<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
[X] Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For Quarterly Period Ended June 30, 1998
Commission File Number 0-23282
Natural Microsystems Corporation
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 04-2814586
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(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Number)
100 Crossing Boulevard, Framingham, Massachusetts 01702
- --------------------------------------------------------------------------------
(Address of principal executive offices) (zip code)
(508) 620-9300
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
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 issuer's classes of
common stock, as of the latest practicable date: 10,960,751 shares of Common
Stock, $.01 par value, outstanding at July 31, 1998.
The Index to Exhibits appears on Page 16 Total Number of Pages with Exhibits: 1
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PART I FINANCIAL INFORMATION
PAGE
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<S> <C>
Item 1. Financial Statements and Notes
Condensed Consolidated Balance Sheets 3
Condensed Consolidated Statements of Operations 4
Condensed Consolidated Statements of Cash Flows 5
Consolidated Statements of Comprehensive Income 6
Notes to Consolidated Financial Statements 7 - 10
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 11 - 13
PART II OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 14
</TABLE>
2
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NATURAL MICROSYSTEMS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(IN $000'S)
<TABLE>
<CAPTION>
December 31, June 30,
ASSETS 1997 1998
- ------ --------------- -------------
<S> <C> <C>
Current assets:
Cash $ 6,318 $ 4,593
Marketable securities 26,992 24,490
Accounts receivable, net of allowance for uncollectable
accounts of $641 and $684, respectively 19,519 17,717
Inventories 8,628 9,312
Prepaid expenses and other current assets 2,620 2,998
--------------- -------------
Total current assets 64,077 59,110
Property and equipment, net 9,109 11,566
Other long-term assets 5,636 6,364
Goodwill, net 2,871 4,312
--------------- -------------
$81,693 $81,352
=============== =============
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
Current liabilities:
Accounts payable 5,359 6,646
Accrued expenses and others liabilities 7,855 3,858
Current portion of long-term obligations 94 97
--------------- -------------
Total current liabilities 13,308 10,601
Long-term obligations, less current portion 243 151
Stockholders' equity 68,142 70,600
--------------- -------------
$81,693 $81,352
=============== =============
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements
3
<PAGE>
NATURAL MICROSYSTEMS CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN $000'S EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
For the For the
Three Months Ended Six Months Ended
June 30, June 30,
1997 1998 1997 1998
------------- -------------- ---------- ------------
<S> <C> <C> <C> <C>
Revenues $ 18,058 $ 18,436 $ 33,926 $ 38,443
Cost of revenues 6,317 6,629 11,961 12,695
----------- ----------- ----------- -----------
Gross profit 11,741 11,807 21,965 25,748
Operating expenses:
Selling, general and administrative 5,235 7,164 9,751 13,469
Research and development 3,536 4,612 6,874 9,195
Provision for uncollectable receivable - - - 2,500
----------- ----------- ----------- -----------
Total operating expenses 8,771 11,776 16,625 25,164
----------- ----------- ----------- -----------
Operating income 2,970 31 5,340 584
Other income, net 268 231 577 454
----------- ----------- ----------- -----------
Income before income taxes 3,238 262 5,917 1,038
----------- ----------- ----------- -----------
Income tax expense 1,095 92 1,998 364
Net income $ 2,143 $ 170 $ 3,919 $ 674
=========== =========== =========== ===========
Basic net income per common share $ 0.21 $ 0.02 $ 0.39 $ 0.06
=========== =========== =========== ===========
Weighted average shares outstanding 10,304,470 10,902,995 10,134,196 10,863,397
=========== =========== =========== ===========
Diluted net income per common share $ 0.20 $ 0.01 $ 0.36 $ 0.06
=========== =========== =========== ===========
Weighted average shares outstanding 10,944,213 11,371,691 10,873,836 11,259,568
=========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements
4
<PAGE>
NATURAL MICROSYSTEMS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(IN $000'S)
<TABLE>
<CAPTION>
Six Months
Ended June 30,
1997 1998
--------------- ---------------
<S> <C> <C>
Cash flow from operating activities:
Net income $ 3,919 $ 674
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization 1,334 2,355
Loss on sale of marketable securities (2)
Deferred tax asset 4
Changes in assets and liabilities:
Accounts receivable (4,590) 1,774
Inventories 270 (640)
Prepaid expenses and other assets (827) (1,426)
