VISTA, Calif. (Map) - VISTA, Calif., March 17 /PRNewswire-FirstCall/ -- Directed Electronics, Inc. (Nasdaq: DEIX) announced today financial results for the fourth quarter and year ended December 31, 2007.

Fourth Quarter Financial Highlights: -- Q4 net sales and adjusted EBITDA of $152 million and $29 million, respectively -- Paid down $40 million of term debt as compared to 2007 requirement of $3 million resulting in 4.5x leverage, well within December 31, 2007 debt compliance ratio -- Pro forma EPS of $0.41 per share, excluding $146 million, net of tax, of non-cash impairment charges related to goodwill and intangibles. These results included $0.05 of non-cash charges related to early debt retirement and certain tax expenses. Excluding these non-cash items, pro forma EPS was $0.46 per share -- Including non-cash impairment charges, GAAP net loss for the fourth quarter of 2007 was ($136.0) million, or ($5.25) per diluted share Recent Operating Highlights: -- Expanded distribution with Polk Audio adding Best Buy and Apple Stores -- Renegotiated debt agreement increasing total leverage covenant -- Reduced risk in satellite radio business with amended SIRIUS agreement -- Appointed Kevin Duffy to the role of Chief Financial Officer -- Implementing plan to reduce $5 million of annualized operating expenses -- Improved cash flow from working capital and operating improvements

"In the fourth quarter, we accomplished most of our goals including strong sales and EBITDA performance, as well as paying down $40 million in term debt bringing our full year 2007 debt down by $75 million, or 22%," commented James E. Minarik, Directed's President and Chief Executive Officer. "For the full year of 2007, we experienced a sizeable sales mix shift as our higher margin, branded security and entertainment business increased by 30% due to a number of factors including our acquisition of Polk Audio, single digit increases in security and convenience, and continued strong performance of our Definitive Technology home audio speakers, while our satellite radio sales declined by 46%. This shift caused our security and entertainment business to increase from 51% of our sales in 2006 to 72% of our sales in 2007 while also driving our gross margins upwards by over 600 basis points to 35%.

"Despite the strong fundamentals of our business including approximately $59 million in adjusted EBITDA and over $400 million in net sales for 2007, we have taken a non-cash impairment charge of $146 million, net of tax, related to goodwill and intangibles resulting in a GAAP net loss of $140 million. This was due primarily to the decline in our stock price as compared to our book value. However, while this is a large number, I want to emphasize that this was a non-cash charge and does not affect our on-going operations.

"While the current economic environment and our market conditions may be more difficult than in the recent past, we expect the combination of our expanded distribution of home audio products at Best Buy and Apple Stores, our improved debt position, and our focus on cost cutting initiatives will ultimately lead to a stronger company."

Fourth Quarter 2007 Versus Fourth Quarter 2006

Sales

Net sales in the fourth quarter of 2007 were $152.0 million compared with net sales of $210.3 million in the fourth quarter of 2006. The fourth quarter sales decline was largely driven by lower satellite radio sales. Gross sales of security and entertainment products were $101.2 million in the fourth quarter of 2007 compared with $103.6 million for the same period in 2006. Security and convenience, as well as home audio sales, increased in Q4 driven by higher sales of remote start due to cold weather and successful new product introductions. These increases were offset by a decline in mobile video and an approximate $4 million decrease in Directed-designed satellite radio accessories, which are included in mobile audio sales, due to the overall slowdown in the retail satellite radio market.

As expected, fourth quarter 2007 gross sales of satellite radio products decreased 51.0% to $56.2 million from $114.0 million in the fourth quarter of 2006.

Gross Profit

For the fourth quarter of 2007, pro forma gross margin increased 610 basis points to 34.6% compared with 28.5% in the prior year. GAAP gross margin increased 850 basis points to 34.3% compared with 25.8% in the prior year. The increase during the period was due to the sales mix shifting to higher-margin security and entertainment product sales.

Operating Expenses

Pro forma operating expenses were $26.3 million in the fourth quarter of 2007, or 17.3% of revenue, compared with $27.4 million, or 13.0% of revenue, in the prior year. The company initiated a program in the first quarter of 2008 to improve operating efficiency and expects to save approximately $5 million on an annualized basis.

