<PAGE> 1
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 September 30, 1998
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 001-12986
INTERLOTT TECHNOLOGIES, INC.
(Exact name of Registrant as specified in its charter)
Delaware 31-1297916
(State of Incorporation) (I.R.S. Employer
Identification No.)
10830 Millington Ct, Cincinnati, Ohio 45242
(Address of principal executive offices, including zip code)
(513) 792-7000
(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 twelve 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
--- ---
Indicate the number of shares outstanding of each of the issuer's classes of
Common Stock as of the latest practicable date.
<TABLE>
<CAPTION>
Class Outstanding at November 13,1998
- ---------------------------- -------------------------------
<S> <C>
Common Stock, $.01 Par Value 3,210,000 shares
</TABLE>
Page 1 of 15
Exhibit Index on page 13
<PAGE> 2
INTERLOTT TECHNOLOGIES, INC.
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTER ENDED SEPTEMBER 30, 1998
TABLE OF CONTENTS
<TABLE>
<CAPTION>
ITEM PAGE
NUMBER PART I. FINANCIAL INFORMATION NUMBER
- ------ ------
<S> <C> <C>
1 Financial Statements:
Condensed Balance Sheets (unaudited) as of
September 30, 1998 and December 31, 1997 3
Condensed Statements of Income (unaudited)
for the three months and nine months ended
September 30, 1998 and 1997 4
Condensed Statements of Cash Flows (unaudited)
for the nine months ended September 30, 1998 and 1997 5
Notes to Condensed Financial Statements 6
2 Management's Discussion and Analysis of
Financial Condition and Results of Operations 7 - 10
3 Quantitative and Qualitative Disclosures about 10
Market Risk
PART II. OTHER INFORMATION
6 Exhibits and Reports on Form 8-K 11
SIGNATURES 12
Exhibit Index 13
</TABLE>
2
<PAGE> 3
ITEM 1. FINANCIAL STATEMENTS PART I. FINANCIAL INFORMATION
INTERLOTT TECHNOLOGIES, INC.
CONDENSED BALANCE SHEETS (UNAUDITED)
SEPTEMBER 30, 1998 AND DECEMBER 31, 1997
<TABLE>
<CAPTION>
ASSETS September 30, 1998 December 31,1997
------------------ ----------------
<S> <C> <C>
Current assets:
Cash $ 231,960 $ 143,071
Accounts receivable, less allowance for doubtful accounts of $123,501
in 1998 and $93,501 in 1997 3,240,891 2,918,092
Investment in sales type leases, current portion 777,274 216,485
Inventories 4,768,496 4,051,495
Prepaid expenses 57,782 147,450
----------- -----------
Total current assets 9,076,403 7,476,593
Property and equipment:
Leased machines 29,462,092 25,718,832
Machinery and equipment 572,722 519,388
Building and improvements 265,153 265,854
Furniture and fixtures 127,378 124,359
----------- -----------
30,427,345 26,628,433
Less accumulated depreciation and amortization 14,678,355 11,382,120
----------- -----------
15,748,990 15,246,313
Investment in sales type leases, less current portion 3,483,475 1,051,011
Product development rights, net of accumulated amortization of $568,332 in 1998
and $513,333 in 1997 531,668 586,667
Deferred tax asset -0- 252,300
----------- -----------
$28,840,536 $24,612,884
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable $11,560,155 $ 8,978,036
Current installments of long-term debt -0- 968
Accounts payable 1,535,495 1,142,065
Accounts payable - related party 307,165 328,960
Accrued expenses 1,199,721 1,254,182
Income taxes payable 144,425 100,450
----------- -----------
Total current liabilities 14,746,961 11,804,661
Notes payable - related parties 479,000 479,000
Deferred tax liability 139,528 -0-
----------- -----------
Total liabilities 15,365,489 12,283,661
Series A preferred stock, $.01 par value, 20,000,000 shares authorized,
1,335,000 shares issued and outstanding in 1998 and 1997 1,335,000 1,335,000
Stockholders' equity:
Common stock, $.01 par value; 20,000,000 shares authorized, 3,210,000
shares issued and outstanding in 1998 and 1997 32,100 32,100
Additional paid-in capital 10,376,017 10,376,017
Retained earnings 1,731,930 586,106
----------- -----------
Total stockholders' equity 12,140,047 10,994,223
----------- -----------
$28,840,536 $24,612,884
=========== ===========
</TABLE>
See accompanying notes to condensed financial statements.
