- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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: JUNE 30, 1997
OR
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
ACT OF 1934
For the transition period from _________________ to _________________
Commission File Number: 0-24094
LESLIE BUILDING PRODUCTS, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware 13-3764357
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
200 Mamaroneck Avenue, White Plains, N.Y. 10601
(Address of principal executive offices)
(Zip Code)
(914) 421-2545
Registrant's Telephone Number including Area Code
(Former name, former address and former fiscal year,
if changed since last year)
Indicate by check marks 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 such shorter period that the registrant
was required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.
Yes |X| No |_|
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date. 4,850,744 shares of common
stock as of July 30, 1997.
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<PAGE>
LESLIE BUILDING PRODUCTS, INC.
INDEX TO FINANCIAL STATEMENTS FILED WITH
QUARTERLY REPORT OF REGISTRANT ON FORM 10-Q
FOR THE QUARTER ENDED JUNE 30, 1997
(UNAUDITED)
------------------------------------------------------------
Page
----
PART I - FINANCIAL INFORMATION
CONSOLIDATED STATEMENTS OF OPERATIONS 3
CONSOLIDATED BALANCE SHEETS 4
CONSOLIDATED STATEMENTS OF CASH FLOWS 5
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY 6
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 7-8
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 9-12
PART II - OTHER INFORMATION
Not applicable
SIGNATURES 13
<PAGE>
LESLIE BUILDING PRODUCTS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended Three Months Ended
June 30, June 30,
---------------- ------------------
1997 1996 1997 1996
- -----------------------------------------------------------------------------------
(In thousands, except per share amounts)
<S> <C> <C> <C> <C>
Net sales $ 48,699 44,720 $28,300 $25,969
Cost of sales (Note 2) 40,825 36,281 23,083 20,777
-------- ------- ------- -------
Gross profit 7,874 8,439 5,217 5,192
Selling, general and administrative expenses 7,448 6,793 3,974 3,699
-------- ------- ------- -------
Operating income 426 1,646 1,243 1,493
Interest expense, net 834 874 384 454
-------- ------- ------- -------
Net income (loss) $ (408) $ 772 $ 859 $ 1,039
======== ======= ======= =======
Net income (loss) per common share $ (.08) $ .16 $ .18 $ .22
======== ======= ======= =======
Weighted average common shares outstanding 4,845 4,808 4,849 4,812
======== ======= ======= =======
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
3
<PAGE>
LESLIE BUILDING PRODUCTS, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
June 30,
------------------ December 31,
1997 1996 1996
- -------------------------------------------------------------------------------------
(In thousands, except shares and per share amounts)
<S> <C> <C> <C>
ASSETS
Current assets
Cash $ 56 $ 10 $ 34
Accounts receivable, trade, less allowance for
doubtful accounts 9,677 15,100 7,815
Inventories (Note 2) 11,979 10,672 16,891
Prepaid expenses and other current assets 1,429 1,544 1,455
-------- -------- --------
Total current assets 23,141 27,326 26,195
Fixed assets, net 14,474 16,318 15,320
Other assets 463 506 442
-------- -------- --------
Total assets $ 38,078 $ 44,150 $ 41,957
======== ======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Current maturities of long-term debt $ 890 $ 886 $ 933
Accounts payable, trade 6,405 8,189 6,442
Accrued expenses and other current liabilities 5,474 4,587 3,882
Discontinued operations, net (Note 3) 3,776 3,620 3,697
-------- -------- --------
Total current liabilities 16,545 17,282 14,954
Long-term debt (Note 4) 12,378 16,970 17,598
Other long-term liabilities 969 1,227 842
-------- -------- --------
Total liabilities 29,892 35,479 33,394
-------- -------- --------
Commitments and Contingencies (Note 3)
Stockholders' equity
Common stock par value $.01 per share:
authorized 20,000,000 shares; issued
4,850,744 shares in June 1997, 4,814,289
shares in June 1996, and 4,833,075 shares
in December 1996 48 48 48
Paid-in capital 20,343 20,275 20,312
Accumulated deficit (12,205) (11,652) (11,797)
-------- -------- --------
Total stockholders' equity 8,186 8,671 8,563
-------- -------- --------
Total liabilities and stockholders' equity $ 38,078 $ 44,150 $ 41,957
======== ======== ========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
4
<PAGE>
LESLIE BUILDING PRODUCTS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended
June 30,
-----------------
1997 1996
- ----------------------------------------------------------------------------
