UNITED STATES
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 28, 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: 0-21876
FUNCO, INC.
(Exact name of registrant as specified in its charter)
Minnesota 41-1609563
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
10120 West 76th Street
Eden Prairie, MN 55344
(Address of principal executive offices)
(612) 946-8883
(Registrant's telephone number, including area code)
Check whether the registrant: (1) 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 ____
On October 28, 1997, the registrant had 6,166,462 outstanding shares of common
stock, $ .01 par value.
<PAGE>
FUNCO, INC.
INDEX
PART I - FINANCIAL INFORMATION PAGE NO.
- ------------------------------ --------
ITEM 1. Consolidated Financial Statements (Unaudited)
Consolidated Statements of Operations - Quarter and six months
ended September 28, 1997 and September 29, 1996 ............. 3
Consolidated Balance Sheets - September 28, 1997 and
March 30, 1997 .............................................. 4
Consolidated Statements of Cash Flows - Six months ended
September 28, 1997 and September 29, 1996 ................... 5
Notes to 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 ............................................. 10
ITEM 4. Submission of Matters to a Vote of Security Holders ........... 11
ITEM 6. Exhibits and Reports on Form 8-K .............................. 11
SIGNATURES .................................................................. 12
- ----------
Exhibit 11 - Statement Re: Computation of Per Share Earnings................. 13
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
FUNCO, INC.
Consolidated Statements of Operations
(in thousands, except share and per share data)
(Unaudited)
<TABLE>
<CAPTION>
Quarter Ended Six Months Ended
------------------------------- --------------------------------
September 28, September 29, September 28, September 29,
1997 1996 1997 1996
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Net sales ................................ $ 26,760 $ 20,415 $ 50,761 $ 39,277
Cost of sales ............................ 16,955 12,543 31,544 24,555
---------- ----------- ---------- -----------
Gross profit .......................... 9,805 7,872 19,217 14,722
Operating expenses ....................... 6,884 5,943 13,242 11,512
General and administrative expenses ...... 2,125 1,897 4,233 3,694
---------- ----------- ---------- -----------
Operating income (loss) ............... 796 32 1,742 (484)
Interest expense ......................... -- (2) -- (11)
Interest income .......................... 66 47 145 82
---------- ----------- ---------- -----------
Net income (loss) before income taxes.. 862 77 1,887 (413)
Income tax provision (benefit) ........... 327 20 717 (161)
---------- ----------- ---------- -----------
Net income (loss) ..................... $ 535 $ 57 $ 1,170 $ (252)
========== =========== ========== ===========
Net income (loss) per share .............. $ 0.08 $ 0.01 $ 0.18 $ (0.04)
Weighted average number of common and
common equivalent shares ................. 6,651,903 6,219,458 6,617,188 5,893,852
</TABLE>
SEE ACCOMPANYING NOTES.
<PAGE>
FUNCO, INC.
Consolidated Balance Sheets
(in thousands, except share data)
<TABLE>
<CAPTION>
September 28, March 30,
1997 1997
------------- ---------
(Unaudited) (Note)
<S> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents ...................... $ 3,853 $ 8,408
Accounts receivable ............................ 1,254 1,094
Inventories .................................... 22,906 13,831
Prepaid expenses ............................... 2,316 782
Current deferred tax asset ..................... 532 532
--------- ---------
Total current assets ......................... 30,861 24,647
Net property and equipment ........................ 6,598 5,954
Long-term deferred tax asset ...................... 984 984
Other assets ...................................... 157 160
--------- ---------
Total assets ...................................... $ 38,600 $ 31,745
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable ............................... $ 7,681 $ 1,387
Accrued liabilities ............................ 4,154 5,182
Capital lease obligations ...................... -- 20
Deferred revenue ............................... 656 747
--------- ---------
Total current liabilities .................... 12,491 7,336
Accrued rent ...................................... 85 91
Shareholders' Equity
Common stock (issued: 6,156,986 and 6,056,788).. 62 61
Additional paid-in capital ..................... 19,233 18,698
Retained earnings .............................. 6,729 5,559
--------- ---------
Total shareholders' equity ................... 26,024 24,318
--------- ---------
Total liabilities and shareholders' equity ........ $ 38,600 $ 31,745
========= =========
</TABLE>
Note: The balance sheet at March 30, 1997 has been derived from the audited
financial statements at that date but does not include all the information and
footnotes required by generally accepted accounting principles for complete
financial statements.
