<PAGE>
FORM 10-QSB QUARTERLY REPORT
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended MARCH 31, 1999.
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission file number 0 - 24012
ALLIED DEVICES CORPORATION
(Exact name of small business issuer as specified in its charter)
Nevada
------
(State or other jurisdiction of incorporation or organization)
13-3087510
----------
(I.R.S. Employer Identification No.)
2365 Milburn Avenue, Baldwin, N.Y. 11510
----------------------------------------
(Address of principal executive offices - Zip code)
Issuer's telephone number, including area code: (516) 223 - 9100
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15 (d) of the Exchange Act during the past 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 / /
Common Stock, Par Value $.001 4,928,442
(CLASS) (Shares Outstanding at April 29, 1999)
- ----------------------------- --------------------------------------
<PAGE>
PART I
ALLIED DEVICES CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
<PAGE>
ALLIED DEVICES CORPORATION
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
MARCH 31, September 30,
1999 1998
----------- -----------
(UNAUDITED) (Audited)
<S> <C> <C>
ASSETS
CURRENT:
Cash $ 188,484 $ 275,238
Accounts receivable 2,552,541 2,526,068
Inventories 9,354,721 8,903,220
Prepaid and other 208,148 366,057
Deferred income taxes 41,000 41,000
----------- -----------
TOTAL CURRENT 12,344,894 12,111,583
PROPERTY, PLANT AND EQUIPMENT, NET 7,582,248 7,607,246
GOODWILL 2,771,898 2,880,523
OTHER 476,239 374,267
----------- -----------
TOTAL ASSETS $23,175,279 $22,973,619
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT:
Accounts payable $ 1,121,561 $ 1,243,306
Taxes payable 88,244 --
Accrued expenses 140,915 286,900
Current portion of long term debt and capital lease obligations 1,227,789 986,625
----------- -----------
TOTAL CURRENT 2,578,509 2,516,831
LONG TERM DEBT AND CAPITAL LEASE OBLIGATIONS 10,943,158 11,031,687
DEFERRED TAXES 309,000 309,000
----------- -----------
TOTAL LIABILITIES 13,830,667 13,857,518
STOCKHOLDERS' EQUITY:
Capital stock 4,948 4,948
Paid-in capital 3,624,721 3,624,721
Retained earnings 5,714,943 5,486,432
----------- -----------
TOTAL STOCKHOLDERS' EQUITY 9,334,612 9,116,101
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $23,175,279 $22,973,619
=========== ===========
</TABLE>
<PAGE>
ALLIED DEVICES CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Quarter Ended Six Months Ended
March 31, March 31,
-------------------------- ---------------------------
1999 1998 1999 1998
---------- ---------- ----------- ----------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Net sales $5,630,480 $4,556,993 $11,000,934 $8,939,762
Cost of sales 3,834,284 2,937,385 7,427,554 5,899,160
---------- ---------- ----------- ----------
Gross profit 1,796,196 1,619,608 3,573,380 3,040,602
Selling, general and administrative
expenses 1,340,469 1,136,272 2,706,318 2,107,916
---------- ---------- ----------- ----------
Income from operations 455,727 483,336 867,062 932,686
Interest expense (net) 256,112 47,710 509,455 85,942
---------- ---------- ----------- ----------
Income before provision for taxes on income 199,615 435,626 357,607 846,744
Taxes on income 72,040 152,500 129,096 305,500
---------- ---------- ----------- ----------
Net income $ 127,575 $ 283,126 $ 228,511 $ 541,244
========== ========== =========== ==========
Basic earnings per share $ 0.03 $ 0.06 $ 0.05 $ 0.12
========== ========== =========== ==========
Basic weighted average number of
shares of common stock outstanding 4,947,942 4,472,141 4,947,942 4,472,141
========== ========== =========== ==========
Diluted earnings per share $ 0.03 $ 0.06 $ 0.05 $ 0.11
========== ========== =========== ==========
Diluted weighted average number of
shares of common stock outstanding 4,961,504 4,751,739 4,961,504 4,751,739
========== ========== =========== ==========
</TABLE>
<PAGE>
ALLIED DEVICES CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED MARCH 31, 1999 1998
- ----------------------------------------------------------------------- --------- -----------
(Unaudited) (Unaudited)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 228,511 $ 541,244
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 738,683 236,289
Gain on sale of equipment -- (2,825)
Decrease (increase) in:
Accounts receivable (26,473) (55,596)
Inventories (451,501) (234,233)
Prepaid expenses and other current assets 157,909 (123,067)
Other assets (97,976) 2,310
Increase (decrease) in:
Accounts payable (121,745) (33,842)
Taxes payable 88,244 (64,914)
