<PAGE> 1
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[x] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the quarterly period ended June 30, 1998 or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the transition period from ____________ to
____________
Commission File Number 000-21465
TALX CORPORATION
(Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>
MISSOURI 43-0988805
<S> <C> <C>
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1850 BORMAN COURT, ST. LOUIS, MO 63146
(Address of principal executive offices) (Zip Code)
(314) 434-0046
(Registrant's telephone
number, including area code)
</TABLE>
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
As of July 24, 1998 there were 5,335,084 shares of the Registrant's Common Stock
outstanding.
Exhibit Index is on page 13.
1
<PAGE> 2
TALX CORPORATION AND SUBSIDIARIES
FINANCIAL INFORMATION
<TABLE>
<CAPTION>
PAGE NO.
--------
<S> <C>
Item 1. Financial Statements
Consolidated Balance Sheets as of June 30, 1998 and March 31, 1998 3
Consolidated Statements of Operations for the Three Months Ended
June 30, 1998 and 1997 4
Consolidated Statements of Cash Flows for the Three Months Ended
June 30, 1998 and 1997 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 7-10
Item 3. Quantitative and Qualitative Disclosures About Market Risk 10
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 11
Item 2. Changes in Securities and Use of Proceeds 11
Item 3. Defaults Upon Senior Securities 11
Item 4. Submission of Matters to a Vote of Securities Holders 11
Item 5. Other Information 11
Item 6. Exhibits and Reports on Form 8-K 11
Signatures 12
</TABLE>
2
<PAGE> 3
TALX CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
<TABLE>
<CAPTION>
JUNE 30, MARCH 31,
1998 1998
--------------------- --------------------
(unaudited)
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 1,897 $ 2,879
Trade receivables, net 8,617 8,422
Inventories 1,006 1,452
Prepaid expenses and other current assets 665 754
Income tax refund receivable 14 14
Deferred tax assets, net 171 171
--------------- ---------------
Total current assets 12,370 13,692
Property and equipment, net 4,684 3,956
Capitalized software development costs, net of amortization of
$5,061 at June 30, 1998 and $4,697 at March 31, 1998 3,950 3,837
Net assets of business held for sale 1,315 1,157
Deferred tax asset, net 1,298 1,324
Other assets 162 155
--------------- ---------------
$ 23,779 $ 24,121
=============== ===============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,856 $ 1,778
Accrued expenses and other liabilities 1,154 1,702
Progress billings in excess of work in progress 380 176
Deferred maintenance revenue 782 957
--------------- ---------------
Total current liabilities 4,172 4,613
--------------- ---------------
Commitments and contingencies
Stockholders' equity:
Preferred stock, $.01 par value; authorized 5,000,000 shares and
no shares issued or outstanding at June 30, 1998 and March 31, 1998 - -
Common stock, $.01 par value; authorized 30,000,000 shares,
issued and outstanding 5,335,084 shares at June 30, 1998
and 5,316,032 at March 31, 1998 53 53
Additional paid-in capital 23,280 23,225
Accumulated deficit (3,726) (3,770)
--------------- ---------------
Total stockholders' equity 19,607 19,508
--------------- ---------------
$ 23,779 $ 24,121
=============== ===============
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE> 4
TALX CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars in thousands, except per share information)
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended June 30,
------------------------------------------------
1998 1997
--------------------- --------------------
<S> <C> <C>
Revenues:
The Work Number $ 1,719 $ 777
Outsourced services 952 575
Customer premises systems 2,806 3,074
Maintenance and support 1,274 994
-------------------- --------------------
Total revenues 6,751 5,420
-------------------- --------------------
Cost of revenues:
The Work Number 664 308
Outsourced services 613 293
Customer premises systems 1,726 1,500
Maintenance and support 426 308
-------------------- --------------------
Total cost of revenues 3,429 2,409
-------------------- --------------------
Gross margin 3,322 3,011
-------------------- --------------------
Operating expenses:
Selling and marketing 2,224 1,875
General and administrative 1,052 766
-------------------- --------------------
Total operating expenses 3,276 2,641
-------------------- --------------------
Operating income 46 370
-------------------- --------------------
Other income (expense), net:
Interest income 24 79
Interest expense - (1)
Other, net - 1
-------------------- --------------------
Total other income, net 24 79
-------------------- --------------------
Earnings from continuing operations
before income tax expense 70 449
Income tax expense 26 166
-------------------- --------------------
Net earnings (loss) $ 44 $ 283
==================== ====================
Basic and diluted earnings per share $ 0.01 $ 0.05
==================== ====================
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE> 5
TALX Corporation and Subsidiaries
Consolidated Statements of Cash Flows
(dollars in thousands)
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended June 30,
-------------------------------------------
1997 1998
---------------- ---------------
<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 44 $ 283
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization 654 611
