<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
- --- SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 29, 1996
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 0-21794
-------
GENZYME TRANSGENICS CORPORATION
-----------------------------------------------------
(Exact name of registrant as specified in its charter)
Massachusetts 04-3186494
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Five Mountain Road, Framingham, Massachusetts 01701
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(508) 872-8400
- --------------------------------------------------------------------------------
Registrant's telephone number, including area code
Indicate by check 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.
Class Outstanding at October 28, 1996
----- -------------------------------
Common Stock, $0.01 par value 17,073,157
<PAGE> 2
GENZYME TRANSGENICS CORPORATION
TABLE OF CONTENTS
PAGE #
------
PART 1. FINANCIAL INFORMATION
ITEM 1 - Unaudited Condensed Consolidated Financial Statements
Condensed Consolidated Balance Sheets as of
September 29, 1996 and December 31, 1995............................... 3
Condensed Consolidated Statements of Operations for
the Nine Months Ended September 29, 1996 and October 1, 1995........... 4
Condensed Consolidated Statements of Cash Flows for
the Nine Months Ended September 29, 1996
and October 1, 1995.................................................... 5
Notes to Unaudited Condensed Consolidated
Financial Statements................................................... 6
ITEM 2
Management's Discussion and Analysis of
Financial Condition and Results of Operations.......................... 8
PART II. OTHER INFORMATION
ITEM 6
Exhibits and Reports on Form 8-K....................................... 12
SIGNATURES............................................................... 13
Exhibit Index............................................................ 14
2
<PAGE> 3
PART I: FINANCIAL INFORMATION
ITEM 1 Unaudited Condensed Consolidated Financial Statements
------------------------------------------------------------
GENZYME TRANSGENICS CORPORATION
<TABLE>
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED, DOLLARS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<CAPTION>
SEPTEMBER 29, DECEMBER 31,
1996 1995
------------- ------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 3,484 $ 4,400
Restricted cash 475 1,425
Accounts receivable, net 8,442 4,035
Unbilled contract revenue 7,536 5,895
Other current assets 1,334 809
-------- --------
Total current assets 21,271 16,564
Net property, plant and equipment 18,523 17,776
Costs in excess of net assets acquired, net 21,219 21,856
Investment in Joint Venture 455 639
Other assets 1,222 1,207
-------- --------
$ 62,690 $ 58,042
-------- --------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 2,154 $ 3,229
Accounts payable - Genzyme Corporation 2,819 1,140
Revolving line of credit - 6,000
Accrued expenses 6,499 6,962
Advance payments 5,683 4,690
Current portion of long-term debt 2,765 1,554
-------- --------
Total current liabilities 19,920 23,575
Long-term debt, net of current portion 4,288 5,725
Deferred lease obligation 481 402
Other liabilities 677 1,052
-------- --------
Total liabilities 25,366 30,754
Stockholders' equity:
Preferred stock, $.01 par value, authorized 5,000,000 shares, none
outstanding; - -
Common stock, $.01 par value; 24,000,000 shares
authorized; 17,073,157 and 13,151,113 shares issued and outstanding
at September 29, 1996 and December 31, 1995, respectively 171 132
Capital in excess of par value 52,675 37,351
Accumulated deficit (15,512) (10,185)
Accumulated translation adjustments (10) (10)
-------- --------
Total stockholders' equity 37,324 27,288
-------- --------
$ 62,690 $ 58,042
======== ========
</TABLE>
The accompanying notes are an integral part of these
financial statements.
