<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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 September 27, 1997
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 0-8105
RYKOFF-SEXTON, INC.
(Exact name of registrant as specified in its charter)
Delaware 95-2134693
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
613 Baltimore Drive
Wilkes-Barre, Pennsylvania 18702
(Address of principal executive offices) (Zip Code)
(717) 831-7500
(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, 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.
Outstanding at
Class of Common Stock October 31, 1997
--------------------- -----------------
$.10 par value 28,662,963 shares
<PAGE>
RYKOFF-SEXTON, INC.
INDEX
Page
No.
Part I. Financial Information
Item l. Financial Statements
Condensed Consolidated Balance Sheets
September 27, 1997 and June 28, 1997 1
Condensed Consolidated Statements of Operations
Thirteen Weeks ended September 27, 1997 and
September 28, 1996 2
Condensed Consolidated Statements of Cash Flows
Thirteen Weeks ended September 27, 1997 and
September 28, 1996 3
Notes to Condensed Consolidated Financial
Statements 4, 5
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 6-9
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K 10
Signatures 11
<PAGE>
RYKOFF-SEXTON, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in Thousands)
<TABLE>
<CAPTION>
ASSETS
September 27, June 28,
1997 1997
(Unaudited)
------------ ------------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 47,133 $ 63,293
Accounts receivable, net 161,371 122,963
Inventories 228,668 210,547
Prepaid expenses 23,171 19,755
Deferred income taxes 18,998 24,797
------------ ------------
Total current assets 479,341 441,355
------------ ------------
Property, plant and equipment, net 314,699 296,012
Goodwill, net 434,563 437,361
Deferred income taxes, net 27,805 21,337
Other assets, net 20,998 22,957
------------ ------------
Total assets $ 1,277,406 $ 1,219,022
------------ ------------
------------ ------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 271,728 $ 231,791
Accrued compensation 19,333 20,815
Accrued liabilities 77,165 85,556
Current portion of long-term debt and capitalized leases 21,672 18,771
------------ ------------
Total current liabilities 389,898 356,933
------------ ------------
Long-term debt and capitalized leases, less current portion 498,662 486,731
------------ ------------
Other long-term liabilities 20,655 21,185
------------ ------------
Shareholders' equity:
Preferred Stock -- --
Common stock, at stated value 2,891 2,829
Additional paid-in capital 311,782 300,757
Retained earnings 56,533 53,685
------------ ------------
371,206 357,271
------------ ------------
Less: treasury stock, at cost 3,015 3,098
------------ ------------
Total shareholders' equity 368,191 354,173
------------ ------------
Total liabilities and shareholders' equity $ 1,277,406 $ 1,219,022
------------ ------------
------------ ------------
</TABLE>
See accompanying notes to condensed consolidated financial statements.
1
<PAGE>
RYKOFF-SEXTON, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in Thousands Except Per Share Amounts)
(Unaudited)
<TABLE>
<CAPTION>
Thirteen Weeks Ended
------------------------------
September 27, September 28,
1997 1996
------------- -------------
<S> <C> <C>
Net sales $ 870,938 $ 904,827
Cost of sales 696,839 727,440
------------- -------------
Gross profit 174,099 177,387
Warehouse, selling, delivery and general and
administrative expenses 150,272 155,928
Executive severance compensation 1,100 --
Amortization of goodwill and other intangibles 2,906 2,933
------------- -------------
Income from operations 19,821 18,526
Interest expense, net 11,515 11,272
Other expenses 3,013 3,137
------------- -------------
Income before provision for income taxes 5,293 4,117
Provision for income taxes 2,445 2,071
------------- -------------
Net income $ 2,848 $ 2,046
------------- -------------
------------- -------------
Weighted average number of shares of
common stock and equivalents outstanding 29,217 28,051
------------- -------------
------------- -------------
Net income per share $ 0.10 $ 0.07
------------- -------------
------------- -------------
Cash dividends per share $ -- $ 0.03
------------- -------------
------------- -------------
</TABLE>
See accompanying notes to condensed consolidated financial statements.
