FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark one)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarter ended June 30, 1997
------------------------------------------
or
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
ACT
For the transition period from to
---------------------------------
Commission File Number: 0-19283
--------------------------
Omega Health Systems, Inc.
---------------------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
Delaware 13-3220466
- ------------------------- -------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5100 Poplar Avenue, Suite 2100, Memphis, Tennessee 38137
---------------------------------------------------------------------------
(Address of principal executive offices)
901-683-7868
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(Issuer's telephone number)
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(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15 (d) of the 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. [X] Yes [ ] No
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
DURING THE PRECEEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13, or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court [ ] Yes [ ] No
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date.
Class Outstanding at July 31, 1997
- ---------------------------------------------------------------------------
Common Stock, $0.06 par value 7,496,973
<PAGE>
OMEGA HEALTH SYSTEMS, INC. AND SUBSIDIARIES
FORM 10-Q
For the Quarter Ended June 30, 1997
PART 1 - FINANCIAL INFORMATION
Index to Financial Information: Page
-------
Item 1:
Condensed Consolidated Balance Sheets
as of June 30, 1997 and December 31,
1996 3
Condensed Consolidated Statements of
Operations for the Three Months Ended
June 30, 1997 and 1996 4
Condensed Consolidated Statements of
Operations for the Six Months Ended
June 30, 1997 and 1996 5
Condensed Consolidated Statements of
Cash Flows for the Six Months Ended
June 30, 1997 and 1996 6
Notes to Condensed Consolidated
Financial Statements 7
Item 2:
Management's Discussion and Analysis of
Financial Condition and Results of
Operations 9
2
<PAGE>
OMEGA HEALTH SYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
June 30, 1997 and December 31, 1996
(unaudited)
<TABLE>
<CAPTION>
ASSETS 1997 1996
---- ----
<S> <C> <C>
Current Assets:
Cash $ 4,779,810 2,943,617
Accounts receivable, net of allowances
for contractual adjustments and
doubtful accounts of $2,237,240 and
$1,760,091 in 1997 and 1996, respectively 10,875,707 6,475,183
Prepaid expenses 920,323 534,661
------------ ------------
Total current assets 16,575,840 9,953,461
Equipment, furniture and fixtures 13,560,685 11,796,511
Accumulated depreciation (6,292,565) (5,965,932)
------------ ------------
Net equipment, furniture and fixtures 7,268,120 5,830,579
Intangible assets from acquisition, net of
amortization of $714,142 and $411,536 in
1997 and 1996, respectively 16,450,249 10,513,937
Other assets 1,728,234 1,141,580
------------ ------------
Total assets $ 42,022,443 27,439,557
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses 7,018,741 2,799,196
Claims liability 2,204,319 1,176,068
Current installments of long-term debt 984,172 836,894
Current installments of subordinated debt 44,773 368,166
------------ ------------
Total current liabilities 10,252,005 5,180,324
Long-term debt, excluding current
installments 11,329,808 5,837,456
Subordinated debt, excluding current
installments 1,118,647 1,367,718
------------ ------------
Total liabilities 22,700,460 12,385,498
Minority Interest 111,551 10,896
Stockholders' equity:
Common stock 448,873 411,946
Preferred stock 184,012 485,049
Additional paid in capital 25,847,801 22,685,778
Accumulated deficit (7,270,254) (8,539,610)
------------ ------------
Total stockholders' equity 19,210,432 15,043,163
------------ ------------
Total liabilities and stockholders' equity $ 42,022,443 27,439,557
============ ============
</TABLE>
See accompanying notes to condensed consolidated financial statements.
3
<PAGE>
OMEGA HEALTH SYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended June 30, 1997 and 1996
(unaudited)
<TABLE>
<CAPTION>
1997 1996
---- ----
<S> <C> <C>
Ophthalmic center net revenues $ 9,181,783 6,187,831
Managed eye care revenues 4,383,259 3,586,677
Optometric practice services 6,388,790 0
Supply and equipment sales 353,030 583,315
Other revenues 139,700 104,672
------------ ------------
Total revenues 20,446,562 10,462,495
Center operating expenses 7,476,451 5,144,917
Eye care claims 3,474,367 2,898,670
Cost of sales 6,273,218 424,614
Provision for doubtful accounts 251,918 134,402
Selling, general, administrative and
development expenses 1,849,264 1,439,315
------------ ------------
Earnings from operations 1,121,344 420,577
Non-operating revenue (expenses):
Interest expense (272,209) (179,182)
Interest and other revenue 21,587 55,935
------------ ------------
Earnings before minority interest 870,722 297,330
Minority interest in net income of majority-owned
partnership (136,514) 0
------------ ------------
Net earnings 734,208 297,330
Preferred dividends, principally imputed (6,650) (1,359,371)
------------ ------------
Net earnings $ 727,558 (1,062,041)
============ ============
Earnings per common share $ 0.10 ($ 0.22)
============ ============
</TABLE>
See accompanying notes to condensed consolidated financial statements.
