SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended: March 31, 1998
Commission file number: 1-12840
CSL LIGHTING MANUFACTURING, INC.
(Exact name of registrant as specified in its charter)
Delaware 95-4463033
(State of incorporation) (I.R.S. employer identification No.)
27615 Avenue Hopkins, Valencia, California 91355-3447
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including Area Code: 805-257-4155
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 |_|
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: 13,564,991 shares of common
stock, $.01 par value, as of May 11, 1998.
<PAGE>
CSL LIGHTING MANUFACTURING, INC.
INDEX
PART I. - FINANCIAL INFORMATION PAGE
----
Item 1. Financial Statements
Condensed Balance Sheets at
December 31, 1997 and
March 31, 1998 (Unaudited).........................................3 - 4
Condensed Statements of Operations
for the three months ended
March 31, 1997 (Unaudited) and
March 31, 1998 (Unaudited).............................................5
Condensed Statements of Cash Flows
for the three months ended March 31, 1997 (Unaudited)
and March 31, 1998 (Unaudited).........................................6
Notes to Unaudited Condensed Financial Statements..................7 - 8
Item 2. Management's Discussion and Analysis
of Financial Condition and Results
of Operations.....................................................9 - 13
PART II - OTHER INFORMATION...................................................13
SIGNATURES....................................................................14
2
<PAGE>
CSL LIGHTING MANUFACTURING, INC.
CONDENSED BALANCE SHEETS
ASSETS
DECEMBER 31, MARCH 31,
1997 1998
---------- ----------
(Unaudited)
CURRENT ASSETS:
Cash $ 152,000 $ 45,000
Accounts receivable, net of
allowance for doubtful
accounts of $194,000 at
December 31, 1997, and
$188,000 at March 31, 1998 2,228,000 2,029,000
Inventories 4,346,000 4,253,000
Other current assets 578,000 481,000
---------- ----------
7,304,000 6,808,000
---------- ----------
PROPERTY AND EQUIPMENT, at cost,
net of accumulated depreciation and
amortization of $1,696,000 at December 31,
1997 and $1,806,000 at March 31, 1998 1,365,000 1,258,000
---------- ----------
OTHER ASSETS 116,000 121,000
---------- ----------
$8,785,000 $8,187,000
========== ==========
The accompanying notes are an integral part of these condensed balance sheets
- 3 -
<PAGE>
CSL LIGHTING MANUFACTURING, INC.
CONDENSED BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' EQUITY
DECEMBER 31, MARCH 31,
1997 1998
------------ ------------
(Unaudited)
CURRENT LIABILITIES:
Current portion of long - term debt $ 2,483,000 $ 2,133,000
Current portion of notes payable
to stockholders 78,000 78,000
Accounts payable 1,038,000 870,000
Accrued expenses 712,000 608,000
------------ ------------
4,311,000 3,689,000
------------ ------------
LONG - TERM LIABILITIES:
Long - term debt, net of current portion 119,000 119,000
Subordinated convertible notes 1,525,000 1,525,000
Deferred rent 206,000 201,000
------------ ------------
1,850,000 1,845,000
------------ ------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred stock, $.01 par value:
Authorized - 1,000,000 shares
Issued and Outstanding - none -- --
Common stock, $.01 par value:
Authorized - 30,000,000 shares
Issued -
14,067,000 shares at December 31, 1997
and March 31, 1998
Outstanding -
13,552,000 shares at December 31, 1997
and March 31, 1998 136,000 136,000
Additional paid-in-capital 16,075,000 16,075,000
Less - Shares held in treasury (1,218,000) (1,218,000)
Deferred compensation (510,000) (494,000)
Retained deficit (11,859,000) (11,846,000)
------------ ------------
2,624,000 2,653,000
------------ ------------
$ 8,785,000 $ 8,187,000
============ ============
The accompanying notes are an integral part of these condensed balance sheets
- 4 -
<PAGE>
CSL LIGHTING MANUFACTURING, INC.
