<PAGE>
THE 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 THE QUARTERLY PERIOD ENDED MAY 3, 1997
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 0-18632
THE WET SEAL, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 33-0415940
(State of Incorporation) (I.R.S. Employer Identification No.)
64 FAIRBANKS
IRVINE, CALIFORNIA 92718
(Address of principal executive offices) (Zip code)
(714) 583-9029
(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
---- ---
The number of shares outstanding of the registrant's Class A
Common Stock and Class B Common Stock, par value $.10 per share, at May 30, 1997
were 10,645,374 and 2,912,665, respectively. There were no shares of Preferred
Stock, par value $.01 per share, outstanding at May 30, 1997.
<PAGE>
THE WET SEAL, INC.
FORM 10-Q
INDEX
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets as of May 3, 1997 (unaudited) and
February 1, 1997.......................................3-4
Statements of Operations (unaudited) for the 13 weeks
ended May 3, 1997 and May 4, 1996........................5
Statements of Cash Flows (unaudited) for the 13 weeks
ended May 3, 1997 and May 4, 1996........................6
Notes to Financial Statements..........................7-8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations...................9-13
PART II. OTHER INFORMATION.......................................14
SIGNATURE PAGE..........................................15
<PAGE>
THE WET SEAL, INC.
BALANCE SHEETS
<TABLE>
<CAPTION>
May 3, February 1,
1997 1997
------------- --------------
(unaudited)
ASSETS
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $65,631,000 $71,483,000
Marketable securities 24,200,000 17,700,000
Other receivables 1,812,000 1,577,000
Merchandise inventories 30,271,000 22,589,000
Prepaid expenses, including $5,500,000
of prepaid rent as of May 3, 1997 6,200,000 -
Deferred tax charges 693,000 693,000
------------- -------------
Total current assets 128,807,000 114,042,000
------------- -------------
EQUIPMENT AND LEASEHOLD IMPROVEMENTS:
Leasehold improvements 55,871,000 55,429,000
Furniture, fixtures and equipment 22,094,000 21,742,000
Leasehold rights 3,342,000 3,342,000
Construction in progress 1,324,000 2,000
------------- -------------
82,631,000 80,515,000
Less accumulated depreciation (50,072,000) (47,285,000)
------------- -------------
Net equipment and leasehold improvements 32,559,000 33,230,000
------------- -------------
OTHER ASSETS:
Deferred tax charges and other assets 6,916,000 6,914,000
Goodwill, net of accumulated amortization of
$577,000 and $566,000 as of May 3, 1997
and February 1, 1997, respectively 555,000 566,000
------------- -------------
Total other assets 7,471,000 7,480,000
------------- -------------
$168,837,000 $154,752,000
------------- -------------
------------- -------------
</TABLE>
<PAGE>
THE WET SEAL, INC.
BALANCE SHEETS
<TABLE>
<CAPTION>
MAY 3, FEBRUARY 1,
1997 1997
-------------- --------------
(unaudited)
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $41,426,000 $26,035,000
Accrued liabilities 19,851,000 24,064,000
Income taxes payable 1,984,000 2,152,000
Current portion of long-term debt 2,000,000 2,000,000
------------- ------------
Total current liabilities 65,261,000 54,251,000
------------- ------------
LONG-TERM LIABILITIES:
Long-term debt 2,764,000 3,264,000
Deferred rent 6,177,000 6,117,000
------------- ------------
Total long-term liabilities 8,941,000 9,381,000
------------- ------------
Total liabilities 74,202,000 63,632,000
------------- ------------
STOCKHOLDERS' EQUITY:
Preferred Stock, $.01 par value, authorized
2,000,000 shares; none issued and outstanding - -
Common Stock, Class A, $.10 par value,
authorized 20,000,000 shares;
10,628,874 shares issued and outstanding
at May 3, 1997 and February 1, 1997, respectively 1,063,000 1,063,000
Common Stock, Class B Convertible, $.10 par value,
authorized 10,000,000 shares;
2,912,665 shares issued and outstanding
at May 3, 1997 and February 1, 1997, respectively 291,000 291,000
Paid-in capital 56,596,000 56,596,000
Retained earnings 36,685,000 33,170,000
------------- ------------
Total stockholders' equity 94,635,000 91,120,000
------------- ------------
$168,837,000 $154,752,000
------------- ------------
------------- ------------
</TABLE>
<PAGE>
THE WET SEAL, INC.
STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
13 WEEKS ENDED
----------------------------------
MAY 3, MAY 4,
1997 1996
------------- ---------------
<S> <C> <C>
SALES $95,563,000 $80,575,000
COST OF SALES (including buying, distribution
and occupancy costs) 70,122,000 61,537,000
------------ ------------
GROSS MARGIN 25,441,000 19,038,000
SELLING, GENERAL AND ADMINISTRATIVE EXPENSE 20,197,000 18,264,000
INTEREST INCOME, NET (714,000) (477,000)
------------ ------------
NET OPERATING EXPENSES 19,483,000 17,787,000
------------ ------------
INCOME BEFORE PROVISION FOR INCOME TAXES 5,958,000 1,251,000
PROVISION FOR INCOME TAXES 2,443,000 529,000
------------ ------------
NET INCOME $3,515,000 $722,000
------------ ------------
------------ ------------
NET INCOME PER SHARE $0.25 $0.06
------------ ------------
------------ ------------
WEIGHTED AVERAGE COMMON AND
COMMON EQUIVALENT SHARES OUTSTANDING 13,832,051 12,497,842
------------ ------------
------------ ------------
</TABLE>
<PAGE>
THE WET SEAL, INC.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
13 WEEKS ENDED
-------------------------------
MAY 3, MAY 4,
1997 1996
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $3,515,000 $722,000
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 2,798,000 3,178,000
Loss on disposal of equipment and leasehold improvements - 2,000
Changes in operating assets and liabilities:
(Increase) decrease in:
Other receivables (235,000) 442,000
Merchandise inventories (7,682,000) (8,431,000)
Prepaid expenses (6,200,000) (5,045,000)
Other assets (2,000) 22,000
(Decrease) increase in:
Accounts payable and accrued liabilities 11,178,000 13,910,000
Income taxes payable (168,000) (2,965,000)
Deferred rent 60,000 211,000
----------- -----------
Total adjustments (251,000) 1,324,000
----------- -----------
Net cash provided by operating activities 3,264,000 2,046,000
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of marketable securities 4,000,000 -
Investment in equipment and leasehold improvements (2,116,000) (2,356,000)
Investment in marketable securities (10,500,000) -
----------- -----------
Net cash used in investing activities (8,616,000) (2,356,000)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on long-term debt (500,000) (500,000)
Proceeds from issuance of stock - 27,000
----------- -----------
Net cash used in financing activities (500,000) (473,000
----------- -----------
NET DECREASE IN CASH AND CASH EQUIVALENTS (5,852,000) (783,000)
CASH AND CASH EQUIVALENTS,beginning of period 71,483,000 57,153,000
----------- -----------
CASH AND CASH EQUIVALENTS,end of period $65,631,000 $56,370,000
----------- -----------
----------- -----------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest $98,000 $172,000
Income taxes 2,611,000 3,494,000
</TABLE>
<PAGE>
THE WET SEAL, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - BASIS OF PRESENTATION:
The information set forth in these financial statements is unaudited except
for the February 1, 1997 balance sheet. These statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information, the instructions to Form 10-Q and Rule 10-01 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments, consisting only of normal
recurring accruals, necessary for a fair presentation have been included. The
results of operations for the 13 weeks ended May 3, 1997 are not necessarily
indicative of the results that may be expected for the year ending January 31,
1998. For further information, refer to the financial statements and notes
thereto included in the Company's Annual Report for the year ended February 1,
1997.
Effective February 2, 1997, Contempo Casuals, Inc. was merged with and into
The Wet Seal, Inc.
NOTE 2 - LINE OF CREDIT AND LOAN PAYABLE TO BANK:
Under an unsecured revolving line-of-credit arrangement with a bank, the
Company may borrow up to a maximum of $30 million on a revolving basis through
July 1, 1998. The cash borrowings under the arrangement bear interest at the
bank's prime rate or, at the Company's option, LIBOR plus 1.75%. As of May 3,
1997, the Company had no borrowings outstanding under the credit arrangement.
In June 1995, the Company entered into an unsecured five-year, $10 million
term loan. The loan bears interest at the bank's prime rate plus .25% or, at
the Company's option, LIBOR plus 1.75%. The estimated annual principal payments
on the loan are $2,000,000 payable in quarterly installments of $500,000 which
commenced October 31, 1995. As of May 3, 1997, the loan has a remaining
outstanding balance of $4,764,000.