2
<PAGE>
RYKOFF-SEXTON, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
Thirteen Weeks Ended
----------------------------------------
September 27, 1997 September 28, 1996
------------------ ------------------
<S> <C> <C>
Cash flows from operating activities--
Net income $ 2,848 $ 2,046
Adjustments to reconcile net income to net
cash provided by (used in) operating activities --
Depreciation and amortization 11,023 10,939
(Gain) loss on sale of property, plant and equipment 102 (1,196)
Deferred income taxes 2,142 2,154
Changes in assets and liabilities:
(Increase) in receivables (38,408) (32,937)
(Increase) in inventories (18,121) (11,974)
(Increase) decrease in prepaid expenses and
other assets (2,835) 3,184
Increase in accounts payable
and accrued and other liabilities 29,507 44,054
------------------ ------------------
Net cash provided by (used in) operating activities (13,742) 16,230
------------------ ------------------
Cash flows from investing activities --
Capital expenditures (24,906) (7,092)
Proceeds from disposal of property, plant and
equipment 745 3,682
------------------ ------------------
Net cash used in investing activities (24,161) (3,410)
------------------ ------------------
Cash flows from financing activities--
Principal payments of long-term debt and capitalized
lease obligations (1,854) (386)
Increase under revolving credit line 15,000 15,000
Issuance of common stock (stock options) 8,597 619
Dividends paid -- (832)
------------------ ------------------
Net cash provided by financing activities 21,743 14,401
------------------ ------------------
Net increase (decrease) in cash and cash equivalents (16,160) 27,221
Cash and cash equivalents at beginning of period 63,293 22,045
------------------ ------------------
Cash and cash equivalents at end of period $ 47,133 $ 49,266
------------------ ------------------
------------------ ------------------
Supplemental disclosures of cash flow information --
Cash paid (refunds) during the period for:
Interest, net $ 8,511 $ 8,148
Income taxes, net 265 (2,481)
------------------ ------------------
------------------ ------------------
</TABLE>
See accompanying notes to condensed consolidated financial statements.
3
<PAGE>
RYKOFF-SEXTON, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. The condensed consolidated financial statements included herein have been
prepared by the Company, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain information
and footnote disclosures normally included in financial statements prepared
in accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations, although the
Company believes that the disclosures are adequate to make the information
presented not misleading. The foregoing financial information, not audited
by independent public accountants, reflects, in the opinion of the Company,
all adjustments (which included only normal recurring adjustments except as
otherwise noted) necessary to present fairly the information purported to
be shown and is not necessarily indicative of the results of the operations
for the entire fiscal year ending June 27, 1998. It is suggested that these
condensed consolidated financial statements be read in conjunction with the
financial statements and notes thereto included in the Company's latest
annual report on Form 10-K.
The Condensed Consolidated Balance Sheets present the assets, liabilities
and shareholders' equity of the Company as of September 27, 1997 and as of
June 28, 1997 (audited). The Condensed Consolidated Statements of
Operations include the results for the thirteen weeks ended September 27,
1997, compared to the thirteen weeks ended September 28, 1996. The Condensed
Statements of Cash Flows present the cash flows for the thirteen weeks ended
September 27, 1997, compared to the thirteen weeks ended September 28, 1996.
2. On June 30, 1997, JP Foodservice Inc. ("JP") of Columbia, Maryland, and the
Company announced the signing of a definitive merger agreement as amended
on September 3, 1997 and November 5, 1997 (the "Agreement") under which the
Company will be merged with a wholly-owned subsidiary of JP. Under the
terms of the Agreement, which was unanimously approved by the boards of
directors of both companies, the Company will merge into a wholly owned
subsidiary of JP in an exchange of stock in which the Company's shareholders
will receive 0.775 (revised from 0.84) of a share of JP common stock for
each share of the Company's common stock held. The transaction is expected
to be accounted for using the pooling-of-interests method and is intended to
qualify as a tax-free reorganization. Completion of the transaction is
subject to shareholder and regulatory approval and is expected to occur
before the end of calendar 1997.
3. Net income per share of common stock has been computed based on the
weighted average number of shares of common stock outstanding and dilutive
common stock equivalents.
In February, 1997 Statement of Financial Accounting Standards (SFAS)
No. 128, "Earnings per Share" was issued. This Statement is effective for
financial statements issued for periods ending after December 15, 1997,
including interim reporting periods. Earlier application is not permitted.
The change in calculating earnings per share under this Statement is that
basic earnings per share, which replaces primary earnings per share, will no
longer assume potentially dilutive securities. There would not have been
a material change in reported primary earnings per share if this statement
was effective for the current fiscal period.
4
<PAGE>
4. Inventories are summarized as follows (amounts in thousands):
September 27, June 28,
1997 1997
------------- -------------
Finished Goods $ 222,487 $ 204,576
Raw Materials 6,181 5,971
------------- -------------
$ 228,668 $ 210,547
------------- -------------
------------- -------------
All inventories are stated at the lower of cost or market, with
approximately 8% at September 27, 1997 determined by the last-in,
first-out ("LIFO") cost method and the remainder by the first-in,
first-out ("FIFO") cost method.
