SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1997
Commission file number 0-23484
STANDARD FUNDING CORP.
- --------------------------------------------------------------------------------
(Exact Name of Small Business Issuer as Specified in its Charter)
New York 11-2523559
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(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
335 Crossways Park Drive, Woodbury, New York 11797
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip code)
(516) 364-0200
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(Issuer's Telephone Number, Including Area Code)
----------
Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act 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 |_|
----------
Common Stock, $.001 par value, outstanding as of November 12, 1997: 2,760,000
shares
Transitional Small Business Disclosure Format: Yes |_| No |X|
<PAGE>
STANDARD FUNDING CORP.
- --------------------------------------------------------------------------------
Quarterly Report on Form 10-QSB
for the period ended September 30, 1997
TABLE OF CONTENTS
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PART I - FINANCIAL INFORMATION Page
- ------ --------------------- ----
Item 1 Financial Statements
BALANCE SHEETS AT SEPTEMBER 30, 1997 AND
DECEMBER 31, 1996 ............................................. 3
STATEMENTS OF INCOME FOR THE NINE MONTHS
ENDED SEPTEMBER 30, 1997 AND SEPTEMBER 30, 1996 ............... 4
STATEMENTS OF INCOME FOR THE THREE MONTHS
ENDED SEPTEMBER 30, 1997 AND SEPTEMBER 30, 1996 ............... 5
STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS
ENDED SEPTEMBER 30, 1997 AND SEPTEMBER 30, 1996 ............... 6
NOTES TO FINANCIAL STATEMENTS ................................... 7
Item 2 Management's Discussion and Analysis of Financial
Condition and Results of Operations ........................... 9
PART II - OTHER INFORMATION
- ------- -----------------
Item 6 Exhibits and Reports on Form 8-K ................................ 13
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-2-
<PAGE>
PART I. FINANCIAL INFORMATION
- ------- ---------------------
Item 1. FINANCIAL STATEMENTS
STANDARD FUNDING CORP.
BALANCE SHEETS
<TABLE>
<CAPTION>
September 30, 1997 December 31, 1996
------------------ -----------------
(unaudited)
<S> <C> <C>
Cash ................................................. $ 123,200 $ 132,563
------------ ------------
Installment loans receivable
under premium finance agreements ................... 42,043,625 33,772,533
Less: Participation program .......................... (1,630,474) (775,997)
Unearned interest .............................. (967,003) (868,300)
Allowance for possible credit losses (Note 2) .. (310,000) (300,000)
------------ ------------
Installment loans receivable
under premium finance agreements - net ............. 39,136,148 31,828,236
Due from officers .................................... 161,996 149,274
Property and equipment - net ......................... 285,485 263,800
Other assets ......................................... 589,446 260,729
------------ ------------
Total .......................................... $ 40,296,275 $ 32,634,602
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES:
Notes payable to financial institutions .............. $ 22,400,000 $ 17,600,000
Commercial paper issued .............................. 2,353,548 2,253,668
Amounts due to insurance companies ................... 2,177,905 535,390
Accrued expenses and other ........................... 133,275 96,132
Funds due - participation program .................... 537,857 219,981
Deferred income taxes payable ........................ 557,431 287,728
------------ ------------
Total, exclusive of subordinated debt .......... 28,160,016 20,992,899
Subordinated debt .................................... 5,003,000 4,913,000
------------ ------------
Total Liabilities .............................. 33,163,016 25,905,899
------------ ------------
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY
Preferred stock, par value $.001 per share:
1,000,000 authorized, none issued .................. -- --
Common stock, par value $.001 per share:
4,000,000 authorized, 2,760,000 shares issued and
outstanding ........................................ 2,760 2,760
Additional paid-in capital ........................... 3,991,501 3,991,501
Retained earnings .................................... 3,138,998 2,734,442
------------ ------------
Total Shareholders' Equity ..................... 7,133,259 6,728,703
------------ ------------
Total ...................................... $ 40,296,275 $ 32,634,602
============ ============
</TABLE>
See notes to financial statements.
