<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarterly Period Ended March 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 0-21717
CASCO INTERNATIONAL, INC.
formerly CA Short Company, Inc.
Incorporated - Delaware I.R.S. Identification No. 56-0526145
4205 East Dixon Boulevard, Shelby, North Carolina 28150
Registrant's Telephone Number (704) 482-9591
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
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of latest practicable date 1,783,200 common shares outstanding,
each with par value $0.01, as of May 1, 1998.
<PAGE> 2
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CASCO INTERNATIONAL, INC.
BALANCE SHEETS
March 31, 1998 and December 31, 1997
Unaudited
<TABLE>
<CAPTION>
ASSETS 1998 1997
----------- -----------
<S> <C> <C>
Current assets:
Cash $ 721,271 $ 73,516
Accounts receivable 2,490,564 5,043,423
Inventory 5,101,763 4,545,752
Prepaid expenses 1,115,646 973,329
----------- -----------
Total current assets 9,429,244 10,636,020
Buildings and equipment:
Buildings 2,601,040 3,194,058
Equipment 2,378,626 2,025,552
----------- -----------
4,979,666 5,219,610
Less accumulated depreciation (1,629,691) (1,664,540)
----------- -----------
3,349,975 3,555,070
Land 111,468 211,468
----------- -----------
Total property and equipment, net 3,461,443 3,766,538
Other assets:
Cost in excess of net assets acquired, net of accumulated
amortization of $276,149 and $267,608 respectively 1,090,318 1,098,859
Other 652,256 646,256
----------- -----------
1,742,574 1,745,115
=========== ===========
TOTAL ASSETS $14,633,261 $16,147,673
=========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE> 3
CASCO INTERNATIONAL, INC.
BALANCE SHEETS
March 31, 1998 and December 31, 1997
Unaudited
<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY 1998 1997
----------- -----------
<S> <C> <C>
Liabilities:
Accounts payable $ 801,839 $ 1,062,112
Short-term subordinated debenture -- 100,000
Accrued liabilities 244,460 320,157
Advanced deposits-current 1,951,471 1,951,471
----------- -----------
Total current liabilities 2,997,770 3,433,740
----------- -----------
Long-term debt 2,362,500 --
Advanced deposits-noncurrent 2,478,393 2,558,517
Subordinated debenture -- 4,900,000
Deferred tax liability 652,550 67,650
----------- -----------
Total Liabilities 8,491,213 10,959,907
Commitments and contingencies -- --
Stockholders' equity:
Preferred Shares: $.01 par value; authorized
300,000 shares; none issued and outstanding -- --
Common shares par value $.01, authorized 5,000,000,
issued 1,783,200 17,832 17,832
Capital in excess of par value 6,417,586 6,417,586
Accumulated deficit (293,370) (1,247,652)
----------- -----------
Total stockholders' equity 6,142,048 5,187,766
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $14,633,261 $16,147,673
=========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE> 4
CASCO INTERNATIONAL, INC.
STATEMENTS OF OPERATIONS
For the three months ended March 31, 1998 and 1997
Unaudited
<TABLE>
<CAPTION>
1998 1997
---------- ----------
<S> <C> <C>
Revenue $4,864,494 $4,216,085
Operating costs and expenses:
Cost of goods sold 2,579,888 2,255,851
Selling, general and administrative 1,939,435 1,987,126
Depreciation and amortization 102,510 86,322
---------- ----------
Total operating costs and expenses 4,621,833 4,329,299
Operating income (loss) 242,661 (113,214)
Other income and (expenses)
Interest expense (52,335) (138,831)
Loss on sale of building (151,144) --
---------- ----------
Total other income and (expenses) (203,479) (138,831)
Income (loss) before income taxes and extraordinary item 39,182 (252,045)
Deferred provision (benefit) for income taxes (14,900) 96,300
---------- ----------
Income (loss) before extraordinary gain on retirement of debt 24,282 (155,745)
Extraordinary gain on retirement of debt (less applicable income
taxes of $570,000) 930,000 --
---------- ----------
Net Income $ 954,282 $ (155,745)
========== ==========
EARNINGS PER SHARE BASIC AND DILUTIVE
Income (loss) before income taxes and extraordinary item $ 0.02 $ (0.25)
Extraordinary gain on retirement of debt $ 0.52 $ --
Net Income $ 0.54 $ (0.15)
Weighted average common shares outstanding 1,783,200 1,003,431
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE> 5
CASCO INTERNATIONAL, INC.
STATEMENTS OF CASH FLOWS
For the three months ended March 31, 1998 and 1997
Unaudited
<TABLE>
<CAPTION>
1997 1996
----------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ 954,282 $ (155,745)
Adjustments to reconcile net (loss) income to cash
provided by operating activities:
Depreciation and amortization 102,510 86,322
Loss of sale of building 151,144 --
Extraordinary gain on retirement of debt (930,000) --
Deferred provision (benefit) 584,900 (96,300)
Changes in assets and liabilities:
(Increase) decrease in assets:
Accounts receivable 2,552,859 2,575,216
Inventory (556,011) 1,013,954
Prepaid expenses and other assets (148,317) (35,636)
Increase (decrease) in liabilities:
Accounts payable and accrued liabilities (335,970) (1,366,734)
Advance deposits (80,124) (71,088)
----------- -----------
Total adjustments 1,340,991 2,105,734
----------- -----------
Net cash provided by operating activities 2,295,273 1,949,989
----------- -----------
Cash flows from investing activities:
Sale of building 421,187 --
Payments for purchases of property and equipment (361,203) (3,863)
----------- -----------
Cash in investing activities 59,984 (3,863)
Cash flows from financing activities:
Proceeds from debt obligation 5,663,767 5,824,327
Principal payments on debt (7,371,269) (7,636,132)
----------- -----------
Cash used in financing activities (1,707,502) (1,811,805)
Increase (decrease) in cash 647,755 134,321
Cash, beginning of year 73,516 130,971
----------- -----------
Cash, end of period $ 721,271 $ 265,292
=========== ===========
Other Cash Flow Information:
Cash payments during the year for:
Interest $ 52,335 $ 53,400
Income taxes, net of refunds -- --
Noncash Financing Activities:
Subordinated debenture with Pages assumed at spin-off $ -- $ 5,000,000
Due to Pages replaced with subordinated debenture $ -- $ --
Decrease to APIC and common stock from spin-off $ -- $ 875,025
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE> 6
CASCO INTERNATIONAL, INC.
