SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-Q
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[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended August 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission file number 0-7422
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STANDARD MICROSYSTEMS CORPORATION
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 11-2234952
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
80 ARKAY DRIVE, HAUPPAUGE, NEW YORK 11788
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 516-435-6000
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes ____X____ No ________
As of October 14, 1998 there were 16,001,034 shares of the registrant's
common stock outstanding.
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
STANDARD MICROSYSTEMS CORPORATION
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
<TABLE>
<CAPTION>
August 31, February 28,
1998 1998
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 60,701 $ 47,155
Short-term investments 2,999 8,603
Accounts receivable, net of allowance for doubtful
accounts of $1,051 and $1,011, respectively 28,496 22,268
Inventories 25,544 19,471
Deferred tax benefits 5,489 6,226
Other current assets 6,938 4,884
- --------------------------------------------------------------------------------------
Total current assets 130,167 108,607
- --------------------------------------------------------------------------------------
Property, plant and equipment:
Land 3,832 3,832
Buildings and improvements 29,091 28,897
Machinery and equipment 105,844 99,087
- --------------------------------------------------------------------------------------
138,767 131,816
Less: accumulated depreciation 91,612 84,397
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Property, plant and equipment, net 47,155 47,419
- --------------------------------------------------------------------------------------
Other assets 37,662 37,688
Net assets of discontinued operation - 17,076
- --------------------------------------------------------------------------------------
$ 214,984 $ 210,790
======================================================================================
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $ 15,799 $ 10,637
Accrued expenses and other liabilities 7,502 8,458
Current portion of obligations under capital leases 575 553
- --------------------------------------------------------------------------------------
Total current liabilities 23,876 19,648
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Obligations under capital leases 2,231 2,524
Other liabilities 4,586 4,773
Minority interest in subsidiary 11,486 11,468
Shareholders' equity:
Preferred stock, $.10 par value-
Authorized 1,000,000 shares, none outstanding - -
Common stock, $.10 par value-
Authorized 30,000,000 shares,
outstanding 15,992,000 and 15,926,000
shares, respectively 1,599 1,593
Additional paid-in capital 108,089 107,306
Retained earnings 61,050 59,999
Accumulated other comprehensive income 2,067 3,479
- --------------------------------------------------------------------------------------
Total shareholders' equity 172,805 172,377
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$ 214,984 $ 210,790
======================================================================================
See Notes to Condensed Consolidated Financial Statements.
</TABLE>
<PAGE>
STANDARD MICROSYSTEMS CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
August 31, August 31,
------------------------- -------------------------
1998 1997 1998 1997
<S> <C> <C> <C> <C>
Revenues $ 40,876 $ 41,184 $ 78,472 $ 75,987
Cost of goods sold 28,255 30,431 54,466 58,220
- ------------------------------------------------------------------------------------------------------------------
Gross profit 12,621 10,753 24,006 17,767
- ------------------------------------------------------------------------------------------------------------------
Operating expenses:
Research and development 4,657 3,556 8,724 7,134
Selling, general and administrative 7,462 8,347 14,547 17,147
- ------------------------------------------------------------------------------------------------------------------
12,119 11,903 23,271 24,281
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Income (loss) from operations 502 (1,150) 735 (6,514)
- ------------------------------------------------------------------------------------------------------------------
Other income (expense):
Interest income 600 100 1,191 230
Interest expense (59) (72) (121) (161)
Litigation settlement - (2,000) - (2,000)
Other income (expense), net (43) 16 (78) 128
- ------------------------------------------------------------------------------------------------------------------
498 (1,956) 992 (1,803)
- ------------------------------------------------------------------------------------------------------------------
Income (loss) before minority interest and
provision for income taxes 1,000 (3,106) 1,727 (8,317)
Minority interest in net income of subsidiary 22 33 18 39
- ------------------------------------------------------------------------------------------------------------------
Income (loss) before provision for income taxes 978 (3,139) 1,709 (8,356)
Provision for (benefit from) income taxes 373 (1,070) 658 (2,948)
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Income (loss) from continuing operations 605 (2,069) 1,051 (5,408)
- -------------------------------------------------------------------------------------------------------------------
Loss from discontinued operation, (net of income
taxes of ($3,709) and ($6,432), respectively) - (7,170) - (12,011)
- ------------------------------------------------------------------------------------------------------------------
Net income (loss) $ 605 $ (9,239) $ 1,051 $ (17,419)
==================================================================================================================
Basis and diluted net income (loss) per share:
Income (loss) from continuing operations $ 0.04 $ (0.14) $ 0.07 $ (0.35)
Loss from discontinued operation - (0.46) - (0.79)
- ------------------------------------------------------------------------------------------------------------------
Basic and diluted net income (loss) per share $ 0.04 $ (0.60) $ 0.07 $ (1.14)
==================================================================================================================
Weighted average common shares outstanding
Basic 15,978 15,490 15,961 15,245
Diluted 16,031 15,490 16,021 15,245
See Notes to Condensed Consolidated Financial Statements.
