,397
<INCOME-PRETAX> 206,021
<INCOME-TAX> 78,000
<INCOME-CONTINUING> 128,021
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 128,021
<EPS-PRIMARY> .03
<EPS-DILUTED> .03
</TABLE>
