SEC File No. 33-85044-d
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended May 31,1998
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File number 33-85044-d
NACO Industries, Inc.
---------------------
(Exact Name of small business issuer as specified in its charter)
Utah 48-0836971
---- ----------
(State of Incorporation) (Federal IRS No.)
395 West 1400 North, Logan, Utah 84341
--------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number 435-753-8020
------------
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act 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
---
As of May 31, 1998, the Registrant had 1,861,852 shares of Common Stock
and 165,412 shares of Preferred Stock outstanding.
Transitional Small Business Disclosure Format Yes No X
---
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
See attached Consolidated Financial Statements for May 31, 1998
2
<PAGE>
NACO Industries, Inc.
CONSOLIDATED FINANCIAL STATEMENTS
May 31, 1998
3
<PAGE>
PART 1 - FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NACO INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
<TABLE>
<CAPTION>
May 31 November 30
---------------- ----------------
ASSETS 1998 1997
- ------ ---------------- ----------------
Current assets:
<S> <C> <C>
Cash $ 242,226 75,378
Accounts receivable, net of allowances
of $70,316 / $69,750 965,132 671,562
Inventory 677,447 772,752
Income Taxes Receivable 5,100 5,100
Other current assets 61,709 97,561
---------------- ----------------
Total current assets 1,951,614 1,622,353
---------------- ----------------
Property and equipment:
Land 40,700 40,700
Buildings and improvements 658,691 600,786
Equipment and vehicles 2,612,630 2,449,997
Equipment construction in progress 28,049 89,980
---------------- ----------------
Total property and equipment 3,340,070 3,181,463
Accumulated depreciation (1,624,009) (1,456,133)
---------------- ----------------
Net property and equipment 1,716,061 1,725,330
---------------- ----------------
Other assets:
Intangible and other assets 107,120 106,776
---------------- ----------------
Total other assets 107,120 106,776
---------------- ----------------
Total assets $ 3,774,795 3,454,459
================ ================
</TABLE>
4
<PAGE>
NACO INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
<TABLE>
<CAPTION>
May 31 November 30
---------------- ----------------
LIABILITIES: 1998 1997
- ----------- ---------------- ----------------
<S> <C> <C>
Current liabilities:
Accounts payable $ 462,625 251,122
Accrued expenses 150,267 198,046
Line of credit 1,049,326 824,326
Current portion of long-term obligations 292,033 321,801
Payable to related party (20,208) (15,704)
---------------- ----------------
Total current liabilities 1,934,043 1,579,591
Long-term liabilities:
Long-term obligations, less current portion 686,896 664,001
Deferred income taxes 94,200 94,200
---------------- ----------------
Total long-term liabilities 781,096 758,201
---------------- ----------------
Total liabilities 2,715,139 2,337,792
Stockholders' equity:
Common stock, $.01 par value; 10,000,000
shares authorized; 2,206,565 shares and
2,193,796 shares issued, repectively
(including 344,713 shares in treasury) 22,067 21,939
Preferred Stock, 7% Cumulative, convertible $3.00 par value
330,000 shares authorized; 165,412 shares issued
(Aggregate liquidation preference $1,061,245 and
$1,037,965, respectively) 496,236 496,236
Additional paid-in capital 1,051,979 1,003,800
Retained earnings (deficit) (384,029) (278,711)
---------------- ----------------
1,186,253 1,243,264
Less: treasury stock - at cost (126,597) (126,597)
---------------- ----------------
Total stockholders' equity 1,059,656 1,116,667
---------------- ----------------
Total liabilities and
stockholders' equity $ 3,774,795 3,454,459
================ ================
</TABLE>
See Notes to Consolidated Financial Statements.
