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Previous: ALTERNATE POSTAL DELIVERY INC, SC 13G, 1998-02-13 |
Next: CHECKFREE HOLDINGS CORP GA, 10-Q, 1998-02-13 |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the Fiscal Quarter Ended December 31, 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: 0-26620
ACCOM, INC.
(Exact name of registrant as specified in its charter)
Delaware 94-3055907
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Number)
1490 O'Brien Drive
Menlo Park, California 94025
(Address of principal executive offices)
Registrant's telephone number, including area code:
(650) 328-3818
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 at least the past 90 days.
Yes X No
----- -----
As of February 9, 1998, 6,675,039 shares of the Registrant's common
stock, $0.001 par value, were outstanding.
<PAGE>
<TABLE>
ACCOM, INC.
FORM 10-Q For the Quarter Ended December 31, 1997
INDEX
<CAPTION>
Page
<S> <C> <C>
Facing sheet 1
Index 2
Part I. Financial Information
Item 1. a) Condensed consolidated interim balance sheets at December 31, 1997 and September 30,
1997 3
b) Condensed consolidated interim statements of operations for the three months
December 31, 1997 and December 28, 1996 4
c) Condensed consolidated interim statements of cash flows for the three months
ended December 31, 1997 and December 28, 1996 5
d) Notes to condensed consolidated interim financial statements 6
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 8
Part II. Other Information 13
Signatures 14
Exhibit 27.1
Financial Data Schedule
</TABLE>
-2-
<PAGE>
<TABLE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
ACCOM, INC.
CONDENSED CONSOLIDATED INTERIM BALANCE SHEETS
(in thousands, except per share data)
<CAPTION>
As of
-----------
December 31, September 30,
1997 1997
-----------------------------
(Unaudited) (Note)
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 5,640 $ 5,317
Accounts receivable, net 3,594 3,239
Inventories 1,289 980
Income tax refunds receivable 243 621
Deferred tax assets 38 38
Prepaid expenses and other current assets 401 334
-----------------------------
Total current assets 11,205 10,529
Property and equipment, net 1,193 967
Other assets 49 49
-----------------------------
Total assets $ 12,447 $ 11,545
=============================
Liabilities and Stockholders' Equity
Current liabilities:
Notes payable $ 10 $ 24
Accounts payable 2,046 1,476
Accrued liabilities 1,525 1,338
Deferred revenue 132 141
-----------------------------
Total current liabilities and total liabilities 3,713 2,979
-----------------------------
Stockholders' equity:
Preferred stock, $0.001 par value; 2,000 shares authorized;
no shares issued and outstanding -- --
Common stock, $0.001 par value; 20,233 shares authorized;
6,660 and 6,627 shares issued and outstanding on
December 31, 1997 and September 30, 1997, respectively 21,453 21,427
Accumulated deficit (12,719) (12,861)
-----------------------------
Total stockholders' equity 8,734 8,566
-----------------------------
Total liabilities and stockholders' equity $ 12,447 $ 11,545
=============================
<FN>
Note: The condensed consolidated balance sheet at September 30, 1997 has been derived from the audited annual consolidated
balance sheet at that date but does not include all of the information and footnotes required by generally accepted
accounting principles for a complete consolidated balance sheet.
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
</FN>
</TABLE>
-3-
<PAGE>
<TABLE>
ACCOM, INC.
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(Unaudited)
<CAPTION>
Three months ended
------------------
December 31, December 28,
1997 1996
----------------------------
<S> <C> <C>
Net sales $ 4,133 $ 4,216
Cost of sales 1,746 4,676
----------------------------
Gross margin 2,387 (460)
----------------------------
Operating expenses:
Research and development 784 798
Marketing and sales 1,214 2,266
General and administrative 299 996
----------------------------
Total operating expenses 2,297 4,060
----------------------------
Operating income (loss) 90 (4,520)
Interest and other income, net 53 23
----------------------------
Income (loss) before provision for income taxes 143 (4,497)
Provision for income taxes 1 --
----------------------------
Net income (loss) $ 142 $(4,497)
============================
Net income (loss) per share:
Basic $ 0.02 $ (0.69)
============================
Diluted $ 0.02 $ (0.69)
============================
Shares used in computation of net income (loss) per share:
Basic 6,638 6,561
============================
Diluted 7,034 6,561
============================
<FN>
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
</FN>
</TABLE>
-4-
<PAGE>
<TABLE>
ACCOM, INC.
