SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
Quarterly Report Under Section 13 or 15(d) of
the Securities Exchange Act of 1934
For Quarter Ended October 31, 1997
Commission file number 0-20085
IQ SOFTWARE CORPORATION
(Exact name of registrant as specified in its charter)
GEORGIA 58-1614492
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3295 River Exchange Drive, Suite 550
Norcross, Georgia
30092
(Address of principal executive office)
(Zip Code)
(770) 446-8880
(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 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.
Number of Shares
CLASS OUTSTANDING AT DECEMBER 15, 1997
Common 4,666,466
FORM 10-Q
Page 1 of 12
<PAGE>
IQ SOFTWARE CORPORATION
Form 10-Q
Quarter Ended October 31, 1997
Table of Contents
Page
Number
Part I. Financial Information
Item 1. Financial Statements
Condensed Consolidated Balance Sheets -
October 31, 1997 (unaudited) and
January 31,1997........................... 3
Condensed Consolidated Statements of Income
(unaudited) - Three months and nine months
ended October 31, 1997 and 1996........... 4
Condensed Consolidated Statements of
Cash Flows (unaudited) - Nine months ended
October 31, 1997 and 1996.................. 5
Notes to Condensed Consolidated Financial
Statements................................. 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations................................. 8
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K........... 11
Signatures................................. 11
FORM 10-Q
Page 2 of 12
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
IQ SOFTWARE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
October 31, 1997 January 31, 1997
(unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents...................................... $ 4,956,989 $ 4,258,458
Marketable securities.......................................... 8,596,560 4,944,596
Accounts receivable:
Billed....................................................... 5,309,840 5,452,025
Non-billed................................................... 2,415,316 3,276,880
----------- -----------
7,725,156 8,728,905
----------- -----------
Allowance for doubtful accounts.............................. (716,550) (654,227)
7,008,606 8,074,678
Note receivable from affiliate (Note 2)........................ -- 1,800,000
Prepaid expenses and other current assets...................... 1,341,819 1,209,382
----------- -----------
Total current assets............................................... 21,903,974 20,287,114
Property and equipment:
Furniture and fixtures......................................... 1,191,441 1,192,163
Equipment...................................................... 5,098,621 4,733,355
----------- -----------
6,290,062 5,925,518
Allowance for depreciation......................................... (4,943,647) (4,296,835)
----------- -----------
1,346,415 1,628,683
Capitalized software development costs, net of accumulated
amortization of $944,000 at October 31, 1997 and $457,000
at January 31, 1997............................................ 1,744,859 1,417,710
Purchased software, net of accumulated amortization of $690,000 at
October 31, 1997 and $458,000 at January 31, 1997.............. 314,617 542,345
Goodwill, net of accumulated amortization of $293,000 at
October 31, 1997 and $169,000 at January 31, 1997.............. 1,446,408 1,242,886
Other assets....................................................... 191,548 176,118
----------- -----------
Total assets................................................... $26,947,821 $25,294,856
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable............................................... $ 606,403 $ 548,153
Accrued expenses............................................... 817,951 821,039
Unearned revenue............................................... 1,638,239 1,357,090
Income taxes payable........................................... 126,649 75,136
Current portion of deferred income taxes....................... 317,000 312,000
----------- -----------
Total current liabilities.......................................... 3,506,242 3,113,418
Deferred income taxes, less current portion........................ 297,000 353,000
Shareholders' equity:
Preferred stock, $.01 par value:
Authorized shares - 5,000,000 - Issued and outstanding shares -
none -- --
Common stock, $.00033 par value:
Authorized shares - 30,000,000
Issued and outstanding shares - 4,666,466 at October 31, 1997
and 4,647,632 at January 31, 1997............................ 1,543 1,534
Additional paid-in capital......................................... 13,034,501 12,912,089
Retained earnings.................................................. 10,030,554 8,991,959
Net unrealized gain on marketable securities available for sale.... 30,734 20,622
Foreign currency translation adjustments........................... 47,247 (97,766)
----------- -----------
Total shareholders' equity..................................... 23,144,579 21,828,438
Total liabilities and shareholders' equity..................... $26,947,821 $25,294,856
=========== ===========
</TABLE>
See Notes to Condensed Consolidated Financial Statements
FORM 10-Q
Page 3 of 12
<PAGE>
<TABLE>
Item 1. Financial Statements (continued)
IQ SOFTWARE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
Three Months Ended Nine Months Ended
October 31, October 31,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Revenues:
License fees................................. $3,505,169 $4,722,876 $11,078,117 $13,141,528
Service fees................................. 2,395,879 1,923,383 6,907,710 5,618,839
---------- ---------- ----------- -----------
5,901,048 6,646,259 17,985,827 18,760,367
Operating expenses:
Cost of license fees......................... 319,501 368,071 984,158 931,451
Cost of service fees......................... 879,343 811,017 2,478,358 2,362,103
Development.................................. 590,393 560,824 1,695,451 1,565,775
Selling...................................... 2,620,056 2,630,792 8,472,157 7,784,647
General and administrative................... 1,095,952 1,243,863 3,208,210 3,533,814
Acquired research and development costs (Note 4) 280,000 -- 280,000 --
---------- ---------- ----------- -----------
Total operating expenses................... 5,785,245 5,614,567 17,118,334 16,177,790
---------- ---------- ----------- -----------
Operating income................................. 115,803 1,031,692 867,493 2,582,577
Investment income, net........................... 136,746 131,906 429,102 359,289
---------- ---------- ----------- -----------
Income before income taxes....................... 252,549 1,163,598 1,296,595 2,941,866
Income taxes..................................... 113,000 307,000 258,000 826,000
---------- ---------- ----------- -----------
Net income....................................... $ 139,549 $ 856,598 $ 1,038,595 $ 2,115,866
========== ========== =========== ===========
Net income per common share...................... $ 0.03 $ 0.18 $ 0.22 $ 0.44
========== ========== =========== ===========
Weighted average number of common and
common equivalent shares outstanding.......... 4,758,000 4,822,000 4,712,000 4,771,000
========== ========== =========== ===========
</TABLE>
See Notes to Condensed Consolidated Financial Statements
FORM 10-Q
Page 4 of 12
<PAGE>
<TABLE>
Item 1. Financial Statements (continued)
IQ SOFTWARE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
Nine Months Ended
October 31,
1997 1996
<S> <C> <C>
Operating activities:
Net income.............................................................. $1,038,595 $2,115,866
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation and amortization....................................... 1,525,770 1,534,892
Deferred income taxes............................................... (40,000) (92,000)
Gain on disposal of equipment....................................... (605) (9,333)
Changes in operating assets and liabilities:
Accounts receivable............................................... 1,174,870 (2,021,261)
Prepaid expenses and other current assets......................... (119,122) (88,623)
Accounts payable.................................................. 41,352 (436,814)
Accrued expenses.................................................. (12,252) (192,296)
Unearned revenue.................................................. 263,283 130,721
Income taxes payable.............................................. 48,000 484,346
---------- ----------
Net cash provided by operating activities............................... 3,919,891 1,425,498
Investing activities:
Purchase of property and equipment...................................... (440,292) (325,346)
Additions of capitalized software development costs..................... (787,552) (569,773)
Payment under note receivable (Note 2).................................. 1,800,000 --
Purchase of marketable securities, net.................................. (3,653,757) (2,557,393)
Payments in connection with the acquisition of Skribe Software, Inc..... (308,537) (346,175)
Payments in connection with the acquisition of Soft Systems, Ltd........ -- (35,000)
Other investing activities.............................................. (17,054) (2,178)
---------- ----------
Net cash used in investing activities................................... (3,407,192) (3,835,865)
Financing activities:
Proceeds from issuance of common stock.................................. 122,421 1,020,856
---------- ----------
Net cash provided by financing activities............................... 122,421 1,020,856
Effect of exchange rate changes on cash................................. 63,411 80,286
---------- ----------
Net increase (decrease) in cash and cash equivalents.................... 698,531 (1,309,225)
Cash and cash equivalents at beginning of period........................ 4,258,458 5,632,580
---------- ----------
Cash and cash equivalents at end of period.............................. $4,956,989 $4,323,355
========== ==========
Supplemental disclosure of cash flow information:
Cash paid during the period for interest................................ $ 814 $ 5,516
========== ==========
Cash paid during the period for income taxes............................ $ 403,792 $ 354,912
========== ==========
</TABLE>
See Notes to Condensed Consolidated Financial Statements
FORM 10-Q
Page 5 of 12
<PAGE>
IQ SOFTWARE CORPORATION AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
October 31, 1997
(unaudited)
1. Basis of Presentation
The accompanying unaudited condensed consolidated financial
statements have been prepared in accordance with generally accepted
accounting principles for interim financial information and with the
instructions to Form 10-Q and Rule 10-01 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for a
fair presentation of the results of operations have been included.