-3-
<PAGE>
STANDARD FUNDING CORP.
STATEMENTS OF INCOME (UNAUDITED)
<TABLE>
<CAPTION>
Nine Months Nine Months
Ended Ended
September 30, 1997 September 30, 1996
------------------ ------------------
<S> <C> <C>
NET INTEREST INCOME:
Finance charge income and other ................. $4,776,471 $4,111,731
Less: Interest and other expenses on borrowings . 1,734,502 1,344,137
---------- ----------
Net Interest Income ........................... 3,041,969 2,767,594
---------- ----------
OTHER EXPENSES:
Operating expenses .............................. 1,431,996 1,346,352
Selling expenses ................................ 490,821 424,733
Provisions for possible credit losses (Note 2) .. 444,892 296,380
---------- ----------
Total ......................................... 2,367,709 2,067,465
---------- ----------
INCOME BEFORE PROVISION FOR
INCOME TAXES .................................... 674,260 700,129
PROVISION FOR INCOME TAXES ........................ 269,704 280,052
---------- ----------
NET INCOME ........................................ $ 404,556 $ 420,077
---------- ----------
NET INCOME PER SHARE (Note 1) ..................... $ .15 $ .15
---------- ----------
AVERAGE NUMBER OF
SHARES OUTSTANDING .............................. 2,760,000 2,760,000
---------- ----------
</TABLE>
See notes to financial statements.
-4-
<PAGE>
STANDARD FUNDING CORP.
STATEMENTS OF INCOME (UNAUDITED)
<TABLE>
<CAPTION>
Three Months Three Months
Ended Ended
September 30, 1997 September 30, 1996
------------------ ------------------
<S> <C> <C>
NET INTEREST INCOME:
Finance charge income and other ................. $1,581,125 $1,396,758
Less: Interest and other expenses on borrowings . 613,738 481,930
---------- ----------
Net Interest Income ........................... 967,387 914,828
---------- ----------
OTHER EXPENSES:
Operating expenses .............................. 466,562 432,104
Selling expenses ................................ 182,454 145,122
Provisions for possible credit losses (Note 2) .. 141,685 104,595
---------- ----------
Total ......................................... 790,701 681,821
---------- ----------
INCOME BEFORE PROVISION FOR
INCOME TAXES .................................... 176,686 233,007
PROVISION FOR INCOME TAXES ........................ 70,674 93,203
---------- ----------
NET INCOME ........................................ $ 106,012 $ 139,804
---------- ----------
NET INCOME PER SHARE (Note 1) ..................... $ .04 $ .05
---------- ----------
AVERAGE NUMBER OF
SHARES OUTSTANDING .............................. 2,760,000 2,760,000
---------- ----------
</TABLE>
See notes to financial statements.
-5-
<PAGE>
STANDARD FUNDING CORP.
STATEMENTS OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
Nine Months Nine Months
Ended Ended
September 30, 1997 September 30, 1996
------------------ ------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income ............................................... $ 404,556 $ 420,077
Adjustments to reconcile net income to net cash
provided by operating activities:
Provision for possible credit losses ................... 444,892 296,380
Deferred income taxes .................................. 269,703 48,273
Depreciation and amortization 59,955 32,815
Changes in assets and liabilities:
Other assets ......................................... 341,439 368,257
Accrued expenses and other amounts due to
insurance companies ................................ 2,311,180 1,210,899
Funds due-accounts receivable participation program .. 537,857 -
------------ ------------
Net cash provided by operating activities ............ 4,369,582 2,376,701
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Installment loans receivable originated .................. (76,983,799) (63,225,614)
Collections of installment loans receivable .............. 66,073,054 54,245,028
Purchase of equipment .................................... (81,640) (85,312)
------------ ------------
Net cash used in investing activities .................. (10,992,385) (9,065,898)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from accounts receivable participation program .. 4,153,656 -
Payment of accounts receivable participation program ..... (2,530,096) -
Proceeds from bank notes - net ........................... 4,800,000 6,300,000
Proceeds (Repayment) of commercial paper issued - net .... 99,880 (575,498)
Proceeds (Repayment) of subordinated debt ................ 90,000 148,000
------------ ------------
Net cash provided by financing activities .............. 6,613,440 5,872,502
------------ ------------
INCREASE (DECREASE) IN CASH ................................ (9,363) (816,695)
CASH AT BEGINNING OF YEAR .................................. 132,563 939,869
------------ ------------
CASH AT END OF PERIOD ...................................... $ 123,200 $ 123,174
============ ============
SUPPLEMENTAL DISCLOSURES OF CASH
FLOWS INFORMATION
Income taxes paid ........................................ $ 298,206 $ 363,753
============ ============
Interest paid ............................................ $ 1,673,571 $ 1,224,467
============ ============
</TABLE>
See notes to financial statements.
