<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 period ended September 30, 1996
-----------------------------
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 0-18490
-------
K-SWISS INC.
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 95-4265988
- -------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
20664 Bahama Street, Chatsworth, CA 91311
- -------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
818-998-3388
- -------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
- -------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report.)
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
----- ----
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Shares of common stock outstanding at October 21, 1996:
Class A 3,583,851
Class B 2,495,572
<PAGE>
PART 1 - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
- ------
K-SWISS INC.
CONSOLIDATED BALANCE SHEETS
(Dollar amounts in thousands)
ASSETS
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
------------- ------------
(Unaudited)
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 38,777 $ 31,431
Accounts receivable, less allowance for doubtful
accounts of $660 and $873 as of September 30,
1996 and December 31, 1995, respectively 20,645 14,764
Inventories 23,372 41,203
Prepaid expenses 8,606 1,197
Deferred taxes 4,351 4,191
-------- --------
Total current assets 95,751 92,786
PROPERTY, PLANT AND EQUIPMENT, net 3,360 3,570
OTHER ASSETS
Intangible assets 5,070 5,096
Other 835 926
-------- --------
5,905 6,022
-------- --------
$105,016 $102,378
======== ========
</TABLE>
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
CURRENT LIABILITIES
<S> <C> <C>
Bank lines of credit $ 2,051 $ 371
Current maturities of capital lease obligations
and subordinated debentures 252 43
Trade accounts payable 1,998 4,529
Accrued liabilities 7,113 4,660
-------- --------
Total current liabilities 11,414 9,603
CAPITAL LEASE OBLIGATIONS 1 6
SUBORDINATED DEBENTURES 250 500
DEFERRED TAXES 8,542 8,200
STOCKHOLDERS' EQUITY
Preferred Stock-authorized 2,000,000 shares of
$.01 par value; none issued and outstanding - -
Common Stock:
Class A-authorized 18,000,000 shares of $.01 par
value; 4,085,851 shares issued, 3,985,851 shares
outstanding and 100,000 shares held in treasury
at September 30, 1996, and 4,085,851 shares issued
and outstanding at December 31, 1995 41 41
Class B-authorized 10,000,000 shares of $.01 par
value; issued and outstanding 2,495,572 shares at
September 30, 1996 and December 31, 1995 25 25
Additional paid-in capital 25,088 25,088
Treasury Stock (1,025) -
Retained earnings 60,743 59,460
Foreign currency translation (63) (545)
-------- --------
84,809 84,069
-------- --------
$105,016 $102,378
======== ========
</TABLE>
The accompanying notes are an integral part of these statements.
2
<PAGE>
K-SWISS INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(Amounts in thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
NINE MONTHS THREE MONTHS
ENDED SEPTEMBER 30, ENDED SEPTEMBER 30,
------------------- -------------------
1996 1995 1996 1995
------- -------- -------- -------
<S> <C> <C> <C> <C>
Revenues $89,165 $101,853 $28,781 $29,361
Cost of goods sold 59,917 63,478 19,718 19,527
------- -------- ------- -------
Gross profit 29,248 38,375 9,063 9,834
Selling, general and administrative
expenses 26,370 27,960 9,103 8,396
------- -------- ------- -------
Operating profit (loss) 2,878 10,415 (40) 1,438
Interest income, net 1,095 494 519 254
------- -------- ------- -------
Earnings before income taxes 3,973 10,909 479 1,692
Income tax expense 2,296 4,359 198 676
------- -------- ------- -------
NET EARNINGS $ 1,677 $ 6,550 $ 281 $ 1,016
======= ======== ======= =======
Earnings per share $.25 $.98 $.04 $.15
======= ======== ======= =======
Weighted average common and common
equivalent shares outstanding 6,598 6,656 6,610 6,625
</TABLE>
The accompanying notes are an integral part of these statements.