NOTES TO FINANCIAL STATEMENTS
Unaudited
The accompanying financial statements have not been audited, but
reflect all adjustments which, in the opinion of management, are necessary for a
fair presentation of financial position, results of operations and cash flows
for the periods presented. All adjustments are of a normal and recurring nature.
These consolidated financial statements should be read in conjunction with the
Company's audited financial statements and notes thereto for the fiscal year
ended December 31, 1997.
Effective at the close of business on December 31, 1996, a tax free
spin off of the Company's common stock from its former parent, Pages, was
completed (the "Distribution"). In the Distribution, for every ten shares of
Pages common stock outstanding on the record date, one and one-half shares of
the Company's common stock was distributed to Pages shareholders.
On January 23, 1998 the Company redeemed, at a discount, the
subordinated debenture due to Pages on January 1, 2002. The debenture in the
original principal amount of $5 million was redeemed for $3.5 million.
Also on January 23, 1998, Huntington National Bank increased the
Company's line of credit from $2 million to $5.5 million from which funds became
available to redeem the subordinated debenture due to Pages.
On March 4, 1998 the Company sold its 167,000 sq. ft. Kings Mountain
warehouse. The sale netted the Company approximately $425,000. Also on March 4,
1998 the Company obtained financing from First National Bank secured by a first
deed of trust on the Shelby facilities. The loan is in the amount of $2,362,500
at an interest rate of prime plus 1/2% and will not increase or decrease more
than two percent. The term of the loan is fifteen years, callable after 5 years.
During the three months ended March 31, 1998, options were granted
under the Company's 1997 Incentive Stock Option Plan and under the Non-Employee
Director Stock Option Plan as shown on the following table. The ending and
average market price of the Company's stock for the three months ended March 31,
1998 was $4.0625 and $3.0215, respectively.
<TABLE>
<CAPTION>
Date Shares
Granted or Reserved and Exercise
Issued Exercisable Price
------ ----------- -----
<S> <C> <C>
INCENTIVE STOCK OPTION PLAN
January 20, 1998 100,000 $2.875
March 3, 1998 40,000 $2.813
March 10, 1998 3,000 $3.000
-------
143,000
NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
January 20, 1998 30,000 $2.875
-------
Total Options 173,000
=======
</TABLE>
<PAGE> 7
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Quarter Ended March 31, 1998 Compared to Quarter Ended March 31, 1997:
Revenues for the three months ended March 31, 1998 approximated $4.86
million, compared to $4.22 million in revenues for the three months ended March
31, 1997, an increase of 15.2% or approximately $650,000. The increase is
attributable to strong retention of existing customers coupled with new
customers in the new markets with employed recognition consultants.
Cost of goods sold for the three months ended March 31, 1998
approximated $2.6 million, compared to approximately $2.3 million of cost of
goods sold for the three months ended March 31, 1997, an increase of 13% or
approximately $300,000. The increase in cost of goods sold was attributable to
the increase in revenues. As a percentage of revenues, cost of goods sold
decreased to 53% for the three months ended March 31, 1998, from 53.5% for the
three months ended March 31, 1997. The .5% decrease in the cost of goods sold as
a percentage of revenues was principally attributable to a change in product mix
and the initial phases of an improved inventory purchasing strategy.
Selling, general, and administrative expense for the three months ended
March 31, 1998 approximated $1.94 million, compared to $1.99 million for the
three months ended March 31, 1997. The decrease in absolute dollars as well as a
percentage of sales were attributable to benefits obtained from aggressive cost
containment policies.
Interest expense was approximately $52,000 for the three months ended
March 31, 1998, compared to $139,000 for the three months ended March 31, 1997,
a decrease of approximately $87,000. The reduction in interest expense was
primarily due to the early redemption of the Company's subordinated debenture
due to Pages on January 1, 2002. The debenture in the original amount of $5
million was redeemed for $3.5 million. The average outstanding debt for the
first three months in 1998 approximated $2.3 million compared to $1.95 million
for the first three months in 1997. Additionally, the average interest rate for
the first three months in 1998 approximated 9.33% compared to approximately
9.25% for the same period in 1997.
Depreciation and amortization expense was approximately $103,000 for
the three months ended March 31, 1998, compared to $86,000 for the three months
ended March 31, 1997, an increase of 19.8% or approximately $17,000. The
increase in depreciation and amortization expense was principally attributable
to the depreciation of newly acquired assets in 1997.
Income tax expense was $14,900 for the three months ended March 31,
1998, compared to an income tax benefit of $96,300 for the three months ended
March 31, 1997. The provisions for income tax benefit were calculated through
the use of estimated income tax rates based upon the loss before taxes.
LIQUIDITY AND CAPITAL RESOURCES
The Company's primary sources of liquidity have been cash generated
from operating activities and amounts available under its existing credit
facility and proceeds from the public offering of units consisting of common
stock and warrants during the third quarter of 1997. The Company's primary uses
of funds consist of financing inventory and receivables.
Net working capital increased to $6,431,000 as of March 31, 1998 from
net working capital of $4,417,000 as of March 31, 1997. The increase was
primarily attributed to reduced borrowings and the proceeds from the public
offering, as well as a reduction in inventory carrying levels.
<PAGE> 8
The Company has adopted a growth strategy, which will be accomplished
through increased efforts of the Company's existing, highly trained sales force,
in order to expand current market share and enter into new markets.
The Company anticipates that operating cash flows during the next
twelve months, coupled with its ability to borrow under the credit facility and
the proceeds from the sale of the Kings Mountain warehouse and the first deed of
trust on the Shelby facility, will cover operating expenditures and meet the
short-term debt obligations. The Company's credit facility is due and payable in
full on June 30, 1998. Although the lender has not issued a commitment to do so,
the Company's relationship with its lender is favorable and the Company
anticipates that the credit facility will be renewed when due.