2. Note Receivable From Affiliate
On April 18, 1995, the Company loaned $1.8 million to Daystar
Digital, Inc. pursuant to a note receivable (the "Note"). Under the
terms of the agreement, the Note was payable one year from the date of
the agreement. The Note bore interest payable monthly at a rate of
prime plus 1/2 percent adjusted quarterly, and was renewable at the
end of one year. The interest rate on the date of the agreement was 9
1/2%. The Company renewed the original agreement with Daystar Digital,
Inc. for an additional term ending June 30, 1997. Under the terms of
renewal, the Note bore interest payable monthly at a rate of prime
plus 1-1/2 percent, adjusted quarterly. The Note was guaranteed by
Intelligent Systems Corporation and was secured by 154,904 shares of
the Company's common stock and certificates of deposit totaling
$1,364,137 owned by Intelligent Systems Corporation. On July 31, 1997,
the Note was paid in full.
FORM 10-Q
Page 6 of 12
<PAGE>
3. Earnings Per Share
In February 1997, the Financial Accounting Standards Board issued
Statement No. 128, Earnings Per Share, which is required to be adopted
for the Company's fourth quarter ending January 31, 1998. At that time
the Company will be required to change the method currently used to
compute earnings per share and to restate all prior periods presented.
Under the new requirements, the Company will be required to report
"basic" earnings per share, which excludes the dilutive effect of
stock options, and "diluted" earnings per share. The following table
sets forth the pro forma results had earnings per share been
calculated under Statement No. 128 for the three and nine months ended
October 31, 1997 and 1996:
<TABLE>
Three Months Ended Nine Months Ended
October 31, October 31,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Basic earnings per share............. $ 0.03 $ 0.19 $ 0.22 $ 0.46
========= ========= ========= =========
Weighted average common
and common equivalent
shares outstanding.............. 4,659,000 4,597,000 4,651,000 4,572,000
========= ========= ========= =========
Diluted earnings per share........... $ 0.03 $ 0.18 $ 0.22 $ 0.44
========= ========= ========= =========
Weighted average common
and common equivalent
shares outstanding.............. 4,758,000 4,822,000 4,712,000 4,771,000
========= ========= ========= =========
</TABLE>
4. Acquisition of Data Direct Explorer
On September 29, 1997 the Company acquired the Data Direct
Explorer technology from Intersolv, Inc. The purchase price was
$300,000 plus a maximum of an additional $300,000 in contingent
consideration based upon the attainment of certain revenue levels
derived from the sale of products which include the acquired
technology. Because it is uncertain whether or not those revenue
levels can be attained, no additional consideration was recorded. The
purchase price was allocated to certain intangible assets based upon
their market value. The Company intends to effect significant
enhancements to the existing technology in order to extend its useful
life. Because management believes that in its current state, the
technology has no alternative future use, a portion of the purchase
price equal to $280,000 was allocated to acquired research and
development cost and was expensed as a one-time, non-tax deductible
charge in the quarter ended October 31, 1997.
FORM 10-Q
Page 7 of 12
<PAGE>
5. Commitments and Contingencies
The Company and various of its current and former executive
officers are party to certain class action litigation initiated in the
quarter ended October 31, 1997. The plaintiffs seek unspecified
damages based upon the increase and subsequent decrease in the market
value of shares of the Company's stock during the period from May 8,
1996 to February 3, 1997. Management intends to defend this action
vigorously and believes that the suite is without merit. While the
Company is unable to predict with certainty the eventual outcome of
the suite, management believes that the proceeding will not have a
material adverse effect on the Company or its financial statements.
6. Reclassifications
Certain prior-year amounts have been reclassified to conform with
current year presentation in the accompanying consolidated financial
statements.
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Liquidity and Capital Resources
The Company's working capital increased $1,224,000 to $18,398,000
as of October 31, 1997 from $17,174,000 as of January 31, 1997. This
increase was due primarily to increases in working capital provided
from operations partially offset by additions to capitalized software
development cost of $788,000 and property and equipment additions of
$440,000.
The Company believes that the current cash, cash equivalents and
cash flow from operations will be sufficient to provide the liquidity
and capital resources to meet its lease obligations and to finance
operating needs, research and development activities and planned
growth for at least the next twelve months.
Results of Operations
Revenues
Revenues were $17,986,000 for the nine months ended October 31,
1997 and $18,760,000 for the nine months ended October 31, 1996, a
decrease of $774,000 or 4%. Revenues were $5,901,000 for the quarter
ended October 31, 1997 and $6,646,000 for the quarter ended October
31, 1996, a decrease of $745,000 or 11%.
License fees were $11,078,000 for the nine months ended October
31, 1997 compared to $13,142,000 for the nine months ended October 31,
1996, a decrease of $2,064,000 or 16%. License fees were $3,505,000
for the quarter ended October 31, 1997 and $4,723,000 for the quarter
ended October 31, 1996, a decrease of $1,218,000 or 26%. These
decreases were due primarily to a decrease in sales personnel related
to the continuing sales force transition.
