UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 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 SEPTEMBER 30, 1997 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 COMMISSION FILE NUMBER: 1-11735 99 CENTS ONLY STORES (Exact name of registrant as specified in its charter) CALIFORNIA 95-2411605 (State or other jurisdiction (I.R.S. Employer Identification No.) or organization) 4000 UNION PACIFIC AVENUE CITY OF COMMERCE, CALIFORNIA 90023 (Address of Principal executive offices) Registrant's telephone number, including area code: (213) 980-8145 NONE Former name, address and fiscal year, if changed since last report Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Security 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 last 90 days. YES [x] NO [ ] Indicate the number of shares outstanding of each of the issuer's classes of common stock as of the latest practicable date. Common Stock, No Par Value, 14,851,750 Shares as of OCTOBER 30, 1997 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS 99 Cents Only Stores Balance Sheets (Amounts In Thousands) September 30, December 31, 1997 1996 (Unaudited) ---------- ---------- Assets Current assets: Cash................................ $4,338 $3,375 Short-term investments.............. 29,588 27,619 Accounts receivable, net of allowance for doubtful accounts of $183,000 and $211,000 as of SEPTEMBER 30, 1997 and December 31, 1996, respectively............ 2,540 1,561 Inventories......................... 39,011 36,933 Other............................... 607 323 -------- -------- Total current assets................ 76,084 69,811 Property and equipment, at cost: Land................................ 8,072 7,159 Building and improvements........... 10,804 10,195 Leasehold improvements.............. 10,202 6,546 Fixtures and equipment.............. 7,846 5,840 Transportation equipment............ 467 438 Construction in progress............ 694 134 -------- -------- 38,085 30,312 Less - accumulated depreciation and amortization............. (9,350) (7,239) -------- -------- Total property and equipment, net... 28,735 23,073 Other assets: Deferred income taxes............... 5,702 5,702 Deposits............................ 231 246 Other............................... 275 0 Receivable from affiliated entity... 165 165 -------- -------- 6,373 6,113 -------- -------- Total assets........................ $111,192 $98,997 ======== ======== The accompanying notes are an integral part of these balance sheets. 99 Cents Only Stores Balance Sheets (Amounts In Thousands) September 30, December 31, 1997 1996 (Unaudited) ---------- ---------- Liabilities and Shareholders' Equity Current liabilities: Current portion of capital lease obligation....................... $691 $656 Accounts payable......................... 6,448 6,577 Accrued expenses: Payroll and payroll related............ 667 1,086 Sales tax.............................. 846 1,056 Liability for claims................... 547 706 Other.................................. 88 34 Workers' compensation.................. 770 771 Income taxes payable................... - 103 -------- -------- Total current liabilities................ 10,057 10,989 Long-term liabilities: Deferred rent............................ 1,325 1,294 Accrued interest on capitalized lease obligation............................... 1,927 1,500 Capital lease obligation, net of Current portion........................ 8,186 8,709 -------- -------- 11,438 11,503 Commitments and contingencies............ - - Shareholders' equity: Preferred stock, no par value Authorized - 1,000,000 shares Issued and outstanding - none.......... - - Common Stock, no par value Authorized - 40,000,000 shares Issued and outstanding - 14,851,750 shares at September 30, 1997 and 14,816,635 shares at December 31, 1996. 65,751 65,354 Retained earnings...................... 23,946 11,151 -------- -------- Total shareholders' equity............... 89,697 76,505 -------- -------- Total liabilities and shareholders' equity $111,192 $98,997 ======== ======== The accompanying notes are an integral part of these balance sheets. 99 Cents Only Stores Statements of Income (Unaudited) (Amounts In Thousands Except Earnings Per Share Data) Three Months Ended Nine Months Ended September 30, September 30, 1997 1996 1997 1996 -------- -------- -------- -------- Net sales: 99 Cents Only Stores................ $46,991 $35,211 128,726 101,603 Bargain Wholesale................... 11,995 10,173 34,818 29,230 -------- -------- -------- -------- Net sales........................... 58,986 45,384 163,544 130,833 Cost of sales....................... 37,794 29,266 105,623 86,315 -------- -------- -------- -------- Gross profit........................ 