Effective at the close of business on December 31, 1996, a tax free
spin off of the Company's common stock from its parent, Pages, was completed
(the "Distribution"). In the Distribution, for every ten shares of Pages common
stock outstanding on the record date, one and one-half shares of the Company's
common stock was distributed to Pages' stockholders. The Company entered into a
$5 million, 7% subordinated debenture with Pages simultaneously with the
Distribution in satisfaction of amounts due to Pages by the Company. The excess
of the amount due to Pages as of the Distribution over the $5 million
subordinated debenture was recorded as paid in capital. Based on the
consummation of the Distribution effective January 1, 1997, the amounts due to
Pages previously recorded as current were reclassified to long term, thus
significantly increasing the Company's net working capital, as described earlier
in this section. The Company discharged the debenture in full in January 1998
for $3.5 million.
The Company does not anticipate any material expenditures for property
and equipment during the next twelve months.
The Company is aware of no trends or demands, commitments or
uncertainties that will result in, or that management believes are reasonably
likely to result in, the Company's liquidity increasing or decreasing in any
material way. The Company is aware of no legal or other contingencies, the
effects of which are believed by management to be reasonably likely to have a
material adverse effect on the Company's financial statements.
SEASONALITY
The Company's business is highly seasonal, with approximately 39% of its
revenues and most of its profits recorded in the months of November, December,
and January. As a result, the Company's working capital requirements are highest
during November and December when the combination of receivables and inventory
are at peak levels. The Company typically experiences losses in its second and
third quarters.
As the results from the Company's growth strategy develop, the effects
of seasonality should diminish. The business categories on which the Company has
chosen to focus offer steadier revenue flows, as well as more consistent
requirements for working capital.
INFLATION
Although the Company cannot determine the precise effects of inflation,
inflation has an influence on the cost of the Company's products and services,
supplies, salaries, and benefits. The Company attempts to minimize or offset the
effects of inflation through increased sales volumes and sales prices, improved
productivity, alternative sourcing of products and supplies, and reduction of
other costs. The Company generally has been able to offset the impact of price
increases from suppliers by increases in the selling prices of the Company's
products and services.
<PAGE> 9
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements contained in this Form 10-Q under "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
regarding matters that are not historical facts and "forward looking statements"
(as such term is defined in the Private Securities Litigation Reform Act of
1996) and because such statements involve risks and uncertainties, actual
results may differ materially from those expressed or implied by such
forward-looking statements. Those statements include remarks regarding the
intent, belief, or current expectations of the Company, its directors, or its
officers with respect to, among other things: (i) future operating cash flows;
(ii) the Company's financing plans, and (iii) the Company's growth strategy,
including the expansion of current market share and the entrance into new
markets. Prospective investors are cautioned that any such forward-looking
statements are not guarantees of future performance and involve risks and
uncertainties, and that actual results may differ materially from those
projected in the forward-looking statements as a result of various factors. The
accompanying information contained in this Form 10-Q, including without
limitation and information set forth under the heading "Management's Discussion
and Analysis of Financial Condition and Results of Operations", identifies
important factors that could cause such differences.
<PAGE> 10
PART II - OTHER INFORMATION
ITEM 1: LEGAL PROCEEDINGS
The Company is not involved in any material pending legal proceedings,
other than ordinary, routine litigation incidental to its business.
ITEM 2: CHANGES IN SECURITIES
None
ITEM 3: DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5: OTHER INFORMATION
None
ITEM 6: EXHIBITS AND REPORTS ON FORM 8K
<TABLE>
<CAPTION>
Exhibit Method
Number Description of filing
------ ----------- ---------
<S> <C> <C>
1 Underwriting Agreement 1
2 Agreement and Plan of Merger 1
3 (i).1 Certificate of Incorporation 1
3 (i).2 Certificate of Amendment to Certificate of Incorporation 1
3 (ii) Bylaws 1
4.1 Form of Stock Certificate 1
4.2 Warrant Agreement 1
4.3 Form of Warrant Certificate 1
4.4 Form of Warrant-R.L. Renck & Company 1
10.1 1996 Incentive Stock Option Plan 1
10.2 Employee Stock Option Plan 1
10.3 Huntington Loan Documents:
10.3.1 Loan and Security Agreement 1
10.3.2 Revolving Note 1
10.3.3 Commercial Letter of Credit
</TABLE>
<PAGE> 11
<TABLE>
<S> <C> <C>
Reimbursement Agreement 1
10.3.4 Deed of Trust, Assignment of
Rents and Security Agreement 1
10.3.5 Debt Subordination and
Intercreditor Agreement 1
10.3.6 Third Amendment to Loan
and Security Agreement 1
10.3.7 Third Note Modification
and Extension Agreement 1
10.4 Non-Employee Director Stock Option Plan 1
10.5 Amendment to 1996 Incentive Stock Option Plan 1
10.6 1997 Incentive Stock Option Plan 1
10.7 Charles R. Davis' Performance Option Agreement 1
10.8 First National Bank Loan Document 2
27 Financial Data Schedule 2
</TABLE>
1. Incorporated by reference to the Company's registration statement on
Form 10, file number 0-271717, filed in Washington, D.C.
2. Filed herewith.
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
CASCO INTERNATIONAL, INC.
Registrant
Date: May 1, 1998 By: /s/ Jeffrey A. Ross
------------------------------------------
Jeffrey A. Ross
Principal Financial and Accounting Officer
<PAGE> 1
- --------------------------------------------------------------------------------
CASCO INTERNATIONAL, INC. FIRST NATIONAL BANK OF SHELBY
4205 E. DIXON BLVD. LOAN CENTER
SHELBY, NC 28150 104 S. LAFAYETTE STREET
SHELBY NC 28151
DEBTOR'S NAME, ADDRESS AND SSN OR TIN SECURED PARTY'S NAME AND ADDRESS
("I" means each Debtor who signs.) ("You" means the Secured Party, its
successors and assigns.)
- --------------------------------------------------------------------------------
I am entering into this security agreement with you on March 4, 1998 (date).
SECURED DEBTS. I agree that this security agreement will secure the payment and
performance of the debts, liabilities or obligations described below that
(Check one) [ ] / [ X ] (name) CASCO INTERNATIONAL, INC. owe(s) to you
now or in the future:
(Check one below):
[ X ] SPECIFIC DEBT(S). The debt(s), liability or obligations evidenced by
(describe): NDT DTD 3-4-98 $2,362,500 and all extensions, renewals,
refinancings, modifications and replacements of the debt, liability
or obligation.
