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 quarterly period ended December 31, 1999
__ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File No. 33-18978
TEL-INSTRUMENT ELECTRONICS CORP.
(Exact name of the Registrant as specified in Charter)
New Jersey 22-1441806
(State of Incorporation) (I.R.S. Employer ID Number)
728 Garden Street, Carlstadt, New Jersey 07072
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone No. including Area Code: 201-933-1600
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 the issuer's common stock, as of
the latest practical date:
2,113,290 shares of Common stock, $.10 par value as of February 1, 2000.
<PAGE>
TEL-INSTRUMENT ELECTRONICS CORPORATION
--------------------------------------
TABLE OF CONTENTS
-----------------
PAGE
----
Item 1. Financial Statements (Unaudited):
Condensed Comparative Balance Sheets
December 31, 1999 and March 31, 1999 1
Condensed Comparative Statements of Operations -
Three and Nine Months Ended December 31, 1999 and 1998 2
Condensed Comparative Statements of Cash Flows -
Nine Months Ended December 31, 1999 and 1998 3
Notes to Condensed Financial Statements 4-6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 7-9
Part II Other Information 10
SIGNATURES 10
<PAGE>
Item 1 - Financial Statements
TEL-INSTRUMENT ELECTRONICS CORPORATION
--------------------------------------
CONDENSED COMPARATIVE BALANCE SHEETS
------------------------------------
<TABLE>
<CAPTION>
(Unaudited) (Audited)
ASSETS December 31, March 31,
1999 1999
------------ -----------
<S> <C> <C>
Current assets:
Cash $ 185,284 $ 70,617
Accounts receivable, net 905,623 638,721
Inventories 1,014,791 713,700
Prepaid expenses and other current assets 36,991 39,173
Deferred income tax benefit - current 170,000 78,300
----------- -----------
Total current assets 2,312,689 1,540,511
----------- -----------
Property, plant, and equipment, net 283,054 130,901
Other assets 154,638 128,892
Deferred income tax benefit 616,771 418,204
----------- -----------
Total assets 3,367,152 2,218,508
=========== ===========
LIABILITIES & STOCKHOLDERS EQUITY
Current liabilities:
Note payable - related party - current portion 100,000 100,000
Note payable - bank 200,000 --
Convertible subordinated notes - related party 15,000 15,000
Capitalized lease obligations - current portion 54,409 9,667
Advance Payments 135,037 134,767
Accrued payroll, vacation pay,
and payroll taxes 297,099 218,289
Accounts payable and accrued expenses 750,783 555,206
----------- -----------
Total current liabilities 1,552,328 1,032,929
----------- -----------
Notes payable - related party - non-current portion 250,000 250,000
Capitalized lease obligations - excluding current portion 115,933 16,486
----------- -----------
Total liabilities 1,918,261 1,299,415
Stockholders' equity:
Common stock 211,332 210,998
Additional paid-in capital 3,927,921 3,925,854
Accumulated deficit (2,690,362) (3,217,759)
----------- -----------
Total stockholders' equity 1,448,891 919,093
----------- -----------
Total liabilities and stockholders' equity $ 3,367,152 $ 2,218,508
=========== ===========
</TABLE>
See accompanying notes to condensed financial statements
<PAGE>
TEL-INSTRUMENT ELECTRONICS CORPORATION
--------------------------------------
CONDENSED COMPARATIVE STATEMENTS OF OPERATIONS
----------------------------------------------
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
December 31, December 31, December 31, December 31,
Sales 1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
Government, net $ 1,110,275 $ 584,490 $ 2,474,990 $ 1,385,702
Commercial, net 299,715 388,446 1,383,623 1,278,103
----------- ----------- ----------- -----------
Total Sales 1,409,990 972,936 3,858,613 2,663,805
Cost of sales 677,030 346,610 1,777,450 1,111,420
----------- ----------- ----------- -----------