SEE ACCOMPANYING NOTES.
<PAGE>
FUNCO, INC.
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
-------------------------------
September 28, September 29,
1997 1996
------------- -------------
<S> <C> <C>
Operating Activities
Net income (loss) ............................................ $ 1,170 $ (252)
Adjustments to reconcile net income (loss) to net cash used in
operating activities:
Depreciation and amortization .............................. 1,520 1,671
Net loss on disposal of property and equipment ............. 14 40
Changes in operating assets and liabilities:
Accounts receivable ...................................... (160) (38)
Inventories .............................................. (9,075) (5,957)
Prepaid expenses ......................................... (1,533) 160
Accounts payable ......................................... 6,294 1,628
Accrued liabilities ...................................... (1,034) (138)
Deferred revenue ......................................... (91) (73)
--------- ---------
Net cash used in operating activities .................. (2,895) (2,959)
Investing Activities
Additions to property and equipment .......................... (2,123) (466)
Increase in other assets ..................................... (53) (54)
--------- ---------
Net cash used in investing activities .................... (2,176) (520)
Financing Activities
Payments of obligations under capital leases ................. (20) (39)
Net proceeds from issuance of common stock ................... 536 33
--------- ---------
Net cash provided by (used in) financing activities ...... 516 (6)
--------- ---------
Decrease in cash and cash equivalents ........................... (4,555) (3,485)
Cash and cash equivalents at beginning of period ................ 8,408 5,783
--------- ---------
Cash and cash equivalents at end of period ...................... $ 3,853 $ 2,298
========= =========
</TABLE>
SEE ACCOMPANYING NOTES.
<PAGE>
FUNCO, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1. The Company
Funco, Inc. (the Company) was incorporated in March 1988, and is engaged in the
business of providing interactive home entertainment, primarily through the
purchase and resale of new and previously played video games along with related
hardware and accessory items through its FUNCOLAND stores and mail order
operation. It also publishes a video game magazine, GAME INFORMER. The Company
operated 215 retail locations at September 28, 1997 compared to 176 retail
locations at September 29, 1996
Note 2. Fiscal Year
The Company's fiscal year ends on a Sunday on or near March 31 which completes a
52 or 53 week reporting period. All quarters for fiscal 1998 and 1997 consist of
13 weeks with the following period ending dates:
Ending Date
-----------------------------------------
1998 1997
------------------ ------------------
First June 29, 1997 June 30, 1996
Second September 28, 1997 September 29, 1996
Third December 28, 1997 December 29, 1996
Fourth March 29, 1998 March 30, 1997
Note 3. Basis of Presentation
The accompanying unaudited 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
solely of normal recurring accruals) considered necessary for a fair
presentation have been included.
The operating results for the quarter and six months ended September 28, 1997,
are not necessarily indicative of the results that may be expected for the year
ending March 29, 1998 due to the seasonal nature of the Company's business.
For further information, refer to the financial statements and footnotes thereto
included in the Company's annual report on Form 10-K for the year ended March
30, 1997.
Note 4. Earnings Per Share
The Financial Accounting Standards Board has issued FASB Statement No. 128
"Earnings per Share," which will be effective for the Company beginning with the
period ending March 29, 1998. The new accounting rules will change the method of
computation of earnings per share. The Company does not believe that the
statement will materially impact earnings per share.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF CONSOLIDATED FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Results of Operations
The following table sets forth certain items in the statements of operations
expressed as (i) percentage of net sales for the quarter and six months
indicated and (ii) percentage changes from the comparable period of the prior
year.