Accrued expenses (145,985) (23,408)
--------- -----------
NET CASH PROVIDED BY OPERATING ACTIVITIES 369,667 241,958
--------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (126,118) (164,361)
Acquisition of Kay Pneumatics -- (850,000)
Proceeds from sale of equipment -- 3,000
--------- -----------
NET CASH USED IN INVESTING ACTIVITIES (126,118) (1,011,361)
--------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase (decrease) in bank borrowings 150,000 (75,000)
Increase in term debt -- 1,000,000
Proceeds from sale of common stock -- 20,000
Deferred financing costs (55,350) --
Payments of long-term debt and capital lease obligations (424,953) (98,314)
--------- -----------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES (330,303) 846,686
--------- -----------
NET (DECREASE) INCREASE IN CASH (86,754) 77,283
CASH, AT BEGINNING OF PERIOD 275,238 162,094
--------- -----------
CASH, END OF PERIOD $ 188,484 $ 239,377
========= ===========
</TABLE>
<PAGE>
ALLIED DEVICES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(INFORMATION FOR MARCH 31, 1999 AND 1998 IS UNAUDITED)
1. BUSINESS Allied Devices Corporation and subsidiaries (the "Company")
are engaged primarily in the manufacture and distribution
of standard and custom precision mechanical components and
a line of screw machine products throughout the United
States.
2. SUMMARY OF (a) BASIS OF PRESENTATION/PRINCIPLES OF CONSOLIDATION
SIGNIFICANT
ACCOUNTING
POLICIES The accompanying consolidated financial statements
include the accounts of Allied Devices Corporation
and its wholly-owned subsidiaries, Empire - Tyler
Corporation ("Empire") and APPI, Inc. ("APPI"),
(collectively, the "Company"). All significant
intercompany accounts and transactions have been
eliminated in consolidation.
The consolidated financial statements and related
notes thereto as of March 31, 1999 and 1998, and for
the three and six month periods then ended, are
unaudited and have been prepared on a basis
consistent with the Company's annual financial
statements. Such unaudited financial statements
include all adjustments (consisting of normal
recurring adjustments) that the Company considers
necessary for a fair presentation of such data.
Results for the six months ended March 31, 1999 are
not necessarily indicative of the results that may be
expected for the entire year ending September 30,
1999.
<PAGE>
ALLIED DEVICES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(INFORMATION FOR MARCH 31, 1999 AND 1998 IS UNAUDITED)
For further information, refer to the consolidated
financial statements and footnotes thereto included
in the Company's Annual Report on Form 10-KSB for the
year ended September 30, 1998.
(B) INVENTORIES
Inventories are valued at the lower of cost (last-in,
first-out (LIFO) method) or market. For the three and
six months ended March 31, 1999 and 1998, inventory
was determined by applying a gross profit method, as
opposed to the year ended September 30, 1998, when
inventory was determined by a physical count.
(C) DEPRECIATION AND AMORTIZATION
Property, plant and equipment is stated at cost.
Depreciation and amortization of property, plant and
equipment is computed using the straight-line method
over the estimated useful lives of the assets. The
estimated useful lives are as follows:
Buildings and improvements 30 years
<PAGE>
ALLIED DEVICES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(INFORMATION FOR MARCH 31, 1999 AND 1998 IS UNAUDITED)
Machinery and equipment 10 years
Furniture, fixtures and office equipment 5-7 years
Tools, molds and dies 8 years
Leasehold improvements Lease term
(D) INCOME TAXES
The Company and its subsidiaries file a consolidated
federal income tax return and separate state income
tax returns. The Company follows the liability method
of accounting for income taxes.
(E) EARNINGS PER SHARE
<PAGE>
ALLIED DEVICES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(INFORMATION FOR MARCH 31, 1999 AND 1998 IS UNAUDITED)
In 1997, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standards
No. 128 EARNINGS PER SHARE. Statement 128 replaced
the previously reported primary and fully diluted
earnings per share with basic and diluted earnings
per share. Unlike primary earnings per share, basic
earnings per share excludes any dilutive effects of
options, warrants and convertible securities. Diluted
earnings per share is very similar to the previously
reported fully diluted earnings per share.
(F) INTANGIBLE ASSETS
The excess of cost over fair value of net assets
acquired is being amortized over periods of 15 years
(for fiscal 1998 acquisitions) and 20 years (for
prior acquisitions).
