<PAGE>
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 March 31, 1999
or
/ / Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
Commission File Number: 0-23278
Brazil Fast Food Corp.
(Exact name of registrant as specified in its charter)
Delaware 13-3688737
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Av. Brasil, 6431, CEP 21040-360, Rio de Janeiro, Brazil
(Address of principal executive offices)
011-55-21-564-6452
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. /X/ Yes / / No
Applicable only to Issuers Involved in Bankruptcy
Proceeding During the Preceding Five Years:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act 1934 subsequent to the distribution of securities under a plan
confirmed by a court. / / Yes / / No
Applicable Only to Corporate Issuers:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
12,933,638 shares of Common Stock at May 14, 1999
<PAGE>
Part 1 - Financial Information
Item 1. Financial Statements
The condensed financial statements included herein have been prepared by
Brazil Fast Food Corp. (the "Company"), without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission. While 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 such rules and regulations, the Company believes that the
disclosures made herein are adequate to make the information presented not
misleading.
<PAGE>
BRAZIL FAST FOOD CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts)
================================================================================
ASSETS
------
<TABLE>
<CAPTION>
March 31, 1999 December 31, 1998
-------------- -----------------
(Unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents R$ 515 R$ 817
Accounts receivable, net of allowance for doubtful
accounts of R$187 1,849 2,146
Inventories 518 660
Prepaid expenses and other current assets 1,095 545
--------- ---------
TOTAL CURRENT ASSETS 3,977 4,168
PROPERTY AND EQUIPMENT, NET 22,227 22,587
DEFERRED CHARGES, NET 11,971 12,162
OTHER RECEIVABLES AND OTHER ASSETS 2,740 2,715
--------- ---------
TOTAL ASSETS R$ 40,915 R$ 41,632
--------- ---------
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
Notes payable R$ 3,957 R$ 4,565
Accounts payable and accrued expenses 4,098 3,937
Payroll and related accruals 3,102 2,397
Taxes, other than income taxes 3,394 2,355
Deferred income 866 866
Other 423 237
--------- ---------
TOTAL CURRENT LIABILITIES 15,840 14,357
NOTES PAYABLE, less current portion 7,056 5,194
DEFERRED INCOME, less current portion 1,856 2,084
--------- ---------
TOTAL LIABILITIES 24,752 21,635
--------- ---------
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Preferred stock, $.01 par value, 5,000 shares
authorized; no shares issued - -
Common stock, $.0001 par value, 40,000,000
shares authorized; and 12,933,638 shares
issued and outstanding at March 31, 1999 and
December 31, 1998, respectively 1 1
Additional paid-in capital 46,226 46,226
Deficit (29,647) (25,902)
Accumulated comprehensive loss (417) (328)
--------- ---------
TOTAL SHAREHOLDERS' EQUITY 16,163 19,997
--------- ---------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY R$ 40,915 R$ 41,632
--------- ---------
</TABLE>
See Accompanying Notes to Consolidated Financial Statements.
3
<PAGE>
BRAZIL FAST FOOD CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share amounts)
(Unaudited)
================================================================================
<TABLE>
<CAPTION>
For the Three Months
Ended March 31,
--------------------------------------------
1999 1998
---------------- ---------------
<S> <C> <C>
NET OPERATING REVENUES:
Restaurant sales R$ 14,384 R$ 18,381
Franchise income 621 433
Other income 206 195
------------- -------------
TOTAL NET OPERATING REVENUES 15,211 19,009
------------- -------------
COSTS AND EXPENSES:
Cost of restaurant sales 5,513 6,670
Restaurant payroll and other employee benefits 3,365 4,213
Restaurant occupancy and other expenses 1,722 1,979
Depreciation and amortization 777 1,060
Other operating expenses 2,217 2,828
Selling expenses 653 637
General and administrative expenses 1,227 2,426
------------- -------------
TOTAL COSTS AND EXPENSES 15,474 19,813
------------- -------------
(LOSS) FROM OPERATIONS (263) (804)
INTEREST (EXPENSE) - NET (1,083) (404)
FOREIGN EXCHANGE LOSS (2,399) -
------------- -------------
NET (LOSS) (3,745) (1,208)
------------- -------------
OTHER COMPREHENSIVE LOSS:
Foreign currency translation adjustment (89) (39)
------------- -------------
COMPREHENSIVE LOSS R$ (3,834) R$ (1,247)
============= ============
BASIC NET (LOSS) PER COMMON SHARE R$ (.29) R$ (.10)
============= ============
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING - BASIC 12,933,638 12,310,998
============= ============
</TABLE>
See Accompanying Notes to Consolidated Financial Statements.
