<PAGE>
Conformed
Securities and Exchange Commission
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 September 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 1-12842
ScanSource, Inc.
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
South Carolina 57-0965380
- -------------------------------- ------------------------------------
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporated or organization)
6 Logue Court, Suite G
Greenville, SC 29615
- -------------------------------- -----------------------------------
(Address of principal executive (Zip Code)
offices)
(864) 288-2432
- -------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
Not Applicable
- -------------------------------------------------------------------------------
(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. Yes X No
------- -------
As of September 30, 1998, 5,454,310 shares of the registrant's common stock, no
par value, were outstanding.
<PAGE>
SCANSOURCE, INC.
INDEX
FORM 10-Q
September 30, 1998
PART I. FINANCIAL INFORMATION Page No.
--------
Item 1. Consolidated Financial Statements (Unaudited)...... 2
Condensed Balance Sheets........................... 2
Condensed Income Statements........................ 4
Condensed Statements of Cash Flows................. 5
Notes to Condensed Financial Statements............ 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.............. 7
Item 3. Quantitative and Qualitative Disclosures About
Market Risk...................................... 12
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.................................. 13
Item 2. Changes in Securities.............................. 13
Item 3. Defaults Upon Senior Securities.................... 13
Item 4. Submission of Matters to a Vote of Security-Holders 13
Item 5. Other Information.................................. 13
Item 6. Exhibits and Reports on Form 8-K................... 13
SIGNATURES........................................................... 14
2
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
SCANSOURCE, INC.
CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, September 30,
1998 1998
-------- -------------
(Note 1) (Note 1)
(Unaudited)
Assets (In thousands)
------
<S> <C> <C>
Current assets:
Cash................................................. $ 88 7,025
Receivables:
Trade, less allowance for doubtful accounts of
$2,045,000 at June 30, 1998 and
$2,360,000 at September 30, 1998................... 28,198 30,877
Other................................................ 1,524 1,160
------- -------
29,722 32,037
Inventories......................................... 31,444 37,208
Prepaid expenses and other assets................... 268 343
Deferred income taxes............................... 2,381 2,381
------- -------
Total current assets.............................. 63,903 78,994
------- -------
Property and equipment, net............................ 6,491 6,756
Intangible assets, net................................. 1,532 1,499
Other assets........................................... 186 155
------- -------
Total assets...................................... $72,112 87,404
======= =======
</TABLE>
See notes to condensed financial statements.
3
<PAGE>
SCANSOURCE, INC.
CONDENSED BALANCE SHEETS (Continued)
<TABLE>
<CAPTION>
June 30, September 30,
Liabilities and Shareholders' Equity 1998 1998
----------------------------------- ------- ------------
(Note 1) (Note 1)
(Unaudited)
(In thousands)
<S> <C> <C>
Current liabilities:
Current portion of long-term debt...................... $ 22 17
Trade accounts payable................................. 14,029 31,662
Accrued compensation................................... 456 934
Accrued expenses and other liabilities................. 1,242 1,169
Income taxes payable................................... -- 363
------- ------
Total current liabilities........................... 15,749 34,145
Deferred income taxes.................................. 24 24
Long-term debt......................................... 1,697 1,692
Line of credit......................................... 4,861 --
------- ------
Total liabilities................................... 22,331 35,861
------- ------
Shareholders' equity:
Preferred stock, no par value; 3,000,000 shares
authorized, none issued and outstanding............. -- --
Common stock, no par value; 10,000,000 shares
authorized, 5,353,310 and 5,454,310 shares issued and
outstanding at June 30, 1998 and
September 30, 1998, respectively.................... 38,710 38,926
Retained earnings...................................... 11,071 12,617
------- ------
Total shareholders' equity.......................... 49,781 51,543
------- ------
Total liabilities and shareholders' equity.......... $72,112 87,404
======= ======
</TABLE>
See notes to condensed financial statements.
4
<PAGE>
SCANSOURCE, INC.
CONDENSED INCOME STATEMENTS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
September 30,
1997 1998
---- ----
(In thousands except per share data)
<S> <C> <C>
Net sales........................................................ $37,933 60,719
Cost of goods sold............................................... 33,360 53,732
------- ------
Gross profit.................................................. 4,573 6,987
Selling, general and administrative
expenses....................................................... 2,958 4,459
Amortization of intangibles...................................... 20 33
------- ------
Total operating expenses...................................... 2,978 4,492
------- ------
Operating income.............................................. 1,595 2,495
Other income (expense):
Interest income (expense), net................................ (103) (43)
Other income (expense), net................................... (30) 2
------- ------
Total other income (expense)................................ (133) (41)
------- ------
Income before income taxes.................................... 1,462 2,454
Income taxes..................................................... 535 908
------- ------
Net income.................................................. $ 927 1,546
======= ======
Basic EPS
Net income per share........................................ $ .27 .29
======= ======
Weighted average shares outstanding......................... 3,489 5,404
======= ======
Diluted EPS
Net income per share........................................ $ .25 .28
======= ======
Weighted average shares outstanding......................... 3,722 5,585
======= ======
</TABLE>
See notes to condensed financial statements.
