<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 March 31, 1999
-------------------------------------------------------
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.)
31248 Oak Crest Drive, Westlake Village, CA 91361
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
818-706-5100
- --------------------------------------------------------------------------------
(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 April 20, 1999:
Class A 7,535,548
Class B 3,346,556
<PAGE>
ITEM 1. FINANCIAL STATEMENTS
- ------
K-SWISS INC.
CONSOLIDATED BALANCE SHEETS
(Dollar amounts in thousands)
<TABLE>
<CAPTION>
March 31, December 31,
1999 1998
--------- ------------
<S> <C> <C>
(Unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 22,843 $ 37,360
Accounts receivable, less allowance for doubtful
accounts of $883 and $825 as of March 31,
1999 and December 31, 1998, respectively 66,128 26,478
Inventories 33,774 33,535
Prepaid expenses and other 1,106 2,883
Deferred taxes 1,696 1,746
-------- --------
Total current assets 125,547 102,002
PROPERTY, PLANT AND EQUIPMENT, net 8,405 8,009
OTHER ASSETS
Intangible assets 4,349 4,429
Other 1,731 1,025
-------- --------
6,080 5,454
-------- --------
$140,032 $115,465
======== ========
</TABLE>
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
CURRENT LIABILITIES
<S> <C> <C> <C>
Bank lines of credit $ 1,289 $ 155
Current maturities of subordinated debentures 500 500
Trade accounts payable 9,745 7,783
Accrued income taxes 5,340 741
Accrued liabilities 10,413 9,524
-------- --------
Total current liabilities 27,287 18,703
OTHER LIABILITIES 6,976 5,267
DEFERRED TAXES 8,093 8,227
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;
10,222,648 shares issued, 7,583,716 shares outstanding
and 2,638,932 shares held in treasury at March 31,
1999 and 9,832,728 shares issued, 7,313,796 shares
outstanding and 2,518,932 shares held in treasury at
December 31, 1998 102 98
Class B-authorized 10,000,000 shares of $.01 par value;
issued and outstanding 3,346,556 shares at March 31,
1999 and 3,426,556 at December 31, 1998 33 34
Additional paid-in capital 30,163 25,830
Treasury stock (20,752) (17,760)
Retained earnings 88,622 75,500
Accumulated other Comprehensive Income -
Foreign currency translation (492) (434)
-------- --------
97,676 83,268
-------- --------
$140,032 $115,465
======== ========
</TABLE>
The accompanying notes are an integral part of these statements.
2
<PAGE>
K-SWISS INC.
CONSOLIDATED STATEMENTS OF EARNINGS
AND COMPREHENSIVE EARNINGS
(Amounts in thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS
ENDED MARCH 31,
------------------------
1999 1998
---- ----
<S> <C> <C>
Revenues $88,577 $42,274
Cost of goods sold 50,202 25,128
------- -------
Gross profit 38,375 17,146
Selling, general and administrative expenses 16,625 11,613
------- -------
Operating profit 21,750 5,533
Interest income, net 273 433
------- -------
Earnings before income taxes 22,023 5,966
Income tax expense 8,737 2,421
------- -------
NET EARNINGS $13,286 $ 3,545
======= =======
Earnings per common share (Note 3)
Basic $1.23 $.32
======= =======
Diluted $1.15 $.31
======= =======
Net Earnings $13,286 $ 3,545
Other comprehensive loss, net of tax -
Foreign currency translation adjustments (58) (30)
------- -------
Comprehensive net earnings $13,228 $ 3,515
======= =======
</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>
THREE MONTHS
ENDED MARCH 31,
-------------------------
1999 1998
---- ----
<S> <C> <C>
Net cash used in operating activities $(13,923) $(6,091)
Cash flows from investing activities:
Purchase of property, plant and equipment (666) (1,370)
Proceeds from sale of property 3 2,250
-------- -------
Net cash (used in) provided by investing activities (663) 880
Cash flows from financing activities:
Net borrowings under bank lines of credit 1,140 429
Purchase of treasury stock (2,992) (2,211)
Payment of dividends (164) (109)
Proceeds from stock options exercised 2,147 -
-------- -------
Net cash provided by (used in) financing activities 131 (1,891)
Effect of exchange rate changes on cash (62) ( 39)
-------- -------
Net decrease in cash and cash equivalents (14,517) (7,141)
Cash and cash equivalents at beginning of period 37,360 36,123
-------- -------
Cash and cash equivalents at end of period $ 22,843 $28,982
======== =======
Supplemental disclosure of cash flow information:
Non-cash investing and financing activities:
Income tax benefit of options exercised $ 2,186 $ 5
Cash paid during the period for:
Interest $ 20 $ 32
Income taxes $ 89 $ 49
</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 March 31, 1999 and
the results of its operations and its cash flows for the three months ended
March 31, 1999 and 1998. The results of operations and cash flows for the
three months ended March 31, 1999 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, 1998.