</TABLE>
<PAGE>
STANDARD MICROSYSTEMS CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
<TABLE>
<CAPTION>
Six Months Ended
August 31,
------------------------
1998 1997
---- ----
<S> <C> <C>
Cash flows from operating activities:
Cash received from customers $ 71,924 $ 72,226
Cash paid to suppliers and employees (73,918) (73,439)
Interest received 1,282 209
Interest paid (121) (155)
Income taxes received (paid) (53) 2,406
- ----------------------------------------------------------------------------------------------
Net cash provided by (used for) operating activities (886) 1,247
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Cash flows from investing activities:
Capital expenditures (6,993) (2,812)
Purchases of short-term investments (3,002) -
Sales of short-term investments 8,606 -
Other (728) 45
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Net cash used for investing activities (2,117) (2,767)
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Cash flows from financing activities:
Proceeds from issuance of common stock 288 15,008
Borrowings under line of credit agreements - 29,160
Repayments of borrowings under line of credit agreements - (31,260)
Repayments of obligations under capital leases (271) -
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Net cash provided by financing activities 17 12,908
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Effect of foreign exchange rate changes on cash and cash equivalents (544) (140)
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Net cash provided by (used for) discontinued operation 17,076 (9,165)
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Net increase in cash and cash equivalents 13,546 2,083
Cash and cash equivalents at beginning of period 47,155 8,382
- -----------------------------------------------------------------------------------------------
Cash and cash equivalents at end of period $ 60,701 $ 10,465
===============================================================================================
Reconciliation of income (loss) from continuing operations
to net cash provided by (used for) operating activities:
Income (loss) from continuing operations $ 1,051 $ (5,408)
Adjustments to reconcile income (loss) from continuing operations
to net cash provided by (used for) operating activities:
Depreciation and amortization 7,627 6,376
Other adjustments, net 355 460
Changes in operating assets and liabilities:
Accounts receivable (6,508) (4,017)
Inventories (6,301) 6,861
Accounts payable and accrued expenses and other liabilities 4,048 (2,319)
Other changes, net (1,158) (706)
- -----------------------------------------------------------------------------------------------
Net cash provided by (used for) operating activities $ (886) $ 1,247
================================================================================================
See Notes to Condensed Consolidated Financial Statements.
</TABLE>
<PAGE>
STANDARD MICROSYSTEMS CORPORATION
AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation
The unaudited interim financial statements furnished reflect all
adjustments (consisting of only normal and recurring adjustments) which
are, in the opinion of management, necessary to present a fair
statement of the Company's financial position and results of operations
for the three and six month periods ended August 31, 1998. The
financial statements should be read in conjunction with the summary of
significant accounting policies and notes to consolidated financial
statements included in the Company's annual report on Form 10-K filed
with the Securities and Exchange Commission for the fiscal year ended
February 28, 1998.