3
<PAGE> 4
GENZYME TRANSGENICS CORPORATION
<TABLE>
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED, IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<CAPTION>
Three months ended Nine months ended
------------------ -----------------
September 29, October 1, September 29, October 1,
1996 1995 1996 1995
------- ------- ------- -------
Revenues
<S> <C> <C> <C> <C>
Services $ 9,857 $ 7,153 $28,033 $18,327
Research and development 2,598 1,616 6,146 3,941
------- ------- ------- -------
12,455 8,769 34,179 22,268
Costs and operating expenses:
Services 8,579 6,528 24,356 17,069
Research and development 2,274 1,527 6,373 4,633
Selling, general and administrative 2,748 2,487 8,165 6,472
Equity in loss of Joint Venture 50 144 184 498
------- ------- ------- -------
13,651 10,686 39,078 28,672
------- ------- ------- -------
Loss from continuing operations: (1,196) (1,917) (4,899) (6,404)
Other income (expense)
Interest income 26 -- 37 28
Interest expense (238) (314) (911) (806)
Other income 220 -- 538 356
------- ------- ------- -------
Loss from continuing operations before
income taxes (1,188) (2,231) (5,235) (6,826)
Provision (benefit) for income taxes -- (2,350) 92 (2,316)
------- ------- ------- -------
Income (loss) from continuing operations $(1,188) $ 119 $(5,327) $(4,510)
Discontinued operations
Income/(loss) from discontinued clinical
operations (less applicable
income taxes of $113 and $239) -- (169) -- 474
Gain on disposal of clinical operations -- 1,159 -- 1,159
------- ------- ------- -------
Net income (loss) $(1,188) $ 1,109 $(5,327) $(2,877)
======= ======= ======= -------
Income (loss) from continuing operations
per common share $ (0.08) $ (0.17) $ (0.37) $ (0.56)
======= ======= ======= =======
Primary net income (loss) per
common share $ (0.08) $ 0.08 $ (0.38) $ (0.23)
======= ======= ======= =======
Average number of common shares used
in primary calculation $15,629 13,417 14,028 12,297
======= ======= ======= =======
Fully-diluted income (loss) from continuing
operations per common share $ (0.08) $ (0.16) $ (0.37) $ (0.56)
======= ======= ======= =======
Fully-diluted net income (loss) per
common share $ (0.08) $ 0.08 $ (0.38) $ (0.23)
======= ======= ======= =======
Average number of common shares used
in fully diluted calculation 15,629 13,537 14,028 12,297
======= ======= ======= =======
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE> 5
GENZYME TRANSGENICS CORPORATION
<TABLE>
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED, DOLLARS IN THOUSANDS)
<CAPTION>
NINE MONTHS ENDED
-----------------
SEPTEMBER 29, OCTOBER 1,
1996 1995
--------- --------
<S> <C> <C>
Cash flows for operating activities:
Net loss $(5,327) $(2,877)
Adjustments to reconcile net loss to net
cash used by operating activities:
Depreciation and amortization 2,735 2,614
Loss on sale of investments -- 14
Adjustment to goodwill (233) 1.537
Deferred tax provision -- 175
Gain on disposal of discontinued operations -- (1,159)
Gain from utilization of operating loss carryforward -- (2,350)
Loss on sale of property, plant and equipment -- 30
Equity in loss of Joint Venture 184 499
Changes in assets and liabilities, net of effects from purchase of
subsidiaries:
Accounts receivable and unbilled contract revenue (6,048) (2,847)
Inventory and other current assets (525) (147)
Decrease in net assets held for sale -- 781
Accounts payable (1,075) (2,296)
Accounts payable - Genzyme Corporation 1,679 803
Accrued income taxes -- (407)
Other accrued expenses (197) (2,056)
Advance payments 993 (115)
------- -------
Net cash used by operating activities (7,814) (7,801)
Cash flows for investing activities:
Purchase of property, plant and equipment (2,569) (2,847)
Proceeds from sales and maturities of
short-term investments -- 2,217
Cash paid for acquisition of TSI Corporation -- (314)
Cash paid for acquisition of Biodevelopment Laboratories -- (356)
Proceeds from sale of discontinued operations -- 6,443
Restricted cash 950 --
Other assets (58) (108)
------- -------
Net cash provided by (used in) investing activities (1,677) 5,035
Cash flows from financing activities:
Net proceeds from the issuance of common stock 13,424 4,404
Proceeds from long-term debt 1,142 1,153
Repayment of long-term debt (1,368) (2,503)
Net borrowings under revolving line of credit (6,000) 1,151
Investment and advances by Genzyme Corporation 1,673 1,857
Deposits on capital leases -- (229)
Other long-term liabilities (296) (454)
------- -------
Net cash provided by financing activities 8,575 5,379
------- -------
Net increase (decrease) in cash and cash equivalents (916) 2,613
Effect of exchange rates on cash -- (5)
Cash and cash equivalents at beginning of the period 4,400 816
------- -------
Cash and cash equivalents at end of period $ 3,484 $ 3,424
======= =======
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE> 6
GENZYME TRANSGENICS CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
1. Basis of Presentation:
---------------------
These unaudited condensed consolidated financial statements should be read
in conjunction with the Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1995 and the financial statements and footnotes
included therein. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted pursuant to
Securities and Exchange Commission rules and regulations.
Per share information is based upon the weighted average number of shares
of Common Stock outstanding during the period.
In the third quarter of 1995, the Company disposed of its clinical units
and, accordingly, the results of operations for the clinical units are
reflected, net of tax, as discontinued operations for the third quarter of
1995.