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 May 1998, the IRS issued its final report proposing additional
taxes of an aggregate approximately $1,561,000 plus penalties and interest
for these years. The Company is protesting the IRS assessment. Also, the
federal income tax returns of the Company for the years ended 1993, 1995
and 1996 are currently under examination by the IRS. The IRS has issued a
preliminary examination report covering the 1993 fiscal year proposing
adjustments to income of approximately $3,426,000 for this year. 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
these examinations 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. The following is a reconciliation of the number of shares (denominator)
used in the basic and diluted earnings per share computations (shares in
thousands):
<TABLE>
<CAPTION>
Three Months Ended March 31,
--------------------------------------------
1999 1998
------------------ -------------------
<S> <C> <C> <C> <C>
Per Share Per Share
Shares Amount Shares Amount
------ --------- ------ ---------
Basic EPS 10,827 $1.23 11,047 $ .32
Effect of Dilutive Stock Options 714 (.08) 391 (.01)
------ --------- ------ ---------
Diluted EPS 11,541 $1.15 11,438 $ .31
====== ========= ====== =========
</TABLE>
The following options were not included in the computation of diluted EPS
because the options' exercise price was greater than the average market
price of the common shares:
<TABLE>
<CAPTION>
1999 1998
------------------ ----------------
<S> <C> <C>
Options to purchase shares of common stock
(in thousands) - 218
Exercise prices - $9.00 - $11.50
Expiration dates - January 2000 -
February 2008
</TABLE>
5
<PAGE>
4. The Company's predominant business is the design, development and
distribution of athletic footwear. The Company is organized into three
geographic regions: the United States, Europe and other international
operations. The following tables summarize segment information (in
thousands):
<TABLE>
<CAPTION>
Three Months Ended March 31,
--------------------------------------------
1999 1998
------------------ -------------------
<S> <C> <C>
Revenues from unrelated entities:
United States $ 81,464 $ 38,159
Europe 5,437 3,057
Other International 1,676 1,058
-------- --------
$ 88,577 $ 42,274
======== ========
Inter-geographic revenues:
United States $ 1,428 $ 755
Europe 1,141 602
Other International 1,164 1,296
-------- --------
$ 3,733 $ 2,653
======== ========
Total revenues:
United States $ 82,892 $ 38,914
Europe 6,578 3,659
Other International 2,840 2,354
Less inter-geographic revenues (3,733) (2,653)
-------- --------
$ 88,577 $ 42,274
======== ========
Operating profit (loss):
United States $ 24,585 $ 8,213
Europe 509 (135)
Other International 1,334 (32)
Less corporate expenses and
eliminations (4,678) (2,513)
-------- --------
$ 21,750 $ 5,533
======== ========
March 31, December 31,
1999 1998
-------- --------
Identifiable assets:
United States $105,402 $ 67,487
Europe 8,503 6,299
Other International 14,574 15,720
Corporate assets and
eliminations (1) 11,553 25,959
-------- --------
$140,032 $115,465
======== ========
</TABLE>
(1) Corporate assets include cash and cash equivalents, investments and
intangible assets.
6
<PAGE>
ITEM 2.