GAAP operating expenses were $221.1 million in the fourth quarter of 2007 compared with $28.8 million in the fourth quarter of 2006. The company's 2007 fourth quarter GAAP operating expenses included a $194.8 million non-cash goodwill and intangible impairment charge.

EBITDA and Net Income (Loss)

Fourth quarter 2007 pro forma EBITDA (earnings before interest, taxes, depreciation and amortization, including goodwill and intangibles impairment) was $28.8 million compared with $34.7 million in the comparable prior year period. Adjusted EBITDA, which includes adjustments as defined by the company's lending agreement, was $29.1 million in the fourth quarter. A quantitative reconciliation from the company's GAAP results to its pro forma and adjusted results is provided in the accompanying tables.

Pro forma operating income was $26.3 million in the fourth quarter of 2007 compared to $32.5 million in the fourth quarter of 2006. Pro forma net income was $10.7 million, or $0.41 per diluted share, in the fourth quarter of 2007 compared with $15.4 million, or $0.59 million per diluted share, in the prior year period. Fourth quarter 2007 pro forma net income included $0.02 per diluted share related to the write-off of non-cash financing fees associated with the company's $39.2 million prepayment of debt, as well as $0.03 of non-cash tax expense related to the delivery of previously scheduled RSU's. Excluding these non-cash charges, fourth quarter 2007 pro forma net income was $0.46. GAAP net loss for the fourth quarter of 2007 was ($136.0) million, or ($5.25) per diluted share, compared with net income of $10.8 million, or $0.41 per diluted share, in the prior year.

Full Year 2007 Versus Full Year 2006

Sales

Net sales were $401.1 million for the full year of 2007, a decrease of 8.4% compared with net sales of $437.8 million for the full year of 2006. Gross sales of security and entertainment products were $298.1 million for the full year of 2007, an increase of 29.9% compared with $229.4 million for the full year of 2006. Gross sales of satellite radio products were $117.9 million for the full year of 2007, a decrease of 46.4% compared with $220.1 million for the full year of 2006.

Gross Profit

Pro forma gross profit increased 11.4% to $143.1 million for the full year of 2007 compared with $128.5 million for the full year of 2006. Pro forma gross margin increased to 35.7% in 2007 from 29.4% in 2006. GAAP gross profit increased 15.6% to $141.7 million for the full year of 2007 compared with $122.6 million for the full year of 2006. GAAP gross margin increased to 35.3% in 2007 from 28.0% in 2006. The gross margin improvement was primarily due to increased sales of higher margin Polk Audio and Definitive Technology products combined with reduced sales of lower margin satellite radio receivers.

Operating Expenses

Pro forma operating expenses were $95.2 million, or 23.7% of net sales, for the full year of 2007 compared with $67.2 million, or 15.4% of net sales, in 2006. For the full year, operating expenses increased due to the full year inclusion of Polk Audio and the acquisition of Trilogix. GAAP operating expenses were $295.5 million in 2007 compared with $71.0 million in 2006. The company's 2007 GAAP operating expenses included a $194.8 million non-cash goodwill and intangible impairment charge and $5.5 million related to the settlement of previously disclosed patent litigation.

EBITDA and Net Income (Loss)

For the full year of 2007, pro forma EBITDA was $57.6 million compared with $68.0 million for the full year of 2006. Adjusted EBITDA, which includes adjustments as defined by the company's lending agreement, was $58.7 million in 2007.

Pro forma operating income was $47.9 million for the full year of 2007 compared with $61.3 million for the full year of 2006. Pro forma net income for the full year of 2007 was $10.7 million, or $0.41 per diluted share. Full year 2007 pro forma net income included $0.02 per diluted share related to the write-off of non-cash financing fees associated with the company's $39.2 million prepayment of debt, as well as $0.05 of non-cash tax expense related to the delivery of previously scheduled RSU's. GAAP net loss for 2007 was ($140.0) million, or ($5.40) per diluted share, compared with GAAP net income of $21.0 million, or $0.81 per diluted share, in 2006.

Balance Sheet and Cash Flows

The company generated $87.0 million of operating cash flow for the full year of 2007, compared with ($20.2) million of operating cash used for the full year of 2006. The company primarily used operating cash flow to repay $75.3 million of debt, including $42.3 million of term debt, and to acquire Trilogix Systems. As of December 31, 2007, debt totaled $266.9 million. The

company was in compliance with all of its debt covenants as of December 31, 2007.