Gross Margin 732,960 626,326 2,081,163 1,552,385
Operating expenses:
Selling, general & administrative 269,915 233,366 838,154 706,593
Engineering, research, & development 381,777 273,057 963,079 842,602
----------- ----------- ----------- -----------
Total operating expenses 651,692 506,423 1,801,233 1,549,195
Income from operations 81,268 119,903 279,930 3,190
Other income (expense):
Interest income 2,735 82 6,433 8,635
Interest expense (20,946) (10,238) (49,233) (31,731)
----------- ----------- ----------- -----------
Income/(loss) before taxes 63,057 109,747 237,130 (19,906)
(Benefit)/provision for income taxes (359,810) 43,844 (290,267) (7,952)
----------- ----------- ----------- -----------
Net income/(loss) $ 422,867 $ 65,903 $ 527,397 $ (11,954)
=========== =========== =========== ===========
Basic and diluted income (loss)
per common share $ 0.20 $ 0.03 $ 0.25 $ (0.01)
Dividends per share None None None None
Weighted average shares outstanding
Basic 2,110,790 2,104,539 2,110,290 2,098,657
Diluted 2,127,883 2,116,101 2,127,383 2,098,657
</TABLE>
See accompanying notes to condensed financial statements
2
<PAGE>
TEL-INSTRUMENT ELECTRONICS CORPORATION
--------------------------------------
CONDENSED COMPARATIVE STATEMENTS OF CASH FLOWS
----------------------------------------------
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
December 31,
1998 1998
--------- ----------
<S> <C> <C>
Increase (decrease) in cash:
Cash flows from operating activities
Net (loss) income $ 527,397 $ (11,954)
Adjustments to reconcile net (loss) income to cash used
in operating activities:
Deferred income taxes (290,267) (7,952)
Depreciation 53,263 30,558
Changes in assets or liabilities:
(Increase) decrease in accounts receivable and unbilled revenue (266,902) (227,000)
(Increase) decrease in inventories (301,091) (209,690)
Decrease (increase) in prepaid expenses and other current assets 2,182 (9,043)
(Increase) decrease in other assets (25,746) (30,996)
Increase in advanced billings 270 --
Increase (decrease) in accrued payroll, deferred wages and
and vacation pay 78,810 (776)
Increase (decrease) in accounts payable and accrued expenses 195,577 (7,827)
--------- ---------
Net cash used in operations (26,507) (474,680)
--------- ---------
Cash flows from investing activities:
Cash purchases of property, plant and equipment (41,090) (59,714)
--------- ---------
Net cash used in investing activities (41,090) (59,714)
--------- ---------
Cash flows from financing activities:
Proceeds from exercise of stock options 2,401 4,619
Proceeds from notes payable - bank, net 200,000 --
Repayment of capitalized lease obligations (20,137) --
--------- ---------
Net cash provided by financing activities 182,264 4,619
--------- ---------
Net increase (decrease) in cash 114,667 (529,775)
Cash at beginning of period 70,617 585,281
--------- ---------
Cash at end of period $ 185,284 $ 55,506
========= =========
Interest paid $ 56,873 $ 20,538
Capitalized lease obligations $ 164,256 $ --
========= =========
</TABLE>
See accompanying notes to condensed financial statements
3
<PAGE>
TEL-INSTRUMENT ELECTRONICS CORP.
--------------------------------
NOTES TO CONDENSED FINANCIAL STATEMENTS
---------------------------------------
Note 1 Basis of Presentation
In the opinion of management, the accompanying unaudited condensed financial
statements contain all adjustments (consisting only of normal recurring
accruals) necessary to present fairly the financial position of Tel-Instrument
Electronics Corp. as of December 31, 1999, the results of operations for the
three and nine months ended December 31, 1999 and December 31, 1998, and
statements of cash flows for the nine months ended December 31, 1999 and
December 31, 1998. These results are not necessarily indicative of the results
to be expected for the full year.