CONDENSED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31,
(UNAUDITED)
1997 1998
------------ ------------
NET SALES $ 3,198,000 $ 3,528,000
COST OF GOODS SOLD 1,831,000 2,052,000
------------ ------------
1,367,000 1,476,000
------------ ------------
OPERATING EXPENSES:
Selling 769,000 696,000
General and administrative 746,000 647,000
------------ ------------
1,515,000 1,343,000
------------ ------------
Income (loss) from operations (148,000) 133,000
------------ ------------
OTHER EXPENSE:
Interest expense - financing obligation (71,000) (84,000)
Interest expense - conversion discount
and additional stock conversion bonus
for convertible notes (175,000) (35,000)
------------ ------------
(246,000) (119,000)
------------ ------------
Income (loss) before provision
for income taxes (394,000) 14,000
PROVISION FOR INCOME TAXES 1,000 1,000
------------ ------------
NET INCOME (LOSS) $ (395,000) $ 13,000
============ ============
WEIGHTED AVERAGE NUMBER OF SHARES
OF COMMON STOCK OUTSTANDING - BASIC
AND DILUTED 8,525,354 13,552,000
============ ============
NET INCOME (LOSS)
PER COMMON SHARE - BASIC $ (0.05) $ 0.00
============ ============
The accompanying notes are an integral part of these condensed financial
statements
- 5 -
<PAGE>
CSL LIGHTING MANUFACTURING, INC.
CONDENSED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31,
(UNAUDITED)
<TABLE>
<CAPTION>
1997 1998
----------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (loss) $ (395,000) $ 13,000
Adjustments to reconcile net income (loss) to
net cash provided by (used in) operating activities:
Deferred compensation 16,000 16,000
Depreciation and amortization 153,000 130,000
Provision for doubtful accounts (123,000) 15,000
Interest expense associated with fixed
conversion discounts and additional stock bonus 144,000 --
Increase (decrease) in assets:
Accounts receivable (145,000) 184,000
Inventories 361,000 93,000
Other (185,000) 79,000
Decrease in liabilities:
Accounts payable (615,000) (168,000)
Accrued expenses (2,000) (104,000)
Deferred rent (1,000) (5,000)
----------- ---------
Net cash provided by (used in) operating activities (792,000) 253,000
----------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (26,000) --
Other assets 1,000 (10,000)
----------- ---------
Net cash used in investing activities (25,000) (10,000)
----------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Additions to long-term borrowings 201,000 --
Repayments of long-term debt -- (350,000)
Proceeds from issuance of subordinated debt 1,000,000 --
Costs associated with registration statements (13,000) --
----------- ---------
Net cash provided by (used in) financing activities 1,188,000 (350,000)
----------- ---------
NET INCREASE (DECREASE) IN CASH 371,000 (107,000)
CASH, beginning of period 7,000 152,000
----------- ---------
CASH, end of period $ 378,000 $ 45,000
=========== =========
</TABLE>
The accompanying notes are an integral part of these condensed financial
statements
- 6 -
<PAGE>
CSL LIGHTING MANUFACTURING, INC.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The accompanying unaudited condensed financial statements have been prepared in
accordance with the requirements of Form 10-QSB and, therefore, do not include
all information and footnotes which would be presented were such financial
statements prepared in accordance with generally accepted accounting principles.
These statements should be read in conjunction with the Company's Annual report
on Form 10-KSB which contain audited financial information as of December 31,
1997 and 1996. In the opinion of management, these interim financial statements,
when read in conjunction with Management's Discussion and Analysis contained in
this report, reflect all adjustments necessary for a fair presentation of the
financial position and results of operations for the periods presented. The
results of operations and cash flows for such periods are not necessarily
indicative of results to be expected for the full year.
Certain prior year financial information has been reclassified to conform to
current year presentation.
2. WEIGHTED AVERAGE NUMBER OF SHARES
Net income or loss per share is based upon the weighted average number of shares
outstanding during the period in accordance with SFAS 128 "Earnings Per Share".
For the three months ended March 31, 1997 and 1998 stock options were not
included as their effect would be anti-dilutive.
