<PAGE> 1
CONFORMED
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the six months ended September 30, 1997 Commission File No. 333-30679
TELEX COMMUNICATIONS, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 13-3521030
-------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
9600 ALDRICH AVENUE SOUTH, MINNEAPOLIS, MINNESOTA 55420
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
Registrant's telephone number, including area code: (612) 884-4051
---------------
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
--- ---
500 COMMON SHARES WERE OUTSTANDING AS OF SEPTEMBER 30, 1997
THIS DOCUMENT CONTAINS 12 PAGES.
================================================================================
1
<PAGE> 2
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATMENTS
TELEX COMMUNICATIONS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands)
(UNAUDITED)
<TABLE>
<CAPTION>
QUARTER ENDED SIX MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
--------------------------------------------------------------
1997 1996 1997 1996
---------- ---------- ---------- ------------
<S> <C> <C> <C> <C>
Net Sales $ 43,109 $ 41,646 $ 82,653 $ 78,850
Cost of sales 24,657 24,021 48,142 45,354
--------- ---------- ---------- ----------
18,452 17,625 34,511 33,496
Operating expenses:
Engineering and development 2,189 1,663 4,618 3,391
Marketing 4,938 4,803 10,608 9,136
General and administrative 4,068 2,080 15,319 4,060
Corporate charges 430 - 692 -
Amortization of goodwill and other
intangibles 412 411 944 823
--------- ---------- ---------- ----------
12,037 8,957 32,181 17,410
--------- ---------- ---------- ----------
Operating profit (loss) 6,415 8,668 2,330 16,086
Other income (expense):
Interest (6,023) (3,135) (13,066) (6,287)
Recapitalization 202 - (6,750) -
Other, net 43 418 346 808
--------- ---------- ---------- ----------
Income (loss) before income taxes and
extraordiny loss 637 5,951 (17,140) 10,607
Provision (benefit) for income taxes 259 2,423 (4,171) 4,136
--------- ---------- ---------- ----------
Income (loss) before extraordinary loss 378 3,528 (12,969) 6,471
Extraordinary loss on early retirement of
debt, net of income taxes - - (10,553) -
--------- ---------- ---------- ----------
Net income (loss) $ 378 $ 3,528 $ (23,522) $ 6,471
========= ========== ========== ==========
</TABLE>
See accompanying notes.
2
<PAGE> 3
TELEX COMMUNICATIONS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
<TABLE>
<CAPTION>
ASSETS
September 30, March 31,
1997 1997
----------- ---------
(UNAUDITED)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 358 $ 35,742
Accounts receivable, net of allowance 27,888 29,459
Recoverable income taxes 7,976 -
Inventories 27,290 23,495
Deferred income taxes 2,813 2,813
Other 1,801 1,525
---------- ---------
Total current assets 68,126 93,034
Property, plant and equipment, net of accumulated
depreciation 21,409 20,867
Deferred financing costs 9,964 2,525
Deferred income taxes 14,953 3,990
Intangible assets, net of accumulated amortization 19,456 20,400
---------- ---------
$ 133,908 $ 140,816
========== =========
LIABILITIES AND SHAREHOLDER'S EQUITY (DEFICIT)
Current liabilities:
Accounts payable $ 9,536 $ 12,224
Revolving line of credit 2,300 -
Accrued wages and benefits 4,255 3,813
Pension accrual 1,648 1,535
Taxes other than income taxes 201 470
Other accrued liabilities 5,741 5,374
Accrued interest 5,938 2,504
Income taxes 189 2,991
Current maturities of long-term debt 3,750 -
---------- ---------
Total current liabilities 33,558 28,911
Long-term debt 236,250 100,000
Due to parent 3,758 3,502
Pension accrual 1,844 1,844
Other accrued liabilities 342 303
Shareholder's equity (deficit):
Common stock and capital in excess of par 2,521 20,001
Cumulative translation adjustment (27) -
Accumulated deficit (144,338) (13,745)
---------- ---------
Total shareholder's equity (deficit) (141,844) 6,256
---------- ---------
$ 133,908 $ 140,816
========== =========
</TABLE>
See accompanying notes.