Income tax receivable (327) 130
Accounts payable 801 1,168
Accrued expenses and other liabilities 1,021 (3,938)
----------- -----------
Cash provided by operating activities 1,605 95
----------- -----------
Cash flow from investing activities:
Additions to property and equipment (5,393) (4,117)
Additions to license agreements (29) (2,040)
Purchases of marketable securities (14,950) (3,813)
Proceeds from the sale of marketable securities 17,683 6,316
Purchase of other assets 23
----------- -----------
Cash used in investing activities (2,689) (3,631)
----------- -----------
Cash flow from financing activities:
Payments of refundable advances (52) (79)
Proceeds from issuance of common stock, net of
Issuance costs 1,752 1,844
Non-statutory stock options 10 3
----------- -----------
Cash provided by financing activities 1,710 1,768
----------- -----------
Effect of exchange rate changes on cash 77 43
Net increase (decrease) in cash and cash equivalents 703 (1,725)
Cash and cash equivalents, beginning of period 6,578 6,318
Cash and cash equivalents, end of period $ 7,281 $ 4,593
=========== ===========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements
5
<PAGE>
NATURAL MICROSYSTEMS CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)
(IN $000'S)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
1997 1998
------------ ----------
<S> <C> <C>
Net Income $3,919 $ 674
Other comprehensive income (loss) items:
Foreign currency translation adjustment (329) (65)
------------ ----------
Comprehensive income $3,590 $ 609
============ ==========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements
6
<PAGE>
NATURAL MICROSYSTEMS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
A. UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The condensed consolidated balance sheet as of June 30, 1998 and the condensed
consolidated statements of income, operations and cash flow for the three month
periods ending June 30, 1998 and 1997 include the accounts of Natural
MicroSystems Corporation and its wholly owned subsidiaries (the "Company").
In the opinion of management, all adjustments necessary to present fairly the
financial position, results of operations and cash flows for all periods
presented have been made. The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the dates of
the financial statements and the reported amounts of revenues and expenses
during the reported periods. Actual results could differ from those estimates.
The operating results for the six month period ended June 30, 1998 are not
necessarily indicative of the operating results to be expected for the full
fiscal year.
The year end condensed balance sheet data was derived from audited financial
statements, but does not include all disclosures required by generally accepted
accounting principles. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. The financial statements
should be read in conjunction with the consolidated financial statements of the
Company as of and for the year ended December 31, 1997.
B. STOCKHOLDERS' EQUITY (IN 000'S)
<TABLE>
<CAPTION>
Common Stock Additional Other
---------------------- Paid-In Retained Equity
Shares Amount Capital Earnings Adjustments Total
---------- ---------- ---------- -------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C>
Balance at december 31, 1997 10,788 $108 $65,203 $2,833 $ (2) $68,142
Exercise of common stock options 151 2 1,273 1,275
Employee stock purchase plan 21 571 571
Grant of non-statutory stock options 3 3
Net income 674 674
Cumulative translation adjustment (65) (65)
---------- ------ ---------- -------- ------------- -----------
Balance at June 30, 1998 10,960 $110 $67,050 $3,507 $(67) $70,600
========== ====== ========== ======== ============= ===========
</TABLE>
7
<PAGE>
C. INDEBTEDNESS
At June 30, 1998, the Company had a $3.0 million bank line of credit through
December 8, 1998, all of which was available. Borrowings under the line of
credit bear interest at the bank's prime rate plus .25%. The Company is subject
to covenants requiring maintenance of certain profitability and equity levels
and leverage and liquidity ratios. At June 30, 1998, the Company was in
compliance with its debt covenants and no borrowings were outstanding under the
line. The Company believes that the net proceeds from its 1996 follow-on public
stock offering, cash flow from operations and funds available under the line of
credit will be sufficient to fund ongoing operations.
At June 30, 1998, the Company had a 2.0 million French franc line of credit with
a bank for its European operations, all of which was available. The Company
also secured a research and development funding grant from a branch of the
French government. This represents an interest-free loan from the French
government repayable from the proceeds of export sales from France. The balance
at June 30, 1998 was $151,000.
