<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q/A
(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MAY 1, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ____ TO ____
COMMISSION FILE NUMBER 0-23389
PAPER WAREHOUSE, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
MINNESOTA 41-1612534
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
7630 Excelsior Boulevard
Minneapolis, MN 55426
(Address of principal executives offices, including zip code)
(612) 936-1000
(Registrant's telephone number, including area code)
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 NO X
---- ----
Number of shares of Common Stock, $0.01 par value per share outstanding as of
June 12, 1998:
4,557,187
<PAGE>
FORM 10-Q INDEX
PAPER WAREHOUSE, INC.
Page Number
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements (Unaudited) 3
Consolidated Statements of Operations--Three months 4
Ended May 1, 1998 and May 2, 1997
Consolidated Statements of Cash Flows--Three months ended 5
May 1, 1998 and May 2, 1997
Notes to Consolidated Financial Statements 6
Item 2 Management's Discussion and Analysis of Financial Condition 8
and Results of Operations.
PART II OTHER INFORMATION
Item 6 Exhibits and Reports on Form 8-K 12
SIGNATURES
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1: Financial Statements
PAPER WAREHOUSE, INC.
Consolidated Balance Sheets
May 1, 1998 and January 30, 1998
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
May 1 January 30
ASSETS 1998 1998
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Current assets:
Cash $ 770,401 2,059,737
Inventories, net 12,081,724 11,161,549
Accounts receivable, net 352,312 451,937
Prepaid expenses and other current assets 819,025 153,968
- --------------------------------------------------------------------------------------------------------------
Total current assets 14,023,462 13,827,191
Property and equipment, net 7,281,509 6,798,228
Other assets, net 489,156 391,918
- --------------------------------------------------------------------------------------------------------------
$ 21,794,127 21,017,337
- --------------------------------------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
- --------------------------------------------------------------------------------------------------------------
Current liabilities:
Current maturities of long-term debt 239,748 305,585
Current maturities of capital lease obligations 198,600 179,671
Accounts payable 4,273,372 2,989,016
Accrued liabilities:
Payroll and related expenses 190,551 369,486
Accrued expenses 575,811 349,718
Accrued interest 9,512 10,317
Other 308,628 240,765
- --------------------------------------------------------------------------------------------------------------
Total current liabilities 5,796,222 4,444,558
- --------------------------------------------------------------------------------------------------------------
Capital lease obligations, less current maturities 312,508 355,927
Long-term debt, less current maturities 911,580 911,409
Deferred rent credits and other 708,137 711,659
- --------------------------------------------------------------------------------------------------------------
Total liabilities 7,728,446 6,423,553
Stockholders' equity:
Serial preferred stock, 10,000,000 shares authorized;
none issued or outstanding - -
Common stock, $.01 par value. Authorized 40,000,000 shares;
issued and outstanding 4,557,187 45,572 45,572
Additional paid-in capital 13,683,807 13,683,807
Retained earnings 336,302 864,405
- --------------------------------------------------------------------------------------------------------------
Total stockholders' equity 14,065,681 14,593,784
Commitments and contingencies
- --------------------------------------------------------------------------------------------------------------
$ 21,794,127 21,017,337
- --------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
PAPER WAREHOUSE, INC.
Consolidated Statements of Operations
Three months ended May 1,1998 and May 2, 1997
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
May 1 May 2
1998 1997
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Revenue:
Company-owned stores $ 12,192,259 10,896,370
Franchise related fees 303,185 232,768
- --------------------------------------------------------------------------------------------------------------
Total revenue 12,495,444 11,129,138
Costs and expenses:
Costs of products sold and occupancy costs 8,454,727 7,509,469
Store operating expenses 3,186,973 2,575,420
General and administrative expenses 1,706,830 1,259,774
- --------------------------------------------------------------------------------------------------------------
Operating income (loss) (853,086) (215,525)
Interest expense (27,086) (240,995)
- --------------------------------------------------------------------------------------------------------------
Income (loss) before income taxes (880,172) (456,520)
Income tax (expense) benefit 352,069 (5,039)
- --------------------------------------------------------------------------------------------------------------
Net income (loss) $ (528,103) (461,559)
- --------------------------------------------------------------------------------------------------------------
Earnings (loss) per share: Basic $ (0.12) -
Weighted average shares outstanding 4,557,187 -
Diluted (0.12) -
Weighted average shares outstanding 4,557,187 -
Pro forma net income (loss) $ - (276,935)
Pro forma basic earnings (loss) per share:
Weighted average shares outstanding - 2,202,818
Net income (loss) per share $ - (0.13)
Pro forma diluted earnings (loss) per share:
Weighted average shares outstanding - 2,202,818
Net income (loss) per share $ - (0.13)
- --------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
PAPER WAREHOUSE, INC.