3
<PAGE>
K-SWISS INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
(Unaudited)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
-------------------
1996 1995
-------- --------
<S> <C> <C>
Net cash provided by operating activities $ 7,793 $14,708
Cash flows from investing activities:
Cash paid for acquisition of certain assets and rights of Robey Sportswear (436) -
Proceeds from maturity of investment securities - 5,102
Purchase of property, plant and equipment (313) (254)
------- -------
Net cash (used in) provided by investing activities (749) 4,848
Cash flows from financing activities:
Net borrowings (repayments) under the bank lines of credit and capital leases 1,629 (2,739)
Proceeds from stock options exercised - 55
Income tax benefit of options exercised - 9
Purchase of treasury stock (1,025) -
Payment of dividends (394) (396)
------- -------
Net cash provided by (used in) financing activities 210 (3,071)
Effect of exchange rate changes on cash 92 (69)
------- -------
Net increase in cash and cash equivalents 7,346 16,416
Cash and cash equivalents at beginning of period 31,431 10,717
------- -------
Cash and cash equivalents at end of period $38,777 $27,133
======= =======
</TABLE>
The accompanying notes are an integral part of these statements.
4
<PAGE>
K-SWISS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. In the opinion of management, the accompanying unaudited consolidated
financial statements contain all adjustments, consisting only of normal
recurring adjustments, necessary to present fairly the consolidated
financial position of K-Swiss Inc. (the "Company") as of September 30, 1996
and the results of its operations and its cash flows for the nine and three
months ended September 30, 1996 and 1995. The results of operations and
cash flows for the nine and three months ended September 30, 1996 are not
necessarily indicative of the results to be expected for any other interim
period or the full year. These consolidated financial statements should be
read in combination with the audited consolidated financial statements and
notes thereto for the year ended December 31, 1995.
2. The federal income tax returns of the Company for the years ended 1990,
1991 and 1992 are under examination by the Internal Revenue Service (IRS).
In December 1995, the IRS issued its report proposing additional taxes of
approximately $3,850,000 plus penalties and interest. The Company is
appealing the IRS assessment. Also, the federal income tax returns of the
Company for the years ended 1993 and 1994 are currently in preliminary
stages of examination by the IRS. Although no assurance can be given
regarding the outcome of such examinations, the Company believes that any
taxes which might become payable as a result of the proposed assessments
for tax years 1990, 1991 and 1992 as well as any reasonably foreseeable
assessments for tax years 1993 and 1994 would not result in additional
expense recognized in the financial statements other than interest and
penalties, if any, as the Company has recorded deferred income taxes on the
untaxed portion of unremitted earnings of a foreign subsidiary. Therefore,
management believes that resolution of the IRS examinations should not have
a material adverse impact on the Company's financial position and results
of operations.
3. During the period from October 1, 1996 through October 21, 1996, in
accordance with its previously announced share repurchase program, the
Company purchased an additional 402,000 shares of its common stock for
approximately $4,196,000.
5
<PAGE>
ITEM 2.
- ------
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
The following table sets forth, for the periods indicated, the percentage of
certain items in the consolidated statements of earnings relative to revenues.
