<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 March 31, 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 May 14, 1999
- ---------------------------- ---------------------------
Common Stock, $.01 Par Value 3,210,000 shares
Page 1 of 14
Exhibit Index on page 14
<PAGE> 2
INTERLOTT TECHNOLOGIES, INC.
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTER ENDED MARCH 31, 1999
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
March 31, 1999 and December 31, 1998 3
Condensed Statements of Income (unaudited)
for the three months ended March 31, 1999 and 1998 4
Condensed Statements of Cash Flows (unaudited)
for the three months ended March 31, 1999 and 1998 5
Notes to Condensed Financial Statements 6 - 7
2 Management's Discussion and Analysis of
Financial Condition and Results of Operations 8 - 11
3 Quantitative and Qualitative Disclosures About 11
Market Risk
PART II. OTHER INFORMATION
1 Legal Proceedings 12
6 Exhibits and Reports on Form 8-K 13
SIGNATURES 14
Exhibit Index 15
</TABLE>
2
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
INTERLOTT TECHNOLOGIES, INC.
CONDENSED BALANCE SHEETS (UNAUDITED)
MARCH 31, 1999 AND DECEMBER 31, 1998
<TABLE>
<CAPTION>
ASSETS March 31, 1999 December 31, 1998
-------------- -----------------
<S> <C> <C>
Current assets:
Cash $ 167,174 $ 30,004
Accounts receivable, less allowance for doubtful accounts of $ 177,501
in 1999 and $153,501 in 1998 2,481,426 2,816,589
899,234 888,627
Investment in sales type leases, current portion
Inventories 3,404,693 3,129,959
Prepaid expenses 51,367 82,105
----------- -----------
Total current assets 7,003,894 6,947,284
Property and equipment:
Leased machines 32,281,376 29,484,623
Machinery and equipment 633,096 631,111
Building and improvements 274,216 271,433
Furniture and fixtures 132,766 130,950
----------- -----------
33,321,454 30,518,117
Less accumulated depreciation and amortization 13,633,482 12,970,895
----------- -----------
19,687,972 17,547,222
Investment in sales type leases, less current portion 3,629,361 3,766,408
Product development rights, net of accumulated amortization of $604,998 in 1999
and $586,665 in 1998 495,002 513,335
----------- -----------
$30,816,229 $28,774,249
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable $12,183,936 $11,166,374
Current portion of notes payable - related parties -- 192,302
Accounts payable 2,060,223 1,479,831
Accounts payable - related party 271,396 215,734
Accrued expenses 894,697 1,111,416
Income taxes payable 472,427 248,458
----------- -----------
Total current liabilities 15,882,679 14,414,115
Notes payable - related parties 286,698 286,698
Deferred tax liability 40,955 121,900
----------- -----------
Total liabilities 16,210,332 14,822,713
Series A preferred stock, $.01 par value, 20,000,000 shares authorized,
1,335,000 shares issued and outstanding in 1999 and 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 in 1999 and 1998 32,100 32,100
Additional paid-in capital 10,376,017 10,376,017
Retained earnings 2,862,780 2,208,419
----------- -----------
Total stockholders' equity 14,605,897 12,616,536
----------- -----------
$30,816,229 $28,774,249
=========== ===========
</TABLE>
See accompanying notes to condensed financial statements.
3
<PAGE> 4
INTERLOTT TECHNOLOGIES, INC.
CONDENSED STATEMENTS OF INCOME (UNAUDITED)
THREE MONTHS ENDED MARCH 31, 1999 AND 1998
Three Months Ended March 31,
<TABLE>
<CAPTION>
Revenues: 1999 1998
---- ----
<S> <C> <C>
Machine and parts sales $ 369,682 $ 2,063,729
Machine leases 4,068,857 3,378,384
Other 521,578 422,028
----------- -----------
4,960,117 5,864,141
Cost of revenues 3,199,109 4,166,039
----------- -----------
Gross profit 1,761,008 1,698,102
Operating expenses:
Selling, general, and administrative 975,101 932,898
expenses
Research and development costs 124,696 78,884
----------- -----------
Total operating expenses 1,099,797 1,011,782
----------- -----------
Operating income 661,211 686,320
Other income (expense):
Interest expense (230,240) (222,642)
Other income 625,000 20,190
----------- -----------
394,760 (202,452)
----------- -----------
Income before income taxes 1,055,971 483,868
Income taxes 401,610 193,000
----------- -----------
Net income $ 654,361 $ 290,868
=========== ===========
Basic and diluted net income $ .20 $ .09
per share =========== ===========
</TABLE>
See accompanying notes to condensed financial statements.
