<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED MARCH 31, 1998
COMMISSION FILE NUMBER 000-22581
STAR TELECOMMUNICATIONS, INC.
(Exact name of registrant as specified in its charter)
Delaware 77-0362681
(State or Other Jurisdiction (IRS Employer
of Incorporation or Organization) Identification Number)
223 East De La Guerra, Santa Barbara, California, 93101
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (805) 899-1962
None
(Former name, former address and
former fiscal year if changed since last report)
Indicate by check mark whether the registrant (1) has filed all
reports 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 [ ]
As of March 31, 1998, the number of the registrant's Common Shares of $.001 par
value outstanding was 35,798,210.
<PAGE> 2
STAR TELECOMMUNICATIONS, INC. AND SUBSIDIARIES
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PART I - FINANCIAL INFORMATION:
Item 1: Financial Statements
Condensed Consolidated Balance Sheets As Of
December 31, 1997 And March 31, 1998 3
Condensed Consolidated Statements Of Income For The
Three Month Periods Ended March 31, 1997
And 1998 4
Condensed Consolidated Statements Of Cash Flows For The
Three Month Periods Ended March 31, 1997 And 1998 5
Notes To Condensed Consolidated Financial Statements 7
Item 2: Management's Discussion And Analysis Of Financial
Condition And Results Of Operations 11
PART II - OTHER INFORMATION 14
</TABLE>
2
<PAGE> 3
ITEM 1. FINANCIAL STATEMENTS
STAR TELECOMMUNICATIONS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
<TABLE>
<CAPTION>
December 31, March 31,
1997 1998
--------- ---------
(Unaudited)
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 1,903 $ 5,285
Short-term investments 18,631 2,978
Accounts receivable, net 46,675 51,024
Receivable from related parties -- 303
Other current assets 10,695 16,057
--------- ---------
Total current assets 77,904 75,647
--------- ---------
Property and equipment, net 35,959 67,814
Other assets 6,453 851
--------- ---------
Total assets $ 120,316 $ 144,312
========= =========
Current Liabilities:
Revolving lines of credit with stockholder $ 138 $ 82
Current portion of long-term obligations 2,975 6,314
Accounts payable and other accrued expenses 22,344 23,242
Accrued network cost 38,403 37,667
--------- ---------
Total current liabilities 63,860 67,305
--------- ---------
Long-Term Liabilities:
Long-term obligations, net of current portion 12,391 25,902
Other long-term liabilities 863 378
--------- ---------
Total long-term liabilities 13,254 26,280
--------- ---------
Stockholders' Equity:
Common Stock $.001 par value:
Authorized - 50,000,000 shares 35 36
Additional paid-in capital 45,697 51,308
Deferred compensation (30) (10)
Retained deficit (2,500) (607)
--------- ---------
Total stockholders' equity 43,202 50,727
--------- ---------
Total liabilities and stockholders' equity $ 120,316 $ 144,312
========= =========
</TABLE>
See accompanying notes to the condensed consolidated financial statements.
3
<PAGE> 4
STAR TELECOMMUNICATIONS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
--------------------------
1997 1998
--------- ---------
(Unaudited)
<S> <C> <C>
Revenue $ 84,827 $ 129,269
Cost of services 73,726 111,593
--------- ---------
Gross profit 11,101 17,676
Operating expenses
Selling, general
and administrative expenses 7,720 11,561
Depreciation and amortization 820 1,879
Merger expense -- 314
--------- ---------
8,540 13,754
--------- ---------
Income from operations 2,561 3,922
--------- ---------
Other income (expense):
Interest income 21 283
Interest expense (398) (618)
Other 51 (160)
--------- ---------
(326) (495)
--------- ---------
Income before provision
for income taxes 2,235 3,427
Provision for income taxes 341 1,534
--------- ---------
Net income $ 1,894 $ 1,893
========= =========
Income before provision
for income taxes 2,235
Pro forma income taxes 888
---------
Pro forma net income $ 1,347
=========
Basic income per share $ 0.05
=========
Diluted income per share $ 0.05
=========
Pro forma basic income per share $ 0.05
=========
Pro forma diluted income per share $ 0.05
=========
</TABLE>
See accompanying notes to the condensed consolidated financial statements.