21,192 16,118 57,921 44,518 Selling, general and administrative expenses........... 13,313 10,334 36,800 29,007 -------- -------- -------- -------- Operating income.................... 7,879 5,784 21,121 15,511 Interest income (expense), net...... 218 242 513 (10) -------- -------- -------- -------- Income before provision for Income taxes...................... 8,097 6,026 21,634 15,501 Provision for income taxes: Historical...... 3,347 2,474 8,839 Pro forma....... -------- -------- -------- 6,355 -------- Net income: Historical...... $4,750 $3,552 $12,795 Pro forma....... ======== ======== ======== $9,146 ======== Earnings per share: Historical...... $0.31 $0.24 $0.85 Pro forma....... ===== ===== ===== $0.66 ===== Weighted average number of common Shares outstanding: Historical...... 15,259 14,922 15,107 Pro forma....... ======== ======== ======== 13,809 ======== The accompanying notes are an integral part of these statements. 99 Cents Only Stores Statements of Cash Flows (Unaudited) (Amounts In Thousands) Nine Months Ended September 30, 1997 1996 -------- -------- Cash flows from operating activities: Net income (Note 4)................................ $12,795 $15,958 Adjustment to reconcile net income to net cash provided by (used in) operating activities: Provision for doubtful accounts.................... - 41 Depreciation and amortization...................... 2,111 1,460 Loss on disposition of property and equipment...... - 16 Provision (benefit) for deferred income taxes...... - (4,547) Changes in asset and liabilities associated with operating activities: Accounts receivable................................ (979) (878) Short-term investments............................. (1,968) (29,870) Inventories........................................ (2,078) (979) Other assets....................................... (559) (136) Deposits........................................... 15 - Accounts payable................................... (129) (884) Accrued expenses................................... (600) (389) Workers' compensation.............................. (2) 97 Income taxes payable............................... (237) 1,964 Deferred rent...................................... 32 50 Accrued interest................................... 427 398 -------- -------- Net cash provided by (used in) operating activities 8,828 ($17,699) Cash flows from investing activities: Purchase of property and equipment................. (7,774) (3,852) -------- -------- Net cash used in investing activities.............. ($7,774) ($3,852) Cash flows from financing activities: Payments of capital lease obligation............... (488) (454) Net proceeds from exercise of stock options........ 397 - Net proceeds from initial public offering.......... - 65,327 Payments of notes payable to shareholders'......... - (35,363) Payment of dividend payable........................ - (4,586) Distributions to shareholders...................... - (5,000) -------- -------- Net cash provided by (used in) financing activities ($ 91) 19,924 Net increase/(Decrease) in cash.................... 963 ($1,627) Cash, beginning of period.......................... 3,375 3,057 -------- -------- Cash, end of period................................ $4,338 $1,430 ======== ======== The accompanying notes are an integral part of these statements. 99 CENTS ONLY STORES NOTES TO FINANCIAL STATEMENTS (Unaudited) 1. BASIS OF PRESENTATION The accompanying unaudited financial statements have been prepared in conformity with generally accepted accounting principles. However, certain information and footnote disclosures normally included in financial statements prepared in conformity with generally accepted accounting principles have been omitted or condensed pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). These statements should be read in conjunction with the Company's December 31, 1996 audited and pro forma financial statements and notes thereto included in the Company's Form 10-K dated March 27, 1997, including all amendments thereto. In the opinion of management, these interim financial statements reflect all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the financial position and results of operations for each of the periods presented. The results of operations and cash flows for such periods are not necessarily indicative of results to be expected for the full year. 2. PUBLIC OFFERING OF STOCK In May 1996, the Company completed its initial public offering of 4,887,500 shares (including 637,500 shares from the exercise of the over allotment option granted to the underwriters) of common stock. Of the net proceeds of approximately $65.3 million, the Company used approximately $39.9 million to pay notes issued and dividends payable declared to the Existing Shareholders in connection with the Company's undistributed Subchapter S taxable earnings (see Notes 3 and 4). The Company is using the balance of the net proceeds to continue to accelerate the expansion of its retail operations and for general corporate purposes. Any net proceeds not immediately used for such purposes have been invested in short-term investment grade securities. 