(G) REVENUE RECOGNITION
Sales are recognized upon shipment of products.
(H) STATEMENT OF CASH FLOWS
For purposes of the statement of cash flows, the
Company considers all highly liquid debt instruments
purchased with a maturity of three months or less to
be cash equivalents.
<PAGE>
ALLIED DEVICES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(INFORMATION FOR MARCH 31, 1999 AND 1998 IS UNAUDITED)
3. INVENTORIES Inventories are summarized as follows:
<TABLE>
<CAPTION>
MARCH 31, September 30,
1999 1998
----------- -----------
<S> <C> <C>
Raw materials $ 1,218,296 $ 1,056,504
Work-in-process 1,034,572 964,563
Finished goods 8,612,605 8,392,905
----------- -----------
10,865,473 10,413,972
Less: adjustment to LIFO (1,510,752) (1,510,752)
----------- -----------
$ 9,354,721 $ 8,903,220
=========== ===========
</TABLE>
4. SUBSEQUENT EVENTS Pursuant to the announcement by the Board of
Directors relating to the Stock Buy Back Program, the
Company acquired 19,500 shares at a cost of $ 25,000,
during the month of April 1999.
<PAGE>
ALLIED DEVICES CORPORATION
RESULTS OF OPERATIONS: SIX MONTHS ENDED MARCH 31, 1999
COMPARED WITH SIX MONTHS ENDED MARCH 31, 1998
ITEM 2 - MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS:
All statements contained herein that are not historical facts,
including, but not limited to, statements regarding the Company's
current business strategy, the Company's projected sources and uses of
cash, and the Company's plans for future development and operations,
are based upon current expectations. These statements are
forward-looking in nature and involve a number of risks and
uncertainties. Actual results may differ materially. Among the factors
that could cause actual results to differ materially are the following:
the availability of sufficient capital to finance the Company's
business plans on terms satisfactory to the Company; competitive
factors; changes in labor, equipment and capital costs; changes in
regulations affecting the Company's business; future acquisitions or
strategic partnerships; general business and economic conditions; and
factors described from time to time in the reports filed by the Company
with the Securities and Exchange Commission. The Company cautions
readers not to place undue reliance on any such forward-looking
statements, which statements are made pursuant to the Private
Litigation Reform Act of 1995 and, as a result, are pertinent only as
of the date made.
Net sales for the quarter and six months ended March 31, 1999, were
$5,630,000 and $11,001,000, respectively, as compared to $4,557,000 and
$8,940,000 in the comparable periods of the prior
<PAGE>
ALLIED DEVICES CORPORATION
RESULTS OF OPERATIONS: SIX MONTHS ENDED MARCH 31, 1999
COMPARED WITH SIX MONTHS ENDED MARCH 31, 1998
year, increases of approximately 23.5% and 23.0%, respectively.
Management attributes these increases principally to the following
factors:
o two businesses acquired in fiscal 1998 (during the second and
fourth quarters, respectively) increased sales volume in the
second quarter and first six months of fiscal 1999
approximately $2.1 million and $4.2 million, respectively; and
o all of the Company's operating units (including the acquired
businesses) were impacted in varying degrees by general
economic conditions and experienced a decline in sales volume
for the second quarter and first six months of fiscal 1999
when compared to the same periods of the prior year, resulting
in approximately $1.0 million and $2.2 million less in
shipments, respectively.
Many capital goods industries slowed down sharply in mid-1998 as a
result of economic and financial turmoil in offshore markets,
principally East Asia, and many of the Company's most prominent
customers in these sectors saw their volume of shipments shrink by as
much as 40%. Management believes that more intense marketing efforts
have served to mitigate the impact of these conditions on the Company
when compared to its competitors. Some sectors of the U.S. economy
appear to have remained healthy through this general slowdown, with the
Company continuing to see growth in sales to customers in those
sectors. The Company has sharpened its focus on providing superior
<PAGE>
ALLIED DEVICES CORPORATION
RESULTS OF OPERATIONS: SIX MONTHS ENDED MARCH 31, 1999
COMPARED WITH SIX MONTHS ENDED MARCH 31, 1998
service to customers in those industries, in particular, the aerospace
instrumentation, medical equipment, robotics and scientific
instrumentation sectors. While it is not possible to forecast with any
accuracy when recovery will come to the affected sectors, it is
management's opinion that signs of a recovery are evident now.
Nonetheless, general consensus currently holds that it will be June,
1999, at the earliest before conditions improve materially.