(In thousands)
Cash flows from operating activities:
Net (loss) income $ (408) $ 772
Adjustments to reconcile net loss to cash flows
used for operating activities:
Depreciation and amortization 1,033 1,023
Provision for accounts receivable 485 58
Loss on disposal of fixed assets 6 15
Changes in assets and liabilities:
Accounts receivable (2,347) (7,451)
Inventories 4,423 1,570
Prepaid expenses and other assets (88) 269
Accounts payable, accrued expenses and other
current liabilities 1,634 2,042
-------- --------
Net cash flows provided by (used for) operating
activities 4,738 (1,702)
-------- --------
Cash flows from investing activities:
Capital expenditures (159) (890)
Proceeds from sales of assets 548
-------- --------
Net cash flows provided by (used for) investing
activities (389) (890)
-------- --------
Cash flows from financing activities:
Proceeds from Industrial Revenue Bond 7,000
Equipment loan 925
Proceeds from secured line of credit 16,633 16,240
Repayments under secured line of credit and other
borrowings (28,896) (14,363)
Other 158 (215)
-------- --------
Net cash flows (used for) provided by financing
activities (5,105) 2,587
-------- --------
Net increase (decrease) in cash 22 (5)
Cash at beginning of period 34 15
-------- --------
Cash at end of period $ 56 $ 10
======== ========
Supplemental disclosure of cash flows information:
Cash paid during the period for:
Interest on debt $ 704 $ 838
Income taxes $ 8
The accompanying notes are an integral part of these consolidated financial
statements.
5
<PAGE>
LESLIE BUILDING PRODUCTS, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(Unaudited)
<TABLE>
<CAPTION>
Retained Total
Common Paid-in Earnings Stockholders'
Stock Capital (Deficit) Equity
- ----------------------------------------------------------------------------------------
(In thousands, except shares)
<S> <C> <C> <C> <C>
Balance - December 31, 1996 $ 48 $ 20,312 $(11,797) $8,563
Net loss for six months ended June 30, 1997 (408) (408)
Employee purchases of 17,669 shares
of common stock 31 31
----- -------- -------- ------
Balance - June 30, 1997 $ 48 $ 20,343 $(12,205) $8,186
===== ======== ======== ======
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
6
<PAGE>
LESLIE BUILDING PRODUCTS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation
The Consolidated Financial Statements presented herein have been prepared
by the Company in accordance with the accounting policies described in its
December 31, 1996 Annual Report on Form 10-K and should be read in conjunction
with the Notes to Consolidated Financial Statements included therein.
In the opinion of management, the information furnished in this Form 10-Q
reflects all adjustments necessary for a fair statement of the results of
operations as of and for the six month and three month periods ended June 30,
1997 and 1996. All such adjustments are of a normal recurring nature. The
Consolidated Financial Statements have been prepared in accordance with the
instructions to Form 10-Q and therefore do not include some information and
notes necessary to conform with annual reporting requirements.
2. Inventories
Inventories are valued at the lower of cost (using the last-in, first-out
and first-in, first-out methods) or market. Cost includes material, labor and
overhead (for manufactured products); market is replacement cost or realizable
value after allowance for costs of distribution.
Quarterly inventories valued on the last-in, first-out method are based on
an annual determination of quantities and costs as of the previous year-end.
Therefore, such quarterly inventory valuations are based on estimates.
3. Discontinued Operations
In fiscal 1990, the Company discontinued the operations of White Metal
Rolling and Stamping Corp. ("White Metal"), the Company's ladder manufacturing
subsidiary, and sold certain assets of White Metal, (machinery, equipment and
supplies and customer lists) to a private company. The buyer did not assume any
liabilities of White Metal, nor acquire the White Metal name and will not
produce White Metal ladders. All manufacturing operations of White Metal ceased
as of January 31, 1991 and substantially all of its remaining assets have since
been liquidated.
At June 30, 1997, White Metal's estimated future product liability, which
is no longer covered by insurance, was approximately $3.8 million (net of
imputed interest). Such liability is reflected in discontinued operations, net,
on the Consolidated Balance Sheet. Although Leslie-Locke was named as a
defendant in certain product liability actions, Leslie-Locke has not been held
responsible, and the Company and Leslie-Locke disclaim any liability for the
obligations of White Metal.