<TABLE>
<CAPTION>
Percent Percent
Quarter Ended Increase Six Months Ended Increase
------------------------------- ---------- -------------------------------- ----------
September 28, September 29, 1998 September 28, September 29, 1998
1997 1996 over 1997 1997 1996 over 1997
-------------- -------------- ---------- -------------- --------------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net sales........................ 100.0% 100.0% 31.1% 100.0% 100.0% 29.2%
Cost of sales.................... 63.4 61.4 35.2 62.1 62.5 28.5
-------------- -------------- ---------- -------------- --------------- ----------
Gross profit..................... 36.6 38.6 24.6 37.9 37.5 30.5
Operating expenses............... 25.7 29.1 15.8 26.1 29.3 15.0
General and admin. expenses...... 7.9 9.3 12.0 8.3 9.4 14.6
-------------- -------------- ---------- -------------- --------------- ----------
Operating income (loss).......... 3.0 0.2 N/A 3.4 (1.2) N/A
Interest expense................. - - N/A - - N/A
Interest income.................. 0.2 0.2 40.4 0.3 0.2 76.8
-------------- -------------- ---------- -------------- --------------- ----------
Net income (loss) before taxes... 3.2 0.4 N/A 3.7 (1.1) N/A
Income tax provision (benefit)... 1.2 0.1 N/A 1.4 (0.4) N/A
-------------- -------------- ---------- -------------- -------------- ----------
Net income (loss)................ 2.0% 0.3% N/A 2.3% (0.6)% N/A
============== ============== ========== ============== =============== ==========
</TABLE>
Comparison of Second Quarter Fiscal 1998 to Second Quarter Fiscal 1997
Net sales for the quarter increased from $20,415,000 in 1997 to $26,760,000 in
1998, an increase of 31.1%. The Company opened 22 new stores during the quarter
and operated a total of 215 locations at the end of the quarter this year
compared to 176 stores at the end of the same period prior year. Comparable
store sales for the quarter increased 25%. The large sales increase is primarily
due to the strong growth of the video game industry led by Sony PlayStation and
Nintendo 64 products.
Cost of sales for the quarter increased from $12,543,000 in 1997 to $16,955,000
in 1998, an increase of 35.2%. The dollar increase in cost of sales is primarily
due to the strong growth in sales. Cost of sales as a percentage of net sales
increased from 61.4% in 1997 to 63.4% in 1998. This increase is primarily due to
sales mix for the quarter reflecting higher sales volume of new Sony PlayStation
and Nintendo 64 products, which are sold at lower gross margin percentages than
that of previously played product.
Operating expenses for the quarter increased from $5,943,000 in 1997 to
$6,884,000 in 1998, an increase of 15.8%. This increase is primarily due to
higher store payroll expense which occurred both as the Company operated a
greater number of stores than in the same period prior year and also to support
the 25% increase in comparable store sales. Operating expenses decreased
favorably as a percentage of net sales from 29.1% in 1997 to 25.7% in 1998, due
to expense leveraging as net sales increased by 31.1%.
General and administrative expenses for the quarter increased from $1,897,000 in
1997 to $2,125,000 in 1998, an increase of 12.0%. This increase is primarily due
to additional payroll costs for staffing administrative functions. General and
administrative expenses decreased favorably as a percentage of net sales from
9.3% in 1997 to 7.9% in 1998, due to expense leveraging as net sales increased
by 31.1%.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF CONSOLIDATED FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
The Company generated operating income for the quarter of $796,000 compared to
operating income of $32,000 in the same period prior year.
Interest income for the quarter increased from $47,000 in 1997 to $66,000 in
1998, an increase of 40.4%, primarily as the Company maintained a higher level
of cash and cash equivalents.
The Company generated net income before income taxes for the quarter of $862,000
compared to net income before income taxes of $77,000 in the same period prior
year. As a result the Company recorded an income tax expense for the quarter of
$327,000 compared to an income tax expense of $20,000 for the same period prior
year.
Due to the above factors, the Company generated net income for the quarter of
$535,000, or $0.08 per share, compared to net income of $57,000, or $0.01 per
share, for the same period prior year.
Comparison of Six Month Period Fiscal 1998 to Six Month Period Fiscal 1997
Net sales for the six month period increased from $39,277,000 in 1997 to
$50,761,000 in 1998, an increase of 29.2%. The Company opened 27 new stores
during the six month period and operated a total of 215 locations at the end of
the six month period this year compared to 176 stores at the end of the same
period prior year. Comparable store sales for the six month period increased
23%. The large sales increase is primarily due to the strong growth of the video
game industry led by Sony PlayStation and Nintendo 64 products.
Cost of sales for the six month period increased from $24,555,000 in 1997 to
$31,544,000 to 1998, an increase of 28.5%. The dollar increase in cost of sales
is primarily due to the strong growth in sales. Cost of sales as a percentage of
net sales decreased from 62.5% in 1997 to 62.1% in 1998.
Operating expenses for the six month period increased from $11,512,000 in 1997
to $13,242,000 in 1998, an increase of 15.0%. This increase is primarily due to
higher store payroll expense which occurred both as the Company operated a
greater number of stores than in the same period prior year and also to support
the 23% increase in comparable store sales. Operating expenses decreased
favorably as a percentage of net sales from 29.3% in 1997 to 26.1% in 1998, due
to expense leveraging as net sales increased by 29.2%.