3
<PAGE> 4
TELEX COMMUNICATIONS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
SEPTEMBER 30,
----------------------
OPERATING ACTIVITIES: 1997 1996
---- ----
<S> <C> <C>
Net income (loss) $ (23,522) $ 6,471
Adjustments to reconcile net income (loss) to cash flows from operations:
Depreciation 2,021 1,996
Amortization of intangibles and deferred financing costs 1,529 1,009
Provision for bad debts 121 75
Write-off of deferred financing costs 4,171 -
Transactions expense 6,750 -
Bond premium, consent and tender fees paid on early retirement of debt 15,093 -
Non-cash compensation expense from change in terms of options 7,410 -
Non-cash compensation expense from option grants 2,520 -
Deferred income taxes (10,964) -
Change in operating assets and liabilities:
Income taxes 104 912
Receivables 1,450 (49)
Inventories (3,795) (2,750)
Other current assets (275) (288)
Accounts payable and accrued expenses (2,377) (682)
Accrued interest 3,434 13
Change in non-current liabilities 295 402
--------- ---------
Net cash provided by operating activities 3,965 7,109
--------- ---------
INVESTING ACTIVITIES:
Additions to property, plant and equipment (2,563) (5,240)
--------- ---------
Net cash (used in) investing activities (2,563) (5,240)
--------- ---------
FINANCING ACTIVITIES:
Proceeds from issuance of long-term debt 115,000 -
Proceeds from issuance of 10.5% Notes 125,000 -
Change in revolving line of credit, net 2,300 -
Retirement of 12% Notes (100,000) -
Bond premium, consent and tender fees paid on early retirement of debt (15,093) -
Equity contribution from parent 108,353 -
Repurchase common stock and outstanding options (253,898) -
Deferred financing costs (12,195) -
Transactions expense (6,253) -
--------- ---------
Net cash (used in) investing activities (36,786) -
--------- ---------
CASH AND CASH EQUIVALENTS:
Net increase (decrease) (35,384) 1,869
Beginning of period 35,742 23,001
--------- ---------
End of period $ 358 $ 24,870
========= =========
SUPPLEMENTAL DISCLOSURES OF CASH PAID FOR:
Interest $ 8,911 $ 6,028
========= =========
Income taxes (refunds), net $ (518) $ 3,207
========= =========
</TABLE>
See accompanying notes.
4
<PAGE> 5
TELEX COMMUNICATIONS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. Telex Communications, Inc. ("Telex" or the "Company"), a Delaware
corporation, is a wholly owned subsidiary of Telex Communications Group,
Inc. ("TCG").
The condensed consolidated balance sheet as of September 30, 1997 and the
condensed consolidated statements of operations and cash flows for the
quarters and six months ended September 30, 1997 and 1996, have been
prepared by the Company without being audited.
In the opinion of management, these financial statements reflect all
adjustments (which include only normal recurring accruals) necessary to
present fairly the financial position of Telex at September 30, 1997 and the
results of its operations and cash flows for all periods presented.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. Therefore, these statements
should be read in conjunction with the more detailed information, risk
factors and financial statements, including the related notes, included in
the Registration Statement on Form S-4 filed with the Securities and
Exchange Commission on September 5, 1997.
The results of operations for interim periods are not necessarily indicative
of results which will be realized for the full fiscal year.
2. Inventories consist of the following, in thousands:
<TABLE>
<CAPTION>
SEPTEMBER 30, MARCH 31,
1997 1997
---- ----
<S> <C> <C>
Raw materials and parts $ 17,147 $ 15,097
Work in process 3,682 2,954
Finished products 6,461 5,444
----------- ----------
$ 27,290 $ 23,495
=========== ==========
</TABLE>
3. Telex's tax provision is calculated on a separate company basis, and
Telex's taxable income is included in the consolidated federal income tax
returns of TCG. The amount listed as "Due to parent" represents the tax
benefit Telex received from TCG.
4. The Company calculated its income tax provision for interim periods by
estimating its annual effective tax rate and applying this rate to the
income before income taxes for the interim period. The effective tax
(benefit) rate applied was 40.7% and 24.3% for the quarter and six months
ended September 30, 1997. The effective tax rate for the same periods in
Fiscal 1997 was 40.7% and 39.0%, respectively.
5
<PAGE> 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
FORWARD LOOKING STATEMENTS
The statements in of this Form 10-Q that are forward looking are based on
current expectations, and actual results may differ materially. Forward
looking statements involve numerous risks and uncertainties that could cause
actual results to differ materially, including, but not limited to: the timely
development and market acceptance of new products; the impact of competitive
products and pricing; the effect of changing general and industry specific
economic conditions; the Company's ability to access external sources of
capital; and such risks and uncertainties detailed from time-to-time in the
Company's Securities and Exchange Commission reports and filings.
RESULTS OF OPERATIONS
General. Telex Communications, Inc. ("Telex" or the "Company"), a Delaware
corporation, is a wholly owned subsidiary of Telex Communications Group, Inc.
("TCG"). TCG has no operations, and its principal asset is its investment in
the Company.