The financial statements for the three months ended September 29, 1996 and
October 1, 1995 are unaudited but include, in management's opinion, all
adjustments (consisting only of normally recurring accruals) necessary for
a fair presentation of the results for the periods presented.
2. Accounting Policies:
-------------------
The accounting policies underlying the quarterly financial statements are
those set forth in Note 2 of the financial statements included in the
Company's Annual Report on Form 10-K for the year ended December 31, 1995.
3. Convertible Debt and Development Funding Agreement:
--------------------------------------------------
On March 28, 1996, the Company entered into a Convertible Debt and
Development Funding Agreement (the "Agreement") with Genzyme under which
Genzyme agreed to fund development costs of the Antithrombin III ("AT-III")
program through March 31, 1997 and to provide a revolving line of credit to
the Company in the amount of $10 million through March 31, 1998. Under the
Agreement, GTC granted Genzyme co-marketing rights to AT-III in all
territories other than Asia subject to negotiation and execution of a
development and supply agreement between the parties prior to March 31,
1997. The line of credit carries an interest rate of 7% and is convertible
into the Company's common stock (at the average market price for the 20-day
period ending two days before any conversion), at GTC's option to maintain
GTC's tangible net worth at
6
<PAGE> 7
the end of each quarter at a level between $4.0 million and $4.2 million,
or by Genzyme at any time for up to the full amount outstanding.
As of September 29, 1996, there was none outstanding and $8.3 million was
available under the revolving line of credit, excluding an aggregate of
$1,673,000 of debt previously converted into 26,244 and 193,321 shares of
the Company's common stock at a price of $5.7156 and $7.8781 per share,
respectively. For purposes of determining availability under the line of
credit, principal amounts converted into Common Stock are deemed
outstanding.
4. Public Offering:
---------------
On August 5, 1996, the Company issued 3,000,000 shares of common stock at
$4.00 per share in an underwritten public offering pursuant to an effective
registration statement under the Securities Act of 1933. The Company
received gross proceeds of $11,454,000 in the offering, $1.4 million of
which was used to repay the outstanding indebtedness to Genzyme under the
Agreement. Genzyme purchased 900,000 shares in the offering, after which
Genzyme owned 45.3% of the Company's outstanding common stock.
On August 21, 1996, the Company issued 450,000 shares of the over-allotment
at $4.00 per share. The Company received gross proceeds of $1,683,000 in
proceeds from the sale of the over-allotment shares, after which Genzyme
owns approximately 44.8% of the Company's outstanding common stock.
7
<PAGE> 8
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Three-months ended September 29, 1996 and October 1, 1995
Total revenues for the three-month period ending September 29, 1996 were
$12,455,000, compared with $8,769,000 in the comparable period of 1995, an
increase of $3,686,000 or 42%. Service revenues increased to $9,857,000 in the
third quarter of 1996 from $7,153,000 in the third quarter of 1995, an increase
of $2,704,000 or 37.8%. Research and development revenue increased to $2,598,000
in the third quarter of 1996 from $1,616,000 in the third quarter of 1995, an
increase of $982,000 or 60.8%, due primarily to an increase in activity and
revenues related to the funding received from Genzyme Corporation ("Genzyme") in
the development of the Company's lead compound, transgenic antithrombin III
("AT-III").
Costs of services for the third quarter of 1996 were $8,579,000 compared with
$6,528,000 in the comparable period of 1995, an increase of $2,051,000 or 31.4%,
due to the increased service revenues. Research and development expenses
increased to $2,274,000 in the third quarter of 1996 from $1,527,000 in the
third quarter of 1995, an increase of $747,000 or 48.9%. The increase was due to
increased activity in the research programs.
Gross profit for the third quarter of 1996 amounted to $1,602,000 versus
$714,000 in the third quarter of 1995. Gross profit on services for the third
quarter of 1996 was $1,278,000 or 13% of service revenue versus $625,000 or 8.7%
in the third quarter of 1995. The majority of the improvement on services
margins was due to increased services revenues and a shift to higher margin
services.
Selling, general and administrative ("SG&A") expenses increased to $2,748,000 in
the third quarter of 1996 from $2,487,000 in the third quarter of 1995, an
increase of $261,000 or 10.5%. The increase was due to increased marketing
efforts of the Company.
Interest income increased to $26,000 in the third quarter of 1996, from none in
the third quarter of 1995, due to the investment of funds from the Company's
secondary public offering (see Note 4). Interest expense decreased to $238,000
in the third quarter of 1996 from $314,000 in the third quarter of 1995. Of the
1996 total, $183,000 represents interest expense incurred under a line of credit
with a commercial bank and other financial obligations relating to the testing
operations and $14,000 represents interest expense incurred under the
Convertible Debt and Development Funding Agreement.
