<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 26, 1997
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: 0-26538
ENCORE MEDICAL CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 65-0572565
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
9800 Metric Boulevard
Austin, Texas 78758
(Address of principal executive offices) (Zip code)
512-832-9500
(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 X No ____
Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of the latest practicable date.
Title Outstanding
Common Stock 9,011,417
<PAGE> 2
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ENCORE MEDICAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF SEPTEMBER 26, 1997 AND DECEMBER 31, 1996
(in thousands, except share data)
<TABLE>
<CAPTION>
September 26, December 31,
1997 1996
---- ----
(unaudited) (audited)
Assets
<S> <C> <C>
Cash $ 77 $ 472
Accounts receivable, net 6,860 4,467
Inventories 12,104 9,912
Prepaid expenses and other current assets 641 537
-------- --------
Total current assets 19,682 15,388
Property, plant and equipment, net 4,963 3,931
Other noncurrent assets 1,525 956
-------- --------
Total assets $ 26,170 $ 20,275
======== ========
Liabilities and stockholders' equity
Accounts payable and accrued liabilities $ 3,501 $ 2,612
Current portion - long-term debt 276 164
Current portion - payable to a related party 300 300
Revolving loan -- 2,300
-------- --------
Total current liabilities 4,077 5,376
Long-term debt, net of current portion 3,694 4,913
Payable to a related party, net of current portion 800 1,100
-------- --------
Total liabilities 8,571 11,389
Common stock put warrants -- 2,297
Preferred stock, $1.00 par value, 1,000,000 shares authorized, 0 and 587,000
(652,000 equivalent basis) shares issued and outstanding,
respectively (See Note 3) -- 2,935
Common stock, $0.001 par value, 35,000,000 shares
authorized, 9,011,417 and 6,334,000 (5,627,000
equivalent basis) shares issued and
outstanding, respectively (See Note 3) 9 6
Additional paid-in capital and deferred
compensation 18,021 6,315
Accumulated deficit (431) (2,667)
-------- --------
Total stockholders' equity 17,599 6,589
-------- --------
Total liabilities and stockholders' equity $ 26,170 $ 20,275
======== ========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
- 2 -
<PAGE> 3
ENCORE MEDICAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 26, 1997 AND SEPTEMBER 27, 1996
(in thousands, except per share amounts)
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 26, September 27, September 26, September 27,
1997 1996 1997 1996
-------- ------- -------- --------
<S> <C> <C> <C> <C>
Sales $ 5,821 $ 3,876 $ 18,062 $ 11,616
Cost of goods sold 1,905 1,432 5,849 4,013
-------- ------- -------- --------
Gross margin 3,916 2,444 12,213 7,603
Operating expenses:
Research and development 383 220 1,134 950
Selling, general and administrative 2,944 2,014 9,028 5,647
-------- ------- -------- --------
Operating income 589 210 2,051 1,006
Interest income 9 10 71 34
Interest expense (70) (316) (548) (671)
Other income (expense) (63) 48 (106) (55)
-------- ------- -------- --------
Income (loss) before extraordinary loss and taxes 465 (48) 1,468 314
Provision for (benefit from) income taxes 158 (34) (71) 23
-------- ------- -------- --------
Income (loss) before extraordinary item 307 (14) 1,539 291
Extinguishment of debt (net of income taxes) 0 0 598 0
-------- ------- -------- --------
Net income (loss) $ 307 $ (14) $ 941 $ 291
Change in redemption amount of put warrants -- (709) -- (1,266)
Preferred stock dividends -- (3) -- (3)
-------- ------- -------- --------
Net income (loss) applicable to common shares $ 307 $ (726) $ 941 $ (978)
======== ======= ======== ========
Net income (loss) applicable to common stock per share
before extraordinary item $ 0.04 $ (0.12)(1) $ 0.16 $ (0.16)(1)
Extraordinary loss per share -- -- (0.04) --
-------- ------- -------- --------
Net income (loss) applicable to common stock per share $ 0.04 $ (0.12) $ 0.12 $ (0.16)
======== ======= ======== ========
Weighted average shares outstanding 16,763 6,218 14,192 6,187
</TABLE>
(1) Includes the effect of the change in the redemption amount of put warrants.
The accompanying notes are an integral part of the consolidated financial
statements.
