<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JANUARY 31, 1998
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 0-20842
TRO LEARNING, INC.
-------------------
(Exact name of Registrant as specified in its charter)
Delaware 36-3660532
- -------- ----------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
1721 Moon Lake Boulevard, Suite 555, Hoffman Estates, IL 60194
- -------------------------------------------------------- -----
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (847) 781-7800
--------------
Not Applicable
---------------
(Former name, former address and former fiscal year,
if changed since last report)
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.
Common stock, $.01 par value 6,414,085 shares
- ---------------------------- ----------------
Class Outstanding as of February 17, 1998
(This document contains 13 pages)
1
<PAGE>
TRO LEARNING, INC. AND SUBSIDIARIES
INDEX
<TABLE>
<CAPTION>
Page
Number
-------
<S> <C> <C>
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements (Unaudited):
Consolidated Statements of Income for the
Three Months Ended January 31, 1998 and 1997 . . . . . . . . . .3
Consolidated Balance Sheets as of
January 31, 1998 and October 31, 1997. . . . . . . . . . . . . .4
Consolidated Statements of Cash Flows for the
Three Months Ended January 31, 1998 and 1997 . . . . . . . . . .5
Notes to Consolidated Financial Statements . . . . . . . . . .6-8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations. . . . . . . . 9-11
PART II. OTHER INFORMATION
Item 1. Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . . 12
Item 2. Changes in Securities. . . . . . . . . . . . . . . . . . . . . 12
Item 3. Defaults Upon Senior Securities. . . . . . . . . . . . . . . . 12
Item 4. Submission of Matters to a Vote of Security Holders. . . . . . 12
Item 5. Other Information. . . . . . . . . . . . . . . . . . . . . . . 12
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . 12
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
</TABLE>
2
<PAGE>
PART I. FINANCIAL INFORMATION
TRO LEARNING, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED, IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
Three Months Ended
January 31,
-------------------
1998 1997
---- ----
<S> <C> <C>
Revenues by product line:
PLATO-Registered Trademark- Education. . . . . . $ 6,043 $ 4,265
Aviation Training. . . . . . . . . . . . . . . . 1,160 822
-------- --------
Total revenues. . . . . . . . . . . . . . . . 7,203 5,087
Cost of revenues . . . . . . . . . . . . . . . . . 1,590 779
-------- --------
Gross profit. . . . . . . . . . . . . . . . . 5,613 4,308
-------- --------
Operating expenses:
Selling, general and administrative expense. . . 5,942 6,116
Product development and customer support . . . . 2,022 1,610
-------- --------
Total operating expenses. . . . . . . . . . . 7,964 7,726
-------- --------
Operating loss . . . . . . . . . . . (2,351) (3,418)
Interest expense . . . . . . . . . . . . . . . . . 384 228
Interest income and other expense, net . . . . . . 166 54
-------- --------
Loss before income taxes. . . . . . . . . . . (2,901) (3,700)
Credit for income taxes. . . . . . . . . . . . . . --- (1,386)
-------- --------
Net loss. . . . . . . . . . . . . . . . . . . $ (2,901) $ (2,314)
-------- --------
-------- --------
Basic and diluted earnings per share. . . . . $ (0.45) $ (0.37)
-------- --------
-------- --------
Weighted average common shares outstanding. . 6,400 6,182
-------- --------
-------- --------
</TABLE>
See Notes to Consolidated Financial Statements
3
<PAGE>
TRO LEARNING, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED, IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
JANUARY 31, OCTOBER 31,
1998 1997
----------- -----------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents. . . . . . . . . . . . $ --- $ 537
Accounts receivable, less allowances of $6,709
and $7,020, respectively . . . . . . . . . . . 16,869 18,305
Inventories. . . . . . . . . . . . . . . . . . . 1,040 990
Prepaid expenses and other current assets. . . . 898 688
-------- --------
Total current assets. . . . . . . . . . . . . 18,807 20,520
Equipment and leasehold improvements, less
accumulated depreciation of $4,236 and $4,092,
respectively . . . . . . . . . . . . . . . . . . 1,238 1,271
