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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE QUARTER ENDED JUNE 30, 1999
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File No. 0-21417
CAPITAL TITLE GROUP, INC.
------------------------------------------------
(Name of registrant as specified in its charter)
Delaware 87-0399785
------------------------------- -------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
2901 East Camelback Road 85016
- ---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
(602) 954-0600
(Registrant's telephone number including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]
Indicate the number of shares outstanding for each of the issuer's classes of
common stock, as of the latest practicable date.
Common Stock, $.001 par value 17,011,841 shares as of August 2, 1999.
================================================================================
<PAGE>
FORM 10-QSB
For the Quarter ended June 30, 1999
TABLE OF CONTENTS
Part I: FINANCIAL INFORMATION Page Number
-----------
Item 1. Condensed Consolidated Financial Statements
A. Consolidated Balance Sheets as of
June 30, 1999 and December 31, 1998 3
B. Consolidated Statements of Operations
for the three month and six month periods
ended June 30, 1999 and 1998 4
C. Consolidated Statements of Cash Flows
for the six month periods ended
June 30, 1999 and 1998 5
D. Notes to Consolidated Financial Statements 6-7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8-11
Part II: OTHER INFORMATION
Items 1 - 3, and 5 of Part II have been omitted because they
are not applicable with respect to the current reporting period.
Item 4. Submission of Matters to a Vote of Security Holders 11
Item 6. Exhibits and Reports on Form 8-K 11
2
<PAGE>
PART 1. FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
CAPITAL TITLE GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
June 30 December 31,
1999 1998
------------ ------------
ASSETS (unaudited)
Current Assets:
Cash $ 3,078,669 $ 4,833,826
Accounts receivable, net 266,021 364,725
Notes and other receivables 298,984 406,028
Other current assets 472,504 575,875
------------ ------------
Total Current Assets 4,116,178 6,180,454
Property and equipment, net 9,402,322 8,863,133
Other Assets:
Notes receivable 251,402 231,531
Investment in title plant 526,438 520,249
Deposits and other assets 327,231 312,693
Property held for investment 170,622 161,270
Goodwill 252,110 259,024
============ ============
Total Assets $ 15,046,303 $ 16,528,354
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current portion of long-term debt $ 432,655 $ 532,346
Accounts payable 226,827 664,737
Accrued expenses 1,545,474 2,656,572
------------ ------------
Total Current Liabilities 2,204,956 3,853,655
Long-Term Debt 1,635,140 1,766,815
Other Liabilities 116,705 117,905
Stockholders' Equity:
Common stock, $.001 par value, 50,000,000
shares authorized, 17,011,841 and 16,926,791
shares issued and outstanding in 1999 and
1998, respectively 17,012 16,927
Paid-in capital 11,029,233 10,944,294
Accumulated earnings (deficit) 43,257 (171,242)
------------ ------------
Total Stockholders' Equity 11,089,502 10,789,979
------------ ------------
Total Liabilities and Stockholders' Equity $ 15,046,303 $ 16,528,354
============ ============
See Notes to Consolidated Financial Statements
3
<PAGE>
CAPITAL TITLE GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three months ended June 30, Six months ended June 30,
--------------------------- ---------------------------
1999 1998 1999 1998
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
REVENUE:
Title insurance premiums $ 6,264,297 $ 3,165,766 $11,951,410 $ 5,654,813
Escrow and related fees 3,002,447 1,423,296 5,715,566 2,685,277
Account servicing 131,326 113,014 247,116 217,286
Other income 96,477 152,617 156,862 208,994
Interest income 360,665 197,116 737,199 302,505
----------- ----------- ----------- -----------
9,855,212 5,051,809 18,808,153 9,068,875
----------- ----------- ----------- -----------
EXPENSES:
Personnel costs 5,321,235 2,442,955 10,327,545 4,259,558
Escrow commissions 760,702 559,342 1,471,556 903,189
Title remittance fees 581,349 330,350 1,120,744 587,345
Rent 499,970 276,060 946,722 491,812
Other operating expenses 2,464,308 938,792 4,500,200 1,793,485
Interest expense 45,354 20,474 83,890 46,149
----------- ----------- ----------- -----------
9,672,918 4,567,973 18,450,657 8,081,538
----------- ----------- ----------- -----------
Income before income taxes 182,294 483,836 357,496 987,337
Provision for income tax 72,997 62,000 142,997 62,000
----------- ----------- ----------- -----------
Net income $ 109,297 $ 421,836 $ 214,499 $ 925,337
=========== =========== =========== ===========
Net income per common share:
Basic $ 0.01 $ 0.03 $ 0.01 $ 0.07
=========== =========== =========== ===========
Diluted $ 0.01 $ 0.03 $ 0.01 $ 0.06
=========== =========== =========== ===========
Weighted average shares outstanding:
Basic 17,175,292 13,416,238 16,968,080 13,111,017
=========== =========== =========== ===========
Diluted 18,946,521 14,949,752 18,758,184 14,598,156
=========== =========== =========== ===========
</TABLE>
See Notes to Consolidated Financial Statements
