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 March 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 0-21036
BLIMPIE INTERNATIONAL, INC.
(Exact name of issuer as specified in its charter)
New Jersey
(State or Other Jurisdiction of Incorporation or Organization)
13-2908793
(IRS Employer Identification No.)
740 Broadway, New York, NY 10003
(Address and Zip Code of Principal Executive Offices)
(212) 673-5900
(Issuer's Telephone Number)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15 (d) of the Exchange Act during the past 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 |_|
There were 9,516,226 shares of the registrant's common stock outstanding as of
May 12, 1998.
<PAGE>
Blimpie International, Inc.
Quarterly Report on Form 10-Q
For the Quarter Ended March 31, 1998
Table of Contents
Page
Number
------
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited):
Condensed Consolidated Balance Sheets - March 31, 1998
and June 30, 1997 3
Condensed Consolidated Statements of Income - Three
and Nine Months Ended March 31, 1998 and 1997 4
Condensed Consolidated Statements of Cash Flows - Nine
Months Ended March 31, 1998 and 1997 5
Notes to Condensed Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 7
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 11
SIGNATURES 12
<PAGE>
PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements
BLIMPIE INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31 June 30
1998 1997
----------- -----------
(Unaudited) (Note)
Assets
Current assets:
Cash and cash equivalents $ 2,690,107 $ 3,532,339
Investments 4,143,035 4,462,253
Accounts receivable, net 2,550,531 2,084,825
Equipment inventory 741,071 247,114
Prepaid expenses and other current assets 715,517 454,390
Current portion of notes receivable 585,178 985,772
----------- -----------
Total current assets 11,425,439 11,766,693
----------- -----------
Property and equipment, net 1,194,057 1,253,003
----------- -----------
Other assets:
Notes receivable less current portion, net 1,743,571 1,518,721
Investments 4,184,775 3,877,827
Trademarks, net 8,602,471 8,704,472
Other 754,991 583,633
----------- -----------
Total other assets 15,285,808 14,684,653
----------- -----------
$27,905,304 $27,704,349
=========== ===========
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $ 2,399,991 $ 3,518,657
Current portion of long-term debt -- 5,202
Income taxes payable 256,384 7,676
Other current liabilities 643,012 473,951
----------- -----------
Total current liabilities 3,299,387 4,005,486
Deferred revenue 1,046,089 1,325,146
Trademark obligations 3,339,063 3,508,594
Commitments and contingencies
Shareholders' equity:
Common stock, $.01 par value 95,737 95,262
Additional paid-in capital 8,488,507 8,209,666
Retained earnings 12,075,706 10,744,290
Net unrealized gain on marketable securities 21,503 25,905
----------- -----------
20,681,453 19,075,123
Less: subscriptions receivable 210,000 210,000
Less: treasury stock 250,688 --
----------- -----------
Total shareholders' equity 20,220,765 18,865,123
----------- -----------
$27,905,304 $27,704,349
=========== ===========
Note: The condensed consolidated balance sheet at June 30, 1997 has been derived
from the audited consolidated financial statements of the Company at that date
bud does not include all of the information required by generally accepted
accounting principles for complete financial statements.
See notes to condensed consolidated financial statements.
3
<PAGE>
BLIMPIE INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Three months ended Nine months ended
March 31 March 31
1998 1997 1998 1997
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Revenues
Continuing fees $ 4,202,161 $ 3,906,671 $12,599,214 $11,127,420
Subfranchisor fees, master license fees, sale of franchises 1,129,893 1,257,409 3,262,819 4,474,173
Store equipment sales 2,671,597 3,452,157 11,189,825 11,523,666
Management fees and other income 305,086 312,638 943,988 1,007,417
----------- ----------- ----------- -----------
8,308,737 8,928,875 27,995,846 28,132,676
Expenses
Subfranchisors' share of franchise and continuing fees 2,304,144 2,335,649 7,256,061 6,912,634
Store equipment cost of sales 2,420,240 3,139,934 9,468,584 10,289,439
Selling, general and administrative expenses 3,090,188 2,433,931 8,632,190 7,511,081
Interest expense 735 372 1,001 3,857
----------- ----------- ----------- -----------
7,815,307 7,909,886 25,357,836 24,717,011
----------- ----------- ----------- -----------
Operating income 493,430 1,018,989 2,638,010 3,415,665
Interest income 197,287 213,759 582,453 721,520
----------- ----------- ----------- -----------
Income before income taxes 690,717 1,232,748 3,220,463 4,137,185
Income taxes 255,000 477,000 1,220,000 1,590,000
----------- ----------- ----------- -----------
Net income $ 435,717 $ 755,748 $ 2,000,463 $ 2,547,185
=========== =========== =========== ===========
Basic earnings per share $ 0.05 $ 0.08 $ 0.21 $ 0.27
=========== =========== =========== ===========
Diluted earnings per share $ 0.05 $ 0.08 $ 0.21 $ 0.26
=========== =========== =========== ===========
Weighted average basic shares outstanding 9,538,000 9,524,000 9,542,000 9,514,000
=========== =========== =========== ===========
Weighted average diluted shares outstanding 9,547,000 9,778,000 9,563,000 9,806,000
=========== =========== =========== ===========
</TABLE>
See notes to condensed consolidated financial statements.