The credit arrangement and the term loan impose quarterly and annual
financial covenants requiring the Company to maintain certain financial ratios
and achieve certain levels of annual income. In addition, the credit
arrangement and the term loan
<PAGE>
NOTE 2 - LOAN PAYABLE TO BANK AND LINE OF CREDIT (CONTINUED):
require that the bank approve the payment of dividends and restrict the level of
capital expenditures. At May 3, 1997, the Company was in compliance with these
covenants.
NOTE 3 - EARNINGS PER COMMON SHARE:
Earnings per common share are based on the weighted average number of
common and common stock equivalent shares outstanding, if dilutive, during the
periods.
In February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 128, "Earnings Per Share" ("SFAS No. 128")
which is effective for financial statements issued for periods ending after
December 15, 1997. SFAS No. 128 requires the disclosure of basic and diluted
earnings per share. For the periods ended May 3, 1997 and May 4, 1996, the
amount reported as net income per common and common equivalent share is not
materially different than that which would have been reported for basic and
diluted earnings per share in accordance with SFAS No. 128.
<PAGE>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
INTRODUCTION
The Company is one of the largest national mall-based specialty retailers
focusing primarily on young women's apparel, and currently operates 363 retail
stores in 34 states and Puerto Rico under the names "Wet Seal", "Contempo
Casuals", "Limbo Lounge" and "Next". The Company sells moderately priced,
fashionable, casual apparel and accessory items designed for consumers with a
young, active lifestyle.
On July 1, 1995, the Company acquired Contempo Casuals. The acquisition
increased the number of stores the Company operates by 237 stores. Acquiring
Contempo Casuals enabled the Company to significantly reduce fixed expenses as a
percentage of sales through the consolidation and integration of the two
companies' management teams, corporate offices and distribution centers. This
process was substantially completed at the time of the acquisition.
As of May 3, 1997 the Company operated 363 stores as compared to 362 stores
as of May 4, 1996, the end of the first quarter of fiscal 1996. The Company
opened eleven stores during the period from May 5, 1996 to May 3, 1997 and
closed ten stores.
Effective February 2, 1997, Contempo Casuals, Inc. was merged with and into
The Wet Seal, Inc.
Management's Discussion and Analysis of Financial Condition and Results of
Operations should be read in conjunction with the Company's Financial Statements
and the Notes related thereto.
RESULTS OF OPERATIONS
THE 13 WEEKS ENDED MAY 3, 1997 (FIRST QUARTER OF FISCAL 1997) AS COMPARED TO THE
13 WEEKS ENDED MAY 4, 1996 (FIRST QUARTER OF FISCAL 1996)
Sales in the first quarter of fiscal 1997 were $95,563,000 compared to
sales in the first quarter of fiscal 1996 of $80,575,000, an increase of
$14,988,000 or 18.6%. The dollar increase in sales was primarily due to an
increase of 14.7% in comparable store sales. Comparable store sales are
defined as sales in stores that were open throughout the full fiscal year and
throughout the full prior fiscal year. The comparable store sales increase is
due in part to the increase in inventory levels
<PAGE>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS, CONTINUED:
compared to prior year. Inventory levels were considered to be below plan in
prior year. Further contributing to the sales increases were the opening of
eleven new stores with a higher sales productivity per store than the ten closed
stores.
Cost of sales, including buying, distribution and occupancy costs, was
$70,122,000 in the first quarter of fiscal 1997 compared to $61,537,000 in the
first quarter of fiscal 1996, an increase of $8,585,000. The dollar increase in
cost of sales was due to the increase in sales. As a percentage of sales, cost
of sales decreased from 76.4% in the first quarter of fiscal 1996 to 73.4% in
the first quarter of fiscal 1997, a decrease of 3.0%. This decrease in cost of
sales as a percentage of sales was related to a decrease in occupancy costs as a
percentage of sales of 3.9%, offset slightly by an increase in the cost of
merchandise. The decrease in occupancy costs was associated primarily with the
improved leverage in fixed costs which was due to the increase in comparable
store sales as well as a decrease in depreciation due to the impact of fully
depreciated assets. The increase in the cost of merchandise was due to an
increase in markdowns in the first quarter of fiscal 1997 as compared to the
first quarter of fiscal 1996. Markdowns in the first quarter of fiscal 1996
were low due to inventory levels that were below plan.