-6-
<PAGE>
STANDARD FUNDING CORP.
NOTES TO FINANCIAL STATEMENTS
For the nine months ended September 30, 1997 and 1996 (unaudited)
1. SIGNIFICANT ACCOUNTING POLICIES
Business - Standard Funding Corp. (the "Company") provides loans to
finance substantially all forms of property and casualty insurance
premiums on policies which are written through independent insurance
agents and brokers. The insurance policies are primarily held by
commercial businesses.
Interim Financial Statements - The financial statements for the three
month and nine month periods ended September 30, 1997 and 1996 are
unaudited. In the opinion of management, the accompanying unaudited
financial statements contain all the adjustments necessary for a fair
presentation of the financial condition and results of operations for the
three month and nine month periods ended September 30, 1997 and 1996. The
interim financial results are not necessarily indicative of the results to
be expected for a full year.
Revenue Recognition - Unearned interest on installment loans receivable
under premium finance agreements is recognized as income using a method
which approximates the results which would be obtained using the interest
method.
The company has entered into an agreement to sell, on a non-recourse
basis, interests in its installment loans receivable under premium finance
agreements to various financial institutions.
Loan processing costs incurred are deferred and amortized on the
straight-line method over the term of the related installment loans
receivable under premium finance agreements. Cancellation fees and late
charges are recognized as income when received.
Allowance for Possible Credit Losses - The balance in the allowance for
possible credit losses is based on management's assessment of risk in the
installment loan portfolio. The Company writes off receivables upon
determination that no further collections are probable.
Property and Equipment - net - Property and equipment are stated at cost.
Depreciation is provided on the straight-line basis over such assets'
estimated useful service lives which range from three to five years.
Purchased computer software is amortized over longer periods. Leasehold
improvements are amortized over the shorter of their estimated useful
lives or the remaining term of the lease.
Revenue and Credit Concentration - The Company receives substantially all
of its revenues from financing arrangements made within the New York, New
Jersey, Pennsylvania and Massachusetts area. Accordingly, at September 30,
1997, substantially all of the Company's installment loans outstanding
were from this geographic region.
-7-
<PAGE>
STANDARD FUNDING CORP.
NOTES TO FINANCIAL STATEMENTS - (Continued)
Income Taxes - Deferred taxes provide for the tax effect of timing
differences between financial and tax reporting primarily arising from the
recognition of unearned interest income for tax purposes and from the use
of accelerated depreciation methods.
Net Income Per Share - Net income per share is based on the weighted
average number of shares outstanding during the period.
Reclassifications - Certain amounts in prior periods have been
reclassified to conform with the current period's presentations.
2. INSTALLMENT LOANS RECEIVABLE UNDER PREMIUM FINANCE AGREEMENTS
Substantially all installment loans receivable under premium finance
agreements are completely repayable in less than one year. In the event of
default by a borrower, the Company is entitled to cancel the insurance
policy financed and receive a refund for the unused term of such policy
from the insurance carrier. The proceeds of such refunds are generally
sufficient to cover the unpaid balance of the loan.