<TABLE>
<CAPTION>
NINE MONTHS THREE MONTHS
ENDED SEPTEMBER 30, ENDED SEPTEMBER 30,
-------------------- --------------------
1996 1995 1996 1995
------ ----- ----- -----
<S> <C> <C> <C> <C>
Revenues 100.0% 100.0% 100.0% 100.0%
Cost of goods sold 67.2 62.3 68.5 66.5
Gross profit 32.8 37.7 31.5 33.5
Selling, general and administrative
expenses 29.6 27.5 31.6 28.6
Interest income, net 1.3 0.5 1.8 0.9
Earnings before income taxes 4.5 10.7 1.7 5.8
Income tax expense 2.6 4.3 0.7 2.3
Net earnings 1.9 6.4 1.0 3.5
</TABLE>
Revenues decreased to $28,781,000 for the quarter ended September 30, 1996 from
$29,361,000 for the quarter ended September 30, 1995, a decrease of $580,000 or
2.0%. Revenues decreased to $89,165,000 for the nine months ended September 30,
1996 from $101,853,000 for the nine months ended September 30, 1995, a decrease
of $12,688,000 or 12.5%. These decreases resulted from a decrease in the volume
of footwear sold to 3,996,000 pair for the nine months ended September 30, 1996
from 4,605,000 pair for the nine months ended September 30, 1995 and a decrease
in the average wholesale price per pair. The volume of footwear sold increased
to 1,388,000 pair for the quarter ended September 30, 1996 from 1,303,000 pair
for the quarter ended September 30, 1995. The increase in the volume of
footwear sold for the quarter ended September 30, 1996 was primarily the result
of increased sales of the Classic, tennis/court and children's categories of
shoes of 13.8%, 13.0% and 12.5%, respectively, partially offset by a 58.2%
decrease in the outdoor category of shoes, which has been discontinued. The
average wholesale price per pair decreased by 7.3% to $20.05 for the quarter
ended September 30, 1996 from $21.64 for the quarter ended September 30, 1995.
The average wholesale price per pair was $20.77 and $21.21 for the nine months
ended September 30, 1996 and 1995, respectively. The decrease in the average
wholesale price per pair is primarily attributable to the increase in the volume
of canvas product sold which carries relatively lower wholesale prices per
pair.
Domestic revenues increased 5.4% to $21,854,000 for the quarter ended September
30, 1996 from $20,725,000 for the quarter ended September 30, 1995. Domestic
revenues decreased 16.9% to $64,060,000 for the nine months ended September 30,
1996 from $77,045,000 for the nine months ended September 30, 1995.
International revenues decreased 19.8% to $6,927,000 for the quarter ended
September 30, 1996 from $8,636,000 for the quarter ended September 30, 1995.
International revenues increased 1.2% to $25,105,000 for the nine months ended
September 30, 1996 from $24,808,000 for the nine months ended September 30,
1995. International revenues, as a percentage of total revenues, decreased to
24.1% for the quarter ended September 30, 1996 as compared with 29.4% for the
quarter ended September 30, 1995. International revenues, as a percentage of
total revenues, increased to 28.2% for the nine months ended September 30, 1996
as compared with 24.4% for the nine months ended September 30, 1995.
International revenues increased for the nine months ended September 30, 1996
due primarily to the sales of apparel made by the Company's newly acquired
Netherlands' subsidiary.
Gross profit margins, as a percentage of revenues, decreased to 31.5% for the
quarter ended September 30, 1996, from 33.5% for the quarter ended September 30,
1995. Gross profit margins, as a percentage of revenues, decreased to 32.8%
from 37.7% for the nine months ended September 30, 1996 and 1995, respectively.
Gross profit margins decreased primarily due to changes in the geographic and
product mix of sales, including an increase in close-out sales.
6
<PAGE>
Selling, general and administrative expenses increased to $9,103,000 (31.6% of
revenues) for the quarter ended September 30, 1996, from $8,396,000 (28.6% of
revenues) for the quarter ended September 30, 1995, an increase of $707,000 or
8.4%. Selling, general and administrative expenses decreased to $26,370,000
(29.6% of revenues) for the nine months ended September 30, 1996, from
$27,960,000 (27.5% of revenues) for the nine months ended September 30, 1995, a
decrease of $1,590,000 or 5.7%. The increase in the amounts, as well as the
percentage of sales, for the quarter ended September 30, 1996 was primarily the
result of an increase in the bonus accrual due to the implementation of an
incentive program, as well as an increase in direct advertisement, promotion
activities, and product development. The decrease in the amounts for the nine
months ended September 30, 1996 was primarily the result of increased bad debt
expense recorded during the nine months ended September 30, 1995, due to the
unexpected bankruptcies of two of the Company's larger customers. In addition,
reductions were made for potential contributions to the employee's profit
sharing plan for the nine months ended September 30, 1996. In addition, for the
nine months ended September 30, 1996, the increase in selling, general and
administrative expenses, as a percentage of sales, was primarily the result of
an increase in direct advertisement, promotion activities and product
development.