5
<PAGE>
<TABLE>
<CAPTION>
NACO INDUSTRIES, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
Three months ended Six months ended
May 31 May 31
---------------------------------- ----------------------------------
1998 1997 1998 1997
--------------- -------------- -------------- ---------------
<S> <C> <C> <C> <C>
Sales, net $ 2,175,256 2,449,863 3,686,412 3,981,058
Cost of goods sold 1,260,547 1,528,285 2,287,463 2,487,591
--------------- -------------- -------------- ---------------
Gross profit 914,709 921,578 1,398,949 1,493,467
Operating expenses:
Selling expenses 393,192 408,828 745,857 755,001
General and administrative expenses 318,165 304,675 658,560 646,877
--------------- -------------- -------------- ---------------
Total operating expenses 711,357 713,503 1,404,417 1,401,878
--------------- -------------- -------------- ---------------
Income (loss) from operations 203,352 208,075 (5,468) 91,589
Other income (expense):
Interest income 6,741 283 7,612 719
Interest expense (55,991) (54,025) (107,462) (109,807)
--------------- -------------- -------------- ---------------
Total other income (expense) (49,250) (53,742) (99,850) (109,088)
--------------- -------------- -------------- ---------------
Income (loss) before income taxes 154,102 154,333 (105,318) (17,499)
Income tax expense (benefit) 0 900 0 900
--------------- -------------- -------------- ---------------
Net income (loss) $ 154,102 153,433 (105,318) (18,399)
Adjustment for preferred dividends in arrears (68,773) (17,310) (68,773) (45,493)
--------------- -------------- -------------- ---------------
Adjusted net to Common Stockholders $ 85,329 136,123 (174,091) (63,892)
--------------- -------------- -------------- ---------------
Earnings (loss) per common share:
Basic:
Earnings (loss) from net income $ 0.08 0.09 (0.06) (0.01)
Dividends in arrears (0.04) (0.01) (0.04) (0.03)
=============== ============== ============== ===============
Net Earnings (loss) $ 0.05 0.08 (0.09) (0.04)
=============== ============== ============== ===============
--------------- -------------- -------------- ---------------
Diluted:
Earnings (loss) from net income $ 0.04 0.07 (0.09) (0.04)
=============== ============== ============== ===============
Weighted average number of common
shares outstanding:
Basic 1,861,852 1,699,196 1,861,852 1,699,196
=============== ============== ============== ===============
Diluted 2,196,676 1,984,805 2,196,676 1,984,805
=============== ============== ============== ===============
</TABLE>
See Notes to Consolidated Financial Statements
6
<PAGE>
NACO INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Six months ended
May 31 May 31
-------------------------------------------
1998 1997
----------------- -------------
<S> <C> <C>
Cash flows from operating activities
Net income (loss) $ (105,318) (18,399)
Adjustments to reconcile net income (loss) to
net cash provided by (used in) operating activities:
Depreciation 167,875 109,470
Amortization 1,478 2,957
Deferred income taxes 0 0
(Increase) decrease in:
Accounts receivable, net (293,570) (371,234)
Inventory 95,305 (89,906)
Taxes Receivable 0 200
Other 34,374 7,660
Increase (decrease) in:
Accounts payable 211,503 (6,789)
Accrued expenses (47,779) (33,342)
Income taxes payable 0 0
-----------------
-------------
Net cash provided by (used in)
operating activities 63,868 (399,383)
----------------- -------------
Cash flows from investing activities
Net change property and equipment (158,606) (255,548)
Investment in intangible and other assets (344) (1,151)
----------------- -------------
Net cash provided by (used in) investing activities (158,950) (256,699)
Cash flows from financing activities
Net change in line of credit 225,000 (10,000)
Payments on related party loan (4,504) (35,636)
Payments on long-term debt (147,631) (146,699)
Payment of Preferred Stock Dividends 0 0
Proceeds from long-term loans 140,758 18,468
Proceeds from issuance of common stock 38,305 742,500
Proceeds from issuance of preferred stock 10,002 195,000
Purchase of treasury stock 0 0
----------------- -------------
Net cash provided by (used in) financing activities 261,930 763,633
----------------- -------------
Increase (decrease) in cash 166,848 107,551
Cash, beginning of period 75,378 198,306
----------------- -------------
Cash, end of period $ 242,226 305,857
================= =============
See Notes to Consolidated Financial Statements
Supplemental disclosures:
Income taxes paid $ 0 0
Interest Paid $ 99,456 93,599
</TABLE>
7
<PAGE>
NACO INDUSTRIES, INC.