5
<PAGE>
SCANSOURCE, INC.
STATEMENT OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
September 30,
1997 1998
------- ------
(In thousands)
<S> <C> <C>
Cash flows from operating activities:
Net income............................................... $ 926 1,546
Adjustments to reconcile net income to cash used
in operating activities:
Depreciation............................................. 135 257
Amortization of intangible assets........................ 20 33
Changes in operating assets and liabilities:
Trade receivables........................................ (4,190) (2,679)
Other receivables....................................... (180) 364
Inventories.............................................. 2,775 (5,764)
Prepaid expenses and other............................... 4 (75)
Trade accounts payable................................... 47 17,628
Accrued compensation..................................... 265 478
Accrued expenses and other liabilities................... (7) (73)
Income tax payable....................................... 129 363
Other noncurrent assets.................................. --- 31
------- ------
Net cash (used in) provided by operating activities............ (76) 12,109
Cash flows from investing activities:
Capital expenditures, net.................................... (371) (522)
Cash paid in business acquisition............................ (700) ---
------- ------
Net cash used in investing activities......................... (1,071) (522)
Cash flows from financing activities:
Payments on building loan................................... --- (5)
Borrowings (payments) on line of credit..................... 948 (4,861)
Proceeds from option exercises.............................. 5 216
Deferred offering cost...................................... (19) ---
------- ------
Net cash (used in) provided by financing activities......... 934 (4,650)
Increase (decrease) in cash................................... (213) 6,937
Cash at beginning of period...................................... 429 88
------- ------
Cash at end of period............................................ $ 216 7,025
======= ======
</TABLE>
6
<PAGE>
SCANSOURCE, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(1) BASIS OF PRESENTATION
The interim financial information included herein is unaudited. Certain
information and footnote disclosures normally included in the financial
statements have been condensed or omitted pursuant to the rules and
regulations of the Securities and Exchange Commission (SEC), although the
Company believes that the disclosures made are adequate to make the
information presented not misleading. These financial statements should be
read in conjunction with the financial statements and related notes
contained in the Company's annual report on Form 10-K for the period ended
June 30, 1998. Other than as indicated herein, there have been no
significant changes from the financial data published in that report. In
the opinion of management, such unaudited information reflects all
adjustments, consisting only of normal recurring accruals and other
adjustments as disclosed herein, necessary for a fair presentation of the
unaudited information.
In February 1998, the Company merged with The CTI Authority, Inc. ("CTI")
in a stock-for-stock transaction accounted for as a pooling-of-interest.
Accordingly, the consolidated financial statements for the periods prior to
the combination have been restated to include the accounts and results of
CTI.
Results for interim periods are not necessarily indicative of results
expected for the full year, or for any subsequent period.
The balance sheet for June 30, 1998 has been derived from the audited
balance sheet for that date.
(2) SIGNIFICANT ACCOUNTING POLICIES
Revenue Recognition - The Company records revenue when products are
shipped.
Inventories - Inventories consisting of point of sale and bar code
equipment are stated at the lower of cost (first-in, first-out method) or
market.
Net Income Per Share - The Company calculates earnings per share in
accordance with Statement of Financial Accounting standards No. 128,
"Earnings Per Share". Basic net income per share is computed by dividing
net income by the weighted average number of common shares outstanding.
Diluted net income per share is computed by dividing net income by the
weighted average number of common and potential common shares outstanding.
Diluted weighted average common and potential common shares include common
shares and stock options using the treasury stock method. Basic and diluted
weighted average shares differed only by the effect of dilutive stock
options. There were no differences between the net income used to calculate
basic and diluted net income per share for the three months ended September
30, 1997 and 1998.
7
<PAGE>
(3) LINE OF CREDIT
In November 1996, the Company closed a line of credit agreement with a bank
providing for maximum borrowings of $15 million, based upon 80% of eligible
accounts receivable and 40% of eligible inventory at the 30 day LIBOR rate
of interest plus a rate varying from 2.00% to 2.65% tied to the Company's
debt-to-net worth ratio ranging from 1:1 to 2:1. Outstanding debt under the
line of credit was repaid in August 1998, leaving $15 million available at
September 30, 1998.