[ ] ALL DEBT(S). Except in those cases listed in the "LIMITATIONS"
paragraph on page 2, each and every debt, liability and obligation
of every type and description (whether such debt, liability or
obligation now exists or is incurred or created in the future and
whether it is or may be direct or indirect, due or to become due,
absolute or contingent, primary or secondary, liquidated or
unliquidated, or joint, several or joint and several).
SECURITY INTEREST. To secure the payment and performance of the above described
Secured Debts, liabilities and obligations, I give you a security interest
in all of the property described below that I now own and that I may own in
the future (including, but not limited to, all parts, accessories, repairs,
improvements, and accessions to the property), wherever the property is or
may be located, and all proceeds and products from the property.
[ ] INVENTORY: All inventory which I hold for ultimate sale or lease, or
which has been or will be supplied under contracts of service, or
which are raw materials, work in process, or materials used or
consumed in my business.
[ ] EQUIPMENT: All equipment including, but not limited to, all
machinery, vehicles, furniture, fixtures, manufacturing equipment,
farm machinery and equipment, shop equipment, office and
recordkeeping equipment, and parts and tools. All equipment
described in a list or schedule which I give to you will also be
included in the secured property, but such a list is not necessary
for a valid security interest in my equipment.
[ ] FARM PRODUCTS: All farm products including, but not limited to:
(a) all poultry and livestock and their young, along with their
products, produce and replacements;
(b) all crops, annual or perennial, and all products of the crops;
and
(c) all feed, seed, fertilizer, medicines, and other supplies used
or produced in my farming operations.
[ ] ACCOUNTS, INSTRUMENTS, DOCUMENTS, CHATTEL PAPER AND OTHER RIGHTS TO
PAYMENT: All rights I have now and that I may have in the future to
the payment of money including, but not limited to:
(a) payment for goods and other property sold or leased or for
services rendered, whether or not I have earned such payment by
performance; and
(b) rights to payment arising out of all present and future debt
instruments, chattel paper and loans and obligations receivable.
The above include any rights and interests (including all liens and
security interests) which I may have by law or agreement against any
account debtor or obligor of mine.
[ ] GENERAL INTANGIBLES: All general intangibles including, but not
limited to, tax refunds, applications for patents, patents,
copyrights, trademarks, trade secrets, good will, trade names,
customer lists, permits and franchises, and the right to use my name.
[ ] GOVERNMENT PAYMENTS AND PROGRAMS: All payments, accounts, general
intangibles, or other benefits (including, but not limited to,
payments in kind, deficiency payments, letters of entitlement,
warehouse receipts, storage payments, emergency assistance payments,
diversion payments, and conservation reserve payments) in which I
now have and in the future may have any rights or interest and which
arise under or as a result of any preexisting, current or future
Federal or state governmental program (including, but not limited
to, all programs administered by the Commodity Credit Corporation
and the ASCS).
[ X ] The secured property includes, but is not limited by, the following:
NDT DTD 3-4-98 $2,362,500 4205 E DIXON BLVD
SHELBY, NC 28150
If this agreement covers timber to be cut, minerals (including oil and gas),
fixtures or crops growing or to be grown, the legal description is:
- --------------------------------------------------------------------------------
I am a(n) [ ] individual I AGREE TO THE TERMS SET OUT ON BOTH PAGE
[ ] partnership 1 AND PAGE 2 OF THIS AGREEMENT. I have
[ X ] corporation received a copy of this document on
[ ] ____________________ today's date.
[ ] If checked, file this agreement
in the real estate records.
Record Owner (if not me):____________ CASCO INTERNATIONAL, INC.
_____________________________________ _________________________________________
The property will be used for (Debtor's Name)
[ ] personal [ X ] business By: _____________________________________
[ ] agricultural CASCO INTERNATIONAL, INC 56-0526145
[ ] _________________ reasons.
FIRST NATIONAL BANK OF SHELBY
LOAN CENTER
_____________________________________ Title:___________________________________
(Secured Party's Name)
By:__________________________________ By:______________________________________
Title:_______________________________ Title:___________________________________
(page 1 of 2)
<PAGE> 2
GENERALLY - "You" means the Secured Party identified on page 1 of this
agreement. "I," "me" and "my" means each person who signs this security
agreement as Debtor and who agrees to give the property described in this
agreement as security for the Secured Debts. All terms and duties under this
agreement are joint and individual. No modification of this security agreement
is effective unless made in writing and signed by you and me. This security
agreement remains in effect, even if the note is paid and I owe no other debt
to you, until discharged in writing. Time is of the essence in this agreement.
APPLICABLE LAW - I agree that this security agreement will be governed by the
law of the state in which you are located. If property described in this
agreement is located in another state, this agreement may also, in some
circumstances, be governed by the law of the state in which the property is
located.
To the extent permitted by law, the terms of this agreement may vary
applicable law. If any provision of applicable law may not be varied by
agreement, any provision of this agreement that does not comply with that law
will not be effective. If any provision of this agreement cannot be enforced
according to its terms, this fact will not affect the enforceability of the
remainder of this agreement.
OWNERSHIP AND DUTIES TOWARD PROPERTY - I represent that I own all of the
property, or to the extent this is a purchase money security interest I will
acquire ownership of the property with the proceeds of the loan. I will defend
it against any other claim. Your claim to the property is ahead of the claims
of any other creditor. I agree to do whatever you require to protect your
security interest and to keep your claim in the property ahead of the claims of
other creditors. I will not do anything to harm your position.
I will keep books, records and accounts about the property and my
business in general. I will let you examine those records at any reasonable
time. I will prepare any report or accounting you request, which deals with the
property.
I will keep the property in my possession and I will keep it in good
repair and use it only for the purpose(s) described on page 1 of this
agreement. I will not change this specified use without your express written
permission. I represent that I am the original owner of the property and, if I
am not, that I have provided you with a list of prior owners of the property.
I will keep the property at my address listed on page 1 of this
agreement, unless we agree I may keep it at another location. If the property
is to be used in another state, I will give you a list of those states. I will
not try to sell the property unless it is inventory or I receive your written
permission to do so. If I sell the property I will have the payment made
payable to the order of you and me.
You may demand immediate payment of the debt(s) if the debtor is not a
natural person and without your prior written consent (1) a beneficial interest
in the debtor is sold or transferred or (2) there is a change in either the
identity or number of members of a partnership or (3) there is a change in
ownership of more than 25 percent of the voting stock of a corporation.
