FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 30, 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 No. 0-22416
KENTUCKY ELECTRIC STEEL, INC.
(Exact name of Registrant as specified in its charter)
Delaware 61-
1244541 (State or other jurisdiction of
(I.R.S. Employer incorporation or organization)
Identification
Number)
P. O. Box 3500, Ashland, Kentucky 41105-3500
(Address of principal executive office, Zip Code)
(606) 929-1222
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
The number of shares outstanding of each of the issuer's classes of common
stock, as of May 13, 1996, is as follows:
4,786,599 shares of voting common stock, par value $.01 per share.
<PAGE>
KENTUCKY ELECTRIC STEEL, INC.
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION
Page
Item 1 - Financial Statements
Condensed Balance Sheets ..............................
3
Condensed Statements of Operations ....................
4
Condensed Statements of Cash Flows ....................
5
Notes to Condensed Financial Statements ...............
6-7
Item 2 - Management's Discussion and Analysis of Financial
Condition and Results of Operations .................
8-10
PART II. OTHER INFORMATION
Item 4 - Submission of Matters to a Vote of Security Holders ...
11
Item 6 - Exhibits and Reports on Form 8-K ......................
11
SIGNATURES ...........................................
12
<PAGE>
<TABLE>
PART I - FINANCIAL INFORMATION
KENTUCKY ELECTRIC STEEL, INC.
CONDENSED BALANCE SHEETS
(Dollars in Thousands)
(Unaudited)
<CAPTION> March 30, Sept. 30,
1996 1995
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 184 $ 327
Accounts receivable, less allowance for doubtful
accounts of $470 at March 30, 1996 and $625
at September 30, 1995 13,445 12,928
Insurance claim receivable 2,600 -
Inventories 13,839 18,205
Operating supplies and other current assets 5,819 5,273
Refundable income taxes 893 452
Deferred tax assets 265 193
------- -------
Total current assets 37,045 37,378
------- -------
PROPERTY, PLANT AND EQUIPMENT
Land and buildings 4,275 3,766
Machinery and equipment 27,549 25,980
Construction in progress 6,706 4,093
Less - accumulated depreciation (6,449) (5,673)
------- -------
Net property, plant and equipment 32,081 28,166
------- -------
DEFERRED TAX ASSETS 6,135 6,881
------- -------
OTHER ASSETS 501 200
------- -------
Total assets $ 75,762 $ 72,625
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Advances on line of credit $ 1,187 $ 11,131
Accounts payable 9,272 7,295
Capital expenditure payable 3,625 3,076
Accrued liabilities 3,205 3,713
Current portion of long-term debt 125 1,839
------- -------
Total current liabilities 17,414 27,054
------- -------
LONG-TERM DEBT 20,000 7,287
------- -------
OTHER LIABILITIES 276 187
------- -------
Total liabilities 37,690 34,528
------- -------
SHAREHOLDERS' EQUITY
Preferred stock, $.01 par value, 1,000,000
shares authorized, no shares issued - -
Common stock, $.01 par value, 15,000,000
shares authorized, 4,974,099 shares
issued, respectively 50 50
Additional paid-in capital 15,710 15,710
Less treasury stock - 172,500 and 100,000
shares at cost, respectively (1,408) (869)
Deferred compensation (563) (672)
Retained earnings 24,283 23,878
------- -------
Total shareholders' equity 38,072 38,097
------- -------
Total liabilities and shareholders' equity $ 75,762 $ 72,625
<FN>
See notes to condensed financial statements
</TABLE>
<TABLE>
KENTUCKY ELECTRIC STEEL, INC.