The financial statements have been prepared in accordance with the requirements
of Form 10-Q and consequently do not include disclosures normally made in an
Annual Report on Form 10-K. The March 31, 1999 results included herein have been
derived from the audited financial statements included in the Company's annual
report on Form 10-K. Accordingly, the financial statements included herein
should be reviewed in conjunction with the financial statements and notes
thereto included in the Company's Annual Report on Form 10-K for the fiscal year
ended March 31, 1999.
Note 2 Accounts Receivable
The following table sets forth the components of accounts receivable:
December 31, March 31,
1999 1999
---- ----
Commercial $ 128,781 $ 179,742
Government 513,248 359,716
Unbilled revenues 279,192 114,848
Allowance for bad debts (15,598) (15,585)
---------- ----------
Total $ 905,623 $ 638,721
========== ==========
Sales are recognized primarily upon shipment of products, except in the case of
long-term contracts wherein sales are recognized on the percentage-of-completion
method.
Sales associated with the documentation and test portion of the U.S. Navy
contract have been recorded on the percentage-of-completion method. Under this
approach, sales and gross margin are recognized based upon the ratio of costs
incurred to date to total current estimated contract costs. Unbilled revenues
represent recoverable costs and accrued profit not billed resulting from the
application of percentage-of-completion accounting. Actual billing of these
amounts will be based upon actual billing terms.
4
<PAGE>
TEL-INSTRUMENT ELECTRONICS CORP.
--------------------------------
NOTES TO CONDENSED FINANCIAL STATEMENTS (continued)
---------------------------------------------------
Note 3 Inventories
Inventories consist of:
December 31, March 31,
1999 1999
---- ----
Purchased Parts $ 694,624 $402,804
Work-in-process 371,187 340,516
Less: Reserve for Obsolescence (51,020) (29,620)
--------- --------
Total $1,014,791 $713,700
========== ========
Note 4 Income Taxes
The Company, in accordance with SFAS 109, has recognized a deferred income tax
benefit based upon the expected utilization of net operating loss carryforwards
as the Company believes that it is more likely than not that it will realize a
portion of its operating losses before they expire. For the nine months ended
December 31, 1999, the Company recorded a net tax benefit of $290,267. During
the quarter ended December 31, 1999, the Company recognized a deferred tax asset
of $385,000. The tax benefit from the recognition of the Company's net operating
losses is offset by its provision for income taxes of $94,733 for the nine
months ended December 31, 1999. The Company has no liability for federal taxes.
The recognized deferred tax assets are based on the Company's expected future
taxable income as a result of a significant increase in orders under the U.S.
Navy contract which are expected to result in the partial utilization of its
operating loss carryforwards. The Company believes that it is more likely than
not that it will realize this portion of its net operating losses before they
expire. The Company has retained its valuation allowance for those net operating
losses that begin to expire after the U.S. Navy contract has been completed, as
there is no assurance that the Company will generate sufficient profits to
utilize such net operating losses. These amounts are based upon management's
estimates and the actual results could differ from these estimates.
Note 5 Earnings Per Share
The Company's basic income (loss) per share is based on net income (loss) for
the relevant period, divided by the weighted average number of common shares
outstanding during the period. Diluted income (loss) per share is based on net
income (loss), divided by the weighted average number of common shares
outstanding, including common share equivalents such as outstanding stock
options and warrants during the period. Common share equivalents, such as
outstanding stock options, are not included in the calculation for the nine
months ended December 31, 1998 since the effect would be antidilutive.
Note 6 Line of Credit
In July 1999, the Company renegotiated its line of credit of $250,000, maturing
in July 2000. Interest is payable monthly at an interest rate of 1% above the
lender's prevailing base rate. The line is collateralized by substantially all
of the assets of the Company. During the six months ended September 30, 1999,
the Company had borrowed all of the $250,000. In November 1999, the Company
repaid $50,000. At December 31, 1999, the Company had an outstanding balance of
$200,000.
5
<PAGE>
TEL-INSTRUMENT ELECTRONICS CORP.
--------------------------------
NOTES TO CONDENSED FINANCIAL STATEMENTS (continued)
---------------------------------------------------
Note 7 Government and Commercial Sales
In 1999, the Company adopted SFAS 131. The prior years information has been
restated to present the Company's government and commercial activities.