3. PRO FORMA PRESENTATION Through April 30, 1996, the Company had elected treatment as an S corporation under provisions of the Internal Revenue Code. Effective May 1, 1996, the Company terminated its S corporation election and became a C corporation. A. Pro Forma Statements of Income As an S corporation, the Company's income, whether distributed or not, was taxed at the shareholder level for federal income tax purposes. For California franchise tax purposes, as an S corporation, the Company was taxed at 1.5 percent of taxable income. Because of the Company's change in tax status, historical results of operations, including income taxes, and related earnings per share information may not in all cases, be comparable to or indicative of current and future results. Therefore, pro forma information, which shows results as if the Company had always been a C Corporation, is presented on the face of the accompanying statements. The pro forma provision for income taxes included in the accompanying statements of income shows results as if the Company had always been subject to taxes as a C Corporation and had adopted Statement of Financial Accounting Standards No. 109 (SFAS 109), "Accounting for Income Taxes," prior to fiscal 1991. Under SFAS 109, deferred income tax assets or liabilities are computed based on temporary differences between the financial statement and income tax bases of assets and liabilities using the current enacted marginal income tax rate in effect. Deferred income tax expenses or credits are based on the changes in the deferred income tax assets or liabilities from period to period. Under SFAS 109, deferred tax assets may be recognized for temporary differences that will result in deductible amounts in future periods and for loss carry forwards. A valuation allowance is recognized if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax asset will not be realized. For the nine months period ended September 30, 1997 the provision for income taxes was based upon a combined federal and state tax rate of approximately 41 percent, offset by the impact of various tax credits. B. Pro Forma Earnings Per Common Share Pro forma earnings per common share have been computed by dividing pro forma net income by the pro forma weighted average number of common shares outstanding plus the dilutive effect of common stock equivalents. Pro forma weighted average number of common shares outstanding also includes amounts (weighted from the beginning of the period to the initial public offering) for shares offered as a part of the public offering. Historical per share data are presented for three months and Pro forma per share data are presented for the nine months period ended September 30, 1996 and historical per share data are presented for the three months and nine months period ended September 30, 1997, in the accompanying statements of income. The number of common shares issuable due to options granted during the twelve months preceding the Company's public offering are included in the calculation of shares outstanding using the treasury stock method from the beginning of all periods presented. 4. CHANGE IN TAX STATUS/INCOME TAX PROVISION As discussed in note 3 above, effective May 1, 1996, the Company terminated its S corporation election and became a C corporation. As such, the actual taxes due by the Company for the period January 1, 1996 through April 30, 1996 are based on S corporation tax rates. The Company was subject to C corporation tax rate thereafter. The historical provision (benefit) for income taxes and resulting historical net income, based on S corporation and C corporation tax rates as discussed above and including the effect of the increase in the tax deferred asset as discussed above, for the nine months period ended September 30, 1996 follows: Nine Months Period Ended September 30, 1996 Income before provision (benefit) For income taxes $15,501 Historical provision (benefit) for Income taxes: During period as an S corporation 75 During period as a C corporation 4,038 Change in tax status (4,570) -------- ($ 457) -------- Historical net income $15,958 ======== ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS General 99 Cents Only Stores is a leading deep-discount retailer of consumable general merchandise at a single price point. The Company has been engaged, since 1976, in the purchase and sale