CONDENSED STATEMENTS OF OPERATIONS
(Dollars in Thousands, Except Per Share Data)
(Unaudited)
<CAPTION>
Three Months Ended Six Months Ended
March 30, April 1, March 30, April 1,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
NET SALES $ 24,625 $ 29,260 $ 48,313 $ 55,977
COST OF GOODS SOLD 22,178 24,721 43,290 47,293
------- ------- ------- -------
Gross Profit 2,447 4,539 5,023 8,684
SELLING AND ADMINISTRATIVE EXPENSES 2,024 1,924 3,987 3,841
------- ------- ------- -------
Operating income 423 2,615 1,036 4,843
INTEREST INCOME AND OTHER 14 7 19 27
INTEREST EXPENSE (415) (58) (773) (194)
GAIN ON INVOLUNTARY CONVERSION
OF EQUIPMENT 369 - 369 -
------- ------- ------- -------
Income before income taxes 391 2,564 651 4,676
PROVISION FOR INCOME TAXES 148 941 246 1,753
------- ------- ------- -------
Net income $ 243 $ 1,623 $ 405 $ 2,923
NET INCOME PER COMMON SHARE $ .05 $ .33 $ .08 $ .59
WEIGHTED AVERAGE SHARES OUTSTANDING 4,828,055 4,911,638 4,850,395 4,931,853
<FN>
See notes to condensed financial statements
</TABLE>
<TABLE>
KENTUCKY ELECTRIC STEEL, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
(Unaudited)
<CAPTION>
Six Months Ended
March 30, April 1,
1996 1995
<S> <C> <C>
Cash Flows From Operating Activities:
Net income $ 405 $ 2,923
Adjustments to reconcile net income to net
cash flows from operating activities:
Depreciation and amortization 1,291 525
Gain on involuntary conversion of equipment (369) -
Change in deferred taxes 746 1,046
Change in other (218) (14)
Change in current assets and current
liabilities:
Accounts receivable (517) (3,550)
Insurance claim receivable (2,600) -
Inventories 4,366 (884)
Operating supplies and other
current assets (546) (985)
Deferred tax assets (72) (82)
Accounts payable 1,977 2,822
Accrued liabilities (508) (250)
Accrued income taxes refundable/payable (441) 733
------- -------
Net cash flows from operating activities 3,514 2,284
------- -------
Cash Flows From Investing Activities:
Proceeds from involuntary conversion of equipment 912 -
Capital expenditures (5,634) (10,911)
Increase in capital expenditure payable 549 2,822
------- -------
Net cash flows from investing activities (4,173) (8,089)
------- -------
Cash Flows From Financing Activities:
Net advances (repayments) on line of credit (9,944) 6,135
Repayments on long-term debt (9,001) (857)
Proceeds from long-term debt borrowings 20,000 -
Purchases of treasury stock (539) (692)
------- -------
Net cash flows from financing activities 516 4,586
------- -------
Net decrease in cash and
cash equivalents (143) (1,219)
Cash and Cash Equivalents at Beginning of Period 327 1,500
------- -------
Cash and Cash Equivalents at End of Period $ 184 $ 281
Interest Paid, net of amount capitalized $ 306 $ 135
Income Taxes Paid $ 14 $ 507
<FN>
See notes to condensed financial statements
</TABLE>
NOTES TO CONDENSED FINANCIAL STATEMENTS
KENTUCKY ELECTRIC STEEL, INC
(1) Basis of Presentation
The accompanying unaudited condensed financial statements of
Kentucky Electric Steel, Inc. (the Company) have been prepared in
accordance with generally accepted accounting principles for interim
financial information and 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
management, all adjustments (consisting of normal recurring
adjustments) considered necessary for a fair presentation have been
included. Operating results for the six-month period ended March 30,
1996, are not necessarily indicative of the results that may be
expected for the year ended September 28, 1996. For further
information, refer to the financial statements and footnotes thereto
included in the Company's annual report on Form 10-K for the year ended
September 30, 1995.
Net income per common share is calculated based on 4,828,055 and
4,911,638 weighted average number of common shares outstanding during
the quarters ended March 30, 1996, and April 1, 1995, respectively.
Net income per common share is calculated based on 4,850,395 and
4,931,853 weighted average number of shares outstanding for the six
months ended March 30, 1996 and April 1, 1995, respectively.