- ------
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Note Regarding Forward-Looking Statements and Analyst Reports
"Forward-looking statements", within the meaning of the Private
Securities Litigation Reform Act of 1995 (the "Act"), include certain written
and oral statements made, or incorporated by reference, by the Company or its
representatives in this report, other reports, filings with the Securities and
Exchange Commission ("the S.E.C."), press releases, conferences, or otherwise.
Such forward-looking statements include, without limitation, any statement that
may predict, forecast, indicate, or imply future results, performance, or
achievements, and may contain the words "believe", "anticipate", "expect",
"estimate", "intend", "plan", "project", "will be", "will continue", "will
likely result", or any variations of such words with similar meaning. These
statements are not guarantees of future performance and are subject to certain
risks, uncertainties and assumptions that are difficult to predict; therefore,
actual results may differ materially from those expressed or forecasted in any
such forward-looking statements. Investors should carefully review the risk
factors set forth in other reports or documents the Company files with the
S.E.C., including Forms 10-Q, 10-K and 8-K. Some of the other risks and
uncertainties that should be considered include, but are not limited to, the
following: international, national and local general economic and market
conditions (including the current Asian economic crisis); the size and growth of
the overall athletic footwear and apparel markets; the size of the Company's
competitors; intense competition among designers, marketers, distributors and
sellers of athletic footwear and apparel for consumers and endorsers;
demographic changes; changes in consumer preferences; popularity of particular
designs, categories of products, and sports; seasonal and geographic demand for
the Company's products; the size, timing and mix of purchases of the Company's
products; fluctuations and difficulty in forecasting operating results,
including, without limitation, the fact that advance "futures" orders may not be
indicative of future revenues due to the changing mix of futures and at-once
orders; the ability of the Company to continue, manage or forecast its growth
and inventories; new product development and commercialization; the ability to
secure and protect trademarks, patents, and other intellectual property;
performance and reliability of products; customer service; year 2000 compliance
issues; adverse publicity; the loss of significant customers or suppliers;
dependence on distributors; business disruptions; increased costs of freight and
transportation to meet delivery deadlines; changes in business strategy or
development plans; general risks associated with doing business outside the
United States, including, without limitation, import duties, tariffs, quotas and
political and economic instability; changes in government regulations; liability
and other claims asserted against the Company; the ability to attract and retain
qualified personnel; and other factors referenced or incorporated by reference
in this report and other reports.
The Company operates in a very competitive and rapidly changing
environment. New risk factors can arise and it is not possible for management to
predict all such risk factors, nor can it assess the impact of all such risk
factors on the Company's business or the extent to which any factor, or
combination of factors, may cause actual results to differ materially from those
contained in any forward-looking statements. Given these risks and
uncertainties, investors should not place undue reliance on forward-looking
statements as a prediction of actual results.
Investors should also be aware that while the Company does, from time
to time, communicate with securities analysts, it is against the Company's
policy to disclose to them any material non-public information or other
confidential commercial information. Accordingly, investors should not assume
that the Company agrees with any statement or report issued by any analyst
irrespective of the content of the statement or report. Furthermore, the
Company has a policy against issuing or confirming financial forecasts or
projections issued by others. Thus, to the extent that reports issued by
securities analysts or others contain any projections, forecasts or opinions,
such reports are not the responsibility of the Company.
7
<PAGE>
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>
THREE MONTHS
ENDED MARCH 31,
---------------
1999 1998
---- ----
<S> <C> <C>
Revenues 100.0% 100.0%
Cost of goods sold 56.7 59.4
Gross profit 43.3 40.6
Selling, general and administrative expenses 18.8 27.5
Interest income, net 0.3 1.0
Earnings before income taxes 24.8 14.1
Income tax expense 9.8 5.7
Net earnings 15.0 8.4
</TABLE>
Revenues increased to $88,577,000 for the quarter ended March 31, 1999 from
$42,274,000 for the quarter ended March 31, 1998, an increase of $46,303,000
or 109.5%. This increase resulted primarily from an increase in the volume of
footwear sold to approximately 3,192,000 pair for the quarter ended March 31,
1999 from approximately 1,669,000 pair for the quarter ended March 31, 1998.