The Company is organized on the basis of its avionics products. The government
segment consists primarily of the sale of test equipment to U.S. and foreign
governments and militaries either direct or through distributors. The commercial
segment consists mostly of sales of test equipment to domestic and foreign
airlines and to commercial distributors. The Company primarily develops and
designs test equipment for the avionics industry and, where appropriate, the
Company's products are designed to be sold in both the government and commercial
markets.
The table below presents information about sales and gross margin. Costs of
sales includes certain allocation factors for indirect costs.
<TABLE>
<CAPTION>
Three Months Ended Three Months Ended
December 31, 1999 December 31, 1998
Government Commercial Government Commercial
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Sales $ 1,110,275 $ 299,715 $ 584,490 $ 388,446
Cost of Sales 529,929 147,101 229,653 116,957
------------ ---------- ---------- ----------
Gross Margin $ 580,346 $ 152,614 $ 354,837 $ 271,489
============ ========== ========== ==========
<CAPTION>
Nine Months Ended Nine Months Ended
December 31, 1999 December 31, 1998
Government Commercial Government Commercial
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Sales $ 2,474,990 $1,383,623 $1,385,702 $1,278,103
Cost of Sales 1,175,818 601,632 616,586 494,834
------------ ---------- ---------- ----------
Gross Margin $ 1,299,172 $ 781,991 $ 769,116 $ 783,269
============ ========== ========== ==========
</TABLE>
Note 8 Note Payable - Related party
The note due March 31, 1999 was extended until March 31, 2000.
Note 9 Convertible Subordinated Note - Related party
The maturity date of this note was extended to March 31, 2000.
6
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
Results of Operations
A number of the statements made by the Company in this report may be regarded as
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995.
Forward-looking statements include, among others, statements concerning the
Company's outlook, pricing trends and forces within the industry, the completion
dates of capital projects, expected sales growth, cost reduction strategies and
their results, long-term goals of the Company and other statements of
expectations, beliefs, future plans and strategies, anticipated events or trends
and similar expressions concerning matters that are not historical facts.
All predictions as to future results contain a measure of uncertainty and
accordingly, actual results could differ materially. Among the factors that
could cause a difference are: changes in the general economy; changes in demand
for the Company's products or in the cost and availability of its raw materials;
the actions of its competitors; the success of our customers; technological
change; changes in employee relations; government regulations; litigation,
including its inherent uncertainty; difficulties in plant operations and
materials; transportation, environmental matters; and other unforeseen
circumstances. A number of these factors are discussed in the Company's filings
with the Securities and Exchange Commission.
Overview
The Company has now received orders from the U.S. Navy for a total of 923 IFF
(Identification, Friend or Foe) Transponder Set Test Sets (TSTS) with a value
totaling over $11,800,000. The contract with the U.S. Navy includes options for
up to 1,300 units against which the 923 have been ordered, the remainder of
which the U.S. Navy can exercise, on behalf of all U.S. military services,
through calendar year 2001. However, there can be no assurance that the U.S.
Navy will exercise all or any additional of its purchase options under this
contract. The Company expects to begin shipping these units at the end of the
fourth quarter of the current fiscal year. These orders represent a significant
milestone for the Company and also represent the successful culmination of a
major Company funded research and development effort.
In January 2000, the Company received from Marconi Communications, through its
Italian intermediary, M.P.G. Instruments s.r.l., a contract in the amount of
$680,000 for Precision DME (Distance Measuring Equipment) Bench Test Sets. This
contract is incremental to the contract received in May 1999 for Precision DME
Ramp Test Sets in the amount of $396,262. Precision DME is directly solely to
the European market. The Company will design and build the Bench Test Set and
expects to begin delivering these units in early calendar year 2001.
The Company's backlog currently exceeds $15,000,000. This backlog is deliverable
over the next few years.