Product development costs, less accumulated
amortization of $3,084 and $2,562,
respectively . . . . . . . . . . . . . . . . . . 6,209 5,989
Other assets . . . . . . . . . . . . . . . . . . . 929 1,308
-------- --------
$ 27,183 $ 29,088
-------- --------
-------- --------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable . . . . . . . . . . . . . . . . $ 4,950 $ 3,472
Accrued employee salaries and benefits . . . . . 2,303 3,199
Accrued liabilities. . . . . . . . . . . . . . . 4,031 4,072
Revolving loan . . . . . . . . . . . . . . . . . 12,449 11,908
Deferred revenue . . . . . . . . . . . . . . . . 1,944 1,949
-------- --------
Total current liabilities . . . . . . . . . . 25,677 24,600
Long term debt . . . . . . . . . . . . . . . . . . 3,050 3,050
Deferred revenue, less current portion . . . . . . 509 519
Other liabilities. . . . . . . . . . . . . . . . . 150 172
Stockholders' equity:
Common stock, $.01 par value, 25,000 shares
authorized; 6,438 shares issued and 6,393
shares outstanding in 1998; 6,450 shares
issued and 6,405 shares outstanding in 1997. . 64 64
Paid in capital. . . . . . . . . . . . . . . . . 22,112 22,074
Treasury stock at cost, 45 shares in 1998
and 1997 . . . . . . . . . . . . . . . . . . . (469) (469)
Accumulated deficit. . . . . . . . . . . . . . . (23,561) (20,660)
Foreign currency translation adjustment. . . . . (349) (262)
-------- --------
Total stockholders' equity. . . . . . . . . . (2,203) 747
-------- --------
$ 27,183 $ 29,088
-------- --------
-------- --------
</TABLE>
See Notes to Consolidated Financial Statements
4
<PAGE>
TRO LEARNING, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED, IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
JANUARY 31,
-----------------------
1998 1997
---------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net loss . . . . . . . . . . . . . . . . . . . . $ (2,901) $ (2,314)
-------- --------
Adjustments to reconcile net loss to net cash
used in operating activities:
Deferred income taxes . . . . . . . . . . . . --- (1,386)
Depreciation and amortization . . . . . . . . 661 503
Provision for doubtful accounts . . . . . . . 75 202
Changes in assets and liabilities:
Decrease in accounts receivable . . . . . . 1,361 2,320
Increase in inventories . . . . . . . . . . (50) (144)
Decrease in prepaid expenses and other
current and noncurrent assets . . . . . . 169 456
Increase in product development costs . . . (742) (726)
Increase (decrease) in accounts payable . . 1,478 (460)
Decrease in accrued liabilities, accrued
employee salaries and benefits and
other liabilities . . . . . . . . . . . . (1,170) (1,571)
Increase (decrease) in deferred revenue . . (15) 246
-------- --------
Total adjustments. . . . . . . . . . . . 1,767 (560)
-------- --------
Net cash used in operating
activities. . . . . . . . . . . . . . (1,134) (2,874)
-------- --------
Cash flows from investing activities:
Capital expenditures . . . . . . . . . . . . . . (123) (207)
-------- --------
Net cash used in investing activities . . . . (123) (207)
-------- --------
Cash flows from financing activities:
Net proceeds from short term borrowings. . . . . 641 2,601
Book overdraft . . . . . . . . . . . . . . . . . 211 231
Repayment of long term debt. . . . . . . . . . . (100) ---
Purchase of treasury stock . . . . . . . . . . . --- (261)
Net proceeds from issuance of common stock . . . 38 95
-------- --------
Net cash provided by financing activities . . 790 2,666
-------- --------
Effect of foreign currency on cash . . . . . . . . (70) (60)
-------- --------
Net decrease in cash and cash equivalents. . . . . (537) (475)
Cash and cash equivalents at beginning of period . 537 475
-------- --------
Cash and cash equivalents at end of period . . . . $ --- $ ---
-------- --------
-------- --------
Cash paid for interest expense . . . . . . . . . . $ 519 $ 227
-------- --------
-------- --------
</TABLE>
See Notes to Consolidated Financial Statements
5
<PAGE>
TRO LEARNING, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
1. NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
NATURE OF BUSINESS:
TRO Learning, Inc. and its subsidiaries (the Company) develop and market
microcomputer-based, interactive, self-paced instructional systems. The
Company markets such systems primarily to educational institutions and
private industry.