8
<PAGE> 9
The Company recognized $50,000 of Joint Venture losses during the third quarter
of 1996 compared to $144,000 in the comparable period of 1995. The decrease was
due to reduced funding from the Joint Venture.
The Company realized no loss from its discontinued clinical operations in the
third quarter of 1996 compared to $169,000 in the third quarter of 1995. The
1995 loss represents the results of operations (net of tax) for the third
quarter of 1995 for G.D.R.U. Limited ("GDRU") and Health and Sciences Research,
Incorporated. ("HSRI"). These operations were acquired by the Company as part of
the TSI acquisition in October 1994. GDRU was sold effective as of September 1,
1995 and the HSRI operation was shutdown in August 1995.
The Company realized no gain on disposal of clinical operations in the third
quarter of 1996 compared to $1,159,000 in the third quarter of 1995. The 1995
gain represents proceeds from the sale of GDRU effective as of September 1,
1995.
The Company realized no tax benefit in the third quarter of 1996 compared to
$2,350,000 the third quarter of 1995. The 1995 tax benefit represents a benefit
from the sale of GDRU effective as of September 1, 1995.
Nine-months ended September 29, 1996 and October 1, 1995
Total revenues for the nine-month period ending September 29, 1996 were
$34,179,000 compared with $22,268,000 in the comparable period of 1995, an
increase of $11,911,000 or 53.5%. Service revenues increased to $28,033,000
during the first nine months of 1996 from $18,327,000 in the comparable period
of 1995, an increase of $9,706,000 or 53.0%. Of the 1996 figure, $1,764,000
represents increased service revenue derived from the operations of
BioDevelopment Laboratories, Inc. ("BDL"), which was acquired in July 1995.
Exclusive of the BDL operations, service revenues increased 43.3%. Research and
development revenue increased to $6,146,000 during the first nine months of 1996
from $3,941,000 in the comparable period of 1995, an increase of $2,205,000 or
56.0%, due primarily to an increase in activity and revenues related to the
funding received from Genzyme Corporation in the development of the Company's
lead compound, AT-III.
Costs of services during the first nine months of 1996 were $24,356,000 compared
with $17,069,000 in the comparable period of 1995, an increase of $7,287,000 or
42.7%. Of the increase, $1,511,000 represents cost of services derived from the
operations of BDL. Exclusive of the BDL operations, cost of services increased
$5,776,000 or 33.8%. Research and development expenses increased to $6,373,000
during the first nine months of 1996 from $4,633,000 in the comparable period of
1995, an increase of $1,740,000 or 37.6%. The increase is due to increased
activity in the research programs.
9
<PAGE> 10
Gross profit during the first nine months of 1996 amounted to $3,450,000 versus
a loss of $566,000 in the comparable period of 1995. Gross profit on services
during the first nine months of 1996 was $3,677,000 or 13.1% of service revenue
versus $1,258,000 or 6.9% in the comparable period of 1995. The improvement in
gross profits was due to increased revenues and a shift to higher margin
services.
SG&A expenses increased to $8,165,000 during the first nine months of 1996 from
$6,472,000 in the comparable period of 1995, an increase of $1,693,000 or 26.2%.
Of the increase, $270,000 represents increased SG&A expenses attributable to the
acquisition of BDL, including $212,000 of goodwill amortization. Exclusive of
BDL, SG&A expense increased by $1,423,000 or 22.0%.
Interest income increased to $37,000 during the first nine months of 1996, from
$28,000 in the comparable period of 1995, due to the investment of funds from
the Company's secondary public offering (see Note 4). Interest expense increased
to $911,000 during the first nine months of 1996 from $806,000 in the comparable
period of 1995. Of the 1996 total, $714,000 represents interest expense incurred
under a line of credit with a commercial bank and other financial obligations
relating to the testing operations and $61,000 represents interest expense
incurred under the Convertible Debt and Development Funding Agreement with
Genzyme.
The Company recognized $184,000 of Joint Venture losses during the first nine
months of 1996 compared to $498,000 in the comparable period of 1995. The
decrease was due to reduced funding from the Joint Venture.
The Company realized no income from its discontinued clinical operations in
during the first nine months of 1996 compared to $474,000 in the comparable
period of 1995. The 1995 income represents the results of operations (net of
tax) for the first quarter of 1995 for GDRU and HSRI. These operations were
acquired by the Company as part of the TSI acquisition in October 1994. GDRU was
sold effective as of September 1, 1995 and the HSRI operation was shutdown in
August 1995.