Reported gross margin for the second quarter and six months of fiscal
1999 were 31.90% and 32.48% of net sales, respectively, as compared to
35.54% and 34.01% for the comparable periods of fiscal 1998. Lower
levels of sales activity (when compared to historical levels) impacted
all operating units of the Company, including the newly acquired
businesses. This served as an opportunity to manufacture more and
purchase less, resulting in the following changes from fiscal 1998:
(1) net materials expense decreased as a percentage of sales,
increasing gross margins by 3.80% and 5.55%, respectively; and
(2) the Company shipped a lower volume of product on relatively
fixed costs of factory operations, decreasing gross margins by
7.44% and 7.08%, respectively.
Towards the end of the second quarter of fiscal 1999, management
instituted certain cost cutting measures to reduce factory operating
costs, including a lay-off. It is management's
<PAGE>
ALLIED DEVICES CORPORATION
RESULTS OF OPERATIONS: SIX MONTHS ENDED MARCH 31, 1999
COMPARED WITH SIX MONTHS ENDED MARCH 31, 1998
expectation that these measures will be reflected in improved gross
margins during the second half of fiscal 1999. The Company did not
increase prices in the second quarter of fiscal 1999. LIFO reserves
remained unchanged during the period.
Selling, general and administrative expenses as a percentage of net
sales were 23.8% and 24.6% in the second quarter and six months of
fiscal 1999, respectively, as compared to 24.9% and 23.6% in the
comparable periods of fiscal 1998. While actual expenditures in fiscal
1999 were lower than in fiscal 1998 (after allowing for the additions
related to the two acquired businesses), such costs did not decrease as
much as sales volume. The following factors account for these changes:
(1) selling and shipping expenses and commissions decreased as a
percentage of net sales by approximately 4.3% and 3.3% (respectively)
as management reduced spending on certain aspects of the Company's
marketing program; (2) administrative payroll, benefits, and related
expenses increased by $285,000 and $557,000 (respectively), primarily
arising from the business acquired in the final quarter of fiscal 1998,
resulting in an increase of such expenses of 3.1% and 3.4%
(respectively) as a percentage of net sales; and (3) other
administrative expenses (collectively) increased as a percentage of net
sales by approximately 0.1% and 0.9%(respectively), primarily as a
result of non-cash charges related to the acquisition completed in the
final quarter of fiscal 1998. Towards the end of the second quarter of
fiscal 1999, management implemented a
<PAGE>
ALLIED DEVICES CORPORATION
RESULTS OF OPERATIONS: SIX MONTHS ENDED MARCH 31, 1999
COMPARED WITH SIX MONTHS ENDED MARCH 31, 1998
plan to reduce administrative payroll and administrative expenses,
expecting the results to be evident in the Company's financial results
in the second half of fiscal 1999.
Interest expense during the second quarter and six months of fiscal
1999 was $256,000 and $509,000, respectively, as compared to $48,000
and $86,000 in the comparable periods of fiscal 1998. These increases
are principally the result of the additional debt assumed by the
Company to finance acquisitions during the second and fourth quarters
of fiscal 1998.
Provision for income taxes is estimated at 36.1% of pre-tax income for
the fiscal 1999 period, as a combination of federal and state taxes.
LIQUIDITY AND FINANCIAL RESOURCES
During the first six months of fiscal 1999, the Company's financial
condition remained healthy. Operations generated cash of $369,000.
Financing activities used $330,000, and capital expenditures used
$126,000, with the balance decreasing cash on hand by $87,000. Working
capital increased by $172,000 to $9,766,000 during the quarter,
principally as a result of the following changes in current assets and
current liabilities:
<PAGE>
ALLIED DEVICES CORPORATION
RESULTS OF OPERATIONS: SIX MONTHS ENDED MARCH 31, 1999
COMPARED WITH SIX MONTHS ENDED MARCH 31, 1998
o Accounts receivable increased by $26,000 as the combined
effect of (1) shortening the average collection period from
about 45 days at the end of fiscal 1998 to about 42 days at
the end of the second quarter of fiscal 1999, lowering
receivables $160,000, and (2) improving shipping rates from
the end of fiscal 1998 to the second quarter of fiscal 1999,
increasing receivables by $186,000.
o Inventories increased by $452,000 during the six month period.