Certain items shown have been reclassified to conform with the fiscal
1999 presentation.
2. Inventories
Inventories are valued at the lower of first-in, first-out cost or
market and consist of the following (in thousands):
Aug. 31, 1998 Feb. 28, 1998
--------------------------------------------------------
Raw Materials $ 1,716 $ 1,269
Work in Process 16,189 11,879
Finished Goods 7,639 6,323
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$ 25,544 $ 19,471
========================================================
3. Net Income Per Share
Basic net income per share is based upon the weighted-average number of
common shares outstanding during the period. Diluted net income per
share is computed using the weighted-average common shares outstanding
during the period plus the dilutive effect of shares issuable through
stock options and warrants. The shares used in calculating basic and
diluted net income (loss) per share are reconciled as follows
(in thousands):
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
August 31, August 31,
------------------ -----------------
1998 1997 1998 1997
<S> <C> <C> <C> <C>
Average shares outstanding for
basic net income (loss) per share 15,978 15,490 15,961 15,245
Dilutive effect of stock options 53 - 60 -
----------------------------------------------------------------------------------
Average shares outstanding for
diluted net income (loss) per share 16,031 15,490 16,021 15,245
==================================================================================
</TABLE>
The Company reported a loss in the second quarter and first six months
of fiscal 1998, and accordingly, the effect of stock options and
warrants was anti-dilutive for this period and was therefore excluded
from the calculation of average common shares outstanding for diluted
net income (loss) per share.
<PAGE>
4. Comprehensive Income
Beginning with the first quarter of fiscal 1999, the Company adopted
Statement of Financial Accounting Standards No. 130 (SFAS 130),
"Reporting Comprehensive Income." SFAS No. 130 separates comprehensive
income into two components: net income and other comprehensive income.
Other comprehensive income refers to revenues, expenses, gains and
losses that, under generally accepted accounting principles, are
recorded as elements of shareholders' equity and are excluded from net
income. The Company's other comprehensive income consists of foreign
currency translation adjustments from those subsidiaries not using the
U.S. dollar as their functional currency, and unrealized gains and
losses on a long-term equity investment. The components of the Company's
comprehensive income (loss) for the three and six month periods ended
August 31, 1998 and 1997 were as follows (in thousands):
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
August 31, August 31,
------------------ -------------------
1998 1997 1998 1997
<S> <C> <C> <C> <C>
Net income (loss) $ 605 $ (9,239) $1,051 $ (17,419)
Other comprehensive income (loss):
Currency translation adjustment 28 (493) (953) (165)
Unrealized gain (loss) on investment (387) 189 (459) 290
---------------------------------------------------------------------------------------
Total comprehensive income (loss) $ 246 $ (9,543) $ (361) $ (17,294)
=======================================================================================
</TABLE>
<PAGE>
Item 2 - Management's Discussion and Analysis of
Financial Condition and Results of Operations
Overview
Standard Microsystems Corporation (the Company) is a worldwide supplier of
MOS/VLSI integrated circuits (ICs) for the personal computer industry and is
also a foundry supplier of MicroElectroMechanical Systems (MEMS) devices. The
Company designs and markets input/output (I/O) circuits for personal computers.
I/O circuits perform many of the basic input/output functions required in every
personal computer, including floppy disk control, keyboard control and BIOS,
parallel port control and serial port control. The Company also supplies ICs
for local area network applications, connectivity applications and embedded
control systems. While most of the Company's IC products are manufactured by
world-class semiconductor foundries and assemblers, the Company's MEMS devices
are produced in the Company's own wafer foundry, which specializes in MEMS
manufacturing. The Company conducts its business in Japan through its
majority-owned subsidiary, Toyo Microsystems Corporation.
Revenues
The Company operates predominantly in one industry segment in which it designs,
develops and markets integrated circuits for the personal computer industry and
provides foundry services for MicroElectroMechanical Systems (MEMS).