of name brand, close-out and regularly available general merchandise. Since that time, the Company has distributed its merchandise on a wholesale basis through its Bargain Wholesale division. In 1982, the Company opened the first of its 99 Cents Only Stores and as of the date of this form 10-Q operates a chain of 51, 99 Cents Only Stores. The Company's growth has primarily come from new store openings and growth in its Bargain Wholesale division. Sales generated from the 99 Cents Only Stores were 80% of total revenues for the quarter ended September 30, 1997. The Company opened three 99 Cents Only Stores in the third quarter ended September 30, 1997 bringing the total new stores opened in the first nine months of 1997 to eight. Bargain Wholesale complements the Company's retail operations by allowing the Company to purchase in larger volumes at more favorable pricing and to generate additional net sales with relatively small increases in operating expenses. The wholesale business has expanded its marketing efforts to target new trade classes and distribution channels. Initial Public Offering In May 1996, the Company completed its initial public offering (see Note 2 above) of 4,887,500 shares (including 637,500 shares from the exercise of the over allotment option granted to the underwriters) of common stock. The Company is using the balance of the net proceeds to continue to accelerate the expansion of its retail operations and for general corporate purposes. Any net proceeds not immediately used for such purposes have been invested in short-term investment grade securities. Effect of Change in Form From an S Corporation to a C Corporation As part of its initial public offering, the Company changed in form from an S Corporation to a C corporation, which will affect its operations and financial condition by increasing the level of federal and state income taxes. As an S Corporation, the Company's income, whether or not distributed, was taxed at the shareholder level for federal income tax purposes. For California franchise tax purposes, S Corporations were taxed at 1.5% of taxable income for the first four months of 1996. Currently the top Corporate tax rate for C Corporations is 35% and the corporate tax rate in California is 9.3%. As such, the change in form will affect the earnings and the cash flows of the Company. The pro forma provision for income taxes in the accompanying statements of income shows results as if the Company had always been a C Corporation and had adopted Statement of Financial Accounting Standards No. 109 "Accounting for Income Taxes" prior to January 1, 1991. (See Note 4 of Notes to Financial Statements.) Three Months Ended September 30, 1997 Compared to Three Months Ended September 30, 1996 NET SALES: Net sales increased $13.6 million, or 30.0%, to $59.0 million in the 1997 period from $45.4 million in the 1996 period. 99 Cents Only Stores net sales increased approximately $11.8 million, or 33.5%, to $47.0 million in the 1997 period from $35.2 million in the 1996 period, and Bargain Wholesale net sales increased approximately $1.8 million, or 17.9%, to $12.0 million in the 1997 period from $10.2 million in the 1996 period. The increase in 99 Cents Only Stores net sales was attributable to the positive effect of 3 new stores opened in the third quarter of 1997, 3 new stores opened in the second quarter of 1997, 2 new stores opened in the first quarter of 1997. The full effect of 3 new store opened in the third quarter of 1996 and 2 in the fourth quarter of 1996 and a 1.5% increase in comparable same store sales in the 1997 period from the 1996 period. Comparable store sales were impacted by new store openings within a 3 mile radius of existing stores. The increase in Bargain Wholesale net sales was primarily attributable to a continued increased focus on marketing efforts targeting new trade classes and distribution channels. GROSS PROFIT: Gross profit increased approximately $5.1 million, or 31.5%, to $21.2 million in the 1997 period from $16.1 million in the 1996 period. The increase in gross profit was due to higher net sales and an increase in the gross profit margin to 35.9% in the 1997 period from 35.5% in the 1996 period. The 0.4% point increase in the gross profit margin is due to merchandise cost factors. SELLING, GENERAL AND ADMINISTRATIVE: SG&A increased by $3.0 million, or 28.8%, to 13.3 million in 1997 period from $10.3 million in 1996 period. This was primarily due to increased costs associated with new store growth. As a result of higher net sales in the 1997 period, SG&A decreased as a percentage of net sales from 22.8% in 1996 to 22.6% in 1997. OPERATING INCOME: As a result of the items discussed above, operating income increased $2.1 million, or 