Also, the average wholesale price per pair increased to $26.26 for the quarter
ended March 31, 1999 from $24.56 for the quarter ended March 31, 1998. The
increase in the volume of footwear sold was primarily the result of increased
sales of the Classic and children's category of shoes of 98.4% and 118.3%,
respectively. The average wholesale price per pair increased due to an increase
in the average wholesale price per pair for all footwear categories, primarily
in the Classic category of shoes.
Domestic revenues increased 112.9% to $80,987,000 for the quarter ended March
31, 1999 from $38,032,000 for the quarter ended March 31, 1998. International
revenues increased 78.9% to $7,590,000 for the quarter ended March 31, 1999 from
$4,242,000 for the quarter ended March 31, 1998. International revenues, as a
percentage of total revenues, decreased to 8.6% for the quarter ended March 31,
1999 from 10.0% for the quarter ended March 31, 1998.
Gross profit margins, as a percentage of revenues, increased to 43.3% for the
quarter ended March 31, 1999, from 40.6% for the quarter ended March 31, 1998.
Gross profit margins increased primarily due to changes in the geographic and
product mix of sales.
Selling, general and administrative expenses increased to $16,625,000 (18.8% of
revenues) for the quarter ended March 31, 1999 from $11,613,000 (27.5% of
revenues) for the quarter ended March 31, 1998, an increase of $5,012,000 or
43.2%. The increases in these expenses were primarily the result of increases in
advertising costs and commissions as well as an increase in the bonus accrual
for an employee incentive program.
Net interest income was $273,000 (0.3% of revenues) for the quarter ended March
31, 1999 compared to $433,000 (1.0% of revenues) for the quarter ended March 31,
1998, a decrease of $160,000 or 37.0%. This decrease in net interest income was
the result of lower average balances and lower average interest rates.
The Company's effective tax rate decreased to 39.7% of earnings before income
tax from 40.6% for the quarters ended March 31, 1999 and 1998, respectively.
Net earnings increased 274.8% to $13,286,000 for the quarter ended March 31,
1999 from $3,545,000 for the quarter ended March 31, 1998.
At March 31, 1999 and 1998, domestic futures orders with start ship dates from
April through September 1999 and 1998 were approximately $135,066,000 and
$58,748,000, respectively, an increase of 129.9%. At March 31, 1999 and 1998,
international futures orders with start ship dates from April through September
1999 and 1998 were approximately $7,012,000 and $6,187,000, respectively, an
increase of 13.3%. "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
8
<PAGE>
determination of backlog. These 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.
Liquidity and Capital Resources
The Company experienced a net cash outflow of approximately $13,923,000 and
$6,091,000 from its operating activities for the quarters ended March 31, 1999
and 1998, respectively. Cash used in operations for the quarter ended March 31,
1999 increased from the quarter ended March 31, 1998 primarily due to changes in
accounts receivable and accounts payable and accrued liabilities, as well as an
increase in net earnings.
The Company had a net outflow of cash from its investing activities for the
quarter ended March 31, 1999 primarily due to the purchase of property, plant
and equipment. The Company had a net inflow of cash from its investing
activities for the quarter ended March 31, 1998 due to the sale of a building,
offset by the purchase of property, plant and equipment.
The Company had a net inflow of cash from its financing activities for the
quarter ended March 31, 1999 primarily due to increases in net borrowings under
bank lines of credit and proceeds from the exercise of stock options partially
offset by the purchase of treasury stock.
In April 1998, the Company announced a new share repurchase program. The Board
of Directors authorized the Company to purchase up to $20 million of its Class A
Common Stock on the open market through April 2002. Such open market purchases,
if any, will occur from time to time as market conditions warrant. The Company
adopted this program because it believes repurchasing its shares can be good use
of excess cash depending on the Company's array of alternatives. From inception
under its new share repurchase program, the Company purchased 323,532 shares of
Class A Common Stock at a cost totaling approximately $5,531,000. Currently, the
Company has made purchases under all stock repurchase programs from August 14,
1996 through April 22, 1999 (the date of filing of this Form 10-Q) of 2,688,932
shares at an aggregate cost totaling approximately $22,241,000.
