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, 1999
OR
[ ] Transition Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Transition Period from____ to ____
Commission File Number 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.
Class Outstanding at August 13,1999
Common Stock, $.01 Par Value 3,210,000 shares
Page 1 of 16
Exhibit Index on page 14
<PAGE>
INTERLOTT TECHNOLOGIES, INC.
Quarterly Report on Form 10-Q
For the Quarter Ended September 30, 1999
Table of Contents
Item Page
Number PART I. FINANCIAL INFORMATION Number
1 Financial Statements:
Condensed Balance Sheets (unaudited) as of
September, 1999 and December 31, 1998 3
Condensed Statements of Income (unaudited)
for the three months and nine months ended
September, 1999 and 1998 4
Condensed Statements of Cash Flows (unaudited)
for the nine months ended September, 1999 and 1998 5
Notes to Condensed Financial Statements 6
2 Management's Discussion and Analysis of
Financial Condition and Results of Operations 7 - 11
3 Quantitative and Qualitative Disclosures about 11
Market Risk
PART II. OTHER INFORMATION
6 Exhibits and Reports on Form 8-K 12
SIGNATURES 13
Exhibit Index 14
2
<PAGE>
Item 1. Financial Statements PART I. FINANCIAL INFORMATION
<TABLE>
INTERLOTT TECHNOLOGIES, INC.
<CAPTION>
Condensed Balance Sheets (Unaudited)
September 30, 1999 and December 31, 1998
ASSETS September 30, 1999 December 31, 1998
<S> <C> <C>
Current assets:
Cash $ 56,409 $ 30,004
Accounts receivable, less allowance for doubtful accounts of
$225,501 in 1999 and $153,501 in 1998 2,509,283 2,816,589
Investment in sales type lease, current portion 1,013,161 888,627
Inventories 5,081,724 3,129,959
Prepaid expenses 250,977 82,105
---------- ----------
Total current assets 8,911,554 6,947,284
Property and equipment:
Leased machines 33,382,005 29,484,623
Machinery and equipment 609,105 631,111
Building and improvements 243,807 271,433
Furniture and fixtures 93,456 130,950
---------- ----------
34,328,373 30,518,117
Less accumulated depreciation and amortization 14,097,543 12,970,895
---------- ----------
Net property and equipment 20,230,830 17,547,222
Investment in sales type lease, less current portion 3,075,141 3,766,408
Product development rights, net of accumulated amortization of
$641,664 in 1999 and $586,665 in 1998 458,336 513,335
---------- ----------
$32,675,861 $28,774,249
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities:
Notes payable $14,430,066 $11,166,374
Current installment of long-term debt 0 192,302
Accounts payable 1,827,457 1,479,831
Accounts payable - related party 223,833 215,734
Accrued expenses 955,794 1,111,416
Income taxes payable 0 248,458
---------- ----------
Total current liabilities 17,437,150 14,414,115
Notes payable - related parties 286,698 286,698
Deferred tax liability 87,728 121,900
---------- ----------
Total liabilities 17,811,576 14,822,713
Series A preferred stock, $.01 par value, 20,000,000 shares
authorized, 1,335,000 shares issued and outstanding at
September 30, 1999 and December 31, 1998 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 at September 30,
1999 and December 31, 1998 32,100 32,100
Additional paid-in capital 10,376,017 10,376,017
Retained earnings 3,121,168 2,208,419
---------- ----------
Total stockholders' equity 13,529,285 12,616,536
---------- ----------
$32,675,861 $28,774,249
========== ==========
</TABLE>
See accompanying notes to condensed financial statements.
3
<PAGE>
<TABLE>
INTERLOTT TECHNOLOGIES, INC.