4
<PAGE>
BLIMPIE INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Nine months ended
March 31
1998 1997
----------- -----------
<S> <C> <C>
Cash Flows From Operating Activities
Net income $ 2,000,463 $ 2,547,185
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 489,874 292,197
Incentive stock granted 97,596 255,196
Changes in operating assets and liabilities:
Accounts receivable (465,706) (969,657)
Prepaid expenses and other current assets (755,084) 49,793
Other assets (171,358) (163,267)
Notes receivable 175,744 57,385
Accounts payable (1,118,666) 684,931
Income taxes payable 248,708 (502,686)
Other current liabilities 169,061 (520,521)
Deferred revenue (279,057) (471,915)
----------- -----------
Net cash provided by operating activities 391,575 1,258,641
----------- -----------
Cash Flows From Investing Activities
Reinvested dividends of available-for-sale securities (3,870) (4,331)
Purchase of held-to-maturity securities -- (4,036,019)
Proceeds from maturities of held-to-maturity securities -- 4,399,011
Proceeds from sale of held-to-maturity securities -- 2,695,562
Purchase of available-for-sale securities (4,014,717) (7,504)
Proceeds from sale of available-for-sale securities 4,026,455 25,625
Purchase of trademarks (109,434) (4,598,426)
Disposal of property, plant and equipment -- 10,232
Acquisition of property, plant and equipment (219,493) (558,353)
----------- -----------
Net cash used in investing activities (321,059) (2,074,203)
----------- -----------
Cash Flows From Financing Activities
Proceeds from stock warrants/options exercised 12,188 12,350
Collections of officer notes receivable for stock purchase -- 41,841
Purchase of treasury stock (250,688) --
Cash dividends paid (669,046) (332,369)
Repayment of long-term debt (5,202) (4,993)
----------- -----------
Net cash used in financing activities (912,748) (283,171)
----------- -----------
Net decrease in cash and cash equivalents (842,232) (1,098,733)
Cash and cash equivalents, at beginning of period 3,532,339 4,328,468
----------- -----------
Cash and cash equivalents, at end of period $ 2,690,107 $ 3,229,735
=========== ===========
</TABLE>
See notes to condensed consolidated financial statements.
5
<PAGE>
Notes To Condensed Consolidated Financial Statements
For the Nine Months Ended March 31, 1998 (Unaudited)
The unaudited interim financial statements should be read in conjunction with
the Company's June 30, 1997 Annual Report.
The unaudited financial statements include all adjustments consisting of only
normal recurring accruals which are, in the opinion of management, necessary to
present a fair statement of financial position as of March 31, 1998 and the
results of operations and cash flows for the periods then ended. Results of
operations for the period are not necessarily indicative of the results to be
expected for the full year.
No significant events have occurred subsequent to the end of fiscal year 1997,
and no material contingencies exist which would require disclosure in this
interim report.
Earnings per Share
Earnings per share on a basic and diluted basis as required by Statement No. 128
is calculated as follows:
Three months
ended Nine months ended
March 31, March 31,
(in thousands, except per share amounts) 1998 1997 1998 1997
------- ------- ------- -------
Net income $ 436 $ 756 $ 2,000 $ 2,547
======= ======= ======= =======
Calculation of weighted average shares
outstanding plus assumed conversions:
Weighted average basic shares
outstanding 9,538 9,524 9,542 9,514
Effect of dilutive employee stock
options 9 254 21 292
------- ------- ------- -------
Weighted average diluted shares
outstanding 9,547 9,778 9,563 9,806
======= ======= ======= =======
Basic earnings per share $ 0.05 $ 0.08 $ 0.21 $ 0.27
======= ======= ======= =======
Diluted earnings per share $ 0.05 $ 0.08 $ 0.21 $ 0.26
======= ======= ======= =======
6
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion contains forward-looking statements subject to
the safe harbor created by the Private Securities Litigation Reform Act of 1995.