The company recently renegotiated its term debt lending agreement including changes to the following key terms:

-- Increased allowable total leverage ratio to 5.25x through Q1 2009 stepping down to 4.95x through Q4 2009 with step-downs thereafter consistent with the previous lending agreement. Prior to the amendment, the company's total allowable leverage ratio was 4.85x with step-downs to 4.60x as of June 30, 2008 and 3.95x as of June 30, 2009. -- Modified loan pricing to LIBOR plus 350 basis points when the company is under 4.5x of leverage and LIBOR plus 400 basis points when the company is over 4.5x of leverage. Previously, the company's debt was priced at LIBOR plus 250 basis points. Taking into account the increased interest rate margin, the company still expects interest expense to decline in 2008 as compared to 2007 due to carrying lower levels of debt, as well as due to a decline in LIBOR. -- Modified other terms including revolver availability, prepayment requirements, right to execute accounts receivable sale/securitization, and permitted add-backs to adjusted EBITDA.

"For the latter part of 2007 and going forward, we are increasing our focus on improving our overall balance sheet and operating expense structure," stated Kevin Duffy, Chief Financial Officer. "Specifically, we have made improvements in our use of working capital by improving our accounts payable terms and implementing tighter A/R and inventory controls, which should ultimately translate into increased debt retirement. Additionally, with the support of our lenders, we have successfully amended our debt agreement to provide greater strategic and financial flexibility.

"Over the last several months, we have also analyzed and identified cost savings across our operations. In the first quarter of 2008, we began implementing cost-cutting initiatives which we ultimately expect to generate $5 million in annualized savings consisting of attrition, reduction in temporary labor, and operating efficiencies."

During the fourth quarter of 2007, the company conducted its annual impairment testing required by SFAS No. 142, "Goodwill and Other Intangible Assets," for fiscal 2007. As a result of the evaluation, the company determined that the carrying amount of the goodwill exceeded its implied fair value, and recognized a non-cash impairment charge to goodwill and intangibles in the amount of $146.4 million, net of tax. The goodwill impairment charge was primarily the result of the decline in the company's stock price.

Guidance

The company has elected to discontinue providing guidance for 2008 due to a number of factors including the historical volatility of satellite radio sales and the pending merger between SIRIUS and XM, which has also caused SIRIUS to suspend guidance. These factors, along with the slowing economy, have increased the difficulty of accurately predicting net sales and earnings.

Conference Call and Webcast

Directed Electronics will host a conference call and webcast to discuss its financial results today at 5:00 p.m. Eastern Time. The conference call may include forward-looking statements. This call will be webcast live on the Investor Relations section of the Company's website at http://www.directed.com and will be archived and available for replay approximately three hours after the live event. The audio replay will be available through 11:59 p.m., March 31, 2008. The Company's financial results are also available online at http://www.directed.com.

To participate in the conference call, investors should dial 800-762-8779 ten minutes prior to the call. International callers should dial 480-248- 5081. A telephone replay of the call will be available through 11:59 p.m. Eastern Time on March 31, 2008 by calling 800-406-7325 (passcode: 3853738). International callers should dial 303-590-3030 and use the same passcode.

About Directed Electronics

Headquartered in Southern California, Directed Electronics is the largest designer and marketer in North America of premium home theater loudspeakers sold under the Polk Audio(R) and Definitive Technology(R) brand names, and consumer-branded vehicle security and remote start systems sold under the Viper(R), Clifford(R), Python(R) and Autostart(R) brand names. Directed is also the largest aftermarket supplier of SIRIUS satellite radios and accessories, and a major supplier of mobile audio and video. Directed markets its broad portfolio of products through many channels including leading national retailers and specialty chains throughout North America, and around the world. Founded in 1982, the company has more than 500 employees and operations in California, Maryland, Canada, Europe and Asia. For more information, please visit http://www.directed.com.