General and administrative expenses for the six month period increased from
$3,694,000 in 1997 to $4,233,000 in 1998, an increase of 14.6%. This increase
was primarily due to additional payroll costs for staffing administrative
functions. General and administrative expenses decreased favorably as a
percentage of net sales from 9.4% in 1997 to 8.3% in 1998, due to expense
leveraging as net sales increased by 29.2%.
The Company generated operating income for the six month period of $1,742,000
compared to an operating loss of $484,000 in the same period prior year.
Interest income for the six month period increased from $82,000 in 1997 to
$145,000 in 1998, an increase of 76.8%, primarily as the Company maintained a
higher level of cash and cash equivalents.
The Company generated net income before income taxes for the six month period of
$1,887,000 compared to a net loss before income taxes of $413,000 in the same
period prior year. As a result the Company recorded
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF CONSOLIDATED FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
income tax expense for the six month period of $717,000 compared to an income
tax benefit of $161,000 for the same period prior year.
Due to the above factors, the Company generated net income for the six month
period of $1,170,000, or $0.18 per share, compared to a net loss of $252,000, or
$0.04 per share, for the same period prior year.
Seasonality and Quarterly Fluctuations
The Company's business is seasonal with a majority of net sales generated in the
third and fourth fiscal quarters, which include the holiday selling season. In
addition to sales seasonality, the Company's quarterly results are also impacted
by factors including new product introductions and the number and timing of new
store openings. Growth of the store base may obscure the impact of seasonal
influences. Because of the seasonality of the Company's business and the factors
mentioned above, results for any quarter are not necessarily indicative of the
results that may be achieved for a full fiscal year. The following table sets
forth net sales by quarter and the number of stores operating at each quarter
end for the past ten quarters:
<TABLE>
<CAPTION>
Net Sales (in thousands) Number of Stores Open at Quarter End
- -------------------------------------------------------- ---------------------------------------------------
Fiscal Fiscal
Quarter 1998 1997 1996 Quarter 1998 1997 1996
- ------------- ----------- ---------- ---------- ----------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
First $24,001 $18,862 $12,261 First 193 173 181
Second 26,760 20,415 15,335 Second 215 176 178
Third - 46,461 31,897 Third - 188 182
Fourth - 34,817 21,889 Fourth - 188 173
</TABLE>
Liquidity and Capital Resources
The Company's primary ongoing financing requirements are for new store capital
expenditures and new store inventory. On an interim basis, the Company's
financing requirements are also impacted by quarterly operating results and
seasonal fluctuations in inventory levels.
During the six months ended September 28, 1997, the Company used $2,895,000 of
cash in operating activities primarily for the purchase of inventory, offset by
an increase in accounts payable, and used $2,176,000 of cash in investing
activities, primarily for capital expenditures. For the six months ended
September 29, 1996, the Company used $2,959,000 of cash in operating activities
and used $520,000 of cash in investing activities.
The Company has a $10,000,000 credit facility available representing the
seasonally adjusted increase to its $3,000,000 revolving credit facility with a
commercial bank. The interest rate on outstanding borrowings under the facility
(8 1/2% at September 28, 1997) is equal to the bank's prime rate. This revolving
credit facility is unsecured. The facility requires the Company to maintain
certain financial ratios and achieve certain operating results. The Company had
no borrowings under this facility through the first six months of the year, and
has had no borrowings in the third quarter through the date of this report.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF CONSOLIDATED FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
During fiscal 1998, the Company plans to incur capital expenditures of up to
$5,500,000, of which $2,123,000 has been incurred to date, for new store
openings and other related store expenditures, corporate information systems and
general corporate expenditures. The Company incurred capital expenditures of
$1,548,000 in fiscal 1997.
The Company believes that cash from operations and funds available under its
revolving credit facility will provide sufficient funds for financing planned
store openings, working capital needs and other capital expenditures for at
least 12 months.
Forward Looking Statements
Forward looking statements contained in this document which relate to future
sales prospects and expansion plans are subject to uncertainties from factors
including growth of the industry, competitive environment, product availability,
success of the Company's existing operations, availability of new store sites
and the Company's ability to finance new store expansion. For further discussion
of factors which can impact the Company's operating results, please refer to the
Company's report on Form 10-K for the year ended March 30, 1997, and other
Company filings with the Securities and Exchange Commission
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company and its Chief Executive Officer were originally named as defendants
in a civil lawsuit filed on August 17, 1995 in the United States District Court,
District of Minnesota, entitled Christopher Cannon v. Funco, Inc. and David R.
