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, 1997
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 0-19155
STATE OF THE ART, INC.
------------------------------------------------------------
(Exact name of registrant as specified in its charter)
California 95-3664592
------------------------------ -----------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
56 Technology Drive
Irvine, California 92618-2301
---------------------------------------------- -----------------
(Address of principal executive offices) (ZIP Code)
(714) 753-1222
(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 12 months (or for such shorter periods 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 ____
As of October 31, 1997, the issuer had 11,128,458 shares of common stock, no par
value, outstanding.
Page 1 of 12
<PAGE>
STATE OF THE ART, INC.,
and subsidiaries
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
<S> <C>
Unaudited Condensed Consolidated Balance Sheets . . . . . . . . . . . . . . . . . . 3
Unaudited Condensed Consolidated Statements of Operations . . . . . . . . . . . . . 4
Unaudited Condensed Consolidated Statements of Cash Flows . . . . . . . . . . . . . 5
Notes to Unaudited Condensed Consolidated Financial Statements. . . . . . . . . . . 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations . . . . . . . . . . . . . . . . . . . . . . . . . . 7
PART II. OTHER INFORMATION
Item 1. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Item 4. Submission of Matters to a Vote of Security Holders . . . . . . . . . . . . . . . . 12
Item 6. Exhibits and Reports on Form 8-K. . . . . . . . . . . . . . . . . . . . . . . . . . 12
SIGNATURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
</TABLE>
2
<PAGE>
PART I. FINANCIAL INFORMATION
<TABLE>
STATE OF THE ART, INC.,
and subsidiaries
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts)
<CAPTION>
September 30, December 31,
1997 1996
--------------- ---------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $22,487 $22,029
Short-term investments 15,657 15,064
Accounts receivable, net 9,974 5,407
Inventories 835 1,494
Prepaid expenses and other current assets 1,324 1,289
Deferred income taxes 52 84
--------------- ---------------
Total current assets 50,329 45,367
--------------- ---------------
Property and equipment, net 5,270 5,334
Capitalized software development costs, net 1,122 1,441
Other assets 2,765 189
=============== ===============
$59,486 $52,331
=============== ===============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $1,492 $2,485
Accrued expenses 2,949 1,544
Deferred revenue 4,851 1,046
Income taxes payable 659 ---
--------------- ---------------
Total current liabilities 9,951 5,075
--------------- ---------------
Accrued rent 233 244
--------------- ---------------
Total liabilities 10,184 5,319
--------------- ---------------
Shareholders' equity:
Preferred stock, 1,000,000 shares authorized, none issued and outstanding --- ---
Common stock, no par value; 25,000,000 shares authorized; 11,114,357
and 11,157,477 shares issued and outstanding at September 30, 1997, and
December 31, 1996, respectively 17,971 18,330
Retained earnings 31,331 28,682
--------------- ---------------
Total shareholders' equity 49,302 47,012
=============== ===============
$59,486 $52,331
=============== ===============
</TABLE>
See accompanying notes to unaudited condensed consolidated
financial statements.
3
<PAGE>
<TABLE>
STATE OF THE ART, INC.,
and subsidiaries
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
<CAPTION>
Three Months Ended Nine Months Ended
---------------------------------------- -------------------------------------
September 30, September 30, September 30, September 30,
1997 1996 1997 1996
------------------ ------------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Net revenues
License fees $12,909 $ 8,898 $34,228 $29,732
Support services 2,314 1,191 5,382 3,672
Business forms 1,108 965 3,338 3,035
------------------ ------------------- ---------------- ----------------
Total Revenues 16,331 11,054 42,948 36,439
Cost of revenues 3,346 2,636 8,527 7,646
------------------ ------------------- ---------------- ----------------
Gross profit 12,985 8,418 34,421 28,793
Operating expenses:
Sales and marketing 6,423 5,676 18,036 15,126
Research and development 3,355 3,191 9,199 9,114
General and administrative 1,700 1,220 4,663 3,606
------------------ ------------------- ---------------- ----------------
Total operating expenses 11,478 10,087 31,898 27,846
------------------ ------------------- ---------------- ----------------
Operating income (loss) 1,507 (1,669) 2,523 947
Interest income 419 354 1,321 1,045
------------------ ------------------- ---------------- ----------------
Income (loss) before income taxes 1,926 (1,315) 3,844 1,992
Income tax provision (benefit) 606 (460) 1,195 697
================== =================== ================ ================
Net income (loss) $1,320 $(855) $2,649 $1,295
================== =================== ================ ================
Net income (loss) per share $ 0.11 ($ 0.07) $ 0.23 $ 0.11
================== =================== ================ ================
Weighted average common and common
equivalent shares outstanding 11,588 11,834 11,553 11,692
================== =================== ================ ================
</TABLE>
See accompanying notes to unaudited condensed consolidated
financial statements.