The words "may," "would," "could," "will," "expect," "estimate," "believe,"
"intends," "plans" and similar expressions and variations thereof are intended
to identify forward-looking statements. Management cautions that these
statements represent projections and estimates of future performance and involve
certain risks and uncertainties. The Company's actual results could differ
materially from those anticipated in these forward-looking statements as a
result of certain factors including, without limitation, The Company's ability
to successfully implement the new concepts currently being formulated; changes
in global and local business and economic conditions; consumer preferences,
spending patterns and demographic trends; food, labor and other operating costs;
availability and cost of land and construction; currency exchange rates; and
other risks outside the control of the Company referred to in the Company's
registration statement and periodic reports filed with the Securities and
Exchange Commission.
Three and Nine Months Ended March 31, 1998 Compared with Three and Nine Months
Ended March 31, 1997
Results of Operations
The Company's net income decreased 42.3% to $436,000 for the three months ended
March 31, 1998 from $756,000 for the three months ended March 31, 1997. The
Company's basic and diluted earnings per share decreased 37.5% to $.05 per share
for the three months ended March 31, 1998 from $.08 for the same period ended
1997. The Company's net income decreased 21.5% to $2,000,000 for the nine months
ended March 31, 1998 from $2,547,000 for the same period ended 1997. The
Company's diluted earnings per share decreased 19.2% to $.21 per share for the
nine months ended March 31, 1998 from $.26 per share for the nine months ended
March 31, 1997. Such decreases are attributable to the decreases in
subfranchise, master license and franchise fees and store equipment sales, and
the increase in selling, general and administrative expenses, all of which are
discussed below.
The Company's continuing fees derived from franchises increased 7.6% to
$4,202,000 for the three months ended March 31, 1998 from $3,907,000 for the
three months ended March 31, 1997. During the nine months ended March 31, 1998,
continuing fees derived from franchises increased 13.2% to $12,599,000 from
$11,127,000 for the nine months ended March 31, 1997. These increases are
directly attributable to the 18.0% net increase in total open outlets at March
31, 1998 to 1,895 from 1,606 at March 31, 1997. The 18.0% increase in total open
outlets is net of outlets closed, and includes a 9.4% increase in traditional
outlets and a 28.9% increase in new concept outlets. Generally, new concept
outlets are smaller locations with lower sales volumes than the traditional
outlets, thus they generate less continuing fees for the Company. Because of the
increase in the percentage of new concept outlets versus traditional outlets,
revenues from continuing fees increased at a slower rate than the increase in
total open outlets.
Revenue from subfranchise, master license and franchise fees for the three
months ended March 31, 1998 decreased 10.1% to $1,130,000 from $1,257,000 for
the same period in 1997. The decrease is due primarily to the absence of master
license fees for international development rights in the current period, as
compared to $132,000 recognized for the three months ended March 31, 1997.
Revenue from subfranchise, master license and franchise fees for the nine months
ended March 31, 1998 decreased 27.1% to $3,263,000 from $4,474,000 for the same
period in 1997. The decrease is due primarily to lower master license fees for
international development rights in the current period.
7
<PAGE>
The Company believes the decreases in subfranchise fees and franchise fees are
the result of the saturation of the domestic market with subfranchisors and the
maturing of the convenience store segment of the new-concept marketplace. The
Company has implemented several new initiatives to encourage future revenue
growth. One such initiative has realigned the Company's franchise support system
in order to more effectively assist the subfranchisors in developing their
territories, selling franchises and opening more outlets. Two other initiatives
involve the development and introduction of two new franchise brands, Maui Tacos
International, Inc. ("Maui Tacos" or "MTII") and Pasta Central, Inc. ("Pasta
Central" or "PCI"). On October 29, 1997 the Company entered into an agreement
with MTII which gives the Company 76% ownership in MTII. The Company plans to
introduce these new brands during the remainder of fiscal 1998 or early in
fiscal 1999. Maui Tacos will be the Company's offering in the second
fastest-growing food category of "Maui-Mex" menu items. Pasta Central will
provide the Company with an entry into the fastest growing market in the
restaurant/food service industry, the "home meal replacement" category. The
Company plans to develop these two new brands similar to the development of
Blimpie outlets, which should increase revenue derived from continuing fees,
subfranchise fees, franchise fees and equipment sales and subsequently increase
net income. No assurances can be given, however, that any such development or
initiative would generate increased revenue or net income.
During the three months ended March 31, 1998, store equipment sales decreased
22.6% to $2,672,000 from $3,452,000 for the same period ended 1997. During the
nine months ended March 31, 1998, store equipment sales decreased 2.9% to
$11,190,000 from $11,524,000. These decreases are attributable to the timing of
shipments and the sale of more used inventory in the 1998 periods, rather than a
decrease in the number of new outlets opened.
