U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
|X| Quarterly report under Section 13 or 15(d) of the Securities Exchange Act
of 1934
For the quarterly period ended June 30, 1998
|_| Transition Report under Section 13 or 15(d) of the Exchange Act
For the transition period from ________ to ___________
Commission file number: 0-26464
CSI Computer Specialists, Inc.
(Exact Name of Small Business Issuer as Specified in Its Charter)
Delaware 52-1599610
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
904 Wind River Lane Suite 100 Gaithersburg, Maryland 20878
(Address of Principal Executive Offices)
301-921-8860
(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 of 1934 during the past 12 months (or
for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
Yes X No ____
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date.
Title Outstanding
Common Stock, par value $0.001 per share 4,029,714 shares at August 10,1998
Transitional Small Business Disclosure Format (check one);
Yes___ No X
<PAGE>
CSI Computer Specialists Inc.
QUARTER ENDED JUNE 30, 1998
INDEX
PART I. FINANCIAL INFORMATION PAGE
Item 1. Financial Statements
Consolidated Balance Sheets as of June 30, 1998
(unaudited) and December 31, 1997 3
Consolidated Statements of Operations for the three
months ended June 30, 1998 and 1997 (unaudited) 4
Consolidated Statements of Operations for the six
months ended June 30, 1998 and 1997 (unaudited) 5
Consolidated Statements of Cash Flows for the six
months ended June 30, 1998 and 1997 (unaudited) 6
Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
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 Security Holders 11
Item 5. Other Information 11
Item 6. Exhibits and Reports on Form 8-K 11
SIGNATURES 14
<PAGE>
<PAGE>
PART 1. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CSI COMPUTER SPECIALISTS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
June 30, December 31,
1998 1997
---------------- ---------------
ASSETS
CURRENT ASSETS
Cash and cash equivalents 164,312 193,056
Accounts receivable 5,406,571 3,647,857
Net investment in sales-type leases - current 153,086 215,618
Inventory for resale 821,888 384,241
Parts and supplies 1,177,613 1,033,068
Prepaid income taxes 466,209 323,544
Prepaid expenses 82,982 173,031
---------------- ---------------
Total current assets 8,272,661 5,970,415
---------------- ---------------
PROPERTY AND EQUIPMENT - AT COST 1,829,620 1,702,375
Less accumulated depreciation 1,049,849 933,686
---------------- ---------------
779,771 768,689
---------------- ---------------
OTHER ASSETS
Goodwill (Net of accumulated amortization) 2,329,698 2,396,365
Net investment in sales-type leases - non-current 130,161 77,271
Cash - restricted 431,512 416,897
Other assets 87,603 96,573
---------------- ---------------
2,978,974 2,987,106
---------------- ---------------
12,031,406 9,726,210
================ ===============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable 3,350,209 1,764,012
Accrued expenses 137,992 146,088
Revolving line of credit 2,172,459 1,146,839
Current maturities of long term debt 3,767 11,401
Deferred income taxes payable 207,623 182,835
---------------- ---------------
Total current liabilities 5,872,050 3,251,175
---------------- ---------------
LONG-TERM DEBT, less current maturities 11,018 8,445
---------------- ---------------
COMMITMENTS
STOCKHOLDERS' EQUITY
Preferred stock - authorized, 10,000,000
shares of $.001 par value $ - $ -
Common stock - authorized, 25,000,000 shares
of $.001 par value; issued and
outstanding, 4,029,212 shares 4,030 3,966
Common stock - $0.001 par value, stock
subscribed and unissued - 75,000 shares - 75
Paid-in capital 5,517,125 5,627,114
Retained earnings 627,183 835,435
---------------- ---------------
Total stockholders' equity 6,148,338 6,466,590
---------------- ---------------
12,031,406 9,726,210
================ ===============
<PAGE>
CSI COMPUTER SPECIALISTS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended
June 30,
1998 1997
----------------- -----------------
Revenues
Maintenance services 3,236,354 2,204,769
Parts and equipment sales 5,059,028 3,211,225
----------------- -----------------
8,295,382 5,415,994
Costs and expenses
Cost of maintenance services 2,274,510 1,758,174
Cost of parts and equipment sales 4,437,664 2,706,769
Selling, general and administrative 1,666,021 1,088,964
----------------- -----------------
8,378,195 5,553,907
----------------- -----------------
Operating (loss) (82,813) (137,913)
Other deductions
Net interest income (expense) (30,874) 15,565
----------------- -----------------
Loss before benefit for income taxes (113,687) (122,348)
(Benefit) Provision for income taxes
Current (57,401) (47,200)
Deferred 24,788 -0-
----------------- -----------------
(32,613) (47,200)
NET LOSS (81,074) (75,148)
================= =================
Per share amounts
Net earnings per share (0.02) (0.02)
================= =================
Weighted average number of shares
Outstanding 4,029,212 3,966,226
================= =================
CSI COMPUTER SPECIALISTS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Six Months Ended
June 30,
1998 1997
----------------- -----------------
Revenues
Maintenance services 6,333,911 4,440,401