The following table presents the Company's consolidated revenues for the three
and six month periods ended August 31, 1998 and 1997 (in thousands):
Three months ended Six months ended
August 31, August 31,
Standard Microsystems Corporation 1998 1997 1998 1997
- ------------------------------------------------------------------------------
Integrated circuit revenues $31,572 $33,877 $61,915 $62,855
Foundry revenues 3,578 2,385 6,172 4,004
- ------------------------------------------------------------------------------
35,150 36,262 68,087 66,859
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Toyo Microsystems Corporation
- ------------------------------------------------------------------------------
Integrated circuit revenues 4,987 3,966 8,483 6,742
Other revenues 739 956 1,902 2,386
- ------------------------------------------------------------------------------
5,726 4,922 10,385 9,128
==============================================================================
Total revenues $40,876 $41,184 $78,472 $75,987
==============================================================================
Combined integrated circuit revenues $36,559 $37,843 $70,398 $69,597
==============================================================================
The Company's revenues of $40.9 million for the three month period ended August
31, 1998 decreased by $0.3 million, or 0.7%, from year-earlier second quarter
revenues of $41.2 million. Revenues for the six month period ended August 31,
1998 were $78.5 million compared to year-earlier revenues of $76.0 million, an
increase of $2.5 million, or 3.3%.
The decrease in revenues for the current three month period compared to the
prior year three month period was attributable to lower average selling prices
on integrated circuit products. During the same period, unit shipments of
integrated circuit products increased with the sales mix moving to newer,
higher margined products. Revenues for the six month period ended August 31,
1998 were higher compared to the year-earlier period due primarily to higher
revenues from foundry products.
Revenues from the Company's I/O product line accounted for 89.4% and 89.7% of
combined integrated circuit revenues for the three and six month periods ended
August 31, 1998, compared to 91.9% and 91.6% for the comparable year-earlier
periods.
Gross Profit
The Company's gross profit margin for the second quarter of fiscal 1999 was
30.9%, compared to a gross profit margin of 26.1% reported for the second
quarter of fiscal 1998. For the current six month period, the gross profit
margin was 30.6%, compared to a margin of 23.4% for the comparable year-earlier
six month period. Contributing to both the three and six month gross margin
increases was a product shift in the I/O product line toward newer products
with higher gross profit margins, as well as a general shift to higher margined
integrated circuit devices. In addition, excess capacity in the semiconductor
manufacturing marketplace has generally provided lower integrated circuit
manufacturing costs. Partially offsetting these factors have been increased
manufacturing overhead costs at the Company's MEMS wafer foundry, driven by
investments in new equipment, and lower selling prices on MEMS devices. Despite
an increase in unit shipments, these factors have resulted in a deficit gross
profit on foundry devices. The Company is focusing on increasing foundry
revenues and improving its operating efficiencies.
Operating Expenses
Research and development expenses increased $1.1 million, or 30.6%, to $4.7
million in the second quarter of fiscal 1999, compared to $3.6 million for the
comparable year-earlier quarter. For the current six month period, R&D
expenses increased by $1.6 million to $8.7 million, an increase of 22.5% from
$7.1 million reported for the six month period ended August 31,1998. These
increases reflect higher spending on engineering prototypes, increased
depreciation expense associated with R&D testing equipment, and increases in
engineering staff.
Selling, general and administrative expenses declined $0.8 million, or 9.6%, to
$7.5 million in the second quarter of fiscal 1999 from $8.3 million for the
year-earlier period. For the current six month period, these expenses declined
from $17.1 million in the prior period to $14.5 million in the current period,
a decrease of $2.6 million, or 15.2%. These decreases reflect reductions in
general administrative expenses (including finance, information systems, human
resources, legal and other administrative support) resulting from the Company's
October 1997 divestiture of a majority interest in SMC Networks, Inc., its
former System Products Division.
Other Income and Expense
During the three and six month periods ended August 31, 1998, the Company's
interest income increased to $0.6 million and $1.2 million, respectively, from
$0.1 million and $0.2 million in the comparable year-earlier periods. These
increases reflect higher average cash balances for the current three and six
month periods to the year-earlier periods.
