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 June 28, 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 0-3698
SILICONIX INCORPORATED
(Exact name of registrant as specified in its charter)
Delaware 94-1527868
(State or other jurisdiction (I.R.S. Employer
of incorporation Identification No.)
or organization)
2201 Laurelwood Road, Santa Clara, California 95054
(Address of principal executive offices)
Registrant's telephone number including area code (408) 988-8000
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 registrant's
classes of common stock:
Common stock, $0.01 par value -- 9,959,680 outstanding shares as of
August 10, 1998.
<PAGE>
SILICONIX INCORPORATED
TABLE OF CONTENTS TO FORM 10-Q
Part I. Financial Information Page No.
Item 1 Financial Statements
Consolidated statements of operations for the
three and six months ended June 28, 1998 and June 29, 1997 3
Consolidated balance sheets as
of June 28, 1998 and December 31, 1997 4
Consolidated statements of cash flows for the six months
ended June 28, 1998 and June 29, 1997 5
Notes to consolidated financial statements 6
Item 2 Management's Discussion and Analysis of
Financial Condition and Results of Operations 9
Part II. Other Information
Item 6 Exhibits and Reports on Form 8-K 13
Signature 14
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<TABLE>
<CAPTION>
SILICONIX INCORPORATED
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
-------------------------------------------------------------------------------------------------------------------------------
Three Months Ended Six Months Ended
June 28, June 29, June 28, June 29,
(In thousands, except per share amounts) 1998 1997 1998 1997
-------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net sales $ 70,371 $ 80,024 $ 135,621 $ 150,236
Cost of sales 49,280 49,815 89,419 92,931
-----------------------------------------------------------------
Gross profit 21,091 30,209 46,202 57,305
Operating expenses:
Research and development 3,831 4,394 8,860 8,523
Selling, marketing, and administration 13,079 14,889 29,791 28,798
Amortization of goodwill 103 -- 103 --
Restructuring -- -- 19,751 --
-----------------------------------------------------------------
Operating income (loss) 4,078 10,926 (12,303) 19,984
Interest expense (728) (571) (1,282) (1,160)
Other income (expense) - net (553) (187) (1,082) 19
-----------------------------------------------------------------
Income (loss) before taxes and minority interest 2,797 10,168 (14,667) 18,843
Income taxes (959) (2,135) 5,153 (3,870)
Minority interest in income of consolidated subsidiary (58) -- (58) --
=================================================================
Net income (loss) $ 1,780 $ 8,033 $ (9,572)$ 14,973
=================================================================
Net income (loss) per share (basic and diluted) $ 0.18 $ 0.81 $ (0.96)$ 1.50
=================================================================
Shares used to compute earnings per share 9,960 9,960 9,960 9,960
=================================================================
See accompanying notes to consolidated financial statements.
</TABLE>
3
<PAGE>
SILICONIX INCORPORATED
CONSOLIDATED BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------
June 28, December 31,
(In thousands) 1998 1997
--------------------------------------------------------------------------------------------------------
Assets
--------------------------------------------------------------------------------------------------------
Current assets:
<S> <C> <C>
Cash and cash equivalents $ 31,569 $ 10,249
Short term investment with affiliate -- 8,586
Accounts receivable, less allowances 36,539 52,310
Accounts receivable from affiliates 17,885 8,247
Inventories 54,308 42,356
Other current assets 10,058 11,592
Deferred income taxes 10,865 6,481
-------------------------------------
Total current assets 161,224 139,821
-------------------------------------
Property, plant, and equipment, at cost:
Land 1,576 1,174
Buildings and improvements 45,749 45,724
Machinery and equipment 252,515 221,014
-------------------------------------
299,840 267,912
Less accumulated depreciation 155,985 141,514
-------------------------------------
Net property, plant, and equipment 143,855 126,398
Goodwill 9,060 --
Other assets 2,599 15,290
-------------------------------------
Total assets $ 316,738 $ 281,509
=====================================
Liabilities and Shareholders' Equity
--------------------------------------------------------------------------------------------------------
Current liabilities:
Accounts payable $ 27,276 $ 31,421
Accounts payable to affiliates 19,271 11,334
Accrued payroll and related compensation 9,875 13,970
Accrued liabilities 45,748 32,877
-------------------------------------
Total current liabilities 102,170 89,602
Long-term related party debt 64,870 34,570
Long-term debt, less current portion 4,038 3,887
Deferred income taxes 2,603 3,900
Minority interest 3,000 --
-------------------------------------
Total liabilities 176,681 131,959
-------------------------------------
Shareholders' equity:
Common stock 100 100
Additional paid-in-capital 59,536 59,482
Retained earnings 80,975 90,547
Accumulated other comprehensive income (554) (579)
-------------------------------------
Total shareholders' equity 140,057 149,550