4
<PAGE> 5
INTERLOTT TECHNOLOGIES, INC.
CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
THREE MONTHS ENDED MARCH 31, 1999 AND 1998
<TABLE>
<CAPTION>
Three Months Ended March 31,
1999 1998
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income $ 654,361 $ 290,868
Adjustments to reconcile net income to net cash
provided by operating activities:
Deferred income taxes (80,945) 1,400
Depreciation and amortization 1,295,784 1,053,067
Principal portion of sales type leases received 200,614 73,410
Gain on sale of equipment under sales type leases (19,173) --
Decrease (increase) in accounts receivable 335,163 (2,548,764)
Increase in inventories (123,791) (219,518)
Decrease in prepaid expenses 30,738 17,245
Increase in accounts payable 580,391 1,620,946
Increase in accounts payable - related party 55,662 192,042
Increase (decrease) in accrued expenses (216,719) 225,577
Increase (decrease) in income taxes payable 223,969 (115,700)
----------- -----------
Net cash provided by operating activities 2,936,054 590,573
----------- -----------
Cash flows from investing activities:
Cost of leased machines (3,617,561) (2,505,310)
Purchases of property and equipment (6,583) (12,556)
----------- -----------
Net cash used in investing activities (3,624,144) (2,517,866)
----------- -----------
Cash flows from financing activities:
Proceeds from notes payable, net 1,017,562 1,791,668
Repayment of long-term debt (192,302) (968)
----------- -----------
Net cash provided by financing activities 825,260 1,790,700
----------- -----------
Increase (decrease) in cash 137,170 (136,593)
Cash at beginning of year 30,004 143,071
----------- -----------
Cash at end of period $ 167,174 $ 6,478
=========== ===========
Supplemental disclosure of cash flow information:
Interest paid $ 423,500 $ 202,817
=========== ===========
Income taxes paid $ 177,641 $ 308,700
=========== ===========
Net book value of capitalized ITVMs returned from the field
and transferred into inventory $ 150,943 $ -0-
=========== ===========
</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 three months ended March 31, 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. The financial statements should be
read in conjunction with the summary of significant accounting policies which
appears in the Company's 1998 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 three months ended March 31, 1999 are
not necessarily indicative of the results to be expected for the entire year
ending December 31, 1999.
2. Segment and Related Information
Effective January 1, 1998, the Company adopted SFAS No. 131,
Disclosures about Segments of an Enterprise and Related Information, which
changes the way the Company reports information about its two operating
segments instant ticket vending machines (ITVMs) and prepaid phone card
dispensing machines (PCDMs). The ITVM segment is the larger of the Company's
two segments. The Company designs, manufactures, sells, leases and services
ITVMs that are used by public lotteries operated by states and foreign public
entities to dispense instant winner lottery tickets primarily in retail
locations such as supermarkets and convenience stores. Within the PCDM segment,
the Company designs, manufactures, sells, leases and services PCDMs that are
used by providers of long distance telephone service to dispense prepaid
telephone calling cards in retail locations.
The accounting policies of the segments are the same as those
described in the summary of significant accounting policies which appears in
the Company's 1998 Annual report. The Company evaluates performance based on
segment operating profits.
<TABLE>
<CAPTION>
MARCH 31, 1998 ITVMs PCDMs Total
<S> <C> <C> <C>
Revenues $ 5,733,235 $ 130,906 $ 5,864,141
Segment gross margin 1,696,998 1,104 1,698,102
Total Assets 26,408,821 966,055 27,374,876
MARCH 31, 1999
Revenues 4,899,967 60,150 4,960,117
Segment gross margin 1,749,351 11,657 1,761,008
Total Assets 29,499,945 632,426 30,132,371
</TABLE>
Total Assets for the segment excludes cash, prepaid expenses, net property and
equipment other than leased machines and deferred tax assets, as such assets
are not specifically identifiable to a particular segment.
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 prepaid phone 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 March 31, 1999, the Company had sold or leased over 15,000 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 ITVMs
and PCDMs in both domestic and international markets.