In summary, sales for the nine months ended December 31, 1999 increased
$1,194,808 (44.9%) to $3,858,613 as compared to the same period in the prior
fiscal year. For the nine months ended December 31, 1999, the Company generated
income before taxes of $237,130 as compared to a loss of $19,906 for the nine
months ended December 31, 1998. The Company continues to invest heavily in
engineering, research, and development as the Company continues to develop other
products for targeted markets.
7
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE
RESULTS OF OPERATIONS AND FINANCIAL CONDITION (continued)
Results of Operations (continued)
Sales
Total sales increased $437,054 (44.9%) and $1,194,808 (44.9%) for the three and
nine months ended December 31, 1999, respectively, as compared to the same
periods in the prior fiscal year.
Government sales increased $525,785 (90.0%) and $1,089,288 (78.6%) for the three
and nine months ended December 31, 1999, respectively, as compared to the three
and nine months ended December 31, 1998. The increase in government sales is
attributed to the sales of the T-47 family of IFF test sets to both domestic and
international customers, including the T-47CC which incorporates a directional
antenna, the T-47N which includes an interrogator function and the T-49CF which
incorporates test scenarios required by the U.S. Air Force. In addition, the
Company recorded sales of $178,578 and $275,060 for the three and nine months
ended December 31, 1999, respectively, associated with the documentation and
test portion of the U.S. Navy T-47M contract.
Although commercial sales decreased $88,731 (22.8%) for the three months ended
December 31, 1999 as compared to the three months ended December 31, 1998 they
increased $105,520 (8.3%) for the nine months ended December 31, 1999 as
compared to the same period last year. There is no assurance that the positive
trend for the first nine months of the current fiscal year will continue as the
Company has experienced a decline in commercial sales during the last two
quarters as compared to the same periods in the prior fiscal year. The increase
is sales in both the commercial and government segments is also contributed to
the efforts of our international distributors.
Gross Margin
Gross margin increased $106,634 (17.0%) and $528,778 (34.1%) for the three and
nine months ended December 31, 1999 as compared to the same periods in the prior
fiscal year. The increase in gross margin, for the most part, is attributed to
the higher volume. Gross margin has been negatively affected as a result of the
introduction of new products and the associated learning curve in building these
more sophisticated products. The gross margin percentage for the three months
ended December 31, 1999 was 52.0% as compared to 64.4% for the three months
ended December 31, 1998. The gross margin percentage for the nine months ended
December 31, 1999 was 53.9% as compared to 58.3% for the nine months ended
December 31, 1998. The gross margin percentage was lower in the current fiscal
year as a result of the increase in sales to distributors (sales to distributors
are sold at a discount from standard list prices), additional costs associated
with the introduction of new products, and the associated learning curve and the
lower gross margin on sales associated with the documentation and test portion
of the U.S. Navy T-47M contract
Operating Expenses
Selling, general and administrative expenses increased $36,549 (15.7%) and
$131,561 (18.6%) for the three and nine months ended December 31, 1999 as
compared to the three and nine months ended December 31, 1998. This increase is
attributed to higher sales and marketing expenses, an increase in salaries, and
the addition to staff of a Director of Finance.
8
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE
RESULTS OF OPERATIONS AND FINANCIAL CONDITION (Continued)
Results of Operations (continued)
Operating Expenses (continued)
Engineering, research and development expenses increased $108,720 (39.8%) and
$120,477 for the three and nine months ended December 31, 1999 as compared to
the same period last year. These expenditures are primarily associated with the
finalization of the design of the T-47M IFF test sets for the U.S. Navy and the
development of additional products, such as the T-47CC, T-47N, and the T-36M.
Income Taxes
For the nine months ended December 31, 1999, the Company, in accordance with
FASB 109, recorded a net tax benefit of $290,267, which represents the effective
federal and state tax rate on the Company's net income before taxes of $237,130
in the amount of $94,733 and reduced its valuation allowance in the amount of
$385,000. For the nine months ended December 31, 1998, the Company recorded a
deferred income tax benefit of $7,952, which represents the effective federal
and state tax rate on the Company's net loss before taxes of $19,906. The
Company currently does not have any federal tax liability. (See Note 4 to Notes
to Condensed Comparative Financial Statements).