Loss on disposal of discontinued operations, net (158) -
Deferred taxes 26 166
Change in assets and liabilites:
Trade receivables (195) 136
Inventories 446 (70)
Prepaid expenses and other current assets 89 (21)
Other assets (7) (123)
Accounts payable 78 98
Accrued expenses and other liabilites (548) 141
Progress billings in excess of work in progress, net 204 (17)
Deferred maintenance revenue (175) (344)
-------------- ------------
Net cash provided by operating activities 458 860
-------------- ------------
Cash flows from investing activites:
Additions to property and equipment (1,018) (396)
Capitalized software development costs (477) (455)
Maturities of short-term investments - 1,068
-------------- ------------
Net cash used in investing activities (1,495) 217
-------------- ------------
Cash flows from financing activities
Issuance of common stock 55 54
Payments on capitalized lease obligations - (12)
-------------- ------------
Net cash provided by financing activities 55 42
-------------- ------------
Net increase (decrease) in cash and cash equivalents (982) 1,119
Cash and cash equivalents at beginning of period 2,879 1,684
-------------- ------------
Cash and cash equivalents at end of period $ 1,897 $ 2,803
============== ============
</TABLE>
See accompanying notes to consolidated financial statements.
5
<PAGE> 6
TALX CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The consolidated balance sheet of TALX Corporation ("TALX" or the
"Company") at March 31, 1998 was obtained from the Company's audited
balance sheet as of that date. All other financial statements contained
herein are unaudited and, in the opinion of management, contain all
adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation. Operating results for the three
months ended June 30, 1998 are not necessarily indicative of the
results that may be expected for the year ending March 31, 1999. The
Company's accounting policies and certain other disclosures are set
forth in the notes to the Company's audited consolidated financial
statements as of and for the year ended March 31, 1998.
2. EARNINGS PER SHARE
Effective with the fiscal year ended March 31, 1998, the Company
adopted Statement of Financial Accounting Standards No. 128 (SFAS No.
128). SFAS No. 128 replaced the calculation of primary and fully
diluted earnings per share with basic and diluted earnings per share.
Unlike primary earnings per share, basic earnings per share excludes
any dilutive effects of stock options. Diluted earnings per share is
similar to the previously reported fully diluted earnings per share.
The weighted average number of shares used in computing basic and
diluted earnings per share was 5,325,076 and 5,506,767, respectively.
6
<PAGE> 7
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
The Company's revenues are derived from interactive Web, interactive voice
response (IVR), computer telephony (CTI) software and services, which consist of
The Work Number, outsourced services, the sale of customer premises systems, and
maintenance and support services related to those systems.
Revenues derived from The Work Number include fees charged to mortgage lenders
and other verifiers for verification of employment history, including the past
three years of salary history of participating employers' current and former
employees, ongoing maintenance fees charged to employers and one-time conversion
fees from new employers.
The Company's customer premises systems business provides interactive Web,
interactive voice response (IVR), computer telephony (CTI) software and services
that enable an organization's users to access, input and update information
without human assistance. Revenues from customer premises systems are derived
from the license or sale of software, custom applications, and related hardware
and are generally recognized upon shipment of the system. Sales are effected
through a direct sales force and in conjunction with strategic marketing
alliances (including third party resellers). The typical size of a system ranges
from $35,000 to $200,000 or more and averages approximately $100,000. In the
case of a third party reseller, revenues are recognized at the time of shipment
to the reseller; however, the Company does not have any future obligations
related to these types of sales. The Company provides maintenance and support
services with respect to installed customer premises systems. These services
include a 24-hour per day, 7-day a week toll-free customer service line.
Revenues from maintenance and support are recognized ratably over the term of
the maintenance agreement.
The Company's outsourced services business provides interactive Web and
interactive voice response services to organizations that choose not to purchase
a customer premises system. The Company maintains a system on its premises that
contains a customer database and receives incoming requests for access to the
information. Revenues from outsourced services include fees derived from
establishment of the service and transaction-based fees.
In addition to providing software and services, the Company has historically
provided database and document services. Database services include sales leads
and pre-press services for directory publishers, and document services include
the preparation and mailing of invoices, statements and confirmation letters for
organizations with high volume requirements. Revenues from database and document
services are recognized as the services are performed through progress billings.