-------------------------------------
Total liabilities and shareholders' equity $ 316,738 $ 281,509
=====================================
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE>
<TABLE>
<CAPTION>
SILICONIX INCORPORATED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
-------------------------------------------------------------------------------------------------------------------------
Six Months Ended
June 28, June 29,
(In thousands) 1998 1997
-------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ (9,572) $ 14,973
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation and amortization 13,479 10,599
Deferred income taxes (5,681) 1,000
Undistributed earnings from joint venture (970) (1,336)
Payment of pension benefits (97) (410)
Restructuring 12,788 --
Other non-cash expenses 248 291
Changes in assets and liabilities, net of acquisitions
Accounts receivable 21,606 (7,683)
Accounts receivable from affiliates (9,769) (1,581)
Inventories (10,619) (390)
Other assets (189) (3,842)
Accounts payable (4,470) 2,221
Accounts payable to affiliates 7,950 (4,818)
Accrued liabilities (2,783) 1,258
---------------------------------------
Net cash provided by operating activities 11,921 10,282
---------------------------------------
Cash flows from investing activities:
Purchase of property, plant, and equipment (14,726) (18,018)
Cash acquired from purchase of business 977 --
Short term investment with affiliate 8,586 2,020
(Purchase) sale of other assets 67 (2,506)
---------------------------------------
Net cash used by investing activities (5,096) (18,504)
---------------------------------------
Cash flows from financing activities:
Proceeds from related party debt 14,300 --
---------------------------------------
Net cash provided by financing activities 14,300 0
---------------------------------------
Effect of exchange rate changes on
cash and cash equivalents 195 (365)
---------------------------------------
Net increase (decrease) in cash and cash equivalents 21,320 (8,587)
Cash and cash equivalents:
Beginning of period 10,249 12,201
---------------------------------------
End of period $ 31,569 $ 3,614
=======================================
</TABLE>
See accompanying notes to consolidated financial statements.
5
<PAGE>
SILICONIX INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1. 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 Article 10 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 the management of the Company, the consolidated
financial statements appearing herein contain all adjustments (consisting only
of normal recurring accruals) necessary for a fair presentation of the results
for, and as of the end of, the periods indicated therein. These statements
should be read in conjunction with the Company's December 31, 1997 consolidated
financial statements and notes thereto. The results of operations for the first
six months of 1998 are not necessarily indicative of the results to be expected
for the full year.
NOTE 2. INVENTORIES
The components of inventory consist of the following:
June 28, December 31,
1998 1997
-------- -------------
(In thousands)
Finished goods $ 11,421 $ 11,758
Work-in-process 34,412 26,432
Raw materials 8,475 4,166
--------- ----------
$ 54,308 $ 42,356
--------- ----------
NOTE 3. RESTRUCTURING EXPENSE
The Company incurred a pre-tax restructuring charge of $19.8 million
relating to the acquisition on March 2, 1998 of an 80.4% interest in the Company
by Vishay Intertechnology Inc. ("Vishay") of Malvern, Pennsylvania. Of the
total, approximately $10.5 million relates to employee termination costs
covering approximately five key executives and 70 technical, production, and
administrative employees. The remaining $9.3 million of restructuring expense
relates to provisions for certain assets, contract cancellations, and other
expenses. As of June 28, 1998, 42 employees have been terminated and $6.1
million of the termination costs were paid. Additionally, $3.5 million has been
charged against the restructuring liability for the write-down of certain assets
and other expenses. Restructuring costs of $10.2 million are included in accrued
liabilities as of June 28, 1998.
As of June 1998, the Company borrowed $10.0 million from Vishay to fund
part of these restructuring costs.
NOTE 4. CONTINGENCIES
The Company is party to two environmental proceedings. The first
involves property that the Company vacated in 1972. The California Regional
Water Quality Board ("RWQCB") issued a cleanup and abatement order to both the
Company and the current owner of the property. The Company subsequently reached
a settlement of this matter with the current owner in which the current owner
indemnifies the Company against any liability that may arise out of any
governmental agency actions brought for environmental cleanup of the site,
including liability arising out of the current cleanup and abatement order.
6
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The second proceeding involves the Company's current facility in Santa Clara.
The RWQCB issued a clean up and abatement order based on the discovery of
contamination of both the soil and the groundwater on the property by certain
chemical solvents. The Company is currently engaged in certain remedial action
and has accrued $750,000 as its best estimate of future costs related to this
matter.