4
<PAGE>
BRAZIL FAST FOOD CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 1999
(in thousands, except share amounts)
(Unaudited)
================================================================================
<TABLE>
Common Stock Additional
---------------------------- Paid-In
Shares Par Value Capital (Deficit)
---------- ----------- ------------- ------------
<S> <C> <C> <C> <C>
Balance, January 1, 1999 12,933,638 R$ 1 R$ 46,226 R$ (25,902)
Net loss - - - (3,745)
Cumulative translation
adjustment - - - -
---------- ---------- ------------ ------------
Balance, March 31, 1999 12,933,638 R$ 1 R$ 46,226 R$ (29,647)
========== ========== ============ ============
<CAPTION>
Cumulative
Translation
Adjustment Total
---------------- ---------------
<S> <C> <C>
Balance, January 1, 1999 R$ (328) R$ 19,997
Net loss - (3,745)
Cumulative translation
adjustment (89) (89)
---------- -----------
Balance, March 31, 1999 R$ (417) R$ 16,163
---------- -----------
</TABLE>
See Accompanying Notes to Consolidated Financial Statements.
5
<PAGE>
BRAZIL FAST FOOD CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands, except share amounts)
(Unaudited)
================================================================================
<TABLE>
<CAPTION>
For the Three Months
Ended March 31,
--------------------------------
1999 1998
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) R$ (3,745) R$ (1,208)
Adjustments to reconcile net
(loss) to net cash provided by
(used in) operating activities:
Depreciation and amortization 778 1,060
Changes in operating assets and liabilities:
(Increase) Decrease in:
Accounts receivable 297 536
Inventories 142 189
Other current assets (550) (225)
Other assets (25) (6)
Increase (Decrease) in:
Accounts payable and accrued expenses 161 (1,416)
Payroll and related accruals 705 193
Taxes, other than income taxes 1,039 (167)
Deferred income (228) (221)
Other current liabilities 186 17
--------- ---------
NET CASH (USED IN)
OPERATING ACTIVITIES (1,240) (1,248)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Capital expenditures (228) (272)
--------- ---------
NET CASH (USED IN) INVESTING ACTIVITIES (228) (272)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings under lines of credit 1,255 859
Proceeds from exercise of options - 23
--------- ---------
NET CASH PROVIDED BY FINANCING ACTIVITIES 1,255 882
--------- ---------
EFFECT OF FOREIGN EXCHANGE RATES (89) (40)
--------- ---------
NET (DECREASE) IN CASH AND CASH EQUIVALENTS (302) (678)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 817 1,522
--------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD R$ 515 R$ 844
========== =========
</TABLE>
See Accompanying Notes to Consolidated Financial Statements.
6
<PAGE>
BRAZIL FAST FOOD CORP. AND SUBSIDIARIES
SELECTED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share amounts)
(Unaudited)
================================================================================
NOTE 1 - FINANCIAL STATEMENT PRESENTATION
The accompanying financial statements have been prepared by Brazil Fast
Food Corp. (the "Company"), without audit. In the opinion of
management, all adjustments (which include only normal recurring
adjustments) necessary to present fairly the financial position,
results of operations and cash flows at March 31, 1999 and for all
periods presented have been made. The results of operations for the
period ended March 31, 1999 are not necessarily indicative of the
operating results for a full year. Unless otherwise specified all
reference in these financial statements to (i ) "Reais", or "R$" are to
the Brazilian Real (singular), or to Brazilian Reais (plural), the
legal currency of Brazil, and (ii ) "U.S. Dollars" or "S" are to United
States' dollars.
Certain information and footnote disclosures prepared in accordance
with general accepted accounting principles and normally included in
the financial statements have been condensed or omitted. It is
suggested that these financial statements be read in conjunction with
the consolidated financial statements and notes included in the
Company's Annual Report on Form 10-K for the year ended December 31,
1998.
Through June 30, 1997 the consolidated financial statements have been
indexed and expressed in currency of constant purchasing power by using
a monthly index derived from the Indice Geral de Precos-Mercado
("IGP-M"). Since the implementation of the Real Plan in June 1994, the
Brazilian economy has experienced a declining rate of inflation with a
cumulative inflation rate for the three-year period from July 1994 to
June 1997, as measured by the IGP-M of 54%. Based on the foregoing,
management determined that Brazil ceased to be considered a
hyperinflationary economy, as defined in Statement of Financial
Accounting Standards ("SFAS") No. 52, and from July 1, 1997 no longer
indexed its financial statements for constant currency purchasing
power.