RESULTS OF OPERATIONS
The Company's revenues decreased 15% to $4,960,117 in the first three
months of 1999 from $5,864,141 for the same period in 1998. Revenues from sales
of ITVMs and PCDMs decreased 82% to $369,682 in the first three months of 1999
from $2,063,729 for the same period in 1998. The decrease in revenues from
sales resulted from the lower number of ITVMs leased to the New York Lottery
which are categorized as sales type leases and which were deployed during the
1999 period. (See Note 2 of Notes to Financial Statements in the Company's 1999
Annual Report.) Revenues from operating leases increased 20% to $4,068,857 in
the first three months of 1999 from $3,378,384 for the same period in 1998.
Lease revenues increased as the result of additional leased units deployed.
Lease revenues represented 82% of total revenues for the three months ended
March 31, 1999 and 58% of total revenues for the three months ended March 31,
1998.
Cost of revenues decreased 23% to $3,199,109 in the first three
months of 1999 from $4,166,439 for the same period in 1998. The decrease in
cost is due to the lower number of machines sold and higher utilization of
manufacturing capacity. Depreciation charged to cost of revenues increased 25%
to $1,232,223 in the first three months of 1999 from $985,813 for the same
period in 1998. Service and installation costs increased 13% to $1,781,718 in
the first three months of 1999 from $1,583,751 for the same period in 1998,
primarily due to the increase in the number of ITVMs and PCDMs deployed rather
than an incremental cost per machine.
Gross profit increased 4% to $1,761,008 in the first three months of
1999 from $1,698,102 for the same period in 1998, as the result of the changes
described previously.
7
<PAGE> 8
Selling, general, and administrative expenses increased 5% to
$975,101 in the first three months of 1999 from $932,898 for the same period in
1998. Increases in personnel and sales activities were the primary factors
related to the increase in cost for both periods.
Interest expense increased 3% to $230,240 in the first three months of
1999 from $222,642 for the same period in 1998. The increase reflects an
increase in borrowings which were incurred to fund increases in leased
machines. Interest rates charged to the Company declined in the first three
months of 1999 due to increased use of optional borrowing rates tied to the
LIBOR rates.
Other income increased by $604,180 in the first three months of 1999
from $20,190 for the same period in 1998 and consists of one time non-recurring
income from settlement of litigation previously reported upon by the Company.
As a result of the previously discussed changes, income before income
taxes increased 118% to $1,055,971 in the first three months of 1999 from
$483,868 for the same period in 1998.
Due to the foregoing factors, net income increased 125% to $654,361 in
the first three months of 1999 from $290,868 for the same period in 1998.
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 March 31, 1999 the Company had a
total of 7,950 ITVMs and PCDMs deployed under operating and sales type leases
as compared to 7,100 at March 31, 1998.
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 three months ended March 31,
1999 and 1998 was $2,936,054 and $590,573, respectively. The increase for the
first three months of 1999 as compared to the same period in 1998 results
primarily from an increase in net income, an increase in depreciation expense
from additional equipment leases and a decrease in accounts receivable.
Net cash used in investing activities was $3,624,144 and $2,517,866
for the three months ended March 31, 1999 and 1998, respectively. This increase
reflects the higher number of ITVMs and PCDMs deployed under lease in the first
three months of 1999 as compared to the first three months of 1998.
8
<PAGE> 9
Net cash provided by financing activities was $825,260 for the three
months ended March 31, 1999 as compared to $1,790,700 for the three months
ended March 31, 1998. The change is the result of decreased borrowings
resulting from the increase in cash provided by operations as mentioned above.
The Company's working capital deficit increased by $1,411,954 to
$8,878,785 at March 31, 1999 as compared to a deficit of $7,436,831 at December
31, 1998. The deficits at both dates reflect the classification of the
Company's revolving credit facility as a current debt. The higher deficit as of
March 31, 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 March 31, 1999, the Company was indebted to MBCI in the aggregate
principal amount of $ 12,183,936 and had $2,816,064 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
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. 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.
9
<PAGE> 10
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 generalor 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.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Not applicable pursuant to Item 305(e) of Regulation S-K.
10
<PAGE> 11
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In January 1996, the Company filed a lawsuit in the United States
District Court for the Southern District of Ohio against Lottery Enterprises,
Inc. ("LEI, " now known as On-Point Technology Systems, Inc.) to collect sums
that the Company alleged were owed to it under an Agreement in Principle dated
March 23, 1995, relating to the Company's potential acquisition of LEI by
merger (the "Transaction"). The parties did not consummate the Transaction. The
Agreement in Principle required LEI to reimburse the Company's reasonable
out-of-pocket expenses incurred in connection with the Transaction in the event
the parties failed to execute a definitive merger agreement within 120 days of
March 23, 1995, and the primary reason that the parties did not execute a
definitive merger agreement was other than a breach of the Agreement in
Principle by the Company. The Agreement in Principle also required LEI to pay
the Company a "break-up fee" in the event that, within one year after the
termination or abandonment of the Transaction by LEI, LEI entered into a
binding commitment to engage in a recapitalization, debt issuance or working
capital financing other than in the ordinary course of business, and the
primary reason for the termination or abandonment of the Transaction was other
than termination or breach of the Agreement in Principle by the Company. The
Company sought reimbursement of approximately $241,000 in out-of-pocket
expenses and a break-up fee exceeding $988,000.