I will pay all taxes and charges on the property as they become due.
You have the right of reasonable access in order to inspect the property. I
will immediately inform you of any loss or damage to the property.
LIMITATIONS - This agreement will not secure a debt described in the section
entitled "Secured Debts" on page 1:
1) if you fail to make any disclosure of the existence of this
security interest required by law for such other debt;
2) if this security interest is in my principal dwelling and you fail
to provide (to all persons entitled) any notice of right of
rescission required by law for such other debt;
3) to the extent that this security interest is in "household goods"
and the other debt to be secured is a "consumer" loan (as those
terms are defined in applicable federal regulations governing
unfair and deceptive credit practices);
4) if this security interest is in margin stock subject to the
requirements of 12 C.F.R. Section 207 or 221 and you do not obtain
a statement of purpose if required under these regulations with
respect to that debt; or
5) if this security interest is unenforceable by law with respect to
that debt.
PURCHASE MONEY SECURITY INTEREST - For the sole purpose of determining the
extent of a purchase money security interest arising under this security
agreement: (a) payments on any non-purchase money loan also secured by this
agreement will not be deemed to apply to the purchase money loan, and (b)
payments on the purchase money loan will be deemed to apply first to the
non-purchase money portion of the loan, if any, and then to the purchase money
obligations in the order in which the items of collateral were acquired or if
acquired at the same time, in the order selected by you. No security interest
will be terminated by application of this formula. "Purchase money loan" means
any loan the proceeds of which, in whole or in part, are used to acquire any
collateral securing the loan and all extensions, renewals, consolidations and
refinancings of such loan.
AUTHORITY OF SECURED PARTY TO MAKE ADVANCES AND PERFORM FOR DEBTOR - I agree to
pay you on demand any sums you advanced on my behalf including, but not limited
to, expenses incurred in collecting, insuring, conserving, or protecting the
property or in any inventories, audits, inspections or other examinations by
you in respect to the property. If I fail to pay such sums, you may do so for
me, adding the amount paid to the other amounts secured by this agreement. All
such sums will be due on demand and will bear interest at the highest rate
provided in any agreement, note or other instrument evidencing the Secured
Debt(s) and permitted by law at the time of the advance.
If I fail to perform any of my duties under this security agreement,
or any mortgage, deed of trust, lien or other security interest, you may without
notice to me perform the duties or cause them to be performed. I understand
that this authorization includes, but is not limited to, permission to: (1)
prepare, file, and sign my name to any necessary reports or accountings; (2)
notify any account debtor of your interest in this property and tell the
account debtor to make the payments to you or someone else you name, rather
than me; (3) place on any chattel paper a note indicating your interest in the
property; (4) in my name, demand, collect, receive and give a receipt for,
compromise, settle, and handle any suits or other proceedings involving the
collateral; (5) take any action you feel is necessary in order to realize on
the collateral, including performing any part of a contract or endorsing it in
my name; and (6) make an entry on my books and records showing the existence of
the property agreement. Your right to perform for me shall not create an
obligation to perform and your failure to perform will not preclude you from
exercising any of your other rights under the law or this security agreement.
INSURANCE - I agree to buy insurance on the property against the risks and for
the amounts you require and to furnish you continuing proof of coverage. I will
have the insurance company name you as loss payee on any such policy. You may
require added security if you agree that insurance proceeds may be used to
repair or replace the property. I will buy insurance from a firm licensed to do
business in the state where you are located. The firm will be reasonably
acceptable to you. The insurance will last until the property is released from
this agreement. If I fail to buy or maintain the insurance (or fail to name you
as loss payee) you may purchase it yourself.
WARRANTIES AND REPRESENTATIONS - If this agreement includes accounts, I will
not settle any account for less than its full value without your written
permission. I will collect all accounts until you tell me otherwise. I will
keep the proceeds from all the accounts and any goods which are returned to me
or which I take back in trust for you. I will not mix them with any other
property of mine. I will deliver them to you at your request. If you ask me to
pay you the full price on any returned items or items retaken by myself, I will
do so.
If this agreement covers inventory, I will not dispose of it except in
my ordinary course of business at the fair market value for the property, or at
a minimum price established between you and me.
If this agreement covers farm products I will provide you, at your
request, a written list of the buyers, commission merchants or selling agents
to or through whom I may sell my farm products. In addition to those parties
named on this written list, I authorize you to notify at your sole discretion
any additional parties regarding your security interest in my farm products. I
remain subject to all applicable penalties for selling my farm products in
violation of my agreement with you and the Food Security Act. In this paragraph
the terms farm products, buyers, commission merchants and selling agents have
the meanings given to them in the Federal Food Security Act of 1985.
DEFAULT - I will be in default if any one or more of the following occur: (1) I
fail to make a payment on time or in the amount due; (2) I fail to keep the
property insured, if required; (3) I fail to pay, or keep any promise, on any
debt or agreement I have with you; (4) any other creditor of mine attempts to
collect any debt I owe him through court proceedings; (5) I die, am declared
incompetent, make an assignment for the benefit of creditors, or become
insolvent (either because my liabilities exceed my assets or I am unable to pay
my debts as they become due); (6) I make any unwritten statement or provide any
financial information that is untrue or inaccurate at the time it was provided;
(7) I do or fail to do something which causes you to believe that you will have
difficulty collecting the amount I owe you; (8) I change my name or assume an
additional name without first notifying you before making such a change; (9)
failure to plant, cultivate and harvest crops in due season; (10) if any loan
proceeds are used for a purpose that will contribute to excessive erosion of
highly credible land or to the conversion of wetlands to produce an
agricultural commodity, as further explained in 7 C.F.R. Part 1940, Subpart G,
Exhibit M.
REMEDIES - If I am in default on this agreement, you have the following
remedies:
1) You may demand immediate payment of all I owe you under any
obligation secured by this agreement.
2) You may set off any obligation I have to you against any right I
have to the payment of money from you.
3) You may demand more security or new parties obligated to pay any
debt I owe you as a condition of giving up any other remedy.
4) You may make use of any remedy you have under state or federal law.
5) If I default by failing to pay taxes or other charges, you may pay
them (but you are not required to do so). If you do, I will repay
to you the amount you paid plus interest at the highest contract
rate.