4
<PAGE>
CAPITAL TITLE GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
For the six months ended June 30,
---------------------------------
1999 1998
----------- -----------
NET CASH PROVIDED (USED) BY OPERATING
ACTIVITIES:
Net income $ 214,499 $ 925,337
Adjustments to reconcile net income to net
cash provided (used) by operating activities:
Depreciation and amortization 617,506 174,120
Changes in assets and liabilities:
Accounts receivable 26,264 (47,639)
Account receivable - other 128,906 --
Interest receivable (125,156) (18,509)
Prepaid expenses (324,582) (117,141)
Deposits and other assets 12,071 (91,332)
Marketable securities 426,631 --
Accounts payable (389,304) (129,581)
Accrued expenses (1,111,098) 566,866
----------- -----------
Net Cash Flows - Operating Activities (524,263) 1,262,121
----------- -----------
NET CASH USED BY INVESTING ACTIVITIES:
Purchase of property and equipment (1,309,121) (1,235,254)
Cash received from sale of fixed assets 12,000 --
Decrease in cash from sale of New Century
Insurance Company and purchase of
California Coast Title Company (107,035) (67,500)
Collection of loans receivable 286,529 --
Other investing activities (15,541) --
----------- -----------
Net Cash Flows - Investing Activities (1,133,168) (1,302,754)
----------- -----------
NET CASH PROVIDED (USED) BY FINANCING
ACTIVITIES:
Proceeds from issuance of common stock, net 85,000 5,750,566
Borrowings -- 125,000
Repayment of debt (182,726) (378,869)
----------- -----------
Net Cash Flows - Financing Activities (97,726) 5,496,697
----------- -----------
NET INCREASE (DECREASE) IN CASH (1,755,157) 5,456,064
CASH AT THE BEGINNING OF THE PERIOD 4,833,826 198,903
----------- -----------
CASH AT THE END OF THE PERIOD $ 3,078,669 $ 5,654,967
=========== ===========
See Notes to Consolidated Financial Statements
5
<PAGE>
CAPITAL TITLE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 1999 AND 1998
NOTE 1 - INTERIM FINANCIAL INFORMATION
The accompanying unaudited consolidated financial statements of Capital
Title Group, Inc. and Subsidiaries (the Company) have been prepared in
accordance with generally accepted accounting principles for interim financial
information and pursuant to the rules and regulations of the Securities and
Exchange Commission. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management all adjustments (consisting
of only normal recurring accruals) necessary for a fair presentation have been
included. For further information, refer to the consolidated financial
statements and footnotes hereto included in the Company's annual report on Form
10-KSB for the year ended December 31, 1998.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the consolidated financial
statements and the accompanying notes. Actual results could differ from these
estimates.
NOTE 2 - EARNINGS PER SHARE
The following table sets forth the computation of basic and diluted earnings per
share ("EPS"):
<TABLE>
<CAPTION>
For the Three month period ended June 30,
----------------------------------------------------------------------------
1999 1998
------------------------------------ ------------------------------------
Per share Per share
Net Income Shares amount Net income Shares amount
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Basic EPS $ 109,297 17,175,292 $ .01 $ 421,836 13,416,238 $ 0.03
========== ==========
Effect of Dilutive Securities:
Stock options -- 1,488,490 -- 1,358,156
Warrants -- 282,739 -- 175,358
---------- ---------- ---------- ----------
Diluted EPS $ 109,297 18,946,521 $ .01 $ 421,836 14,949,752 $ 0.03
========== ========== ========== ========== ========== ==========
For the Six month period ended June 30,
----------------------------------------------------------------------------
1999 1998
------------------------------------ ------------------------------------
Per share Per share
Net Income Shares amount Net income Shares amount
---------- ---------- ---------- ---------- ---------- ----------
Basic EPS $ 214,999 16,968,080 $ .01 $ 925,337 13,111,017 $ 0.07
========== ==========
Effect of Dilutive Securities:
Convertible debentures -- -- 18,723 301,105
Stock options -- 1,507,309 -- 1,109,349
Warrants -- 282,795 -- 76,685
---------- ---------- ---------- ----------
Diluted EPS $ 214,999 18,758,184 $ .01 $ 944,060 14,598,156 $ 0.06
========== ========== ========== ========== ========== ==========
</TABLE>
6
<PAGE>
CAPITAL TITLE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 1999 AND 1998
NOTE 3 - SUPPLEMENTAL CASH FLOW INFORMATION
For the six months ended June 30,
---------------------------------
1999 1998
-------- --------
SUPPLEMENTAL DISCLOSURE OF NONCASH
ACTIVITY:
Equipment purchased through debt $ -- $199,179
Stock issued for California Coast Title
Company -- 90,000
Sale of New Century Insurance Company 25,156
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Cash paid during the period for interest $ 83,890 $ 46,149
7
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULT
OF OPERATIONS
The 1998 Form 10-KSB and the Annual Report should be read in conjunction
with the following discussion since they contain important information for
evaluating the Company's operating results and financial condition.