Net interest income was $519,000 (1.8% of revenues) and $1,095,000 (1.3% of
revenues) for the quarter and nine months ended September 30, 1996,
respectively, compared to $254,000 (0.9% of revenues) and $494,000 (0.5% of
revenues) for the quarter and nine months ended September 30, 1995,
respectively, an increase of $265,000 and $601,000 or 104.3% and 121.7%,
respectively. For the quarter and nine months ended September 30, 1996 as
compared to the quarter and nine months ended September 30, 1995, the increase
in net interest income was the result of higher average balances, partially
offset by lower average rates, on commercial paper investments. This increase
was partially offset by interest expense recorded relating to taxes assessed as
a result of a state income tax audit, for the nine months ended September 30,
1996.
The Company's effective tax rate increased to 57.8% of earnings before income
tax from 40.0% for the nine months ended September 30, 1996 and 1995,
respectively, due primarily to recording income taxes relating to a state income
tax audit.
Net earnings decreased 72.3% to $281,000 for the quarter ended September 30,
1996 from $1,016,000 for the quarter ended September 30, 1995. Net earnings
decreased 74.4% to $1,677,000 for the nine months ended September 30, 1996 from
$6,550,000 for the nine months ended September 30, 1995. Net earnings for the
quarter and nine months ended September 30, 1996 included net losses of the
Company's European operations of $593,000 and $1,360,000, respectively. Net
earnings for the quarter and nine months ended September 30, 1995 included net
losses incurred by the Company's Canadian operations of $85,000 and $410,000,
respectively, and for the Company's European operations net profits for the
quarter ended September 30, 1995 of $148,000 and net losses for the nine months
ended September 30, 1995 of $43,000. In January 1996, K.Swiss Canada adopted a
voluntary liquidation program and an independent distributor was appointed to
serve the Canadian market.
At September 30, 1996 and 1995, domestic footwear futures orders with start ship
dates from October 1996 and 1995 through March 1997 and 1996 were approximately
$27,325,000 and $26,972,000, respectively. At September 30, 1996 and 1995,
international footwear futures orders with start ship dates from October 1996
and 1995 through March 1997 and 1996 were approximately $7,819,000 and
$11,840,000, respectively. "Backlog", as of any date, represents orders
scheduled to be shipped within the next six months. Backlog does not include
orders scheduled to be shipped on or prior to the date of determination of
backlog. The orders are not necessarily indicative of revenues for subsequent
periods because: (1) the mix of "futures" and "at-once" orders can vary
significantly from quarter to quarter and year to year and (2) the rate of
customer order cancellations can also vary from quarter to quarter and year to
year.
7
<PAGE>
Liquidity and Capital Resources
The Company generated cash of $7,793,000 and $14,708,000 from its operating
activities during the nine months ended September 30, 1996 and 1995,
respectively. Cash provided by operating activities for the nine months ended
September 30, 1996 as compared to the nine months ended September 30, 1995
varied primarily due to changes in accounts receivable, inventories, prepaid
expenses (principally a prepayment to secure inventory purchases) and other
assets, and accounts payable and accrued liabilities as well as a decrease in
net earnings.
The Company had a net outflow of cash from its investing activities for the nine
months ended September 30, 1996 due primarily to the purchase of certain assets
and rights of a small apparel brand where products are primarily sold in the
Netherlands. The Company had a net inflow of cash from its investing activities
for the nine months ended September 30, 1995 due to the maturity of investment
securities. The Company had a net inflow of cash from its financing activities
of $210,000 for the nine months ended September 30, 1996 due primarily to
borrowings under its bank lines of credit, partially offset by a purchase of
treasury stock.