In management's opinion, based on discussion with legal counsel and
other considerations, the ultimate resolution of the above-mentioned matters
will not have a material adverse effect on the Company's consolidated financial
condition or results of operations.
The Company is engaged in discussions with various parties regarding
patent licensing and cross patent licensing issues. In the opinion of
management, the outcome of these discussions will not have a material adverse
effect on the Company's consolidated financial condition or overall trends in
the results of operations.
NOTE 5. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENT
As of January 1, 1998, the Company adopted Statement of Financial
Accounting Standards ("SFAS") No. 130, "Reporting Comprehensive Income". SFAS
No. 130 establishes rules for the reporting and presentation of comprehensive
income and its components. SFAS No. 130 requires accumulated translation
adjustments to be included in other comprehensive income. The accumulated
translation adjustments as of December 31, 1997 have been reclassified to
conform to the requirements of SFAS No. 130. The adoption of SFAS No. 130 did
not impact the Company's net income or total stockholders' equity. For the six
months ended June 28, 1998 and June 29, 1997, total comprehensive income (loss)
amounted to $(9,547,000) and $14,862,000, respectively.
NOTE 6. ACQUISITION OF ADDITIONAL INTEREST IN JOINT VENTURE
On April 1, 1998, Vishay acquired for $16,000,000 a 40% interest in
Simconix, a back-end manufacturing facility in Shanghai, China. This interest
was transferred to Siliconix, which had a 50% interest in Simconix dating from
1993. The Company previously reported its interest in the Simconix joint venture
under the Equity Method of accounting. The interest in Simconix is now reported
under the Purchase Method of accounting, and the operating results of Simconix
are included in the consolidated financial statements of the Company as of April
1, 1998. As a result of the purchase, the Company recorded goodwill of
$9,163,000. The goodwill will be amortized over 20 years.
NOTE 7. SUPPLEMENTAL CASH FLOW INFORMATION
The following are the effects of the non-cash transactions relating to
the purchase of Simconix.
(In thousands) June 28, 1998 June 29,1997
Net non-cash assets acquired
by related party $ 15,023 --
Investment in joint venture
converting to consolidated subsidiary 11,872 --
Long-term related party loan related
to non-cash assets acquired 16,000 --
7
<PAGE>
NOTE 8. SUBSEQUENT EVENT
Effective July 31, 1998, the Board of Directors of the Company selected
Ernst & Young LLP to replace KPMG Peat Marwick LLP ("KPMG") as the Company's
independent accountant. KPMG's audit reports on the Company's financial
statements for the fiscal years ended December 31, 1997 and 1996 did not contain
an adverse opinion or disclaimer of opinion and were not qualified or modified
as to uncertainty, audit scope or accounting principles. Furthermore, during
fiscal 1996 and 1997 and the subsequent interim period preceding the replacement
of KPMG there were no disagreements between the Company and KPMG on any matter
of accounting principles or practices, financial statement disclosure or
auditing scope or procedures.
8
<PAGE>
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Overview
Siliconix designs, markets, and manufactures power and analog
semiconductor products. The Company focuses on technologies and products for the
computer, data storage, communications, and automotive markets. The Company is
organized into three business units: Power MOSFET, Power IC, and Signal
Processing. Power MOSFET is the producer of low-voltage, surface-mount Power
MOSFET products primarily used for the communication, computer, and automotive
markets. Power IC focuses on Power Integrated Circuits used in communication and
data storage applications. Signal Processing manufactures a wide array of
commodity products such as Analog Switches, Low Power MOSFETS, and JFETs for
industrial and consumer markets.
With 1997 worldwide sales of $321.6 million, the Company's facilities
include Class 1, six-inch wafer fabs dedicated to the manufacture of power
products in Santa Clara, California and Itzehoe, Germany. Analog switches and
multiplexers are fabricated in the Company's four-inch wafer fab in Santa Clara.
A subcontractor in Beijing, China manufactures small signal transistors.
Assembly and test facilities include Company-owned facilities in Taiwan and
Shanghai, China, as well as subcontractors in the Philippines, India and Taiwan.
For the past four years, Siliconix has been a member of TEMIC
Semiconductors, a unit of the Daimler-Benz microelectronics consortium. In
December 1997, Daimler-Benz announced it had agreed to sell the Semiconductor
Division of TEMIC, which included its 80.4% interest in Siliconix, to Vishay
Intertechnology, Inc. ("Vishay") of Malvern, Pennsylvania. The acquisition was
completed on March 2, 1998, and on that date, Vishay became the Company's
largest shareholder.