BASIS OF PRESENTATION:
The accompanying unaudited consolidated financial statements have been prepared
by the Company pursuant to the rules and regulations of the Securities and
Exchange Commission. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. Accordingly, these
quarterly consolidated financial statements should be read in conjunction with
the financial statements and the notes thereto included in the Company's Form
10-K for the fiscal year ended October 31, 1997.
The financial information furnished reflects, in the opinion of the Company, all
adjustments of a normal, recurring nature necessary for a fair statement of the
results for the interim periods presented. Because of cyclical and other
factors, the results for the interim periods presented are not necessarily
indicative of the results to be expected for the full fiscal year.
REVENUE RECOGNITION:
Revenue from the sale of education and training courseware licenses, computer
hardware, and related support services, is recognized when courseware, hardware,
and related services are delivered. Upon delivery, future service costs, if
any, are accrued. Future service costs represent the Company's problem
resolution and support "hotline" service for a one year period. Deferred
revenue represents the portion of billings made or payments received in advance
of services being performed or products being delivered.
PRODUCT DEVELOPMENT, ENHANCEMENT, AND MAINTENANCE COSTS:
The Company develops education and training products, referred to hereafter as
courseware products. Costs incurred in the development of the Company's current
generation courseware products and related enhancements and routine maintenance
thereof are expensed as incurred. All costs incurred by the Company in
establishing the technical feasibility of new courseware products to be sold,
leased, or otherwise marketed are expensed as incurred. Once technical
feasibility has been established, costs incurred in the development of new
generation courseware products are capitalized.
6
<PAGE>
TRO LEARNING, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
1. NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES,
CONTINUED
PRODUCT DEVELOPMENT, ENHANCEMENT, AND MAINTENANCE COSTS, Continued
Amortization is provided over the estimated useful life of the new courseware
products, generally three years, using the straight-line method. Amortization
begins when the product is available for general release to customers.
Unamortized capitalized costs determined to be in excess of the net realizable
value of the product are expensed at the date of such determination.
COMPUTATION OF INCOME (LOSS) PER SHARE:
The Company has adopted Statement of Financial Accounting Standards 128 (SFAS
128), "Earnings Per Share", as required, effective November 1, 1997. SFAS 128
requires presentation of basic and diluted earnings per share, including a
restatement of all prior periods presented. Basic earnings per share is
calculated based only upon the weighted average number of common shares
outstanding during the period. Diluted earnings per share is calculated based
upon the weighted average number of common and, where dilutive, potential common
shares outstanding during the period. Potential common shares include options,
warrants and convertible securities. Since the Company incurred a net loss for
all periods presented, potential common shares are antidilutive and excluded
from the calculation, and basic and diluted earnings per share are the same.
RECLASSIFICATIONS:
Certain prior year amounts have been reclassified on the consolidated statements
of cash flows to conform to the current year presentation.
2. ACCOUNTS RECEIVABLE:
Accounts receivable include net installment receivables of $5,953,000 and
$6,264,000 at January 31, 1998 and October 31, 1997, respectively. Installment
receivables with terms greater than one year were $195,000 and $565,000 at
January 31, 1998 and October 31,1997, respectively, and are included in other
assets on the consolidated balance sheets.
3. DEBT:
The Company's revolving loan agreement provides for a maximum $18 million
line of credit and $3 million term loan through August 31, 1998. The
agreement also provides for additional line of credit borrowings up to a
maximum $3,500,000 from time to time during certain periods of the remaining
term of the agreement. Borrowings under the line bear interest at the prime
rate plus 1.5%. The term loan has an annual interest rate of 15%. At
January 31, 1998, borrowings of $9,549,000 under the line were outstanding at
an interest rate of 10% and the term loan
7
<PAGE>
TRO LEARNING, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
3. DEBT, CONTINUED
balance was $2,900,000. The Company was in compliance with all financial
covenants at January 31, 1998.
The Company is currently reviewing alternatives to meet its short and long term
financing requirements.