4
<PAGE>
OMEGA HEALTH SYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Six Months Ended June 30, 1997 and 1996
(unaudited)
<TABLE>
<CAPTION>
1997 1996
---- ----
<S> <C> <C>
Ophthalmic center net revenues $ 16,742,896 11,103,161
Managed eye care revenues 8,688,147 6,920,540
Optometric practice services 6,388,790 0
Supply and equipment sales 787,139 1,075,093
Other revenues 166,292 261,428
------------ ------------
Total revenues 32,773,264 19,360,222
Center operating expenses 13,789,704 9,646,255
Eye care claims 6,779,845 5,399,637
Cost of sales 6,573,787 778,432
Provision for doubtful accounts 376,014 178,308
Selling, general, administrative and
development expenses 3,464,232 2,756,057
------------ ------------
Earnings from operations 1,789,682 601,533
Non-operating revenue (expenses):
Interest expense (442,021) (294,853)
Interest and other revenue 121,969 112,779
------------ ------------
Earnings before minority interest 1,469,630 419,459
Minority interest in net income of majority-owned
partnership (183,126) 0
------------ ------------
Net earnings 1,286,504 419,459
Preferred dividends, principally imputed (17,149) (1,359,371)
------------ ------------
Net earnings $ 1,269,355 (939,912)
============ ============
Earnings per common share $ 0.17 ($ 0.19)
============ ============
</TABLE>
See accompanying notes to condensed consolidated financial statements.
5
<PAGE>
OMEGA HEALTH SYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended June 30, 1997 and 1996
(unaudited)
1997 1996
---- ----
Cash flows from operations:
Net earnings $ 1,286,504 419,459
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and amortization 896,806 548,755
Provision for doubtful accounts 376,014 178,308
Minority Interest in partnerships 183,126 0
Increase in:
Receivables (1,355,251) (453,083)
Prepaids and other assets (908,629) (401,685)
Increase (decrease) in:
Accounts payable and accrued expenses 815,282 (971,912)
Eye care claims payable 1,028,251 (290,210)
----------- -----------
Net cash provided by (used in)
operating activities 2,322,103 (970,368)
Cash flows from investing activities:
Capital expenditures (645,361) (471,245)
Acquisition of assets of ophthalmic practices (484,131) (2,126,716)
Acquisition of Primary Eye Care Network, net
of cash acquired 518,462 0
----------- -----------
Net cash used in investing activities (611,030) (2,597,961)
Cash flows from financing activities:
Proceeds from issuance of common stock 201,001 0
Proceeds from issuance of preferred stock 0 6,546,237
Net change in long-term debt 27,218 (224,048)
Distributions to minority interest (82,471) 0
Other (20,628) 0
----------- -----------
Net cash provided by financing
activities 125,120 6,322,189
----------- -----------
Net increase in cash 1,836,193 2,753,860
Cash at beginning of period 2,943,617 2,735,556
----------- -----------
Cash at end of period $ 4,779,810 5,489,416
=========== ===========
See accompanying notes to condensed consolidated financial statements.
6
<PAGE>
OMEGA HEALTH SYSTEMS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
1. ACCOUNTING POLICIES
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with the accounting policies in effect as of December 31,
1996, as set forth in the annual consolidated financial statements of Omega
Health Systems, Inc. Certain prior year interim balances have been reclassified
to conform to the 1997 presentation. In the opinion of management, all
adjustments necessary for a fair presentation of the consolidated financial
statements have been included. The results of operations for the six month
period ended June 30, 1997 and 1996 are not necessarily indicative of the
results to be expected for the full year.
2. EARNINGS PER SHARE
Earnings per common share for 1997 and 1996 were computed by dividing the
earnings or losses by the weighted average number of common and common
equivalent shares outstanding during the quarter (7,516,502 and 4,882,929,
respectively) and the six month period (7,321,679 and 4,872,065, respectively).