4
<PAGE> 5
STAR TELECOMMUNICATIONS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
------------------------
1997 1998
-------- --------
(Unaudited)
<S> <C> <C>
Cash Flows From Operating Activities:
Net income $ 1,894 $ 1,893
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 820 1,879
Loss on disposal of equipment 42 --
Compensation expense relating to stock options 20 20
Provision for doubtful accounts 1,128 1,017
Deferred income taxes -- (1,411)
Deferred compensation (81) 50
Decrease (increase) in assets:
Accounts receivable (6,315) (5,366)
Receivable from related parties (14) (303)
Other assets (207) 6,294
Increase (decrease) in liabilities:
Accounts payable and accrued expenses 9,169 898
Accrued network cost (3,599) (736)
Other liabilities 287 (535)
-------- --------
Net cash provided by
operating activities 3,144 3,700
-------- --------
Cash Flows From Investing Activities:
Capital expenditures (2,324) (15,636)
Investments (93) --
Short-term investments, net 1,656 15,653
Proceeds from the sale of assets 18 --
-------- --------
Net cash provided (used) by investing activities $ (743) $ 17
======== ========
</TABLE>
See accompanying notes to the condensed consolidated financial statements.
5
<PAGE> 6
STAR TELECOMMUNICATIONS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
----------------------
1997 1998
------- -------
(Unaudited)
<S> <C> <C>
Cash Flows From Financing Activities:
Repayments under lines of credit (2,472) --
Repayments under lines of credit with stockholder (26) (56)
Payments under long-term debt (101) (187)
Payments under capital lease obligations (67) (1,061)
Other financing activities (467) --
Stock options exercised -- 969
------- -------
Net cash used in financing activities (3,133) (335)
------- -------
Increase (decrease) in cash and cash equivalents (732) 3,382
Cash and cash equivalents, beginning of period 1,844 1,903
------- -------
Cash and cash equivalents, end of period $ 1,112 $ 5,285
======= =======
</TABLE>
See accompanying notes to the condensed consolidated financial statements.
6
<PAGE> 7
STAR TELECOMMUNICATIONS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(1) GENERAL
The financial statements included herein are unaudited and have been prepared in
accordance with generally accepted accounting principles for interim financial
reporting and Securities Exchange Commission ("SEC") regulations. Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations. In management's
opinion, the financial statements reflect all adjustments (of a normal and
recurring nature) which are necessary to present fairly the financial position,
results of operations, stockholders' equity and cash flows for the interim
periods. These financial statements should be read in conjunction with the
audited financial statements for the year ended December 31, 1997, as set forth
in the Registration Statement on Form S-1 of STAR Telecommunications, Inc.
("STAR" or the "Company") Registration No. 333-48559, as amended, which was
filed with the SEC on March 24, 1998. The results for the three month period
ended March 31, 1998, are not necessarily indicative of the results that may be
expected for the year ending December 31, 1998.
In March 1998, the company consummated a merger with T-One Corp. ("T-One"). The
merger constituted a tax-free reorganization and has been accounted for as
pooling of interests under Accounting Principles Board Opinion No. 16.
Accordingly, all prior period consolidated financial statements presented have
been restated to include the results of operations, financial position, and cash
flows of T-One.
On March 31, 1998, the Company effected a 2.05 for 1 stock split in the nature
of a stock dividend with payment to the holders of the shares of common stock
outstanding on February 20, 1998. The stock split has been retroactively
reflected in the condensed consolidated financial statements for all periods
presented.
(2) BUSINESS AND PURPOSE
Star is an international long distance service provider offering low cost
switched voice services on a wholesale basis primarily to U. S.-based long
distance carriers. In addition, STAR provides domestic commercial long-distance
services through its subsidiary, LD Services, Inc. ("LDS").
(3) NET INCOME PER COMMON SHARE
In February 1997, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 128, "Earnings Per
Share". The statement replaces primary EPS with basic EPS, which is computed by
dividing reported earnings available to common stockholders by weighted average
shares outstanding. The provision requires the calculation of diluted EPS.
The Company adopted this statement in 1997.
7
<PAGE> 8
The following schedule summarizes the information used to compute net income per
common share for the three months ended March 31, 1997 and 1998 (in thousands):
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
-------------------
1997 1998
------ ------
<S> <C> <C>
Weighted number of common shares used to compute
basic earnings per share 24,577 35,629
Weighted common share equivalents 3,917 2,085
------ ------
Weighted number of common share and share
equivalents used to compute diluted earnings per share 28,494 37,714
====== ======
</TABLE>
(4) PRO FORMA INCOME TAXES
The results of operations and provision for income taxes for the three months
ended March 31, 1997 reflects LDS' status as an S-Corporation prior to the
merger with STAR. The pro-forma income taxes, pro-forma net income, and
pro-forma earnings per share information reflected in the condensed consolidated
statements of income assumes that both STAR and LDS were taxed as C-Corporations
for all periods presented.
