<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR QUARTERLY PERIOD ENDED MARCH 29, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 0-18339
SYLVAN INC.
(Exact name of registrant as specified in its charter)
NEVADA 25-1603408
(State or other jurisdiction of (IRS Employer Identification No.)
Incorporation or organization)
333 MAIN STREET, P.O. BOX 249, SAXONBURG, PA 16056-0249
(Address of principal executive offices) (Zip Code)
(724) 352-7520
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
--------- --------
Number of shares of Common Stock outstanding as of May 1, 1998........6,463,844
<PAGE> 2
SYLVAN INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
INDEX
Page No.
--------
<S> <C>
Part I - FINANCIAL INFORMATION
Item 1. Condensed Consolidated Balance Sheets
March 29, 1998 and December 28, 1997...........................................................3
Condensed Consolidated Statements of Income, Three Months
Ended March 29, 1998 and March 30, 1997........................................................5
Condensed Consolidated Statements of Cash Flows, Three
Months Ended March 29, 1998 and March 30, 1997.................................................6
Notes to Condensed Consolidated Financial Statements
March 29, 1998.................................................................................7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.................................................11
Part II - OTHER INFORMATION
Item 1. Legal Proceedings 14
Item 6. Exhibits and Reports on Form 8-K..............................................................14
</TABLE>
<PAGE> 3
Item 1. - Financial Statements
CONDENSED CONSOLIDATED BALANCE SHEETS
Sylvan Inc. and Subsidiaries
(In Thousands)
<TABLE>
<CAPTION>
March 29, 1998 December 28, 1997
-------------- -----------------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 5,471 $ 5,567
Trade accounts receivable, net of allowance
for doubtful accounts of $546 and $812, respectively 13,189 13,435
Inventories 9,621 8,723
Deferred income tax benefit 686 686
Prepaid expenses and other current assets 2,318 1,792
- ----------------------------------------------------------------------------------------------------------------
Total current assets 31,285 30,203
Property, plant and equipment, net 47,336 47,628
Intangible assets, net of accumulated amortization
of $2,743 and $2,647, respectively 11,135 11,466
Other assets, net of accumulated amortization
of $1,536 and $1,473, respectively 3,828 4,383
- ----------------------------------------------------------------------------------------------------------------
TOTAL ASSETS $ 93,584 $ 93,680
================================================================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE> 4
CONDENSED CONSOLIDATED BALANCE SHEETS
Sylvan Inc. and Subsidiaries
(In Thousands Except Share Data)
<TABLE>
<CAPTION>
March 29, 1998 December 28, 1997
-------------- -----------------
(Unaudited)
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable - trade $ 5,239 $ 5,643
Current portion of long-term debt 467 448
Accrued salaries, wages and other employee benefits 2,710 3,323
Accrued interest 176 300
Other accrued liabilities 3,868 3,550
- ---------------------------------------------------------------------------------------------------------------------------
Total current liabilities 12,460 13,264
- ---------------------------------------------------------------------------------------------------------------------------
Long-term and revolving term debt 32,207 32,690
- ---------------------------------------------------------------------------------------------------------------------------
Other long-term liabilities:
Postretirement medical benefits 971 1,037
Other employee benefits 619 730
Other 1,046 1,054
- ---------------------------------------------------------------------------------------------------------------------------
Total other long-term liabilities 2,636 2,821
- ---------------------------------------------------------------------------------------------------------------------------
Minority interest 936 914
SHAREHOLDERS' EQUITY:
Common stock, voting, par value $.001, 10,000,000 shares
authorized, 6,599,784 and 6,589,784 shares issued and
6,454,244 and 6,449,344 shares outstanding
at March 29, 1998 and December 28, 1997, respectively 7 7
Common capital contributed in excess of par 15,740 15,638
Retained earnings 37,253 35,320
Less: Treasury stock, at cost, 145,540 and 140,440 shares
at March 29, 1998 and December 28, 1997, respectively (855) (792)
------------ -----------
52,145 50,173
Cumulative translation adjustment (3,650) (3,032)
Pension adjustment (3,150) (3,150)
- ---------------------------------------------------------------------------------------------------------------------------
Accumulated other comprehensive income (6,800) (6,182)
- ---------------------------------------------------------------------------------------------------------------------------
Total shareholders' equity 45,345 43,991
- ---------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 93,584 $ 93,680
===========================================================================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE> 5
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Sylvan Inc. and Subsidiaries
(Unaudited, In Thousands Except Share Data)
<TABLE>