5. In connection with the May 17, 1996 US Foodservice merger, the Company
recorded a restructuring charge of $57.6 million ($35.7 million after tax)
in the transition period ended June 29, 1996, of which approximately $10.7
million related to severance and termination benefit costs, $20.2 million
related to lease related costs and $26.7 million related to other exit
costs, including the closure of duplicate facilities and other integration
activities. During the current fiscal quarter, the Company charged $1.7
million against the restructuring liability, leaving a remaining balance of
$23.7 million for future costs to be incurred. The $1.7 million utilization
primarily consisted of $624 thousand in severance payments, $631 thousand
in lease related costs and the remaining balance for closure costs, asset
writedowns and other obligations arising from the Company's restructuring
program. Most of the remaining cash outlays are estimated to be paid in
subsequent years (primarily related to non-cancelable operating lease
commitments).
6. The following represents summarized combined financial information of
the guarantor subsidiaries of the Company's $130 million principal amount
of 8 7/8% Senior Subordinated Notes.
Thirteen Weeks
As Of Ended
September 27, 1997 September 27, 1997
------------------ ------------------
(in thousands) (in thousands)
Current assets $ 273,038 Net sales $ 697,908
------------------ ------------------
Noncurrent assets 649,683 Cost of sales 568,639
------------------ ------------------
Current liabilities 278,929 Net income 323
------------------ -------------------
Noncurrent liabilities 599,939
------------------
5
<PAGE>
RYKOFF-SEXTON, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
BASIS OF PRESENTATION
This report discusses the consolidated results of Rykoff-Sexton, Inc. (the
"Company") for the thirteen weeks ended September 27, 1997, the first fiscal
quarter in the Company's fiscal year ending June 27, 1998. The discussion
will compare this fiscal year's first quarter results to the comparable prior
fiscal year's first quarter results.
RESULTS OF OPERATIONS
<TABLE>
<CAPTION>
In 000's:
Thirteen Weeks Ended Thirteen Weeks Ended
September 27, 1997 % of Sales September 28, 1996 % of Sales
-------------------- ---------- -------------------- ----------
<S> <C> <C> <C> <C>
Net sales $ 870,938 100.0% $ 904,827 100.0%
Cost of sales 696,839 80.0% 727,440 80.4%
-------------------- --------------------
Gross profit 174,099 20.0% 177,387 19.6%
Warehouse, selling, delivery and
general and administrative expenses 150,272 17.3% 155,928 17.2%
Executive severance compensation 1,100 0.1% --- 0.0%
Amortization of goodwill and other
intangibles 2,906 0.3% 2,933 0.3%
-------------------- --------------------
Income from operations 19,821 2.3% 18,526 2.1%
Interest expense, net 11,515 1.3% 11,272 1.3%
Other expenses 3,013 0.4% 3,137 0.4%
-------------------- --------------------
Income before provision for income
taxes 5,293 0.6% 4,117 0.4%
Provision for income taxes 2,445 0.3% 2,071 0.2%
-------------------- --------------------
Net income $ 2,848 0.3% $ 2,046 0.2%
-------------------- --------------------
-------------------- --------------------
</TABLE>
6
<PAGE>
NET SALES. Net sales for the thirteen weeks ended September 27, 1997 were
$870.9 million. This represents a decrease of $33.9 million or approximately
a 4.0% decline from the thirteen weeks ended September 28, 1996. This
decrease is primarily the result of the consolidation and rationalization of
distribution centers and customer relationships, respectively, that took
place following the merger with US Foodservice Inc. ("US Foodservice"), which
occurred on May 17, 1996. On a comparable branch basis (which excludes
closed, consolidated or significantly changed branches but includes
approximately 78% of the Company's quarterly sales) sales increased
approximately four percent. In fiscal 1998 the Company's efforts are being
refocused on sales growth so that by year end total fiscal 1998 sales are
anticipated to exceed total sales for the prior year.
GROSS PROFIT. Gross profit for the thirteen weeks ended September 27, 1997
was $174.1 million. Gross margin (gross profit as a percentage of net sales)
for the thirteen weeks ended September 27, 1997 was 20.0% compared to 19.6%
for the thirteen weeks ended September 28, 1996. The increase in gross margin
over the prior year comparable period is attributable to the Company's
purchasing synergies that are continuing to develop as a result of improved
vendor programs that were evaluated and re-negotiated following the US
Foodservice merger and as a result of changes in the mix of products sold and
in the mix of customers.