3
<PAGE> 4
INTERLOTT TECHNOLOGIES, INC.
CONDENSED STATEMENTS OF INCOME (UNAUDITED)
THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------- -------------
Revenues: 1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Machine and parts sales $ 1,741,828 $ 566,664 $ 7,049,825 $ 3,995,656
Machine leases 3,235,382 2,823,809 10,148,288 9,744,993
Other 650,120 451,463 1,579,976 1,196,462
------------ ------------ ------------ ------------
5,627,330 3,841,936 18,778,089 14,937,111
Cost of revenues 3,839,992 2,314,736 12,836,219 9,700,448
------------ ------------ ------------ ------------
Gross profit 1,787,338 1,527,200 5,941,870 5,236,663
Operating expenses:
Selling, general, and administrative
expenses 1,037,563 931,634 3,046,516 2,732,836
Research and development costs 201,729 177,168 371,927 433,197
------------ ------------ ------------ ------------
Total operating expenses 1,239,292 1,108,802 3,418,443 3,166,033
------------ ------------ ------------ ------------
Operating income 548,046 418,398 2,523,427 2,070,630
Other income (expense):
Interest expense (257,750) (201,000) (753,445) (535,183)
Interest income 86,356 25,029 142,342 25,948
------------ ------------ ------------ ------------
(171,394) (175,971) (611,103) (509,685)
------------ ------------ ------------ ------------
Income before income taxes 376,652 242,427 1,912,324 1,560,945
Income taxes 151,199 34,800 766,500 546,000
------------ ------------ ------------ ------------
Net income $ 225,453 $ 207,627 $ 1,145,824 $ 1,014,945
============ ============ ============ ============
Basic and diluted net income
per share $ .07 $ .06 $ .36 $ .31
============ ============ ============ ============
</TABLE>
See accompanying notes to condensed financial statements.
4
<PAGE> 5
INTERLOTT TECHNOLOGIES, INC.
CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
<TABLE>
<CAPTION>
Nine Months Ended September 30,
1998 1997
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income $ 1,145,824 $ 1,014,945
Adjustments to reconcile net income to net cash
provided by operating activities:
Deferred income taxes 391,828 48,000
Depreciation and amortization 3,351,234 3,067,501
Principal portion of sales type leases received 344,532 91,035
Gain on sale of equipment under sales type leases (1,080,585) (447,915)
Decrease (increase) in accounts receivable (322,799) 385,177
Increase in inventories (717,001) (738,883)
Decrease in prepaid expenses 89,668 17,925
Increase (decrease) in accounts payable 393,430 (157,904)
(Decrease) increase in accounts payable - related party (21,795) 59,391
Increase (decrease) in accrued expenses (54,461) 83,340
Increase in income taxes payable 43,975 188,000
----------- -----------
Net cash provided by operating activities 3,563,850 3,610,612
----------- -----------
Cash flows from investing activities:
Cost of leased machines (6,000,460) (5,017,689)
Purchases of property and equipment (55,652) (305,965)
----------- -----------
Net cash used in investing activities (6,056,112) (5,323,654)
----------- -----------
Cash flows from financing activities:
Proceeds from notes payable, net 2,582,119 1,672,585
Repayment of long-term debt (968) (3,708)
----------- -----------
Net cash provided by financing activities 2,581,151 1,668,877
----------- -----------
Increase (decrease) in cash 88,889 (44,165)
Cash at beginning of year 143,071 188,586
----------- -----------
Cash at end of period $ 231,960 $ 144,421
=========== ===========
Supplemental disclosure of cash flow information:
Interest paid $ 711,530 $ 528,332
=========== ===========
Income taxes paid $ 330,700 $ 310,000
=========== ===========
</TABLE>
See accompanying notes to condensed financial statements.