A summary of activity in the allowance for possible credit losses is as
follows:
<TABLE>
<CAPTION>
Nine Months
Ended Year Ended
September 30, 1997 December 31, 1996
------------------ -----------------
<S> <C> <C>
Balance, beginning of period ................ $ 300,000 $ 208,000
Provision...................................... 444,892 583,398
Charge-offs - net of recoveries of $23,483
and $47,913, respectively .................. (434,892) (491,398)
---------- ----------
Balance, end of period......................... $ 310,000 $ 300,000
========== ==========
</TABLE>
-8-
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Results of Operations
Comparison of Nine Months Ended September 30, 1997 to Nine Months Ended
September 30, 1996
Finance charge income increased by 16.2% to $4,776,471 in the first nine
months of 1997 from $4,111,731 in the first nine months of 1996 primarily
because of an increase in total installment loans financed during the respective
periods. Total installment loans originated increased 21.8% to $76,983,799 from
$63,225,614. The Company's average receivables for the period ended September
30, 1997 increased 30.1% to $39,582,116 from $30,422,887 for the period ended
September 30, 1996. Interest expense for the period ended September 30, 1997
increased 29% to $1,734,502 from $1,344,137 for the period ended September 30,
1996, an increase of $390,365, due to an increase in borrowings. Selling and
operating expenses increased during the period ended September 30, 1997 to
$1,922,817 from $1,771,085 in the period ended September 30, 1996. The increase
of $151,732 was primarily attributable to salaries, expenses and non-recurring
costs of approximately $32,000.
The provision for possible credit losses increased to $444,892 for the
period ended September 30, 1997 from $296,380 for the period ended September 30,
1996. This increase of $148,512 is primarily in the assigned risk automobile
personal lines portfolio. Installment loans receivable balances in the assigned
risk automobile personal lines portfolio continue to decrease. The allowance for
possible credit losses increased to $310,000 at September 30, 1997 from $246,000
at September 30, 1996.
Approximately 89% of gross charge-offs relate to losses incurred in the
assigned risk automobile personal lines portfolio which at September 30, 1997
represented approximately 9% of installment loans receivable.
Comparison of Three Months Ended September 30, 1997 to Three Months Ended
September 30, 1996
Finance charge income increased by 13.2% to $1,581,125 in the third
quarter of 1997 from $1,396,758 in the third quarter of 1996 primarily because
of an increase in total installment loans financed during the respective
periods. Total installment loans originated increased 22.9% to $24,576,885 from
$19,997,827. The Company's average receivables for the third quarter of 1997
increased 28.9% to $42,070,097 from $32,632,433 for the third quarter of 1996.
Interest expense for the third quarter of 1997 increased 27.4% to $613,738 from
$481,930 for the third quarter of 1996, an increase of $131,808, due to an
increase in borrowings. Selling and operating expenses increased during the
third quarter of 1997 to $649,016 from $577,226 in the third quarter of 1996.
The increase of $73,790 was primarily attributable to salaries, expenses and
non-recurring costs of approximately $32,000.
The provision for possible credit losses increased to $141,685 for the
third quarter of 1997 from $104,595 for the third quarter of 1996. This increase
of $37,090 is primarily in the assigned risk automobile personal lines
portfolio. Installment loans receivable balances in the assigned risk automobile
personal lines portfolio continue to decrease.
Liquidity and Capital Resources
The Company's operations are dependent upon the continued availability of
funds on satisfactory terms and rates. The Company uses such funds principally
to finance the origination of installment loans under premium finance
agreements. The Company obtains required funds from a variety of sources,
including internal generation of funds, unsecured borrowings under lines of
credit, direct issuance of commercial paper, placement of subordinated debt, the
sale of accounts receivable participation program and the sale common equity.