Consolidated Statements of Cash Flows
Three months ended May 1, 1998 and May 2, 1997
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
May 1 May 2
1998 1997
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ (528,103) (461,559)
Adjustments to reconcile net income (loss) to net cash provided
by (used in) operating activities:
Depreciation and amortization 367,753 263,327
Gain on sale of property and equipment (107) -
Changes in operating assets and liabilities, net of the
effect of the purchase of the assets of a business:
Accounts receivable, net 99,625 12,556
Prepaid expenses and other current assets (665,057) (349,779)
Merchandise inventories, net (857,941) (1,930,211)
Accounts payable 1,284,356 2,448,713
Accrued liabilities 110,694 298,185
- ---------------------------------------------------------------------------------------------------------------
Net cash provided by (used in) operating activities (188,780) 281,232
- ---------------------------------------------------------------------------------------------------------------
Cash flows from investing activities:
Purchase of assets of business (148,710) -
Proceeds from sale of property and equipment 3,967 -
Purchases of property and equipment (816,487) (528,817)
Other assets, net of effect of asset acquisition (49,170) (16,184)
- ---------------------------------------------------------------------------------------------------------------
Net cash used in investing activities (1,010,400) (545,001)
- ---------------------------------------------------------------------------------------------------------------
Cash flows from financing activities:
Net proceeds from notes payable to bank - 430,000
Principal payments on long-term debt (65,666) (7,293)
(Payments) on capital lease obligations (24,490) -
Distribution of earnings - (125,424)
- ---------------------------------------------------------------------------------------------------------------
Net cash provided by (used in) financing activities (90,156) 297,283
- ---------------------------------------------------------------------------------------------------------------
Net increase (decrease) in cash (1,289,336) 33,514
Cash:
Beginning of period 2,059,737 357,167
- ---------------------------------------------------------------------------------------------------------------
End of period $ 770,401 390,681
- ---------------------------------------------------------------------------------------------------------------
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest $ 30,305 218,794
Income taxes - 5,039
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
PAPER WAREHOUSE, INC.
(1) Basis of Presentation
Paper Warehouse, Inc. (the Company) is a paper and party goods retailer
operating 75 company-owned stores in the states of Minnesota, Missouri, Iowa,
Kansas, Oklahoma, Colorado, and Wisconsin. Paper Warehouse, Inc. also sells
Paper Warehouse franchises through its wholly owned subsidiary, Paper Warehouse
Franchising, Inc., Paper Warehouse operates under the names "Paper Warehouse"
and "Party Universe".
The financial statements of the Company represent the consolidated financial
statements of Paper Warehouse, Inc. and Paper Warehouse Franchising, Inc. as
of May 1, 1998 and for the three months ended May 1, 1998 and May 2, 1997.
The results of all intercompany transactions have been eliminated.
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for
interim financial information. Accordingly, they do not include all of the
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments
(consisting of normal, recurring accruals) considered necessary for fair
presentation have been included. Interim results may not be indicative of
annual results. For further information, refer to the financial statements
and footnotes included in the Company's report on Form 10K.
<PAGE>
(2) Income Taxes --S Corporation Election
Prior to November 25, 1997, the Company elected to be taxed as an S corporation
under the Internal Revenue Code. The Company's earnings or losses for the S
Corporation period were allocated to its then current stockholders for
inclusion in their individual tax returns. As a result, no provision for
federal taxes was required at the corporate level for that period. The
Company agreed to make distributions of earnings in amounts sufficient to
enable stockholders to pay their federal and state income taxes resulting
from pass-through of taxable income as a result of the S Corporation
election. A provision was made for state taxes during the S Corporation
period as some states impose a tax on S Corporations. Prior to such
termination of S Corporation status, the Company distributed to its then
current stockholders all accumulated S Corporation earnings as of the
termination date. Accordingly, the pro forma effect of this transaction has
been disclosed in the accompanying pro forma balance sheet.
Pro forma net income and pro forma net income per share for the three month
period ended May 2, 1997, have been determined assuming that the Company had
been taxed as a C Corporation for federal and certain state income tax
purposes for such periods. The pro forma tax benefit was $184,624. Federal
and state income taxes are provided for by the Company for first quarter,
1998.