The following tables set forth, for the periods indicated, the Company's
net sales, in thousands:
<TABLE>
<CAPTION>
Quarter ended September 30, Six months ended September 30,
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Net Sales:
Professional Sound and
Entertainment $ 16,553 $ 14,922 $ 30,538 $ 28,605
Multimedia/Audio Communications 12,562 14,364 26,105 26,154
RF/Communications 6,577 5,764 12,085 11,532
Hearing Instruments 7,417 6,596 13,925 12,559
------------- ------------ ------------ ------------
Total net sales $ 43,109 $ 41,646 $ 82,653 $ 78,850
============= ============ ============ ============
</TABLE>
QUARTER AND SIX MONTHS ENDED SEPTEMBER 30, 1997 COMPARED TO THE QUARTER AND
SIX MONTHS ENDED SEPTEMBER 30, 1996.
Net sales increased $1.5 million (3.5%), and $3.8 million (4.8%) for the
quarter and six months ended September 30, 1997, respectively, due to increased
shipments in three of the four business segments.
Net sales of Professional Sound and Entertainment products increased $1.6
million (10.9%), and $1.9 million (6.8%) for the quarter and six months ended
September 30, 1997, respectively, primarily due to increased shipments of
wireless microphone products. The increase in wireless microphone shipments
was primarily the result of new products introduced in the fourth quarter of
Fiscal 1997.
6
<PAGE> 7
Net sales of Multimedia/Audio Communications products decreased $1.8 million
(12.5%), and $0.1 million (0.2%) for the quarter and six months ended September
30, 1997, respectively, primarily as a result of decreased shipments of LCD
projection products partially offset by increased shipments of aircraft
communications products.
Net sales of RF/Communications products increased $0.8 million (14.1%), and
$0.6 million (4.8%) for the quarter and six months ended September 30, 1997,
respectively, as a result of increased shipments of CB microphones, commercial
antenna systems and talking book players to the Library of Congress.
Net sales of Hearing Instruments products increased $0.8 million (12.5%), and
$1.4 million (10.9%) for the quarter and six months ended September 30, 1997,
respectively. This improvement is due to higher unit volumes of the Company's
hearing aid and auditory trainer products.
Gross profit increased $0.8 million (4.7%), and $1.0 million (3.0%) for the
quarter and six months ended September 30, 1997,respectively. Gross margin
increased 0.5 percentage points from 42.3% for the quarter ended September 30,
1996 to 42.8% for the quarter ended September 30, 1997. The rate increase was
the result of higher gross margins in the Professional Sound and Entertainment
segment offset by declines in gross margins for the Multimedia/Audio
Communications, Hearing Instruments and RF/Communications segments.
Operating expenses for the quarter and six months ended September 30, 1997 (not
including costs related to the Transactions of $1.8 million and $9.5 million,
respectively), increased $1.2 million (13.9%), and $3.4 million (19.6%),
respectively. Operating expenses represented 23.7%, and 25.2% of net sales for
the quarter and six months ended September 30, 1997, compared to 21.5% and
22.1% of net sales for the same periods in Fiscal 1997. Engineering expenses
increased by $0.5 million (31.6%), and $1.2 million (36.2%) for the quarter and
six months ended September 30, 1997, respectively, primarily due to increased
outside development costs incurred to accelerate new product development.
Marketing expenses increased $0.1 million (2.8%), and $1.5 million (16.1%) for
the quarter and six months ended September 30, 1997, respectively, primarily
due to increased advertising and marketing development costs associated with
new products, and increased travel and commission expenses. Marketing expense
decreased $0.7 million (12.9%) for the quarter ended September 30, 1997, from
the unusually high levels for the quarter ended June 30, 1997, and were
consistent with management's expectations. Marketing expenses represented
11.5% and 12.8% of sales for the quarter and six months ended September 30,
1997, respectively, compared with 11.5% and 11.6% of sales for the same periods
in Fiscal 1997.
Excluding the Transactions, general and administrative expenses increased $0.2
million (7.5%), and decreased $0.1 million (2.5%) for the quarter and six
months ended September 30, 1997, respectively. Included in general and
administrative expenses for the quarter and six months ended September 30,
1997, were compensation charges of $1.8 million and $11.1 million,
respectively, associated with changes in the terms of the Rollover Options, new
option grants and special management bonus compensation. Corporate charges
include fees in the amount of $0.4 million and $0.7 million for the quarter and
six months ended September 30, 1997, respectively, for consulting and
management services provided by GSCP under a management and services agreement.