Liquidity and Capital Resources
At December 31, 1999 the Company had positive working capital of $760,361 as
compared to $507,582 at March 31, 1999. For the nine months ended December 31,
1999, cash used in operations was $26,507 as compared to $474,680 for the nine
months ended December 31, 1998. This reduction in cash used in operations is
primarily attributed to the improvement in the Company's operating income.
Increases in accounts receivable and inventories were partially offset by the
Company's operating income, borrowings from the bank in the amount of $200,000,
and increases in accounts payable and other accrued liabilities.
The Company had a line of credit from Summit Bank for $350,000, which was
originally scheduled to expire in July 1999, however, the bank renewed the line
of credit until July, 2000 with a maximum credit of $250,000. As of December 31,
1999, the Company had an outstanding loan balance of $200,000.
Based upon the current backlog and available working capital, the Company
believes that it has sufficient working capital to fund its plans for the next
twelve months. At present, the Company does not expect to incur significant
long-term needs for capital outside of its normal operating activities. However,
the Company continues to seek additional credit in order to fund opportunities
that may arise.
There was no significant impact on the Company's operations as a result of
inflation for the nine months ended December 31, 1999.
These financial statements should be read in conjunction with the Company's
Annual Report on Form 10-K to the Securities and Exchange Commission for the
fiscal year ended March 31, 1999.
Year 2000 Issue
The Company is not aware of any problems associated with the Year 2000 issue
and, as such, has experienced no disruption in its operations.
9
<PAGE>
Part II Other Information
Item 4 Submission of Matters to a Vote of Security Holders
(a) The Annual Meeting of Shareholders was held on December 1, 1999 (the
"Annual Meeting").
(b) Not applicable because (i) proxies for the Annual Meeting were not
solicited pursuant to Regulation 14A under the Securities Exchange Act of
1934; (ii) there was no solicitation in opposition to management's
nominees as listed in the Company's proxy statement; and (iii) all of such
nominees were elected.
(c) At the Annual Meeting, the Company's shareholders voted in favor of
management's nominees for election as directors of the Company as follows:
For Against
--- -------
Harold K. Fletcher 1,626,941 0
George F. Leon 1,626,941 0
Robert J. Melnick 1,626,941 0
Jeff C. O'Hara 1,626,941 0
Robert J. Walker 1.626,941 0
The shareholders also voted all 1,429,941 shares in favor of
PricewaterhouseCoopers L.L.P. as the Company's certified public accountants for
the fiscal year ending March 31, 2000.
(d) Not applicable
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.
TEL-INSTRUMENT ELECTRONICS CORP.
Date: February 14, 2000 By: /s/ Harold K. Fletcher
----------------------
Harold K. Fletcher
Chairman and President
Date: February 14, 2000 By:/s/ Joseph P. Macaluso
----------------------
Joseph P. Macaluso
Principal Accounting Officer
10
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-Mos
<FISCAL-YEAR-END> Mar-31-1999
<PERIOD-START> Apr-01-1999
<PERIOD-END> Dec-31-1999
<CASH> 185
<SECURITIES> 0
<RECEIVABLES> 922
<ALLOWANCES> 16
<INVENTORY> 1,015
<CURRENT-ASSETS> 2,313
<PP&E> 965
<DEPRECIATION> 682
<TOTAL-ASSETS> 3,367
<CURRENT-LIABILITIES> 1,552
<BONDS> 0
0
0
<COMMON> 211
<OTHER-SE> 1,238
<TOTAL-LIABILITY-AND-EQUITY> 3,367
<SALES> 3,859
<TOTAL-REVENUES> 3,859
<CGS> 1,777
<TOTAL-COSTS> 1,801
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 43
<INCOME-PRETAX> 237
<INCOME-TAX> (290)
<INCOME-CONTINUING> 527
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 527
<EPS-BASIC> .25
<EPS-DILUTED> .25
</TABLE>