Notes to Consolidated Financial Statements (Unaudited)
May 31, 1998
NOTE A - BASIS OF PRESENTATION
Management has elected to omit substantially all footnotes to these
unaudited consolidated quarterly financial statements. In the opinion of
management, all adjustments (consisting only of normal recurring accruals)
considered necessary for a fair presentation have been included. Operating
results for the six month period ended May 31, 1998, are not necessarily
indicative of the results that may be expected for the fiscal year ending
November 30, 1998. These statements should be read in conjunction with the
consolidated financial statements and related notes in the Company's Annual
Report on Form 10-KSB for the year ended November 30, 1997.
NOTE B - INVENTORY
Inventory consists of the following:
May 31, Nov. 30,
1998 1997
------------ ------------
Raw Materials $ 255,824 $ 309,193
Work in Process 9,735 12,276
Finished Goods 411,988 451,283
------------ ------------
Total $ 677,447 $ 772,752
NOTE C - DIVIDENDS
Dividends on the preferred stock are cumulative at 7%. At May 31, 1998,
the cumulative amount of dividends accrued was $68,773. Of this amount $68,773
was in arrears.
NOTE D - EARNINGS PER SHARE
Effective February 28, 1998 the Company adopted SFAS No. 128, "Earnings
Per Share", which establishes new standards for computing and presenting
earnings per share. No restatement was required for prior year's earnings per
share figures to conform to the new standard. Basic earnings per common share
are calculated by dividing adjusted net income by the average shares of common
stock outstanding during the period. The calculation of diluted earnings per
share of common stock assumes the diluting effect of the Company's cumulative
preferred stock, options and warrants. During the period the market price did
not exceed the option price for the outstanding options and warrants and
therefore no dilution occurred. When conversion of potential common shares has
an anti-dilutive effect no conversion is assumed in the diluted earnings per
share calculation.
8
<PAGE>
NOTE E - PREFERRED STOCK AND WARRANTS
The Company raised $38,305 from warrants exercised for 12,769 shares of
common stock and the Company sold 1,667 shares of treasury preferred stock for
$10,002 during the quarter ended May 31, 1998.
Item 2 - Management's Discussion and Analysis of Financial Condition and Results
of Operations
- --------------------------------------------------------------------------------
Introduction
NACO Industries, Inc. ("NACO" or the "Company") is a manufacturing
company, which produces and sells polyvinyl chloride (PVC) and composite
products. The Company's primary line of business consists of manufacturing PVC
pipe fittings and valves, which are sold throughout the United States through
wholesale distributors to irrigation, industrial, construction and utility
industries. The Company manufactures and sells fabricated fittings (4" through
36" in diameter), as well as molded fittings (4" though 10" in diameter). Pipe
fittings produced by the Company include tees, reducers, elbows, couplers, end
caps, and bolted repair couplers. NACO also manufacturers and sells PVC valves
(4" through 12" in diameter).
The Company, through its subsidiary, also manufacturers and sells
composite products for the transportation, amusement, recreation and
architectural industries. These products include trailer tops and amusement ride
materials. The Company also produces tooling and molds for other companies in
various industries.
Results of Operations
The following discussion relates to the three and six months ended May
31, 1998 and May 31, 1997, respectively. For comparison purposes, percentages of
sales will be used rather than dollars. In the following discussion, the three
months ended May 31, 1998 and May 31, 1997 are referred to as 2Q98 and 2Q97,
respectively, and the six months ended May 31, 1998 and May 31, 1997 are
referred to as 6M98 and 6M97, respectively.