3. INVENTORIES
Inventories include costs of materials, labor and manufacturing overhead, and
are stated at the lower of cost (weighted average) or market and consist of the
following at December 31, 1997 and March 31, 1998:
December 31, March 31,
1997 1998
------------ ---------
Raw Material $ 1,042,000 $ 1,002,000
Finished Goods 3.304,000 3,251,000
----------- -----------
$ 4,346,000 $ 4,253,000
=========== ===========
4. INCOME TAXES
Under FASB Statement No. 109, Accounting for Income Taxes, deferred tax assets
may be recognized for temporary differences that will result in deductible
amounts in future periods and for loss carry-forwards. A valuation allowance is
recognized if, based on the weight of available evidence, it is more likely than
not that some portion or all of the deferred tax asset will not be realized.
Based on the Company's operating history, and inception to date accumulated
deficit, all of the Company's deferred tax assets are offset by a valuation
allowance.
The current provision for income taxes for the three months ended March 31, 1998
consists of the minimum state tax.
7
<PAGE>
5. STATEMENTS OF CASH FLOWS
Supplemental cash flows disclosures at March 31, 1997 and 1998 are as follows:
1997 1998
---- ----
Interest paid $ 67,000 $ 80,000
======== ========
Income taxes paid $ 1,000 $ 1,000
======== ========
The Company incurred the following non-cash transactions for the three months
ended March 31, 1997:
Write off of subordinated debt accrued interest canceled in connection
with the conversion of subordinated debt to common stock of $86,000;
Write off of subordinated debt issuance costs in connection with the
conversion of subordinated debt to common stock of $217,000;
Reclassification of other long term asset costs to property, plant and
equipment of $164,000;
The Company converted $2,651,000 of subordinated debt to common stock.
There were no non-cash transactions in the first quarter of 1998.
6. DEBT
Bank Debt
At March 31, 1998 the Company had an outstanding balance of $2,111,000 on its
bank line of credit and term loan. The line of credit and term loan bears
interest at 11.25 percent and 11.5 percent, respectively, and is due in October
1998. The Company is of the opinion that its current lender will refinance its
debt under the similar terms that are in place as of March 31, 1998. However,
there can be no assurance that the Company will be able to refinance its line of
credit or term debt on terms acceptable to the Company or at all.
Subordinated Convertible Notes
During 1996 and 1997, the Company raised operating capital through the placement
of six different series of Subordinated Convertible Notes bearing interest at
rates ranging from six to twelve percent. Each series could be converted into
common stock commencing 90 days after issuance at discounted conversion prices
based on 75 or 80 percent of the average bid price for the five days preceding
the notice of conversion.
As of March 31, 1998 the company had three series of Subordinated Convertible
Notes outstanding totaling $1,525,000. During the first quarter of 1998 no
subordinated convertible notes were converted to common stock. Interest rates
for these notes range from seven to twelve percent.
The twelve percent Subordinated Convertible Note of $325,000 outstanding at
March 31, 1998 became due and payable on November 27, 1997. The Company has
advised the debt holder that the $325,000 of debt is subordinate to the
Company's line of credit and term financing with its bank.
8
<PAGE>
Item 2 - Management's Discussion and Analysis of Financial Conditions and
Results of Operations:
Certain statements made in this form 10 - QSB are "forward looking statements
(within the meaning of the Private Securities Litigation Reform Act of 1996)
regarding the plans and objectives of management for future operations. Such
statements involve known and unknown risks, uncertainties and other factors that
may cause actual results, performance or achievements of the Company to be
materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. The forward-looking
statements included herein are based on current expectations that involve
numerous risks and uncertainties. The Company's plans and objectives are based,
in part, on assumptions involving the continued expansion of business.