<CAPTION>
-------------- Three Months Ended --------------
March 29, 1998 March 30, 1997
-------------- --------------
<S> <C> <C>
NET SALES $ 21,988 $ 19,913
- ---------------------------------------------------------------------------------------------------------
OPERATING COSTS AND EXPENSES:
Cost of sales 12,459 11,499
Selling, administration, research and development 4,915 4,660
Depreciation 1,228 1,103
- ---------------------------------------------------------------------------------------------------------
18,602 17,262
- ---------------------------------------------------------------------------------------------------------
OPERATING INCOME 3,386 2,651
INTEREST EXPENSE, NET, INCLUDING
AMORTIZATION OF DEBT ISSUANCE COST 528 500
OTHER (EXPENSE) INCOME (2) 34
- ---------------------------------------------------------------------------------------------------------
INCOME BEFORE INCOME TAXES 2,856 2,185
PROVISION FOR INCOME TAXES 900 626
- ---------------------------------------------------------------------------------------------------------
INCOME BEFORE MINORITY INTEREST IN
INCOME OF CONSOLIDATED SUBSIDIARIES 1,956 1,559
MINORITY INTEREST IN INCOME OF
CONSOLIDATED SUBSIDIARIES 23 26
- ---------------------------------------------------------------------------------------------------------
NET INCOME $ 1,933 $ 1,533
=========================================================================================================
NET INCOME PER SHARE - DILUTED $ 0.30 $ 0.24
=========================================================================================================
NET INCOME PER SHARE - BASIC $ 0.30 $ 0.24
=========================================================================================================
WEIGHTED AVERAGE NUMBER OF COMMON AND
COMMON EQUIVALENT SHARES (See Note 1) 6,539,391 6,396,979
=========================================================================================================
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES (See Note 1) 6,450,771 6,388,006
=========================================================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE> 6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Sylvan Inc. and Subsidiaries
(Unaudited, In Thousands)
<TABLE>
<CAPTION>
------- Three Months Ended --------
March 29, 1998 March 30, 1997
-------------- --------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 1,933 $ 1,533
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization 1,386 1,255
Deferred income taxes (19) (48)
Noncash interest cost of employee benefits (125) (41)
Net gain on sale of assets 0 (7)
Trade accounts receivable 246 715
Inventories (898) (484)
Prepaid expenses and other assets 201 1,386
Accounts payable and accrued liabilities (456) (1,668)
Postretirement medical and other employee benefits (665) (916)
Income taxes payable 255 212
Minority interest 23 66
- --------------------------------------------------------------------------------------------------------------
Net cash provided by operating activities 1,881 2,003
- --------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Net expenditures for property, plant and equipment (1,293) (1,888)
- --------------------------------------------------------------------------------------------------------------
Net cash used in investing activities (1,293) (1,888)
- --------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on long-term debt (116) (118)
Net (repayments) borrowings under revolving credit line (217) 1,420
Common stock transactions, net 40 175
- --------------------------------------------------------------------------------------------------------------
Net cash (used in) provided by financing activities (293) 1,477
- --------------------------------------------------------------------------------------------------------------
EFFECT OF EXCHANGE RATES ON CASH (391) (1,252)
- --------------------------------------------------------------------------------------------------------------
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (96) 340
CASH AND CASH EQUIVALENTS, beginning of period 5,567 4,220
- --------------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS, end of period $ 5,471 $ 4,560
==============================================================================================================
SUPPLEMENTAL DISCLOSURE OF CASH FLOW DATA:
Interest paid $ 1,063 $ 513
Income taxes paid 647 315
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
<PAGE> 7
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Sylvan Inc. and Subsidiaries
March 29, 1998
(Unaudited)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
General
These condensed consolidated financial statements of Sylvan Inc. (the
Company) are unaudited and reflect all adjustments (consisting only of
normal recurring adjustments) which are, in the opinion of management,
necessary for a fair presentation of the results of operations for the
interim period. These statements should be read in conjunction with the
consolidated financial statements and notes thereto contained in the
Company's Annual Report to Shareholders and its Form 10-K for the year
ended December 28, 1997.
Cash
The Company maintains a cash balance of approximately $3.3 million with a
U.S. bank in support of a letter of credit issued to a European bank. This
balance is reported under "Other Assets."