(3) Acquisitions
During the three months ended May 1, 1998, the Company acquired the assets
of a franchisee. The assets and operations of the business acquired have
been included in the accompanying consolidated financial statements since the
date of acquisition.
Subsequent to the end of the first quarter the Company acquired the assets of
another franchisee.
<PAGE>
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following discussion of the Company's results of operations and its
liquidity and capital resources should be read in conjunction with the Financial
Statements of the Company and related Notes thereto appearing elsewhere in this
10Q.
OVERVIEW
Paper Warehouse is a growing chain of stores specializing in party supplies and
paper goods operating under the names Paper Warehouse and Party Universe. The
current management team purchased the business in 1986 and incorporated the
Company in Minnesota in 1987. At the time of the acquisition, the Company
consisted of three stores located in Minneapolis/St. Paul metropolitan area. In
1987, the Company began granting franchises. Over the past ten years, the
Company has grown to an aggregate of 127 stores, including 75 Company-owned
stores and 52 franchise stores throughout 23 states. In growing the number of
Company-owned stores, management has employed a strategy of clustering stores in
the Company's principal markets in an effort to provide its customers with
convenient store locations, expand its total market share and achieve favorable
economies of scale.
The Company completed its initial public offering on November 28, 1997. The
total offering was for 1,778,000 shares of common stock, all of which were
offered by the Company. Proceeds to the Company, net of offering expenses,
were approximately $11.7 million. On December 24, 1997, the underwriters
partially exercised their over-allotment option and the Company sold an
additional 207,800 shares of common stock. Proceeds to the Company, net of
offering expenses, were approximately $1.4 million. The proceeds from the
sale of common stock were used to retire the Company's revolving line of
credit, prepay Subordinated Debt, and retire indebtedness. The balance of
the proceeds will be used to finance new store openings and additional growth.
Prior to November 28, 1997, the Company elected to be treated for federal and
state income tax purposes as an S Corporation under the Internal Revenue Code of
1986, as amended, and comparable state tax laws. For the purpose of discussion
and analysis, the Company has presented a pro forma tax provision and pro forma
net income. These pro forma amounts represent what the income tax provision and
the net income would have been if the Company had been a C Corporation and thus
was subject to Federal income taxation for the entire period. This pro forma
provision is computed using a combined Federal and state income tax rate of
40% for 1997.
Total revenue consists of Company-owned store sales and franchise revenues.
Franchise revenues are generated from royalties received on sales, generally 4%
of the store's sales, and initial franchise fees, which are recognized at the
time the franchisee signs the lease for the
<PAGE>
store. Company-owned stores enter the comparable store sales base at the
beginning of their 13th month of operations. Stores in which retail square
footage is increased more than 50%, or stores that are relocated, are no longer
included in the comparable store sales base until 12 months have passed. Cost
of goods sold includes the direct cost of merchandise, plus handling and
distribution, coupon costs, and certain occupancy costs. Store operating
expenses include all costs incurred at the store level, such as advertising,
credit card processing fees, and store payroll. General and administrative
expenses include corporate administrative expense for Company-owned stores and
expenses relating to franchising. Franchise expenses are primarily payroll,
legal, travel, and advertising.
RESULTS OF OPERATIONS
THREE MONTHS ENDED MAY 1, 1998, COMPARED TO THREE MONTHS ENDED MAY 2, 1997
REVENUE. Company-owned store sales increased 11.9% to $12.2 million for the
three months ended May 1, 1998, from $10.9 million for the comparable period of
fiscal 1997. Of this increase, approximately $10.6 million is attributable to
comparable store sales and approximately $1.6 million is attributable to new and
remodeled Company-owned stores. Stores open in the first quarter of fiscal 1997
had a 3.4% same store sales increase for the first quarter of fiscal 1998.
During first quarter of 1998, the Company opened two new company-owned stores,
purchased one franchise store, and closed one store, increasing the total number
of Company-owned stores to 75 as of May 1, 1998. This compares to 67
Company-owned stores as of May 2, 1997.
Franchise revenue increased 30.3% to $303,000 for the three months ended May
1, 1998, from $233,000 for the comparable period of fiscal 1997. Initial
franchise fees increased due to an increase in franchise store openings in
the three months ended May 1, 1998. The increase in initial franchise fees
was augmented by increased royalty payments resulting from higher sales in
the franchise stores. The Company opened three new franchise stores,
purchased one of the franchise stores, and closed one franchise store,
increasing the total number of franchise stores to 52, as of May 1, 1998.