<CAPTION>
Condensed Statements of Income (Unaudited)
Three Months and Nine Months ended September 30, 1999 and 1998
Three Months Ended Nine Months Ended
September 30, September 30,
Revenues: 1999 1998 1999 1998
<S> <C> <C> <C> <C>
Machine and parts sales $ 211,718 $1,741,828 $ 906,124 $ 7,049,825
Machine leases 4,261,893 3,235,382 12,611,924 10,148,288
Other 521,394 650,120 1,576,432 1,579,976
--------- --------- ---------- ----------
4,995,005 5,627,330 15,094,480 18,778,089
Cost of revenues 3,470,232 3,839,992 10,121,360 12,836,219
--------- --------- ---------- ----------
Gross profit 1,524,773 1,787,338 4,973,120 5,941,870
Operating expenses:
Selling, general and administrative
expenses 1,044,625 1,037,563 3,131,759 3,046,516
Research and development costs 144,774 201,729 455,160 371,927
--------- --------- ---------- ----------
Total operating expenses 1,189,399 1,239,292 3,586,919 3,418,443
--------- --------- ---------- ----------
Operating income 335,374 548,046 1,386,201 2,523,427
Other income (expense):
Interest expense (283,339) (257,750) (768,238) (753,445)
Other (1,591) 86,356 610,157 142,342
--------- --------- ---------- ----------
(284,930) (171,394) (158,081) (611,103)
--------- --------- ---------- ----------
Income before income taxes and
extraordinary items 50,444 376,652 1,228,120 1,912,324
Income taxes 19,169 151,199 466,479 766,500
--------- --------- ---------- ----------
Income before extraordinary item 31,275 225,453 761,641 1,145,824
Extraordinary item (less applicable)
income taxes of $92,371) 151,106 0 151,106 0
--------- --------- ---------- ----------
Net Income $ 182,381 $ 225,453 $ 912,747 $ 1,145,824
========= ========= ========== ==========
Basic and diluted net income per
share before extraordinary item $.01 $.07 $.23 $.36
=== === === ===
Basic and diluted extraordinary
item per share $.05 - $.05 -
=== ===
Basic and diluted net income
per share $.06 $.07 $.28 $.36
=== === === ===
</TABLE>
See accompanying notes to condensed financial statements.
4
<PAGE>
<TABLE>
INTERLOTT TECHNOLOGIES, INC.
<CAPTION>
Condensed Statements of Cash Flows (Unaudited)
Nine Months ended September 30, 1999 and1998
Nine Months Ended September 30,
1999 1998
<S> <C> <C>
Cash flows from operating activities:
Net income $ 912,747 $1,145,824
Adjustment to reconcile net income to net cash
provided by operating activities:
Net book value of equipment disposals 113,564 0
Deferred income taxes (34,173) 391,828
Depreciation and amortization 4,068,365 3,351,234
Principal portion of sales type leases received 661,135 344,532
Gain on sale of equipment under sales type leases (24,402) (1,080,585)
Decrease (increase) in accounts receivable 307,306 (322,799)
Increase in inventories (1,113,501) (717,001)
(Increase) decrease in prepaid expenses (168,872) 89,668
Increase in accounts payable 347,626 393,430
Increase (decrease) in accounts payable - related party 8,099 (21,795)
(Decrease) in accrued expenses (155,620) (54,461)
Decrease (increase) in income taxes payable (248,458) 43,975
--------- ---------
Net cash provided by operating activities 4,673,816 3,563,850
Cash flows from investing activities:
Cost of leased machines (7,692,363) (6,000,460)
Purchases of property and equipment (26,438) (55,652)
--------- ---------
Net cash used in investing activities (7,718,801) (6,056,112)
Cash flows from financing activities:
Net proceeds from notes payable 3,263,692 2,582,119
Repayment of long-term debt (192,302) (968)
--------- ---------
Net cash provided by financing activities 3,071,390 2,581,151
--------- ---------
Increase in cash 26,405 88,889
Cash at beginning of year 30,004 143,071
--------- ---------
Cash at end of period $ 56,409 $ 231,960
========= =========
Supplemental disclosure of cash flow information:
Interest paid $ 921,545 $ 711,530
========= =========
Income taxes paid $ 996,956 $ 330,700
========= =========
NBV of capitalized leased ITVMs returned to inventory $ 868,264 $ 0
========= =========
</TABLE>
See accompanying notes to condensed financial statements.