WAREHOUSE, SELLING, DELIVERY AND GENERAL AND ADMINISTRATIVE EXPENSES
(OPERATING EXPENSES). Operating expenses for the thirteen weeks ended
September 27, 1997 were $150.3 million. As a percentage of net sales,
operating expenses for the thirteen weeks ended September 27, 1997 were 17.3%
compared to 17.2% for the thirteen weeks ended September 28, 1996. The
slightly higher percentage results from the positive impacts of consolidation
and rationalization of distribution centers and customer relationships and
the negative impact of lower sales volume to cover the fixed portion of
operating expenses.
EXECUTIVE SEVERANCE COMPENSATION. During the thirteen weeks ended September 27,
1997, the employment of a senior executive was terminated and the present
value of severance compensation and related benefits aggregating $1.1 million
was charged to expenses.
AMORTIZATION OF GOODWILL AND OTHER INTANGIBLES. Amortization of goodwill and
other intangibles, resulting primarily from the merger with US Foodservice,
represents approximately $0.09 per share for both thirteen week periods.
INTEREST EXPENSE, NET. Interest expense, net, was $11.5 million for the
thirteen weeks ended September 27, 1997 compared to $11.3 million for the
thirteen weeks ended September 28, 1996. The interest expense, net, is
reflective of the Company's total debt following the US Foodservice merger.
At September 27, 1997 and September 28, 1996 total indebtedness including
current portion was $520.3 million and $515.9 million, respectively.
OTHER EXPENSES. Other expenses were $3.0 million for the thirteen weeks
ended September 27, 1997 and $3.1 million for the thirteen weeks ended
September 28, 1996. Other expenses consist of the charges incurred under
the Company's accounts receivable securitization facility.
PROVISION FOR INCOME TAXES. Provision for income taxes was $2.4 million for
the thirteen weeks ended September 27, 1997. The effective tax rate for the
thirteen week period is 46.2%, which approximates the expected effective tax
rate for the 1998 fiscal year. This effective rate is higher than the Federal
statutory income tax rate primarily because of non-deductible goodwill
amortization, which for the thirteen weeks ended September 27, 1997 was $2.6
million. The effective tax rate in the first quarter of fiscal 1998 is lower
than the rate in the first quarter of fiscal 1997 primarily due to a
reduction ($250 thousand) in the valuation allowance.
7
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
During the thirteen weeks ended September 27, 1997, cash and cash equivalents
decreased by $16.2 million. Cash was used primarily for seasonal working
capital requirements and capital expenditures for new distribution centers.
The working capital increase during this period is attributable to increased
school related business.
Net cash used in operations was $13.7 million during this period. Accounts
receivable and inventories increased $38.4 million and $18.1 million,
respectively. Accounts payable and accrued and other liabilities increased
$29.5 million during the same period. Reducing the increase in accounts
payable and accrued and other liabilities was a $7.1 million tax payment.
This represented the repayment of a carryback refund which will be available
on a carryforward basis to offset future taxable earnings.
The Company also utilized $24.9 million of cash for capital expenditures
associated with the ongoing construction costs for state-of-the-art
distribution facilities in Ft. Mill, South Carolina to replace the facility
in Charlotte, North Carolina and Las Vegas, Nevada for replacement of the
existing facility in this same location. These expenditures also included
$3.2 million of systems development and roll-out costs during the first
quarter. The utilization of cash flow in operating and investment activities
was partially funded through an increase in the Company's revolving credit
facility of $15 million and $8.6 million of proceeds from the exercise of
stock options.
The current period decrease in cash and cash equivalents represents a $43.3
million dollar change from the increase in cash and cash equivalents of $27.2
million for the same period in the prior year. The reasons for this change
include greater increases in receivables and inventory in the thirteen week
period ended September 27, 1997 versus the prior year accompanied by a lesser
increase in accounts payable and accrued and other liabilities this current
period versus the same period last year. The cumulative effect of these
three elements represents $30.0 million of the change. In addition, capital
expenditures were $17.8 million higher in this current thirteen week period
versus the same period last year. As noted above, the capital expenditure
increase is attributable to investments in two new distribution centers.
This increased utilization was partially offset by the $8.6 million in
proceeds from the exercise of stock options which were minimal in the prior
year. The fiscal 1998 tax benefit of $2.6 million from the exercise of stock
options has been credited directly to additonal paid-in capital.
8
<PAGE>
As of September 27, 1997, the Company's total indebtedness including current
portion was $520.3 million. Under the bank credit facility at September 27,
1997 the Company had $328.5 million in term loans outstanding. Availability
under the Company's revolving credit facility, net of outstanding letters of
credit, was $107.7 million.