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
<CAPTION>
Three Months Ended
------------------
December 31, December 28,
1997 1996
---------------------------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ 142 $(4,497)
Adjustments to reconcile net income (loss) to net cash provided by
(used in) operating activities:
Depreciation and amortization 118 222
Establishment of reserves against accounts receivable,
inventories, property and equipment and accruals
for streamlining operations -- 3,995
Changes in operating assets and liabilities, net of effects of
reserves to streamline operations:
Accounts receivable (355) 624
Inventories (309) 754
Income tax refunds receivable 378 --
Prepaid expenses and other current assets (67) (7)
Accounts payable 570 (1,114)
Accrued liabilities and customer deposits 187 (111)
Deferred revenue (9) (75)
---------------------------
Net cash provided by (used in) operating activities 655 (209)
---------------------------
Cash flows from investing activities:
Expenditures for property and equipment (344) (136)
---------------------------
Net cash used in investing activities (344) (136)
---------------------------
Cash flows from financing activities:
Repayments on notes payable (14) (15)
Issuance of common stock 26 36
---------------------------
Net cash provided by financing activities 12 21
---------------------------
Net increase (decrease) in cash and cash equivalents 323 (324)
Cash and cash equivalents at beginning of period 5,317 4,221
---------------------------
Cash and cash equivalents at end of period $ 5,640 $ 3,897
===========================
Supplemental disclosure of cash flow information:
Interest paid $ 1 $ 2
===========================
Income taxes paid $ 1 $ --
Supplemental disclosure of noncash investing
and financing activities:
===========================
Reduction in accrued acquisition costs $ -- $ 43
===========================
<FN>
The accompanying notes are an integral part of these condensed consolidated interim financial statements
</FN>
</TABLE>
-5-
<PAGE>
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(Unaudited)
Note 1. Basis of Preparation
The condensed consolidated interim balance sheet as of December 31,
1997, and the condensed consolidated interim statements of operations and cash
flows for the three month periods ended December 31, 1997 and December 28, 1996
have been prepared by the Company and are unaudited. In the opinion of
management, all adjustments (consisting of normal accruals) necessary to present
fairly the financial position as of December 31, 1997 and the results of
operations and cash for the three month periods ended December 31, 1997 and
December 28, 1996, have been made.
These condensed consolidated interim financial statements should be reviewed in
conjunction with the audited consolidated annual financial statements and notes
thereto included in the Company's Annual Report on Form 10-K for the fiscal year
ended September 30, 1997. The results of operations for the three month period
ended December 31, 1997 are not necessarily indicative of the operating results
for any future period.
Note 2. Inventories
Inventories consist of the following (in thousands):
December 31, September 30,
1997 1997
-------------------------------
Purchased parts and materials $ 170 $ 225
Work-in-process 386 204
Finished goods 189 182
Demonstration inventory 544 369
-------------------------------
$1,289 $ 980
===============================
Note 3. Bank Information
The Company has a revolving line of credit with Comerica Bank that
allows for borrowings of up to $4.0 million, subject to the level of accounts
receivable. As of December 31, 1997, the Company had $3.9 million available
under the line with no borrowings outstanding. Indebtedness under the line of
credit accrues interest at the bank's base rate and is secured by substantially
all of the Company's assets. The line of credit may be terminated by either
party upon 30 days' notice. Borrowings under the line of credit are subject to
certain financial covenants. The Company is currently in compliance with these
covenants.