5
<PAGE>
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, 1999 and 1998 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. These financial statements should be read in
conjunction with the financial statements and footnotes, including the summary
of significant accounting policies, which appear in the Company's1998 Annual
Report filed with the Securities and Exchange Commission as an exhibit to the
Company's 1998 Annual Report on Form 10-K. The results of operations for the
nine months ended September 30, 1999 are not necessarily indicative of the
results to be expected for the entire year ending December 31, 1999.
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
599 Instant Ticket Vending Machines are leased to another state lottery under a
similar type lease that commenced in May, 1998. 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 permitted the Company to borrow through
October 2000, up to $15,000,000 at the prime interest rate (8.25% at September
30, 1999). In September 1999, the Company and the financial institution amended
this agreement to permit borrowing of up to $25,000,000. 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 the assignment of proceeds from lease
agreements. At September 30, 1999, the Company had borrowings of $14,430,066
outstanding with additional borrowings of $10,569,934 available under the
facility.
6
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
General
This report contains "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended and Section 21E of the
Securities Exchange Act of 1934, as amended. These statements relate to future
economic performance, plans and objectives of management for future operations
and projections of revenue and other financial items that are based on the
beliefs of the Company's management, as well as assumptions made by and
information currently available to the Company's management. The words "expect,"
"estimate," "anticipate," "believe," "intend," and similar expressions are
intended to identify forward-looking statements which involve risks and
uncertainties such as fluctuations in financial results, a decline in market
acceptance of ITVMs, loss of large contracts, loss of patent protection, changes
in technology and increasing competition. If one or more of these risks or
uncertainties materialize or underlying assumptions prove incorrect, actual
outcomes may vary materially from those indicated.
The Company manufactures instant ticket vending machines or ITVMs, and
phone card dispensing machines or 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 (1)
the lease of ITVMs and PCDMs, (2) the sale of ITVMs and PCDMs, and (3) to a
lesser extent, service agreements and the sale of parts for ITVMs and PCDMs.
As of September 30, 1999, the Company had sold or leased over 16,700
ITVMs and PCDMs 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 both
ITVMs and PCDMs in both domestic and international markets.
Results of Operations
The Company's net revenues decreased 11% to $4,995,005 from $5,627,330
for the three months, and 20% to $15,094,480 from $18,778,089 for the nine
months, ended September 30, 1999 and1998, respectively. Revenues from sales of
ITVMs and PCDMs decreased 88% to $211,718 from $1,741,828 for the three months
ended September 30, 1999 and 1998, respectively, and decreased 87% to $906,124
from $7,049,825 for the nine months ended September 30, 1999 and 1998
respectively. The decrease in revenues from sales resulted from a lower number
of ITVMs leased to the New York Lottery which are categorized as sales type
leases (see Note 2 of Notes to Financial Statements in the Company's 1998 Annual
Report) and from a lower numbers of machines sold directly. For the nine months
ended September 30, 1998, the Instant Ticket Vending Machines accounted for as
sales type leases amounted to over $3.3 million in sales revenue. Revenues from
operating leases increased 32% to $4,261,893 from $3,235,382 for the three
months, and increased 24% to $12,611,924 from $10,148,288 for the nine months,
7
<PAGE>
ended September 30, 1999 and 1998, respectively. Lease revenues represented 85%
and 57% of total revenues for the three months, and 84% and 54% of total
revenues for the nine months ended September 30, 1999 and1998, respectively.
This increase in lease revenues as a percentage of total revenues results from
the Company's continuing emphasis on leasing. For further information in this
regard, see the Company's Report on Form 10-K for the year ended December 31,
1998.