These customers' contracts cover periods generally from one to six months and
progress billings are made in accordance with individual customer contract
terms. In August 1996, the Company determined to pursue the divestiture of the
database and document services businesses and, accordingly, has reflected the
results of operations of such businesses as discontinued operations. In January
1997, the document services business was sold.
This discussion and analysis contains certain statements regarding future
results, performance, expectations, or intentions that may be considered forward
looking statements ("Forward Looking Statements") within the meaning of Section
27A of the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended. All statements other than statements of
historical facts are Forward Looking Statements. Although the Company believes
that the expectations reflected in such Forward Looking Statements are
reasonable, it can give no assurance that such expectations will prove to be
correct. Actual results could differ materially from those projected in the
Forward Looking Statements as a result of risks facing the Company. Such risks
include, but are not limited to, the Company's ability to successfully market
and expand The Work Number for Everyone(R) and its other products and services,
the successful divestiture of the remaining assets of the discontinued
operations, intense competition in the interactive web and interactive voice
response industry, dependence on certain strategic marketing alliances, risks
associated with rapid technological change, a lengthy sales cycle and other
factors set forth under "Risk Factors" in Item 1 of the Company's Annual Report
on Form 10-K filed with the Securities and Exchange Commission.
7
<PAGE> 8
RESULTS OF OPERATIONS
The following table sets forth, for the periods indicated, certain items from
the Company's consolidated statements of operations, expressed as a percentage
of total revenues, and the percentage change in the dollar amount of such items
compared to the prior comparable period.
<TABLE>
<CAPTION>
Percentage
Increase
Three Months Three Months
Ended June 30, Ended June 30,
---------------------- 1998 over
1998 1997 1997
---- ---- ----
<S> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues
The Work Number 25.4% 14.4% 121.2%
Outsourced services 14.1 10.6 65.6
Customer premises systems 41.6 56.7 (8.7)
Maintenance and support 18.9 18.3 28.2
---- ----
Total revenues 100.0 100.0 24.6
----- -----
Cost of revenues
The Work Number 9.8 5.7 115.6
Outsourced services 9.1 5.4 109.2
Customer premises systems 25.6 27.7 15.1
Maintenance and support 6.3 5.7 38.3
--- ---
Total cost of revenues 50.8 44.5 42.3
---- ----
Gross margin 49.2 55.5 10.3
---- ----
Operating expenses
Selling and marketing 32.9 34.6 18.6
General and administrative 15.6 14.1 37.3
---- ----
Total operating expenses 48.5 48.7 24.0
---- ----
Operating income 0.7 6.8 (87.6)
Other income (expense), net 0.4 1.5 (69.6)
--- ---
Earnings from continuing operations
before income tax expense 1.1 8.3 (84.4)
Income tax expense 0.4 3.1 (84.3)
--- ---
Net earnings from continuing operations 0.7% 5.2% (84.5)
=== ===
</TABLE>
THREE MONTHS ENDED JUNE 30, 1997 AND 1998
REVENUES. Total revenues increased by 24.6%, from $5.4 million for the three
months ended June 30, 1997 to $6.8 million for the three months ended June 30,
1998. Revenues from The Work Number increased 121.2% from $777,000 for the three
months ended June 30, 1997 to $1.7 million for the three months ended June 30,
1998, due to the continued expansion of marketing on a nationwide basis and an
increase in the number of employment records on the system. Revenues from
outsourced services increased 65.6% from $575,000 for the three months ended
June 30, 1997 to $1.0 million for the three months ended June 30, 1998, due to
the Company capitalizing on the trend of some corporations to outsource their
non-core functions. Revenues from customer premises systems decreased 8.7% from
$3.1 million for the three months ended June 30, 1997 to $2.8 million for the
three months ended June 30, 1998. Management believes that the revenue decrease
is due principally to a lengthened sales cycle, as customers study the impact of
incorporating web-based capabilities in their self-service systems. Revenues
from maintenance and support related to the customer premises systems increased
28.2% from $1.0 million for the three months ended June 30, 1997 to $1.3 million
for the three months ended June 30, 1998, reflecting the support provided to an
increased installed base of customer premises systems.