Parts and equipment sales 8,574,603 6,239,325
----------------- -----------------
14,908,514 10,679,726
Costs and expenses
Cost of maintenance services 4,488,616 3,017,772
Cost of parts and equipment sales 7,488,424 5,183,679
Selling, general and administrative 3,209,720 2,398,758
----------------- -----------------
15,186,760 10,600,209
----------------- -----------------
Operating (loss) profit (278,246) 79,517
Other deductions
Net interest (expense) income (43,627) 50,618
----------------- -----------------
(Loss) Earnings before income taxes (321,873) 130,135
(Benefit) Provision for income taxes
Current (138,409) 50,200
Deferred 24,788 -0-
----------------- -----------------
(113,621) 50,200
NET (LOSS) EARNINGS (208,252) 79,935
================= =================
Per share amounts
Net earnings per share (0.05) 0.02
================= =================
Weighted average number of shares
outstanding 4,029,212 3,966,226
================= =================
<PAGE>
CSI COMPUTER SPECIALISTS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended
June 30,
1998 1997
-------------- --------------
Net cash flows from operating activities (812,058) (503,844)
-------------- --------------
Cash flows used in investing activities
Net cash transferred - acquisition of subsidiary - 13,907
Payment of subsidiary acquisition costs - (1,960,642)
Cash - restricted - (400,000)
Acquisition of property and equipment (127,245) (146,455)
-------------- --------------
Net cash used in investing activities (127,245) (2,493,190)
-------------- --------------
Cash flows used in financing activities
Payments on long-term debts (5,061) (5,011)
Acquisition of treasury stock (110,000) -
Increase in revolving line of credit 1,025,620 (328,000)
-------------- --------------
Net cash used in financing activities 910,559 (333,011)
-------------- --------------
NET (DECREASE) IN CASH (28,744) (3,330,045)
Cash at beginning of period 193,056 3,915,578
-------------- --------------
Cash at end of period 164,312 585,533
============== ==============
Supplemental disclosure of cash flow information
Cash paid through June 30, 1998 and 1997 for:
Interest 85,582 26,527
Income taxes - 5,180
<PAGE>
CSI COMPUTER SPECIALISTS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
Note 1 - Basis of Presentation
The condensed financial statements at June 30, 1998 and for the three
and six month periods ended June 30, 1998 and 1997 are unaudited and reflect all
adjustments (consisting only of normal recurring adjustments) which are, in the
opinion of management, necessary for a fair presentation of the financial
position and operating results for the interim periods. The condensed financial
statements have been prepared in accordance with the rules and regulations of
the Securities and Exchange Commission, and therefore omit certain information
and footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles. The Company believes
that the disclosures contained in the condensed financial statements are
adequate to make the information presented therein not misleading. The financial
statements should be read in conjunction with the financial statements and notes
thereto, together with management's discussion and analysis of financial
condition and results of operations, contained in the Company's Annual Report on
Form 10-KSB for the fiscal year ending December 31, 1997.
The results of operations for the three and six months ended June 30,
1998 are not necessarily indicative of the results that may be expected for the
entire fiscal year ending December 31, 1998.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operation
Certain statements made in this Quarterly Report on Form 10-QSB are
"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. Such statements involve known and unknown risks, uncertainties, and
other factors that may cause actual results, performance, or achievements of the
Company to be materially different from any future results, performance, or
achievements expressed or implied by such forward-looking statements. Although
the Company believes that the expectations reflected in such forward-looking
statements are based upon reasonable assumptions, the Company's actual results
could differ materially from those set forth in the forward-looking statements.
Certain factors that might cause such a difference include, but are not limited
to, the timing of revenues, rapid technological change, the demand for services
for computer hardware systems and computer equipment, the timing and amount of
capital expenditures and other risks detailed herein.
GENERAL
The Company provides a full range of computer hardware services,
including sales and maintenance of mainframe and mid-range computer equipment
and parts, network design and installation, computer upgrades, and installation
and de-installation of equipment. These services are provided to commercial
customers, agencies of federal, state and local governments, universities,
associations and hospitals primarily in the Mid-Atlantic region of the United
States, including West Virginia, Virginia, Maryland, the District of Columbia,
New Jersey, New York, Connecticut and Pennsylvania, and also in Illinois and
California.