Depending on the Company's future growth rate, funds may be required by
operating activities. With continued use of its revolving credit facility and
internally generated funds, the company believes its present and anticipated
sources of capital are sufficient to sustain its capital needs for the remainder
of 1996.
In November 1995, the Company announced a share repurchase program whereby the
Company may purchase, from time to time as market conditions warrant, up to
$10,000,000 of its Class A Common Stock on the open market through December
1996. The Company adopted this program because it believes repurchasing its
shares can be a good use of excess cash depending on the Company's array of
alternatives. From the period August 14, 1996 through October 21, 1996 (the
date before the filing of this Form 10-Q), the Company made purchases under this
program of 502,000 shares at an aggregate cost totaling approximately
$5,221,000.
The Company's working capital increased $1,154,000 to $84,337,000 at September
30,1996 from $83,183,000 at December 31, 1995.
8
<PAGE>
PART II - OTHER INFORMATION
ITEM 1: Legal Proceedings.
-----------------
None.
ITEM 2: Changes in Securities.
---------------------
None.
ITEM 3: Defaults Upon Senior Securities.
-------------------------------
None.
ITEM 4: Submission of Matters to a Vote of Security Holders.
---------------------------------------------------
None.
ITEM 5: Other Information.
-----------------
None.
ITEM 6: Exhibits
--------
(a) Exhibits
10- Second Amendment to Credit Agreement
11- Computation of Earnings Per Share
27- Financial Data Schedule
(b) Reports on Form 8-K
There were no reports filed on Form 8-K during the third quarter of
1996.
9
<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.
K-Swiss Inc.
Date: October 22, 1996 By: /s/George Powlick
----------------------------------
George Powlick,
Vice President Finance and
Chief Financial Officer
10
<PAGE>
EXHIBIT INDEX
--------------
Exhibit Page
- ------- ----
10 Second Amendment to Credit Agreement 12
11 Computation of Earnings Per Share 14
27 Financial Data Schedule
11
<PAGE>
EXHIBIT 10
SECOND AMENDMENT TO CREDIT AGREEMENT
This Second Amendment to Credit Agreement (this "Amendment") is entered
into as of August 12 , 1996, between Bank of America National Trust and
------------
Savings Association ("Bank") and K-Swiss, Inc. ("Borrower"), with reference
to the following:
Recitals
--------
A. Bank and Borrower are parties to that certain Credit Agreement
dated as of March 25, 1994, as modified by an amendment dated as
of June 29, 1995 (as amended, the "Credit Agreement").
B. Bank and Borrower now desire to further amend the Credit
Agreement on the terms and conditions set forth below.
Agreement
---------
NOW, THEREFORE, the parties hereto agree as follows:
1. Definitions. Capitalized terms not otherwise
-----------
defined in this Amendment shall have the
meanings ascribed to them in the Credit Agreement.
2. Amendments. The Credit Agreement shall be
----------
amended as follows:
(a) In the definition of "Availability Period" in
Paragraph 1.1, the date "May 1, 1997" is
amended to read "July 1, 1998."
(b) In the definition of "Credit Limit" in
Paragraph 1.1, the amount "Fifty Million Dollars
($50,000,000)" is amended to read "Thirty Million
Dollars ($30,000,000)".
(c) Subparagraph 2.4(d) is amended in full to read as follows:
"(d) Borrower shall pay Bank negotiation fees of the
greater of one quarter percent(0.25%) of the amount of each
drawing or Ninety Dollars ($90), and other fees at the
times and in the amounts Bank advises Borrower from time to
time as being generally applicable to commercial letters of
credit issued by Bank, including without limitation
amendment, discrepancy, and cancellation fees."
(d) Paragraph 3.1 is amended in full to read as follows:
"3.1 Unused Commitment Fee (Advances).