36.2%, to $7.9 million in 1997 from $5.8 million in 1996. The operating margin increased to 13.4% of sales in 1997 compared to 12.7% in 1996. INTEREST INCOME (EXPENSE): Interest income (expense) relates to interest on the Company's capitalized warehouse lease, net of interest earned on the Company's cash balances and short-term investments. The change in interest expense between 1997 and 1996 was due to interest earned on short-term marketable securities. During 1997 and 1996, the Company had no bank debt. PROVISION FOR INCOME TAXES: The provision for income taxes for the three months ended September 30, 1997, was $3.3 million in 1997 compared to $2.5 million in 1996. The effective rates of the historical and pro forma provision for income taxes was approximately 40.7% in 1997 and 41.7% in 1996. The change in the effective rate in 1997 from 1996 results from the benefit of available tax credits. NET INCOME: As a result of the items discussed above, net income increased $1.2 million, or 33.7% to $4.8 million in 1997 from $3.6 million in the 1996 period. Net income as a percentage of sales increased to 8.1% in 1997 from 7.8% in the 1996 period. Nine Months Ended September 30, 1997 Compared to Nine Months Ended September 30, 1996 NET SALES: Net sales increased $32.7 million, or 25.0%, to $163.5 million in the 1997 period from $130.8 million in the 1996 period. 99 Cents Only Stores net sales increased approximately $27.1 million, or 26.7%, to $128.7 million in the 1997 period from $101.6 million in the 1996 period, and Bargain Wholesale net sales increased approximately $5.6 million, or 19.1%, to $34.8 million in the 1997 period from $29.2 million in the 1996 period. The increase in 99 Cents Only Stores net sales was attributable to the positive effect of 8 new stores opened in the first nine months of 1997, the full effect of 3 new store openings in the third quarter of 1996 and 2 in the fourth quarter of 1996 and a 1.5% increase in comparable store net sales in the 1997 period from the 1996 period. Comparable store sales were impacted by new store openings within a 3 mile radius of existing stores. The increase in Bargain Wholesale net sales was primarily attributable to a continued increased focus on marketing efforts targeting new trade classes and distribution channels. GROSS PROFIT: Gross profit increased $13.4 million, or 30.1%, to $57.9 million in the 1997 period from $44.5 million in the 1996 period. The increase in gross profit was due to higher net sales and an increase in the gross profit margin to 35.4% in the 1997 period from 34.0% in the 1996 period. The 1.4% point increase in the gross profit margin is due to merchandise cost factors. SELLING, GENERAL AND ADMINISTRATIVE: SG&A increased by $7.8 million, or 26.9%, from $29.0 million in 1996 to $36.8 million in the 1997 period. This was primarily due to increased costs associated with new store growth. As a result SG&A increased as a percentage of net sales from 22.2% in 1996 to 22.5% in 1997. OPERATING INCOME: As a result of the items discussed above, operating income increased $5.6 million, or 36.2%, to $21.1 million in 1997 from $15.5 million in 1996. The operating margin increased to 12.9% of sales in 1997 compared to 11.9% in 1996. INTEREST INCOME (EXPENSE): Interest income (expense) relates to interest on the Company's capitalized warehouse lease, net of interest earned on the Company's cash balances and short-term investments. The change in interest expense between 1997 and 1996 was due to interest earned on short-term marketable securities. During 1997 and 1996, the Company had no bank debt. PROVISION FOR INCOME TAXES: The provision for income taxes for the nine months ended September 30, 1997 was $8.8 million in 1997 compared to a pro forma provision of $6.4 million in 1996. The increase results primarily from the increase in taxable earnings. The effective rate of the historical and pro forma provision for income taxes was approximately 40.7% in 1997 and 41.0% in 1996. The change in the effective rate in 1997 from 1996 results from the benefit of available tax credits. NET INCOME: As a result of the items discussed above, net income increased $3.6 million, or 39.9% to $12.8 million in 1997 from $9.1 million in the 1996 period. Net income increased to 7.8% of net sales from 7.0% in the 1996 period. LIQUIDITY AND CAPITAL RESOURCES The Company has funded its operations principally from cash provided by operations, and has not generally relied upon external sources of financing. The Company's capital requirements result primarily from purchases of inventory, expenditures related to store openings and the working capital requirements for new and existing stores. The Company takes advantage of close-out and other special