8
<PAGE>
D. EARNINGS PER SHARE
The following is a reconciliation of basic to the diluted earning per share
(EPS) computations for net income:
<TABLE>
<CAPTION>
Three months ended June 30, 1998
----------------------------------------------------------
Income Shares Per Share
(In 000's except per share data) (Numerator) (Denominator) Amount
- ---------------------------------------------------- ----------------------------------------------------------
<S> <C> <C> <C>
Basic EPS (income available to all shareholders) $ 170 10,903 $ 0.02
Effect of dilutive securities (stock options) 469
- ---------------------------------------------------- ----------------------------------------------------------
Diluted EPS (income available to common
stockholders + assumed conversions) $ 170 11,372 $ 0.01
==========================================================
Three months ended June 30, 1997
-----------------------------------------------------------
Income Shares Per Share
(Numerator) (Denominator) Amount
- ---------------------------------------------------- -----------------------------------------------------------
Basic EPS (income available to all shareholders) $ 2,143 10,305 $ 0.21
Effect of dilutive securities (stock options) 639
- ---------------------------------------------------- -----------------------------------------------------------
Diluted EPS (income available to common
stockholders + assumed conversions) $ 2,143 10,944 $ 0.20
===========================================================
Six months ended June 30, 1998
----------------------------------------------------------
Income Shares Per Share
(Numerator) (Denominator) Amount
- ---------------------------------------------------- ----------------------------------------------------------
Basic EPS (income available to all shareholders) $ 674 10,863 $ 0.06
Effect of dilutive securities (stock options) 397
- ---------------------------------------------------- ----------------------------------------------------------
Diluted EPS (income available to common
stockholders + assumed conversions) $ 674 11,260 $ 0.06
==========================================================
Six months ended June 30, 1997
-----------------------------------------------------------
Income Shares Per Share
(Numerator) (Denominator) Amount
- ---------------------------------------------------- -----------------------------------------------------------
Basic EPS (income available to all shareholders) $ 3,919 10,134 $ 0.39
Effect of dilutive securities (stock options) 740
- ---------------------------------------------------- -----------------------------------------------------------
Diluted EPS (income available to common
stockholders + assumed conversions) $ 3,919 10,874 $ 0.36
===========================================================
</TABLE>
9
<PAGE>
E. INVENTORIES
Inventories are stated at the lower of cost (principally first-in, first-out) or
market. Inventories as of December 31, 1997 and June 30, 1998 were comprised of
the following:
<TABLE>
<CAPTION>
December 31, June 30,
(In $000's) 1997 1998
-------------------- --------------------
<S> <C> <C>
Raw materials $ 558 $ 785
Work In process 4,277 4,964
Finished goods 3,793 3,563
-------------------- --------------------
$ 8,628 $ 9,312
==================== ====================
</TABLE>
10
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS
Natural MicroSystems Corporation designs, manufactures and markets integrated
hardware and software products which enable its customers to develop and
implement high value telecommunications applications and systems based on open,
standards based, client-server architectures, collectively referred to as Open
Telecommunications(TM).
REVENUES
Revenues of $18.4 million for the three months ended June 30, 1998 increased
2.1% percent from $18.1 million for the three months ended June 30, 1997.
Revenues of $38.4 million for the six months ended June 30, 1998 increased 13.3%
from $33.9 million for the six months ended June 30, 1997. In 1998, compared to
1997 there was an increase in revenue from sales of Fusion, and high port count
AG products, offset by lower revenues from sales of low port count AG products
and VBX products. AG products have supplanted and are expected to continue to
supplant sales of VBX products for higher port count and more sophisticated
applications.
Revenues from customers located outside of North America of $5.4 million for the
three months ended June 30, 1998 decreased 2.0% from $5.5 million for the three
months ended June 30, 1997 and represented 29.3% and 30.1% of total revenues
respectively. Sales remained relatively flat in for all geographic regions. The
Asian economic decline might adversely impact sales in that region for future
periods. Revenues from customers locates ouside of North America of $10.1
million for the six months ended June 30, 1998 decreased 1.0% from $10.2 million
for the six months ended June 30, 1997, and represented 26.2% and 30.0% of total
revenues, respectively.
COST OF REVENUES
Cost of revenues of $6.6 million for the three months ended June 30, 1998
increased 5.0% from $6.3 million for the three months ended June 30, 1997, and
represented 36.0% and 35.0% of total revenues, respectively. The increase is
primarily attributable to increases in personnel related costs within the
services department, compared to relatively flat revenue, partially offset by
improved direct margins on product sales in 1998. Cost of revenues of $12.7
million for the six months ended June 30, 1998 increased 6.1% from $12.0 million
for the six months ended June 30, 1997 and represented 33.0% and 35.3% of total
revenues, respectively. In 1997 the Company had sales to a European customer
with lower margins associated with a system contract.