Forward-Looking Statements

Certain statements in this news release that are not historical fact constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements typically are identified by the use of terms such as "may," "should," "might," "believe," "expect," "anticipate," "estimate" and similar words, although some may be expressed differently. Forward-looking statements in this release include, but are not limited to, statements as to expected savings from the company's operating efficiency program and interest expense. Shareholders and other readers are cautioned not to place undue reliance on these forward- looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results of Directed to be materially different from historical results or from any results expressed or implied by such forward-looking statements. These factors include competition in the consumer electronics industry, development of new products and changing demand of customers, reliance on certain key customers, adverse developments affecting SIRIUS Satellite Radio, decline in consumer spending, reliance on certain manufacturers and their ability to maintain satisfactory delivery schedules, disruption in supply chain, shortages of components and materials, economic risks associated with changes in social, political, regulatory, and economic conditions in the countries where our products are manufactured, quality installation of products by customers, significant product returns or product liability claims, compliance with various state and local regulations, risks with international operations, impairment of goodwill and intangible assets, claims related to intellectual property, ability to service debt obligations, restrictive terms of our senior secured credit facility, vulnerability to increases in interest rates, disruption in distribution centers, ability to raise additional capital if needed, dependence on senior management, ability to realize on investments made in the business, and integration of acquired businesses. Certain of these factors, as well as various additional factors, are discussed from time to time in the reports filed by Directed with the Securities and Exchange Commission, including the Form 10-K for the year ended December 31, 2007. Directed disclaims any intent or obligation to update these forward-looking statements.

DIRECTED ELECTRONICS, INC. Consolidated Statements of Income (unaudited, in thousands, except per share amounts) GAAP Pro Forma Quarter Quarter Quarter Quarter Ended Ended Ended Ended 12/31/2007 12/31/2006 12/31/2007 12/31/2006 Net product sales $150,562 $209,268 $150,562 $209,268 Royalty and other revenue 1,425 1,031 1,425 1,031 Net Sales 151,987 210,299 151,987 210,299 Cost of sales 99,891 156,092 99,406 150,451 Gross profit 52,096 54,207 52,581 59,848 Operating expenses: Selling, general and administrative 26,270 28,771 26,270 27,369 Goodwill and intangible asset impairment 194,832 - - - Total operating expenses 221,102 28,771 26,270 27,369 Income from operations (169,006) 25,436 26,311 32,479 Other income (expense): Interest expense, net (7,433) (6,830) (7,433) (6,830) Income before provision for income taxes (176,439) 18,606 18,878 25,649 Provision for income taxes (40,480) 7,846 8,224 10,293 Net income (loss) $(135,959) $10,760 $10,654 $15,356 Net income per common share: Basic $(5.25) $0.41 $0.41 $0.59 Diluted $(5.25) $0.41 $0.41 $0.59 Weighted average number of shares: Basic 25,898 26,032 25,898 26,032 Diluted 25,898 26,041 25,898 26,041

This earnings release includes information presented on a pro forma basis. These pro forma financial measures are considered "non-GAAP" financial measures within the meaning of SEC Regulation G. The Company believes that this presentation of pro forma results provides useful information to both management and investors by excluding specific revenue, costs and expenses that the Company believes are not indicative of core operating results. The presentation of this additional information should not be considered in isolation or as a substitute for results prepared in accordance with generally accepted accounting principles. The reconciliation set forth below is provided in accordance with Regulation G and reconciles the pro forma financial measure with the most directly comparable GAAP-based financial measure.

DIRECTED ELECTRONICS, INC. Reconciliation of GAAP to Pro Forma Net Income Available to Common Shareholders (unaudited, in thousands, except per share amounts) Quarter Quarter Ended Ended 12/31/2007 12/31/2006 GAAP net income $(135,959) $10,760 Adjustments: Gross profit reduction from purchase accounting 485 5,641 Patent litigation costs - 1,402 Goodwill and intangible asset impairment 194,832 - Tax effects of adjustments (48,704) (2,447) Pro forma net income (loss) $10,654 $15,356 GAAP net income per common share, diluted $(5.25) $0.41 Pro forma net income per common share, diluted $0.41 $0.59 Diluted weighted average number of shares (GAAP and pro forma) 25,898 26,041 DIRECTED ELECTRONICS, INC. Reconciliation of GAAP Net Income to Pro Forma and Adjusted EBITDA (Note 1) (unaudited, in thousands) Quarter Quarter Ended Ended 12/31/2007 12/31/2006 Net income $(135,959) $10,760 Adjustments: Interest expense, net 7,433 6,830 Depreciation 698 647 Amortization 1,838 1,586 Goodwill and intangible asset impairment 194,832 - Taxes (40,480) 7,846 EBITDA (Note 1) $28,362 $27,669 Gross profit reduction from purchase accounting 485 5,641 Patent litigation costs - 1,402 Pro forma EBITDA (Note 1) $28,847 $34,712 Non-cash stock-based compensation 234 46 Other - 2,039 Adjusted EBITDA (Note 1) $29,081 $36,797 DIRECTED ELECTRONICS, INC. Itemization of Net Sales (unaudited, in thousands) Quarter Quarter Ended Ended 12/31/2007 12/31/2006 Gross Security and Entertainment Sales $101,163 $103,573 Gross Satellite Radio Sales 56,217 113,975 Rebates and Discounts (6,818) (8,280) Net Product Sales 150,562 209,268 Royalties and Other Revenue 1,425 1,031 Net Sales $151,987 $210,299