-9-
<PAGE>
As the Company increases the size of its business, it originates more
installment loans receivable than it collects, resulting in a larger outstanding
balance of installment loans receivable. For the nine month periods ended
September 30, 1997 and 1996, the Company originated installment loans receivable
of $76,983,799 and $63,225,614, respectively, compared to installment loans
collected for each period of $66,073,054 and $54,245,028, respectively. The
result was an increase in outstanding installment loan receivables to
$40,413,151 from $32,324,284 at September 30, 1997 and 1996, respectively.
The growth in the Company's loan portfolio has been the single largest
factor influencing the Company's cash flow from operations and its need for
financing. The determining factor influencing the growth in the loan portfolio
has been the extent to which the Company has been able to leverage its capital
into subordinated debt and then into short-term senior debt. For the nine month
periods ended September 30, 1997 and 1996, net cash provided by operating
activities was $4,369,582 and $2,376,701, respectively, which amounts were
comprised primarily of net earnings, loss provisions, depreciation and
amortization and other changes in assets and liabilities. For the nine month
periods ended September 30, 1997 and 1996, net cash provided by financing
activities was $6,613,440 and $5,872,502, respectively, comprised of proceeds
from bank notes and repayment of bank notes, proceeds from sales and repayments
of commercial paper, proceeds of subordinated debt and the sale of accounts
receivable participation program.
The following table sets forth the amounts of installment loans receivable
originated and the collections of installment loans receivable for the periods
indicated.
For the Nine Month
Periods Ended September 30,
------------------------------
1997 1996
---- ----
Installment loans originated........... $ 76,983,799 $ 63,225,614
Installment loans collected............ $ 66,073,054 $ 54,245,028
The Company has no present plans related to significant capital
expenditures. The Company is not aware of any pending legislation that would
have a material effect on its capital requirements or business prospects.
State statutes and regulations impose minimum capital requirements, govern
the form and content of financing agreements and limit the interest and service
charges the Company may impose. The Commonwealth of Pennsylvania requires a
minimum net worth of $50,000. The State of New York requires that equity capital
be equal to at least 10% of outstanding and, in any event, not less than $1,500.
The sources of funds (other than internal generation of funds and the sale
of common equity) which are presently available or being utilized by the Company
are described below. Management believes that the sources of funds presently
available to the Company are adequate for the conduct of its business at its
present level. To the extent that the Company in the future expands its business
and increases its total installment receivables outstanding beyond its present
levels of funding, the Company will need to obtain additional sources of funds
or expand existing sources of funds, which may not be available or, if
available, may not be on terms acceptable to the Company.
-10-
<PAGE>
Lines of Credit
At September 30, 1997, the Company had unsecured short term lines of
credit aggregating $35,500,000 available through six commercial banks, under
which $22,400,000 was outstanding. Amounts outstanding under these lines bear
interest at variable rates over LIBOR. The Company pays fees to some of these
banks in connection with these lines. These lines expire on various dates
through June 30, 1998, although there can be no assurance that these lines will
not be revoked, suspended or reduced at any time. No bank is contractually
obligated to renew any such line. During the nine month periods ended September
30, 1997 and 1996, the maximum aggregate amount outstanding under these lines at
any time was $24,800,000 and $17,300,000, respectively.
Commercial Paper
The Company directly issues its own commercial paper with maturities of up
to 270 days, which is unsecured and is unrated by commercial paper rating
agencies. Commercial paper outstanding at September 30, 1997 bore interest at
fixed annual rates ranging from 6.19% to 7.12%. During the nine month periods
ended September 30, 1997, the maximum outstanding commercial paper net of
prepaid discount at any month end was $2,481,337. Such commercial paper is
generally sold to officers of the Company and their affiliates and to
non-affiliated investors. The Company has obtained no commitments from any
purchaser of its commercial paper regarding additional or future purchases. It
is the Company's policy to maintain unused short-term bank lines of credit in an
amount in excess of the amount of commercial paper outstanding. The interest
rate on the Company's commercial paper has been and will continue to be
determined by reference to prevailing interest rates in the commercial paper
market. The Company does not anticipate any change in the level of financing
provided by affiliates of the Company or any changes in the costs of financing
provided by such affiliates. There can be no assurance, however, that such
levels of financing will be maintained in the future.