4. INCOME TAXES:
In line with the Company's decision to fully reserve its deferred tax asset at
the end of fiscal 1997, no tax benefit has been recorded at January 31, 1998 for
the first quarter loss.
5. LEGAL PROCEEDINGS:
On December 15, 1997, a securities fraud class action was filed in the United
States District Court for the Northern District of Illinois against the Company
and two of its current and former executive officers. The purported class
action was filed on behalf of all persons who purchased common stock of the
Company during the period December 7, 1995 through June 10, 1997, seeking
damages for alleged violations of the federal securities laws. The complaint in
the purported class action alleges that throughout this time period, defendants
knowingly participated in a course of conduct involving misrepresentation and
concealment of adverse material information about the business and finances of
the Company. The complaint alleges that the course of action followed by the
defendants caused the plaintiff and other members of the purported class to
purchase the Company's securities at artificially inflated prices. The
complaint seeks damages suffered as a result of the actions of the defendants,
including costs, expenses and fees incurred in the litigation.
The Company cannot predict the outcome of this litigation but believes it has
meritorious defenses to these allegations and intends to defend itself
vigorously.
8
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
- -------------------------------------------------------------------------------
RESULTS OF OPERATIONS
FIRST QUARTER FISCAL 1998 COMPARED TO FIRST QUARTER FISCAL 1997
REVENUES:
Total revenues for the first quarter of fiscal 1998 of $7,203,000 increased by
$2,116,000 or 42% as compared to $5,087,000 for the first quarter of fiscal
1997. The following table highlights revenues by product line (in 000's):
<TABLE>
<CAPTION>
PLATO EDUCATION AVIATION TRAINING TOTAL
------------------ ------------------ -----------------
1998 1997 1998 1997 1998 1997
-------- -------- --------- ------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
Courseware license and support $ 4,622 $ 3,569 $ 1,107 $ 799 $ 5,729 $ 4,368
Hardware, third party courseware
and other 1,421 696 53 23 1,474 719
-------- -------- --------- ------- -------- -------
Total revenues $ 6,043 $ 4,265 $ 1,160 $ 822 $ 7,203 $ 5,087
-------- -------- --------- ------- -------- -------
-------- -------- --------- ------- -------- -------
</TABLE>
PLATO Education revenues increased $1,778,000 or 42% compared to the prior year.
This increase was due principally to increased courseware license and support,
hardware and third party courseware revenues.
Aviation Training revenues increased $338,000 or 41% compared to the prior year.
This increase was principally due to increased courseware revenues.
GROSS PROFIT:
Gross profit for the first quarter of fiscal 1998 increased $1,305,000 or 30% to
$5,613,000 as compared to $4,308,000 for the first quarter of fiscal 1997.
This increase was due principally to the growth in courseware revenues slightly
offset by decreased margins from third party courseware and other support
services. The Company's gross margin was 78% for the first quarter of fiscal
1998 as compared to 85% for the first quarter of fiscal 1997, reflecting the
increased mix of lower margin hardware, third party courseware and other
revenues.
SELLING, GENERAL, AND ADMINISTRATIVE EXPENSE:
Selling, general, and administrative expense for the first quarter of fiscal
1998 decreased $174,000 or 3% to $5,942,000 as compared to $6,116,000 for the
first quarter of fiscal 1997. PLATO Education selling and marketing expenses
decreased $437,000 as a result of the restructuring of operations initiated in
late fiscal 1997. This decrease was offset by increased PLATO Education
commissions of $263,000, resulting from increased revenues.
9
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS, CONTINUED
- -------------------------------------------------------------------------------
RESULTS OF OPERATIONS, CONTINUED
FIRST QUARTER FISCAL 1998 COMPARED TO FIRST QUARTER FISCAL 1997, CONTINUED
PRODUCT DEVELOPMENT AND CUSTOMER SUPPORT:
Product development and customer support expense for the first quarter of fiscal
1998 increased $412,000 or 26% to $2,022,000 as compared to $1,610,000 for the
first quarter of fiscal 1997. While PLATO Education product development
spending was comparable to the prior period, an increase in amortization of
previously capitalized costs, as well as increased Aviation Training product
development spending, resulted in the increased expense for the period.