The Company has a commitment from the bank, which it intends to exercise,
to renew the line of credit under terms similar to its existing agreement
for amounts up to $35 million to October 2001.
(4) RECENT ACCOUNTING PRONOUNCEMENTS
In June 1998, the FASB issued Statement of Financial Accounting Standards
No. 133, "Accounting for Derivative Instruments and Hedging Activities"
("SFAS No. 133") SFAS No. 133 requires that an enterprise recognize all
derivatives as either assets or liabilities in the statement of financial
position and measure those instruments at fair value. SFAS No. 133 is
effective for all fiscal quarters and all fiscal years beginning after June
15, 1999. The Company is currently assessing the effects of SFAS No. 133 on
its financial position.
8
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
NET SALES. Net sales for the quarter ended September 30, 1998 increased
60% to $60.7 million from $37.9 million for the comparable prior year quarter.
Growth of net sales resulted primarily from additions to the Company's sales
force, competitive product pricing, selective expansion of its product line, and
increased marketing efforts to specialty technology resellers.
GROSS PROFIT. Gross profit for the quarter ended September 30, 1998
increased 53% to $7.0 million from $4.6 million for the comparable prior year
quarter. Gross profit as a percentage of sales for the quarter ended September
30, 1998 was 11.5% compared to 12.1% for the comparable prior year quarter. The
decrease in gross profit as a percentage of sales is the result of a change in
the mix of sales of more lower-margin products and the volume discounts provided
to resellers on large orders.
OPERATING EXPENSES. Operating expenses, which include selling, general and
administrative expenses and amortization, for the quarter ended September 30,
1998 increased 51% to $4.5 million compared to $3.0 million for the comparable
prior year period. Operating expenses as a percentage of sales was 7.4% for the
quarter ended September 30, 1998, compared to 7.9% for the comparable prior year
period. Generally, lower gross margin sales require the Company to provide
fewer value-added services causing a corresponding decrease in operating
expenses. The general and administrative portion of operating expenses also
decreased as a percentage of sales due to efficiencies gained through increased
sales volume.
OPERATING INCOME. Operating income for the quarter ended September 30,
1998 increased 56% to $2.5 million from $1.6 million for the same period in
1997, driven by the improvement in gross profit as described above. Operating
income as a percentage of sales was 4.1% for the quarter ended September 30,
1998, compared to 4.2% for the comparable prior year period.
OTHER INCOME (EXPENSE). Total other income (expense), net consists of
interest income (expense), net, and other expense, net. Net interest expense for
the quarters ended September 30, 1998 and 1997 of $43,000 and $103,000,
respectively, resulted from interest paid on borrowings under the Company's line
of credit for each quarter and included interest paid on long-term debt for the
1998 quarter. The September 1998 quarter interest expense was also offset by
interest income from invested cash during August and September 1998.
INCOME TAXES. Tax expense was provided at a 37% effective rate for both
periods presented, and represented the state and federal tax expected to be due
after annualizing income to the fiscal year end.
NET INCOME. Improved operating income and lower net interest expense,
resulted in net income increasing 67% to $1.5 million for the quarter ended
September 30, 1998 from $927,000 for the year-earlier quarter. Net income as a
percentage of sales was 2.5% for the quarter ended September 30, 1998 compared
to 2.4% for the quarter ended September 30, 1997.
9
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
The Company financed its initial operating requirements and growth through
private financings totaling $500,000. In March 1994, the Company completed an
initial public offering of units, which consisted of common stock and warrants,
which provided the Company with approximately $4.6 million. The Company also
received proceeds of approximately $6.3 million from common stock issued upon
the exercise of stock purchase warrants prior to their redemption date in
September 1995. In October 1997 the Company completed a secondary offering of
stock which provided the Company approximately $26.2 million for general
corporate purposes.
In November 1996, the Company entered into a revolving credit facility with
a bank which allowed for borrowings up to $15.0 million at an interest rate
equal to the 30 day LIBOR, plus a rate varying from 2.00% to 2.65% tied to the
Company's debt-to-net worth ratio ranging from 1:1 to 2:1. The borrowing base
available under the credit facility is limited to 80% of eligible accounts
receivable and 40% of eligible inventory. The revolving credit is secured by
accounts receivable and inventory. All outstanding debt under the line of
credit was repaid in August 1998; therefore the full $15 million line was
available at September 30, 1998. The Company has a commitment from the bank,
which the Company intends to exercise, to renew the credit facility for amounts
up to $35 million to October 2001 under terms similar to the existing agreement.