On September 30, 1994, White Metal filed a voluntary petition seeking
liquidation under the provisions of chapter 7 of the United States Bankruptcy
Code. In connection with the chapter 7 filing by White Metal, numerous proofs of
claim have been filed against White Metal. Included is a claim by Sears Roebuck
& Co., ("Sears") dated April 7, 1995, in the amount of $164 million, including
actual losses of $1,657,000 and estimated future product liability losses for
the next 20 years, based upon indemnification
7
<PAGE>
LESLIE BUILDING PRODUCTS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
obligations which Sears alleges White Metal undertook in connection with White
Metal's sale of ladders to Sears. These proofs of claim have been evaluated and
no change was required in the Company's estimated product liability accrual. The
Company and Leslie-Locke have in the past disclaimed, and continue to disclaim,
any liability for the obligations of White Metal.
On May 7, 1996, the Company and Leslie-Locke and Drew Industries
Incorporated ("Drew"), the former parent of Leslie-Locke, and its subsidiary,
Kinro, Inc., were served with a summons and complaint in an adversary proceeding
commenced by the chapter 7 trustee of White Metal. The proceeding is based upon
the trustee's allegations, previously disclosed by the Company, that
Leslie-Locke, as well as Drew and Drew affiliated companies, obtained tax
benefits attributable to the use of White Metal's net operating losses. The
trustee seeks to recover the purported value of the tax savings achieved. In
addition, the trustee alleges that White Metal made certain payments to
Leslie-Locke and Drew which were preferential and are recoverable by White
Metal. The complaint, which appears to allege several duplicate claims, seeks
damages in the aggregate amount of approximately $10.6 million plus attorneys'
fees. Management believes that the trustee's allegations are without merit and
have no basis in fact. The Company and Leslie-Locke deny any liability for any
amount claimed and are vigorously defending against the allegations. However, an
estimate of potential loss, if any, cannot be made at this time. The Company
believes that it has sufficient accruals for the defense of this proceeding
which will have no material adverse impact on its financial condition or results
of operations.
4. Long-Term Debt
The Company has a seasonally adjusted $12 million revolving line of credit
with Branch Banking and Trust Company ("BBT"), consisting of cash advances of a
maximum of $10.5 million and letters of credit of $1.5 million, with interest
payable at 0.625% over the prime rate. At June 30, 1997, the interest rate on
this line of credit was 9.125%.
Pursuant to its bank agreements, the Company is prohibited from declaring
or paying dividends without the prior written consent of the lender.
Leslie-Locke is also required to maintain certain financial covenants typical to
secured borrowing arrangements. For the period ended June 30, 1997 the Company
was in violation of its working capital requirement and a waiver of such
violation was received from BBT.
On June 1, 1997, the Company obtained financing in the form of a $7
million Industrial Revenue Bond. The proceeds were used to pay the existing
mortgage to BBT on the Company's second plant in Burgaw, North Carolina and
other debt. The loan is for thirteen years with quarterly amortization beginning
after the first year and is secured by a letter of credit from BBT which expires
after three years. Interest is variable with the market (3.95% per annum at June
30, 1997) and there is a letter of credit fee of 1.9% per annum.
8
<PAGE>
LESLIE BUILDING PRODUCTS, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Leslie Building Products, Inc. ("Leslie Building Products"), including its
wholly-owned subsidiary Leslie-Locke, Inc. ("Leslie-Locke") (together, the
"Company"), is a diversified manufacturer and marketer of a wide variety of
specialty building products for the professional and do-it-yourself home
remodeling and residential construction industry. Its products consist of
ornamental iron security products (including doors, window guards, fencing and
railings), residential ventilation products, metal and fiberglass air
distribution products for the HVAC industry, skylights, and a full line of door
louvers and vision lite products for the architectural door market. This broad
range of products is marketed primarily to leading home center chains and, to a
lesser extent, to building material distributors, hardware co-ops and mass
merchandisers.
RESULTS OF OPERATIONS
Operations
The results of operations for the six and three months ended June 30, 1997
and 1996 should not be regarded as indicative of the results that may be
expected for the entire year, since operations are seasonal in nature.
Operations are historically stronger in the spring and summer months with 60% of
sales occurring during the six month period March to August.
Net sales increased 9% for both the six months and three months ended June
30, 1997 compared to the same period last year, as a result of increased sales
of security products, ventilation products and, to a lesser extent, ductwork.
This sales increase is primarily volume related. The increase in ventilation
sales are the result of new ventilation product business awarded by two of the
Company's major customers in December 1996.
Gross profit as a percentage of sales declined 2.7% for the six months and
1.6% for the three months ended June 30, 1997 from the same period last year.