Vishay, a Fortune 1000 company with 1997 revenues of $1.1 billion, is
the largest U.S. and European manufacturer of passive electronic components
(resistors, capacitors, and inductors) and a producer of discrete
semiconductors. These components are vital to the operation of everything
electronic and can be found in products manufactured in a broad range of
industries worldwide. With headquarters in Malvern, Pennsylvania, Vishay employs
over 20,000 people in 60 facilities in the U.S., Mexico, Germany, Austria, the
United Kingdom, France, Portugal, the Czech Republic, Israel, Japan, Taiwan
(R.O.C.), China, and the Philippines.
Results of Operations
Revenues for the second quarter of 1998 were $70.4 million, compared
with $80.0 million in the second quarter of 1997 and $65.3 million for the first
quarter of 1998. The decline of 12% over 1997 was driven primarily by weaker
bookings, which began during the end of the fourth quarter of 1997, and
persisted throughout the first half of 1998. The Company believes that the major
reasons for the decline in bookings were initiated by high inventory levels of
its commodity products at its customers and distributors, followed by an overall
worldwide decline in demand for semiconductors. The Company completed the
integration of its sales force into the Vishay worldwide sales force and expects
that its distribution business, which has been slow in the first half of 1998,
particularly in North America, will improve as a result of this effort. The
Company continued to focus on its major markets in the second quarter by
introducing additional Power MOSFETs optimized for specific applications in
notebook computers and cellular telephones.
Sales of Power IC products increased 30% from the first quarter of
1998, while sales of Power MOSFETs increased 12%. Sales of the Signal Processing
product line decreased by 17%. In comparison to sales for the same quarter in
1997, the Power MOSFET and Signal Processing product lines decreased by 12% and
33%, respectively; Power IC sales increased by 32%
9
<PAGE>
from the prior year. Asia Pacific experienced a 49% revenue increase compared to
the second quarter of 1997. Revenues in North America, Europe, and Japan
declined by 35%, 11%, and 64%, respectively, from the second quarter of 1997.
Gross profit of 30% for the second quarter of 1998 declined by 8% in
comparison to the second quarter of 1997. The decrease in margin is primarily a
result of the substantial price pressures worldwide, especially in Japan, along
with under-utilization of existing manufacturing capacity due to a decline in
demand. After experiencing significant front-end manufacturing capacity
shortages, during 1997 the Company executed its strategy of increasing capacity.
A new 6-inch wafer fabrication facility was started in Itzehoe, Germany, and the
capacity of the existing Santa Clara site was increased. However, this capacity
was increased just as the worldwide slowdown in semiconductor demand impacted
the Company. The net effect of the overall decrease in demand and resulting
increased depreciation and other capacity-related fixed costs has had a
significant adverse impact on gross margins. While the increased capacity is
causing pressure on gross margins in the short-term, management believes that
the Company is now well positioned to respond to customer needs when the
slowdown in the semiconductor market subsides.
Research and development expenses were $3.8 million for the second
quarter of 1998, which marks a decrease of 13% from $4.4 million in the second
quarter of 1997. Research and development expenditures as a percentage of
revenue remained constant at 5% from the same quarter in the previous year. In
light of low production volumes, the throughput of research and development
wafers has been significantly improved which results in shorter cycle times for
new product releases. Therefore the Company will release more new products in
1998 compared to 1997, at overall reduced spending levels.
Selling, marketing, and administration expenses were reduced to $13.1
million for the second quarter of 1998 from $14.9 million for the same quarter
of 1997. Due to cost reduction efforts, spending for selling, marketing, and
administration expenses declined by $3.6 million from the first quarter of 1998.
As a percentage of revenue, this expense category declined from 26% of revenue
for the first quarter of 1998 to 19% of revenue for the second quarter of this
year. Selling, marketing, and administration expenses for 1998 are expected to
further decline as a result of the restructuring plan, initiated in the first
quarter of this year.
The Company incurred a pre-tax restructuring charge of $19.8 million in
the first quarter of 1998. See Note 3 of Notes to Consolidated Financial
Statements for additional details.
Restructuring costs of $10.2 million are included in accrued
liabilities as of June 28, 1998. When fully implemented, the restructuring plan
is expected to reduce the Company's operating costs by approximately $10.0
million per year. In 1998, the Company borrowed $10.0 million from Vishay to
fund part of these restructuring costs.
Income tax expense for the second quarter of 1998 decreased by 55% from
the same quarter of 1997 due to the decrease in earnings before taxes.