-6-
<PAGE>
Note 4. Computation of Net Income (Loss) Per Share
<TABLE>
At the start of the current fiscal year, the Company adopted new required
accounting guidelines addressing the computation and disclosure of net income
(loss) per share. Net income (loss) per share and shares used in computation of
net income (loss) per share have been restated for all periods presented to
comply with the new required accounting guidelines.
<CAPTION>
Three Months Ended
------------------
December 31, December 28,
1997 1996
--------------------------
<S> <C> <C>
Net income (loss) $ 142 $(4,497)
==========================
Shares used in computation of net income (loss) per share:
Basic:
Weighted average shares of common stock outstanding 6,638 6,561
--------------------------
Shares used in basic net income (loss) per share computation 6,638 6,561
==========================
Diluted:
Weighted average shares of common stock outstanding 6,638 6,561
Net effect of dilutive stock options 396 --
--------------------------
Shares used in diluted net income (loss) per share computation 7,034 6,561
==========================
Net income (loss) per share:
Basic $ 0.02 $ (0.69)
==========================
Diluted $ 0.02 $ (0.69)
==========================
</TABLE>
Note 5. Other New Accounting Guidelines
In 1997, two additional accounting guidelines were issued addressing the
reporting of comprehensive income and revised disclosure of segment information,
both of which will be effective for the Company in fiscal 1999.
Note 6. Special Charges
Special charges for the first quarter of fiscal 1997 ended December 31, 1996
represent $4.0 million pretax to streamline operations and provide valuation
reserves against inventories, receivables and fixed assets. The charges were
taken to reflect historic changes in existing product support as well as
anticipated changes due to future product development.
-7-
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
The following Management's Discussion and Analysis of Financial
Condition and Results of Operations should be read in conjunction with the
Company's Consolidated Financial Statements as of September 30, 1997 and 1996
and for the three fiscal years ended September 30, 1997, 1996 and 1995 included
in its Annual Report on Form 10-K for the fiscal year ended September 30, 1997.
In addition, in order to take advantage of the "safe harbor" provisions
of the Private Securities Litigation Reform Act of 1995, the Company hereby
notifies readers that the factors set forth in Item 1 under "Additional Factors
That May Affect Future Results," included in its Annual Report on Form 10-K for
the fiscal year ended September 30, 1997, as well as other factors, could in the
future affect, and in the past have affected, the Company's actual results for
future periods to differ materially from those expressed in any forward looking
statements made by or on behalf of the Company, including without limitation
those made in the discussion below.
Overview
Accom designs, manufactures, sells, and supports a complete line of
digital video signal processing, editing, and disk recording tools, and its
ELSET virtual set systems, primarily for the professional worldwide video and
computer graphics production, post production and distribution marketplaces.
The following table summarizes the Company's products and the primary
marketplaces they address.
- --------------------------------------------------------------------------------
Primary Marketplaces / Products
Production:
ELSET(TM) Virtual Set
Work Station Disk ("WSD(R)") 2Xtreme(TM) Computer Graphics Digital
Disk Recorder
Post Production:
Signal Processors
Editing:
On-line Video Editors:
Axial(R) 2020 (first generation)
Axial(R) 2010 (lower cost first generation)
Axial(R) 3000 (second generation)
Digital Disk Recorders:
Real Time Disk ("RTD(TM) ") 4224
Accom Professional Recorder ("APR(TM) ") Attache(TM)
Distribution:
Axess(TM) Digital News Graphic and Clip Server
- --------------------------------------------------------------------------------
The Company's revenues are currently derived primarily from product
sales. The Company generally recognizes revenue upon product shipment. If
significant obligations exist at the time of shipment, revenue recognition is
deferred until these obligations are met.
The Company's gross margin has historically fluctuated from quarter to
quarter. If the Company resells a Silicon Graphics, Inc. ("SGI") workstation as
part of the ELSET Virtual Set, gross margins will decline. Additionally, gross
margins will be dependent on the mix of higher and lower-priced products having
various gross margin percentages and the percentage of sales made through direct
and indirect distribution channels.