Cost of revenues as a percent of total revenues increased 1% to 69%
from 68% for the three months and decreased 1% to 67% from 68% for the nine
months ended September 30, 1999 and 1998, respectively. Depreciation charged to
cost of revenues increased 25% to $1,342,027 from $1,072,488 for the three
months, and increased 24% to $3,901,678 from $3,144,912 for the nine months,
ended September 30, 1999 and 1998, respectively. Service and installation costs
increased 34% to $1,874,308 from $1,399,098 for the three months, and increased
22% to $5,343,722 from $4,395,863 for the nine months, ended September 30, 1999
and 1998, respectively, primarily due to an increase in the number of ITVMs and
PCDMs deployed rather than an incremental cost per machine. Gross profit
percentage decreased 1% to 31% from 32% for the three months, and increased 1%
to 33% from 32% for the nine months, ended September 30, 1999 and 1998,
respectively.
Selling, general, and administrative expenses increased 1% to
$1,044,625 from $1,037,563 for the three months, and 3% to $3,131,759 from
$3,046,516 for the nine months, ended September 30, 1999 and 1998, respectively.
An increase in personnel, plus legal and professional fees were the primary
factors related to the increase in cost for both the three months and nine
months ended September 30, 1999 as compared to the same periods in 1998.
Interest expense increased 10% to $283,339 from $257,750 for the three
months, and increased 2% to $768,238 from $753,445 for the nine months, ended
September 30, 1999 and 1998, respectively. The increase reflects the difference
in the average amounts outstanding and an increase in interest rates.
Other (expense) income was ($1,591) and $86,356 for the three months
and $610,157 and $142,342 for the nine months ended September 30, 1999 and 1998,
respectively. The income for the nine month period in 1999, includes a one time
non-recurring item of $625,000 from settlement of litigation as reported in the
Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 1999.
The extraordinary item is a one time non-recurring gain of $151,106
from the involuntary conversion of property lost in a tornado, covered by
insurance at replacement cost.
As a result of the changes discussed above, income before income taxes
decreased 22% to $293,921 from $376,652 for the three months, and decreased 23%
to $1,471,597 from $1,912,324 for the nine months, ended September 30, 1999 and
1998, respectively.
Net income decreased 19% to $182,381 from $225,453 for the three
months, and decreased 20% to $912,747 from $1,145,824 for the nine months, ended
September 30, 1999 and 1998, respectively.
8
<PAGE>
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, 1999, the Company had a total of
8,059 ITVMs and PCDMs deployed under leases as compared to 7,587 at September
30, 1998.
The Company finances its operations primarily through cash flow from
operations and a three year revolving credit facility from Mercantile Business
Credit, Inc. or MBCI, entered into as of October 29,1997. The credit facility
with MBCI is a $25,000,000 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,
1999 and 1998 was $4,673,816 and $3,563,850, respectively. The increase for the
first nine months of 1999 as compared to the same period in 1998 results
primarily from the decrease in accounts receivable and an increase in
depreciation. The increase in depreciation is the result of the greater number
of ITVMs and PCDMs deployed under leases as compared to the number deployed in
the first nine months of 1998.
Net cash used in investing activities was $7,718,801 and $6,056,112 for
the nine months ended September 30, 1999 and 1998, respectively. This increase
reflects the increase in larger and higher value ITVMs and PCDMs deployed under
lease in the first nine months of 1999 as compared to units deployed under lease
in the first nine months of 1998.
Net cash provided by financing activities was $3,071,390 for the nine
months ended September 30, 1999 as compared to $2,581,151 net cash used in
financing activities for the nine months ended September 30,1998. The change is
the result of borrowing to fund the increase in leased ITVMs and PCDMs, offset
by repayment of long-term debt.
The Company's working capital deficit increased by $1,058,765 to
$8,525,596 at September 30, 1999, as compared to a deficit of $7,466,831
December 31, 1998. The deficits at both dates reflect the classification of the
Company's revolving credit facility as a current debt. The deficit as of
September 30, 1999 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, 1999, the Company was indebted to MBCI in the
aggregate principal amount of $14,430,066 and had $10,569,934 available under
the credit facility.