Management fees and other income for the three months ended March 31, 1998
decreased 2.4% to $305,000 from $313,000 for the same period ended March 31,
1997. During the nine months ended March 31, 1998, management fees and other
income decreased 6.3% to $944,000 from $1,007,000 for the same period ended
March 31, 1997. These decreases resulted from the January 1997 relocation of one
of the Company's subfranchisors who had previously been sharing office space in
the Atlanta office, thereby reducing the fees the Company was receiving for
reimbursement of a portion of office expenses.
Subfranchisors' share of continuing and franchise fees includes subfranchisors'
and master licensors' share of continuing and franchise fees as well as
trademark license fees on continuing, franchise, master license and subfranchise
fees. Such fees decreased 1.3% to $2,304,000 for the three months ended March
31, 1998 from $2,336,000 for the same period ended 1997. This decrease is due
primarily to a decrease in the international trademark fees paid. In February
1997, the Company purchased an undivided 60% interest in the international
rights to the Blimpie trademarks and Blimpie marketing system. This agreement
had the effect of reducing international trademark fees by approximately 60%.
The remaining 40% of the international rights, as well as rights to certain
domestic markets, are owned by Metropolitan Blimpie, Inc. ("MBI"), an
unaffiliated corporation.
Subfranchisors' share of continuing and franchise fees increased 5.0% to
$7,256,000 for the nine months ended March 31, 1998 from $6,913,000 for the same
period ended 1997. These increases are directly related to the increase in the
revenue derived from continuing fees, but such increases were partially offset
by a decrease in international trademark fees caused by the purchase of the 60%
interest in such rights as discussed above.
Store equipment cost of sales as a percentage of store equipment sales was 90.6%
and 91.0% in the three months ended March 31, 1998 and 1997, respectively, and
was 84.6% and 89.3%, respectively, in the nine months then ended. Effective July
1, 1997, the Company implemented a price increase for the equipment, which had
the effect of decreasing the cost of sales percentage
8
<PAGE>
during the nine months ended March 31, 1998. However, the Company experienced a
high volume of sales of used equipment during the three months ended March 31,
1998, which had the effect of offsetting the price increase and returning the
cost of sales percentage to the levels experienced in the prior year.
Selling, general and administrative expenses rose 27.0% to $3,090,000 for the
three months ended March 31, 1998 from $2,434,000 for the same period ended
1997. During the nine month period ended March 31, 1998, selling, general and
administrative expenses rose 14.9% to $8,632,000 from $7,511,000 for the same
period ended 1997. These increases are the result of continued expansion of the
Company's workforce and related expenses required to implement the Company's
strategy of increasing the number of outlets open and introduce new concepts,
including Maui Tacos and Pasta Central, as well as increases in amortization
expense for the trademarks purchased in February 1997.
Interest income for the three months ended March 31, 1998 decreased 7.7% to
$197,000 from $214,000 for the same period ended 1997. Interest income decreased
19.3% for the nine month period ended March 31, 1998 to $582,000 from $722,000
for the same period ended 1997. These decreases are the result of the selling of
a portion of the U.S. Treasury notes owned by the Company to finance the
acquisition of the 60% interest in the international trademarks in February
1997, as noted above.
The effective income tax rate (income taxes expressed as a percentage of pre-tax
income) was 36.9% and 38.7% for the three months ended March 31, 1998 and 1997,
respectively, and 37.9% and 38.4% for the nine months ended March 31, 1998 and
1996, respectively.
Liquidity and Capital Resources
The Company generated cash flows from operating activities of $392,000 and
$1,259,000 for the nine months ended March 31, 1998 and 1997, respectively. The
decrease of $867,000 was mainly the result of a decrease in accounts payable
which was partially offset by an increase in income taxes payable and other
current liabilities.
Net cash used in investing activities during the nine months ended March 31,
1998 and 1997 totaled $321,000 and $2,074,000, respectively. The greater use of
cash in the 1997 period was due to the purchase of trademark rights, which was
partially offset by the net sale of investments in order to fund the payment for
the trademarks.
Net cash used in financing activities during the nine months ended March 31,
1998 and 1997 was $913,000 and $283,000, respectively. The increase in the use
of cash was due to the purchase of treasury stock and the payment of greater
dividends in the 1998 period.
The Company's working capital position was $8,093,000 as of March 31, 1998.