The Company's principal business is providing computer maintenance and
repair services, which are provided under both fixed fee and time and materials
arrangements. Under the fixed fee arrangement, which is the primary method of
service, a customer pays a fixed monthly fee for the term of the agreement,
generally one to two years, for which the Company provides the parts and labor
for both scheduled preventive maintenance and emergency repairs. The Company
records the revenue from fixed fee contracts ratably over the term of the
contract, while the costs the Company incurs to provide the maintenance and
emergency repairs are charged to expense as incurred. Accordingly, the
profitability of the Company's maintenance and repair services can and will be
affected by period to period fluctuations in the number and severity of the
emergency repairs required by its customers, which the Company cannot predict or
control. Additionally, in certain circumstances the Company will choose to
provide the contracted-for services by subcontracting with third party service
providers, particularly when the equipment covered by the agreement cannot be
serviced in a cost effective manner by the Company, is difficult to repair or
replace, or requires unique engineering expertise that is not applicable to
equipment utilized by a significant number of the Company's other customers. The
Company obtains such subcontracting services through short-term agreements, and
its profit margin will generally be lower than if the work were not
subcontracted. Accordingly, operating results may fluctuate from period to
period as a result of changes in the level and nature of subcontracted services.
The sale of computer equipment accounts for a rapidly expanding portion
of the Company's business, and, as a result, revenues therefrom have and will
continue to fluctuate from period to period. This fluctuation stabilized
somewhat with the Company's 1997 acquisition of Cintronix, Inc., whose business
is primarily equipment sales, but which sales are also somewhat seasonal. The
Company expects that cross marketing among the Company's subsidiaries and
divisions will decrease these fluctuations over time. Mainframe equipment sales
are entered into more commonly to secure contracts for the maintenance of such
equipment than for the profit on the equipment sale itself, and the margins on
these sales of equipment are subject to market conditions. Consequently,
operating profits as a percentage of gross sales are subject to fluctuation due
to the volume and the makeup of equipment sales. Other areas of expansion are in
the areas of servicing laser printers, providing help desk support services, and
expanding the Company's technical capabilities to maintain the more current
mainframe technology.
RESULTS OF OPERATIONS
The Company's second quarter revenues increased 53% from $5.4 million
for the three months ended June 30, 1997, to $8.2 million for the three months
ended June 30, 1998, and increased 40% from $10.7 million to $14.9 million for
the six months ended June 30, 1997 and 1998, respectively. The increase in net
revenues resulted from sales growth in both maintenance services and equipment
sales. Maintenance revenues increased 47% and 43%, respectively, for the three
and six months ended June 30, 1998 over comparable periods in the preceding
year. The increase in maintenance revenues resulted primarily from expansion of
the Company's business. Equipment sales for the three and six months ended June
30, 1998 increased 57% and 37%, respectively, over the comparable periods in
1997. Management intends to increase marketing efforts to promote continued
growth in both maintenance services and equipment sales, and anticipates that
the marketing staffs of the Company and each of its subsidiaries will continue
to cross promote products and services. Maintenance revenues accounted for
approximately 42% of the Company's consolidated revenues for the first six
months of both 1998 and 1997.
The Company's cost of sales as a percentage of revenues was 81%and 80%,
respectively, for the three and six months ended June 30, 1998 compared to 82%
and 77% for the comparable periods in 1997. A decrease in the costs of
maintenance services as a percentage of maintenance service income was offset by
a decrease in the profit margins on equipment sales. The decreased costs of
maintenance services resulted primarily from the elimination of duplicate
resources in the integration of the Company's subsidiaries and divisions as well
as a decrease in the need for emergency replacement parts and decreased reliance
on subcontracted services. Subcontractor costs could continue to decrease as the
necessary expertise is further developed in-house to service newer technology;
however, as the Company enters into contracts involving more recent technology,
the services of subcontractors may still be required. Gross margins on equipment
sales dropped primarily due to the mix of equipment sold. As personal computer
and mid-range network computer sales increase, the normally lower margin on
these sales will offset the higher margins on mainframe computer sales, and
decrease the overall profit percentages.
