<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15 (d) of
the Securities Exchange Act of 1934
For the Quarter Ended June 30, 1996
Commission File Number 0-20110
CROSSCOMM CORPORATION
---------------------
(Exact name of registrant as specified in its charter)
DELAWARE 52-1513201
- -------- ----------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) I.D. No.)
450 DONALD LYNCH BOULEVARD, MARLBOROUGH, MASSACHUSETTS 01752
- ------------------------------------------------------ -----
(Address of principal executive office) (Zip Code)
(508)-481-4060
- --------------
(Registrant's telephone number, including area code)
Indicate by check mark whether 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 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 registrant's classes of
common stock, as of the latest practicable date.
CLASS OUTSTANDING AT AUGUST 5, 1996
----- -----------------------------
Common stock, $.01 par value 9,195,611 shares
Page 1 of 16
<PAGE> 2
CROSSCOMM CORPORATION QUARTERLY REPORT ON
FORM 10-Q FOR THE PERIOD ENDED JUNE 30, 1996
INDEX
PART I FINANCIAL INFORMATION:
ITEM 1. Financial Statements:
Condensed Consolidated Balance Sheets as of June 30, 1996 and
December 31, 1995
Condensed Consolidated Statements of Operations for the three and six
months ended June 30, 1996 and June 30, 1995
Condensed Consolidated Statement of Stockholders' Equity for the six
months ended June 30, 1996
Condensed Consolidated Statements of Cash Flows for the six months
ended June 30, 1996 and June 30, 1995
Notes to Condensed Consolidated Financial Statements
ITEM 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
PART II OTHER INFORMATION
ITEM 1. Legal Proceedings
ITEM 2. Changes in Securities
ITEM 3. Defaults upon Senior Securities
ITEM 4. Submission of Matters to a Vote of Security Holders
ITEM 5. Other Information
ITEM 6. Exhibits and Reports on Form 8-K
Signatures
2
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CROSSCOMM CORPORATION
<TABLE>
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
<CAPTION>
JUNE 30, DECEMBER 31,
1996 1995
(UNAUDITED) (*)
----------- ------------
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 2,518 $ 2,244
Available-for-sale securities 44,914 44,529
Accounts receivable, net 8,474 7,141
Inventories, net 5,211 6,395
Prepaid expenses and other current assets 1,487 1,254
-------- --------
Total current assets 62,604 61,563
Equipment and Leasehold improvements, net of accumulated depreciation of
$13,885 at June 30, 1996 and $12,295 at December 31, 1995 7,204 7,079
Other assets, net 2,932 2,704
-------- --------
Total assets $ 72,740 $ 71,346
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 5,193 $ 4,728
Accrued liabilities 5,897 5,863
Deferred revenue 3,406 3,348
-------- --------
Total current liabilities 14,496 13,939
Minority interest in consolidated subsidiary - 44
Stockholders' equity:
Preferred stock, $.01 par value, 4,000,000 shares authorized, none
issued or outstanding at June 30, 1996 or December 31, 1995 - -
Common stock, $.01 par value, 20,000,000 shares authorized,
9,195,611 shares issued and outstanding at June 30, 1996 and
9,147,557 shares issued and outstanding at December 31, 1995 92 91
Paid-in capital in excess of par value 72,352 71,950
Retained earnings (accumulated deficit) (19,484) (16,169)
Unrealized gain (loss) on available-for-sale securities 5,284 1,491
-------- --------
Total stockholders' equity 58,244 57,363
-------- --------
Total liabilities and stockholders' equity $ 72,740 $ 71,346
======== ========
<FN>
* Condensed from audited financial statements
</TABLE>
See accompanying notes.
3
<PAGE> 4
CROSSCOMM CORPORATION
<TABLE>
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except earnings (loss) per share)
(Unaudited)
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
----------------------- ------------------------
1996 1995 1996 1995
------- ------- ------- -------
<S> <C> <C> <C> <C>
Revenues:
Product $ 9,058 $ 9,199 $17,087 $20,123
Service 2,744 2,334 5,373 4,612
------- ------- ------- -------
Total revenues 11,802 11,533 22,460 24,735
Cost of revenues:
Cost of goods sold 4,461 4,069 8,763 8,602
Cost of services 1,682 1,594 3,065 3,050
------- ------- ------- -------
Total cost of revenues 6,143 5,663 11,828 11,652
------- ------- ------- -------
Gross profit 5,659 5,870 10,632 13,083
Operating expenses:
Selling, general & administrative 5,313 5,332 9,926 9,945
Research and development 2,516 3,102 4,964 6,113
------- ------- ------- -------
Total operating expenses 7,829 8,434 14,890 16,058
------- ------- ------- -------
Income (loss) from operations (2,170) (2,564) (4,258) (2,975)
Interest income, net 487 587 1,024 1,113
Gain on sale of investment 2,100 2,100
Other income (expense) (37) (1) (81) (8)
------- ------- ------- -------
Income (loss) before provision
for income taxes (1,720) 122 (3,315) 230
Provision for income taxes - - - -
------- ------- ------- -------
Net income (loss) $(1,720) $ 122 $(3,315) $ 230
======= ======= ======= =======
Earnings (loss) per share $ (0.19) $ 0.01 $ (0.36) $ 0.03
======= ======= ======= =======
Shares used in computing earnings
(loss) per share 9,175 9,200 9,163 9,190
======= ======= ======= =======
</TABLE>
See accompanying notes.