The Company's three and six month results in fiscal 1998 include a $2 million
charge recorded in the first quarter of fiscal 1998 for the settlement of class
action litigation initiated against the Company in fiscal 1996.
Income Taxes
For the three and six month periods ended August 31,1998, income tax provisions
have been provided at effective tax rates of 38.1% and 39.5%, respectively,
compared to tax benefits recorded at effective rates of 34.1% and 35.3% for the
corresponding year-earlier periods. The Company's effective income tax rate
primarily reflects statutory tax rates, income tax credits, and the impact of
certain non-deductible expenses and tax-exempt income.
Liquidity and Capital Resources
Cash and cash equivalents increased $13.5 million to $60.7 million as of August
31, 1998, compared to $47.2 million for February 28, 1998. Short-term
investments decreased by $5.6 million as of August 31, 1998 to $3.0 million
compared to $8.6 million for February 28, 1998. Working capital increased from
$89.0 million at February 28, 1998 to $106.3 million at August 31, 1998.
During the second quarter of fiscal 1999, the Company received an $18.1 million
federal income tax refund, most of which was attributable to the Company's
discontinued operation and was previously reported within Net assets of
discontinued operation on the consolidated balance sheet.
Working capital increased by $17.3 million for the six months ended August 31,
1998. Cash, cash equivalents and short-term investments increased by $7.9
million, accounts receivable increased by $6.2, inventories increased by $6.1
million, accounts payable increased by $5.2 million and all other working
capital items increased by $2.3 million.
The Company's inventories increased from $19.5 million at February 28, 1998 to
$25.5 million at August 31, 1998. This increase reflects the Company's
expectations for increasing shipments in the quarter ending November 30, 1998,
which traditionally has been a strong quarter in the personal computer
industry. The Company also built some inventory of several newer devices which
are expected to begin shipping in volume in the third quarter. Accounts
receivable also increased from $22.3 million to $28.5 million during this
period, partially resulting from higher revenues in the second quarter of
fiscal 1999 compared to the fourth quarter of fiscal 1998. Also, apparently
due to ongoing economic turmoil in that region, several of the Company's larger
customers in Asia have extended their payments beyond the Company's expected
payment terms. The Company received commitments for payments from these
customers in the third quarter, and most of these payments have already been
received.
For the first six months of fiscal 1999, the Company's operating activities
consumed $0.9 million of cash and investing activities consumed $2.1 million of
cash. Offsetting this cash consumption was an $18.1 million federal income tax
refund received during the second quarter of fiscal 1999, most of which has
been classified within Cash provided by discontinued operation on the
consolidated statements of cash flows.
The Company's capital expenditures increased to $7.0 million during the first
six months of fiscal 1999, compared to $2.8 million for the year-earlier
period. Most of this increase reflects capital expenditures in semiconductor
test equipment and manufacturing equipment at the Company's MEMS foundry.
The Company has a $2.1 million escrow account included within Other current
assets on its consolidated balance sheet as of August 31, 1998. This account
holds a short-term investment and is scheduled for release to the Company in
January 1999. This account was established pursuant to the Company's October
1997 sale of its former System Products Division to Accton Technology
Corporation of Hsinchu, Taiwan, as security for the Company's indemnity
obligations in that transaction.
The Company's previous $25 million credit line, which was scheduled to expire
in July 1998, was instead extended through October 1998 under its existing
terms and conditions, with a reduction in the amount of the line to $10
million. The Company and its banks are currently negotiating a further
extension of this $10 million credit line through July 1999, and the Company
expects this extension to be in place before the end of October 1998. There
have been no borrowings under this credit facility since October 1997.
In October 1998, the Company's Board of Directors approved a common stock
repurchase program, allowing the Company to repurchase up to 1 million shares
of its common stock on the open market or in private transactions. The timing
and amount of shares repurchased under this plan will be determined by the
Company's management based upon its evaluation of general market and business
conditions. This program will be funded through the Company's existing cash
balances.