Pomije. This was a putative class action in which the named plaintiff in the
Class Action Complaint purported to represent a class of all purchasers of the
Company's common stock during the putative class period of May 18, 1994 through
December 15, 1994. On October 18, 1996 the court dismissed the state common law
claims with prejudice and dismissed the federal securities claims without
prejudice, giving the plaintiff leave to file an Amended Complaint. The
plaintiff filed an Amended Complaint on January 6, 1997.
The Amended Complaint is a similarly styled class action suit and alleges the
Company's share price was artificially inflated, asserting various claims under
the Securities Exchange Act of 1934 as amended. Plaintiff seeks damages in an
unspecified amount plus costs and attorney's fees. The Company and its Chief
Executive Officer filed a motion to dismiss the Amended Class Action Complaint
in its entirety.
The parties have reached an agreement-in-principle to settle this lawsuit,
subject to approval by the Court and members of the class. The proposed
settlement will not have a material impact on the Company including its results
of operations, financial condition and liquidity.
<PAGE>
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) The Company held its Annual Meeting of Shareholders on August
1, 1997.
(b) The Shareholders voted on the election of Directors, each to
serve a one year term. The vote was as follows for each of the
nominees:
NAME AFFIRMATIVE AUTHORITY WITHHELD
------------------- ----------- ------------------
David R. Pomije 5,628,618 8,642
Stanley A. Bodine 5,628,518 8,742
Richard T. Guidera 5,627,618 9,642
George E. Mileusnic 5,627,618 9,642
Patrick J. Ferrell 5,627,618 9,642
(c) The Shareholders also voted on the appointment of Ernst &
Young LLP as the Company's independent auditors for the 1998
fiscal year. The vote was as follows:
AFFIRMATIVE AUTHORITY WITHHELD ABSTENTIONS
----------- ------------------ -----------
5,608,600 19,177 9,483
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits filed with this Form 10-Q:
11 Statements Re: Computation of Per Share Earnings
27 Financial Data Schedule
(b) No report on Form 8-K was filed by the registrant during the
quarter ended September 28, 1997.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Funco, Inc.
(Registrant)
Date: October 29, 1997 By: /s/ David R. Pomije
-----------------------------------
David R. Pomije
Chief Executive Officer
By: /s/ Robert M. Hiben
-----------------------------------
Robert M. Hiben
Chief Financial Officer
Exhibit 11 - Statement Re: Computation of Per Share Earnings
FUNCO, INC.
COMPUTATION OF PER SHARE EARNINGS
(in thousands, except per share data)
<TABLE>
<CAPTION>
Quarter Ended Six Months Ended
------------------------------ ------------------------------
September 28, September 29, September 28, September 29,
1997 1996 1997 1996
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Weighted average common shares outstanding ...... 6,138 5,898 6,103 5,894
Weighted average number of common stock
equivalents:
Stock options .............................. 514 291 514 --
Warrants ................................... -- 30 -- --
--------- --------- --------- ---------
Adjusted common equivalent shares outstanding ... 6,652 6,219 6,617 5,894
========= ========= ========= =========
Net income (loss) ............................... $ 535 $ 57 $ 1,170 $ (252)
========= ========= ========= =========
Net income (loss) per common share .............. $ 0.08 $ 0.01 $ 0.18 $ (0.04)
========= ========= ========= =========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000889664
<NAME> FUNCO INC
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-29-1998
<PERIOD-START> JUN-30-1997
<PERIOD-END> SEP-28-1997
<CASH> 3,853
<SECURITIES> 0
<RECEIVABLES> 1,290
<ALLOWANCES> (36)
<INVENTORY> 22,906
<CURRENT-ASSETS> 30,861
<PP&E> 18,628
<DEPRECIATION> (12,030)
<TOTAL-ASSETS> 38,600
<CURRENT-LIABILITIES> 12,491
<BONDS> 0
0
0
<COMMON> 62
<OTHER-SE> 25,962
<TOTAL-LIABILITY-AND-EQUITY> 38,600
<SALES> 26,760
<TOTAL-REVENUES> 26,760
<CGS> 16,955
<TOTAL-COSTS> 16,955
<OTHER-EXPENSES> 9,009
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 862
<INCOME-TAX> 327
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 535
<EPS-PRIMARY> .08
<EPS-DILUTED> .08
</TABLE>