(5) COMPREHENSIVE INCOME
On January 1, 1998, the Company adopted SFAS No. 130, "Reporting Comprehensive
Income". For year end financial statements SFAS 130 requires that comprehensive
income, which is the total of net income and all other non-owner changes in
equity, be displayed in a financial statement with the same prominence as other
consolidated financial statements. In addition, the standard encourages
companies to display the components of other comprehensive income below the
total for net income. During the quarters ended March 31, 1997 and 1998,
comprehensive income equaled net income.
(6) SIGNIFICANT EVENTS
In March 1998, the Company acquired T-One, an international wholesale long
distance telecommunications provider based in New York, in a transaction that
was accounted for as a pooling of interests. The Company issued 1,353,000 shares
of its common stock to T-One's shareholders in exchange for all outstanding
T-One shares. The accompanying consolidated financial statements are restated to
include the financial position and result of operations of T-One for all periods
presented. Net sales and historical net income (loss) of the combining companies
for the three months ended March 31, 1997 and 1998, are as follows (in
thousands):
8
<PAGE> 9
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
---------------------------
1997 1998
--------- ---------
<S> <C> <C>
Net Sales:
STAR $ 79,382 $ 117,899
T-One 5,528 11,788
Elimination (83) (418)
Total $ 84,827 $ 129,269
Net Income (Loss):
STAR $ 1,907 $ 1,981
T-One (13) (88)
Total $ 1,894 $ 1,893
--------- ---------
</TABLE>
In November 1997, the Company signed a merger agreement with United Digital
Network, Inc. ("UDN"). The company intends to account for the transaction as a
pooling of interests.
On February 3, 1998, the Company announced a 2.05 for 1 stock split in the
nature of a stock dividend. The Company effected the stock split on March 31,
1998, which has been retroactively reflected in the accompanying consolidated
financial statements for all periods presented.
(7) STATEMENTS OF CASH FLOWS
During the three month periods ended March 31, 1997 and 1998, cash paid for
interest was $357,000 and $585,000, respectively. For the same periods, cash
paid for income taxes amounted to $212,000 and $1,575,000, respectively.
Non-cash investing and financing activities are as follows (in thousands):
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
----------------------
1997 1998
------- -------
<S> <C> <C>
Equipment purchased through
notes and capital leases $ 913 $18,098
Tax benefits related to stock options -- 4,643
------- -------
$ 913 $22,741
======= =======
</TABLE>
(8) SUBSEQUENT EVENTS
On May 4, 1998, the Company completed a public offering of 6,000,000 shares of
Common Stock of which 5,685,000 shares were sold by the Company and 315,000
shares were sold by a selling stockholder. The net proceeds to the Company
(after deducting underwriting discounts and offering expenses) from the sale of
such shares of Common Stock were approximately $145 million.
9
<PAGE> 10
(9) SEGMENT INFORMATION
At March 31, 1998, Star has two business segments, wholesale long distance and
commercial long distance telecommunications. The wholesale segment provides long
distance services to U.S. and foreign based telecommunications companies and the
commercial segment provides commercial long distance services to small retailers
throughout the United States.
Both segments are accounted for in accordance with Generally Accepted Accounting
Principles or "GAAP". Reportable segment information for the periods ended March
31, 1997 and 1998 are as follows:
<TABLE>
<CAPTION>
MARCH 31, 1997 WHOLESALE COMMERCIAL TOTAL
<S> <C> <C> <C>
Revenue from external customers $ 76,454 $ 8,373 $ 84,827
Interest income 21 -- 21
Interest expense 397 1 398
Depreciation and amortization 814 6 820
Segment profit 1,419 475 1,894
Segment assets 63,546 5,181 68,727
</TABLE>
<TABLE>
<CAPTION>
MARCH 31, 1998 WHOLESALE COMMERCIAL TOTAL
<S> <C> <C> <C>
Revenue from external customers $ 121,193 $ 8,076 $ 129,269
Interest income 281 2 283
Interest expense 618 -- 618
Depreciation and amortization 1,876 3 1,879
Segment profit (loss) 1,978 (85) 1,893
Segment assets 137,678 6,634 144,312
</TABLE>
10
<PAGE> 11
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
This Quarterly Report on Form 10-Q contains certain "forward-looking statements"
within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking
statements are statements other than historical information or statements of
current condition. Some forward looking statements may be identified by use of
such terms as "believes", "anticipates", "intends", or "expects". These
forward-looking statements relate to the plans, objectives and expectations of
the Company for future operations. In light of the risks and uncertainties
inherent in all such projected operation matters, the inclusion of
forward-looking statements in this report should not be regarded as a
representation by the Company or any other person that the objectives or plans
of the Company will be achieved or that any of the Company's operating
expectations will be realized. The Company's revenues and results of operations
are difficult to forecast and could differ materially from those projected in
the forward-looking statements contained in this report as a result of numerous
factors including among others, the following: (i) changes in customer rates per
minute; (ii) foreign currency fluctuations; (iii) termination of certain service
agreements or inability to enter into additional service agreements; (iv)
inaccuracies in the Company's forecast of traffic growth; (v) changes in or
developments under domestic or foreign laws, regulations, licensing requirements
or telecommunications standards; (vi) foreign political or economic instability;
(vii) changes in the availability of transmission facilities; (viii) loss of the
services of key officers; (ix) loss of a customer which provides significant
revenues to the Company; (x) highly competitive market conditions in the
industry; and (xi) concentration of credit risk. The foregoing review of the
important factors should not be considered as exhaustive; the Company undertakes
no obligation to release publicly the results of any future revisions it may
make to forward-looking statements to reflect events or circumstances after the
date hereof or to reflect the occurrence of unanticipated events.