Gross profit declined as a result of additional trade discounts in connection
with acquiring the new business described above. In addition, selling prices
were reduced on certain items as a result of competitive pressures, and the
Company experienced increases in freight rates. In order to alleviate the impact
on profits for 1997, substantial overhead cuts have been made and additional
steps to improve manufacturing processes are being developed. In addition, in an
effort to focus on its primary products the Company is considering disposing of
less significant products. In this connection, the aluminum rake business was
sold in the second quarter and the Company may sell its skylight product line.
The sale of these two product lines which had revenues of $2.9 million in 1996,
or 2% of total revenues, are expected to result in a breakeven.
Selling, general and administrative expenses as a percentage of sales is
consistent with last year. The increase in market development costs incurred in
connection with acquiring the new business described above, as well as a
provision of more than $350,000 for accounts receivable relating to the Chapter
11 filing of a major customer, were partially offset by reductions in fixed
administrative costs.
Interest Expense, Net
Interest expense, net includes interest on bank debt, as well as imputed
interest on certain long-term obligations of White Metal, Leslie-Locke's
discontinued ladder manufacturing subsidiary. The reduction in
9
<PAGE>
LESLIE BUILDING PRODUCTS, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (Continued)
interest expense for the six months and quarter ended June 30, 1996 results
primarily from lower average borrowings under the Company's revolving credit
line. The lower borrowings are attributable to lower inventory and improved cash
management including faster turnover of receivables.
Income Taxes
The Company's income tax provision is recorded pursuant to the
requirements of Financial Accounting Standards No. 109 "Accounting for Income
Taxes" ("Statement 109"). At December 31, 1996, the Company had a net operating
loss carryforward for Federal income tax purposes of approximately $4.3 million
that expires in the years 2010 and 2011. Due to the uncertainty of future
realization no income tax benefit has been recorded.
Accounting Changes
Statement of Financial Accounting Standards No. 128 ("Statement 128"),
"Earnings Per Share", will require presentation of "basic" and "diluted"
earnings per share for periods ending after December 15, 1997. The effect on
prior periods' reported earnings per share is not expected to be material.
Other
Pursuant to a Shared Services Agreement following the spin-off of the
Company from Drew Industries Incorporated ("Drew") on July 29, 1994, Drew and
Leslie Building Products have shared certain administrative functions and
employee services, such as management overview and planning, tax preparation,
financial reporting, coordination of independent audit, stockholder relations,
and regulatory matters. Drew has been reimbursed by Leslie Building Products for
the fair market value of such services. This agreement expires on December 31,
1997 but may be extended. The Company was charged management fees by Drew of
$287,000 and $266,000 for the six months ended June 30, 1997 and 1996,
respectively.
LIQUIDITY AND CAPITAL RESOURCES
The Company has a seasonally adjusted $12 million revolving line of credit
with Branch Banking and Trust Company ("BBT"), consisting of cash advances of a
maximum of $10.5 million and letters of credit of $1.5 million, with interest
initially payable at 0.375% over the prime rate. The interest rate was amended
to 0.625% over the prime rate on February 20, 1996. The line of credit, of which
$5.5 million is available at the close of business of June 30, 1997, is adequate
for the Company's anticipated needs. The loan agreement expires in July 1998.
Pursuant to its bank agreements the Company is prohibited from declaring
or paying dividends without the prior written consent of the lender. Leslie
Locke is also required to maintain certain financial covenants typical to
secured borrowing arrangements. For the period ended June 30, 1997 the Company
was in violation of its working capital requirement and a waiver of such
violation was received from BBT.
10
<PAGE>
LESLIE BUILDING PRODUCTS, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (Continued)
On June 1, 1997, the Company obtained financing in the form of a $7
million Industrial Revenue Bond. The proceeds were used to pay the existing
mortgage to BBT on the Company's second plant in Burgaw, North Carolina and
other debt. The loan is for thirteen years with quarterly amortization beginning
after the first year and is secured by a letter of credit from BBT which expires
after three years. Interest is variable with the market (3.95% per annum at June
30, 1997) and there is a letter of credit fee of 1.9% per annum.
The Statements of Cash Flows reflect the following (in thousands):
<TABLE>
<CAPTION>
Six Months Ended June 30,
1997 1996
-------------------------------------------------------------------------------------
<S> <C> <C>
Net cash flows provided by (used for) operating activities $ 4,738 $(1,702)
Net cash flows provided by (used for) investing activities $ 389 $ (890)
Net cash flows (used for) provided by financing activities $(5,105) $ 2,587
</TABLE>
Net cash provided by operating activities was $4.7 million in the 1997
period compared to $1.7 million used for operating activities in the 1996
period. The seasonal increase in accounts receivable was only $2.3 million
compared to $7.5 million for the 1996 period as a result of shorter average
payment terms. Better production and inventory control resulted in a reduction
in inventories, other than the sale of the aluminum rake product line, of $4.4
million during the 1997 period compared to $1.6 million during the prior year's
period. Accounts payable and accrued expenses increased $1.6 million in 1997
compared to $2.0 million in 1996.