(2) Accounting Policies
Fiscal Year End
The Company's fiscal year ends on the last Saturday of September.
The fiscal year normally consists of fifty-two weeks, however, the
fiscal year ended September 30, 1995 had fifty-three weeks. The first
six months of 1996 consists of twenty-six weeks as compared to twenty-
seven weeks for the first six months of 1995.
Reclassifications
Certain reclassifications have been made to prior year income
statement data in order to conform with the fiscal 1996 presentation.
Property, Plant, Equipment and Depreciation
Property, plant and equipment is recorded at cost, less
accumulated depreciation. For financial reporting purposes,
depreciation is provided on the straight-line method over the estimated
useful lives of the assets, generally 3 to 12 years for machinery and
equipment and 15 to 30 years for buildings and improvements.
Depreciation for income tax purposes is computed using accelerated
methods. Expenditures for maintenance and repairs are charged to
expense as incurred. Expenditures for equipment renewals which extend
the useful life of any asset are capitalized.
The Company capitalizes interest costs as part of the historical
cost of constructing major capital assets. Interest costs of $32,000
and $217,000 were capitalized for the quarters ended March 30, 1996 and
April 1, 1995, respectively. Interest costs of $84,000 and $307,000
were capitalized for the six months ended March 30, 1996 and April 1,
1995, respectively.
(3) Inventories
Inventories at March 30, 1996 and September 30, 1995 consist of the
following ($000's):
<TABLE>
<CAPTION>
March 30, September 30,
1996 1995
<S> <C> <C>
Raw materials $ 1,921 $ 3,621
Semi-finished and finished goods 11,918 14,584
Total inventories $ 13,839 $ 18,205
</TABLE>
(4) Insurance Claim Receivable
The Company's melting and casting operations were shut down for
eleven (11) days and the Rolling Mill was shut down for seven (7) days
during the quarter due to a fire at the caster. The fire was the
result of a breakout on the ladle at the caster. The financial
statements include a receivable of $2.6 million which represents the
estimated reimbursement receivable from the insurance carrier for the
amount of recovery for business interruption and the cost to repair and
replace damaged equipment. The accompanying statements of operations
for the quarter and six months ended March 30, 1996 includes $1,688,000
of reimbursement for business interruption in the calculation of cost
of goods sold and a gain on the involuntary conversion of property and
equipment of $369,000 resulting from the destruction of equipment with
a net book value of $543,000 and the related insurance reimbursement of
$912,000.
(5) Commitments and Contingencies
The Company has various commitments for the purchase of materials,
supplies and energy arising in the ordinary course of business.
The Company is subject to various claims, lawsuits and
administrative proceedings arising in the ordinary course of business
with respect to commercial, product liability and other matters, which
seek remedies or damages. The Company believes that any liability that
may ultimately be determined will not have a material effect on its
financial position or results of operations.
The Company generates both hazardous wastes and non-hazardous
wastes which are subject to various governmental regulations.
Estimated costs to be incurred in connection with environmental matters
are accrued when the prospect of incurring costs for testing or
remedial action is deemed probable. The Company is not aware of any
material asserted or unasserted environmental claims against the
Company and no accruals for such matters have been recorded in the
accompanying balance sheets. However, discovery of unknown conditions
could result in the recording of accruals in the periods in which they
become known.
<PAGE>
KENTUCKY ELECTRIC STEEL, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
General. The Company manufactures special bar quality alloy and
carbon steel bar flats to precise customer specifications for sale in a
variety of niche markets. Its primary markets are manufacturers of
leaf-spring suspensions, cold drawn bar converters, flat bed truck
trailers, and steel service centers.
Net Sales. Net sales decreased $4.7 million (15.8%) in the second
quarter of fiscal 1996 to $24.6 million, as compared to $29.3 million
for the second quarter of fiscal 1995. The decrease in net sales is
due to a 15.6% decrease in shipments during the second quarter of
fiscal 1996 from the comparable period for fiscal 1995. The decrease
in shipments is primarily attributable to the effect on production of
the caster fire in February which shut down the melting and casting
operation for eleven (11) days and the rolling mill for seven (7) days.