-3-
<PAGE> 4
ENCORE MEDICAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW
FOR THE NINE MONTHS ENDED SEPTEMBER 26, 1997 AND SEPTEMBER 27, 1996
(in thousands) (unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 26, September 27,
1997 1996
------- -------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net income $ 941 $ 291
Adjustments to reconcile net income to net cash provided by
(used in) operating activities:
Depreciation and amortization 1,081 694
Amortization of debt discount 65 99
Extinguishment of debt discount 588 --
Benefit from deferred tax asset (537) --
Other 10 --
Changes in operating assets and liabilities:
Increase in accounts receivable (2,393) (907)
Increase in inventories (2,192) (4,035)
(Inc.)/dec. in prepaid expenses and other assets 20 (440)
Increase in accounts payable and accrued expenses 889 409
------- -------
Net cash used in operating activities (1,528) (3,889)
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (1,614) (1,530)
------- -------
Net cash used in investing activities (1,614) (1,530)
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of stock 7,461 1,687
Payments on payable to a related party (300) (200)
Proceeds from long-term debt 3,043 2,000
Payments on long-term debt (5,153) (48)
Dividends paid (4) --
Payment on debt issuance costs -- (48)
Net change in cash due to conforming fiscal year-end of
pooled company -- (31)
Payments on revolving loan (2,300) --
Proceeds from revolving loan -- 1,800
------- -------
Net cash provided by financing activities 2,747 5,160
------- -------
Net decrease in cash equivalents (395) (259)
Cash and cash equivalents at beginning of period 472 1,200
------- -------
Cash and cash equivalents at end of period $ 77 $ 941
======= =======
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
-4-
<PAGE> 5
ENCORE MEDICAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The accompanying consolidated financial statements include the accounts
of Encore Medical Corporation and its wholly owned subsidiaries (individually
and collectively referred to as the "Company"). All significant intercompany
balances and transactions have been eliminated in consolidation. The unaudited
consolidated financial statements have been prepared in accordance with
generally accepted accounting principles for interim financial information and
with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X.
Accordingly, they do not include all of the information and notes 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 a fair presentation have been included.
Operating results for the three and nine month period ended September 26, 1997
are not necessarily indicative of the results that may be expected for the year
ending December 31, 1997. For further information, refer to the consolidated
financial statements and notes thereto included in the Company's Joint
Proxy/Prospectus dated February 27, 1997 (the "Joint Proxy/Prospectus").
2. DESCRIPTION OF BUSINESS
The Company designs, manufactures, markets and sells products for the
orthopedic implant industry primarily in the United States, Europe and Asia. The
Company's products are subject to regulation by the Food and Drug Administration
("FDA") with respect to their sale in the United States, and the Company must
obtain FDA authorization to market each of its products before they can be sold
in the United States. Additionally, the Company is subject to similar
regulations in many of the international countries in which it sells products.
As explained in Note 3, Encore Orthopedics, Inc. ("Encore") merged with
Healthcare Acquisition, Inc., a wholly-owned subsidiary of Healthcare
Acquisition Corp. ("HCAC").
3. HCAC MERGER
In November 1996, Encore and a wholly owned subsidiary of HCAC, a
publicly traded, specified purpose acquisition company, executed a definitive
agreement and plan of merger. The merger was contingent upon, among other
things, the approval of the shareholders of both Encore and HCAC at meetings
which were held in March 1997. Effective March 25, 1997, the merger was
completed and HCAC's name was changed to Encore Medical Corporation.
The merger was effected by HCAC issuing 0.8884 HCAC common shares and
0.13326 HCAC warrants with an exercise price of $7.00 ("HCAC $7.00 warrants")
for each common share of Encore and 1.11049 HCAC common shares and 0.16657 HCAC
$7.00 warrants for each preferred share of Encore in accordance with the
exchange ratio set forth in the Agreement and Plan of Merger. In addition,
outstanding options and warrants to purchase common stock of Encore were
exchanged for options and warrants to purchase HCAC common stock and HCAC $7.00
warrants based on the exchange ratio discussed above.
For financial reporting and accounting purposes, the merger was
accounted for as a recapitalization of Encore, with the issuance of shares by
Encore for the net assets of HCAC, consisting primarily of cash. As such, Encore
is considered the predecessor company, and the accompanying balance sheet at
December 31, 1996 and statement of income for the three and nine months ended
September 27, 1996 are those of Encore and do not include the accounts or
results of operations of HCAC. The capital accounts of Encore at December 31,
1996, however, have been reflected on an equivalent share basis to give effect
to the exchange ratios discussed above. The accompanying statements of income
for the three and nine months ended September 26, 1997 include the results of
operations of HCAC from the effective date of the merger (March 25, 1997)
through the end of the period.