4
<PAGE>
<TABLE>
STATE OF THE ART, INC.,
and subsidiaries
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
<CAPTION>
Nine months ended
September 30,
------------------------------
1997 1996
-------------- --------------
<S> <C> <C>
Cash flows from operating activities:
Net income $2,649 $1,295
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization 2,240 1,908
Provision for (benefit from) deferred income taxes 7 (38)
Changes in assets and liabilities:
Accounts receivable (4,567) 609
Inventories 659 (214)
Prepaid expenses (144) (661)
Accounts payable (989) 946
Accrued expenses 1,405 417
Deferred revenue 3,805 87
Income taxes payable 659 (874)
Other, net 421 703
-------------- --------------
Net cash provided by operating activities 6,145 4,178
Cash flows from investing activities:
Purchase of short-term investments (593) (551)
Acquisition of subsidiaries (2,618) ---
Capital expenditures -- property and equipment, net (1,736) (2,588)
Capital expenditures -- software development costs (121) (450)
-------------- --------------
Net cash used in investing activities (5,068) (3,589)
Cash flows from financing activities:
Repurchase of common stock (1,764) ---
Proceeds from sale of common stock under stock option plan 1,145 1,232
-------------- --------------
Net cash provided by (used in) financing activities (619) 1,232
-------------- --------------
Net increase in cash and cash equivalents 458 1,821
Cash and cash equivalents at beginning of period 22,029 16,681
============== ==============
Cash and cash equivalents at end of period $22,487 $18,502
============== ==============
Supplemental disclosures of cash flow information:
Interest paid $1 $11
============== ==============
Income taxes paid $153 $1,609
============== ==============
</TABLE>
See accompanying notes to unaudited condensed consolidated
financial statements.
5
<PAGE>
STATE OF THE ART, INC.,
and subsidiaries
Notes to Unaudited Condensed Consolidated Financial Statements
1. Basis of Presentation:
The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with generally accepted accounting principles
and with the instructions to Form 10-Q and Article 10 of Regulation S-X for
interim financial information. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete consolidated financial statements. In the opinion of management,
all adjustments (consisting only of normal recurring accruals) considered
necessary for a fair presentation have been included. The operating results for
the three and nine month periods ended September 30, 1997, are not necessarily
indicative of the results that may be expected for the year ending December 31,
1997. For further information, refer to the consolidated financial statements
and related notes included in the Company's Annual Report on Form 10-K for the
year ended December 31, 1996.
2. Net Income (Loss) Per Share:
Net income (loss) per share was computed based on the weighted average
number of common shares and equivalents outstanding during the three and nine
month periods ended September 30, 1997, as well as the similar periods ended
September 30, 1996. Common stock equivalents include stock options, which were
computed using the treasury stock method.
The computations of the weighted average common and common equivalent
shares follows (in thousands):
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
---------------------------------------- -------------------------------------
September 30, September 30, September 30, September 30,
1997 1996 1997 1996
------------------ ------------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Weighted average common shares
outstanding during the period 11,105 11,112 11,165 11,023
Common stock equivalents 483 722 388 669
------------------ ------------------- ---------------- -----------------
Weighted average common and common
equivalent shares outstanding 11,588 11,834 11,553 11,692
================== =================== ================ ================
</TABLE>
6
<PAGE>
Part I. Item 2.
STATE OF THE ART, INC.,
and subsidiaries
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Overview:
Net income was $1.3 million, or $0.11 per share, on net revenues of $16.3
million for the quarter ended September 30, 1997, as compared with a net loss of
$0.9 million, or ($0.07) per share, on net revenues of $11.1 million for the
corresponding quarter of the prior year. For the nine month period ended
September 30, 1997, the Company's net income was $2.6 million, or $0.23 per
share, on net revenues of $42.9 million, as compared with $1.3 million, or $0.11
per share, on net revenues of $36.4 million for the nine month period ended
September 30, 1996.
Forward Looking Information:
This Quarterly Report on Form 10-Q contains certain forward-looking statements,
including, without limitation, statements concerning the Company's product
development, future revenue patterns and future research and development, sales
and marketing and other expenditures. These forward-looking statements involve
risks and uncertainties, which include technological risks involved in the
development and testing of new products, the impact of competitive products and
pricing, and the uncertainties of which operating systems and hardware platforms
will dominate, and which emerging technologies could impact the demand for the
Company's products.