In June 1998 the Company assumed a non-recourse loan for $1,719,000 in
connection with the purchase of its office building. The loan's fixed interest
rate is 9.19%. The loan matures in October 2006 and is collateralized by the
land and building acquired.
For the quarter ended September 30, 1998 net cash of $12.1 million was
provided by operating activities compared to $76,000 used in operations for the
quarter ended September 30, 1997. Cash provided by operations was primarily
from an increase in accounts payable which exceeded the amount needed to pay for
increases in receivables and inventory.
Cash used in investing activities of $522,000 for the quarter ended
September 30, 1998 was for capital expenditures. Cash used in investing
activities for the quarter ended September 30, 1997 included $700,000 for cash
paid in business combination and $371,000 for capital expenditures.
Cash used in financing activities for the quarter ended September 30, 1998
was $4.7 million, primarily from payments on the Company's line of credit. Cash
provided by financing activities for the quarter ended September 30, 1997 was
$934,000, primarily from borrowings on the line of credit.
The Company's current ratios at September 30, 1998 and at June 30, 1998
were 2.31 and 4.06, respectively.
YEAR 2000
It is possible that the Company's currently installed computer systems,
software products or other business systems, or those of the Company's vendors
or resellers, working either alone or in conjunction with other software or
systems, will not accept input of, store, manipulate and output dates in the
years 1999, 2000 or thereafter without error of interruption (commonly known as
the "Y2K" problem). Following is a summary of the initiatives the Company has
taken to address this issue.
10
<PAGE>
The Company has conducted a review of its computer systems, including its
primary business software, and believes that such software is Y2K compliant.
The Company is also querying its vendors and resellers as to their progress in
identifying and addressing problems that their computer systems may face in
correctly processing date information as the year 2000 approaches and is
reached.
Since early 1996, ScanSource, in support of its long-term plans, has
significantly upgraded and continues to upgrade its information technology and
communication systems. These upgrades include: enterprise-wide application
system, a Digital Alpha Server, personal computers "PC's", PC software
(standardized on Windows NT, Windows 9x, Microsoft Office Suite and Lotus
Notes), local area networks (LAN's), LAN software (Novell NetWare, Windows NT),
wide area networks (WAN's) and network integration of advanced fax, printer, and
copier systems. As a result, a large portion of ScanSource's IT and non-voice
communication systems, along with many of its voice communication systems, are
now Y2K compliant.
ScanSource's exceptions to the Y2K compliance are: certain PC's require
BIOS and/or operating system and application system upgrades; certain network
operating systems need to be upgraded; other intelligent office equipment in a
stand alone mode such as fax machines, copiers, printers, etc. may not be Y2K
compliant. These issues are anticipated to be remediated by the end of the
first calendar quarter of 1999 at a cost not expected to be material. The IT
System software upgrades are being executed under agreements with software
vendors, and the BIOS upgrades to certain hardware are being executed under
similar arrangements with hardware vendors. The replacement cost of non-
remediable PC's, network hardware components, copiers and fax machines is not
expected to be material.
ScanSource is not yet in a position to estimate the cost of Non-IT system
and third party compliance issues, but has no reason to believe, based upon its
evaluations done to date, that such costs, in the aggregate, would be material.
ScanSource intends to address contingency planning in April 1999 after
evaluating the results of assessment and remediation in progress.
There can be no assurance that the Company's systems will address all Y2K
problems, that its current and ongoing efforts will identify all such problems
in its own computer systems or those of its vendors or resellers in advance of
their occurrence, or that the Company will be able to successfully remedy any
problems that are discovered. To date the expenses of the Company's efforts to
identify and address such problems have not been material. However, the
expenses or liabilities to which the Company may become subject as a result of
any such problems that may arise could have a material adverse effect on the
Company's business, financial condition, and results of operations. In
addition, the purchasing patterns of existing and potential customers may be
affected by Y2K problems, which could cause fluctuations in the Company's sales
volumes. Maintenance or modification costs have been and will continue to be
expensed as incurred.