-5-
<PAGE> 6
4. INVENTORIES
Inventories at September 26, 1997 and December 31, 1996 are as follows
(in thousands):
<TABLE>
<CAPTION>
September 26, December 31,
1997 1996
<S> <C> <C>
Components and raw materials $ 2,304 $1,563
Work in process 1,083 985
Finished goods 8,717 7,364
------- ------
$12,104 $9,912
======= ======
</TABLE>
5. NET INCOME (LOSS) PER SHARE
Net income (loss) per share is computed based on the weighted average
number of outstanding common and common equivalent shares, using the modified
treasury stock method. Common equivalent shares are not included in the per
share calculation where the effect of their inclusion would be anti-dilutive.
For the three and nine months ended September 26, 1997, the application of the
modified treasury stock method resulted in an assumed reduction of interest
expense and amortization of debt discount, net of the related tax benefit, and
interest income generated from the assumed investment in U.S. government
securities, net of the related tax expense, of approximately $338,000 and
$759,000, respectively, which has been added to net income available to common
stockholders for purposes of calculating earnings per share.
6. EXTRAORDINARY ITEM
During the second quarter of fiscal year 1997, the Company repaid $5
million of long term debt, plus accrued interest of $39,000. The Company had
previously capitalized approximately $476,000 of financing costs and established
a debt discount of $821,000 associated with detachable put warrants issued in
accordance with the debt. The unamortized portions of these two items were
expensed in conjunction with the repayment of the debt, resulting in an
extraordinary charge to earnings of $598,000, net of an income tax benefit of
$308,000.
7. DEFERRED TAX VALUATION ALLOWANCE
Prior to fiscal 1997, the Company placed a valuation allowance against
its otherwise recognizable net deferred tax assets due to concerns regarding the
realization of these assets. During the second quarter of fiscal 1997,
management determined that it was probable that the benefits of such deferred
tax assets would be realized and, therefore, eliminated the valuation allowance
of $537,000.
8. RECENT PRONOUNCEMENT
The Financial Accountings Standards Board has issued Statement of
Financial Accounting Standards No. 128, "Earnings per Share" ("FAS 128")
establishing a new methodology for calculating earnings per share. FAS 128 must
be adopted as of December 31, 1997, and earlier adoption is not permitted. Had
net income (loss) applicable to common stock per share been determined under
this new standard, there would have been no change for the three and nine months
ended September 27, 1996 from amounts reported, but for the three and nine
months ended September 26, 1997, basic earnings per share would have been $0.04
and $0.12, respectively, and diluted earnings per share would have been $0.03
and $0.09, respectively.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 26, 1997, AS COMPARED
TO THE THREE MONTHS ENDED SEPTEMBER 27, 1996.
Sales increased 50.2% to $5.8 million for the third quarter of 1997, when
compared to $3.9 million for the same period in 1996. U.S. sales increased 70.4%
to $3.4 million while sales outside the U.S. increased 28.3% to $2.4 million.
The increase was primarily due to the continued expansion of the U.S. sales
force and penetration of the reconstructive device market led by the
Foundation(R) Total Knee and Hip Systems.
-6-
<PAGE> 7
Gross margin for the third quarter of 1997 was $3.9 million, or 67.3% of sales,
up from $2.4 million or 63.1% of sales for the three month period ended
September 27, 1996. The increase in gross margin was primarily due to increased
sales volume and an increase in U.S. sales, which generate a greater gross
margin than sales outside the U.S.
Selling, general and administrative expenses increased by $930,000 or 46.2% more
than for the same period in 1996. However, selling, general and administrative
expenses as a percentage of sales decreased in the third quarter of 1997 to
50.6% from 52.0% for the third quarter of 1996. The primary contributors to this
increase in actual expenditures were commissions and royalties resulting from
increased sales, expenses associated with clinical support activities,
additional instrumentation depreciation and the continual investment in the
development of the U.S. sales infrastructure and expansion of the business.
Operating income increased by $379,000 or 180.5% when compared to the third
quarter of 1996. The increase was due to increased gross margins, which was
partially offset by the increased selling, general and administrative expenses.
Operating income as a percentage of sales increased to 10.1% in 1997 from 5.4%
in 1996.
Net income for the third quarter of 1997 was $307,000, representing an increase
of 2,292.9% over the same period in 1996. This increase resulted from increased
operating income and lower interest expense partially offset by an increase in
income taxes.
RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 26, 1997, AS COMPARED
TO THE NINE MONTHS ENDED SEPTEMBER 27, 1996.