Shipments were also affected by a softening in demand experienced
during the first part of the quarter. The average net selling price
per ton for the second quarter of fiscal 1996 was approximately the
same as the second quarter of fiscal 1995 even though the product mix
included a greater percentage of higher priced products. However,
price reductions on selected products, in order to remain competitive,
offset the improvements in product mix.
Net sales for the six months ended March 30, 1996 decreased $7.7
million (13.7%) to $48.3 million, as compared to $56.0 million for the
six months ended April 1, 1995. The decrease in net sales is
attributed to shipments decreasing by approximately fifteen percent.
The decrease in shipments was due to customer inventory adjustments,
customer holiday shutdowns, and softening in demand in the first
quarter of fiscal 1996 combined with the loss of production as a result
of the caster fire in the second quarter of fiscal 1996. Due to
improvement in product mix, the average net selling price per ton has
increased slightly for the six months ended March 30, 1996 as compared
to the six months ended April 1, 1995.
Cost of Goods Sold. Cost of goods sold decreased $2.5 million
(10.3%) in the second quarter of fiscal 1996 to $22.2 million, as
compared to $24.7 million for the second quarter of fiscal 1995. As a
percentage of net sales, cost of goods sold increased from 84.5% for
the three months ended April 1, 1995 to 90.1% for the three months
ended March 30, 1996. The increase in cost of goods sold as a
percentage of net sales was primarily due to an increase in conversion
costs and depreciation. The increase in conversion costs was primarily
attributed to lower productivity during the first part of the second
quarter and the effect of the February fire, which has been offset by
the inclusion of the $1.7 million reimbursement from business
interruption in the calculation of cost of goods sold. Although
productivity improved during the second quarter, continued problems
associated with the start up of the new equipment resulted in lower
productivity during the first half of the quarter. The increase in
conversion cost was also related to additional depreciation as a result
of the equipment placed in service during the latter part of the third
fiscal quarter of 1995.
Cost of goods sold for the six months ended March 30, 1996
decreased $4.0 million (8.5%) to $43.3 million as compared to $47.3
million for the six months ended April 1, 1995. As a percentage of net
sales, cost of goods sold increased from 84.5% for the six months ended
April 1, 1995 to 89.6% for the six months ended March 30, 1996. The
increase in cost of goods sold as a percentage of net sales reflects an
increase in conversion costs and depreciation. The increase in
conversion cost was primarily due to lower productivity in the melt
shop in the first quarter of fiscal 1996 and lower productivity during
the first part of the second quarter and the effect of the February
fire as discussed in the preceding paragraph. The problems associated
with the start up of the new equipment negatively impacted productivity
for the first quarter of fiscal 1996 and the first half of the second
quarter of fiscal 1996. The increase in conversion cost was also
related to additional depreciation as a result of the equipment placed
in service during the latter part of the third fiscal quarter of 1995.
Gross Profit. As a result of the above, gross profit for the
second quarter of fiscal 1996 decreased by $2.1 million (46.1%) to $2.4
million from $4.5 million for the second fiscal quarter of 1996. As a
percentage of net sales, gross profit decreased from 15.5% for the
three months ended April 1, 1995 to 9.9% for the three months ended
March 30, 1996.
As a result of the above, gross profit for the six months ended
March 30, 1996 decreased $3.7 million (42.2%) to $5.0 million as
compared to $8.7 million for the six months ended April 1, 1995. As a
percentage of net sales, gross profit decreased from 15.5% for the six
months ended April 1, 1995 to 10.4% for the six months ended March 30,
1996.