Note 1: EBITDA (earnings before interest, income taxes, depreciation, and amortization, including goodwill and intangible asset impairment) is not a measure of financial performance under generally accepted accounting principles, or GAAP, but is used by some investors to determine a company's ability to service or incur indebtedness. The company presents pro forma EBITDA as it believes that pro forma results provide useful information to both management and investors by excluding specific revenue, costs and expenses that the company believes are not indicative of core operating results. Adjusted EBITDA is presented as it includes other adjustments permitted under the company's lending agreement for covenant calculations. The presentation of this additional information should not be considered in isolation or as a substitute for results prepared in accordance with generally accepted accounting principles. The reconciliation set forth above is provided in accordance with Regulation G and reconciles EBITDA, pro forma EBITDA, and adjusted EBITDA with the most directly comparable GAAP-based financial measure. EBITDA is not calculated in the same manner by all companies and accordingly is not necessarily comparable to similarly entitled measures of other companies and may not be an appropriate measure for performance relative to other companies. EBITDA is not intended to represent and should not be considered more meaningful than, or as an alternative to, measures of operating performance as determined in accordance with GAAP.

DIRECTED ELECTRONICS, INC. Consolidated Statements of Income (unaudited, in thousands, except per share amounts) GAAP Pro Forma YTD YTD YTD YTD 12/31/2007 12/31/2006 12/31/2007 12/31/2006 Net product sales $396,491 $433,927 $396,491 $433,927 Royalty and other revenue 4,649 3,851 4,649 3,851 Net Sales 401,140 437,778 401,140 $437,778 Cost of sales 259,443 315,155 258,016 309,280 Gross profit 141,697 122,623 143,124 128,498 Operating expenses: Selling, general and administrative 100,682 70,972 95,188 67,227 Goodwill and other intangible asset impairment 194,832 - - - Total operating expenses 295,514 70,972 95,188 67,227 Income (loss) from operations (153,817) 51,651 47,936 61,271 Other income (expense): Interest expense, net (27,785) (17,516) (27,785) (17,091) Income before provision for (benefit from) income taxes (181,602) 34,135 20,151 44,180 Provision for (benefit from) income taxes (41,634) 13,126 9,494 17,409 Net income (loss) $(139,968) $21,009 $10,657 $26,771 Net income (loss) per common share: Basic $(5.40) $0.81 $0.41 $1.04 Diluted $(5.40) $0.81 $0.41 $1.04 Weighted average number of shares: Basic 25,921 25,827 25,921 25,827 Diluted 25,921 25,839 25,921 25,839

This earnings release includes information presented on a pro forma basis. These pro forma financial measures are considered "non-GAAP" financial measures within the meaning of SEC Regulation G. The Company believes that this presentation of pro forma results provides useful information to both management and investors by excluding specific revenue, costs and expenses that the Company believes are not indicative of core operating results. The presentation of this additional information should not be considered in isolation or as a substitute for results prepared in accordance with generally accepted accounting principles. The reconciliation set forth below is provided in accordance with Regulation G and reconciles the pro forma financial measure with the most directly comparable GAAP-based financial measure.