Sales were $18.1 million for the nine months ended September 26, 1997,
representing an increase of $6.4 million or 55.5% over the nine months ended
September 27, 1996. U.S. sales and sales outside the U.S. increased 75.1% and
36.1%, respectively, over the same nine month period in 1996. The continued
expansion of the U.S. sales force and penetration of the reconstructive device
market led by the Foundation(R) Total Knee, Hip and Shoulder Systems were the
primary contributors to this sales increase.
Gross margin increased to $12.2 million, or 67.6% of sales, as compared to $7.6
million or 65.5% of sales for the same nine month period in 1996. This gross
margin increase resulted from increased U.S. sales, which generate a greater
gross margin than sales outside the U.S., manufacturing efficiencies and cost
controls.
Selling, general and administrative expenses increased by $3.4 million or 59.9%
when compared to the same period in 1996. This increase was primarily due to
commissions and royalties associated with increased sales, legal expenses
associated with litigation and patent applications, expenses associated with
clinical support activities, additional instrumentation depreciation and the
continual investment in the development of the U.S.
sales infrastructure and expansion of the business.
Operating income increased 103.9% to $2.1 million or 11.4% of sales, as compared
to $1.0 million or 8.7% of sales for the nine month period ended September 27,
1996. This increase was due to increased gross margins, which was partially
offset by increased selling, general and administrative expenses.
Net income for the nine months ended September 26, 1997 increased 223.4% to
$941,000 from $291,000 for the same nine month period in 1996. This increase was
due to the increase in operating income, lower interest expense, and a benefit
from the reversal of the deferred tax asset valuation allowance ($537,000) in
the previous quarter (see Note 7) offset by an extraordinary charge ($598,000)
associated with the extinguishment of debt in the previous quarter (see Note 6).
LIQUIDITY AND CAPITAL RESOURCES
The Company's continued growth has resulted in an increase in working capital
requirements. These requirements have been funded primarily from the merger
proceeds and the $10 million line of credit established in the second quarter.
As of September 26, 1997, the Company had drawn $3 million on its line of credit
with an eligible borrowing base of $9.7 million.
-7-
<PAGE> 8
Over the past quarter and nine month period ended September 26, 1997, the
Company's primary use of cash has been to continue to fund the increase in
accounts receivable and inventory, and for capital expenditures. These areas
will continue to be the primary uses of funds as the Company grows. The Company
believes that through the combination of cash generated from operations and its
credit facilities, there will be sufficient cash available to meet its needs
over at least the next 12 months. It is also anticipated as the Company grows
and performs, increased credit facilities will be available until such time that
the outstanding $5 warrants are exercised.
FORWARD LOOKING STATEMENTS
The discussion in this document contains analysis or trends and other 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. These statements involve management assumptions and are subject to
risks and uncertainties, including the risk factors which are fully described in
the Joint Proxy/Prospectus in "Risk Factors - Risks Relating to Encore" on pages
21 to 27 thereof, and "Business of Encore" on pages 84 to 94 thereof.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Other than the litigation referred to in Part II, Item 1 of the Form
10-Q for the Quarter ended March 28, 1997, which is hereby incorporated by
reference, there are no pending legal proceedings and there have been no
developments since the filing of the Form 10-K for the quarter ended March 28,
1997 with respect to the litigation referred to in such Form 10-Q.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
1. Exhibits. See Index to Exhibits
2. Reports on Form 8-K. No Form 8-K's were filed during the quarter ended
September 26, 1997.
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.