Service fees were $6,908,000 for the nine months ended October
31, 1997 compared to $5,619,000 for the nine months ended October 31,
1996, an increase of $1,289,000 or 23%. Service fees were $2,396,000
for the quarter ended October 31, 1997 compared to $1,923,000 for the
quarter ended
FORM 10-Q
Page 8 of 12
<PAGE>
October 31, 1996, an increase of $473,000 or 25%. Service fees
increased principally as a result of the increase in the installed
base of the Company's software products and increases in training and
consulting revenues.
Cost of License Fees
Cost of license fees includes the amortization of capitalized
software development costs, royalties related to licensed products and
the costs of magnetic media, packaging and documentation. Cost of
license fees was $984,000 or 5% of revenues and $931,000 or 5% of
revenues for the nine months ended October 31, 1997 and 1996,
respectively. Cost of license fees was $320,000 or 5% of revenues for
quarter ended October 31, 1997. For the comparable quarter of the
prior year, cost of license fees was $368,000 or 6% of revenues.
Cost of Service Fees
Cost of service fees consists of the costs associated with
supplying customers with technical assistance and training and
consulting services. Cost of service fees was $2,478,000 or 14% of
revenues and $2,362,000 or 13% of revenues for the nine months ended
October 31, 1997 and 1996, respectively. Cost of service fees was
$879,000 or 15% of revenues for the quarter ended October 31, 1997.
Cost of service fees was $811,000 or 12% of revenues for the quarter
ended October 31, 1996. The increase in cost of service fees in
dollars is due principally to increases in the Company's support,
training and consulting staffs. The increase in cost of service fees
as a percentage of revenues is due primarily to the service fees
representing a larger percentage of total revenues as compared to the
previous year. The Company expects costs of service fees to continue
to increase in dollars as the Company's customer base expands.
Development Expenses
Development expenses were $1,695,000 or 9% of revenues for the
nine months ended October 31, 1997 compared to $1,566,000 or 8% of
revenues for the nine months ended October 31, 1996. Development
expenses were $590,000 or 10% of revenues for the quarter ended
October 31, 1997 and $561,000 or 8% of revenues for the quarter ended
October 31, 1996.
Selling Expenses
Selling expenses were $8,472,000 for the nine months ended
October 31, 1997 as compared to $7,785,000 for the nine months ended
October 31, 1996, an increase of $687,000 or 9%. Selling expenses were
$2,620,000 for the quarter ended October 31, 1997 and $2,631,000 for
the quarter ended October 31, 1996. Selling expenses as a percentage
of revenues were 47% for the nine months ended October 31, 1997 and
41% for the nine months ended October 31, 1996, and 44% for the
quarter ended October 31, 1997 and 40% for the quarter ended October
31, 1996. The increase in selling expenses in dollars and as a
percentage of revenues for the nine months and quarter ended October
31, 1997 is due principally to the increase in residual fixed sales
costs related to temporary increases in sales personnel occurring in
the fourth quarter of fiscal 1997.
FORM 10-Q
Page 9 of 12
<PAGE>
General and Administrative Expenses
General and administrative expenses were $3,208,000 for the nine
months ended October 31, 1997 and $3,534,000 for the nine months ended
October 31, 1996, a decrease of $326,000 or 9%. General and
administrative expenses were $1,096,000 for the quarter ended October
31, 1997 and $1,244,000 for the quarter ended October 31, 1996, a
decrease of $148,000 or 12%. General and administrative expenses were
18% of revenues for the nine months ended October 31, 1997 and 19% of
revenues for the nine months ended October 31, 1996. These expenses
were 19% of revenues for the quarter ended October 31, 1997 and 19%
for the quarter ended October 31, 1996.
Acquired Research and Development Costs
On September 29, 1997 the Company acquired the Data Direct
Explorer technology from Intersolv, Inc. for $300,000 plus additional
contingent consideration excluding direct costs. The purchase price
was allocated to certain intangible assets and to acquired research
and development costs of $280,000 which was expensed as a one-time,
non-tax deductible charge in the quarter ended October 31, 1997.
Income Taxes
The Company's effective tax rate on pretax income was 20% and 28%
for the nine months ended October 31, 1997 and 1996, respectively, and
45% and 26% for the quarters ended October 31, 1997 and 1996,
respectively. Income tax expense was $258,000 and $826,000 for the
nine months ended October 31, 1997 and 1996, respectively. Income tax
expense was $113,000 and $307,000 for the quarters ended October 31,
1997 and 1996, respectively. The decrease in income tax expense and
the Company's effective tax rate for the nine months ended October 31,
1997 was due principally to a decrease in operating income. The
increase in the effective tax rate for the quarter ended October 31,
1997 is due primarily to the one-time, non-tax deductible charge
related to the acquisition of the Data Direct Explorer technology from
Intersolv, Inc. in September of 1997.