DIRECTED ELECTRONICS, INC. Reconciliation of GAAP to Pro Forma Net Income Available to Common Shareholders (unaudited, in thousands, except per share amounts) YTD YTD 12/31/2007 12/31/2006 GAAP net income (loss) $(139,968) $21,009 Adjustments: Gross profit reduction from purchase accounting 1,427 5,875 Patent litigation costs 5,494 2,978 Transaction specific stock compensation expense related to Polk acquisition - 767 Write-off of debt issuance costs - 425 Goodwill and intangible asset impairment 194,832 - Tax effects of adjustments (51,128) (3,619) Revaluation of deferred tax assets and liabilities - (664) Pro forma net income $10,657 $26,771 GAAP net income (loss) per common share, diluted $(5.40) $0.81 Pro forma net income per common share, diluted $0.41 $1.04 Diluted weighted average number of shares (GAAP and pro forma) 25,921 25,839 DIRECTED ELECTRONICS, INC. Reconciliation of GAAP Net Income (Loss) to Pro Forma and Adjusted EBITDA (Note 1) (unaudited, in thousands) YTD YTD 12/31/2007 12/31/2006 Net income (loss) $(139,968) $21,009 Adjustments: Interest expense, net 27,785 17,516 Depreciation 2,613 1,995 Amortization 7,069 4,727 Goodwill and intangible asset impairment 194,832 - Taxes (41,634) 13,126 EBITDA (Note 1) $50,697 $58,373 Gross profit reduction from purchase accounting 1,427 5,875 Patent litigation costs 5,494 2,978 Transaction specific stock compensation expense related to Polk acquisition - 767 Pro forma EBITDA (Note 1) $57,618 $67,993 Non-cash stock-based compensation 885 46 Other 233 11,209 Adjusted EBITDA (Note 1) $58,736 $79,248 DIRECTED ELECTRONICS, INC. Itemization of Net Sales (unaudited, in thousands) YTD YTD 12/31/2007 12/31/2006 Gross Security and Entertainment Sales $298,054 $229,367 Gross Satellite Radio Sales 117,906 220,070 Rebates and Discounts (19,469) (15,510) Net Product Sales 396,491 433,927 Royalties and Other Revenue 4,649 3,851 Net Sales $401,140 $437,778

Note 1: EBITDA (earnings before interest, income taxes, depreciation, and amortization, including goodwill and intangible asset impairment) is not a measure of financial performance under generally accepted accounting principles, or GAAP, but is used by some investors to determine a company's ability to service or incur indebtedness. The company presents pro forma EBITDA as it believes that pro forma results provide useful information to both management and investors by excluding specific revenue, costs and expenses that the company believes are not indicative of core operating results. Adjusted EBITDA is presented as it includes other adjustments permitted under the company's lending agreement for covenant calculations. The presentation of this additional information should not be considered in isolation or as a substitute for results prepared in accordance with generally accepted accounting principles. The reconciliation set forth above is provided in accordance with Regulation G and reconciles EBITDA, pro forma EBITDA, and adjusted EBITDA with the most directly comparable GAAP-based financial measure. EBITDA is not calculated in the same manner by all companies and accordingly is not necessarily comparable to similarly entitled measures of other companies and may not be an appropriate measure for performance relative to other companies. EBITDA is not intended to represent and should not be considered more meaningful than, or as an alternative to, measures of operating performance as determined in accordance with GAAP.

DIRECTED ELECTRONICS, INC. Condensed Consolidated Balance Sheets (in thousands) December 31, December 31, 2007 2006 ASSETS Cash and cash equivalents $4,760 $9,861 Accounts receivable, net 77,366 157,013 Inventories 64,219 122,697 Other current assets 22,936 31,755 Total current assets 169,281 321,326 Property and equipment, net 7,353 7,068 Goodwill and intangible assets, net 157,265 342,729 Other assets 6,535 7,584 Total assets $340,434 $678,707 LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT) Accounts payable $44,814 $116,690 Accrued expenses 28,527 40,630 Current portion of notes payable 2,669 3,068 Total current liabilities 76,010 160,388 Revolving loan 4,000 37,000 Senior notes, less current portion 260,257 302,159 Deferred tax liability 8,864 53,473 Other liabilities 5,201 1,296 Total liabilities 354,332 554,316 Shareholders' equity (deficit) (13,898) 124,391 Total liabilities and shareholders' equity (deficit) $340,434 $678,707 (Logo: http://www.newscom.com/cgi-bin/prnh/20020424/DIRECTLOGO)