On April 1, 1998, Vishay acquired for $16.0 million an
additional 40% interest in Simconix, a back-end manufacturing facility in
Shanghai, China. See Note 6 of Notes to Consolidated Financial Statements for
additional details.
10
<PAGE>
Liquidity and Capital Resources
Cash and cash equivalents and short-term investment with affiliate
increased by $12.7 million from December 31, 1997. The consolidation of Simconix
accounted for $5.8 million of the increase in the cash balance. The Company also
received $14.3 million this quarter from a revolving credit note with Vishay. In
1998, the Company borrowed a total of $30.3 million from Vishay to fund a
portion of the restructuring costs, capital investments as well as the
acquisition of Simconix. Management expects 1998 cash flows from operations and
existing lines of credit with Vishay to be sufficient to fund investment in
capital expenditures and research and development.
Accounts receivable decreased by $15.8 million or 30% from December 31,
1997 primarily due to the decrease in revenues. Revenues for the second quarter
of 1998 were $70.4 million, compared with $90.4 million for the fourth quarter
of 1997.
Net affiliate accounts receivable/payable increased by $1.7 million
from December 31, 1997 mainly due to the timing of cash received from
unconsolidated affiliates.
Inventories increased by $12.0 million or 28% from December 31, 1997
due to the addition of manufacturing capacity, including the leased fabrication
facility in Itzehoe, Germany.
Capital expenditures were $14.7 million in the first six months of
1998, compared to $18.0 million in the first six months of 1997. The
expenditures were related to additions for plant capacity initiated in 1997,
expansion and new technology capability. Driven by the overall market conditions
and reduced growth expectations for 1998, the Company decided during the second
quarter to cancel further capacity expansion which will keep capital
expenditures below 1997 levels.
Current liabilities increased by $12.6 million or 14% from December 31,
1997 mainly due to the restructuring costs relating to the Vishay acquisition.
As of June 28, 1998, $10.2 million of restructuring costs is included in accrued
liabilities.
Although the Company believes that its products and systems are Year
2000 compliant, the Company utilizes third-party equipment and software that may
not be compliant. Many currently installed computer sysytems and software
products are coded to accept only two digit entries in the date code field.
These date code fields will need to accept four digit entries to distinguish
21st century dates from 20th century dates. As a result, software and computer
systems may need to be upgraded or replaced in order to comply with such "Year
2000" requirements. Failure of third party equipment or software to operate
properly with regard to the Year 2000 and thereafter could require the Company
to incur unanticipated expenses to remedy any problem. Furthermore, the
purchasing patterns of customers or potential customers may be affected by Year
2000 issues as companies expend significant resources to correct their current
systems for Year 2000 compliance. These issues could have a material adverse
effect on the Company's business and operating results.
11
<PAGE>
SAFE HARBOR STATEMENT
"Safe Harbor" Statement under the Private Securities Litigation Reform
Act of 1995: With the exception of historical information, the matters discussed
in this Form 10-Q are forward-looking statements that involve risks and
uncertainties including, but not limited to, economic conditions, product demand
and industry capacity, competitive products and pricing, manufacturing
efficiencies, new product development, availability of raw materials and
critical manufacturing equipment, the regulatory and trade environment, and
other risks indicated in previous filings with the Securities and Exchange
Commission.
12
<PAGE>
PART II - OTHER INFORMATION
ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K
The following exhibit is filed herewith:
27 Financial Data Schedule
13
<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.
SILICONIX INCORPORATED
Date: August 12, 1998 By: /s/King Owyang
--------------
King Owyang
President and Chief Executive Officer
By: /s/Jens Meyerhoff
-----------------
Jens Meyerhoff
Principal Financial and Accounting
Officer
14
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-28-1998
<CASH> 31,569
<SECURITIES> 0
<RECEIVABLES> 48,072
<ALLOWANCES> 11,533
<INVENTORY> 54,308
<CURRENT-ASSETS> 161,224
<PP&E> 299,840
<DEPRECIATION> 155,985
<TOTAL-ASSETS> 316,738
<CURRENT-LIABILITIES> 102,170
<BONDS> 0
0
0
<COMMON> 100
<OTHER-SE> 139,957
<TOTAL-LIABILITY-AND-EQUITY> 316,738
<SALES> 135,621
<TOTAL-REVENUES> 135,621
<CGS> 89,419
<TOTAL-COSTS> 89,419
<OTHER-EXPENSES> 59,645
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,282
<INCOME-PRETAX> (14,725)
<INCOME-TAX> 5,153
<INCOME-CONTINUING> (9,572)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (9,572)
<EPS-PRIMARY> (0.96)
<EPS-DILUTED> (0.96)
</TABLE>