6) You may require me to gather the property and make it available to
you in a reasonable fashion.
7) You may repossess the property and sell it as provided by law. You
may repossess the property so long as the repossession does not
involve a breach of the peace or an illegal entry onto my property.
You may sell the property as provided by law. You may apply what you
receive from the sale of the property to: your expenses; your
reasonable attorneys' fees and legal expenses (where not prohibited
by law); any debt I owe you. If what you receive from the sale of
the property does not satisfy the debts, you may take me to court
to recover the difference (where permitted by law).
I agree that 10 days written notice sent to my address listed on
page 1 by first class mail will be reasonable notice to me under
the Uniform Commercial Code.
If any items not otherwise subject to this agreement are contained
in the property when you take possession, you may hold these items
for me at my risk and you will not be liable for taking possession
of them.
8) In some cases, you may keep the property to satisfy the debt. You
may enter upon and take possession of all or any part of my
property, so long as you do not breach the peace or illegally enter
onto the property, including lands, plants, buildings, machinery,
and equipment as may be necessary to permit you to manufacture,
produce, process, store or sell or complete the manufacture,
production, processing, storing or sale of any of the property and
to use and operate this property for the length of time you feel is
necessary to protect your interest, all without payment or
compensation to me.
By choosing any one or more of these remedies you do not waive your
right to later use any other remedy. You do not waive a default if you choose
not to use any remedy, and, by electing not to use any remedy, you do not waive
your right to later consider the event a default and to immediately use any
remedies if it continues or occurs again.
FILING - A carbon, photographic or other reproduction of this security
agreement or the financing statement covering the property described in this
agreement may be used as a financing statement where allowed by law. Where
permitted by law, you may file a financing statement which does not contain my
signature, covering the property secured by this agreement.
CO-MAKERS - If more than one of us has signed this agreement, we are all
obligated equally under the agreement. You may sue any one of us or any of us
together if this agreement is violated. You do not have to tell me if any term
of the agreement has not been carried out. You may release any co-signer and I
will still be obligated under this agreement. You may release any of the
security and I will still be obligated under this agreement. Waiver by you of
any of your rights will not affect my duties under this agreement. Extending
this agreement or new obligations under this agreement, will not affect my duty
under the agreement.
BANKERS SYSTEMS, INC., ST. CLOUD, MN (1-800-397-2341)
SECURITY AGREEMENT FORM SA 8/5/91 (page 2 of 2)
<PAGE> 3
<TABLE>
- ------------------------------------------------------------------------------------------------------------------------------------
CASCO INTERNATIONAL, INC KHC / 024
4205 E. DIXON BLVD. FIRST NATIONAL BANK OF SHELBY Loan Number_______
SHELBY, NC 28150 LOAN CENTER Date: March 4, 1998
104 S. LAFAYETTE STREET Maturity Date March 3, 2003
SHELBY NC 28151 Loan Amount $2,362,500.00
Renewal Of ___________________
BORROWER'S NAME AND ADDRESS LENDER'S NAME AND ADDRESS
"I" includes each borrower above, joint and severally "You" means the lender, its successors and assigns
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
For value received, I promise to pay to you, or your order, at your address listed above the PRINCIPAL sum of TWO MILLION THREE
HUNDRED SIXTY-TWO THOUSAND FIVE HUNDRED AND 00/100 Dollars $ 2,362,500.00
[X] SINGLE ADVANCE: I will receive all of this principal sum on 3/4/1998. No additional advances are contemplated under this note.
[ ] MULTIPLE ADVANCE: The principal sum shown above is the maximum amount of principal I can borrow under this note. On N/A
I will receive the amount of $ N/A and future principal advances are contemplated.
CONDITIONS: The conditions for future advances are ____________________________________________________________________________
________________________________________________________________________________________________________________________________
________________________________________________________________________________________________________________________________
[ ] OPEN END CREDIT: You and I agree that I may borrow up to the maximum amount of principal more than one time. This feature
is subject to all other conditions and expires on N/A.
[ ] CLOSED END CREDIT: You and I agree that I may borrow up to the maximum only one time (and subject to all other conditions).
INTEREST: I agree to pay interest on the outstanding principal balance from 3/4/1998 at the rate of 9.000% per year until THE NEXT
RATE CHANGE DATE.
[X] VARIABLE RATE: This rate may then change as stated below:
[X] INDEX RATE: The future rate will be .500% ABOVE the following index rate: PRIME RATE AS PUBLISHED IN THE WALL STREET JOURNAL
___________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________
[ ] NO INDEX. The future rate will not be subject to any internal or external index. It will be entirely in your control.
[X] FREQUENCY AND TIMING: The rate on this note may change as often as DAILY.
A change in the interest rate will take effect ON THE SAME DAY
[X] LIMITATIONS: During the term of this loan, the applicable annual interest rate will not be more than 11.000% or less than
7.000%. The rate may not change more than __________% each DAY.
EFFECT OF VARIABLE RATE: A change in the interest rate will have the following effect on the payments.
[ ] The amount of each scheduled payment will change. [X] The amount of the final payment will change.
[ ] ____________________________________________________________________________________________________________________________
ACCRUAL METHOD: Interest will be calculated on a 360/ACTUAL basis.
POST MATURITY RATE: I agree to pay interest on the unpaid balance of this note owing after maturity, and until paid in full, as
stated below:
[X] on the same fixed or variable rate basis in effect before maturity (as indicated above).
[ ] at a rate equal to ________________________________________________________________________________________________________.
[X] LATE CHARGE: If a payment is made more than 14 days after it is due, I agree to pay a later charge of 4.000% of THE PAYMENT
WITH A MAXIMUM OF $100.00 WHICHEVER IS LESS.
[X] ADDITIONAL CHARGES: In addition to interest, I agree to pay the following charges which [ ] are [x] are not included in the
principal amount above: ORIGINATION AND FLOOD CERT FEES.
PAYMENTS: I agree to pay this note as follows:
[ ] INTEREST: I agree to pay accrued interest _____________________________________________________________________________________
_______________________________________________________________________________________________________________________________.
[ ] PRINCIPAL: I agree to pay the principal ______________________________________________________________________________________
___________________________________________________________________________________________________________________________________.