Selling, general and administrative expenses as a percentage of net
revenues were 20% for the second quarters of both 1998 and 1997, and 21% and
22%, respectively, for the first six months of 1998 and 1997. The decrease in
the percentage is primarily due to the larger base of the increased sales . The
Company expects short-term fluctuations in this percentage in the future as it
adds to its technical support, marketing staff and other administrative
personnel in order to expand its customer base and increase equipment sales. The
selling, general and administrative expenses increased 53% to $1.6 million for
the second quarter of 1998 compared to $1.1 million for the same period of 1997,
and increased 43% to $3.2 million for the first six months of 1998 compared to
the first six months of 1997's expenses of $2.4 million. The increase is
primarily attributable to hiring additional marketing and office personnel to
support the increased revenue base, as well as the administrative costs of
integrating the three companies acquired in 1997.
The Company's operating loss of $81,074 for the second quarter of 1998
decreased 40% from an operating loss of $137,913 for the second quarter of 1997.
The six-month loss of $278,246 represents a 450% decrease in profits from the
first six months of 1997's operating profits of $79,517. The decrease in
operating loss for the quarter was largely attributable to the decrease of costs
on maintenance contracts, and the decrease of profits for the six months are
primarily a result of inefficiencies that are still in the process of being
eliminated from the integration of the combined operations of each of the
Company's newly acquired businesses.
Net interest decreased 298% and 186%, respectively, to a net expense
for the second quarter and first six months of 1998 of $30,874 and $43,627
compared to net interest income of $15, 565 and $50,618 for the same periods of
1997, This is primarily a result of the decrease in investment earnings as the
remaining proceeds of the Company's 1995 initial public offering were utilized
for the 1997 acquisitions. The Company expects that net interest expense will
continue to increase until the Company starts generating additional cash from
operations.
Net income decreased 8% and 360%, respectively, to a loss of $81,704
for the second quarter and $208,252 for the first six months of 1998, from a
loss of $75,148 and a profit of $79,935 for the same periods of the prior year.
This was primarily a result of the high costs of sales, the increased selling
and administrative costs and the inefficiencies prior to the integration of the
acquired businesses. The Company expects that its continued cross marketing
efforts, as well as cost-cutting efforts to reduce duplication of expenses, will
improve its performance in the future.
LIQUIDITY AND CAPITAL RESOURCES
Working capital, which consists principally of cash, was $164,312 at
June 30,1998 compared to $193,056 at December 31, 1997. Cash flows used in
operations for the first six months of 1998 totaled $812,058, resulting
primarily from operations and by growth in accounts receivable due to the growth
in sales and an increase in the parts and supply inventories necessary to
support service contracts on newer technologies. The ratio of current assets to
current liabilities decreased to 1.4:1 from 1.8:1 at December 31, 1997. The
decrease in the current ratio was due chiefly to the use of Company cash to fund
operations while the integration of the Company's divisions and subsidiaries
continued.
The Company has a $2.5 million revolving line of credit with Crestar
Bank, which will expire in March, 1999. This line was acquired to replace the
separate lines held by the Company and Cintronix, Inc. At June 30, 1998, the
balance owed on this line of credit was $2,172,459.
The Company's principal commitments at June 30, 1998 consisted of
obligations under operating leases for facilities.
The Company believes that its existing cash, as supplemented by
expected cash flow from operations and existing credit facility, is sufficient
to satisfy its working capital needs.
Year 2000 Issues
Year 2000 Compliance means the ability of software and other processing
capabilities to interpret and manipulate correctly all date data that includes
up to and through the Year 2000, including leap years. The Company principally
sells and services computer hardware and, to date, has not been confronted with
Year 2000 issues in providing such services. Further, the Company has surveyed
all of its internal business systems and software applications and determined
that they are Year 2000 compliant. Consequently, the Company does not expect its
business to be adversely affected in any material respect because of Year 2000
issues.
<PAGE>
Part II. Other Information
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities and Use of Proceeds
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
(a) The regular annual meeting of stockholders of the Company was
held in Gaithersburg, Maryland on July 27, 1998 for the
purposes of electing the board of directors.
(b) Proxies for the meeting were solicited pursuant to Section
14(a) of the Securities Exchange Act of 1934, as amended, and
the regulations promulgated thereunder, and there was no
solicitation in opposition to management's solicitations. All
of management's nominees for director were elected.
The stockholders approved the election of the following persons as
directors of the Company:
Name For Against
Herbert H. Derian 3,672,038 65,700
William F. Pershin 3,672,038 65,700
Donald C. Weymer 3,672,038 65,700
David A. Chappell 3,672,038 65,700
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit
Number Title of Exhibit
3.4 ** Agreement and Plan of Merger between CSI Computer Specialists,
Inc. (Delaware) and Computer Specialists, Inc. (Maryland)
filed with the Securities and Exchange Commission as an
exhibit to the Registration Statement filed on July 19, 1995
(the "Registration Statement") and incorporated herein by
reference.