5
<PAGE> 6
INTERLOTT TECHNOLOGIES, INC.
Notes to Condensed Financial Statements
1. Basis of Presentation
The accounting and reporting policies of Interlott Technologies, Inc.
conform to generally accepted accounting principles. The financial statements
for the nine months ended September 30, 1998 and 1997 are unaudited and do not
include all information or footnotes necessary for a complete presentation of
financial condition, results of operations and cash flows. The interim financial
statements include all adjustments, consisting only of normal recurring
accruals, which in the opinion of management are necessary to make the financial
statements not misleading. The financial statements should be read in
conjunction with the summary of significant accounting policies which appears in
the Company's 1997 Annual Report filed with the Securities and Exchange
Commission as an exhibit to the Company's 1997 Annual Report on Form 10-K. The
results of operations for the nine months ended September 30, 1998 are not
necessarily indicative of the results to be expected for the entire year ending
December 31, 1998.
2. Investment in Sales Type Leases
The Company leases 200 Instant Ticket Vending Machines to one state
lottery under a sales type lease that commenced in May, 1997 and an additional
495 Instant Ticket Vending Machines are leased to another state lottery under a
similar type lease that commenced in May, 1998, with ongoing deployments
throughout the year. Revenues from sales type leases are included in revenues
from sales in accordance with Statement of Financial Accounting Standards (SFAS)
No. 13, Accounting for Leases, as amended.
3. Notes Payable
In October, 1997, the Company entered into a revolving credit facility
with a financial institution that permits the Company to borrow through October,
2000, up to $15,000,000 at the LIBOR rate plus two percent (7.65% at September
30, 1998). In conjunction with the facility, the Company maintains a lockbox and
controlled disbursement account with the bank parent of the financial
institution. All lockbox receipts are recorded as payments against the facility
and presented checks are recorded as draws on the facility. Borrowings under
this credit facility are collateralized by all of the assets of the Company and
assignment of proceeds from lease agreements. At September 30, 1998, the Company
had borrowings of $11,560,155 outstanding with additional borrowings of
$3,439,845 available under the facility.
6
<PAGE> 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS.
GENERAL
Interlott Technologies, Inc. (the "Company") manufactures instant
ticket vending machines ("ITVMs") and telephone card dispensing machines
("PCDMs") that dispense instant lottery tickets and prepaid telephone calling
cards without the assistance of an employee of the lottery or the telephone card
vendor. The Company derives its revenues from (i) the lease of ITVMs and PCDMs,
(ii) the sale of ITVMs and PCDMs, (iii) and to a lesser extent the service
agreements and the sale of parts for ITVMs and PCDMs.
As of September 30, 1998, the Company had sold or leased over 13,000
ITVMs under agreements with both domestic and international lotteries, their
licensees or contractors, as well as to both domestic and international vendors
of prepaid telephone calling cards. The Company continues to test ITVMs and
PCDMs in both domestic and international markets.
RESULTS OF OPERATIONS
The Company's net revenues increased 46% to $5,627,330 from $3,841,936
for the three months, and increased 26% to $18,778,089 from $14,937,111 for the
nine months ended September 30, 1998 and 1997, respectively. Revenues from sales
of ITVMs and PCDMs increased 207% to $1,741,828 from $566,664 for the three
months ended September 30, 1998 and 1997, respectively, and increased 76% to
$7,049,825 from $3,995,656 for the nine months ended September 30, 1998 and 1997
respectively. The increase in revenues from sales is primarily due to the
inclusion of revenues from 495 ITVMs leased to the New York Lottery which are
categorized as sales type leases and which were deployed throughout 1998. (See
Note 2 of Notes to Condensed Financial Statements.) Revenues from operating
leases increased 15% to $3,235,382 from $2,823,809 for the three months, and
increased 4% to $10,148,288 from $9,744,993 for the nine months ended September
30, 1998 and 1997, respectively. Lease revenues increased as the result of
additional units deployed. Lease revenues represented 57% and 73% of total
revenues for the three months, and 54% and 65% of total revenues for the nine
months ended September 30, 1998 and 1997, respectively.