FORWARD LOOKING STATEMENTS
Certain of the statements contained in this report to shareholders as well
as in the Company's other filings with the Securities and Exchange Commission
that are not historical facts are forward-looking statements subject to the safe
harbor created by the Private Securities Litigation Reform Act of 1995. The
Company cautions readers of this report that a number of important factors could
cause the Company's activities and/or actual results in fiscal 1998 and beyond
to differ materially from those expressed in any such forward-looking
statements. These factors include, without limitation, the Company's dependence
on vendors, product supply, senior management, centralized functions, and third-
party shippers, the Company's ability to compete successfully in a highly
competitive market and manage significant additions in personnel and increases
in working capital, the Company's entry into new products markets in which it
has no prior experience, the Company's susceptibility to quarterly fluctuations
in net sales and operations results, the Company's ability to manage
successfully price protection or stock rotation opportunities associated with
inventory value decreases, and other factors described in other reports and
documents filed by the Company with the Securities and Exchange Commission.
11
<PAGE>
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK
The Company is exposed to changes in financial market conditions in the
normal course of its business as a result of its selective use of bank debt as
well as transacting in Canadian currency in connection with its Canadian
operations.
The Company is exposed to changes in interest rates primarily as a result
of its borrowing activities, which includes a revolving credit facility with a
bank used to maintain liquidity and fund the Company's business operations. The
nature and amount of the Company's debt may vary as a result of future business
requirements, market conditions and other factors. The definitive extent of the
Company's interest rate risk is not quantifiable or predictable because of the
variability of future interest rates and business financing requirements, but
the Company does not believe such risk is material. The Company does not
currently use derivative instruments to adjust the Company's interest rate risk
profile.
The table below presents principal amounts and related weighted average
rates by year of maturity for the Company's debt obligations at September 30,
1998:
<TABLE>
<CAPTION>
(IN THOUSANDS) 1999 2000 2001 2002 2003 THEREAFTER TOTAL FAIR VALUE
---- ---- ---- ---- ---- ---------- ----- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Average interest
rate (variable) --- 7.66% --- --- --- --- 7.66%
Long-term debt 17 24 26 29 31 1,587 1,714 1,867
Average interest
rate (fixed) 9.19% 9.19% 9.19% 9.19% 9.19% 9.19% 9.19%
</TABLE>
The Company is exposed to changes in foreign exchange rates in connection
with its Canadian operations. It is the Company's policy to enter into foreign
currency transactions only to the extent considered necessary to support its
Canadian operations. The amount of the Company's cash deposits denominated in
Canadian currency has not been, and is not expected to be, material.
Furthermore, the Company has no capital expenditure or other purchase
commitments denominated in foreign currency. The Company does not utilize
forward exchange contracts, currency options or other traditional hedging
vehicles to adjust the Company's foreign exchange rate risk profile. The
Company does not enter into foreign currency transactions for
speculative purposes.
The Company does not utilize financial instruments for trading or other
speculative purposes, nor does it utilize leveraged financial instruments. On
the basis of the fair value of the Company's market sensitive instruments at
September 30, 1998, the Company does not consider the potential near-term losses
in future earnings, fair values and cash flows from reasonable possible near-
term changes in interest rates and exchange rates to be material.
12
<PAGE>
PART II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS.
Not applicable
Item 2. CHANGES IN SECURITIES.
Not applicable
Item 3. DEFAULTS UPON SENIOR SECURITIES.
Not applicable
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS.
Not applicable
Item 5. OTHER INFORMATION.
Not applicable.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
Exhibit 27 Financial Data Schedule
(b) Reports on Form 8-K
None
13
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SCANSOURCE, INC.
/s/ Steven H. Owings
-----------------------------------
STEVEN H. OWINGS
Chief Executive Officer
/s/ Jeffery A. Bryson
-----------------------------------
JEFFERY A. BRYSON
Chief Financial Officer
Date: November 16, 1998
14
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM BALANCE
SHEET & INCOME STATEMENT FOR THE PERIOD ENDED SEPTEMBER 30, 1998.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1999
<PERIOD-START> JUL-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 7,025
<SECURITIES> 0
<RECEIVABLES> 30,877
<ALLOWANCES> 2,360
<INVENTORY> 37,208
<CURRENT-ASSETS> 78,994
<PP&E> 8,546
<DEPRECIATION> 1,790
<TOTAL-ASSETS> 87,404
<CURRENT-LIABILITIES> 34,145
<BONDS> 0
0
0
<COMMON> 38,926
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 87,404
<SALES> 60,719
<TOTAL-REVENUES> 60,719
<CGS> 53,732
<TOTAL-COSTS> 4,492
<OTHER-EXPENSES> 2
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 43
<INCOME-PRETAX> 2,454
<INCOME-TAX> 908
<INCOME-CONTINUING> 1,546
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,546
<EPS-PRIMARY> .29
<EPS-DILUTED> .28
</TABLE>