Software development costs are recorded in accordance with Statement of
Financial Accounting Standards No. 86. To date, the Company has expensed all of
its internal software development costs.
-8-
<PAGE>
Results of Operations
Three Months Ended December 31, 1997 and December 28, 1996
<TABLE>
The following table presents the Company's Condensed Consolidated
Interim Statements of Operations for the three months ended December 31, 1997
and December 28, 1996 as reported and as normalized to remove the effects of
special charges incurred during the first three months of fiscal 1997 ended
December 31, 1996 (dollar amounts in thousands, except per share data).
<CAPTION>
Three Months Ended
Dec. 31, Dec. 28, Increase (Decrease)
1997 1996 Amount Percent
------- ------- ------- -------
<S> <C> <C> <C> <C>
Net sales
Reported $ 4,133 $ 4,216 $ (83) (2.0)%
Normalized 4,133 4,216 (83) (2.0)%
Cost of sales
Reported 1,746 4,676 (2,930) (62.7)%
Normalized 1,746 2,176 (430) (19.8)%
-----------------------------------------------------------------
Gross margin
Reported 2,387 (460) 2,847 618.9%
Normalized 2,387 2,040 347 17.0%
-----------------------------------------------------------------
Operating expenses:
Research and development
Reported 784 798 (14) (1.8)%
Normalized 784 798 (14) (1.8)%
Marketing and sales
Reported 1,214 2,266 (1,052) (46.4)%
Normalized 1,214 1,421 (207) (14.6)%
General and administrative
Reported 299 996 (697) (70.0)%
Normalized 299 346 (47) (13.6)%
-----------------------------------------------------------------
Total operating expenses
Reported 2,297 4,060 (1,763) (43.4)%
Normalized 2,297 2,565 (268) (10.5)%
-----------------------------------------------------------------
Operating income (loss)
Reported 90 (4,520) 4,610 102.0%
Normalized 90 (525) 615 117.0%
Interest and other income, net
Reported 53 23 30 130.4%
Normalized 53 23 30 130.4%
-----------------------------------------------------------------
Loss before provision for income taxes
Reported 143 (4,497) 4,640 103.2%
Normalized 143 (502) 645 128.5%
Provision for income taxes
Reported 1 -- 1 --
Normalized 1 -- 1 --
-----------------------------------------------------------------
Net income (loss)
Reported $ 142 $(4,497) $ 4,639 103.2%
Normalized 142 (502) 644 128.3%
=================================================================
Net income (loss) per share Reported:
Basic $ 0.02 $ (0.69) $ 0.71 102.9%
=================================================================
Diluted $ 0.02 $ (0.69) $ 0.71 102.9%
=================================================================
Normalized:
Basic $ 0.02 $ (0.08) $ 0.10 125.0%
=================================================================
Diluted $ 0.02 $ (0.08) $ 0.10 125.0%
=================================================================
</TABLE>
Note: Special charges for the first quarter of fiscal 1997 ended
December 31, 1996 represent $4.0 million pretax to streamline operations and
provide valuation reserves against inventories, receivables and fixed assets.
The charges were taken to reflect historic changes in existing product support
as well as anticipated changes due to future product development.
-9-
<PAGE>
<TABLE>
The following table presents the Company's fiscal Condensed
Consolidated Interim Statements of Operations for the first three months of
fiscal 1998 and 1997 as a percentage of net sales, as reported and as normalized
to remove the effects of special charges and credits incurred during each of
those periods.