Overview. The Company sustained an operating profit of $154,102 for
2Q98 and an operating loss of $(105,318) for 6M98, compared to an operating
profit of $154,333 for 2Q97 and an operating loss of $(17,499) for 6M97. The
Company's plastic products operations generated a profit of $189,679 and
$299,060 for 2Q98 and 2Q97, respectively. The Company's composite products
operation generated an operating loss of $(35,577) and $(145,627) for 2Q98 and
2Q97 respectively. Management believes lower than expected results for 2Q98
resulted primarily from poor weather conditions and increased competition. The
unusually wet weather in the West Coast and Midwest regions was a material
factor in lower sales of the Company's agricultural fittings products.
Installation of an irrigation system is very difficult if not impossible in
extremely wet weather. In the East and Midwest, the weather has also had a
negative impact on sales of the Company's industrial sewer products. The
composites segment relies heavily on the construction industry, which is
adversely affected by cold winter weather. With sales in the industry being off
because of weather the Company has experienced increased competition from its
competitors as they try to make up for lost sales. The Company is continuing to
diversify and expand into the industrial and commercial markets. Although these
markets tend to have lower sales during winter months, they are less seasonal
than the Company's current markets. Sales in these markets increased from .9% of
total revenues in 6M97 to 9.6% in 6M98. The Company also continues to review its
operations to try and reduce expenses without affecting quality and service to
its customers.
Sales. Net sales for 2Q98 decreased by 11.2% to $2,175,256, compared to
net sales of $2,449,863 for 2Q97. Net sales for the plastics segment decreased
by 11.1% to $1,906,826 in 2Q98, compared to net sales of $2,145,486 for 2Q97.
Net sales for the composite segment decreased by 11.8% to $268,430 in 2Q98,
compared
9
<PAGE>
to net sales of $304,377 for 2Q97. These decreases resulted mainly from a
decrease in volume primarily due to the unusually wet weather on the West Coast
and Midwest regions. Weather traditionally can move sales a month or two earlier
or later in the season depending whether the weather is harsh or mild. If
weather continues to be unseasonably wet, some irrigation projects may be put
off until fall, which affects the 2nd quarter sales in plastic fittings.
Management believes this is what has happened in 2Q98. Sales decreased mostly in
the agricultural line of fittings.
Gross Margin. Gross margin, as a percentage of sales for 2Q98 and 2Q97
was 42.1% and 37.6%, respectively, and for 6M98 and 6M97 gross margin was 38.0%
and 37.5%, respectively. Gross margin for plastics and composites as a
percentage of sales for 2Q98 was 44.8% and 17.8%, respectively, compared to
44.4% and (8.6)% for 2Q97. Sewer fittings as a percentage of total sales
increased from 1.1% in 2Q97 to 10.1% in 2Q98. Gross margins on sewer fittings
are generally lower than on the other fittings made by the Company due to market
pricing in the industry. The composites gross margin continues to be low because
of low volumes and fixed overhead costs. Management believes that increases in
volume along with improving throughput should improve gross margins in both
areas. The Company takes a complete physical inventory once a year and a
physical inventory of the top 80% of the dollars in inventory every quarter.
This helps to offset any inventory adjustments at year-end. Any year-end
adjustments are reflected during the fourth quarter after the year-end physical
inventory is completed.
Selling. Selling expenses were 18.1% of net sales for 2Q98, compared to
16.7% for 2Q97. The increase in selling expenses as a percentage of sales was
mainly due to decreased sales volume. In actual dollars, selling expenses
decreased $15,636 or 3.8% from 2Q97 to 2Q98. Advertising decreased as a
percentage of sales from .4% in 2Q97 to .1% in 2Q98 primarily because brochures
were produced in 2Q97, which were not needed in 2Q98. Freight out decreased
$5,996 due to decreased shipments of product. Travel increased $11,981 from
$11,256 in 2Q97 to $23,646 due to increased sales efforts to offset the lower
sales in the quarter.
General and administrative. General and administrative expenses
remained relatively level in total dollars, but as a percentage of sales they
were 14.6% of net sales for 2Q98, compared to 12.4% for 1Q97. The increase in
percentage was mainly due to decreased sales volume. As a percentage of sales,
salaries and related benefits increased 8.0% mainly due to a average pay
increase of 3.2% over 2Q97 and the addition of a production manager in the
Company's Logan facility. Insurance expense decreased $1,627 from 2Q97 to 2Q98
or 11.0% due to the a decrease in insurance premium over the previous year.