4
<PAGE> 5
CROSSCOMM CORPORATION
<TABLE>
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(in thousands, except share data)
<CAPTION>
UNREALIZED
COMMON STOCK PAID-IN RETAINED GAIN (LOSS)
-------------------- CAPITAL IN EARNINGS ON AVAILABLE- TOTAL
EXCESS OF (ACCUMULATED FOR-SALE STOCKHOLDERS'
SHARES AMOUNT PAR VALUE DEFICIT) SECURITIES EQUITY
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1995 (audited) 9,147,557 $91 $71,950 $(16,169) $1,491 $57,363
Adjustment to unrealized gain (loss) on available-
for-sale securities (unaudited) - - - - 3,793 3,793
Issuance of common stock under stock
option and stock purchase plans (unaudited) 48,054 1 402 - - 403
Net income (loss) (unaudited) - - - (3,315) - (3,315)
--------- --- ------- -------- ------ -------
Balance, June 30, 1996 (unaudited) 9,195,611 $92 $72,352 $(19,484) $5,284 $58,244
========= === ======= ======== ====== =======
</TABLE>
See accompanying notes.
5
<PAGE> 6
CROSSCOMM CORPORATION
<TABLE>
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
<CAPTION>
SIX MONTHS ENDED
-----------------------------
JUNE 30, JUNE 30,
1996 1995
--------- ---------
<S> <C> <C>
OPERATING ACTIVITIES
Net cash provided (used) by operating activities $ (275) $ (323)
INVESTING ACTIVITIES
Purchase of minority interest (350)
Acquisitions of fixed assets (2,626) (1,391)
Purchases of available-for-sale securities (24,717) (52,743)
Sales and maturities of available-for-sale securities 28,446 49,005
Additions to other assets (607) (308)
-------- --------
Net cash provided (used) by investing activities 146 (5,437)
FINANCING ACTIVITIES
Proceeds from employee stock plans 403 838
-------- --------
Net cash provided by financing activities 403 838
-------- --------
Net increase (decrease) in cash and cash equivalents 274 (4,922)
Cash and cash equivalents at beginning of period 2,244 8,731
-------- --------
Cash and cash equivalents at end of period $ 2,518 $ 3,809
======== ========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period for:
Interest $ 1 $ 1
======== ========
Income taxes $ 63 $ 60
======== ========
</TABLE>
See accompanying notes.
6
<PAGE> 7
CROSSCOMM CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1) BASIS OF PRESENTATION
The condensed consolidated financial statements presented have been prepared by
the Company without audit but, in the opinion of management, reflect all
adjustments of a normal recurring nature necessary for a fair statement of the
interim periods presented. The results of operations for the interim periods
shown on this report are not necessarily indicative of results for any future
interim period or for the entire year. Certain information and footnote
disclosures normally included in annual financial statements prepared in
accordance with generally accepted accounting principles have been omitted,
although the Company believes that the disclosures included are adequate to make
the information presented not misleading. The condensed consolidated financial
statements and the notes included herein should be read in conjunction with the
financial statements and notes for the year ended December 31, 1995, included in
the Company's Annual Report on Form 10-K as filed with the Securities and
Exchange Commission.
2) ACCOUNTING CHANGES
In the first quarter of 1996, the Company adopted the Financial Accounting
Standards Board Statement No. 121, " Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed Of," which requires impairment
losses to be recorded on long-lived assets used in operations when indicators of
impairment are present and the undiscounted cash flows estimated to be generated
by those assets are less than the assets' carrying amount. Statement No. 121
also addresses the accounting for long-lived assets that are expected to be
disposed. The effect of adoption did not have a material impact on the Company's
financial position or results of operations.