The following table sets forth income statement data as a percentage of revenues
for the periods indicated.
<TABLE>
<CAPTION>
THREE MONTHS
ENDED MARCH 31,
----------------------
1997 1998
------ ------
<S> <C> <C>
Revenues 100.0% 100.0%
Cost of services 86.9 86.3
------ ------
Gross profit 13.1 13.7
Operating expenses:
Selling, general and administrative 9.1 8.9
Depreciation and amortization 1.0 1.5
Merger Expense -- 0.2
------ ------
10.1 10.6
------ ------
Income from operations 3.0 3.0
Other income (expense):
Interest income -- 0.2
Interest expense (0.5) (0.5)
Other 0.1 (0.1)
------ ------
Income before provision for income taxes 2.6 2.7
Provision for income taxes 0.4 1.2
------ ------
Net income 2.2% 1.5%
====== ======
</TABLE>
Three Months Ended March 31, 1998 Compared to Three Months Ended March 31, 1997.
Revenues: Revenues increased 52.4% to $129.3 million in the first quarter of
1998 from $84.8 million in the first quarter of 1997. Wholesale revenues
increased to $121.2 million (including $11.4 million of revenue from T-One) from
$76.5 million (including $5.4 million of revenue from T-One). Wholesale
11
<PAGE> 12
minutes of use increased 73.2% to 324.4 million in the first quarter of 1998, as
compared to 187.3 million minutes of use in the comparable quarter of the year
prior. This increase reflects growth in the number of wholesale customers from
100 in March of 1997 to 131 at the end of March 1998, as well as an increase in
usage by existing customers. The average rate per minute of use declined to
$0.37 for the current quarter as compared to $0.40 for the quarter ended March
31, 1997 reflecting the change in country mix to include a larger proportion of
lower rate per minute countries as well as lower prices on competitive routes.
Commercial revenues decreased to $8.1 million in the first quarter of 1998 from
$8.4 million in the first quarter of 1997 reflecting the termination of the LDS
customer base in California due to the 1997 settlements entered into by LDS with
each of the California PUC and the District Attorney of Monterey, California.
Gross Profit: On a consolidated basis gross profit increased 59.2% to $17.7
million in the first quarter of 1998 from $11.1 million in the first quarter of
1997. Wholesale gross profit increased to $14.3 million in 1998 from $7.6
million for 1997 and wholesale gross margin increased to 11.8% from 9.9%,
respectively. Wholesale gross profit expanded during the first quarter of 1998
as traffic was increasingly routed over the Company's proprietary international
network. Without the inclusion of T-One in the Company's wholesale results the
gross margin would have been 12.5% and 10.2% for the quarters ending March 31,
1998 and 1997, respectively.
Selling, General and Administrative: For the first quarter of 1998, selling,
general and administrative expenses increased 49.8% to $11.6 million, from $7.7
million in the first quarter of 1997. Wholesale selling, general and
administrative expenses increased to $8.1 million in the first quarter of 1998
from $4.7 million in the first quarter of 1997, and increased as a percentage of
wholesale revenues to 6.7% from 6.1% over the comparable periods. Total expenses
increased year to year in absolute dollars as STAR expanded its proprietary
international network and employee base. Commercial selling, general and
administrative expenses increased to $3.5 million in the first quarter of 1998
from $3.0 million in the first quarter of 1997 and increased as a percentage of
commercial revenues to 42.4% from 36.3%, respectively, as LD Services increased
its telemarketing sales force to focus on new ethnic marketing programs. The
Company expects selling, general and administrative expenses to expand in
absolute dollars and as a percentage of revenues throughout fiscal year 1998, as
the Company expands its network and employee base and in connection with the
Company's development of the commercial market.
