UNITED STATES
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 quarterly period ended June 30, 1996
[ ] 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 0-17739
RAMTRON INTERNATIONAL CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 84-0962308
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
1850 Ramtron Drive, Colorado Springs, CO 80921
(Address of principal executive offices) (Zip Code)
(Registrant's telephone number, including area code) (719) 481-7000
Indicate by check mark whether 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 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.
Common Stock, $.01 Par Value - 36,482,516 shares as of July 25, 1996
<PAGE>
<TABLE>
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
RAMTRON INTERNATIONAL CORPORATION
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except par value amounts)
<CAPTION>
June 30, Dec. 31,
1996 1995
-------- --------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash $ 6,227 $ 6,283
Accounts receivable, less allowances
of $468 and $284, respectively 3,131 2,599
Inventories 7,710 5,552
Deposits 1,665 5,445
Prepaid expenses 1,015 839
Other current assets 265 118
-------- --------
Total current assets $20,013 $20,836
Property, plant and equipment, net 9,568 10,169
Intangible assets, net 5,353 5,532
Other assets 21 21
-------- --------
$34,955 $36,558
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 4,362 $ 3,347
Accrued compensation 1,779 150
Other accrued liabilities 2,004 1,595
License rights 550 550
Deferred revenue 1,121 2,499
-------- --------
Total current liabilities 9,816 8,141
Long-term promissory note and
accrued interest, related party 3,011 2,854
Long-term license rights 1,100 1,100
-------- --------
Total liabilities 13,927 12,095
======== ========
Stockholders' Equity:
Preferred stock, $0.01 par value,
10,000 shares authorized - no shares issued -- --
Common stock, $0.01 par value, 50,000 shares
authorized - 36,482 and 36,387 shares issued
and outstanding, respectively 365 364
Additional paid-in capital 148,450 148,290
Accumulated deficit (127,787) (124,191)
-------- --------
Total Stockholders' Equity 21,028 24,463
-------- --------
$34,955 $36,558
======== ========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
RAMTRON INTERNATIONAL CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 1996 AND 1995
(Unaudited)
(Amounts in thousands, except per share amounts)
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
1996 1995 1996 1995
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Revenue:
Product sales $ 6,415 $ 3,076 $ 10,848 $ 5,579
Royalties -- 5,123 -- 6,500
License fees 5,000 600 5,000 1,000
Customer-sponsored research
and development 64 46 94 136
-------- -------- -------- --------
11,479 8,845 15,942 13,215
-------- -------- -------- --------
Costs and expenses:
Cost of product sales 4,748 2,996 8,107 5,367
Research and development 3,324 3,371 6,401 6,577
Customer-sponsored research
and development 58 33 85 116
Sales, general and administrative 2,760 1,862 4,913 3,988
Sales, general and
administrative, related parties -- -- -- 148
-------- -------- -------- --------
10,890 8,262 19,506 16,196
-------- -------- -------- --------
Operating income (loss) 589 583 (3,564) (2,981)
Interest expense, related parties (78) (818) (157) (1,558)
Gain on disposition of equity investment -- 788 -- 788
Other income 49 42 126 70
-------- -------- -------- --------
Net income (loss) $ 560 $ 595 $ (3,595) $ (3,681)
======== ======== ======== ========
Net income (loss) per share $0.01 $0.02 $(0.10) $(0.21)
======== ======== ======== ========
Weighted average shares 40,051 27,797 36,428 17,796
======== ======== ======== ========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
RAMTRON INTERNATIONAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1996 AND 1995
(Unaudited)
(Amounts in thousands)
<CAPTION>
1996 1995
-------- --------
<S> <C> <C>
Cash flows from operating activities:
Net loss $(3,595) $(3,681)
Adjustments used to reconcile net loss to net cash
provided by (used in) operating activities:
Depreciation and amortization 1,455 1,470
Accrued compensation 1,630 --
Gain on sale of equity investment -- (788)
Other -- 23
Changes in assets and liabilities:
Accounts receivable (532) 2,377
Inventories (2,159) 5,290
Deposits 3,779 (4,000)
Accounts payable and accrued liabilities 1,423 (4,660)
Long-term accrued interest, related parties 157 1,558
Deferred revenue (1,378) 1,393
Other (512) (291)
-------- --------
Net cash provided by (used in) operating activities 268 (1,309)
-------- --------
Cash flows from investing activities:
Purchase of property, plant and equipment (490) (258)
Proceeds from sale of equity investment -- 1,500
Proceeds from sale of assets 7 375
-------- --------
Net cash provided by (used in) investing activities (483) 1,617
-------- --------
Cash flows from financing activities:
Proceeds from notes payable, related parties -- 3,579
Payments on note payable, related party -- (810)
Payments on capital lease obligations -- (22)
Issuance of common stock, net of expenses 159 22
-------- --------
Net cash provided by financing activities 159 2,769
-------- --------
Net increase (decrease) in cash and cash equivalents (56) 3,077
Cash and cash equivalents, beginning of period 6,283 181
-------- --------
Cash and cash equivalents, end of period $ 6,227 $ 3,258
======== ========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
RAMTRON INTERNATIONAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 1996
___________________________________________________________________________
Note 1. Basis of Presentation and Management Opinion
The accompanying consolidated financial statements at June 30, 1996 and for
the periods then ended have been prepared from the books and records of the
Company without audit. The statements reflect all normal recurring adjustments
which, in the opinion of management, are necessary for the fair presentation
of financial position, results of operations and cash flows for the periods
presented.
Certain information and disclosures normally included in financial statements
have been omitted under Securities and Exchange Commission regulations. It is
suggested that the accompanying financial statements be read in conjunction
with the annual report on Form 10-K for the year ended December 31, 1995. The
results of operations for the period ended June 30, 1996, are not necessarily
indicative of the operating results for the full year.
Note 2. Inventories
Inventories consist of:
June 30, Dec. 31,
1996 1995
-------- --------
(in thousands)
(Unaudited)
Finished goods $2,892 $3,149
Work in process 4,717 2,115
Raw material 101 288
-------- --------
Total $7,710 $5,552
======== ========
Note 3. Promissory Note, Related Party
In September 1995, the Company and the National Electrical Benefit Fund (the
"Fund") entered into a Loan Agreement (the "Fund Credit Facility") pursuant
to which the Fund agreed to lend to the Company up to $12,000,000 bearing
interest at 12% and maturing in June 1998. The outstanding principal balance
and accrued interest as of June 30, 1996 under the Fund Credit Facility were
$2,600,000 and $411,000, respectively. The Fund Credit Facility is secured
by a first priority security lien on the Company's assets. The Fund has the
right to convert all or any portion of the amounts outstanding under the Fund
Credit Facility into common stock at any time or times before maturity of the
loan in June 1998 at a conversion price equal to $10.5125 for each share of
common stock.
Note 4. Income Taxes
The Company provides for income taxes pursuant to Statement of Financial
Accounting Standards No. 109 "Accounting for Income Taxes" ("SFAS 109"). The
Company has determined that under SFAS 109, any previously unrecognized tax
benefits did not satisfy the realization criteria set forth therein. A
valuation allowance has therefore been recorded against the entire net
deferred tax asset.
<PAGE>
Note 5. Earnings Per Share
Net income or loss per share is computed by dividing the net income or loss
by the weighted average number of shares of common stock outstanding during
each period presented. Certain warrants, employee stock options and in 1995
convertible preferred stock are common stock equivalents; however, such
warrants, certain employee stock options and convertible preferred stock have
not been included in net loss per share calculations for the six month
periods ended June 30, 1996 and 1995 due to their antidilutive affect.