3) AVAILABLE-FOR-SALE SECURITIES
Available-for-sale securities generally consist principally of U.S. Government
obligations and tax-exempt municipal bonds maturing within one to three years or
which contain a put option at par that can be exercised within one to three
years. The Company considers these investments, which represent funds available
for current operations, an integral component of its cash management activities.
The tax exempt municipal bonds represent `AAA' rated investment grade securities
with no significant concentration in any one issue. Management determines the
appropriate classification of debt securities at the time of purchase and
reevaluates such designation on an ongoing basis. Available-for-sale securities
also include certain restricted equity securities of Fore Systems, Inc. (Fore),
received upon Fore's acquisition of an entity in which the Company held a
minority equity interest. These
7
<PAGE> 8
securities, although not salable until late 1996 and mid 1997, are considered
available-for-sale pursuant to Financial Accounting Standard No. 115,
"Accounting for Certain Investments in Debt and Equity Securities," and are
accounted for as such. Subsequent to June 30, 1996 the market value of these
equity securities declined in value such that the effect on available-for-sale
securities and shareholders' equity would be a reduction of approximately
$1,800,000. This decline is not considered to be other than temporary at this
time.
<TABLE>
Available-for-sale securities consist of the following as of June 30, 1996:
<CAPTION>
Gross Gross Estimated
Unrealized Unrealized Fair
Cost Gains Losses Value
-------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. Government and government
agency obligations $38,669,000 $ 28,000 $(190,000) $38,507,000
Equity securities 960,000 5,447,000 - 6,407,000
-------------------------------------------------------------------
Totals $39,629,000 $5,475,000 $(190,000) $44,914,000
===================================================================
</TABLE>
Realized gains and losses were not material for the six month periods ended June
30, 1996 and 1995. During the six month period ended June 30, 1996 the
unrealized gain increased by $3,793,000, primarily reflecting the
reclassification of Fore Systems common stock to a short term investment at
market value, as these shares became salable within twelve months.
4) CONCENTRATION OF CREDIT
The Company operates in a single industry segment encompassing the development,
manufacture, marketing and support of advanced networking products. Accordingly,
the Company's customers include distributors and resellers of high technology
equipment, along with the end users of such equipment. The Company performs
periodic credit evaluations of its customers' financial condition and extends
trade credit to its customers under normal terms.
For the quarter ended June 30, 1996 revenues attributable to each of three
customers exceeded 10% of revenues. Amounts due from each of these customers
approximated $1,755,000, $642,000 and $386,000.
8
<PAGE> 9
<TABLE>
5) INVENTORIES
Inventories are valued at the lower of cost (first in, first out) or market and
consist of the following, net of reserves:
<CAPTION>
June 30, 1996 December 31, 1995
------------- -----------------
<S> <C> <C>
Raw Materials $1,421,000 $2,251,000
Work-in-Process 1,592,000 1,826,000
Finished Goods 2,198,000 2,318,000
---------- ----------
$5,211,000 $6,395,000
========== ==========
</TABLE>
9
<PAGE> 10
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Revenue
- -------
The Company's product revenue decreased by 2% from $9,199,000 for the three
months ended June 30, 1995 to $9,058,000 for the three months ended June 30,
1996 and decreased by 15% from $20,123,000 to $17,087,000 for the six month
periods ending June 30, 1995 and 1996, respectively. These decreases are
primarily attributable to the market transition from routing to switching
technologies. Declines in sales of the Company's router products and the later
than expected introduction of the Company's new switching products resulted in
the product revenue decline. Indirect sales volume has also declined due to the
reasons stated above.
The Company believes that future product revenue levels are highly dependent on
its ability to successfully complete and market asynchronous transfer mode
("ATM") and local area network ("LAN") switching modules, its ability to expand
and capitalize on new indirect and international sales channels, and its ability
to bring other new products to market on a timely basis.
Service revenue (i.e. maintenance and support contracts, billable product
repairs, customer training and product installations) increased by 18% from
$2,334,000 for the three months ended June 30, 1995 to $2,744,000 for the three
months ended June 30, 1996 and increased by 17% from $4,612,000 to $5,373,000
for the six months ended June 30, 1995 and 1996, respectively. This growth is
attributable to increases in the number of installed units and the Company's
increased emphasis on the sale and marketing of services.
International revenues accounted for 38% and 34% of total revenues for the three
and six month periods ended June 30, 1996, respectively, versus 21% and 22% of
total revenues for the three and six month periods ended June 30, 1995,
respectively. The increase is primarily attributable to increased revenues from
the Company's subsidiary in the United Kingdom. The Company believes that
international sales will continue to represent a significant portion of the
Company's revenues. However, the percentage of total revenues derived from
international sales may continue to fluctuate based on changes in the percentage
growth of domestic revenues versus international revenues, the timing of orders
from international distributors and the addition of new international
distributors.