Results of Operations:
Net revenues for the third quarter, and nine month period ended September 30,
1997, were $16.3 million and $42.9 million, respectively. This constituted a
$5.3 million, or 48% increase, for the third quarter of 1997 versus the third
quarter of 1996, and a $6.5 million, or 18% increase, for the nine month period
over the same nine month period of the prior year.
Revenues from the Company's Acuity Financials (TM) accounting software product
line contributed $1.2 million in the third quarter of 1997, and accounted for 7%
of the Company's revenue. For the nine month period, Acuity Financials
contributed $2.8 million or 7% of the Company's revenue. This product line,
which features a graphical user interface, was introduced in 1996.
Software license revenues from the Company's MAS 90(R) product line
increased $2.1 million or 27% in the third quarter versus the third quarter of
1996, and accounted for 60% of the Company's total revenues as compared with 70%
of the Company's total revenues in the same period of the previous year. For the
nine month period, MAS 90 accounting software license revenues increased $2.3
million or 9% over the same nine month period of the prior year, and
7
<PAGE>
STATE OF THE ART, INC.,
and subsidiaries
accounted for 63% of the total Company's revenues, as compared with 68% of
the Company's revenues for the prior year. For the third quarter and initial
nine month period of 1997, the MAS 90 for Windows product line increased $3.9
million or 103% and $10.5 million or 121%, respectively, over comparable periods
of the prior period. These increases were offset by decreases of $1.8 million or
47% and $8.2 million or 51% in the Company's MAS 90 DOS-based product line for
the third quarter and nine month period, respectively. The Company believes that
the new generation graphical user interface product lines of Acuity Financials
and MAS 90 for Windows and MAS 90 Client/Server for Windows NT will grow at a
rate that will outpace the anticipated decline from the older MAS 90 for DOS
product line.
BusinessWorks (R) software license revenues increased 58% or $0.7 million
for the third quarter, as compared with the third quarter of 1996, and decreased
3% or $0.1 million for the nine month period versus the comparable nine month
period in the prior year. The Company attributes the increase in the
BusinessWorks revenue during the third quarter of 1997 to a major upgrade of
BusinessWorks released in September.
The Company's support services experienced revenue gains of 94% or $1.1 million
in the third quarter, and 47% or $1.7 million for the nine month period of 1997,
as compared with similar periods of the prior year. The Company attributes this
increase to a new software maintenance and support program implemented in March
1997. Business forms revenue grew 15% or $0.1 million in the third quarter of
1997, and 10% or $0.3 million for the nine month period ended September 30,
1997, as compared with the same periods of the prior year. The increase was
primarily due to increased forms demand resulting from higher software license
sales.
Quarterly revenues can fluctuate significantly when compared with similar
periods of the prior year due to the timing of product introductions,
enhancements, upgrades, commencement of sales and marketing promotions, and
general economic conditions. The Company has historically operated with minimal
backlog because orders are generally shipped on an immediate basis. As a result,
the Company's quarterly revenues and operating results are difficult to forecast
because the revenues and results are dependent upon the volume and timing of
orders received during any period. Historically, the revenue volume for the
first, second, and third quarters of the year have been lower than the fourth
quarter. The historically higher revenue volume in the fourth quarter has been
largely due to two factors: higher end-user demand for the Company's software
products and the release of the Company's annual payroll tax update program.
Management believes this pattern will continue for the fourth quarter of 1997.
The previous sentence is a forward looking statement; important factors that
could cause actual results to differ materially include demand for software and
tax updates that is lower than in the past.
8
<PAGE>
STATE OF THE ART, INC.,
and subsidiaries
Cost of revenues in the third quarter of 1997 as a percentage of revenue was
20%, in comparison with 24% in the third quarter of the prior year. For the nine
month period ended September 30, 1997, cost of revenues as a percentage of
revenue was 20%, as compared with 21% for the same period of the previous year.
The decreases in cost of revenues in the three month and nine month periods
ended September 30, 1997, are primarily due to lower material costs resulting
from shifts in product mix. The Company continues to pursue cost reduction
opportunities whenever practicable. There can, however, be no assurance that the
Company will be able to maintain its current gross profit percentage levels for
the remainder of 1997.