Inventories
Inventories at March 29, 1998 and December 28, 1997 consisted of the
following (in thousands):
<TABLE>
<CAPTION>
March 29, 1998 December 28, 1997
-------------- ------------------
<S> <C> <C>
Growing crops and compost material $4,119 $3,757
Stores and other supplies 1,694 2,023
Mushrooms and spawn on hand 3,808 2,943
------ ------
$9,621 $8,723
====== ======
</TABLE>
Earnings Per Common Share
Earnings per share for the three months ended March 29, 1998 and March 30,
1997 were calculated in accordance with Statement of Financial Accounting
Standards No. 128 (SFAS No. 128), "Earnings per Share," using the weighted
average number of shares outstanding during the period and including the
effect of stock options outstanding. Pursuant to the Company's 1990 and
1993 Stock Option Plans, options for a total of 1,056,417 shares of the
Company's common stock have been granted and options for a total of
454,991 of these shares have been exercised as of March 29, 1998.
The following table reconciles the number of shares utilized in the
earnings per share calculations for the three-month periods ended March
29, 1998 and March 30, 1997.
7
<PAGE> 8
<TABLE>
<CAPTION>
Three Months Ended
March 29, 1998 March 30,1997
-------------- -------------
<S> <C> <C>
Net income (in thousands) $1,933 $1,533
====== ======
Earnings per common share - diluted $ 0.30 $ 0.24
Earnings per common share - basic $ 0.30 $ 0.24
====== ======
Common shares - basic 6,450,771 6,388,006
Effect of dilutive securities:
Stock options 88,620 8,973
--------- ---------
Common shares - diluted 6,539,391 6,396,979
========= =========
</TABLE>
At March 30, 1997, options to purchase approximately 412,000 shares of
common stock were outstanding, but were not included in the computation of
diluted earnings per share because the options' exercise prices were
greater than the average market price of the common shares for the period.
There were no shares excluded at March 29, 1998.
Recent Pronouncements
In February 1998, the Financial Accounting Standards Board issued SFAS No.
132, "Employers' Disclosures about Pensions and Other Postretirement
Benefits." SFAS No. 132 revises employers' disclosures about pension and
other postretirement benefit plans, but does not change the measurement or
recognition of those plans. SFAS No. 132 standardizes the disclosure
requirements for pensions and other postretirement benefits, to the extent
practicable; requires additional information on changes in the benefit
obligations and fair values of plan assets that will facilitate financial
analysis; and eliminates certain disclosures. SFAS No. 132 will be
effective for the Company's financial statements for the year ended
January 3, 1999.
Reclassifications
Certain reclassifications have been made to the prior-year condensed
consolidated financial statements to conform to the current-year
presentation.
2. CONTINGENT LIABILITIES:
Certain of the Company's subsidiaries are self-insured for claims filed
under Pennsylvania workers' compensation laws. Workers' compensation
claims for medical and lost wages in excess of $350,000 are covered by an
insurance policy.
3. FOREIGN CURRENCY TRANSLATION:
Assets and liabilities of non-U.S. operations are translated into U.S.
dollars using period-end exchange rates, while revenues and expenses are
translated at average exchange rates throughout
8
<PAGE> 9
the quarter. The resulting net translation adjustments are recorded as a
separate component of shareholders' equity.
4. LONG-TERM DEBT AND BORROWING ARRANGEMENTS:
The Company has a Revolving Credit Agreement (the Agreement) with a
commercial bank dated June 1, 1996. It provides for revolving credit loans
on which the aggregate outstanding balance available to the Company may
not initially exceed $45.0 million, but this aggregate outstanding balance
will decline over the life of the Agreement as follows:
<TABLE>
<CAPTION>
Maximum Aggregate
Period Beginning Outstanding Balance
---------------- -------------------
<S> <C>
June 1, 1996 $45.0 million
June 1, 1998 40.0 million
June 1, 1999 35.0 million
June 1, 2001 25.0 million
June 1, 2002 20.0 million
</TABLE>
Outstanding borrowings under the Agreement bear interest at either the
Prime Rate or LIBOR (plus the applicable margin) at the Company's option.
On March 29, 1998, the Company had outstanding borrowings under the
Agreement of $27.7 million. The revolving credit loans mature on May 31,
2003.
The Agreement provides for the maintenance of various financial covenants
and includes limitations as to incurring additional indebtedness and the
granting of security interests to third parties. Spending for capital
projects and payment of dividends are subject to annual limitations. The
Company has pledged to the lending banks a security interest in the
capital stock of its subsidiaries.
The Company has two interest rate swap agreements which apply to $10.0
million of the Company's total long-term debt. The Company agreed to pay a
fixed interest rate over the life of the agreements of 6.08% and 6.03%
plus the applicable margin. The balance of long-term debt is subject to
variable interest rate pricing.
The Company has a French franc denominated loan of $2.4 million. Interest
is payable based on a formula that utilizes a Paris Interbank Offered Rate
plus the applicable margin. Repayment is due in January 2000. This loan is
supported by a letter of credit.