LEI denied any liability to the Company and also asserted
counterclaims against the Company for unfair competition and tortious
interference seeking unspecified money damages exceeding $500,000. LEI claimed
that the Company had competed unfairly with LEI and had wrongfully interfered
with LEI's business by misrepresenting Lei's financial condition to the
Pennsylvania state lottery agency and by utilizing information about LEI
received during the due diligence conducted in connection with the Transaction.
LEI also claimed that it was entitled to recover from the Company unspecified
costs and expenses that it incurred in connection with the Transaction and
sought a declaration from the Court that it was not obligated to pay the
Company a break-up fee under the Agreement in Principle.
In 1997, the Court ruled that the Company was entitled to summary
judgement in its favor on LEI's counterclaims for unfair competition and
tortious interference. The Court also ruled that within one year after the
Transaction was abandoned or terminated, LEI did enter into a recapitalization,
debt issuance or working capital financing other than in the ordinary course of
business. The Court left open the question whether LEI had abandoned or
terminated the Transaction (as opposed to the Company), and the question of
whether LEI was obligated to reimburse the Company's out-of-pocket expenses
incurred in connection with the Transaction, both of which were to be
determined at trial.
On March 4, 1999, the Company and LEI entered into a confidential
settlement agreement that resolved all claims asserted in the lawsuit on
satisfactory terms.
11
<PAGE> 12
ITEM 6. 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 March 31, 1999.
12
<PAGE> 13
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: May 14,1999 /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> 14
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Number Description Page Number
- -------------- ----------- -----------
<S> <C> <C>
11 Computation of earnings per share 16
27 Financial Data Schedule 17
</TABLE>
14
<PAGE> 1
EXHIBIT 11
INTERLOTT TECHNOLOGIES, INC
Computation of Earnings per Share
<TABLE>
<CAPTION>
Three Months Ended March 31,
1999 1998
---------- ----------
<S> <C> <C>
Weighted average common shares outstanding during 3,210,000 3,210,000
the period
Net income $ 654,361 $ 290,868
Net income per share $ 0.20 $ 0.09
Assuming full dilution:
Shares
Weighted average number of
common shares outstanding
during the period 3,210,000 3,210,000
Assuming exercise of options -0- 3,322
Weighted average number of
common shares outstanding ---------- ----------
as adjusted 3,210,000 3,213,322
========== ==========
Net income $ 654,361 $ 290,868
Earnings per common share $ 0.20 $ 0.09
assuming full dilution
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF INTERLOTT TECHNOLOGIES, INC. FOR THE PERIOD ENDED MARCH
31, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> MAR-31-1999
<CASH> 167
<SECURITIES> 0
<RECEIVABLES> 2,481<F1>
<ALLOWANCES> 0<F1>
<INVENTORY> 3,405
<CURRENT-ASSETS> 7,004
<PP&E> 33,322
<DEPRECIATION> 13,634
<TOTAL-ASSETS> 30,816
<CURRENT-LIABILITIES> 15,883
<BONDS> 287
1,335
0
<COMMON> 32
<OTHER-SE> 10,376
<TOTAL-LIABILITY-AND-EQUITY> 30,816
<SALES> 370
<TOTAL-REVENUES> 4,960
<CGS> 263
<TOTAL-COSTS> 3,199
<OTHER-EXPENSES> 1,100<F2>
<LOSS-PROVISION> 0<F2>
<INTEREST-EXPENSE> 230
<INCOME-PRETAX> 1,056
<INCOME-TAX> 402
<INCOME-CONTINUING> 654
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 654
<EPS-PRIMARY> 0.20
<EPS-DILUTED> 0.20
<FN>
<F1>Notes and accounts receivable - trade are reported net of allowances for
doubtful accounts in the Condensed Balance Sheets.
<F2>Other costs and expenses include the provision for doubtful accounts and
notes.
</FN>
</TABLE>