Cash flows provided by investing activities in 1997 primarily consists of
proceeds from the sale of the aluminum rake product line reduced by capital
expenditures, which were only $.2 million. Capital expenditures aggregated $.9
million for the six months ended June 30, 1996.
At June 30, 1997, the estimated future product liability of White Metal,
Leslie-Locke's discontinued ladder manufacturing subsidiary, which is no longer
covered by insurance, was approximately $3.8 million (net of imputed interest.)
Such liability is reflected in discontinued operations, net, on the Consolidated
Balance Sheet. Although Leslie-Locke was named as a defendant in certain product
liability actions, Leslie-Locke has not been held responsible, and the Company
and Leslie-Locke disclaim any liability for the obligations of White Metal.
On September 30, 1994, White Metal filed a voluntary petition seeking
liquidation under the provisions of chapter 7 of the United States Bankruptcy
Code. In connection with the chapter 7 filing by White Metal, numerous proofs of
claim have been filed against White Metal. Included is a claim by Sears, Roebuck
& Co., ("Sears") dated April 7, 1995, in the amount of $164 million, including
actual losses of $1,657,000 and estimated future product liability losses for
the next 20 years, based upon indemnification obligations which Sears alleges
White Metal undertook in connection with White Metal's sale of ladders to Sears.
These proofs of claim have been evaluated and no change was required in the
Company's estimated product liability accrual. The Company and Leslie-Locke have
in the past disclaimed, and continue to disclaim, any liability for the
obligations of White Metal.
11
<PAGE>
LESLIE BUILDING PRODUCTS, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (Continued)
On May 7, 1996, the Company and Leslie-Locke, and Drew, the former parent
of Leslie-Locke, and its subsidiary, Kinro, Inc., were served with a summons and
complaint in an adversary proceeding commenced by the chapter 7 trustee of White
Metal. The complaint, which appears to allege several duplicate claims, seeks
damages in the aggregate amount of approximately $10.6 million plus attorneys'
fees, of which approximately $9.7 million is sought, jointly, and severally,
from the Company, Leslie-Locke, Drew and Kinro. The proceeding is based
principally upon the trustee's allegations, previously disclosed by the Company,
that the Company and its affiliated companies obtained tax benefits attributable
to the use of White Metal's net operating losses. The trustee seeks to recover
the purported value of the tax savings achieved, which appears to be
approximately $7.5 million. Management believes that the trustee's allegations
are without merit and have no basis in fact. In addition, the trustee alleges
that White Metal made certain payments to Leslie-Locke and Drew which were
preferential and are recoverable by White Metal, in the approximate amount of
$2.2 million. Leslie-Locke denies liability for any such amount and is
vigorously defending against the allegations. However, an estimate of potential
loss, if any, cannot be made at this time. The Company believes the defense of
this proceeding will not have a material adverse impact on its financial
condition or results of operations.
INFLATION
The prices of raw materials, consisting primarily of steel, aluminum,
paint, electric motors and packaging materials are influenced by demand and
other factors specific to these commodities rather than being directly affected
by inflationary pressures.
12
<PAGE>
LESLIE BUILDING PRODUCTS, INC.
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.
LESLIE BUILDING PRODUCTS, INC.
Registrant
By /s/ Fredric M. Zinn
--------------------------
Fredric M. Zinn
Principal Financial Officer
August 11, 1997
13
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 56
<SECURITIES> 0
<RECEIVABLES> 10,548
<ALLOWANCES> 871
<INVENTORY> 11,979
<CURRENT-ASSETS> 23,141
<PP&E> 22,393
<DEPRECIATION> 7,919
<TOTAL-ASSETS> 38,078
<CURRENT-LIABILITIES> 16,545
<BONDS> 0
0
0
<COMMON> 48
<OTHER-SE> 8,138
<TOTAL-LIABILITY-AND-EQUITY> 38,078
<SALES> 48,699
<TOTAL-REVENUES> 48,699
<CGS> 40,825
<TOTAL-COSTS> 48,273
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 834
<INCOME-PRETAX> (408)
<INCOME-TAX> 0
<INCOME-CONTINUING> (408)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (408)
<EPS-PRIMARY> (.08)
<EPS-DILUTED> (.08)
</TABLE>