8
<PAGE> 9
COST OF REVENUES. Total cost of revenues increased by 42.3%, from $2.4 million
for the three months ended June 30, 1997 to $3.4 million for the three months
ended June 30, 1998. Cost of revenues from The Work Number increased 115.6% from
$308,000 for the three months ended June 30, 1997 to $664,000 for the three
months ended June 30, 1998, due principally to the growth in revenues. Cost of
revenues from outsourced services increased by 109.2%, from $293,000 for the
three months ended June 30, 1997 to $613,000 for the three months ended June 30,
1998. This increase in cost is attributable to the revenue growth described
above and the increase of fixed labor costs and telephone and network
infrastructure to support possible future increases in revenue. Cost of revenues
from customer premises systems increased by 15.1%, from $1.5 million for the
three months ended June 30, 1997 to $1.7 million for the three months ended June
30, 1998. This increase in cost is primarily attributable to an increase in
fixed labor costs to support possible higher levels of revenue. Cost of revenues
from maintenance and support related to customer premises systems increased by
38.3%, from $308,000 for the three months ended June 30, 1997 to $426,000 for
the three months ended June 30, 1998, due to the revenue growth and an increase
in personnel costs to provide an appropriate level of customer service.
SELLING AND MARKETING EXPENSES. Selling and marketing expenses increased 18.6%
from $1.9 million for the three months ended June 30, 1997 to $2.2 million for
the three months ended June 30, 1998. As a percentage of revenues, such expenses
decreased from 34.6% for the three months ended June 30, 1997 to 32.9% for the
three months ended June 30, 1998. The increase in expense reflects the
continuing expansion of the Company's sales and marketing efforts, including
development of distribution channels both in domestic and international markets.
The Company anticipates that selling and marketing expenses will continue to
increase in dollar amount as the Company expands its sales and marketing
efforts.
GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses
increased 37.3% from $766,000 for the three months ended June 30, 1997 to $1.1
million for the three months ended June 30, 1998. As a percentage of revenues,
such expenses increased from 14.1% for the three months ended June 30, 1997 to
15.6% for the three months ended June 30, 1998. The increase in expense reflects
the expansion of the Company's infrastructure to respond to possible increased
levels of revenues. The Company anticipates that general and administrative
expenses will increase in dollar amount in future periods.
OTHER INCOME (EXPENSE), NET. Interest income decreased 69.6% from $79,000 for
the three months ended June 30, 1997 to $24,000 for the three months ended June
30, 1998, due to a lower level of invested funds.
INCOME TAX EXPENSE. The Company's effective income tax rate was 37.0% for the
three months ended June 30, 1997 and 37.1% for the three months ended June 30,
1998.
DISCONTINUED OPERATIONS
In August 1996, the Company determined to pursue the divestiture of the database
and document services businesses and, accordingly, has reflected the results of
operations of such businesses as discontinued operations. A provision of
$350,000 was made as of June 30, 1996 to reflect the anticipated loss from
operations until the time of disposal. On January 31, 1997, the Company sold
substantially all of the assets of the document services business to Sterling
Direct, Inc., the largest customer of the division. The sales price, after
giving effect to the post-closing adjustments, was $1,241,000. Of this amount,
$200,000 was in the form of a subordinated note and the remainder was paid in
cash. The net assets related to this sale were approximately $566,000. At March
31, 1997 and 1998, the Company provided additional provisions for loss, net of
tax, in the amount of $550,000 and $374,000, respectively. The Company
anticipates disposition of the remaining operations through sale during fiscal
1999.
LIQUIDITY AND CAPITAL RESOURCES
The Company had a current ratio of 4.64 to 1, 2.97 to 1 and 2.97 to 1 at March
31, 1997, March 31, 1998 and June 30, 1998, respectively. The Company's working
capital was $13,351,000, $9,079,000 and $8,198,000 at March 31, 1997, March 31,
1998 and June 30, 1998, respectively. Total working capital decreased in fiscal
1998 due to the Company's net loss and investments in property and equipment and
capitalized software development costs. Total working capital decreased during
the three months ended
9
<PAGE> 10
June 30, 1998 due principally to current year earnings, offset by investments in
property and equipment and capitalized software development costs.
The Company's accounts receivable increased from $8,422,000 at March 31, 1998 to
$8,617,000 at June 30, 1998. The increase is due to increased revenues in the
first quarter of fiscal 1999 compared to the fourth quarter of fiscal 1998,
offset by improved collections of accounts receivable. As a percentage of the
Company's total revenues for the respective quarter, accounts receivable
decreased from 199% of revenues at March 31, 1998 to 128% of revenues at June
30, 1998.