No other material capital commitments exist at March 31, 1999. 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 currently anticipated sources of
capital are sufficient to sustain its anticipated capital needs for the
remainder of 1999.
The Company's working capital increased $14,961,000 to $98,260,000 at March
31, 1999 from $83,299,000 at December 31, 1998.
Impact of Year 2000
The Year 2000 Issue is the result of computer-controlled systems using two
digits rather than four to define the applicable year. For example, computer
programs that have time-sensitive software may recognize a date ending in "00"
as the year 1900 rather than the year 2000. This could result in system failure
or miscalculations causing disruptions of operations including, among other
things, an inability to process transactions, send invoices, or engage in
similar normal business activities. If the Company, its significant customers,
or suppliers fail to make necessary modifications and conversions on a timely
basis, the Year 2000 Issue could have a material adverse effect on Company
operations. However, the impact cannot be quantified at this time.
To address these Year 2000 Issues with its internal systems, the Company has
initiated a comprehensive program which is designed to deal with the most
critical systems first. Assessment and remediation are proceeding in tandem.
The Company completed its year 2000 software program conversions for its
critical systems during the first quarter of 1999, which encompass all major
categories of systems in use by the Company, including manufacturing, sales and
finance. During the second quarter of 1999, the Company will work with critical
suppliers of products and services, and customers to determine that they are
year 2000 capable or to monitor their progress towards year 2000 capability.
Once supplier and customer capability is determined, the Company will commence
work on various types of contingency planning to address potential problem areas
with internal systems and with suppliers, customers, and other third parties.
Nevertheless, there can be no assurance that there will not be a material
adverse effect on the Company if third party governmental or business entities
do not convert or replace their systems in a timely manner and in a way that is
compatible with the Company's systems.
Costs related to the Year 2000 Issues are funded through operating cash flows.
Currently, the Company has expended
9
<PAGE>
approximately $450,000 in remediation efforts, principally the cost of modifying
the applicable code of existing software. The Company estimates remaining costs
to be approximately $100,000. The Company presently believes that the total cost
of achieving Year 2000 compliant systems is not expected to be material to
financial condition, liquidity, or results of operations.
Time and cost estimates are based on currently available information.
Developments that could affect estimates include, but are not limited to, the
availability and cost of trained personnel; the ability to locate and correct
all relevant computer code and systems; and remediation success of the Company's
suppliers and customers.
10
<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 and Reports on Form 8-K:
--------------------------------
(a) Exhibits
27 -- Financial Data Schedule.
(b) Reports on Form 8-K
None.
11
<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: April 22, 1999 By: /S/ GEORGE POWLICK
---------------------------------
George Powlick,
Vice President Finance and
Chief Financial Officer
12
<PAGE>
EXHIBIT INDEX
--------------
Exhibit Page
- ------- ----
27 Financial Data Schedule
13
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEETS AND CONSOLIDATED STATEMENTS OF EARNINGS AND
COMPREHENSIVE EARNINGS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 22,843
<SECURITIES> 0
<RECEIVABLES> 67,011
<ALLOWANCES> (883)
<INVENTORY> 33,774
<CURRENT-ASSETS> 125,547
<PP&E> 8,405
<DEPRECIATION> 0
<TOTAL-ASSETS> 140,032
<CURRENT-LIABILITIES> 27,287
<BONDS> 0
0
0
<COMMON> 135
<OTHER-SE> 97,541
<TOTAL-LIABILITY-AND-EQUITY> 140,032
<SALES> 88,577
<TOTAL-REVENUES> 88,577
<CGS> 50,202
<TOTAL-COSTS> 16,625
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 273<F1>
<INCOME-PRETAX> 22,023
<INCOME-TAX> 8,737
<INCOME-CONTINUING> 13,286
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 13,286
<EPS-PRIMARY> 1.23
<EPS-DILUTED> 1.15
<FN>
<F1>Interest Income Net of Interest Expense
</FN>
</TABLE>