Cost of revenues increased 66% to $3,839,992 from $2,314,736 for the
three months, and increased 32% to $12,836,219 from $9,700,448 for the nine
months ended September 30, 1998 and 1997, respectively. Depreciation charged to
cost of revenues increased 14% to $1,072,488 from $941,628 for the three months,
and increased 8% to $3,144,912 from $2,907,904 for the nine months, ended
September 30, 1998 and 1997, respectively. Service and installation costs
increased 12% to $1,399,098 from $1,253,028 for the three months, and increased
14% to $4,395,863 from $3,850,014 for the nine months ended September 30, 1998
and 1997, respectively, primarily due to the increase in the number of ITVMs and
PCDMs deployed rather than an incremental cost per machine. Gross profit
percentage decreased 3% to 32% from 35% for the nine months ended September 30,
1998 and 1997, respectively, as the result of the changes described previously.
7
<PAGE> 8
Selling, general, and administrative expenses increased 11% to
$1,037,563 from $931,634 for the three months, and increased 11% to $3,046,516
from $2,732,836 for the nine months, ended September 30, 1998 and 1997,
respectively. Increases in personnel and sales activities were the primary
factors related to the increase in cost for both periods.
Interest expense increased 28% to $257,750 from $201,000 for the three
months, and increased 41% to $753,445 from $535,183 for the nine months, ended
September 30, 1998 and 1997, respectively. The increase reflects an increase in
borrowings which were incurred to fund increases in leased machines and
receivables. Interest rates charged to the Company declined throughout the
periods due to increased use of optional borrowing rates tied to the LIBOR
rates. Interest income was $86,356 and $25,029 for the three months, and
$142,342 and $25,948 for the nine months ended September 30, 1998 and 1997,
respectively. The increase is the result of higher carrying costs associated
with sales type leases.
As a result of the previously discussed changes, income before income
taxes increased 55% to $376,652 from $242,427 for the three months, and
increased 23% to $1,912,324 from $1,560,945 for the nine months, ended September
30, 1998 and 1997, respectively.
Due to the foregoing factors, net income increased 9% to $225,453 from
$207,627 for the three months, and increased 13% to $1,145,824 from $1,014,945
for the nine months, ended September 30, 1998 and 1997, respectively.
LIQUIDITY AND CAPITAL RESOURCES
The Company's liquidity and capital resources are significantly
impacted by the Company's decision to use leasing as a means to market its ITVMs
and PCDMs. However, leasing inherently requires significantly more capital and
longer-term payout than sales. At September 30, 1998 the Company had a total of
7,587 ITVMs and PCDMs deployed under leases as compared to 6,757 at September
30, 1997.
The Company finances its operations primarily through cash flow from
operations and a three-year revolving credit facility from Mercantile Business
Credit, Inc. ("MBCI") entered into as of October 29, 1997. The Credit facility
with MBCI is a $15,000,000 three year credit line, secured by a lien on all of
the assets of the Company. The rate of interest on this loan is prime or LIBOR
plus two percent.
Net cash provided by operations for the nine months ended September 30,
1998 and 1997 was $3,563,850 and $3,610,612, respectively. The slight decrease
for the first nine months of 1998 as compared to the same period in 1997 results
primarily from an increase in equipment leases classified as sales type leases
offset by an increase in accounts receivable.