OPERATING REVENUE
Revenue increased by $ 4,803,403 or 95.1% for the three months ended June
30, 1999 and revenue increased by $ 9,739,278 or 107.4% for the six months ended
June 30, 1999 compared to the same periods ended June 30, 1998, respectively.
Approximately $3,473,000 of the revenue increase for the quarter is related to
acquisitions and startup operations, with the remainder attributed primarily to
a favorable real estate market and the expansion of the Company's operations in
Maricopa County, Arizona.
The following table presents information regarding the Company's operating
revenue:
For the Three months ended June 30,
----------------------------------------------------
1999 % of total 1998 % of total
----------- ---------- ----------- ----------
Title insurance premiums $ 6,264,297 63.6% $ 3,165,766 62.7%
Escrow fees 3,002,447 30.5 1,423,296 28.2
Account servicing 131,326 1.3 113,014 2.2
Other fees 96,477 1.0 152,617 3.0
Interest income 360,665 3.6 197,116 3.9
----------- ---------- ----------- ----------
Total revenue $ 9,855,212 100.0% $ 5,051,809 100.0%
For the Six months ended June 30,
----------------------------------------------------
1999 % of total 1998 % of total
----------- ---------- ----------- ----------
Title insurance premiums $11,951,410 63.6% $ 5,654,813 62.4%
Escrow fees 5,715,566 30.4 2,685,277 29.6
Account servicing 247,116 1.3 217,286 2.4
Other fees 156,862 0.8 208,994 2.3
Interest income 737,199 3.9 302,505 3.3
----------- ---------- ----------- ----------
Total revenue $18,808,153 100.0% $ 9,068,875 100.0%
The Company's primary business is providing title and escrow services in
three counties in Arizona and four counties in California. Approximately 50% of
total revenue for the quarter ended June 30, 1999 is attributable to Maricopa
County where the Company currently operates 21 locations. The June 1999 SYKES
REPORT shows Capital Title as the 3rd largest of the 24 title companies in
Maricopa County with approximately 7.4% market share, compared to a market share
of less than 5.5% for the same period of the prior year. Approximately 11% of
total revenue for the quarter is attributable to Yavapai County where the
Company has 7 locations and ranks first in overall market share. The Company
expanded its operations into San Diego County, California in June 1998, Mohave
County, Arizona in July 1998 and in November 1998 purchased a nine branch escrow
and title operation in northern California. The California operations accounted
for approximately 33% of total revenue for the quarter ended June 30, 1999.