Selling and Administrative Expenses. Selling and administrative
expenses include salaries and benefits, corporate overhead, insurance,
sales commissions and other expenses incurred in the executive, sales
and marketing, shipping, personnel, and other administrative
departments. Selling and administrative expenses increased by
approximately $100,000 and $146,000 for the three months and six months
ended March 30, 1996, respectively, as compared to the same periods in
fiscal 1995. These increases in selling and administrative expenses
were primarily the result of a higher provision for uncollectible
accounts and an increase in health benefit costs which have been offset
by a decrease in shipping wages (due to reorganization of the Shipping
Department, in connection with the completion of the capital expansion
plan) and a decrease in incentive compensation (due to the decrease in
pre-tax income). As a percentage of net sales, such expenses increased
from 6.6% for the three months ended April 1, 1995 to 8.2% for the
three months ended March 30, 1996. As a percentage of net sales, such
expenses increased from 6.9% for the six months ended April 1, 1995 to
8.3% for the six months ended March 30, 1996. The increase in selling
and administrative expenses as a percentage of net sales was primarily
attributed to the decrease in shipments, resulting in lower net sales
for the second quarter and first six months of fiscal 1996.
Operating Income. For the reasons described above, operating
income decreased by $2.2 million (83.8%) from $2.6 million in the
second quarter of fiscal 1995 to $.4 million in the second quarter of
fiscal 1996. As a percentage of net sales, operating income decreased
from 8.9% in the second quarter of 1995 to 1.7% in the second quarter
of 1996.
Operating income for the six months ended March 30, 1996 decreased
by $3.8 million (78.6%) to $1.0 million from $4.8 million for the six
months ended April 1, 1995. As a percentage of net sales operating
income decreased from 8.7% for the six months ended April 1, 1995 to
2.1% for the six months ended March 30, 1996.
Interest Expense. Interest expense increased by $357,000 for the
three months ended March 30, 1996 from $58,000 for the second quarter
of fiscal 1995 to $415,000 for the second quarter of fiscal 1996, net
of interest capitalized of $217,000 and $32,000, respectively.
Interest expense for the six months ended March 30, 1996 increased
$579,000 from $194,000 for the six months ended April 1, 1995 to
$773,000 for the six months ended March 30, 1996, net of interest
capitalized of $307,000 and $84,000, respectively. These increases in
interest expense were attributed to the additional debt incurred in
financing Project '94 and other capital expenditures, and the reduction
in capitalized interest due to the completion and start-up of Project
'94.
Gain on Involuntary Conversion of Equipment. As a result of the
caster fire, the Company has recorded a receivable of $912,000 for the
replacement cost of the equipment destroyed which had a net book value
of $543,000. The excess of the replacement cost over the net book
value of the equipment destroyed resulted in a gain of approximately
$369,000.
Net Income. As a result of the above, net income decreased by $1.4
million (85.0%) for the three months ended March 30, 1996 from $1.6
million for the second quarter of fiscal 1995 to $243,000 for the
second quarter of fiscal 1996.
Net income for the six months ended March 30, 1996 decreased $2.5
million (86.1%) from $2.9 million for the six months ended April 1,
1995 to $405,000 for the six months ended March 30, 1996.
Liquidity and Capital Resources.
The cash flows provided from operating activities were $3.5
million for the first six months of fiscal 1996 as compared to $2.3
million for the first six months of fiscal 1995. The first six months
of fiscal 1996 operating cash flows reflect the reduction in raw
material and work in process inventories and the increase in accounts
payable. The cash flows used by investing activities consist of
capital expenditures of $5.6 million and $11.0 million for the first
six months of fiscal 1996 and 1995, respectively. These amounts were
offset by increases in construction expenditures payable of $.5 million
and $2.8 million, respectively. Cash flows from investing activities
for the six months ended March 30, 1996 also include the proceeds from
the involuntary conversion of equipment of $.9 million.
The cash flows from financing activities were $.5 million for the
first six months of fiscal 1996 as compared to $4.6 million for the
first six months of fiscal 1995. The cash flows from financing
activities of $.5 million for fiscal 1996 reflect net repayments of
$10.0 million on the Company's line of credit, $9.0 million repayment
on long-term debt, and $.5 million for purchase of treasury stock;
however, these amounts have been offset with the proceeds of $20.0
million of new long-term debt. The cash flows from financing
activities of $4.6 million for the first six months of fiscal 1995
reflect the $6.1 million of net advances under the Company's line of
credit, offset by $.8 million repayment on long-term debt and $.7
million for purchase of treasury stock.