OPERATING LOSS:
The operating loss was $2,351,000 for the first quarter of fiscal 1998 as
compared to $3,418,000 for the first quarter of fiscal 1997. The first quarter
loss reflects the impact of a traditionally lower level of revenue in the first
half of the Company's fiscal year. The improvement in operating results is due
principally to the increase in revenues and the positive impact of the
restructuring of operations initiated in late fiscal 1997.
INTEREST EXPENSE:
Interest expense for the first quarter of fiscal 1998 was $384,000 as compared
to $228,000 for the first quarter of fiscal 1997. Interest expense increased
due principally to the Company's long term debt incurred in the second quarter
of fiscal 1997.
LIQUIDITY AND CAPITAL RESOURCES
As of January 31, 1998, the Company's principal sources of liquidity included
net accounts receivable of $16,869,000, and its line of credit. The Company has
net installment receivables of $5,953,000 at January 31, 1998, of which
$5,758,000 are due within one year and are included in net accounts receivable.
Net cash used in the Company's operating activities was $1,134,000 in the first
quarter of fiscal 1998 as compared to $2,874,000 in the first quarter of fiscal
1997. Cash flows from operations were used principally to fund the Company's
working capital requirements. In addition to cash flows from operations, the
Company has resources available under its revolving loan agreement (see Note 3
of Notes to Consolidated Financial Statements). At January 31, 1998, borrowings
of $9,549,000 were outstanding under the line of credit at an interest rate of
10%.
10
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS, CONTINUED
- -------------------------------------------------------------------------------
LIQUIDITY AND CAPITAL RESOURCES, CONTINUED
Net cash used in the Company's investing activities was $123,000 in the first
quarter of fiscal 1998 for capital expenditures.
Net cash provided by financing activities was $790,000 in the first quarter of
fiscal 1998, primarily from borrowings under the Company's line of credit.
In November 1997, the Company announced that it had retained BancAmerica
ROBERTSON STEPHENS to advise it regarding strategic alternatives to enhance
shareholder value. The Company is currently reviewing financing alternatives to
meet its short and long term working capital, capital expenditure, and business
investment requirements.
11
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
See Note 5 of Notes to Consolidated Financial Statements
ITEM 2. CHANGES IN SECURITIES
Not Applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not Applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not Applicable.
ITEM 5. OTHER INFORMATION
Not Applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Number Description
------ ------------
27 Financial Data Schedule
(b) Reports on Form 8-K:
No reports on Form 8-K were filed for the quarter ended
January 31, 1998.
12
<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 on March 5, 1998.
TRO LEARNING, INC.
By /s/William R. Roach
---------------------------------
Chairman of the Board, President
and Chief Executive Officer
(principal executive officer)
/s/Andrew N. Peterson
---------------------------------
Senior Vice President, Chief
Financial Officer, Treasurer and
Secretary (principal financial
officer)
/s/Mary Jo Murphy
---------------------------------
Vice President, Corporate
Controller and Chief Accounting
Officer (principal accounting
officer)
13
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEETS AND CONSOLIDATED STATEMENTS OF INCOME FOUND IN THE
COMPANY'S FORM 10-Q FOR THE QUARTER ENDED JANUARY 31, 1998 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> OCT-31-1998
<PERIOD-END> JAN-31-1998
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 16869
<ALLOWANCES> 6709
<INVENTORY> 1040
<CURRENT-ASSETS> 18807
<PP&E> 1238
<DEPRECIATION> 4236
<TOTAL-ASSETS> 27183
<CURRENT-LIABILITIES> 25677
<BONDS> 3050
0
0
<COMMON> 64
<OTHER-SE> (2267)
<TOTAL-LIABILITY-AND-EQUITY> 27183
<SALES> 7203
<TOTAL-REVENUES> 7203
<CGS> 1590
<TOTAL-COSTS> 1590
<OTHER-EXPENSES> 8130
<LOSS-PROVISION> 75
<INTEREST-EXPENSE> 384
<INCOME-PRETAX> (2901)
<INCOME-TAX> 0
<INCOME-CONTINUING> (2901)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2901)
<EPS-PRIMARY> (0.45)
<EPS-DILUTED> (0.45)
</TABLE>