8
<PAGE>
OPERATING EXPENSES
The following table presents the components of the Company's expenses and
the percentage they bear to the total revenue for the respective period:
For the Three months ended June 30,
----------------------------------------------------
1999 % of revenue 1998 % of revenue
----------- ---------- ----------- ----------
Personnel costs $ 5,321,235 54.0% $ 2,442,955 48.3%
Escrow commissions 760,702 7.7 559,342 11.1
Title remittance fees 581,349 5.9 330,350 6.5
Rent 499,970 5.1 276,060 5.5
Other operating expenses 2,464,308 25.0 938,792 18.6
Interest expense 45,354 0.5 20,474 0.4
----------- ---------- ----------- ----------
$ 9,672,918 98.2% $ 4,567,973 90.4%
For the Six months ended June 30,
----------------------------------------------------
1999 % of revenue 1998 % of revenue
----------- ---------- ----------- ----------
Personnel costs $10,327,545 54.9% $ 4,259,558 46.9%
Escrow commissions 1,471,556 7.8 903,189 10.0
Title remittance fees 1,120,744 6.0 587,345 6.5
Rent 946,722 5.0 491,812 5.4
Other operating expenses 4,500,200 23.9 1,793,485 19.8
Interest expense 83,890 0.5 46,149 0.5
----------- ---------- ----------- ----------
$18,450,657 98.1% $ 8,081,538 89.1%
Overall operating expenses have increased by $5,104,945 and $10,369,119 for
the three and six-month periods ended June 30, 1999, respectively, compared to
the same periods ended June 30, 1998. This increase resulted from the expansion
of the Company's operations. Operating expenses increased as a percentage of
revenue to 98.2% in the three months ended June 30, 1999 from 90.4% in the
comparable period in 1998. Operating expenses increased as a percentage of
revenue to 98.1% in the first six months of 1999 from 89.1% in the same period
of 1998. These increases in operating costs as a percent of revenue were
primarily the result of costs associated with the Company's California
operations as it expanded its infrastructure and branch operations. In addition,
the California operations historically have had a high percentage of their
business dependent on refinance markets, but are transitioning their mix of
business to the more stable and profitable residential resale market. The volume
of refinance business has decreased significantly and as a result, the Company's
California operations lost approximately $517,000 during the quarter ended June
30, 1999 compared to a loss of approximately $193,000 for the corresponding
quarter of the prior year. The Company is continuing its efforts to replace the
decrease in refinance business by focusing on resale markets in its California
operations.
Personnel costs, including commissions, are the most significant component
of the Company's operating expenses. Personnel costs including commissions
increased as a percentage of revenue to 61.7% in the three months ended June 30,
1999 from 59.4% in the comparable period in 1998. Personnel costs including
commissions increased as a percentage of revenue to 62.7% in the first six
months of 1999 from 56.9% in the same period of 1998. These increases were the
result of higher personnel costs in California relative to revenue as discussed
above.
9
<PAGE>
Title remittance fees relate to the amounts paid pursuant to title
insurance underwriting agreements the Company has with five national title
companies. Title remittance fees decreased as a percent of revenue to 5.9% from
6.5% for the three months ended June 30, 1999 and to 6.0% from 6.5% for the six
months ended June 30, 1999 as compared to the same periods in 1998. This
decrease was the result of more favorable underwriting agreements.
Rent expense decreased as a percent of revenue to 5.1% from 5.5% for the
three months ended June 30, 1999 and to 5.0% from 5.4% for the six months ended
June 30, 1999 as compared to the same periods in 1998. This decrease was the
result of the fixed nature of these costs in relation to the increase in
revenue.
The significant components of other operating expenses include supplies,
utilities, insurance, depreciation, title plant maintenance and access, postage,
and professional fees. Other operating expenses increased as a percentage of
total revenue to 25.0% in the three months ended June 30, 1999 from 18.6% in the
comparable period in 1998. Other operating expenses increased as a percentage of
revenue to 23.9% in the first six months of 1999 from 19.8% in the same period
of 1998. These increases were the result of costs associated with opening eleven
new offices during the six months ended June 30, 1999, coupled with the
relatively fixed nature of many of these costs relative to the level of revenue
in the California operations.
An income tax provision in the amount of $72,997 was recorded in the
quarter ended June 30, 1999 based on the estimated annual effective tax rate.
The effective tax rate increased from the same period in 1998 as a result of a
net operating loss carryforward which was fully utilized during 1998.
LIQUIDITY AND CAPITAL RESOURCES
At June 30, 1999, the Company had current assets totaling $4,116,178
compared to current liabilities which totaled $2,204,956. Management believes
that cash on hand and future cash receipts will be sufficient to pay all
obligations as they become due.
In February 1999, the Company secured a $5,000,000 credit facility from a
bank which will bear interest on any outstanding balance at the prime rate. This
credit facility is comprised of a $2,000,000 revolving line of credit and a
$3,000,000 term loan to be used for future acquisitions. No amounts have been
drawn against this credit facility; however, $150,000 was committed for a
standby letter of credit required pursuant to an office lease.
YEAR 2000 ISSUE
Many older computer programs use only two digits to identify a year in the
date field. These programs were designed and developed without considering the
impact of the upcoming change in the century. If not corrected, many computer
applications could fail or create erroneous results by the year 2000.