The most recent dividend the Company paid was on March 3, 1997 and amounted
to $.03 per share of common stock. Under certain provisions of the Company's
current financing arrangements, the Company's ability to pay dividends could
be limited to a cumulative total of $5 million. The Board of Directors has
decided not to declare a dividend in the first quarter of fiscal 1998 in
light of the pending merger with JP.
Management believes that the Company will generate cash flows from operations
during fiscal 1998 and have sufficient capital resources to meet its
operating needs, as well as debt obligations and other cash outlays for the
foreseeable future. For the remainder of fiscal 1998, the Company on a stand
alone basis has plans for the expenditure of approximately $22.2 million of
capital in the construction of new distribution facilities and approximately
$25.1 million related to the implementation of a proprietary software system
and related hardware and the construction of regional processing centers. In
addition, ongoing maintenance capital expenditures are expected to be
approximately $21.3 million for the remainder of fiscal 1998. The Company may
elect, under certain provisions of the Company's current financing
arrangements, to finance all of the expenditures made on new distribution
facilities through industrial bonds or other mortgage financing. The Company
also holds for sale a number of commercial real estate properties with an
approximate net book value of $40 million as a result of the construction of
new distribution facilities and the consolidation and integration of
facilities that resulted from the merger with US Foodservice. Although the
Company cannot predict when, or how much these idle properties will be sold
for, it believes their net book value approximates fair market value.
FORWARD-LOOKING STATEMENTS
From time to time Rykoff-Sexton may publish forward-looking statements about
anticipated results. The Private Securities Litigation Reform Act of 1995
provides a safe harbor for forward-looking statements. In order to comply
with the terms of the safe harbor, the Company notes that such forward-looking
statements are based upon internal estimates which are subject to change
because they reflect preliminary information and management assumptions, and
that a variety of factors could cause the Company's actual results and
experience to differ materially from the anticipated results or other
expectations expressed in the Company's forward-looking statements. The
factors which could cause actual results or outcomes to differ from such
expectations include the extent of the Company's success in (i) integrating
all operations within the planned time frame; (ii) achieving increased sales
and marketing allowances from its enhanced purchasing leverage; and
(iii) achieving budgeted cost reductions, as well as gains or losses from
sales of the Company's operations, along with the uncertainties and other
factors, including unusually adverse weather conditions, described from time
to time in the Company's SEC filings and reports. This report includes
"forward-looking statements" including, without limitation, statements as to
liquidity and capital resources.
9
<PAGE>
PART II. OTHER INFORMATION
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
27 Financial Data Schedule
(b) Reports on Form 8-K
During the period ended September 27, 1997, the Company filed
the following reports on Form 8-K:
(1) The Company filed a report on From 8-K dated June 30,
1997 reporting the following items:
Item 5. Other Events.
Items 7. Financial Statements, Pro Forma Financial
Information and Exhibits.
(2) The Company filed a report on Form 8-K dated September 3,
1997 report the following items:
Item 5. Other Events.
Items 7. Financial Statements, Pro Forma Financial
Information and Exhibits.
10
<PAGE>
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.
RYKOFF-SEXTON, INC.
Date: November 07, 1997 /s/ Mark Van Stekelenburg
-------------------------------------
Mark Van Stekelenburg
Chairman and Chief Executive Officer
(Principal Executive Officer)
Date: November 07, 1997 /s/ Richard J. Martin
-------------------------------------
Richard J. Martin
Executive Vice President and
Chief Financial Officer
(Principal Financial Officer)
Date: November 07, 1997 /s/ Christopher I. Mellon
-------------------------------------
Christopher I. Mellon
Vice President and Controller
(Principal Accounting Officer)
11
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-27-1998
<PERIOD-START> JUN-29-1997
<PERIOD-END> SEP-27-1997
<CASH> 47,133
<SECURITIES> 0
<RECEIVABLES> 173,693
<ALLOWANCES> 12,322
<INVENTORY> 228,668
<CURRENT-ASSETS> 479,341
<PP&E> 464,418
<DEPRECIATION> 149,719
<TOTAL-ASSETS> 1,277,406
<CURRENT-LIABILITIES> 389,898
<BONDS> 498,662
0
0
<COMMON> 2,891
<OTHER-SE> 365,300
<TOTAL-LIABILITY-AND-EQUITY> 1,277,406
<SALES> 870,938
<TOTAL-REVENUES> 870,938
<CGS> 696,839
<TOTAL-COSTS> 154,278
<OTHER-EXPENSES> 3,013
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 11,515
<INCOME-PRETAX> 5,293
<INCOME-TAX> 2,445
<INCOME-CONTINUING> 2,848
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,848
<EPS-PRIMARY> 0.10
<EPS-DILUTED> 0.10
</TABLE>