Assumptions relating to the foregoing involve judgments with respect to, among
other things, future economic, competitive and market conditions and future
business decisions, all of which are difficult or impossible to predict
accurately and many of which are beyond the control of the Company. Although the
Company believes that its assumptions underlying the forward looking statements
are reasonable, any of the assumptions could prove inaccurate and, therefore,
there can be no assurance that the forward looking statements included in this
report will prove to be accurate. In light of the significant uncertainties
inherent in the forward-looking statements included herein, particularly in view
of the Company's operations, the inclusion of such information should not be
regarded as a representation by the Company or any other person that the
objectives and plans of the Company will be achieved.
Overview:
The Company's strategy is to exploit new markets for its product offerings and
maximize the efficiencies of its manufacturing and distribution network on a
worldwide basis. In furtherance of this strategy the Company expanded its
operations to include a presence in Asia, Europe and Africa. In addition, the
Company also developed overseas distributor relations with foreign entities.
These joint venture distribution agreements are exclusive as to certain
geographic areas and require minimum purchase commitments. Theses minimum
purchase committments vary depending upon the size of the market and the length
of the exclusive arrangement. To date the minimum purchase requirements have
ranged from $100,000 to $1,000,000 and the period of exclusivity has ranged from
one to two years. The Company currently has overseas joint venture and
distribution agreements in China, Hong Kong, Singapore, the Philippines,
Malaysia, Vietnam, The Sultanate of Oman, Morocco, Indonesia and Taiwan. The
Company maintains an office, showroom and staff in Singapore to manage these
joint venture and distribution arrangements.
During 1997, Management began a cost cutting program to reduce its operating
expenses. These cost cutting measures included the reduction of salaries, the
consolidation of certain employee responsibilities along with limiting travel,
and entertainment. Management continues to analyze its overhead and make
adjustments as warranted.
Going Concern Consideration
The Company has suffered recurring losses from operations and had a retained
deficit at March 31, 1998 of $11,846,000 that raises substantial doubt about the
Company's ability to continue as a going concern. In addition, the Company is
out of compliance with a NASDAQ listing requirement. For continued listing on
the NASDAQ SmallCap Market, a company among other criteria, must now have at
least $2,000,000 of total net tangible assets (or $35,000,000 of market
capitalization or $500,000 in net income in two of the last three years),
500,000 shares in the Public Float, a market value of its public float of
$1,000,000 and a minimum bid price of $1.00 per share. While at March 31, 1998
the Company met the other requirements for continued listing on the NASDAQ
9
<PAGE>
SmallCap Market, the Company did not meet the minimum bid requirement. The
Company may not meet this requirement in the near future. Accordingly, it
appears that the Company's common stock may be dropped from the Nasdaq SmallCap
Market.
Management has evaluated its current operations and has focused the Company's
efforts and developed plans to generate operating income and sustain the
Company's operations through fiscal 1998. Management's plans include the
following:
o The Company plans to expand its existing markets worldwide. As discussed,
management believes that the development of distribution relationships
will support the Company's growth effort in these worldwide markets.
o The Company is currently in the process of exploring a strategic
partnership and/or a synergistic merger.
o The Company will continue to evaluate its costs and reduce expenditures as
warranted.
o The Company will seek to raise additional capital as necessary.
There can be no assurance that the Company's expansion efforts, development of
distribution relationships, merger with a strategic partner or efforts to raise
additional capital will be successful or will enable the Company to meet its
current operating needs. In addition, there can be no assurance that the
Company's products will be successful in its foreign markets or that the Company
will be able to produce and distribute products in sufficient quantities or at
sufficient price levels to make its expansion effort profitable.
Sales
Sales increased by $330,000 or 10.4% from $3,198,000 for the three months ended
March 31, 1997, to $3,528,000 for the three months ended March 31, 1998. The
increase in sales for the three months ended March 31, 1998 over the three
months ended March 31, 1997 is attributable to Management's focus on domestic
sales.
Gross Profit
Gross profit increased by $109,000 or 8.0% from $1,367,000 for the three months
ended March 31, 1997 to $1,476,000 for the three months ended March 31, 1998.