SELLING, GENERAL AND ADMINISTRATIVE
Selling, general and administrative expenses of $7.2 million for the three
months ended June 30, 1998 increased 36.8% from $5.2 million for the three
months ended June 30, 1997, and represented 38.9% and 29.0% of revenues,
respectively. Selling, general and administrative expenses of $13.5 million for
the six months ended June 30, 1998 increased 38.1% from $9.8 million for the six
months ended June 30, 1997, and represented 35.0% and 28.7% of revenues,
respectively. These increases were due to costs associated with increased
selling activity as well as increased expenditures for marketing, international
operations, and technical support. The Company expects that its selling,
general and administrative expenditures will continue to increase, but may vary
as a percentage of future product revenues in future periods.
RESEARCH AND DEVELOPMENT
Research and development expenditures of $4.6 million for the three months ended
June 30, 1998 increased 30.4% from $3.5 million for the three months ended June
30, 1997 and represented 25.0% and 19.6% of revenues, respectively . Research
and development expenditures of $9.2 million for the six months ended June 30,
1998 increased 33.8% from $6.9 million for the six months ended June 30, 1997
and represented 23.9% and 20.3% of revenues, respectively. The increases were
due to increased personnel and development project related costs for both
periods. The Company expects that its research and development expenditures will
continue to increase, but may vary as a percentage of future product revenues in
future periods.
11
<PAGE>
OTHER INCOME, NET
Other income, net was $231,000 and $268,000, respectively for the three months
ended June 30,1998 and 1997, respectively. Other income, net was $454,000 and
$577,000 for the six months ended June 30, 1998 and 1997, respectively. The
decrease was due to less interest income in 1998 due to lower cash reserves for
investment purposes as well as the investment of cash reserves in tax-free
securities that produce lower yields.
INCOME TAX EXPENSE
Income tax expense was $92,000 and $1.1 million for the three months ended June
30,1998 and 1997, respectively. Income tax expense was $364,000 and $2.0 million
for the six months ended June 30, 1998 and 1997, respectively. Income taxes were
computed based on an effective tax rate which differed from the U. S. federal
statutory rate primarily due to state and foreign income taxes and income tax
credits.
OPERATING AND NET INCOME
As a result of the foregoing, operating income was $31,000 and $2.9 million for
the three months ended June 30, 1998 and 1997, respectively. Net income was
$170,000 and $2.1 million for the same periods, respectively. Operating income
was $584,000 and $5.3 million for the six months ended June 30, 1998 and 1997,
respectively. Net income was $674,000 and $3.9 million for the same periods,
respectively.
LIQUIDITY AND CAPITAL RESOURCES
Cash provided by operations for the six months ended June 30,1998 and 1997 was
$95,000 and $1.6 million respectively. Cash was provided by operations in 1998
due to a reduction in accounts receivable and a reduction in current
liabilities, partially offset by increases in inventory. Cash was provided in
operations in 1997 from increased accounts receivable associated with increased
in revenues, offset by a reduction in inventories and increased accounts
payable.
Cash used in investing activities for the six months ended June 30, 1998 and
1997 was $3.6 million and $2.7 million, respectively. For both periods cash was
used to purchase property and equipment of $4.1 million and $5.4 million
respectively. A significant portion of the property and equipment purchased in
1998 and 1997 was attributable to investments related to the Company's new
headquarters and increased personnel. In 1998 the Company invested $2.0 million
in license agreements to support current and future product offerings.
Cash provided by financing activities for the six months ended June 30, 1998 and
1997 was $1.8 million and $1.7 million, respectively. Cash provided by
financing activities in both periods primarily represent proceeds from issuance
of common stock under the Company's employee stock option and stock purchase
plans of $1.8 million in both periods.
Current assets at June 30, 1998 were $59.1 million, 8.5% less than current
assets of $64.1 million at December 31, 1997. The reduction in current assets
was due primarily to a one-time increase in the provision for doubtful accounts
of $2.5 million on March 9, 1998 and a reduction in accounts receivable before
provision of $3.7 million. Current liabilities at June 30, 1998 were $10.6
million, 20.3% less than current liabilities of $13.3 million at December 31,
1997. Lower incentive compensation related accruals, accounts payable and tax
related accruals totaling $3.7 million accounted for the decrease in liabilities
in 1998.
For U. S. federal income tax purposes the Company has net operating loss
carryforwards available to reduce future income of approximately $6.0 million at
June 30, 1998. These carryforwards expire beginning in 2004. Utilization of net
operating loss carryforwards are subject to an annual limitation of
approximately $1.0 million under Internal Revenue Code section 382.