Professional fees decreased $5.803 or 48% percent from 2Q97 to 2Q98.
Other. Other expenses/revenues were 2.3% for 2Q98, compared to 2.2% for
2Q97. Interest expense went from 2.2% in 2Q98 to 2.6% in 2Q98 mainly due to an
increase of $289,566 in the overall debt load of the Company and due to lower
sales volume. The effective interest rates (interest expense divided by the
average debt balance for the period) for 6M98 and 6M97 were 11.02% and 11.84%,
respectively.
Liquidity and Capital Resources
The Company's sources of liquidity have been cash from operations,
credit facilities and equity financing. Cash provided in operating activities
was $63,473 in 6M98. Cash as of May 31, 1998 was $242,226, an increase of
$166,848 from November 30, 1997. The increase resulted primarily from a decrease
in inventory and an increase in payables. Because of the slower sales and need
for capital, the Company is facing a potential cash flow shortage. The Company
raised $38,305 from warrants exercised for 12,769 shares of common stock and the
Company sold 1,667 units (each unit consisting of one share of preferred stock
and a warrant to purchase one-half share of common stock) for $10,002 during
2Q98.
The Company continues to struggle to improve its liquidity position. In
the course of the Company's expansion, the Company has incurred losses, which
have significantly reduced the Company's available working capital. The losses
have been explained in above paragraphs. During the expansion, part of the
10
<PAGE>
capital improvements and new equipment funding has been from the line of credit
and internal financing. The total cash paid for property and equipment amounted
to $158,606 in 6M98 and $255,548 in 6M97. The Company also increased trade
payables by $211,128 from November 30, 1997 to May 31, 1998. At November 30,
1997 the Company was current on trade payables, but at May 31, 1998 the Company
was out 30 days. Cash flow traditionally is always slow during the 1st quarter
and improves during the 2nd quarter and this year was not an exception. The
Company is addressing the potential cash flow shortage by managing inventories,
increasing its sales efforts and working to reduce expenses.
Management believes that external financing or additional capital is
necessary to replenish working capital to permit the Company to meet its
obligations on a timely basis and to provide the additional working capital
which will be required to sustain the expected growth. At May 31, 1998 the
Company's revolving line of credit was $1,100,000 of which $1,049,326 was used
leaving only $50,674 available. The availability of the line is based on a
percentage of accounts receivable and inventory and the maturity date is August
31, 1998. At May 31, 1998, the Company's current ratio and debt to equity ratio
were in breach of the line of certain covenants set forth in credit loan
agreement. The Company received a written waiver of this restrictive covenant
for the period ending February 28, 1998, and needs to obtain similar waivers for
the current period and may need similar waivers in the future if operating
results do not continue to improve. The Company is working on several options to
improve working capital including private placement of equity.
Under the terms of the Company's line of credit, the Company is
prohibited from making capital expenditures in excess of $150,000 without
written authorization from the bank unless its working capital ratio improves.
The Company has received written authorization from the bank for an additional
$87,000 in capital expenditures.
Management believes that the actions presently being taken to revise
the Company's operating and financial requirements and to raise additional
capital, together with its capital resources on hand at May 31,1998, revenues
from sales and bank resources, will be sufficient to satisfy its working capital
requirements for the foreseeable future. There can be no assurance, however,
that additional debt or equity financing will be available on terms favorable to
the Company, if at all. If the Company is unable to secure additional financing
or raise additional capital, this will likely have a material adverse effect on
the Company's operations, financial condition, and its ability to continue to
grow and expand its operations. If the Company raises capital through equity
financing, this may result in dilution to existing holders of common stock and
preferred stock.