The Company has examined its operating systems and, with the exception of
its offices in Northern California, believes that its operations are
substantially year 2000 compliant. The computer systems and programs currently
used by the nine offices the Company acquired from Northwestern Consolidated
Corporation are not year 2000 compliant; however, it was the Company's
intentions at the time of the acquisition to replace these systems prior to
December 1999 with technology and programs similar to those used in its other
operations. It is estimated that the costs associated with purchasing and
installing this technology will be approximately $620,000. These costs,
consisting primarily of hardware and software purchased and installed by third
party vendors, will be capitalized and will have a nominal impact on results of
operations.
The Company has initiated formal communications with all of its significant
suppliers, larger customers and other parties of which the Company
10
<PAGE>
electronically interacts to determine the extent to which the Company's
interface systems are vulnerable to those third parties' failure to remediate
their own year 2000 issues. The Company is not aware of any significant impact
on its operations that would result from third party year 2000 issues based on
presently available information. However, there can be no guarantee that the
systems of other companies on which the Company's systems rely will be timely
converted and would not have an adverse effect on the Company's systems.
The Company's business and financial transactions are processed on local
area networks comprised of relatively new personal computers and servers. As a
contingency plan, in the event of any unforseen problems related to
communications or third party interface, the Company could input, process and
store data on stand-alone networks until such problems could be remedied. This
contingency plan would, however, be negatively impacted in the event of a
catastrophic failure in banking systems and the failure of systems related to
county recorders.
SAFE HARBOR STATEMENT
Certain statements contained in this discussion and analysis with respect
to factors which may affect future earnings, including management's beliefs and
assumptions based on information currently available, are forward-looking
statements made pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Such forward-looking statements that are not
historical facts involve risks and uncertainties, and results could vary
materially from the descriptions contained herein. For more details on risk
factors, see the Company's annual reports on Form 10-K and other filings with
the Securities and Exchange Commission.
11
<PAGE>
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company's Annual Meeting of Stockholders was held on May 4, 1999. The
matters voted on at the Annual Meeting were as follows:
(a) Election of a slate of directors to serve a three year term.
(b) Ratification of Ernst & Young LLP to serve as independent auditors for
the Company.
(c) Approval of an increase in the number of shares of common Stock
authorized for issuance under the Company's 1996 Option Plan to
3,900,000 shares.
(d) Approval of an increase in the number of shares of Common Stock
authorized for issuance under the Company's Non-employee Director
Option Plan to 600,000 shares.
All matters voted on at the Annual Meeting were approved by
stockholders as follows:
Votes Votes
Votes For Against Abstained
--------- ------- ---------
Board of Director nominees:
David C. Dewar 11,743,404 0 0
Andrew A. Johns 11,743,404 0 0
Ben T. Morris 11,743,404 0 0
Ratification of Ernst & Young LLP 11,743,404 0 0
Amendment of 1996 Option Plan 10,362,222 313,125 259,992
Amendment of Non-Employee Director
Option Plan 10,235,604 292,554 407,181
The Company's Board of Directors currently consists of nine members and is
divided into three classes, each with three year terms. The following are board
members with terms not expiring on the May 4, 1999 annual meeting: Richard A.
Alexander, Jeffrey P. Anderson, Donald R. Head, Theo F. Lamb, Robert B. Liverant
and Stephen A McConnell.
Mr. Anderson resigned from the Company's Board of Directors effective
August 3, 1999 due to other professional commitments.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
27 Financial Data Schedule
(b) The Company did not file any reports on Form 8-K during the three
months ended June 30, 1999.
12
<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.
CAPITAL TITLE GROUP, INC.
(Registrant)
By: /s/ Donald R. Head Date: August 9, 1999
------------------------------------
Donald R. Head
Chairman of the Board,
Chief Executive Officer
By: /s/ Mark C. Walker Date: August 9, 1999
------------------------------------
Mark C. Walker
Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 3,078,699
<SECURITIES> 0
<RECEIVABLES> 266,021
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 4,116,178
<PP&E> 14,497,502
<DEPRECIATION> (5,095,180)
<TOTAL-ASSETS> 15,046,303
<CURRENT-LIABILITIES> 2,204,956
<BONDS> 1,635,140
0
0
<COMMON> 17,012
<OTHER-SE> 11,072,490
<TOTAL-LIABILITY-AND-EQUITY> 15,046,303
<SALES> 0
<TOTAL-REVENUES> 18,808,153
<CGS> 0
<TOTAL-COSTS> 18,366,767
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 83,890
<INCOME-PRETAX> 357,496
<INCOME-TAX> 142,997
<INCOME-CONTINUING> 214,499
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 214,499
<EPS-BASIC> .01
<EPS-DILUTED> .01
</TABLE>