Working capital at March 30, 1996 was $19.6 million as compared to
$10.3 million at September 30, 1995, and the current ratio was 2.1 to
1.0 as compared to 1.4 to 1.0. The increase in working capital and
current ratio is primarily attributed to the Company refinancing its
debt through the private placement of $20.0 million in unsecured notes,
which require no principal payments for five years. The remaining
proceeds from the issuance were utilized to pay down the Company's bank
credit facility. The change in working capital and current ratio can
also be attributed to the $2.6 million insurance reimbursement
receivable and the reduction in inventories, both of which resulted
from the fire at the caster.
The Company's primary ongoing cash requirements are for the final
installments on Project '94, which expanded the Company's casting,
rolling, and finishing capacity and the $8.0 million Ladle Metallurgy
Project to expand the melting capacity. The two sources for the
Company's liquidity are internally generated funds and its $24.5
million bank credit facility. The Company had $1.2 million in
borrowings outstanding as of March 30, 1996. The Company believes that
the bank credit facility and internally generated funds will be
sufficient to finance the capital expansion projects and for its
ongoing cash needs through the next twelve-month period.
<PAGE>
PART II. - OTHER INFORMATION
ITEM 4. Submission of Matters to a Vote of Security-Holders
The annual meeting of shareholders was held on February 1,
1996. In connection with the meeting, proxies were solicited
pursuant to the Securities Exchange Act. The following are
the voting results on proposals considered and voted upon at
the meeting, all of which were described in the proxy
statement.
1. The nominees for director were elected. The vote was as
follows:
<TABLE>
For Withheld Term Expires
<S> <C> <C> <C>
Clifford R. Borland 4,138,259 27,958 1999
David C. Struve 4,144,609 21,608 1999
</TABLE>
2. The proposal to ratify the Board of Directors'
appointment of Arthur Andersen LLP as the Company's
independent public accountants for the fiscal year ending
September 28, 1996. (For 4,154,109; Against 1,800;
Abstain 10,308)
ITEM 6. Exhibits and Reports on Form 8-K
A) Exhibits
27 - Financial Data Schedule
B) Reports on Form 8-K - None
<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.
DATED: May 13, 1996 KENTUCKY ELECTRIC STEEL, INC.
(Registrant)
William J. Jessie
William J. Jessie, Vice
President,
Secretary, Treasurer, and
Principal Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from
Kentucky Electric Steel, Inc.'s condensed financial statements as of
and for the six month period ended March 30, 1996, included in this
Company's quarterly report on Form 10-Q and is qualified in its
entirety by reference to such condensed financial statements.
</LEGEND>
<CIK> 0000910394
<NAME> KENTUCKY ELECTRIC STEEL, INC.
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-28-1996
<PERIOD-START> OCT-1-1995
<PERIOD-END> MAR-30-1996
<EXCHANGE-RATE> 1
<CASH> 184
<SECURITIES> 0
<RECEIVABLES> 13,915
<ALLOWANCES> 470
<INVENTORY> 13,839
<CURRENT-ASSETS> 37,045
<PP&E> 38,530
<DEPRECIATION> 6,449
<TOTAL-ASSETS> 75,762
<CURRENT-LIABILITIES> 17,414
<BONDS> 20,000
<COMMON> 50
0
0
<OTHER-SE> 38,022
<TOTAL-LIABILITY-AND-EQUITY> 75,762
<SALES> 48,313
<TOTAL-REVENUES> 48,313
<CGS> 43,290
<TOTAL-COSTS> 43,290
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 773
<INCOME-PRETAX> 651
<INCOME-TAX> 246
<INCOME-CONTINUING> 405
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 405
<EPS-PRIMARY> .08
<EPS-DILUTED> .08
</TABLE>