ENCORE MEDICAL CORPORATION
10-30-97 By: /s/ Nick Cindrich
Date Nick Cindrich, Chief Executive Officer
10-30-97 By: /s/ August Faske
Date August Faske, Chief Financial Officer
INDEX TO EXHIBITS
Number Assigned in
Regulation S-K
Item 601 Description of Exhibit
- -------- ----------------------
(2) No exhibit
(4) No exhibit
(10) No exhibit
(11) Attached
(15) No exhibit
(18) No exhibit
-8-
<PAGE> 9
(19) No exhibit
(22) No exhibit
(23) No exhibit
(24) No exhibit
(27) Financial data schedules
(99) No exhibit
-9-
<PAGE> 10
INDEX TO EXHIBITS
Number Assigned in
Regulation S-K
Item 601 Description of Exhibit
- -------- ----------------------
(2) No exhibit
(4) No exhibit
(10) No exhibit
(11) Attached
(15) No exhibit
(18) No exhibit
(19) No exhibit
(22) No exhibit
(23) No exhibit
(24) No exhibit
(27) Financial data schedules
(99) No exhibit
<PAGE> 1
EXHIBIT 11
ENCORE MEDICAL CORPORATION AND SUBSIDIARIES
EARNINGS PER SHARE COMPUTATION
AS OF SEPTEMBER 26, 1997 AND SEPTEMBER 27, 1996
(in thousands, except per share data)
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended Three Months Ended
September 26, 1997 September 27, 1996
Fully Fully
Primary Diluted Primary Diluted
<S> <C> <C> <C> <C>
Net income (loss) applicable to common stock $ 645(1) $ 645(1) $ (726) $ (726)
Weighted average shares outstanding 16,763 16,763 6,218 6,218
Net income (loss) applicable to common stock per share $ 0.04 $ 0.04 $ (0.12) $ (0.12)
======= ======= ======= =======
CALCULATION OF WEIGHTED AVERAGE SHARES OUTSTANDING
Weighted average common stock outstanding 8,873 8,873 6,218 6,218
Dilutive effect of stock performance plans and warrants 7,890 7,890 -- --
Weighted average shares outstanding 16,763 16,763 6,218 6,218
======= ======= ======= =======
</TABLE>
<TABLE>
<CAPTION>
Nine Months Ended Nine Months Ended
September 26, 1997 September 27, 1996
Fully Fully
Primary Diluted Primary Diluted
<S> <C> <C> <C> <C>
Net income (loss) applicable to common stock $1,700(1) $1,700(1) $ (978) $ (978)
Weighted average shares outstanding 14,192 14,192 6,187 6,187
Net income (loss) before extraordinary item
applicable to common stock per share $ 0.16 $0.16 $(0.16) $(0.16)
Net income (loss) applicable to common stock per share $ 0.12 $0.12 $(0.16) $(0.16)
====== ====== ====== ======
CALCULATION OF WEIGHTED AVERAGE SHARES OUTSTANDING
Weighted average common stock outstanding 7,846 7,846 6,187 6,187
Dilutive effect of stock performance plans and warrants 6,346 6,346 - -
------ ------ ------ ------
Weighted average shares outstanding 14,192 14,192 6,187 6,187
====== ====== ====== ======
</TABLE>
(1) For the three and nine months ended September 26, 1997, the application of
the modified treasury stock method resulted in an assumed reduction of
interest expense, net of the related tax benefit, of approximately $32,000
and $270,000, respectively, the amortization of debt discount, net of the
related tax benefit, of approximately $45,000, respectively, and the
interest income, generated from the assumed investment in U.S. government
securities, net of the related tax expense, of approximately $306,000 and
$444,000 respectively, which has been added to net income and net income
before extraordinary item applicable to common stockholders for purposes of
calculating net income and net income before extraordinary item applicable
to common stockholders per share for the primary and fully diluted
calculation, respectively.
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 26, 1997 September 26, 1997
<S> <C> <C>
Net Income $307 $941
Assumed reduction of interest 32 270
Amortization debt discount - 45
Interest income 306 444
---- ------
Net income applicable to common shares $645 $1,700
==== ======
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
UNAUDITED CONSOLIDATED BALANCE SHEET DATED SEPTEMBER 26, 1997 AND THE UNAUDITED
CONSOLIDATED STATEMENT OF INCOME FOR THE NINE MONTHS ENDED SEPTEMBER 26, 1997
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-26-1997
<CASH> 77
<SECURITIES> 0
<RECEIVABLES> 6,860
<ALLOWANCES> 0
<INVENTORY> 12,104
<CURRENT-ASSETS> 19,682
<PP&E> 8,761
<DEPRECIATION> 3,798
<TOTAL-ASSETS> 26,170
<CURRENT-LIABILITIES> 4,077
<BONDS> 4,494
0
0
<COMMON> 9
<OTHER-SE> 17,590
<TOTAL-LIABILITY-AND-EQUITY> 26,170
<SALES> 18,062
<TOTAL-REVENUES> 18,062
<CGS> 5,849
<TOTAL-COSTS> 5,849
<OTHER-EXPENSES> 10,162
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 548
<INCOME-PRETAX> 1,468
<INCOME-TAX> (71)
<INCOME-CONTINUING> 1,539
<DISCONTINUED> 0
<EXTRAORDINARY> (598)
<CHANGES> 0
<NET-INCOME> 941
<EPS-PRIMARY> 0.12
<EPS-DILUTED> 0.12
</TABLE>