Gross profit as a percentage of net sales decreased 0.9% from 42.8% for the
three months ended March 31, 1997, to 41.9% for the three months ended March 31,
1998. The decrease in margin as a percentage of sales is attributable to an
increase in material expense for the quarter. The dollar increase in gross
profit is attributable to the Company's increased sales volume.
Selling Expense
Selling expenses decreased by $73,000 or 9.5% from $769,000 for the three months
ended March 31, 1997 to $696,000 for the three months ended March 31, 1998.
Selling expense as a percentage of net sales decreased 4.3% from 24.1% for the
three months ended March 31, 1997 to 19.8% for the three months ended March 31,
1998.
The decrease in selling expense as a percentage of sales and dollars for the
three months ended March 31, 1997 and 1998 of 4.3% and $73,000, respectively, is
attributable to (i) reduced expenditures for the Company's foreign operations,
primarily in Shanghai China, (ii) reduced commissions, and (iii) the utilization
of in-house design personnel to reduce royalties generated on certain products.
10
<PAGE>
General and Administrative Expenses
General and administrative expenses decreased by $99,000 or 13.3% from $746,000
for the three months ended March 31, 1997 to $647,000 for the three months ended
March 31, 1998. General and administrative expense as a percentage of net sales
decreased 5.0% from 23.4% for the three months ended March 31, 1997 to 18.4% for
the three months ended March 31, 1998.
The decrease in general and administrative expenses as a percentage of sales and
dollars for the three months ended March 31, 1997 and 1998 of 5% and $99,000,
respectively, is attributable to reductions in employee levels and salaries,
insurance premiums, overseas travel, and public relations costs. Decreases in
general and administrative costs were partially offset by increases in legal
fees.
Other Expense
Other expense as a percentage of net sales for the three months ended March 31,
1997 and 1998 were 7.7% and 3.4%, respectively. For the three months ended March
31, 1997 and 1998, other expense were $246,000 and $119,000, respectively. The
decrease in other expense as a percentage of net sales and dollars of 4.4% and
$127,000, respectively, is primarily due to the Company, in the first quarter of
1997, recognizing $144,000 of interest expense from the conversion of 6%
subordinated convertible notes to common stock at a 25% discount. In accordance
with generally accepted accounting principles the Company was required to
account for the discount conversion feature of this subordinated convertible
note as interest expense. In the first quarter of 1998, interest expense
consisted of interest from the Company's bank line of credit and term debt
financing and subordinated convertible notes of $84,000 and $35,000,
respectively. The Company did not issue any convertible subordinated notes in
the first quarter of 1998. The increase in the Company's interest expense from
financing is due to additional borrowings on the Company's bank line of credit.
Provision for Income Taxes
The provision for income taxes for the three months ended March 31, 1997 and
1998 reflects the minimum state tax due.
11
<PAGE>
Liquidity and Capital Resources
During the first quarter of 1998, the Company provided cash from operations of
$253,000. The net cash provided from operations is primarily attributable to the
Company's earnings before depreciation, aggressive collection of its accounts
receivable and use of existing inventory. In addition, the Company used cash
from operations to pay down its accounts payable and accrued expenses.
During the first quarter of 1998, net cash used in investing activities, of
$10,000, consisted primarily of costs relating to trademarks.
During the first quarter of 1998, net cash used in financing activities, of
$350,000, consisted primarily of payments on the Company's bank line of credit.
At March 31, 1998, the Company had an outstanding balance of $2,111,000 on its
bank line of credit and term loan. The line of credit and term loan bears
interest at 11.25 percent and 11.5 percent, respectively, and is due in October
1998. The Company believes that its current lender will refinance its debt under
the similar terms that are in place as of March 31, 1998. However, there can be
no assurance that the Company will be able to refinance its line of credit or
term debt on terms acceptable to the Company or at all.
The twelve percent Subordinated Convertible Note of $325,000 outstanding at
March 31, 1998 became due and payable on November 27, 1997. The Company has
advised the debt holder that the $325,000 of debt is subordinate to the
Company's line of credit and term financing with its bank.