Turns on inventory were 1.6 times during the six months of
fiscal 1999, as compared to 1.4 times at the end of fiscal
1998. This change is attributable to increased shipping
volumes.
o Prepaid and other current assets decreased by $158,000 as the
Company collected cash reimbursements due from its insurance
company related to the fire in April, 1998.
o Current liabilities, exclusive of current portions of
long-term debt and capital lease obligations, decreased
$180,000 as accounts payable and accrued expenses decreased
$268,000, and taxes payable increased by $88,000.
o Current portions of long-term debt and capital lease
obligations increased by $241,000.
o Cash balances decreased by $ 87,000.
Net capital expenditures in the six month period were $126,000
($554,000 including capital lease acquisitions) as management continued
to add to capacity and to modernize and streamline its manufacturing
processes. Management's capital spending plans for the remaining six
months of fiscal 1999 include additional expenditures of
<PAGE>
ALLIED DEVICES CORPORATION
RESULTS OF OPERATIONS: SIX MONTHS ENDED MARCH 31, 1999
COMPARED WITH SIX MONTHS ENDED MARCH 31, 1998
approximately $350,000 for productive equipment and approximately
$25,000 for expansion into additional space. Management expects to
curtail portions of its capital spending plans until it sees evidence
of improvement in its markets. When and if such plans are carried out,
management expects to fund such spending out of its working capital and
lease lines.
Management believes that the Company's working capital as now
constituted will be adequate for the needs of the on-going core
business. Management further believes that, in light of the Company's
expansion objectives, the Company's current financial resources will
not be adequate to provide for all of the on-going cash needs of the
business. In particular, management expects to require additional
financing to carry out its acquisition objectives. It is management's
intention to complete at least one additional acquisition during fiscal
1999. Success in this part of the Company's growth plan will rely, in
large measure, upon success in raising additional debt and/or equity
capital. Management believes that it has several sources for such
capital and expects that the combination of capital raised and
acquisitions completed will produce anti-dilutive results for the
Company's existing stockholders. While this is management's intention,
there is no guarantee that they will be able to achieve this objective.
The Company is not relying on the receipt of any new capital for its
existing operations. It is important to note that, absent new capital,
the Company will not be in a position to undertake some of the most
promising elements of management's plans for expansion. In the
<PAGE>
ALLIED DEVICES CORPORATION
RESULTS OF OPERATIONS: SIX MONTHS ENDED MARCH 31, 1999
COMPARED WITH SIX MONTHS ENDED MARCH 31, 1998
event that new capital is raised, management intends to implement its
plans and will do so in keeping with its judgment at that time as to
how best to deploy such added capital.
YEAR 2000
Management believes that all of the Company's computer systems,
applications and operating software are Year 2000 compliant. The
Company has also undertaken a review of the major vendors and third
party suppliers critical to its operation to assess their Year 2000
readiness. Although the company is not aware that any such Company's
systems are noncompliant in a way that will materially adversely affect
the Company, there can be no assurances that the computer systems of
other companies upon which the Company's systems rely will be timely
compliant, or that such failure to comply by another company would not
have a material adverse effect on the Company's business.
The statements contained in this Year 2000 readiness disclosure are
subject to certain protection under the Year 2000 Information and
Readiness Disclosure Act.
<PAGE>
PART II. OTHER INFORMATION
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
DATE: APRIL 29, 1999 ALLIED DEVICES CORPORATION
- -------------------- --------------------------
(Registrant)
By: /s/ M. Hopkinson
----------------------------
M. Hopkinson
Chairman
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM MARCH 1999
10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000869495
<NAME> ALLIED DEVICES CORP
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 188,484
<SECURITIES> 0
<RECEIVABLES> 2,595,525
<ALLOWANCES> 42,984
<INVENTORY> 9,354,721
<CURRENT-ASSETS> 12,344,894
<PP&E> 13,727,855
<DEPRECIATION> 6,145,607
<TOTAL-ASSETS> 23,175,279
<CURRENT-LIABILITIES> 2,578,509
<BONDS> 0
0
0
<COMMON> 4,948
<OTHER-SE> 9,329,664
<TOTAL-LIABILITY-AND-EQUITY> 23,175,279
<SALES> 5,630,480
<TOTAL-REVENUES> 5,630,480
<CGS> 3,834,284
<TOTAL-COSTS> 3,834,284
<OTHER-EXPENSES> 1,340,469
<LOSS-PROVISION> 42,984
<INTEREST-EXPENSE> 256,112
<INCOME-PRETAX> 199,615
<INCOME-TAX> 72,040
<INCOME-CONTINUING> 127,575
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 127,575
<EPS-PRIMARY> .03
<EPS-DILUTED> .03
</TABLE>