Net cash used in investing activities was $6,056,112 and $5,323,654 for
the nine months ended September 30, 1998 and 1997, respectively. This increase
reflects the increase of larger and higher value ITVMs and PCDMs deployed under
lease in the first nine months of 1998 as compared to units deployed under lease
in the first nine
8
<PAGE> 9
months of 1997.
Net cash provided by financing activities was $2,581,151, for the nine
months ended September 30, 1998 as compared to $1,668,877 for the nine months
ended September 30, 1997. The change is the result of increased borrowings to
fund the increase in leased ITVMs and PCDMs and receivables.
The Company's working capital deficit increased by $1,342,491 to
$5,670,559 at September 30, 1998, as compared to a deficit of $4,328,068 at
December 31, 1997. The deficits at both dates reflect the classification of the
Company's revolving credit facility as a current debt. The higher deficit as of
September 30, 1998 reflects the Company's use of cash generated from operations
in addition to draws on the credit facility to finance the increased number of
leased ITVMs and PCDMs.
At September 30, 1998, the Company was indebted to MBCI in the
aggregate principal amount of $11,560,155 and had $3,439,845 available under the
credit facility.
THE YEAR 2000 ISSUE
Many existing computer programs utilized globally use only two digits
to identify a year in the date field. These programs, if not corrected, could
fail or create erroneous results after the century date changes on January 1,
2000 or when otherwise dealing with dates later than December 31, 1999. This
Year 2000 issue is believed to affect virtually all companies and organizations,
including the Company.
The Company relies on computer-based technology and utilizes a variety
of third-party hardware and proprietary and third party software. The Company's
dispensing equipment generally uses proprietary software, with third-party
software being used more extensively for administrative functions, such as
accounting and human resource management. In addition to such information
technology ("IT") systems, the Company's operations rely on various non-IT
equipment and systems that contain embedded computer technology, such as
elevators, escalators and energy management systems. Third parties with whom the
Company has commercial relationships including vendors of materials and
components incorporated into the Company's products, and of products and
services used by the Company in it's operations (such as banking and financial
services, data processing services, telecommunications services and utilities)
are also highly reliant on computer based technology.
The Company has assessed the potential effects of the Year 2000 issue
on the Company's business, financial condition and results of operations. In
conjunction with this assessment, the Company developed and commenced the
implementation of the compliance program described below.
The Company has undertaken a review of its proprietary IT systems. No
systems were identified as relating to the critical functions of the Company's
ITVMs, Therefore the Company believes that no remediation with regard to
proprietary IT systems is necessary at this time.
9
<PAGE> 10
All third party providers of critical hardware and software have been
contacted and appropriate representations to the effect that such hardware or
software is or will timely be year 2000 compliant have been obtained.
The Company has undertaken a review of its non-IT systems and is in the
process of implementing a remediation program in respect to such systems that
are within the control of the Company. Selected non-IT suppliers and vendors
have been contacted to identify any significant exposures that may exist and
identify alternate sources or strategies where necessary.
The Company has incurred minimal costs to date in assessing the
potential effects of the Year 2000 issue on the Company and does not expect or
anticipate any material expenditure in the future.
The Company's Year 2000 compliance effort is directed towards ensuring
that the Company will be able to continue to perform three critical functions:
(i) effect sales, (ii) order and receive supplies and materials, and (iii) pay
its employees and vendors. It is difficult to assess with any degree of accuracy
the impact on any of these three areas of the failure of one or more aspects of
the Company's compliance program.
The complexity of the issues presented by the Year 2000 problem and the
proposed solutions therefor and the Company's dependence on the technical skills
of employees and independent contractors and on the representations and
preparedness of third parties are among the factors that could cause the
Company's efforts to be less than fully effective. Moreover, Year 2000 issues
present a number of risks that are beyond the Company's reasonable control, such
as the failure of utility companies to deliver electricity, the failure of
telecommunications companies to provide voice and data services, the failure of
financial institutions to process transactions and transfer funds, the failure
of vendors to deliver materials or perform services required by the Company and
the collateral effects on the Company of the effects of Year 2000 issues on the
economy in general or on the Company's business partners and customers in
particular. Although the Company believes that its Year 2000 compliance program
is designed to appropriately identify and address those Year 2000 issues that
are subject to the Company's reasonable control, there can be no assurance that
the Company's efforts in this regard will be fully effective or that the Year
2000 issues will not have a material adverse effect on the Company's business,
financial condition or results of operations.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Not applicable pursuant to General Instruction 1 to Item 305 of
Regulation S-K.