Warrants, certain employee stock options and in 1995 convertible preferred
stock are included in weighted average shares for the three month periods
ended June 30, 1996 and 1995, as they are common stock equivalents and their
effects are dilutive.
Note 6. Commitments
EMPLOYMENT SECURITY PROGRAM. In May 1995, the Board of Directors of the
Company adopted and in December 1995, the Company's stockholders approved,
an Employment Security Program (the "Severance Plan") pursuant to which
substantially all full-time employees of the Company on April 26, 1995 are
entitled to receive severance pay and accrued vacation pay following
involuntary termination of employment initiated after April 26, 1995 and on
or before October 25, 1996. The Severance Plan requires that the Company set
aside funds in a separate bank account to provide for the payment, if
necessary, of severance pay as outlined in the Severance Plan as well as an
amount equal to accrued employee vacation pay to eligible employees upon
termination of their employment with the Company, if necessary, during the
Severance Plan period. To date, no amounts have been paid or accrued relating
to the Severance Plan.
INCENTIVE PROGRAM. In May 1995, the Board of Directors of the Company
adopted and in December 1995, the Company's stockholders approved, an
Incentive Program pursuant to which the Company will, in December 1996, award
bonuses payable in cash or the Company's common stock to eligible employees of
the Company. The purpose of the Incentive Program is to retain and motivate
employees of the Company in order to ensure the growth and success of the
Company. Under the Incentive Program, on October 25, 1996, the Company
will establish an employee bonus pool in the amount equal to the principal
amount of the funds (i.e., $1,502,769) initially set aside by the Company for
the Company's Severance Plan less the amount of any severance payments made by
the Company to its employees under the Severance Plan above. As of June 30,
1996, the maximum amount of the bonus pool was $1,502,769.
On December 2, 1996, the Company will distribute to eligible employees of the
Company all of the funds in the bonus pool. Employees eligible to receive a
distribution on December 2, 1996 may elect to receive their distribution
either in cash or in common stock of the Company. If an employee elects to
receive their distribution in common stock, the number of shares distributed
to the employee will be equal to the total cash value of the employee's
distribution divided by $3.50, which amount approximates the last reported
sale price for the Company's common stock as reported on The Nasdaq Stock
Market on April 26, 1995. The incentive program will terminate on December 2,
1996 after the distribution thereunder has been made.
The Company accounts for the Incentive Program by amortizing the total
estimated expense of the Incentive Program evenly over the period of time
between the date of shareholder approval of the plan, December 15, 1995, and
the bonus pool establishment date of October 25, 1996. The total expense of
the Incentive Program is estimated on a quarterly basis and is determined
based upon either the minimum cash payout or the market price of the Company's
common stock if such market price is in excess of $3.50 per share. Pursuant
to the terms of the Incentive Program, the Company expensed approximately
<PAGE>
$943,000 and $1,629,000 in the three and six month periods ended June 30, 1996
and the total accrued liability as of June 30, 1996 for such program was
approximately $1,779,000.
Note 7. Contingencies
Interference proceedings are continuing, challenging one of the Company's
issued patents which pertains to an invention that the Company believes is of
fundamental importance to its business. In 1992, a three-way "interference"
contest was declared in the United States Patent and Trademark Office (the
"Patent Office") concerning US Patent 4,873,664, which is owned by the
Company. US Patent 4,873,664 covers a basic ferroelectric memory cell design
that is of fundamental importance to the Company's business interests in the
United States. An interference is declared in the Patent Office when two or
more parties each claim to have made the same invention. The interference is
therefore conducted to determine which party is entitled to the patent rights
corresponding to the invention. In the present interference contest, the
Company is the "senior" party and is in possession of the issued US patent.