Gross Profit
- ------------
Gross profit for the three and six month periods ended June 30, 1996 decreased
to 48% and 47%, respectively, from 51% and 53% for the same periods in 1995. The
decrease in gross profit is primarily attributable to: (i) lower average selling
prices on some of the Company's router products not being offset proportionately
by lower product costs (ii) higher introductory costs for new ATM and LAN
Switching products , and (iii) an increase in service revenues as a percentage
of total revenue, as the Company realizes lower margins on service revenue than
on product
10
<PAGE> 11
revenue. These factors were partially offset by decreases in the provision of
inventory reserves in 1996 compared to 1995. The Company believes that future
gross profit levels will be highly dependent on the transition to new switching
technologies. Delays in the introduction of new XL features and new ATM
switching modules, engineering change orders related to existing XL or switching
products, pricing pressures associated with new switching products, or higher
than expected introductory costs of new switching modules could negatively
impact gross profits. Additionally, the Company plans to increase its sales
efforts through indirect channels, which require higher discounting. To the
extent the Company is successful at increasing sales through indirect channels,
gross profit rates could be adversely affected.
Selling, General and Administrative
- -----------------------------------
Selling, general and administrative expenses decreased to $5,313,000, or 45% of
total revenues during the three months ended June 30, 1996 from $5,332,000, or
46% of total revenues during the three months ended June 30, 1995 and decreased
to $9,926,000 or 44% of total revenues during the six months ended June 30, 1996
from $9,945,000, or 40% of total revenues for the corresponding period in 1995.
The 1996 amounts are essentially level with 1995, as the decrease in headcount
costs related to the corporate restructuring undertaken in the fourth quarter of
1995, coupled with lower expenditures on marketing programs, was offset by a one
time charge related to the buy-out of the minority interest in a consolidated
subsidiary, together with the costs related to the recruitment and hiring of a
new senior management team.
Selling, general and administrative expenses as a percentage of revenues may
fluctuate on a quarterly basis due to quarterly fluctuations in revenues, the
timing of spending for marketing programs and the timing of hiring sales,
marketing and administrative personnel.
Research and Development
- ------------------------
Research and development expenses decreased to $2,516,000, or 21% of total
revenues during the three months ended June 30, 1996 from $3,102,000, or 27% of
total revenues during the three months ended June 30, 1995 and decreased to
$4,964,000 or 22% of total revenues during the six months ended June 30, 1996
from $6,113,000, or 25% of total revenues for the corresponding period in 1995.
The decrease in amounts is primarily due to: (i) a decline in payroll costs
related to the corporate restructuring undertaken in the fourth quarter of 1995
and (ii) a decline in the development costs associated with high speed
networking products involving ATM and LAN switching technologies due to the
Company's introduction of these products.
The Company believes that the markets for its products are characterized by
rapid rates of technological innovation for both hardware and software products.
The Company expects to continue to invest a significant amount of its resources
in new products, product enhancements and software development.
11
<PAGE> 12
Income Taxes
- ------------
Pursuant to Financial Accounting Standards No. 109, "Accounting for Income
Taxes", the Company has not recorded a benefit related to the operating losses
experienced for the three and six month periods ended June 30, 1996 and 1995.
LIQUIDITY AND CAPITAL RESOURCES
To date, the Company has satisfied its cash requirements principally with the
proceeds of equity financings and cash provided from operating activities.
During the six months ended June 30, 1996, the Company used $575,000 in cash
from operating activities compared to $323,000 used for the six months ended
June 30, 1995. The increase in cash used from operating activities is primarily
attributable to the increased operating loss for the six months ended June 30,
1996 versus 1995, and the timing of changes in working capital in 1996 compared
to 1995. At June 30, 1996, the Company had $2,518,000 in cash and cash
equivalents, $44,914,000 in available-for-sale securities, and available,
committed, unsecured credit lines of $7,500,000, of which no amounts were
outstanding. The Company also has a line available for international borrowings
in the amount of $5,000,000. This line makes available short-term credit in the
form of direct borrowings, guarantees and overdraft lines. Grant of credit and
its continued availability is at the sole discretion of the bank. At June 30,
1996, the Company had used $320,000 in the form of a duty deferment guarantee.
The Company believes that existing cash and available-for-sale securities will
be sufficient to meet the Company's cash requirements for the foreseeable
future.