12
<PAGE>
OTHER
In March 1998, the American Institute of Certified Public Accountants issued
Statement of Position (SOP) 98-1, "Internal Use Software," which provides
guidance on the accounting for the costs of software developed or obtained for
internal use. SOP 98-1 is effective for fiscal years beginning after December
15, 1998. Management does not expect the statements to have a material impact on
its financial position or results of operations.
YEAR 2000
The Company continues to assess its exposure related to the impact of the Year
2000 date issue which is attributable to the fact that many computer programs
use only two digits to identify a year in a date field. The Company's products
and key financial and operational systems are being reviewed and, where
required, detailed plans have been, or are being, developed and implemented on a
schedule intended to permit the Company's computer systems and products to
continue to function properly. The Year 2000 date conversion effort is expected
to increase costs in 1998, 1999 and 2000. The schedule for completion and the
estimated conversion costs are based on management's estimates, which include
assumptions of future events, including items such as availability of qualified
resources. The Company could be adversely impacted by the Year 2000 date issue
if the conversion schedule and cost estimates for its internal systems are not
met or if suppliers, customers and other businesses do not address this issue
successfully. Management continues to assess these risks in order to reduce the
impact on the Company.
CAUTIONARY STATEMENT
When used anywhere in this Form 10-Q and in future filings by the Company with
the Securities and Exchange Commission, in the Company's press releases and in
oral statements made with the approval of an authorized executive officer of the
Company, the words or phrases "will likely result", "the company expects", "will
continue", "is anticipated", "estimated", "project", or "outlook" or similar
expressions (including confirmations by an authorized executive officer of the
Company of any such expressions made by a third party with respect to the
Company) are intended to identify "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995. The Company
wishes to caution readers not to place undue reliance on any such forward-
looking statements, which speak only as of the date made. Such statements are
subject to certain risks and uncertainties that could cause actual results to
differ materially from historical earnings and those presently anticipated or
projected. Such risk factors are set forth in Part I of the Company's annual
report on Form 10-K for the year ended December 31, 1997. The Company
specifically declines any obligation to publicly release the result of any
revisions which may be made to any forward-looking statements to reflect
anticipated or unanticipated events or circumstances occurring after the date of
such statements.
13
<PAGE>
PART II - OTHER INFORMATION
ITEMS 1 - 3
Not applicable.
ITEM 4
Not applicable.
ITEM 5.
Not applicable.
ITEM 6. Exhibits and Reports on Form 8-K.
A. Exhibits
No. 27.1 - Financial Data Schedule
B. Not applicable.
14
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
NATURAL MICROSYSTEMS CORPORATION
Dated: August 7, 1998
By: /s/ Robert P. Schechter
-------------------------------------
Robert P. Schechter
President and Chief Executive Officer
Dated: August 7, 1998 By: /s/ David C. Flynn
-------------------------------------
David C. Flynn
Controller and Chief Accounting Officer
15
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NATURAL MICROSYSTEMS CORPORATION
EXHIBIT INDEX
PAGE
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No. 27.1 Financial Data Schedule 17
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SUMMARY CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM QUARTERLY
UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 6-MOS
<FISCAL-YEAR-END> DEC-31-1998 DEC-31-1998
<PERIOD-START> APR-1-1998 JAN-01-1998
<PERIOD-END> JUN-30-1998 JUN-30-1998
<CASH> 0 4,593
<SECURITIES> 0 24,490
<RECEIVABLES> 0 18,401
<ALLOWANCES> 0 684
<INVENTORY> 0 9,312
<CURRENT-ASSETS> 0 59,110
<PP&E> 0 18,223
<DEPRECIATION> 0 6,657
<TOTAL-ASSETS> 0 81,352
<CURRENT-LIABILITIES> 0 10,601
<BONDS> 0 0
0 0
0 0
<COMMON> 0 110
<OTHER-SE> 0 0
<TOTAL-LIABILITY-AND-EQUITY> 0 81,352
<SALES> 18,436 38,443
<TOTAL-REVENUES> 18,436 38,443
<CGS> 6,629 12,695
<TOTAL-COSTS> 6,629 12,695
<OTHER-EXPENSES> 0 25,164
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 0 0
<INCOME-PRETAX> 262 1,038
<INCOME-TAX> 92 364
<INCOME-CONTINUING> 170 674
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 170 674
<EPS-PRIMARY> 0.02 0.06
<EPS-DILUTED> 0.01 0.06
</TABLE>