<CAPTION>
Three Months Ended
Dec. 31, Dec. 28, Increase
1997 1996 (Decrease)
---------------------------------
<S> <C> <C> <C>
Net sales
Reported 100.0% 100.0% 0.0%
Normalized 100.0% 100.0% 0.0%
Cost of sales
Reported 42.3% 110.9% (68.6)%
Normalized 42.3% 51.6% (9.3)%
---------------------------------
Gross margin
Reported 57.8% (10.9)% 68.7%
Normalized 57.8% 48.4% 9.4%
---------------------------------
Operating expenses:
Research and development
Reported 19.0% 18.9% 0.1%
Normalized 19.0% 18.9% 0.1%
Marketing and sales
Reported 29.4% 53.8% (24.4)%
Normalized 29.4% 33.7% (4.3)%
General and administrative
Reported 7.2% 23.6% (16.4)%
Normalized 7.2% 8.2% (1.0)%
---------------------------------
Total operating expenses
Reported 55.6% 96.3% (40.7)%
Normalized 55.6% 60.8% (5.2)%
---------------------------------
Operating income (loss)
Reported 2.2% (107.2)% 109.4%
Normalized 2.2% (12.5)% 14.7%
Interest and other income, net
Reported 1.3% 0.6% 0.7%
Normalized 1.3% 0.6% 0.7%
---------------------------------
Income (loss) before provision for income taxes
Reported 3.5% (106.7)% 110.2%
Normalized 3.5% (11.9)% 15.4
Provision for income taxes
Reported - % - % - %
Normalized - % - % - %
---------------------------------
Net income (loss)
Reported 3.4% (106.7)% 110.1%
Normalized 3.4% (11.9)% 15.3%
=================================
</TABLE>
Note: Special charges for the first quarter of fiscal 1997 ended
December 31, 1996 represent $4.0 million pretax to streamline operations and
provide valuation reserves against inventories, receivables and fixed assets.
The charges were taken to reflect historic changes in existing product support
as well as anticipated changes due to future product development.
-10-
<PAGE>
The following discussion of results of operations for the three months
ended December 31, 1997 and December 28, 1996 is based upon normalized results,
without inclusion of the above noted special charges and credits incurred during
the first quarter of fiscal 1997, which ended December 28, 1996.
Net sales. The decrease in net sales during the first quarter of fiscal
1998 from fiscal 1997 levels was primarily due to decreased sales in the video
post production marketplace. That decrease was partially offset by increased
sales in the video broadcasting and computer graphics production and post
production marketplaces.
International sales for the first three months of fiscal 1998 and 1997
represented 48.6% and 45.8% of net sales, respectively.
<TABLE>
The following table presents net sales dollar volume for the three
months ended December 31, 1997 and December 28, 1996 by market and related
percentages of total net sales (dollar amounts in thousands).
<CAPTION>
Three Months Ended
--------------------------------------------------------------
December 31, 1997 December 28, 1996
----------------- -----------------
Marketplace Amount Percent Amount Percent
----------- ------ ------- ------ -------
<S> <C> <C> <C> <C>
Production $2,389 57.8% $1,406 33.3%
Post Production 1,040 25.1% 2,314 54.9%
Broadcasting 631 15.3% 450 10.7%
Other 73 1.8% 46 1.1%
----------------------------- -----------------------------
$4,133 100.0% $4,216 100.0%
============================= =============================
</TABLE>
Cost of sales. Normalized gross margin percentage for the first quarter
of fiscal 1998 increased over fiscal 1997 first quarter levels primarily due to
a greater portion of higher margin ELSET software sales included in the sales
mix.
Research and development. The decrease in normalized research and
development expenses in the first quarter of fiscal 1998 from the same period in
fiscal 1997 was primarily a result of decreases in headcount and related
overhead expenses.
Marketing and sales. The decrease in normalized marketing and sales
expenses in the first quarter of fiscal 1998 from the same period in fiscal 1997
was primarily due to decreases in headcount, demonstration equipment
refurbishment costs, and commission expenses partially offset by increased trade
show expenses and increased expenses relating to the marketing of virtual sets.
General and administrative. The decrease in normalized general and
administrative expenses from fiscal 1997 levels was primarily due to decreased
overhead costs.
Interest and other income, net. The increase in interest and other
income, net during the first quarter of fiscal 1998, was primarily due to
increased average interest bearing cash and cash equivalent balances.