3. ACQUISITIONS
On March 5, 1997, the Company completed the acquisition of the assets of the
ophthalmology practice of Sarah J. Hays, M.D., of Birmingham, AL. Simultaneously
with the acquisition, the Company entered into a long-term management agreement
with Dr. Hays' professional corporation. The assets were acquired in exchange
for 108,081 shares of the Company's common stock and $859,500 in cash. The cash
portion of the transaction was financed under the Company's revolving credit
facility with NationsCredit Commercial Corporation (NationsCredit).
On May 1, 1997, the Company completed the acquistion of the assets of the
ophthalmology practice of Joseph F. Faust, M.D., of Marion, IN and a 50%
interest in the associated ambulatory surgery center. Simultaneously with the
acquisitions, the Company entered into long-term management agreements to manage
both the practice and the surgery center. The assets were acquired in exchange
for 169,000 shares of the Company's common stock and $1.7 million in cash. The
cash portion of the transaction was financed under the Company's revolving
credit facility with NationsCredit.
On May 1, 1997, the Company completed a merger with Primary Eyecare Network,
based in San Ramon, CA. Primary Eyecare Network provides products and services
to independent optometrists, including management, purchasing, education,
training, and publications. In connection with the merger, the Company issued
195,000 shares of its common stock to the shareholders of Primary Eyecare
Network and paid $1.9 million in cash The cash portion of the transaction was
financed under the Company's revolving credit facility with NationsCredit.
7
<PAGE>
OMEGA HEALTH SYSTEMS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(continued)
4. REVOLVING CREDIT AGREEMENT
On February 25, 1997, the Company entered into a $15,000,000 revolving credit
agreement with NationsCredit Commercial Corporation, an affiliate of
NationsBank. Borrowings under the credit agreement will be used to finance
acquisitions, repay existing indebtedness and provide working capital. The
credit agreement has a six-year term and is fully revolving for the first two
years.
5. CONTINGENCIES
The Company is engaged in the business of providing support and management
services to the eye care profession, which subjects it to intense federal and
state regulation. Both state and federal laws prohibit fee splitting and other
forms of compensation based on patient referral. These regulations may, in the
future, be amended or interpreted in such a fashion as to adversely affect the
business of Omega.
The Company maintains professional liability coverage on a claims made basis for
its centers, employees, and independent contractors, including center directors,
with minimum requirements of $3,000,000 per occurrence and $3,000,000 annually.
The Company also maintains general liability coverage. Additionally, the
physicians associated with the Company maintain professional liability coverage.
Providing support associated with health care services may give rise to claims
from patients or others for damages. The Company has been named in certain
professional liability claims. The Company believes that the ultimate resolution
of these matters will not have a significant effect on the Company's financial
position or results of operations. To the extent that any claims-made coverage
is not renewed or replaced with equivalent insurance, claims based on
occurrences during the term of such coverage, but reported subsequently, would
be uninsured. Management anticipates that the claims-made coverage currently in
place will be renewed or replaced with equivalent insurance as the term of such
coverage expires.
6. RECENT ACCOUNTING PRONOUNCEMENT
The Company will adopt Statement of Financial Accounting Standards No. 128 (SFAS
No. 128) Earnings per Share for the year ending December 31, 1997. SFAS No. 128
requires the calculation of basic earnings per share which is computed by
dividing net income by the weighted average number of shares of common stock
outstanding during the period and diluted earnings per common share which is
computed using the weighted average number of shares of common stock, common
stock equivalents and any other dilute securities. As required, the Company will
restate the reported earnings per share. Basic earnings (loss) per share would
have been $.10 and $(.23) for the three months ended June 30, 1997 and 1996,
respectively, and $.18 and $(.20) for the six months ended June 30, 1997 and
1996, respectively. Diluted earnings (loss) per share would have been $.10 and
$(.17) for the six months ended June 30, 1997 and 1996, respectively.
8
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Total revenues for the quarter ended June 30, 1997 increased $9,984,000 or 95%
over revenues for the corresponding period of the prior year. Total revenues for
the six months ended June 30, 1997 increased $13,413,000 or 69%.