The Company believes that it will be able to generate sufficient cash flows to
help support its operations through fiscal 1998. If, however, the Company
generates losses from operations it may be required to raise additional funding
to support its operations and or explore alternatives with respect to future
operations of its business including strategic partners or a potential
synergistic merger. The Company is currently in the process of exploring
strategic alliances or merger alternatives. However, there is no assurance that
the Company will consummate any such transaction: the failure of which, absent
other capital raising activity, will significantly impact the Company's ability
to continue operations as a going concern. Further, there can be no assurance
that the Company will be able to generate sufficient cash flows from operations,
or raise additional funding to support the Company's operations, the failure of
which would have a material effect on the Company's operations and financial
position.
The Securities and Exchange Commission ("the Commission") has approved new
maintenance requirements for the NASDAQ SmallCap Market. For continuing listing,
on the NASDAQ SmallCap Market, a company among other criteria, must now have at
least $2,000,000 of total net tangible assets (or $35,000,000 of market
capitalization or $500,000 in net income in two of the last three years),
500,000 shares in the Public Float, a market value of its public float of
$1,000,000 and a minimum bid price of $1.00 per share. While at March 31, 1998
the Company met the other requirements for continued listing on the NASDAQ
SmallCap Market, the Company did not meet the minimum bid requirement. The
Company may not meet this requirement in the near future. Accordingly, it
appears that the Company's common stock may be dropped from the Nasdaq SmallCap
Market. In the event that the Company's common stock is delisted for the NASDAQ
stock market, trading, if any, in the Company's common stock would thereafter be
conducted in the over-the-counter market in the so-called "pink sheets"
published by the National Quotation Bureau or the OTC Bulletin Board of the
National Association of Dealers, Inc. As a consequence of such delisting, a
shareholder would likely find it more difficult to sell, or to obtain quotations
as to price of, the Company's common stock. The Company has in the past years
12
<PAGE>
been able to raise additional funds primarily through the issuance of
convertible notes with a fixed discount feature. However, the delisting of the
Company's stock by NASDAQ would adversely impact the Company's ability to raise
additional capital.
Year 2000 Issue
Management does not anticipate material costs, problems or uncertainties
associated with the year 2000 issue. The Company will rely upon third party
vendors of its software used internally to become Year 2000 compliant.
The Company believes that inflation has not had a material impact on it
operations.
PART II - OTHER INFORMATION
Not Applicable
13
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly authorized and caused the undersigned to sign this Report on
the Registrant's behalf.
CSL LIGHTING MANUFACTURING, INC.
By: /s/ Mark Allen
---------------------------
Mark Allen,
Chief Executive Officer
By: /s/ Sylvan Gerber
---------------------------
Sylvan Gerber,
Chairman of the Board
Dated: May 12, 1998
14
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from CSL Lighting
Manufacturing Inc. and is qualified in it's entirety by reference to such
financial statements.
</LEGEND>
<CURRENCY> U.S.
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<EXCHANGE-RATE> 1
<CASH> 45,000
<SECURITIES> 0
<RECEIVABLES> 2,217,000
<ALLOWANCES> 188,000
<INVENTORY> 4,253,000
<CURRENT-ASSETS> 6,808,000
<PP&E> 3,064,000
<DEPRECIATION> 1,806,000
<TOTAL-ASSETS> 8,187,000
<CURRENT-LIABILITIES> 3,689,000
<BONDS> 3,777,000
0
0
<COMMON> 16,211,000
<OTHER-SE> (13,558,000)
<TOTAL-LIABILITY-AND-EQUITY> 8,187,000
<SALES> 3,528,000
<TOTAL-REVENUES> 3,528,000
<CGS> 2,052,000
<TOTAL-COSTS> 3,395,000
<OTHER-EXPENSES> 119,000
<LOSS-PROVISION> 15,000
<INTEREST-EXPENSE> 119,000
<INCOME-PRETAX> 14,000
<INCOME-TAX> 1,000
<INCOME-CONTINUING> 13,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 13,000
<EPS-PRIMARY> .00
<EPS-DILUTED> .00
</TABLE>