3.5 ** Bylaws of CSI Computer Specialists, Inc. (Registrant) filed
with the Securities and Exchange Commission as an exhibit to
the Registration Statement and incorporated herein by
reference.
3.7 ** Certificate of Amendment of Certificate of Incorporation of
CSI Computer Specialists, Inc. (Delaware) as filed with the
Secretary of State of the State of Delaware on August 5, 1994,
filed with the Securities and Exchange Commission as an
exhibit to the Registration Statement and incorporated herein
by reference.
4.1 ** Specimen Common Stock Certificate, filed with the
Securities and Exchange Commission as an exhibit to the
Registration Statement and incorporated herein by reference.
4.2 ** Specimen Warrant Certificate, filed with the Securities and
Exchange Commission as an exhibit to the Registration
Statement and incorporated herein by reference.
4.3 ** Form of Underwriter's Unit Purchase Option, filed with the
Securities and Exchange Commission as an exhibit to the
Registration Statement and incorporated herein by reference.
4.4 ** Form of Warrant Agreement by and among the Company, Biltmore
Securities, Inc. and Continental Stock Transfer & Trust
Company, amended from that which was filed with the Securities
and Exchange Commission as an exhibit to the Registration
Statement and incorporated herein by reference.
10.1 ** Form of Maintenance Agreement filed with the Securities and
Exchange Commission as an exhibit to the Registration
Statement and incorporated herein by reference.
10.2 ** Form of Subcontracting (Microcomputer Service) Agreement
filed with the Securities and Exchange Commission as an
exhibit to the Registration Statement and incorporated herein
by reference.
10.3 ** Form of Equipment Sales Agreement filed with the Securities
and Exchange Commission as an exhibit to the Registration
Statement and incorporated herein by reference.
10.6 ** Employment Agreement, dated April 7, 1994, by and between the
Company and Donald C. Weymer filed with the Securities and
Exchange Commission as an exhibit to the Registration
Statement and incorporated herein by reference.
10.7 ** Employment Agreement, dated April 7, 1994, by and between the
Company and William Pershin filed with the Securities and
Exchange Commission as an exhibit to the Registration
Statement and incorporated herein by reference.
10.8 ** CSI Computer Specialists, Inc. 1994 Stock Option Plan filed
with the Securities and Exchange Commission as an exhibit to
the Registration Statement and incorporated herein by
reference.
10.9 ** Plan for Incentive Compensation of Donald C. Weymer filed
with the Securities and Exchange Commission as an exhibit to
the Registration Statement and incorporated herein by
reference.
10.10 ** Revolving Commercial Loan Note, dated May 27, 1994, in
favor of Citizens Bank of Maryland in the principal amount of
$750,000 filed with the Securities and Exchange Commission as
an exhibit to the Registration Statement and incorporated
herein by reference.
10.11 ** Security Agreement, dated May 27, 1994, in favor of
Citizens Bank of Maryland and corresponding Financing
Statement filed with the Securities and Exchange Commission as
an exhibit to the Registration Statement and incorporated
herein by reference.
27. Financial Data Schedule.
** Previously filed as noted.
(b) Reports on Form 8-K
None.
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
CSI Computer Specialists, Inc.
August 10, 1998 By: /s/ James D. Boccabella
Date James D. Boccabella, CPA
Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-mos
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> APR-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 164,312
<SECURITIES> 0
<RECEIVABLES> 5,406,571
<ALLOWANCES> 190,253
<INVENTORY> 1,999,501
<CURRENT-ASSETS> 8,272,661
<PP&E> 1,829,620
<DEPRECIATION> 1,049,849
<TOTAL-ASSETS> 12,031,406
<CURRENT-LIABILITIES> 5,872,050
<BONDS> 0
0
0
<COMMON> 4,030
<OTHER-SE> 6,144,308
<TOTAL-LIABILITY-AND-EQUITY> 12,031,406
<SALES> 8,295,382
<TOTAL-REVENUES> 8,321,625
<CGS> 6,712,174
<TOTAL-COSTS> 6,712,174
<OTHER-EXPENSES> 1,666,021
<LOSS-PROVISION> 9,000
<INTEREST-EXPENSE> 57,117
<INCOME-PRETAX> (113,687)
<INCOME-TAX> (32,613)
<INCOME-CONTINUING> (81,074)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (81,074)
<EPS-PRIMARY> (.02)
<EPS-DILUTED> (.02)
</TABLE>