The Company believes that its current cash, cash equivalents and short-term
investments, cash flows from operations, and its borrowing capacity, will be
sufficient to meet its operating and capital requirements for the next twelve
months.
Other Factors That May Affect Future Operating Results
Certain statements and information contained in this quarterly report
constitute "forward-looking statements" within the meaning of the Federal
Securities laws. These forward-looking statements involve risks and
uncertainties which may cause actual results and performance to be different
from those expressed or implied in such statements.
The Company's operating results are subject to general economic conditions and
a variety of risks characteristic of the semiconductor and personal computer
industry, including cyclical market patterns, price erosion, product
development risks, technological change, business conditions and concentrations
in Asia, reliance upon foundries and subcontractors, and forecasts of product
demand, any of which could cause the Company's operating results to differ
materially from past results. For a discussion of such risks, see "Risk
Factors" in Part 2, Item 7 - "Management's Discussion and Analysis of Financial
Condition and Results of Operations" included within the Company's Annual
Report on Form 10-K filed for the fiscal year ended February 28, 1998.
For a discussion of the Company's efforts to address Year 2000 issues, see Part
2, Item 7 within "Management's Discussion and Analysis of Financial Condition
and Results of Operations" included within the Company's Annual Report on Form
10-K filed for the fiscal year ended February 28, 1998.
<PAGE>
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Not applicable.
<PAGE>
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
The following matters were submitted to a vote of security holders at the
registrant's annual meeting of shareholders which was held on July 14, 1998.
The following were elected directors, each receiving the number of votes set
opposite their respective name:
Broker
For Withheld Non-Votes
James R. Berrett 14,269,669 828,832 -0-
Kathleen B. Earley 14,272,207 825,794 -0-
Ivan T. Frisch 14,266,919 831,582 -0-
The selection of Arthur Andersen LLP as the Company's auditors for the current
year was ratified by the following vote:
Broker
For Against Abstain Non-Votes
11,473,767 592,895 97,429 -0-
The 1998 Stock Option Plan was approved and adopted by the following vote:
Broker
For Against Abstain Non-Votes
4,284,442 2,614,912 212,044 5,052,693
The amendment to the 1994 Director Stock Option Plan was approved and adopted
by the following vote:
Broker
For Against Abstain Non-Votes
9,268,669 2,648,470 247,952 -0-
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 27 - Financial Data Schedule
(b) Reports on Form 8-K
None.
<PAGE>
SIGNATURE
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.
STANDARD MICROSYSTEMS CORPORATION
(Registrant)
DATE: October 14, 1998 /S/ Eric M. Nowling
---------------------------------
(Signature)
Eric M. Nowling
Vice President - Finance and Chief Financial Officer
(Principal Financial and Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> FEB-28-1999
<PERIOD-END> AUG-31-1998
<CASH> 60,701
<SECURITIES> 2,999
<RECEIVABLES> 28,496
<ALLOWANCES> 1,051
<INVENTORY> 25,544
<CURRENT-ASSETS> 130,167
<PP&E> 138,767
<DEPRECIATION> 91,612
<TOTAL-ASSETS> 214,984
<CURRENT-LIABILITIES> 23,876
<BONDS> 0
0
0
<COMMON> 1,599
<OTHER-SE> 171,206
<TOTAL-LIABILITY-AND-EQUITY> 214,984
<SALES> 78,472
<TOTAL-REVENUES> 78,472
<CGS> 54,466
<TOTAL-COSTS> 54,466
<OTHER-EXPENSES> 23,271
<LOSS-PROVISION> 40
<INTEREST-EXPENSE> 121
<INCOME-PRETAX> 1,709
<INCOME-TAX> 658
<INCOME-CONTINUING> 1,051
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,051
<EPS-PRIMARY> 0.07
<EPS-DILUTED> 0.07
</TABLE>