NOTE 2 - MANAGEMENT PLANS REGARDING GOING CONCERN
Since the acquisition on Venbo by the Company in 1996, the Company has
sustained net losses totaling approximately R$29.6 million. To date,
the Company has been dependent upon its initial capital, additional
equity and debt financing to fund its operating losses and capital
expansion. Currently, the Company has no debt financing available under
its current credit lines, other than the ability to finance certain
acquisitions of property and equipment.
Management plans to address its immediate and future cash flow needs by
focusing on a number of areas including: the sale of Company-owned
stores; reduction of expenses, including head count reductions; the
expansion of its franchisee base, which would generate additional cash
flows from royalties and franchise fees without significant capital
expenditure; the introduction of new programs and menu expansion to
meet the wants of the consumer. In order to act on these plans and
sustain current operations, the Company is dependent upon the continued
forbearance of its creditors, as well as additional financing.
7
<PAGE>
BRAZIL FAST FOOD CORP. AND SUBSIDIARIES
SELECTED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share amounts)
(Unaudited)
================================================================================
NOTE 2 - MANAGEMENT PLANS REGARDING GOING CONCERN (cont'd)
There can be no assurance that management's plans will be realized, or
that additional financing will be available to the Company when needed,
or at terms that are desirable. Furthermore, there can be no assurance
that the Company will continue to receive the forbearance of its
creditors, or that it will locate suitable new franchisees, or
desirable locations for new franchisees to open stores. The Company's
ability to further reduce expenses and head count is directly impacted
by its need to maintain and infrastructure to support its current and
future chain of locations. The Company's ability to remarket
Company-owned stores to franchisees, and to generate cash flows from
such activities, is impacted by the ability to locate suitable buyers
with the interest and capital to compete such transactions, and the
time to complete such sales. Additionally, the Company's ability to
achieve its plans if further impacted by the instability of the
economic environment in Brazil, which has a direct impact on the desire
and ability of consumers to visit fast food outlets. The Company is
also dependent upon the continued employment of key personnel. These
factors, among other, raise substantial doubt about the Company's
ability to continue as a going concern.
NOTE 3 - RECLASSIFICATIONS
Certain reclassifications have been made to the 1998 financial
statements to conform with the current period presentation.
8
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF RESULTS OF OPERATIONS AND LIQUIDITY
AND CAPITAL RESOURCES
RESULTS OF OPERATIONS
Introduction
The world financial market disruptions that were initiated by the Asian
financial crisis in late 1997 and exacerbated by the near-collapse of the
Russian economy in mid 1998 ultimately spread to Brazil in late 1998. Bank
interest rates surged upward beyond 35% per annum, while interest rates on
consumer credit transactions rose to in excess of 8% per month. Unemployment
rose substantially, particularly in cities such as Rio de Janeiro and Sao Paulo,
as businesses attempted to cope with curtailed credit facilities and reduced
economic growth. After several years of relative stability, the Brazilian
currency was devalued in January 1999. All of these events led to a significant
slowdown in retail traffic.
Restaurant Sales
Net restaurant sales for Company-owned stores were R$ 14,384,000 and R$
18,381,000 for the three months ended March 31, 1999 and 1998, respectively.
Same stores sales declined approximately 10% when compared quarter to quarter.
In addition to the macroeconomic factors described above, the
approximately 21% decrease in first quarter 1999 revenues is attributable to the
decrease in the number of Company owned retail outlets from 89 at March 31, 1998
to 67 at March 31, 1999, being the net effect of the closure of four existing
outlets, the opening of two new outlets and the sale of 20 outlets to
franchisees. This reflects implementation of the Company's strategy to limit its
direct operations to highly profitable outlets, and to focus its future growth
on developing and expanding its franchise network.
The decrease in sales was partially offset by an overall 2% increase in
selling prices.
Franchise Income
Franchise income was R$ 621,000 and R$ 433,000 for the three months
ended March 31, 1999 and 1998, respectively. The increase of 43% was principally
attributable to the expansion of franchised locations, which grew from 64 units
at March 31, 1998 to 96 units at March 31, 1999.
The growth in the number of franchisees resulted in the Company's
receipt of both increased initial franchise fees and increased royalty income.