The Company's capital expenditures were $2,300,000 in fiscal 1998. At June 30,
1998, the Company had no significant capital spending or purchase commitments
other than normal purchase commitments and commitments under facilities and
operating leases. The Company believes that its working capital, together with
its anticipated cash flows from operations and borrowing capacity under a $5
million line of credit, will be sufficient to meet its working capital and
capital expenditure requirements for at least the next 12 months. Outstanding
borrowings, if any, under the line of credit will bear interest at LIBOR plus
2.25% and will be secured by accounts receivable and inventory.
The Company's net increase to capitalized software development costs was
$735,000 in fiscal 1998 and $113,000 in the first three months of fiscal 1999.
See Notes 1 and 5 of Notes to Consolidated Financial Statements contained in the
Company's Annual Report on Form 10-K for the year ended March 31, 1998. The
Company intends to continue to make investments in software solutions at
comparable or increasing levels in fiscal 1998.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Not required.
10
<PAGE> 11
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities and Use of Proceeds
Not applicable.
Item 3. Defaults Upon Senior Securities
Not applicable.
Item 4. Submission of Matters to a Vote of Securities Holders
None.
Item 5. Other Information
Not applicable.
Item 6. Exhibits and Reports on Form 8-K
(a) See Exhibit Index.
(b) Reports on Form 8-K
There were no reports on Form 8-K filed during the quarter for
which this report is filed.
11
<PAGE> 12
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.
TALX CORPORATION
(Registrant)
Date: July 31, 1998 By /s/ William W. Canfield
-----------------------------------------
William W. Canfield
Chairman, President and
Chief Executive Officer
Date: July 31, 1998 By /s/ Craig N. Cohen
-----------------------------------------
Craig N. Cohen
Chief Financial Officer
12
<PAGE> 13
EXHIBIT INDEX
Exhibit
Number Description
3.1 Restated Articles of Incorporation, as amended (incorporated by
reference from Exhibit 3.1 to the Company's Form 10-K for the
fiscal year ended March 31, 1997 (File No. 000-21465))
3.3 Bylaws of the Company (incorporated by reference from
Exhibit 3.3 to the Company's Registration Statement on Form S-1
(File No. 333-10969))
11.1 Computation of Earnings Per Share
27 Financial Data Schedule
(provided for the information of the Securities and Exchange
Commission only)
13
<PAGE> 1
EXHIBIT 11.1
TALX CORPORATION AND SUBSIDIARIES
Statement Regarding Computation of Earnings Per Share
Three Months Ended June 30, 1998 and 1997
<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
Basic Earnings Per Share:
Actual shares outstanding - beginning of year 5,316,032 5,263,455
Weighted average number of common shares issued 9,044 177,344
---------- ----------
Weighted average number of common - end of period 5,325,076 5,440,799
========== ==========
Three months ended June 30:
Net earnings $ 44,000 $ 283,000
========== ==========
Basic earnings per common share $ .01 $ .05
=== ===
Diluted Earnings Per Share:
Shares outstanding - beginning of year 5,316,032 5,263,455
Weighted average number of common shares issued (1) 190,735 177,344
--------- ---------
Weighted average number of common
shares outstanding - end of period 5,506,767 5,440,799
========= =========
Three months ended June 30:
Net earnings $ 44,000 $ 283,000
========= =========
Diluted earnings per common share: $ .01 $ .05
=== ===
</TABLE>
(1) Basic and diluted earnings (loss) per share has been computed using the
number of shares of common stock and common stock options and warrants
outstanding. The weighted average number of shares was based on common stock
outstanding for basic earnings (loss) per share and common stock outstanding and
common stock options and warrants for diluted earnings (loss) per share in
periods when such common stock options and warrants are not antidilutive.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAR-31-1999
<PERIOD-START> APR-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 1,897
<SECURITIES> 0
<RECEIVABLES> 8,675
<ALLOWANCES> 58
<INVENTORY> 1,006
<CURRENT-ASSETS> 12,370
<PP&E> 7,774
<DEPRECIATION> 3,090
<TOTAL-ASSETS> 23,779
<CURRENT-LIABILITIES> 4,172
<BONDS> 0
0
0
<COMMON> 53
<OTHER-SE> 19,554
<TOTAL-LIABILITY-AND-EQUITY> 23,779
<SALES> 6,751
<TOTAL-REVENUES> 6,751
<CGS> 3,429
<TOTAL-COSTS> 3,429
<OTHER-EXPENSES> 3,276
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 70
<INCOME-TAX> 26
<INCOME-CONTINUING> 44
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 44
<EPS-PRIMARY> 0.01
<EPS-DILUTED> 0.01
</TABLE>