Center net revenues increased $2,994,000 or 48% for the quarter and $5,640,000
or 51% for the six months compared to the same periods in 1996. The increase
resulted from the addition of the practice in Tallahassee, Florida purchased
late in the first quarter of 1996, the addition of the practice and surgery
center in Dallas, Texas purchased late in the third quarter of 1996, the
addition of the Birmingham, Alabama practice purchased in March 1997, the
addition of the Marion, Indiana practice purchased in May, 1997, as well as
increases in revenues of practices managed in both 1996 and 1997 ("same clinic")
of 7% for the quarter and 10% for the six months. Center operating expenses rose
45% or $2,331,000 for the quarter and 43% for the six months compared to the
same periods in 1996. The increase in center operating expenses reflected the
additions of the practices in Tallahassee, Dallas, Birmingham, and Marion. The
increase in same clinic center operating expenses were 13% for the quarter and
9% for the six months compared to the same periods in 1996.
The Company's managed care operations continued to experience growth with
revenue increase of 22% or $576,000 for the quarter and 26% for the six months
over the corresponding periods of 1996. Claims expense also increased 20% for
the quarter and 25% for the six months in correlation with the increase in
managed care revenue.
Optometric practice service revenue is $6,389,000 for the quarter and six months
ended June 30, 1997. Optometric practice services provides products and services
to independent optometrists, including management, purchasing, education,
training, and publications and is related to the acquisition of Primary Eye Care
Network. Supply and equipment sales decreased $230,000 or 39% for the quarter
and $288,000 or 27% for the six months ended June 30, 1997 over the same period
of 1996. The decrease reflects the reduction in equipment sales, which have
lower margins, and is partially offset by an increase in mobile surgical
revenues, resulting in higher margins realized in 1997.
Selling, general, and administrative expenses increased approximately 28% for
the quarter and 26% for the six months compared to the same periods in 1996.
This increase primarily reflects the expansion of operations at the Eye Health
Network as well as increased development costs as the Company began to expand
its acquisition program and administrative expenses related to Primary Eye Care
Network, acquired in May, 1997.
Interest expense increased $93,000 for the quarter and $147,000 for the six
months ended June 30, 1997 compared to the same period of 1996. This increase
relates to the increase in bank financing incurred in late 1996 and in 1997 in
connection with acquisitions.
ACQUISITIONS
On March 5, 1997, the Company completed the acquisition of the assets of the
ophthalmology practice of Sarah J. Hays, M.D., of Birmingham, AL. Simultaneously
with the acquisition, the Company entered into a long-term management agreement
with Dr. Hays' professional corporation. The assets were acquired in exchange
for 108,081 shares of the Company's common stock and $859,500 in cash. The cash
portion of the transaction was financed under the Company's revolving credit
facility with NationsCredit Commercial Corporation (NationsCredit).
9
<PAGE>
On May 1, 1997, the Company completed the acquisition of the assets of the
ophthalmology practice of Joseph F. Faust, M.D., of Marion, IN and a 50%
interest in the associated ambulatory surgery center. Simultaneously with the
acquisitions, the Company entered into long-term management agreements to manage
both the practice and the surgery center. The assets were acquired in exchange
for 169,000 shares of the Company's common stock and $1.7 million in cash. The
cash portion of the transaction was financed under the Company's revolving
credit facility with NationsCredit.
On May 1, 1997, the Company completed a merger with Primary Eyecare Network,
based in San Ramon, CA. Primary Eyecare Network provides products and services
to independent optometrists, including management, purchasing, education,
training, and publications. In connection with the merger, the Company issued
195,000 shares of its common stock to the shareholders of Primary Eyecare
Network and paid $1.9 million in cash. The cash portion of the transaction was
financed under the Company's revolving credit facility with NationsCredit.
LIQUIDITY, CASH FLOW, AND CAPITAL RESOURCES
For the six months ended June 30, 1997, the operating activities of the Company
generated $2,322,103. The Company used $611,000 in investing activities and
generated $125,000 in financing activities.
Cash flows from operations included significant adjustments for depreciation and
amortization ($897,000) as well as provision for doubtful accounts ($376,000).
Investing activities during the period included $645,000 in capital expenditures
for equipment as well as acquisitions of the assets of ophthalmic and optometric
practices in Alabama, Texas, Indiana, and Tennessee, net of cash acquired in the
acquisition of Primary Eye Care Network. Financing activities included an
increase in debt, distributions to minority interest and proceeds from the
issuance of common stock.
On February 25, 1997, the Company entered into a $15,000,000 revolving credit
agreement with NationsCredit Commercial Corporation, an affiliate of
NationsBank. Borrowings under the credit agreement will be used to finance
acquisitions, repay existing indebtedness and provide working capital. The
credit agreement has a six-year term and is fully revolving for the first two
years.