This compares to 49 franchise stores as of May 2, 1997.
COST OF GOODS SOLD. Cost of goods sold for the three months ended May 1, 1998,
was $8.5 million, or 69.3% of Company-owned stores revenue, as compared to $7.5
million, or 68.9% of Company-owned stores revenues, for the comparable period of
fiscal 1997. The increase as a percentage of Company-owned store revenues was
primarily attributable to increasing occupancy costs.
STORE OPERATING EXPENSES. Store expenses for the three months ended May 1,
1998 were $3.2 million, or 26.1% of Company-owned store revenue, as compared
to $2.6 million, or 23.6% of Company-owned store revenue, for the comparable
period of fiscal 1997. Over 80% of the variance is due to tight labor
markets and continued increases in the average hourly compensation. The
balance of the variance is due to expense timing differences which should
reverse later in the year. The
<PAGE>
Company believes that the impact of the Year 2000 issues will not be
material, because its mission critical operations appear to be Year 2000
compliant. Management has determined that any additional modifications will
not have a material impact on its business, operations, or financial
condition.
GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses for
the three months ended May 1, 1998 were $1.7 million as compared to $1.3
million in the prior year period. The increase was primarily attributable to
the increase in senior management positions and additional lease expense on
new cash registers.
INTEREST EXPENSE. Interest expense decreased 88.8% to $27,000, or .2% of total
revenue for the three months ended May 1, 1998 from $241,000, or 2.2% for the
comparable period of fiscal 1997. This is the result of using the proceeds of
the initial public offering to repay bank debt. Interest rates have been
stable.
NET INCOME (LOSS). As a result of the factors discussed above, net loss
increased 90.7% to $528,000, or 4.3% of total revenue for the three months
ended May 1, 1998, from a proforma net loss of $277,000, or 2.5% of total
revenue for the comparable period of fiscal 1997. Pro forma net income for
the three months ended May 2, 1997 includes a provision for federal and state
income taxes.
LIQUIDITY AND CAPITAL RESOURCES
The Company's primary capital requirements are for ongoing operations,
principally inventory, and capital improvements to support the opening of new
Company-owned stores and the remodeling of existing Company-owned stores.
Historically, the Company's primary sources of liquidity have been met by cash
from operations, payment terms from vendors, and borrowing under its revolving
line of credit and the Subordinated Notes.
At May 1, 1998 and January 30, 1998, the Company's working capital was $8.2
million and $9.4 million respectively. Cash provided by (used in) operating
activities for the first three months of fiscal 1998 and fiscal 1997 was
($189,000) and $281,000, respectively.
At May 1, 1998, and January 30, 1998, the Company's accounts payable were $4.3
million and $3.0 million, respectively. The increase in accounts payable was
primarily attributable to increased merchandise inventory. Historically, the
amount of the Company's obsolete inventory has been immaterial.
Net cash used in investing activities for the first three months of fiscal 1998
and the comparable period of fiscal 1997 was $1.0 million and $545,000,
respectively.
Net cash used in financing activities during the first three months of fiscal
1998 was $90,000. Net cash provided by financing activities during the first
three months of fiscal 1997 was $297,000. The Company had no amounts
outstanding at May 1, 1998, or January 30, 1998, under its existing line of
credit. In November, 1997, the Company paid its revolving credit facility in
full from the proceeds of its initial public offering. The credit facility
expires on May 31, 1999.
<PAGE>
SUBSEQUENT EVENTS
The Company purchased one of its franchise stores in Denver, Colorado on May 29,
1998.
USE OF INITIAL PUBLIC OFFERING PROCEEDS
On November 25, 1997 the Company commenced an initial public offering of
1,778,000 shares of its common stock, par value $.01 per share in the United
States. The Company's registration statement on Form S-1 (Registration No.
333-36911) with respect to the Offering was declared effective by the Securities
and Exchange Commission on November 20, 1997. All 1,778,000 shares were offered
and sold by the Company. As part of the offering, the Company and a Selling
Shareholder granted to the underwriters an over-allotment option to purchase up
to an additional 266,700 shares of common stock. The offering terminated on
November 25, 1997. On December 22, 1997, the underwriters exercised the
over-allotment, purchasing 207,800 shares of common stock from the Company. The
offering price of the 1,985,600 shares of common stock (including the
over-allotment) was $7.50 per share. The proceeds to the Company, after
deduction of the underwriting discount and expenses associated with the
Offering, were $13.2 million.