The Year 2000 Issue
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
9
<PAGE>
software being used more extensively for administrative functions, such as
accounting and human resource management. In addition to such information
technology or IT systems, the Company's operations rely on various non-IT
equipment and systems that contain embedded computer technology. 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 its operations (such as banking and
financial services, data processing services, telecommunications services and
utilities), also rely heavily 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
relating to its dispensing equipment. No systems were identified as relating to
the critical functions of the Company's ITVMs or PCDMs. As such, the Company
believes that no remediation with regard to those proprietary IT systems is
necessary.
The Company has contacted its third party providers of critical
hardware and software and has obtained appropriate representations to the effect
that such hardware or software is or will be Year 2000 compliant.
The Company has undertaken a review of its non-IT systems and is
implementing a remediation program with respect to those 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 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 expenditures in the future in connection with the Year
2000 issue. Nevertheless, the issues presented by the Year 2000 issue and the
proposed solutions therefrom are very complex and the Company's Year 2000
compliance depends heavily on the technical skills of employees and independent
contractors and the representations and preparedness of third parties. Moreover,
Year 2000 issues present a number of risks that are beyond the Company's
reasonable control, such as 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 will appropriately
identify and address those Year 2000 issues that are most 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.
10
<PAGE>
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Not applicable
11
<PAGE>
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 for the Nine Months Ended
September 30, 1999
(b) Reports on Form 8-K. No current reports on Form 8-K were filed by the
Company during the quarter ended September 30, 1999.
12
<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.
INTERLOTT TECHNOLOGIES, INC.
(Registrant)
Date: November 12, 1999 /s/ David F. Nichols
President and
Chief Executive Officer
(Duly Authorized Officer)
/s/ Dennis W. Blazer
Dennis W. Blazer
Chief Financial and Accounting Officer
13
<PAGE>
EXHIBIT INDEX
Exhibit Number Description Page Number
11 Computation of earnings per share 15
27 Financial Data Schedule for the
Nine Months ended September 30, 1999 16
14
<TABLE>
INTERLOTT TECHNOLOGIES, INC
<CAPTION>
Computation of Earnings per share
Three Months Ended Nine Months Ended
September 30, September 30,
1999 1998 1999 1998
<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 $182,381 $225,453 $912,747 $1,145,824
Net income per share $0.06 $0.07 $0.28 $0.36
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 0 13,839 0 12,249
Weighted average number of
common shares outstanding
as adjusted 3,210,000 3,223,839 3,210,000 3,222,249
========= ========= ========= =========
Net income $182,381 $225,453 $912,747 $1,145,824
Earnings per common share
assuming full dilution $0.06 $0.07 $0.28 $0.36
</TABLE>
15
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from financial
statements for the period ended September 30, 1999 and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 56
<SECURITIES> 0
<RECEIVABLES> 2,509<F1>
<ALLOWANCES> 0<F1>
<INVENTORY> 5,082
<CURRENT-ASSETS> 8,912
<PP&E> 34,328
<DEPRECIATION> 14,098
<TOTAL-ASSETS> 32,676
<CURRENT-LIABILITIES> 17,437
<BONDS> 287
1,335
0
<COMMON> 32
<OTHER-SE> 13,497
<TOTAL-LIABILITY-AND-EQUITY> 32,676
<SALES> 906
<TOTAL-REVENUES> 15,094
<CGS> 625
<TOTAL-COSTS> 10,121
<OTHER-EXPENSES> 3,587<F2>
<LOSS-PROVISION> 0<F1>
<INTEREST-EXPENSE> 768
<INCOME-PRETAX> 1,228
<INCOME-TAX> 466
<INCOME-CONTINUING> 762
<DISCONTINUED> 0
<EXTRAORDINARY> 151
<CHANGES> 0
<NET-INCOME> 913
<EPS-BASIC> 0.28
<EPS-DILUTED> 0.28
<FN>
<F1> Notes and accounts receivable - trade are reported net of allowance for
doubtful accounts in the Condensed Balance Sheets.
<F2> Other costs and expenses include the provision for doubtful accounts and
notes.
</FN>
</TABLE>