The other two parties involved in the interference are "junior" parties, and
each has the burden of proof of convincing the Patent Office by a
preponderance of the evidence that it was the first to invent the subject
matter of the invention and thus is entitled to the corresponding patent
rights. The Company and only one of the two claimant parties in the
interference proceedings filed briefs in this matter. Oral arguments were
presented before the Patent Office on March 1, 1996. A decision by the Patent
Office is expected within six (6) months after the oral hearing. Such
decision would complete the administrative process. The non-prevailing
party would then have the right, upon the filing of appropriate petitions,
to pursue its case in Federal Court. The Company, if the non-prevailing
party, would remain in possession of the issued US Patent while it pursues
its case in Federal Court. The Company has vigorously defended its
patent rights in this interference contest and will continue such efforts.
The Company is uncertain as to the ultimate outcome of the above matter, as
well as the associated effect upon the Company's financial position and
results of operations.
ITEM 2 Management's Discussion and Analysis of Financial Condition and
Results of Operations
RESULTS OF OPERATIONS
Revenues for the second quarter and six months ended June 30, 1996 increased
to $11.5 million and $15.9 million, respectively, representing increases of
30% for the quarter and 21% for the six month period over the respective
periods in 1995. The revenue increases for the quarter and for the six month
period were attributable primarily to higher unit volume of the Company's FRAM
and EDRAM products as compared with the same periods in 1995. Although there
was also a significant increase in license fee revenue for the quarter and six
months ended June 30, 1996 as compared to the same periods in 1995, the
increase was offset by a significant decrease in royalty revenue.
Product sales revenue for the second quarter and six months ended June 30,
1996 increased to $6.4 million and $10.8 million, respectively, representing
increases of 109% and 94% for the six month period over the respective periods
in 1995. The Company's product revenue mix continues to be dominated by EDRAM
product sales with EDRAM product revenue totaling 93% and 91% of total product
revenue for the second quarter and six months ended June 30, 1996,
respectively. FRAM product revenues for the second quarter and six months
ended June 30, 1996 increased to $.5 million and $1 million, respectively,
representing increases of 36% for the quarter and 69% for the six month period
over the respective periods in 1995. Increases in FRAM product revenues for
the first six months in 1996 as compared to the same period in 1995 resulted
primarily from increased sales volume to a single customer for use in a
set-top box application. EDRAM product revenues for the second quarter and
<PAGE>
six months ended June 30, 1996 increased to $6 million and $9.9 million,
respectively, representing increases of 118% for the quarter and 97% for the
six month period over the respective periods in 1995. Increases in EDRAM
product shipments during the first six months of 1996 as compared with the
same period in 1995 resulted primarily from an increased supply of EDRAM
product during the period enabling the Company to fulfill its previous
delinquent customer backlog and supply EDRAM product to new customers. The
rate of EDRAM product revenue growth is expected to decrease in the remaining
two quarters of 1996 resulting from competitive pressure on pricing and the
now fulfilled delinquent customer backlog.
No royalty revenue was recorded in the second quarter or the six months ended
June 30, 1996 as the contract that produced such royalty revenue of $5.1
million and $6.5 million for the same periods in 1995 terminated during the
second quarter of 1995.
License fee revenue during the quarter and for the six months ended June 30,
1996 resulted from the achievement of milestones pursuant to existing license
agreements with Hitachi Ltd., Rohm Co., Ltd., and Fujitsu Ltd. License fee
revenue for the six month period ending June 30, 1995 resulted from license
agreements with Racom Systems, Inc., and Intag International Ltd., regarding
the use of the Company's ferroelectric technology.
Cost of product sales as a percentage of product revenues during the quarter
and for the six months ended June 30, 1996 were 74% and 75%, respectively,
compared with 97% and 96% for the same periods in 1995. The improvement in
cost of sales as a percentage of product revenues is related directly to the
Company's EDRAM products. Increased sales volumes, favorable average selling
prices and lower supply costs were the primary reasons leading to the improved
cost of product sales percentages during 1996. Cost of product sales
percentages for FRAM products remains high due primarily to the introduction
of new designs, low volume of manufacturing and changes in manufacturing
processes. FRAM product cost of sales percentages are expected to remain high
until certain economies relating to volume manufacturing and more efficient
designs can be realized internally and through the Company's alliance foundry
relationships.