Selling, general and administrative expense was $20,197,000 in the first
quarter of fiscal 1997 compared to $18,264,000 in the first quarter of fiscal
1996, an increase of $1,933,000 or 10.6%. The dollar increase in selling,
general and administrative expense was related to the increase in sales. As a
percentage of sales, selling, general and administrative expense decreased from
22.7% in the first quarter of fiscal 1996 to 21.1% in the first quarter of
fiscal 1997, a decrease of 1.6%. The decrease as a percentage of sales was
related to the leverage of the fixed components of this expense, primarily store
wages, as a result of the increase in comparable store sales.
Interest income, net, was $714,000 in the first quarter of fiscal 1997
compared to $477,000 in the first quarter of fiscal 1996, an increase of
$237,000. The increase was due to an increase in the average cash balance
invested in the current year period as compared to the prior year.
Income tax provision was $2,443,000 in the first quarter of fiscal 1997
compared to $529,000 in the first quarter of fiscal 1996. The effective tax
rate was 41.0% compared to 42.3% in the prior year.
<PAGE>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS, CONTINUED
Due to the factors noted above, net income was $3,515,000 in the first
quarter of fiscal 1997 compared to $722,000 in the first quarter of fiscal 1996.
As a percentage of sales, net income was 3.7% in the first quarter of fiscal
1997 compared to 0.9% in the first quarter of fiscal 1996.
LIQUIDITY AND CAPITAL RESOURCES
Working capital at May 3, 1997 was $63,546,000 compared to $59,791,000 at
February 1, 1997, an increase of $3,755,000. The Company's primary source of
working capital has historically been cash flows from operating activities. Net
cash flows provided by operating activities for the first quarter of fiscal 1997
was $3,264,000 compared to $2,046,000 for the first quarter of fiscal 1996.
Inventory increased $7,682,000 at May 3, 1997 compared to the fiscal year end
due to the seasonal nature of the business; inventory levels are typically at a
low point at year end. The increase in accounts payable and accrued liabilities
of $11,178,000 more than offset this increase in inventory due to the terms of
the payments in relation to the receipt of the inventory.
In the first quarter of fiscal 1997, the Company invested $2,116,000 in
equipment and leasehold improvements. These expenditures related primarily to
the one store opened in the first quarter of fiscal 1997 along with construction
in progress for additional new and remodeled stores. The Company currently
estimates that the capital expenditures for the remainder of fiscal 1997 will be
approximately $28,000,000. These planned expenditures relate primarily to store
openings and remodels as well as a new corporate office and distribution center.
Under an unsecured revolving line-of-credit arrangement with a bank, the
Company may borrow up to a maximum of $30 million on a revolving basis through
July 1, 1998. The cash borrowings under the arrangement bear interest at the
bank's prime rate or, at the Company's option, LIBOR plus 1.75%. As of May 3,
1997, the Company had no borrowings outstanding under the credit arrangement.
In June 1995, the Company entered into an unsecured five-year, $10 million
term loan. The loan bears interest at the bank's prime rate plus .25% or, at
the Company's option, LIBOR plus 1.75%. The estimated annual principal payments
on the loan are $2,000,000 payable in quarterly installments of $500,000 which
commenced October 31, 1995. As of May 3, 1997, the loan
<PAGE>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS, CONTINUED
has a remaining outstanding balance of $4,764,000.
The credit arrangement and the term loan impose quarterly and annual
financial covenants requiring the Company to maintain certain financial ratios
and achieve certain levels of annual income. In addition, the credit
arrangement and the term loan require that the bank approve the payment of
dividends and restrict the level of capital expenditures. At May 3, 1997, the
Company was in compliance with these covenants.
The Company invests its excess funds primarily in a short-term investment
grade money market fund, investment grade commercial paper and U.S. Treasury and
Agency obligations. Management believes the Company's working capital and cash
flows from operating activities will be sufficient to meet operating and capital
requirements in the foreseeable future.
SEASONALITY AND QUARTERLY OPERATING RESULTS
The Company's business is seasonal by nature with the Christmas season
(beginning the week of Thanksgiving and ending the first Saturday after
Christmas) and the back-to-school season (beginning the last week of July and
ending the first week of September) historically accounting for the largest
percentage of sales volume. In the Company's three fiscal years ended February
1, 1997, the Christmas and back-to-school seasons together
accounted for an average of approximately 32% of the Company's annual sales,
after adjusting for sales increases related to new stores. The Company does not
believe that inflation has had a material effect on the results of operations
during the past three years. However, there can be no assurance that the
Company's business will not be affected by inflation in the future.