During the period from November 28, 1997, through December 30, 1997, the
aggregate amount of expenses incurred by the Company in connection with the
issuance and distribution of the shares of common stock offered and sold in the
offering, including the underwriter's over-allotment, was approximately $1.6
million. This includes underwriting discounts and commissions (of approximately
$1.0 million) and expenses paid for accounting, legal, printing, and other
expenses.
The sole underwriter for the offering was Dain Rauscher Incorporated f/k/a Dain
Bosworth Incorporated ("Dain") . As sole underwriter for the offering,
Dain received all of the underwriting commissions and discounts paid by the
Company.
During the period from November 28, 1997, through May 1, 1998, the net
proceeds of the offering have been applied as follows: (i) to repay borrowings
outstanding under the Company's revolving credit facility in the amount of $5.8
million, (ii) to prepay the 10% Subordinated Notes due November 30, 2004 in the
amount of $2.1 million, and (iii) to repay shareholder notes in the amount of
$2.1 million to Yale T. Dolginow and Brent D. Schlosser. The remaining $3.2
million will be used for other general corporate purposes.
<PAGE>
ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K
(a) LISTING OF EXHIBITS:
<TABLE>
<CAPTION>
QUARTERLY REPORT ON FORM 10-Q
FOR THE
QUARTER ENDED MAY 1, 1998
Exhibit Index
--------------------------------------------------------
Exhibit
Number
<S> <C>
--------------------------------------------------------
11 Computation of Net Income per Common Share
--------------------------------------------------------
27 Financial Data Schedule
--------------------------------------------------------
</TABLE>
(b) REPORTS ON FORM 8-K
There were no reports on Form 8-K filed during the three months ended May 1,
1998.
<PAGE>
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.
PAPER WAREHOUSE, INC.
Date: June 12, 1998 s/ Yale T. Dolginow
-------------------------------------
Yale T. Dolginow
President and Chief Executive Officer
Date: June 12, 1998 s/ Cheryl W. Newell
-------------------------------------
Cheryl W. Newell
Chief Financial Officer
(Principal Financial Officer)
<PAGE>
Exhibit 11
Paper Warehouse Inc.
Computation of Actual and Pro Forma Earnings (Loss) Per Share
(In thousands of dollars, except per share data)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
------------------
Actual Pro forma (1)
5/1/98 5/2/97
---------- ----------
<S> <C> <C>
BASIC
Actual/Pro forma net earnings
(loss) (a) $ (528,103) $ (276,935)
---------- ----------
---------- ----------
Weighted average shares
of common stock
outstanding (b) 4,557,187 2,202,818
---------- ----------
---------- ----------
Basic Actual/pro forma earnings (loss)
per share of common stock (a/b) $ (0.12) $ (0.13)
---------- ----------
---------- ----------
DILUTED
Actual/Pro forma net earnings
(loss) (c) $ (528,103) $ 276,935
---------- ----------
---------- ----------
Weighted average shares
of common stock
outstanding 4,557,187 2,202,818
---------- ----------
---------- ----------
Common stock
equivalents - -
---------- ----------
---------- ----------
Weighted average shares of
common stock and common
stock equivalents (d) 4,557,187 2,202,818
---------- ----------
---------- ----------
Diluted actual/pro forma earnings
(loss) per share of common stock and
common stock equivalents
(c/d) $ (0.12) $ (0.13)
---------- ----------
---------- ----------
</TABLE>
(1) Pro forma to reflect an income tax benefit resulting from the Company's
termination of its S Corporation election.
Page 1
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS CONTAINED ELESWHERE IN THIS FORM 10-K, AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-29-1999
<PERIOD-START> JAN-31-1998
<PERIOD-END> MAY-01-1998
<CASH> 770
<SECURITIES> 0
<RECEIVABLES> 352
<ALLOWANCES> 0
<INVENTORY> 12,082
<CURRENT-ASSETS> 14,023
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 21,794
<CURRENT-LIABILITIES> 5,796
<BONDS> 1,151
0
0
<COMMON> 46
<OTHER-SE> 14,020
<TOTAL-LIABILITY-AND-EQUITY> 21,794
<SALES> 12,495
<TOTAL-REVENUES> 12,495
<CGS> 8,454
<TOTAL-COSTS> 4,894
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 27
<INCOME-PRETAX> (880)
<INCOME-TAX> (352)
<INCOME-CONTINUING> (528)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (528)
<EPS-PRIMARY> (.12)
<EPS-DILUTED> (.12)
</TABLE>