[X] INSTALLMENTS: I agree to pay this note in 60 payments. The first payment will be in the amount of $24,087.55 and will be due
APRIL 3, 1998. A payment of $24,087.55 will be due MONTHLY thereafter. The final payment of the entire unpaid balance of principal
and interest will be due MARCH 3, 2003.
ADDITIONAL TERMS:
SECURITY:
NDT DTD 3-4-98 $2,362,500
4205 E. DIXON BLVD
SHELBY, NC 28150
[X] SECURITY: This note is separately secured by (describe separate
document by type and date):
NDT DTD 3-4-98 $2,362,500
(This section is for your internal use. Failure to list a separate security PURPOSE: The purpose of this loan is ________
document does not mean the agreement will not assure this note.) REFINANCE OFFICE/
______________________________________________
SIGNATURES: I AGREE TO THE TERMS OF THIS NOTE
INCLUDING THOSE ON PAGE 2) AND EXECUTE THIS
NOTE UNDER SEAL. I have received a copy on
today's date.
(Seal)
---------------------------------------
Signature for Lender CASCO INTERNATIONAL, INC 56-0526145
(Seal)
- --------------------------------------- ---------------------------------------
(Seal)
- --------------------------------------- ---------------------------------------
(Seal)
---------------------------------------
UNIVERSAL NOTE FORM 4
(PAGE 1 of 2)
</TABLE>
<PAGE> 4
DEFINITIONS: As used on page 1, "[X]" means the terms that apply to this loan.
"I," "me" or "my" means each Borrower who signs this note and each other person
or legal entity (including guarantors, endorsers, and sureties) who agrees to
pay this not (together referred to as "us"). "You" or "your" means the Lender
and its successors and assigns.
APPLICABLE LAW: The law of the state of North Carolina will govern this note.
Any term of this note which is contrary to applicable law will not be effective,
unless the law permits you and me to agree to such a variation. If any provision
of this agreement cannot be enforced according to its terms, this fact will not
affect the enforceability of the remainder of this agreement. No modification of
this agreement may be made without your express written consent. Time is of the
essence in this agreement.
PAYMENTS: Each payment I make on this note will first reduce the amount I owe
you for charges which are neither interest nor principal. The remainder of each
payment will then reduce accrued unpaid interest, and then unpaid principal. If
you and I agree to a different application of payments, we will describe our
agreement on this note. I may prepay a part of, or the entire balance of this
loan without penalty, unless we specify to the contrary on this note. Any
partial prepayment will not excuse or reduce any later scheduled payment until
this note is paid in full (unless, when I make the prepayment, you and I agree
in writing to the contrary).
INTEREST: Interest accrues on the principal remaining unpaid from time to time,
until paid in full. If I receive the principal in more than one advance, each
advance will start to earn interest only when I receive the advance. The
interest rate in effect on this note at any given time will apply to the entire
principal advanced at that time. Notwithstanding anything to the contrary, I do
not agree to pay and you do not intend to charge any rate of interest that is
higher than the maximum rate of interest you could charge under applicable law
for the extension of credit that is agreed to here (either before or after
maturity). If any notice of interest accrual is sent and is in error, we
mutually agree to correct it, and if you actually collect more interest than
allowed by law and this agreement, you agree to refund it to me.
INDEX RATE: The index will serve only as a device for setting the rate on this
note. You do not guarantee by selecting this index, or the margin, that the rate
on this note will be the same rate you charge on any other loans or class of
loans to me or other borrowers.
ACCRUAL METHOD: The amount of interest that I will pay on this loan will be
calculated using the interest rate and accrual method stated on page 1 of this
note. For the purpose of interest calculation, the accrual method will determine
the number of days in a "year." If no accrual method is stated, then you may use
any reasonable accrual method for calculating interest.
POST MATURITY RATE: For purposes of deciding when the "Post Maturity Rate"
(shown on page 1) applies, the term "maturity" means the date of the last
scheduled payment indicated on page 1 of this note or the date you accelerate
payment on the note, whichever is earlier.
SINGLE ADVANCE LOANS: If this is a single advance loan, you and I expect that
you will make only one advance of principal. However, you may add other amounts
to the principal if you make any payments described in the "PAYMENTS BY LENDER"
paragraph below.
MULTIPLE ADVANCE LOANS: If this is a multiple advance loan, you and I expect
that you will make more than one advance of principal. If this is closed end
credit, repaying a part of the principal will not entitle me to additional
credit.
PAYMENTS BY LENDER: If you are authorized to pay, on my behalf, charges I am
obligated to pay (such as property insurance premiums), then you may treat those
payments made by you as advance and add them to the unpaid principal under this
note, or you may demand immediate payment of the charges.
SET-OFF: I agree that you may set off any amount due and payable under this note
against any right I have to receive money from you.
"Right to receive money from you" means:
(1) any deposit account balance I have with you;
(2) any money owed to me on an item presented to you or in your possession
for collection or exchange; and
(3) any repurchase agreement or other nondeposit obligation.
"Any amount due and payable under this note" means the total amount of which
you are entitled to demand payment under the terms of this note at the time you
set off. This total includes any balance the due date for which you properly
accelerate under this note.
If my right to receive money from you is also owned by someone who has not
agreed to pay this note, your right of set-off will apply to my interest in the
obligation and to any other amounts I could withdraw on my sole request or
endorsement. Your right of set-off does not apply to an account or other
obligation where my rights are only as a representative. It also does not apply
to any individual Retirement Account or other tax-deferred retirement account.
You will not be liable for the dishonor of any check when the dishonor occurs
because you set off this debt against any of my accounts. I agree to hold you
harmless from any such claims arising as a result of your exercise of your right
of set-off.
REAL ESTATE OR RESIDENCE SECURITY: If this note is secured by real estate or a
residence that is personal property, the existence of a default and your
remedies for such a default will be determined by applicable law, by the terms
of any separate instrument creating the security interest and, to the extent not
prohibited by law and not contrary to the terms of the separate security
instrument, by the "Default" and "Remedies" paragraphs herein.