Operating expenses, when expressed as a percentage of net revenues, decreased in
the third quarter of 1997 by twenty-one percentage points to 70%, as compared
with 91% for the third quarter of the prior year, and for the nine month period
ended September 30, 1997, decreased two percentage points to 74% in comparison
with the same period of the prior year. Total operating expenses for the three
and nine month periods ended September 30, 1997, increased 14% or $1.4 million
and 15% or $4.1 million, respectively, over comparable periods of the prior
year. The increase in operating expenses was driven by sales and marketing
expense increases of 13% or $0.7 million for the quarter, and 19% or $2.9
million for the nine month period; research and development expense increases of
5% or $0.2 million for the quarter, and 1% or $85,000 for the nine month
period; and general and administrative expense increases of 39% or $0.5 million
for the quarter, and 29% or $1.1 million for the nine month period.
The increase in sales and marketing expenses can be attributed to higher
personnel-related costs, in addition to increased direct marketing, advertising,
and lead generation activities. These activities resulted from the Company's
launch of two major product lines, Acuity Financials and MAS 90 for Windows,
both of which began shipping in 1996, MAS 90 Client/Server for Windows NT which
started shipping in June 1997 and a major upgrade to BusinessWorks, which
shipped in September 1997. In addition, the higher sales and marketing expenses
reflect costs for the Visions conference held in July 1997. The increase in
research and development expenses is basically due to development programs
completed during the quarter, while the increase in general and administrative
expenses is primarily related to accruals for pay-for-performance bonuses.
The Company continues to project a trend toward increased operating expenses
from higher headcount and personnel-related costs in future quarters. The
Company's introduction of Acuity Financials, MAS 90 for Windows, and MAS 90
Client/Server for Windows NT will likely require additional expenditures in the
areas of product support, sales and marketing, and research and development.
Furthermore, the Company plans to increase advertising and marketing plans
aggressively to promote these new products. If the Company is not able to
increase future revenue over the third quarter 1997 level, the projected
increase in expenditures could result in lower profitability.
9
<PAGE>
STATE OF THE ART, INC.,
and subsidiaries
Interest income for the third quarter of 1997 increased $65,000 or 18%, to
$0.4 million or 3% of net revenues, as compared with $0.4 million or 3% of net
revenues in the third quarter of 1996. For the nine month period ended September
30, 1997, interest income increased $0.3 million or 26%, to $1.3 million or 3%
of net revenues, versus $1.0 million or 3% of net revenues for the comparable
period of the prior year. These increases were primarily due to higher cash
balances provided from operating activities.
New Accounting Standards
In February 1997, the Financial Accounting Standards Board (the "FASB")
issued Statement of Financial Accounting Standards Number ("Statement") 128,
entitled "Earnings per Share." Statement 128 specifies new standards designed to
improve the earnings per share ("EPS") information provided in financial
statements by simplifying the existing computational guidelines, revising the
disclosure requirements, and increasing comparability of EPS on an international
basis. Some of the changes made to simplify the EPS computations include: (a)
eliminating the presentation of primary EPS, and replacing primary EPS with
basic EPS, the principal difference being that common stock equivalents are not
considered in computing basic EPS; (b) eliminating the modified treasury stock
method and the three percent materiality provision; and (c) revising the
contingent share provisions and the supplemental EPS data requirements.
Statement 128 also makes a number of changes to existing disclosure
requirements. Statement 128 is effective for financial statements issued for
periods ending after December 15, 1997, including interim periods. Company
management believes the adoption of Statement 128 will not have a material
impact on the Company's financial position or results of operations.
In June 1997, the FASB issued Statement 130, "Reporting Comprehensive
Income." Statement 130 is effective for both interim and annual accounting
periods beginning after December 15, 1997. Company management has not yet
determined the impact of adopting this new standard on the Company's
consolidated financial statements.
In June 1997, the FASB issued Statement 131, "Disclosure about Segments of an
Enterprise and Related Information." Statement 131 is effective for fiscal years
beginning after December 15, 1997. Company management has not yet determined the
impact of adopting this new standard on the Company's consolidated financial
statements.
In October 1997, the Accounting Standards Executive Committee issued a
statement of position ("SOP") on software recognition, SOP 97-2, which
supersedes SOP 91-1. The new statement is effective for transactions entered
into in fiscal years beginning after December 15, 1997. Management believes
adoption of SOP 97-2 will not have a material impact on the Company's financial
position or results of operations.
10
<PAGE>
STATE OF THE ART, INC.,
and subsidiaries
Liquidity and Capital Resources:
Working capital at September 30, 1997, totaled $40.4 million, an increase
of $0.1 million from $40.3 million as of December 31, 1996. Net cash generated
by operations was $6.1 million for the first nine months of 1997, compared with
$4.2 million for the comparable period in 1996. The major sources of cash were
earnings, deferred revenue, depreciation, and amortization, which were partially
offset by an increase in accounts receivable associated with the Company's
increase in revenue. In the second quarter of 1997, the Company repurchased in
the open market 182,000 shares of the Company's outstanding common stock at a
cost of approximately $1.8 million, and completed the purchase of two sister
corporations based in Markham, Ontario, Canada, for approximately $2.6 million.