STATEMENT REGARDING FORWARD LOOKING DISCLOSURE
Certain sections of this Quarterly Report on Form 10-Q, including the
preceding "Management's Discussion and Analysis of Financial Condition and
Results of Operations," contain various forward looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended (the
"Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as
amended, which represent the Company's expectations or beliefs concerning future
events. The Company cautions that these statements are further qualified by
important factors that could
<PAGE>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS, CONTINUED
cause actual results to differ materially from those in the forward looking
statements, including, without limitation, the retention by the Company of
suppliers for both brand name and Company-developed merchandise, the ability of
the Company to expand and to continue to increase comparable store sales, the
sufficiency of the Company's working capital and cash flows from operating
activities, a decline in demand for the merchandise offered by the Company, the
ability of the Company to locate and obtain acceptable store sites and lease
terms or renew existing leases, the ability of the Company to obtain adequate
merchandise supply, the ability of the Company to hire and train employees, the
ability of the Company to gauge the fashion tastes of its customers and provide
merchandise that satisfies customer demand, management's ability to manage the
Company's expansion, the effect of economic conditions, the effect of severe
weather or natural disasters and the effect of competitive pressures from other
retailers.
NEW ACCOUNTING PRONOUNCEMENTS
In February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 128, "Earnings Per Share" ("SFAS No. 128")
which is effective for financial statements issued for periods ending after
December 15, 1997. SFAS No. 128 requires the disclosure of basic and diluted
earnings per share. For the periods ended May 3, 1997 and May 4, 1996, the
amount reported as net income per common and common equivalent share is not
materially different than that which would have been reported for basic and
diluted earnings per share in accordance with SFAS No. 128.
<PAGE>
PART II - OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS.
The Company is not party to any material legal proceedings, other
than ordinary routine litigation incidental to the Company's business.
ITEM 2 - CHANGES IN SECURITIES. Not Applicable
ITEM 3 - DEFAULTS UPON SENIOR SECURITIES. Not Applicable
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not Applicable
ITEM 5 - OTHER INFORMATION. Not Applicable
ITEM 6(A) - EXHIBITS. Not Applicable
ITEM 6(B) - REPORTS ON FORM 8-K. Not Applicable
<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.
The Wet Seal, Inc.
(Registrant)
Date: JUNE 13, 1997 /S/KATHY BRONSTEIN
--------------------------- ---------------------------
Kathy Bronstein
Vice Chairman and Chief
Executive Officer
(Principal Executive
Officer)
Date: JUNE 13, 1997 /S/EDMOND THOMAS
--------------------------- ---------------------------
Edmond Thomas
President and
Chief Operating Officer
Date: JUNE 13, 1997 /S/ANN CADIER KIM
--------------------------- ---------------------------
Ann Cadier Kim
Vice President of Finance
and Chief Financial
Officer (Principal
Financial and Accounting
Officer)
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THE WET SEAL, INC. BANANCE SHEETS AND STATEMENTS OF OPERATIONS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-START> FEB-02-1997
<PERIOD-END> MAY-03-1997
<CASH> 65,631,000
<SECURITIES> 24,200,000
<RECEIVABLES> 1,812,000
<ALLOWANCES> 0
<INVENTORY> 30,271,000
<CURRENT-ASSETS> 128,807,000
<PP&E> 82,631,000
<DEPRECIATION> 50,072,000
<TOTAL-ASSETS> 168,837,000
<CURRENT-LIABILITIES> 65,261,000
<BONDS> 0
0
0
<COMMON> 1,354,000
<OTHER-SE> 93,281,000
<TOTAL-LIABILITY-AND-EQUITY> 168,837,000
<SALES> 95,563,000
<TOTAL-REVENUES> 95,563,000
<CGS> 70,122,000
<TOTAL-COSTS> 20,197,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (714,000)
<INCOME-PRETAX> 5,958,000
<INCOME-TAX> 2,443,000
<INCOME-CONTINUING> 3,515,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,515,000
<EPS-PRIMARY> $0.25
<EPS-DILUTED> $0.25
</TABLE>