10
<PAGE> 11
PART II. OTHER INFORMATION
ITEM 4. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
Exhibit 11 - Computation of earnings per share
Exhibit 27 - Financial Data Schedule
(b) Reports on Form 8-K. No Current Reports on Form 8-K were filed by the
Company during the quarter ended September 30, 1998.
11
<PAGE> 12
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.
INTERLOTT TECHNOLOGIES, INC.
(Registrant)
Date: November 5, 1998 /s/ L. Rogers Wells, Jr.
--------------------------------------
L. Rogers Wells, Jr.
Chairman of the Board and
Chief Executive Officer
(Duly Authorized Officer)
/s/ Dennis W. Blazer
--------------------------------------
Dennis W. Blazer
Chief Financial and Accounting Officer
12
<PAGE> 13
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Number Description Page Number
- -------------- ----------- -----------
<S> <C> <C>
11 Computation of earnings per share 14
27 Financial Data Schedule 15
</TABLE>
13
<PAGE> 1
EXHIBIT 11
INTERLOTT TECHNOLOGIES, INC
Computation of Earnings per Share
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------- -------------
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Weighted average common shares
outstanding during the period 3,210,000 3,210,000 3,210,000 3,210,000
Net income $ 225,443 $ 207,627 $1,145,824 $1,014,945
Net income per share $ .07 $ 0.06 $ 0.36 $ 0.31
Assuming full dilution:
Shares
Weighted average number of
common shares outstanding
during the period 3,210,000 3,210,000 3,210,000 3,210,000
Assuming exercise of options 13,839 72,783 12,249 32,261
Weighted average number of
common shares outstanding ---------- ---------- ---------- ----------
as adjusted 3,223,839 3,282,783 3,222,249 3,242,261
========== ========== ========== ==========
Net income $ 225,443 $ 207,627 $1,145,824 $1,014,945
Earnings per common share
assuming full dilution $ .07 $ .06 $ 0.36 $ 0.31
</TABLE>
14
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FINANCIAL
STATEMENTS OF INTERLOTT TECHNOLOGIES FOR THE PERIOD ENDED SEPTEMBER 30, 1998 AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.<F1>
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-END> SEP-30-1998
<CASH> 232
<SECURITIES> 0
<RECEIVABLES> 3,241<F2>
<ALLOWANCES> 0<F2>
<INVENTORY> 4,788
<CURRENT-ASSETS> 9,076
<PP&E> 30,427
<DEPRECIATION> 14,678
<TOTAL-ASSETS> 28,841
<CURRENT-LIABILITIES> 14,747
<BONDS> 479
1,335
0
<COMMON> 32
<OTHER-SE> 10,376
<TOTAL-LIABILITY-AND-EQUITY> 28,841
<SALES> 18,778
<TOTAL-REVENUES> 18,778
<CGS> 0
<TOTAL-COSTS> 16,254
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 611
<INCOME-PRETAX> 1,912
<INCOME-TAX> 767
<INCOME-CONTINUING> 1,146
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,146
<EPS-PRIMARY> $0.36
<EPS-DILUTED> $0.36
<FN>
<F1>Amounts inapplicable or not disclosed as a separate line on the Condensed
Balance sheets and Statement of Operations are reported as 0 herein.
<F2>Notes and accounts receivable - trade are reported net of allowances for
doubtful accounts in the Condensed Balance Sheets.
</FN>
</TABLE>