The Company's majority-owned Dutch subsidiary has a long-term plant and
equipment and overdraft facility with a Dutch bank. At March 29, 1998,
term loans amounting to 4.2 million Dutch guilders (approximately $2.0
million) were outstanding under this agreement.
9
<PAGE> 10
5. COMPREHENSIVE INCOME:
The Company adopted SFAS No. 130, "Reporting Comprehensive Income," in the
quarter ended March 29, 1998. This accounting standard requires the
reporting of all changes in the equity of an enterprise that result from
recognized transactions and other economic events of the period other than
transactions with owners in their capacity as owners. Prior to the
issuance of this standard, some of those changes in equity were displayed
in the income statement, while others were included directly in balances
within a separate component of equity in a statement of financial
position.
<TABLE>
<CAPTION>
Three Months Ended
March 29, 1998 March 30, 1997
-------------- --------------
(unaudited, in thousands)
<S> <C> <C>
Net income $1,933 $1,533
Other comprehensive income:
Foreign currency translation adjustment (618) (2,223)
------ ------
Comprehensive income (loss) $1,315 $ (690)
====== ======
</TABLE>
10
<PAGE> 11
Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Sylvan Inc. and Subsidiaries
RESULTS OF OPERATIONS (Three Months Ended March 29, 1998 and March 30, 1997)
Net Sales
Sales for the first quarter of 1998 were $22.0 million, 10% higher than the
first quarter of 1997. Spawn sales volume, measured in units, increased by 3%,
with a 12% increase in Europe and an 8% decrease in the Americas. Growth was
especially strong in Hungary, Turkey, Poland, Russia and various countries of
the former Soviet Union. The local currency selling prices increased in Hungary,
Poland and Turkey, while those in the remaining European markets did not change
from the first quarter of 1997. Market penetration continues to be strong in
Australia, where we now supply almost the entire noncaptive spawn market. The
European realized selling price, as expressed in U.S. dollars, was 5% lower than
the corresponding 1997 period, reflecting the adverse effect of the stronger
U.S. dollar. Spawn selling prices in the Americas were 1% lower than in the
first quarter of 1997. North American mushroom revenues increased by 12% on a 9%
increase in total pounds sold and a 3% increase in the average selling price per
pound. The percentage of mushrooms sold through the fresh channel was 94% for
the first quarter of 1998, an improvement from the 92% recorded for the first
quarter of 1997.
Sales outside the United States were 46% of total sales for the current quarter,
as compared with 43% for the corresponding 1997 quarter. Sales of fresh
mushrooms accounted for 37% of total sales, the same as in the first quarter of
1997. Sales of agricultural chemicals, compost nutritional supplements and other
products increased by 86% when compared with the first quarter of 1997.
Operating Costs and Expenses
Cost of sales was $12.5 million, or 56.7% of sales, for the first quarter of
1998, as compared with $11.5 million, or 57.7% of sales, for the corresponding
1997 period. Efficiency improvements at the Quincy Farms operation contributed a
0.9% improvement in the cost of sales percentage. European spawn operations
benefited from increased production levels, which decreased the fixed-cost
component on a per-unit basis. U.S. spawn operations were adversely affected by
production levels which were lower than in the first quarter of 1997.
Selling, general, administration, and research and development costs for the
current quarter were $4.9 million, or 22.4% of sales, as compared with $4.7
million, or 23.4% of sales, for the first quarter of 1997. The addition of the
recently acquired French subsidiary resulted in increased selling expenses,
which were partially offset by the translation effect of the stronger U.S.
dollar. Depreciation expense was $1.2 million, or $125,000 higher than in the
first quarter of 1997, reflecting the $7.6 million of capital expenditures in
1997.
11
<PAGE> 12
Interest Expense
The Company's net interest expense for the first quarter of 1998 was $528,000,
or 6% higher than the corresponding 1997 quarter. The effective borrowing rate
was 6.9% as compared to the 7.4% rate recorded for the first quarter of 1997.
Increased base borrowing levels were partially offset by the lower borrowing
rate.
Income Tax Expense
The effective income tax rate in the first quarter of 1998 was 32%, as compared
with 29% in the corresponding 1997 quarter. This increase reflects the higher
proportion of the Company's total taxable income derived from North American
operations.
LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operating activities for the first quarter of 1998 was $1.9
million, as compared with $2.0 million for the first quarter of 1997. Working
capital increases exceeded cash flow improvements from net income and
depreciation and amortization. Inventories required $898,000 of the current
quarter's cash flow, as inventory levels were increased in Europe to support
increasing sales. Trade accounts receivable provided $246,000 of cash flow, with
improvements in North American receivables. Prepaid expenses and other assets
contributed $201,000 to operating cash flow, as compared with $1.4 million for
the first quarter of 1997. Accounts payable and accrued liabilities used
$456,000 in operating cash flow, $1.2 million less than the corresponding 1997
period. Workers' compensation payments were $111,000 for the current period,
down from the $173,000 recorded for the corresponding 1997 quarter. The U.S.
dollar strengthened by approximately 3% during the current quarter, when
measured in terms of the Company's major foreign currencies.
Capital expenditures for the first quarter of 1998 totaled $1.3 million,
compared with $1.9 million for the first quarter of 1997. Significant projects
included the completion of an additional spawn growing room at the Company's
Netherlands facility, the computerization of the inoculum blender in
Pennsylvania and the construction of a new inoculum facility in France.
Replacement capital expenditures were approximately 50% of total capital
expenditures. Total capital expenditures for 1998 are expected to be in the $7
million to $10 million range. The Company believes that it has sufficient cash
resources from current cash balances, internally generated funds and available
bank credit facilities to meet its ongoing capital needs.
Available credit under the Company's $45.0 million revolving credit arrangement
was $17.3 million as of March 29, 1998. The arrangement provides for a reduction
of the total credit amount over a four year period, with the first reduction to
$40.0 million effective June 1, 1998. Term debt and revolving credit obligations
decreased by $0.5 million for the first quarter of 1998, compared with a $0.9
million increase in the first quarter of 1997. The amendment to the Company's
revolving credit arrangement, which permits the Company to repurchase its common
shares up to $6.0 million in value, will expire May 14, 1998. Transactions under
the Company's stock repurchase plan totaled $62,000 for the first quarter of
1998.
12
<PAGE> 13
Forward-Looking and Cautionary Statements
From time to time in this report, particularly in the Liquidity and Capital
Resources section, references are made to expectations regarding future
performance of the Company. These "forward-looking statements" are based on
currently available competitive, financial and economic data and the Company's
operating plans, but they are inherently uncertain. Investors must recognize
that events could turn out to be significantly different from what is expected,
depending upon such factors as pricing or product initiatives of the Company's
competitors, changes in currency and exchange risks, or changes in a specific
country's or region's political or economic conditions.
13
<PAGE> 14
PART II - OTHER INFORMATION
Item 1. - Legal Proceedings
Other than ordinary routine litigation incidental to their respective
businesses, there are no material pending legal proceedings to which the Company
or any of its subsidiaries is a party or of which any of their property is the
subject.
Item 6. - Exhibits and Reports on Form 8-K
(a) Exhibits
(11) Statement re computation of per share earnings is not required
because the relevant computation can be clearly determined
from the material contained in the financial statements
included herein.
(27) Financial Data Schedule.
(b) Reports on Form 8-K
None
14
<PAGE> 15
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.
Date: SYLVAN INC.
-----------------------
By: /s/ DONALD A. SMITH
-------------------------------------
Donald A. Smith
Corporate Controller
(principal financial officer
and chief accounting officer)
By: /s/ FRED Y. BENNITT
-------------------------------------
Fred Y. Bennitt
Secretary/Treasurer
15
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000861291
<NAME> SYLVAN INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-03-1999
<PERIOD-START> DEC-29-1997
<PERIOD-END> MAR-29-1998
<CASH> 5,471
<SECURITIES> 0
<RECEIVABLES> 13,735
<ALLOWANCES> 546
<INVENTORY> 9,621
<CURRENT-ASSETS> 31,285
<PP&E> 71,665
<DEPRECIATION> 24,329
<TOTAL-ASSETS> 93,584
<CURRENT-LIABILITIES> 12,460
<BONDS> 0
0
0
<COMMON> 7
<OTHER-SE> 45,338
<TOTAL-LIABILITY-AND-EQUITY> 93,584
<SALES> 21,988
<TOTAL-REVENUES> 21,988
<CGS> 12,459
<TOTAL-COSTS> 18,603
<OTHER-EXPENSES> 2
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 528
<INCOME-PRETAX> 2,855
<INCOME-TAX> 900
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,933
<EPS-PRIMARY> 0.30<F1>
<EPS-DILUTED> 0.30<F1>
<FN>
<F1>(a) The Company adopted SFAS No. 128, "Earnings per Share" in 1997. "EPS
Primary" has been completed as Basic earnings per share and "EPS Diluted" has
been completed as Diluted earnings per share.
</FN>
</TABLE>