7
<PAGE> 8
Interest expense increased $2.9 million (92.1%), and $6.8 million (107.8%) for
the quarter and six months ended September 30, 1997. The increase was due to
$1.7 million of loan fees paid in connection with a bridge loan commitment
related to the Transactions in the first quarter and an increase in average
outstanding indebtedness for the quarter and six months ended September 30,
1997.
The Company calculates its income tax provision (benefit) for interim periods
by estimating its annual effective tax rate and applying this rate to the
income (loss) before income taxes for the interim periods. The effective tax
(benefit) rate applied was 40.7% and 24.3% for the quarter and six months ended
September 30, 1997, respectively. The effective tax rate was 40.7% and 39.0%
for the same periods in Fiscal 1997.
In the first quarter of Fiscal 1998 the Company recorded an extraordinary loss
on the early retirement of debt consisting of the bond premium, consent and
tender fees, along with the write-off of deferred financing costs associated
with the repurchase and early retirement of the Company's $100.0 million Senior
Notes, which totaled $17.6 million ($10.6 million net of income taxes).
LIQUIDITY AND CAPITAL RESOURCES
At September 30, 1997, the Company had cash and cash equivalents of $0.4
million compared to $35.7 million at March 31, 1997. The ratio of current
assets to current liabilities decreased to 2.0 to 1.0 at September 30, 1997,
compared to 3.2 to 1.0 at March 31, 1997. The decrease in cash and cash
equivalents and the ratio of current assets to current liabilities was the
result of the Transactions, which utilized $36.5 million of available cash.
The Company's principal source of funds has consisted of cash generated from
operating activities. Historically, the Company's principal non-operating uses
of cash have been for interest expense, repayments of long-term debt, capital
expenditures, and certain repurchases of TCG securities. Net cash provided by
operations for the six months ended September 30, 1997, was $4.0 million versus
$7.1 million for the same period in Fiscal 1997. The decrease in cash provided
by operations was primarily the result of lower operating profit and the
recording of the Transactions. Net cash used in financing activities for the
six months ended September 30, 1997, was $36.8 million. There were no cash
flows from financing activities for the comparable period in Fiscal 1997. The
net cash used in financing activities was for fees and expenses associated with
the Transactions of $6.3 million which were charged to non-operating expense,
deferred debt financing fees of $12.2 million and bond premium, consent and
tender fees paid on the early retirement of debt of $15.1 million.
Inventory has increased at September 30, 1997 $3.8 million (16.2%) from March
31, 1997, primarily in preparation for new product launches scheduled for the
remaining two quarters in Fiscal 1998. As the Company introduces new products,
the potential for inventory obsolescence is addressed by: coordinating the
phase out of products nearing the end of their salable lives, conducting
reviews for obsolescence and related liquidation measures, and providing
monthly provisions to ensure an adequate reserve is maintained.
8
<PAGE> 9
The Company's capital expenditures were $2.6 million for the six months ended
September 30, 1997, compared to $5.2 million for the same periods in Fiscal
1997. The decrease in capital expenditures for the six months ended September
30, 1997 was anticipated, as the Company is nearing completion of the project
to replace and upgrade the Company's computer information systems. The Company
anticipates that capital expenditures to complete the upgrade of the Company's
computer information systems will total approximately $1.8 million in Fiscal
1998. The Company anticipates total capital expenditures for Fiscal 1998 will
be approximately $4.5 million. This amount includes approximately $2.7 million
that management estimates is required for maintenance levels of capital
expenditures.
The Company has an available $25.0 million commitment under the Revolving
Credit Facility, subject to a borrowing base calculation. As of September 30,
1997, there was $2.3 million outstanding and net availability under the
Revolving Credit Facility (computed by deducting approximately $3.2 million of
letters of credit outstanding) totaled $19.5 million, subject to borrowing base
limitations. The effective interest rate under the Company's Senior Secured
Credit Facility for the quarter and six months ended September 30, 1997 was
approximately 8.7% and 8.6%, respectively.
As a result of the Transactions, the Company's consolidated indebtedness at
September 30, 1997 increased to $242.3 million, compared to $100.0 million at
March 31, 1997. The degree to which the Company is leveraged could have
important consequences, including the following: (i) the Company's ability to
obtain additional financing in the future for working capital, capital
expenditures, acquisitions, general corporate purposes or other purposes may be
impaired; (ii) a substantial portion of the Company's cash flows from
operations must be dedicated to the payment of interest on the Company's
long-term debt and its other existing indebtedness; (iii) the agreements
governing the Company's long-term indebtedness contain certain restrictive
financial and operating covenants; (iv) the Company is substantially more
leveraged than certain of its competitors, which might place the Company at a
competitive disadvantage; (v) the Company may be hindered in its ability to
adjust rapidly to changing market conditions; and (vi) the Company's
substantial degree of leverage could make it more vulnerable in the event of a
downturn in general economic conditions or its business.