The Company does not provide for U.S. federal income taxes on
undistributed earnings of foreign subsidiaries as such earnings are
considered to be permanently reinvested. The amount of undistributed
earnings which would be subject to U.S. federal income tax if
repatriated as of July 31, 1996 was approximately $743,000. The tax
liability on these earnings, if repatriated, would not be material.
Income Per Share
Net income per share decreased to $0.22 from $0.44 for the nine
months ended October 31, 1997 and 1996, respectively. Net income per
share decreased to $0.03 from $0.18 for the quarters ended October 31,
1997 and 1996, respectively. This decrease was due primarily to
decreased income from operations, coupled with the one-time charge of
$280,000 or $0.06 per share related to purchased research and
development.
FORM 10-Q
Page 10 of 12
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
11. Computation of Primary and Fully Diluted Per Share
Earnings
(b) Reports on Form 8-K
A report dated October 23, 1997 was filed during the
quarter ended October 31, 1997, reporting under Item 5,
Other Events, a Complaint served to the Corporation anda
number of its current and former Executive Officers. The
action was filed in the United States District Court for
the Northern District of Georgia, Atlanta Division by
Harvey Altman, individually, and on behalf of purchasers
of the Company's common stock between May 8, 1996 and
February 3, 1997.
S I G N A T U R E S
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.
IQ SOFTWARE CORPORATION
..................................
(Registrant)
December 15, 1997
Date:..........................
/s/ Charles R. Chitty
By:..............................
Charles R. Chitty
Chairman, President and
Chief Executive Officer
(Principal Executive Officer)
/s/ J. Kent Elmer
By:..............................
J. Kent Elmer
Controller
(Principal Accounting Officer)
FORM 10-Q
Page 11 of 12
<PAGE>
<TABLE>
EXHIBIT 11
IQ SOFTWARE CORPORATION AND SUBSIDIARIES
COMPUTATION OF PRIMARY AND FULLY DILUTED PER SHARE EARNINGS
Three Months Ended Nine Months Ended
October 31, October 31,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
PRIMARY
Weighted average Common Stock outstanding 4,659,000 4,597,000 4,651,000 4,572,000
Net effect of dilutive stock options
based on the treasury stock method.... 99,000 225,000 61,000 199,000
---------- ---------- ----------- -----------
Total................................. 4,758,000 4,822,000 4,712,000 4,771,000
========== ========== =========== ===========
Net income.............................. $ 140,000 $ 857,000 $1,039,000 $ 2,116,000
Net income per share.................... $ 0.03 $ 0.18 $ 0.22 $ 0.44
========== ========= ========== ===========
FULLY DILUTED
Weighted average Common Stock outstanding 4,659,000 4,597,000 4,651,000 4,572,000
Net effect of dilutive stock options
based on the treasury stock method.... 99,000 248,000 61,000 247,000
---------- --------- --------- ----------
Total................................. 4,758,000 4,845,000 4,712,000 4,819,000
========= ========= ========= ==========
Net income.............................. $ 140,000 $ 857,000 $1,039,000 $ 2,116,000
Net income per share.................... $ 0.03 $ 0.18 $ 0.22 $ 0.44
========== ========= ========== ===========
</TABLE>
FORM 10-Q
Page 12 of 12
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-START> FEB-01-1997
<PERIOD-END> OCT-31-1997
<CASH> 4,956,989
<SECURITIES> 8,596,560
<RECEIVABLES> 7,725,156
<ALLOWANCES> 716,550
<INVENTORY> 0
<CURRENT-ASSETS> 21,903,974
<PP&E> 6,290,062
<DEPRECIATION> 4,943,647
<TOTAL-ASSETS> 26,947,821
<CURRENT-LIABILITIES> 3,506,242
<BONDS> 0
0
0
<COMMON> 1,543
<OTHER-SE> 23,143,036
<TOTAL-LIABILITY-AND-EQUITY> 26,947,821
<SALES> 11,078,117
<TOTAL-REVENUES> 17,985,827
<CGS> 984,158
<TOTAL-COSTS> 17,118,334
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,296,595
<INCOME-TAX> 258,000
<INCOME-CONTINUING> 1,038,595
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,038,595
<EPS-PRIMARY> 0.22
<EPS-DILUTED> 0.22
</TABLE>