FUTURE OPERATING RESULTS
The Company's future operating results could be adversely affected by a number
of factors including, among other things, general economic conditions, market
conditions specific to the highly competitive networking industry market, the
degree and rate of growth of the market in which the company operates, the
ability of the Company to develop, market and forecast demand of new products,
customer acceptance of new products introduced by the Company, dependence on
suppliers and the Company's ability to successfully develop indirect sales
channels and the Company's ability to attract and retain key personnel.
The Company's XL family of products is designed to provide increased performance
with nonstop availability and total network connectivity while allowing
customers a migration path to high bandwidth switched networks. The Company
believes that future profitability is highly dependent on successfully
completing and marketing its new high speed LAN and ATM switching modules. The
success of these new modules will depend on the Company's ability to bring them
to market on a timely basis, successful product performance, market acceptance
of the modules and the Company's ability to produce the modules in quantities
sufficient to meet the expected demand.
12
<PAGE> 13
The Company is increasingly dependent on suppliers to deliver key components on
time, in quantities sufficient to meet demand. The failure of any of these
suppliers to deliver these components on time could have a material adverse
effect on the Company's results of operations.
The Company expects to continue to invest in research and development, sales and
marketing and technical support staff. If the Company is not able to increase
revenue levels, as occurred in 1994 and 1995, results of operations could be
materially adversely affected.
13
<PAGE> 14
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities
None.
Item 3. Defaults Upon Senior Securities
Not Applicable.
Item 4. Submission of Matters to a Vote of Security Holders
On April 25, 1996 the Registrant held its 1996 Annual Meeting of
Stockholders. Proposals submitted to stockholders at the Annual Meeting were as
follows (i) elect Tadeusz Witkowicz, Nancy Casey, Alexander M. Levine and
Michael C. Ruettgers as Directors of the Registrant, (ii) to ratify and approve
the Registrant's 1996 Stock Option Plan, and (iii) to ratify the selection of
Ernst & Young LLP as the Registrant's independent auditors.
The holders of 8,577,910 shares (approximately 99.4% of the shares
present or represented) voted in favor of the election of Tadeusz Witkowicz,
Nancy Casey, Alexander M. Levine and Michael C. Ruettgers as Directors and the
holders of 53,662 shares (approximately .6% ) witheld authority to vote. On the
proposal to ratify and approve the Registrant's 1996 Stock Option Plan, the
holders of 4,362,431 shares (approximately 75.5% of the shares present or
represented) voted in favor of the proposal, the holders of 1,377,910 shares
(approximately 24%) voted against the proposal and the holders of 33,505 shares
(approximately .5%) abstained. On the proposal to ratify the selection of Ernst
& Young LLP as the Registrant's independent auditors, the holders of 8,599,044
shares (approximately 99.6% of the shares present or represented) voted in favor
of the proposal, the holders of 18,364 shares (approximately 0.21%) voted
against the proposal and the holders of 14,164 shares (approximately 0.19%)
abstained.
Item 5. Other Information
None
14
<PAGE> 15
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
The exhibit filed as part of this form 10-Q is listed on the Exhibit
Index immediately preceding such exhibits, which Exhibit Index is incorporated
herein by reference.
(b) Reports on Form 8-K
None
15
<PAGE> 16
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.
CROSSCOMM CORPORATION
Date: August 12, 1996 By:/s/ William Johnson
------------------- ------------------------------------------
William Johnson
President & Chief Executive Officer
By:/s/ Douglas G. Bryant
------------------------------------------
Douglas G. Bryant
Acting Chief Financial Officer
(Principal Financial & Accounting Officer)
16
<PAGE> 17
EXHIBIT INDEX
Exhibit No. Document
----------- --------
27 Financial Data Schedule (EDGAR)
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<EXCHANGE-RATE> 1
<CASH> 2,518
<SECURITIES> 44,914
<RECEIVABLES> 8,474
<ALLOWANCES> 0
<INVENTORY> 5,211
<CURRENT-ASSETS> 62,604
<PP&E> 7,204
<DEPRECIATION> 13,885
<TOTAL-ASSETS> 72,740
<CURRENT-LIABILITIES> 14,496
<BONDS> 0
<COMMON> 92
0
0
<OTHER-SE> 58,152
<TOTAL-LIABILITY-AND-EQUITY> 72,740
<SALES> 9,058
<TOTAL-REVENUES> 11,802
<CGS> 4,461
<TOTAL-COSTS> 6,143
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (1,720)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,720)
<EPS-PRIMARY> (0.19)
<EPS-DILUTED> (0.19)
</TABLE>