Research and development expenses for the second quarter and six months ended
June 30, 1996 remained flat compared to the same periods in 1995. Decreases
in research and development expenses during the first six months of 1996
occurred as a result of decreases in manufacturing volumes associated with
research and development activities and from decreases in design costs
associated with the Company's EDRAM products, but were offset by expenses
related to the Company's incentive program totaling $.6 million and $1 million
for the second quarter and six months ended June 30, 1996, respectively, with
no such expenses being recorded during the same periods in 1995 (see Note 6
to Notes to Consolidated Financial Statements).
Sales, general and administrative expenses for the second quarter and six
months ended June 30, 1996 increased 48% and 23%, respectively, as compared
with the same periods in 1995 due primarily to foreign tax withholding of
$.5 million on license fee revenue recognized during the second quarter of
1996, commissions on increased product sales and expenses associated with the
Company's incentive program. Sales, general and administrative expenses for
the second quarter and six months ended June 30, 1996 included incentive
expenses of $.5 million and $.7 million, respectively, with no such expense
being recorded for the same periods in 1995 (see Note 6 to Notes to
Consolidated Financial Statements).
Sales, general and administrative expenses, related parties, for the six
months ended June 30, 1996 decreased by $148,000 as compared to the same
period in 1995. Such decreases resulted from the discontinuation of services
from companies owned by Oren L. Benton.
<PAGE>
Interest expense, related parties for the second quarter and six months ended
June 30, 1996 decreased by $.7 million (90%) and $1.4 million (90%),
respectively, as compared with the same periods in 1995 resulting from the
conversion of approximately $27 million of debt to equity during the last six
months of 1995.
LIQUIDITY AND CAPITAL RESOURCES
The Company's cash balance as of June 30, 1996 was $6.2 million, representing
a $60,000 decrease for the first six months of 1996. The Company's primary
sources of liquidity during the first six months of 1996 were cash flows from
operations and the issuance of common stock pursuant to the exercise of stock
options in the amounts of $270,000 and $280,000, respectively. The primary
uses of cash for the same period were for the purchase of equipment and stock
registration costs in the amounts of $490,000 and $120,000, respectively.
Working capital as of June 30, 1996 totaled $10.2 million, a decrease of
approximately $2.5 million from December 31, 1995.
The Company intends to finance its operations and working capital requirements
during the remainder of 1996 by relying on its existing cash resources as of
June 30, 1996, which consist of $6.2 million of cash and $1.7 million of
deposits for future EDRAM inventory purchases. In addition, the Company
intends to rely on payments from existing and future license and development
agreements and from the sale of the Company's products. If required, the
Company also has amounts available to it under a credit facility of $9.4
million as of June 30, 1996. Such credit facility agreement does not contain
any requirements for the Company to satisfy any performance criteria or
specific financial covenants other than those typically found in standard
commercial credit agreements in order for the Company to borrow amounts
pursuant to the credit facility.
The Company's future capital requirements include financing the growth of
working capital items such as accounts receivable and inventory, the purchase
of manufacturing equipment and the funding of research and development
efforts. The Company is continuing to pursue additional license and
development arrangements with third parties as a source of such capital.
The Company will also continue to seek reasonable sources of financing to
satisfy its future operating and working capital requirements, but has not
yet identified any specific new sources of such financing. There can be no
assurance, however, that such financing, if required, will be available or,
if available, will be on satisfactory terms to the Company.