10
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
Not Applicable.
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. Exhibits and Reports on Form 8-K.
(a) Exhibits:
(11) Statement re: computation of per share earnings.
(27) Financial Data Schedule (Electronic filing only).
(b) Reports on Form 8-K:
The Company filed a current report on Form 8-K on May 16,
1997. The Form 8-K reported Item 1 Acquisition or Disposition
of Assets in connection with the acquisition of the assets of
the ophthalmology practice of Joseph Faust, M.D., the
formation of Outpatient Surgery Center of Indiana, LLP, and
the merger with Primary Eye Care Network.
11
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act,
the registrant caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
OMEGA HEALTH SYSTEMS, INC.
----------------------------------
Registrant
August 13, 1997 By \s\ Ronald L. Edmonds
------------------------------------
Ronald L. Edmonds
Executive Vice President and
Chief Financial
Officer
12
EXHIBIT 11
OMEGA HEALTH SYSTEMS, INC. AND SUBSIDIARIES
Computation of Earnings Per Common Share
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30 June 30
----------------------- -----------------------
1997 1996 1997 1996
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Primary (for Statement of Operations):
Net earnings $ 734,208 297,330 1,286,504 419,459
Preferred stock dividends 6,650 72,900 17,149 72,900
Imputed preferred dividends 0 1,286,471 0 1,286,471
---------- ---------- ---------- ----------
Net earnings to common shareholders 727,558 (1,062,041) 1,269,355 (939,912)
Shares:
Weighted average number of shares outstanding 7,312,859 4,716,096 7,124,569 4,716,096
Assuming exercise of warrants and options,
net
of number of shares which could have been
purchased with the exercise of such options
(using average price for the 203,643 166,833 197,110 155,969
period)
---------- ---------- ---------- ----------
Weighted average number of shares, adjusted 7,516,502 4,882,929 7,321,679 4,872,065
---------- ---------- ---------- ----------
Primary earnings per common share
and common equivalent share:
Net earnings (loss) $ 0.10 (0.22) 0.17 (0.19)
========== ========== ========== ==========
Assuming full dilution (for Statement of Operations):
Net earnings $ 734,208 297,330 1,286,504 419,459
Preferred stock dividends 6,650 72,900 17,149 72,900
Imputed preferred dividends 0 1,286,471 0 1,286,471
---------- ---------- ---------- ----------
Net earnings to common shareholders 727,558 (1,062,041) 1,269,355 (939,912)
Shares:
Weighted average number of shares outstanding 7,312,859 4,716,096 7,124,569 4,716,096
Assuming exercise of warrants and options,
net
of number of shares which could have been
purchased with the exercise of such options
(using closing market price) 234,066 191,600 233,799 191,384
---------- ---------- ---------- ----------
Weighted average number of shares, adjusted 7,546,925 4,907,696 7,358,368 4,907,480
---------- ---------- ---------- ----------
Primary earnings per common share
and common equivalent share:
Net earnings (loss) $0.10(a) (0.22)(a) 0.17(a) (0.19)(a)
========== ========== ========== ==========
</TABLE>
(a) This calculation is submitted in accordance with Regulation S-B item
601(b)(11) although not required by footnote 2 to paragraph 14 of APB
Opinion No. 15 because it results in dilution of less than 3%.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF OMEGA HEALTH SYSTEMS, INC., FOR THE SIX MONTH PERIOD
ENDED JUNE 30, 1997, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 4,780
<SECURITIES> 0
<RECEIVABLES> 10,005
<ALLOWANCES> 2,237
<INVENTORY> 0
<CURRENT-ASSETS> 16,576
<PP&E> 13,561
<DEPRECIATION> 6,293
<TOTAL-ASSETS> 42,022
<CURRENT-LIABILITIES> 10,252
<BONDS> 0
0
184
<COMMON> 449
<OTHER-SE> 18,577
<TOTAL-LIABILITY-AND-EQUITY> 42,022
<SALES> 32,773
<TOTAL-REVENUES> 32,773
<CGS> 6,574
<TOTAL-COSTS> 30,984
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 376
<INTEREST-EXPENSE> 442
<INCOME-PRETAX> 1,287
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,287
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,287
<EPS-PRIMARY> .17
<EPS-DILUTED> .17
</TABLE>