Factors Affecting Future Results
The Company's operating results are subject to certain inherent risks
that could adversely affect the Company's operating results and its ability to
operate profitably. If the Company is not able to successfully secure sufficient
equity or debt financing to meet its working capital and operational
requirements as discussed above, this will likely have a material adverse effect
on the Company's operating results. In addition, the Company's operating results
also could be adversely affected by increased competition in the markets in
which the Company's products compete, competitors offering products at prices
below the Company's prices, manufacturing delays and inefficiencies associated
with expanding the Company's manufacturing capacity, adverse weather conditions,
increases in labor or raw materials, changes in economic conditions in its
markets, unanticipated expenses or events and other factors discussed in this
report and the Company's other filings with the Securities and Exchange
Commission.
11
<PAGE>
PART II - OTHER INFORMATION
Item 2 - Changes in Securities and Use of Proceeds
- ------ -----------------------------------------
During March and May, 1998, the Company sold 12,769 shares of its Common
Stock, $.01 par value (the "Common Stock"), to ten existing shareholders of the
Company upon the exercise of outstanding warrants to purchase Common Stock. The
warrant exercise price paid by the shareholders was $3.00 per share, resulting
in total proceeds to the Company of $38,305. The Company did not engage an
underwriter in connection with the warrant exercises. Based upon the Company's
pre-existing relationship with each of the purchasing shareholders, the access
of such shareholders to information regarding the Company, the absence of any
general solicitation activities and other factors deemed relevant by the
Company, the Company relied upon the exemption from registration set forth in
Section 4(2) of the Securities Act of 1933, as amended (the "Securities Act") in
selling the shares of Common Stock described above.
On May 15, 1998, the Company sold 1,667 units (each unit consisting of
one share of the Company's Class A 7% Cumulative Convertible Preferred Stock,
$3.00 par value (the "Preferred Stock"), and a warrant to purchase one-half
share of Common Stock) to an existing shareholder. The shareholder paid a
purchase price of $3.00 per unit, resulting in total proceeds to the Company of
$10,002. The Company did not engage an underwriter in connection with the sale
of such units. Based upon the Company's pre-existing relationship with the
purchasing shareholder, the access of such shareholder to information regarding
the Company, the absence of any general solicitation activities and other
factors deemed relevant by the Company, the Company relied upon the exemption
set forth in Section 4(2) of the Securities Act in selling such units.
Item 6 - Exhibits and Reports on Form 8-K
- ------ --------------------------------
(a) Exhibits. The following are filed as exhibits to this Report.
Regulation S-K
Exhibit No. Description
- --------------- --------------------------------------------------------------
27 Financial Data Schedule
(b) Reports on Form 8-K. None
12
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Exchange Act, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Naco Industries, Inc.
Registrant
By /s/ VERNE E. BRAY July 1, 1998
-------------------------------------------------- ------------
Verne E. Bray Date
President
By /s/ JEFFREY J. KIRBY July 1, 1998
-------------------------------------------------- ------------
Jeffrey J. Kirby Date
Principal Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> NOV-30-1998
<PERIOD-END> MAY-31-1998
<CASH> 242,226
<SECURITIES> 0
<RECEIVABLES> 1,035,382
<ALLOWANCES> 70,316
<INVENTORY> 677,447
<CURRENT-ASSETS> 1,951,614
<PP&E> 3,340,070
<DEPRECIATION> 1,624,009
<TOTAL-ASSETS> 3,774,795
<CURRENT-LIABILITIES> 1,934,043
<BONDS> 686,896
0
496,236
<COMMON> 22,067
<OTHER-SE> 541,353
<TOTAL-LIABILITY-AND-EQUITY> 3,774,795
<SALES> 3,686,412
<TOTAL-REVENUES> 3,686,412
<CGS> 2,287,463
<TOTAL-COSTS> 2,287,463
<OTHER-EXPENSES> 1,404,417
<LOSS-PROVISION> 1,672
<INTEREST-EXPENSE> 107,462
<INCOME-PRETAX> (105,318)
<INCOME-TAX> 0
<INCOME-CONTINUING> (105,318)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (105,318)
<EPS-PRIMARY> (0.09)
<EPS-DILUTED> (0.09)
</TABLE>