During the nine months ended March 31, 1998, the Company incurred a material
capital commitment pursuant to the agreement it executed on October 29, 1997 in
connection with its acquisition of the rights to the Maui Tacos trademark and
development rights. This agreement requires a minimum initial contribution from
the Company for the development of MTII totaling $250,000, to be repaid by MTII
in five years. The Company also has the option of loaning an additional
$1,250,000 to MTII, also to be repaid in five years. The Company's primary
liquidity needs arise from expansion, research and development, capital
expenditures and trademark obligations. These needs are primarily met by the
cash flows from operations and from the Company's cash and investments. The
Company believes that the cash flows from operations and the Company's cash and
investments will be sufficient to fund its liquidity needs for the foreseeable
future.
9
<PAGE>
Impact of Year 2000
The Company's business and relationships with its business partners and
customers depend significantly on a number of computer software programs,
internal operating systems and connections to other networks, and the failure of
any of these programs, systems or networks to successfully address the Year 2000
data rollover problem could have a material adverse effect on the Company's
business, financial condition and results of operations. Many installed computer
software and network processing systems currently accept only two-digit entries
in the date code field and may need to be upgraded or replaced in order to
accurately record and process information and transactions on and after January
1, 2000. The Company believes that it has completed substantially all
modifications of its affected software programs and has minimal additional work
required to finalize these modifications. However, the Company is not certain as
to whether the computer software and business systems of its customers and
suppliers are Year 2000 compliant. There can be no assurance that the failure or
delay of The Company's customers and suppliers in successfully addressing the
Year 2000 issue or the costs involved in such process will not have a material
adverse effect on The Company's business, financial condition and results of
operations.
10
<PAGE>
PART II. Other Information
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits. The following exhibits are filed as part of this
report:
Exhibit no. Description
27 Financial Data Schedule
(b) No Current Reports on Form 8-K were filed by the Company
during the quarter for which this report has been filed.
11
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
BLIMPIE International, Inc.
(Registrant)
Dated: May 14, 1998 By: /s/ Brian D. Lane
------------------------------
Brian D. Lane
Vice President and Chief Financial Officer
(Principal Financial Officer)
12
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Consolidated Balance Sheet at March 31, 1998 (Unaudited) and the Consolidated
Statement of Operations for the nine months ended March 31, 1998 (Unaudited) and
is qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JUL-01-1997
<PERIOD-END> MAR-31-1998
<CASH> 2,690,107
<SECURITIES> 4,143,035
<RECEIVABLES> 2,633,281
<ALLOWANCES> 82,750
<INVENTORY> 741,071
<CURRENT-ASSETS> 11,425,439
<PP&E> 2,341,115
<DEPRECIATION> 1,147,058
<TOTAL-ASSETS> 27,905,304
<CURRENT-LIABILITIES> 3,299,386
<BONDS> 0
0
0
<COMMON> 95,737
<OTHER-SE> 20,125,029
<TOTAL-LIABILITY-AND-EQUITY> 27,905,304
<SALES> 27,051,858
<TOTAL-REVENUES> 27,995,845
<CGS> 16,724,645
<TOTAL-COSTS> 16,724,645
<OTHER-EXPENSES> 8,632,190
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,001
<INCOME-PRETAX> 3,220,463
<INCOME-TAX> 1,220,000
<INCOME-CONTINUING> 2,000,463
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,000,463
<EPS-PRIMARY> 0.21
<EPS-DILUTED> 0.21
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Consolidated Balance Sheet at March 31, 1997 (Unaudited) and the Consolidated
Statement of Operations for the nine months ended March 31, 1997 (Unaudited) and
is qualified in its entirety by reference to such financial statements.
</LEGEND>
<RESTATED>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> MAR-31-1997
<CASH> 3,229,735
<SECURITIES> 5,013,880
<RECEIVABLES> 2,487,143
<ALLOWANCES> 61,500
<INVENTORY> 169,538
<CURRENT-ASSETS> 12,004,396
<PP&E> 2,086,020
<DEPRECIATION> 785,458
<TOTAL-ASSETS> 23,768,515
<CURRENT-LIABILITIES> 3,782,968
<BONDS> 0
0
0
<COMMON> 95,262
<OTHER-SE> 18,340,282
<TOTAL-LIABILITY-AND-EQUITY> 23,768,515
<SALES> 27,125,259
<TOTAL-REVENUES> 28,132,676
<CGS> 17,202,073
<TOTAL-COSTS> 17,202,073
<OTHER-EXPENSES> 7,511,081
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,857
<INCOME-PRETAX> 4,137,185
<INCOME-TAX> 1,590,000
<INCOME-CONTINUING> 2,547,185
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,547,185
<EPS-PRIMARY> 0.27
<EPS-DILUTED> 0.26
</TABLE>