Subordinated Debt
The Company has obtained unsecured senior subordinated debt in the amount
of $4,100,000 from outside investors. The notes bear interest at a fixed rate of
10%, 12.50% and 14% and are due from November 1, 2000 to March 31, 2002. Some of
the 14% senior subordinated debt notes restrict the Company's ability, among
other things, to merge, pay dividends and permit its business to be heavily
concentrated with a single broker or agency. Several of the underlying
agreements also contains various covenants requiring the Company to meet certain
financial ratios and other restrictions on acquisitions and investments. The
Company may, at its option, prepay the loan in whole or in part. However, with
respect to several of the notes, the Company must reimburse the investors for
any loss of margin on reemployment of the funds so repaid. The Company does not
currently anticipate prepaying or otherwise refinancing its existing senior
subordinated debt prior to its maturity.
In addition, the Company had obtained unsecured junior subordinated debt in the
amount of $903,000 from various investors. These notes bear interest at a fixed
rate of 11.25%, 12% and 14.25% and are due from February 16, 2001 to September
30, 2001.
-11-
<PAGE>
The following table indicates amounts, rates and maturity dates as of September
30, 1997 of all senior and junior subordinated debt of the Company.
Rate Due Date Amount
---- -------- ------
14.25% 06/30/2001 $ 810,000
14.00% 11/01/2000 500,000
14.00% 12/27/2000 3,000,000
12.50% 03/31/2001 510,000
12.00% 02/16/2001 50,000
11.25% 09/30/2001 43,000
10.00% 03/31/2002 90,000
-----------
$ 5,003,000
===========
Subordinated debt is generally sold to officers of the Company and their
affiliates and to non-affiliated investors. The Company has obtained no
commitments from any holder of its subordinated debt regarding additional or
future purchases.
Participation Program
In addition to the sources of funds described above, the Company has
entered into an agreement to sell, on a non-recourse basis, interests in its
installment loans receivable under premium finance agreements to various
financial institutions.
Other Potential Sources
The Company continually engages in discussions with both current and
prospective lenders regarding obtaining increases, in extensions of or additions
to, both its short-term lines of credit and its subordinated borrowings. The
Company is currently engaged in such discussions with several lenders, but can
give no assurance as to whether or when such discussions will be favorably
consummated.
-12-
<PAGE>
PART II. OTHER INFORMATION
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
None.
(b) Reports on Form 8-K
None.
-13-
<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.
STANDARD FUNDING CORP.
Date: November 12, 1997 /s/ Alan J. Karp
Alan J. Karp -------------------------
President and Chief Executive Officer
Date: November 12, 1997 /s/ David E. Fisher
David E. Fisher -------------------------
Treasurer and Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from 9-30-97 and
is qualified in its' entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 123,200
<SECURITIES> 0
<RECEIVABLES> 39,136,148
<ALLOWANCES> 310,000
<INVENTORY> 0
<CURRENT-ASSETS> 40,010,790
<PP&E> 665,811
<DEPRECIATION> 380,326
<TOTAL-ASSETS> 40,296,275
<CURRENT-LIABILITIES> 33,163,016
<BONDS> 0
0
0
<COMMON> 2,760
<OTHER-SE> 7,133,259
<TOTAL-LIABILITY-AND-EQUITY> 40,296,275
<SALES> 0
<TOTAL-REVENUES> 4,776,471
<CGS> 0
<TOTAL-COSTS> 1,922,817
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 444,892
<INTEREST-EXPENSE> 1,734,502
<INCOME-PRETAX> 674,260
<INCOME-TAX> 269,704
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 404,556
<EPS-PRIMARY> .15
<EPS-DILUTED> 0
</TABLE>