Depreciation: Depreciation increased to $1.9 million for the first quarter of
1998 from $820,000 for the first quarter of 1997, and increased as a percentage
of revenues to 1.5% from 1.0% in the prior period. Depreciation increased as a
result of STAR's continuing expansion of its proprietary international network
which includes purchases of switches, undersea cable and leasehold improvements
associated with switch sites. STAR expects depreciation expense to increase as
the Company continues to expand its global telecommunications network.
Other Income (Expense): Other expense, net, increased to $495,000 in the first
quarter of 1998 from $326,000 in the first quarter of 1997. This increase is
primarily due to interest expense of $618,000 incurred under various capital
leases and bank lines of credit. Interest income earned on short-term
investments increased to $283,000 in the first quarter of 1998 from $21,000 in
the first quarter of 1997 reflecting interest earned on cash generated by
operations. Also included in other expense is $171,000 in foreign currency
losses related to the intercompany account between STAR and its German
subsidiary.
Provision for Income Taxes: The provision for income taxes increased to $1.5
million in the first quarter of 1998 from $341,000 in the first quarter of 1997
($888,000 pro forma), primarily due to the increase in profitability of the
Company.
12
<PAGE> 13
LIQUIDITY AND CAPITAL RESOURCES
As of March 31, 1998, STAR had cash and cash equivalents of approximately $5.3
million, short-term investments of $3.0 million and a working capital surplus of
$8.3 million.
As of March 31, 1998, STAR had no funds outstanding on its $25 million revolving
line of credit, which bears interest at a rate of the bank's cost of funds plus
175 basis points and expires on July 1, 1999. However, the line of credit is
reduced by outstanding letters of credit in the amount of $4.7 million.
STAR generated net cash from operating activities of $3.7 million in the first
quarter of 1997, primarily from net income plus depreciation and amortization
and other assets offset by increases in receivables. The Company's investing
activities provided cash of approximately $17,000 during the first quarter of
1998 primarily from the sale of marketable securities offset by investments made
in additional undersea cables and switching equipment. The Company's financing
activities used cash of approximately $335,000 during the first quarter of 1998
primarily from repayments under capital lease agreements offset by the exercise
of employee stock options.
On May 4, 1998, the Company completed a secondary offering of 6,000,000 shares
of Common Stock of which 5,685,000 shares were sold by the Company and 315,000
shares were sold by a selling stockholder. The net proceeds to the Company
(after deducting underwriting discounts and offering expenses) from the sale of
such shares of Common Stock were approximately $145 million.
13
<PAGE> 14
PART II. OTHER INFORMATION
None
14
<PAGE> 15
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.
STAR TELECOMMUNICATIONS, INC.
Dated: May 12, 1998
By: /s/ Christopher E. Edgecomb
-----------------------------------------
Christopher E. Edgecomb
Chief Executive Officer and Director
(Duly Authorized Officer)
By: /s/ Kelly D. Enos
-----------------------------------------
Kelly D. Enos
Chief Financial Officer
(Principal Financial & Accounting
Officer)
15
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S CONDENSED CONSOLIDATED BALANCE SHEETS, THE CONDENSED CONSOLIDATED
STATEMENTS OF INCOME, CONDENSED CONDOLIDATED STATEMENTS OF CASH FLOWS AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH SCHEDULES.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 5,285
<SECURITIES> 2,978
<RECEIVABLES> 57,025
<ALLOWANCES> 6,001
<INVENTORY> 0
<CURRENT-ASSETS> 75,647
<PP&E> 76,262
<DEPRECIATION> 8,448
<TOTAL-ASSETS> 144,312
<CURRENT-LIABILITIES> 67,305
<BONDS> 32,216
0
0
<COMMON> 36
<OTHER-SE> 50,691
<TOTAL-LIABILITY-AND-EQUITY> 144,312
<SALES> 129,269
<TOTAL-REVENUES> 129,269
<CGS> 111,593
<TOTAL-COSTS> 13,754
<OTHER-EXPENSES> 160
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 618
<INCOME-PRETAX> 3,427
<INCOME-TAX> 1,534
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,893
<EPS-PRIMARY> .05
<EPS-DILUTED> .05
</TABLE>