DEFAULT: I will be in default if any one or more of the following occur: (1) I
fail to make a payment on time or in the amount due; (2) I fail to keep the
property insured, if required; (3) I fail to pay, or keep any promise, on any
debt or agreement I have with you; (4) any other creditor of mine attempts to
collect any debt I owe him through court proceedings; (5) I die, am declared
incompetent, make an assignment for the benefit of creditors, or become
insolvent (either because my liabilities exceed my assets or I am unable to pay
my debts as they become due); (6) I make any written statement or provide any
financial information that is untrue or inaccurate at the time it was provided;
(7) I do or fail to do something which causes you to believe that you will have
difficulty collecting the amount I owe you; (8) any collateral securing this
note is used in a manner or for a purpose which threatens confiscation by a
legal authority; (9) I change my name or assume an additional name without first
notifying you before making such a change; (10) I fail to plant, cultivate and
harvest crops in due season, if I am a producer of crops; (11) any loan proceeds
are used for a purpose that will contribute to excessive erosion of highly
credible land or to the conversion of wetlands to produce an agricultural
commodity, as further explained in 7 C.F.R. Part 1940, Subpart G, Exhibit M.
REMEDIES: If I am in default on this note you have, but are not limited to, the
following remedies:
(1) You may demand immediate payment of all I owe you under this note
(principal, accrued unpaid interest and other accrued charges).
(2) You may set off this debt against any right I have to the payment of
money from you, subject to the terms of the "Set-Off" paragraph herein.
(3) You may demand security, additional security, or additional parties to be
obligated to pay this note as a condition for not using any other remedy.
(4) You may refuse to make advances to me or allow purchases on credit by me.
(5) You may use any remedy you have under state or federal law.
By selecting any one or more of these remedies you do not give up your right to
later use any other remedy. By waiving your right to declare an event to be a
default, you do not waive your right to later consider the event as a default if
it continues or happens again.
COLLECTION COSTS AND ATTORNEY'S FEES: I agree to pay all costs of collection,
replevin or any other or similar type of cost if I am in default. In addition,
if you hire an attorney to collect this note, I also agree to pay reasonable
attorney's fees plus court costs (except where prohibited by law). To the extent
permitted by the United States Bankruptcy Code, I also agree to pay the
reasonable attorney's fees and costs you incur to collect this debt as awarded
by any court exercising jurisdiction under the Bankruptcy Code.
WAIVER: I give up my right to require you to do certain things. I will not
require you to:
(1) demand payment of amounts due (presentment):
(2) obtain official certification of nonpayment (protest); or
(3) give notice that amounts due have not been paid (notice of dishonor).
I waive any defenses I have based on suretyship or impairment of collateral.
OBLIGATIONS INDEPENDENT: I understand that I must pay this note even if someone
else has also agreed to pay it (by, for example, signing this form or a separate
guarantee or endorsement). You may sue me alone, or anyone else who is obligated
on this note, or any number of us together, to collect this note. You may do so
without any notice that it has not been paid (notice of dishonor). You may
without notice release any party to this agreement without releasing any other
party. If you give up any of your rights, with or without notice, it will not
affect my duty to pay this note. Any extension of new credit to any of us, or
renewal of this note by all or less than all of us will not release me from my
duty to pay it. (Of course, you are entitled to only one payment in full.) I
agree that you may at your option extend this note or the debt represented by
this note, or any portion of the note or debt, from time to time without limit
or notice and for any term without affecting my liability for payment
CREDIT INFORMATION: I agree and authorize you to obtain credit information about
me from time to time (for example, by requesting a credit report) and to report
to others your credit experience with me (such as a credit reporting agency). I
agree to provide you, upon request, any financial statement or information you
may deem necessary. I warrant that the financial statements and information I
provide to you are or will be accurate, correct and complete.
NOTICE: Unless otherwise required by law, any notice to me shall be given by
delivering it or by mailing it by first class mail addressed to me at my last
known address. My current address is on page 1. I agree to inform you in writing
of any change in my address. I will give any notice to you by mailing it first
class to your address stated on page 1 of this agreement, or to any other
address that you have designated.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
DATE OF PRINCIPAL BORROWER'S PRINCIPAL PRINCIPAL INTEREST INTEREST INTEREST
TRANSACTION ADVANCE INITIALS PAYMENTS BALANCE RATE PAYMENTS PAID
(not required) THROUGH:
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
/ / $ $ $ % $ / /
- ------------------------------------------------------------------------------------------------------------------
/ / $ $ $ % $ / /
- ------------------------------------------------------------------------------------------------------------------
/ / $ $ $ % $ / /
- ------------------------------------------------------------------------------------------------------------------
/ / $ $ $ % $ / /
- ------------------------------------------------------------------------------------------------------------------
/ / $ $ $ % $ / /
- ------------------------------------------------------------------------------------------------------------------
/ / $ $ $ % $ / /
- ------------------------------------------------------------------------------------------------------------------
/ / $ $ $ % $ / /
- ------------------------------------------------------------------------------------------------------------------
/ / $ $ $ % $ / /
- ------------------------------------------------------------------------------------------------------------------
/ / $ $ $ % $ / /
- ------------------------------------------------------------------------------------------------------------------
/ / $ $ $ % $ / /
- ------------------------------------------------------------------------------------------------------------------
/ / $ $ $ % $ / /
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
(page 2 of 2)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF CASCO INTERNATIONAL FOR THE THREE MONTHS ENDED MARCH 31,
1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 721,271
<SECURITIES> 0
<RECEIVABLES> 2,490,564
<ALLOWANCES> 0
<INVENTORY> 5,101,763
<CURRENT-ASSETS> 9,429,244
<PP&E> 5,091,134
<DEPRECIATION> 1,629,691
<TOTAL-ASSETS> 14,633,261
<CURRENT-LIABILITIES> 2,997,770
<BONDS> 2,362,500
0
0
<COMMON> 17,832
<OTHER-SE> 6,417,586
<TOTAL-LIABILITY-AND-EQUITY> 14,633,261
<SALES> 4,864,494
<TOTAL-REVENUES> 4,864,494
<CGS> 2,579,888
<TOTAL-COSTS> 4,621,833
<OTHER-EXPENSES> 151,144
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 52,335
<INCOME-PRETAX> 39,182
<INCOME-TAX> 14,900
<INCOME-CONTINUING> 190,326
<DISCONTINUED> 0
<EXTRAORDINARY> 930,000
<CHANGES> 0
<NET-INCOME> 954,282
<EPS-PRIMARY> 0.54
<EPS-DILUTED> 0.54
</TABLE>