The decrease in average franchise income was attributable in part to
the opening of new outlets with lower sales levels than those previously in
operation. A number of these outlets are located in smaller cities or were
opened as kiosks in locations in close proximity to other Bob's stores.
Other Income
Other income was R$ 206,000 and R$ 195,000 for the three months ended
March 31, 1999 and 1998, respectively. Other income, which is mainly derived
from suppliers pursuant to license and exclusivity agreements, remained at a
relatively constant level from quarter to quarter.
COST OF RESTAURANT SALES
Cost of restaurant sales expressed as a percentage of net operating
revenues were 36.2% and 35.1% for the three months ended March 31, 1999 and
1998, respectively.
RESTAURANT PAYROLL AND OTHER EMPLOYEE BENEFITS
Restaurant payroll and other employee benefits expressed as a
percentage of net operating revenues decreased from 22.2% in the quarter ended
March 31, 1998 to 22.1% in the quarter ended March 31, 1999.
RESTAURANT OCCUPANCY COSTS AND OTHER EXPENSES
Restaurant Occupancy Costs and Other Expenses expressed as a percentage
of net operating revenues were approximately 11.3% and 10.4% for the three
months ended March 31, 1999 and 1998, respectively.
9
<PAGE>
Other Operating Expenses
Other operating expenses expressed as a percentage of net operating
revenues were approximately 14.6% and 14.9% for the three months ended March 31,
1999 and 1998, respectively. The decrease from quarter to quarter is due to
reductions and non-renewals of professional service contracts covering such
tasks as repair, maintenance and money collection.
Selling Expenses
Selling expenses as a percentage of net operating revenues were 4.3%
and 3.3% for the three months ended March 31, 1999 and 1998, respectively.
The increase from quarter to quarter reflects a change in the
correlation of such expenses to the Company's sales levels.
General and Administrative Expenses
General and administrative expenses expressed as a percentage of net
operating revenues were approximately 8.1% and 12.8% for the three months ended
March 31, 1999 and 1998, respectively. The reduction of the general and
administrative expense level is mainly due to:
. a total headcount reduction of 13 administrative employee
(including 2 senior managers and 3 managers)
. restructuring of the Company's middle management, including the
outsourcing of some departments in order to reduce administrative
charges
. termination of an accounting service agreement in September 1998
with a total net saving of approximately R$ 100,000 per month
. relocation of the Company's executive and principal administrative
offices to a Company-owned facility in July 1998
Interest Income and Expense
Net interest expense expressed as a percentage of net operating
revenues were approximately (7.1%) and (2.1%) for the three months ended March
31, 1999 and 1998, respectively. Net interest expense increased primarily due to
interest rate increases and an increase in the Company's level of indebtedness.
Foreign Exchange Loss
Foreign exchange loss of R$ 2,399,000 for the three months ended March
31, 1999 was primarily due to the devaluation of the Brazilian Reais on the
Company's debt which is indexed to the U.S. dollar.
LIQUIDITY AND CAPITAL RESOURCES
Since March 19, 1996, the Company has funded its operating losses of
R$29,647,000 and made acquisitions of businesses and capital improvements
(including store remodeling) by using cash remaining at the closing of its
acquisition of Vembo, by borrowing funds from various sources and private
placements of securities. As of March 31, 1999, the Company had cash on hand of
R$515,000 and a working capital deficiency of R$11,863,000.
The Company's capital requirements are primarily for expansion of its
retail operations. Currently, five of the Company's stores are in owned
facilities and all the others are in leased facilities. For the quarter ended
March 31, 1999, the Company's EBITDA was R$514,000. During the same period, the
Company's average cost to open a store approximated R$300,000 to
10
<PAGE>
R$500,000, including leasehold improvements, equipment and beginning inventory,
as well as expenses for store design, site selection, lease negotiation,
construction supervision and obtaining permits. The Company currently estimated
that capital expenditures for fiscal 1999 will approximate R$1,000,000. During
1999, the Company intends to focus its efforts on expanding both the number of
its franchisees and its franchised outlets, neither of which are expected to
involve significant capital expenditures by the Company.
In the first quarter of 1999, the Company had net cash used in
operating activities of R$1,240,000 and had net cash used in investing
activities of R$228,000. The primary use of cash for investing activities was
for capital expenditures related to the Company's retail store expansion.