situation opportunities which frequently results in large volume purchases, and as a consequence, its cash requirements are not constant or predictable during the year and can be affected by the timing and size of its purchases. In May 1996, the Company completed its initial public offering (see Note 2 above). The Company is using the net proceeds for the expansion of its retail operations, and for general corporate purposes. Since the offering, the Company has opened 15 new stores. At September 30, 1997 the Company had purchased the land and buildings for 3 of the locations. The Company may purchase other locations in the future. Available cash not immediately needed for such purposes has been invested in short-term investments grade securities. During the nine months ended September 30, 1997 and 1996, net cash provided by (used in) operations was $8.8 million and ($17.7) million respectively. Inventories increased $2.1 million in 1997 and increased $1.0 million in 1996. Receivables increased $1.0 million, in 1997 and $0.9 in 1996 respectively. Accounts payable was reduced $0.1 million in 1997 and $0.9 million in 1996. Current income taxes payable decreased $0.2 million in 1997 and increased $2.0 million in 1996. The increase in 1996 is as a result of the change in corporate tax status to a C corporation. In the third quarter of 1997, the Company also reinvested $0.5 million of interest earned on marketable securities. Net cash used in investing activities was $7.8 million in 1997, consisting of expenditures for property and equipment. In 1996, cash flow from investing activities consisted of $3.9 million used for capital expenditures. In 1997, net cash used in financing activities of $0.1 million included $0.5 for payments on the capitalized warehouse lease, this was offset by $0.4 of proceeds from the exercise of stock options. In 1996, net cash provided by financing activities was $20.0 million. These funds represented the net proceeds of the initial public offering in May 1996 of $65.3 million. The Company used approximately $39.9 million to pay notes payable and dividends payable declared to existing shareholders in connection with the Company's undistributed Subchapter S taxable earnings (see Notes 3 and 4). The Company has a $7.0 million bank line of credit facility bearing interest at the bank's prime rate. Under terms of the facility, the Company must comply with one financial covenant, the ratio of total liabilities to tangible net worth. As of September 30, 1997, the Company was in compliance with this covenant and there were no amounts outstanding on the line of credit. The Company believes that it can adequately fund its planned capital expenditures and working capital requirements for the next 12 months from the net cash provided by operations, cash on hand and marketable securities. PART II OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS None ITEM 2. CHANGES IN SECURITIES None ITEM 3. DEFAULTS UPON SENIOR SECURITIES None ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS None ITEM 5. OTHER INFORMATION None ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K None EXHIBITS. (a) EXHIBIT 11.1 Statement Regarding Computation of Per Share Earnings (b) EXHIBIT 27.1 Financial Data Schedule SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereto duly authorized. 99 CENTS ONLY STORES Date: October 30, 1997 /s/ Andrew A. Farina Andrew A. Farina Vice President Finance Exhibit 11.1 99 Cents Only Stores Statement Regarding Computation of Per Share Earnings (Amounts in thousands) Three Months Ended Nine Months Ended September 30, September 30, 1997 1997 ------- ------- Net Income $4,750 $12,795 ======= ======= Common Stock: Shares outstanding from Beginning of period 14,830 14,817 Exercise of Employee Stock Options 21 35 Common Stock Equivalents 408 255 ------- ------- Weighted Average number of common shares outstanding 15,259 15,107 ======= ======= Earnings per common share $0.31 $0.85 ======= ======= EXHIBIT 27.1 <PERIOD TYPE> 3-mos <FISCAL YEAR END> Dec 31 1997 <PERIOD START> Jan 01 1997 <PERIOD END> Sep 30 1997 [CASH] 4,338 [SECURITIES] 29,588 [RECEIVABLES] 2,540 [ALLOWANCES] (183) [INVENTORY] 39,011 <CURRENT ASSETS> 76,084 [PP&E] 38,085 [DEPRECIATION] (9,350) <TOTAL ASSETS> 111,192 <CURRENT LIABILITIES> 10,057 [BONDS] 0 <PREFERRED MANDATORY> 0 [PREFERRED] 0 [COMMON] 65,751 <OTHER SE> 23,946 <FN 1> <TOTAL LIABILITY AND EQUITY> 111,192 [SALES] 163,544 <TOTAL REVENUE> 163,544 [CGS] 37,794 <TOTAL COSTS> 13,313 <OTHER EXPENSES> 0 <LOSS PROVISION> 0 <INTEREST EXPENSE> 45 <INCOME PRE TAX> 8,097 <INCOME TAX> 3,347 <INCOME CONTINUING> 4,750 [DISCONTINUED] 0 [EXTRAORDINARY] 0 [CHANGES] 0 <NET INCOME> 4,750 <EPS PRIMARY> 0.31 <EPS DILUTED> 0.31 < /TABLE> <FN1> Retained Earnings