The acquisition was accounted for as a purchase.
In March, 1997, the Company entered into an agreement whereby it may borrow, on
a revolving credit line basis, up to $10 million. The revolving line is
unsecured. The Company has the option to pay interest on the revolving credit
line at the bank's prime interest rate, or the LIBOR rate plus 1.5 percent. The
agreement requires the Company to meet certain financial covenants and expires
in April 1998. As of September 30, 1997, there were no outstanding balances on
this revolving credit line.
The Company has historically funded its operations primarily through cash flows
from operations. The Company believes that funds generated from operations,
existing cash balances and the available bank credit line will be sufficient to
finance the Company's operations, working capital requirements and capital
expenditures for at least the next twelve months.
Part II. OTHER INFORMATION.
Item 1. Legal Proceedings.
As is discussed in detail in the Company's Form 10-K for 1996, the Company is
engaged in litigation with the Company's former president, Charles Milden, and
his wife, Susan Milden. As of the end of 1996, all parties to the Mildens'
bankruptcy had settled all claims with the bankruptcy trustee. The bankruptcy
court had confirmed the settlement and made related orders.
The Mildens had appealed the settlement and orders to the United States
District Court for the Central District of California, which affirmed the
settlement and orders. The Mildens had then appealed to the United States Court
of Appeals for the Ninth Circuit. In April 1997, a unanimous panel of that court
also affirmed the settlement and orders. Later in April 1997, the
Mildens petitioned that court for a rehearing. In June 1997, the Ninth Circuit
denied the Mildens' petition. In August 1997, the Mildens filed a petition for
certiorari with the United States Supreme Court.
11
<PAGE>
STATE OF THE ART, INC.,
and subsidiaries
The Orange County, California, Superior Court had also approved the settlement;
in March 1994 that court had dismissed both of the pending state court actions
with prejudice. The Mildens have appealed from these dismissals. The parties
have completed briefing of this state court appeal. In June of 1997, the
California Court of Appeal, Fourth Appellate District, Division Three, set oral
arguments on this appeal for July 21, 1997. On July 16, 1997, that Court of
Appeal continued those oral arguments until January 1998.
As is discussed in more detail in the Company's Form 10-K for the 1996 fiscal
year, the Company was engaged in litigation with RapidForms, Inc. In May of
1997, all parties to that litigation agreed in writing to settle the litigation
in exchange for a payment by the Company to RapidForms. The settlement agreement
requires the parties to keep the amount of this payment confidential, but the
payment did not have a material effect on the Company's results of operations.
All parties stipulated to a dismissal with prejudice of all claims in the
lawsuit. On July 14, 1997, the parties completed the settlement and the court
dismissed the suit.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits: None filed with this report.
Reports on Form 8-K:
The Company has not filed any reports on Form 8-K during the
quarter for which this report is filed.
12
<PAGE>
STATE OF THE ART, INC.,
and subsidiaries
SIGNATURE:
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.
STATE OF THE ART, INC.
Registrant
Date: November 14, 1997 By: / s / JAMES R. ECKSTAEDT
----------------- ------------------------
James R. Eckstaedt
Vice President, Finance and
Chief Financial Officer
(Principal Financial Officer)
13
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
condensed consolidated balance sheet, condensed consolidated statements of
operations, condensed consolidated statement of cash flows, and notes thereto,
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-31-1997
<PERIOD-START> JUL-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 22,487
<SECURITIES> 15,657
<RECEIVABLES> 10,574
<ALLOWANCES> 600
<INVENTORY> 835
<CURRENT-ASSETS> 50,329
<PP&E> 12,320
<DEPRECIATION> 7,050
<TOTAL-ASSETS> 59,486
<CURRENT-LIABILITIES> 9,951
<BONDS> 0
0
0
<COMMON> 17,971
<OTHER-SE> 31,331
<TOTAL-LIABILITY-AND-EQUITY> 59,486
<SALES> 16,331
<TOTAL-REVENUES> 16,331
<CGS> 3,346
<TOTAL-COSTS> 3,346
<OTHER-EXPENSES> 11,478
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,926
<INCOME-TAX> 606
<INCOME-CONTINUING> 1,320
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,320
<EPS-PRIMARY> 0.11
<EPS-DILUTED> 0.11
</TABLE>