Management believes that cash generated from operations, together with amounts
available under the Revolving Credit Facility, will be adequate to meet its
debt service and principal payment requirements, capital expenditure needs and
working capital requirements. However, no assurance can be given in this
regard and working capital requirements may change. The Company's future
operating performance and its ability to service its obligations under the
Notes and the Senior Secured Credit Facility will be subject to future economic
conditions and to financial, business and other factors, many of which are
beyond the Company's control.
9
<PAGE> 10
MANAGEMENT OF FOREIGN CURRENCY RISK
The Company enters into forward exchange contracts to hedge inventory purchases
denominated in Japanese yen on a continuing basis for periods consistent with
its inventory purchase commitments. These foreign exchange contracts typically
have maturities which do not exceed one year and require the Company to
exchange U.S. dollars for Japanese yen at maturity, at rate agreed to at the
inception of the contracts. As of September 30, 1997, the Company had foreign
currency forward exchange contracts, all having a maturity of less than one
year, to exchange yen for U.S. dollars in the amount of $1.7 million. Gross
deferred unrealized losses from hedging firm purchase commitments at September
30, 1997 were not material.
ENVIRONMENTAL MATTERS
The Company is a party in a number of environmental enforcement matters and
related claims which have arisen in the ordinary course of business. The
Company believes that such matters and claims, if finally determined in a
manner adverse to the Company, whether considered separately or in the
aggregate, would not have a material adverse effect on the operating results or
financial condition of the Company. The Company believes that compliance with
current federal, state and local environmental protection laws and provisions
should not have a material adverse effect on the operating income or financial
condition of the Company. The assessment of materiality of such environmental
matters and claims is based on a gross determination of such charges that could
occur and does not give effect to possible third party recoveries.
10
<PAGE> 11
PART II. OTHER INFORMATION
ITEM 5 OTHER INFORMATION
On October 10, 1997, the Company completed the Exchange Offer of its
outstanding 10 1/2% Senior Subordinated Notes due 2007 (the "Existing Notes")
for new 10 1/2% Senior Subordinated Notes due 2007 (the "New Notes"). All of
the Existing Notes were tendered and accepted for exchange in the Exchange
Offer.
The New Notes were registered under the Securities Act of 1933, as amended (the
"Securities Act"), pursuant to a Registration Statement on Form S-4, filed with
the Securities and Exchange Commission on September 5, 1997. The Existing
Notes were originally issued and sold in a transaction under the Securities Act
and resold to certain qualified institutional buyers in reliance on, and
subject to the restriction imposed pursuant to, Rule 144A under the Securities
Act. The terms of the New Notes are identical in all material respects to the
terms of the Existing Notes for which they were exchanged pursuant to the
Exchange Offer, except that the New Notes have been registered under the
Securities Act.
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
27 Financial data schedule Filed herewith electronically
(b) Reports on Form 8-K
There were no reports on Form 8-K filed during the six months ended
September 30, 1997.
11
<PAGE> 12
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.
<TABLE>
TELEX COMMUNICATIONS, INC.
<S> <C>
Dated: October 31, 1997 By: /s/ John Hale
---------------- ------------------------------------
John L. Hale
Chairman of the Board,
(President and Chief Executive Officer)
TELEX COMMUNICATIONS, INC.
Dated: October 31, 1997 By: /s/ John Hislop
---------------- -----------------------------------
John T. Hislop
Vice President, Chief Financial Officer,
(Principal Financial & Accounting
Officer)
</TABLE>
12
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-START> APR-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 358
<SECURITIES> 0
<RECEIVABLES> 27,888
<ALLOWANCES> 0
<INVENTORY> 27,290
<CURRENT-ASSETS> 68,126
<PP&E> 21,409
<DEPRECIATION> 0
<TOTAL-ASSETS> 133,908
<CURRENT-LIABILITIES> 33,558
<BONDS> 125,000
0
0
<COMMON> 2,521
<OTHER-SE> (144,365)
<TOTAL-LIABILITY-AND-EQUITY> 133,908
<SALES> 82,653
<TOTAL-REVENUES> 82,653
<CGS> 48,142
<TOTAL-COSTS> 48,142
<OTHER-EXPENSES> 32,181
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 13,066
<INCOME-PRETAX> (17,140)
<INCOME-TAX> (4,171)
<INCOME-CONTINUING> (12,969)
<DISCONTINUED> 0
<EXTRAORDINARY> (10,553)
<CHANGES> 0
<NET-INCOME> (23,522)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