The Company realized no gain on disposal of clinical operations in the first
nine months of 1996 compared to $1,159,000 in the comparable period of 1995. The
1995 gain represents the proceeds from the sale of GDRU effective as of
September 1, 1995.
The Company realized no tax benefit during the first nine months of 1996
compared to $2,316,000 in the comparable period of 1995. The 1995 tax benefit
represents a benefit from the sale of GDRU effective as of September 1, 1995.
LIQUIDITY AND CAPITAL RESOURCES
The Company had cash, and cash equivalents of $3,959,000 at September 29, 1996.
During the first nine months of 1996, the Company had a $900,000 net decrease in
10
<PAGE> 11
cash; $7.8 million of cash was used in operations (due primarily to the net loss
of $5.3 million and an increase in net assets of $5.2 million offset by $2.7
million of non-cash charges), $2.6 million was invested in capital equipment,
$6.0 million was used to pay down the revolving line of credit and $1.4 million
was used to pay down long-term debt. Sources of funds during the period included
$13.4 million from the Company's secondary public offering, $1.7 million in
advances under the Convertible Debt and Development Funding Agreement with
Genzyme (see Note 3), $950,000 of proceeds from the sale of GDRU which were
released from escrow during the period and $1.1 million in proceeds from
long-term debt.
The Company had working capital of $1.4 million at September 29, 1996 compared
to a deficit of $7.0 million at December 31, 1995. As of September 29, 1996 the
Company had $6,000,000 available under its operating line of credit, $8,327,000
available under the Convertible Debt and Development Agreement (see Note 3), and
$858,000 available under a capital lease line. Under the Company's current
operating plan, existing cash balances, along with funds available under the
bank line, the Convertible Debt and Development Agreement and the proceeds from
the secondary public offering, are expected to be sufficient to fund the Company
through the end of 1997.
Management's current expectations regarding the sufficiency of the Company's
cash resources are forward-looking statements and the Company's cash
requirements may vary materially from such expectations. Such forward-looking
statements are dependent on several factors, including the results of TSI's
existing business, the ability of the Company to enter into any transgenic
research and development collaborations and the terms of such collaborations,
the results of research and development and preclinical and clinical testing,
competitive and technological advances and regulatory requirements. If the
Company experiences increased losses, the Company may have to seek additional
financing through collaborative arrangements or from public or private sales of
its securities, including equity securities. There can be no assurance that
additional funding will be available on terms acceptable to the Company, if at
all. If additional financing cannot be obtained on acceptable terms, to continue
its operations the Company could be forced to delay, scale back or eliminate
certain of its research and development programs or to enter into license
agreements with third parties for the commercialization of technologies or
products that the Company would otherwise undertake itself.
11
<PAGE> 12
GENZYME TRANSGENICS CORPORATION
FORM 10-Q, SEPTEMBER 29, 1996
PART II. OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
--------
27 Financial Data Schedule
(b) Reports on Form 8-K.
-------------------
None.
12
<PAGE> 13
GENZYME TRANSGENICS CORPORATION
FORM 10-Q
SEPTEMBER 29, 1996
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 hereunto duly authorized.
Date: November 8, 1996 GENZYME TRANSGENICS CORPORATION
BY: /s/ John B. Green
----------------------------
John B. Green
Duly Authorized Officer,
Vice President and
Chief Financial Officer
13
<PAGE> 14
EXHIBIT INDEX
-------------
Exhibit No. Description Page No.
- ----------- ----------- --------
27 Financial Data Schedule 15
14
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-29-1996
<PERIOD-END> SEP-29-1996
<CASH> 3,959
<SECURITIES> 0
<RECEIVABLES> 8,666
<ALLOWANCES> 224
<INVENTORY> 607
<CURRENT-ASSETS> 21,271
<PP&E> 21,727
<DEPRECIATION> 3,204
<TOTAL-ASSETS> 62,690
<CURRENT-LIABILITIES> 19,920
<BONDS> 4,288
<COMMON> 171
0
0
<OTHER-SE> 37,153
<TOTAL-LIABILITY-AND-EQUITY> 62,690
<SALES> 34,179
<TOTAL-REVENUES> 34,179
<CGS> 30,729
<TOTAL-COSTS> 39,078
<OTHER-EXPENSES> (575)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 911
<INCOME-PRETAX> (5,235)
<INCOME-TAX> 92
<INCOME-CONTINUING> (5,327)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (5,327)
<EPS-PRIMARY> (.38)
<EPS-DILUTED> (.38)
</TABLE>