Provision for income taxes. In the first quarter of fiscal 1998 and
1997, the Company was in a net operating loss carryforward position.
-11-
<PAGE>
Liquidity and Capital Resources
Since inception, the Company has financed its operations and
expenditures for property and equipment through the sale of capital stock,
borrowings under a bank line of credit and term loans, and cash from operations.
As of December 31, 1997, the Company had $5.6 million of cash and cash
equivalents.
Operating activities provided $655,000 in net cash during the first
quarter of fiscal 1998 and used $209,000 in net cash during the first quarter of
fiscal 1997. Net cash provided in the first quarter of fiscal 1998 was due
primarily to decreases in income tax refunds receivable and increases in
accounts payable and accrued liabilities, partially offset by increases in
accounts receivable, inventories, and property and equipment. Net cash used in
the first quarter of fiscal 1997 was due primarily to increases in accounts
payable and accrued liabilities partially offset by increases in accounts
receivable and inventories.
The Company has a revolving line of credit with Comerica Bank that
allows for borrowings up to $4.0 million, subject to the level of accounts
receivable. As of December 31, 1997, approximately $3.9 million of borrowings
were available under this line of credit, of which the Company had no borrowings
outstanding. Indebtedness under the line of credit accrues at Comerica's base
rate and is secured by substantially all of the Company's assets. The line of
credit may be terminated by either party upon 30 days' notice. Borrowings under
the line of credit are subject to certain financial covenants , and the Company
was in compliance with all such covenants at December 31, 1997.
The Company believes that its existing cash, cash equivalents and
credit facilities will be sufficient to meet its cash requirements for at least
the next twelve months. Although operating activities may provide cash in
certain periods, to the extent the Company grows in the future, its operating
and investing activities may use cash and, consequently, such growth may require
the Company to obtain additional sources of financing. There can be no assurance
that any necessary additional financing will be available to the Company on
commercially reasonable terms, if at all.
New Accounting Guidelines
At the start of the current fiscal year, the Company adopted new
required accounting guidelines addressing the computation and disclosure of net
income (loss) per share. Net income (loss) per share and shares used in
computation of net income (loss) per share have been restated for all periods
presented to comply with the new required accounting guidelines.
In 1997, two additional accounting guidelines were issued addressing
the reporting of comprehensive income and revised disclosure of segment
information, both of which will be effective for the Company in fiscal 1999.
Item 3. Quantitative and Qualitative Disclosures About Market Risks
Not Applicable.
-12-
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities and Use of Proceeds
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits.
27.1 Financial Data Schedule
(b) Reports on Form 8-K.
None.
-13-
<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.
ACCOM, INC.
By: /s/ Cal R. Hoagland
----------------------
Vice President, Finance and Chief Financial Officer
Principal Financial And Accounting Officer
Date: February 13, 1998
-14-
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-START> OCT-01-1997
<PERIOD-END> DEC-31-1997
<CASH> 5,640,000
<SECURITIES> 0
<RECEIVABLES> 4,238,000
<ALLOWANCES> (401,000)
<INVENTORY> 1,289,000
<CURRENT-ASSETS> 11,205,000
<PP&E> 3,390,000
<DEPRECIATION> (2,196,000)
<TOTAL-ASSETS> 12,447,000
<CURRENT-LIABILITIES> 3,713,000
<BONDS> 0
0
0
<COMMON> 21,453,000
<OTHER-SE> (12,719,000)
<TOTAL-LIABILITY-AND-EQUITY> 12,447,000
<SALES> 4,133,000
<TOTAL-REVENUES> 4,133,000
<CGS> 1,746,000
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2,297,000
<LOSS-PROVISION> 90,000
<INTEREST-EXPENSE> 53,000
<INCOME-PRETAX> 143,000
<INCOME-TAX> 1,000
<INCOME-CONTINUING> 142,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 142,000
<EPS-PRIMARY> 0
<EPS-DILUTED> 0.02
</TABLE>
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