FACTORS AFFECTING FUTURE RESULTS
This quarterly report contains forward-looking statements including statements
regarding the timing and composition of revenues, future operating results and
the timing of product introductions, among others. Except for historical
information, the matters discussed in this report are forward-looking
statements that are subject to certain risks and uncertainties that could
cause the actual results to differ materially from those projected. Factors
that could cause actual results to differ materially include the following:
(i) the timely completion of the development and qualification for
manufacturing of the Company's new EDRAM and FRAM products; (ii) broader
customer acceptance of its EDRAM products and low-density FRAM products; (iii)
acceptance of new high-density FRAM products, which may be developed; (iv) the
Company's and its alliance partners' ability to manufacture its products on a
cost-effective and timely basis in the Company's own facility and through its
alliance foundry operations; (v) the Company's ability to perform under
existing alliance agreements and to develop new alliance relationships; (vi)
the availability and related cost of future financing; (vii) the retention of
key personnel; (viii) the outcome of patent interference proceedings,
and (ix) factors not directly related to the Company, such as competitive
pressures on pricing, market conditions in general, competition, technological
progressions, product obsolescence and the changing needs of potential
customers and the semiconductor industry in general.
<PAGE>
OUTLOOK
The Company expects revenues will continue to be sporadic in the foreseeable
future until the Company's products gain wider market acceptance and can be
manufactured in increased volumes and in a cost effective manner. The Company
currently depends on revenues from new license arrangements and upon the
achievement of milestones under the Company's existing and new license
agreements as the primary contributor of positive operating results. Such
license revenue does not typically occur on a consistent basis and is
therefore expected to create substantial fluctuations in the Company's
future quarterly revenues and results of operations.
The Company is continuing efforts to improve its existing internal
manufacturing capabilities and obtain commercial production of its FRAM
products through its alliance partners which the Company believes is essential
to its future profitability. The Company expects certain of its FRAM alliance
partners to announce the availability of FRAM product engineering samples
during the second half of 1996 with commercial quantities expected to be
available during the first half of 1997. The Company is also continuing its
efforts to reduce the cost of its FRAM products as well as developing for
commercialization high-density FRAM products.
A second source for manufacturing of the Company's EDRAM products through IBM
has produced a limited quantity of products to date with the delivery of
commercial production expected by the end of September 1996. The Company is
continuing to pursue additional sources of EDRAM production. The Company is
also continuing its efforts to decrease the cost of its EDRAM products,
develop new higher density products and enhance existing designs to contribute
to the operating results of the Company.
There can be no assurance that the Company's foundry and alliance partners
will be able to achieve commercial production of the products currently in
development or in the periods presented above. If such commercial production
is not achieved or is not achieved in a timely manner, the Company's results
of operations could be materially affected.
PART II - OTHER INFORMATION
Items 1 - 5 None
Item 6 - Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 27 - Financial Data Schedule
(b) Reports on Form 8-K
No reports have been filed on Form 8-K
during this quarter.
<PAGE>
RAMTRON INTERNATIONAL CORPORATION
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
RAMTRON INTERNATIONAL CORPORATION
(Registrant)
August 9, 1996 /S/ Richard L. Mohr
Richard L. Mohr
Executive Vice President and
Chief Financial Officer
(Principal Accounting Officer)
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 6,227
<SECURITIES> 0
<RECEIVABLES> 3,599
<ALLOWANCES> 468
<INVENTORY> 7,710
<CURRENT-ASSETS> 20,013
<PP&E> 22,158
<DEPRECIATION> 12,590
<TOTAL-ASSETS> 34,955
<CURRENT-LIABILITIES> 9,816
<BONDS> 0
<COMMON> 365
0
0
<OTHER-SE> 20,663
<TOTAL-LIABILITY-AND-EQUITY> 34,955
<SALES> 15,942
<TOTAL-REVENUES> 15,942
<CGS> 8,107
<TOTAL-COSTS> 19,506
<OTHER-EXPENSES> (126)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 157
<INCOME-PRETAX> (3,595)
<INCOME-TAX> 0
<INCOME-CONTINUING> (3,595)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,595)
<EPS-PRIMARY> ($.10)
<EPS-DILUTED> 0
</TABLE>