Management plans to address its immediate and future cash flow needs
include focusing on a number of areas including
. the sale of Company-owned stores
. reduction of expenses, including head count reductions
. the expansion of its franchisee base, which may be expected to
generate additional cash flows from royalties and franchise
fees without significant capital expenditure
. the introduction of new programs and menu expansions to meet
consumer wishes
In order to act on these plans and sustain current operations, the
Company is dependent upon the continued forbearance of its creditors, as well as
additional financing.
There can be no assurance that management's plans will be realized, or
that additional financing will be available to the Company when needed, or at
terms that are desirable. Furthermore, there can be no assurance that the
Company will continue to receive the forbearance of its creditors, or that it
will locate suitable new franchisees, or desirable locations for new franchisees
to open stores. The Company's ability to further reduce expenses and head count
is directly impacted by its need to maintain an infrastructure to support its
current and future changing of locations. The Company's ability to re-market
Company-owned stores to franchisees, and to generate cash flows from such
activities, is impacted by the ability to locate suitable buyers with the
interest and capital to complete such transactions, and the time to complete
such sales. Additionally, the Company's ability to achieve its plans is further
impacted by the instability of the economic environment in Brazil, which has a
direct impact on the desire and ability of consumers to visit fast food outlets.
The Company is also dependent upon the continued employment of key personnel.
These factors, among others, raise substantial doubt about the Company's ability
to continue as a going concern.
11
<PAGE>
YEAR 2000
The Company has performed a review of its Year 2000 preparedness
relative to its products and systems, its accounting software and its computer
hardware. The Company believes that it will not incur material costs in
connection with becoming Year 2000 compliant. In addition, the Company has
received communications from its significant third party vendors and service
providers stating that they are generally on target to become Year 2000
compliant in 1999 if they have not already done so. There can be no assurance
that these third party vendors and service providers will complete their own
Year 2000 compliant projects in a timely manner and that failure to do so would
not have an adverse impact on the Company's business.
QUANTITATIVE AND QUALITATIVE INFORMATION ABOUT MARKET RISK
The Company does not engage in trading market risk sensitive instruments
and does not purchase hedging instruments or "other than trading" instruments
that are likely to expose the Company to market risk, whether interest rate,
foreign currency exchange, commodity price or equity price risk. The Company has
issued no debt instruments, entered into no forward or future contracts,
purchased no options and entered into no swaps. The Company's primary market
risk exposure is that of interest rate risk. A change in Brazilian interest
rates would affect the rate at which the Company could borrow funds under its
several credit facilities with Brazilian banks and financial instruments.
FORWARD-LOOKING STATEMENTS
Forward-looking statements in this report, including without limitation
statements relating to the Company's plans, strategies, objectives,
expectations, intentions and adequacy of resources, are made pursuant to the
safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
Investors are cautioned that such forward-looking statements involve risks and
uncertainties, including those risk factors set forth in the Company's periodic
filings made with the Securities and Exchange Commission, most recently in its
Annual Report on Form 10-K for the year ended December 31, 1998. Investors are
urged to read such periodic reports.
12
<PAGE>
PART II - Other Information
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit 27 - Financial Data Schedule
(b) None
13
<PAGE>
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this Report, as amended, to be signed on its behalf
by the undersigned thereunto duly authorized.
Brazil Fast Food Corp.
(registrant)
Dated: May 14, 1999
By: /s/ Peter van Voorst Vader
-----------------------------------
Peter van Voorst Vader
Chief Executive Officer
(Principal Executive Officer)
By: /s/ Carlos Henrique da Silva Rego
-----------------------------------
Carlos Henrique da Silva Rego
Chief Financial Officer
(Principal Financial and
Accounting Officer)
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> MAR-31-1999
<CASH> 515
<SECURITIES> 0
<RECEIVABLES> 2,036
<ALLOWANCES> 187
<INVENTORY> 518
<CURRENT-ASSETS> 3,976
<PP&E> 29,306
<DEPRECIATION> 7,079
<TOTAL-ASSETS> 40,915
<CURRENT-LIABILITIES> 15,840
<BONDS> 7,056
0
0
<COMMON> 1
<OTHER-SE> 16,162
<TOTAL-LIABILITY-AND-EQUITY> 40,915
<SALES> 14,384
<TOTAL-REVENUES> 15,211
<CGS> 5,513
<TOTAL-COSTS> 15,474
<OTHER-EXPENSES> 2,399
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,083
<INCOME-PRETAX> (3,745)
<INCOME-TAX> 0
<INCOME-CONTINUING> (3,745)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,745)
<EPS-PRIMARY> (.29)
<EPS-DILUTED> (.29)
</TABLE>