--------------------------------
Intentionally omitted;"
(e) Paragraph 8.6 is amended in full to read as follows:
"8.6 Effective Tangible Net Worth. Maintain at
---------------------------------
all times on a consolidated basis effective Tangible Net
Worth plus Subordinated Debt of at least Sixty Seven
Million Two Hundred Thirty Four Thousand Dollars
($67,234,000) plus the sum of seventy-five percent (75%) of
net income after income taxes (without subtracting losses)
earned in each fiscal year commencing after December 31,
1995;
12
<PAGE>
(f) Paragraph 8.9 is amended to add the following sentence:
"For purposes of the foregoing calculation, the total
of all advances outstanding at any one time under the
Revolving Facility shall be a current liability."
(g) Paragraph 8.10 is amended in full to read as follows:
"8.10 Maximum Debt Requirement. Repay any advances in
------------------------
full, and not to draw any additional advances on the
Revolving Facility, for a period of at least thirty (30)
consecutive calendar days during the period from the date
of this Agreement through July 1, 1997, and during each
subsequent twelve-month period during the Availability
Period. For purposes of this paragraph, "advances" does not
include undrawn amounts of outstanding letters of credit;"
(h) Except as hereby amended, all of the terms and
conditions of the Credit Agreement shall remain in full
force and effect.
3. Representations and Warranties. Borrower represents and
------------------------------
warrants to Bank that: (a) no Event of Default has occurred
and is continuing under the Credit Agreement, (b) the
representations and warranties in the Credit Agreement are
true as of the date of this Amendment, (c) this Amendment is
within Borrower's powers, has been duly authorized, and does
not conflict with Borrower's organizational papers,and (d)
this Amendment does not conflict with any law, agreement, or
obligation by which Borrower is bound.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of
the date first above written.
BANK OF AMERICA NATIONAL TRUST K-SWISS, INC.
AND SAVINGS ASSOCIATION
By: /s/ Richard J. Pankow By: /s/ George Powlick
-------------------------- ---------------------
Richard J. Pankow George Powlick
Vice President Vice President
13
<PAGE>
EXHIBIT 11
COMPUTATION OF EARNINGS PER SHARE
(Amounts in thousands, except per share amounts)
<TABLE>
<CAPTION>
NINE MONTHS THREE MONTHS
ENDED SEPTEMBER 30, ENDED SEPTEMBER 30,
------------------- -------------------
1996 1995 1996 1995
----- ----- ----- -----
<S> <C> <C> <C> <C>
PRIMARY
Earnings applicable to common
stock $1,677 $6,550 $ 281 $1,016
===== ===== ===== =====
Weighted average shares:
Average shares outstanding 6,574 6,577 6,560 6,578
Net effect of warrants and dilutive
stock options based on application
of treasury stock method using
average market price 24 79 50 47
----- ----- ----- -----
Total average shares 6,598 6,656 6,610 6,625
===== ===== ===== =====
Earnings per share $ .25 $ .98 $ .04 $ .15
===== ===== ===== =====
</TABLE>
FULLY DILUTED
Fully diluted earnings per share are considered equal to primary earnings per
share due to immaterial dilution.
14
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Consolidated
Balance Sheets and Consolidated Statements of Operations and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 38,777
<SECURITIES> 0
<RECEIVABLES> 21,305
<ALLOWANCES> (660)
<INVENTORY> 23,372
<CURRENT-ASSETS> 95,751
<PP&E> 3,360
<DEPRECIATION> 0
<TOTAL-ASSETS> 105,016
<CURRENT-LIABILITIES> 11,414
<BONDS> 0
0
0
<COMMON> 66
<OTHER-SE> 84,743
<TOTAL-LIABILITY-AND-EQUITY> 105,016
<SALES> 89,165
<TOTAL-REVENUES> 89,165
<CGS> 59,917
<TOTAL-COSTS> 26,370
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (1,095)<F1>
<INCOME-PRETAX> 3,973
<INCOME-TAX> 2,296
<INCOME-CONTINUING> 1,677
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,677
<EPS-PRIMARY> .25
<EPS-DILUTED> .25
<FN>
<F1>Interest Income net of Interest Expense
</FN>
</TABLE>
